WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/140/Add.1 
15 February 2005 
 (05-0619) 
Trade Policy Review Body 
29 November and 1 December 2004 Original:  English/ 
                 anglais/ 
                 inglés 
  
TRADE POLICY REVIEW 
BRAZIL 
Minutes of Meeting  
Addendum  
Chairperson:  H.E. Mrs. Puangrat Asavapisit (Thailand) 
 This document contains the advance written questions, and replies provided by Brazil.1 
__________________________________________________________________________________ 
 
Organe d'examen des politiques commerciales 
30 novembre et 1er décembre 2004 
 
EXAMEN DES POLITIQUES COMMERCIALES 
BRÉSIL 
Compte rendu de la réunion  
Addendum  
Présidente:  S.E.  Mme Puangrat Asavapisit (Thaïlande) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par le Brésil.1 
__________________________________________________________________________________  
Órgano de Examen de las Políticas Comerciales 
30 de noviembre y 1° de diciembre de 2004  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
BRASIL 
Acta de la reunión
 
Addendum  
Presidenta:  Excma. Sra. Puangrat Asavapisit (Tailandia) 
 En el presente documento figuran las preguntas presentadas anticipadamente por escrito, junto 
con las respuestas facilitadas por Brasil1 
                                                      
1 In English only./En anglais seulement./En inglés solamente.  WT/TPR/M/140/Add.1
 Page 3 
  
ADVANCE WRITTEN QUESTIONS BY MEMBERS AND 
REPLIES PROVIDED BY BRAZIL 
  
INDONESIA 
 
Questions on the Report by Secretariat (WT/TPR/S/140)  II. TRADE AND INVESTMENT POLICY REGIME ;  (2) Trade Policy Formulation and 
Implementation;  (ii) Trade and investment policy objective;  (p. 19. paragraph 14)  
 
1. Paragraph 14 of the Secretariat Report notes that  Brazil strongly supports enhancing south-south 
trade, while recognizing the need for more flexible rules for developing countries at the multilateral level.  Indonesia would be interested to know if Brazil has any plan to enhance south-south trade especially with 
non-major trading partner. Indonesia would also appreciate if Brazil could explain ‘the need for more 
flexible rules for developing countries’ in the south-south cooperation. 
 
Answer:  
Brazil believes South-South trade is a valuable complement to north-south trade.  Moreover, trade 
between developing countries has been growing at higher pace than average world trade and, thus 
it has become an additional source of dynamism to the world economy, as recognised in recent 
studies by UNCTAD, OECD and WTO.  In order to enhance south-south trade, Brazil understands 
that the third round of negotiations of the Global System of Trade Preferences for Developing 
Countries (GSTP) should become a major tool, and that member countries should engage fully on 
these negotiation and non-members consider acceding to them.  Brazil is also engaged in pushing 
forward Mercosul´s trade association with countries in South America and other developing 
regions.  Regardless of their specific weight in world trade, all developing countries can benefit 
from the expansion of South-South trade and project it further. 
 
The expression “the need for more flexible rules for developing countries” is considered within the concept of “policy space”, as described in the “São Paulo Consensus” of the UNCTAD XI, which 
states (paragraph 8):  “It is for each Government to evaluate the trade-off between the benefits of 
accepting international rules and commitments and the constraints posed by the loss of policy 
space.  It is particularly important for developing countries, bearing in mind development goals 
and objectives, that all countries take into ac count the need for appropriate balance between 
national policy space and international disciplines and commitments.” 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) Measures Directly Affecting Imports;   
(viii) Contingency measures;  (p. 61. paragraph 110) 
 2. Paragraph 110 of the Secretariat Report notes that the decision to initiate an investigation or a 
review is taken by SECEX.  Our understanding is  that SECEX might initiate or review contingency 
measures on behalf of the domestic industry. Indonesia would like to learn from Brazil how SECEX 
ensure the fairness of contingency measure that only be applied for removal, preventing and or temporary 
protecting domestic industry from injury.  Indonesia would appreciate if Brazil could explain how this kind of ex-officio initiation could not simply be brought by SECEX into protection purposes.  WT/TPR/M/140/Add.1 
Page 4   
Answer: 
 SECEX will only initiate an investigation or review, whether in request of the domestic industry or ex-officio , if the initiation is proposed by the Department of Commercial Defence (DECOM) on a 
non-confidential report, in which all conditions and requirements established in the ADA and in the ASCM are examined, and provided that there is sufficient evidence of dumping or subsidies, injury and causal relation.  We would like to observe that, since 2000, no self-initiated investigation or review took place in Brazil.  It is the Brazilia n understanding that no initiation based on the 
relevant provision of the WTO agreements could be brought into protection purposes. 
 Questions on the Report by Government (WT/TPR/G/140);  IV. FUTURE DEVELOPMENT 
 3. Seemingly that Government Report does not touch upon bilateral trade relations matters within Brazilian future policy directions. Indonesia would be interested to know Brazil’s view on the importance 
of bilateral trade relations.  
Answer:  A global trader, Brazil aims to diversify and to enhance its bilateral trade with a comprehensive 
number of partners world-wide, regardless the size of its economy and its geographical placement.  
Therefore, Brazil attaches great importance to bilateral trade agreements as a valuable 
complement, but no substitute to the multilateral trade system.  Conforming a customs union with 
Merscosul’s partners, Brazil approaches bilateral trade in co-ordination with them.  A number of agreements has been signed over the last years between Mercosul and countries - or group of them 
(such as the Andean Community of Nations and Southern Africa Customs Union) - from all 
developing regions, as presented in the Secretariat’s and Government’s reports. 
 
HONG KONG CHINA 
 
Anti-dumping;  (WT/TPR/S/140, P. 63, Para. 120; and P. 65, Para. 125) 
 
1. We note that out of the 182 investigations initiated by Brazil during 1988-2002, 77 cases resulted 
in no application of duties.  In other words, mo re than 40% of the investigations resulted in negative 
findings.  What are Brazil’s comments on this high percentage of negative determinations, in particular on 
whether it attributes to factors like initiation re quirements?  Bearing in mind the considerable trade-
stifling effect that can be brought about by mere initiation of AD investigation, would Brazil consider any measures for minimising unwarranted initiations? 
Answer: 
 The non-application of anti-dumping duties do not necessarily corresponds to negative anti-
dumping determinations.  It should be pointed out that the Brazilian authority applies the lesser 
duty rule in ALL cases.  Furthermore, negative determinations are also a consequence of two 
factors:  a) periods of investigation of dumping  and injury are always brought up-to-date after the 
initiation of the procedure, b) the results reached after on-the-spot verifications, both in the domestic industry and on producers of the investigated origin. 
  WT/TPR/M/140/Add.1
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  Sanitary and Phytosanitary Measures;  (WT/TPR/S/140, P. 73, Para. 167)  2. It is stated that all companies exporting products of animal origin to Brazil are required to be 
registered with the Animal Origin Products Inspection Department, and the products are also subject to 
registration.  The above apart, we note that new requirements on inspection, registration and certification 
were introduced during the period under review.  Grateful if the Brazilian authorities could share with us 
the details on these new SPS requirements. 
 
Answer: 
 Actually, no new requirements on inspection, registration and certification during the period under review were issued.  Ministerial Act (Portaria) No . 183/SDA, of 9 October 1998, remains the main 
legislation with respect to the sanitary requirements of import of animal products.  This Act prescribes the conditions for recognition of inspection systems and the certification of foreign 
establishments.  Besides that, the Secretarial Ac t (Instrução Normativa) No. 26, of 12 June 2001, 
approved the Manual of Operational Procedures on Agriculture and Livestock Surveillance.  It 
must be noted, however, that the Act No. 26 does not change any requirements on inspection, registration and certification for products of anim al origin. It only approves a list of merely 
operational procedures and documents to simplify the inspection routine on ports, airport and 
border controls. 
  
NOTE:  Please note that the correct number of Ministerial Act (Portaria) is 183 and not 283 as stated in Paragraph 166 of the Secretariat Report.  
 
Financial Services – Banking;  (WT/TPR/S/140, P. 152, Paras. 194-195)  3. It is noted that banks incorporated in Brazil may be 100% owned by foreign capital.  However, in Brazil’s GATS commitments, it is scheduled that increases in the percentage of the participation of 
foreign equity of Brazilian financial institutions are no t permitted.  Would Brazil clarify whether its GATS 
commitments reflect its existing regime regarding foreign ownership of Brazilian banks? 
 
Answer: 
 The establishment in Brazil of new branches of fina ncial institutions domiciled abroad, as well as 
the increase in the participation of individuals or foreign entities domiciled abroad in the capital of financial institutions with headquarters in Brazil, is prohibited under Article 52 of the Temporary Constitutional Provisions Act, but this prohibition does not apply when special authorizations are 
granted under the national interest, international agreements or a reciprocity condition.  Since 
1995, 140 Presidential Decrees were promulgat ed approving foreign capital participations in 
Brazilian financial institutions. 
 
4. It is stated that the number of foreign bank branches in Brazil is restricted.  Banks established in Brazil before 5 October 1988 may not open new branches, and for banks authorized after that date the number of branches is subject to the conditions set out at the time of authorization.  The regime described therein appears to be more liberal than what has been inscribed in Brazil’s GATS commitments.  If it is 
actually the case, would Brazil consider improving its commitments accordingly? 
 
Answer: 
 
Brazil does not exclude a priori the possibility of including any sector in its revised services offer. WT/TPR/M/140/Add.1 
Page 6   5. It is also stated that to obtain a bank licence, the same requirements apply to nationals and foreigners.  However, national treatment limitations have been scheduled in Brazil’s GATS commitments for a foreign service supplier to expand existing operations and conduct new activities.  Would Brazil confirm whether the scheduled limitations are still in place in its existing regime?  If not, would it 
consider removing them from the schedule in its revised offer?  
Answer:  Licensing requirements may differ from requirement s for the expansion of licensed operations or 
the performance of new kinds of activities.  Modification of current regulation is not under consideration at the moment. 
 
Financial Services – Insurance;  (WT/TPR/S/140, P. 154, Para. 207)  
6. While limitations on foreign participation in terms of capital ceiling and voting stock ceiling have 
been inscribed in Brazil’s GATS commitments, such limitations have not been mentioned in the 
Secretariat’s Report.  We would like to know whether the limitations still prevail in Brazil’s existing 
regime.  If not, would Brazil consider removing them from the schedule in its revised offer?  
Answer: 
 
Brazil applies no foreign participation limits on the capital or voting stock of insurance companies. 
 
Telecommunications Services;  (WT/TPR/S/140, P. xiv, Para. 10; P. xvii, Para. 37; P. 159, Para. 234; and 
P. 161, Para. 245) 
 
7. We appreciate the efforts made by Brazil to liberalize its services sectors, which in turn has 
promoted efficiency gains.  Liberalization has been particularly noticeable in telecommunications, which is one of the sectors attracting most investment.  We are however disappointed to note that the Brazilian 
Government still has the right to limit foreign partici pation in this sector, as this would substantively 
reduce the legal certainty for foreign investors.  We note that Brazil has not included this sector in its initial services offer.  Given the importance of the sector in Brazil’s economy, would Brazil consider 
making commitment in its revised offer? 
 
Answer: 
 Brazil does not exclude a priori the possibility of covering any sector in its revised offer. 
 
CANADA 
 
Report by the Secretariat (WT/TPR/S/140);  Part I. Economic Environment;  (3) Trade and Investment Flow;  (iii) Foreign direct investment;  Table I.7  
1. Table I.7 establishing the foreign direct in vestment (FDI) by sector notes a net decrease in 
energy services (US$2,972 million in 2000; US$1,442 million in 2001; US$1,534 million in 2002; 
US$651 million in 2003).  Please explain the context in which foreign direct investment has decreased in this sector?    WT/TPR/M/140/Add.1
 Page 7 
  
Answer: 
 Foreign direct investment has decreased in the ener gy sector in the context of global retraction of 
investment, not only in this sector, over the last few years.  Brazil is concerned about promoting both foreign and domestic investment in this and many other sectors.  Regulatory frameworks are evolving, taking especially into account the necessity to promote such investment. 
 
Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 28 
 
2. Paragraph 28 states that “foreign direct investment (FDI) is accorded, in general, national 
treatment”.  Under what circumstances and in what sectors or sub-sectors is FDI not accorded national 
treatment?  Is Brazil working on measures to ensure consistent national treatment for all FDI in the future?  Is information on the Brazilian investment regime publicly available for investors?  If so, where is such information available? 
 Answer: 
 Brazil has scheduled a list of specific commitments in which are inscribed measures inconsistent with the obligations contained in Article XVII of  GATS (National Treatment).  In the scheduled 
sectors, it can clearly be seen that Brazil accords, in general, national treatment.  National 
treatment is also the rule in non-scheduled sectors .  The legal framework for investment in Brazil is 
under continuous review in order to promote investment both by foreign and Brazilian capital.  
This legal framework provides a high level of legal certainty and a stable business environment.  Macroeconomic policies are also geared to stability, thus adding to the quality of the investment 
climate.  In the following sites it is possible to obtain more information regarding investment 
regimes: 
 
http://sistemasweb.desenvolvimento. gov.br/INVESTIMENTO_WEB/home.asp 
http://www.bcb.gov.br/  
http://www2.senado.gov.br/sf/ 
 
Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 29 
 
3. Paragraph 29 states that “[i]n the 2004-2007 Brazil Plan, the authorities point out that investment 
policy should be geared at reducing investment costs, mainly through lower financial intermediation 
costs, and lower taxation on capital goods.  The Ex Tarifario mechanism allows the temporary reduction to 2% of import tariffs on capital, computer and telecommunications goods that are not produced in 
MERCOSUR (Chapter III(2)(iv)(c)).”  Does Brazil plan to make permanent the reduction to 2% of import 
tariffs on capital?  If not, what is meant by a “temporary reduction” and what is the rationale for dropping 
the import tariffs by 2%?  Is Brazil considering the elimination of all tariffs on imports of capital? 
 
Answer: 
 
The tariff reduction allowed by the ex-tarifario regime are not to be made permanent, for they are 
supposed to be maintained in force only during the period necessary to the respective import 
operation to be carried out.  This kind of goods is generally build under order for big projects.  The goods assignable to the tariff reductions allowed by the regime are those which, though 
produced within the MERCOSUR, are classified (since the current MERCOSUR’s 8-digit WT/TPR/M/140/Add.1 
Page 8   
nomenclature is not able to comprehend all the possible items) in tariff headings subjected to a 
tariff protection level.  For this purpose, a specific description is provided to such good. The tariff heading referred to capital goods, and informatics and telecommunication goods, not produced within the MERCOSUR are rated 0%. 
 Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 31 
 4. Paragraph 31 states that “[f]oreign investors in financial institutions must obtain an authorization 
through a Presidential Decree prior to registration in the RDE-IED”.  What is the process for obtaining 
authorization through a Presidential Decree and under  what circumstances is such a request refused? 
 
Answer: 
 Central Bank of Brazil carries out a previous asse ssment and provide a report to be forwarded to 
the Ministry of Finance which analyses the report and, after approval by the National Monetary Council (CMN), prepares an “Exposição de Motivos”, recommending approval by the President of the Republic.  Not a single license has been denied since this mechanism has been established in 1995.  Since then, 140 Presidential Decrees were promulgated approving foreign capital participations in Brazilian financial institutions. 
 
Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 32 
 
5. Paragraph 32 notes that the repatriation of capital is based on the amount of foreign exchange registered.  How is the amount of capital which can be repatriated calculated?  Is detailed information on 
this restriction readily accessible to foreign investors?  If so, where is such information available? 
 
Answer: 
 The total amount obtained with the sale of a st ake in Brazilian company can be repatriated, at any 
time (Law 4.131/62, Decree 55.762/64 and Circular Bacen 2.997/2000, available at www.bcb.gov.br).  
For taxation purposes, capital gain is defined as the amount that exceeds the original investment 
calculated in national currency, in the same way for the investments made by domestic investors 
(art. 17 and 18, Law nº 9249, of 12/261995), available on the Ministry of Finance website 
(www.fazenda.gov.br).  The repatriation of capital gains is subject to a 15% withholding income 
tax. 
 
Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 35 
 
6. Paragraph 35 states that “prospecting and mining of mineral resources may take place only with 
the authorization or concession by the Union, in the national interest, by Brazilians or by a company 
organized under Brazilian laws and having its head-office and management in Brazil (Chapter IV(4))”.  The Secretariat Report adds that in relation to the prospecting, exploitation, refining, importation and exportation of hydrocarbons, and activities related to ocean and pipeline transportation, “the State may 
contract out the execution of these activities to state-owned or private enterprises”.   
 
a. What process is involved in obtaining authorization by the Union for the mining of minerals and 
how does Brazil define “in the national interest”? 
 
b. In cases involving the prospecting, exploitation, refining, importation and exportation of 
hydrocarbons, and activities related to ocean and pipeline transportation, are foreign-owned firms  WT/TPR/M/140/Add.1
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eligible to bid on State contracts?  Are such contracts subject to a public bidding process and are these contracts open to foreign-owned private enterprises? 
 c. Please explain the role of the State monopoly. 
 Answer: 
 Prospection and production of oil and natural gas are contracted through concession, preceded by 
tender.  Contracts must be signed with companies  constituted under Brazilian law, having their 
headquarters and administration in Brazil, without any limits to foreign participation in their capital.  Refining, import/export and transportation activi ties are contracted through authorization, without 
tendering process, with companies constituted under Brazilian law, having their headquarters and administration in Brazil, without any limits to foreign participation it their capital.  The Union holds a monopoly on oil and gas, which can be exploited under a concession regime by private companies, which acquire ownership over the extracted product after duties, taxes and contractual fees are paid. 
 
Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 36 
 
7. Paragraph 36 notes that rural property larger than a quarter of the municipality in which the property is located, cannot be owned by foreigners.  What is the rationale for this discrimination against 
foreigners covering the restriction of ownership of  rural property larger than one quarter of the 
municipality? 
 
Answer: 
 
The measure is linked to national security.  It derives from Article 190 of the Federal Constitution 
and Law 5709/71.  The Law and Decree 74,965 regulate the ownership of land by foreigners.  This legislation was issued in the 1970’s based on national security concerns.  It is necessary to mention 
that this legal restriction has not been impeding the acquisition of land by foreigners.  Actually, 
agricultural foreign investments have been increasing in recent years and no cases of discrimination 
against acquisition by foreigners have been reported.  Moreover, the average areas of Brazilian 
municipalities are significantly large and allow for investment under the Brazilian legal framework. 
 
Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 38 
 
8. Paragraph 38 states that foreign investment in highway freight transportation is limited to no 
more than one fifth of the capital stock with voting rights.  Similarly in road transportation, “foreign ownership is limited to 20% of capital without voting rights, for companies established in Brazil after 7 November 1980.  International road transport is reserved to companies with more than half of capital with 
voting rights held by citizens of the seven member countries of the International Land Transport 
Agreement (ATIT), and of the Latin-American Integration Association (LAIA).”  What is the rationale 
for these restrictions of 20% foreign ownership in highway freight transportation and less than half in international road transport?  WT/TPR/M/140/Add.1 
Page 10   
Answer: 
 The measures are aimed at the preservation of dome stic industry in this sector.  Restrictions 
deriving from ATIT are currently under revision. 
 Part II. Trade and Investment Policy Regime;  (3 ) Foreign Investment Regime;  Paragraph 41: 
 9. Paragraph 41 states that in relation to Brazil’s signed bilateral investment treaties (BITs), “[t]he Executive decided to withdraw these agreements from the consideration of the Brazilian Parliament” as 
some elements of their texts were considered by members of Congress to be “incompatible with the 
Brazilian Constitution”.  
 
a. What elements of these agreements are considered incompatible with the Brazilian Constitution 
and why?   
  
b. What impact will this have on prospects for future BITs with Brazil?   
 
c. How has Brazil been able to address this problem with regard to GATS Mode 3 commitments? 
 
Answer: 
 
Some disciplines, such as, for instance, conditi ons for payment of compensation in the case of 
expropriation which create a discrimination against national investors, are deemed incompatible with the Brazilian Constitution, as well as dispute settlement provisions that allow foreign investor 
to refer the matter to international arbitration to solve controversies related to his investments, 
opposing, this way, the juridical principle of internal resources debility (“esgotamento dos recursos 
internos”) and generating a privilege to the foreign investor, in prejudice of the national investor.  
Prospects for future BITs are under study in an inter-ministerial task force.  BITs signed by Brazil only address post-establishment.  Incompatible elements are not covered by GATS provisions. 
 
Part III. Trade Policies and Practises by Measure;  (2 ) Measures Directly Affecting Imports;  (v) Other 
charges affecting imports;  Paragraphs 74-83 
 
10. In addition to the IPI and ICMS charges listed in this section, as well as the Airport (ATAERO) 
and Merchant Marine Renovation (AFRMM) Fees referred to in Chapter IV(7)(iv)(b) and (c), additional 
fees involving various degrees of complexity may apply to imports including: (i) International Trade System (SISTOMEX) Usage Fee of R$30.00 per Import Declaration plus a fee per additional item 
included in the Declaration according to a table; (i i) the PIS/Pasep and Cofins Taxes of 1.65% and 7.6% 
respectively; and (iii) Other Port Fees set by each individual port authority including the Wharfage 
(Capatazias) Fee, Bill of Lading Fee, Unloading Fee, Harbour Dredging Fee, Translation Fee and Storage 
Fees.  a. What purposes are served by these taxes? 
 
Answer: 
 With the exception of the Merchant Marine Renewal Tax (MMR), PIS/Pasep and Cofins, the taxes listed above correspond to services delivered, whose price is proportional to the cost. 
 
b. What level of funds do they generate?  WT/TPR/M/140/Add.1
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Answer: 
 The level of funds is not available at present moment.  
c. Will Brazil amend these programmes in such a way that the same purposes can be served without restricting imports or discriminating against imports and among WTO Members? 
 
Answer: 
 Brazil does not intend to review these taxes, because they do not discriminate against imports.  
General Comment: 
 It is not clear whether any such taxes and fees apply to domestically produced goods or goods imported 
by different modes of transport, nor what trade-restricting and trade-distorting effect they may have.  
Collectively, the accumulation of all these taxes and fees along with existing applied tariffs may also have 
the effect of exceeding the binding.  In any event, it is likely that the sheer volume and complexity involved in calculating the various taxes and fees would have a trade-restricting effect and are not consistent with Brazil’s WTO obligations.   
 
Part III. Trade Policies and Practices by Measure;  (2 ) Measures Directly Affecting Imports;  (vi) Import 
prohibitions, restrictions, and licensing;  Paragraph 90 
 11. Paragraph 90 lists a number of products that are subject to non-automatic licensing.  While 
consequent paragraphs outline the administrative requirements for identifying products subject to and 
administrative arrangements for non-automatic licensing, it does not provide the legislative basis and 
conditions for such licensing.  As a result, clarification would be appreciated on the following points: 
 a. What is the purpose of non-automatic licensing? 
 
Answer: 
 
Non-automatic Licensing aims at fulfilling administrative requirement, usually deriving from the 
provisions of international agreements, such as the Basel Convention and of the Montreal Protocol, 
in accordance with the dispositions of GATT Article XX. 
 
b. Under what conditions are products placed under non-automatic licensing? 
 
Answer: 
 
The products subject to non-automatic Licensin g under the Administrative Treatment of 
SISCOMEX are displayed on the web page of the Ministry of Development, Industry and Foreign Trade.  Most of these products either pose risks to human, animal or plant life health;  can provoke 
environmental disasters;  are classified as weapons or that that may be used for warlike objectives;  
or are subject to tariff quotas foreseen in Agreements deriving from the Uruguay Round. 
 
c. Under what conditions are products removed from the non-automatic licensing requirement? 
 WT/TPR/M/140/Add.1 
Page 12   
Answer: 
 In the case of non-automatic licensing related to  WTO Agreement, the products will be excluded 
from the requirement of non-automatic licens ing according to the period established therein 
(example: quotas established by the Agreement on Textiles and Clothing).  In the remaining cases, the end of the adopted measures is not considered,  unless those measures are not deemed necessary. 
d. What are the specific conditions under which licenses are issued or not issued? 
 
Answer: 
 
Requirements concerning the issuance of non-automatic licenses are laid down by Ministerial Act 
SECEX n°14, of 17 November 2004, which has consolidated rulings related to the Brazilian 
importation regime.  
 
Part III. Trade Policies and Practices by Measure;  (2) Measures Directly Affecting Imports;  
(vii) Contingency measures;  Paragraph 109 
 
12. Paragraph 109 refers to several legislative and regulatory instruments on anti-dumping and 
countervailing investigations and measures, some of which were notified to the WTO in accordance with Article 16.4 of the Anti-dumping Agreement and Article 32.6 of the Agreement on Subsidies and Countervailing Measures.  Paragraph 109 would appear to be slightly incorrect with respect to the 
notification of these instruments to the WTO.  While, in March 2002, Brazil notified SECEX Circular 
No. 59 of 28 November 2001 (in WTO document G/ADP/N/1/BRA/2/Suppl.1), it would appear that 
SECEX Circular No. 20 and SECEX Circular No. 21 of 2 April 1996 containing the procedures to prepare requests for anti-dumping or countervailing duty investigations were not notified to the WTO.  Will Brazil notify these instruments?  
Answer: 
 SECEX Circular nº 20 and SECEX Circular nº 21 prescribe the same rules contained in Decrees numbers 1.602/95 and 1.751/95.  Both were notified to the WTO (G/ADP/N/1/BRA/2 + Corr. 1 and G/SCM/N/1/BRA/2).  SECEX Circular nº 59 brought new rules to Brazilian legislation on commercial defense procedures, such as rules on the counting of time periods and confidential information.  SECEX Circular nº 59 was duly notified to WTO under document G/ADP/N/1/BRA/2/Suppl.1, G/SCM/N/1/BRA/2/Suppl.1.  
Part III. Trade Policies and Practices by Measure;  (2) Measures Directly Affecting Imports;  (vii) Contingency measures;  Paragraph 115 
 13. Paragraph 115 seems to suggest that Brazil has  a changed circumstances provision in its anti-
dumping or countervailing duty law, i.e. that the law provides for a change in the application of such 
duties if, upon review, the duty itself or the amount of the existing duty is no longer necessary.  Please 
provide details as to the administrative requirements and conditions under which this provision would be 
employed.  
 
Answer: 
 
There is no exhaustive list of administrative requirements and conditions under which a changed 
circumstances provision would be employed.  For instance, once an anti-dumping measure is in  WT/TPR/M/140/Add.1
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force, if an exporter reduces its exporting prices, a domestic producer would be able to request a 
revision by submitting a petition with evidence that the ad valorem  duty in force is no longer 
sufficient to neutralize the increase in the marg in of dumping.  Administrative requirements and 
conditions under which changed circumstances provision would be employed are described in article 58 of the Regulation related to Anti-dumping investigations (Decree nº 1.602/95) and article 68 of the Regulation related do Subsidies and Countervailing measures (Decree nº 1751/95). 
 
Part III. Trade Policies and Practices by Measure;  (2) Measures Directly Affecting Imports;  (vii) Contingency measures;  Paragraph 119 
 
14. According to paragraph 119, MDIC unveiled a new strategy for the Brazilian system of trade 
defence in September 2003.  One of the main points of this strategy is to intensify aid provided to Brazilian exporters subject to contingency measure in vestigations abroad.  Please explain what actions are 
being contemplated by Brazil to intensify its aid to  Brazilian exporters subject to contingency measure 
investigations abroad? Will these actions be established by law or regulation?  
 
Answer: 
 The basic information that might be provided to Brazilian exporters is free from any charge and 
depends on a formal request by interested exporters, according to Article 18, X of Decree 
4.632/2003.  It consists of helping them to understand the legislation, concepts and procedures 
related to trade defence investigations; help in analysing questionnaires received by Brazilian 
exporters;  attendance in on-the-spot verifications;  and the submission of arguments and reasoning to foreign investigating authorities, whenever the Brazilian Government is also an interested parties 
to these investigations. 
 
Part III. Trade Policies and Practices by Measure;  (2) Measures Directly Affecting Imports;  
(vii) Contingency measures;  Paragraph 130  
15. Please provide a detailed description of the conditions under which imports from other 
MERCOSUR countries are handled in global safeguard investigations.  Are such imports exempted from the investigation at the initiation of the investig ation or are they exempted from any measure which 
may result from an investigation?  
 
Answer: 
 Decree 2.667/98 contains the regulation related to the application of safeguards measures on 
imports from non-members of MERCOSUR. Article 2, which provides the conditions for the 
application of safeguard measures, states that an investigation shall determine that the imports of 
the investigated product in MERCOSUR's territory occur in such conditions as to cause or 
threatens to cause serious injury to the domestic  industry.  Thus, the imports of other MERCOSUR 
members are exempted from the investigation at the initiation of the investigation and are exempted from any measures that may result from this investigation. 
 
Part III. Trade Policies and Practices by Measure;  (3) Measures Directly Affecting Exports;  (ii) Export 
taxes and minimum export prices;  Paragraphs 176-178  16. With respect to Brazil’s system of export taxes and minimum export prices, please provide a 
detailed commentary of its objectives, basis in la w and conditions under which it is administered. 
 WT/TPR/M/140/Add.1 
Page 14   
Answer: 
 Brazil does not apply minimum pricing.  Relating to export taxes Brazil applies for the products listed on Annex C of the Ministerial Act SECEX n° 15, 17 November 2004, which has consolidated rulings related to the Brazilian exportation regime.  Law n.º 5.172, of 25 October 25 1966 lays down dispositions for the application of exportation duties. 
 
Part III. Trade Policies and Practices by Measure;  (4) Measures affecting production and trade;  (vi) Intellectual property rights;  Paragraph 305 
 
17. Paragraph 305 notes that Brazil has made intellectual property rights commitments under bilateral 
and regional agreements entered into as part of MERCOSUR.  Canada understands that Brazil may be 
under pressure, as a part of MERCOSUR, to make commitments under bilateral or regional agreements to provide TRIPS-Plus protection with respect to geogra phical indications (GIs).  Does Brazil have plans to 
include such provisions in the agreements under negotiation?  If so, please elaborate. 
 
Answer: 
 As stated in the Secretariat's Report, commitments made by Brazil under bilateral and regional 
agreements entered into as a part of MERCOSUR are modeled on intellectual property rights 
agreements that Brazil has ratified,  such as the TRIPS Agreement.  Brazil confirms that in the 
framework of the bi-regional negotiations with the European Communities, the latter has indeed 
proposed the extension of TRIPS Article 23-type protect ion to foodstuffs and, with respect to wines 
and spirits, TRIPS-plus commitments, such as the derogation of flexibilities provided for by TRIPS 
Article 24. 
 
Part III. Trade Policies and Practices by Measure;  (4) Measures affecting production and trade;  
(vi) Intellectual property rights;  Paragraph 308:  
18. Canada notes that the Industrial Property Law (Law No. 9,279 of 14 May 1996) contains 
provisions for the repression of false GIs.  Could Brazil please define what a “false” GI is and provide 
examples in support of its definition?  Also, coul d Brazil please elaborate on the measures (judicial, 
administrative or otherwise) provided in the above Law to repress false GIs?  
 
Answer: 
 The Brazilian Industrial Property Law does not prohibit the registration of a false geographical 
indication as a trademark.  It prohibits the register as a trademark of a signal that is susceptible to 
falsely imply a true geographical indication.  T he judicial and administrative measures to prevent 
the register of a trademark that falsely implies a true geographical indication are the same as those 
applied to prevent the register of a trademark in violation of other register prohibitions.  
Part III. Trade Policies and Practices by Measure;  (4) Measures affecting production and trade;  
(vi) Intellectual property rights;  Paragraph 327 
 
19. Canada notes that there are two types of GIs in Brazil which are “indication of source” and “denomination of origin”.  Could Brazil clarify the difference, including with respect to the scope of protection, between these two types of GIs? How do these two types of GIs relate to the TRIPS 
Article 22.1 definition of GIs? 
  WT/TPR/M/140/Add.1
 Page 15 
  
Answer: 
 According to articles 177 and 178 of the Brazilian Industrial Property Law, both an "indication of source" and a "denomination of origin" are "the  geographic name of a country, city, region or 
locality in its territory".  The former "has become known as a center of extraction, production or manufacture of a given product or of provision of a given service", while the latter "designates a product or service whose qualities or characteristics are due exclusively or essentially to the geographical environment, including natural and human  factors".  Both possibilities are covered by 
the definition of "geographical indications" provided f or in Article 22.1 of the TRIPS Agreement. 
 Part IV. Trade Policies by Sector;  (1) Overview;  Paragraph 5 
 20. Paragraph 5 notes that Brazil may establish fo reign investment limits for the telecommunications 
and financial services sectors.  Could Brazil please explain what measures it is considering with respect to 
each of the telecommunications and financial services  sector?  Which specific sectors will be affected and 
how?  Under what circumstances would Brazil limit foreign investment in each of these sectors?   
 
Answer: 
 
The possibility of establishment of limits to forei gn capital in the telecommunications sector stems 
from Article 18 of the General Law on Telecommunications (LGT).  No measure is being currently 
considered in that direction.  In the financial sector , there is no limit to foreign participation in the 
capital of financial institutions, once authorized to establish in Brazil under Brazilian law.  
Part IV. Trade Policies by Sector;  (6) Energy;  (i) Petroleum and gas;  Paragraph 126 
 
21. Please explain the dual role of government and private companies authorized to operate in the 
petroleum and gas sector. 
 
Answer: 
 The role played by the government is to elaborate sectoral policies and to carry them out through 
the National Oil Agency – ANP – regulatory agency.  Private companies and state-owned ones 
implement those policies competing in the market. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial services;  Paragraph 167  
22. Paragraph 167 notes that Brazil has not yet ratified the Fifth Protocol to the GATS.  What steps 
have been taken by Congress to ratify the Fift h Protocol?  When does Brazil expect ratification? 
 
Answer: 
 The executive branch has taken all the steps necessary for the approval of the V Protocol by 
Parliament, a pre-condition to its ratification by  Brazil.  A time-frame for such approval cannot be 
determined, since there is no time-limit for the examination of legal instruments by Congress, and 
also in view of the independence among branches of Government. 
 WT/TPR/M/140/Add.1 
Page 16   Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial services;  Paragraph 177  23. Paragraph 177 states that commercial presence restrictions apply in financial services, and that until conditions for the participation of foreign capital in financial institutions have been established, the 
establishment in Brazil of new branches of financial institutions domiciled abroad, as well as the increase 
in the participation of individuals or foreign entities domiciled abroad in the capital of financial 
institutions with headquarters in Brazil, is prohibited under Article 52 of the Temporary Constitutional 
Provisions Act.  However, this prohibition does not apply when special authorizations are granted under 
the national interest, international agreements or a reciprocity condition.    
 
a. Could Brazil please indicate when it expects official conditions permitting the participation of 
foreign capital in financial institutions will be established?  
 b. Could Brazil provide more details regarding the circumstances under which the “national interest” 
condition would be met?  Are objective criteria established for this assessment?  Who does the 
assessment?  Is information readily available to foreign companies seeking information with 
regard to investment opportunities in Brazil?  If so, where is such information available? 
 
Answer: 
 
There is no limit to foreign participation in the capital of financial institutions, once authorized to 
establish in Brazil under Brazilian law.  The main criteria are operational efficiency and financial 
capability.   
Comunicado 10.844 Bacen (March, 19, 2003) establishes that companies or persons seeking 
participation in the capital of financial institutions with headquarters in Brazil must provide 
information about: 
 i. the kind of institution to be established; 
 
ii. the objectives to be pursued;  
iii. the administrative structure, including, if possible, the names of the persons involved; 
 
iv. the relevance of the operation for the Brazilian economy, including the expected 
 contribution for the development of the domestic financial market with regards to products  and services to be provided; 
 
v. the identification of the ownership compositio n, including the identification of the holding 
 group and its cross-participations; 
 vi. the level of capitalization to be maintained;  
vii. operations carried out in Brazil or with Brazilian companies; 
 
viii. the rating of the holding group, as provided by rating agency from the country of origin;  ix. the economic viability of the enterprise, based in fundamented study; 
 
x. the last financial demonstrative, approved by an independent auditing company;  WT/TPR/M/140/Add.1
 Page 17 
  
xi. the organizational framework of the holding group, including the capital composition of the 
 financial institution to be established;  xii. the last annual report of the holding group; 
 
xiii. the identification of the supervision authori ties to which the group is subordinated in its 
 country of origin.  In the case of a company affiliated to a financial conglomerate, based on information provided, the Central Bank of Brazil will ask the supervision authorities of the country of origin about the 
soundness of the institution, as well as about their opinion regarding the intended participation. 
 Central Bank of Brazil carries out a previous asse ssment and provide a report to be forwarded to 
the Ministry of Finance which analyses the report and, after approval by the National Monetary Council (CMN), prepares an “Exposição de Motivos”, recommending approval by the President of the Republic. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial Services;  Paragraph 194  
24. Paragraph 194 indicates that the number of fore ign bank branches in Brazil is restricted.  Foreign 
banks established in Brazil before October 5, 1998, are not allowed to open new branches and banks 
authorized after that date are restricted to a limited number of branches according to the conditions set out 
at the time of authorization.    
a. Could Brazil please explain the rationale for prohibiting the opening of new branches for banks 
established in Brazil before October 5, 1988? 
 
Answer: 
 
Banks established before 1988 and those established after that date are essentially receiving the 
same treatment.  October 5, 1988 is the date of  the promulgation of the Brazilian Constitution, 
which conditioned the authorization of new banks and the number of branches to the approval of a 
complementary law to regulate the financial system.  
 
b. What considerations are taken into account in determining the number of branches that a new 
foreign bank can open?  Why is the total number of allowable branches set out at the time of authorization before the foreign bank has had a chance to demonstrat e its potential benefit to the Brazilian market or 
fully assess its opportunities for growth? 
 
Answer: 
 The number of branches is limited by capital requirements.  Resolution CMN 2.099 (August, 17, 1994), updated by Resolution CMN 2.815 (January, 24, 2001), established levels of capital 
requirements to be maintained by financial institutions in order to operate in the domestic financial 
market.  Institutions are allowed to have up to 10 branches if minimum capital requirements are 
met.  Additional capital is required to allow an institution to operate more than 10 branches. 
 WT/TPR/M/140/Add.1 
Page 18   Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial Services;  Paragraph 197  25. Could Brazil please indicate whether it is contemplating allowing cross-border insurance or banking in the future? 
 Answer: 
 There is no prevision for allowing cross-border insurance. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial services;  Paragraph 208  
26. Paragraph 208 suggests that since July 2004 authorizations for foreign insurance companies to 
establish in Brazil are provided by the SUSEP and that an act from the Minister of Finance is no longer required.  It also indicates that reciprocity regarding market access is a condition of entry.  We have the 
following questions: 
 
a. Does this mean that public or national interest considerations do not play a role in the approval of  the entry of foreign insurance companies?  
b. How is reciprocity assessed and who does the assessment? 
 
c. Does Brazil maintain any foreign participation limits on the capital or voting stock of insurance 
 companies?   
Answer: 
 
Regarding this matter, the national interest is always taken into account.  There is no foreign 
participation limits on the capital or voting stock of insurance companies. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial services;  Paragraph 210 
 27 What is the typical approval time for life insurance products? 
 
Answer: 
 
In general, the approval time for ordinary life insurance products lasts about ten days. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (ii) Financial services;  Paragraph 212 
 
28. It is our understanding that foreign-based reinsurance companies are not allowed to do business in 
Brazil until the privatization of the Brazilian Reinsurance Institute (IRB) is realized.  Could Brazil please report on the steps taken to privatize IRB and an approximate time frame when the Brazilian market will be open for foreign-based reinsurance companies? 
 Answer: 
 There is still no sufficient legal framework to allow foreign access to the reinsurance sector.  The privatization of IRB is not considered a pre-requisite for such access.  A time-frame for that legal 
framework to be completed cannot be given since it involves legislative process.   WT/TPR/M/140/Add.1
 Page 19 
  Part IV. Trade Policies by Sector;  (7) Services;  (iii) Telecommunication;  Paragraph 245  29. Paragraph 245 notes that Brazil made commitments for basic telecommunications in 1997 under the Fourth Protocol to the GATS but that these comm itments were not ratified by Brazilian Parliament 
and that a subsequent draft schedule that sought to revise those commitments was ultimately withdrawn.   
 
a. Could Brazil please speak to the status of its earlier offers on basic and value-added 
telecommunications services?  
 
b. If Brazil has withdrawn the telecommunications commitments of 1997, is Brazil in a position to 
rectify the situation? If so, does Brazil intend to do so in the current round of negotiations?  If not, 
are there any specific concerns that prev ent Brazil from making telecommunications 
commitments at this time? 
 
Answer: 
 The offers made during the negotiation of the IV Prot ocol were valid exclusively in that context.  
The situation regarding the IV Protocol is described in paragraph 161, page 146 of the Secretariat Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its 
impossibility to ratify the IV Protocol in the 19 97 form, but such offer was rejected by some 
Members (United States, Hong Kong/China, European Communities, Japan).  Brazil does not 
exclude a priori the possibility of including any sector in its revised services offer. 
 
Part IV. Trade Policies and Practices by Sector;  (7) Services;  (iv) Transport;  Paragraph 248 
 
30. Paragraph 248 states that Brazil runs traditional  deficits in air and maritime transport services but 
a surplus in land transportation.  Please provide more information on imported air and maritime transport 
services.  Specifically, what is meant by imported services?  Does this mean that foreign services suppliers export air and maritime services on cross-border basis only? 
 
Answer:  
The statistics on imported transportation services cover only cross-border supply.  Services 
provided by foreign companies established in Brazil (Mode 3) are not considered as 
imported services to that effect.  The specific information can be obtained in the following 
sites:  www.antaq.gov.br (maritime), www.an tt.gov.br (land) and www.infraero.gov.br (air 
transportation). 
 
Part IV. Trade Policies and Practices by Sector;  (7) Services;  (iv) Transport;  Paragraph 251 
 
31. Paragraph 251 states that Law No. 10,233  “seeks to encourage investment and technology 
development in the sector, including through the use of concessions after an investment project or contingent upon one.”   
 
a. What kinds of concessions are contemplated by Law No. 10,233? 
 b. To whom are such concessions granted? 
 
c. On what basis are concessions granted or withdrawn? 
 WT/TPR/M/140/Add.1 
Page 20   d. What concessions have been granted or withdrawn to date? 
 
Answer: 
 Concession of public services is foreseen in Article 175 of the Federal Constitution.  Laws 8.666, 8.987, 9.074, and 10.233 regulate it.  This set of laws stipulates clearly the conditions for concessions, basis for granting and withdrawal, and their possible beneficiaries.  To this date, 42 concessions of highways and roads have been granted (6 by the Federal Government, 35 by State governments, and 1 by a Municipal government), covering a total of more than 10.000 km. 
 Part IV. Trade Policies and Practices by Sector;  (7) Services;  (iv) Transport;  Paragraph 252 
 32. According to paragraph 252, “[i]n its GATS Schedule of Specific Commitments, Brazil left all  specific air and maritime transport services unbound.”   
 
a. Please provide some clarification as to why these two sub-sectors remain unbound compared to 
rail and road freight transport. 
 b. What are the impediments to a Brazilian GATS offer in air and maritime transport services? 
 
Answer: 
 
Binding of commitments in these or in any other sectors is a decision that depends on the overall evolution of negotiations, as well as on the level of development of national regulation.  A Brazilian 
offer in maritime transport services can be presented pending on the developments of the services 
sector negotiations, as well as in those air service sub-sectors currently covered by GATS.  
 
Part IV. Trade Policies and Practices by Sector;  (7) Services;  (iv) Transport;  Paragraph 267  
33. Paragraph 267 states that “[t]he provision of maintenance services is open to both domestic and 
foreign companies.  To operate in Brazil, a foreign maintenance company must obtain a Certification of Approval of the Company (CHE), issued by the DA C;  the company must first obtain a Brazilian 
maintenance-shop certification, for which it must meet a number of requirements.”  Please clarify the 
status of the remaining air transport services sub-sectors covered by the GATS (i.e., computers 
reservation systems, selling and marketing). 
 
Answer: 
 
These sub-sectors are regulated by INFRAERO as well as by the DAC.  
 
Part IV. Trade Policies and Practices by Sector;  (7) Services;  (iv) Transport;  Paragraph 275  34. According to the Report, Brazil’s last trade poli cy review noted that “liberalization of maritime 
transport was followed by a substantial reduction in the cost of maritime freight, but also by the shrinkage 
of the Brazilian merchant fleet during the 1990s.”  Please clarify what is meant by the liberalization of 
maritime transport.  Does this refer to the establishm ent of a second register, relaxation of requirements 
allowing the establishment of foreign shipping companies, or deregulation? Does this liberalization apply to maritime auxiliary services? 
  WT/TPR/M/140/Add.1
 Page 21 
  
Answer: 
 The appointed liberalization results from the extinction of Liner Conferences in Brazil. 
Part IV. Trade Policies and Practices by Sector;  (7) Services;  (iv) Transport;  Paragraph 294 
 
35. Paragraph 294 reads: “A lighthouse fee (TUF), established by Decree-Law No. 1,023/69, and 
regulated by Decree No. 70,198 of 24 February 1972 and Decree No. 878 of 22 July 1993, is applied only 
to foreign flag vessels.  The fee is applied every time a foreign ship uses a Brazilian port in a different 
Brazilian State.  The fee is increased by 50% for ships over 50,000 tons, and by 100% for ships over 100,000 tons. Ships under 1,000 tons are exempt from the TUF.  Revenue collected under the TUF in 
2003 was R$97.5 million.”  Please explain how other port services are made available to foreign flag 
vessels. 
 
Answer: 
 
Port services and port services prices are offered on the same conditions and bases to national and 
foreign flag vessels.  
 
Part IV. Trade Policies by Sector;  (7) Services;  (v) Professional and business services;  Paragraph 299  36. Paragraph 299 notes that for architectural and various engineering services, Brazil’s GATS 
Schedule of Specific Commitments lists a restriction for commercial presence that requires foreign 
service suppliers joining Brazilian service suppliers to do so in the form of a specific type of legal entity 
(consorcio), where the Brazilian partner must maintain  leadership.  Could Brazil please clarify whether its 
leadership in a “consorcio” constitutes a limitation or  restriction on ownership (i.e. numerical limitation)? 
 
Answer: 
 
The leadership in a consórcio means solely that the Brazilian supplier will act as the “contacting party” between the consórcio and the contracting partner.  This is not a limitation on ownership, but a type of partnership. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (v) Professional and business services;  Paragraph 303   37. Paragraph 303 notes that one of the aims of Provision No. 91 of 13 March 2000 (Provision N  91/2000) was to facilitate the provision of certain kinds of services by foreign-trained lawyers.  Could 
the Government of Brazil please share the results of Provision No. 91/2000 with respect to foreign-trained 
lawyers?  Also, please provide any available statis tics regarding the number of foreign-trained lawyers 
currently practicing in Brazil.  
Answer: 
 
Provision 91 resulted in effective increase in the presence of foreign-trained lawyers in Brazil, in a 
very significant degree, thus adding to the quality of the law services, in a context of growing 
international interdependence in the law profession, which is due mainly to increasing participation of Brazil in international trade and investment flows.  
 
Part IV. Trade Policies by Sector;  (7) Services;  (v) Professional and business services;  Paragraph 308  
 WT/TPR/M/140/Add.1 
Page 22   38. Paragraph 308 makes reference to fact that auditors wishing to audit in the area of securities must register with the Securities Exchange Commission (CVM) in addition to registering with their corresponding Regional Accounting Council (CRC).  Could Brazil please clarify the procedures for 
registration with the CVM?  
Answer: 
 
CRC registration is required to accountants.  Sp ecifically for independent  auditors of open 
companies, registration in CVM is required both for physical and juridical persons.  Procedures 
are detailed in Instruction CVM 308 (available in the site www.cvm.gov .br).  Besides inscription in 
the CRC (which requires passing the exam of that institution), a specific exam for independent 
auditor is required, under the responsibility of t he Federal Council of Accounting and the Brazilian 
Institute of Accountants (IBRACON).  Commercial presence (in an auditing company), as well as 
proof of having exercised the activity of account auditing in Brazil (of non-open companies) for a 
period not inferior to 5 years are required. 
 
Part IV. Trade Policies by Sector;  (7) Services;  (v) Professional and business services;  Paragraph 309  
 
39. Paragraph 309 makes reference to a bill that is currently being discussed in Parliament which is 
aimed at modifying the accounting section of the Corporate Act to better reflect international accounting standards and practices.  Could Brazil please provide additional information regarding the status and nature of this bill? 
 
Answer: 
 The basis for the bill is to be found in the princ iples and parameters of the IASB.  The project is 
currently under parliamentary examination. 
 
Report by the Government (WT/TPR/G/140)  Part IV. The Trade Institutional and Regulatory Fr amework;  (2) Sectoral Issues;  Paragraph 97 
 40. The Government Report describes some of Brazil’s efforts in its transition to an open and competition-based telecommunications regime.  Some of these touch on the areas addressed by the WTO Reference Paper and GATS Annex on Telecommunications.  Please elaborate on the extent to which these reforms meet the pro-competitive standards in the Reference Paper and Annex?  Is there anything that prevents Brazil from committing to the WTO Reference Paper? 
 
Answer:  Brazilian regulatory framework in telecommunications is to a large extent convergent with the 
Reference Paper on Telecommunications to which a number of WTO Members have adhered.  The regulatory framework is evolving on the basis of  the General Law on Telecommunications and it 
may be premature at this juncture to preclude an y possibility of adjustment in relation to the 
current version of the Reference Paper.  Moreover, the rationale for the adoption of regulatory 
reference papers in some sectors, but not in other s ectors or modes of supply,  is still not completely 
clarified in the discussions under GATS.  It seems to create a strong imbalance in favor of some exporting interests, which should be corrected. 
 Part IV. The Trade Institutional and Regulatory Fr amework;  (2) Sectoral Issues;  Paragraph 84  WT/TPR/M/140/Add.1
 Page 23 
  41. According to paragraph 84, Brazil has introduced in Congress a Bill on the use of Public Private Partnership (PPP) in support of promoting investments in transport.  This is also mentioned in paragraph 
102.  The Government of Canada would be grateful for any additional information on the PPP that Brazil could provide. 
Answer: 
 
PPP is conceived as a means to making it possible for the necessary i nvestments in infrastructure to 
be undertaken, with strong private participation (both domestic and foreign), preserving for the 
State its role in promoting development.  PPPs can cover not only traditional infrastructure 
projects (highways, electric plants, etc.), but al so investments in health, education and the social 
area as a whole.  The private side to the partnership finances the construction works.  Amortization 
of the investment begins after construction is fi nished.  It can take the form of direct payment or 
concession contracts which can last up to 30 years.  The public side provides to the private partner 
guarantees such as ear-marked taxes and other revenues, and special funds.  Payment of PPP 
contracts will have priority over other governmental contracts.  The initial portfolio of projects to 
be financed via the PPP amounts to US$36 billion for the peri od until 2007.  
 
Full implementation of the PPP still depends on the approval of a specific law, which will define all 
the necessary lega l framework for that program.  All details , as well as the text of the PPP Bill in 
English, can be found in the site of the Mi nistry of Planning (www.planejamento.gov.br). 
 
Part IV. The Trade Institutional and Regulatory Fr amework;  (2) Sectoral Issues,  Paragraph 85 
 
42. Paragraph 85 notes that regulations that have been developed and enhanced by the National Agency of Land Transport (ANTT) in order to improve the transport system for goods and passengers along ten bordering countries.  Could Brazil please provide examples of such regulations?  
Answer: 
 Some examples of such regulations are the following:  
− Border control integrated with customs control, in a real-time system, regarding domestic and 
foreign companies performing international transportation, in 22 border points. 
− Real-time system for consultation to domestic and foreign companies. 
− Periodical updating of companies’ and vehicl es’ registration, with automated system for 
inclusion or substitution of vehicles. 
− Harmonization of requirements for drivers’ qualification exams, among south-american 
countries. 
− Harmonization of technical inspection of vehicles. 
− Improvement of fiscalization/enforcement, in cooperation with the highway police. 
 All these measures are intended at increasing flexibility, safety and reducing the time of transportation.  WT/TPR/M/140/Add.1 
Page 24   
CHILE 
 
III TRADE POLICIES AND PRACTICES BY MEASURE;  2) Measures directly affecting imports;  
(viii)Technical regulations and standards 
 
1. En esta sección no se hace mención al etiquetado de los Organismos Genéticamente Modificados 
(OGMs) ya que según se desprende del  documento existiría la entidad que lo normaría.  ¿Por qué no se informó sobre el etiquetado de OGMs en este punto?  
Answer: 
 There is no particular reason for not mentioning the labeling of GMOs in Brazil, since the matter is fully regulated by Decree 4680/03 and Normative Act n° 1/2004. 
 
2. ¿La Comisión Técnica Nacional en Bioseguridad (CTNBio), pertenece a la Agencia Sanitaria de 
Brasil (ANVISA) del Ministerio de Salud?.  ¿Cómo se relaciona su trabajo y ámbito de acción con las 
materias sanitarias y fitosanitarias? 
 
Answer: 
 
CTNBio is not linked to ANVISA.  According to Decree n. 1.752, of 20 December 1995, it is 
subordinated to the Ministry of Science and Technolog y of Brazil.  The aim of CTNBio is to follow 
the technical and scientific development and progress of genetic engineering, biotechnology and bioethics, with a view to protecting consumers and the environment.  Among its competence, 
CTNBio also regulates sanitary and phytosanitary matters. 
 
(ix) Sanitary and phytosanitary measures;  (d) Pesticides 
 3.  En relación a la RDC Resolución Nº 57 del 26 de febrero de 2002 que establece los criterios para 
evaluar los OGMs usados como pesticidas (Par. 171), solicitamos aclaración y su vinculación con las 
materias sanitarias y fitosanitarias. 
 
Answer: 
 
Resolution RDC nº 57 regulates th e Temporary and Spec ial Registry (RET) for GMOs.  It was 
adopted in accordance with ANVISA competence (Law nº 9.782/99).  The RET – for GMOs or not – is intended to confer a right of use, for a limited period of time, of a pesticide, active substance or a 
similar product for research.  The right to produce or import the pesticide is limited to the quantity 
necessary to perform the research.  It does not have therefore an impact on trade.  RDC nº 57 is not 
related to SPS issues. 
 
IV  TRADE POLICIES BY SECTOR;  (7) Services;  (iii) Telecommunications  
4. Is Brazil considering the adoption of the GATS Forth Protocol on Basic Telecommunications? 
 
Answer:  The offers made during the negotiations of the IV Protocol were valid exclusively in that context.  
The situation regarding the IV Protocol is described in paragraph 161, page 146 of the Secretariat 
Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its  WT/TPR/M/140/Add.1
 Page 25 
  
impossibility to ratify the IV Protocol in the 19 97 form, but such offer was rejected by some 
Members (United States, Hong Kong/China, Europea n Communities, Japan).  Adoption of the IV 
Protocol as such is thus not under consideratio n.  However, Brazil does not exclude a priori the 
possibility of including any sector in its revised services offer.  
 
5. Para. 241.  Would Brazil consider the elimination of market access limitations such as, residency 
or nationality requirements for the majority of shareholders voting rights, regarding the supply of “collective interest services in fixed telephony trough the private regime”?  
 
Answer:  Modifications of the General Law on Telecommunications (LGT) are not under consideration.  
 
(7) Services;  (iv) Transport;  (c) Maritim e transport and ports;  Maritime transport 
 
6. Para. 278.  Would Brazil consider the elimination of nationality requirements for the captain, 
chief engineer and the two thirds of the crew for Brazilian flag vessels? 
 
Answer: 
 
Modification of the nationality requirements in the maritime transport sector is not under 
consideration. 
 
7. Para. 280.  Would Brazil consider the elimination of restrictive measures regarding the supply of 
“cabotage” services by foreign vessels, such as, EBN chartering requirement, and the “first option” – 
preferential treatment to Brazilian flag vessels? 
 
Answer:  
Modification of the measures regarding cabotage is not under consideration.  
 
8. Para. 281.  Would Brazil consider the elimination of Brazilian flag vessel’s monopoly to transport 
imports and exports of crude oil, and crude oil derivatives produced in the country? 
 
Answer: 
 
Modification of the regulation regarding reserved cargo is not under consideration . 
 
(7) Services;  (v) Professional an d Business Services;  a) Overview 
 
9. Para. 299.  Would Brazil consider the elimination of the “commercial presence” requirement for the supply of accounting, auditing, bookkeeping, architectural and various engineering services? 
 
Answer: 
 
Modification of commercial presence requirements in the professional services sector is not under consideration. 
 WT/TPR/M/140/Add.1 
Page 26   
AUSTRALIA 
 
Export Taxes  
1. Brazil imposes export taxes on a small range of commodities and the rationale for such taxes is 
the guarantee of supply for domestic consumption.  To what extent have these taxes served to guarantee 
supply? To what extent does the policy limit production capacity? Has Brazil considered revising this policy?  
Answer: 
 The use of export taxes in Brazil is restricted to an extremely limited number of products.  In such 
few cases, it was considered to have served its purpose.  That policy has not limited the production capacity.  This policy is applied on an exception bas is and is permanently the object of revision. 
 Agriculture 
 2. Could Brazil indicate whether it provides any officially supported agricultural export credits?  If so, can Brazil provide information on which products, the total value of the export credits, and to what 
magnitude any export credits are subsidised? 
 
Answer: 
 Brazil does not have any export credit designed specifically for agricultural goods.  However, 
agricultural products may benefit from generally available export credit programmes. 
 
3. Several media reports have noted that market access wins for agriculture foreshadowed in 
MERCOSUL – EC will be at the cost of the EC opening  its market on an MFN basis in the Doha Round.  
How does Brazil see the relationship between bilateral/regional trade agreements and multilateral 
negotiations? 
 
Answer: 
 
Brazil attaches great importance to bilateral trade agreements/FTAs as valuable complement, 
though not a substitute to a fair, balanced, transparent, rule-based, and non-discriminatory 
multilateral trade system.  There must be a balance between FTAs and the MTS in order to assure their mutual strength and dynamism so to enhance the benefits of trade.  Over the period subject to 
the TPR, Brazil has pursued a three-dimension trade strategy focusing on: (i) the strengthening of 
Mercosur, (ii) regional and extra-regional trade agreements; (iii) advancing the WTO Doha Round.  
 
4. We note that Brazil’s most recent notification on  domestic support is dated 1997/98.  Will Brazil 
undertake to bring its notifications up to date as soon as possible to allow full transparency in agriculture negotiations? 
 
Answer: 
 The Brazilian government is finalizing the notificat ion on domestic support for the years 1999 to 
2003.  As soon as the final statistics are collecte d and compiled, these notifications will be presented 
to the WTO.  We expect to be in a position to bring our notifications up to date by the first 
trimester of 2005.  WT/TPR/M/140/Add.1
 Page 27 
  
Brazil understands that the issuing of notificat ions is an essential instrument to proceed the 
monitoring of the commitments undertaken by members and this is why we championed the question of monitoring during the framework negotiations.  
 
Energy  5. Exports of ethanol fuels (expected to be close to 20 per cent of ethanol production) are expected to increase given the continued higher prices of oil.  The Brazilian Sao Paulo Cane Industry Union estimates exports will double within 5 years.  Ethanol usage has been encouraged by various government policies across various agencies from the motor vehicle industry to support for the price and transportation of ethanol fuels.  Could Brazil please provide data on the level of support paid under Law No. 10,453 and Decree No. 4,353 (see page 141 of WT/TPR/S/140)?  To what extent did the Federal Government subsidize nationally produced alcohol fuels over the past few years in terms of price?  
Answer: 
 In Brazil's view, the environmental component must be in the center of a government’s concerns when designing a program on fuels, as well its compatibility to the WTO rules.  
During the 1990’s, Brazil has promoted a broad reform in the ethanol sector, which practically 
dismantled the subsidies given in the previous decades.  This set of reforms allowed a complete 
liberalization of the sugar and ethanol sectors in Brazil.  Brazil’s latest notification (G/AG/N/BR A/18), concerning agriculture domestic support 
commitments for the year 1997/98, refers to the expenditures destined to the sugar cane producers, 
especially in the Northeast region, which is the poorest in Brazil.  This program, which was 
terminated in 2001, had of course impacts on the et hanol production, but it is important to note 
that the amounts given to sugar cane producers did not surpass the de minimis levels.  For this 
reason, the above mentioned program did no t cause distortion in world markets.  
 
Regarding Law No. 10,453 and Decree No. 4,353, Brazil has provided official statistics as stated in 
TPR (§§ 140 and 141):  “Article 177 of the Constitution stipulates that the funds collected through the 
CIDE (see (a) above) will be used, among other things, to subsidize the price or the cost of 
transportation of alcohol fuel (as well as natural gas and refined gas and petroleum products).  Law 
No. 10,453 of 13 May 2002, which regulates the use of part of the revenue collected from CIDE, 
stipulates that transportation costs or prices of nationally produced alcohol fuel may be subsidized or 
given support by the Federal Government, provided that the Executive Power allocates, at its own 
discretion, budgetary resources aimed at supporting production or transportation of the product.   
Concerning the implementation of Law No. 10,453, the authorities indicated that, as of mid-2004, the 
only support programme for alcohol fuel in force was the Ethylic Alcohol Fuel Stock Financing 
Programme, created by Resolution CIMA No. 24 of 12 September 2002.  The objective of this Programme is to ensure fuel supply throughout the year, taking into account that alcohol production 
depends on the harvest of sugar cane, which is concentrated in the first half of each year”.  According 
to official statistics, R$470 million from CIDE  were used for financing alcohol fuel stocks.  
 
Industrial / Mining  
6. Brazil has a highly diverse manufacturing sector with some industries being recognised as world-
class producers.  Despite this, Brazil continues to apply specific support programs to industries such as 
the automotive industry (see par. 36 of WT/TPR/S/140).  Given the improved economic situation in WT/TPR/M/140/Add.1 
Page 28   Brazil, is the high tariff on imported cars (currently 35 per cent) and a high Industrial Products Tax (currently 25 per cent) on cars with an engine capacity of more than 2 litres just ified?  Does Brazil intend 
to review the level of support to the automotive industry?  
Answer: 
 The present level of support for cars (53 headings) is considered adequate by the Brazilian authorities.  Besides, that policy is agreed between all Mercosul members and there are no plans to revise it in the short term.  The tariff on imp orted cars, currently 35 percent, is a duty agreed by 
Argentina and Brazil under the “Automotive Policy of Mercosur” (PAM).  To change that policy, the agreement of all four MERCOSUR Member would be needed.  The Industrial Products Tax (IPI), is not applied on a discriminatory basis: the rates are the same for national and imported products.  According to Brazilian Constitution, the IPI is selective in function of the utility and 
needfulness of the product. 
7. Page 138 of the Secretariat report highlights the dramatic increase in employment in the 
shipbuilding industry in Brazil – a rise of almost 60 per cent over the past year.  Could Brazil provide data 
on the number of shipbuilding projects currently unde r construction that are destined for export? What 
was the US Dollar ($USD) figure of support provided to the shipbuilding industry over the past year?  
 
Answer: 
 
Shipbuilding projects currently under construction in Brazil are destined not to export, but to the 
Brazilian domestic market, particularly to the oil and gas offshore industry.  In 2003 BNDES has 
disbursed US$201,458,000 to the shipbuilding industry. 
 
8. Brazil’s mining industry contributes significantly to the economy and to Brazil’s export performance.  Could Brazil outline progress on reform of the regulatory framework for the mining sector and state whether it plans to establish a regulatory agency for the mining sector (similar to those established for the electricity and oil sectors) to enhance transparency?  Can Brazil also provide detail on environmental regulations on mining activities in ecologically sensitive areas?  
Answer: 
 The current model of the mining sector is different from the ones established by the regulatory agencies concerned with electricity and oil.  Currently, the Brazilian Government has been prom oting the development of the mining sector 
through the consolidation and strengthening of the National Department for the Mineral Production (DNPM) and the Brazilian Geological Service (CPRM).  
The strengthening of the DNPM has been implemented through the following actions: 
(a) Promotion of technological innovations aiming at transparency and quick processing of the 
 department's actions, progressively reducing the average time of  mining bills expedition; 
(b) Promotion of increased safety of database in the process of mining registration, providing 
 more accountability to investors;  WT/TPR/M/140/Add.1
 Page 29 
  
− Promotion of institutional values, through increased visibility and descentralization of 
competences; 
− Promotion of administration's modernization with a new statutory regulation and opening of 
civil service admission competitions; 
− Promotion of improvements in mining legi slation in order to make it more effective. 
 
The Brazilian Geological Service is being consolidated as a fundamental institution to the 
development of geological knowledge, of mining and territorial management, as well as to the 
improvement of the geological kno wledge of the Brazilian territory. 
 
Thus, the Government has been promoting actions with a view to increase basic geological 
mappings (mostly in scales 1:250.000 and 1:100.000) as well as aerogeophysical research of pre-selected targets which can present mineral potential. 
 
The Brazilian Government has elaborated a proposal for the creation of a new National Council for 
Mineral Policies with the aim of: 
− Make policies of interest to the mineral sector; 
− Integrate public policies and sectorial and state plans for mining;  
− Articulate national and state plans, programs and policies; 
− Evaluate measures inducive to the development of the mineral sector. 
 
Trade Facilitation 
 
9. The Secretariat report notes that the average time for customs clearance has reduced significantly 
since Brazil’s last Review (page 39, para 11).  Can Brazil elaborate on the institutional factors and forces 
that have led to this improvement in customs clearance times?  Are there any lessons from this experience that could assist Members in the DDA trade facilitation negotiations? 
 
Answer: 
 
The reduction of the average time for customs clearance was a result of a modernization program that included the use of informatic tools (SISCOMEX).  The legal basis remains the same and thus 
the deadlines, but now the efficiency of customs  units is appraised according the time spend 
between the registration and the clearance of products, since the entry into force of the SISCOMEX 
Management Part.  Brazil stands ready to share its experience with interested parties in the DDA 
on trade facilitation. 
 
Services 
 
10. Can Brazil outline the progress made to date on the privatisation of the Brazil Reinsurance 
Institute (IRB)?  Could Brazil provide detail on the regulations that will govern the privatised reinsurance 
market?  Could Brazil also confirm whether or not the new regulations will reserve the reinsurance 
market to Brazilian firms only for a period of two years after privatisation of the IRB? 
 WT/TPR/M/140/Add.1 
Page 30   
Answer: 
 There is still no sufficient legal framework to allow foreign access to the reinsurance sector.  The privatization of IRB is not considered a pre-requisit e for such access.  A time-frame for that legal 
framework to be completed cannot be given since it involves legislative process. 
 
11. Can Brazil clarify the policy rationale for requiring state-owned companies doing business with insurance brokerage firms to use Brazilian-owned insurance firms, and indicate whether any change to this requirement is proposed? 
 Answer: 
 The measure is part of the government procurem ent policy.  Changes are not under consideration 
at this moment. 
 12. The Secretariat Report states that Brazil currently has “no GATS commitments in 
telecommunications in force”.  Australia notes that over 60 developing country WTO Members have made commitments in telecommunications.  Could Brazil explain whether there is a domestic process in place to move towards ratification of the Fourth Protocol on Telecommunications and, if so, when that 
ratification is expected to occur and enter into force? 
 
Answer: 
 The offers made during the negotiation of the IV Prot ocol were valid exclusively in that context.  
The situation regarding the IV Protocol is described in paragraph 161, page 146 of the Secretariat 
Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its 
impossibility to ratify the IV Protocol in the 19 97 form, but such offer was rejected by some 
Members (United States, Hong Kong/China, European Communities, Japan).  Brazil does not exclude a priori the possibility of including any sector in its revised services offer. 
 
13. The Secretariat’s report outlines the market and regulatory environment for telecommunications in Brazil.  This outline includes a statement (page 159, para 230) of policy objectives which include “to 
foster competition in the sector”.  Noting that Brazil does not currently have WTO services commitments 
in force in the telecoms sector, are the current arrangements in Brazil consistent with the 
telecommunications Reference Paper? If so, for which segments of the telecommunications market? 
 
Answer: 
 
The telecommunications sector in Brazil is extremely open to foreign participation and is regulated 
in a strongly pro-competition fashion.  Regulation is to a large extent convergent with the Reference 
Paper on Telecommunications, to which a number of WTO Members have adhered.  The regulatory framework is evolving on the basis of  the General Law on Telecommunications and it 
may be premature at this juncture to preclude an y possibility of adjustment in relation to the 
current version of the Reference Paper.  Moreover, the rationale for the adoption of regulatory 
reference papers in some sectors, but not in other s ectors or modes of supply,  is still not completely 
clarified in the discussions under GATS.  It seems to create a strong imbalance in favour of some exporting interests, which should be corrected.  
14. The Report by Brazil (para 46) states that in the DDA services negotiations, Brazil’s initial offer 
contains “substantial improvements in several sectors” and “fourteen new sub-sectors have been  WT/TPR/M/140/Add.1
 Page 31 
  included”.  However, in 13 of these new sub-sectors: technical testing and analysis services;  services incidental to fishing;  placement and supply services of personnel;  investigation and security;  maintenance and repair of equipment;  photographic services;  packaging services;  convention services;  building completion and finishing work;  commission agents’ services; travel agencies and tour operators;  
tour guide services;  and sporting services, Brazil has entered “unbound” in two of the four modes of 
supply (specifically, in modes one and two).  This means, in effect, that Brazil has taken no commitments 
in these modes of supply for these new sub-sectors.  Can Brazil indicate whether it is willing to provide 
more extensive commitments in these new subsectors, and in other services sectors, during the course of 
the Doha Round? 
 Answer: 
 No sector or mode of supply is a priori excluded from consideration in the preparation of Brazil’s revised offer. 
 Intellectual Property 
 15. Australia notes that Brazil has made its IP enforcement regime more robust and has stepped up actions to combat copyright and patent infringements in recent times.  Will Brazil allocate additional 
resources to support these measures? (page 11 1 of Secretariat Report, paras 318-333). 
 
Answer: 
 Brazil has dedicated growing efforts to improve the enforcement of intellectual property rights.  
One of the relevant conclusions reached by national authorities from the experience of enforcing 
Brazilian TRIPS-compliant legislation is that, with  the resources currently available, increasing the 
coordination among Government agencies and also with the private sector can lead to considerable 
improvement in curbing the violation of intellectual property rights.  The work of the Inter-Ministerial Committee to Combat Piracy as well as the recommendations from the final report of 
the Parliamentary Inquiry Commission on Piracy, which eventually led to the recent creation of the 
National Council for Combating Piracy and Intellect ual Property Violations, also point to the 
conclusion that increased coordination can produce satisfactory outcomes without greater 
allocation of resources. 
 
It should be pointed out, in any case, that the Government has recently allocated a larger budget 
for the State agencies responsible for the administration of the intellectual property system, like the INPI (the National Institute of Industrial Property) and the SNPC (the National Service of Plant 
Varieties Protection). 
 
Transportation 
 16. The WTO Secretariat has identi fied that Brazil applies a tax on freight with differing rates for 
domestic and international cargoes.  Our understanding is that the international tax on freight is charged 
as a percentage of the freight cost.  The cost of freight increases with the distances that the freight has 
travelled.  What is the rationale for this tax?  Does Brazil plan to review the manner in which this tax is 
applied?  WT/TPR/M/140/Add.1 
Page 32   
Answer: 
 The additional tax for the renovation of the merchant marine (AFRMM), as described in the Secretariat Report (paragraphs 285 and 286), is an additional tax for the renovation of the merchant marine that exists since the 60’s, although it was changed in 1987 (Decree-Law No 2.404/87).  It applies to the freight charged by Brazilian and/or foreign companies operating in Brazilian ports.  The AFRMM is not directly relate d to distances, but to freights and freights costs 
depend on several variables such as the number of lines and companies in operation, the volume of cargo and others. Brazil does not foresee any change in the application of AFRMM. 
 Competition Policy 
 17. Brazil’s efforts to strengthen anti-competitive laws is a welcome development and sends a clear message to those engaged in anti-competitive behaviour and encourages competition in the economy.  
Could Brazil please explain further what the “leniency agreement” aims to achieve, who were the 
signatory parties, and what is the longevity of the agreement? 
 
Answer: 
 
The leniency agreement is an amnesty program that can be entered by companies or individuals 
that were part to a cartel (provided that not the leader) and want to inform its existence to the 
competition authorities in order to benefit from an amnesty in the penalty or, at least, a penalty 
reduction.  Through the agreement, this party (usu ally referred as whistleblower) will agree to 
disclose all the information it has about the cart el and fully cooperate with the investigation.  The 
law determines that the agreement will be enter ed by the competition authority (Secretaria de 
Direito Econômico, SDE - or  Secretariat of Economi c Law) and the whistleblower(s).  However, as 
in Brazil cartels are both criminal and administrative proceedings, SDE has been asking the 
criminal authority to sign the agreements as well, even though there is no legal requirement for that.  The longevity of the agreement depends on the duration of the investigation and it can be 
executed either in cases where the authority has no knowledge about the infraction, or, even if 
knowing, it still needs further evidence to pursue the cartel and pledge it guilty.  The first leniency agreement in Brazil was entered in 2003. 
 
Foreign Investment 
 
18. Incentives offered by Brazil’s State governm ents have served as enticements for a number of 
transnational corporations to locate in various states.  How will the establishment of the National 
Investment Information Network (NIIN) aim to diffuse investment activities in Brazil?  Is it the intention 
of the Government of Brazil that the NIIN play a direct  or indirect role in encouraging FDI in those states 
where FDI has not been as significant?  
 
Answer:  
The NIIN aim is to diffuse information that can be us eful to potential investors in Brazil.  For that, 
there are partnerships with public and private entities that operate on fields of interest for those 
investors.  In the same manner, the NIIN aims to encourage the sub-federal entities on the implementation of its FDI attraction programs, playing an indirect role in all the FDI attraction programs.  Those States with less capacity of FDI attraction are, undoubtedly, the more benefited 
States by the NIIN work, once they cannot count on own resources and expertise to promoting and 
attracting FDI.  WT/TPR/M/140/Add.1
 Page 33 
  
NEW ZEALAND 
 
1. From the Secretariat’s report it appears that t he Brazilian system of non-tariff charges affecting 
imports has a high level of complexity (pages 53-54, paragraphs 75-83; pages 79-80, paragraphs 191-
197).  For example: 
 
− there is both a federal industrial products tax (IPI), and a state-level services and merchandise 
circulation tax (ICMS); 
− rates vary, and are changeable; 
− the ICMS is levied on both intrastate and interstate transactions and is assessed on every transfer or 
movement of merchandise; 
− compensation must be claimed due to differences in ICMS across states; 
− there are exemptions; 
− the application of the exemptions could discriminate against imported products; 
− there are airport and marine taxes; 
− there are drawback provisions and a Special System of Industrial Depots subject to Standardised 
Control (RECOF). 
 
The complexity of this system, together with a complicated legal environment and bureaucracy, 
constitutes a significant obstacle to companies wishing to do business in Brazil. 
 It would be appreciated if Brazil would outline what steps it will take to rationalise the non-tariff charges 
system to make it easier for trade to occur. 
 
Answer: 
 In order to make the foreign trade process less bureaucratic, less complex and, consequently, more attractive, the Brazilian Government is coordinating several initiatives.   
 
Two Ministerial Acts consolidating all Braz ilian trade regimes were recently published.    
 The Ministerial Act SECEX no. 14, of November 17, 2004 consolidates legal documents related to imports and to the Drawback regime (replacing the Ministerial Act SECEX n° 17, of December 1, 
2003 that had earlier updated regulations).  Eighty-seven normative acts of foreign trade on 
operational procedures of imports in Brazil were consolidated and revoked.   
 Besides, the exemption of licensing procedures is now considered the general rule in the administrative system of imports.  Imports of around 1,600 different capital goods were exempted from non-automatic licensing.  It now suffices for the importer to address himself/herself to the 
Brazilian Customs to proceed with the customs clearance.   Among other implemented measures, we would highlight the publishing, on the Ministry’s webpage, of the Ministerial Act and of its future amendments in a system of automatic consolidation, as well as of the list of goods s ubjected to automatic and non-automatic licensing, 
along with their corresponding responsible administrative bodies.   The second main Act published was in relation to export operations.  The Ministerial Act SECEX no. 15, of November 17, 2004 replaced the Ministerial Act SECEX no. 12, of September 03, 2003.  That regulation consolidated 54 normative acts and revoked another 29 export-related Ministerial WT/TPR/M/140/Add.1 
Page 34   
Acts of the Ministry of Development, Industry and Foreign Trade (MDIC), which has resulted in 
the revocation of 83 foreign trade normative acts.  
2. The Secretariat’s report notes that the average applied agricultural tariff in January 2004 was 
10.2%, lower than for non-agricultural goods at 10 .5% (page 43, paragraph 38).  Table III.1 (page 44), 
however, reveals that applied tariffs for dairy products were significantly higher than this average, at 
18.8%.  This year Brazil will become a net dairy exporter for the first time.  In light of that fact, it would be 
appreciated if Brazil would provide a rationale for the relatively high tariff on dairy products, and outline 
how it plans to bring this tariff into line with other agricultural products. 
 
Answer:  Although applied tariffs for dairy products are higher than the average, they are still lower then the tariffs applied by most of our major trading partners.  In Brazil, this sector is receiving a differentiated protection because it is deemed one of the most distorted sectors with regard to export subsidies and domestic support measures.  Brazil expects that after positive results from current negotiations in the DDA, a favourable en vironment would allow us to further reduce our 
applied tariffs in the dairy products sector. 
 
3. The table on page 46 of the Secretariat’s report shows that imports of food and beverages and 
wood products are subject to significant tariff escalation.  
Could Brazil outline the rationale for this pattern of tariff escalation?  How does Brazil intend to reduce 
the extent of tariff escalation in these industries? 
 
Answer:  
The structure of the MERCOSUR’s Common External Tariff establishes different tariff levels 
according the grade of added value contained in the good and defines that the highest tariff would be 20% with differences of two percent among them. 
 
Therefore, the evaluation of matters regarding tariff escalation within the MERCOSUR’s CET 
should take into consideration the fact that a nu mber of tariff headings referred to goods placed at 
the primary stage of certain productive chains are rated 0%, while goods placed in further stages 
have tariff protection, in a level determined by the structure of the CET. 
 
MERCOSUL members agreed that raw agriculture products would have a tariff of 10%, 
regardless of the degree of competitiveness of the sector comparing to other countries.  A tariff of 
10% was thus established both for wheat and rice, traditionally imported products, and for soybeans and coffee, two important exported products.  
The rationale used to define tariffs for raw and processed agriculture products was to add two 
percent points at each step of the production cha in.  Above that, however, considering the existence 
of huge amounts of subsidies in the international market for some agricultural products, and the possibility to take advantage of CET – List of Exceptions, Brazil has raised temporarily the tariffs for some those products, such as powdered milk, processed peach and rice. 
  WT/TPR/M/140/Add.1
 Page 35 
  In our view, the moderate level of tariff escalation verified in the MERCOSUR’s CET is surely lower than those noted in many other WTO members’ tariffs. 
 
Answer:  Changes in the general tariff structure of the CET described above are not envisaged at the 
moment.  Possible modification in that structure may only occur as a result of the negotiation process on WTO.  
 
4. In the horizontal section of its services schedule, Brazil’s mode 4 commitment on “foreign 
specialised technicians and highly qualified professionals” seems to equate to a commitment on 
individual service suppliers providing services on a fee or contractual basis without commercial presence.  Also, Brazil's commitment on “managers and directors appointed to affiliates of foreign companies established in Brazil” seems to equate to the executiv e/senior managers, senior personnel and specialist 
categories of intra-corporate transferees (ICT).  Coul d Brazil please confirm these interpretations, or 
provide clarification? 
 
Answer: 
 
Brazil’s horizontal commitments for the entry and temporary stay of natural persons reflect the 
Brazilian legal framework.  Taking into account that, currently, there is no clear consensus on the 
Mode 4 categories under GATS, it is not possible at this time for Brazil to draw an unambiguous 
parallel between its national provisions and some Mode 4 classifications.  
5. The Secretariat’s report notes that the assistance provided by the government of Brazil to 
agriculture includes credit at preferential conditio ns, price support and stabilisation mechanisms, and 
option contracts (page 116, paragraph 20), but that the overall impact “appears modest” (page 112, 
paragraph 1).  
It would be appreciated if Brazil could outline how it will ensure that support schemes do not increase in 
size and scope over time such that they become trade distorting. 
 
Answer: 
 
The majority of assistance programs provided by government are targeted at resource-poor and 
family farmers, mainly located in frontier regions far from consumption areas or sites with 
precarious infrastructure.  Such programs are based on minimum prices set well below world levels 
(as noted in Paragraph 44 - page 123), making their role mainly as a social safety net.  The amount 
of resources employed for those programs are very modest and rarely surpasses de minimis levels. 
 
Regarding credit at favoured conditions, although their preferential rates are lower than the opportunity cost of the money, still they are usually above the current inflation levels.  
Due to their nature and amounts involved, those programs have limited or no impact on production 
and/or trade. 
 
6. The Secretariat’s report explains that Brazil applies the Mercosur Common External Tariff (CET), with the exclusion of 100 tariff lines constituting its exception list, and 302 tariff lines 
corresponding to information technology and teleco mmunication goods (BIT) (page 28, paragraph 62). 
 WT/TPR/M/140/Add.1 
Page 36   Can Brazil confirm that the convergence of these tariff line exceptions towards the CET will proceed on schedule and will not be rolled  over beyond 31 December 2005?  
 
Answer:  Brazil is committed to the Decision 31/03 of the Council of the Common Market, which establishes the deadline of 31 December 2005 for the 100 items exceptions list and to the Decision 7/94, that establishes the convergence schedule and the deadline of 1
st January 2006 for the BIT exceptions 
list. 
7. The Secretariat report notes that the determining factors in awarding government procurement 
contracts are the lowest price, best technical offer, and the best technical and price offer (page 101, 
paragraph 293), but also that “in order to qualify for government contracts, suppliers must be legally 
established or represented in Brazil” and that “[f]oreign firms without operations in Brazil and involved in 
international tenders need legal representation in the country or to be associated with a Brazilian firm (at 
least 51% Brazilian capital participation and operational control)” (paragraph 294).  
 
Could Brazil provide a rationale for these restrictions and outline its plans for the further liberalisation of 
its government procurement regime? 
 
Answer:  
Brazilian legislation on government procurement estab lishes a strict system of checks and balances, 
involving both the internal control of spendings by the executive, and a system of external control 
by the Federal Court of Accounts.  The rationale behind the requirement for a contractors to be legally established or represented in Brazil stems from the need for Brazilian authorities to control the expenditure before, during and after the services or purchases executed. 
 
8. The Secretariat’s report notes that purchases made through the Internet are subject to 60% import duties (page 45, paragraph 41).  Could Brazil provide a rationale for the imposition of this duty, and outline the steps it is taking to encourage the development of e-commerce?  
Answer: 
 The simplified tariff regime (RTS) is an alternati ve import system, that include a generically 60% 
import duties.  In this case, the importer must not present information about, for example, tariff 
classification.  If the importer decides to present  an import declaration the goods will be subjected 
to the normal applicable duties applied to each import product.  It is necessary highlight that the RTS rate includes the import duty (II), the IPI duty, and PIS/COFINS.  The II may vary from 0 to 55%, the IPI from 0 to 60%, and PIS/COFINS from 0 to 9,25%.  In order to determine if a good has been ordered through the mail, it is observed if the mail company (ECT) fulfills the import 
declaration.  
 
9. The Secretariat’s report notes that Brazil has continued to enhance the transparency and reduce the complexity of its trade regime, including by reducing the requirement for import licensing.  It also 
notes, however, that non-automatic import licensing still affects over a third of all tariff lines, or parts 
thereof (page 37, paragraph 1).  The summary table provided on page 57 of the Secretariat’s report  WT/TPR/M/140/Add.1
 Page 37 
  reveals that among the products that are still subject to non-automatic licensing are: live animals, vegetable products, fats and oils, prepared food, hides and skins, and wood and articles.  Could Brazil explain the rationale for maintaining a non-automatic licensing regime for these products, 
and outline its plan and timeframe for remedying this situation? 
 
Answer: 
 The ‘over a third’ does not reflect exactly the tota l sum of goods subjected to automatic licensing, 
since most of these goods listed in the same ta riff item are not subjected to such a procedure.  They 
are the so-called “destaques”, which means that they  are part of that sub-item of the harmonized 
system of tariffs.  For example: only leather and shoes originating from wild animals are subject to the previous approval of IBAMA, and the trade volume is based on products of bovine origin.  Their inclusion in the licensing regime derives from our firm intention to comply with obligations laid down by an international agreement or by Law, such as the Basel Convention and Montreal Protocol, in accordance with article XX of the GATT.      The goods subjected to non-automatic licensing and listed on the SISCOMEX, which are under 
Agreements ratified by Brazil, will be exempted from the procedure according to period of time 
required by the Agreement, (i.e, quotas allowed by the Agreement on Textiles and Clothing, ending 
on December 31, 2004).  For the rest of goods, there is no prevision of extinguishing the adopted 
measures, since they aim at fulfilling legitimate objectives, in accordance with article XX of the 
GATT.   
With regard, specifically, to non-automatic license for products subject to Brazilian Sanitary 
Surveillance Agency’s licensing regards the sanitary control, in order to protect human safety, 
health and life as granted in WTO agreements. 
 
10. The Secretariat’s report notes (page 34, footnote 73) that none of the free trade agreements and 
framework agreements concluded by Brazil/Mercosur have been notified to the WTO. 
 Can Brazil provide a rationale for not having notified these agreements and/or a timetable by which it will 
do so? 
 
Answer: 
 The agreements signed with Bolivia and Chile, which are those already in force, as well as those 
signed with Peru, Colombia, Ecuador, and Venezuela (Andean Community), presently in the phase 
of finalization of registration procedures in AL ADI, are all Agreements signed under the 
Montevideo Treaty of 1980 (ALADI) and are part of the ALADI integration process. 
 According to the established practice, their notification is included in the reports presented to the WTO by the Secretariat General of ALADI through the delegation of Uruguay. 
 
As far as the framework agreements are concerned, th ey provide for the initiation of negotiations, 
but do not contain trade preferences in themsel ves and are not required to be notified to the WTO, 
either under the enabling clause or any other WTO provision. 
 
11. The Secretariat report notes that the average time for customs clearance is between 30 and 
40 hours (page 39, paragraph 11). WT/TPR/M/140/Add.1 
Page 38   Can Brazil outline the steps it is taking to ensure that this speed of turnaround becomes more widespread, especially for agricultural products, and that further improvements are achieved?  
Answer: 
 The average time for customs clearance is the same for agricultural and non-agricultural products.  Brazil Customs Administration is considering the possibility to further reduce the average time for customs clearance and improve risk assessment procedures.  JAPAN 
 
Report by the Secretariat (WT/TPR/S/140)  
II. TRADE AND INVESTMENT POLICY REGIME;  (1) Overview;  (3) Foreign Investment Regime;   
Investment (p. 17, para. 4, p. 24, para. 41)  
 1. Brazil has signed bilateral investment agreements with several countries.  However, none of these 
agreements has been ratified.  According to the Secretariat Report, this was because some elements of 
their texts were considered by members of Congress to be incompatible with the Brazilian Constitution. 
 
Concerning the bilateral investment agreements which Brazil has signed, please indicate whether they were the agreements which included provisions of investment liberalization such as national treatment for pre-establishment and prohibition of performance requirements, or the traditional agreements which 
mainly targeted protection of investment with the disciplines on expropriation and compensation, etc. 
 
Please indicate specifically which article of the Brazilian Constitution members of Congress judged that the signed bilateral investment agreements were incompatible with.  
Answer:  
The BITs signed by Brazil were of the traditiona l kind, concentrated in investment protection (post-
establishment).  Some disciplines, such as, for instance, conditi ons for payment of compensation in the case of 
expropriation which create a discrimination against national investors, are deemed incompatible with the Brazilian Constitution, as well as dispute settlement provisions that allow foreign investor to refer the matter to international arbitration to solve controversies related to his investments, opposing, this way, the juridical principle of internal resources debility (“esgotamento dos recursos 
internos”) and generating a privilege to the foreign investor, in prejudice of the national investor. 
 
(4) International Relations;  Dispute Settlement (p. 25, para. 46 to p. 26, para. 50)   2. Brazil has made active use of the WTO dispute settlement mechanism, as referred to in the 
Secretariat Report.  Brazil therefore has many experie nces with it.  At present, many developing countries 
have difficulties making active use of it because of the complexity and speciality of the procedures of the 
dispute settlements.  Japan considers that it is useful for Brazil to share its experiences of the dispute 
settlement process with other developing countries in order to enhance the understandings by such 
countries of the dispute settlement system.  Regarding this point, please indicate the specific view of Brazil.  WT/TPR/M/140/Add.1
 Page 39 
  
Answer: 
 Brazil regards the WTO Dispute Settlement Mechanism as a central element in the multilateral system of trade.  However, Brazil's participat ion in the WTO dispute settlement system has not 
come without sacrifice.  From the point of view of a developing country, several difficulties arise from the high costs and complexity of the DSU rules and procedures that demand human and financial resources many Members just cannot afford.  In bringing challenges to the WTO dispute settlement system, Brazil often relies on highly qua lified legal assistance provided -and paid for- by 
producers or exporters associations.  Without th at assistance, the Brazilian Government would 
have no option but to bring its cases to the WTO dispute settlement mechanism relying on its own resources, which are limited.  Regarding the implementation of panel recommendations, Brazil considers that developed countries with big markets and substantial participation in world trade are currently the only ones in a position to assure the implementation of DSB Decisions by the responding party.  Brazil considers that resort to retaliation is difficult, onerous and often leads to doubtful results, if none at 
all.  For smaller economies, retaliation is simply not an option.  With respect to the human resources aspect of the issue, Brazil created a disput e settlement unit at the Ministry of External 
Relations to coordinate our participation in WTO dispute settlement procedures and negotiations.  
The Government is also working with the academic and legal communities to enhance and extend 
concrete knowledge of the operation of the WTO dispute settlement mechanism.  Finally, Brazil 
notes that participating as third party in relevant  disputes provides Members with a valuable (and 
a less burdensome) opportunity to develop and increase familiarity with the system. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE;  (1) Overview;  (2) Measures Directly 
Affecting Imports 
 Japan hopes that Brazil will actively contribute to further tariff reductions on non-agricultural goods in 
the NAMA negotiations of the DDA in order to improve substantially tariff gaps and market access. 
 
Customs procedures (p. 37 para. 1, p. 38, para. 38 to p. 40 para. 19)  
 
3. According to the Secretariat Report, Brazil has continued to enhance the transparency and reduce the complexity of its trade regime, including streamlining its import procedures and consolidating import 
regulations.  However, Japanese enterprises have been requesting further improvement of the customs 
procedures and enhancements of their transparency. 
 
With regard to facilitating the customs procedures and enhancing their transparency, please indicate the specific prospects of Brazil. 
 
Answer:  
Brazil Customs Administration is considering the possibility to further reduce the average time for 
customs clearance and improve risk assessment procedures. 
 
Tariff rate (p. 37 para. 2, p. 43, para. 38 and 39, p. 47 para. 50)   
4. Japan appreciates that Brazil bound its whole tariff and has been decreasing its tariff rate, such as 
shown in the average applied MFN tariff from 13.7% in 2000 to 10.4% in 2004.  However, the average 
bound rate for non-agricultural goods remains high (29.6%), compared to the applied rate (10.5%).  WT/TPR/M/140/Add.1 
Page 40   Regarding the applied rate, the tariff headings concerni ng the automotive sector carry rates of 35% and 
tariff headings labeled informatics and communication goods (such as television sets, computers, and micro radio communications devices) have tariffs higher  than 20%.  Japan hopes that Brazil will reduce 
such high tariff rates both in the bound rate and in the applied rate. 
 
Regarding this point, please indicate the specific prospects of Brazil. 
 
Answer: 
 The tariff headings labelled Informatics and Communication Goods currently carrying rates above 20% follow a schedule for the convergence to the Common External Tariff to 16%, to be accomplished by 31, December 2005.  From then on, tariff headings included in the schedule will carry their regular rates, none of them higher than 20%.  With regard to the automotive sector, the MERCOSUR’s Automotive Policy (Decision CMC 70/00) which allows Argentina and Brazil to apply 35%, does not envisage any tariff reductions in the short term. 
 
Tariff escalation (p. 45, para. 40)   5. Concerning non-agricultural goods, the tariff shows signs of escalation for many goods.  Japan 
hopes that Brazil will solve this tariff escalation. 
 
Regarding this point, please indicate the s pecific standpoint and prospects of Brazil. 
 
Answer: 
 
The structure of the MERCOSUR’s Common External Tariff establishes different tariff levels 
according the grade of added value contained in the good. 
 Therefore, the evaluation of matters regarding tariff escalation within the MERCOSUR’s CET 
should take into consideration the fact that a num ber of tariff headings referred to goods placed at 
the primary stage of certain productive chains are rated 0%, while goods placed in further stages 
have tariff protection, in a level de termined by the structure of the CET. 
 
In our view, the moderate level of tariff escalati on verified in the MERCOSUR’s CET is surely 
lower than those noted in many other WTO members’ tariffs. 
 It could also be mentioned that the MERCOSUR’s Common External Tariff, adopted by all 
MERCOSUR members, takes into account specific sensibilities concerning some sectors, including 
those affected by subsidies and other distortive measures practiced in the country of origin.  In the 
case of agricultural products, particularly, the presence of huge amounts of subsidies in some 
international markets explains the temporary increase in tariff rates for some products, such as powdered milk, processed peach and rice. 
 
Tariff reductions (p. 48, para. 52 to p. 50, para. 62)  
 
6. According to the Secretariat Report, MERCOSUR members, including Brazil, can reduce CET rates temporarily in cases of insufficient supply of goods in the MERCOSUR.  We are very interested in how such a temporary tariff reduction scheme and the policy for free trade zones will be influenced by the 
progress of integration in the MERCOSUR and the FTA to the EU. 
  WT/TPR/M/140/Add.1
 Page 41 
  Regarding this point, please indicate the specific view of Brazil.  
Answer: 
 MERCOSUR countries are allowed to adopt punctual tariff reduction measures to face supply deficiencies, under some exceptional circumstances .  The imports made under the measure are put 
into effect through quotas, and the concession is limited to 20 tariff headings per country, up to 12 months, renewable for one single period.  Alth ough the mechanism allows the members to use 
20 tariff headings simultaneously, concessions never exceeded 5 tariff headings per member at the same time.  In principle, this situation is not going to be affected by the progress of the integration process or the negotiations with the EU.  The policy for free trade zones is under discussion in the context of the negotiations for the perfection of the comm on policy instruments, but is not affected by 
discussions in the context of Mercosur/EU negotiations. 
(4) Measures Affecting Production and Trade;  Intellectual property rights (p. 110, para. 331 to p. 111, 
para. 333)  
 
7. According to the Secretariat Report, between July 2003 and end August 2004, the Brazilian Federal Police initiated 6,910 police investigations.  
Please provide the number per each category of infringement, if possible. 
 
Answer: 
 It is not possible to single out the number of investigations by category of infringement.  Police 
investigations pertaining to piracy are sometimes in extricably associated with contraband and, 
therefore, the number of investigations referred to  in the question posed by Japan were either filed 
under the provisions of Articles 334 (contraband or embezzlement) or under article 184 (violation of copyright and neighbouring rights) of the Brazi lian Criminal Code alone, or under both of them. 
 
8. Please explain specifically, as much as possible, how the relevant organizations in charge of the protection of intellectual property rights, including customs, enforce the prevention of infringement and 
how the legal courts judge these matters.  
Answer: 
 At the federal level, prevention is conducted primarily by:  a) the Brazilian Federal Police;  b) the Brazilian Federal Revenue Secretariat, which has jurisdiction over customs control in the entire national territory;  c) the Brazilian Federal Highway Police;  d) the Federal Public Prosecutors’ Office.  
At the state level, actions to crack down on piracy are conducted primarily by:  a) State Police;  
b) State Public P rosecutors’ Office. 
 Starting in 2003, the Brazilian federal Government, through the National Secretariat for Public Safety (SENASP), under the Ministry of Justice, began implementing the Unified System of Public 
Safety (SUSP), to play the roles of both the in itiator and coordinator of public policies regarding 
this issue.  An integrated and joint action is one of  the main bases of the Unified System of Public WT/TPR/M/140/Add.1 
Page 42   
Safety.  The SUSP is aimed primarily at bri nging all law enforcement agents together to confront 
violence and criminality, by standardizing procedures and equipment nationwide, such as by providing basic professional training, establishing information systems with criminal data that 
enable information sharing among databases, unifying operational techniques and integrating social initiatives focused on areas with high levels of criminality and low levels of human development.  The SUSP serves as a mechanism for the Government to introduce coordinated planning among the federal Government, the states, municipalities and civil society.  The agencies under the Federal and State Pros ecutors’ Offices act in conjunction with law 
enforcement officers in the preparation of legal actions that are forwarded to the court system.  As regards judicial enforcement, IPR-related issues  are subject to both State and Federal-level 
courts, according to the legal provisions at issue. 
 
9. Does Brazil have any plans to amend its IPR legislation?  If so, please indicate specific time 
schedules for it.  
Answer: 
 
Improvements of laws depend on the National Congress.  It is to be noted that there are always bills 
being proposed and examined by the Brazilian Congress.  Hence, it is not possible to set schedules for the approval (or non-approval) of such bills.  
 
IV. TRADE POLICIES BY SECTOR;  (7) Services 
 10. Japan appreciates that Brazil has been liberalizin g financial services, telecommunications services 
and transport services.  With regard to the remaining trade restrictive measures, Japan hopes that further 
liberalization will be promoted.  From the standpoint of ensuring legal stability and transparency, Japan 
hopes that such liberalization will be committed to in the DDA negotiations.  In particular, Japan hopes that Brazil will undertake more commitments on the cross border supply of services (Modes 1 and 2), which remain unbound in most sectors.  Japan also hopes that Brazil will adopt the Fourth Protocol concerning telecommunications and the Fifth Protocol concerning financial services to the General Agreement on Trade in Services as soon as possible. 
 
Answer:  Brazil is preparing its revised services offer.  Requests by Japan will be taken into account along 
the negotiating process.  The offers made during the negotiation of the IV Protocol were valid 
exclusively in that context.  The situation is described in paragraph 161, page 146 of the Secretariat 
Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its impossibility to ratify the IV Protocol in the 19 97 form, but such offer was rejected by some 
Members (United States, Hong Kong/China, Europea n Communities, Japan).  Adoption of the IV 
Protocol as such is thus not under consideratio n.  However, Brazil does not exclude a priori the 
possibility of including any sector in its revised services offer. 
 
Financial services (p. 147, para. 166 to p. 158, para. 224)   
11. Regarding the ratification of the Fifth Protocol to the General Agreement on Trade in Services, 
please indicate the specific prospects of Brazil, including time schedules. 
  WT/TPR/M/140/Add.1
 Page 43 
  
Answer: 
 The executive branch has taken all the steps necessary for the approval of the V Protocol by Parliament, a pre-condition to its ratification by  Brazil.  A time-frame for such approval cannot be 
determined, since there is no time-limit for the examination of legal instruments by Congress, and also in view of the independence among branches of Government. 
 
12. Regarding the limitations of foreign pa rticipation such as the number of branches and 
specifications concerning the qualifications of the administrators of the institutions in the banking sector, referred to in para. 193 to para. 197, does Brazil consi der relaxing such limitations?  If so, please indicate 
specific time schedules for it.  
Answer: 
 The number of branches is limited by capital requirements. Resolution CMN 2.099 (August 17, 1994), updated by Resolution CMN 2.815 (January, 24, 2001), established levels of capital requirements to be maintained by financial institutions in order to operate in the domestic financial market.  Institutions are allowed to have up to 10 branches if minimum capital requirements are 
met.  Additional capital is required to allow an institution to operate more than 10 branches.  
Modifications of the actual framework is not under consideration. 
 
13. Regarding the exchange contract market, please  indicate the current status and the specific 
prospects of Brazil, including time schedules for implementation.  
Answer: 
 Brazil already possesses a dynamic market in the area of foreign exchange contracts.  These contracts are regulated by the Central Bank.  All details concerning such regulation can be found in the site www.bcb.gov.br. 
 
14. Regarding the foreign commercial presence in insurance services referred to in para. 208, please 
indicate the limitations for the types of commercial presence and foreign ownership, if any. 
 
Answer: 
 
There are no limitations to foreign ownership of insurance companies once allowed to established in 
Brazil.  
 
15. Regarding the prohibition of cross-border supply of insurance services referred to in para. 211, 
does Brazil consider relaxing this prohibition?  If so, please indicate specific time schedules for it. 
 
Answer: 
 Modifications of the insurance regulation are not under consideration at this moment.  
 
16. According to para. 212 of the Secretariat Report, the reinsurance market in Brazil continues to be 
a monopoly. 
 Regarding this point, please indicate how Brazil will improve the current monopolistic situation. 
 WT/TPR/M/140/Add.1 
Page 44   
Answer: 
 There is still no sufficient legal framework to allow foreign access to the reinsurance sector or the end of the current monopolistic situation.  A time-frame for that legal framework to be completed cannot be given since it involves legislative process. 
 
Telecommunications (p. 162, para. 245)   17. Regarding the adoption of the Fourth Protocol to the General Agreement on Trade in Services, 
please indicate the specific prospects of Brazil, including time schedules.  
Answer:  Regarding the IV Protocol, the situation is described in paragraph 161, page 146 of the Secretariat Report.  The offers made during the negotiation of the IV Protocol were valid exclusively in that context.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its impossibility to ratify the IV Protocol in the 19 97 form, but such offer was rejected by some 
Members (United States, Hong Kong/China, European Communities, Japan).  Adoption of the IV Protocol as such is thus not under consideration.  However, Br azil does not exclude a priori the 
possibility of including any sector in its revised services offer.  
 
Maritime transport and ports (p. 170, para. 294)  
 18. The Secretariat Report states in para. 294, that a lighthouse fee (TUF) is applied only to foreign 
flag vessels. 
 
Regarding this regulation, does Brazil consider relaxing it?  If so, please indicate specific time schedules. 
 
Answer: 
 
Modification of the regulation regarding TUF is not foreseen. 
 
Professional and business services (p. 172, para. 304 and 305)  
 
19. Please provide the number of applications from foreign lawyers to practice in Brazil in recent 
years. 
 
Answer:  
Provision 91 resulted in effective increase in the presence of foreign-trained lawyers in Brazil, in a 
very significant degree, thus adding to the quality of the law services, in a context of growing international interdependence in the law profession, which is due mainly to increasing participation 
of Brazil in international trade and investment flows. 
 
20. Please also provide the number of BBA authorizations for foreign lawyers to practice in recent 
years. 
 
Answer: 
 
Please see previous answer.   WT/TPR/M/140/Add.1
 Page 45 
  21. Regarding the FLC (Foreign Legal Consultant ), please answer the following three questions: 
 (a) Concerning a registry for an FLC, is there a requirement for job experience as lawyers?  
(b) Is an FLC allowed to provide services on a third-country law in which he is qualified? 
 
(c) Is it permitted for an FLC to employ local lawyers and to associate with local lawyers?  
Answer: 
 As per Provision 91 of the Brazilian bar association (OAB), requirement for job experience is in principle not required for a Consultant in Foreign Law to be authorized to work in Brazil.  An FLC can be authorized as consultant in the law of a country where he is qualified.  FLCs cannot 
associate with local lawyers. 
 Report by the Government (WT/TPR/G/140);  Copyrights (p. 20, para. 78 and 80) 
 22. According to para. 78 of the Government Report, provisions to facilitate a collective management of rights related to phonograms, to improve the enforcement of copyrights and neighbouring rights, and to 
prevent piracy have been established. 
 
Please indicate the administrative procedures, such as registration procedures, for the organization of a 
collective management of rights and also indicate the specific content of the rights for the organization.  
Answer: 
 
The establishment of any intellectual property ass ociation follows the same legal requirements for 
the establishment of any other civil association.  According to the Brazilian Civil Code, an association consists of a group of people who join together for the pursuit of non-profit objectives, 
being considered a private law institution.  Rights and obligations are reciprocal among its 
associates.  
It should be noted, furthermore, that the Law no. 9.610, of 1998, establishes that the associations 
shall jointly maintain a single central office for the collection and distribution of the public 
presentation to the public concerning musical works and phonograms. 
  
Please see articles 97, 98, 99, 100, 109, and 110 of the Law no. 9.610, of 1998. 
 
23. Are there any provisions on the collective management of rights for anything other than 
phonograms? 
 
Answer: 
 
Please see articles 97, 98, 99, 100, 109, and 110 of the Law no. 9.610, of 1998.  
24. Please indicate the specific measures to promote the implementation of copyrights and neighbouring rights.  WT/TPR/M/140/Add.1 
Page 46   
Answer: 
 Brazil has always protected the rights of authors and neighbouring rights, being one of the first 
parties to the Berne Convention for the Protection of Literary and Artistic Works.  The laws 
related to the protection of copyright and neighbouring rights in Brazil are Law 9.610, of 1998, Law 
9.609, of 1998, and Law 10.695, of 2003. 
 
25. According to para. 80 of the Government Report, the Parliamentary Inquiry Commission, 
established in Congress to investigate actions of pi racy and tax evasions, accomplished its work in June 
2004 and submitted its conclusions. 
 
Please indicate the specific content of the conclusions by this commission. 
 
Answer: 
 
In its final report, the Parliamentary Inquiry Commission (CPI) has made many recommendations, 
some of which relate to combating piracy.  In many instances, these reco mmendations referred to 
actions already being undertaken by the Government: 
(a) Prosecution of individuals identified by the CPI Report as criminals:  Individuals identified 
 in the CPI's report as possible indictees for committing crimes and illegal actions against  copyrights laws are already being investigated by the Brazilian Federal Police and the 
 Federal Revenue Secretariat, within the established legal deadlines and in compliance with 
 the rules regarding the confidentiality of investigations; 
 (b) Establishment of a national plan to comba t piracy:  The recommendation to establish a 
 National Plan to Combat Piracy will be followed up with the recent creation of the National 
 Council to Combat Piracy and other Intellectual Property Violations, whose tasks include 
 the preparation of such a National Plan, in accordance with the Decree number 5.244 
 (October 15th 2004).  It is important to note, in this regard, that the Inter-Ministerial  Committee to Combat Piracy, created in 2001 and recently replaced by the National  Council, was already considering the adoption of an Action Plan;  (c) Creation of a database on combating piracy:  The suggestion to create a database on  combating piracy coincides with a similar initiative by the Inter-Ministerial Committee to  Combat Piracy, which completed the first phase of the establishment of the National System  of Statistical Data and Cracking Down on Piracy (SENARP).  The abovementioned Decree  number 5,244 establishes that the new Na tional Council will develop such a database; 
 (d) Bills aimed at improving measures to combat piracy:  The CPI bills are already under  consideration in the Constitution and Justice Committee of the Brazilian Chamber of  Deputies and efforts will be undertaken to reconcile, improve and expedite the proposed  legislative texts, bearing in mind the s pecial attention given by both the Government and 
 the Legislative Branch to the issue of combating piracy and counterfeiting. 
  WT/TPR/M/140/Add.1
 Page 47 
  
CHINESE TAIPEI 
 
II. TRADE AND INVESTMENT POLICY REGIME;  (1) OVERVIEW;  (Page 17, paragraph 2)  
1. As indicated, Brazil has not ratified the Fourth Protocol on Basic Telecommunications Services 
and the Fifth Protocol on Financial Services.  We would be interested in knowing Brazil’s reasons for not 
having ratified the Fourth Protocol on Basic Telecommunications Services.  In terms of the Fifth Protocol on Financial services, we realize that two other countries, Jamaica and the Philippines, have also yet to complete ratification.  However, may we encourage Brazil to complete the relevant domestic procedures 
as soon as possible and to please indicate when her ratification of both the above Protocols is likely to be 
completed. 
 
Answer:  Regarding the IV Protocol, the situation is described in paragraph 161, page 146 of the Secretariat Report.  The offers made during the negotiation of the IV Protocol were valid exclusively in that context.  The situation is described in paragraph 161, page 146 of the Secretariat Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its impossibility to ratify the IV Protocol in the 1997 form, but such offer was rejected by some Members (United States, 
Hong Kong/China, European Communities, Japan).  Ad option of the IV Protocol as such is thus 
not under consideration.  However, Brazil does not exclude a priori the possibility of including any 
sector in its revised services offer. 
 The executive branch has taken all the steps necessary for the approval of the V Protocol by 
Parliament, a pre-condition to its ratification by  Brazil.  A time-frame for such approval cannot be 
determined, since there is no time-limit for the examination of legal instruments by Congress, and 
also in view of the independence among branches of Government. 
 
II. TRADE AND INVESTMENT POLICY REGIME;  (4) INTERNATIONAL RELATIONS;  (ii) 
Preferential agreements;  (a) MERCOSUR;  (Page 28, paragraph 61) 
 2. MERCOSUR’s Common External Tariff (CET) has been in effect since 1 January, 1995, 
although a number of sector-specific exceptions, (for capital, informatics and telecommunication goods as 
well as for the automotive and sugar sectors) and country-specific exceptions, are still in effect.  As a 
major party to MERCOSUR, could Brazil please advise us of the expected future schedule of 
convergence to the CET?  
Answer: 
 
The current Brazilian exceptions to the Common Exte rnal Tariff, with the respective terms, are: 
 
− 100 tariff headings national exception list; term: 31 December 2005 (according Decision CMC 
31/03); 
− 302 tariff headings list of informatics (infor mation technology) and  Telecommunications  
Goods (schedule for convergence to the Common External Tariff); term: 31 December 2005 (according Decision CMC 07/94); 
− 348 tariff headings (“Ex tarifarios”) labeled capital or informatics and telecommunications 
goods, containing 1,488 items not produced within MERCOSUR countries; term:  31 December 2005; WT/TPR/M/140/Add.1 
Page 48   
− 80 tariff headings containing 246 pharmaceutical substances; term: 31 December 2004; 
 
It should be noted that Brazil does not apply excepti ons to the CET or any restrictions to the trade 
of products pertaining the sugar sector.  In which concerns the rules regarding the automotive sector, MERCOSUR established a common trade policy for Argentina and Brazil through the 
Decision CMC 70/00.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) MEASURES DIRECTLY 
AFFECTING IMPORTS;  (vii) Conti ngency measures;  (a) Anti-dumping and countervailing measures;  
(Page 62, Paragraph 117) 
 
3. Paragraph 117 of page 62 states that the De partment of Commercial Defence (DECOM) provides 
exporters that are subject to AD, CVD or safeguard investigations abroad with information and advice on how to prepare their defence in these investigations and that the DECOM also helps such exporters prepare answers to questionnaires, accompanies them during verification visits and provides them with 
any other technical assistance required. 
 
It would be appreciated if Brazil could clarify whether this assistance is offered free of charge, and also describe the conditions of eligibility for such assistance.  
Answer: 
 
The aid that might be provided to Brazilian exporters is free from any charge and depends on a formal request by interested exporters, according to Article 18, X of Decree 4.632/2003.  It consists of helping them to understand the legislation, concepts and procedures related to trade defence 
investigations;  help in analysing questionnaires  received by Brazilian exporters;  attendance in on-
the-spot verifications;  and the submission of arguments and reasoning to foreign investigating 
authorities, whenever the Brazilian Go vernment is also an interested parties to these investigations. 
 
IV. TRADE POLICIES BY SECTOR;  (7) SERVICES;  (ii) Financial services;  (a) Main features;  
(P. 147, paragraph 167) 
 4. As indicated in the report, Brazil also made commitments regarding provision of services by non-financial institutions.  Please could we be provided with more details about this commitment. 
 Answer: 
 Such commitments are part of the V Protocol as presented by Brazil in documents GATS/SC/13, 15 
April 1994, and GATS/SC/13/Suppl.3, 26 February 1998. 
 
(P. 147, paragraph 169) 
 
5. As indicated in the report, the banking system of Brazil comprises multiple, commercial, development, investment, and saving banks.  Could Brazil please explain the qualifications needed for the 
various licenses to be granted and describe the criteria that commercial banks must meet in order to 
upgrade to multiple banks? 
  WT/TPR/M/140/Add.1
 Page 49 
  
Answer: 
 Commercial banks are those who take demand deposits.  Development banks are state-controlled banks which supply medium and long term finance for programs and projects to both private and public sectors in order to promote economic and social development.  Investment banks, which take only time deposits, supply finance for productive activities and operate with asset management and temporary equity participations.  Multiple banks are those which operate in at least two of the 
following banking segments:  commercial; investment;  mortgage credit;  leasing;  and, credit, financing and investment.  It is mandatory for the multiple bank to operate in one of the two first segments (commercial or investment).   Different levels of capital requirements are defined for each of the different banking segments.  
Granting of banking licenses is dependent on t he provision of information regarding, among others 
(for complete details, see guide of proceedings – available in Portuguese – on Central Bank of Brazil website,  http://www.bcb.gov.br /?SFNACESSO):  
− the kind of institution to be established; 
− the objectives to be pursued; 
− the administrative structure, including, if pos sible, the names of the persons involved; 
− the relevance of the operation for the Brazilian economy, including the expected contribution 
for the development of the domestic financial market with regards to products and services to be provided; 
− the identification of the ownership composition,  including the identification of the holding 
group and its cross-participations; 
− the level of capitalization to be maintained; 
− operations carried out in Brazil or with Brazilian companies; 
− the rating of the holding group, as provided by rating agency from the country of origin; 
− the economic viability of the enterprise, based in fundamented study; 
− the last financial demonstrative, approved by an independent auditing company; 
− the organizational framework of the holding group, including the capital composition of the 
financial institution to be established; 
− the last annual report of the holding group; 
− the identification of the supervision authorities to which the group is subordinated in its 
country of origin. 
 In the case of a company affiliated to a financial conglomerate, based on information provided, Bacen will ask the supervision authorities of t he country of origin about the soundness of the 
institution, as well as about the intended participation.  
 
(P. 149, paragraph 177)  6. Article 52 of the Temporary Constitutional Provisions Act states that, until conditions are 
established, the establishment in Brazil of new branch es of financial institutions domiciled abroad, as well 
as an increase in the participation of foreign entities in the capital of financial institutions with 
headquarters in Brazil, is prohibited.  In practice, the installation of new financial institutions is subject to 
case-by-case approval; authorizations are granted by me ans of a presidential decree, which gives way to 
Central Bank authorizations. 
 WT/TPR/M/140/Add.1 
Page 50   Could Brazil please explain the criteria for authorizations used by the Central Bank?  In addition, does the Central Bank also have the right to grant the establishment in Brazil of new branches of existing financial institutions under the authorization of a presidential decree?  
Answer: 
 Comunicado 10.844 Bacen (March, 19, 2003) establishes that companies or persons interested seeking participation in the capital of financial institutions with headquarters in Brazil must provide information about: 
 
− the kind of institution to be established; 
− the objectives to be pursued; 
− the administrative structure, including, if pos sible, the names of the persons involved; 
− the relevance of the operation for the Brazilian economy, including the expected contribution 
for the development of the domestic financial market with regards to products and services to be provided; 
− the identification of the ownership composition,  including the identification of the holding 
group and its cross-participations; 
− the level of capitalization to be maintained; 
− operations carried out in Brazil or with Brazilian companies; 
− the rating of the holding group, as provided by rating agency from the country of origin; 
− the economic viability of the enterprise, based in fundamented study; 
− the last financial demonstrative, approved by an independent auditing company; 
− the organizational framework of the holding group, including the capital composition of the 
financial institution to be established; 
− the last annual report of the holding group; 
− the identification of the supervi sion authorities to which the group is subordinated in its 
country of origin. 
 
In the case of a company affiliated to a financial conglomerate, based on information provided, Bacen will ask the supervision authorities of t he country of origin about the soundness of the 
institution, as well as about the intended participation. 
 
The number of branches is limited by capital requirements.  Resolution CMN 2.099 (August, 17, 
1994), updated by Resolution CMN 2.815 (January, 24, 2001), established levels of capital requirements to be maintained by financial institutions in order to operate in the domestic financial market.  Institutions are allowed to have up to 10 branches if minimum capital requirements are 
met.  Additional capital is required to allow an institution to operate more than 10 branches.  
 
IV. TRADE POLICIES BY SECTOR;  (7) SERVICES;  (ii) Financial services;  (b) Banking (P. 152 paragraph 194)  7. As indicated, (foreign) banks established in Brazil before 5 October, 1988 may not open new branches; for banks authorized after that date, the number of branches is subject to the conditions set out at the time of authorization.  Please could Brazil ex plain its rationale for restricting the establishment of 
new branches by foreign banks and indicate when this restriction is likely to be lifted.   WT/TPR/M/140/Add.1
 Page 51 
  
Answer: 
 Banks established before 1988 and those established after that date are essentially receiving the same treatment.  October 5, 1988 is the date of  the promulgation of the Brazilian Constitution, 
which conditioned the authorization of new banks and the number of branches to the approval of a complementary law to regulate the financial system.  
 UNITED STATES OF AMERICA 
 
SUMMARY OBSERVATIONS;  Other Measures Affecting Trade 
 
1. According to paragraphs 27-29, page xvi of the Secretariat’s report, “export promotion” is considered an important element of Brazil’s trade policy.  These sections further noted that Brazil considers it “vital to improve its external balance, through competitive (market-based) import substitution 
and export growth.”  Among the programs in effect to achieve these goals, the Automatic BNDES and 
FINAME, are noted in paragraph 29 as being contingent upon domestic-content and/or local-ownership 
requirements. 
 
A) Please explain how these programs are consistent with its obligations under Article 3 of the SCM 
Agreement?   
 
Answer: 
 FINAME’s program purpose is to provide asset-based financing for the acquisition of new 
machinery and equipment manufactured in Mercosur countries.  Automatic BNDES program aims 
to finance companies with up to R$10 million on projects related to implementation, expansion, 
modernization or relocation.  Neither of these programs provide export credits.  Both are available 
to exporting and non-exporting companies of any economic sector, and are offered to the market through accredited financial institutions, most of them private.  FINAME and Automatic BNDES 
do not provide any kind of subsidy, as their fi nancial costs are fully covered, at interest rates 
compatible with those of the international market.  Both programs are, therefore, fully compliant with the provisions set forth in the WTO Agreement on Subsidies and Countervailing Measures.  
 
B) In addition, for each of the programs could you please provide information regarding the terms of 
the financing?   
 
Answer: 
 
The interest rate related to both programs  covers the remuneration of both BNDES and the 
accredited financial institution, as well as  the financial cost of the transaction. 
 BNDES remuneration is 1% per year for small and medium enterprises and private individuals and between 2.5% and 4% per year for large enterprises.  The remuneration of the accredited 
financial institution is negotiated direct ly between the latter and the customer.  
 
The financial cost of the loan corresponds for the most part to the Long Term Interest Rate – TJLP, which is regulated by Law 9365 (Dec. 16, 1996), as modified by Law 10183 (Feb. 12, 2001).  TJLP includes a risk premium, which is determined based on interest rates in force in the 
international market and on Brazil’s sovereign risk.  The TJLP rate is set every quarter by the 
Brazilian Central Bank in accordance with the norms established by the National Monetary WT/TPR/M/140/Add.1 
Page 52   
Council and can be found in any of the main Brazi lian newspapers.  The remaining portion of the 
loan is updated by the variation of the US dollar and by the weighted average cost of all taxes and 
expenses which BNDES incurs when funding in foreign currency (“currency basket”). 
 
Sectoral Policies 
 
2. On page xvii, paragraph 36 of the Secretariat’s Report comments that Brazil’s industrial policy 
“now emphasizes expanding the volume of exports, particularly by small and medium-size enterprises.”   
Please provide information on any policies that have been instituted in order to achieve this objective.  
Specifically, please provide information on any support measures that have been instituted in order to 
reach this goal.  
Answer: 
 Large companies make most part of Brazil’s exports.  However, many countries around the world, such as from Italy or Taiwan, have a considerable percentage of exports made by small and medium enterprises.  In order to increase exports by small and medium enterprises held in Brazil, the government set up a program called “Redeagentes”, that offer regular short courses with a view 
to disseminating technical aspects of internationa l trade.  This includes general information on 
international trade and on documents necessary to export a good or service.  
TRADE AND INVESTMENT REGIME;  Overview 
 
3. Insurance: We do not understand the assertion in paragraph 2, page 17 of the Secretariat’s report that Brazil is unable to ratify its 1997 commitments until it passes a complementary law on reinsurance.  There is nothing in Brazil’s additional commitment on reinsurance that should hold up ratification of its financial services commitments.    Could Brazil please clarify why such a linkage is made?  Where do legislative efforts stand with respect to the complementary law?  
Answer: 
 The adoption of a complementary law regarding reinsurance may be necessary for Brazil to fullfil its additional commitment on reinsurance, according to which a future opening of that sector to competition shall be consolidated in the schedule.  There is no direct link between that fact and the legislative process necessary for the ratification of the V Protocol on Financial Services.  In that respect, the executive branch has performed its role in bringing that instrument to the examination of Parliament, without interfering with the legislative process. 
 
TRADE POLICIES and PRACTICES BY MEASURE;  Me asures Directly Affecting Imports – Customs 
Procedures and Documentation 
 
4. Paragraph 13, page 39 of the Secretariat’s Re port describes Brazil’s customs clearance process. 
 A) Please describe in detail the “four channel” mechanism. 
 
B) Specifically, are there certain products for which the red or gray channel review is mandatory? 
  WT/TPR/M/140/Add.1
 Page 53 
  
Answer: 
 As was described in the Secretariat report, the channels are selected through the SISCOMEX based on risk assessment, taking into account: the importer’s fiscal compliance record, the frequency of 
use of the system, the nature, volume and value of  imported goods, their taxation value, the country 
of origin, the import regime, the good’s characteristics, the operational and financial capacity of the importer, the importer’s customs history, and also may use a random selection.  The criteria used to select any import operation to customs control are not public for security reasons.  The red or gray channels are not mandatory for any product.  Clearance through the green channel is automatic.  For goods going through the yellow channel, the documentation is checked and, if no irregulari ties are found, clearance and delivery are authorized, 
without a physical examination of the goods.  Goods that go to the red channel are cleared and delivered to the importer following examination of the documents and physical verification.  Gray channel goods are subject to an examination of the import declaration, physical analysis and special 
provision against fraud as established by Normative Instruction SRF Nº 206, of 25 September 2003, available on www.receita.fazenda.gov.br. 
 
Measures Directly Affecting Imports;  Tariffs;  Structure   
 
5. The Secretariat’s Report in paragraph 39, page 43, states that 53 tariff headings labeled 
informatics and communications goods have tariffs temporarily higher than 20%.    
A) Please clarify the meaning of “temporarily”.  How long have these tariffs been in effect?  When 
will they be reduced? 
 
Answer: 
 
The mentioned tariff headings carry rates higher than 20% accordingly to the convergence 
schedule to the Common External Tariff (CET) authorized by the MERCOSUR since the entry in force of the CET in 1995. 
 
Brazil was allowed to accomplish the convergence by 31 December, 2005.  When the convergence is 
completed, the tariff headings currently subject  to the schedule will be carrying their respective 
CET rates (14% or 16% ad valorem ). 
 
B) Does this mean that these tariffs will eventually be lowered under the MERCOSUR CET for 
these products? 
 
Answer:  The regular CET to be carried by the mentioned tariff headings from 2006 on is 14% or 16% 
ad valorem . 
 
Eventually, they may be modified under the regular process established to all CET modification requests. 
 
6. Paragraph 41 on page 45 of the Secretariat’s indi cates there is a special tariff regime for goods 
imported through the mail. WT/TPR/M/140/Add.1 
Page 54   A) Please explain why goods imported through the mail or via the Internet, of a value up to US$3,000, are subject to 60% import duties.  B) Why are they not subject to the normal applicable duties applied to each imported product? 
 
C) How do you determine that a good has been ordered through the mail or purchased through the 
Internet?  
Answer: 
 The simplified tariff regime (RTS) is an alternative  import system.  The tariff applied is 60%.  In 
this case, the importer is not supposed to present  information, such as tariff classification.  
 If the importer decides to present an import declarat ion, the goods will be subjected to the normal 
applicable duties to each import product.   It is necessary to highlight that the RTS rate includes the import duty (II), the IPI duty, and 
PIS/COFINS.  The II may vary from 0 to 55%, the IPI from 0 to 60%, and PIS/COFINS from 0 to 9,25%. 
 
In order to determine if a good has been ordered through the mail, the customs authority checks if 
the mail company (ECT) fulfills the import declaration. 
 
Measures Directly Affecting Imports;  Other Charges Affecting Imports 
 
7. The following questions refer to Paragraphs 74-83 on pages 53-54 of the Secretariat’s Report.  
A) We understand that on 4/30/2004, the Brazilian Government enacted Law number 10,865, which 
imposed PIS/COFINS taxes on imports of goods and services into Brazil, at a combined rate of 9.25%.  Would the representative of Brazil please identify clarify how this tax is assessed on imports as compared to domestic sales of products?   B) We understand that for imports, the tax basis is the import value plus duties paid plus the ICMS tax.  Is the tax liability for domestic sales also assessed taking into account a sales value that includes the ICMS tax?  C) It is our general understanding from this text  that taxpayers can util ize a credit mechanism to 
offset the tax liability.  What activities generate these credits, and is their any difference between the 
credit allowed on imports and those allowed in a domestic transaction?   
 D) There are evidently sector exceptions to the PIS/COFIN taxes.  Do these exceptions apply equally to imports and domestic sales? 
 
Answer: 
 
Law Nº 10.865, of 30 April 2004, imposed a new methodology on payment of PIS/COFINS taxes on imports of goods.  In the past, these taxes were paid only when the import companies sold the goods, and now the payment occurs in two moments:  the first one, when the goods are introduced 
in the accountably systems;  and the second one, when the goods are sold.  
  WT/TPR/M/140/Add.1
 Page 55 
  
PIS/COFINS is assessed on domestic sales of pro ducts based on the group of invoices registered 
during one month.  In the same sense, PIS/CONFINS is assessed on imports based on the invoice value.  The rates for any product are the same in both cases, and the value paid at the first moment is considered when the company realizes the monthly payment related with the second moment. 
 It is necessary to highlight that for domestic goods, these taxes are included in the price paid by the buyer company.  The situation for domestic sales is the same of that of imports, and in both cases include the ICMS tax.   The credit mechanism to offset the tax liabil ity consists on a compensation system, where the 
payment realized monthly is reduced in exactly value paid at the first moment.  The exceptional cases are applied equally to imports and domestics sales. 
 
8. With respect to paragraph 75, page 53 and paragraph 202, page 81 of the Secretariat Report, can 
domestic ICMS tax credits be applied to offset PIS/PA SEP and/or COFINS social contributions - incurred 
by enterprises in purchasing production inputs and packing materials - if the goods produced are 
exported? 
 
Answer: 
 
The domestic ICMS tax credits cannot be applied to offset PIS/PASEP and/or COFINS. 
 
9. Paragraph 75, page 53, of the Secretariat’s Report describes major domestic taxes [industrial Products tax (IPI) and Merchandise Circulatio n Tax (ICMS)] that apply to imports. 
 
A) Do exporters receive credit for the value of the industrial product taxes (IPI) paid on domestic products? 
 
B) Can the value of or credit amount of ICMS and IPI taxes paid be traded or used as currency to 
purchase goods, machinery, or equipment from other companies in Brazil? 
 
Answer: 
 
The exporters receive credit for the value of the industrial products taxes (IPI) paid independently 
if the goods are national or imported. 
 The value or credit amount of IPI taxes paid cannot be traded or used directly as a currency to 
purchase goods, machinery, or equipment from other companies in Brazil.  However, it is possible 
that an export company requests a restitution of the IPI paid.  
Measures Directly Affecting Imports;  Import Pr ohibitions, Restrictions, and Licensing;  Import 
Licensing and Other Authorizations  
10. With reference to paragraph 92, page 58 of the Secretariat’s Report, the United States understands 
that, under Decreto 2413/97, Brazil established that th e importation of lithium or its minerals or products WT/TPR/M/140/Add.1 
Page 56   containing lithium, of nuclear use, shall get previous authorization from CNEN.  However, this legislation 
is not included in the list of legislation notifi ed in documents G/LIC/N/1/BRA/1, G/LIC/N/2/BRA/1, 
G/LIC/N/3/BRA/2, and G/LIC/N/3/BRA/3, and appears not to have been subsequently notified to the Committee on Import Licensing.   
 
Please state when Brazil intends to notify this legislation and regulations, and provide the information on 
these requirements to the Committee?   
 
Answer:  We would like to inform that Brazil will in due time notify the Committee on Import Licesing, as 
requested by Articles 1.4(a), 5, 7.3 and 8.2 of the Agreement on Import Licensing Procedures.  The 
product under discussion is subject to non-automatic licensing and is listed on the Administrative Treatment of SISCOMEX and also on the webpage of the Ministry of Development, Industry and 
Foreign Trade.  Since there is a large amount of legal documents to be notified, we have chosen to notify, at a first stage, rulings which have a compr ehensive nature.  We intend to notify, as soon as 
possible, complementary legal documents on importation procedures, without detriment to consultations of the concerned legislation by means of the Internet.   
11. The United States posed several questions concer ning import licensing requirements for certain 
lithium compounds, i.e., lithium carbonate and lith ium hydroxide at the meeting of the Committee on 
Import Licensing held on September 30, 2004.  The United States also requested that these questions be 
circulated in document G/LIC/Q/BRA/3, dated November 11, 2004.  The United States eagerly awaits responses from Brazil to these questions.   
 
Please advise when Brazil intends to provide a response to G/LIC/Q/BRA/3? 
 
Answer:  
We would like to mention that the issue has been under discussion in the Committee on Import 
Licensing Procedures and that a response to document G/LIC/Q/BRA/3, of 03 November 2004 will 
be sent in due time . 
 
12. Paragraph 96, page 58 of the Secretariat’s Report states that non-automatic licenses are granted 
with 60 days.  The United States notes that Article 3 (5)(f) of the Agreement on Import Licensing 
Procedures provides that the period for processing an application shall not be longer than 30 days.  
Please explain whether the non-automatic licenses granted within 60 days are considered as and when 
received, i.e. on a first-come first-served basis , or whether they are considered simultaneously.  
 
Answer:  The maximum period allowed for the approval of non-automatic licenses is 60 days, consistent with 
article 17 of the Ministerial Act Secex no. 14, 17 November 2004, which has revoked Ministerial Act 
Secex no. 17/2003.  We would like to stress that 10 days is the average period for approving 
the above-mentioned licenses.  However, in order to fulfill some legal requirements, such as transparency by publishing legal documents in the Official Gazette, in some cases, such as the case of importation of used material as well as import s by governmental agencies subject to the test of 
national similarity, the average period  is approximately 60 days, when requests are simultaneously 
considered.   WT/TPR/M/140/Add.1
 Page 57 
  Measures Directly Affecting Imports;  Import Prohib itions, Restrictions, and Licensing;  Quantitative and 
Other Restrictions  13. The Secretariat Report (WT/TPR/S/140) in paragraph 99, page 59, states that as of December 
2003, no imports were subject to import quotas, except for products under the Agreement on Textiles and 
Clothing (ATC), and to coconut as a result of a safeguard measure.  However, we note that CNEN 
Portaria 279/97 establishes annual quotas for the import of lithium products, and that we have been unable to find information with regard to the pr ocedures for requesting approval to import lithium 
products under quota. 
 
A) Does Brazil publish or maintain a list of products that can only be imported under quota?   
 B) Is this information publicly available and if so where is it published? 
 
C) Are there other products subject to non-automatic import licensing procedures whose approvals 
are contingent on the granting of approval to import under quota? 
 
D) When does Brazil intend to notify CNEN Portaria 279/97 to the WTO?  
Answer: 
 
The issue is currently being discussed in the Committee on Import Licesing Procedures.  We can 
provide, however, the following answers:    
(a) A list of the products subject to quotas under Uruguay Round Agreements is available at 
 the Annex B of Ministerial Act Secex no. 14, 17 November 2004, which will be notified in 
 due time.    
 (b) The aforementioned Ministerial Act was published in the Official Gazette and is available at 
 the webpage of the Ministry of Development, Industry and Foreign Trade 
 (www.desenvolvimento.gov.br).    
(c) Criteria and requirements are published in the cited Ministerial Act.   
 
(d) See answer to question no. 10.   
 
Measures Directly Affecting Imports;  Contingency Measures;  Safeguards 
 
14. According to the Secretariat Report, Brazil's safeguard measure on toys has been in effect since 
1996.  We recall that Uruguay (on behalf of MERCOSUR) notified the Safeguards Committee in 
December 2003 that Brazil was proposing to extend the measure through June 2006.  Brazil subsequently told the Safeguards Committee that it had decided to extend the measure only through December 2004, but we have not yet seen any formal Article 12.1(c) notification of a decision to extend the measure.  
 
A) Will the toy safeguard measure lapse in December 2004?  
 B) Does Brazil intend to conduct an investigation, pursuant to the requirements of Article 7.2 of the Agreement on Safeguards, to determine whether the safeguard measure continues to be necessary 
to prevent or remedy serious injury and that there is evidence that the industry is adjusting?  If yes, will WT/TPR/M/140/Add.1 
Page 58   Brazil notify the WTO Committee on Safeguards that it is initiating such an investigation pursuant to Article 12.1(a) of the Safeguards Agreement?   C) If the competent authority makes a positive determination, will Brazil notify the WTO Committee 
on Safeguards of a decision pursuant to Article 12.1 (b), as well as any extension of such measures 
pursuant to Article 12.1(c) of the Safeguards Agreement? 
 
Answer: 
 The notification of the extension of the Brazilian safeguard measure on toys was circulated to Members on December 19
th 2003, under document G/SG/N/8/BRA/2/Suppl.2, 
G/SG/N/10/BRA/2/Suppl.2, G/SG/N/11/BRA/1/Suppl.2.  In the notification, made pursuant Articles 
12.1(b), 12.1(c) and footnote 2 to Article 9 of the Agreement on Safeguards, it is stated:  “Brazil proposes the extension of the measure for an additional two and a half years, adding up to a total application period of ten years, from 1 January 2004 to 30 June 2006”.  It is our understanding that Brazil´s safeguard measure on toys has been applied in full conformity with the Agreement on Safeguards.  Any decision that may modify the terms of the notification made in 2003 will follow all relevant provisions of the WTO agreements.  In this regard, the representative of Brazil stated during the regular meeting of the Committee on Safeguards in April (G/SG/M/25, par 42) that it 
“would notify the Committee in due course, should a decision be made not to utilize the full 
period”.  
Measures Directly Affecting Imports;  Technical Regulations and Standards;  Institutional and Legal 
Framework 
 15. Referring to paragraphs 143-144, page 69 of the Secretariat Report, Brazil notified Decree 4851, an “emergency decree” on rum definitions to the WTO TBT Committee in (G/TBT/N/BRA/135) on October 27, 2003.  U.S. industry sent comments thro ugh the U.S. TBT Inquiry Point to Brazil’s National 
Institute of Metrology (INMETRO) on March 22, 2004.  The U.S., Trinidad and Tobago, Jamaica, Dominican Republic, and the EC raised concerns over the decree at both the March and July 2004 WTO TBT Committee meetings.  At the November 4, 2004 WTO TBT Committee, Brazil indicated that it had sent letters of response to the other Members, but not to the U.S. yet.  A) When does Brazil plan to send a response to the United States?   
Answer: 
 During the November 4
th, 2004 WTO TBT Committee Meeting, Brazil indicated that the comments 
sent by US will be responded in due time.  They have not been responded yet due to its technical nature which demands further analysis. 
 
B) How does Brazil justify the “urgent” nature of its notification?  
 
Answer: 
 
It was notified as urgent matter due to the short period of the time for the law enter into force. 
 
Measures Directly Affecting Exports;  Export Finance, Insurance, and Guarantees;  BNDES EXIM 
  WT/TPR/M/140/Add.1
 Page 59 
  16. Although not specifically mentioned by the Secretariat’s Report in this section, we understand that BNDESPAR was established as an equity portfolio with BNDES as its shareholder.  A) Could Brazil please provide more information about BNDESPAR?  
 Answer: 
 BNDESPAR was created in 1982, with BNDES as its sole shareholder, as an equity-portfolio, comprised of stocks freely negotiated on the market.  BNDESPAR has the purpose of developing Brazilian capital markets. 
 
B) Specifically, please provide information regarding the terms of loans provided under this program 
and the eligibility requirements for companies to receive financing under this program.   
Answer: 
 BNDESPAR is not a program and does not provide loans. 
 
Measures Directly Affecting Exports;  Incentives and Other Government Assistance;  Other Credit 
Facilitation Schemes 
 
17. According to paragraph 287, page 100 of the Secretariat’s Report, FINAME provides “financing 
for individual acquisitions of new machinery and equipment of domestic manufacture” in which financing is limited by “the domestic content of the goods, which must be in any case greater than 60%.”   
 
A) Please explain how this program is in compli ance with Brazil’s commitments under Article 3.1(b) 
of the SCM Agreement. 
 
Answer: 
 
FINAME’s program purpose is to provide asset-based financing for the acquisition of new machinery and equipment manufactured in Mercosur countries.  Automatic BNDES program aims 
to finance companies with up to R$10 million on projects related to implementation, expansion, 
modernization or relocation.  Neither of these programs provide export credits.  Both are available 
to exporting and non-exporting companies of any economic sector, and are offered to the market 
through accredited financial institutions, most of them private.  FINAME and Automatic BNDES do not provide any kind of subsidy, as their fi nancial costs are fully covered, at interest rates 
compatible with those of the international market.  Both programs are, therefore, fully compliant 
with the provisions set forth in the WTO Agreement on Subsidies and Countervailing Measures. 
 
B) Please also provide information regarding the specific criteria used to determine eligibility for 
FINAME financing for non-domestic companies.  
Answer:  
Any company duly incorporated and existing in Brazil, regardless of its control, is eligible for financing under FINAME. 
 WT/TPR/M/140/Add.1 
Page 60   Measures Affecting Production and Trade;  State Owned Enterprises, Privatization, and State Trading  18. Paragraph 251, page 92 of the Secretariat Report indicates the Government of Brazil owns controlling interest in 128 firms engaged in a wide variety of activities - electricity, petroleum, 
petrochemicals, port services, transportation services, and health services.  The Government, according to 
the Secretariat Report, retains ownership interest in these firms for a variety of reasons – the firms are 
involved in the provision of public services, to offset market failures, or because state control of some sectors is considered as strategic.  Paragraph 252 on page 92 relates that Decree 3735 of 24 January 2001, defines federal state enterprises as “public or mixed enterprises and their subsidiaries in which the Federal 
Government, directly or indirectly, owns the majority of voting-right capital.”  The decree also sets 
directives for the administration of majority government-owned enterprises.  The Secretariat Report adds 
that “the Ministry of Planning, Budget and Management’s Department of Coordination and Control of State Enterprises (DEST) is in charge of coordinating the expenditure and investment programs of these enterprises and of monitoring their performance.” 
 
A) Please list all State-Owned Enterprises (SOE), the percentage of government interest, and the 
reason for government ownership of each business. 
 
B) In the interest of transparency, please indicate which SOEs the government controls “indirectly” 
and explain how that indirect control is exercised. 
 
C) If the DEST is responsible for coordinating SOE expenditure and investment programs and for 
monitoring SOE performance, is it also responsible for insuring SOE compliance with Brazilian law?  If not, what Brazilian institution(s) regulate SOE activities? 
 
D) Are Brazil’s SOEs subject to competition laws? 
 
E) What annual reports must Brazilian SOEs file to validate that their operations are on a commercial basis?  If reports are filed, what Brazilian government agency is the recipient? 
 
F) If reports are filed, are they available to shar eholders of partially private SOEs, the public, and 
other WTO Members?  Are the reports reviewed by  independent auditors who publish their findings? 
 
Answer: 
 
A list of all state-owned enterprises (SOE), with information by sector of activity, privatization 
process evolution, and board of directors are included in the website www.planejamento. 
gov.br/controle_estatais/conteudo/perfil/index.htm.  Additional information will be provided during 
the notification process, due to be done next year. 
 
Related to the compliance to Law, several Brazilian institutions (Central Bank, Regulatory Agencies, etc) are responsible for insuring SOE compliance with Brazilian Law, it depends on the kind of control necessary and activity executed by the company.  All SOEs are subject to the 
Brazilian competition law.  
19. The Secretariat’s Report describes in para graphs 247-250 on page 91 Brazil’s privatization 
program that netted the Government over $100 billion and attracted significant Foreign Direct Investment.  However, the report notes that there has been no privatization activity since 2002.   
  WT/TPR/M/140/Add.1
 Page 61 
  Does the Government of Brazil intend to resume privatization activity in the near future?  If so, does it have a plan for which firms will be offered?  If there is a list of companies the Government intends to privatize, please provide that list.  
Answer: 
 
At the moment, the Brazilian Government is engaged in defining regulatory frameworks for no 
privatized sectors, and the approval of this framework is a previous condition for any kind of 
future privatization process.  
 
20. Paragraph 253, page 92, the Secretariat’s Report states that since 1997, Brazil has not provided 
the WTO Secretariat with notifications of existing stat e trading enterprises as required by Article XVII of 
the GATT 1994. 
 
When does Brazil intend to notify its state trading enterprises to the WTO?    
Answer: 
 
Brazil will provide a full notification of STEs in 2005. 
 
21. Paragraph 254, page 92, of the Secretariat Repo rt suggests that in 1997, Brazil removed 
PETROBRAS from its state trading enterprise notification to the WTO.  However, the Secretariat Report 
comments in paragraph 255 that authorities indicated that PETROBRAS is a state trading enterprise “in 
the context of the present review.”   
 Is PETROBRAS a state trading enterprise?  If so, when  does Brazil plan to notify the WTO of this status? 
 
Answer:  
PETROBRAS remains an STE as determined by article. 62 of Law 9.478, from 06 August 1997. 
 
Measures Affecting Production and Trade;  Intellectual Property Rights;  Patents and Industrial Designs  22. With reference to paragraph 314, page 106, of t he Secretariat’s Report, we understand that Brazil 
requires patent applicants to disclose the source of bi ological materials that were used in an invention in 
their patent applications.    
A) Please explain how this requirement operates and how long it has been in effect.  
 
B) Please provide the total number of disclosures that have occurred under this requirement.  C) Please describe any evidence that would indicate that this requirement has ensured prior informed 
 consent for access to genetic resources or benefit sharing. 
 
Answer: 
 Paragraph 314 of the Secretariat’s Report does not ref er specifically to the question of disclosure of 
source of biological materials used in inventions.  Brazil maintains that requiring patent applicants 
to disclose the origin of the biological material  would constitute an important measure to prevent WT/TPR/M/140/Add.1 
Page 62   
acts of “bio-piracy” and misappropriation of genetic resources and associated traditional 
knowledge, particularly in those jurisdictions wher e most patenting activity takes place today. 
 
Measures Affecting Production and Trade;  Intellectual Property Rights;  Copyrights 
 
23. Paragraph 332, page 110, of the Secretariat’s report states that in July 2003, the government of 
Brazil enacted Law No. 10,695, which modified the existing Criminal Code to expand the types of copyright infringement considered as felonies, to requir e harsher penalties, to re move the possibility of 
suspended sentences, to clarify the rules of procedure so that in certain circumstances the judge may, at 
the request of the affected party, order the destr uction of the production or reproduction seized, etc. 
 
Please provide information showing prosecutions wher e these new provisions of the Criminal Code were 
employed.  For example, please provide information on any cases where these laws led to the incarceration of the offender, where these laws al lowed for the destruction of the production or 
reproduction seized, etc.   
 
Answer: 
 (a) Law 10,695 entered into force on July 1
st, 2004.  Since then, it has made available to courts 
 in Brazil more stringent remedies to combat piracy. 
 
(b) As in most legal systems, cases of piracy ar e first submitted to courts with local jurisdiction 
 and, if appealed, brought to the attention of higher courts, which in  Brazil are those that 
 exercise State or Federal-level jurisdiction, and also of the superior courts (Supreme 
 Federal Tribunal and the Superior Justice Tribunal). 
 
(c) Although the decisions by high and superi or courts are easily available, there is no 
 centralized database of decisions of local cour ts.  Therefore the assessment of the cases in 
 which Law 10,695 has led to the incarceratio n of the offenders would only be possible by 
 consultation of the decisions of high and super ior courts, and this in turn would only inform 
 the cases in which an appeal has been filed.   Nonetheless, because the Law entered into 
 force in July 2003, it is as of yet much too soon to expect these cases to reach high courts, let 
 alone superior courts. 
 
(d) In addition to this, assessing the exact number of prosecutions under Law 10,695 is even 
 more difficult due to the fact that, more often than not, piracy is related to offenses covered  by other provisions in the criminal legislation, such as contraband, under which these cases 
 are frequently filed.  
 
(e) Recognizing, on the one hand, the increased efforts of Brazilian authorities in combating 
 piracy, and, on the other hand, the difficul ties in gathering data on a centralized basis that 
 reflect these efforts, Decree 5.244 (October 15
th 2004), which establishes the National 
 Council to Combat Piracy and other Intellectual Property Violations, not only mandates the 
 creation of a database but also establishes that increased coordination with the Judicial 
 branch be reached.  This could eventually lead to an improved and precise assessment of 
 the number of cases prosecuted by the courts under Law number 10,695, especially those  that are not appealed to higher courts. 
 
24. Paragraph 333, page 111, of the Secretariat Report states that despite limited resources and 
difficulty coordinating Government agencies, actions to combat copyright piracy increased during the  WT/TPR/M/140/Add.1
 Page 63 
  first six months of 2004, and that as a result the value of pirated goods seized during that period was almost five times greater than the value of seized goods destroyed over the same period in 2003.  However, since 1998, less than 1% of raids in which goods were seized and destroyed have led to successful prosecutions and convictions. 
 
A) Please explain why the rate of convictions following seizures is so low, and what Brazil’s plans 
are for increasing both the number and the effectiveness of prosecutions.   
 
B) Or, alternatively, if prosecutions and/or convictions have increased, please provide information 
showing copyright prosecutions and convictions as a result of cases where pirated goods were seized 
and/or destroyed. 
 
Answer:  At least two factors account for the rate of convictions referred to by the question posed by the United States of America:   a) the fact that many piracy cases are prosecuted under provisions of criminal legislation 
 referring to acts other than copyright violat ions (article 184 of the Brazilian Criminal 
 Code), such as contraband (article 334), which are frequently related to copyright 
 violations.  This certainly contributes to port ray the situation of piracy combat in Brazil as 
 worse than it is in fact;  
 b) before the entry into force of Law 10,695 (July 1
st, 2003), which increased the minimum 
 punishment for copyright violations from 1 to  2 years of imprisonment, these infringements 
 were considered crimes with a lesser offensive potential, thus authorizing the suspension of 
 the prosecutions in those cases where the conviction would be set at one year or less, under 
 the provisions set forth by article 89 of Law 9,099 (September 25th, 1995). 
 
25. It has also come to our attention that the rate of piracy in Brazil is relatively high, about 60%.  
Article 41 of the TRIPS Agreement states that “Members shall ensure that enforcement procedures … are available under their law so as to permit effective action against any act of infringement of intellectual 
property rights … including expeditious remedies to prevent infringements and remedies which constitute 
a deterrent to further infringements.”   
 
Given this extremely high rate of piracy, please explain  how Brazil is in compliance with Article 41 of the 
TRIPS Agreement. 
 
Answer: 
 
Expeditious judicial remedies to prevent infrin gements (medidas cautelares and antecipação de 
tutela) are available in Brazilian legislation for all sorts of claims, including those related to intellectual property (in compliance with TRIPS, article 41.5), even before a final judicial decision 
is given.  In addition to this, Brazilian courts very often determine that, aside from compensation, 
an additional amount be set as a deterrent to fu rther infringements (which would work similarly to 
punitive damages under common law systems). 
 WT/TPR/M/140/Add.1 
Page 64   Measures Affecting Production and Trade;  Intellectual Property Rights;  Geographical Indications  26. According to the Secretariat Report, paragraph 32 7, p. 109, Brazil provides information about the 
protection of geographical indications.  
 
A) How is the definition of geographical indications provided by Brazil, as either an indication of 
source or a denomination of origin, consistent with the definition of geographical indications found in Article 22.1 of the TRIPS Agreement?    
B) What procedures are in place for the interested parties or owners of third-country geographical 
indications to prevent the misleading use of foreign geographical indications? 
 
Answer:  A) The definition of indication of source in th e Brazilian Industrial Property Law is consistent 
with the definition of article 22.1 of the TRIP S Agreement, since the Brazilian Law states that an 
indication of source is an indication which identifies a product that has a certain reputation due to its origin in a given region.  This region, by its characteristics, is recognized as the center of production, extraction or manufacture of that product.  By the same token, the definition of 
appellation of origin in the Brazilian Industrial Property Law also complies with the definition in 
article 22.1 of the TRIPS Agreement.  In the Brazi lian Law, an appellation of origin consists of an 
indication which identifies a product whose qual ities or characteristics are exclusively and 
fundamentally attributable to the geographical environment in which it originates.  
B) Although for the time being INPI has not received any request of protection of 
homonymous geographical indications from any WTO country, INPI requests that such indications 
be supplied with elements that may allow one to distinguish them from each other and that indicate 
the true origin of the products, thus offering equitable treatment for the producers concerned and in a manner that is sufficient to avoid the possibility of the consumer being misled as to the true 
origin of the products. 
 
27. In paragraph 328, p. 110 of the Secretariat Report , Brazil indicates that a division within INPI has 
been established to cover the protection of geographical indications.   
 
Please describe the procedures taken by this division to approve the protection of geographical 
indications.  
Answer: 
 In the INPI, the request for protection for a geographical indication that is already protected in the country of origin is subject to a simplified procedure.  The presentation of a specific request with a 
copy of the official document granting the protection from the country of origin, with a simple translation, is considered sufficient, if in compliance with the Brazilian Industrial Property Law.  
 28. It is unclear from paragraphs 327 and 328 on pages 109 and 110 of the Secretariat Report whether 
trademarks in Brazil would be protected from confusingly similar and geographical indications established later in time. 
 
In what way does Brazil’s geographical indications law preserve the legal rights of trademark owners, 
consistent with Article 16(1) of the TRIPS Agreement?   WT/TPR/M/140/Add.1
 Page 65 
  
Answer: 
 The rights related to a trademark titleholder are est ablished in articles 122 to 175, 189, 190, 196 to 
210 of the Brazilian Industrial Property Law.  It is  also to be noted that the Brazilian legislation 
foresees the possibility that interested parties oppose the registration of a trademark or a geographical indication.  Besides the administrative procedures, interested parties may also resort to judicial authorities.  Thus, the rights of registered trademark owners are preserved in accordance with articles 16.1 and 24.5 of the TRIPS agreement.  
 
Measures Affecting Production and Trade;  Intellectual Property Rights;  Enforcement 
 
29. With respect to the discussion of Brazil’s enforcement efforts in paragraph 332, page 110 of the Secretariat Report, what national role and authority has the newly National Council to Combat Piracy been given?  Also, has the Council developed a national action plan to combat the ongoing piracy 
problem? 
 
Answer: 
 The role of the National Council to Combat of Piracy and other Intellectual Property Violations is 
set by the Decree 5,244 (October 15
th, 2004).  The Council was created as a body of the Department 
of Justice, through the Provisional Measure nº 220 of October 1st, 2004.   The development of a 
nationwide action plan is one of the tasks mandated to the Council, as provided by article 2.II of the 
aforementioned Decree.  The new Council will also be charged with ensuring inter-ministerial coordination, promoting coordination among federal level agencies and state level agencies (with 
exchange of information for combating piracy); incre asing coordination with the interested private 
sector, etc. 
  
TRADE POLICIES BY SECTOR;  Agricul ture;  Domestic Support Measures 
 
30. The Secretariat Report states in paragraph 22, page 116 that the last WTO notification made by 
Brazil with respect to internal support measures to agriculture covered the 1997-98 period.  
 Is a new notification forthcoming? 
 
Answer: 
 The Brazilian government is finalizing the notificat ion on domestic support for the years 1999 to 
2003.  As soon as the final statistics are collecte d and compiled, these notifications will be presented 
to the WTO.  We expect to be in a position to bring our notifications up to date by the first 
trimester of 2005. 
 Brazil understands that the issuing of notificat ions is an essential instrument to proceed the 
monitoring of the commitments undertaken by members and this is why we championed the 
question of monitoring during the framework negotiations.  Thus, we also invite the USA and other 
members to update their notifications. 
 
31. Although not specifically mentioned in this section of the Secretariat Report, we understand that The Plano de Safra (Agricultural Plan) for 2004-05 is R$ 39.5 billion or slightly over US$14.0 billion.   
 WT/TPR/M/140/Add.1 
Page 66   Can you determine how this amount is allocated by sector (soybeans, rice, livestock, poultry, pork, and beef)?  
Answer: 
 The amount of credit available is not allocated by sector.  The allocation of the mandatory 
resources is according to criteria used by each financial institution in its regular operations.  As can be noted on Paragraph 29 (page 118), the credit limit vary according to the crop or type of operation (sometimes also according to the region), with maximum amounts ranging from R$60,000 to R$500,000.  Producers may obtain credit for more than one product, but the limits per product must be observed.  
32. Paragraphs 27-37 on pages 118-121 of the Secr etariat Report identify a number of Brazilian 
credit mechanisms to assist farmers.   
 
A) Since 1990, were other industrial subsidies - such as long term loans of up to 60 years at a 4 per 
cent interest rate - made available to poultry, pork, and beef producers?    
Answer: 
 
No.  There aren’t any other industrial subsidie s made available to producers besides those 
mentioned in the Report by the Secretariat. 
 
B) If so, were other agricultural enterprises eligible to receive these loans? 
 
Answer: 
 
Not applicable.  
33. The Secretariat Report described in paragraphs 30 and 31, on pages 119 described BNDES 
agricultural credit programs.  What is the average tenor and interest rate applicable to BNDES-Exim agricultural loans?  
Answer: 
 BNDES-Exim does not provide agricultural loans. 
 Manufacturing  
 34. It appears, from information available in public source documents, that Brazil's Companhia Vale do Rio Doce (CVRD) is now talking to foreign steel companies about partnerships to build three steel 
plants on Brazil's northern coast and that Brazil's national development bank has offered to provide a third 
of the possible $11.5 billion cost of this project.   
 
A) Could you please provide further information on this project and what type of government assistance could be provided to assist CVRD?   
  WT/TPR/M/140/Add.1
 Page 67 
  
Answer: 
 Since CVRD has not presented any formal request to BNDES regardin g steel plants in the northern 
coast of Brazil, it is impossible to the Brazilian government to comment on conditions of any such possible future requests.  
Manufacturing;  Market Structure 
 
35. Referring to paragraph 94 on page 133 of the Secretariat’s Report, please explain the criteria 
which the BDMG uses to determine whether an industry may be eligible to receive incentives through the Pro-Industria program. 
 
Answer: 
 
Pro-Industria program is aimed at financing both the implantation and expansion of industries in the state of Minas Gerais.  Any interested company may apply to the Pro-Industria program.  
Projects will be analysed according to the social and economic impact they may have.  Further 
information can be obtained at BDMG  website (www.bdmg.mg .gov.br), under resp onsibility of the 
Government of the State of Minas Gerais. 
 
Manufacturing;  Aircraft Industry 
 
36. Paragraph 107, page 135 of the Secretariat Report  states that the Brazilian government owns only 
0.2 percent of the aircraft manufacturer EMBRAER.   However, according to the company's 2003 20-F 
Report, EMBRAER has ten organizations that cont rol the outstanding shares, one of them being 
BNDESPAR, Banco Nacional de Desenvolvimento Economico e Social.  BNDESPAR owns 1.5% of common shares and is a wholly owned subsidiary of BNDES, which is the government-owned national development bank of Brazil.    Is it also true that one of the Federal Government’s shares, called the "Golden Share", gives the government of Brazil special control over corporate functions? 
Answer: 
 
BNDESPar owns 1.44% of common shares with voting rights, and thereby it is not entitled to a seat 
in the Board of Directors.  The golden share is he ld by the Federative Republic of Brazil, and has 
the same voting rights as common shares.  The golden share does not entitle its holder to any 
“special control” over corporate functions, but only to veto rights over a very restricted number of 
issues, as follows: 
 
− change of company name and corporate purpose; 
− amendment to and/or extension of company logo; 
− creation and/or alteration of military programs (whether or not involving Brazil); 
− third party training in technology for military programs; 
− discontinuance of the supply of military airplane maintenance and replacement parts; 
− transfer of share control; and 
− any changes to the list above, to the structure and composition of the board of directors, and to 
the rights conferred to the golden share.  
 WT/TPR/M/140/Add.1 
Page 68   Manufacturing;  Textiles and Clothing  37. In paragraph 117, page 137, the Secretariat’s Report states that, “BNDES provided R$453 million in credits for investment, to finance purchases of fixed assets, and exports in textiles and clothing.”   
 
Could you please provide further information regarding the terms of the financing provided by BNDES to 
the textile industry?  
Answer: 
 BNDES does not have any special terms of financing applicable to the textile industry.  Credits extended to the textile industry are similar to those offered to other sectors. 
 
Services;  Banking;  Legal and Regulatory Framework 
 
38. Paragraph 194, page 152 of the Secretariat Report states that “the number of foreign bank 
branches in Brazil is restricted.  Banks established in Brazil before 5 October 1988 may not open new branches;  for banks authorized after that date, the number of branches is subject to the conditions set out at the time of authorization.”  
 
A) Are such sub-branches indeed permitted and at what levels?  
 
B) What criteria are used to permit sub-branches? 
 
Answer: 
 
The number of branches is limited by capital requirements.  Resolution CMN 2.099 (August 17, 
1994), updated by Resolution CMN 2.815 (January 24, 2001), established levels of capital requirements to be maintained by financial institutions in order to operate in the domestic financial 
market.  Institutions are allowed to have up to 10 branches if minimum capital requirements are 
met.  Additional capital is required to allow an institution to operate more than 10 branches. 
 
39. With regard to the criteria for obtaining a banking license, the Secretariat Report states in 
Paragraph 195, page 152 that “the same requirements apply to nationals and foreigners.” 
 
A) How many bank licenses have been approved for national and foreign investors in recent years? 
 
Answer: 
 
Not a single license has been denied to foreign investors since the present mechanism has been 
established in 1995.  Then, the Ministry of Finance published two “Exposição de Motivos” (89 and 311), which called for the national interest in liberalizing the entry of foreign financial institutions in the Brazilian financial market.  Operational efficiency and financial capability identified in 
sound foreign financial institutions are considered important to foster competition in Brazilian 
markets.  Since then, 140 Presidential Decrees were promulgated approving foreign capital 
participations in Brazilian financial institutions. 
  WT/TPR/M/140/Add.1
 Page 69 
  Services;  Insurance  40. In Paragraph 207, page 154, the Secretariat Report states that foreign insurance companies must be incorporated under Brazilian law.  This would se em to prohibit direct branching.  We note that 
countries around the world allow branching as a complement to incorporated insurance companies.  
Branches can result in more product choices for Brazilian consumers and lower prices for insurance 
services.  A) If it is the case that Brazil prohibits establishment of foreign insurance company branches, what is 
the rationale for such limitations?  
 
B) Does Brazil envision allowing direct branching of foreign insurance companies in the future?  
Answer: 
 The rationale of that situation relates to t he need for due supervision and enforcement, which can 
be hindered when the company is not incorporated in Brazil.  Allowing direct branching of foreign insurance companies is not under consideration in the moment.  
 
41. Paragraph 208, page 155 of the Secretariat’s Report summarizes the rules for foreign insurance 
companies to establish foreign commercial presence in Brazil. 
 
A) Why does Brazil deem it necessary for SUSEP to approve each new license for a life or non-life insurance company?   
 
Answer: 
 
In order to protect the interests of policy-holder s, an insurer must be licensed before it can operate 
in a jurisdiction.  This requirement is in accordance with IAIS Core Principles (ICP 6). 
 
42. The Secretariat’s Report states in paragraph 211, page 155 that cross-border supply of insurance 
is not allowed with exceptions that must be authorized by the IRB.   
 
A) Please clarify. 
 
B) Since the IRB is referenced, are the exceptions specific to reinsurance?  
C) More generally, given that countries are increa singly recognizing the benefits of cross-border 
supply in areas where the consumer is sophisticated – such as reinsurance, marine, aviation and transport 
insurance, brokerage, and auxiliary services – what plans does Brazil have to enable a uniform and 
predictable means for consumers to benefit from cross-border supply?  
Answer: 
 
The exceptions mentioned in paragraph 211, page 155 of the Secretariat’s Report, relate only to 
reinsurance, in which sector the IRB is the regulatory agency.  The Brazilian government is concerned about the necessities of consumers and the need to reduce costs, maintaining at the same time the soundness of the reinsurance market and the financial market as a whole. 
 WT/TPR/M/140/Add.1 
Page 70   
ARGENTINA 
 
III. Politicas Comerciales por Medidas;  2) Medidas que afectan a las importaciones;  (v) Otras cargas 
 
1. En la página 53, párrafo 75, se menciona que el impuesto más importante que afecta tanto a la 
producción local como a las importaciones, es el Im puesto a los Productos Industriales (IPI), con 
aranceles que oscilan entre el 0% y el 20%.  Además en  determinados casos este impuesto  puede ser aplicado de manera específica.  ¿En qué caso se aplica en forma de específico?  ¿Como se determina el porcentaje del IPI?  
Answer: 
 
The typical case of products where the IPI is appli ed in specific terms is that of liquors and 
cigarettes.  The value of the specific tariff is determined in terms of volume, for liquors, and 
quantity for cigarettes.  
2. En la página 53, párrafo 78, el informe hace mención a que, con respecto a la aplicación del 
Impuesto a la Circulación de Mercancía y Servicios (ICMS), las autoridades pueden discriminar entre 
productos locales o importados, y que ello ocurre en contadas ocasiones.  Sería conveniente saber todos 
aquellos casos en los que se ha planteado esta situación y sobre que bases se determina esta discriminación.    
Answer:  
The ICMS falls under the competence of States.  Each State determines the duty and how it is applied.  The central government is currently examining whether and to which extent discrimination between imported goods and locally produced goods. 
 
III. Politicas Comerciales por Medidas;  2) Medidas q ue afectan a las importaciones;  (vi) Prohibiciones a 
las importaciones, restricciones, licencias 
 
3. En la página 58, párrafo 94, se menciona que los productos que se encuentran sujetos a licencias 
no-automáticas pueden ser objeto de licencias por “otras razones” luego de que la mercadería arriba a territorio brasileño.  ¿Cuales son esas “otras razones”?  ¿Como funciona este mecanismo.   
 
Answer:  The importation of used material, as well as the importation made by governmental agencies of goods subject to tests of national similarity are examples of “other situations” subjected to non-
automatic licensing, according to the Ministerial Act Secex n.º 14, of November 17, 2004, which revoked the Ministerial Act Secex 17/2003.  This mechanism works in the same way as other non-automatic licensing procedures does not discrimi nate among different origins, or different 
products, or different importers.  
 
4. En la página 60, párrafo 104, como “otras restricciones” se especifica el establecimiento de un 
test para determinadas importaciones. Podrían detallar los parámetros que se utilizan para determinar la aplicación de dicho test y si el mismo se lleva cabo de manera discrecional o no frente al universo de 
productos importados. 
  WT/TPR/M/140/Add.1
 Page 71 
  
Answer: 
 Only the imports latter subject to fiscal exemptio ns are subject to test of similarity.  Three basic 
parameters are assessed in those tests: price; deadline of delivery and product quality.  If any of those are parameters are not attended, then t he product is considered not to be similar. 
 
III. Políticas Comerciales por Medidas;  3) Medida s que afectan a las exportaciones;  (v) Financiamiento 
a las exportaciones, seguros y garantías  
5. En la página 122, párrafo 38, se menciona la aplicación de una política de sostén de precios, la 
Política de Garantías de Precios Mínimos (PGPM) y se ofrecen sumariamente explicaciones sobre los 
mismos.  ¿Podrían explicar con más detalle como se activa este mecanismo?  ¿Sobre que bases se toman los precios de referencia?  
Answer: 
 The activation of the PGPM mecanism occours when the market price is below the minimum price.  Generally speaking, the AGF is used in frontier  regions far from consumption areas, sites with 
deficitary infrastructure, or regions of low-income or resource-poor producers.  The minimum 
prices are annually established taking into accoun t prospective cenarios of the products, production 
costs for different regions, and the international parity price.  This methodology allows a low 
degree of governmental intervention as can be observed in Paragraph 44 (page 123).  
 
6. En la página 123 párrafo 46, se hace mención a un programa llamado PEP (Premium for Product 
Outflow).  ¿Que productos quedan comprendidos en di cho programa?  ¿A que se hace referencia cuando 
menciona que el PEP “depende de las condiciones del mercado y la necesidad de garantizar el precio”? 
 
Answer: 
 
As mentioned in Paragraph 47 (page 123), all the products included in the AGF program are 
elegible to benefited from PEP.  The products under AGF program are those covered by PGPM:  cotton, coffee, peanuts, rice, edible beans, sunf lower, jute, maize, soybean, sorghum, Brazilian wax 
(carnauba wax), cassava, cassava flour and starch, castor seed, canola, oat, sisal, wheat, triticale, 
rye, barley, grapes, garlic, cashew nut, milk, rubber, silk cocoon, brazil´s nut and guarana. 
 
The PEP, like AGF, was criated to operate in situations where the market price is below the 
minimum price, but with the advantage of avoinding product acquisitions and diminishing 
governmental intervention in the market. 
 
KENYA 
 
1. We note from the Secretariat report that although Brazil participated actively in the GATS negotiations on telecommunications and on financial services it has not yet ratified the Fourth Protocol on 
telecommunications and the Fifth Protocol on financial services.  Kenya would like to know what has 
been the reason for the delay in ratifying these two protocols and when does Brazil intend to finalize this 
process?  WT/TPR/M/140/Add.1 
Page 72   
Answer: 
 Regarding the IV Protocol, the situation is described in paragraph 161, page 146 of the Secretariat Report.  The offers made during the negotiation of the IV Protocol were valid exclusively in that context.  The situation is described in paragraph 161, page 146 of the Secretariat Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its impossibility to ratify the IV Protocol in the 1997 form, but such offer was rejected by some Members (United States, Hong Kong/China, European Communities, Japan).  Ad option of the IV Protocol as such is thus 
not under consideration.  However, Brazil does not exclude a priori the possibility of including any sector in its revised services offer.  The executive branch has taken all the steps necessary for the approval of the V Protocol by Parliament, a pre-condition to its ratification by  Brazil.  A time-frame for such approval cannot be 
determined, since there is no time-limit for the examination of legal instruments by Congress, and also in view of the independence among branches of Government. 
 
2. Kenya would like to hear Brazil's views regarding what has been stated on Page 17 paragraph 3 of the Secretariat report that its involvement in preferential agreements has resulted in increased administrative burden, decreased transparency of its trade regime, and trade diversion. 
 
Answer: 
 
Brazil considers that preferential agreements do not led necessarily to increase in administrative burden, transparency problems and trade diversion.  The agreements that Brazil is involved in are 
fully compatible with the respective WTO disciplin es, and they have the objective to regulate and 
facilitate preferential trade between the parties.  In this sense, as properly stated in the Secretariat 
report, Brazil sees preferential agreements as a complement to multilateral trade system. 
 
3. Why has Brazil continued to maintain a number of market access and investment limitations for 
foreigners in mining, financial services and transport? 
 
Answer: 
 
In mining, participation of foreigners is limited to 49% of the control of companies only for 
activities in the border area, for reasons of national security.  In all the other areas, there is no limit 
to foreign participation in mining companies.  
In the financial sector, access of foreign banks and insurance companies depends on Presidential 
authorization, but there is no limit in terms of a proportion of the capital.  Presidential 
authorization is the only means that the Constitution allows for access to foreign financial 
companies, pending a more complete regulation of that access through a Complementary Law which is still not in place.  
Regarding transport, there are no restrictions to foreign participation in shipping companies 
incorporated in Brazil.  Restrictions in land tr ansportation are linked to the protection of national 
industry in that sector.   WT/TPR/M/140/Add.1
 Page 73 
  
EUROPEAN COMMUNITIES 
 
1. TRADE IN GOODS  
One of the core business’ of the WTO is market opening for goods and services, thereby fostering global 
economic growth and promoting developing countries’ efforts to fully participate in the global economy.  
Noting the importance of market-opening for goods, and for increasing trade in goods, the EC should like to pose the following questions to Brazil.   
A stable tariff is important for ensuring certainty for exporters and importers, thereby allowing traders to 
more easily assess the potential for trading in certain products.  The report of the WTO Secretariat notes 
that Brazil has a high number of applied tariffs which are lower than the bound tariffs.  The EC has noted that Brazils applied tariffs are often changed, sometimes even periodically.   
The EC should like to ask Brazil why such changes are made and information on how often.  How does 
Brazil appraise the impact of such changes for promoting trade, and is there any plans to change current 
practice, thereby increasing the transpar ency of the Brazilian trading regime?  
 
Answer: 
 
One of the components of the rationale adopted by the MERCOSUR for the structure of its 
Common External Tariff (CET) is the system in which the goods of an economic sector may carry 
rates placed in two levels:  i) a minimum rate for goods not produced within the MERCOSUR;  and ii) a rate established in a protection tariff level for goods produced within it. 
 
Most of the requests regarding the modification in the CET aim basically at adjusting the tariff 
level assigned to a given good, according to the information regarding the beginning of the 
production of an item or its inexistence.  In many cases, modifications are also necessary to keep the structure of the MERCOSUR’s Common Nomenclature compatible with the Harmonized System. 
 
It must be mentioned that during the period under re view it took place the elimination of the 3.0 
percentage points temporary increasing to the CET started in 1997, ended in 2003. 
 
The regular modifications in the CET and in the MERCOSUR’s Common Nomenclature are 
carried out twice a year, at the beginning of each semester.  The methodology by which 
MERCOSUR countries agreed to update tariffs and nomenclature allows a suitable administration 
of the demands presented by the producers, especially taking into account the dynamics of the 
MERCOSUR countries developing economies. 
 
According to the report of the WTO Secretariat, Br azil maintains export taxes at zero-rate for most 
products, instead of removing the export tax on those products.  The EC should like to ask Brazil why she keeps such as system if it is not applied?  Does Brazil foresee 
using the system in the near future, and for which products would Brazil expect to use the system.  
 
Answer:  Despite no further measures regarding export taxes are expected to be adopted, Brazil considers 
that the maintenance of particular regulations is  legitimate and at a certain extension unavoidable, 
in order to permit its eventual resorting in front of circumstances referred in WTO provisions.  The WT/TPR/M/140/Add.1 
Page 74   
Brazilian legislation on the issue is relevant, des pite the fact that export taxes are not applied, 
because it gives a complete framework for its possib le application, including the highest level for 
the application of the rates.  
According to the report of the WTO Secretariat Brazil has a policy regarding import substitution, including in public procurement at federal, state and public companies level (e.g. Petrobras).  The report 
refers to competitive (market-based) import substituti on, while in many areas it should rather refer to 
government-driven import substitution.  
The EC should like to ask Brazil to submit further in formation on the setting-up of this system, how does 
it function, how many items does the scheme cover, what is the economic value of the scheme and how 
does Brazil assess the effects of the scheme for the state being able to provide price-competitive and thus efficient goods?  
Answer: 
 The industrial policy being implemented is referred as market-based import substitution process because it is result of an opened and internationa l competition in a new institutional and trade 
environment, characterized by an opened economy.  There are no preferences for national 
companies, and, regarding PETROBRAS, most of its procurement is result of international public 
tender. 
 
Regarding the general industrial policy, it focuses the following priorities: capital goods, electronic 
components, informatic goods and biotechnology.  T hese four horizontal sectors were chose as they 
are important for the whole economy, contribu ting for modernizing and increasing the general 
productivity. 
 
Customs matters, including rules of origin, valuation and import licences 
 
In the report of the WTO Secretariat, paragraph. 29, it is explained that “Brazil does not apply non-
preferential rules of origin”.  Furthermore the report also states in paragraph 10 that:  “A certificate of origin is mandatory only if origin information does not appear in the commercial invoice”. 
 
In the view of the EC, if Brazil is not applying non-preferential rules of origin, it does not seem apparent 
that a certificate is systematically needed (apart the case of  preferential treatment, of course) when there is 
no reference to the origin in the invoice.  To the knowledge of the EC, imports originating in other countries must be accompanied by a certificate of origin.  The EC is therefore somewhat puzzled of how 
Brazil can determine the accuracy of the information provided in the certificates of origin if such 
certificates do not have rules of origin? Please explain. 
 
Answer: 
 Brazil accepts the basic criteria of WTO, that consid er substantial transformation:  change of tariff 
heading, added value or technical criteria, when t he exported country issues a certificate of origin. 
 
The report of the WTO secretariat explains that when there are clear indications of fraud involving the 
declared value, the procedures in Article 88 of Provisional Measure No. 2, 158-35 of 24 August are used.  These specify that if the transaction value cannot be ap plied, then the import price must be determined 
using the export price of identical or similar goods, or the price of the good in the international market, or 
through a determination made by a specialized entity.  WT/TPR/M/140/Add.1
 Page 75 
  The EC should to ask Brazil what is meant by the export price? The CVA speaks about the transaction value of identical or similar goods sold for export to the same country.  What is the meaning of the price of the good in the international market? CVA refers always to the 
country of importation to determine the value of goods. 
 
Answer: 
 First, The Brazilian Government explains that procedure in Article 88 of Provisional Measure Nº. 2.158-35 is related with frauds cases, which are not covered by Customs Valuation Agreement.  In this situation the national legislation is applied to cover the blank of regulation.  In order to clarify, Brazil informs that export price means the price registered for customs proposes in the export country linked with the go ods presented to customs authorities in the import 
country.  If the authorities of the export country do not present information registered during the 
export clearance procedure, it is possible to use, when available, the price quoted in the international market.  In the same sense, the price can be determined by a specialized entity. 
 
The EC noted that the report of the WTO Secretaria t states that “licensing requirements have been 
substantially reduced”. 
 
The EC should like Brazil for further data showing the number of tariff lines which require import and 
also export licences for the last three years.  
Answer: 
 
The tariff lines subjected to import and export license are available at the internet site of the 
Ministry of Development, Industry and Foreign Trade.  
The report of the WTO secretariat that the list of products subject to non-automatic licensing is available 
online since December 2003.  In this list in is indicated that some 35.8% of all CET tariff lines are subject to non-automatic licensing. 
 
Why is it necessary to subject all these goods to import licences?  How does the procedure for the issue of 
the licences work? 
 Could Brazil kindly explain why approximately 40% of all tariff lines are subjected to non-automatic 
import licensing requirements? 
 
Answer: 
 The licensing system valid until the issuance of Portaria SECEX n.º 17, of December 01, 2003, 
foresaw the application of licensing procedures for all tariff-lines.  Brazil used to apply automatic 
and non-automatic licensing.  After the publishing of the above-mentioned Portaria, the licensing 
exemption has become the rule.  Solely goods which are under monitoring or are subject to an 
administrative requirement are still affected by automatic and non-automatic licensing, always in 
accordance with article XX of the GATT or based on legal determination.  All those cases are available at the Portaria SECEX n.º 17, which was consolidated in the new Portaria SECEX n.º 14, 
of November 17, 2004. 
 WT/TPR/M/140/Add.1 
Page 76   
On the percentage of 35,8%, we would like to clarify that this figure does not reflect exactly the 
total amount of goods subjected to automatic licensi ng, since most of these goods listed in the same 
tariff item are not subjected to such a procedure.  They are the so-called “destaques”, which means that they are part of that sub-item of the harmonized system of tariffs. 
 For example: only leather and shoes originating from wild animals are subject to the previous approval of IBAMA, and the trade volume is based on products of bovine origin.  Their inclusion in the licensing regime derives from our firm intention to comply obligations laid down by an international agreement or by Law, such as the Basel Convention and Montreal Protocol, in accordance with article XX of the GATT.  With regard to non-automatic license for products subject to Brazilian Sanitary Surveillance Agency’s licensing regards the sanitary control, in order to protect human safety, health and life as granted in WTO agreements.  All requirements and procedures applied in the non-au tomatic licensing system are foreseen in the 
Agreement on Import Licensing Procedures and are li sted in the Portaria SECEX n.º 14, of 
November 17, 2004. 
 
Contingency measures 
 
In the report of the WTO Secretariat Brazil is de scribed as an active user of the WTO trade defence 
instruments, the report in particular referring to anti-dumping measures being used, as a mean to protect domestic producers against imports deemed unfair.  
 
The EC is considering whether this term applies to some of the measures in force vis-à-vis companies 
based in the territory of the EC. 
 In this context it is noted that Brazil has been appl ying anti-dumping duty on the exports of sheet products 
of stainless steel laminated in cold for more than for years.  The EC should therefore like to ask Brazil if 
the government has information about the effects of th is duty on the local industry, and if so, if Brazil 
could share such information with the EC. 
 
Answer: 
 
Anti-dumping measures are used all over the world, as a means to protect domestic producers against imports deemed unfair under WTO rules.  Brazilian contingency measures are applied in 
conformity with all relevant provisions of the WTO.   Regarding the case stated, no review of the 
measure on exports of sheet products of stainless steel laminated in cold was requested or initiated 
ex-officio .  The evidence that justified the application of the duty is available only to the interested 
parties. 
 
It is furthermore noted that for the past eight years Brazil has been applying a safeguard measure 
protecting the sector of toys.  The EC should like to ask Brazil if members of the WTO should expect that 
this measure be kept in force beyond December 2004.  Does Brazil have data indicating that the situation 
in this particular sector is caused by the industries  in other WTO members, rather than by structural 
challenges of the Brazilian industry?     WT/TPR/M/140/Add.1
 Page 77 
  
Answer: 
 The notification of the extension of the Brazilian safeguard measure on toys was circulated to Members on December 19
th 2003, under document G/SG/N/8/BRA/2/Suppl.2, G/SG/N/10 
/BRA/2/Suppl.2, G/SG/N/11/BRA/1/Suppl.2.  In the notification, made pursuant Articles 12.1(b), 
12.1(c) and footnote 2 to Article 9 of the Agreeme nt on Safeguards, it is stated:  “Brazil proposes 
the extension of the measure for an additional two and a half years, adding up to a total application period of ten years, from 1 January 2004 to 30 June 2006”.  It is our understanding that Brazil's safeguard measure on toys has been applied in full conformity with the Agreement on Safeguards.  Any decision that may modify the terms of the notification made in 2003 will follow all relevant provisions of the WTO agreements.  In this regard , the representative of Brazil stated during the 
regular meeting of the Committee on Safeguards in April (G/SG/M/25, par 42) that it “would notify the Committee in due course, should a decision be made not to utilize the full period”. 
 
As regards to the situation of the domestic industry, it  is stated in the above-mentioned notification that 
imports from other countries were responsible for “the injury caused to the toy industry in the first half of 
the 90's…”, which “was such that it has not yet been possible for the industry to restructure competitively”.  The same notification contains the non-confidential data that underscores Brazilian conclusions.  From the very beginning of the application of the safeguard, the sector of toys has been 
fulfilling adjustment plans, renewed with each prorogation of the measur e.  The Brazilian government is 
carefully following the fulfillment of the several items of these adjustment plans and considers that the 
adjustment goals are being satisfactorily fulfilled.  
 The EC and Brazil enjoys good and close relations.  The EC is therefore rather astonished that the EC, 
which is represented by the European Commission, is not notified, in accordance with WTO rules, of all 
trade defence proceedings affecting exports originating in one or several EC Member States.  
 
The EC should therefore like to ask Brazil if this prac tice is also exercised vis-à-vis other members of the 
WTO, and why Brazil had adopted such practice?  
 
Answer: 
 
Notifications in accordance to WTO rules are made to all countries that are interested parties to a 
specific procedure, directly through their diplomatic representation in Brazil, whether they are 
WTO members or not. 
 
Furthermore, the European Commission, on behalf of the European Community and as an interested party 
in the review of the Brazilian safeguard measures on imports of toys, participated in hearing called by the 
Brazilian competent authorities.  The European Commission requested that the EC views be put on the 
record, but was informed that this was not possible.  The EC should therefore like to ask Brazil to clarify 
the purpose of hearings where no record of the position of interested parties is kept, as well as how the rights of third parties are protected in such circumstances.    
Answer:  
Public hearings are held for interested parties to ex press their views, to listen to other parties’ views 
and to debate.  Third parties rights are protected by the fact that the investigating authority will only take into account those arguments filed on the record of the procedure by the interested 
parties who attended to public hearings.  During th e procedure of revision of  the safeguards on toys 
carried out by the Brazilian investigating authority, a public hearing took place in November 4
th, WT/TPR/M/140/Add.1 
Page 78   
2003.  The Delegation of the European Commission was represented in that hearing and enjoyed 
the opportunity to file on the records a document with its views over the review.  Also, as an 
interested party, the Delegation of the European Commission was able to take notice of other parties views filled on the record.  All interested parties´ considerations that were filed on the records were duly taken into account and commented by the investigating authority on its final determination.   
The report of the WTO Secretariat refers to a consolid ation in two single acts of all Brazilian import- and 
export-procedures.  
 
The EC should like to receive the reference to and further explanation of these acts, as well as an 
identification of all the measures already adopted amending those single acts, and thus resulting in the non existence of a single act?  
Answer: 
 In order to make the foreign trade process less bureaucratic, less complex and, consequently, more attractive, the Brazilian Government is coordinating several initiatives.  Two Ministerial Acts consolidating all Brazilian trade re gimes were recently published. 
 
The Ministerial Act SECEX no. 14, of November 17, 2004 consolidates legal documents related to 
imports and to the Drawback regime (replacing the Ministerial Act SECEX n° 17, of December 1, 
2003 that had earlier updated regulations).  Eighty-seven normative acts of foreign trade on operational procedures of imports in Brazil were consolidated and revoked.   
 
Besides, the exemption of licensing procedures is now considered the general rule in the 
administrative system of imports.  Imports of around 1,600 different capital goods were exempted 
from non-automatic licensing.  It now suffices for the importer to address himself/herself to the 
Brazilian Customs to proceed with the customs clearance.  
 
Among other implemented measures, we would highlight the publishing, on the internet, of the Ministerial Act and of its future amendments in a sy stem of automatic consolidation, as well as of 
the list of goods subjected to automatic and non-automatic licensing, along with their 
corresponding responsible administrative bodies.  
 
The second main Act published was in relation to export operations.  The Ministerial Act SECEX no. 15, of November 17, 2004 replaced the Ministerial Act SECEX no. 12, of September 03, 2003.  
That regulation consolidated 54 normative acts and revoked another 29 export-related Ministerial 
Acts of the Ministry of Development, Industry and Foreign Trade (MDIC), which has resulted in 
the revocation of 83 foreign trade normative acts. 
 
Export support and related tax concessions 
 
According to the report of the WTO Secretariat, Export promotion remains a key element of Brazil’s 
trade policy of which one of support systems is the drawback system.  The drawback system mentions 
that in order to receive the benefits from this system, a general guideline foresees that the f.o.b. value of the exports is expected to be at least 40% higher than the imported goods.   WT/TPR/M/140/Add.1
 Page 79 
  Does this mean that companies which export products with less than 40% value added cant benefit from the system?  This seems to imply a local content requirement.  Can Brazil please explain how this complies with Article 3 ASCM?  
Answer: 
 As it is stated in Article 76  of Portaria Secex no. 14/2004, export products with ANY ratio of value 
added are entitled to the drawback system.  SISCOMEX automatically entitles export products with less than 40% of import/export ratio to the drawback system.  Higher percentages begin to be automatically entitled to the drawback system once t he information entered the system for the first 
time.  The latest figures indicate that 76% of  all operations are automatically accepted by 
SISCOMEX.  
The Special System of Industrial Depot subject to Standardized Control describes the new conditions 
governing the RECOF.  It is stated that beneficiaries  must commit to export a minimum of US$10 million 
per year in the first 3 years and an average of US$20 million as from the fourth year and commit to cap 
sales to the domestic market at a maximum of 20% of the goods imported under the regime.   This seems to imply an export requirement.  Can Brazil please explain how this system is compatible with 
Article 3 ASCM? 
 
Answer: 
 All companies in Brazil are entitled to use indust rial depots.  By their very nature, industrial depots 
are related to exporting activities.  RECOF is only one of the modalities of industrial depots.  Since 
the implementation of the RECOF system demands quite an infrastructure by the beneficiary, the 
system is currently available to companies of a cert ain size.  As soon as the system is streamlined, 
new beneficiaries will be entitled to this modality of industrial depot.  
Continuing under this heading the EC has noted the existence of export-processing zones, EPZ’s, and 
descriptions concerning exemptions from import duty, IPI, ISCM, AFRMM and tax on financial operation.  In the report of the WTO Secretariat it is stated that companies operating in EPZ’s must export 
100% of their production.  According to the information of the EC, as of the year 2000, 18 EPZ’s had 
been authorized but none were at that point in time in operation.  Furthermore legislation was passed in 
2000 to dismantle the EPZ’s and there have been no declarations of EPZ concession to date.  
 The EC should like to ask Brazil if the produce from export-processing zones is linked to a clear export 
requirement.  The EC should further like to ask Brazil for data on the level of activity in such zones, 
including how many plants, persons, etc. are employed as well as the turn over.  Could Brazil also provide 
statistics on how much of the produce that is exported? 
 
Answer: 
 
By its very nature, an EPZ will be closely linked to expo rts activities.  As no EPZ has entered into 
operation in Brazil, there are no statistics on the factors pointed out in the question. 
 
The report of the WTO also describes support programmes available to the ship building industry and 
ship operators.  
 WT/TPR/M/140/Add.1 
Page 80   The EC should like to ask Brazil if these programme s are only available for ships manufactured in Brazil 
or also for foreign manufactured ships.  Furthermore can Brazil please explain why these programmes are not included in Brazil’s subsidy notification under Article 25 ASCM?  Should they not have been?  
Answer: 
 The support programmes available to the ship building industry and ship operators are only available for ships manufactured in Brazil and do not include foreign manufactured ships.  The Additional Tax for the Renovation of the Merchant Marine (AFRMM) is not a subsidy 
program.  The AFRMM is an additional tax for the renovation of the merchant marine and it applies to the freight charged by Brazilian and/or foreign companies operating in Brazilian ports.  It enables the government to finance ships manufactured in Brazil.  Its financial costs are fully covered, at interest rates compatible with those of the international market.  
In the same paragraphs of the Secretariats report it is also stated that the Brazilian majority state owned 
petroleum and gas company PETROBRAS has modified its contracting procedures requiring between 60% to 70% domestic content for operations in order to receive concessions for exploration and extraction.  
 
The EC should like to ask Brazil if she considers that  the present situation with respect to exploration and 
extraction constitutes a subsidy within the meaning of Article 1 ASCM and in the affirmative please 
explain how these provisions are compatible with Article 3 ASCM?  
 
Answer: 
 
Brazil considers that none of the criteria set forth in Article 1 of the ASCM would be applicable 
with regard to the situation described in the question above.  
Can Brazil please explain, if any of these advantages we re actually granted, how this is compatible with 
Article 3 ASCM?  Are there presently any EPZ’s operative or planned according to this legislation? 
 
Answer: 
 
There are no EPZ’s in operation or under consideration to become operative. 
 
Furthermore, what has been the tax burden increase on imports since the last Review, including the 
imposition of a new COFINS-PIS tax on imports? 
 
Answer: 
 The Law Nº 10.865, of 30 April 2004 does not represent an increase in the tax burden.  This law merely states the new methodology for the payment of PIS/COFINS taxes on imports of goods.  In 
the past, these taxes were paid only when the im port companies sold the goods, whereas now the 
payment occurs in two separate moments:  the first one, when the goods are introduced in the 
accountably systems; and the second one, when the goods are sold.  The value to be paid in the moment, takes into account the value paid in the first one, without duplication.   
The EC notes that export promotion remains a key element of Brazil’s trade policy.  It has been explained 
in the report by the WTO secretariat that the BNDES- EXIM programme provides export credits subject to  WT/TPR/M/140/Add.1
 Page 81 
  a domestic-content requirement, in value of terms, of at  least 60%.  With regard to this information we 
would like to ask for clarification of the following:  In continuation of the EC should like Brazil to lis t the total amounts of support provided by the BNDES 
to Brazilian companies, also identifying the specific amounts of export support, including differentiation 
between industrial and agricultural goods. 
 
Answer: 
 Regarding the disbursements, within the period 2002-2003, the figures for the amounts of support provided by BNDES to Brazilian companies are the following:  
US$ mil 
 2002 2003
Total disbursements of BNDES* 13,293.728 12,225.435
Disbursements of BNDES to Brazilian companies** 10,922.468 11,062.953
Total Disbursements of BNDES Foreign Trade Area*** 3,947.602 4,006.506
Total Disbursements of BNDES Foreign Trade Area  to Brazilian Companies**** 1,576.342 2,844.023
(*) Applying an exchange rate of 2,87.  
(**) Excluding export buyer’s credit provided to non-domestic comp anies from the total disbursements of BNDES within these peri ods. 
(***) Including export buyer’s credit provided to non-domestic companies. (****) Excluding export buyer’s credit provided to non-domestic comp anies from the total disbursements of BNDES Foreign Trade A rea 
 within these periods. 
 For 2003, approximately 13% of the disbursements were destined to agriculture (financing of agricultural equipments), 47% to industry and 40% to services.  The list of products that may be financed to exportation by BNDES follows the NCM classification and is available on the Internet, 
on the website of BNDES, on http://www.bndes.gov.br. 
 
The disbursements of the BNDES Foreign Trade Area were wholly directed towards the exportation of manufactured goods, excluding agricultural commodities of any kind.  
Noting that there might be other support arrangements, the EC should furthermore like Brazil to list all 
the export support programmes at federal and state levels, including amounts spent under each 
programme to support industrial and agricultural exports. 
 
Answer: 
 
The disbursements of BNDES through the Foreign Trade Area were distributed amongst the 
following programmes 
 
US$ mil 
Programme 2002 2003 
Pre-Shipment* 700.610 1,496.627 
Special Pre-Shipment  577.419 484.539 
Post-Shipment (Supplier's credit) 298.313 862.857 
Post-Shipment (Buyer's credit) 2,371.260 1,162.482 
TOTAL 3,947.602 4,006.506 
(*) Includes Short-term Pre-Shipment. 
 WT/TPR/M/140/Add.1 
Page 82   
Brazil federal government is devoting considerable time and resources in working with government 
officials at the sub-federal level to ensure their cognizance of the commitments Brazil has undertaken as a WTO Member.  Therefore, the federal government of Brazil is still working on consolidated information on support programmes.  
Agriculture  
 
The EC notes Brazil’s interest in trade in agricultural product.  As the EC shares this interest, The EC 
should like to ask Brazil the following questions. 
 
In the reports it is stated that in WTO negotiations Brazil has been calling for the reduction of all trade-
distorting domestic support measures on a product -specific basis.  Is there a difference in Brazil’s 
approach to non-product specific as compared to product specific support? 
Answer: 
 
Brazil’s main objective in the domestic support pillar is to guarantee the fulfillment of the Doha 
Declaration, which calls for “substantial reductions  in trade-distorting domestic support”.  To 
attain this purpose, Brazil and the G-20 are following a strategy that combines three levels: cuts, 
disciplines and monitoring. 
 
Regarding cuts, as required by the Doha Mandate, it is essential to reduce substantially all trade distorting 
domestic support, which encompasses AMS, blue box payments and de minimis .  That is why we insisted 
to reflect in the framework agreed on 1st August on the provision to reduce substantially the overall trade 
distorting domestic support.  This provision addresses  the amount of distorting domestic support that the 
EU and the USA are allowed to provide.  In the specific case of the EU, the total amount of trade distortion reaches an outrageous level of over US$100 billion.  Besides recognizing the urgent need to reduce overall trade distorting support, it is fundamental to cap and reduce such support in a product specific basis, wi th a view to avoiding box-shifting and, as a 
consequence, undermining the spirit of the Doha Declaration.  For these reasons, Brazil and the G-20 are analyzing various options to discipline the use of domestic support on a product specific basis.  On the other hand, Brazil is not neglecting the question of redu cing non-product specific domestic support and is 
particularly concerned by support unduly classified under such heading.  From the information provided under point (i) on page 113 of the WTO Secretariats report it seems that Brazil is a very competitive producer in agriculture.  Nevertheless we note defensive characteristics in the 
TPR in agriculture resulting in a low ambition to liberalise its agricultural sector in the bi-regional 
negotiations EU-MERCOSUR, while requesting significant liberalisation from the EU. 
 
Answer: 
 Indeed, Brazil is a well-recognized competitive pr oducer in agriculture.  The figures mentioned in 
the WTO Secretariat Report derive from three interrelated reasons:  i) Brazil’s competitive 
advantage;  ii) the lack of government intervention;  iii) and a market-oriented agriculture.  
Nevertheless, Brazil faces unfair competitio n in the world agricultural markets, which are 
characterized by high amounts of export subsidies and trade-distorting domestic support, utilized in large proportions by the EU.  Despite these factors, Brazil keeps applied tariffs much lower than 
bound rates.  Its tariff structure is more homogeneous and is devoid of tariff peaks and tariff  WT/TPR/M/140/Add.1
 Page 83 
  
escalation.  Furthermore, agricultural trade within MERCOSUR, with one exception, is totally 
tariff-free. 
The assessment of the Brazilian offer in the bi-regional negotiations can only be undertaken in the context 
of such negotiations.  It is unwarranted to extrapolate from the Brazilian offer an orientation of the overall 
agricultural trade policy.  The difficulties in the EU-MERCOSUR negotiations derive, to a large extend, 
from the lack of flexibility demonstrated by the EU in the course of the negotiations, especially in agricultural market access.  MERCOSUR wishes to  conclude an ambitious agreement with the EU, 
including agriculture, but expects additional movements in the EU position with a view to creating an 
adequate negotiating environment for further mutual concessions. 
 In paragraph 12 on page 114 of the WTO Secretariats report it is stated that CONAB does not “generally” export or import.  What does the word “generally” imply in this context? Does CONAB own commodity 
stocks.  If yes what are currently the commodities and quantities stored and what is the share of these 
quantities stored in relation to total production per commodity?  If “generally” implies that exports could 
take place on occasion, what is the record in this respect? 
 
Answer: 
 
The word “generally” means that CONAB is allowed export or import.  In practice, however, 
CONAB has never exported any product, and made only two imports during the early nineties, one 
of wheat and the other of beef.  
CONAB owns commodity stocks through PGPM and Option Contract programs.  CONAB also acquires 
products from small farmers or under market conditions for domestic food aid purposes. 
 
Bellow are the current commodity stocks from PGPM and Option Contracts, as well as their quantities 
(updated in November 18
th of 2004) and their relation to the total production (2003) per commodity: 
 
Commodity Stock (MT) Total Production 2003/04 (MT) Relation to product 
Cotton 88 1,255,100 0,01% 
Rice 3,391 12,700,400 0,03% 
Coffee 27,236 2,305,000 1,18% 
Beans 11,711 3,049,900 0,38% 
Jute 1,061 11,000 9,65% 
Maize 1,394,274 42,466,700 3,28% 
Wheat 157,111 5,894,800 2,67% 
Sources: CONAB and IBGE.  
The current commodity stocks from acquisitions from small farmers or under market conditions for 
domestic food aid are (updated in November 18th of 2004): 
 
Product  Stock (kg)  
Sugar  148,650  
Cassava flour  1,421,805  
Wheat flour  36,850  
Beans  16,588,151  
Sorghum  167,183  
Maize  9,779,842  
Rice 520,665  
Powdered milk  56,104  
Source: CONAB. WT/TPR/M/140/Add.1 
Page 84   On page 114, paragraph 14, of the WTO Secretariats report the EC notes that the government involvement in the provision of credit and insur ance is “limited”.  Could Brazil please elaborate on 
quantitative aspects of the word “limited”?  Does the Government provide Guarantees in the context of 
reinsurance? 
 
Answer:  The total amount of credit available in the Agriculture Plan 2004-05 is R$24.7 billion, with interests at preferential rate (R$17.7 billion generally available to producers and R$7.0 billion to family farmers).  The provision of credit is “limited” be cause this amount of R$24.7 billion represents 
around only 25% of the credit needed, which is estimated at about R$100 billion.  There are also limitations as mentioned on page 118, paragraph 29.  
On page 115, paragraph 15, of the WTO Secretariats report it is mentioned that in the Cancun Ministerial 
Meeting in 2003, Brazil put forward a framework proposal for agricultural reform.  Does Brazil agree the 
July 2004 package successfully superseded Brazil’s framework proposal? 
 
Answer:  
Actually, the framework proposal mentioned was put forward by the G-20.  The evaluation the G-
20 makes of the July Package is very positive.  We considered the framework on agriculture 
balanced and it constitutes a fundamental benchmark for the continuation of the negotiations of 
full modalities on a more specific and balanced manner, in line with the level of ambition of the Doha Declaration.  Thus, we could say that the July framework captured the essential elements of 
the original G-20 proposal. 
 
On page 115, paragraph 17, of the WTO Secretariats report the EC notes that Brazil’s average tariff was 
10.2% in 2004. What does Brazil consider to be the average of its average bound rate?   
Answer: 
 The simple average rate in the Brazilian tariff bound in the WTO is 30,4% ad valorem .  For 
agricultural goods the average is 35,6% ad valorem , and for non agriculture goods the average is 
29,7% ad valorem . 
 
On page 115 of the WTO Secretariats report which relates to policy instruments, a number of products that benefit from a higher than average protection are mentioned.  To the knowledge of the EC wines and 
spirit drinks should also be mentioned.  Does Brazil consider that these have been wrongfully omitted in 
the report by the Secretariat, as these products according to the EC’s information benefit from a 20% 
ad valorem  protection. 
 
Answer: 
 
Taking into account that the text of the Secretariat Report mentions “beverages and spirits and 
vinegar”, which corresponds exactly to the title of the HS Chapter 22, we understand that it also 
includes wines and spirit drinks.  On the other hand, these products in fact are subject to rates higher than the average.  On Table III.1 (page 44), the group “beverages and spirits” is shown with an average applied tariff of 17.7%, ranging from 12% to 27%. 
  WT/TPR/M/140/Add.1
 Page 85 
  On page 115, paragraph 18, it is stated that Brazil has announced the withdrawal of the TRQ for wheat.  What is the status of the negotiations on this issue?  Why does it take so long to withdraw the TRQ?  Does the withdrawal imply that the out of quota bound rate will not exceed the last applicable in-quota bound rate? 
 Answer: 
 As explained on other occasions, the Brazilian government announced in 1996 its intention to eliminate the TRQ for wheat contained in its schedules, as indicated in the notification G/AG/N/BRA/19.  This quota was established at a volume of 750 thousand tons and with in-quota tariff rate of zero.  As a consequence of the elim ination of the TRQ for wheat, negotiations were 
conducted under Article XXVIII of GATT 1994 with the USA - with initial rights – and Canada, as main supplier.  During these negotiations, concerns over possible loss es arising from the elimination of the quota 
were dispelled in view of the strong liberalization of trade in wheat in Brazil during the 1990's.  The end of state monopoly in the beginning of the 19 90’s in the sector was a central element of this 
move.   
Due to this new internal scenario, Brazil has become one of the largest world importers of wheat, 
with total imports averaging 6 millions t on/year, rendering the quota meaningless. 
 
Notification G/AG/N/BRA/19 indicates that Brazili an total imports of wheat amounted to 6,890,988 
tons of wheat in 1999; 7,522,694 tons; in 2000, and 7,014,798 tons, in 2001, 
 
Applied rates for wheat were as follows: 
 
Period Applied rate 
1996 10% 
01/1997 to 10/1997 10% 
11/1997 to 12/1997 13% 
1998 13% 
1999 13% 
2000 13% 
2001 12,5% 
2002 11,5% 
2003 10% 
 
Brazil firmly believes on the superiority of a tariffs only regime and invites other countries with TRQs to follow our example. 
 
The EC notes that on page 115, paragraph 19, of the WTO Secretariats report it is established that Brazil 
in practice does not apply export taxes for a majority of products, where legally it would be possible.  Does Brazil envisage withdrawing the legislative fr amework today suppressing the potential to tax for 
these products? 
 Answer: 
 Although no measures regarding export taxes are expected to be adopted, Brazil considers that the maintenance of particular regulations is legitimate and to a certain extent desirable, so as to permit 
its eventual resorting in face of circumstances ref erred in WTO provisions.  The Brazilian 
legislation states the highest level for the application of these rates. WT/TPR/M/140/Add.1 
Page 86   The EC has noted that on page 116 of the WTO Secretariats report, paragraph 20, that there is data available which is significantly more recent, than can be derived from Brazil’s last DS:1 notification to 
WTO (97/98).  When will Brazil notify the more re cent information? Furthermore can Brazil inform how 
the measures described in the paragraphs 23-62 (p ages 116-126) have been notified to WTO (i.e. box 
classification)?   
Answer:  The Brazilian government is finalizing the notificat ion on domestic support for the years 1999 to 
2003.  As soon as the final statistics are collecte d and compiled, these notifications will be presented 
to the WTO.  We expect to be in a position to bring our notifications up to date by the first trimester of 2005.  
Brazil understands that the issuing of notifications is an essential instrument to proceed the monitoring of 
the commitments undertaken by members and this is why we championed the question of monitoring 
during the framework negotiations.  Thus, we also invite the EC and other members to update their 
notifications.  The measures described in the paragraphs 23-62 have been notified as following: 
 
− Amber box – product-specific measures: production credit, commercialisation credit, PEP, AGF and 
Option Contracts. 
− S&D (Article 6.2):  production credit for sm all farmers (PRONAF), investment credit and 
PROCERA. 
− Green box:  PROAGRO. 
− To the knowledge of the EC the Brazilian government plays an active role in the production of sugar 
cane and thus alcohol-fuel, including through financing and setting of mandatory percentages of 
alcohol-fuel, which guarantee a captive mar ket for Brazilian sugar cane derived products. 
 The EC should like to receive more information about this role and how the government’s actions impact 
on the production of sugar, including its costs.  Has Brazil made an analysis which could be shared with 
the Member of the WTO?  
 
Answer: 
 
Following the end of the National Fuel and Al cohol Program (PROALCOOL), launched in the mid-
1970s, Brazilian technological development and natural endowment in the ethanol field has made 
the national sugar and alcohol industry one of the most competitive in the world.   Hardly can the role of the Brazilian government in that market be qualified as “active”.  Sugar 
cane grown in the Southeast and Northeast of Brazil has a natural competitive advantage.  The 
gross feedstock costs per litre of fuel ethanol produced from sugar cane in Brazil is today US$0,08 
per litre, as compared to beet (US$0,25/litre) and to corn (US$0,24/litre).  Brazil's total production of anhydrous fuel ethanol and hydrous fuel ethanol was 12.6 million metres
3 in 2002. 
 After the liberalization of hydrous alcohol prices in 1998, government intervention largely stopped.  Today Brazilian authorities regulatory role in the market is limited to define the blending rate for anhydrous alcohol.  Such regulatory role is due to the fact that environmental concerns are the kernel of fuel policies in Brazil.  In fact, vehicles made to run on "flex fuel" in 2003, combining, in  WT/TPR/M/140/Add.1
 Page 87 
  
any proportion, ethanol and gasoline, are rapidly capturing large shares of the market.  Consumers 
are free to choose the fuel proportions according to prices.  The Law No. 8,723, of 28 October 1993, established the threshold of polluting gases, which only can be achieved at a low cost basis by adding alcohol-fuel to gasoline from 20% to 25%.  This range was defined according technical specification of engines.  This measure does not guarantee any captive market for Brazilian sugar cane derived products because it was not determined that the alcohol-fuel must be nationally produced. 
 
The main features of the Brazilian sugar and ethanol fuel industry are its flexibility and 
interconnectedness.  In that sense, a plant is able to produce either sugar or ethanol fuel, according to prices in the international market.  Cane is allocated to the most profitable end-use. 
 
Fisheries 
 
According to information at the website of the “Secre taria Especial de Aqüicultura e Pesca da Presidência 
da República– SEAP/PR” (http://www.presidencia.gov.br/seap/ ), the Federal Government has set up an 
aid programme to the fisheries called “PROFROTA” (Lei no. 10.849, of 23 March 2004 and implementing regulation, Decreto no. 5.095, of 1 June 2004).  The main objectives of this programme, as 
mentioned in Law no 10.849, appear to be the expansion and modernisation of Brazil’s fishing fleet.  The 
Law includes among other programme targets: the construction of up to 100 vessels for distant water 
fisheries (pesca oceânica) and the purchase of up to 30 vessels, not older that 5 years, also for distant 
water fisheries as well as the conversion for distant water fishing operations or other expanding fisheries, of up to 240 vessels of the coastal fleet, currently fishing on resources that are being over-fished or over-
exploited, so as to reduce the fishing effort on these over-fished or over-exploited (coastal) resources. 
 
The EC should like Brazil to specify what type of aid is being provided to vessel owners and more 
specifically if the aid is being provided in the form of direct grants, involving transfers of money?  Is aid granted in the form of “foregone revenue”, such as tax rebates, etc?  What is the foreseen duration of this 
programme?  Should the EC expect that this subsidy and the subsidies themselves will be notified in 
Brazil’s next notification pursuant to Article 25 of the ASCM?  
Answer: 
 
The PROFROTA program will provide financing to  the acquisition, construction, modernization, 
adaptation and equipping of fishing vessels.  There will be no direct grant nor foregone revenue provided under PROFROTA.  The PROFROTA program is expected to enter into force and to 
become operational in 2005 and its end is envisaged for 2007.  Notification under Article 25 of the 
ASCM will be made as soon as the program enters into force. 
 
Furthermore, have the competent authorities assessed how the increase in fishing capacity in distant 
waters or in the high seas, could affect existing stocks, in particular those that are over-fished and/or over-
exploited? 
 
Answer: 
 Yes.  It is clear in both pieces of legislation that over-exploitation is a basic concern of Brazilian authorities.  For instance, article 2 of Law 10. 849 states that the PROFROTA aims at “reducing the 
pressure on over-exploited fishing resources”.  Moreover, it must be pointed out that the 
sustainability of fishing resources is regulated by international organizations, such as ICCAT.  WT/TPR/M/140/Add.1 
Page 88   SPS  The EC notes the section in the report of the WTO Secretariat concerning Brazil’s legal and institutional framework as well as Brazils inspection, registration and certification activities.  
 
The EC should like Brazil to list all the SPS measur es, including import restrictions, applied on imports 
from all sources and identifying specifically those from the EC.  
Answer: 
 All SPS measures introduced during the period under rev iew that might have significant impact on 
trade were notified to the WTO Secretariat.  Information on SPS import requirements can be obtained from the following web site:  www.agricultura.gov.br and www.anvisa.gov.br.    
 
With regard to imports of animal products, there exists the possibility, forecast or will, in order to replace 
the current system of inspection “in situ” of the exporter’s industrial plant with a system of recognition of 
equivalences between systems of sanitary inspection? 
 
Answer: 
 
Brazil is open to negotiate with other members conditions to implement the SPS Agreement so as to 
allow for the recognition of equivalence between systems of sanitary inspection.  The terms of such 
negotiations should be based on some basic elements s uch as:  1) historic trade data;  2) scientific 
resolution of possible disputes;  3) recognition of certification process;  and 4) simplification of 
border controls and other aspects that could result in immediate new trade opportunities. 
 
At present, the sending of samples of wine, necessary to promote the foreign wines, is considered as an 
ordinary import.  The EC should like to ask Brazil if there is some way to facilitate the entry of these samples? 
 
Answer: 
 
The sending of wine samples for market promotion in trade fairs, trade shows, exhibitions, tasting 
proofs and events related to market promotion is usually authorized by the Ministry of Agriculture.  
There are some requirements to be fulfilled, such as indication of types, amount estimated to be 
used, name and local of the event, trade marks, an d types of packing and bottling.  In such cases, 
there is no selling permission. 
 
What is the Brazilian position in relation to a possible agreement with the EC relatively to systems of 
sanitary inspection, reciprocal protection of geo graphical indications, and oenological practices? 
 
Answer: 
 
Brazil would like to continue the discussions with the EU regarding a possible agreement between 
Mercosur and the EU on sanitary and phytosanitary measures.  Brazil wishes to negotiate a 
comprehensive agreement which will cover the ma in disciplines on the SPS area, including 
regionalization, equivalence, control and inspecti on systems, and transparency.  The agreement 
shall take into account Mercosur’s level of integration in the SPS area and shall create a framework 
that will allow both sides to address current and future market access problems. 
  WT/TPR/M/140/Add.1
 Page 89 
  2. TRADE IN SERVICES  Brazil has continued to liberalize its services sector in  recent years, which in turn has promoted efficiency 
gains.  Although efforts have been made in this ar ea, the EC noted that Brazil has not yet harvested the 
benefits of opening of liberalising in areas such as transportation.  Noting the benefits that are to be 
derived from continued opening of service markets, the EC should like to ask Brazil the following. 
 According to paragraph 46 of Brazil's government report the initial offer of Brazil on services in DDA includes:” substantive improvements in several sectors”.  The EC should like to take the opportunity to 
ask Brazil to substantiate the view presented in the re port, in particular taking into consideration that the 
initial offer does not include the commitments of the 4th Protocols on financial services, environmental 
services, transport services, telecommunication services which were not ratified by Brazil? 
 
Answer: 
 The Brazilian initial offer included improvements in 14 sub-sectors, encompassing 5 sectors (professional services, building and construction, di stribution, tourism, and recreational services).  
In almost all cases the offer consolidates a situation of absence of restrictions to foreign suppliers with a commercial presence in Brazil.  Moreover, by making clear reference to the CPC, Brazil has 
ensured transparency in its commitments. 
 
The question is not clear regarding “4
th protocols” (sic).  It appears to refer to protocols on 
environmental services and transport services, whic h do not exist.  Regarding the IV Protocol on 
Telecommunication, the reasons for Brazil not adhering to it are explained in paragraph 161, 
page 146 of the Secretariat’s Report.  Regarding the V Protocol on Financial Services, its 
ratification depends on the completion of legislative process.  It is not convenient to repeat its 
elements in the initial offer, since it is an inde pendent legal instrument which is following its due 
course in Parliament, and to duplicate it in a negotiating offer might give rise to legal confusion. 
 
Noting this, the EC should like to ask Brazil to pr ovide further information on the state of autonomous 
liberalisation in the areas of insurance services, environmental services and transport services. 
 
Answer: 
 
Brazilian insurance market provides broad access for foreign companies, which operate in a 
climate of open competition.  Environmental serv ices are normally supplied through concessions 
and there are in principle no restrictions to foreign suppliers wishing to participate in tenders 
called by the public authorities, normally at municipal level.  A new piece of legislation creating 
parameters for the water and sanitation sect or across the country is under consideration by the 
Parliament.  Regarding maritime transportation, there is no restriction to the foreign participation 
in the capital of Brazilian companies.  
The EC should also like to ask if Brazil applies specific restrictions to the cross-border supply of services 
in areas like other business services, computer services, distribution services, telecommunication services 
and environmental services. 
 
Answer: 
 
There are in principle no specific restrictions to the cross-border supply of services in the sectors of 
other business services, computer services and distribution services.  Restrictions regarding WT/TPR/M/140/Add.1 
Page 90   
advertisement are linked to measures aimed at fostering national cinema, since advertisement and 
artistic cinema have a growing interdependence.  Cross-border supply in environmental services (sewage, sanitation, etc.) seems rather to be unappli cable.  In telecommunication services (fixed and 
mobile telephony), supply is allowed for companies which have commercial presence in Brazil. 
 Energy 
 Could the Brazil explain the regime regarding the construction, operation and ownership of electricity power stations in Brazil?  
 
Answer:  Please, refer to the web site http://www.mme.gov.br/ for details regarding the regulatory framework.   
Is it possible for a private foreign operator to build, own and operate a power station, provided it respects 
the appropriate regulatory requirements regarding the energy planning and environmental regulation? 
 
Answer: 
 
Generally yes, provided it meets the licensing an d qualification requirements.  For details, please 
refer to the website of the Ministry of  Energy (site http://www.mme.gov.br/). 
 
Is the regulatory framework in Brazil providing for an open and non-discriminatory system of concession 
for the operation of the electricity distribution companies? 
 
Answer: 
 Yes, the system of concession is open and non-dis criminatory for operation of the electricity 
distribution companies.  For details, please refer to the website of the Ministry of Energy (site 
http://www.mme.gov.br/)  
 
Professional services 
 
Could Brazil explain if the obligation for foreign suppliers of professional services to form a “consórcio” 
in which the Brazilian partner maintains the leadership is still applied and explain the rationale behind this requirement?  
 
Answer: 
 
It is still applied as a requirement of Brazilian legislation.   The leadership in a consórcio means 
solely that the Brazilian supplier will act as the “contacting party” between the consórcio and the 
contracting partner.  This is not a limitation on ownership, but a type of partnership.  
 Could the Brazil explain if the economic need test applied to the professionals and technicians working in 
Brazil on a temporary basis (“The company must justify the need to contract such professionals and technicians in relation to similar professionals and technicians available in Brazil “) is still applied? 
  WT/TPR/M/140/Add.1
 Page 91 
  
Answer: 
 Brazil’s commitments regarding professional technicians inscribed in its schedules are still in force.  
Could Brazil explain the rationale behind the residence requirement for the practice of the legal profession in Brazil, both for consultancy on Brazilian and foreign law? 
 Before being authorized for a consultancy practice in Brazil under Provision No. 91/2000, the applicant must show proof of permanent residency in Brazil, a licence to practise law, an effective admission at the 
Bar in the country of qualification, proof of good conduct including an affidavit by three BBA-registered 
Brazilian lawyers, and proof that there is an instrument for reciprocity for Brazilian attorneys wishing to 
practice law in the applicant's country of origin.   Could Brazil explain the rationale behind the requ irement for a proof of good conduct including an 
affidavit by three BBA-registered Brazilian lawyers?   Would a good conduct certificate delivered by 
authorities of the applicant’s country not have a stronger link with the applicant than an affidavit by three 
BBA-registered Brazilian lawyers? 
 
Answer: 
 
Brazil will provide answer for this question in due course. 
 
Accountants and auditors, both nationals and foreigners , must be registered in their corresponding CRC.  
In order to obtain this registration, is there only a sufficiency exam requirement, or are there other 
conditions (local degree, traineeship program, etc.)? 
 
Answer: 
 Besides an accountant exam in CRC, independent auditors of open companies must pass a 
qualification exam for this specific accounting modality.  The outcomes of such exam form an 
integral part of registration in CVM (Securities Commission).  Independent auditors must also 
make proof of having exercised the activity of account auditing in Brazil for a period not inferior to 
5 years, and have commercial presence (Mode 3). 
 
Postal and courier 
 
How precisely is the area reserved to the postal monopoly (i.e. activities excluded from competition) 
defined?  Is there a weight or a price limit or a limit based on the nature of the item transported (i.e. 
Parcels, letters, direct mail, unaddressed letters) or on  the nature of the service provided?  If yes, what are 
their levels? 
 
Answer:  
Brazil will provide answer for this question in due course. 
 
Are some activities or postal/courier services subj ect to licensing and if so what are he licensing 
requirements applied?  
 WT/TPR/M/140/Add.1 
Page 92   
Answer: 
 Brazil will provide answer for this question in due course.  
What is the status of express delivery services in Brazil?  Are they defined in some way in the internal legislation?  Are express delivery operat ors authorised to deliver all items, including letters?  Are they 
subject to licensing and if so, what are the licensing requirements?  
 
Answer:  Brazil will provide answer for this question in due course. 
 
Telecommunication services  
Brazil has not yet ratified the 4th Protocol on Telecommunication services.  
 
Could the Brazilian authorities please inform about t he procedure in Brazil regarding the ratification of 
this protocol and the intentions in this regard?  
Answer: 
 
The situation regarding the IV Protocol is described in paragraph 161, page 146 of the Secretariat 
Report.  Brazil presented in 2000 an offer intended to rectifying the situation generated by its impossibility to ratify the IV Protocol in the 19 97 form, but such offer was rejected by some 
Members (United States, Hong Kong/China, European Communities, Japan).  The offers made 
during the negotiation of the IV Protocol were valid exclusively in that context.  Adoption of the 
IV Protocol as such is thus not under consideration.  However, Brazil does not exclude a priori the 
possibility of including any sector in its revised services offer.  
Financial services 
 
The EC notes that Brazil has not ratified the 5
th protocol for services.  
 
Could Brazilian authorities provide an update on t he state of its ratification procedure for the 5th 
protocol? 
 
Answer: 
 
The executive branch has taken all the steps necessary for the approval of the V Protocol by 
Parliament, a pre-condition to its ratification by  Brazil.  A time-frame for such approval cannot be 
determined, since there is no time-limit for the examination of legal instruments by Congress, and 
also in view of the independence among branches of Government . 
 
The WTO secretariat report states that although the monopoly on reinsurance operations was eliminated 
in 1996, and regulations establishing conditions of operation for new reinsures in Brazil were issued in 
January 2000, the reinsurance market continues to be a monopoly of IRB-Brasil Resseguros.  Furthermore, the WTO secretariat report states the January 2000 Resolution, allowing foreign-based reinsurance companies to sell reinsurance services in the country, directly or through brokers, to become 
effective upon privatization of IRB, was left temporarily ineffective.  
  WT/TPR/M/140/Add.1
 Page 93 
  Could Brazil inform the EC whether it intends to pursue new initiatives to open its reinsurance market?  
Answer: 
 
This matter needs to be regulated by law in order to allow a private open market of reinsurance. 
 
Transport Services;  Maritime Transports  
Maritime transport  
In the report from the WTO secretariat we could read that Brazil constitution (as amended in 1995) 
requires reciprocity in transport agreement.  How ever, Brazil did make an offer (April 1996) during the 
extended negotiation on maritime transport, that included commitments (in Mode 1 and 2) on 
international transport. 
 
Can Brazil confirm that it can make similar or improved commitments in a revised GATS offer?  
 
Answer: 
 
Brazil does not exclude any sector from its revised offer in services negotiation.   
 
Furthermore, in this part of the report it also clarifies the cargo reservation that Brazil has in place:  with 
respect to the oil and oil related products it is underli ned that it has to be transported by Brazilian flagged 
vessels.  However, the Brazil-US maritime agreement of October 1999, states and the ocean borne liner 
trade is free and open, and there are no exemptions that related to this type of products.  
 
Can Brazil confirm that oil and oil related products are not excluded form the agreement?  Can Brazil clarify if these products are also included in agreement that covers international maritime transport with other trading partners?   
Answer: 
 Brazil will provide written response for this question in due course.  
In addition, it also mentions that equipment and parts for the Brazilian military organisations and public 
entities cargo and good benefiting from official fiscal or credit  programmes are reserved to Brazilian flagged vessels (subject to availability/waivers).  Th is appears to be broader that the exclusion found in 
the Brazil US maritime agreement the where only defence cargo and agricultural assistance cargo are excluded.  
 
Can Brazil confirm that only defence and agricultural assistance cargo are reserved to Brazilian vessels?  
Can Brazil clarify if these products are also inclu ded in agreements that cover international maritime 
transport with other trading partners?   
Answer: 
 
Brazil will provide written response for this question in due course. 
 
Concerning the maritime transport it can also be read in the report from the WTO secretariat that cabotage 
is reserved to Brazilian vessels subject to availability.  Since Brazil exports more than it imports  the gap 
is created where empty containers  on the incoming vessels (import) make up more than 60% of the total 
number of containers (imports are estimated to be 700.000 full containers, exports to 1.500.000).  WT/TPR/M/140/Add.1 
Page 94   Can by foreign maritime operators freely reposition empty containers between ports in Brazil?  Given the unbalance of the import/export volumes and in order to remedy port congestion, have Brazil considered to grant general waivers to foreign maritime operators to operate dedicated feeder vessels for relay their own international cargo between some of the 15 Brazilian ports currently served by foreign containers vessels 
ports of Brazil?  
Answer: 
 
Brazil will provide written response for this question in due course. 
 
Air-transport 
 
In paragraph 265 of the WTO Secretariats it is mentioned that Brazil intends to equalize the conditions for 
Brazilian and foreign international air transport operators.  
 In relation to remittance and currency conversion airlines have to have a license before they can convert 
locally earned revenue into other currencies.  The license is given on a monthly basis, and therefore 
causes delay in the remittance and conversion.  Since many costs (including fuel and airport charges) in 
Brazil have to be paid in US dollars, the restriction and the delay of conversion puts financial pressure on 
foreign airlines.   Can Brazil clarify if Brazilian airlines are covered by identical restrictions?   
 
Answer: 
 Brazil will provide written response for this question in due course.  
Furthermore, foreign airlines usually want to provide its costumers with additional services such as 
booking of holiday packages, car hire, travel insurance etc as an integrated part of the selling/marketing, and in some cases these related products are even integrated in the reservations systems of the carriers.    Can Brazil clarify under which conditions foreign airlines are allowed to provide such products?  Can Brazil clarify whether the same conditions apply to Brazilian carriers?   
Answer: 
 Brazil will provide written response for this question in due course.  
In paragraph 279 of the WTO Secretariats report it is mentioned that Brazil’s constitution (as amended in 
1995) requires reciprocity in transport agreement.  However, Brazil did make an offer (April 1996) during the extended negotiation on maritime transport, that included commitments (in Mode 1 and 2) on international transport.  
 
Can Brazil confirm that it can make similar or improved commitments in a revised GATS offer?  
 
Answer: 
 Brazil does not exclude any sector from its revised offer in services negotiation.   
  WT/TPR/M/140/Add.1
 Page 95 
  In paragraph 281 of the WTO Secretariats report a clarification is given of the cargo reservation that Brazil has in place:  with respect to the oil and o il related products it is underlined that it has to be 
transported by Brazilian flagged vessels.  However, the Brazil-US maritime agreement of October 1999, states and the ocean borne liner trade is free and open, and there are no exemptions that relates to this type 
of products.  
 
Can Brazil confirm that oil and oil related products are not exempted by the agreement?  Can Brazil clarify if these products are also included in agreements that cover international maritime transport with other trading partners?  
 Answer: 
 Brazil will provide written response for this question in due course.  
Furthermore paragraph 281 of the WTO Secretariats report also mentions that equipment and parts for the Brazilian military organisations and  public entities  cargo and goods benefiting from official fiscal or 
credit programmes are reserved to Br azilian flagged vessels (subject to availability/waivers).  This 
appears to be broader that the exclusion found in the Brazil US maritime agreement the where only defence cargo and agricultural assistance cargo are excluded.  
 
Can Brazil confirm that only defence and agricultural assistance cargo are reserved to Brazilian vessels?  
Can Brazil clarify if these products are also inclu ded in agreements that cover international maritime 
transport with other trading partners?  Can Brazil cl arify whether the obligation to use Brazilian flagged 
vessels also applies in other situations for example when a foreign company has received official (local) 
fiscal support to set up a (green field) production of go ods: will the export/import  related to this 
production come under the flag requirement?  
 
Answer: 
 
Brazil will provide written response for this question in due course. 
 
Paragraph 280 of the WTO Secretariats report explain s that cabotage is reserved to Brazilian vessels 
subject to availability.  Since Brazil exports more than it imports the gap is created where empty 
containers on the incoming vessels (import) make up more than 60% of the total number of containers 
(imports are estimated to be 700.000 full containers, exports to 1.500.000).   
 Can foreign maritime operators freely reposition empty containers between ports in Brazil?  Given the 
unbalance of the import/export volumes and in order to remedy port congestion, have Brazil considered to 
grant general waivers to foreign maritime operators to operate dedicated feeder vessels for relay their own 
international cargo between some of the 15 Brazilian ports currently served by foreign containers vessels 
ports of Brazil ?   
Answer: 
 
Brazil will provide written response for this question in due course. 
 
3. INTELLECTUAL PROPERTY RIGHTS   
The EC notes the efforts taken by the authorities of Brazil in order to implement intellectual property 
rights.  It has been noted in the report prepared by the WTO secretariat that Brazil is a member of the WT/TPR/M/140/Add.1 
Page 96   World Intellectual Property Organisation (WIPO) and a signatory to several intellectual property rights 
(IRPs) agreements.  With respect to this we would like to ask the following questions:  What is the role of the agency ANVISA in the granting of patents?  Why is ANVISA’s approval 
mandatory in the case of certain patent applications?  How is this additional mandatory requirement 
compatible with the three patentability requirements contained in Article 27 of the TRIPs Agreement (i.e. 
novelty, inventive step and industrial application).  What is the average time between a patent application and the decision on its granting?  How many patent applications are currently pending a decision on their granting? 
 Answer: 
 ANVISA acts jointly with INPI, cooperating in the technical examination of patent applications.  
This joint action is regulated solely by the rule s established in the Brazilian Industrial Property 
Law.  There is no isolated action by ANVISA in the processing of patent ap plications.  Thus, this 
joint action by INPI/ANVISA does not constitu te a reexamination of patent applications, nor an 
additional requirement for the granting of a patent.  The technical examination of patent applications by INPI, with the technical support of ANVISA, is a single act accomplished, exclusively, in the light of the patentability criteria established in the Brazilian Industrial Property 
Law, consistent with those in the TRIPS Agreemen t.  It demonstrates, moreover, Brazil’s full 
commitment to the implementation of the Doha  Declaration on the TRIPS Agreement and Public 
Health.  
 
What is the protection offered by ANVISA to the undisclosed test data required for the marketing of 
pharmaceutical and AGRI-chemical products?  Why ar e data disclosed and their use permitted to third 
parties?  How is this compatible with Article 39 of the TRIPs Agreement? 
 
Answer: 
 
The Brazilian Government protects all undisclosed information against unfair commercial use, as 
required by Article 39 of the TRIPS Agreement.  Specifically for Agri-chemical products, as informed on page 107, paragraph 317, Brazil adopted rules for the protection of undisclosed 
information submitted to the authorities responsible for marketing approval, in line with Article 39 
of the TRIPS Agreement, through Law Number 10,603 of 2002. 
 
Explain what protection is granted to geographical indications in Brazil.  List all the geographical 
indications registered at the INPI.  What is the average time between a patent application and the decision 
on its granting?  How many patent applications are currently pending a decision on their granting? 
 
Answer: 
 Resolution Nº 75/2000 establishes the conditions for the registration of geographical indications in INPI.  For the time being, INPI has registered the following geographical indications:  “Região 
dos Vinhos Verdes”, “Cognac”, “Vale dos Vinh edos”, “Franciacorta”, “Cachaça” and “Brasil” are 
registered by virtue of Decree nº 4.062, December 21st, 2001 . 
 The EC notes that it continues to be possible to market olive oil under the denomination of "Azeite" (Olive oil).  For how long should the EC expect that this continues to be possible, even for products that 
have a very small proportion of olive oil? 
  WT/TPR/M/140/Add.1
 Page 97 
  
Answer: 
 Brazil establishes specific identity and quality standards for each product.  The product called “Azeite” has its standard defined by Resolution RDC ANVISA nº 482, of September 23rd, 1999.  These standards allow for a variation in the names depending on the proportion of olive oil contained in each product, which distinguishes the categories. 
4. BRAZIL’S TRADE AND INVESTMENT REGIME  
 
It was said in the report of the WTO that there has been a strong decline in the FDI inflows to Brazil 
during the past years.  The decline is accorded to several factors, such as unstable global economic 
environment but also reduced investor confidence.  
 
Could the Brazil please explain what is being done in order to restore the investor confidence in order to 
attract more FDI into Brazil?  Furthermore, we would also like to request to have some explanations about the plans of opening up/facilitate the areas which have so far been closed for FDI.  
 
Answer: 
 
Investment flows are a result of overall macroeconomic conditions both at domestic and international level.  FDI flows have experienced a decl ine at international level during recent years, 
and seems to be only slowly recovering.  This climate is not specific to Brazil.  Actually, investment 
flows in the country are on the rise in several sectors accompanying the fact that the economy is 
regaining speed.  Brazilian government has traditionally and consistently worked to increase 
investors’ confidence in its market.  Foreign participation in the capital of Brazilian companies is restricted only in very specific sectors:  nuclear energy, transportation of money and valuables.  Foreign participation is limited to a proportion of the company’s capital also only in very few 
sectors:  broadcasting, air transportation, highway freight transportation.  
Please list all services and investment areas where li mits to foreign-ownership are established.  Identify 
those limits (e.g. complete prohibition, capital limitations, etc.).  
Answer: 
 Foreign participation in the capital of Brazilian companies is restricted only in very specific sectors: nuclear energy, transportation of money and valuables.  Foreign participation is limited to a proportion of the company’s capital also only in very few sectors:  broadcasting, air transportation, highway freight transportation.  
 
5. TRADE POLICY STRATEGY  Brazil is one of the founding Members of the WTO, and one of the most active participants in the 
multilateral trading system.  The EC considers that the WTO and multilateral liberalization is the most 
certain way for all countries to promote their interests, and to ensure that such interests are promoted in an 
inclusive manner, reflecting the interests of all Members also when establishing a level “playing-field”.  
Noting the common interest in promoting a multilateral trade agenda, the EC should like to ask Brazil the following. 
 
Bilateral, regional and global trade liberalisation is vital for promoting prosperity, growth and 
development to the benefits of the world at large.  The EC considers that the WTO and multilateral WT/TPR/M/140/Add.1 
Page 98   liberalisation is the most certain way for promoting global interests for industrialised countries and developing countries at large.   How does Brazil assess the relative importance and weight of bilateral/FTA policies and further 
development of the WTO system in terms of its own trade and development needs?  How does Brazil 
assess the impact on the less developed developing countries of her policies? 
 
Answer: 
 Brazil attaches great importance to bilateral trade agreements/FTAs as valuable complement, though not a substitute to a fair, balanced, transparent, rule-based, and non-discriminatory multilateral trade system.  There must be a balance between FTAs and the MTS in order to assure their mutual strength and dynamism so to enhance the benefits of trade.  Over the period subject to 
the TPR, Brazil has pursued a three-dimension trade strategy focusing on:  (i) the strengthening of 
Mercosur, (ii) regional and extra-regional trade ag reements; (iii) advancing the WTO Doha Round.  
The development needs of Brazil and other developing countries, particularly the LDCs, is intimately related to the benefits of trade gene ration accruing from FTAs and, in particular, 
through the MTS, which is the ultimate provider of stability, transparency and certainty for trade relations.  Today it is clear that there is a cr itical development gap within the structure of world 
trade in agriculture.  That is why Brazil trade po licies at both multilateral and bilateral levels aim 
to foster a trading environment with larger market access to exports by developing countries and 
conducive to the elimination of distorting schemes to these exports.  
 
According to the Brazil government report, Brazil’s broad objective is to use trade policy to foster 
sustainable economic growth and to reduce the country’s vulnerability with respect to global financial 
markets.  
 
The EC should like Brazil to explain further how this has been implemented in practice?  
 
Answer: 
 As presented in both the Secretariat and Government’s reports, Brazil has been conducting a series 
of consistent macroeconomic and microeconomic policies that are conducive to sustainable 
economic growth, from a coherent monetary regime based on inflation targeting and solid fiscal 
discipline, with an extraordinary performance of primary surpluses, to a number of reforms aiming 
at fostering entrepreneurship, innovation, credit markets and financial deepening.  Brazil's insertion in international trade is key to support these set of policies, as trade is not only a relevant 
factor for growth, but also a steady source of external financing.  Besides its impact on technology, 
productivity and the economic activity, trade can enhance the dynamism of the current account 
and, as a result, play a relevant role in promoti ng the soundness of the balance of payment and the 
debt sustainability.  Within the current econo mic policy conditions, which include a floating 
exchange rate, the expansion of trade, in particular of exports, has been crucial in reducing the risk-premium in international financial markets and in enabling a higher liquidity in credit and 
capital markets in general.  A clear signal of this positive outcome, as recognised by rating agencies 
and other financial markets agents has been the increase in the ratios of trade and exports  to GDP, 
to debt and to debt service.  All these developments contribute to reducing Brazil and other developing countries’ vulnerability with respect to global financial markets and should be well considered by the Working Group on Trade, Debt and Finance.    
  WT/TPR/M/140/Add.1
 Page 99 
  The EC noted from the report by the WTO Secretariat and the government of Brazil that a measures have been taken to increase investments and promote trade as well as competition.  As some of the steps seem to be bordering to issue covered in discussions on an agreements in the WTO on investment and competition, the EC should like Brazil to further clarify, also considering her support for the multilateral 
trading agenda, why efforts like to ones undertaken by Brazil should not be encouraged in the WTO? 
 
Answer:  Brazil agrees that competition and investments are important issues for the global economy.  Nevertheless, the Doha Agenda was already overcharged with new issues, and the postponement of the talks on three Singapore Issues is welcomed, since it helped to streamline the multilateral negotiations. 
 
Furthermore, does Brazil intend to sign the pluril ateral Government Procurement Agreement, which she 
seems to already have implemented in practice? 
 
Answer: 
 Brazil is not envisaging acceding to the Government Procurement Agreement, or any other 
plurilateral agreement in the WTO. 
 
A number of developing countries are much worse off than Brazil, who has enjoyed the benefits of global 
trade on a challenging but however more or less rapid and safe path of development.   
How does Brazil assess the possibilities for less developed countries to participate in global trade and to 
benefit from the same development as Brazil? 
 
Answer: 
 
Brazil believes that all developing countries shall benefit from a truly open, equitable, fair and non-
discriminatory multilateral trade system.  In this regard, all developing countries will gain with the elimination of agriculture export subsidies, enh anced market access for good in which they are 
competitive (such as textiles), further clarification of rules governing anti-dumping measures, 
advancement in services Mode 4, and the design of rules to protect traditional knowledge and 
genetical resources.  All these objectives Brazil shares with all developing countries, in particular 
with LDCs, that are those which suffer most from t he protection and distortions in agriculture.  As 
established within the Millenium Development Goals, LDCs should have greater market access to 
their exports, and it is important that the international community supports their efforts in a 
transparent, predictable and steady bases.  Brazil hopes that this aim can be met by the Doha 
negotiations and the launching of the third round of the GSTP.  It is also crucial to poverty 
reduction that all the MDGs, in parallel to market access, be taken on a serious and coherent way by the international community, in particular the developed countries. 
 
How does Brazil perceive the differences between the developing needs of these countries and those of a 
country as Brazil and how does Brazil believe that the different needs could be most optimally dealt with 
in regional as well as global trade arrangements?  WT/TPR/M/140/Add.1 
Page 100   
Answer: 
 Brazil believes that all developing countries suffer with the asymmetries of the multilateral trade 
rules.  The situation of LDCs is further aggravated  because of serious supply-side constraints, 
among which low levels of human and social capitals.  There must be concrete and co-ordinated efforts from the international community in targeting adequate financial support, technical co-operation, and capacity-building to those countries, in line with the objectives of the MDGs.  The 
multilateral trade rules has to respond to these objectives and can help them by assuring fair and competitive conditions for, inter alia , agricultural trade and services Mode 4.  Furthermore, the 
LDCs can benefit from the growing dynamism of south-south trade, through engagement in the third negotiating round under the GSTP.  
 
In the Brazil government report reference is made to Brazil’s participation in the Global System of Trade Preferences among Developing Countries, and the increase of the so-called South-South trade.  
 
Could Brazil provide further information concerning this arrangement, does it apply in the same manner 
to all developing countries or is there a grouping of countries at a different level of development.  Does this arrangement provide for full access of LDC’s to the markets of emerging developing countries?  
 
Answer: 
 
The GSTP agreement provides additional degrees of fl exibility for LDCs, as stated in its article 
3.(f).  “The special needs of the least developed  countries shall be clearly recognised and concrete 
preferential measures in favour of these countries should be agreed upon;  the least developed 
countries will not be required to make concessions on a reciprocal basis”.  Such flexibility includes 
special consideration for products of export interest of LDCs, as well as special regard concerning 
safeguards measures against LDCs (article 17 of the agreement). 
 
Is and in case when does Brazil intent to provide duty and quota-free access to goods from least 
developed countries? 
 
Answer: 
 
Brazil intends to further open its market to LDC exports within the third round of the GSTP, as 
well as within the Doha Round.  Duty and quota-free access to goods from LDCs is a possible 
outcome of the GSTP negotiations. 
 
During a visit by Present Lula to Africa last year , the President indicated that Brazil was considering 
granting non-reciprocal trade preferences to LDC’s.  
 
Would these preferences be granted under the WTO 1999 Waiver authorizing developing countries to grant unilateral tariff preferences to LDC’s?  Would the preferential market access granted to LDCs be duty- and quota-free?  What is the timetable envisaged for the entry into force of this preferential scheme? 
 Answer: 
 As already stated, besides a successful conclusion to  the Doha Round, Brazil intends to further open 
its market to LDC exports within the third negotiating round of the GSTP, whose agreement 
establishes (article 17) market access for LDCs in a non-reciprocal basis.  A duty- and quota-free  WT/TPR/M/140/Add.1
 Page 101 
  
system is a possible outcome of the negotiations.  The GSTP is under the framework of the 
Enabling Clause.  
In the report of Brazil emphasis is put on her role to promote sustainable development.  The EC notes this 
shared interest, and should like to pose the following question to Brazil. 
 
How does Brazil take sustainability concerns into account when formulating her trade policy? 
 
Answer:  Brazilian policies take in full account all the aspects related to sustainable development – either in environmental and social aspect.  Brazil has been active promoting the use o bio-fuels, such as ethanol, and advancing intellectual property rules that shall grant protection to traditional knowledge and genetical resources.  
What steps has Brazil undertaken to assess the potential effects of its trade policy on sustainable 
development within Brazil and for least developed countries?  What measures does Brazil use to try to offset any possible negative effects its trade policy might have on sustainable development, and what measures does it apply in order to enhance the positive effects? 
 
Answer: 
 
As stated, Brazilian policies take in full account all the aspects related to sustainable development.  Brazilian trade policy is environment-friendly and promotes new opportunities for all developing 
countries.  For instance, intellectual property rules for traditional knowledge and genetical 
resources, as proposed by Brazil in the TRIPS Council, might benefit all developing countries. 
 
Has Brazil surveyed the impact of her economic trading zones, both internally and for other smaller 
developing countries, some of which are enjoying a much lower level of development than Brazil? 
 
Answer:  
Trade with Brazil is benefiting several smaller economies within LAIA, such as Cuba and Bolivia, 
an associate member of Mercosur.  Moreover, many developing economies share with Brazil some 
common proposals regarding trade rules, as the G-20 membership can demonstrate . 
 
What structures does Brazil have in place for consulting representatives of civil society on the 
formulation of Brazil's trade policy and its potential effects on sustainable development? 
 
Answer: 
 Trade policy issues are discussed within CAMEX, whose participating Ministries consult regularly 
with civil society, through, inter alia , seminars, working groups and focused discussions with 
different interested parties.  The Government also promotes discussions on economic, trade and 
entrepreneurial issues within the National Council for Economic and Social Development, which 
gathers 114 members, of which 90 from the civil society.  Furthermore, representatives of civil society play a significant role in Brazil trade nego tiations through GICI (Inter-ministerial Group on 
International Trade), which convenes regular meetings between representatives from business 
groups, trade unions, NGOs active in various areas and government authorities to discuss issues 
relative to trade policies and negotiations.  Similar institutions were created with regard to specific WT/TPR/M/140/Add.1 
Page 102   
bilateral negotiations to provide a more structured debate with civil society and to enable their 
representatives to present viewpoints on specific matters that might appear more relevant in the 
specific negotiations.  Views expressed in all the above mentioned exercises are taken into account on the drafting of Brazil's trade policies and es tablishing Brazil's strategi es in trade negotiations, 
and in many cases their contribution is extremely valuable. 
 
Regional trade arrangements   Like Brazil and MERCOSUR, EC has progressively deepened its internal integration and sought closer 
economic relations with other regions in the world, in parallel with playing an active role in the 
multilateral trading system.  The EC believes that an ever more deeply integrated and outward looking 
MERCOSUR, with a common external tariff and trade regime, would produce large benefits both for the its members and for its trading partners.  The EC therefore sympathises with Brazil’s various efforts to promote economic integration - in the region, on the South American continent and globally. 
 
In continuation of the previous paragraph, the EC should like Brazil to list all the exceptions to the 
MERCOSUR Common External Tariff, including their period of validity and reason for their existence.   
Answer: 
 
The current exceptions to the Common External Tariff in Brazil are: 
 
(a) 100 tariff headings national exception list; term: 31 December 2005; available at:  http://www.desenvolvimento.gov.br/a rquivo/secex/tec/TecListaExcecoes.zip.  
 
(b) 302 tariff headings list of Informatics (information technology) and  Telecommunication 
 Goods (schedule for convergence to the Common External Tariff);  term:  31 December 
 2005;  available at:  http://www.desenvolvi mento.gov.br/arquivo/secex/tec/TecListaConv 
 BIT.zip. 
 
(c) 348 tariff headings (“ex tarifarios”) l abeled capital or informatics and telecommunications 
 goods, containing 1,488 items not produced within MERCOSUR countries;  term:  
 31 December 2005; available at:  http://w ww.desenvolvimento.gov.br/arquivo/secex/tec/ 
 Extarifarios.zip.  
 
(d) 80 tariff headings containing 246 pharmaceutical substances; term:  31 December 2004;  available at:  http://www.desenvolvimento. gov.br/arquivo/secex/tec/TecMedicamentos.zip.   
 
Reason for the exceptions: flexibility for adaptation to the CET taking into account conjunctural changes 
in the international economy and, in the case of BITs, convergence to CET levels which are lower than 
original Brazilian tariff levels.  The EC should also like Brazil to list all the products subject to voluntary export restrictions agreed with 
Argentina, including their reasoning, duration and compatibility with WTO rules. 
 
Answer: 
 The Brazilian Government has not adopted any volunt ary export restriction mechanism in relation 
to trade with Argentina.  It is necessary to highlight that alternatives recently adopted in the  WT/TPR/M/140/Add.1
 Page 103 
  
regional trade in some particular segments follow arrangements agreed by the national private 
sectors. 
The Protocol of Montevideo, which establishes a lis t of commitments on services within MERCOSUR, 
was signed in 1997 but has not yet been ratified by Brazil.  Could the Brazilian authorities inform about the state of ratification? 
 
Answer: 
 
The text of the Protocol of Montevideo was approved by the Brazilian Congress in 2003.  The initial list of commitments attached to  that instrument, and forming an  integral part thereof, is under 
final examination by the Senate, and, once approved by that House, will allow Brazil to ratify the 
Protocol. 
 
As part of Brazil’s trade policy, explain the state of play, plans and prospects to create a single MERCOSUR market the EC should like to ask Brazil the following question.  
 
When will non-MECORSUR products and services be able to circulate freely within MERCOSUR?  
When will the customs, technical and sanitary procedures and documents be harmonised to permit such 
free circulation?  
 
Answer: 
 
Fundamentally, it is expected that the free circulation of goods and services within MERCOSUR 
will be able after the suppression of the exceptions to the CET placed in the trade made by the members is complete, and the MERCOSUR customs territory is fully integrated.   
 
There has been continuous progress in this resp ect.  At present, goods originating in Mercosur 
circulate freely within Mercosur.  Goods originating in third countries will progressively be allowed 
to circulate freely within Mercosur in time frames and conditions to be established in the legislation that is being produced under the Work Program 2004-2006 (Decision CMC 26/03).  The Council of the Common Market is expected to approve in its next meeting, in 15 December 2004, a decision allowing such movement to a number of products that do not affect the distribution of customs 
revenues.  As technical regulations, conformity evaluation procedures and sanitary and phitosanitary measures are concerned, Mercosur has been developing activities on harmonization and mutual recognition of conformity assessment results, with the objective of facilitating trade 
within the region and with third countries as well as ensuring adequate conditions of health, safety, environment protection etc., taking into account differences in the level of development of national systems of conformity evaluation.  Circulation of services imported from third co untries is normally allowed in conditions not 
different from the ones prevailing for the circulation of services originating in Mercosur countries themselves.  That is, once legally established in a Mercosur country, a foreign supplier will 
normally be treated in other Mercosur countries as a Mercosur supplier, with the corresponding 
benefits and requirements, both for cross-border supply within Mercosur (Mode 1) and for 
establishment in other Mercosur countries (Mode 3).  As for free circulation within Mercosur under Mode 1 of services supplied by foreigners without commercial presence in any of Mercosur countries, this seems to be technically and practically unfeasible:  in that case the service would be 
supplied from the originating country into one Mercosur country, following that country’s 
requirements.   WT/TPR/M/140/Add.1 
Page 104   On page 35 of the report of the WTO Secretaria t report, all concluded Free Trade Agreements and 
Framework Agreements to which MERCOSUR, and Brazil, is  a party is listed.  The report also indicates 
that MERCOSUR itself was notified under the Enabling Clause and is presently undergoing examination in the CRTA.  
 
The EC would thus like to know how and when t hese various Free Trade and Frameworks Agreements 
have been, or will be, notified to the WTO, in accordance with paragraph 4 (a) and (b) of the Enabling Clause, i.e. the requirements on notification and “adequate opportunity for prompt consultations”, paragraph 7 (a) of the GATT Article XXIV and/or paragraph 7 (a) of the GATS Article V, as appropriate?  
 
Answer: 
 The agreements signed under the Montevideo Treaty of 1980 are part of the LAIA integration process.  Their notification, according to the established practice, is therefore included in the reports presented by the Secretariat General of ALADI through the delegation of Uruguay.  As far as the framework agreements are concerned, they provide for the initiation of negotiations, but do not contain trade preferences in themselves and are not required to be notified under the enabling clause or any other WTO provision. 
 
In the report of the WTO Secretariat report and the Report by Brazil, it is indicated that the Free Trade 
Agreements and Framework Agreements could contain disciplines in the area of, for example, anti-
dumping, safeguards, countervailing measures, technical barriers to trade, and sanitary and phytosanitary 
measures.  In so far as the following questions have not been responded to in another context in the WTO, the EC would appreciate to get further information on: 
 
Exactly which of the various Free Trade Agreements and Framework Agreements contain disciplines that 
go beyond mutual reduction and elimination of tariffs?  
 
Answer: 
 
The Economic Complementation Agreement no. 36, between Bolivia and MERCOSUR, contains provisions regarding the promotion and protection of investments. 
 
The Framework Agreements signed by Mercosul with South Africa (subsequently expanded to 
include all members of the Southern African Customs Union), India and Egypt (on November 26, a 
similar agreement was signed with Morocco) essentially provide the legal framework and general objectives for substantive trade negotiations be tween the parties.  The agreements determine 
negotiations for a preferential trade agreement as a first step towards concluding a free trade area.  
To this end, a negotiating committee is created to oversee and facilitate the negotiations.  The 
preferential trade agreements in negotiation by Mercosul with India and the Southern African 
Customs Union cover only trade in goods.  The main text contains provisions on the principles, definitions and objectives, as well as rules regardin g the administration of the agreements.  It refers 
to the parties rights and obligations under the re spective WTO Agreements in the areas of sanitary 
and phytosanitary measures, techni cal barriers to trade, customs valuation, anti-dumping and 
countervailing duties.  The agreements contain spec ific chapters on safeguards, dispute settlement 
and rules of origin, which are essential for th e administration of preferential trade between the 
parties.  
With regards to the Association Agreement under negotiation with the European Union, this has a 
wider scope than even a fully fledged free trade area, as it includes chapters on political dialogue  WT/TPR/M/140/Add.1
 Page 105 
  
and co-operation.  The range of subjects covered in the trade section include:  market access for 
agricultural and non-agricultural goods, sanitary and phytosanitary measures, technical barriers to trade, trade defence instruments, rules of origin, customs procedures, services, investments, intellectual property, government procurement, dispute settlement and competition.  
 Regarding FTAA negotiations, the range of subjects covers market access for agricultural and non-
agricultural goods and services, as well as transparency disciplines related to sanitary and phytosanitary measures, technical barriers to trade, trade defence instruments, customs procedures, investments, intellectual property, government procurement and competition. 
 
For each of the Free Trade Agreements and Framework Agreements that do contain such disciplines, 
what are the content of the substantive provisions?  
Answer: 
 The Mercosul free trade agreements referred to above fall into the category of partial scope agreements in LAIA’s framework.   The definition and characteristi cs of partial scope agreements 
are dealt with in the third section of the Montevideo Treaty (from Article 7 to Article 14).  Article 9 
of the said instrument establishes the genera l rules governing partial scope agreements, which 
includes trade disciplines that go beyond tariff reduction.  The mentioned Mercosur agreements 
also have programatic disciplines such as cooperation in the fields of transportation, investments, 
infrastructure and so forth.  It is difficult to comment overall the content of the referred provisions, 
since some of the substantive texts are still under negotiation.  As a general rule, it can be stated 
that the provisions are fully compatible with the respective WTO disciplines, and that they have the 
objective to regulate and facilitate preferential trade between the parties.  In brief, the safeguards 
texts aim to discipline the application of preferential safeguards to counter surges in preferential 
trade; the rules of origin texts outline the criteria for covered products to be eligible for preferential 
treatment; and the dispute settlem ent establishes a mechanism for addressing any disputes in the 
implementation of the agreements. 
 
How, if at all, do these substantive provisions (1) facilitate and promote the trade among the parties, (2) 
affect third parties and (3) impact on the participation of the parties in the Doha Development Agenda?  
 
Answer: 
 
The two kind of provisions referred to above, that is, the ones which complement tariff reduction and non-tariff barriers elimination measures (such as rules of origin, SPS measures, for instance) 
and the ones that have a programatic nature (cooperation actions in various fields, as stated above), 
tend to facilitate and promote trade among the parties.  As these agreements are of a limited scope 
in this initial phase, no significant impact on third parties is foreseen.  Any possible impact would 
be negligible in comparison to those created by the extensive range of free trade agreements undertaken by many WTO Members.  The disciplines covered in these agreements are restricted to preferential trade, thereby not affecting the participation of the negotiating parties in the Doha 
Development Agenda. 
 
In so far as some of the Free Trade Agreements and Framework Agreements have or will be notified to 
the WTO under the Enabling Clause, and given that many of the disciplines are in areas where multilateral instruments are available, would these disciplines on non-tariff measures be considered to fall 
under paragraph 2 (b) or 2(c) of Enabling Clause?    
 WT/TPR/M/140/Add.1 
Page 106   
Answer: 
 The disciplines established within LAIA agreements are foreseen in the Montevideo Treaty.  These agreements themselves belong to the Montevideo Treaty system and, as such, they implement the latter.  Thus, they are (and will be) mentioned in t he reports that the Secretariat General of LAIA 
sends periodically to WTO.  Disciplines being negotiated under the preferential trade agreements with India and SACU are limited in scope to those required for the operation of preferential 
concessions among the parties (preferential safeguards and rules of origin).  Therefore, there is no negotiation of disciplines on non-tariff measures  where multilateral instruments are available. 
 KOREA 
 
II. III. TRADE POLICIES AND PRACTICES BY MEASURE;  (page 116-117, para. 22-26) 
 1. According to para. 22-26 and Table IV 1 and 2, it is noted that the Rural Credit Programme increased from 6,481 million US dollars to 22,443 million US dollars. 
 
Could Brazil inform us of the main products which benefit from this programme?   
Answer: 
 ll the products covered by PGPM are eligible to benefit from this program.  The products covered 
by PGPM are:  cotton, coffee, peanuts, rice, edib le beans, sunflower, jute, maize, soybean, sorghum, 
Brazilian wax (carnauba wax), cassava, cassava flo ur and starch, castor seed, canola, oat, sisal, 
wheat, triticale, rye, barley, grapes, garlic, cas hew nut, milk, rubber, silk cocoon, Brazil nut and 
guarana. 
 
(page 145, para. 161) 
 
2. The Secretariat reports that, as of August 2004, Brazil had not ratified the Fourth Protocol on 
basic telecommunications services. 
 
Could Brazil explain why the Protocol has not yet been ratified?  
 
Answer:  
Regarding the IV Protocol, the situation is described in paragraph 161, page 146 of the Secretariat 
Report.  The offers made during the negotiation of the IV Protocol were valid exclusively in that context.  The situation is described in paragraph 161, page 146 of the Secretariat Report.  Brazil 
presented in 2000 an offer intended to rectifying the situation generated by its impossibility to ratify 
the IV Protocol in the 1997 form, but such offer was rejected by some Members (United States, Hong Kong/China, European Communities, Japan).  Adoption of the IV Protocol as such is thus 
not under consideration.  However, Brazil does not exclude a priori the possibility of including any 
sector in its revised services offer. 
 
(page 159, para. 234) 
 
3. According to the Secretariat, Article 18(IV) of the LGT provides the Executive Branch with the 
right to limit foreign participation in the sector. 
  WT/TPR/M/140/Add.1
 Page 107 
  Please explain why Brazil maintains this Article.   Does Brazil have any intention to abolish this Article and eliminate the horizontal restriction in the 
Schedule of commitments when it submits the schedule for telecommunications in future?  
 
Answer: 
 
Article 18, as part of a Law (the General Telecommunications Law), cannot be simply abolished by 
act of the Executive.  Any modifications of LG T would require the presentation of a new bill to 
Parliament, which could lead to a broader revision of that Law, possibly entailing the modification 
of various of its elements which are extremely favorable to foreign investment. 
 
(page 159, para. 235) 
 
4. The Secretariat reports that Brazil does not consider value-added services as telecommunication services.  Reportedly, providers of value-added services are considered by law to be users of telecommunications services.  The right of users of telecommunication networks to render value-added 
services is guaranteed and regulated by ANATEL.  In the schedule of commitment submitted in April 
2001, value-added services were included in 2.E others. 
 
Could Brazil explain more in details about the cl assification and regulations of value-added services? 
 Is there any difference between the value-added services in the schedule of commitment and those in 
terms of domestic law?  
 
Were value-added services classified in accordance with the way used in W120 of the schedule of 
commitments in 2001?   
Answer:  
Regulations of value-added services involves various agencies and several of its aspects are being 
developed, since they are in the frontier of technological innovation.  As they are not considered as 
telecommunication services, value-added services are not regulated by ANATEL.  Classification of such services in domestic law may differ from W120 classification. 
 
(page 160, para. 239) 
 
5. The Secretariat reports that interconnection tariffs will be retail based during 2006-2007 and 
thereafter they will be cost-based. 
 
What is the difference between ‘retail based’ and ‘cost-based’? 
  
Answer: 
 Up to 2006 Brazil will utilize the current model to calculate the Interconnection Tariff, which relies on a maximum “price-cap” established by Anatel (price caps to adjust tariffs are used to ensure 
that companies do not obtain above normal revenues).  Between 2006-2007, there will be a 
“transition period” during which a “Retailed based” model will be used and the Interconnection of 
networks will be calculated based on a public tota l tariff cost percentage (retail price) which 
represents a percentage of the price per minute.  From 2008 onwards, the shift towards a “cost-WT/TPR/M/140/Add.1 
Page 108   
oriented” model will be implemented (as establishe d in the Reference paper), where the tariff will 
reflect its costs. 
 
(page 160, para. 241)  6. The Secretariat reports that companies that apply for authorization to supply services of collective 
interest in fixed telephony through the private regime must be constituted in Brazil under domestic law, 
with offices and administration in Brazil, and the ma jority of shareholders with voting rights must be 
natural residents or companies constituted in Braz il with offices and administration in Brazil. 
 Please explain the meaning of services of collective interest in fixed telephony through the private regime. 
 
Please inform us the reason for implementing such requirements. 
 
Does Brazil have any plan to eliminate those requirements in the near future? 
 
Answer: 
 
The services are classified in accordance with the targeted group they are offered to - collective 
interest services and restrict inte rest services (LGT art. 59) - and in relation to the legal regime that 
underscore their provision:  public s ervices and private services (LTG art. 60).  The services of 
collective interest are characterized as services to be provided to the public in general, and are, 
therefore, subject to stricter legal and administrative conditions. 
 
The services to be explored under the public regime are all those which are not expressly reserved to exclusive exploitation under private regime, and they are to attend all collective interest. 
 
The services of restrict interest represent those of pri vate interest, therefore its provision is subject 
only to the applicant being able to meet the necessary licensing and qualification requirements in 
order to ensure the quality of the services.  The reason for such requirements is related to the need to ensure both competition and consumer rights.  
Brazil does not exclude a priori the possibility of including any sector in its revised services offer.  
 
(page 161, para. 245) 
 
7. The Secretariat reports that Brazil withdrew its 2001 GATS schedule of commitments and 
currently has no GATS commitments in telecommunications in force.  Brazil has not adopted the 
Reference Paper. 
 Does Brazil have any plan to submit a new schedule of commitments in telecommunications?  
 
Answer: 
 
Brazil does not exclude a priori the possibility of including any sector in its revised services offer.  
  WT/TPR/M/140/Add.1
 Page 109 
  (page 167, para. 279) 
 
8. It was our understanding that foreigners were not allowed to invest 40% or more in a shipping 
company that operates a vessel flying the Brazilian fl ag, and they were required to establish the company 
there.  However, paragraph 167 seems to suggest that there are no restrictions on foreign investment in 
the shipping industry. 
 
Is it correct to understand that those restrictions mentioned above do not exist?  We would appreciate it if 
Brazil could clarify this fact. 
 
If it is true that there are no restrictions on foreign investment in shipping industry, when were the 
restrictions eliminated? 
 Could Brazil provide detailed information about the new investment system for the shipping industry?  
Answer: 
 
Yes, it is correct that those restrictions do not exist.  There is no limit for foreign capital 
participation in the Brazilian shipping industry. 
 
(page 167, para. 282) 
 9. The Secretariat reports that Brazilian ships mu st be registered in the Registry of Maritime 
Property and Brazilian flag vessels may also be regist ered in the Special Brazilian Registry (REB).  It 
seems the registration of ships in Brazil has two systems, where the first one is mandatory and the second 
one is selective. 
 Please explain the differences between the two r egistration systems above (including the difference of 
benefits to shipping companies).  
Answer: 
 
Brazil will provide a written answer to this question in a latter stage.  MEXICO 
 
II. RÉGIMEN DE POLÍTICA COMERCIAL Y DE INVERSIONES;  4) RELACIONES INTERNACIONALES;  ii) Acuerdos preferenciales;  a) MERCOSUR. 
 
1. El párrafo 59 indica que la Comisión de Comercio emite directivas las cuales son elaboradas a 
través de diversos comités técnicos.  Al respecto, ¿podría Brasil indicar: 
 
(a) cuál es el procedimiento que siguen dichos Comités para la elaboración de directivas, en 
particular aquéllas relacionadas con el ámbito de aplicación del Acuerdo de Obstáculos Técnicos 
al Comercio (AOTC) y del Acuerdo sobre la Aplicación de Medidas Sanitarias y Fitosanitarias 
(AMSF)?; 
 WT/TPR/M/140/Add.1 
Page 110   
Answer: 
 The Trade Commission issues Directives and the Common Market Group (GMC) issues 
Resolutions.  Within the Common Market Group (GMC), Mercosur’s main executive body, there are several working groups (SGTs), which perform , each in their own subject area, harmonization 
of technical regulations and of conformity assessment evaluation procedures and of sanitary and phytosanitary measures.  The harmonization process is done on the basis of the rules and principles set out in the TBT and SPS Agreements and take into account the relevant international standards as adopted by international standardizing bodies or relevant international organizations and subsidiaries bodies, in particular the Codex Alim entarius Commission, the International Office of 
Epizootics and the International Plant Protection.  The concrete final form of this harmonization procedure, at the Mercosur level, is a Resolution of the GMC. 
 
(b) de qué forma el Brasil da cumplimiento a las obligaciones previstas en el AOTC y el AMSF 
respecto de dichas directivas?, y 
 
Answer: 
 
The results of the Uruguay Round were all incorporat ed in Brazil’s legislation.  Therefore, Brazil’s 
governmental regulatory bodies have to follow the TBT and SPS Agreements.  Specifically, at the 
Mercosur level, the TBT Agreement was adopted by Decision Nº58/00 of the Council of the Common Market.  The SPS Agreement was adopted by Decision 05/96 of the Council of the 
Common Market. 
 
(c) cuál es el proceso de adopción de dichas direct ivas para convertirlas en disposiciones obligatorias 
a nivel nacional? 
 
Answer: 
 As provided in item a), the technical regulatio ns and conformity assessment evaluation procedures 
and sanitary and phytosanitary measures are subm itted by the specific SGT, after a process of 
internal domestic consultations and legal analysis, for approval by the GMC.  As with all Mercosur 
legal norms, they have then to be internalized in each Member’s legal system. 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS;  2) MEDIDAS QUE AFECTAN 
DIRECTAMENTE A LAS IMPORTACIONES;  viii) Reglamentos técnicos y normas;  a) Marco 
institucional y jurídico. 
 
2. En el párrafo 136 se señala que no hay ninguna norma general por la que se guíe la preparación de reglamentos técnicos y que cada organismo sigue sus propios procedimientos.  Al respecto, México desea que Brasil responda: 
 
(a) ¿De qué manera da cumplimiento a lo dispuesto por el artículo 2.9.1 del AOTC y en qué 
momento se publica el aviso correspondiente?; 
  WT/TPR/M/140/Add.1
 Page 111 
  
Answer: 
 In order to comply with article 2.9.1 of the TB T Agreement, the Inquiry Point for Technical 
Barriers to Trade in Brazil (“Instituto Nacional de Metrologia, Normalização e Qualidade, INMETRO”) remains in close contact with national regulatory bodies with a view to ensuring that any new proposal for technical regulation or conformity assessment procedure be properly notified to the WTO.  
(b) ¿Si el desarrollo de un reglamento técnico implica la elaboración de un análisis de impacto 
regulatorio como requisito previo a su expedición y, en caso de ser así, informe si dichos análisis 
pueden ser consultados por nacionales de los Miembros de la OMC?;  
Answer: 
 
The analysis of the regulatory impact of a technical regulation and its subsequent availability for consultation does not constitute an obligation pursuant the TBT Agreement.  However, this practice 
has been increasingly promoted by a number of regulatory bodies in a number of countries.  In 
accordance with this recent international tendency, regulatory bodies in Brazil have been carrying 
out analysis of regulatory impact and allowed for interested persons to have access to them. 
 
(c) ¿Cuál es el plazo normal de consulta pública de un reglamento técnico?; 
 
Answer:  
The usual deadlines applied in Brazil in these cases are those recommended  by the TBT Council and contained in document G/TBT/1/Rev.8. 
 
(d) ¿Cuál es el procedimiento al que son sometidas las observaciones que son remitidas por los 
Miembros de la OMC y sus nacionales y de qué manera se dan a conocer las respuestas a las mismas?; 
 
Answer: 
 Comments from WTO Members concerning proposed technical regulations are sent to the regulatory body by the Inquiry Point (INMETRO), which is in charge of  receiving and transmitting them to the agency in case.  Upon receiving these comments, the regulatory body will elaborate an appropriate answer, which will be transmitted though the Inquiry Point to the Member in question. 
 
(e) ¿Cuál es el plazo normal de entrada en vigor de un reglamento o norma técnica y cuales son las 
excepciones a esa regla, así como los supuestos en los que aplican?; 
 
Answer: 
 
In view of the complex specificities of each new technical regulation, there is no unified deadline for 
its entering into force.  The date for a new technical regulation to enter into force will be defined by the regulatory body involved, taking into account the technical and other relevant aspects of the question.   
 WT/TPR/M/140/Add.1 
Page 112   
(f) ¿Si existe alguna disposición legal que obligue a sus autoridades a nivel federal a revisar 
periódicamente el contenido de sus reglamentos técnicos?; 
 
Answer: 
 There is no legal provision that requires Brazilian regulatory bodies to review regularly the content of technical regulations, but this can occur as a response to new scientific and technological developments.  
 
(g) ¿Si los nacionales (personas y empresas) de Miembros de la OMC pueden participar en la 
elaboración, modificación o cancelación de reglamentos técnicos?  En este sentido, ¿cuál es el 
procedimiento a seguir para obtener ese derecho?; 
 
Answer: 
 Elaboration, modification or cancellation of technical regulations are undertaken according to a broad process of public consultations in Brazil, open to nationals and foreigners alike.  WTO Members as such can participate in the process upon notification of the regulation to the WTO.  The Inquiry Point in Brazil centralizes the receipt of these comments/requests/suggestions. 
 
(h) ¿Dónde se encuentran disponibles los procedimientos internos de cada organismo encargado de 
elaborar reglamentos técnicos y si los mismos son sometidos a revisión periódica?; 
 
Answer: 
 
These “internal procedures” are defined by each Regulatory Body and can also be requested from 
them.  There is no requirement for a periodic review of the procedures, but this can occur as a 
response to new scientific and technological developments.  
 
(i) Debido a que no existe un inventario exhaustivo de normas y reglamentos técnicos a nivel de 
fracción arancelaria ¿indicar qué acciones está llevando para atender problemas de transparencia que enfrentan los exportadores de terceros países a su mercado, al tratar de identificar los 
reglamentos y normas técnicas que aplican a sus productos?, y 
 
Answer: 
 In accordance with the TBT, the Inquiry Point in Brazil follows the timeframes recommended by 
the Agreements and notifies new technical regulations to the WTO.  Any requests by exporters on 
existing regulatory standards can be directed to the Inquiry Point. 
 
(j) ¿Qué porcentaje del total de fracciones arance larias incluidas en el sistema armonizado se 
encuentran reguladas a través de normas o reglamentos técnicos? 
 
Answer:  
No statistical breakdown is available.  
3. En el párrafo 139 se señala que uno de los propósitos de CONMETRO es promover el empleo de 
normas voluntarias en el Brasil.  Al respecto , ¿podría Brasil explica qué mecanismos emplea 
CONMETRO para lograr este objetivo?.  WT/TPR/M/140/Add.1
 Page 113 
  
Answer: 
 Conmetro has established the Brazilian Standardizing Committee (Comitê Brasileiro de Normalização, CBN), which is composed of representatives of the civil society and economic operators, and which follows execution and evaluates results of the Plano Brasileiro de Normalização (PBN).  Once a concrete proposal has been discussed and approved, it is submitted to the ABNT, which will give the voluntary norm its final form.  Conmetro advises CBN and ABNT to set up standards in accordance with the relevant international standards. 
 
4. El Informe de la Secretaría no contiene información detallada sobre las disposiciones que rigen la 
elaboración, modificación o cancelación de reglamentos y normas técnicas por parte de las autoridades 
estatales.  Al respecto, ¿puede Brasil describir qué ordenamiento(s) legal(es) describen tal procedimiento, qué principios deben observar dichas autoridades en la elaboración de reglamentos y normas técnicas (vgr. Consulta pública, consenso, etc.) y, en su caso, describir brevemente tal procedimiento? 
 Answer: 
 All activity by the Public Administration is governed by the Federal Constitution, articles 37 to 43.  Each regulatory body is also governed by its own set of  legislation.  All legislation (Leis, Decretos, 
Portarias) related to Inmetro, for example, can be found in www.inmetro.gov.br/legislação. 
 
5. El párrafo 141 indica que en Brasil se estimula a los Estados y organismos públicos a que se 
ocupen preferentemente de las cuestiones referentes a la salud, seguridad, el medio ambiente y la protección de los consumidores.  ¿Podría explicar Brasil de qué manera se lleva a cabo esta actividad? 
 
Answer: 
 
This activity is carried out through periodical exchange of information between the Regulatory Bodies and the Inquiry Point, with a view to stre ss the importance of those areas in the preparation 
of technical regulations or conformity assessment procedures. 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS;  2) MEDIDAS QUE AFECTAN 
DIRECTAMENTE A LAS IMPORTACIONES;  viii) Reglamentos técnicos y normas;  b) Normalización 
y regulación 
 
6. En cuanto a lo expresado en el párrafo 146, ¿podría Brasil explicar qué procedimiento siguen sus autoridades y el ABNT para justificar las desviaciones de los reglamentos y normas técnicas, 
respectivamente, respecto de las normas internacionales y dónde puede consultarse esa información? 
 
Answer: 
 In Brazil, technical standards and regulations are, as far as possible, based on international standards.  The objective of this procedure is to facilitate international trade through the adoption 
on a national basis of technical regulations that  already were previously adopted by consensus.  
However, in those cases in which no international standard is available or the existing ones are 
inadequate since they do not take into account the specific geographic, climatic or technological conditions in Brazil, national standards have to be developed.  The projects of these new standards and regulations will be notified to the ISO and the WTO, as appropriate. 
 WT/TPR/M/140/Add.1 
Page 114   III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS;  2) MEDIDAS QUE AFECTAN 
DIRECTAMENTE A LAS IMPORTACIONES;  viii) Regl amentos técnicos y normas;  c) Acreditación 
 7. En el párrafo 150 se señala que para obtener la acreditación se ha de presentar una solicitud 
oficial, seguida de la documentación justificativa y de una inspección in situ .  ¿Podría indicar Brasil si es 
necesario que los organismos acreditados se encuentren ubicados en su territorio? 
 
Answer: 
 In the cases where the conformity assessment eva luation is voluntary, certification bodies not 
located in Brazil may be accredited.  However, when certification is mandatory, it is necessary that 
the accredited body have a regular office in Brazil.  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS;  2) MEDIDAS QUE AFECTAN 
DIRECTAMENTE A LAS IMPORTACIONES;  viii) Reglamentos técnicos y normas;  d) Pruebas y 
evaluación de la conformidad 
 8. En los párrafos 152 a 158 se hace referencia a diversos Acuerdos de Reconocimiento Mutuo celebrados por Brasil.  Al respecto ¿podría explicar Br asil el procedimiento para que un tercer país forme 
parte de dichos Acuerdos, a la luz de lo dispuesto por el artículo 6.3 del AOTC?  
 
Answer: 
 It must be noted, for the sake of clarification, th at the agreements mentioned in paragraphs 152 to 
158 are not bilateral, but multilateral.  In th is regard, the referred agreements involve the 
recognition by their members that INMETRO’s sy stem of accreditation conforms to their norms, 
being hence accepted and recognized on an international basis. 
 
9. Con relación a lo indicado en los párrafos 154 y 155, ¿podría Brasil indicar: 
 
(a) si existen procedimientos de evaluación de la conformidad a nivel federal y estatal, dónde pueden 
consultarse dichos procedimientos y si los mismos se someten a consulta pública?;   
 
Answer: 
 
Any mandatory conformity assessment evaluation procedure may be obtained through the WTO Brazilian Inquiry Point, INMETRO (www.inmetro.gov.br). 
 
(b) en qué casos la evaluación de la conformidad con los reglamentos técnicos puede ser llevada a 
cabo por organismos acreditados y en qué casos dicha actividad es llevada a cabo por las 
autoridades del gobierno?; 
 
Answer: 
 
In the vast majority of cases, conformity assessment evaluations are carried out through accredited 
bodies.  However, this general rule is subjected to some exceptions and any information on them may be obtained through the Brazilian Inquiry Point.  
 
(c) describir el procedimiento para la evaluación de la conformidad de normas o reglamentos 
técnicos expedidos por sus Estados miembros o las jurisdicciones locales de estos, y  WT/TPR/M/140/Add.1
 Page 115 
  
Answer: 
 An appropriate answer for this question can only be given within an extended deadline, for it requires consultation with each and every Brazilian state.  
 (d) cuál es el procedimiento para reconocer una norma extranjera o procedimiento de evaluación de 
la conformidad como equivalente y, en su caso, cuántas normas o procedimientos de evaluación de la conformidad han reconocido? 
 
Answer: 
 The interested party should ask equivalence of the regulation at the Brazilian regulatory body responsible for the specific case, which may acc ept it, provided that it adequately fulfill the 
objectives of Brazilian regulations. 
 10. Respecto de lo indicado en el párrafo 157, ¿podría indicar en qué sectores y productos es posible 
utilizar la “declaración del proveedor” y cuál es la razón para exigir que el proveedor tenga un representante legal en Brasil como responsable de la emisión del documento?  
Answer: 
 
Brazil has began to use suppliers declaration in 2000 and intends to increase its utilization, 
depending on the risks associated with the use of t he product.  At present, this procedure is used in 
a few products such as lighters and low tension electrical products.  The complete list may be 
obtained at the site http://www.inmetro.gov.br/qualidade/prodDeclaracao.asp.  
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS;  2) MEDIDAS QUE AFECTAN 
DIRECTAMENTE A LAS IMPORTACIONES;  ix) Medida s sanitarias y fitosanitarias;  a) Marco 
institucional y jurídico. 
 
11. Por lo que se refiere a lo señalado en los párrafos 159 a 165 ¿Puede Brasil explicar: 
 
(a) de qué manera da cumplimiento a lo dispuesto por el inciso a) del párrafo 5 del Anexo B al 
AMSF y en qué momento se publica el aviso correspondiente?; 
 
Answer:  
Proposed regulations are usually notified, provi ding 60 days for comments whenever possible.  
According to its regulations process, Brazil complies  with Paragraph 5 a) and b) simultaneously. 
 
(b) si existe una base de datos u otro mecanismo en el que se agrupen todos los reglamentos 
sanitarios y fitosanitarios vigentes en Brasil, así como los análisis de riesgo elaborados respecto de cada uno de ellos?; 
 Answer: 
 Sanitary regulations are gathered on the sanitary surveillance database, available on http://e-legis.bvs.br/leisref/public/php/home.php.  Regulations themselves usually contain the references 
that basis its adoption.  Regulations related to animal and plant health can be consulted in the 
following website www.agricultura.gov.br. WT/TPR/M/140/Add.1 
Page 116   
(c) qué procedimiento sigue la Secretaría de Prot ección Agropecuaria y la Agencia Nacional de 
Vigilancia Sanitaria del Brasil para elaborar reglamentos sanitarios y fitosanitarios, en dónde puede consultarse y cuál es el plazo normal de consulta pública de dichos reglamentos?; 
 
Answer:  It is usually given 60 days to public consultation, whenever possible.  All public consultations, including those related to SPS or TBT Agreement, are available on http://www.anvisa.gov.br/ scriptsweb/consulta_publica and are published on “Diário Oficial da União”, the Brazilian official journal (www.in.gov.br).  
 
(d) cuál es el procedimiento al que son sometidas las observaciones que son remitidas por los 
Miembros de la OMC y sus nacionales y de qué manera se dan a conocer las respuestas a las mismas?; 
 Answer: 
 The submission of comments, as stated on SPS Agreement and on SPS Committee decisions, are made directly to the enquiry point indicated on notifications.  It can be made by fax, mail or e-mail.  
They are answered bilaterally.  
 
(e) cuál es el plazo normal de entrada en vigor de un reglamento sanitario o fitosanitario y cuáles son 
las excepciones a esa regla, así como los supuestos en los que aplican?, y 
 
Answer: 
 
It depends on the regulation impact, urgency, implementation costs, feasibility and other aspects.  
Whenever possible it is given 180 days to entry into force. 
 
(f) si los nacionales (personas y empresas) de Miembros de la OMC pueden participar en la 
elaboración, modificación o cancelación de reglamentos sanitarios o fitosanitarios? 
 
Answer: 
 
Besides SPS transparency provisions, all public consultations are available on internet and are 
open for comments, which can also be done through e-mail, fax, mail or online form.  
 
12. El Informe de la Secretaría no contiene información detallada sobre las disposiciones que rigen la 
elaboración, modificación o cancelación de medidas sanitarias y fitosanitarias por parte de las autoridades 
estatales.  Al respecto, ¿puede Brasil describir qué ordenamiento(s) legal(es) describen tal procedimiento, 
qué principios deben observar dichas autoridades en la  elaboración de dichos reglamentos y, en su caso, 
describir brevemente tal procedimiento?  
Answer:  
ANVISA is responsible to regulate and control products, substances and services related to health and MAPA is responsable for controlling the sanitary and phitosanitary aspects of all livestock, vegetable and grain production.  The regulation elaboration follows the general principles of public 
administration, established on the Brazilian Federal Constitution, in its articles from 37 to 43.   WT/TPR/M/140/Add.1
 Page 117 
  
When applicable, Brazil follows the international guidelines and recommendations of the 
international standard setting organizations for the elaboration of SPS measures.  
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS;  2) MEDIDAS QUE AFECTAN 
DIRECTAMENTE A LAS IMPORTACIONES;  ix) Medidas sanitarias y fitosanitarias;  b) Actividades 
de inspección, registro y certificación 
 13. Respecto de lo señalado en el párrafo 168, ¿Podría Brasil detallar cuál es el porcentaje de medidas sanitarias y fitosanitarias equivalentes o idénticas a las normas, guías y recomendaciones 
internacionales y de qué manera se justifican las desviaciones correspondientes?  
Answer:  Brazil does not maintain such estimates.  M easures that eventually deviate from international 
standards, recommendations or guidelines are justified according to Brazilian adequate level of protection, established on a case by case basis.  
 
14. ¿Podría Brasil describir el procedimiento que sigue para reconocer zonas libres de plagas o enfermedades y zonas de escasa prevalencia de plagas o enfermedades? 
 
Answer: 
 
Regarding plant and animal protection, respectively, Brazil follows the procedures issued by International Plant Protection Convention (IPPC)  and World Organization of Animal Health 
(OIE).  
 
IV. POLÍTICAS COMERCIALES POR SECTORES ;  7) SERVICIOS;  i) Introducción 
 15. ¿Podría Brasil explicar de qué manera está dando cumplimiento a lo dispuesto por el artículo VI.5 
del AGCS respecto de los compromisos específicos que ha adquirido? 
 
Answer: 
 
The regulatory development in Brazil takes into account the criteria established in Article VI of 
GATS, namely: they are based on objective and transparent criteria; they are not more 
burdensome than necessary to ensure the quality of t he service;  and, in the case of licensing 
procedures, they are not in themselves a restri ction on the supply of the service. 
 
16. ¿Podría el Brasil identificar las subvenciones relacionadas con el comercio de servicios que 
actualmente otorga y si las mismas están restringidas a sus nacionales? 
 
Answer:  
Given the absence of parameters in the GATS related to definition of subsidies in services, the 
insufficient statistics available, as well as the lack of clarity in terms of coverage of the GATS as far 
as “services supplied in the exercise of governmenta l authority” are concerned, it is not possible to 
provide a precise answer to these questions. 
17. En el párrafo 163 se especifica que Brasil en su calidad de miembro del MERCOSUR participa 
en las negociaciones de servicios y que en Diciembre de 2003 el Consejo del MERCOSUR aprobó una WT/TPR/M/140/Add.1 
Page 118   iniciativa que otorga la Visa MERCOSUR y establece reglas para la entrada temporal de los proveedores de servicios, un mecanismo para ejercer temporalmente una profesión y establece directivas para los ARM entre instituciones profesionales y para licenci as temporales.  ¿Puede Brasil explicar qué medidas 
establecidas en el marco de MERCOSUR se reflejan en su oferta presentada en septiembre de 2004 con 
respecto a los servicios profesionales? Adicionalmente , nos gustaría saber sobre qué criterios se otorgan 
las licencias temporales, la duración de éstas y a qué profesiones cubre las directivas para los ARM´s. 
 
Answer: 
 Measures taken in the framework of Mercosur in order to facilitate trade in services among the 
member countries of that process constitute a pr eferential treatment in th e scope of a regional 
agreement, and as such are not transposed to Brazil’s multilateral offer.  The mechanism related to temporary licenses is a different one from the one relating to the Mercosur visa, although they complement each other.  The temporary license mechanism – which still has to pass through Parliament in order to enter into force – provides guidelines for the negotiation of mutual recognition agreements betwe en professional associations of the four 
countries, to be later approved by governments.  It does not in itself establish a mechanism of temporary licenses.  The criteria and duration of licenses should be established in each individual 
agreement.  In principle, all professions regulated through professional associations can be the 
subject of such agreements. 
 
18. En el párrafo 167 relativo a los servicios financieros se señala que Brasil no ha ratificado el 
Quinto Protocolo (sólo faltan tres países).  ¿Cuál es la razón por la que el Congreso brasileño no concluye 
el proceso de ratificación? 
 
Answer: 
 The Brazilian Parliament has been examining carefully the V Protocol, particularly as it refers to a 
sector explicitly regulated by the Brazilian Constitution (Article 192), which it turn calls for 
detailed regulation to be established in the form of a Complementary Law, still not in place.  The fulfilling of the additional commitment related to reinsurance, included in the V Protocol, also 
requires the enactment of a Complementary Law.  Although Congress does not consider these facts 
as impediments to the approval of the V Protocol, their discussion is inevitably linked to the one 
raised by the V Protocol.  The Executive Branch cannot set any sort of deadlines for the 
examination of such matters by the Parliament.  A ll steps at the disposal of the Executive to ensure 
approval are being taken.  It should be remarked that the conditions foreseen in the market access 
and national treatment columns of Brazil’s list under the V Protocol are in force.  In several cases, 
conditions are actually better than the ones consolidated. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES;  7) SERVICIOS;  iii) Telecomunicaciones. 
 19. México tiene interés de saber si Brasil tiene pr evisto la eliminación de las exenciones del Art. II 
(NMF) a los servicios de telecomunicaciones suministrados para distribución de programas radiodifusión 
sonora o televisión destinados a la recepción directa por los consumidores del servicio. 
 
Answer:  
Brazil will address this issue under the GATS MFN Exemption revision that is currently being held 
at the Council for Trade in Services.   WT/TPR/M/140/Add.1
 Page 119 
  20. Brasil ha firmado Memorando de Entendimiento de cooperación técnica e intercambio de información (párrafo 247) y Acuerdos de Reciprocidad (párrafo 242) con varios países ¿Podría explicar Brasil la cobertura de estos mecanismos y si tienen relación con el comercio de servicios? 
Answer: 
 
The Memoranda of Understanding to which the question refers are limited to the domain of 
technical cooperation and exchange of experiences, and thus they do not include elements of trade 
in services. 
 The reciprocity arrangements are linked to the use of satellites.  Brazil will address this issue under 
the GATS MFN Exemption revision that is currently being held at the Council for Trade in 
Services. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES;  7) SERVICIOS;  ii) Servicios Financieros;  
c) Seguros 
 
21. La reestructuración del sistema nacional de seguros en Brasil ha permitido a las compañías de 
seguros nacionales diversificar su mercado, sin emba rgo, para las compañías extranjeras existe una serie 
de restricciones como el contar con la autorización para poder proveer en el mercado brasileño seguros de vida, seguros de cargamento, seguros de atención médica, seguros de responsabilidad civil, maquinaria y seguros de casco para buques.  ¿Podrían comentar si continuarán con los procesos de reestructuración del 
sector seguros y si a corto plazo eliminarán estas restricciones para permitir un mayor acceso de mercado 
a las compañías extranjeras? 
 
Answer: 
 
Brazilian insurance market provides broad access for foreign companies, which operate in a 
climate of open competition.  Regulation in the sector is evolving. 
 
IV. POLÍTICAS COMERCIALES POR SECTORES;  7) SERVICIOS;  v) Servicios profesionales y 
servicios prestados a las empresas  22. ¿Qué acuerdos ha celebrado Brasil para el reconocimiento de la educación obtenida, los requisitos cumplidos o las licencias o certificados otorgados a prestadores de servicios profesionales? 
 
Answer:  As such agreements are of the responsibility of s everal different entities, detailed information will 
be provided as soon as possible.  
23. ¿Cuál es el marco legal que rige la celebración de dichos acuerdos por parte del Brasil y que 
requisitos deben cumplirse para la participación en ellos por parte de terceros países? 
 
Answer: 
 As such agreements are of the responsibility of s everal different entities, detailed information will 
be provided as soon as possible.  Please see also answer to question 17. 
 WT/TPR/M/140/Add.1 
Page 120   24. En el párrafo 299 se señala los compromiso s específicos que tiene Brasil en el AGCS sobre 
servicios profesionales, los cuales son muy restrictivos, asimismo, identificamos que en su oferta presentada en septiembre de 2004 no se refleja una mayor apertura en este sector sobre todo en acceso a los mercados.  ¿Podría Brasil comentarnos si ha co nsiderado tener una mayor apertura para profesiones 
como contaduría, auditoria, teneduría de libros o en ingeniería a mediano plazo principalmente en 
modo 4?   
 
Answer:  It should be observed that the sectors of accounting, auditing, book-keeping and engineering are traditionally among the most regulated all over the world, since in most cases they are closely related to the solidity of corporate economy as such (independent auditors, for example, are essential in that context).  Brazil can consider covering these sectors, under diff erent modes of supply, in its revised offer.  In 
the case of Mode 4, specifically, Brazil considers that it should rather be the subject of across-the-board, not sectoral negotiations.  
25. Respecto al mismo párrafo ¿puede Brasil explicarnos el requisito solicitado a las profesiones de 
arquitectura e ingeniería en modo 3 de que los proveedores extranjeros de servicios se unan a proveedores 
brasileños de servicios en una entidad jurídica denominada “consorcio”? 
 
Answer:  
The leadership in a consórcio means solely that the Brazilian supplier will act as the “contacting 
party” between the consórcio and the contracting partner.  This is not a limitation on ownership, 
but a type of partnership. 
 SWITZERLAND 
 
II. Trade and investment policy regime;  (3) Foreign investment regime  
1. With regards to the bilateral agreements on the protection and the promotion of investments 
which were withdrawn from Congress in December 2002, Switzerland would like to know how the 
Brazilian authorities intend to proceed on the matter.  Do the Brazilian authorities intend to renegotiate 
these agreements?   
Answer: 
 
This decision is still under consideration by the Brazilian government. 
 
II. Trade and investment policy regime;  (4) Inte rnational relations;  (ii)  Preferential agreements 
 
2. What are the measures envisaged by Mercosul to achieve a customs union by 2006? 
 
What steps are foreseen by Mercosul to reduce the administrative burden, to increase the transparency of 
the trade regime and to avoid trade diversion? 
  WT/TPR/M/140/Add.1
 Page 121 
  
Answer: 
 From 1
st January 2006, Brazil intends to fully apply the CET without exceptions. 
 With regard to administrative requirements, Mercosur procedures and decisions are completely transparent and all of them are at disposal to the public on Internet sites.  There is no evidence that the Mercosur Agreement has caused any trade diversion.  In the Brazilian case, the external trade increased with all countries and regional blocks, reflecting a geographical 
balance on the distribution of exports and imports.  In terms of products, as well as in terms of partners, Brazil’s trade pattern is increasingly diversified, being labeled as a global player. 
 
III. Trade policies and practices by measure;  (4) Me asures affecting production and trade;  (ii) Pricing 
and competition policy 
 3. General Comment: The report of the Secretariat suggests that with Brazil's implementation of its competition policy legislation, engaging in anti-competitive behaviour is becoming more of a risk.  There 
is no mention however of a leniency policy in place.  If there is no such policy in place, are there plans to 
introduce such a policy?  If not, why? Experience in many countries in this respect has shown indeed that 
a leniency policy can help the authorities uncover anti-competitive arrangements that might have 
otherwise gone unnoticed.  
Answer: 
 
In 2000 the Brazilian Competition Law was modified in order to introduce the leniency programs 
and, effectively, the first leniency agreement was entered in 2003, with other following.  The Secretariat of Economic Law (which is the competition authority in charge of entering into leniency 
programs) fully agrees with the statement made by the Swiss delegation that leniency programs can 
help the authorities uncover anti-competiti ve arrangements that might have otherwise gone 
unnoticed.  As leniency programs are possibly one of the most effective tools for anti-cartel 
enforcement, the Brazilian authorities have been trying to do as much advocacy as possible in order 
to push companies and individuals to enter into this kind of agreement. 
 
4. The Secretariat's report also suggests in §242 that Brazil has ratified a competition policy cooperation agreement with the United States which covers all anti-competitive behaviour defined as "any 
conduct or transaction which could be subject to penalti es or other sanctions under the laws of one of the 
parties".  We would appreciate to know in what cases  this cooperation agreement is likely to be applied.  
Also, how can the authorities ensure a fair treatment  to all parties subject to an investigation for anti-
competitive behaviour? 
Answer: 
 
This cooperation agreement can be applied in the investigation of any anti-competitive conduct, as 
well as for merger reviews.  It is worth mentioning that each country is responsible for applying its 
own laws, observing all due process procedures, which guarantees fair treatment to any involved parties.  The main goal of the cooperation agreement is that US and Brazilian authorities share non-confidential information about any investigations in course, observing the positive and negative 
courtesy principles.  
 WT/TPR/M/140/Add.1 
Page 122   III. Trade policies and practices by measure;  (4) M easures affecting production and trade;  (iii) State-
owned enterprises, privatisation and state trading 
 
5. Under Article XVII of GATT 1994 and paragraph 1 of the Understanding on the Interpretation of 
Article XVII of the GATT 1994, all Members of the WTO are required to submit annual notifications of 
their state trading activities.  In 2003 the periodicity of state trading notifications were changed (G/STR/5) 
so that new and full notifications are due every two years and the up-dating notifications in the intervening years are eliminated.  Brazil's last up-dat ed notification was in 1997 and reported ten state-
trading enterprises.  According to §255, as per today, Brazil is left with seven state trading enterprises.  
Could the Brazilian delegation please inform on the date when it is intending to comply with the 
notification obligation?  My delegation is interested to receiving further and detailed information on those 
enterprises cited in §255 which appear to enjoy exclusive or special privileges in conformity with the provisions of Article XVII of GATT, 1994.  Once in possession of this specific information, we would then like to comment on this issue.  
 Answer: 
 A list of all state-owned enterprises (SOE), with information by sector of activity, privatization 
process evolution, and board of directors are included in the website www.planejamento.gov.br 
/controle_estatais/conteudo/perfil/index.htm.  Ad ditional information will be provided during the 
notification process, due to be done next year. 
 
III. Trade policies and practices by measure;  (4) Measures affecting production and trade;  (v) Government procurement 
 
6. We note that Brazil has been making efforts to improve the legal framework towards enhancing 
the transparency of government procurement, and towards harmonising tender process and procedures in 
accordance with international practices.  We encourage Brazil to become an observer to the Committee on Government Procurement. 
 
Answer: 
 
Brazilian rules regarding government procurement are fully transparent and the system of control 
on public expenditures is showing increasing level of efficiency. 
 
Brazil may consider the possibility to participat e in meetings of the Committee on Government 
Procurement as an observer.  The Brazilian Governm ent, however, is not envisaging to accede to 
the plurilateral agreement related to that committee. 
 
III. Trade policies and practices  by measure;  (1) Overview 
 7. The report indicates that Brazil has bound its entire tariff and this is very welcomed.  However, these bindings are mostly at ceiling levels which cr eates unpredictability and uncertainty for the economic 
operators as Brazil has the right to increase its appli ed tariffs to the bound levels.  Which steps is Brazil 
considering to enhance the predictability of its customs regime taking into account the present DDA 
negotiations?   
  WT/TPR/M/140/Add.1
 Page 123 
  
Answer: 
 The average of the tariffs bound by Brazil is 30,4%, being 35,6% for agricultural products and 29,7% for industrial products.  These rates are much higher than the applied tariffs, which average reaches 10,8% (for 9.750 headings).  This is very close to the CET rate, which is 10,7%.  The maximum tariff bound was 55% (145 headings).  Brazil’s tariff structure is transparent and predictable, considering 100% tariff lines have been bound in ad valorem terms. 
 Since 1990, Brazil started a process of autonomou s reduction of applied tariffs, further intensified 
after the adoption of the Common External Tariff of MERCOSUR.  The fact that Brazil is currently applying tariffs lower than the bound should be recognized as positive step by Members and operators.  
 8. It is noted in §3 that " a VAT (ICMS) is applied by states at rates that, in a limited number of cases 
may discriminate against imported and domestic products" .  Could Brazil indicate in which cases this 
discrimination occurs, for which products and what measures Brazil will undertake to put the ICMS in line with the national treatment principle? 
 
Answer: 
 
The ICMS falls under the competence of States.  Each State determines the duty and how it is applied.  The central government is currently examining whether and to which extent a 
discrimination between imported goods and locally produced goods exists.  
 
III. Trade policies and practices by measure;  (2) Measures directly affecting imports;  (i) Customs 
procedures and documentation  
9. §11 indicates that Brazil has been able to reduce significantly the average time for customs 
clearances (now between 30 and 40 hours depending on the level of verification needed).  This is a very welcomed improvement.  Could Brazil indicate which factors and measures contributed to this 
improvement of the clearance time?  Does Brazil intend to  take other measures in the future to continue to 
reduce the time needed for customs clearance and which measures are foreseen and in which timeframe? 
 
Answer: 
 
The reduction of the average time for customs clearance was a result of a modernization program 
that included the use of informatic tools (SISCOMEX). 
 
The legal basis remains the same and thus the dea dlines, but now the efficiency of customs units is 
appraised according the time spend between the registration and the clearance of products, since 
the entry into force of the SISCOMEX Management Part. 
 
Brazil Customs Administration is considering the possibility to further reduce the average time for 
customs clearance and improve risk assessment procedures.  
10. §13:  On the basis of which criteria are goods identified as goods falling under the grey channel 
(i.e. goods for which an examination of the ID (import declaration), a physical analysis, and a special 
provision against fraud is needed)? WT/TPR/M/140/Add.1 
Page 124   
Answer: 
 The channel is selected through the SISCOMEX on the basis of a risk assessment process that takes 
into account the following parameters: the importance of fiscal compliance record and the frequency of use of the system, the nature/volume of imported goods, their taxation value, the country of origin, the import regime, the goods characteristics, the operational and financial capacity of the importer, the importers customs history. 
 
11. §16: Please provide an exhaustive list of the six exclusions, in addition to petroleum, that are 
excluded from the scope of the fines in the cases when importers do not meet payment deadlines. 
 
Answer: 
 The six cases of exclusions mentioned are explicit ly outlined in Article 2 of Law 10.755, of 
3 November 2003.   
 
III. Trade policies and practices by measure;  (2) M easures directly affecting imports;  (ii) Customs 
valuation   
12. §23 indicates that information requested may go beyond what is required for the Import 
declaration, and may include the correspondence used for the commercial transaction, information on the 
persons involved, and on the process of price determination of the merchandise.  Could Brazil indicate 
how it ensures that information confidential by nature or provided on a confidential basis for the purposes of customs valuation are treated as strictly confidential as requested by article 10 of the customs valuation 
agreement? 
 
Answer: 
 The confidentiality of all fiscal procedures is mandated by the Federal Constitution of Brazil and 
the customs officers that deal with confidential in formation are subject to specific legislation. 
 
III. Trade policies and practices by measure;  (2) Me asures directly affecting imports;  (iv) Tariffs 
 
13. According to §39, " 53 tariff headings labelled informatics and communication goods have tariffs 
temporarily higher than 20%".  Please indicate what you mean by temporarily?  Please provide an 
exhaustive list of these products by HS number with the product description.  
According to §44 countries may alter up to 20% of the headings in basic exceptions list every six months.  
Comparing the list submitted to the WTO secretariat w ith the one found on the website of the Ministry of 
development, industry and foreign trade, it appears that more than 20% of the headings in the basic 
exception list has been modified in July 2004.  For which reasons and on the basis of which criteria have the changes taken place?   
There seems to be discrepancies between the number of tariff headings mentioned in §45 and in the three 
lists (more tariff headings according to §45 than in th e lists themselves).  Could Brazil explain the reasons 
of these differences?  §47:  This paragraph indicates that the exceptions to the CET other than those listed in §45 were 
scheduled to be in place until 31 March 2004.  Co uld Brazil provide an update on these exceptions and 
are they now in place?  WT/TPR/M/140/Add.1
 Page 125 
  According to §51 28 entire HS 8 digit headings and parts of 48 other HS headings bear CET rates above the bound rates.  How and when does Brazil intend to remedy this situation in order to comply with Article II GATT?  Although the same paragraph indicates that the bindings negotiated by Brazil remain in force and that the application of the bound rates instead of the CET, how does Brazil ensure that at the 
border the bound rates in these cases will be the maximum levied?  Which control mechanisms are in 
place? 
 According to § 54  tariff concessions can also be obta ined through the Ex Tarifario mechanism.  Are these 
concessions limited to 31 December 2005, as it seems to be the case?  Does Brazil foresee to extend these 
concessions beyond 31 December 2005?  
Answer:  The mentioned tariff headings carry rates higher than 20% accordingly to the convergence schedule to the Common External Tariff (CET) authorized by the MERCOSUR since the entry in force of the CET in 1995.  Brazil was allowed to  accomplish the convergence until 31 December, 
2005.  When the convergence is finished, the ta riff headings currently subjected to the schedule will 
be carrying their respective CET rates (16% ad valorem ).  The list is available in the following 
address: http://www.desenvolvimento.gov.br/arquivo/secex/tec/TecListaConvBIT.zip. 
 
The inclusion of products by Brazil in its list of temporary exceptions to the CET has, among 
others, the following economic reasons:  tariffs higher than the CET are adopted to compensate 
subsidized products in third countries or requests under analysis in Mercosur for increasing the CET due to the beginning of domestic production.  Tariffs under the CET rates are adopted for 
some strategic agricultural inputs and medicines and pharmaceutical products without regional 
production. 
 
In relation to §45, a list of exceptions had been temporarily increased to 103 headings (Resolution nº 20 of 6 July 2004) as a result of the opening of headings in the CET structure, but returned to the 
limit 100 headings foreseen for the CET exceptions after 15 days (CAMEX Resolution nº 22 of 
22 July 2004), in observance the procedures agreed by Mercosur for the modification of lists of exceptions to the CET. 
 
In the CET, Mercosur established the universe of Capital Goods - BK (1.181 headings) and of 
Computer and Telecommunications Goods – BIT (427 he adings).  Brazil carries exception tariffs in 
302 headings of the BITs.   
Some additional exceptions  for medicines and pharmaceutical products to cancer and SIDA will 
remain until 31 December 2004 and are listed in the following address:  
http://www.desenvolvimento.gov.br/arquivo/secex/tec/TecMedicamentos.zip 
 For the headings that bear CET rates above the bound rates, Brazil intends to unbound them, through compensations, on the basis of future negotiations in Mercosur for the recognition as a 
customs union (GATT/arts. XXIV and XXVIII).  In these cases, the application of the bound tariff 
is guaranteed by the programming of SISCOMEX, which is an electronic information system that 
processes imports and exports operations.   Through Decision CMC 34/03, Mercosur established, as from 01 January 2006, the implementation 
of a Common Regime for Capital Goods Not Produced In The Region, which will replace the 
Brazilian Ex-tarifario regime.  WT/TPR/M/140/Add.1 
Page 126   III. Trade policies and practices by measure;  (2) Me asures directly affecting imports;  (v) Other charges 
affecting imports  14. According to §75 the IPI (industrial products tax) is changed periodically.  Could Brazil indicate 
how often it is changed and on the basis of which criteria and for which reasons?  
Answer:  The IPI may change every six month, if in function of modifications in the MERCOSUR Common Nomenclature (NCM), or at any period, if in function of deliberations of national policy. 
 
15. As indicated in §79 the Brazilian authorities note that, while the application of the exemptions to the ICMS (VAT Applicable at the state level), could  discriminate against imported or domestic products 
and that this occurs in practise only in certain residual cases.  Could Brazil specify which are these 
residual cases, how often they occur and which meas ures does Brazil intend to take to remedy this 
situation and comply with article III GATT? 
 
Answer:  
The ICMS falls under the competence of States.  Each State determines the duty and how it is 
applied.  The central government is currently examining whether and to which extent a 
discrimination between imported goods and locally produced goods exists.  
 
16. §79: Are the ICMS exemptions to the importat ion of certain chemical products authorized by 
CONFAZ in April 2003 still in place and for the same products? 
 
Answer: 
 Yes, those exemptions are still effective. 
 
17. §80:  Could Brazil indicate what happened to the 18% ICMS imposed by Rio de Janeiro on the temporary admission or importation of certain good s that have been challenged by the Attorney General? 
 
Answer: 
 
This issue is still under review by the appropriate courts.  A legal suit is in course at the Supreme Federal Tribunal. 
 
PHILIPPINES 
 
1. A reading of paragraphs 127 and 133 of the Secretariat’s report in WT/TPR/S/140 indicate that contingency actions have virtually been taken continuously against imports of desiccated coconut products (or HS tariff line number 0801.11.10 from Brazil’s notification in G/SG/N/6/BRA/2) through, 
first, a countervailing measure from 1996 to 2000, and now a safeguard measure.  Paragraph 133 also 
says the following:  the safeguard measure is accompanied by an adjustment program (proposed by the 
domestic industry and accepted by the Brazilian authorities);  and that a mid-term review of the safeguard measure was scheduled for July 2004.  
In this regard, the following questions could be asked: 
  WT/TPR/M/140/Add.1
 Page 127 
  What was the outcome of the mid-term review scheduled last July 2004?  Is there a medium to long-term adjustment program for the desiccated coconut industry that would allow it to compete internationally, instead of it seeking relief from foreign competition through contingency 
measures?  And if so, could Brazil demonstrate that such a program is consistent with its obligations in 
the WTO?  
Answer: 
 
The notification with the outcome of the mid-term review is being circulated as document G/SG/N/13/BRA/3, G/L/723.  One of the purposes  of the mid-term review was to verify the 
accomplishment of the adjustment plan of the dom estic industry.  Although there is no specific 
guidance on the Agreement on Safeguards on how to conduct an adjustment, the whole procedure 
is consistent with Brazil's obligations in the WT O.  The notification that has been sent contains non-
confidential information regarding how domestic producers are carrying out this adjustment plan.  
2. A reading of paragraphs 204 to 217 of the Secretariat’s report appear to indicate that the PROEX 
and BNDES-EXIM programs are tantamount to export subsidies contingent on both export performance 
and the use of domestic over imported goods, which in the case of Brazil, are prohibited subsidies under 
Article 3 of the Subsidies Agreement.  Moreover, the Philippines takes note of existing jurisprudence on Brazil’s export financing programs like 
the PROEX.  We also note that a panel had concluded that a more recent variation of PROEX (i.e., 
PROEX III) was not inconsistent with the Subsidies Agreement since it was legally possible for Brazil to 
operate the program in a WTO consistent manner.  However, we understand that the panel also said that it did not necessarily follow from previous conclusions that future application of the PROEX III program would be likewise consistent with the Subsidies Agreement (paragraph 212 of the Secretariat’s report refers).  In this regard, could Brazil demonstrate how the operation of the PROEX and BNDES-EXIM could be deemed as consistent with its obligations in the Subsidies Agreement?  
Answer: 
 PROEX III is consistent with the SCM Agreement, si nce it is operated in a way that:  (a) does not 
result in a benefit being conferred on producers of regional aircraft and hence not constitute a subsidy;  or (b) does result in a benefit being conferred, but conforms to the interest rates 
provisions of the Arrangement on Guidelines for Officially Supported Export Credits, which would 
not constitute a prohibited export subsidy.  BNDES-Exim is BNDES's Export-Import Division.   It is not a programme.  No operations or 
programmes under BNDES-Exim have ever been challenged under the WTO Dispute Settlement Mechanism.  None of these operations or programmes provide any kind of subsidy, as their 
financial costs are fully covered, and they are extended at interest rates compatible with those of the 
international market.  They are, therefore, fully comp liant with the provisions set forth in the WTO 
Agreement on Subsidies and Countervailing Measures. 
 
3. Could Brazil also indicate specifically wher e further information on these types of export 
promotion programs could be acquired, considering that its last new and full notification under Article 
25.1 of the Subsidies Agreement was made in 2002? WT/TPR/M/140/Add.1 
Page 128   
Answer: 
 It should be pointed out that the last new and full notification of Brazil under Article 25.1 of the Subsidies Agreement was made in July 30
th 2003 (document G/SCM/N/71/BRA, 
G/SCM/N/95/BRA).  
Further information regarding PROEX and BNDES-Exim can be obtained, respectively, at the following 
websites:  www.bb.com.br and www.bndes.gov.br.  
 
COLOMBIA 
 
I) Políticas comerciales, por medidas  El documento de la Secretaría (WT/TPR/S/140) destaca los importantes logros que en materia de 
transparencia ha realizado Brasil en su régimen comercial.  Sin embargo, subsisten algunas áreas en las 
que es posible continuar mejorando.  Las siguientes preguntas están relacionadas con estos aspectos: 
 1) Medidas que afectan las importaciones  
Normas de Origen 
 
1. Los párrafos 29 a 36 del Informe de la Secretaría describen con suficiente detalle los distintos 
regímenes de origen preferenciales que aplica Brasil, tanto al interior del MERCOSUR como en varios acuerdos regionales.  En especial nos ha llamado la atención el suscrito con Chile, por la utilización de 
contingentes con distintos porcentajes de contenido regional para conferir el origen.  
 
Si bien los contingentes se eliminarán en el 2006 y se aplicará un porcentaje uniforme de 60% de 
contenido regional, nos gustaría conocer la experiencia de Brasil en la aplicación del esquema y los sistemas de control y verificación que se utilizan para garantizar la correcta utilización del mismo.  
Agradecemos se nos suministre información sobre los procedimientos empleados por las empresas en sus 
procesos de producción para aplicar distintos regíme nes de origen según el destino de las exportaciones.  
 
Answer: 
 
El control y la verificación de la origen de mercancias se realiza em el país de exportación por 
intermédio de entidades certificadoras nacionales supervicionadas por el govierno central.  Em el de Brasil lãs empresas optaram por cumplir com el requisito de mayour contenido regional, como 
forma de viabilizar exportaciones para cualquier mercado. 
 
Aranceles 
 2. El Informe de la Secretaría destaca que los aranceles continúan siendo el principal instrumento de la política comercial de Brasil e ilustra sobre los prog resos en su estructura arancelaria desde el anterior 
examen, tanto en la dispersión como en los niveles promedios.  No obstante, al analizar los cuadros III.1 y 
los gráficos III.1 y III.2 notamos que en algunos sectores la progresividad arancelaria es marcada y la 
protección a algunos sectores se aparta del promedio.   Tiene previsto Brasil continuar sus esfuerzos de ra cionalización de su estructura arancelaria para 
uniformizar la protección efectiva de la industria y de la agroindustria? 
  WT/TPR/M/140/Add.1
 Page 129 
  
Answer: 
 The Common External Tariff (CET) is defined by consensus by the four member states of 
MERCOSUR, on the basis of the criteria and tariff le vels defined by the authorities in the economic 
area, taking into account the sensitivities of product s as well as the density of the industrial network 
within MERCOSUR.  
The tariff structure has a tariff escalation and the duties vary according to the degree of 
manufacturing of the products in the respective chains of production, in each economic sector 
(basic, intermediary and final) e according to the nomenclature of the Harmonized System.  Brazil considers that the present structure of the CET and the effective protection of the chains is 
adequate.  
 
3. En el párrafo 39, página 53, se menciona que los productos de informática y de comunicaciones 
tienen aranceles que temporalmente son superiores al 20%.  En que nivel se ubican dichas tarifas?  Por cuánto tiempo se aplicarán?  Cuál fue la razón del incremento? 
 
Answer: 
 
As an exception, the CET was not applied for that  sector  immediately on the formation of the 
Union.  The policy adopted for that sector is that all duties would converge to the common gradually.  The tariff headings labeled Informatics and Communication Goods currently carrying 
rates above 20% follow a schedule for the convergence to the Common External Tariff of 16%, to 
be accomplished by 31, December 2005.  In the case of Brazil there was no increase: the duty is 
gradually being reduced from an original 30% duty to the 16% CET.  
Otras cargas que afectan a las importaciones 
 4. Los párrafos 77 y 78, página 64, describen la composición y forma de aplicación del impuesto sobre la circulación de mercancías y la prestación de  servicios (ICMS).  Encontramos que el esquema no 
es de aplicación uniforme y cuenta con un importante número de exenciones y de tarifas preferenciales que los Estados pueden autorizar de manera discrecional.   Por su parte, el Informe de la Secretaría comenta que las autoridades reconocieron que la aplicación de las exenciones del ICMS puede ser discriminatoria contra los productos importados o nacionales, aunque en la práctica tal discriminación ocurre en contados casos.   
En que productos se presenta esta situación de discriminación?  Existen planes en el corto plazo para 
racionalizar la aplicación de exenciones o de tari fas preferenciales y la corrección de los casos de 
discriminación?  
Answer: 
 
The ICMS falls under the competence of States.  Each State determines the duty and how it 
is applied.  The central government is currently examining whether and to which extent a 
discrimination between imported goods and locally produced goods.  The government proposed a tax reform that may reduce the complexity of the ICMS legislation. 
 WT/TPR/M/140/Add.1 
Page 130   Reglamentos Técnicos y Normas  5. El párrafo 158, página 85 del Informe de la Secretaría comenta sobre un importante Programa en el área de evaluación de la conformidad, en el que se seleccionaron 30 programas adecuados para 
productos y servicios y 10 para modelos distintos de la certificación. 
 
Solicitamos mayor información sobre este Programa, su evolución y los resultados alcanzados, tanto para bienes como para servicios. 
 
Answer:  The Brazilian Programme for Conformity Assessment – PBAC was designed to  develop a long-term strategy and a thorough management plan for conf ormity assessment activities in Brazil.  The 
Programme is being constantly revised and re-chec ked, with the participation of governmental and 
private entities associated with conformity assessment activities.  Based on demands previously identified, a study on technical viability is carried out, through the 
use of a specially-developed methodology, taking into account technical, social, legal and economic-
financial factors, with the objective of defini ng the viability of the program, its infrastructure 
(metrological standards, standards and regulations, plus accreditation bodies and laboratories) and 
the mechanism for Conformity Asses sment, due mainly to the level of risk offered by the product or 
service. 
 The Brazilian Programme for Conformity Assessment, previously comprising 30 programs, has 
been extended to 40, of which 18 have already been concluded and 15 are still currently being 
carried out.  Information about concluded programs, to gether with their Ministerial Acts and the 
programs in operation is in the file attached below.   
 More information about PBAC is available on the following links:   
http://www.inmetro.gov.br/ english/quality/index.asp  
http://www.inmetro.gov.br/qualidade/pbac.asp   
Medidas Sanitarias y Fitosanitarias  
 
Párrafo 74 del informe de la Secretaría: 
 6. En el párrafo 74 del Informe de Gobierno de Brasil (WT/TPR/G/140), se comenta sobre el 
limitado uso que hace Brasil de acuerdos de equivalencia, lo que incide sobre sus exportaciones.  
 
Cuáles son las razones por las cuáles este uso es limitado? Con cuáles países desarrollados y en desarrollo 
tiene Brasil firmado este tipo de acuerdos?  Cuál ha sido la experiencia?  
Answer: 
 
Article 4 of the WTO SPS Agreement on equivalence was designed to provide members, especially 
developing countries, with a tool for facilitating international trade of agricultural products.  As 
provided for in the agreement, members shall accept other members SPS measures as equivalent, even if they are different from their own.  The application of this concept would allow exporting 
countries to implement SPS measures to mitigate risks arising from the exports of an agricultural 
product adequate to the circumstances of its own production, as long as it could demonstrate that  WT/TPR/M/140/Add.1
 Page 131 
  
these measures achieve the adequate level of protecti on of the importing country.  Brazil  does not 
have yet any equivalence agreement with either developing or developed countries, but negotiations are underway.  The main difficulty in celebrating equivalence agree ments is related to the “objective assessment” 
of the equivalent measure made by importing countries.  The objective demonstration of equivalence requires intense exchange of information and visits, which results in a lengthy process.  
As the objective of equivalence agreements is to facilitate trade, this long term process ends up to be 
a burden on both sanitary services.  Exporters would then prefer to comply with importing countries’ SPS requirements instead of seeking equivalence.  In one particular case, Brazil insisted on the recognition of equivalence of its own phytosanitary treatment by its trading partner, with a view to gain access to that market.  The process is still underway and the economic results could not be measured yet.  Brazil hopes that decisions on equivalence adopted by the WTO SPS Committee as well as the recommendations adopted by the international standard setting organizations could made the 
implementation of equivalence principle easier. 
 
2) Medidas que afectan las exportaciones 
 
7. El párrafo 176, página 89, del documento de la Secretaría nos brinda información sobre los 
impuestos a las exportaciones que se aplican a todos los países para asegurar el suministro del mercado 
interno y en otros casos, de manera selectiva para controlar el comercio. 
 
Considera Brasil que éste último caso es compatible con las disposiciones del GATT de 1994 y los 
principios de la OMC? Cuáles son los criterios que utilizan las autoridades de Brasil para seleccionar los 
productos y los mercados?   
Answer: 
 The use of export taxes in Brazil is restricted to  an extremely limited number of products.  This 
policy is applied on an exceptional basis and is being the object of revision. 
 
II) Políticas Comerciales, por sectores 
 
Servicios 
 
8. En el párrafo 159, página 173, del Document o de la Secretaría se menciona que Brasil aplica 
condiciones especiales al nombramiento de gerentes para filiales de empresas extranjeras.  Podría el 
Brasil explicar cuales son dichas condiciones especiales?  
Answer: 
 
The conditions for managers and directors appointed to affiliates of foreign companies are listed in 
the horizontal section of the Brazilian services’ schedule.  
 
9. En el párrafo 163, página 174, del documento de la Secretaría se menciona que en el proceso de 
liberalización de los servicios que viene adelantando el MERCOSUR, existe la iniciativa de incluir el 
programa de aprobación de la visa del MERCOSUR, la cual contiene normas comunes para el WT/TPR/M/140/Add.1 
Page 132   movimiento temporal de proveedores de servicios, así como mecanismos para el ejercicio profesional temporal.  Podría Brasil explicar con mayor detalle cu áles son las características de dicha visa y las 
condiciones de aplicación?  Ha pensado Brasil en un futuro cercano extender la aplicación de este programa a otros esquemas regionales? Estaría pensando en establecer un mecanismo similar en él ámbito 
multilateral? 
 
Answer: 
 The Mercosur Visa harmonizes the requirements applied by the four member countries for the concession among themselves of working visas for professionals of several categories who possess work contracts in the host country.  The only requirements are those linked to the proof of contract itself, as well as the absence of criminal records.  No economic needs tests apply.  This does not affect the requirement for specific licenses or reco gnition of diplomas in some professionals.  The 
mechanism is intended rather to guarantee that  professionals possessing a contract in the 
prospective host country and fulfilling specific r equirements to the exercise of that professional 
cannot be denied a working visa on the grounds of economic needs tests or similar instruments. 
 Brazil can consult with its Mercosur partners regarding the possibility to negotiate arrangements of this kind in the context of integration agreements with other countries. 
 
10. En el mismo párrafo anterior se menciona que dentro de los mecanismos para el ejercicio 
profesional temporal se establecieron directivas sobre acuerdos de reconocimiento mutuo entre entidades 
profesionales y sobre licencias temporales.  Está pensando Brasil establecer mecanismos de este tipo con otros países de la región? Para que sectores se pretende llevar a cabo dichos Acuerdos? 
 
Answer: 
 
The temporary license mechanism – which still has to pass through Parliament in order to enter 
into force – provides guidelines for the negotiation of mutual recognition agreements between 
professional associations of the four countries, to be later approved by governments.  It does not in 
itself establish a mechanism of temporary licenses .  The criteria and duration of licenses should be 
established in each individual agreement.  In principle, all professions regulated through 
professional associations can be the subject of such agreements. 
 
Brazil can consult with its Mercosur partners regarding the possibility to negotiate arrangements of 
this kind in the context of integration agreements with other countries.  
COSTA
 RICA 
 
I. Políticas y prácticas comerciales, por medidas 
 a. Procedimientos aduaneros y documentación  
1. En la página 45, párrafo 8, del documento de la Secretaria se indica que el registro de un 
importador o exportador puede ser denegado en casos de “abuso de poder económico”.  ¿Podría aclararse 
a qué se refieren estos términos, o mencionar algunos ejemplos en los que el registro pueda ser denegado por esta condición?    WT/TPR/M/140/Add.1
 Page 133 
  
Answer: 
 The issue apparently refers to page 38, paragraph 9.  The “abuse of economic power” is as an extreme situation, characterized as imports related to monopolistic action or to the creation of stocks merely with speculation purposes, as stated by Portaria MICT 280, of 12 July 1995.  
 
b. Prohibiciones, restricciones y licencias de importación  2. En la página 71, párrafo 104, del Informe de la Secretaría se hace referencia a una “prueba de 
similitud”, indicando que una mercancía solamente estará exenta de derechos de importación cuando no 
exista un producto nacional similar.  Se indica que esta prueba aplica a las importaciones que se 
benefician de una exención o reducción de impuestos a la importación.  ¿Aplica esta medida a las importaciones provenientes de todos los países, inclusive a las que se realizan en el marco de los acuerdos preferenciales que ha suscrito Brasil? 
 Answer: 
 Tests of similarity are applied for products from orig in, regardless of the existence of preferential 
schemes.  What is relevant for the tests of similarity  is that it refers to products that would later be 
subjected to fiscal exemptions.  Three basic parameters are assessed in those tests:  price; deadline 
of delivery and product quality. 
 
c. Medidas anti-dumping y compensatorias  
3. En el párrafo 110, del Informe de la Secretaría se indica que las investigaciones para la aplicación 
de medidas anti-dumping y compensatorias se inician a solicitud de la rama de producción nacional o de 
oficio por SECEX.  En este último caso, ¿en algún momento de la investigación, o bien, antes de 
determinar si procede o no la imposición de medidas, se corrobora el apoyo de la investigación de la rama de producción nacional de conformidad con los requerimientos establecidos en el Acuerdo Relativo a la 
Aplicación del Artículo VI del Acuerdo General sobre Aranceles Aduaneros y Comercio de 1994 
(Acuerdo Anti-dumping) y el Acuerdo sobre Subvenciones y Medidas Compensatorias?  
 
Answer: 
 
Since 2000, there was no self-initiated investigation or review in Brazil.  In past cases of self-
initiation, the domestic industry answered the questi onnaire sent, indicating its support to the 
initiation. 
 
4. En referencia a párrafo 125, ¿qué porcentaje de las investigaciones anti-dumping entre 1988 y el 
2002 a las que se les aplicaron derechos provisionales culminaron con la aplicación de derechos 
definitivos?  
Answer: 
 
From 1988 to 2002, provisional anti-dumping measures were applied in 33 investigations.  From 
these, in 24 cases definitive anti-dumping measures were applied, representing 72,7% of the cases where provisional measures were applied. 
 WT/TPR/M/140/Add.1 
Page 134   d. Salvaguardias  5. En referencia al párrafo 132, ¿qué tipo de concesiones se aplicaron para los países que se vieron afectados por la medida de salvaguardia de juguetes, cuando se prorrogó el plazo de aplicación de dicha 
medida?  Se facilitaron pruebas de que la rama de producción de juguetes estaba en proceso de reajuste?  
Answer:  Together with the prorogation of the safeguard on toys, opportunity to discuss all issues, including concessions, was made available throughout consultations in the terms of Article 12.3 of the Agreement on Safeguards.  As regards to the situati on of the domestic industry, it is stated in the 
notification (document G/SG/N/8/BRA/2/Suppl.2, G/SG/N/10/BRA/2/Suppl.2, G/SG/N/11/BRA/1/ 
Suppl.2.) that imports from other countries were responsible for “the injury caused to the toy 
industry in the first half of the 90's…” , which “was such that it has not yet been possible for the 
industry to restructure competitively” .  The same notification contains the non-confidential data that 
underscores Brazilian conclusions.  From the very beginning of the application of the safeguard, the sector of toys has been fulfilling adjustment pl ans, renewed with each prorogation of the measure.  
The Brazilian government is carefully following the fulfillment of the several items of these adjustment plans and considers that the adjustme nt goals are being satisfactorily fulfilled. 
 
e. Reglamentos Técnicos y Normas  
 
6. Dado que no existe una norma general que guíe la preparación de los reglamentos técnicos, sino que cada organismo sigue sus propios procedimientos internos, para efectos de someter a consulta pública 
los reglamentos técnicos,  ¿aplican diferentes plazos pa ra recibir comentarios de los interesados?  ¿Cómo 
se verifica en el mercado brasileño el cumplimiento de los reglamentos técnicos a los productos de 
importación? (párrafo 136 del Informe de la Secretaría). 
 
Answer: 
 
Deadlines for comments are specified by each regulatory agency responsible for the issuance of technical regulations, nevertheless G_TBT_Rev.8 recommendations are observed.  In accordance 
with national legislation, the minimum deadline of 180 days for the entry into force of any Brazilian 
technical regulation, after its publication on the Brazilian Official Journal, shall be followed.   
 
In the Brazilian market, there is no distinction between imported and national products.  All products must comply with technical regulations.  To this end, conformity assessment procedures 
are issued and in cases related to health, security and environmental issues, on a mandatory basis. 
 
7. Puede el CONMETRO emitir un criterio vinculante en relación con la aprobación o revocación 
de un reglamento técnico propuesto por una entidad federal o estatal?  (párrafo 137 del Informe de la Secretaría).  
Answer:  
No.  Provisions issued by Conmetro are recommendations, which do not have a compulsory status.  Information on Conmetro’s competence as defi ned by Law 9.933, of December 20, 1999, may be 
obtained in the electronic address below:  http ://www.inmetro.gov.br/legislacao/lei9933.asp. 
  WT/TPR/M/140/Add.1
 Page 135 
  8. ¿Cuáles son las disposiciones que regulación la utilización de la “declaración del proveedor” para la demostración del cumplimiento de la reglamentación técnica brasileña?  (párrafo 157 del Informe de la Secretaría).  
Answer: 
 The provisions related to Suppliers Declarations of Conformity and Product Marking are included in "Resolução CONMETRO / CONMETRO número 4 de 16/12/1998", whose full text can be downloaded from the link below:  http://www.inmetro.gov.br/resc/resultado_pesquisa.asp  
 f. Medidas Sanitarias y Fitosanitarias. 
 9. ¿Qué normas internacionales aplica Brasil para la realización de los análisis de riesgo?  (párrafo 161 del Informe de la Secretaría) 
 
Answer:  On the phytosanitary field, Brazil applies the relevant IPPC International Standards for Phytosanitary Measures (ISPMs), including ISPM nº 2 “Guidelines for pest risk analysis”, ISPM 
nº 11 Rev. 11 “Pest risk analysis for quarantin e pests including analysis of environmental risks”, 
and ISPM nº 14 “The use of integrated measures in a systems approach for pest risk management”.  
On the sanitary field, Brazil applies the releva nt chapters of the OIE’s Terrestrial and Aquatic 
Animal Health Codes.  With regard to food safety, Brazil follows the guidelines and recommendations approved by the Codex Alimentari us Commission related to risk analysis. 
 
10. ¿En qué consisten las “licencias de importación no automáticas” en materia sanitaria y 
fitosanitaria?  ¿Cuándo aplican este tipo de licencias?  (párrafo 162 del Informe de la Secretaría)   
 
Answer: 
 
Non-automatic license for products subject to Brazilian Sanitary Surveillance Agency’s licensing regards the sanitary control, in order to protect human safety, health and life, and MAPA is 
responsable for controlling the sani tary and phitosanitary aspects of all livestock, vegetable and 
grain production, as granted in WTO agreements. 
 
11. ¿Es la inspección in situ un requisito general obligatorio para poder exportar productos sanitarios 
y fitosanitarios al Brasil?  ¿Qué productos especí ficos no pueden ser exportados a Brasil en razón de 
proteger la salud animal de este país?  (párrafo 167 del Informe de la Secretaría)   
 
Answer: 
 The requirement for a in situ inspection may vary according to the product, and the sanitary and phytosanitary status of the country of origin, as well as the existence of bilateral SPS Agreements.  
Animal and plant products intended to be exported to Brazil are subject to a risk analysis process 
in order to determine importing requirements. 
 
12. ¿Cuál es el fundamento científico que respalda la norma que establece la obligación de etiquetar 
para productos que contengan más de un 1% de OMGs?  ¿En qué plazo espera Brasil lograr que su 
regulación sobre OMGs en materia de etiquetado e importación adquiera carácter permanente?  (párrafo 
169 del Informe de la Secretaría)   WT/TPR/M/140/Add.1 
Page 136   
Answer: 
 Brazil, among other countries, understands that the principle that should guide labeling rules of GMOs is the consumer's right to information.  The so called "substantial equivalence" approach to labeling has no scientific basis.  Therefore, the consumer's "right to know" has been the approach to labeling adopted by the Brazilian legislation.  Labeling is fully regulated in Brazil by Decree 4680/03 and Normative Act n  1/2004. 
 
g. Impuestos a la exportación y precios mínimos de exportación 
 
13. En la página 89, párrafo 176, del Informe de  la Secretaría, se señal a que Brasil grava ciertas 
exportaciones para asegurar el suministro del mercado interno y para controlar la regularidad de las corrientes comerciales.  Asimismo, se indica que esta práctica obedece a los diferentes objetivos propuestos y que de éstos dependen los tipos impositivos.  ¿Cuáles otros objetivos obedece los impuestos 
a la exportación? 
 
Answer: 
 The use of export taxes in Brazil is restricted to  an extremely limited number of products.  This 
policy is applied on an exceptional basis and is being the object of revision. 
 
II. Políticas comerciales, por sectores;  a. Agricultura;  i. Objetivos y administración de política 
 14. En esta sección se indica que la Compañía Nacional de Abastecimiento (CONAB), la cual es una 
empresa comercial del Estado, puede realizar actividades de importación y exportación en circunstancias 
excepcionales por decisión del Ministerio de Agricultura, Ganadería y Abastecimiento (MAPA), pero no 
mencionan en cuáles casos se han dado o se pueden dar esas importaciones o exportaciones por parte del 
CONAB.  ¿Cuáles podrían ser esas circunstancias excepcionales en las que el CONAB puede importar o exportar, y si en el caso de las exportaciones, éstas tienen alguna relación con el Programa de Contratos 
de Opción el cual funciona como mecanismo de estabilización de precios? 
 
Answer: 
 
According to Brazilian legislation, CONAB is allowed to export or import agricultural products, 
under special circumstances.  In practice, however, CONAB has never exported any product, and 
made only two imports during the early nineties, one of wheat and the other of beef. 
 
ii. Instrumentos de política 
 
15. En el Programa de Contratos de Opción existe el denominado "Precio de ejercicio", el cual 
equivale al precio mínimo del producto más el costo de almacenamiento y el costo financiero.  ¿Se podría explicar la manera en la cual  Brasil fija ese "pre cio mínimo" y cuáles han sido sus valores (por producto) 
en los últimos 3 años de aplicación? 
 
Answer: 
 The minimum prices are annually established taking into account prospective scenarios of production, production costs for different regions, and the international parity price.  This 
methodology allows a low degree of governmental intervention as can be observed in Paragraph 44 
(page 123).  WT/TPR/M/140/Add.1
 Page 137 
  
Data on the minimum prices for the last 3 year s are public and can be obtained in the web page of 
the Ministry of Agriculture, Livestock and Food Supply:  www.agricultura.gov.br.  
16. En la página 137, párrafo 17, del Informe de la Secretaría, sobre aranceles y otras cargas, 
Costa Rica está interesada en obtener información más específica sobre los aranceles nominales medios 
NMF aplicable a los subsectores de la agricultura: productos lácteos, el azúcar, las bebidas, los líquidos 
alcohólicos y el vinagre, y el tabaco y los productos del tabaco elaborados. 
 
Answer:  Table III.1 on page 44 of the Secretariat Report presents the average aplicable MFN tariffs for the 
products indicated above.  For dairy products, the applied MFN tariff is 18.8%; for sugar, 13.8%; for tobacco, 15.3%.  For additional information on these and other products, it is useful to consult the web site of the Ministry of Development, Industry and Foreign Trade (www.desenvolvimento. gov.br/arquivo/secex/tec). 
 
17. Costa Rica está interesada en conocer con más detalle el alcance de cada uno de los programas de ayuda interna (página 138, párrafo 20 del Informe de la Secretaría). 
 
Answer: 
 
Detailed information on the programs described in the Secretariat Report can be obtained in the 
web sites of the institutions that manage each program.  In the case of rural credit, Program of Guaranteed Minimum Prices (PGPM), Option Cont racts and Premium for Product Outflow (PEP), 
the web site of the Ministry of Agriculture, Livestock and Food Supply can be consulted 
(www.agricultura.gov.br);  on BNDES/FINAME Credit Line and Special BNDES Credit Lines, the 
web site of BNDES (www.bndes.gov.br);  and on the Program to Strengthen Family Farming 
(PRONAF), the web site of the Ministry of Agrarian Development (www.mda.gov.br). 
 
18. En la página 143, párrafo 32 del Informe de la Secretaría, se menciona el Programa Nacional de 
Fortalecimiento de la Agricultura Familiar (PRONAF), cuyos principales productos beneficiarios son el algodón, el arroz, el maíz y el trigo;  ¿podría Brasil describir más detalladamente el impacto de esta 
política en esos subsectores? 
 
Answer: 
 Pronaf is designed to benefit exclusively family farm ers, who are, by legal definition, resource-poor 
producers and owners of small areas, being their production mainly targeted to domestic markets.  
The assistance provided under Pronaf is totally de-lin ked from production.  That is to say that the 
farmer is totally free to choose which product to produce.  In the harvest 2003/2004, 50% of the 
total assistance benefited the production of corn, dairy, manioc and beans.  Such products are traded in internal markets, with no interference in international markets.  Moreover, due to its nature and amounts of resources involved, Pronaf has limited or no impact on production and/or 
trade.   
b. Sector manufacturero  19. En la página 158, párrafo 93, del Informe de la Secretaría se establece que los principales 
instrumentos de política del sector manufacturero son las reducciones arancelarias para los bienes de 
capital no producidos en el país.  ¿Estas reducciones tienen plazo de vencimiento?  WT/TPR/M/140/Add.1 
Page 138   
Answer: 
 The issue apparently refers to page 132, paragraph 93.  The tariff reductions allowed by the ex-tarifario regime are not to be made permanent, fo r they are supposed to be maintained in force 
only during the period necessary to the respective import operation to be carried out (usually for two years only).  This kind of goods is generally build under order and also subjected to a unique importation.  The goods assignable to the tariff reductions allowed by the regime are those that, though produced within the MERCOSUR, are classified (since the current MERCOSUR’s 8-digit nomenclature is 
not able to comprehend all the possible items) in  tariff headings subjected  to a tariff protection 
level.  For this purpose, a specific description is provided to such good.  
c. Servicios 
 
20. Además de los sectores de telecomunicaciones, servicios financieros y servicios de puertos y 
aeropuertos, ¿en qué otros sectores se están llevando a cabo procesos de privatización?  
Answer: 
 
At this moment, privatization processes are not foreseen in other sectors. 
 
21. ¿Cuáles son las profesiones para las cuales no hay que registrarse en el Consejo Federal o en los Consejos Regionales?  ¿Cuáles son los requisitos que deben cumplir los extranjeros para ejercer una 
profesión en Brasil que no deben cumplir los nacionales? 
 
Answer: 
 Professions such as law professions, accounting,  medical professions, engineering and architecture 
are subject to registration requirements.  There ar e no discriminatory requirements for foreigners. 
 
22. ¿Tiene previsto el Congreso una fecha par a ratificar el V Protocolo anexo al AGCS? 
 
Answer: 
 
The executive branch has taken all the steps necessary for the approval of the V Protocol by Parliament, a pre-condition to its ratification by  Brazil.  A time-frame for such approval cannot be 
determined, since there is no time-limit for the examination of legal instruments by Congress, and 
also in view of the independence among branches of Government.  
 
23. Podría explicar con mayor detalle las mejoras realizadas a la lista de compromisos específicos, así 
como los compromisos asumidos en nuevos sectores en la oferta inicial sobre servicios presentada por Brasil en julio del 2004. 
 Answer: 
 The Brazilian initial offer included improvements in 14 sub-sectors, encompassing 5 sectors (professional services, building and construction, dist ribution, tourism, and recreational services).  
In almost all cases the offer consolidates a situat ion of absence of restrictions to foreign suppliers  WT/TPR/M/140/Add.1
 Page 139 
  
with a commercial presence in Brazil.  Moreover, by making clear reference to the CPC, Brazil has 
ensured transparency in its commitments. 
 
24. Podría indicar en qué estado se encuentra la elaboración de las listas de compromisos específicos 
de los países del MERCOSUR, en el marco de la negociación regional.  
Answer:  The Brazilian list of specific commitments in Me rcosur, after five rounds of negotiations among the 
four member countries, encompasses practically all sect ors and modes of supply.  It consolidates 
the present status of market access and national treatm ent, both at horizontal and sectoral level.  
The specific commitments are complemented by agreements on the Mercosur Visa and on temporary exercise of professions. 
 
25. ¿Para qué fecha estaría Brasil ratificando el Protocolo de Montevideo sobre el Comercio de 
Servicios? 
 
Answer: 
 
The Brazilian Congress has already approved the text of the Montevideo Protocol.  It has still to 
approve the initial lists of commitments, which form an integral part of that Protocol.  As soon as 
the initial lists are approved, Brazil will be able to ratify the Protocol. 
 
26. ¿Para qué fecha tiene previsto establecer las restricciones a las que deberán sujetarse los servicios 
financieros referentes a la presencia comercial, de conformidad con lo establecido en el artículo 192 de la 
Constitución?  ¿A que países no se le aplican estas restricciones como resultado de acuerdos 
internacionales o de reciprocidad negociados por Bras il, así como por interés del Gobierno brasileño? 
 
Answer: 
 
The regulation of Article 192 of the Constitution depends on the enactment of a Complementary Law.  While this Law is still not in place, Brazil has been authorizing the entry of foreign financial 
institutions through Presidential Decrees, based on Arti cle 52 of the Transitional Dispositions of the 
Constitution.  These authorizations are based on grounds of national interest.  At this moment, 
there are no international agreements or reciprocity agreement as a basis for that sort of 
authorization. 
 
III. Medidas que afectan a la producción y al comerc io;  a. Marco jurídico para la producción y las 
inversiones 
 
27. ¿Cuáles son las principales diferencias entre el régimen de inversión que se aplica a los nacionales con respecto a las disposiciones que se aplican a los extranjeros en la legislación nacional? 
 
Answer:  
National treatment is the cornerstone of Brazil’s approach to FDI, once a foreign company is incorporated in the country. 
 
28. Además de los sectores de minería, servicio s financieros y transporte, ¿en qué otros sectores 
existen limitaciones para el acceso de las inversiones por parte de extranjeros?  WT/TPR/M/140/Add.1 
Page 140   
Answer: 
 Foreign participation in the capital of Brazilian companies is restricted only in very specific sectors: nuclear energy, transportation of money and valuables.  There are also limitations relating to the proportion of a company’s capital in very few sectors:  broadcasting, air transportation, highway freight transportation.  
 
29. ¿Cuál es la posición que mantienen actualmente las autoridades brasileñas con respecto a la 
aplicación de los mecanismos de solución de diferencias inversionista-Estado dentro de sus negociaciones 
comerciales? 
 
Answer: 
 The basic rationale of the Brazilian position is t hat the investor-State dispute settlement clause, as 
usually understood, introduces an element of discrimination against the domestic investor, to whom there would be no option but to file complaints against the State before domestic courts.  The foreign investor, by contrast, could either refer the matter to the recipient-State’s judicial system or request an international arbitration to settle the dispute. 
 
b. Política de precios y de competencia 
 
30. El párrafo 239 hace referencia a la aprobación del CADE para todo acto que dé lugar al control 
del 20 por ciento de un mercado pertinente o en que dos de los participantes obtengan ventas anuales brutas superiores o iguales a 400 millones de reales ¿Implica esta disposición que las fusiones que se 
pretendan llevar a cabo que cumplan estas características deben hacer una notificación previa antes de 
efectuarse? 
 
Answer: 
 
If a transaction meets any of the above mentioned tresholds (market share of more that 20% or a 
turnover of more than 400 million), the transaction has to be authorized by the competition 
authority (Conselho Administrativo de Defesa Econômica, CADE).  However, as the Brazilian 
Competition Law (Law No. 8.884/94) establishes a post-merger review , a company can enter into the 
transaction and submit it to the authority within 15 days from the execution of the first binding 
document, having in mind that such transaction will only be considered effective once approved by 
CADE. 
 
31. En relación con el párrafo 242 relativo al Acuerdo entre los Gobiernos del Brasil y de los Estados 
Unidos de América con respecto a la cooperación entre sus autoridades de política de competencia y la 
aplicación de sus leyes de competencia, ¿cómo se plantea en este Acuerdo el tratamiento a los carteles de 
exportación en los cuales los efectos de dicho acuerdos se dan en el territorio de la otra Parte sin que se de una aplicación extraterritorial de la ley de competencia de alguna de las Partes?   
Answer:  
The cooperation agreement does not have any specific provision about export cartels and, so far, the Countries have not dealt with this situation, wh ich makes it hard to provide a clear answer.  In 
any case, it is worth mentioning the Brazilian Competition Law does not have any exceptions to 
export cartels or to any other kind of conduct or sector. 
  WT/TPR/M/140/Add.1
 Page 141 
  
TURKEY 
 
II. TRADE AND INVESTMENT REGIME  
1. Paragraph 14 of the Report by the Secretariat notes that “Brazil strongly supports enhancing 
south-south trade, while recognizing the need for more flexible rules for developing countries at the 
multilateral level...”.  Could Brazil provide us comments on its strategy to impr ove south-south trade in 
industrial goods within the context of DDA?  
Answer: 
 Brazil believes south-south trade is a valuable comp lement to north-south trade.  Moreover, trade 
between developing countries has been growing at higher pace than average world trade and, thus it has become an additional source of dynamism to the world economy.  WTO negotiations should help to improve south-south trade by eliminating market distorting policies such as agricultural export subsidies, which unfairly reduces developing  countries competitiveness.  Besides a successful 
conclusion to the Doha Round, Brazil intends to further open its market to developing countries exports within the third negotiating round of the GSTP, which is under the framework of the Enabling Clause.  Hence, Brazil wishes that member countries should engage fully on these 
negotiation and non-members consider acceding to them. 
 
III. TRADE POLICY AND PRACTICES BY MEASURE 
 2. Paragraph 38 of the Report by the Secretariat mentions that “the average applied MFN tariff was 
10.2% for agricultural goods (WTO Definition) and 10.5% for non-agricultural goods.  Unlike many 
other WTO members, agricultural tariffs in Brazil are on average slightly lower than no-agricultural 
tariffs”.  Could Brazil comment on the general directions  of its industrial policy in terms of liberalization 
and competitiveness? 
 
Answer: 
 Brazil’s industrial policy might help domestic firms to import capital goods to improve productivity 
and capacity.  At the same time, the Government disseminates information about trade 
opportunities abroad.  In order to increase exports by Brazilian enterprises, the government set up 
a program called “Redeagentes” that offer regular short courses to disseminate the technical 
aspects of international trade:  this includes general information about international trade and about the documents required to export goods and services.  Hence, as Brazilian firms are 
increasingly participating in international trade,  they become more competitive as they benefit 
from technological inputs from abroad and face competition on foreign and domestic markets.  
 
3. In paragraph 39 Secretariat Report mentions Brazil has a relatively high tariff in automobile among 
other industrial goods.  Could Brazil kindly provide us the rationale behind the higher tariff for the automotive sector compared to the other manufacturing goods? 
 
Answer: 
 The policy for this sector is agreed between all Mer cosul members that est ablished the “Automotive 
Policy of MERCOSUR” (PAM).  The present level of support for cars is considered adequate by the 
Brazilian authorities, considering the level of competitiveness of our industry and the strategic 
importance of this sector to our economy. WT/TPR/M/140/Add.1 
Page 142   
THAILAND 
 
Trade Policies and Practices by Measure  
Tariff Quotas 
 
1. The Secretariat’s Report (paragraph 63, page 50) shows that Brazil establishes temporary tariff 
quotas, through reduction of the CET for a certain quantity of imports, in a certain period, when it is considered that there is insufficient supply of the product. 
 
Could Brazil give more information on what basis that Brazil determines insufficient supply of the 
products?  How many products will tariff quotas be applied in 2005?  What are those products?   
 Answer: 
 Brazil does not determine insufficiency alone.  It falls to MERCOSUR, as a group, to assess that 
insufficiency and adopt temporary punctual tariff reduction measures to address them.  The 
resolution MERCOSUL/GMC/RES/69/00 states that it s provisions could only be used under strict 
exceptional circumstances.  The imports made under the measure is put into effect through quotas, 
and the concession is limited to 20 tariff headi ngs per country, up to 12 months, renewable for one 
single period.  
Although the mechanism allows the members to us e 20 tariff headings simultaneously, concessions 
never exceeded 5 tariff headings per member at the same time. 
 
In Brazil only one single product is currently subject to the provisions of this resolution - sardines - and will cease to be effective from 1 December 2004 on.  The periodic tariff reduction for 
this product follows the prohibition to fish sardines in Brazil between 1
 November 2004 and 
1 December 2004. 
 
Other Charges Affecting Imports 
 
2. According to the Secretariat’s Report (paragraph 78, page 54), the Brazilian authorities noted that 
while the application of the exemptions to the services and merchandise circulation tax (ICMS) could discriminate against imported or domestic products, this occurs in practice only in certain residual cases. 
 
Could Brazil specify and provide more details on such discrimination? 
 
Answer:  The ICMS falls under the competence of States.  Each State determines the duty and how it is 
applied.  The central government is currently examining whether and to which extent a 
discrimination between imported goods and locally produced goods exists.  
 
3. We have been reported by our agency in the capital that imports into Brazil are subject to 
different kinds of taxes including import taxes, goods and services taxes as well as other import charges 
such as 
  WT/TPR/M/140/Add.1
 Page 143 
  
− Warehouse Tax at the rate of 0.65% of CIF value for a period of 15 days to store the merchandise in 
the warehouse 
 
− Terminal Handling Charge at the average rate of 100 US$ per container (at Santos Seaport in 
Sao Paolo) 
 
− Merchant Marine Renewal Tax (MMR) imposed on importers at 25% of ocean freight in case of 
import by sea 
 
− Compulsory Contribution to Custom Broker’s Union at the rate of 2.2% of CIF value or the lowest 
rate at 71 US$ and the highest rate  at 160 US$ 
 
− SISCOMEX Tax, the charge for the use of SISC OMEX System which is used in the customs 
activities to facilitate international trade at the charge of 30 US$ per one use 
 
On the whole, imported products will have higher costs of approximately 50% of CIF value whereas domestic products in Brazil will have higher costs of approximately 20% only.  
Could Brazil clarify this report? 
 
Answer: 
 With the exception of the Merchant Marine Renewal Tax (MMR), the taxes listed above 
correspond to services delivered, whose price is proportional to the cost.  With regard to the 
SISCOMEX, we clarify that the tax to use the service is of R$30,00 (thirty Reais). 
 
Import Prohibitions, Restrictions and Licensing  
4. For each import of products with value higher than 5,000 US$, authorization must be sought from 
the Foreign Trade Secretariat - SECEX’s Export and Impo rt Registry who will issue the import licence.  
In general, the import authorization will take approximately 5 days and, once authorized, import process 
must be done within 90 days, which makes it difficult to import in terms of documents and processes.  
Will Brazil consider streamlining the process? 
 
Answer: 
 
Importation of products in Brazil are, as a general rule, exempted from licensing, regardless of 
their value.  In the few the cases where imports are subject to licensing – either automatic or non-
automatic – the importer has to register itself in the Foreign Trade Secretariat - SECEX’s Export 
and Import Registry.  The great majority of cases – both automatic and non-automatic – are processed within 24/48 hs.  In some situations of non-automatic licensing, the process may extend to 
up to 60 days, which is compatible with the rules of the Agreement on Import Licensing. 
 
5. Brazil has introduced temporary prohibition of import of hard shell marine animals except if the 
products have passed the risk analysis test and received the import authorization from the Animal Sanitation Department.  Will Brazil consider reviewing this prohibition? 
 WT/TPR/M/140/Add.1 
Page 144   
Answer: 
 This import prohibition was in place to preserve domestic animal life.  Import prohibitions apply to products which origin has the presence of exotic pests for Brazil in the Aquatic Animals Zoo Sanitary Code of OIE.  This kind of prohibition is  limited to the countries where the risk is deemed 
to be present or when emergency conditions must be applied.  As noted in Paragraph 161 (page 72), in this respect, the risk analyses take into consideration technical information received from third countries  interested in exporting to Brazil and that, 
therefore, the duration of the risk analysis process depends primarily on how fast this information is exchanged and evaluated.  Brazil considers risk analysis as one of the most important points of implementation of the SPS Agreement. 
 
Anti-dumping Measures 
 
6. Since the Brazilian government uses Portugues e as its official language in the investigation 
procedures, Thai government agencies and Thai exporters certainly encounter the time consuming process in converting questionnaires into English and translating the response back into Portuguese.  If the Brazilian government could provide an unofficial Englis h translation, it would be helpful for Thailand to 
provide proper information on time.  Consequently, this would reduce the use of BIA (Best Information 
Available) in calculating the dumping margin by the Brazilian authorities, which will create high and 
artificial AD margin for Thai exporters. 
 
Answer: 
 
Brazilian Law requires that all official acts and procedures must be published and conducted in 
Portuguese.  Under the WTO agreements, there is  no obligation for the Members to provide 
translations or to maintain records of an investigation procedure in a specific language.  It should be pointed out that the Brazili an authority always extends the time period for answering the 
questionnaires. 
 
7. Referring to the Sunset Review on new tyres for bicycles from various countries, including 
Thailand, Brazil determined that there would be a recurrence of dumping and injury from China, India 
and Thailand if the duty were removed.  However, the Department of Commercial Defence (DECOM) 
finally decided to maintain the AD measure only for Thailand, for the reason of shortage of supply 
domestically.  If there is a shortage, the measures should have been suspended for all countries on a non-discriminatory basis.  Thailand hereby urges Brazil to reconsider the suspension of the current AD 
measures against Thailand along with China and India.  Could Brazil give concrete arguments for this 
discriminatory manner? 
 
Answer:  The Department of Commercial Defence (DECOM) does not decide for the application of AD 
measures.  The decision to end an investigation with a negative recommendation to apply measures 
is taken by the Secretariat of Foreign Trade - SECEX while the decision to whether or not duties 
might be applied, based in a positive recommendati on, is the responsibility of the Chamber of 
Foreign Trade - CAMEX, which is a college of 6 ministers.  The reason for suspension, as published in the official gazette, was not at all for reasons of shortage of supply domestically.  All arguments 
concerning the decision are found in CAMEX resolution nº 02, from January 16
th 2004. 
  WT/TPR/M/140/Add.1
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  Investment Regime  8. Regarding foreign capital investment, there are re gulations on the remittance of profits.  Please 
provide information on such regulations. 
Answer: 
 
The matter is regulated by CMM 2689, of January, 26 of 2000 and Circular Banco Central 2997, of 
August, 15 of 2000.  Further informatio n can be found at the Central Bank website 
(www.bcb.gov.br). 
 
Trade Policies by Sector;  Services 
 
9. Brazil makes no commitments in education, environment, and health services sectors.  What are 
the national policies associated with these services sectors?  
Answer: 
 
Brazil wants to ensure that its population has acces s to services of high quality in the areas of 
education, environment and health. 
 
10. Concerning financial services: insurance on freight (CPC 81293), there is mode 1 Market Access 
limitation stating that “Imports can only be insured with established companies.”  Please clarify? 
 
Answer: 
 This limitation is related to the pru dential aspects of the financial sector. 
 
NORWAY 
 
A - Questions pertaining to chapter III of the Secretaria t Report - "Tariffs" and "other charges affecting 
imports"  1) According to the Secretariat's report Brazil maintains relatively high tariffs for industrial goods and is 
an active user of non-tariff barriers.  What plans does Brazil have for reducing tariffs for these goods as well as for reducing the "non tariff barriers"?  
Answer: 
 In our view, the statement provided by Norway does  not reflect the Secretariat’s report accurately.  
With regard to the tariff structure, what the report indicates is that the rates applied to industrial 
goods are higher in comparison with agricultural goods.  That does not mean industrial tariffs in Brazil are to be deemed to be higher than that of other countries.  With reference to the phrase on 
non-tariff barriers, it should be clarified that what  the report states is that "Brazil is an active user 
of anti-dumping measures", which is correct, but should in no way lead to the conclusion that 
Brazil is unduly or excessively applying non-tariff barriers in general.  
 The tariff level of the Common External Tariff (CET) is based on criteria defined by consensus 
among the four member states of MERCOSUR, taking into account the sensitiveness regarding 
some products as well as the density of the in dustrial network within MERCOSUR.  The tariff WT/TPR/M/140/Add.1 
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structure of MERCOSUR follows a moderate escalation in which the duties keep correspondence to 
the products' manufacturing degree, according to its stage in the respective chain of production and to its economic sector (basic, intermediary or final).  Brazil keeps applied tariffs at a lower level than bound rates.  The average of the tariffs bound by Brazil is 30,4%, being 35,6% for agricultural products and 29,7% for industrial product, and the maximum tariff bound is 55%, to 145 agricultural headings.  In 2004, the average applied tariff (9.750 headings) is 10,8%, being 10,2% for agricultural products.  
 Taking into account the specific conditions and dynamics of the MERCOSUR countries developing economies, and particular sensibilities concerning some sectors, including those affected by distortive measures practiced in the country of origin, Brazil considers that the current structure of the CET and the effective protection of the chains are appropriate.  Brazil is committed to reducing its tariffs in the context of the Doha Development Round.  As a 
vigorous defendant of a balanced trade liberaliza tion, Brazil considers that all commitments 
regarding market access, including those related to rates applied to industrial goods and non tariff 
barriers, will be granted or obtained according to  the balance provided by the parties in negotiation 
rounds, either on multilateral, regional or bilateral basis.  
 
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