. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q2/BRA/26 
19 April 2011 
 (11-2006) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions posed by TURKEY regarding the New and Full  
Notification of BRAZIL1 
 
  The following communication, dated 14 April 2011,  is being circulated at the request of the 
Delegation of Turkey.  
_______________ 
 
 
Programmes Contingent Upon the Use of Domestic Goods 
 
According to Brazil's latest Trade Polic y Review (TPR) Report dated 11 May 2009 
(WT/TPR/S/212/Rev.1), Brazil provides subsidies c ontingent upon the use of domestic goods which 
are not notified in its latest new and full notification to the Committee on Subsidies and 
Countervailing Measures (SCM).   
- According to pages 62, 63 and 64 of the TPR Report "the Export Financing 
Programme"  (PROEX) and "BNDES (the Brazilian Development Bank) EXIM"  
programmes aim at financing Brazilian expor ts of goods and services at conditions 
similar to those obtainable in international markets . However, the value of this 
financing seems to be contingent u pon the use of domestic content. 
- According to page 82 of the TPR Report, FINAME Program, which is administered 
by the BNDES, provides financing at prefer ential conditions in order to acquire new 
machinery and equipment of domestic manufact ure. This programme appears to have 
domestic content requirements.  
Question 
 
Please explain why these programmes were not notified to the Committee on SCM and 
how they are consistent with Brazil's obli gations under Articles 3 and 25 of the SCM 
Agreement?    The Development and Diversification of Exports of States Programme 
 
According to Brazil's TPR Report at page 83, th e Development and Diversification of Exports 
of States Programme (State Exporter Programme) states that exports less than US$100 million 
annually, benefit from the programme in order to increase exports of small businesses, expand the 
                                                      
1 G/SCM/N/186/BRA G/SCM/Q2/BRA/26 
Page 2  
 
  range of products exported, di versify export markets and the insertion of new businesses in the 
exporting process of these states.  The programme consists of a range of support activities. 
 
Question 
 
Please explain why this programme was not notified to the Committee on SCM and how 
it is consistent with Brazil's obligations under Articles 3 and 25 of the SCM Agreement?    Regional Subsidies  
According to Brazil's latest TPR Report Braz il, provides regional incentives other than the 
ones mentioned in its latest new and full notification to the Committee on SCM.  
- Export-Processing Zones:  
At page 61 of the TPR Report of Brazil, companies located in the export-processing 
zones (EPZs) may benefit from several incen tives. According to the Report, firms 
operating in EPZs must export 80 per cent of  the turnover related to the sales of goods 
and services in order to benefit from the pr ogramme. Thus this programme appears to 
be contingent upon export performance.   
- Free Trade Zones:  
At page 79 of the TPR Report of Brazil, it is stated that "incentives to companies 
established in the ZFM (Manaus Free Trade Z one) are in the form of tax suspensions, 
reductions or exemptions, granted by the federal and state governments."  Moreover, 
ZFM beneficiaries may be subsidized relate d directly to the exports under the Special 
Western Amazon Export Programme (PEXPAM). 
Question 
 
Please explain why these programmes were not notified to the Committee on SCM and 
how they are consistent with Brazil's obli gations under Articles 3 and 25 of the SCM 
Agreement?   
 
 
__________