WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/BRA 
10 January 2012 
 (12-0095) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 of the  
GATT 1994 and Article 25 of the Agreement on  
Subsidies and Countervailing Measures 
 
BRAZIL 
 
 
 The following notification, dated 21 December 2011,  is being circulated at the request of the 
Delegation of Brazil.   
 
_______________ 
  
 
The following notification constitutes Brazil's subsidies notification for the fiscal years 
of 2009 and 2010.  
 This notification does not prejudge the nature or legal status of the programmes herein under 
GATT 1994 and Articles 1 and 2 of the Ag reement on Subsidies and Countervailing 
Measures (ASCM).  Data may reflect approximations, estimates or preliminary information.  
Technical or legal inaccuracies may have been inadve rtently introduced in the text in the attempt to 
make the description of the programmes sufficiently illu strative, but also straightforward and concise.  
For information purposes, Brazil has included certa in programmes which arguably are not specific 
within the meaning of the Agreement. G/SCM/N/220/BRA 
Page 2 
 
 
  TABLE OF CONTENTS 
 
  Page 
I.  INDUSTRIAL INCENTIVES .................................................................................................. 3  
A.  SUPPORT PROGRAM FOR THE DEVELOPMENT OF THE PHARMACEUTICAL PRODUCTIVE 
CHAIN (PROFARMA  – INNOVATION ) ........................................................................................ 3  
B.  CAPACITY BUILDING AND COMPETITIVENESS ENHANCEMENT IN INFORMATION 
TECHNOLOGY  ..............................................................................................................................  4 
C.  INDUSTRIAL TECHNOLOGY AND AGRICULTURAL /CATTLE BREEDING TECHNOLOGY 
DEVELOPMENT PROGRAMME (PDTI  & PDTA) .......................................................................... 5  
D.  PRODUCTIVE DEVELOPMENT POLICY (PDP) .............................................................................. 6  
II.  REGIONAL INCENTIVES ..................................................................................................... 7  
A.  AMAZON DEVELOPMENT AUTHORITY AND NORTHEAST REGION DEVELOPMENT 
AUTHORITY  .............................................................................................................................. ... 7 
B.  INVESTMENT FUNDS FOR THE AMAZON , THE NORTHEAST REGIONS AND THE STATE 
OF ESPÍRITO SANTO (FINAM /FINOR /FUNRES ) ............................................................................. 9  
C.  CONSTITUTIONAL FUNDS FOR FINANCING THE NORTHEAST , THE NORTH AND THE 
MIDWEST REGIONS (FNE/FNO/FCO) ....................................................................................... 11  
D.  DEVELOPMENT FUNDS FOR THE AMAZON AND THE NORTHEAST REGIONS 
(FDA/FDNE) .................................................................................................................... ........ 12 
E.  REGIONAL DEVELOPMENT AND PROMOTION OF R &D AND TECHNOLOGICAL 
INNOVATION PROGRAMME  ........................................................................................................ 13  
III. FISHERIES INCENTIVES ................................................................................................... 14  
A.  PROGRAMME FOR DIESEL OIL SUPPORT  ................................................................................... 14  
B.  NATIONAL PROGRAMME FOR FINANCING THE ENLARGEMENT AND MODERNIZATION 
OF NATIONAL FISHING FLEET – PROFROTA ........................................................................... 15  
 
 
  G/SCM/N/220/BRA 
 Page 3 
 
 
  I. INDUSTRIAL INCENTIVES 
A. SUPPORT PROGRAM FOR THE DEVELOPMENT OF THE PHARMACEUTICAL PRODUCTIVE CHAIN 
(PROFARMA  – INNOVATION ) 
1. Title of the programme 
 
Support Programme for the Development of the Pharmaceutical Productive Chain 
(PROFARMA – Innovation).   
 2. Period covered by the notification 
  From January 2009 to December 2010.  
3. Policy objective and/or purpose 
 
 PROFARMA – Innovation aims at supporting project s that contribute to the consolidation of 
the pharmaceutical industry in Brazil.  PROFAR MA-Innovation supports exclusively R&D efforts by 
the pharmaceutical industry in Brazil aiming at th e development of new or significantly improved 
products and/or processes.   
 
4. Legislation and authority 
 
 The Brazilian Development Bank (BNDES) is responsible for the administration of the 
programme.  The Programme was established in  09/18/07 by BNDES's Resolution 1501/07. 
 
5. Form of subsidy 
  Long-term financing and/or equity participation in the company (through subscription of 
securities) or participation in the project's revenu es.  Minimum financial support is R$ 1 million.  
Loans are granted at a fixed interest rate of 4.5 per cent per year with maturity up to 15 years. 
 
6. To whom and how the subsidy is provided 
 
 Any enterprise incorporated under Brazilian Law. 
 7. Total amount 
  Fiscal Year 2009:  R$ 12,702,000.00.  Fiscal Year 2010:  R$ 19,022,000.00. 
 
8. Duration 
 
 The Programme will be due in August 2012. 
 
9. Trade effects 
 
 N.A. G/SCM/N/220/BRA 
Page 4 
 
 
  B. CAPACITY BUILDING AND COMPETITIVENESS ENHANCEMENT IN INFORMATION TECHNOLOGY  
1. Title of the programme 
 
 Capacity building and competitiveness enhanc ement in Information Technology and related 
fields.   
 
2. Period covered by the notification 
 
 From January 2009 to December 2010. 
 
3. Policy objective and/or purpose 
 
 To encourage manufacturers of information technology goods to invest in research and 
development activities, create new products and improve the country's competitiveness. 
 
4. Legislation and authority 
 
 Law 8248/91, as amended by Law 10176/01 and, more recently, by Law 11077/04. 
 
 Within their respective area of responsibility,  the Ministry of Finance, the Ministry of 
Development, Industry and Foreign Trade and the Ministry of Science and Technology manage the 
provision of benefits such as partial tax exemption a nd the follow up of the counterparts offered, such 
as research and development programmes execution.  
5. Form of subsidy 
  Exemption or reduction of the indirect Tax on Industrialized Products (IPI) for information 
technology goods.  
 Reduction of IPI for raw materials, intermedia te goods and material from used packages.  To 
qualify for this programme, companies must invest at least 5 per cent of their turnover from product 
sales (after deduction of other indirect taxes) and th e value of the acquisition of the products benefited 
by the programme, in research and development activities. 
  According to a framework defined in the legislation, the incentives provided by the 
programme began to be phased out in Marc h 2005 with a view to termination in 2019. 
 
6. To whom and how the subsidy is provided 
 
 Industrial enterprises, through tax credits provi ded by the Federal Government at the amount 
of due deductive taxes. 
 
 Research Institutes, Centers and Laboratori es, through financial support from industrial 
enterprises which choose to outsource the execution of research projects. 
 7. Total amount 
 
Fiscal Year 2009:  R$ 3,026.97 million. Fiscal Year 2010:  R$ 3,464.11 million (estimated).  G/SCM/N/220/BRA 
 Page 5 
 
 
  8. Duration 
 
 The programme will be phased out by 2019.    
9. Trade effects 
  N.A. 
 C. I
NDUSTRIAL TECHNOLOGY AND AGRICULTURAL /CATTLE BREEDING TECHNOLOGY 
DEVELOPMENT PROGRAMME (PDTI  & PDTA) 
1. Title of programme 
 
 Industrial Technology and Agricultural/C attle Breeding Technology Development 
Programme (PDTI & PDTA).  The objective is to pr ovide incentive for research and development in 
the above mentioned areas. 
 
2. Period covered by the notification 
 
 From January 2009 to December 2010. 
 3. Policy objective and/or purpose 
  Foster technological improvement for industrial and agricultural/cattle breeding enterprises, through research and development initiatives, in order to create new projects and processes or 
improve existing projects, as well as promote industrial and agricultural training.  The programme 
seeks to promote partnerships between research ce nters and universities, institutes and enterprises 
managed by the enterprises through a permanen t infrastructure of technological management. 
 4. Legislation and authority 
  The Industrial Technology and Agricultural/Cattle Breeding Technology Development Programme (PDTI & PDTA) was established by La w 8661 of 2 June 1993, regulated by Decree 949 
of 5 October 1993.  The Ministry of Science and T echnology is responsible for the administration of 
the programme.  
 Law 9532 (10 December 1997) reduced the benef its granted to enterprise's research and 
development programmes.  Law 10332 (19 Dece mber 2001) and Decree 4195 (11 April 2002) set 
forth provisions to enterprises which had projects approved under the PDTI/PDTA programmes.  This 
law was revoked in January 2006, thus terminating the programme. Firms with ongoing projects were 
authorized to keep benefiting from PDTI/PDTA until their completion.  
5. Form of subsidy 
  Deductions of income tax due on the sum of  the expenses in technological research and 
development activities and of Tax on Industrialized  Products (IPI) due on equipment, machinery and 
devices directly allocated to research and technolog ical development and also on instruments, parts 
and tools associated with those goods. 
 6. To whom and how the subsidy is provided 
  The beneficiaries are industrial and agricultural/cattle breeding enterprises.  The amount of the subsidy is proportional to the value of the ex penses on research and development.  For instance, G/SCM/N/220/BRA 
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  the amount of the IPI tax break depends on the value of machinery and equipment acquired for 
research and development purposes. 
 7. Total amount 
  Fiscal Year 2009:  R$ 1,4 million. 
 Fiscal Year 2010:  R$ 1,5 million (estimated). 
 8. Duration 
  The programme was established in 1993 and term inated in January 2006.  Only enterprises 
that had PDTI/PDTA projects approved before Ja nuary 2006 can still benefit from the programme.  
The maximum time period for executing a project is five years. 
 9. Trade effects 
  N.A.  
D. P
RODUCTIVE DEVELOPMENT POLICY (PDP) 
1. Title of Programme 
 
 Productive Development Policy (PDP). 
 2. Period covered by the notification 
 
From January 2009 to December 2010.   
 
3. Policy objective and/or purpose 
 
The Productive Development Policy was created to increase production capacity, aiming to 
meet the growing of goods demand.  
4. Legislation and authority 
 
 The Productive Development Policy was established by Law 11774/2008. 
 
 The Ministry of Finance is responsible fo r the inspection of the tax incentives of the 
programme and the Ministry of Defense is respons ible for the Brazilian Especial Register (REB). 
 
5. Form of subsidy 
 
a) Reduction of the indirect taxes PIS and COFI NS for imports and acqui sitions in the domestic 
market of goods and equipments, including parts and components, used in construction, conservation, 
modernization, conversion or repair of vessels regi stered in the Brazilian Especial Register (REB). 
 b) Income tax postponement, as a result of accelerat ed depreciation of capital goods used in the 
manufacturing of vehicles and their parts. 
 c) Income tax postponement, as a result of accelerated depreciation of equipment, machinery 
and devices used in the manufacturing of capital goods.  G/SCM/N/220/BRA 
 Page 7 
 
 
  6. To whom and how the subsidy is provided 
 
 The reduction of indirect taxes PIS and COFINS mentioned in 5(a) is granted to shipyards that execute the activities of build ing, conservation, modernization,  conversion or repair of vessels 
registered in the Brazilian Especial Register (REB). 
 
 The postponement of income tax mentioned in 5( b) and (c) is granted to vehicle and vehicle 
parts industries, as well as capital goods industries.  
7. Total amount 
 
Fiscal Year 2009:  R$ 97 million.  
Fiscal Year 2010:  R$ 106 million (estimated). 
 8. Duration 
  The programme has no pre-established time limit for its termination.    
9. Trade effects 
 
 N.A. 
 
II. REGIONAL INCENTIVES 
A. AMAZON DEVELOPMENT AUTHORITY AND NORTHEAST REGION DEVELOPMENT AUTHORITY  
 " Superintendência para o De senvolvimento da Amazônia " (SUDAM), the Amazon Region 
Development Authority, was established by  Law 5174, dated 27 October 1966.  " Superintendência 
para o Desenvolvimento do Nordeste " (SUDENE), the Northeast Region Development Authority, was 
established by Law 3692, dated 15 December 1959.  Provisional Measures 2156-5 and 2157-5, of 
August 2001, extinguished both authorities and the programmes they administered.  The same 
Provisional Measures replaced those authorities by  "Agência do Desenvolvi mento da Amazônia" 
(ADA) and "Agência do Desenvolvimento do Nord este" (ADENE).  On 3 January 2007, ADA and 
ADENE were extinguished by Supplementary La ws 124/2007 and 125/2007, respectively, being 
replaced by SUDAM and SUDENE.  The changes introduced by Supplementary Laws 124/2007 
and 125/2007 relate mainly to the legal struct ure and legal nature of those authorities. G/SCM/N/220/BRA 
Page 8 
 
 
  1. Title of programme1 
 
 SUDAM and SUDENE programme s provide assistance to th e economically disadvantaged 
Amazon and Northeast regions by m eans of income tax reductions. 
 
2. Period covered by the notification 
  From January 2009 to December 2010.  
3. Policy objective and/or purpose 
 
 To reduce economic and social imbalances between the Brazilian regions by means of 
compensatory mechanisms for the developm ent of the North and Northeast Regions. 
  The area covered by SUDAM is denominated "Legal Amazonia", or the Amazon Region, 
encompassing the states of Acre, Amapá, Amaz onas, Mato Grosso, Pará, Rondônia, Roraima, 
Tocantins, and part of the state of Maranhão.  The Amazon Region is an area of continental 
dimensions covering 5,046,143 square kilometers and corres ponding to 59 per cent of Brazil's 
territory and approximately 70 per cent of the so -called Pan-Amazon or C ontinental Amazon, which 
has a population of approximately 22 million inhabita nts heavily concentrated in urban areas and 
scattered widely across a vast rural area.  The jurisdiction of SUDENE encompasses the states of Piauí, 
Ceará, Rio Grande do Nort e, Paraíba, Pernambuco, Alagoas, Sergipe, Bahia and Maranhão, in addition 
to the north of State of Espírito Santo and an area of the state of Minas Gerais included in the so-called "polígono das secas " (drought area in Northeastern Brazil). 
 
4. Legislation and authority 
  Both programmes are under the responsibility of SUDAM and SUDENE, as established by 
Supplementary Law 124/2007 and Supplementary Law 125/2007.  Law 9532/97 regulates the tax 
exemptions and reductions.  Provisional Measure 2199/01, as amended by Law 11196/2005, is the most 
recent regulation on the matter.    
5. Form of subsidy 
 
 Income tax exemptions and reductions.2 
                                                      
1 The Constitution of Brazil, in its article 3, item III of Title I, regarding th e Fundamental Principles, 
considers that "the fundamental obj ectives of the Federative Republic of  Brazil are to eradicate poverty and 
substandard living conditions and to reduce social and regional inequalities".  In Section IV (article 43, 
paragraph 2, item III) of Chapter VII, Title III, which refe rs to the Organization of th e State considers that "the 
regional incentives shall include, among others, as pres cribed by law, exemptions, reductions or temporary 
deferment of federal taxes owed by indi viduals or by legal entities".  In article  151, item I, Section II of Title VI, 
regarding Taxation and Budget considers that "it is forbidden for the Union: to institute a tax which is not 
uniform throughout the entire national territory (...), it being allowed to grant tax incentives for the purposes of 
promoting the balanced social and economic development of the various regions of the country".  In article 165, 
paragraphs 6 and 7, Section II of Chapter II, Public Fi nances, of the previous Title, considers that "the budget 
bill shall be accompanied by a regionalized statement on the effect on revenues and expenses, deriving from 
exemptions, forgiveness, remissions, subsidies and benefits of a financial, tributary and credit nature (§ 6).  The 
budget set forth (...) in consistence with the pluriannual plan, shall include the functions of reducing 
interregional inequalities, according to population criteria (§ 7)". 
2 Companies which submitted the project until 14 November 1997 and which were granted income tax 
exemption will be entitled to such benefit until the date specified in the act of concession.  G/SCM/N/220/BRA 
 Page 9 
 
 
  6. To whom and how the subsidy is provided 
 
 Beneficiaries are industrial and agricultural enterprises with undertakings in the Amazon or 
Northeast Regions.   
 
7. Total amount 
 
 2009 – R$ million 2010 – R$ million* 
Sudam 1.508,9 1.703,9 
Sudene 2.849,8 3.217,9 
Total 4.358,7 4.921,8 
* estimated values . 
 8. Duration 
  Companies are allowed to submit projects un til 31 December 2013.  The income tax reduction 
benefit is terminated after 10 years from th e date that industry starts its operation. 
 
9. Trade effects 
  N.A.  
B. I
NVESTMENT FUNDS FOR THE AMAZON , THE NORTHEAST REGIONS AND THE STATE OF 
ESPÍRITO SANTO (FINAM /FINOR /FUNRES ) 
1. Title of programme 
 
 "Fundo de Investimento da Amazônia" (A mazon Investment Fund – FINAM), "Fundo de 
Investimento do Nordeste" (Northeast Regi on Investment Fund – FINOR) and "Fundo de 
Recuperação Econômica do Estado do Espírito Santo"  (Fund for the Economic Recovery of the State 
of the Espirito Santo – FUNRES).  
2. Period covered by the notification 
 
 From January 2009 to December 2010. 
 
3. Policy objective and/or purpose 
 
 To reduce economic and social imbalances between the Brazilian regions by means of 
compensatory mechanisms for the development of th e North (Amazon) and Northeast regions and for 
the state of Espírito Santo. 
 4. Legislation and authority 
  FINOR and FINAM previously administered by SUDAM and SUDENE are now under the responsibility of the Ministry of National Integration (MI).  Banco da Amazônia S.A. (BASA), and 
Banco do Nordeste do Brasil S.A. (BNB) are respective ly the financial agents of the Funds.  FUNRES 
is administered by Grupo de Recu peração Econômica do Estado do Es pírito Santo (GERES), and Banco 
de Desenvolvimento do Espírito Santo S.A.  is the financial agent of this fund. 
 G/SCM/N/220/BRA 
Page 10 
 
 
   The Secretariat of Federal Revenue of Brazil and the National Treasury Secretariat of the 
Ministry of Finance are charged with the funding mechanisms of resources to FINAM, FINOR and 
FUNRES.  
 The main legislation is the following:  Law 8167, of 16 January 1991;  Law 9532, of 
10 December 1997, Law 9808, of 20 July 1999 a nd Decree-law 880, of 18 September 1969.   
 
5. Form of subsidy 
 
 Risk capital investments through primary subscription of debentures convertible into stock, at 
a ratio of 70 per cent in convertible debentures and 30 per cent in non-convertible debentures.  
In 2000, Provisional Measure 2058 extinguished the non-convertible debentures.  The FINAM / 
FINOR / FUNRES tax incentives programs, regulated  by Law 8167 of January 16 1991, Law 9532, 
10 December 1997, and Law No. 9808 of 20 July 1999, allowed investors deduction of 18 per cent 
until 2003, 12 per cent from 2004 to 2008 and 9 per cen t from 2009 to 2013 of its income tax to be 
invested in the Amazon region and the Northeast.  As to Espírito Santo State, the applicable 
percentages are 25 per cent by 2003, 17 per cent from 2004 to 2008 and 9 per cent from 2009 to 2013.  Tax incentives are channeled through the Amaz on Investment Fund (FINAM), the Northeast 
Investment Fund (FINOR), or the Fund for the Fund  for Rehabilitation of the State of Espírito Santo 
(FUNRES) for investment in projects by companies lo cated in those regions which can generate jobs 
and incomes and promote development. 
 
6. To whom and how the subsidy is provided 
 
 The beneficiaries are legal persons that implemen t a project considered to be relevant to the 
region.  The project, in order to be implem ented with FINAM, FINOR or FUNRES financial 
assistance, should involve activities that foster regional or local development. 
 7. Total amount 
 
FINOR/FINAM/FUNRES Fiscal  benefits (R$ million) 
 
Fiscal Year FINAM FINOR FUNRES 
2009 5.2 49.7 5.9 
2010 * 0.0 164.8 4.8 
* estimated values. 
 
8. Duration 
 
 Expiration is scheduled for December 2013 (Law 9532/97). 
 9. Trade effects 
  N.A.    G/SCM/N/220/BRA 
 Page 11 
 
 
  C. CONSTITUTIONAL FUNDS FOR FINANCING THE NORTHEAST , THE NORTH AND THE MIDWEST 
REGIONS (FNE/FNO/FCO) 
1. Title of programme 
 
 "Fundos Constitucionais de Financiamento do Nordeste, do Norte e do Centro-Oeste" 
(FNE/FNO/FCO):  Constitutional Funds for Financing the Northeast, the North, and the Midwest 
Regions.   
 2. Period covered by the notification 
  From January 2009 to December 2010.  
3. Policy objective and/or purpose 
 
 To reduce economic and social imbalances between the Brazilian regions by means of 
compensatory mechanisms for the development of  the North, Northeast and Midwest regions. 
 4. Legislation and authority 
  The Ministry of National Integration and the Deliberative Council of the Development 
Authorities of the North and Northeast Regions  and the Deliberative Council of the Midwest 
Constitutional Financing Fund are the authorities.  Th e financial agents of the Funds are Banco da 
Amazônia S.A., Banco do Nordeste do Br asil S.A. and Banco do Brasil S.A. 
 
 The relevant legislation is the following :  Law 7827, of 27 September 1989, as amended by 
Law 10177, of 12 January 2001, and Decree 6367, of 30 January 2008.
3 
 
5. Form of subsidy 
 
 Loans. 
 6. To whom and how the subsidy is provided 
  According to the legislation, the benefici aries of loans backed by Constitutional Fund 
resources are producers and companies, whether natural or legal pers ons, as well as production 
cooperatives, that carry out productive activities in the crop/livestock, mineral, industrial and agro-
industrial, tourism, infra-structure, commerce and service sectors of the North, Northeast and Midwest 
Regions. 
 
7. Total amount 
 
FCO/FNE/FNO Contracted loans 
(R$ million) 
 
Fiscal Year FCO FNE FNO 
2009 3,183.4 9,134.1 2,440.4 
2010 4,253.7 10,755.1 2,568.6 
                                                      
3 See also Complementary Law 125, of 3 January 2007.   G/SCM/N/220/BRA 
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  8.  Duration 
 
 Loans backed by Constitutional Financi ng Fund resources have been granted since 
September 1989.  The Constitutional Funds  have no pre-established time limits. 
 
9. Trade effects 
  N.A.  
D. D
EVELOPMENT FUNDS FOR THE AMAZON AND THE NORTHEAST REGIONS (FDA/FDNE) 
1. Title of programme 
 
 "Fundo de Desenvolvimento da Amazônia" (FDA), Amazon Development Fund, and "Fundo 
de Desenvolvimento do Nordeste" (FDNE),  Northeast Region Development Fund. 
 
2. Period covered by the notification 
 
 From January 2009 to December 2010. 
 
3. Policy objective and/or purpose 
 
 To provide funding for productive investme nts in the areas covered by SUDAM and 
SUDENE (see p. 7).  
4. Legislation and authority 
  Authorities are the Ministry of National Integration, SUDAM/ADA, SUDENE/ADENE 
and the Deliberative Council of the Development Au thorities of the North and Northeast Regions.  
Banco da Amazônia S.A. and Banco do Nordeste do Brasil S.A. are the financial agents of the Funds. 
 
 The relevant legislation is Provisional Measur es 2156-5 and 2157-5 (articles 4, 5 and 6 of 
both).
4 
 
5. Form of subsidy 
 
 Loans in the form of convertible debentures. 
 6. To whom and how the subsidy is provided 
  The beneficiaries of loans backed by Deve lopment Fund resources are enterprises that carry 
out productive activities in the sectors of crop/liv estock, mineral, industrial and agro-industrial, 
tourism, and infra-structure in the Amazon and Northeast regions. 
                                                      
4 As amended by article 19 and 16 of Law Complementary 125 and 124, dated 3 January 2007.  G/SCM/N/220/BRA 
 Page 13 
 
 
  7. Total amount 
 
FDA/FDNE Contracted loans 
(R$ million) 
 
Fiscal Year FDA FDNE 
2009 334.5 2, 672.4 
2010 1,809.3 53.5 
 
8. Duration 
 
 Loans backed by Development Fund resour ces have been granted since 2006 with the 
deadline of December 2013. 
 
9. Trade effects 
 
 N.A. 
 
E. REGIONAL DEVELOPMENT AND PROMOTION OF R &D AND TECHNOLOGICAL INNOVATION 
PROGRAMME  
1. Title of programme 
 
 Regional Development and Promotion of Research and Development and Technological 
Innovation Programme.  
 2. Period covered by the notification 
  From January 2009 to December 2010.  
3. Policy objective and/or purpose 
 
Reduce economic and social imbalances between Brazilian regions by means of 
compensatory mechanisms for the development of the North, Northeast and Midwest.  Regions and 
promote investment in research, development a nd technological innovation in the North, Northeast 
and Midwest regions.  For the purpose of the programme the Midwest region does not comprise 
Federal District.  
4. Legislation and authority 
 
 Law 9.826/1999 amended by Law 12.218/2010. 
 
 The Ministry of Development, Industry and Fo reign Trade and the Ministry of Finance are 
responsible for determining the requirements for the submission of project's application and approval.  
The Ministry of Development, Industry and Foreign Trade is responsible for the evaluation, approval 
and monitoring the programme.  The Ministry of Sc ience and Technology is responsible for verifying 
the proof of investment in research and develo pment and technological innovation in the regions 
covered by the programme.    G/SCM/N/220/BRA 
Page 14 
 
 
  5. Form of subsidy 
 
 Reduction of 32% of IPI levied on sales of products classified in codes 8702 a 8704 of the Table of Incidence of IPI.  The reduction is applie d on products produced in the domestic market or 
directly imported by the beneficiaries.  
 
 The beneficiaries shall invest, at least, 10%  of the value corresponding to IPI reduction in 
research and development and technological innova tion in the regions covered by the programme.  
 
6. To whom and how the subsidy is provided 
 
 Beneficiaries are industrial enterprises inst alled in the areas covered by SUDAM, SUDENE 
and in the Midwest region.  Beneficiaries shall inv est, at least, 10% of the value corresponding to IPI 
reduction in research and development and technol ogical innovation in the regions covered by the 
programme.  Project submitted by beneficiaries sha ll be approved by the Ministry of Development, 
Industry and Trade Foreign. 
 7. Total amount (R$ million) 
  Fiscal Year 2009:  R$ 1.165,4.  Fiscal Year 2010:  R$ 1.333,7 (estimated values). 
 
8. Duration 
 
 Expiration is scheduled for December 2015 (Law 12.218/2010). 
 
9. Trade effects 
 
 N.A. 
 
III. FISHERIES INCENTIVES 
A. PROGRAMME FOR DIESEL OIL SUPPORT  
1. Title of programme 
 
 Programme for Economic Subvention to the Pric e of Diesel Oil Used by Fishing Vessels. 
 
2. Period covered by the notification 
 
 From January 2009 to December 2010. 
 3. Policy objective and/or purpose 
  The main objective of the program is to equalize the price of maritime diesel paid by fishing 
companies or fishermen to its pr ice in the international market. 
 4. Legislation and authority 
  The programme was established by Law 9445, of  14 March 1997 and, regulated by Decree 
nº 7.077, of 26 January 2010.  The Ministry of Fi sheries and Aquaculture is responsible for the 
administration of the programme. 
  G/SCM/N/220/BRA 
 Page 15 
 
 
   In order to benefit from equalization scheme th e fishing companies or fisherman must comply 
with administrative procedures se t in regulation by the Ministry fo r Fisheries and Aquaculture, which 
take into account vessel contro l and other administrative issues. 
 
5. Form of subsidy 
  This equalization encompasses the reimburseme nt of the difference between the price of 
maritime diesel in Brazil and international markets.  However, this equalization payment is limited to 
25% of the price of maritime diesel at the refinery level. 
 
6. To whom and how the subsidy is provided 
 
 Recipients:  Fishing vessel owners or char ters (natural or legal persons); professional 
fishermen and fishing industries.  
 In operational terms, the beneficiaries pay the regular national price of maritime diesel (with 
the tax exemption of ICMS).  Subsequently, the Ministry for Fisheries and Aquaculture will reimburse to the beneficiary the difference between the price paid  and the international market price, up to the limit 
of 25% of the maritime diesel price at the refinery level. 
  At the end of each fiscal year, a public regu lation issued by the Ministry for Fisheries and 
Aquaculture establishes the benefi ciaries (company, cooperative, asso ciation or fishermen), by state 
level (regional) and the maximum amount of reimburs ement that will be available for the following year 
for each of the beneficiaries. 
 
7. Total amount 
  Fiscal Year 2009:  R$ 23, 3 million (encompassing 2,188 vessels).  Fiscal Year 2010:  R$ 20, 8 million (encompassing 1,865 vessels). 
 
8. Duration 
 
 Not defined. 
 9. Trade effects 
  N.A.  
B. N
ATIONAL PROGRAMME FOR FINANCING THE ENLARGEMENT AND MODERNIZATION OF 
NATIONAL FISHING FLEET – PROFROTA 
1. Title of programme 
 
 National Programme for Financing the Enlarg ement and Modernization of National Fishing 
Fleet – PROFROTA. 
 2. Period covered by the notification 
  From January 2009 to December 2010. G/SCM/N/220/BRA 
Page 16 
 
 
  3.  Policy objective and/or purpose 
 
 Construction, acquisition and im provements of fishing vessels in order to enhance the ocean 
fishing fleet, taking into consideration environmenta l criteria of sustainability (including management 
of fishing effort). 
 
 Replacement of coastal and continental fleet fishing vessels with the objective to renew them, 
taking into consideration environmental criteria of  sustainability (including management of fishing 
effort). 
 
 Modernization, conversion, equipping and ad aptation of fishing vessels, to enhance the 
management control on fishing effort, taking into consideration environmental criteria of 
sustainability. 
 4.  Legislation and authority 
  The program was established by Law nº 10.948 , of 23 May 2004 and regulated by Decree 
no. 5.474, of 22 June 2005 and by Decree no. 6.746 , of 22 January 2009.  The Ministry of Fisheries 
and Aquaculture is responsible for the administration of the program. 
 5.  Form of subsidy 
  A "non-default" bonus ("paid-on time" in stallment performance bonus) calculated on the 
interest due of the financed amount, taking into c onsideration environmental, social and targeted 
species stimulus issues. 
 
 This performance bonus can be granted to the lo an taker, in a non-cumulative way, to be 
calculated only on the interest amount of the loan.  It is only granted when the installment of the loan 
is paid on time, and taking into consideration sustainability criteria and improvements in the working 
conditions for the wo rkers in the vessel. 
  The bonuses can be of 5%, 20% and 30%.   
 
6.  To whom and how the subsidy is provided 
 
 Recipients:  Fishing vessel owners or charte rs (natural or legal persons);  professional 
fishermen and fishing industries.  
 Recipients:  Industrial fishing companies (natur al or legal persons and cooperatives dedicated 
to fishing activities).    
 The bonus is granted when the installment of the loan is paid on time.  In operational terms, it 
generates a discount in the interest payment to be made on that installment. 
 
7. Total amount 
 
 Fiscal Year 2009:  R$ 38,1 57 (encompassing 1 vessel). 
 Fiscal Year 2010:  R$ 98,2 13 (encompassing 2 vessels).  G/SCM/N/220/BRA 
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  8.  Duration 
 
 Up to 2015.  
9.  Trade effects 
  N.A. 
 
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