WT/TPR/S/212 Trade Policy Review 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) OVERVIEW1 
1. During the review period, Brazil continued to ta ke gradual steps to simplify and modernize its 
customs procedures.  The average applied MFN tariff was 11.5% in 2008, up from 10.4% in 2004;  
the average tariff on agricultural products (WTO definition) was 10.1%, and on non-agricultural 
products 11.6%.  All tariffs are ad valorem .  In addition to tariffs, imports are subject to four non-
cumulative domestic taxes;  the application of two was extended to imports in 2004.  Brazil continues 
to be an active user of anti-dumping (AD) measur es.  As at October 2008, it had 63 AD measures in 
force, affecting the exports of 23 trading partners ;  the average duration of an AD measure is some 
6 and a half years. 
2. Brazil prohibits imports of virtually all used consumer goods.  Since Brazil's last Review, 
there have been only a few changes in the lega l and institutional frame work governing technical 
regulations and sanitary and phytosanitary measures;   among other, guidelines were introduced for the 
adoption of technical regulations, and new rules we re issued for genetically modified organisms. 
3. Brazil implements a number of schemes to en courage exports, including export financing, 
insurance, and guarantee programmes.  One of th e main schemes, the Export Financing Programme 
(PROEX), was challenged in the WTO and modified  during the period under review.  Brazil provides 
other incentives and government assistance to domestic  producers both at the federal and at the state 
level.  Export taxes are levied on cigars, leathers, and skins. 
4. Brazil has continued to reinforce its competition policy system, and changes to legislation are 
under consideration.  Government  procurement is based on best-price criteria, with preferences 
granted to domestic suppliers in case of a tie;  a preference margin of up to 10% for micro and small 
enterprises was introduced in 2006.  Brazil's legislat ion covers all the major aspects mentioned in the 
TRIPS Agreement.  In 2007, Brazil passed new legi slation on layout designs of integrated circuits. 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures and documentation 
5. During the review period, Brazil continued to ta ke gradual steps to simplify and modernize its 
customs procedures.  For example, it introduced an  express import declaration regime for frequent 
importers, and reduced by 26% the numbe r of rejected import declarations. 
6. The Secretariat of Foreign Trade (SECEX), in the Ministry of Development, Industry and 
Foreign Trade (MDIC), is responsible for formul ating regulations to implement import measures.2  
The Secretariat of Federal Revenue of Brazil (RFB, pr eviously the SRF), in the Ministry of Finance, 
is responsible for customs administration, including duty collection.3 
7. There were no significant amendments to Decree No. 4,543 of 26 December 2002, which 
establishes the framework for customs procedures.  Ministerial Act SECEX No. 36 of 
                                                      
1 In Chapters III and IV, figures in Brazilian real were  converted to U.S. dollars at an exchange rate of 
R$1.8/US$1, which represents the simple average for the fi rst 11 months of 2008.  As at 15 December 2008, the 
exchange rate was of R$2.37 per US$. 
2 MDIC online information.  Viewed at:  h ttp://www2.desenvol vimento.gov.br/sitio/secex/secex/ 
competencia.php.  
3 RFB online information.  Viewed at:  http ://www.receita.fazenda.gov.br/grupo1/aduana.asp. Brazil WT/TPR/S/212 
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22 November 2007 consolidates the main regulati ons on import procedures, some of which were 
introduced during the review period.  
8. All individuals and legal entities engaging in foreign trade must be registered with the 
SECEX in the single Register of Importers and Exporters (REI).  Since 1999, registration with 
SECEX is automatic at the time of the first import operation, but may be denied in cases of abuse of 
economic power or for breach of tax, exchange rate, or trade regulations.4 
9. With few exceptions (see below), all trade opera tions must be registered in the Integrated 
Foreign Trade System (SISCOMEX), a computerized  system that processes all customs procedures.  
SISCOMEX operations may be performed by the im porter, (whether a natural person or a legal 
entity), or through its accredited representatives (e.g. custom broker).5 
10. Only Brazilian citizens are allowed to  act as customs brokers in Brazil.6 
11. In order to use SISCOMEX, the importer must apply for authorization from the RFB;  the 
type of authorization depends on the type of importe r.  In an effort to further modernize customs 
procedures, as from January 2008, the password used to access SISCOMEX was replaced by an 
"e-certificate" based on the general fiscal registrati on maintained by the RFB;  cancellation of this 
registration results in the suspension of access to SISCOMEX.  An "e-certificate" can be obtained 
online from an accredited certification authority.7 
12. An importer may use one of three main types of  import declaration (ID):   (a) regular import 
declaration;  (b) simplified import declaration (DSI);  or c) express shipment declaration (DRE-I).  The regular ID is the most commonly used;  it is processed through SISCOMEX and must contain the 
identification of the importer, and the identification,  classification, customs value, and origin of the 
imported merchandise.  The documents that shou ld accompany the regular ID are listed in the 
Secretariat Report for Brazil's previous Review.
8  A certificate of origin is required when an importer 
is requesting a tariff preference under a preferential agreement.  A sanitary certificate is required for 
shipments of certain products (section (ix) below).  Import duties are paid when the ID is registered 
with SISCOMEX. 
13. A DSI may be used, inter alia , for imports whose value does not exceed US$3,000, goods 
imported via regular and express mail, and imports under the temporary import regime.  The use of SISCOMEX is exempted, and may be replaced  by paper forms, for certain imports.
9 
14. There is a minimum fee of R$40 (some US$21) per ID registered in SISCOMEX;  
decreasingly smaller fees apply for each item adde d to the same ID.  The fees may be adjusted 
annually by an Act of the Finance Minister.  
15. The DRE-I is intended to expedite customs clearance for imports through international 
express shipment companies, or providers of interna tional courier services.  It applies to imports of 
products such as documents, books , newspapers, and goods for pe rsonal use whose value does not 
                                                      
4 Ministerial Act SECEX No. 36 of 22 November 2007. 
5 Normative Instruction SRF No. 650 of 12 May 2006. 
6 Decree No. 646 of 9 September 1992. 
7 Normative Instruction SRF No. 650 of 12 May 2006. 
8 WTO (2005), Chapter III (2)(i). 
9 Products for exhibitions and trade fairs, samples from international companies, perishables (including 
agricultural products), goods imported in case of emergency, and others.  Normative Instructions SRF No. 611 of 18 January 2006, and No. 285 of 14 January 2003. WT/TPR/S/212 Trade Policy Review 
Page 28 
 
 
exceed US$3,000.10  Unlike in the DSI, the courier company, rather than the importer, is responsible 
for customs procedures. 
16. In 2004, in order to improve its efficiency , Customs introduced th e "blue line" regime, 
through which goods of authorized importers are preferentially directed towards the green channel 
(see below).  To qualify for the "blue line", importers  must have strong internal control systems in 
place, and comply with other requirements establishe d in the legislation;  RFB is responsible for 
granting these authorizations.11  In a similar way, imports assigned to technological research that enter 
duty free under Law No. 8,010 of 1990 are automatically directed to the green channel and, in case of 
inspection, receive priority treatment.12 
17. Between 2004 and 2007, the number of IDs th at were rejected fell by 26%.  In 
December 2007, 94.5% of IDs were cleared by Custom  within 30 days of registration, compared with 
93% in December of 2003.13  According to the authorities the av erage time for customs clearances in 
2007 was between 0.8 and 35.7 days, depending on the level of verification needed.  The authorities 
noted that the trade facilitation activities being carried out in 2008 should reduce these times. 
18. The first step in the customs clearance procedure is registra tion of the ID, which normally 
takes place after the arrival of the merchandise at the port of entrance.  Registration may be before 
arrival for some products, such as those transporte d by land, river or lake, in bulk, flammable, 
animals, and plants.14  The ID is subject to fiscal examination through one of four channels:  (i) green, 
for which clearance is automatic;  (ii) yellow, for wh ich the ID is checked and, if no irregularities are 
found, clearance and delivery are authorized without a physical examination of the goods;  (iii) red, 
which involves goods being cleared and delivered to  the importer following documental and physical 
examination;  or (iv) grey, which involves goods being subject to verification of the documents, 
physical analysis, and a special provision to verify evidence of fraud, including related to the declared 
value of merchandise.15 
19. The channel is selected according to risk ass essment ran by SISCOMEX, which takes into 
account:  the importer's fiscal compliance record;  the operational and financial capacity of the 
importer;  frequency of use of the system;  the natu re, volume, and value of imports;  taxation value;  
country of origin;  and the import regime.16  The authorities note that the red and grey channels are not 
mandatory for any product.17  If fraud is suspected in any of the other channels, the ID may undergo 
special control procedures. 
20. In 2007, some 85.5% of all import declarations  were processed through the green channel, 
5.0% through the yellow channel, 9.3% through th e red channel, and 0.2% through the grey channel.18 
21. Since 2006, the unloading of imported cargo for physical inspection may be exempted where 
customs premises are equipped with scanne rs, that allow non-invasive inspection.19  There are nine 
                                                      
10 Normative Instruction SRF No. 560 of 19 August 2005. 
11 Normative Instruction SRF No. 476 of 13 December 2004. 
12 Normative Instruction SRF No. 799 of 26 December 2007. 
13 RFB online information.  Viewed at:  h ttp://www.receita.fazenda.go v.br/Aduana/Declaracao 
Importacao/2007/default.htm. 
14 Normative Instruction SRF No. 680 of 2 October 2006. 
15 Normative Instructions SRF No. 206 of 25 September 2002, and No. 680 of 2 October 2006. 
16 Normative Instruction SRF No. 680 of 2 October 2006. 
17 WTO document WT/TPR/M/140/Add.1, 15 February 2005. 
18 Information provided by the Brazilian authorities. 
19 Normative Instruction SRF No. 680 of 2 October 2006. Brazil WT/TPR/S/212 
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border entry points and ports (responsible for so me 90% of imported cargo customs procedures) 
equipped with scanners, which are, inter alia , expected to cut down customs clearance time. 
22. In November 2006, Brazil abolished the applicati on of fines for importers that did not meet 
payment deadlines.  These included:  not observing deadlines and other conditions determined by the 
Central Bank for foreign exchange ope rations, and failing to pay for financed imports within 180 days 
from the first day of the month following the due date for payment.20 
23. Brazilian legislation requires that importers mu st be responsible for all customs formalities 
and duties, therefore, import contracts known as delivered duty paid (DDP) (an incoterm ) are not 
allowed.  
24. Customs administration decisions may be app ealed in the first instance to the Federal 
Revenue Courts of the Ministry of Finance, a nd to the Taxpayers' Council in the second instance. 
25. The customs cooperation agreement between Brazi l and the United States entered in force 
during the review period.  Brazil also participates in similar agreements with Argentina, Bolivia, 
Chile, Colombia, Costa Rica, Cuba, the Dominica n Republic, Ecuador, El Salvador, Haiti, Honduras, 
Mexico, Nicaragua, Panama, Paraguay,  Peru, Portugal, Spain, Uruguay, and Venezuela.  Additionally, 
Brazil has bilateral agreements on customs issu es with France, the Netherlands, and Russia. 
26. The Brazilian authorities have increased their efforts to fight contraband and customs fraud.  
During the period under review, the RFB and the Fede ral Police carried out numerous investigations 
at the border and in Brazil's largest city centres;  as a result, the value of confiscated merchandise 
increased by 127% during 2004-07, reaching some US$584 million in 2007.21  According to non-
official estimates, contraband reduces tax collection by more than US$1 billion, with 70% entering 
Brazil from MERCOSUR neighbours.22 
(ii) Customs valuation 
27. Brazil applies the WTO Customs Valuation Agreement (CVA).  It made reservations with 
respect to:  inversion of the order of application of the methods foreseen in Articles 5 and 6 of the CVA, and the use of the unit price of the greatest aggregate quantity sold, established in Article 5, 
paragraph 2, of the CVA;  these are applied in accordance with the respectiv e interpretative note, 
regardless of the importer's request.  In 2002, Brazil notified to the WTO Committee on Customs 
Valuation that it had been applying the Decision on th e Treatment of Interest Charges in the Customs 
Value of Imported Goods, and the Decision on the Valuation of Carrier Media Bearing Software for 
Data Processing Equipment, since 1 March 1998.
23 
28. Brazil has notified its regulatory regime on customs valuation to the WTO.24  It did not 
respond to the WTO checklist of issues on customs valuation agreed by Members in 1995.25  WTO 
                                                      
20 Law No. 10,755, of 3 November 2003 as amended by Law No. 11,371 of 28 November 2006. 
21 RFB online information.  Vi ewed at:  http://www.receita.fazen da.gov.br/DestinacaoMercadorias/ 
ercadoriasApreendidas/default.htm. 
22 Agencia Brasil online information.  Viewed at:  http://www.agenciabrasil.gov.br/noticias/ 
2006/07/07/materia.2006-07-07.9141821665/view. 
23 WTO document G/VAL/N/3/BRA/1, 23 October 2002. 
24 WTO documents G/VAL/N/1/BRA/1, 21 October 19 96;  G/VAL/N/1/BRA/1, 30 November 1998;  
and G/VAL/N/1/BRA/3, 14 March 2000. 
25 WTO document G/VAL/M/1, 11 August 1995. WT/TPR/S/212 Trade Policy Review 
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Members have discussed, on various occasions, Br azil's regulatory regime in the Committee on 
Customs Valuation.26 
29. There were no significant changes to the main  laws and regulations on customs valuation 
during the review period.  Decree No. 4,543 of  26 December 2002 as amended, establishes that all 
imported goods are subject to control of their cust oms value, defined as the assessment of conformity 
of the value declared by the importer with the rule s of the CVA.  The rules applied by Brazil on 
customs valuation have not changed since 2004;  these are detailed in Brazil's previous Review.27 
30. Normative Instruction SRF No. 327, of 9 May 2003 establishes the norms and procedures for 
the declaration and control of the customs value of  imported goods.  It requires importers to keep all 
import documents for up to five years, during which they may be requested by the RFB to prove the 
customs value of the imported goods.  Information requested may go beyond what is required for the 
ID, and may include the correspondence used for the commercial transaction, information on the 
persons involved, and on the process of price determ ination of the merchandise.  This information 
may be requested by the RFB when the good is direct ed to the grey channel (see section (i) above).  
The authorities note that the verification of the decl ared customs value always takes place after the 
merchandise has been cleared by Customs. 
31. The transaction value is, by large, the main valu ation method used;  in 2007, it was used for 
imports representing some 99% of the value of import s.  If application of this method is impossible, 
the value is established in accordan ce with the substitute methods provided for in the CVA.  The 
Brazilian authorities confirm that Brazil does not us e reference prices to determine the customs value 
of imported goods.  Instead, whenever needed, th e authorities compare the price of imports with 
international prices of the respective product.  
(iii) Rules of origin 
32. Brazil  does not apply non-preferential rules of origin.28  It does require information (not a 
certificate) on the origin of all imports (section (i) above). 
33. Preferential rules of origin apply to imports from MERCOSUR and in the context of 
MERCOSUR's free-trade agreements with third co untries (see Chapter II(ii));  Brazil has notified 
these to the WTO.29  The rules of origin vary according to the agreement.  There are no cross-
cumulation rules established in Brazil's preferentia l agreements;  however, the authorities note that 
LAIA members are working on the implementation of cross-cumulation rules (November 2008).   
34. MERCOSUR origin is determined using genera l or specific rules.  Under the general 
MERCOSUR rules, products must fulfil at least one  of the following requirements to be conferred 
MERCOSUR origin:  (a) they must be wholly obt ained or produced in MERCOSUR;  (b) if non-
originating materials are used in the production of  the good, a change of tariff heading must take 
place, or the c.i.f. value of inputs from third countri es must not exceed 40% of the f.o.b. value of the 
final product;  or (c) in cases of assembly operations , the c.i.f. value of inputs from third countries 
must not exceed 40% of the f.o.b. value of the final product.  Specific rules apply to, inter alia , 
foodstuffs, pharmaceuticals, textiles, steel, telecommunications, and informatics products.30  In 2005, 
                                                      
26 For example, in WTO document G/VAL/M/12, 19 January 2000. 
27 WTO (2005), Chapter III(2)(ii). 
28 WTO document G/RO/N14, 2 December 1996. 
29 WTO document G/RO/N/12, 1 October 1996. 
30 MERCOSUR online information.  View ed at:  http://www.mercosur.int/. Brazil WT/TPR/S/212 
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MERCOSUR members decided to extend the applicati on of MERCOSUR rules of origin for all intra-
MERCOSUR trade until December 2010 (see Chapter II(ii)).31 
35. There are general and specific LAIA rules of orig in.  LAIA agreements that do not have their 
own rules of origin apply general LAIA rules, under which origin is conferred if products are 
produced in the territory of one of the signatory pa rties using exclusively materials from one or more 
of these parties, or, if non-originating materials are us ed in the production of a good, a change of tariff 
heading takes place, or, when this criterion is not me t, the c.i.f. value of inputs from third countries 
does not exceed 50% of the f.o.b. value of the fina l product (including assembly operations).  For less 
developed countries this percentage is 60%.32 
36. In the MERCOSUR agreement with Bolivia, a change of tariff heading must take place, or the 
c.i.f. value of inputs from third countries must not exceed 40% of the f.o.b. value of the final product.  
For assembly operations, change in tariff heading no twithstanding, the 40% rule must be followed.  
The agreement allows specific rules of origin, if re quired, on a list of products (Appendix No. 1 to the 
Agreement).  No changes were introduced since 2004. 
37. There were no significant changes to the rul es of origin applied in MERCOSUR's free-trade 
agreements with Chile or Mexico;  these are described in Brazil's previous Review.33  I n  t h e  
agreement with Chile, quotas of motor vehicles subject to specific rules of origin were eliminated in 
December 2005, as scheduled;  since then, a 60% regi onal-content requirement has been applied to all 
motor vehicles traded.  The only other change to this agreement since 2004 was the elimination of 
specific rules of origin applied to certa in products, mainly foodstuffs and textiles.34 
38. The Partial Scope Agreement between MERCO SUR and Colombia, Ecuador, and Venezuela 
entered into force in January 2005.  To be conferre d origin, products that make use of non-originating 
materials must have undergone a change of tariff heading, or the c.i.f. value of non-originating 
material must not exceed 40% of the f.o.b. value of the final product.  The same rule applies for 
assembly operations.  The agreement allows for bila teral specific rules of origin, if required, and 
includes a list of the products covered.35  Some transitory origin requirements between Brazil and 
Colombia, and between Brazil and Ecuador were extended until Dece mber 2008, but have not been 
ratified by the Brazilian Congress (November 2008). 
39. The Partial Scope Agreement between MERCOSU R and Cuba, which entered into force in 
March 2007, applies the rules of origin established in its Annex IV.36  These are identical to LAIA's 
rules of origin (see above);  the c.i.f. value of non-originating material of Cuba's exports must not 
exceed 40% of the f.o.b. value of the final product. 
40. The Partial Scope Agreement between MERCOSUR and Peru entered into force in December 
2005.37  To be conferred origin, products from Brazi l, Argentina, and Peru that make use of non-
originating materials must undergo a change of tariff  heading, or the c.i.f. value of non-originating 
material must not exceed 50% of the f.o.b. value of the final product in the first three years, 45% in 
                                                      
31 Decision MERCOSUR/CMC No. 20/05 of 8 December 2005. 
32 LAIA online information.  Viewed at:  http://www.aladi.org/. 
33 WTO (2005), Chap ter III (2)(iii). 
34 47th Additional Protocol to the Economic Co operation Agreement betw een MERCOSUR and Chile. 
35 7th Additional Protocol to the Economic Cooperation Agreement between MERCOSUR and 
Colombia, Ecuador, and Venezuela. 
36 Decree No. 6.068 of 26 March 2007. 
37 Decree No. 5.651 of 29 December 2005. WT/TPR/S/212 Trade Policy Review 
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the following three years, and 40% as from the seven th year after the agreement entered into force.38  
The same rule applies for assembly operations.  Th e agreement allows specific rules of origin, if 
required, and includes a list of the products  covered (Appendix No. 1 to the Agreement).39 
41. Certificates of origin for imports are valid for 1 80 days, and must be issued within 60 days of 
issuance of the commercial invoice in the case of LAIA and MERCOSUR countries.  The request for 
a certificate of origin must be accompanied by the commercial invoice and a declaration by the 
producer.  Certificates of origin must be issued  by the appropriate authorized government body in 
each country.  In Brazil, the MDIC controls the proc ess of issuing certificates, but delegates the act of 
issuing to representative industry associations.  The authorities indicate that in 2007 the RFB 
accredited private institutions the right  to issue certificates of origin.  
(iv) Tariffs 
(a) Structure 
42. The Brazilian MFN tariff applied in January 2008 had 9,765 lines at the eight-digit level, with 
rates ranging from duty free to 35%.  All tariffs are ad valorem , levied on the c.i.f. value of the 
imports.  Brazil grants at least MFN treatment to a ll its trading partners.  It does not impose seasonal, 
temporary, or variable import levies. 
43. The 2008 simple average applied MFN was 11.5%, up from 10.4% in 2004.  This is mainly 
due to an increase of 1.1 percentage points in  the average tariff of non-agricultural products 
(WTO definition) to 11.6%, since the agriculture sector average remained practically constant at 
10.1%.  More specifically, between 2004 and 2008, Br azil increased its applied tariffs for chemical 
products, footwear, and textiles and clothing;  the la tter incurred the highest increase (7.9 percentage 
points).  Brazil's tariff structure still shows low disper sion, as measured by a coefficient of variation of 
0.7 (Table III.1). 
Table III.1 
Summary analysis of the MFN tariff, 2008  
 MFN  
Description No. of lines Average 
(%) Range 
(%) Coefficient 
of variation 
(CV) Final bound 
averagea 
(%) 
Total 9,765 11.5 0 - 35 0.7 30.2 
HS 01-24 1,064 10.2 0 - 35 0.5 35.7 
HS 25-97 8,701 11.6 0 - 35 0.7 29.5 
By WTO category      
WTO Agriculture 943 10.1 0 - 35 0.5 35.2 
 - Animals and products thereof 110 8.1 0 - 16 0.6 36.9 
 - Dairy products 34 18.8 12 - 27 0.3 50.1 
 - Coffee and tea, cocoa, sugar etc. 169 13.8 0 - 20 0.3 36.1 
 - Cut flowers, plants 55 5.7 0 - 14 0.6 33.8 
 - Fruit and vegetables 193 10.1 0 - 35 0.4 34.4 
 - Grains 35 6.3 0 - 18 0.8 49.6 
 - Oil seeds, fats and oils and their products 116 7.6 0 - 12 0.5 34.7 
 - Beverages and spirits 42 17.7 12 - 27 0.2 37.8 
 - Tobacco 18 15.3 10 - 20 0.2 38.9 
 - Other agricultural products n.e.s. 171 7.6 0 - 30 0.6 28.6 
Table III.1 (cont'd) 
                                                      
38 The preferential rules of origin are different for trade between Paraguay, Uruguay, and Peru. 
39 LAIA online information.  Viewed at:  http://www.aladi.org/. Brazil WT/TPR/S/212 
 Page 33 
 
 
 MFN  
Description No. of lines Average 
(%) Range 
(%) Coefficient 
of variation 
(CV) Final bound 
averagea 
(%) 
WTO Non-agriculture (including petroleum) 8,822 11.6 0 - 35 0.7 29.6 
 - WTO Non-agriculture (excluding petroleum) 8,796 11.7 0 - 35 0.7 29.6 
 - Fish and fishery products 232 9.8 0 - 16 0.3 33.8 
 - Mineral products, precious stones and precious metals 448 7.5 0 - 20 0.8 32.4 
 - Metals 767 11.2 0 - 18 0.5 32.9 
 - Chemicals and photographic supplies 3,143 7.1 0 - 18 0.8 23.9 
 - Leather, rubber, footwear and travel goods 240 14.8 0 - 35 0.6 34.5 
 - Wood, pulp, paper and furniture 378 10.7 0 - 18 0.5 28.8 
 - Textile and clothing 1,004 25.1 2 - 35 0.4 34.7 
 - Transport equipment 202 18.3 0 - 35 0.6 33.2 
 - Non-electric machinery 1,098 11.7 0 - 20 0.5 32.5 
 - Electric machinery 595 12.2 0 - 20 0.6 31.6 
 - Non-agriculture articles n.e.s. 689 13.7 0 - 20 0.5 32.5 
 - Petroleum 26 0.4 0 - 6 3.6 35.0 
By ISIC sectorb      
Agriculture and fisheries 419 7.1 0 - 35 0.6 33.9 
Mining 127 3.1 0 - 10 0.6 34.2 
Manufacturing 9,218 11.8 0 - 35 0.7 30.0 
By HS section      
01  Live animals & products 372 9.3 0 - 27 0.5 35.6 
02  Vegetable products 353 7.8 0 - 35 0.5 35.5 
03  Fats & oils 71 9.5 2 - 12 0.2 34.5 
04  Prepared food etc. 268 14.9 2 - 27 0.3 36.5 
05  Minerals 206 2.4 0 - 6 0.8 34.4 
06  Chemical & products 2,967 6.7 0 - 30 0.8 23.9 
07  Plastics & rubber 417 11.5 0 - 35 0.5 25.5 
08  Hides & skins 115 10.8 0 - 20 0.5 34.9 
09  Wood & articles 129 8.4 2 - 14 0.4 20.6 
10  Pulp, paper etc. 225 11.2 0 - 16 0.5 32.5 
11  Textile & articles 981 25.0 2 - 35 0.4 34.9 
12  Footwear, headgear 63 26.0 16 - 35 0.3 35.0 
13  Articles of stone 215 10.7 0 - 20 0.4 34.7 
14  Precious stones, etc. 64 9.6 0 - 18 0.6 35.0 
15  Base metals & products 737 11.8 0 - 20 0.4 32.8 
16  Machinery 1,720 11.9 0 - 20 0.5 32.2 
17  Transport equipment 215 17.8 0 - 35 0.6 33.0 
18  Precision equipment 457 12.3 0 - 20 0.6 31.7 
19  Arms and ammunition 20 20.0 20 - 20 0.0 34.3 
20  Miscellaneous manufacturing 163 17.8 0 - 20 0.2 33.9 
21  Works of art, etc. 7 4.0 4 - 4 0.0 35.0 
By stage of processing      
First stage of processing 913 6.9 0 - 35 0.7 34.0 
Semi-processed products 3,723 9.3 0 - 30 0.8 26.1 
Fully-processed products 5,129 13.9 0 - 35 0.6 32.5 
 
a Bound rates are provided in HS02 classifica tion and applied rates in HS2007;  therefore there may be a difference between the  
number of lines included in the calculation. 
b ISIC (Rev.2) classification, excluding electricity (1 line). 
 
Source: WTO Secretariat estimates, based on data provided by the Brazilian authorities. 
44. Brazil reduced its highest duty rates from 55% in 2004 to 35% in 2008.  However, the 
authorities note that at the end of 2008 it incr eased the tariff applied to one tariff line (peaches 
otherwise prepared or preserved) to 55%.  Duty-free tariff lines represent 8.3% of the total tariff 
(Table III.2).  If only dutiable lines are considered, the tariff average rises to  12.5% in 2008.  More 
than one third of tariff lines bear rates between 1% and 10%.  The most frequent duty rate is 14%, 
accounting for some 22% of total lines, followed by the 2% duty rate, representing about 18% of total 
tariff lines. WT/TPR/S/212 Trade Policy Review 
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Table III.2 
Structure of the tariff schedule, 2008 
1. Total number of tariff lines 9,765 
2. Non- ad valorem  tariffs (% of all tariff lines) 0.0 
3. Non- ad valorem  with no AVEs (% of all tariff lines) 0.0 
4. Tariff quotas (% of all tariff lines) 0.1 
5. Duty-free tariff lines (% of all tariff lines) 8.3 
6. Dutiable lines average tariff rate (%) 12.5 
7. Domestic tariff "peaks" (% of all tariff lines)a 4.3 
8. International tariff "peaks" (% of all tariff lines)b 26.3 
9. Bound tariff lines (% of all tariff lines) 100.0 
 
a Domestic tariff peaks are defined as those exceed ing three times the overall average applied rate. 
b International tariff peaks are defined as those exceeding 15%. 
 
Source: WTO Secretariat calculations, based on data provided by the authorities of Brazil.  
45. Some 58% of tariff lines carry rates of 10-20%;  661 lines are subject to tariffs higher or equal 
to 20% but lower than 35%, of which most are app lied to cotton, man made staple fibres, beverages, 
nuclear reactors and electrical machinery.  The highest rate of 35% applies to 424 tariff lines (4% of 
the total), including garlic, tyres, carpets and tex tile floor coverings, textiles, footwear, articles of 
apparel and clothing, and motorized vehicles.  The highest average rate applies to the textile and 
clothing product group (25.1% in 2008, up from 17. 2% in 2004), followed by dairy products and 
transport equipment. 
46. The tariff continues to show signs of escalation in most industries, with a higher tariff average 
on processed items than on semi-processed goods, which,  in turn are higher than raw materials 
(Table III.1). 
47. The Chamber of Foreign Trade (CAMEX) is res ponsible for the formulation of and changes 
in the tariff and for its approval (Chapter II(3)). 
48. Brazil has applied the MERCOSUR Common Extern al Tariff (CET) since 1 January 1995.  
The CET is expressed in the Common MERCOSUR Nomenclature (NCM), which is based on the 
Harmonized System (HS).  The new version of the NCM, based on HS 2007, published in CAMEX 
Resolution No. 43 of 22 December 2006, entered into effect on 1 January 2007;  this version also 
incorporates changes to the CET introduced by Resolution GMC No. 42 of 22 September 2006 and Resolution GMC No. 68 of 24 November 2006. 
49. As mentioned in Brazil's previous Review, in 1994 each MERCOSUR member was allowed 
to prepare a List of Exceptions to the CET, comprising capital goods (BK list), informatics and 
telecommunications equipment (BIT list), and a b asic list of national exemptions.  The exceptions 
may result in applied tariffs above or below the CE T, but they are not allowed to break WTO tariff 
binding commitments.  Brazil eliminated its BK list during the period under review;  its BIT list 
contains 376 tariff lines corresponding to products that are not produced in Brazil.
40 
50. The basic list of national exemptions includes products for which the immediate adoption of 
the CET may pose difficulties.  In 2007, the deadline for the elimination of the basic exception list of 
Brazil was extended until 31 December 2010.41  Brazil is allowed to maintain its 100 tariff headings 
                                                      
40 MDIC online information.  Viewed at:  http://w ww.desenvolvimento.gov.br/sitio/interna/interna. 
php?area=5&menu=1848. 
41 MERCOSUR Decision CMC No . 59 of 17 December 2007. Brazil WT/TPR/S/212 
 Page 35 
 
 
up to 31 December 2008, and is required to reduce them gradually until 2010.  Up to 20% of the 
headings in the basic list of exemptions may be altered upwards every six months. 
51. Brazil also applies exceptions to the CET in the form of MFN tariff quotas (see below).  
Exceptions to the CET for a number of medicine s and pharmaceutical products, as decided by the 
Minister of Health, were elimin ated during the review period. 
52. Import duty revenue in 2007 amounted to US$6.8 billion, an increase of 34% over 2004.  It 
represented 10.2% of the value of imports, compared with 14.6% in 2004, and was just 1.3 percentage 
points lower than the average MFN applied rate.  This difference between MFN and collected tariff 
rates could be the result of no imports for a signifi cant number of tariff headings and the application 
of preferential rates, which would both lower th e average tariff rate based on duty collection. 
(b) Tariff bindings 
53. Brazil bound its whole tariff in the context of the Uruguay Round.  Bindings for agricultural 
products (WTO definition), range from 0% to 55%,  with the highest averages applying to dairy 
products, grains and tobacco (Table III.1).  Bound rates for non-agricultural products range from 0% 
to 35%.  The calculated overall average for the bound  tariff is 30.2%, which comprises an average of 
35.2% for agricultural goods and 29.6% for non-agricultural goods.42 
54. At end 2008, the WTO process of certifying Brazil's tariff bound schedule in order to 
incorporate the changes resulting from the introduction of the Harmonized System 2007 had not been completed. 
(c) Tariff concessions 
55. Tariff concessions may be obtained through the "Ex Tarifário"  mechanism, a temporary 
reduction in import duties for products in the BK and BIT lists (see above).  Tariff rates are normally 
reduced to 2%, or 0% in a few cases.  The reduced  tariff rates may be used for two years;  the 
objective of the concessions is to reduce invest ment costs.  The rules and procedures for 
"Ex Tarifário" requests are contained in CAMEX Resolutio n No. 35 of 22 November 2006, and have 
not changed since Brazil's previous review.
43 
56. Goods imported under the temporary admission regime  are eligible for total or partial tariff 
exemptions, while goods and services imported into a free-trade zone or export zone are eligible for 
exemption (or reduction) from all taxes and du ties levied on imports (see section (3)(iv)). 
57. Goods in transit are subject to to the suspen sion of import duties and may be stored for a 
maximum of three months for perishables and one y ear for other merchandise.  Goods in transit must 
enter through specified ports designated as tr ansit zones for each neighbouring country.  
58. Tariff concessions are also granted through a number of customs regimes, such as the 
Distribution Customs Deposit (DAC), the Guaranteed Deposit (DAF) and the Special Deposit (DE), which allow for the warehousing of imports withou t prior payment of customs duties.  The DAC 
allows for a good to be considered exported (for credit, exchange, and tax purposes) when it is 
actually stored in customs depots, even if it was produced abroad by enterprises linked to the 
                                                     
 
42 Tariff bindings are provided in HS2002 classification, resulting in a different number of tariff lines 
compared with the MFN 2008 tariff schedule, which is expr essed in the HS2007 classifi cation.  Therefore, these 
two averages are not strictly comparable. 
43 For further details see WTO (2005), Chapter III (2)(iv). WT/TPR/S/212 Trade Policy Review 
Page 36 
 
 
Brazilian beneficiary, which must be an industrial enterprise established in Brazil.44  Concessions 
under the DAC are authorized by the RFB on a case-by- case basis.  Goods subject to this regime must 
not undergo any transformation in Brazil and are admitted for a maximum of one year. 
59. Materials may benefit from the DAF and DE regi mes for up to five years from the date of 
admission.45  The DAF regime allows the warehousing of  imported material for the maintenance and 
repair of ships and aircraft belonging to an enterpri se authorized to engage in international transport 
activities and used for these activities.  Foreign enterprises may benefit from the DAF provided the 
country of origin has an international agreement wi th Brazil or if it offers reciprocal treatment to 
Brazilian companies.  The DE regime allows the st orage of imported parts, pieces, and material for 
replacement or maintenance of vehicles, machin ery, and equipment produced abroad and in cases 
defined by the Minister of Finance46;  the goods may be exported, re-exported, destroyed, or used 
domestically (in which case duties must be paid). 
(d) Tariff quotas 
60. In the case of shortages within MERCOSUR, its  members are allowed to temporarily reduce 
the CET applied rate on up to 20 products at a time.47  CAMEX may establish the reduction ex-officio 
or after reviewing a request from private enterprises.48  The reduction must be coupled with 
quantitative restrictions in the form of tariff quotas, and must not cause an intra-MERCOSUR trade 
reduction nor alter competitiveness conditions in  the region;  in any case, other MERCOSUR 
members must always be consulted before a re duction is enacted.  In 2008, Brazil applied CET 
reductions in the form of tariff quotas to 12 tariff lines.49 
61. Under the Agreement on Agriculture, Brazil may apply an MFN tariff quota (10,000 tonnes) 
for pears and apples (HS 0808.2010 and 0808.1000).  As in the previous review period, this quota was 
not opened because the MFN tariff applied duri ng 2004-07 (ranging from 13% to 10%) was lower 
than the in-quota tariff rate of 15%. 
(e) Tariff preferences 
62. Since its last Review, Brazil has extended its preferential regime to the countries of the 
Andean Community (Colombia, Ecuador, and Venezu ela), Cuba, Peru via preferential agreements, 
and Suriname via a partial scope agreement (s ee Chapter II(5)).  In addition to MERCOSUR 
members, Brazil extends tariff preferences to im ports from Bolivia, Chile, and Mexico through 
MERCOSUR's free-trade agreements;  and to Guya na via the partial scope agreement under the 
framework of LAIA.  The authorities noted that  in all these cases the schedule of preferential 
reductions will converge and eventually harmoni ze the preferences that each MERCOSUR member 
grants to third parties. 
                                                      
44 Ministerial Act MF No. 720 of 23 November 1992 and Normative Instruction SRF No.138 of 
18 December 1992. 
45 Decree No. 4,543, of 26 December 2002, as amended.  
46 Ministerial Act No. 284 of 18 November 2003. 
47 MERCOSUR Resolution GMC No. 69 of 12 July 2000. 
48 CAMEX Resolution No. 9 of 25 April 2002. 
49 The products subject to tariff quotas are:  sardines (0303.71.00);  almond oils (1513.21.10 and 
1513.29.10);  disodium sulphate (2833.11.10);  other phosphinates (2835.31.90);  cumene (2902.70.00);  
teraphthalic acid (2917.36.00);  flat-rolled products of iron of a thickness exceeding 10mm (7208.51.00);  other 
flat-rolled products of other alloy steel (7225.40.90 and 7225.99.90);  other structures and parts of structures (7308.90.90);  and other carbon electrodes, brushes, lamps and batteries (8545.90.90). Brazil WT/TPR/S/212 
 Page 37 
 
 
63. Summary statistics could not be calculated for preferential tariffs under Brazil's various free-
trade agreements because the WTO Secretariat di d not have access to the tariff-line level rates 
actually applied under these agreements in 2008.50 
(v) Other charges affecting imports 
64. In addition to tariffs, the following internal taxes are levied on imports:  the industrial 
products tax (IPI);  the tax on the circulation of  merchandise and on the supply of interstate 
transportation and communication services (ICMS);  and contributions to the social integration 
programme (PIS) and to finance social security (COFINS).  All four taxe s follow value-added tax 
principles.  The application of the PIS and COFINS to imports was introduced in 2004.  Internal taxes 
are applied to different pr oduct groups at diverse rates, with the IC MS also varying from state to state, 
all of which adds complexity to the tax system.  Moreover, certain states establish ICMS exemptions 
for goods produced and sold within that state, but apply the full ICMS rate to imported goods and 
goods from other states.  
65. In the Uruguay Round negotiations Brazil bound "other duties and charges" for one line 
covering certain navigational instruments (HS 9014.80.0400)51;  the bound rate is 15%.  In practice, 
Brazil does not apply this duty. 
66. The IPI, a federal value-added tax, is levied on a wide range of manufactured products.  It is 
levied at the point of sale of domestic products.  It is levied at the point of customs clearance for imports, and is based on the c.i.f. value plus th e import duty and other fees and foreign exchange 
charges levied on imports.  IPI rates generally range from 0% to 20%, but can be up to 35% for 
vehicles, 60% for alcoholic beverages, and 330% for ci garettes;  in some cases, IPI rates are specific.  
The same rates apply on domestically produced  and imported goods.  IP I rates are changed 
periodically through decrees.
52  Products such as chemicals, f ood items, some textiles and clothing, 
pharmaceuticals, steel, and iron wires are subject to a 0% rate.  Mineral products, skins, fertilizers, 
fuels, and some other textiles are not subject to IPI. 
67. The ICMS is a value-added tax levied by  Brazil's federal states on all merchandise 
transactions that take place domestically (both intr astate and interstate) and at importation.  On 
domestic products it is levied on the market price of  the product plus the IPI.  For imports, the ICMS 
is paid by the importer at the time of entry of the good into the country;  the tax is calculated on the c.i.f. value, plus duties, IPI, and any "other cust oms costs".  The law grants the states the right to 
define what is included under "other customs ch arges".  The states have not agreed on a common 
definition and thus, depending on the state, these ch arges may or may not include:  specific taxes on 
transport (see below), SISCOMEX's fees, eventu al anti-dumping duties, and fees for port handling 
services. 
68. Interstate tax rates are applicable in mercha ndise transactions between taxpayers situated in 
different states.  Due to differences in ICMS rate s across states, subsequent compensation reflects any 
difference in rates between the state of departure a nd the state of destination of the good.  Importers 
                                                     
 
50 For each free-trade agreement, the Secretariat did have access to the reductions relative to the MFN 
tariff rate;  however, these were expressed in the 1996 or 2002 HS Nomenclatures, while Brazil's applied MFN 
tariff rates are in the 2007 HS Nomenclature.  This information did not permit the calculation of the reductions 
provided for or, thus, the respective applied preferential rates. 
51 The authorities note that the former HS code 9014 .80.0400 corresponds to HS codes 9014.80.10 and 
9014.80.90 in the current MERCOSUR nomenclature. 
52 For an updated list of the rates see RFB online in formation.  Viewed at:  http://www.receita.fazenda. 
gov.br/ Aliquotas/TabIncidIPITIPI.htm. WT/TPR/S/212 Trade Policy Review 
Page 38 
 
 
must always pay the intrastate rate adopted by the state where custom s clearance takes place;  other 
taxpayers also pay the intrastate rate applied in the state of final destination of the good.53  In general, 
ICMS rates are either 7% or 12% for interstate tr ansactions;  with the lower rate collected by rich 
states for sales directed to poor states and vice versa, in order to promote tax revenue distribution 
between rich and poor states.  In intrastate tran sactions (including imports), the predominant rate 
applied is 18%.  Effective ICMS rates are higher than the rates published because the ICMS is itself 
part of the base value for calculating the tax.54 
69. The Constitution allows states to set ICMS rates up to a maximum rate established by the 
Senate, but prohibits discrimination on the basis of product origin.55  Furthermore, the states seek to 
coordinate and reach agreements on the applicati on of ICMS rates and exemptions, as well as other 
taxation issues, in the National Council of Fiscal Policy (CONFAZ), where all states and the Federal 
Government are represented.  However, certain st ates have established ICMS exemptions for goods 
produced and sold within their state (also known as "internal exit"), while applying the full ICMS rate 
to imported goods and goods from other Brazilian st ates.  Brazilian courts (e.g. Regional Federal 
Court of the State of Rio Grande do Sul) have of ten ruled in favour of extending the exemption to 
imported goods, but there is no jurisprudence on this issue.56 
70. The PIS and COFINS follow value-added tax prin ciples;  they were created in 1970 and 1991, 
respectively.  Until April 2004, both taxes were app lied only to domestic products;  since then, they 
have also been applied to imports.57  Domestic and imported goods ar e subject to the same general 
rates:  1.65% for PIS and 7.6% for COFINS.  These rates are higher for motor vehicles and their parts, 
pharmaceuticals, and cosmetic products;  specific rates apply on beverages and on fuels.  For 
domestic products, the taxes are levied on the co mpany's turnover including IPI and ICMS.  For 
imports, the tax is calculate using the c.i.f. value of imports, plus duties, IPI, and ICMS.58  T h e  
legislation provides for exemptions on a wide range of products.  The PIS and COFINS are not levied 
on exports of goods and services (section (4)(iii)). 
71. Imports of certain commodities, semi-manufactures, and equipment by companies established 
in the Manaus Free Trade Zone, are exempt from IPI, ICMS, PIS and/or COFINS (section (4)(iii)).59 
72. Over the last two decades, total tax collection as a percentage of GDP and of total federal tax 
revenue fell by half in the case of IPI, wh ile it increased threefold for the PIS/COFINS.60  In 2007, IPI 
on imports totalled some US$4 billion,  or 3.3% of the value of imports, and PIS/COFINS on imports 
totalled some US$2 billion, or 1.7% of the value of imports.61  No data are available for the amount of 
ICMS collected on imports;  ICMS tax collection is concentrated (52%) in three large states 
(São Paulo, Rio de Janeiro, and Minas Gerais). 
                                                      
53 Suplementary Law No. 87 of 13 September 1996. 
54 ICMS effective rate = (published ICMS rates) times (nominal value of the good + nominal value of 
the tax) divided by (nominal value of the good). 
55 Articles No. 152 and 155 of Brazil's Federal Constitution. 
56 For further information see:  http://www.netlegi s.com.br/fiscolegis/index.jsp?arquivo=detalhes 
Fiscolegis.jsp&codb=1&cod=3403;  http://www.conjur.com .br/static/text/40121,1;  and http://www.bdtd.ucb.br/ 
tede/tde_busca/arquivo.php?codArquivo=400. 
57 Law No. 10.865 of 30 April 2004. 
58 A more detailed description of the calculation method is available in Normative Instruction SRF 
No. 572 of 22 November 2005.  
59 SUFRAMA online information.  Viewed at:  http://www.suframa.gov.br/modelozfm_comexterior_ 
expor_vantagens_it.cfm#8. 
60 RFB (2006).  
61 UN Comtrade database, and information provided by RFB.  Brazil WT/TPR/S/212 
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73. The importation and commercialization of gasolin e, diesel, kerosene, fuel oil, liquefied 
petroleum gas (LPG), and combustible ethylic alcohol  are subject to a contribution for "interventions 
in the economic domain" (CIDE).62  This tax is charged as a specific rate per import unit.63  Revenue 
from the CIDE accounted for some 0.3% of GDP in 2006 (latest year available) (Chapter IV(4)). 
74. Brazil applies two special charges on transporta tion, including imports:  the additional airport 
tax (ATAERO), and the additional tax for the renovation of the merchant marine (AFRMM) 
(Chapter IV(iv) and (v)). 
(vi) Contingency measures 
75. Brazil continues to be an active user of an ti-dumping (AD) measures.  It has 63 AD measures 
in force, affecting the exports of 23 trading partne rs (October 2008).  Most of these measures take the 
form of specific duties;  32 have been in place for over five years, and eleven for at least 12 years.  The number of AD investigations initiated a nd of provisional AD measures applied since 2004 
increased compared with the previous review peri od, but the number of new definitive AD duties (28) 
was only marginally higher.  AD measures have b een applied more frequently to semi-processed 
products.  Brazil also has two countervailing measur es in force.  Since 2002, it has applied one 
safeguard measure, on coconuts, which was extended in  2006 by four years;  this safeguard is not 
applied to MERCOSUR members nor to most developi ng countries.  In 2005, imports of products 
affected by contingency measures represented 1.5% of Brazil's total imports.
64 
(a) Anti-dumping and countervailing duties 
76. Brazil introduced only one significant change to its legislation concerning the application of 
AD or CV duties (see below).  As noted in its previous Review, Legislative Decree No. 30 of 
15 December 1994 approved the results of the Urugu ay Round;  Decree No. 1,355 of 30 December 
1994 promulgated the Uruguay Round Agreements ;  and Law No. 9,019 of 30 March 1995, as 
amended, regulates the application of AD and CV du ties.  In addition, Decree No. 1,602 of 23 August 
1995 regulates the administrative procedures related to the application of AD measures.  The procedures to prepare a request for an AD or a CV investigation are contained in SECEX Acts 
Nos. 21 and 20, both of 2 April 1996.  SECEX Act No. 59 of 28 November 2001, clarifies the conduct 
of trade defence investigations with respect to confidential information, time periods, and economies 
that are not predominantly market orientated.
65  The legislation was notified to the WTO and 
discussed by Members in the WTO Committee on Anti-Dumping Practices.66 
77. The SECEX, through its Department of Trad e Remedies (DECOM), is responsible for 
carrying out AD, CV or safeguards investigations a nd all other related procedures.  The Chamber of 
Foreign Trade (CAMEX) is responsible for maki ng the final decision, including the use of the 
"national interest" clause, on the application of provisional AD and CV measures and definitive 
duties, and for altering or terminating definitiv e duties as a result of a review, and accepting or 
                                                      
62 Law No. 10.336 of 19 December of 2001, as amended. 
63 For details on specific rates, see WTO (2005). 
64 Data provided by the Brazilian authorities. 
65 MDIC online information.  Viewed at:  http://w ww.desenvolvimento.gov.br/sitio/interna/interna. 
php?area=5&menu=235.  
66 WTO documents G/ADP/N/1/BRA/1, 5 April 1995 up to G/ADP/N/1/BRA/2/Suppl.1, 27 March 
2002;  and WTO documents G/ADP/Q1/BRA/1 to 11, 1997-2002. WT/TPR/S/212 Trade Policy Review 
Page 40 
 
 
terminating undertakings.  The CAMEX is also resp onsible for establishing the rules and procedures 
for contingency measure investigations.67 
78. Investigations may be initiated at the request of the domestic industry, ex officio by the 
SECEX, or at the request of an affected third count ry;  in the case of the latter, Brazilian legislation 
requires CAMEX to seek approval from the WTO Council for Trade in Goods.68  There has never 
been an investigation initiated at the request of a third country, and only one  initiated by SECEX (in 
2006). 
79. The SECEX examines applications for investiga tion or review of an AD or CV measure, and 
decides whether to proceed.  The SECEX is al so responsible for dete rmining, through an 
administrative process, the margin of dumping or th e amount of subsidy, the existence of material 
injury or threat thereof or material retardation, and the causal link between th em.  If the existence of 
dumping or subsidies or of injury or threat th ereof caused is not established, it terminates the 
investigation, with no application of measures. 
80. The SECEX must conclude investigations within  12 months in ordinary circumstances, and 
within 18 months in exceptional circumstances.  Provisional AD and CV measures may be established 
but may not be applied earlier than 60 days from the date of initiation of the investigation.  In an AD 
procedure, provisional measures may take the form of a provisional duty or a security (a cash deposit 
or bank guarantee), while in a CV procedure they must take the form of a security.  If the SECEX concludes that there is no dumping or countervailabl e subsidy, or that dumping or a countervailable 
subsidy does exists but does not cause or threaten  injury to the domestic industry, any provisional 
anti-dumping duty or cash deposit or bank guarantee is returned. 
81. AD investigations may be suspended if the e xporters voluntarily agree to an undertaking to 
revise prices or to cease exporting to Brazil at dumped prices.  CV investigations may be suspended if 
the government of the exporting country undertakes to  eliminate or reduce the subsidies it applies or 
to take other measures with similar effect, or if the exporter voluntarily undertakes to revise prices on 
exports destined for Brazil. 
82. Under Brazilian legislation, an AD or CV duty must not exceed the margin of dumping or the 
amount of the subsidy.  Brazil also follows, in the ma jority of cases, the lesser duty rule, i.e. duties are 
applied to the extent necessary to remove the injury to the domestic industry, even if that implies a 
duty lower than the dumping margin.  Since 2007, Brazil has applied the full margin of dumping on suppliers who do not respond to the questionnaires sent by the SECEX during the investigation. 
83. A new provision introduced into Brazilian legislation in September 2008 allows the 
Government to extend AD and CV measures (including  to parts, pieces, and components of a product) 
to third countries whenever it verifies that elusive practices are undermining its application.
69  But in 
November 2008, the Government had yet to issue speciifc regulation on this issue. 
84. Reviews of the whole or a part of an AD or CV duty decision may be initiated at the request 
of an interested party or on the initiative of the Public Federal Administration or of SECEX, after at 
least a year from the imposition of the definitive duties.  The request must be accompanied by 
evidence that:  the duty is no longer necessary;  injury is unlikely to subsist if the duty is eliminated or 
altered;  or the existing duty is no longer suffi cient to neutralize the in jury.  During the review 
                                                      
67 Decree No. 4,732 of 10 June 2003. 
68 Article 62, paragraph 3 of Decree No. 1.602 of 23 August 1995. 
69 Article 14 of Law No. 9,019 of 30 March of 1995, as modified by Law No. 11,786 of 25 September 
2008. Brazil WT/TPR/S/212 
 Page 41 
 
 
process, which must be finalized within 12 months, duties applied or price undertakings are 
maintained. 
85. AD and CV duties must be terminated not late r than five years from imposition or from the 
date of the most recent review that confirmed its application.  This peri od may only be extended if 
five months prior to the expiry of the duty, interest ed parties request a review to demonstrate that the 
injury will persist.  The duty remains in force pending the outcome of the review. 
86. Brazilian exporters subject to AD, CV or safegua rd investigations abroad, or whose products 
are subject to any of these measures, may r eceive formal assistance from the DECOM and the 
Ministry of External Relations (MRE) in the form of information and advice.  Both agencies help 
exporters to prepare answers to questionnaires,  accompany them during verification visits, and 
provide them with any other technical assistance  required.  Based on their assessment, the MRE may 
submit a request for consultation to the authorities of the importing country. 
87. In the framework of the WTO Negotiating Group on Rules, Brazil has submitted a number of 
proposals, alone, and with other Members, for th e improvement of several provisions of the Anti-
Dumping Agreement, and to reduce the Members' ab ility to arbitrarily apply anti-dumping measures.  
Proposals submitted during the review period were main ly made with other Members, and included:  
a proposal on cumulation rules;  a proposal on the definition of the term "product under consideration";  several proposals on the concept of  "affiliated parties";  a proposal on the use of 
sunset review;  a proposal on lesser duties;   and a proposal on prohibition of zeroing.
70 
Anti-dumping measures 
88. In the period January 2004 to October 2008, Brazil initiated 61 AD investigations (of which 
22 were initiated in 2008), compared with 37 initiated during 2000-03.  Of the 61 investigations, 21 (35%) resulted in the application of final duties,  15 (25%) were terminated without the imposition 
of duties, and 25 (40%) are ongoing (October 2008) (T able III.3).  During the same period, 30 reviews 
of AD duties were initiated (two of which were mid- term reviews), and 13 ad ditional sunset reviews 
initiated before 2004 were finalized.  Out of these 43 reviews, the vast majority (32) resulted in the 
renewal of duties, 4 in non-renewal, and 3 in th e establishment of price undertakings (see below);  
4 are ongoing.
71 
89. During the review period, Brazil reviewed two AD duties upwards, on the imports of bicycle 
tyres and garlic from China. 
90. In line with the objective of imposing more provisional AD duties, noted by the authorities in 
the context of Brazil's previous review72, Brazil adopted 13 provisional AD measures between January 
2004 and October 2008.  Nine were converted into definitive duties and four are still in force.  As 
with definitive duties, Chinese products account fo r about one third of the provisional AD measures.73  
                                                      
70 WTO documents TN/RL/GEN/1, 14 July 2004;  TN/RL/GEN/50, 1 July 2005;  TN/RL/GEN/51, 
1 July 2005;  TN/RL/GEN/67, 12 October 2005;  TN/RL/GEN/43, 13 May 2005;  TN/RL/W/189, 13 October 2005;  TN/RL/GEN/99, 3 March 2006;  TN/RL/GEN/117, 21 April 2006;  TN/RL/W/215, 
31 January 2008;  and TN/RL/W/224 of 12 March 2008. 
71 MDIC (2007), and MDIC online information.  Viewed at:  http://www.desenvolvimento.gov.br/ 
sitio/interna/interna.php?area=5&menu=234. 
72 WTO (2005), Chapter III(2)(vii). 
73 MDIC (2007), and MDIC online information.  Vi ewed at:  http://www.des envolvimento.gov.br/sitio/ 
interna/interna.php?area=5&menu=234. WT/TPR/S/212 Trade Policy Review 
Page 42 
 
 
In sunset reviews, five prelimin ary determinations were imposed:  two resulted in price undertakings, 
and the other three were converted into definitive duties. 
91. As in the period 2000-03, 25 trading partners were affected by AD measures (new, renewed, 
and provisional) during the review period (consideri ng the EC as one).  China remains, by far, the 
most affected trading partner, followed by the United States and India.74  The number of new duties 
applied to China remained constant, while those applied to the EC fell significantly. 
Table III.3 
Anti-dumping measures, 1 January 2004 to 30 October 2008a 
 2004 2005 2006 2007 2008b Total 
Initiation of original inve stigations 8 6 12 13 22 61 
Provisional duties imposedc 0 0 6 4 3 13 
Definitive AD duties imposed 3 0 9 11 0 23 
No definitive duties imposed  5 6 3 1 0 15 
Price undertakings 0 0 0 0 0 0 
Ongoing investigations 0 0 0 1d 22 23 
Initiation of sunset reviews 5e 7 11e 5 2 30 
Preliminary determinations imposedc 2 0 3 0 0 5 
AD duties continued 3 7 11 2f 0 23 
AD duties not renewed 0 0 0 1 0 1 
Price undertakings 2 0 0 0 0 2 
Ongoing sunset reviews 0 0 0 2d 2 4 
 
a The outcome of original investigations and of sunset revi ews is listed under the same year as the corresponding initiation, 
irrespective of the date of the decision (w hich was, in many cases, one year after the start of the investigation/review). 
b 1 January-30 October 2008. c Not included in the totals of investig ations and sunset reviews initiated.  
d Ongoing as at October 2008. 
e One is a mid-term review. f In addition to the renewal of the AD duties, theses two sunset reviews also resulted in the establishment of price undertakin gs 
with some of the companies.  
 Note: Five AD duties applied during 2004, but for which investiga tions began in 2003, are not included in the table;  nor are 1 3 sunset 
reviews initiated before 2004 and concluded du ring the review period, 9 of which resulte d in the continued application and 4 in  
non-renewal.  
 
Source: WTO Secretariat, based on MDIC online informati on.  Viewed at:  http ://www.desenvol vimento.gov. 
 br/sitio/interna/interna.php?area=5&menu=234. 
92. As at October 2008, Brazil had 63 AD measures  in force, compared with 48 in June 2004.75  
Brazil imposed 26 new definitive AD duties between  January 2004 and Oct ober 2008, which is 
marginally higher than the number of new AD duties imposed during 2000-03.  Six definitive AD measures were suspended during the review period, two of which were re-a pplied three years later 
(chrome iron from South Africa and Russia), and one applied one year later (bicycles from China). 
93. Of the 63 AD measures in force, four were provisional measures, one was a price 
undertaking, four were ongoing sunset reviews, 27 i nvolved new duties, and 27 renewed duties.  Most 
                                                     
 
74 The numbers of new and renewed duties adopted by Brazil between January 2004 and September 
2008 by trading partner were:  China, 20;  United States, 8;  India, 5;  EC(27), 3;  Argentina, 3;  Mexico, 3;  
Russia, 2;  Romania, 2;  France, 2;  Germany, 2;  South Africa, 2;  Spain, 2;  Austria 1;  Bangladesh, 1;  Chinese 
Taipei, 1;  Chile, 1;  Finlan d, 1;  Kazakhstan, 1;  Korea, 1;  Japan, 1;  New Zealand, 1;  Thailand, 1;  United 
Kingdom, 1;  Uruguay, 1;  and Venezuela, 1.  Estimates by the WTO Secretariat based on MDIC online 
information, viewed at: http://www.desenvolvimento.gov.br/. 
75 MDIC online information.  Viewed at:  http://w ww.desenvolvimento.gov.br/sitio/interna/interna.php 
?area=5&menu=234. Brazil WT/TPR/S/212 
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of the products affected belong to basic industr ies such as plastics, base metals, chemicals, and 
machinery.76  Fully processed products represent 35% of the imported goods affected by AD duties, 
while semi-processed products 62%.  Furthermore,  of the 63 AD measures in force, 31 had been 
renewed after one or more sunset reviews, i.e. they  had been in place for over five years.  Eleven AD 
measures had been in place for at least 12 years.  The average duration of an AD measure in place in 
October 2008 was some 6.4 years.77 
94. In contrast with the situation in June 2004, most AD duties in force in October 2008 were 
specific rather than ad valorem .  The 13 definitive ad valorem  duties ranged from 0% for glyphosate 
to 202.3% for pencils. 
95. Since 2003, apart from the measures mentione d above, Brazil agreed to five price 
undertakings as a result of AD sunset reviews.  Th e undertaking agreed with Chile (on cardboard) and 
with companies from the United States and the EC (on polycarbonate resins) were still in force in 
October 2008, while the undertakings with Argen tina and Uruguay (on milk) were terminated in 
February and April of 2008, respectively. 
96. During the review period, one AD duty applied by Brazil to imports of certain polyethylene 
terephthalate (PET) resins from Argentina was cha llenged in the WTO.  A panel was established in 
2007, however its work was suspended at Argentina's request;  Brazil suspended the application of the 
duty in January 2008.78 
Countervailing duties 
97. Since its last Review, Brazil has applied only two new CV duties, both of which are still in 
force (October 2008).79  The measures concern two products e xported from India:  stainless steel bars 
and PET film.  No other CV measures were in fo rce during the review period.  No preliminary 
measures have been taken since 1995. 
98. Brazilian legislation does not allow for the simu ltaneous application of AD and CV duties to 
compensate for the same injury.80  However, it does allow that AD and CV investigations to be 
carried out at the same time.  In  the specific case of imports of PET film from India, where both duties 
are applied, the Brazilian authorities decided to apply AD duties plus the excess of CV duties over 
AD duties, if any.81 
(b) Safeguards 
99. The WTO Agreement on Safeguards was incorpor ated into Brazilian legislation through 
Decree No. 1,355 of 30 December 1994.  Administrativ e procedures for the application of safeguard 
measures are established in Decree No . 1,488 of 11 May 1995, as amended. 
                                                      
76 Other products affected were:  textiles, mineral products, milk powder, bicycle parts, optical 
products, and garlic. 
77 Calculated by the WTO Secretariat, based on the dates of entry into force and considering 
October 2008 to be the end date. 
78 WTO online information.  Viewed at:  http://www.wto.org/english/tratop_e/dispu_e/dispu_by_ 
country_e.htm. 
79 WTO document G/SCM/N/178/BRA, 6 August 2008. 
80 Decree No. 1.751 of 19 December 1995. 
81 CAMEX Resolution No. 43 of 3 July 2008. WT/TPR/S/212 Trade Policy Review 
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100. A common MERCOSUR regulation, based on the WTO Agreement on Safeguards, 
establishes the procedures for the application of safeguard measures by MERCOSUR, as a single entity, and in the name of a member State with respect to imports of third countries.
82  However, this 
regulation is not yet in force, since other MERCOSUR members have not incorporated it into their 
legislation. 
101. Safeguard measures are not applied among MERCOSUR members, however they may apply 
to MERCOSUR's associate members, i.e. Chile and Bo livia.  In the respective bilateral agreements 
with these two countries, there are specific regulations on the application of preferential safeguard measures, which consist of temporary suspension or reduction of the tariff preferences accorded 
therein. 
102. Safeguard investigations are initiated and c onducted by the SECEX.  CAMEX is responsible 
for determining safeguard measures
83, which can take the form of tariff surcharges or quantitative 
restrictions and can be applied for a maximum of four years, renewable for six years.  Measures applied for over three years must be subject to a mid-term review by SECEX. 
103. During the review period, Brazil did not apply new safeguard measures. 
104. Brazil initiated a safeguard investigation on imports of coconuts in August 2001.  The 
investigation resulted in the application of safeguard measures on all WTO Members as of 1 September 2002, with the exception of MERCO SUR members, and developing countries whose 
imports are below the de minimis specified in the Safeguards Agreement (the list of countries has not 
changed since 2005).
84  The quantitative restrictions were schedul ed to remain in place for four years, 
until August 2006.  However, as a result of a review , Brazil decided to extend the measure for an 
additional four years, i.e. until August 2010.85  The global quota resulting from the renewed measure 
followed the previously established progressive libera lization at an annual rate of 5%, that is:  4,778 
tons in the first year;  5,017 tons in the second;  5,256 tons in the third;  and 5,495 tons in the fourth year.  The quota is allocated to importers on a first-come, first-served basis. 
(vii) Prohibitions, restrictions, and licensing 
105. Brazil imposes import prohibitions on virtuall y all used consumer goods, including motor 
vehicles, as well as on certain grapes and grape juices to  be used in the production of wine, and wine 
transported in containers larger than five litr es.  Brazil uses both automatic and non-automatic 
licences;  the latter affect slightly more than one thir d of all tariff lines.  Li cences for used machinery, 
equipment, and cargo containers are issued only if no similar goods are produced in Brazil.  Licences 
are not issued for the importation of retreaded tyres, except from MERCOSUR;  this exception was 
found inconsistent with multila teral rules by a Panel. 
(a) Import prohibitions 
106. According to the Brazilian authorities, absolute  import prohibitions are in place mainly for 
environmental and safety reasons (Table III.4). 
                                                     
 
82 18th Additional Protocol to MERCOSUR, inco rporated into Brazilian legislation through 
Decree No. 2,667of 10 July 1998. 
83 Decree No. 4,732 of 10 June 2003. 
84 WTO document G/SG/N/10/BRA/3/Suppl.4, 27 July 2006. 
85 WTO document G/SG/N/10/BRA/3/Suppl.4, 27 July 2006. Brazil WT/TPR/S/212 
 Page 45 
 
 
Table III.4 
Import prohibitions and licensing requirements, 2008 
Products affected Type of restriction Legal basis 
Prohibitions   
Wines Prohibited if  transported in bottles of more 
than 5 litres Article 26 of Law No. 7.678 of 8 November 1988 
Grapes and grape juice Foreign grapes or grape juice may not be used 
in the production of wine and its derivative products Article 57 of Decree No. 99,066 of 8 march 1990 
Toys that replicate 
firearms Prohibited in all circumstances (domestic 
production is also prohibited) Article 26 of Law No. 10.826 of 22 December 2003 
Weapons and 
ammunitions Private importation prohibited if the goods are 
intended for exclusive use of the army Decree No. 2,998 of 23 March 1999 
Endangered animals and 
plants Animals and plants listed as endangered by 
CITES Decree No. 3,607 of 21 September 2001 
Used tyres Granting of non-automatic licences prohibited, 
including if the tyres are for use as raw 
material;  imports of retreaded tyres from other 
MERCOSUR member countries are allowed Article 41 of Portaria  SECEX No. 36 of 22 November 
2007 
Used consumer goods Granting of non-automatic licences prohibited, 
except for imports by the State or educational and scientific institutions Article 27 of Portaria  SECEX No. 235 of 7 December 
2006 
Licensing requirements   
Imports under drawback 
scheme Automatic licence Portaria  SECEX No. 36 of 22 November 2007 
Used goods Non-automatic licence required for imports of 
all used goods, with the exception of 
packaging material used in temporary 
importation or re-importation Portaria  SECEX No. 36 of 22 November 2007 
Weapons and products 
made for warlike 
purposes Non-automatic licence Decree No . 3,665 of 20 November 2000. 
Goods restricted by a UN 
resolution   Non-automatic licence required for specific 
goods whose trade is restricted by a UN resolution Portaria  SECEX No. 36 of 22 November 2007 
Scheduled chemicals 
controlled under the Chemical Weapons Convention Non-automatic licence Decree No. 2,977 of 1 March 1999. 
 
Source: Latin American Integration Association (LAIA) database and MDIC online information.  Viewed at:  
 www.aladi.org, a nd www.mdic.gov.br/. 
107. The importation of retreaded tyres from all sources, except MERCOSUR members, is subject 
to non-automatic licences, but by la w such licences may not be grante d.  This measure was challenged 
by the EC under the WTO dispute settlement mechanism in November 2005.  The Panel and 
Appellate Body Reports concluded, inter alia , that the exemptions from the import ban granted to 
retreaded tyres from MERCOSUR, as well as imports of used tyres by local retreaders through court 
injunctions constituted arbitrary or unjustifiable discrimination, and we re, therefore, inconsistent with 
the GATT Agreement.86  Following consultations with Brazil, the EC requested that the period of 
time in which Brazil had to implement the decision be determined through ar bitration.  In August 
2008, the arbitrator determined that Brazil had to implement the recommendations by 17 December 
2008.87 
108. Brazil is a signatory to the Basel Convention,  and as a result it controls all cross-border 
movements of hazardous wastes.  In accordan ce with CONAMA Resolution No. 23 of 1996, the 
importation of hazardous waste is prohibited and other movements should follow the Basel 
                                                      
86 WTO documents WT/DS332/R , 12 June 2007, and WT/D S332/AB/R, 3 December 2007. 
87 WTO document WT/DS332/16, 29 August 2008. WT/TPR/S/212 Trade Policy Review 
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Convention procedures.  Also, according to the Mo ntreal Protocol and CONAMA Resolution No. 257 
of 2000, there are import prohibitions of substances that deplete the ozone layer. 
109. Brazil also restricts the importation of some pharmaceutical products, narcotics, 
psychotropics and precursors, products and equipm ent for health and diagnosis, tobacco products, 
cosmetics, foodstuff, and other products to protect  animal and human health (see section (vii) and 
(ix) below). 
(b) Import licensing 
110. Since its last Review, Brazil has introduced a few changes to its regulatory framework on 
import licensing, which were notified to the WTO.88  Since 2004, Brazil has been receiving questions 
from the United States on licensing require ments concerning certain lithium compounds89;  in the 
context of this review, the authorities note that  they have no new information on this subject.90 
111. Brazil applies both automatic and non-automatic  licences to imports of various products 
(Table III.4).  The purpose of the automatic licensing regi me is to collect statistical information;  as at 
end 2008, automatic licensing is applied mainly to  products imported under the special regime of 
drawback.  According to the authorities, the major ity of products subject to non-automatic licensing 
are products that may cause damage to human, plant or animal health;  products capable of causing 
environmental damage;  and pr oducts subject to tariff quotas.91 
112. The complete list of products subject to non- automatic licensing can be found in MDIC's 
website.  Almost 3,500 eight-digit level lines in th e common external tariff (CET), or some 35.8% of 
all lines, are subject to non-automatic licensing.92  The list of products spans all HS headings, except 
headings 47, 51, 57, 66, 68, 77, 86 and 91.93  Non-automatic import licences were issued by various 
agencies.94 
113. Since Brazil's last Review, there have been no changes to the main laws and regulations 
governing import licensing procedures.95  SECEX is the administrative authority responsible for 
licensing.  No specific form is necessary, and im porters may apply for automatic and non-automatic 
licences through SISCOMEX;  licences issued by go vernment agencies other than SECEX are also 
dealt with through this automatic system.  Ther e are no extra fees or administrative charges for 
obtaining a licence. 
                                                      
88 WTO document G/LIC/N/1/BRA/3, 18 October 2006. 
89 WTO documents G/LIC/Q/BRA/3, 11 November 2004, up to G/LIC/Q/BRA/3/Add.3, 
10 April 2007. 
90 WTO document G/LIC/M/27, 11 June 2008. 
91 WTO document G/LIC/N/3/BRA/6, 8 October 2007. 
92 MDIC online information.  Viewed at:  http://w ww.desenvolvimento.gov.br/sitio/interna/interna.php 
?area=5&menu=272&refr=246. 
93 The authorities note that in most cases licensing requirements applied only to a particular part of the 
goods classified in a single item, and not to the whole eight-digit tariff heading, as presented in the CET. 
94 Namely the National Electric Energy Agency (ANEEL); National Cinema Agency;  Empresa 
Brasileira de Correios e Telégrafos (postal services);  National Department of Mineral Production;  National 
Institute of Metrology, Normalization and Industrial Quality (INMETRO);  Superintendency of the Manaus Free 
Trade Zone (SUFRAMA); National Petroleum Agency  (ANP);  Brazilian Health Surveillance Agency 
(ANVISA);  National Commission of Nuclear Energy;  Foreign Trade Operations Department;  Federal Police 
Department;  Brazilian Institute of the Environment and Re newable Natural Resources;  Ministry of Agriculture, 
Livestock and Food Supply;  and the Ministry of Science and Technology. 
95 Brazil's main laws and regulations on import licensing are listed in WTO document 
G/LIC/N/1/BRA/3, 18 October 2006. Brazil WT/TPR/S/212 
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114. Licensing is applied to all origins, without discrimination.  Importers must apply for 
automatic and non-automatic licences before sh ipment of the goods from the exporting country.  
Under certain circumstances, as for imports under the drawback regime, licences may be granted by 
the authorities after shipment but before customs clea rance.  Under Brazilian legislation, an automatic 
licence should be issued no later than ten working da ys after the date of registration of the ID in 
SISCOMEX.  For non-automatic licences, the proces sing period should not be longer than ten days;  
non-automatic licences are valid for at least 60 days.  Importation without a licence is subject to a fine equivalent to 30% of the customs value of the goods , or of 10% or 20% if the merchandise is shipped 
after the import licence has expired.
96 
115. Requests for licence may be refused if they do not fulfil the requirements set out in the 
legislation.  Refusals may be cha llenged by the importer before SECEX.97 
116. Non-automatic licences for used machinery, equipment, and cargo containers will only be 
granted if it is proven that the products are not produced in Brazil and cannot be substituted by a 
similar product currently produced in Brazil.  Notabl e exceptions to this requirement are:  factory's 
production lines related to specific pr ojects;  and parts and equipment used for maintenance and repair 
of telecommunication and informatics goods.98 
(c) Quantitative and other restrictions 
117. As from January 2005, the only imports subject to quotas are coconuts, as a result of a 
safeguard measure (section (vi)).  Along with other WTO members, at that date Brazil eliminated all 
quotas on imports of textiles and clothing, and fully integrated its import regime applied to this 
products into the rules of GATT 1994.99 
118. Under Brazilian legislation, a good may only be exempted from import duties, including 
imports by the federal or sub-fe deral governments and autonomous bodies, when no similar domestic 
product is available.100  A "similarity test", conducted by SECEX , must be applied on imports for this 
purpose. 
119. A Brazilian product is considered si milar and fit to substitute a foreign product if:  (i) it is of 
equivalent quality and has suitable specifications for th e expected application;  (ii) its price is not 
higher than the import cost, in national currency, of  the foreign product, calculated on the c.i.f. price 
and including import duties and similar expenses;  and (iii) it can be delivered within the delay 
considered normal for the type of product.  Wher e the domestic production of a good requires a large 
share of imported inputs as a percentage of its total cost, the share of local value added is the basis for 
recognition of a good as "similar" to an imported good.101 
120. The similarity test must be carried out prior to the shipment of the good from the country of 
origin, constituting therefore a type of non-automati c licence.  When an import licence is requested at 
SISCOMEX under an import tax reduction or exempti on regime, the SECEX indicates its rejection or 
approval, according to the findings of the similarity test.  In the case of rejection, the SECEX registers 
the name and address of the domestic supplie rs able to manufacture the requested good. 
                                                      
96 Decree No. 4,453 of 31 October 2002. 
97 WTO document G/LIC/N/3/BRA/6, 8 October 2007. 
98 Portaria  SECEX No. 235 of 7 December 2006 lists all the exceptions. 
99 WTO document G/TMB/N/475, 13 May 2004. 
100 Decree Law No. 37 of 18 November 1966, and Portaria  SECEX No. 36 of 22 November 2007. 
101 The "similarity test" should be applied according to the rules established in Decree No. 4,543 of 
26 December 2002. WT/TPR/S/212 Trade Policy Review 
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121. Imports from other ALADI countries are subject to  special rules for the application of the 
similarity test (section (iv) above). 
(viii) Technical regulations and standards 
122. A large number of agencies issue technical regulations at the federal level, each following its 
own procedures.  The adoption in 2007 of guidelines  for the elaboration of technical regulations is 
thus a valuable measure to help ensure that this pr ocess is carried out in a transparent and consistent 
manner.  Brazil is also taking steps to ensure that the notification of technical regulations is in all 
cases made within the multilaterally recommended periods.  Technical regulations are always 
published in the Official Journal  and, according to the authorities, are mostly based on international 
standards.  
(a) Institutional and legal framework 
123. Legislative Decree No. 30 of 15 December  1994 incorporates the TBT Agreement into 
domestic legislation.  Brazil's latest review on the measures it has taken to ensure the implementation 
and administration of the TBT Agreement was issued in 2003.102 
124. The National Council of Metrology, Standard ization and Industrial Quality CONMETRO, 
presided by the Minister of Development, Indust ry and Foreign Trade (MDIC), is responsible for 
formulating, coordinating, and supervising policy on  metrology, standardization, and certification.  
CONMETRO is the standardization body of the Nati onal System of Metrology, Standardization and 
Industrial Quality (SINMETRO).103 
125. The National Institute of Metrology, Norma lization and Industrial Quality (INMETRO), a 
federal agency linked to the MDIC, is the Execu tive Secretariat of CONMETRO and coordinates the 
Brazilian Network of Legal Metrol ogy and Quality.  This Network comprises the institutes for 
weights and measurements (IPEMs) of all the Brazilia n states.  INMETRO is also responsible for the 
notification of proposed (mandatory) technical re gulations, including by sub-federal bodies, to the 
WTO, and is the national enquiry point under the TBT Agreement.104 
126. SINMETRO is a federal body comprising both public and private entities;  its aims are to 
ensure coordination in the formulation and adoption of standards and technical  regulations, both at the 
federal and at the sub-federal level.  The work of SINMETRO is established at the sub-federal level 
by standardizing bodies, metrology laboratories an d institutes in the different states.  SINMETRO 
comprises a number of bodies, including:  CONMET RO and its technical committees;  INMETRO, 
and a number of certification, inspection, and training  bodies;  a proficiency testing body;  calibration 
and testing laboratories;  the Brazilian Associati on for Technical Standardization (ABNT);  IPEMs;  
and state metrological networks.105 
127. A large number of agencies (27) at the federal level have the authority to issue technical 
regulations in the specific area of its competence.  Responsibility for developing standards has been 
ascribed to the ABNT (see below). 
128. Brazil notified to the WTO five multilateral recognition agreements (MRAs) on conformity 
assessment between INMETRO and agencies of:  the EC, Canada and the United States, Canada and 
                                                      
102 WTO document G/TBT/2/Add.26/Rev.2, 26 June 2003. 
103 Law No. 5,966, of 11 December 1973 created SINMETRO, CONMETRO and INMETRO.  
104 WTO document G/TBT/ENQ/33, 26 June 2008. 
105 INMETRO online information.  Viewed at:  http://www.inmetro.gov.br/inmetro/sinmetro.asp. Brazil WT/TPR/S/212 
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Mexico, and two other agreements with some 30 countries each.106  In general, under these 
agreements, each signatory recognizes the operati on of the other signatories' quality management 
systems within the programmes defined as equivale nt to its own.  INMETRO has memoranda of 
understanding with Argentina, Cuba, France, Germany, India, Paraguay, Ukraine, the 
United Kingdom, and LAIA countri es;  and cooperation agreements  with Bolivia, Costa Rica, 
Guatemala, Mozambique, Russia, and Uruguay.107  Additionally, INMETRO has signed various 
multilateral recognition agreements  on certification and accreditation.108 
129. In 2007, CONMETRO issued a Good Regulator y Practice Guide, providing recommendations 
on how to elaborate, revise, revoke, a nd disseminate technical regulations.109  Public bodies are 
encouraged to concentrate on safety, health, enviro nment, and consumer protection issues.  However, 
there are no mandatory regulations of general applic ation to prepare technical regulations;  each entity 
is responsible for adopting technical regula tions following its own internal procedures. 
130. All ministries and agencies follow similar genera l procedures to adopt technical regulations.  
They may initiate the elaboration of a technical regulati on ex officio, or at the request of a third party.  
If the competent authority deems it necessary, a draft technical regulation is prepared and published in 
the Official Journal .  Public hearings may also be organized to promote public consultation.  In 
parallel, if the proposed technical regulation is consider ed to have trade effects, the draft is sent to the 
WTO to allow Members to present comments.  INM ETRO is in charge of handling international 
comments.  The private sector, both domestic and fore ign, may participate in the discussions.  After 
all comments and suggestions are ta ken under consideration, the ministry or agency decides whether 
to adopt the technical regulation, with or without modification. 
131. Technical regulations take the form of laws, decrees or reso lutions, as appropriate, and are 
published in the Official Journal  and, in some cases, in the ministry's website.  Brazil normally allows 
a period of six months between the publication of the measure and its entry into force. 
132. The authorities note that they notify to WTO all proposed technical regulations considered to 
have trade effects, even if such re gulations are identical to internationa l standards.  In practice, about a 
fifth of the notifications made by Brazil during th e review period allowed only 30 days for comments 
by Members.  In this respect, the authorities note that the extension of the period for comments was 
usually granted to interested parties, and that the Good Regulatory Practice Guide adopted in 2007 was expected to raise the average num ber of days allowed for comments. 
133. The authorities further note that the vast majority of Brazil's technical regulations are 
established based on international standards.  In th e exceptional cases where this is not the case, they 
are based on performance criteria. 
134. MERCOSUR's main executive body, the Common Market Group (GMC), may issue 
MERCOSUR technical regulations in the form of Re solutions.  Working grou ps within the GMC are 
responsible for drafting the measure, incorpora ting comments resulting from the process of domestic 
consultation, and submiting the final draft for approv al by the GMC.  The measure is notified to the 
                                                     
 
106 WTO documents G/TBT/10.7/N/39, 12 December 20 02;  G/TBT/10.7/N/40, 12 December 2002;  
G/TBT/10.7/N/41, 12 December 2002;  G/TBT/10.7/N/42, 8 January 2003;  G/TBT/10 .7/N/43, 8 January 2003. 
107 INMETRO online information.  Viewed at:  http://www.inmetro.gov.br/barreirastecnicas/ 
oopTecnica.asp.  
108 For a complete list of these agreements see INM ETRO online information.  Viewed at:  http://www. 
inmetro.gov.br/barreirastecnicas/ ecmutuo.asp.  
109 CONMETRO (2007). WT/TPR/S/212 Trade Policy Review 
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WTO after domestic consultations, but before it is  adopted by MERCOSUR or internalized into the 
domestic legal system.  The WTO TBT Agreem ent was adopted by MERCOSUR Decision 05/96.110 
135. Brazil does not accept as equivalent the technical regulations adopted by any trading partner.  
It does, however, accept equivalence in test results.  
136. INMETRO maintains a computerized database system that contains all the technical 
regulations notified to the WTO since 2001.  Whil e there is no central inventory of all technical 
regulations in force in Brazil, an exporter may u se SISCOMEX (section (i) above) to find out if the 
product being exported to Brazil is subject to any tec hnical regulation.  No statistics were available to 
the WTO Secretariat on the number of technical regul ations currently in force, nor the percentage 
notified to the WTO.  Brazil did not adopt any urge nt technical regulations during the review period. 
137. Brazil notified 181 technical regulations to th e WTO during the period under review.  The 
notifications cover regulations in several areas and by different federal authorities, and include 
MERCOSUR regulations.  The number of notifications issued each year has decreased, although Brazil notified 48 technical regulations in the first ten months of 2008.  Almost one fifth of the 
technical regulations notified were with respect  to health and pharmaceutical products;  other 
significant product groups were consumer goods, ag ricultural products, foodstuffs, electrical and 
electronics, chemicals, machinery, and beverages. 
138. There is no legal provision that requires regulatory bodies to review regularly the content of 
technical regulations, nor a specific rule for thei r elimination.  Neverthe less, CONMETRO's Good 
Regulatory Practice Guide covers these issues.  
139. As noted in Brazil's previous Review, produc t labelling must provide the consumer with 
correct, clear, precise, and easily readable information a bout the products' quality, quantity, 
composition, price, guarantee, shelf life, origin, and risks to consumers' health and safety.  Imported 
products must bear this information in Portuguese, a nd indicate the country of origin.  In addition, all 
labels must contain the brand or name of the manufacturer.
111  Medicines, textiles, pharmaceutical 
specialties, and certain foodstuffs are subject to sp ecific labelling regulations.  Labels for a group of 
processed food products, including all products of animal  origin, require approval by the Ministry of 
Agriculture.  In addition, ten groups of electrical pr oducts are subject to manda tory labelling as part of 
a government energy-saving programme. 
140. Importers, exporters or manufactures of pharmaceu ticals, cosmetics, and foodstuffs must be 
authorized by, and registered with ANVISA (section (ix) below).112 
(b) Conformity assessment 
141. INMETRO and ANVISA are responsible for the adoption of conformity assessment 
procedures.  The steps followed for the adoption of  conformity assessment are similar to those for 
technical regulations (see above);  there is a pe riod of public consultation and the measure is 
published in the Official Journal  and on the website of each responsible government body.  
Conformity assessment procedures that differ from in ternational standards, or have considerable 
economic importance or impact on health, are notified to the WTO through INMETRO. 
                                                      
110 MERCOSUR online information.  View ed at:  http://www.mercosur.int/. 
111 Brazilian Customer Protection Code, in effect since 1990. 
112 Registration requirements are contained in ANVISA Resolution No. 79, of 28 August 2000, as 
amended. Brazil WT/TPR/S/212 
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142. Depending on the specific characteristics of the product, conformity assessment may be 
through certification, labelling, inspection, sampling, and/or a conformity declaration by the supplier.  
Certification is mainly carried out by accredited thir d parties and is generally voluntary.  Products and 
services subject to mandatory certification are those that may affect consumer health, safety or the 
environment.  Certification and labelling pr ocesses are defined according to the conformity 
assessment procedure;  procedures applied during in spections (e.g. sampling and testing) also vary 
according to the conformity assessment. 
143. As at October 2008, 59 products were subject to mandatory certification, including baby 
bottles and dummies, buses, electrical cables, electr ical appliances, fuel tanks, gas containers, 
matches, parts for vehicles, preservatives, steel tubes, toys, and tyres.  Certification is also mandatory 
for eight types of services, mostly linked to motor-v ehicle and gas distribution, and for the process of 
manufacturing food baskets.113  Motor-vehicle safety and the transport of dangerous products are 
subject to mandatory inspection. 
144. Under the Brazilian System for Conformity A ssessment, conformity declaration by the 
supplier is only applied to products or services of low to medium risk to human health and safety.  
Foreign suppliers must have a legal representative in Brazil responsible for the issuance of the 
declaration of conformity.  INMETRO and state IPEM s are responsible for ensuring that suppliers are 
following the appropriate provision114;  in that respect, there are six areas, including for tyre retreaders 
(section (vii)), where specific supervisory programme s were established.  Eight products are subject to 
mandatory conformity declaration by suppliers, and three products are subject to mandatory 
verification of performance (advance signal regist ration equipment, liquefiers, and hair dryers).115 
145. INMETRO is authorized to apply fines, via administrative procedures, for non-compliance 
with mandatory technical regulations and conformity assessment procedures.  The fines vary from R$100.00 (some US$51) for minor infringements, to  R$1.5 million (US$770,000) for the most 
serious.
116 
146. Brazil recognizes product and system certification from foreign certification agencies that 
have a memorandum of understanding with a Braz ilian certification body, or with whom INMETRO 
has signed an agreement (see above).  One of INMETRO's strategic goals is to promote the use of provisions set out in Brazil's MRAs, which acco rding to INMETRO are not fully exploited.
117 
(c) Accreditation 
147. INMETRO is the national accreditation body vested by SINMETRO.  INMETRO is advised 
by CONMETRO's technical committe es in its accreditation activities,  and accredits bodies engaging 
in certification, inspection, training, calibration, and testing, including agri-toxic laboratories and 
clinical analysis laboratories.  As a general rule , accreditation must be formally requested, followed 
by supporting documentation, and an in situ  inspection must be carried out.  To maintain 
accreditation, a body is subject  to periodic evaluations.  
                                                      
113 INMETRO online information.  Viewed at:  http://www.inmetro.gov.br/qualidade/prod 
Compulsorios.asp. 
114 CONMETRO Resolution No. 4 of 16 December 1998. 
115 INMETRO online information.  Viewed at:  http://www.inmetro.gov.br/qualidade/prod 
Compulsorios.asp. 
116 Law No. 9,933 of 20 December 1999. 
117 INMETRO online information.  Viewed at:  h ttp://www.inmetro.gov.br/qualidade/sumario.asp. WT/TPR/S/212 Trade Policy Review 
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148. The authorities note that where conformity assessment is mandatory, certification bodies must 
have a regular office in Brazil in order to be accredited.118  Otherwise, Brazil grants national treatment 
to foreign laboratories or certification bodies. 
149. Accreditation of laboratories is based on NBR ISO / IEC 17025, according to the 
International Laboratory Accredita tion Cooperation (ILAC) guidelines, and OECD BPL codes.  There 
are 227 accredited calibration laboratories (all Brazili an), and 307 sampling laboratories (1 Japanese, 
1 Mexican, and 305 Brazilian) (November 2008);  these laboratories are under the Brazilian 
Calibration Network (RBC) and the Brazilian Laboratory Network (RBLE), respectively. 
150. There are 33 certification bodies accredited for quality systems, of which 29 are Brazilian and 
4 foreign (from Italy, the United States, Uruguay,  and Venezuela);  48 bodies are accredited for 
product certification (of which only three are forei gn, from Argentina, Costa Rica, and Venezuela);  
and 17 environmental systems management and 4 fo rest accreditation bodies (two are foreign, from 
Italy and the United States).  Since 2003, ten accred itations granted to foreign bodies have been 
suspended.119 
(d) Standards 
151. Responsibility for the development of (voluntary) standards has been vested by SINMETRO 
in the ABNT, a non-governmental body that receive s financial support from the Federal Government, 
and which has the authority to accredit sectoral standardization bodies (ONSs) related to specific 
industrial and economic sectors.  The ABNT represents Brazil in the ISO/IEC and in regional normalization fora.   
152. The ABNT represents Brazil at the regional (m ostly in Latin America) and international 
levels.  It signed the WTO/TBT Code of G ood Practice in 1995 and follows its Annex 3.
120 
153. The process of adopting standards starts with  a demand for a standard received by ABNT 
from a government body, a private producer, a consumer  or any other interested party.  The demand is 
sent to the appropriate technical committee, whic h decides whether to include it in its annual 
programme.  A study commission is set up to formulat e the standard or find a suitable international 
standard that already exists.  The draft is ope n for consultation with both the public and private 
sectors.  Public consultation takes at least 60 da ys for standards that differ from international 
standards, and 30 days otherwise.  Where a consen sus is reached among partic ipants, the standard is 
adopted by the ABNT, which also notifies it to ISO.   The annual work programme of all technical 
committees is published twice a year.121 
154. According to the authorities, in order to guarant ee that the content of the standards is up to 
date, standards older than five years are review ed every year.  The review process must follow 
international guidelines, and must include four months of public consultation through the ABNT 
website.  Interested parties have the opportunity to say whether the standard should be confirmed as it 
is, cancelled or updated. 
155. Since its previous Review, Brazil has develope d approximately 2,130 standards, of which 
some 38% were adoptions of ISO or IEC standards without any change.  The remainder were either 
purely domestic initiatives or adaptatio ns of international standards. 
                                                      
118 WTO document WT/TPR/M/140/Add.1, 15 February 2005. 
119 INMETRO online information.  Viewed at:  h ttp://www.inmetro.gov.br/organismos/consulta.asp. 
120 WTO document G/TBT/CS/2/Rev.14, 20 February 2008. 
121 ABNT online information.  Viewed at:  http://www.abnt.org.br/. Brazil WT/TPR/S/212 
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(ix) Sanitary and phytosanitary measures 
156. Since Brazil's last Review, there have been onl y a few changes in the legal and institutional 
framework governing the adoption of sanitary and phytosanitary (SPS) measures, with new 
regulations introduced, inter alia , for genetically modified organisms.  Brazil prohibits the 
importation of hormone-treated meat and poultry.  During the period under review, Brazil made 392 
notifications under the SPS Agreement.  The author ities note that, while most notified SPS measures 
being based on international standards, they are taki ng steps to improve the notification procedures in 
order to allow more time for comments. 
(a) Institutional and legal framework 
157. The administration of regulations on animal a nd plant health for domestic goods, imports, and 
exports is the responsibility of the Ministry of Agriculture, Livestock and Supply (MAPA), through 
the Secretariat of Agricultural Protection (SDA).  The SDA is responsible for controlling the sanitary 
and phytosanitary (SPS) aspects of production and tr ade of all livestock, fruits, vegetables, grains, 
plants, veterinary drugs, pesticides, and their co mponents, including, inspecting their manufacture, 
import, and storage, administration and applica tion of SPS regulations, and the implementation of 
actions agreed upon with international agencies  and foreign governments.  The SDA is also 
responsible for issuing safety certification for food exports. 
158. The Brazilian Health Surveillance Agency (ANVISA) is an autonomous government body 
related to the Ministry of Health.  It is responsib le for administering sanitary regulations designed to:  
protect human health and related to imported a nd locally produced foodstuffs, tobacco, cosmetics, 
pesticides, and pharmaceutical produc ts;  and to avoid or reduce the risk of entry, establishment or 
spread of epidemics of human diseases.  
159. The Secretariat for International Relations of  Agribusiness of the MAPA, and the Office of 
International Affairs (formerly the Assistance Unit for International Issues) of ANVISA are the 
Brazilian enquiry points.122  The Ministry of Foreign Relations is Brazil's notification authority for 
SPS matters.123 
160. Decree No. 1,355 of 30 December 1994 inco rporates the SPS Agreement into domestic 
legislation.  Ministerial Act No. 183 of 9 October 1998 remains the main legislation with respect to 
the sanitary requirements for imports of animal products.  This Act prescribes the conditions for 
recognition of inspection systems and certification of foreign establishments.  The Resolution RDC 
ANVISA No. 181/08 of 2008 establishes the rul es for sanitary surveillance of imported goods, 
including processed foodstuffs.  The authorities indi cate that, with regard to plant products, several 
regulations apply to each specific type or family of plant. 
161. Among the legislation passed during 2004-08, Decree No. 5,591 of 22 November 2005 
regulates the use of genetically modified orga nisms (see below), and Decree No. 4,954 of 
14 January 2004 establishes rules for the inspection a nd surveillance of the production of and trade in 
fertilizers.  A number of regulations affecting speci fic animal and plant products, were also introduced 
during the review period.124 
                                                      
122 WTO document G/SPS/ENQ/23, 27 March 2008. 
123 WTO document G/SPS/NNA/14, 18 September 2008. 
124 MAPA online information.  Viewed at:  http://www.agricultura.gov.br/. WT/TPR/S/212 Trade Policy Review 
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162. Brazil is a member of the Codex Alimentari us Commission (Codex), the World Organisation 
for Animal Health (OIE) and the Intern ational Plant Protection Convention (IPPC).125  Brazil is also a 
signatory to the Biological Diversity Convention.126 
163. Brazil has memoranda of unders tanding and/or partial agreemen ts on SPS issues with various 
countries, and it is negotiating agreements for th e recognition of equivalence of SPS measures with 
Argentina and Peru.127  Brazil conducts periodic bilateral discussions on agriculture issues, such as 
SPS measures, in the context of Consulting Comm ittees on Agriculture with Canada, Chile, China, 
Korea, and the United States, and is negotiating simi lar arrangements with India and South Africa.  At 
the sub-regional level, Brazil participates in  the Southern Cone Phytosanitary Committee 
(COSAVE).128 
164. ANVISA and the SDA are the only Brazilian authorities that can issue and adopt SPS 
measures.  Both issue directiv es, when necessary, that list the products subject to sanitary 
requirements, as well as non-automatic import licen ces in their respective area of competence.129 
165. Proposed SPS measures are published in Brazil's Official Journal  and notified regularly to the 
WTO.  Compared with the 47 SPS-related no tification made during 2000-03, Brazil made 
8 notifications in 2004, 39 in 2005, 116 in 2006, 125 in 2007, and 104 in 2008.  During 2004-08, 
Brazil notified two emergency measur es, taken in April and July 2008.130  The majority of the 
392 notifications made during 2004-08 provided less than 60 days for comments by Members.  Moreover, a significant number of the measures notif ied did not allow for an adaptational period of 
six months between the dates of publication and entry into force.  The authorities note that, although 
not indicated in the notifications, most of the me asures notified were equiva lent to international 
standards and/or used for trade facilitation.  They also indicate that steps are being taken to improve 
the notification procedures in order to allow more time for comments. 
(b) Implementation activities 
166. Analyses (e.g. sampling) are carried out to de termine conformity with SPS measures.  They 
must take into account the place of origin and the characteristics of the product. 
167. Risk assessment for plant pests is carried out in accordance with the Regional Standard for 
Plant Protection 3.1, contained in the COSAVE Directive for Pest Risk Analysis, approved by 
Normative Instruction No. 641, of 3 October 1995 as ame nded.  In general, pest risk assessment is 
required when:  the vegetal product concerned has never been imported into Brazil;  or the product 
has never been used inside Brazil;  or comes fro m a country that has never exported the product to 
Brazil.  The risk assessment is carried out by the Department of Vegetal Health of the MAPA.  Costs 
are borne by the interested party.  Decisions are published in the Official Journal  and notified to the 
pertinent SPS authority of the country of origin.  Where pests are detected during re-inspection (see below) at the port of entry, Brazilian authorities will notify the SPS authorities of the country of origin and may suspend imports of the good concerned from that country. 
                                                     
 
125 WTO document G/SPS/GEN/49/Rev.8 of 9 October 2007. 
126 CBD online information.  Viewed at:  http://www.cbd.int/convention/parties/list/. 
127 The agreement under negotiation with Peru covers only hydro-biological products. 
128 MAPA online information.  Viewed at:  http://www.agricultura.gov.br/. 
129 The latest versions of these documents are:  MAPA Normative Instruction No. 40 of 30 June 2008, 
ANVISA Resolution RDC No. 217 of 15 December 2006, and Portaria  SVS/MS No. 344 of 1998 re-issued in 
1 January 1999.   
130 WTO documents G/SPS/N/BRA/397, 7 April 2008;  and G/SPS/N/BRA/4 60, 13 August 2008. Brazil WT/TPR/S/212 
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168. Risk assessment, including recognition of insp ection systems, certification of foreign 
establishments, import licences, re-inspection procedur es, and transit controls of animals and their 
products are conducted by MAPA and governed by Ministerial Act No. 183 of 9 October 1998. 
169. The authorities note that the risk assessment process takes into consideration technical 
information received from third countries and, therefore, its duration depends primarily on how fast 
this information is exchanged and evaluated.  No information was available on the minimum and 
maximum periods required to conduct a risk assessment. 
170. Brazilian SPS regulations require all companies e xporting products of anim al origin to Brazil 
to be registered with the Animal Origin Products  Inspection Department (D IPOA) at the MAPA;  all 
products must also be registered.131  Importers and domestic manufact urers of foodstuffs, cosmetics, 
and pharmaceutical products subject to sanitary requirements must obtain a licence to operate, from the state or municipal sanitary authority, as well as authorization to operate from ANVISA.
132  The 
licence results in an authorization from the Natio nal Sanitary Surveillance System, and is valid 
throughout the Brazilian territory.  Importers are al so required to register certain products with 
ANVISA.133  Imports of products already registered with ANVISA only require notification to the 
Agency.  No estimates were available to the WTO Secretariat on the time required to register new 
products with ANVISA, which varies according to the product, its risk and complexity. 
171. All imports of products subject to SPS requirements must obtain a non-automatic licence (via 
SISCOMEX), in most cases before departure from the country of origin (section (vii) above).134  
Where the good is already at the border, ANVISA ta kes no longer than 72 hours to issue the licence.   
172. Brazil accepts phytosanitary and zoosanitary certif icates issued by official sanitary services in 
countries that follow the guidelines of Codex, I PPC, OIE, and other international scientific 
organizations.  Import prohibitions for the protection of animal health are in place for a number of products;  they are established under various regulations, and there is no unified list. 
173. All imports of animal products and their s ub-products that are subject to SPS requirements 
must be inspected at the port of entry.  In principle, physical inspection should be carried out on 1% of 
packages that constitute the tariff line;  from a minimum of two to a maximum of ten packages.  For 
products in bulk, five samples should be collected sepa rately for inspection;  different rules apply for 
containers.  Samples from the packages that were physically inspected may also be used for the 
laboratory testing.  There is no ge neral rule with respect to the criteria applied when testing is 
required, different criteria are established for each product in the specific regulation.  Testing should 
be made by MAPA laboratories;  when necessary, laboratories officially accredited by MAPA may 
also be used.  Any testing costs are to be paid by the owner of the products.
135 
174. Brazilian legislation requires that all plants and processed plant products, including imports, 
comply with the relevant standards esta blished in Brazil's classification system.136  The system is 
                                                      
131 For product requirements (in Portuguese) see MAPA  online information.  Viewed at:  http://www. 
agricultura.gov.br/. 
132 MRE and FUNCEX (2006). 
133 Products that require registration are listed in ANVISA Resolution RDC No. 278 of 22 September 
2005 (foodstuffs);  ANVISA Resolution RDC No. 211 of  14 July 2005 (cosmetics);  and ANVISA Resolution 
RDC No. 132 of 29 May 2003, as amended (pharmaceuticals).  
134 Normative Instruction MAPA No. 40 of 30 June 2008 contains the list of products that require a 
non-automatic licence before departure. 
135 Annex of Ministerial Act ( Portaria ) MAPA No. 183 of 9 October 1998. 
136 Law No. 9,972 of 25 May 2000 and Decree No. 6,268 of 22 November 2007. WT/TPR/S/212 Trade Policy Review 
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based on quality-related characteristics such as size,  purity, and maturity.  MAPA or private, 
accredited companies are responsible for verifyin g compliance, at the border.  The rules and 
guidelines that regulate inspections of imported plan ts and their products are established in Normative 
Instruction MAPA No. 36 of 10 November 2006.137 
175. Recognition of pest- or disease-free areas or of areas of non-dangerous pest and disease 
prevalence is subject to an on-site inspection, as well as an analysis of the e xporting country's relevant 
procedures.  Based on questionnaires sent to the SPS authorities of the exporting country, Brazilian 
authorities evaluate whether the inspections systems, accrediting procedures, and product/label 
approval mechanisms are equivalent to those applied in Brazil.  On-site inspections of the exporters' 
establishments are undertaken at the cost of the interested party. 
176. During the review period, the EC raised concerns at two meetings of the WTO Committee on 
SPS Measures about Brazil's lack of recognition of regionalization and disease-free status for classical 
swine fever and Newcastle disease.138  The Brazilian authorities note that the EC has not raised this 
issue since 2006. 
177. Decree No. 5,591 of 22 November 2005 regulates the new Law No. 11,105 of 24 March 2005 
on the production, storage, transport, research, and trade of genetically modified organisms (GMOs).  
Any product containing GMOs may only be import ed with prior authorization from the National 
Technical Commission of Bio Security (CTNBio) , which is responsible for formulating and 
implementing the national bio-security policy.  CNTBio comprises representatives of various ministries and specialists in the relevant scientific areas.  It may organize public hearings on important 
issues before it makes a decision.  Decree No . 4,680 of 24 April 2003, makes compulsory the 
labelling of food products for animal and human consumption containing over 1% of GMOs.  Brazil 
is reportedly the largest exporter of non-GM soy beans.  
178. Brazil prohibits imports, exports, and the dom estic commercialization of meat and other 
products from bovines fed with hormones.  Trade a nd commercialization of substances, natural or 
artificial, with anabolic characteristics are also  banned, unless intended for therapeutic and research 
use.
139  The use of hormones in poultry production, as well as imports of poultry fed with hormones, is 
prohibited.140 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures and documentation 
179. Export procedures are codified in Title III of Ministerial Act ( Portaria ) SECEX No. 36 of 
22 November 2007, gazetted on 26 November 2007.  The only major modification to Brazil's export 
procedures since its previous Review in 2004, is the abolition of the need for exporters to engage in 
contracts to sell foreign currency.  This procedure benefits exporters of bot h goods and services.  All 
procedures for the export of goods take place electronically through Brazil's Integrated Foreign Trade System (SISCOMEX), introduced in 1997.  Operati ons in the SISCOMEX can be made by exporters 
or their representatives, including banks.
141  In 2006, the Government a pproved the development of an 
Internet-based system, which will register sales and acquisitions of services and of intangible goods.  
                                                      
137 WTO document G/SPS/N/BRA/144/Add.1, 28 November 2006. 
138 WTO documents G/SPS/R/37/Rev.1, 18 August 2005;  and G/SPS/R/40, 26 May 2006. 
139 MAPA Normative Instruction No. 10 of 27 April 2001. 
140 MAPA Normative Instruction No. 17 of 18 June 2004. 
141 Title III, Chapter II of Ministerial Act ( Portaria ) SECEX No. 36 of 22 November 2007.  
Viewed online at:  http://www.desenvolvime nto.gov.br/arquivos/dwnl_1198260273.pdf. Brazil WT/TPR/S/212 
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The new system is expected to be implemented in  2009.  No fees are required in relation to export 
procedures or documents. 
180. Exporters are automatically registered in the Secretariat of Foreign Trade (SECEX) Exporters 
and Importers Registry (REI) at the time of their fi rst export operation.  In order to finance their 
exports through the financial system, e xporters must obtain a Credit Registry ( Registro de  Credito,  
RC) prior to their inscription in the REI.  Registra tion in the REI is not required when the value of 
exports is less than US$50,000, and they ar e shipped by post, with certain exceptions.142  All export 
operations must be registered in the Export Registry  (RE).  A Simplified Export Registry (RES) is in 
place for exports up to US$50,000, which allows for immediate shipment.  The RES cannot be used 
for exports under the Automotive Regime, the drawb ack system, exports subject to export taxes, 
under any quantitative restriction or under any special proceeding listed in Annex N of Ministerial Act 
(Portaria ) SECEX No 36/2007. 
181. Export documentation is processed through the SI SCOMEX before the merchandise is loaded 
for exportation, except for exports of fuel and fo od to airlines and ships, and domestic sales of 
precious stones and jewellery to foreigners in foreign currency and merchandise subject to the 
RECOF regime, under specific regulation pr ovided by the Receita Federal do Brasil.143  Export 
documents required include a bill of lading, a le tter of credit (when required), commercial invoice, 
certificate of export classification144, and in some instances an export licence (see below) and 
certificate of origin (as required by the importing country).  Certificates of origin are required for preferential exports to LAIA and MERCOSUR countries, as well as under the GSP and GSTP 
schemes.  Certificates of origin for LAIA, and ME RCOSUR must be issued by entities recognized by 
the SECEX, as listed in Circular SECEX No. 44, of 13 November 2000.  Certificates of origin for 
GSP, and for preferential poultry exports to the EU  are issued by the Banco do Brasil;  certificates of 
origin for the GSTP are issued by the Brazilian Federa tion of Industry.  Certificates of authenticity or 
of origin are required for preferential exports of tobacco and some meat a nd poultry products to the 
EU. 
182. Annex N of Ministerial Act ( Portaria ) SECEX No. 36 of 2007 contains a list of exports 
subject to special procedures, which may include expo rts subject to the payment of export taxes, or to 
licensing and restrictions, or exports that bene fit from country-specific access conditions (tariff 
quotas) to certain markets.
145  The list has been shortened since Brazil's last Review.146 
183. Until 31 October 2008, exports of coffee had to be inscribed in the Registry of Sale (Registro 
de Venda, RV), prior to their inscription in the RE.  Ministerial Act SECEX No. 23 of 31 October 
                                                      
142 The limit was fixed by Ministerial Act ( Portaria ) SECEX No. 8 of 16 May 2008.  Ministerial Act 
(Portaria ) SECEX No. 36 of 22 November 2007 (Article 148 and Annex L), contains the list of exported goods 
exempted from export registrati on requirements.  Viewed at:  http://www. desenvolvimento.gov.br/ 
arquivos/dwnl_1198260273.pdf. 
143 Ministerial Act ( Portaria ) SECEX No. 36/2007. 
144 Prepared by the exporter and legalized by SECEX, and applied only to the following products:  
lobster (HS 0306.11.90), tobacco (HS 2401), marble (HS 2515) and granite in bloc (HS 6802.93.90).  Annexes 
N and O of Ministerial Act SECEX No. 36/2007. 
145 These goods include:  certain types of bovine meat (HS 0210.30.00 and 0202.30.00) exported to the 
EU under the Hilton quota;  poultry (HS 0210.99.00) and poultry meat preparations (HS 1602.31.00, 
16.02.32.00) also exported under co untry-specific tariff quotas to the EU145;  lobster (HS 0306.11.90);  coffee 
(HS 0901.11.10);  ethylic alcohol (HS 2207.10.00, 220 7.20.10):  tobacco (HS 240 1), cigars (HS 2402);  
marble (HS 2515);  furs (HS chapter 41);  pine wood (HS 44.12);  granite in block (HS 6802.93.90);  
precious stones (HS 7102.10.00, 7102.21.00, 710231.00);  and arms and ammunition (HS 93). 
146 The following items were eliminated from the list:  chestnuts, soy (including oil and flour), sugar, 
palmetto, salt, paper for cigars, silk, cotton, a number of textile and clothing products, and gold. WT/TPR/S/212 Trade Policy Review 
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2008 eliminated this requirement.  Inscription in th e RV had to stipulate the conditions of the export 
operation, including pricing.  
184. Effective 1 March 2007, foreign currency sale c ontracts are no longer required for exports of 
goods and services, and Brazilian exporters of goods and services may keep abroad the totality of 
their export proceeds.  However, if the exporter d ecides to bring the export proceeds into Brazil, a 
foreign exchange contract must be made with a financial institution registered in the Central Bank 
Information System (SISBACEN).147 
(ii) Export taxes 
185. Brazilian legislation allows for the applica tion of an export tax of 30%, which can be 
decreased or increased (to up to 150%) by the CAMEX.148  The export tax applies, in principle, to all 
exports, but with the exception of a few products liste d below, the tax is zero-rated.  The export tax is 
assessed on the f.o.b. value or the price of the goods  in the international market at the time of 
exportation.149  This price may not be lower than the cost of production, as defined by the law, 
augmented by taxes and other contributions and a ma rk-up of 15% on the sum of the costs and taxes.  
Exports may be exempt from this tax according to their destination150;  coffee, sugar, alcohol, and 
related products are exempt. 
186. Export taxes are levied on three product categor ies (Table III.5) down from seven product 
categories at the time of the previous review.  In one case (leather and skins) levies are charged on all 
exports, while, in the other two cases (cigars and arms and ammunition), taxes are levied only on 
exports to certain markets, all of them in the w estern hemisphere.  Where taxes are applied to all 
countries, their stated purpose is to ensure domestic  market supply;  where they are targeted to 
specific markets, the stated purpose is to control the regularity of the commercial flow .  Export tax 
revenue amounted to R$42 million (US$25.3 million)  in 2006 and R$60.5 million (US$36.4 million) 
in 2007.151  Export taxes on leathers and skins have increased to 9% since the last review, from 7%.  
The authorities indicate that the increase was to compensate tariff escalation abroad.  During the 
period under review, the export taxes were elimin ated on tobacco and substitutes to Paraguay and 
Uruguay by Decree No. 5,492 of 18 July 2005, which revoked  Decree No. 3,646 of 30 October 2000.  
The elimination followed a complaint brought to a MERCOSUR Tribunal by Uruguay.152 
187. In the context of this review, the authorities em phasized that export taxes are applied in very 
specific cases, and that Brazil intends to remain a reliable supplier of commodities. 
188. Brazil does not make use of minimum exports prices, except as a base to calculate export 
taxes.  For products that must be inscribed in the Re gistry of Sale, a fixed price may be used, but this 
                                                      
147 Central Bank of Brazil, RMCCI-International Capital and Foreign Exchange Market Regulation .  
Update 21, effective as from 18 March 2008 – Circul ar No. 3.379.  Viewed a t:  http://www.bcb.gov.br/ 
?RMCCINORMS. 
148 Law No. 9,716, 26 Novemb er 1998, and Decree No. 4,543 of 26 December 2002. 
149 Decree-Law No. 1,578 of 1977 and Provisional Measure No. 2,158-35 of 2001. 
150 Law No. 9,716, of 26 November 1998. 
151 Ministry of Finance online information.  Viewed  at:  http://www.stn.fazenda. gov.br/contabilidade_ 
governamental/execucao_ orcamentaria_do_GF/R eceita_Tributaria.xls. 
152 For more information on the case see ME RCOSUR online informati on.  Viewed at:  
http://www.mercosur.int/msweb/portal%20intermedia rio/es/controversias/arquivos/X%20LAUDO.pdf. Brazil WT/TPR/S/212 
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price must be based on prevailing international market conditions.153  The IPI, PIS, COFINS and 
ICMS are not levied on exports. 
Table III.5 
Export taxes, 2004-08 
NCM 
Heading Products Destination Rate Legislation Situation as at 
August 2008 
0801.31.00 Cashew nuts, 
with shells Any country 30%  CAMEX Resolution No. 31, 
20/10/03 Expired on 21/10/2005 
2401, 2403 Tobacco and its 
substitutes Paraguay and Uruguay 150% Decree No. 3,646, 30/10/00 Revoked by Decree No. 
5,492, 18/07/05  
2402.20.00 Cigars South and Central America 
and the Caribbean 150% Decree No. 2,876, 14/12/98 In place 
41011, 4102, 
4103, 4104.11, 
4104.19 Leathers and 
skins Any country 9%c CAMEX Resolution No. 42, 
19/12/06 In place 
4813 Paper for cigars Sout h and Central America 
and the Caribbeana 150% CAMEX Resolution No. 26, 
28/08/03 Revoked by CAMEX 
Resolution No. 20, 05/07/05
5601.22.91 Cylinders for 
cigar filters South and Central America 
and the Caribbeanb 150% CAMEX Resolution No. 26, 
28/08/03 Revoked by CAMEX 
Resolution No. 20, 05/07/05
Chapter 93 Arms and 
ammunitiond South and Central America 
and the Caribbeanb 150% CAMEX Resolution No. 17, 
06/06/01 In place 
a Excluding Argentina, Bolivia, Chile, Colombia, Cuba, Ecuador, Guatemala, Honduras, Jamaica, Mexico, Peru, Puerto Rico, 
 Dominican Republic, and Venezuela. b Excluding Argentina, Chile, and Ecuador. 
c As of 1 January 2007.  Before that date the rate was 7%. 
d Except when destined to au thorized consumers and to the military and police forces. 
 
Source:  Information provided by the Brazilian authorities. 
(iii) Export prohibitions, restrictions, and licensing 
189. Law No. 9,112 of 10 October 1995 regulates th e export control of sensitive (dual-use) 
commodities.  Exports of potentially sensitive goods are analysed by the Inter-ministerial Commission 
for the Export Control of Sensitive Goods (CIBES), created by Law No. 9,112 as amended by Decree 
No. 4,214 of 30 April 2002.  The Commission is in charge of preparing the regulations, criteria, 
proceedings, and control mechanism for the expor tation of sensitive commodities and their related 
services.154 The CIBES analyses requests for an export licence in light of the main international 
conventions, treaties, and non-proliferation regim es related to nuclear, chemical, biological, and 
missile-related technologies.  Control Lists are dr awn up, updated regularly, and approved by CIBES, 
which is headed by the Ministry of Science and Technology (MCT).155 
(a) Export prohibitions 
190. In compliance with United Nations resolutions , Brazil restricts exports of:  weapons and 
military equipment to Iraq, Ivory Coast, Liberia,  Sierra Leone, and Somalia;  and material and 
                                                      
153  Ministerial Act (Portaria) SECEX No. 36/2007. 
154 MDIC online information.  Viewed at:  http://w ww.desenvolvimento.gov.br/sitio/interna/interna. 
php?area=1&menu=777. 
155 The other participating ministries are:  Defence, External Relations, Justice,  Finance, and the MDIC.  
Law No. 9,112 of 10 October 1995 defines as sensitive:  double-use goods that could be utilized for war 
purposes; goods of use in nuclear activities and equipment,  chemical or biological goods that may be used for 
war purposes;  services directly linked to the producti on or use of a sensitive good.  For the Control List see 
MCT online information.  Viewed at:  http://www.mct.gov.br/index.php/content/view/43073.html. WT/TPR/S/212 Trade Policy Review 
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technology that could lead to the de velopment of nuclear  weapons to Iran.156  Exports of some organic 
chemicals included in HS Chapter 29 are prohibited to non-signatories of the Montreal Protocol.  Exports of wood in the rough (HS 4403) have genera lly been suspended unless certain conditions are 
met, and are subject to prior approval of the IBAMA. 
(b) Export quotas and licensing 
191. Brazilian exports of certain bovine meat and pou ltry products listed in A nnex N of Ministerial 
Act (Portaria) SECEX N.36/2007, are subject to country-specific tariff quotas in the EU.  Quotas are 
administered through an export licensing procedure in  which producers accredited by the Ministry of 
Agriculture (MAPA) and accepted by the EU may participate as safe exporters of bovine 
meat/poultry.  Licences are issued by the Department of Foreign Trade (DECEX). 
192. Exports of certain wood (pine, imbuia, and viro la) is subject to specific rules and requires 
prior authorization from the IBAMA.  Exports of mahogany, Brazil wood, and cedar are subjected to permission by CITES, which is issued by the IBAMA.  Exports of jacaranda from Bahia (HS 
4407.29.90) are ruled by special norms on the grounds that this wood is becoming extinct.  Ministerial 
Act IBAMA No. 73 of 14 July 2004 abolished the wood quota system;  and Normative Instruction 
No. 77 of 7 December 2005, sets out the procedur es for exporting wood products and subproducts, 
including pine, imbuia and virola .  
193. Prior authorization is required from various ag encies for exports of a relatively large number 
of products, generally for safety, health, security or  environmental reasons, or when they are subject 
to export quotas.  The list included some 663 tariff headings at the HS eight-digit level in April 2008 (latest available information), representing some 6.8% of all tariff headings.
157  Various agencies are 
responsible for issuing the licences;  and some products require authorization by more than one 
agency.158 
(iv) Export support and related tax measures 
194. Establishing tax neutrality for exports remains a key element of Brazil's trade policy.  Brazil 
considers that this objective is served by the impl ementation of schemes such as the drawback system, 
export-processing zones, no indirect taxation on exports, and a Special System of Industrial Depots subject to Standardized Control.  The latter is sim ilar to the drawback system but is narrower in scope 
and may be extended. 
                                                     
 
156 In accordance with Decree No. 4.775, 9 July 2003 (Iraq);  (Decrees No. 4,742, 13 June 2003;  
No. 4,299, 11 July 2002,  No. 4,995, 19 February 2004 and No. 6,034, 1 February 2007 (Liberia);  
Decree No. 1,517, 7 June 1995 (Somalia);  Decree No. 2, 696, 29 July 1998 (Sierra Leone);  Decree No. 6,033, 
1 February 2007 (Ivory Coast);  and Decree No. 6,045, 21 February 2007 (Iran). 
157 Comprising mostly:  live animals;  live plants;  some oils and resins;  hides and skins from wild 
animals;  some types of wood;  a range of chemical products, in particular those in HS Chapter 29;  a group of 
medicines;  uranium and some other metals;  weapons;  and some vehicles and aircraft.  Some two thirds of the 
products are in HS Chapter 6.  For the complete list at the ten-digit HS level, containing 1,319 heading subdivisions (destaques) see MDIC online informatio n.  Viewed at:  http://www.desenvolvimento.gov. 
br/arquivo/secex/ conporexportacao/exigeanue ncia.pdf .[Website still at August 2007] 
158 The main agencies responsible for issuing li cences include:  the National Petroleum Agency;  
ANVISA (Brazilian Health Surveillance Agency);  th e National Commission of Nuclear Energy (CNEN);  the 
Commission of Civil Air Transport Coordination (COTAC);  DECEX;  the Federal Police Department (DPF),  
the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA);  the Ministry of Science 
and Technology (MCT);  and the Ministry of Defence, and the Army Command. Brazil WT/TPR/S/212 
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(a) Export subsidies 
195. The Export Financing Programme (PROEX) procedures used for the aircraft sector were 
redefined as a consequence of a WTO DSB ruling that  found that they constituted an export subsidy 
(section(v)(a) below).  The Brazilian Special Expor t Programme (BEFIEX), notified as subsidy to the 
WTO, and that provided the exemption or reduction of import duties and of the IPI on imports of 
machinery, equipment and accessori es, as well as of raw materials, intermediate products, and inputs 
to firms that exported industrial goods, subject to export performance targets, was discontinued on 
31 December 2002.159 
196. In 2003, Brazil notified WTO Members that it di d not grant export subsidies to agricultural 
products;  this corresponded to the 1999-01 period.160  No new notification has been submitted since 
then. 
(b) Drawback 
197. Brazil uses a drawback system that provides fo r the suspension, exemption, or restitution of 
tariffs.  The system also allows for the suspension of taxes such as the IPI, PIS, COFINS, ICMS, and 
AFRMM paid on imported inputs or parts used to produce exportable goods or to package them.161  
The drawback system is governed by Decree-Law No. 37 of 18 November 1966, as modified;  Law 
No. 8,804 of 8 January 1992;  Decree No. 4,543 of  26 December 2002;  and Ministerial Act SECEX 
No. 36 of 22 November 2007.  The procedures for granting the drawback were consolidated by 
Ministerial Act (Portaria) SECEX No. 36 of 22 November 2007;  if all the conditions for the 
drawback are not met, all taxes must be paid back with interest calculated at the SELIC rate. 
198. Users of the drawback regime are industrial or commercial enterprises engaging in foreign 
trade.  The requirement that the f.o.b. value of exports be at least 40% higher than the value of 
imported inputs was eliminated by Ministerial Ac t SECEX No. 36/2007.  The drawback regime as 
applied by the SECEX has two modalities:  suspensi on and exemption.  A third modality, restitution, 
is granted by the Ministry of Finance Secretaria t of Federal Revenue of Brazil (RFB), and it may 
imply the reimbursement of indirect taxes paid on imported goods used in the production or assembly 
of exported goods.  The authorities indicate  that this modality is rarely used. 
199. The suspension modality consists in deferring payment of import duties and other taxes on 
goods to be exported after transformation or assembly.  It is granted by the SECEX electronically for the minimum period required for importation, manuf acture, and exportation, maximum two years.  
However, the suspension of duties may be granted for a maximum of five years when the goods are 
imported to produce capital goods with a long producti on cycle.  Extensions to the benefits may be 
requested.  Within the suspensi on modality, there are some special cases, such as the generic 
drawback, the input drawback ( intermediário ), and the drawback for agricultural or livestock 
products. 
200. The exemption modality allows imports of inputs, free of import duties, the IPI, PIS, 
COFINS, and the AFRMM, in a quantity equivalent to those already imported tax paid, and used for 
the production of exported industrial goods, in accord ance with Law No. 10,865/2004, Article 14.  
Procedures and conditions are the same as for the suspension modality, except that companies must 
also present a request to the Banco do Brasil's office  in their jurisdiction, and proof of imports and 
                                                     
 
159 WTO document G/SCM/N/71/BRA, G/SCM/N/95/BRA, 30 July 2003. 
160 WTO document G/AG/N/BRA/21, 6 June 2003. 
161 Decree No. 4,543 of 26 Decem ber 2002, Articles 335, 336 an d 337;  Decree No. 4,544 of 
26 December 2002, Article 42;  Law No. 10.865, of 30  April 2004, Article 14. WT/TPR/S/212 Trade Policy Review 
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exports made.  Imports that benefit from the regime are subject to automatic licensing before they can 
clear Customs, and the drawback concession is valid for just one year. 
201. The restitution modality consists in a devolution of taxes already paid, through a fiscal credit 
to be used in any subsequent import operati on, as specified in Normative Instructions 
SRF No. 81/1998 and 680/2006. 
202. An electronic drawback system has been in  place since 1 November 2001.  The system 
operates through the SISCOMEX and integrates expor t and import operations.  To benefit from the 
electronic drawback system on their imports, exporte rs must obtain an import licence, processed and 
granted automatically through the SISCOMEX.162 
(c) Special System of Industrial Depots subject to Standardized Control (RECOF) 
203. The Special System of Industrial Depots subject to Standardized Control (RECOF), created 
by Decree No. 2,412 of 12 March 1997, and administered following Normative Instruction RFB No. 757, of 25 July 2007 suspends the payment of tariffs PIS, COFINS and the IPI levied on imports 
for industrial transformation and production of goods for export.
163  The suspension is for one year, 
with the possibility of an extension for an additi onal year, during which the goods must be exported or 
duties paid.  The RECOF's beneficiary base is na rrower than that of th e drawback suspension 
modality;  the RECOF is mostly aimed at assembly , transformation, and reconditioning activities in:  
the aeronautic industry (RECOF Aeronáutico);  th e  automotive industry (RECOF Automotivo);  the 
informatics and telecommunications industries (REC OF Informática);  and the semiconductors and 
high technology electronics industry (RECOF Semicondutores).  Concessions are approved by 
importer.  Under the RECOF, benefits may be ex tended beyond their initial period of one year, unlike 
the drawback system, which may not be extended. 
204. Authorization to use the RECOF is granted by  the Federal Revenue Secretariat of Brazil 
(RFB).  Enterprises must export products using the imports under the regime for a value of at least 50% of the value of the imports under the RECOF, and not less than US$10 million for companies benefiting from RECOF Informática and RECOF Se micondutores, and US$20 million for companies 
benefiting from the other RECOF modalities. 
205. Companies benefiting from the regime must have capital equal to or above R$25 million 
(some US$15 million.
164  Beneficiaries must also commit to cap sales to the domestic market at a 
maximum of 20% of the goods imported under the regi me.  This limit can be raised to 25% if the 
company exports annually, using the goods impo rted under the regime, for a value of over 
US$50 million, or of 30% if it exports over US$100 m illion.  Such sales are subject to all the taxes 
imposed on domestic acquisition or importation, with interest at S ELIC rates and applicable penalties 
in accordance with legal provisions.  The authorities note that the main products imported under RECOF from 2002 to 2007 were for the automotive and aeronautic industries. 
(d) Export-processing zones 
206. Export-processing zones (EPZs) in Brazil are regulated by Law No. 11.508, of 20 July 2007, 
as amended by Law No. 11.732, of 20 July 2008.   Companies established in EPZs are allowed to 
                                                     
 
162 MDIC online information.  Vi ewed at:  http://www.mdic.gov .br/comext/secex/drawback.htlm. 
163 Secretaria da Receita Federal do Bras il online information.  Viewed at:  
http://www.receita.f azenda.gov.br/Legislacao/ Ins/2007/. 
164 The modified rules governing the RECOF are specified in Normative Instruction RFB 
No. 757/2007. Brazil WT/TPR/S/212 
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acquire or import goods and services with suspensi on of import duty and of the Tax on Industrial 
Products (IPI), and the Contribution to Social Secu rity Financing (COFINS), the Contribution to the 
Social Integration Programme (PIS), and the Addi tional Freight for the Renewal of the Merchant 
Marine (AFRMM).  The suspension applies to new and used capital goods for use by enterprises 
authorized to operate in the EPZ, under certain c onditions.  To benefit from the scheme, firms must 
export 80% of the turnover related to the sales of  goods and services.  Products and services sold in 
the internal market, as well as the services and go ods used as inputs in the production of those 
domestic sales, are subject to all taxes imposed on domestic acquisition or importation.  All taxes 
must be paid with interest at the SELIC rate. 
207. Administration of EPZs is under the supervisi on of the National Council of Export Processing 
Zones (CZPE).  The CZPE is responsible for granting EPZs concessions, which are valid up to 20 years, renewable for the same period for long-term  investment amortization.   EPZs that do not start 
operations within twelve months of their agreed in stallation chronogram lose the right to installation, 
as established by Law No. 11.732 of 30 June 2008.  Companies that wish to establish in EPZs must 
submit an application in accordance to CZPE’s regulations, contained in Decree No. 6,634 of 
5 November 2008.  As at November 2008, 17 EPZs  had been authorized but none was yet in 
operation, awaiting full implementation of Decree No. 6,634. 
(e) Other export-related tax concessions 
208. In accordance with Decree No. 5,183 of 13 Au gust 2004, the withholdi ng tax on overseas 
payments and remittances for the promotion of ex ports is zero-rated, including for market research, 
promotion of products, rent of st ands, and participation in fairs.  Requests must be submitted to the 
DEPLA, as specified in Ministerial Act SECEX No 12, of 22 June 2007. 
(v) Export finance, insurance, and guarantees 
209. Brazil implements a number of other export financing, insurance, and guarantee schemes 
aimed at helping producers and exporters to access credit.
165  The Export Financing Programme 
(PROEX) is one of Brazil’s main tools to suppor t exports.  The programme is aimed at providing 
access to credit, at preferential conditions, to comp anies that would, otherwise, have difficulties 
obtaining it, or would be able do so only at the hi gh market interest rates in the domestic economy.  
The manner in which PROEX was applied to aircra ft exports was challenged in the WTO, and its 
procedures were modified twice during the period un der review after the DSB determined that they 
constituted an export subsidy.  In addition, the BNDES-EXIM programme provides preferential 
export credits linked to domestic content. 
(a) Export Financing Programme (PROEX) 
210. The Export Financing Programme (PROEX) is a federal government programme managed by 
the Banco do Brasil.  The PROEX is one of the mo st important export support schemes in Brazil (for 
goods and services) in terms of the value of exports covered.166  The PROEX is mainly, but not only, 
an important source of export funding for smal l and medium-sized companies involved in 
international trade.  The PROEX is aimed at financing Brazilian exports of goods and services at 
conditions similar to those obtaina ble in international markets.  
                                                      
165 Brazil has a relatively low credit to GDP ratio; it was 34.7% in D ecember 2007.  (Central Bank of 
Brazil (2008). 
166 Banco do Brasil online information.  Viewed at:  http://www.bb.com.br/portalbb/ page45,108,3396, 
8,0,1,2.bb?codigoMenu=190&codigoNoticia=180&codigoRet=310&bread=6. WT/TPR/S/212 Trade Policy Review 
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211. The PROEX was created in 1991 and was reviewed  in 1999.  In 2000, the criteria of PROEX 
Equalization were redefined, un der Central Bank Resolution CMN No. 2,799 of 6 December 2000, to 
implement the determinations of the DSB Panel on Brazil-Export Financing Programme for Aircraft 
(WT/DS46).167  The programme does not have an expiry da te.  The PROEX can be used for exports of 
goods and services.  The PROEX allows for exports to be grouped in a "package" containing 
ineligible goods, such as pieces and parts for mainte nance of machinery and equipment, to a value of 
up to 20% of the value of eligible goods. 
212. The PROEX has two modalities:  direct financ ing (PROEX Financing), and interest rate 
equalization support (PROEX Equalization).  It supp orted exports of approxima tely US$4.4 billion in 
2007, or 2.7% of total Brazilian exports, covering 1,986 transactions of 460 exporters;  disbursements 
by the Banco do Brasil were US$331.6 million for financing and US$183.8 million for rate 
equalization 168  Support in 2007 was below the US$5.5 b illion reported for 2002 in Brazil's previous 
Review. 
213. PROEX Financing is managed by the Banco do Brasil with resources from the Treasury 
directly to the exporter or to the importer for payment to the exporter.  It is focused on micro, small or 
medium-size enterprises, in accordance with Resolution CAMEX No. 27, of 6 May 2008, which 
defines companies with an annual turnover of up to R$150 million (around US$95 million) as eligible 
under the programme.  Exceptions are made for la rge companies on a case-by -case basis, such as 
when the credit is required for the fulfilment of Government en gagements resulting from bilateral 
negotiations or from export operations that may no t access other financing.  The decision to grant 
credit to large companies is taken by a Governme nt committee organized under CAMEX instructions.  
In 2007, small and medium-sized exporters repre sented 96% of beneficiary companies under PROEX 
Financing. 
214. Most credits are granted for between 60 days and 10 years, depending on the value added of 
the product or the complexity of the service rendered.  Exports with a domestic content of 60% or more are eligible for direct financing for 85% of th eir value, in the case of credits granted for over two 
years;  financing can be for up to 100% if it is for less than two years.  For goods with a domestic 
content of less than 60%, financing is reduced accord ing to the percentage below that threshold.  
International market interest rate s are applied;  credits are in U.S. dollars or other convertible 
currencies.  A financial guarantee is required.  Th e programme intends to grant access to credits to 
companies that would otherwise have difficulties obtaining it, or would be able to obtain it only at a 
higher cost in private banks.  The benchmark inter est rate adopted by the programme is the LIBOR.  
215. PROEX Equalization assumes part of the cost  of export credit provided by Brazilian and 
foreign banks (commercial a nd development) to make it equivalent to  that in the international market.  
The percentage financed can be up to 100% of the value of exports;  however, the percentage eligible 
for credit equalization is limited to 85% of the valu e of exports.  The period of equalization varies 
between 60 days and 10 years, in accordance with the value added generated, or the complexity of the 
service rendered.  However, the financing conditions (period, financing percentage, interest rate, and 
guarantees) may be negotiated by the banks with the exporter, and do not need to coincide with the 
equalization conditions. 
216. Equalization is paid to the bank granting the export credit, through the issue of Brazilian 
National Treasury Notes (NTN-I);  these may be conv erted to currency on the dates the credit interest 
payments are made (semi-annual), or may be discounted for a lump-sum in the market.  The notes are 
issued in the name of the lending bank, and may onl y be redeemed in Brazil and in domestic currency, 
                                                     
 
167 As notified to the WTO in WTO document G/SCM/N/71/BRA, G/SCM/N/95/BRA, 30 July 2003. 
168 Banco do Brasil (2008). Brazil WT/TPR/S/212 
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at the exchange rate prevailing at the time of paymen t.  If the lending bank is located outside Brazil, it 
may appoint a Brazilian bank as its agent to receive  the semi-annual payments on its behalf.  The 
maximum per company was recently increased from US$10 million to US$20 million. 
217. PROEX equalization payments for regional aircraft  were the subject of a dispute with Canada 
under the WTO dispute settlement mechanism.  A Pane l found that payments on exports of regional 
aircraft under the PROEX interest rate equalizati on scheme were export subsidies inconsistent with 
the SCM Agreement and recommended that Brazil withdraw the subsidies.169  As a result of the 
recommendations, Brazil redefined the criteria for th e Equalization Programme.  Canada subsequently 
claimed that Brazil did not phase out the subsidy as required, and the original  Panel concluded that 
Brazil had failed to implement its recommendati on;  the Appellate Body upheld the Panel 
conclusion 170  To address the DSB recommendations, Brazil again redefined the criteria for PROEX 
Equalization (PROEX III), specifying that financ ial equalization operations involving exports of 
aircraft for regional aviation must not result in net interest rates lower than the Commercial Interest 
Reference Rate (CIRR), as published monthly by the OECD. 
218. In January 2001, Canada requested a new DSB proceeding for PROEX III.  The Panel 
concluded that PROEX III, as such, was not inconsis tent with the SCM Agreement, but noted that it 
did not necessarily follow from their previous conclu sion that future application of the PROEX III 
programme would be likewise cons istent with the SCM Agreement.171  CAMEX Resolution No. 29 of 
31 July 2007 reinforced the policy that Brazilian o fficial support to the exportation of aircraft must 
follow the new 2007 OECD Aircraft Sector Unde rstanding on Export Credits for Civil Aircraft 
(ASU).172 
219. CAMEX Resolution No. 35 of 22 August 2007 implementing Law No. 10,184, of 
12 February 2001 and Law No. 11,499/2007, exte nded the scope of the PROEX Financing and 
Equalization schemes to support Brazilian exports to c ountries, projects or sectors with limited access 
to financing at market conditions.  This was la ter confirmed by CAMEX Resolution No. 27 of 6 May 
2008, which revoked Resolution No. 35.  The authorities indicate that the financing is to be provided 
on a case-by-case basis, mainly for social and humanitarian reasons, after examination and 
deliberation by CAMEX's Council of Ministers, ta king into consideration the provisions for trade-
related aid in the OECD Arrangement on Guidelin es for Officially Supported Export Credits.  The 
financing goes to the purchaser and a number of cond itions must be met;  35% of the credit must be 
financed with domestic funds. 
220. The Export Financing and Guarantee Committee (COFIG) created by Decree No. 4,993 of 
18 February 2004, part of CAMEX, is responsible for supervising the operations of the PROEX and 
of the Export Guarantee Fund (FGE) and establishing the parameters and conditions for the granting 
of financial assistance.  COFIG is presided by a representative of the MDIC, and has representatives 
from other government bodies, such as the Ministries of Finance, Foreign Affairs, and Agriculture. 
                                                      
169 WTO documents WT/DS46/R, 14 April 1999 and WT/DS46/AB/R, 2 August 1999. 
170 WTO documents WT/DS46/RW, 9 May 2000 and WT/DS46/AB/RW, 21 July 2000. 
171 WTO document WT/DS46/RW2, 26 July 2001. 
172 The new ASU is much broader than the 1986 framework (OECD online information. Viewed at:  
http://www.oecd.org/document/49/0,3343,en_2649_201185_39052529_1_1_1_1,00.html). WT/TPR/S/212 Trade Policy Review 
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(b) BNDES EXIM 
221. The BNDES-EXIM programme, operated by th e BNDES, provides export credits for 
products listed in Circular-Letter BNDES No. 31/2007 of 30 July 2007.173  Products with a domestic 
content, in value terms, of at least 60% are automa tically eligible for financ ing;  products not meeting 
this requirement may also benefit from the programme  subject to a non-automatic analysis procedure.  
Operations are conducted through accr edited financial institutions.  The total financial cost for the 
borrower is the relevant interest rate plus the BNDES' remuneration plus the financial institution's 
remuneration .  All exporting companies, regardless of the or igin of the capital, are eligible to use the 
programme.  The list of eligible goods, which comp rises three groups of products, covers over 80% of 
the list of goods exported by Brazil.  There are six financing modalities (Table III.6).  Financing 
granted in 2007 totalled US$4.2 billion, (2.6% of total exports), down from US$6.4 billion (4.6% of 
total exports) in 2006, and US$4 billion, (5.5% of to tal exports) reported in Brazil's previous Review 
for 2003.174 
Table III.6 
BNDES-EXIM programmes 
Programme Conditions Rates/charges 
Preshipment Financing can be for up to 100% of the f.o.b. value of 
exports.  Credit is granted for up to 18 months.  
Where  the production cycle is over 12 months, the 
period may be extended to 24 or 30 months. To benefit from the preshipment programme, the exporting 
company must be located in Brazil.  Interest rates are:  (a) for 
micro, small or medium enterprises:  the TJLP or the 6-month LIBOR adjusted by the variation of the U.S. dollar ;  (b) for 
large enterprises regardless of the origin of the capital:  the 
TJLP or the 6-month LIBOR adjusted by the variation of the 
U.S. dollar for goods included in Group I of the list of eligible products;  for goods included in Groups II and III, at most 
80% of the TPJP plus at least 20% of the TJPE adjusted by th
e
variation of the U.S. dollar.  The BNDES charges, in addition, 
a remuneration rate of 1% to micro, small and medium 
enterprises, and of 2% or 2.5%  to large enterprises, depending 
on whether the goods financed are in Group I, or Groups II or 
III. 
Agile (short-term) 
preshipment Finances 30% of an export engagement to be 
performed in the following 6 or 12 months. Terms 
are similar to those for preshipment credits. The interest rate charged is the same as for the regular 
preshipment programme. 
Special preshipment Programme can be used only if there is an increase 
in the value of exports;  th e value to be financed is 
limited to the difference between the value of the 
exports to be made in the following 12 months, and  those made in the previous 12, 24 or 36  months.  
The financing period is up to 18 months for small 
enterprises and up to 15 months for large ones;  these can be extended to 30 months if agreed export 
increase goals are met. The interest rate on the outstanding debt corresponding to the 
agreed export increase is the same as for the regular 
preshipment programme.  Where the agreed export increase 
is not achieved, the BNDES remuneration varies inversely with the actual increase in exports as a percentage of the 
expected increase.  The remuneration margins vary between 
2.5% and 20% 
Preshipment "Anchor" Geared to companies that make indirect exports by 
micro, small and medium size companies, viable.  
Financing is for up to 100% of the f.o.b. value.  Same conditions as the preshipment programme for micro, 
small and medium-size enterprises. 
   
Table III.6 (cont'd)
                                                      
173 Products that may be financed include items from all NCM chapters , except chapters 01, 10, 11, 12, 
14, 26 27 and 43.  In most cases, whol e chapters are included in the three groups;  in some cases, products are 
disaggregated at the four- or eight-digit level.  S ee Circular-Letter BNDES No. 31/2007.  Viewed at:  
http://www.bndes.gov.br/produt os/download/Rel_prod.pdf. 
174 BNDES online information.  Viewed at:  http://www.bndes.gov.br/ exportacao/default.asp. Brazil WT/TPR/S/212 
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Programme Conditions Rates/charges 
Preshipment 
"Automovéis" The preshipment "Automovéis" modality finances 
exports of motor vehicles classified under NCM 
87.03, associated with an export engagement.  Financed items must have an index of 
nationalization (domestic components) of at least 
60%. Financing is for up to 55% of the export engagement value, 
for up to 15 months, divided into two sub-credits:  20% of 
the credit at the TJFPE and 80 % at the TJLP rate.  BNDES 
remuneration is 3% for the first sub-credit and up to 4.5% for 
the second. 
Post-shipment Post-shipment financing takes the form of 
refinancing to clients abroad, through the discount of promissory notes or letters of credit, issued for the 
purchase of Brazilian goods on the list of products 
that may be financed.  The refinancing is for up to 12 years, for up to 100% of the value exported. The cost of refinancing is the LIBOR corresponding to the 
financing period plus a BNDES remuneration which varies according to the risk incurred pl us the financial institution's 
remuneration.  A management fee administrative 
commission of up to 1% and a commitment fee of 0.5% are also levied.   
 Note:  The BNDES classifies micro, small and medium-sized enterprises as those with annual operational gross revenues of less than or 
equal to R$60 million;  large enterprise are those w ith  annual operational gross revenues of over R$60 million. 
 TJLP: The long term interest rate is fixed by Brazil’s National Monetary Council and is the sum of the inflation target and a r isk 
premium, which incorporates a real interna tional interest rate and a country-risk elem ent as viewed over the medium to long ter m 
(see section (4)(iv)). 
TJPE:  The preshipment fixed interest rate is set by BNDES quarterly to be applied in expor t dollar-denominated cr edit so as to reflec t 
the BNDES external funding costs. 
 
Source: WTO Secretariat; and information provided by the Brazilian authorities. 
222. Post-shipment financing takes the form of refi nancing to clients abroad, through the discount 
of  promissory notes or letters of credit, issued  for the purchase of Brazilian goods on the list of 
products that may be financed.  The refinancing is  for up to 12 years, on up to 100% of the value 
f.o.b. exported. 
223. The cost of refinancing is the LIBOR corres ponding to the financing period plus a BNDES 
remuneration, which varies from 1% to 2.5% accord ing to the risks incurre d, plus the financial 
institution's remuneration.  An administrative commission management fee of up to 1% and a 
commitment fee of 0.5% are also levied. 
(c) Export insurance and guarantees 
224. Brazil provides export insurance through the E xport Credit Insurance (SCE) scheme, which 
guarantees and covers losses incurred by exporters from non-receipt of foreign payments for their 
exports at market conditions.  Law No. 6,704 of 26 October 1979, sets out rules for export credit 
insurance, and Decree No. 3,937 of 25 Septembe r 2001 regulates the law.  The SCE covers any 
exporter or financial institution that finances or refinances exports.  There are five specialized 
institutions authorized to operate the SCE for goo ds and services against commercial, political, and 
extraordinary risks in short-term transactions, for up to 90% of the risk:  the Brazilian Export Credit 
Insurance Company S.A. (SBCE);  SECRESB;  Euler Hermes;  Credit y Caución;  and Mapfire.  The 
five insurance companies are private, althou gh SBCE has two public companies as minority 
shareholders. 
225. The SBCE is the only institution authorized to  operate the SCE for medium and long-term 
operations.  It provides coverage for external Brazilian sales against commercial, political, and 
extraordinary risks.175  The value of exports covered by the SBCE totalled US$7.28 billion over 2004-
07, representing 1.42% of total exports.  The main us ers of export insurance credit have been the civil 
construction and capital-goods industri es.  All banks may use the SBCE for short-term operations.  In 
practice, only BNDES and Banco do Brasil use the SBCE, for the medium and long-term operations 
under the SCE. 
                                                      
175 SBCE online information.  Viewed at:  http://www.sbce.com.br/us/aEmpresa.asp. WT/TPR/S/212 Trade Policy Review 
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226. SBCE short-term operations (under to two years)  generally take the form of an annual global 
policy by the exporter, usually applied to products  with shipment periods of up to 180 days.  For 
certain products, such as some equi pment, this period may be exte nded for up to two years, depending 
on prior analysis.  Export credit insurance cove rage is to a maximum of 90% of the risk. 
227. For medium and long-term commercial operati ons (over two years), and for political and 
extraordinary risks of any term, the SBCE acts on be half of the Government and coverage is through 
the Export Guarantee Fund (FGE), created by Law No. 9,818 of 1999, represented by IRB-Brasil Re until 2006 and by the International Affairs Secretariat of the Ministry of Finance (SAIN), since then.  
It is operationalized by the SBCE.  SBCE is responsible for all the technical analysis and management 
of the policies;  export credit coverage granted by the Government varies in relation to risks involved, 
as a general rule, to a maximum of 90%.  This type  of insurance is geared, in general, to projects 
involving capital goods, services, and other specific contracts.  Policies can be of two types:  supplier's credit, issued on behalf of the exporter;  and buyer's credit, issued on behalf of a bank.  
Decree No. 6,314 of 20 December 2007 extended the gua rantees granted under the FGE to four years 
in the case of defence-related exports. 
228. Reinsurance coverage is provided by the Br azilian Institute of Reinsurance (IRB-Brasil 
Resseguros S.A, or IRB-Brasil Re) only for short- term operations.  The cost of a specific policy 
depends on:  the country of exportation;  the tota l volume to be exported per country;  the type of 
product to be exported;  the characteristics of th e importing entity;  and previous losses incurred by 
the exporter. 
(vi) Export promotion and marketing assistance 
229. The Brazilian Trade and Investment Promo tion Agency (APEX-Brasil), an autonomous 
agency, was established under Decree No. 4,584 of 5 February 2003 and Law No. 10,668 of 14 May 2003, and works in association with the MD IC.  It is in charge of coordinating and 
implementing export promotion policies in Brazi l, with a focus on small and medium-sized 
enterprises.  Additionally, APEX Brasil is in char ge of attracting foreign investment to Brazil.  
APEX-Brasil's main goals are to increase and dive rsify Brazilian exports, expand the insertion of 
Brazilian companies in the world market, consolidat e existing markets, and open up new ones.  It is 
mandated to focus particularly on export activities that may favour small enterprises and the creation 
of jobs.  The Deliberative Council, APEX-Brasil' s top managing body, has representatives from both 
the public sector (MDIC, Ministry of External  Relations, CAMEX, and BNDES), and the private 
sector.  A Technical Cooperation Programme between  MDIC and APEX-Brasil has been prepared for 
services. 
230. Support is granted mainly to activities and actio ns that help to enhance Brazil's exports, 
including seminars and workshops, market researc h, training, marketing and advertising, and 
participation in trade fairs abroad.  The total r esources allocated by APEX-Brasil, in 2004-07, for 
operational expense and trade and investment  promotion activities, amounted to around 
US$591 million.  Support for export promotion is executed through the co-financing of projects, 
generally limited to 50% of the total value, but up to 75% for projects considered of special social 
interest.  As at April 2008, APEX-Brasil had 326 ongoing projects with Brazilian industry or trade 
associations representing 70 manufacturing and services sectors.
176 
                                                      
176 Projects areas include:  food and beverages;  building materials;  furniture;  design services;  textiles 
and clothing;  cosmetics;  construction;  electrical goods;  machinery and equipment;  ethanol;  audiovisual;  
aircraft components;  and penetration of international markets.  APEX online information.  Viewed at:  http://www.apexbrasil.com.br/. Brazil WT/TPR/S/212 
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(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Legal framework for production and investment 
231. The legal framework for production and investme nt is somewhat complex due to the large 
number of tax and incentive schemes, and the number of procedures. 
232. Brazilian legislation requires companies to be registered in one of two public registries 
(commercial or civil) in the State in which the co mpany is headquartered.  Companies with mainly 
commercial activities must be registered in one of the 27 state commercial registries.  Companies not 
undertake commercial activities must register in the civil registry. 
233. Since the last Review of Brazil, measures have been adopted to provide a legal framework to 
foster efficiency in registration procedures.  Th ese include the Micro and Small Business General Law 
(Supplementary Law No. 123/2006) and the National Network for Simplification of Registry and 
Legalization of Businesses – REDESIM (Law No . 11,598/2007), which have implemented the 
principle of single data entry, to avoid unnecessary multiple entries in diverse public agencies.  Also, 
measures have been adopted to issue a provisiona l licence to start a business.  These new measures 
are compulsory for public entities in regard to small and micro businesses, but voluntary for State and 
Municipal authorities in regard to larger companies. 
234. Commercial companies are usually established as limited liability ( limitadas ), in accordance 
with the Civil Code, or as corporations, unde r Law No. 6,404 of 15 December 1976 (Brazilian 
Corporation Law), which distinguishes between closed  and open (publicly held) companies.  Brazilian 
legislation provides for:  simple companies, general partnerships, partnerships by shares, corporations, 
and private limited liability companies.177  A joint stock company or public company ( sociedade 
anônima or companhia ) is a business corporation, with capital stock represented shares.178 
235. Only publicly held companies are permitted to raise funds through public offerings of 
securities.  They are subject to regulations set out by the Brazilian Securities Commission (CVM), which include periodic filing and other specific requi rements.  Under CVM rules, purchases of shares 
that lead to a stake of 5% or more in a public company require disclosure of  information regarding the 
purchaser and the transaction, including the reasons  for acquiring the shares.  In some cases, the 
acquirer must undertake a public tender offering fo r the remaining shares of the same class, for 
example when acquiring a controlling block or more than  a third of the shares of a specific class (free 
float).  Privately held companies are not regul ated by the CVM and may only place their securities 
privately.   
236. Foreign enterprises may operate in Brazil throu gh either a subsidiary (when a new legal entity 
is incorporated under Brazilian law), a branch or a representative office (when the interested 
enterprise does not plan to incorporate a new lega l entity under Brazilian law).  The distribution and 
remittance of profits abroad are exempt from withhol ding tax.  Foreign capital must be registered 
through the Central Bank's Electronic Declaratory Registry-Foreign Direct Investment (RDE-IED).  
Profit remittances must also be registered in the RDE -IED.  Reinvested earnings are also registered, in 
                                                     
 
177 The corresponding names in Portuguese are:  so ciedades simples;  sociedade em nome coletivo and 
sociedade em comandita simples;  so ciedade limitada;  sociedade anônima;  and sociedade em comandita por 
ações (Legal Guide for the Foreig n Investor in Brazil, 2007.  Vi ewed at:  http://www.braziltradenet. 
gov.br/CDINVESTIMENTO/?Idioma=I). 
178 As described in Article 1,088 of Brazilian Civil Code, and Law No. 6,404/76, and partially amended 
by Law No. 9,457 of 5 June 1997, and Law No. 10,303 of 31 October, 2001. WT/TPR/S/212 Trade Policy Review 
Page 70 
 
 
the currency of the country to which the remittan ce was due.  Foreign capital registered with the 
Central Bank may be repatriated without approval requirements. 
237. Companies are subject to taxes at the federal and the state levels (Table III.7).  Foreign trade, 
income, and capital gains taxes, and social contribution taxes, and othe r taxes are levied at the federal 
level.  Social contributions are also levied at the federal level.  Consumpti on is taxed by the Union, 
the States and the municipalities. 
Table III.7 
Principal taxes applicable to companies 
Tax Statutory tax rate (%) / tax base Comments 
Corporate income tax (IRPJ) Annual profits up to R$48 million:  15%;  
additional profits:  10% and 27.5%, depending 
on the income bracket;  net profits exceeding R$20,000 per month are subject to an additional 
10% tax. / taxable profits For corporations, income tax is assessed on profits 
and capital gains generated by operations in Brazil 
or abroad.  Corporate income is taxed on net profits, minus deductions, at 15%;  on a world-wide 
basis 
Payroll tax 20% / gross salaries  
Severance contribution (FGTS) 8% / gross salaries  
Withholding tax (IRF) Overseas remittances are taxed at:  interest, 
royalties, technology and know-how related 
payments:  15%;  and services' fees:  at 25% Since 1996, dividends are not subjected to 
withholding tax.  An adjustment fee of 10% is 
charged on remittances of royalties or 
compensation deriving from technology transfers, 
when the IRF is 15%. 
Contribution for the social 
integration programme (PIS) 0.65%:  cumulative regime/ turnover Rate s are levied on companies' turnover 
The social contribution on 
profits (CSL) 9% / taxable profits  
The social security 
contribution (COFINS) 3% gross income (cumulative regime)/ turnover  
Environmental tax (TCFA) Rates are variable Applies to entities that may cause pollution, 
defined in Annex VIII of Law No. 10,165 of 27 
December 2000.  Rates are based on the size of the 
entity;  rural owners pay reduced rates 
Source:  WTO Secretariat. 
238. The World Bank has classified Brazil 122nd out of 178 countries with respect to ease of 
doing business;  Brazil ranked particularly low in the area of taxation.179  Studies have found that 
Brazil's tax system is relatively complex, with a number of federal and state taxes.180 
239. The authorities note that the Brazilian Governme nt expressed, in writing, to the World Bank 
that it did not concur with its findings, since several inconsistencies rendered the conclusions 
inappropriate and unsustainable.  In the context of this Review, the authorities further note that they do not consider the tax system to be complex, as most taxpayers, including small and medium-sized 
companies pay taxes under simplified legislation. 
240. Law 11,638/2007 of 28 December 2007, which entered into effect on 1 January 2008, 
amended several articles of the Corporations Act (Law 6,404/76).  The law introduced a set of 
requirements that change accounting standards and fi nancial statements for Br azilian corporations and 
large companies not formed as corporations (with assets above R$240 million (US$137 million) or 
annual gross income above R$300 million (US$17 1 million) to make Brazil’s accounting principles 
fully converge to interna tional accounting standards. 
                                                     
 
179 World Bank online information.  Viewed at:  http://www.doingbusiness.org/economyrankings/. 
180 See Souza (2005) for a description of the Braz ilian tax system and its reform through time.   Brazil WT/TPR/S/212 
 Page 71 
 
 
241. The social security contribution  (COFINS) and the contribution for the social integration 
programme (PIS) are levied on companies' turnover,  generally following the non-cumulative principle 
of a value-added tax (see section(2)(v) above).  However, certain companies are subjected to a 
cumulative regime:  financial businesses;  companies that pay corporate income tax and social 
contribution on profits based on presumed prof its;  small companies;  telecommunications, 
information technology and media enterprises;  pub lic transportation;  and concessions to explore 
highways.  Under the cumulative regime, the PIS and COFINS rates are 0.65% and 3%, respectively, levied on companies' turnover;  no credit is allowed in these cases. 
242. Companies that are subjected to the cumulative regime can obtain a credit on the PIS and 
COFINS included in the price of raw materials a nd inputs used in the production of exported products 
and use it against IPI payments.  Exporters may also benefit from a tax credit as compensation for the PIS and COFINS paid for inputs and packaging material used for export.
181  The amount of credit is 
calculated by multiplying the ratio of export earnings to total earnings by 5.37%, in accordance with 
Ministerial Act MF No. 093 of 27 April 2004.  The tax credit obtained can be used against IPI payments due on sales in the domestic market.  Benefi ciaries have 180 days from the date they were 
granted the credit to perform the export operation.  The authorities note that few companies use this 
scheme, as most use the non-cumulative regime. 
243. The States and the Federal District are empowered to levy:  an inheritance and gift tax (ITD);  
a tax on circulation of goods, in terstate and inter-municipal trans port, and communications (ICMS);  
and a tax on ownership of motor vehicles (IPVA).  The ICMS, the main state tax, is due on operations 
involving the circulation of goods (including manuf acturing, marketing, and importation) and on 
interstate and inter-municipal transport and comm unications services.  The ICMS is non-cumulative, 
and thus tax due may be offset by credits arisi ng from the purchase of raw materials, intermediary 
products, and packaging materials.  Intra-state rate s vary from 7% to 25%;  the average rate is 17-
18%.  Rates for interstate commerce are 7% or 12% , depending on the destination (see section(2)(v)).  
Exports are exempted from the ICMS.  Municipalities a nd the Federal District are empowered to levy:  
an urban property tax (IPTU);  a tax on real estate transfers (ITBI);  and a services tax (ISS).  The ISS 
is levied on certain services listed in a supplementary  law, and the average rate may vary from zero to 
5%. 
(ii) Pricing and competition policy 
(a) Pricing arrangements 
244. Brazil has no legislation empowering the Governme nt to introduce price controls, in general, 
with the exception of medicines, which are still under price control, under Law No. 10,742 of 
6 October 2003.  Brazil did not introduce any new pr ice controls during the review period.  Although, 
in general, prices are market-determined, minimu m prices are used for a few agricultural products 
(Chapter IV(2)).  Utilities' tariffs  are generally regulated by th e corresponding supervisory body;  
intervention is generally limited to the fixing of ma ximum tariffs, especially for smaller consumers.  
Prices charged for some services, such as rail and road transport, are regulated, as are domestic air 
fares, and electricity rates. 
245. Special provisions apply for medicines (prici ng issues) under Law No. 9,782 of 1999, and for 
health care under Law No. 9,961 of 2000.  The authorities note that some 90% of medicine prices are fixed.  Brazil's Health Ministry has more recen tly adopted a policy of setting a mandatory minimum 
discount (CAP) of 24.92% on certain high-cost medications used to treat chronic diseases.  The 
                                                     
 
181 Law No. 9,363 of 13 December 1996, Law No. 10 ,637 of 30 December 2002, and Law No. 10,833 
of 29 December 2003. WT/TPR/S/212 Trade Policy Review 
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discount, regulated by Resolution CMED No. 4 of 18 December 2006, Communiqué CMED No. 15 
of 28 December 2007, and Resolution CMED No. 2 of 14 March 2008, must be implemented by 
distributors and/or laboratories when selling to the public health system.182  The list comprises drugs 
to treat AIDS, cancer, Parkinson's disease, Alzheimer's, and arthritis.183 
(b) Competition policy 
246. During the period under review, Brazil has con tinued to reinforce its competition policy 
system, and improvements have been adopted, in lin e with an OECD report, (see below).  However, 
Brazil still faces challenges in consolidating the investigative, prosecutorial, and adjudicative 
functions of its bodies into one autonomous agency .  Enforcement activities continued to focus on 
preserving competition in the market, and on surveilla nce of the activities of international cartels. 
247. Administration of competition policy is the respons ibility of the three agencies that constitute 
the Brazilian Competition Policy System (BCPS):  th e Administrative Council for Economic Defence 
(CADE);  the Secretariat of Economic Law (SDE);   and the Secretariat for Economic Monitoring 
(SEAE).  Competition policy legisla tion is contained in Law No. 8,8 84 of 11 June 1994, as amended 
by Law No. 10,149 of 21 December 2000, and by Law No. 11,482, of 31 May 2007.  Resolution 
No. 45, of 28 March 2007 approved CADE's Internal Regulations. 
248. The SDE, a decentralized body in the Ministry of Justice, has authority to investigate any 
irregularities in an economic sector and to open ad ministrative proceedings accordingly.  It is the 
main investigative body with respect to competition policy issues.  The SEAE, under the Ministry of 
Finance, may also start investigations ex officio  or by request of third party.  Both bodies prepare non-
binding reports used by CADE when judging cases.   
249. CADE, an autonomous agency linked to the Ministry of Justice, for budgetary reasons, has 
been functioning since 1962, and acts as an administrative tribunal.184  Its main functions are to 
undertake administrative proceedings and consultati ons, fiscalizing, preventing, and investigating 
abuse of economic power.185  CADE's board comprises of a president and six members, named by the 
President of Brazil and approved by Congress.  CADE is the tribunal of last instance on competition 
policy issues;  the administrative sphere, it is res ponsible for the final decision regarding competition, 
after having received non-binding opinions from the SEAE and SDE. 
250. Anti-trust legislation applies to all sectors;  no immunities are listed in Law No. 8,884 of 
1994.  CADE rules apply in general;  some sect ors, however, considered by the Government to 
require a specialized approach, are subject to specifi c simultaneous legislation and are supervised by 
specialized regulatory agencies, including:  en ergy, telecommunications, and gas and petroleum 
(see Chapter IV(4) for details).  CADE and th ese agencies have complementary competence. 
Regulation does not preclude CADE’s jurisdiction to  rule on an operation or conduct, taking into 
consideration its particular regulatory frame. 
251. Law No. 8,884 of 11 June 1994 prohibits any practice aimed at:  restricting, limiting, or 
harming free competition;  dominating the relevant market of goods or services;  arbitrarily increasing 
profits;  or abusing dominant market position.  It lists a range of prohibited horizontal and vertical 
                                                      
182 Ministry of Health online information.  Viewed at:  http://portal.saude.gov.br/portal/saude/visualizar 
_texto.cfm?idtxt=27943. 
183 For the most recent version of the list (August 20 08) see Portal Saude online information.  Viewed 
at:  http://portal.saude.gov.br/por tal/arquivos/pdf/cap_cmde_26_8_08.pdf. 
184 CADE online information.  View ed at:  http://www.cade.gov.br/. 
185 CADE online information.  View ed at:  http://www.cade.gov.br. Brazil WT/TPR/S/212 
 Page 73 
 
 
practices that may result in competition r estraints.  Practices are not prohibited per se , but due to their 
effect;  they are considered illegal only if they  have anti-competitive effects or the potential for 
causing them.  Anti-competitive practices are examined case-by-case, using a rule-of-reason 
approach. 
252. Brazilian legislation provides for the monitoring of all acts and contracts that may limit or in 
any way harm competition or result in the dominance of relevant goods or services markets, including those expressly aimed at any type of economic con centration.  CADE must, according to the Article 
54 of Law No. 8,884/94, analyse the effect of mergers and acquisitions, especially in view of potential damage or restriction to free competition.  An titrust legislation assumes this to be the case in 
economic concentrations of more than 20% of th e market for the good or service being analysed, or 
whenever one of the enterprises has a gross income of over R$400 million.  As a result, CADE's 
approval is required for any act resulting in these th resholds.  If the deal proves to be damaging to 
competition, CADE has the power to impose obliga tions on the companies involved or to determine 
the total or partial sale of the assets involved or th e alteration of contracts as a condition for approval 
of the transaction.  Mergers and acquisitions are analysed ex-post ;  pre-merger analysis is not 
conducted as current legislation does not require pre-merger notifications.  
253. Brazilian legislation establishes a system of merg er control, pursuant to Law No. 8,884/94, 
with the rule of reason as the fundamental princi ple.  To facilitate the analysis of mergers and 
acquisitions, the Ministry of Finance and the Minist ry of Justice, have developed horizontal merger 
guidelines, which set out the procedures and principles to be adopted by SEAE and SDE in the 
analysis of mergers, and outline the main steps of the antitrust analysis.
186  Acts of economic 
concentration leading to a reduction in competition ma y be approved if they are considered by CADE 
to be in the public interest, but technical aspects  will also be considered in the analysis.  The 
authorities note that the horizontal merger guidelines, based on Article 54 of Law No. 8,884/94, specify that consumer welfare must be taken in to account in such cases, and that, hence, public 
interest should also be understood in terms of econom ic efficiency.  To date, no such cases have been 
approved. 
254. Law No. 11,482, of 31 May 2007 modified Br azilian antitrust legislation to clarify the 
circumstances and conditions under which CADE may engage in a cease- and -desist settlement with 
an investigated party on a practice or its effects.
187 
255. The authorities note that new draft competition policy legislation is being analysed by 
Congress (November 2008).  The new legislation c ontains changes to competition policy law to 
enhance the CADE's powers and to introduce a system of pre-merger notifications. 
256. The number of mergers and acquisitions reviewed by CADE and the number of complaints on 
anti-competitive practices increased during the peri od under review.  Cases reviewed rose from 430 in 
2006 to 599 in 2007, just short of the peak of  621 in 2001.  In 2007, CADE judged 563 cases of 
mergers and acquisitions, a large increase from 2006 (402):  of these, 490 were approved without any 
conditions;  37 cases were approved w ith conditions;  and the remaining 36 were closed and archived 
due to lapse or appeal.  CADE approved the vast majority of the mergers and acquisitions reviewed 
during the January 2004-March 2008 period.188  Some of the most prominent mergers during the 
                                                      
186 For the guidelines in English, see CADE online information.  Viewed at:  http://www.cade.gov.br/ 
internacional/Horizontal_Merger_Guidelines.pdf. 
187 Viewed at:  http://www.cade.go v. br/ legislacao/11482lei.asp.  Law No. 11,484 (in Portuguese 
only). 
188 CADE em números .  Viewed at:  http://www.cade.gov .br/english/apresentacao/graficos/ 
cade_numbers.asp.  WT/TPR/S/212 Trade Policy Review 
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review period include:  the acquisition by Compa nhia Valle Do Rio Dolce (CVRD) of four iron-ore 
mining companies and their associated rail lines;  the Sky-DirecTV case that brought together the two 
largest paid television companies in Brazil that make use of DTH technology;  and the Petrobras/White Martins JV joint venture to explore for liquefied natural gas.
189 
257. CADE analysed 42 cases of possible anti-compe titive action during 2007, up from 37 in 2006 
and 41 in 2005.  Of the 37 cases in 2006, 30 were  judged and six of them were found guilty (all 
related to cartel practices) and resulted in th e imposition of fines totalling R$552,469 and other 
sanctions;  three settlements were signed.  Also, in  2006, 94 fine collecti on procedures were initiated 
leading to collection of a record amount of R$10.7 million (US$6.7 million) in fines.190 
258. A joint IADB/OECD 2005 review of Brazil's competition policy notes that Brazil made 
substantial headway during 2000-05 in implemen ting sound competition policy, particularly by 
increasing efficiency in merger reviews, reallocati ng resources to cartel enforcement, eliminating the 
case backlogs in CADE investigations, establishi ng a certification system for antitrust compliance 
programmes, and enhancing the agencies' capacity to undertake economic analysis.191  The report 
notes, however, that Brazil still faces challenges, and recommended, inter alia  that it:  consolidate the 
investigative, prosecutorial, and adjudicative func tions of the SBDC into one autonomous agency;  
consider the economic feasibility of establishing regional CADE offices;  modify the merger notification and review process to adopt an e xplicit standard for reviewing the competitive 
implications of merger transactions;  establish a pr e-merger notification system;  eliminate the present 
market share notification threshold, and adopt thr esholds based on the domestic turnover of both the 
larger and the smaller parties to the transacti on;  and eliminate notification of non-merger 
transactions. 
259. During the period under review, the Brazilian co mpetition authorities have continued with the 
work on modernizing competition law and policy.  The focus has been on anti-cartel enforcement, 
merger review, and competition advocacy.  In this respect, Brazil has been conducting an Anti-Cartel 
Programme focused on cracking cartels, and which includes a Leniency Programme and a Cartel 
Settlement Programme.
192  The authorities indicate that there ar e a growing number of candidates for 
the Leniency Programme:  10 ag reements have been signed si nce 2003, and others are being 
negotiated.  As a result, the number of search warr ants served has increased significantly:  from 2003 
to 2005, 11 warrants were served a nd two people were arrested temporarily;  in 2006, 19 warrants 
were served; and from January to November 2007 , 84 warrants were served and 30 people were 
arrested temporarily.  With respect to merger review, a number of time-saving measures were 
adopted, such as a fast-track procedure in 2004 and the SEAE-SDE joint review mechanism for 
complex transactions.  In addition, in August 200 7, SDE and CADE signed a cooperation agreement 
applicable to transactions recognized at the outset to pose little threat to competition.  The authorities 
consider that this procedure is applicable to mo re than 70% of the cases filed before the Brazilian 
authorities.193 
260. At the subregional level, Brazil uses the provisions of the MERCOSUR Competition 
Protocol, approved in December 1996, a nd ratified by Congress in September 2000. 
                                                      
189 CADE, (2006a);  and SDE (2008). 
190CADE (2006b). 
191 IADB and OECD (2005). 
192 Under the Brazilian Leniency Programme, launched in 2000, the SDE has power to negotiate and 
sign a leniency agreement with ap plicants who fully cooperate with the investigation and cease their 
involvement in the anti-competitive practice.  The benefits are full or partial immunity. 
193 CADE (2006b). Brazil WT/TPR/S/212 
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261. Brazil has subscribed a number of interna tional cooperation agreements on competition 
policy.  As at May 2008, agreements were in force with:  Argentina, Canada, Portugal, Russia, and the 
United States.  The agreements usually deal with inter-agency coopera tion and conditions for 
exchange of information in investigatio ns dealing with international cartels. 
(iii) State-owned enterprises, privatization, and state trading 
262. Brazil reported ten state-trading enterprises in  its 1996 full notification to WTO Members 
under Article XVII of the GATT 1994 and the Unders tanding on the Interpretation of Article XVII.194  
In December 1997, Brazil made an updating notification.195  As at 2008, Brazil had not made any 
updates or new notifications under these provisions.196  Ten companies were included as state-trading 
enterprises in Brazil's latest full notification.197  Three were removed from the list in 1997198;  of the 
remaining firms, two have been privatized.199  In the context of this review, the authorities note that 
the state-trading enterprises are:  PETROBRÁS; BR Distribuidora;  COBRA;  INB;  CONAB (Companhia Nacional de Abastecimento);  CMB;  and the energy company ELETROBRÁS. 
263. The Brazilian Privatization Programme (PND) was put in place by Law 8,031/90, revoked by 
Law No. 9,491 of 9 September 1997.  The National Privatization Council (CND), created in 1995, is 
in charge of implementing the privatization pr ocess.  Since 2002, six state-owned enterprises 
operating in the financial sector have been privati zed, one in the  electrical sector was incorporated, 
and four were disolved. 
264. The State still controls a relatively large number of entities involved in the production of 
goods and services.  In 2008, there were 135 major ity government-owned enterprises covering a wide 
range of activities:  electricity, petroleum and petrochemicals, port services, transportation services, 
and health services.  Twenty of these 135 govern ment-owned enterprises operate abroad.  16 are 
linked to PETROBRÁS and 4 to Banco do Brasil S.A. 
265. State ownership of some firms reflects a policy decision that government control is 
appropriate to accomplish strategic objectives or to offset market failures, or because the firms involved provide public services.  Plans for future  privatizations focus on granting concessions in 
electricity generation and transmission, oil explor ation and transformation, and public services linked 
to modernization and expansion of railways, railroads, and port services.
200   
266. Under Decree No. 3,735 of 24 January 2001, the Ministry of Planning, Budget and 
Management's Department of Coordination and Cont rol of State Enterprises (DEST), is in charge of 
coordinating the expenditure and investment pr ogrammes of state-owned enterprises and of 
monitoring their performance. 
                                                      
194 WTO document G/STR/N/1/BRA, 21 March 1996. 
195 WTO document G/STR/N/3/BRA, 11 December 1997. 
196 WTO documents G/STR/W/36, 8 October 1999, G/STR/W/37, 16 November 2000, G/STR/W/38, 
4 October 2001, and G/STR/W/4, 4 November 2003. 
197 Computadores e Sistemas Brasileiros S.A. (COB RA);  Petrobrás Química S.A. (PETROQUISA);  
ITAIPU Binacional (hydroelectric);  Industrias Nucleares do Brasil S.A. (INB);  Florestas Rio Doce S.A. 
(forestry);  Companhia Vale do Rio Doce (CVRD;  Compa nhia Nacional de Abastecime nto (CONAB);  Casa da 
Moeda do Brasil (CMB);  Petrobrás Distribuidora S.A.  (BR Distribuidora);  and Petróleo Brasileiro S.A. 
(PETROBRÁS). 
198 CMB and BR Distribuidora and PETROBRAS. 
199 Florestas Rio Doce S.A and CVRD.  INB may not be privatized as its monopoly rights are granted 
by the Constitution. 
200 Information provided by the authorities;  and IADB and OECD (2005). WT/TPR/S/212 Trade Policy Review 
Page 76 
 
 
(iv) Incentives and other government assistance 
267. Assistance for production and investment, in general,  is granted mostly through official credit.  
Some 30% of total credit in 2008 went to earmark ed activities, with the national development bank 
(BNDES) managing more than half.  Such credit is made available at rates significantly below market 
rates, and in some cases are linked to local-content requirements.  Brazil has notified to the WTO that 
a number of regional assistance programmes provide subsidies for the development of particular 
regions, and for research and development.  Incen tives for regional development are also provided 
through the free trade zones regime. 
268. Brazil provides incentives and government assistance both at the federal and at the state level.  
Incentives programmes can be regional, aimed at devel oping research, or targeted at specific sectors;  
sectoral assistance is discussed in Chapter IV. 
269. Incentives programmes represented some 0.39% of GDP in 2007.201  S o m e  o f  t h e s e  
programmes may have domestic or local content requir ements.  In 2008, some 30% of total credit was 
in the form of earmarked credit, i.e., credit assi gned to a specific user.  The Brazilian Development 
Bank (BNDES) manages more than half of the ear marked credit.  Each programme specifies the 
interest rates and commissions to be charged, ba sed on the long-term inter est rate (TJLP) as a 
benchmark rate, plus a spread;  this cost is gene rally lower than for non-earmarked credits, which are 
mostly short-run credits.  The Central Bank reports that, in December 2007 the average interest rate 
on non-earmarked bank credit was at 33.8% per annum, while earmarked rates were around 10%.202 
270. Brazil has been notifying periodically to the WTO its subsidies programmes under Article 
XVI.1 of the GATT 1994 and Article 25 of the Ag reement on Subsidies and Countervailing Measures 
(SCMA).  In its October 2007 notification, for fiscal years 2005 and 2006, Brazil included the SUDAM/ADA and SUDENE/ADENE regional programmes;  the FINAM/FINOR/FUNRES programmes for the development of the Amazon and north-east regions and the state of Espírito 
Santo;  the programme of constitutional funds for the financing of the north-east, the north and the 
mid-west regions;  the programme for capacity  building and competitiveness, enhancement in 
information techonology;  fisheries incentives;   and the industrial technology development 
programme (PDTI) and agriculture/cattle breedi ng technology development programme (PDTA).
203 
(a) Regional programmes 
271. Brazil maintains a number of regional programme s run at the federal level.  They consist 
mainly of tax benefits for investment in less de veloped regions, such as the north and north-east.  
Benefits apply equally to foreign and domestic invest ors.  They will be terminated at the latest on 
31 December 2023.  There are also pr ogrammes at the state level, of a general nature or targeted to 
certain industries, which imply ICMS reductions or exemption. 
SUDAM/ADA and SUDENE/ADENE programmes 
272. These programmes grant both tax incentives (SUDAM/ADA and SUDENE/ADENE) and 
financing (through the Amazon Development F und (FDA) and North East Development Fund 
(FDNE)).  Complementary Laws Nos. 124 and 125 of 3 January 2007 reintroduced the Amazon Region Development Authority (SUDAM) and th e Northeast Region Development Authority 
                                                     
 
201 Ministry of Finance online information at:  http://www.stn.fazenda.gov.br/hp/downloads/ 
resultado/Tabela1.xls 
202 Central Bank online information.  Viewed at:  http://www.bcb.gov.br. 
203 WTO document G/SCM/N/155/BRA, 11 October 2007. Brazil WT/TPR/S/212 
 Page 77 
 
 
(SUDENE) as the agencies in charge of developm ent for their respective regions, and abolished the 
Amazon Region Development Agency and the North-East Region Development Agency.204 
273. The SUDAM and SUDENE programmes grant tax concessions to firms and evaluate and 
approve projects of interest to the developmen t of the "legal Amazon" or north-east regions.205  Law 
No. 9,532/97 and Provisional Measure No. 2,199 /01 and Law No. 11,196/05 regulate the tax 
exemptions and reductions.  The fiscal benefits granted include:  a 75% reduction of income tax for 
firms or activities classified as being of priority inte rest to regional development, for ten years starting 
from the year after the enterprise began operations (Decrees No. 4,212/2002 and 4,213/2002);  a 25% 
reduction in 2004-08, and 12.5% reduction in 2009-13 for industrial or agricultural projects that 
previously enjoyed a 50% income tax reduction;  and reinvestment of income tax for activities of 
interest for regional development, requiring firms to  deposit 30% of the income tax due, plus 50% of 
their own resources, on an annual basi s, ending in 2013, in the Banc o da Amazônia (BASA) or in the 
Banco do Nordeste do Brasil (BNB), to be used in the legal Amazon or north-east regions in activities 
linked to capacity modernization or expansion.206 
274. Accumulated tax exemptions/reductions for both SUDAM and SUDENE programmes for 
2002-06 were R$7.06 billion (Table III.8), or some US$4.25 billion, compared with R$3.36 billion, or 
US$1.16 billion, for 1998-2002.  The authorities note that statistical data are not available for assessment of the trade effects of the subsidy.
207 
Table III.8 
Tax exemption/reduction under the SUDAM/ADA and SUDENE/ADENE programmes, 2002-07 
(R$ million) 
Year SUDAM/ADA SUDENE/ADENE Total 
2002 394.8 392.1 786.9 
2003 802.0 841.9 1,643.9 
2004 417.7 522.3 940.0 
2005 636.5 933.2 1,569.7 
2006 856.8 1,256.2 2,113.0 
2002-07 4,606.2 6,019.7 10,625.9 
2007 1,498.4 2,074.0 3,572.4 
Source: Information provided by the  Ministry of Finance;  and WTO doc uments G/SCM/N/123/BRA, 20 October 2005, 
and G/SCM/N/155/BRA, 11 October 2007.  Information for 2007 was provided by the Secretariat of Federal 
Revenue of Brazil and it is estimated. 
275. The SUDAM took over the FDA as well as th e Constitutional Fund for the Amazon (see 
below), and the SUDENE took over the FDNE and th e Constitutional Fund for the North East (FNE).  
Complementary Laws Nos. 124 and 125 of 2007, 2%  of the financial opera tions approved under FDA 
or FDNE must be assigned as resources to their respective superintendence. 
                                                      
204 For the text of these laws see Ministry of National Integration online information.  Viewed at:  
http://www.planalto.gov.br/ccivil_03/Leis/LCP/Lcp124.h tm and http://www.planalto.gov.br/ccivil_ 03/Leis/ 
LCP/Lcp125.htm. 
205 States of Acre, Amazonas, Roraima, Amapá, Pará , Tocantins, Rondania, Mato Grosso, and part of 
Maranhão.  The north-east area includes  Maranhão, Piauí, Ceará, Rio Grande  do Norte, Paraíba, Pernambuco, 
Alagoas, Sergipe, and Bahia, and an area of Minas Gerais and Espirito Santo included in the so-called "draught 
polygon". 
206 Ministry of National Integration online informa tion.  Viewed at:  http://www.integracao.gov.br/ 
fundos/incentivos_fiscais/index.asp. 
207 WTO documents G/SCM/N/123/BRA, 20 October 2005, and G/SCM/N/155/BRA, 11 October 
2007. WT/TPR/S/212 Trade Policy Review 
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276. The financing covered by the FDA and the FDNE takes place through the creation of 
debentures convertible into ordinary or preferred sh ares.  The debentures have a guarantee of at least 
125% of the amount financed;  the maturity date is up to 12 years including the grace period and may be extended up to 20 years for infrastructure projects.  The debentures, from their issue, carry a return 
equal to the TJLP;  after the expected date for th e project to comes into operation, the agency in 
charge may add interest for up to 3% a year.  There is also a yearly risk-management charge of up to 
0.15%.  The FDA or the FDNE cover up to 97.5% of the risk of their participation in each project.
208 
FINAM/FINOR/FUNRES 
277. The FINAM/FINOR/FUNRES programme, regulated by Law No. 8,167 of 16 January 1991, 
amended by Provisional Measure No. 2,199-14 of 24 August 2001 allows businesses to deduct 12% 
of their income tax to be invested in the Am azon and north-east regions.  Companies located in 
Espírito Santo are allowed to invest 17% of the in come tax due in a fund used for recovery of the 
state.  The funds are channelled through the Am azon Investment Fund (FINAM), the Northeast 
Investment Fund (FINOR), or the Fund for the Econom ic Recovery of the State of the Espirito Santo 
(FUNRES) for investment in projects by any enterprise  located in those regions that can generate jobs 
and income and promote regional development. 
278. The purpose of the programmes is to reduce econo mic and social imbalances between regions 
by means of compensatory mechanisms for the development of the Amazon and north-east regions 
and for the state of Espírito Santo.  The programme provides financial support in the form of risk 
capital investments through primary subscription of de bentures convertible into ordinary or preferred 
shares.  The financial benefits have been grante d since 1975 and are to expire in December 2013 at 
the latest. Benefits totalled R$532.6 million (U S$321 million) in 2002-06, down from R42.9 billion 
1998-02 (Table III.9). 
279. FINAM and FINOR are managed by the Ministry of National Integration's Department of 
Investment Funds Management, in accordance with Decree No. 5,847 of 14 July 2006 and Ministerial 
Order No. 436 of 28 February 2007.209  Provisional Measure No. 2,146-1 of 4 May 2001, established 
that no new projects would be approved under these funds, although approximately 540 projects 
already in the FINAM/FINOR portfolio would be im plemented.  In spite of the abolition of SUDAM 
and SUDENE, through Provisional Measures No. 2, 156-5 and 2,157-5 of 24 August 2001, these 
projects were implemented as scheduled.  FUNR ES is administered by Grupo de Recuperação 
Econômica do Estado do Espírito Santo (GERES). 
280. The beneficiaries of FINAM/FINOR/FUNRES are legal persons that implement a project 
considered to be relevant to the region.  Benefici aries may also receive a tax advantage consisting in 
the payment of 70% of the income tax accruing from the project, as provided in Article 9 of 
Law No. 8,167/91.  Projects should involve activities th at foster regional or local development.  The 
programme provides financial support in the form of risk capital investment operated by BASA, 
BNB, or Banco de Desenvolvimento do Espírito Sa nto, with funding drawn from the FINAM, the 
FINOR, and the FUNRES, respectively. 
                                                      
208 Ministry of National Integartion online informa tion.  Viewed at:  http://www.integracao.gov.br/ 
fundos/fundos_de_desenvolvimento_regional/index.asp. 
209 WTO document G/SCM/N/155/BRA, 11 October 2007. Brazil WT/TPR/S/212 
 Page 79 
 
 
Table III.9 
FINOR/FINAM/FUNRES benefits, 2002-07 
(R$ million) 
Years 2002 2003 2004 2005 2006 2007 2002-07 
FINAM 75.0 190.0 0.0 7.4 17.6 21.5 311.5 
FINOR 174.3 0.0 0.0 22.8 35.4 72.0 304.5 
FUNRES 0.0 0.0 0.0 5.1 5.0 1.3 11.4 
Total 249.3 190.0 0.0 35.3 58.0 94.8 627.4 
 
Source:  Information provided by the Brazilian authorities;  and WTO documents G/SCM/ N/123/BRA, 20 October 2005, 
and G/SCM/N/155/BRA, 11 October 2007.   Information regarding 2007 are estima tes provided by Secretariat of 
Federal Revenue of Brazil. 
Funds for financing the north-east, north, and mid-west regions (FNE/FNO/FCO) 
281. The constitutional funds to finance productive ac tivities in the north, north-east and mid-west 
regions (FNE/FNO/FCO) were created by Law No. 7,827 of 27 September 1989, as amended by Law No. 10,177 of 12 January 2001.  Their aim is to contribute to the social and economic development of these regions.  The administration of each fund is autonomous and held by a Deliberative C ouncil in 
each region;  these councils approve the financing programmes of each fund and evaluate the results 
obtained.  The Ministry of Nationa l Integration is responsible for de fining the guidelines and priorities 
for investments, and for monitoring and evaluatin g the financing programmes.  The constitutional 
funds have no pre-established time limits.  They co mprise some of the financial instruments included 
in Decree No. 6,047, of 22 February 2007, est ablishing a National Policy of Regional Development 
(PNDR). 
282. The beneficiaries of loans backed by constitu tional fund resources are producers, companies, 
and production cooperatives that carry out produc tive activities in the cr op/livestock, mineral, 
industrial and agri-industrial, tourism, infrastructure, commerce and service sectors of the north, north-east and mid-west regions.  The FCO, FNE a nd FNO, are financed with 3% of the revenue  
produced by the industrial products tax (IPI) and the in come tax (IR), of which 0.6% is allocated to 
the FCO, 1.8% to the FNE, and 0.6% to the FNO.   Credit operations based on constitutional financing 
fund resources are subject to the charges defined in Law No. 10,177 of 2001
 and subsequent 
legislation.  Decree No. 6,367, of 30 January 2008 fi xes annual interest rates at 5% to 8.5% for rural 
operations, and 6.75% to 10% for other agri-industry,  industrial operations, infrastructure, tourism, 
commerce, and services.210  These rates may be subject to a reduction of 15% for payments until the 
due date, or 25% if the beneficiary operates in the north east semi-arid area.  
283. Between 2002 and 2007 the constitutional funds granted loans for an estimated 
R$31.93 billion (over US$17.5 billion), of whic h more than 50% under the FNE (Table III.10).  The 
accumulated loans granted since the beginning of the programme in 1989, to end 2007, reached some R$56.8 billion.  Some 90% of benefici aries were micro and mini producers. 
284. Under Law No. 9,440 of 14 March 1997 fiscal incentives are granted, until 31 December 
2020,  to enterprises in the automotive industry locat ed in the north, north-east and central-west 
regions of Brazil.  Since August 2002, benefits have been limited to credits on IPI payments.  
Cumulated benefits over 2003-07 reached  some R$95.9 million (US$53.3 million). 
                                                     
 
210 Ministry of Integration online information.  Viewed at:  http://www.in tegracao.gov.br/fundos/ 
fundos_constitucionais/index.asp. WT/TPR/S/212 Trade Policy Review 
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Table III.10 
Constitutional fund loans, 2002-07 
(R$ million) 
Years 2002 2003 2004 2005 2006 2007 2002-07
FCO 1,493.3 919.8 1,172.1 1,468.1 1,444.4 1,973.8 8,417.5
FNE 254.4 1,019.20 3,208.9 4,173.9 4,588.2 4,426.5 17,491.1
FNO 604.9 1,075.1 1,321.1 976.3 986.3 1,110.0 6,073.7
Total 2,289.6 3,014.1 5,702.1 6,618.3 7,018.94 7,330.3 31,932.3
 
Source:  Ministry of National Integration;  and WTO doc uments G/SCM/N/71/BRA, G/SCM/N/95/BRA, 30 July 2003, 
 G/SCM/N/123/BRA, 20 October 2005, and G/SCM/N/155/BRA, 11 October 2007. 
Other regional programmes 
285. A second programme to promote regional devel opment and support the automotive industry 
was established by Law No. 9,826 of 23 August 1999.   Industries established in the north, north-east 
and central-west regions of the country (with the exception of the Federal District), that produce 
automotive vehicles (HS 8702-HS 8704), benefit from a reduction of the IPI.  The measure will be in 
place until 2010. 
286. In early 2008, the BNDES had one regional pr ogramme in operation, the Regional Dynamism 
Programme, aimed at increasing investment in less developed areas of Brazil, to reduce social and income imbalances.  For projects located in m unicipalities covered by the programme, the BNDES 
increases its participation in total investment and establishes a basic spread of 1% per year.
211 
(b) Free-trade zones 
287. Under Brazilian legislation, free-trade zones  for imports and exports, are defined as zones 
created to promote the development and regional inte gration of border areas in the north region, for 
which they are granted fiscal incen tives.  The basic legislation is contained in Decree Law No. 288 
of 28 February 1967, Decree Law No. 356 of  15 August 1968, Decree Law No. 1,435 of 
16 December 1975, and Law No. 8,387 of 30 December 1991 modified by Law No. 10,176/2001 and Law No. 11,077/2004. 
288. Eight free-trade zones have been created (Manaus and Tabatinga, in Amazonas;  
Macapa/Santana in Amapá;  Brasiléia and Cruzeiro do Sul, in Acre;  Boa Vista and Bonfim, in 
Roraima;  and Guajará-Mirim, in Rondônia).
212  However, only the Manaus Free Trade Zone (ZFM) 
is engaged in production operations  (mid 2008);  the others engage  only in commerce operations.  The 
ZFM was established in 1967 with the goal of cr eating a development pole in the Amazon region 
through the formation of an industrial park, which would turn Manaus into an industrial, commercial, 
and agriculture centre with economic  conditions to promote the development of the region.  It is 
administered by the Superintendence for the Mana us Free Zone (SUFRAMA), an autonomous agency 
created in 1967 and linked to the MDIC.  SUFRAMA also manages Brazil's seven other free-trade zones.
213 
289. Incentives to companies establishe d in the ZFM are in the form of tax suspensions, reductions 
or exemptions, granted by the federal and state governments.  The main requirement for the 
concession of benefits is observance of the basi c productive process (PPB) criteria, for which firms 
                                                      
211 Municipalities covered by the programme include those in low or medium income micro-regions, in 
accordance with the methodology of the National Policy for Regional De velopment and municipalities in the 
North and Northeast regions of Brazil, even if classified as high income. 
212 SUFRAMA online information.  Viewed at: http ://www.suframa.gov.br/eng /ing_legis_federal.cfm. 
213 SUFRAMA online information.  View ed at:  http://www.suframa.gov.br/. Brazil WT/TPR/S/212 
 Page 81 
 
 
need to undertake agreed local manufacturing st eps for specific products, and provide a detailed 
description of the various stages of assembly, prepar ation, and transformation of inputs used for 
manufactures.214  All imports to the ZFM require a licence, authorized both by the SECEX and by 
SUFRAMA.  The incentives will be in for ce until 2023, in accordance with Constitutional 
Amendment No. 42 of 19 December 2003. 
290. Federal tax incentives include:  (i) exemption from import duties for goods to be used or 
consumed in the ZFM, including capital goods and ra w materials, as well as for goods listed in Inter-
Ministerial ( Portaria)  No. 300 of 20 December 1996215, destined for consumption in the western 
Amazon region;  (ii) up to 88% reduction of impor t duties applied on raw materials, intermediate 
inputs, and secondary and packaging materials used in the production of industrial goods in the ZFM 
to be sold in the rest of Brazil;  (iii) reduction of import duties for ma terial used in the fabrication of 
informatics goods and motor vehicles, with the perc entage of reduction depending on the share of 
domestic inputs and labour in total production (the  coefficient of reduction is increased by 5% for 
motor vehicles);  (iv) exemption from the IPI for goods produced in the ZFM, for imports used or 
consumed in the zone, and for goo ds listed in Inter-Ministerial ( Portaria) No. 300/96 destined for 
consumption in the western Amazon region;  (v) exemption from the IPI for domestic goods entering 
the ZFM or other areas of the western Amazon regi on, for goods produced with regional agricultural 
raw materials in all areas of the western Amazon region;  (vi) IPI credits, when applicable;  
(vii) exemption from export taxes for goods produced  in the ZFM, when applicable;  (viii) zero-rated 
PIS and COFINS on acquisition of goods for consump tion or industrialization in the ZFM.  In this 
case, companies are not allowed to retain PIS and COFINS credits on the acquisition or importation of 
goods and services. 
291. ZFM beneficiaries may also take advant age of the Special Western Amazon Export 
Programme (PEXPAM), an incentive mechanism that allows the import of raw material, inputs, and 
industrial components exclusively for export and gran ts exemption of import duties and the ICMS, as 
well as any other tax or financial contribution to  any administration public body.  In this case, 
companies are not required to fulfil the PPB crite ria.  ZFM enterprises may also benefit from the 
SUFRAMA programme until 2023, in accordance with Constitutional Amendment No. 42 of 
19 December 2003.  
292. Users of the ZFM also benefit from the follo wing fiscal incentives granted by the state of 
Amazonas:  (i) exemption from the ICMS on industria l inputs, parts, and pieces, including imports 
sent from other Brazilian states to be used in the ZFM;  (ii) ICMS credit on industrial product 
purchases of domestic origin, other than inputs;  and (iii) reimbursement of ICMS where it has already 
been paid, at rates of:  45% for final cons umption goods;  55% to 100% for capital goods, food, 
clothing, and vehicles;  up to 100% for inputs, basic agricultural products , medicines, and other 
products using regional raw material s, and fish products, as well as for purchases by micro and small 
enterprises, and for goods produced in the state of  Amazonas.  There is also the possibility of 
deferring the ICMS for imports of raw materials, and of reducing the ICMS rate to 7%.  On average, 
some 80% of the ICMS is returned.  Municipal government incentives are also granted, such as the 
exemption for ten years from the Tax on Urban Real  Estate Property Tax (IPTU), the public cleaning 
and conservation tax, and business taxes. 
                                                      
214 The following products are excl uded from tax incentives in the ZP M, in accordance with Decree 
Law No. 288/67:  weapons and muniti ons;  tobacco and derived products;  alcoholic beverages;  passengers 
automobiles;  perfume or beauty products (except positio ns 3303 to 3307 of the MERCOSUR CET) destined for 
internal consumption in the ZFM or when made with regional fauna or flora raw material. 
215 SUFRAMA online information.  Viewed at:  http://www.suframa.gov .br/download/legislacao/ 
ppb/1996/pi-300-96.pdf. WT/TPR/S/212 Trade Policy Review 
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293. Importers are allowed to supply foreign goods fro m their stock in the ZFM to other parts of 
the country, without quantitative limits.  These goods are subject to all normally assessed import duties and taxes, in accordance with  Decree Law No. 1,455 of 1976;  however, as stated above, duties 
on inputs are subject to a reduction of up to 88%.
216  Exceptions are informatics products and vehicles, 
for which the full duty is applied.  Products ma nufactured in the ZFM solely with imported inputs, 
goods sold to free-trade zones, and obsolete machin ery and equipment are not subject to the payment 
of duties.  
294. The main activities in the ZFM are:  electronics, information technology and 
telecommunication goods (including mobile phones), two-wheel vehicles, chemicals, thermoplastics, 
lighters, pens, disposable shavers, mechanical mach inery, metallurgical products, and watches.  Most 
production in the ZFM is industrial and destined for the domestic market:  in 2007, 95.9% of 
production was sold in the Brazilian market, up from 88. 4% in 2003 noted at the time of the previous 
review.  Production for the domestic market increase d substantially during the period under review, 
almost doubling between 2004 and 2007, to US$ 24.7 billion;  production for export remained 
stagnant (Table III.11). 
Table III.11  
Manaus Free Trade Zone production, 2002-07 
(US$ million) 
 Domestic market Foreign market  
Year Exports Imports Balance Expo rts Imports Balance Final balance 
2002 8,079 2,363 5,716 1,026 2,584 1,558 4,158 
2003 9,306 2,854 6,452 1,225 3,223 1,998 4,454 
2004 12,876 3,843 9,033 1,085 3,759 2,.674 6,359 
2005 16,943 5,070 11,873 2,021 4,763 2,742 9,131 
2006 21,374 6,005 15,369 1,484 5,923 4,439 10,930 
2007 24,672 6,594 18,078 1,042 6,291 5,249 12,830 
 
Source:  SUFRAMA. 
(c) R&D and other programmes 
295. The Ministry of Science and Technology (MCT) is responsible for the administration of R&D 
programmes and incentives.  Law No. 8,661 of  2 June 1993 establishes Brazilian policy for 
technological training in industry and agriculture , and fiscal incentives for promoting research and 
development (R&D) programmes in Brazilian ente rprises.  The programmes and fiscal incentives 
under this law are regulated by Decree No. 949 of 5 October 1993. 
296. The Industrial Technology Development Progra mme (PDTI), the Agricu lture/Cattle Breeding 
Technology Development Programme (PDTA), and the Capacity Building and Competitiveness 
Enhancement in Information Technology and Relate d Fields programme were notified by Brazil as 
subsidies in its 2007 updated notification pursuant to Article XVI:1 of the GATT 1994 and Article 25 
of the Agreement on Subsidies and Countervailing Measures.217 
297. The PDTI and PDTA provide incentives for R& D in their respective areas.  The law 
governing the two programmes was revoked in Janua ry 2006, thus terminating the programmes, 
although benefits continue to be pa id.  The maximum time period for executing a project is five years, 
so benefits from the programme should end in ear ly 2011 at the latest.  Total incentives granted under 
the PDTI and PDTA programmes amounted  to some R$63 million in 2003-06. 
                                                      
216 The methodology to assess final duty is set out  described in Decree No. 4,543 of 26 December 
2002. 
217 WTO document G/SCM/N/155/BRA, 11 October 2007. Brazil WT/TPR/S/212 
 Page 83 
 
 
298. The incentives provided by the Capacity Bu ilding and Competitiveness Enhancement in 
Information Technology and Relate d Fields began to be phased out in March 2005 with a view to 
termination in 2019.  Benefits, in the form of tax credits provided by the Federal Government, 
amounted to some R$5 million during 2004-06.218 
299. Since 1999, the scientific and technological development support funds comprise the main 
R&D financing mechanism in Brazil.  There ar e 16 such funds, each corresponding to a specific 
area and with its own resources, which stem from direct contributions, or from other revenues from the different sectors, such as royalties, taxes, licences, and authorizations (Table III.12).  The 
resources allocated to each of the funds are depos ited with the FNDCT (with the exception of the 
Telecommunications Fund) and managed by the FI NEP.  A regional policy is followed for the 
allocation of the funds:  at least 30% of the resour ces must be invested in the north, north-east and 
mid-west regions, and there is a special fund for the Amazon region targeted at companies operating 
in the Manaus Free Zone.  Resources ma y not be transferred between funds.  
Table III.12 
Scientific and technological development support funds, 2008  
Fund/law Resources 
Petroleum and Natural Gas Fund (CT-PETRO), Law No. 9,478 
of 6 August 1997 25% of the share of the value of royalties, which exceed 5% of the 
production of petroleum and natural gas 
Energy Fund (CT-ENERG), Law No. 9,991 of 24 July 2000 0.75% to 1% of the net turnover of concessionaries for the 
generation, transmission, and distribution of electricity 
Hydric Resources Fund (CT-HIDRO), Law No. 9,993 of 24 July 
2000 4% of the income of electricity generation companies 
Land Transport Fund (CT-TRANSPORTES), Law No. 9,992 of 
24 July 2000 10% of the revenues obtained by the National Transportation 
Infrastructure Department (DNER) from contracts for land transport 
services with communications and telecommunications companies 
Mining Fund (CT-MINERAL), Law No. 9,993 of 24 July 2000 2% of the income of the mining sector 
Spatial Fund (CT-ESPACIAL), Law No. 9,994 of 24 July 2000 25% on operations  and revenue from licences and authorizations  of 
the Brazilian Space Agency (AEB).  
Telecommunications Technology Development Fund (FUNTTEL), Law No. 10,052 of 28 November 2000 0.5% on telecommunications provide rs bills and 1% on bills of 
participative events carried out through telephone calls 
Information Technology Fund (C T- INFO), Law No. 10,176 of 
11 January 2001 0.5% on informatics enterprises' bills 
University and Enterprise Fund (CT-VERDE AMARELO), 
Laws Nos. 10,168 and 10,332 of 29 December 2000 and 
19 December 2001 50% of the CIDE and 43% of the IPI on informatics-related  
products 
Infrastructure Fund (CT-INFRA), Law No. 10,197 of 14 February 2001. 20% of other funds 
Water Transport and Naval Construction Fund (CT- 
Aquaviário).  Law No. 10,893 of 13 July of 2004. 3% of the AFRMM for the Merchant Marine Fund (FMM) 
Amazon Fund (CT-AMAZÔNIA); Law No. 8,387 of 30 
December 199, Law No. 10,176, of 11 January 2001, and Decree 
No. 4,401, of 1 October 2002 At least 0.5% of the bills of comp anies operating in the Manaus Free 
Trade Zone that produce informatics-related goods and services 
Biotechnology Fund (CT-Biotecnol ogia);  Agri-business Fund 
(CT-AGRONEGÓCIO);  Aeronautical Fund (CT-AERONÁUTICO),  Health Fund  (CT SAÚDE), 
Law No. 10,332 of 29 December 2001 17.5% of proceeds collected by the CIDE to be devoted to the Agri-
business Fund;  17.5% to the Health Fund;  7.5% to the 
Biotechnology Fund;  and 7.5%  to the Aeronautical Fund 
 
Source: Information provided by the Brazilian authorities. 
(d) Other credit schemes 
300. The BNDES also maintains a number of schemes th at facilitate access to credit at preferential 
conditions.  Operations under these credit lines may be carried out directly by the BNDES, or through 
                                                      
218 WTO documents G/SCM/N/123/BRA, 20 October 2005, and G/SCM/N/155/BRA, 11 October 
2007. WT/TPR/S/212 Trade Policy Review 
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accredited financial institutions.  Production of cer tain goods for export (but not for the Brazilian 
market) is eligible for credit.219  In addition, production of new machinery and equipment produced in 
Brazil and accredited by the BNDES, is eligible for credit.  Other eligible projects:  implementation, 
expansion, and modernization of fixed assets;  offe ring or development of services for export;  foreign 
commercialization of eligible goods;  and working capital associated with a fixed investment.  A 
number of items are eligible for credit, under certain  conditions, including:  importation of equipment;  
expenses incurred through the impor tation of equipment, and implem entation and/or expansion of 
foreign activities. 
301. Among the credit lines operated by the BNDES through other financial institutions, the 
Automatic BNDES offers financing of up to R $10 million for the execution of implementation, 
expansion, or modernization projects, including the acquisition of new machinery and equipment of 
domestic manufacture, accredited by the BNDES, and associated working capital. 
302. The FINAME provides financing at preferential conditions, without a limit in value, for 
individual acquisitions of new ma chinery and equipment of domestic manufacture, accredited by the 
BNDES.  The BNDES maximum financing depend s on the credit line, and ranges from 70% for 
production of capital goods, to 100% for acquisition of capital goods or  investment projects carried 
out by micro, small and medium enterprise, as l ong as the domestic content of the financed goods is 
equal to or greater than 60%.  For goods with do mestic content of less than 60%, the 70-100% range 
applies only to the domestic content value.220  The financial cost is the TJLP (or UMBNDES variance 
plus Currency Basket charges, when applicable, plus  a BNDES fee of up to 1.8% per year, defined in 
function of the financing lines, plus a financial inte rmediation rate of 0.5% pe r year (operations with 
micro, small, and medium enterprises are exempt), pl us an accredited financial institution fee of up to 
4% per year, negotiated between the accredited fi nancial institution and the client.  The maximum 
credit amount is R$10 million. 
303. The Development and Diversification of E xports of States Programme, also known as the 
State Exporter programme, launched by the MDIC in 2004 , aims to pay special attention to states that 
export less than US$100 million annu ally;  Currently, only two states (Alagoas and Paraiba) benefit 
from the programme (June 2008).221  Its focus is to increase exports of small businesses, expand the 
range of products exported, dive rsify export markets, and the insertion of new businesses in the 
exporting process.  The programme consists of a ra nge of support activities, developed in partnership 
with state governments, public and private entities,  including trading compan ies, aimed at reducing 
regional inequalities and ensuring sustained growth, and generating jobs and income through exports. 
(e) Other schemes 
304. Law No. 9,478 of 6 August 1997 created a Special Regime for the Exportation and 
Importation of Goods Destined to the Explorati on of Petroleum and Natural Gas (REPETRO).  The 
REPETRO allows for the "fictitious exportation" an d subsequent importation, under the suspension 
modality of the drawback regime, of goods produced in Brazil sold in foreign currency to a person 
domiciled abroad for use in the exploration of pe troleum and natural gas in Brazil.  The REPETRO 
also covers aircraft, classified in heading 88. 02 of the MERCOSUR Common Nomenclature, when 
leased by an airline granted a regular transport c oncession in Brazil.  The application of federal and 
                                                      
219 This includes most manufactured products.  For the list see BNDES online information.  Viewed at:  
http://www.bnd es.gov.br/english/bndes/ financeable_products.pdf. 
220 BNDES online information at.  Viewed at:  http://www.bndes.gov.br/english/finame.asp. 
221 Initially, the programme included the states of Acre , Piaui, Rondonia, Roraima, Sergipe, Tocantins, 
and the Federal District.  The programme was subsequen tly extended to cover stat es that export less than 
US$500 million.   Brazil WT/TPR/S/212 
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state taxes on these goods is suspe nded.  The regime is granted with the waiver of all import taxes 
until 31 December 2020.222 
305. The Competitiveness Promotion Guarantee Fund (FGPC) was created in 1997 to guarantee 
the risk of financing operations undertaken by the BNDES and FINAME to micro, small, and 
medium-sized enterprises that:  export;  produce inpu ts to manufacture, assemble, or package exports; 
or engage in projects to increase their competitiveness.223  Each operation can be guaranteed, using 
FGPC funds, for 70% or 80% of its value, depending on the size of the enterprise, its location, and the 
type of credit received.224  Some 77 operations for a total of R$13.3 million were conducted in 
2006.225  In 2007, 24 operations for a total of R $2.9 million, were approved by the BNDES. 
(v) Government procurement 
306. Brazil has taken steps to increas e transparency in its government procurement regime, with 
procurement based on best-price criteria when tend ering takes place.  In practice, over 40% of 
procurement contracts take place under some kind of  waiver from tendering requirements.  Although 
in general national treatment is afforded to fore ign suppliers legally established or represented in 
Brazil, preference may be given to goods and servi ces produced in Brazil as a criterion for deciding 
between identical offers.  Also, a preference margin  of up to 10% for micro and small enterprises was 
introduced in 2006.  Brazil is a not a party to the GPA;  joining it would increase the predictability of 
its trade regime and could result in benefits to taxpayers by reducing procurement costs, and to 
domestic producers as there are Brazilian firms that could realistically compete for contracts in foreign markets. 
307. In 2006, government procurement expenditure for programming, executing, and 
implementing Federal Government activities (excl uding hospital, medical services, pharmacological, 
and laboratory material) totalled R$22.2 billion (some US$13.4 billion, or 1% of GDP), up 29% from 
2005.  In the same year, total tendering by  the Federal Government was R$28.9 billion 
(US$17.4 billion, or 1.3% of GDP;  this was 37% higher than in 2005.  The Ministries of Defence and of Transport had the highest expenditure (17% and 16.4% of the total, respectively), followed by the 
Ministry of Education (14.5%), the Ministry of Health (11.7%), and the Ministry of Finance 
(10.1%).
226  Data for 2007 show total expenditure of  R$20.5 billion (US$12.8 billion), and tenders 
totalling R$38.2 billion (US$23.9 billion).227  These figures are relatively low because they refer to 
purchases by the Federal Government only. 
308. The authorities indicate that the Federal Government does not have comprehensive estimates 
of overall government procurement, since Brazil procur ement is decentralized at three levels (federal, 
state and municipal). 
309. Brazil is not a party to the WTO Plurilateral Agreement on Government Procurement (GPA).  
However, it participates in the Working Group on Tran sparency in Government Procurement.  In the 
context of this Review, the authorities indicate that  becoming a party to the GPA is not currently a 
                                                      
222 Decree No. 5,138, of 12 July 2004 extended the period from 31 December 2005, as stipulated in 
Decree No. 4,543 of 26 December 2002, to 31 December 2020. 
223 Law No. 9,531 of 10 September 1997 regulated by Decree No. 2,509 of 9 March 1998. 
224 BNDES online information at:  http://www.bnd es.gov.br/produtos/instituicoes/fgpc2.asp. 
225 BNDES (2006). 
226 ComprasNet Bulletin , December 2006.  Viewed at http ://www/comprasnet.gov.br/publicacoes/ 
boletins/12-2006.pdf. 
227 ComprasNet Bulletin , December 2007.  Viewed at:  h ttp://www.comprasnet.gov.br/publicacoes/ 
boletins/12-2007.pdf. WT/TPR/S/212 Trade Policy Review 
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priority for Brazil, and that Brazil aims first to strengthen MERCOSUR by implementing the Public 
Procurement Protocol, which has not yet been validated by the parties involved (Chapter II). 
310. Administrative units and state enterprises may conduct their own purchasing activities 
independently.  However, entities directly and indir ectly administered by the Federal Government are 
subject to general norms regarding tenders and administrative contracts (for goods and services) 
established by the Ministry of Planning, Budget and Management.  All procuring agencies are audited 
by the Federal Accounts Tribunal (TCU). 
311. The main legislation regulating government pr ocurement is contained in Law No. 8,666 of 
12 June 1993 (Tendering Law), as  amended by Law No. 8,883/94, Law No. 9,648 of 27 May 1998, 
and Law No. 9,854 of 7 October 1999.  Purch ases of telecommunications equipment, digital 
electronics products, computers, computer soft ware and related services are exempt from 
Law No. 8,666;  they are governed by Law No. 8,248 of 1991 and Law No. 10,176 of 11 January 2001.  All federal, state, and municipal agencies  and foundations, as well as all public companies, 
including those with private participation, are subject to the Tendering Law. 
312. According to Article 37, item XXI of the Fede ral Constitution, government purchases must be 
regulated by a specific law, and with the exception of the cases specified in  the law, public works, 
services, purchases, and disposals must be contracted by public bidding proceedings that ensure equal 
conditions to all bidders, with clau ses that establish the t echnical and economic qualifications required 
to guarantee the fulfilment of these obligations.  This is reflected in the Tendering Law, which 
mandates that all procurement of goods, works, and services must be tendered, except in cases listed 
in Article 24 of the Law.  Article 175 of the Constitution, requires tenders for concessions and 
licences to provide public services.  This h as been implemented through Law No. 8,987/95, as 
amended by Law No. 9,648/98. 
313. Advertisement and other transparency issues regarding tenders and related procedures are 
governed by Articles 20 and 21 of Law 8,666 and Artic le 4 of Law No. 10,520 of 2002.  All federal 
tenders must be published in the Official Journal ;  tenders are also published on the agencies' 
respective websites and on Comprasnet (see below).  In the case of tendering at the state or municipal 
level, tender notices must be published in the State's Official Gazette , and in a large newspaper of the 
state or municipality. 
314. In accordance with the Tendering Law, the dete rmining factors in selecting suppliers are the 
lowest price, best technical offer, and the best t echnical and price offer.  Any preference for domestic 
suppliers or firms was revoked by Constitutional Amendment No. 06/95, which establishes that no 
discrimination between companies incorporated under  Brazilian law is allowed on the basis of the 
degree of foreign participation in their capital, ex cept in the information technology sector.  However, 
the nationality of the bidders may be considered as a tie-breaking criterion. 
315. Preference may be given to goods and servi ces produced in Brazil in three cases:  as a 
criterion for deciding between identical offers;  in the information technology sector, including 
telecommunication and informatics products, in the case  of a tie;  and, as of 2006, for micro, small 
and medium-size companies (see below).  Unde r Law No. 10,176 of 2001, the Federal Public 
Administration must give preference to informa tion technology goods and re lated services developed 
within Brazil in the case of identical offers. 
316. Suppliers must be legally established or re presented in Brazil to qualify for government 
contracts;  foreign firms without operations in Br azil and involved in interna tional tenders need legal 
representation in the country or to be associated w ith a Brazilian firm (at least 51% Brazilian capital Brazil WT/TPR/S/212 
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participation and operational contro l by Brazilian nationals).  Proc urement funded by international 
financial institutions is open to international bidding and subject to the rules of the financing 
institution.  
317. The tendering procedures are:  open tendering (concôrrencia) ;  selective tendering, involving 
price quotes or price enquiry from officially registered firms (tomada de preços , generally  for small 
purchases);  limited tendering or invitation by the administration to suppliers that meet specific requirements (convite) ;  contest (concurso) , for technical and artistic works;  the best-priced goods 
meeting minimum evaluation requirements are selected;  public auction (leilão) for specific goods;  
and inverse auction or bid (pregao)  for common goods and services irrespective of value.
228 
318. The legislation does not state a preference for the use of any procedure;  the main factor to be 
considered is the estimated value of the contract to be signed.  There are, however, situations in which 
the complexity of services or works lead to other cons iderations prevailing over value.  In all cases, 
the procedure must seek to obtain the most  efficient result for the Government.   
319. The Tendering Law foresees three situations in  which the requirement to tender may be 
waived ( Dispensa e Inexigibilidade ):  (i) low value of the object of bidding;  (ii) emergency or public 
disaster situations, war and/or serious disorder;  or (iii) purchase or lease of real estate, which for 
specific reasons (e.g. geographic location of the pr operty) make competitive bidding unfeasible.  
These three, and 21 other exceptional situations liste d in Article 24 of Law 8,666/93, justify direct 
contracting under the law.  Article 25 of the sam e law states that waivers may be justified by 
impossibility of tendering where only one supplier is ab le to fulfil the tender requirements, or in cases 
of renowned expertise on the part of the professionals or companies providing specialized technical 
services, or of a publicly acclaimed professional. 
320. The Tendering Law specifies the value limits for each type of procurement.  The Ministry of 
Planning, Budget and Management reviews and re vises these thresholds periodically.  The last 
revision is contained in Law No. 9,648 of 27 Ma y 1998.  The thresholds for limited tendering 
(invitation) are R$80,000 for of goods and servi ces, and R$150,000 for c onstruction;  and for 
selective tendering are R$650,000, for goods and ser vices, and R$1.5 million for construction;  open 
tendering must be used above these thresholds.  Th ere are no thresholds for the other modalities. 
321. In 2007, 38% of federal administration pr ocurement contracts did not require bidding 
(Dispensa e Inexigibilidade ), compared with 51% reported for 2003 in Brazil's last Review.  Also in 
2007, 29% of government contracts were awarded  using open tendering;  and another 29% using 
inverse auction, which is a simplified process done mainly through Internet.  Price quotes or price 
enquiries accounted for 2% of the value of contracts;  and invitations and public auction  represented 
2% and less than 1% respectively.  Contest (consulta e concurso)  was not used for procurement 
during the year. 
322. The General Services System (SIASG), a comput erized system under the responsibility of the 
Ministry of Planning Budget and Management, is used for procurement by all central government 
entities except the Public Ministry and the Ministry of Defence.  The SIASG has a system for pre-
registration of suppliers (SICAF);  registration, which is done online, allows participation in any 
tendering process.229  In the procurement process, the time allowed for preparation and receipt of 
proposals varies by regime:  45 days for contest a nd competition;  30 days for competition and price 
                                                      
228 Brazil Trade Net (2007). 
229 For information on SICAF see ComprasNet on line information.  Viewed at:  http://www. 
comprasnet.gov.br/ajud a/siasg/faq_sicaf.pdf. WT/TPR/S/212 Trade Policy Review 
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enquiries where the lowest price is not the only criterion;  15 days for price quotes for selection on 
lowest price;  eight days for reverse auct ions;  and five days for limited tendering. 
323. General information on tendering pr ocedures and on contracts is available in the Ministry of 
Planning, Budget and Management's Comprasnet  website, which is the federal government 
procurement portal.230  All tenders are advertised in Compr asnet, which also provides information on 
offers and awards, submissions from suppliers, signed  contracts, and other areas of the procurement 
process.  Comprasnet also publishes monthly bull etins of procurement activities.  Apart from the 
SICAF, the Comprasnet system includes subsystems that:  allow purchases and contracts to be posted online, the electronic forwarding of documents, searching by public sector managers of prices 
previously paid by the Federal Government;  and provide information on specifications for supplies.  
Tenders at the State level may be found on the official websites of most Brazilian States. 
324. Complementary Law No. 123, of 14 December  2006 (General Law of Micro and Small 
Businesses) established a 10% margin of prefer ences in public procurement tendering processes for 
micro and small enterprises, except in the case of i nverse auctions, where the margin is 5%.  The Law 
also allows for set-asides for micro and small enterprises:   participation in a bid for a contract of up to 
R$80,000 may be limited to this type of enterprise.   These set-asides may not exceed 25% of the total 
tendering of an agency in any calendar year.  To benefit from these preferences, in any bidding 
process there must be at least three competing micro or small enterprises.  Decree No. 6.204, of 5 September 2007 contains the regulations for the preferential treatment for micro and small 
enterprises in the procurement process. 
325. Under Article 3 of the Tendering Law, all bidders must be informed, in advance, of the terms 
of the contract and of the relevant bidding procedures.  They must also be informed of the award decision.  The Law allows for appeals based on different administrative activities, such as disqualification of a bidder, modification of a regist ration request, contract termination or fines.  The 
authorities indicate that there were 22,232 such appeals over the 2004-07 period.  Hearings may be requested during any phase of the bidding process.  Once the means of administrative recourse are 
exhausted, there is the possibility of judicial recourse. 
326. Public enterprises must follow the general pr ocurement law and guidelines;  however, the 
petroleum company PETROBRAS has its own procurement regulations.  PETROBRAS has a 
"closed" procurement system, whereby it can choose a nd invite three companies to participate in a 
tender.  The authorities indicate that a new law specif ic to procurement by public enterprises is being 
drafted and is expected to be sent to Congress by  mid-2009.  Companies with non-controlling state 
participation do not have to fo llow general procurement rules. 
327. In a 2004 report on Brazil's procurement practices, the World Bank noted that the 
constraining environment imposed by the 1993 le gislation did not prevent Brazil from moving 
forward to modern practices, such as developing an  Internet-based system to implement the electronic 
version of ComprasNet, which was rated as satisfactory.   However, the report also noted that the legal 
framework laid no foundation for a dispute resolution system for government contracts, and that exhaustively detailed legal provisions discouraged  flexible interpreta tions, and allowed the 
disqualification of proposals for reasons that were not substantial.  It also observed the lack of a 
policy-making agency responsible for developing pr ocurement norms, leaving a gap filled at times by 
law enforcement units not specialized in govern ment procurement.  The report recommended the 
                                                     
 
230 ComprasNet online information..  View ed at:  http://www.comprasnet.gov.br/. Brazil WT/TPR/S/212 
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establishment of a normative entity, standard bi dding documents, Web-b ased planning, and an 
effective dispute resolution system.231 
328. The authorities note that, with regard to this re port, the Ministry of Planning has implemented 
significant changes in the Federal Government Pr ocurement System, making the electronic reverse 
auction ( pregão ) the main procedure used, and making e-procurement systems safer, more 
transparent, efficient, and competitive.  Congr ess is examining an extensive amendment to the 
Tendering Law (in October 2008), focused on increasing efficiency and promoting the use of information technology resources in tenders.  Simu ltaneously, the Government  is working on a draft 
for a new General Tenders and Contracts Law, aimed at developing a more efficient, simple, 
transparent, faster, and modern procurement system. 
329. Moreover, all electronic tenders can be monitore d online, in real time, and are saved by the 
system.  The Department of Logistics and General Services, of the Ministry of Planning, is responsible for the development of norms, the management of e-procurement systems, and 
standardization of documents and procedures. 
(vi) Intellectual property rights 
(a) General features 
330. Brazil is a net importer of IPR-intensive goods ;  its royalties and licence fee deficit was 
US$1.94 billion in 2007, the product of US$2.25 b illion in imports and US $319 million in exports.
232 
331. Brazil is a member of the World Intellectual Pr operty Organization (WIPO) and a signatory to 
a number of intellectual property rights (IPRs) agreements.233  Brazil has also made IPR commitments 
under bilateral or regional agreements  entered into as a part of ME RCOSUR.  It has been negotiating 
(alone and as part of MERCOSUR), bilateral and regional agreements involving IPRs, based  on IPR 
agreements it has ratified, e.g. the WTO TR IPS Agreement and the Convention on Biological 
Diversity.  Brazil has not joined any IPR treaties sin ce its previous Review.  It has not entered into 
any agreements on the protection of designations for spirit drinks. 
332. The TRIPS Agreement was incorporated in to Brazilian legislation in December 1994, 
together with the other Agreements resulting from the Uruguay Round.234  Brazil notified its main 
intellectual property laws and regula tions to the TRIPS Council in 2000.235  Brazil's IPR legislation 
was reviewed by the TRIPS Council in late 2001.236  Brazil has submitted a number of proposals and 
                                                      
231 World Bank (2004). 
232 Central Bank of Brazil online information.  Viewed at:  h ttp://www.bcb.gov.br/ftp/notaecon/ 
balpaya.exe. 
233 The Berne Convention for the Protection of Literary and Artistic Works;  the Paris Convention for 
the Protection of Industrial Property;  the Patent Coop eration Treaty (PCT);  the Patent Law Treaty (PLT);  the 
Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations;  
the Geneva Convention for the Protection of Producers of Phonograms against Unauthorized Duplication of 
their Phonograms;  the International Convention for the Protection of New Varieties of Plants (UPOV);  the 
Madrid Agreement for the Repression of False or Deceptive Indications of  Source on Goods;  the Nairobi Treaty 
on the Protection of the Olympic Symbol;  and the Stra sbourg Agreement Concerning the International Patent 
Classification. 
234 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP/Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
235 WTO document IP/N/6/BRA/1, 24 March 2000;  IP/N/1/BRA/2, 10 April 2000;  IP/N/1BRA/C/1, 
IP/N/1/BRA/C/2, IP/N/1/BRA/I/1, IP /N/1/BRA/P/1, IP/N/1/ BRA/P/3, and IP/N/1/BRA/P/4, 19 September 
2000;  IP/N/1/BRA/I/1/Add.1, 4 October 2001 ;  and IP/N/REV.6/ADD.1, 24 July 2002. 
236 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP/Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. WT/TPR/S/212 Trade Policy Review 
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communications to the TRIPS Council and the TNC during the review period, on issues such as:  
technical cooperation and capacity building237;  the draft amendment to TRIPS Article 29 bis238;  draft 
modalitities for TRIPS related issues under the Doha work programme239;  the Relationship between 
the TRIPS Agreement and the Convention on Biological Diversity (CBD)240;  and the Protection of 
Traditional Knowledge.241 
(b) Legal and institutional framework 
333. Brazil's legislation covers all the major aspects mentioned in the TRIPS Agreement 
(Table III.13).  In some cases, including copyright and pipeline patents, Brazil grants rights that 
exceed the minimum terms laid down in the Agreem ent.  In 2007, Brazil passed new legislation on 
layout designs of integrated circuits, which we re previously not protected by a specific law. 
334. The Interministerial Group on Intellectual Property (GIPI), under CAMEX, created in 
August 2001, is responsible for pr omoting inter-ministerial coordi nation on matters concerning IP 
policy, for providing technical inputs on IP issu es arising in bilateral, regional or multilateral 
negotiations, and for analysing propo sals for IP laws and regulations. 
335. The National Industrial Property Institute (INP I), an autonomous federal agency under MDIC, 
is responsible for implementing rules regulating indust rial property in Brazil.  INPI is also mandated 
to offer comments regarding the advisability of signing, ratifying, and terminating conventions, 
treaties, accords, and agreements on industrial property .  It is responsible for granting or registering 
patents (inventions and utility models), industrial designs, marks, geographical indications, computer 
programs, and technology transfer or franchise contracts.242  In 2007, INPI was appointed as 
International Searching Authority (ISA) and Inte rnational Preliminary Examining Authority (IPEA) 
under the Patent Cooperation Treaty (PCT). 
336. The number of patents granted annually has de creased since 2003;  1,855 were granted, down 
from 4,725 in 2003;  over 90% were to non-residents.  Registrations of industrial designs in 2007 also 
declined from 5,651 in 2003 to 4,085 in 2007.  Trad e marks registrations, on the other hand, increased 
substantially from 10,541 to 128,540.243 
                                                      
237 WTO document IP/C/W/513, 20 June 2008. 
238 WTO document IP/C/W/475, 26 July 2006. 
239 Joint communication with Albania, China, Colo mbia, Croatia, Ecuador, the European Communities, 
Georgia, Iceland, India, Indonesia, the Kyrgyz Republic, Liechtens tein, the Former Yugoslav Republic of 
Macedonia, Moldova, Pakistan, Peru, Sri Lanka, Switzerla nd, Thailand, Turkey, the ACP Group and the African 
Group, WTO documents TN/C/W/52, 19 July 2008, TN/C/W/52/Add.1, 24 July 2008, TN/C/W/52/Add.2 and 
TN/C/W/52/Add.3. 
240 Joint communication with China, Colombia, Cuba, India, Pakistan, Peru, Thailand, and Tanzania.  
WTO document WT/GC/W/564/Rev.2, TN/C/W/41/Rev.2, IP/C/W/474, 5 July 2006;  communication from 
Brazil, WTO document IP/C/W/475, 26 July 2006;  join t communication with China, Colombia, Côte d'Ivoire, 
Cuba, Dominican Republic, Ecuador, Indian, Indonesia, Pakistan, Paraguay, Peru, South Africa, Sri Lanka, 
Tanzania, Thailand, Venezuela, LDC Group and ACP Group, WTO documents WT/GC/W/590, 28 May 2008, TN/CW/49, 28 May 2008, TN/C/W/49/Add.1, 13 June 2008 and TN/C/W/49/Add.2, 10 July 2008. 
241 Joint communication with Bolivia, Colombia, Cuba, India, and Pakistan, WTO document  
IP/C/W/459, 18 November 2005;  and joint proposal with submission from Bolivia, Colombia, Cuba, Dominican Republic, Ecuador, India, Peru, and Thailand, WTO document IP/C/W/442, 18 March 2005. 
242 INPI online information.  Viewed at:  http://www.inpi.gov.br/inpi/conheca_inpi.htm. 
243 INPI online information.  Viewed at:  http:// www.inpi.gov.br/menu-esquerdo/instituto/estatisticas, 
and INPI (2007), Relátorio de Gestão  2006. Brazil WT/TPR/S/212 
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Table III.13 
Overview of IPR protection, 2008 
Coverage Duration Exclusions and limitations Remarks 
Patents 
Industrial Property Law No. 9,279 of 14 May 1996;  Law No. 10,196 of 2001.  Decree No. 4,830/2003  
Any invention that is new and 
involves an inventive step, that is capable of industrial 
application 20 years from the 
date of filing Substances, matter, mixtures, 
and processes for their modification, biological 
processes and natural living 
material;  compulsory licenses may be granted in cases of 
national emergency or in the 
public interest Protection for IPRs, taking into account the 
country's social interest and technological and economic development;   
Law No. 10,196 of 2001: prior approval from 
the National Sanitary Surveillance Agency (ANVISA) for the granting of patents for 
medicines and its processes;   
Decree No. 4,830/2003 amends Decree No. 3,201 of 6 October 1999, which provides for 
the grant of compulsory licences in cases of 
national emergency or in the public interest 
Industrial designs  
Industrial Property Law, Normative Act No, 129 of 1997 Re solution No. 076 of 2000.  Normative Act No. 161 of 2002  
New ornamental form of an 
object or new ornamental 
arrangement of lines or colours 
whose visual configuration is capable of industrial 
application 10 years from date of 
filing;  which can be 
extended for 
3 successive 5-year periods Not registrable when contrary to 
morals and good customs or 
when it is an ordinary shape of 
an object determined essentially by technical or functional 
considerations Resolution No. 076/2000 provides for the 
adoption of the international classification 
system 
Utility models  
Industrial Property Law No. 9,279 of 14 May 1996. 
New invention in a new shape 
or arrangement, capable of 
industrial application 15 years from date of 
filing Substances, matter, mixtures, 
and processes for their 
modification, biological processes and natural living 
material  
Trade marks  
Industrial Property Law, Normative Acts No. 83, 159 and 160 of 2001.  Normative Act No. 110 of 2004 
Visually perceptible sign that 
distinguishes or certifies a good or service 10 years renewable 
for equal successive periods Crests, armorial bearings, 
emblems, flags, national and international monuments Normative Act 83/2001 provides for 
registration forms in accordance with the goods and services international 
classification system;   
Normative Act No. 110 of 2004 establishes rules for the recognition of famous marks 
Geographic indications  
Industrial Property Law, Normative Act No. 075 of 2000  
Name of a country or region 
used to designate a service or 
good whose characteristics or reputation are derived from the 
country or region. Undetermined  Normative Act No. 075 of 2000 establishes 
conditions for the registration of geographic 
indications 
Copyright and related rights  
Law No. 9,610 of 19 February 1998;  Law No. 10,695 of July 2003  
Text of literary, scientific or 
artistic works; musical compositions, audiovisual works, drawings, paintings, 
photographic works.  No 
registration necessary Life of the author 
plus 70 years as the general term of protection;  term 
varies according to 
the type or nature of the work No authorization required where 
the name of the author is cited in the reproduction of current affairs, or the copier uses for 
educational purposes without 
intent for financial gain. Protects the work of the author and of 
foreigners resident outside Brazil;   Law No. 10,695 amends the Criminal Code to include stiffer sanctions for c opyright violations and 
to improve criminal procedures 
Table III.13 (cont'd)WT/TPR/S/212 Trade Policy Review 
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Coverage Duration Exclusions and limitations Remarks 
Computer software  
Law No. 9609 of 19 February 1998  
Information in natural 
language or encoded, used in 
automatic machines for the 
manipulation of data 50 years from 
1 January of the year 
following its 
publication or, if unavailable, its 
creation Acts related to backup copy, 
partial quotes for teaching 
purposes, similarity with a pre-
existing program and integration with an application or 
operational system technically 
indispensable for user needs, shall not constitute offence to 
the rights of the titleholder, 
subject to certain conditions  
New plant varieties  
Plant Variety Protection Law of 25 April 1997 (Law No. 9,456 of 25 April 1997)  
New plant varieties and 
derived plant varieties of any 
genus or species. 15 years from the 
grant of certificate 
except for vines, fruit 
trees, forest trees and ornamental trees, 
including,  the 
mother graft thereof, for which the term is 
18 years. May be subject to compulsory 
licences for three-year periods, 
subject to renewal Guarantees the property  right to any natural 
or legal person obtaining a new plant variety 
or essentially derived variety 
Layout designs of integrated circuits  
Law No. 11,484 of 31 May 2007  
Protection of layout of 
integrated circuits 10 years from 
application No protection for concepts, 
processes, systems or 
techniques on which the layout 
is based or of any information 
stored  Protection may be granted to layouts that 
have been exploited for up to two years 
Undisclosed Information  
Law No. 10, 603 of 17 December 2002  
Undisclosed information 
related to pharmaceutical 
products for veterinary use, fertilizers, pesticides, their 
components and related 
products Up to 10 years May be subject to compulsory 
licences Protects against unfair commercial use, 
information and data presented to the 
authorities for commercial approval 
 
Source: Information provided by the INPI;  and WTO Secretariat. 
337. The processing of patent applications in a reasonable time-period seems to remain a 
challenge.  The average pendency time for patents is seven years.  Brazil maintains an archive of 
international patents (Banco de Patentes do INPI), which contains complete technical descriptions and 
is open for consultation.  The INPI considers this  a valuable source of technological information and 
technology transfer for domestic companies. 
338. Parallel imports of goods embodying IPRs cove red by the Industrial Property Law are not 
allowed.  The Copyright Law does not contain provis ions with respect to the exhaustion of rights.  
The authorities note that in the absence of provisi ons, the law has been interpreted as providing 
national exhaustion. 
339. Whenever a good's characteristics are altered in  such a way as to jeopardize or to make 
impossible its identification, it can be seized ex  officio by customs authorities, both in case of 
importation or exportation.  The holder of an inte llectual property right of any type can request a 
judicial order for the suspension by the customs au thorities of the release into free circulation of 
goods.  Brazil WT/TPR/S/212 
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340. Brazilian legislation provides for the granting of compulsory licences.  In the case of patents, 
compulsory licences may be granted under certain cond itions:  for national emergencies;  to meet the 
public interest;  in cases of abuse of rights or of economic power, for non-commercial use in Brazil;  
and for failure to meet the needs of the market.  Decrees No. 4,830 of 4 September 2003 and 
No. 3,201 of 6 October 1999 regulate the grantin g of compulsory licences in cases of national 
emergency and public interest.  If a compulsory licence is granted in the public interest, it must be for 
non-commercial public use.244  Compulsory licensing of patents may also be used as a remedy for 
anti-competitive conduct, as determined by the CADE.  There is no compulsory licensing of industrial 
designs and trade marks.245 
341. During the period under review, one compulsory licence was issued by Decree No. 6,108, of 
4 May 2007 for one anti-HIV drug (Efavirenz).  This decision was the first of its kind taken by Brazil, 
and allows Brazil to import gene ric versions of Efavirenz or manufacture a domestic version at 
government laboratories. 
342. A patent will be forfeited, ex officio or at the request of any party having a legitimate interest, 
if, after two years since the granting of the first compulsory licence, abuse or disuse has not been 
remedied, unless there are justifiable reasons.  Indus trial design applications are examined only in 
case of challenges.246  Under Law No. 9,279 of 1996 provision w as made for "pipeline" protection for 
certain categories of inventions that were prev iously unpatentable, namely, substances obtained by 
chemical means or processes, medicaments, foods tuffs or chemical pharmaceutical products or 
methods for obtaining or modifying them, provided applications were filed before 15 March 1997.  
Such pipeline protection was made available as an extension of the patent granted in some other 
country or the first-filed application for protection of the invention.  Brazilian patents granted on such 
a pipeline application expire on the same date as that  foreign patent.  During the period under review, 
the INPI filed several cases seeking to remove pa tents granted to pharmaceuticals in the pipeline, 
which were deemed to have been granted incorrectly.247 
343. Law 10,196 of 16 February 2001 amended Law No. 9,279 of 1996, inter alia , with respect to 
the procedures for the patentability of pharmaceu tical products.  The grant of patents for 
pharmaceutical products or processes must receive the prior approval of the Brazilian Sanitary 
Surveillance Agency (ANVISA).  Brazil ratified the General Council Decision on the implementation 
of paragraph 6 of the Doha Declaration on the TR IPS Agreement and Public Health on 13 November 
2007. 
344. Brazil adheres to the Convention on the Protec tion of New Varieties of Plants (UPOV).248  
The plant variety protected may be the object of a compulsory licence.  The INPI has a division that 
covers the protection of geographical indications  and has already approved protection to some 
geographical indications.249 
345. Registration is not required for copyright protecti on.  However, to secure copyright an author 
may register his/her work with the Brazilian National Library;  the School of Music or the School of 
Fine Arts of the Federal University of Rio de Janeiro;  or the Federal Council of Engineering, 
Architecture and Agronomy. 
                                                      
244 INPI online information.  Viewed at:  http ://www.inpi.gov.br/legislaca o/conteudo/dec4830.htm. 
245 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP/Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
246 WTO documens IP/Q/BRA/1, IP/Q2/BRA/1, IP/Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
247 World Intellectual Property, Volume 21, No. 08, August 2007. 
248 WTO document IP/C/M/25, 22 December 1999. 
249 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP/Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. WT/TPR/S/212 Trade Policy Review 
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346. Regarding the collective management of pub lic performance rights for musical works, 
Article 99 of the Brazilian Copyright Law provides that existing private non-profit associations 
maintain a single office for collection and distributi on (ECAD);  this currently brings together ten 
associations.250  The ECAD collects the amounts linked to performance rights and then distributes 
them as follows:  18% of the total is retained by ECAD and 7% is paid to the associations to cover 
their operational expenses.  The remaining 75% is pa id to the associated titleholders:  two thirds are 
distributed for author rights (75% to the authors themselves and 25% for editors);  the remaining third 
is destined to related rights titleholders (except for live music performances, in which case 100% of 
the collected resources are distributed to author right sholders).  The total distributed over 2004-07 was 
R$857 million (US$476 million).  Resources concerni ng related rightsholders are distributed as 
follows:  41.7% are directed to phonogram producers and 58.3% to performers. 
(c) Enforcement 
347. Brazil responded to the questions in the Checklis t of Issues on Enforcement with respect to 
IPRs in 2000.251  The Industrial Property Law establishes ci vil and criminal offences and procedures 
for violation of patents, trade marks, industr ial designs, geographical indications, and unfair 
competition.  Criminal procedures and penalties are available for infringements of all categories of  
intellectual property rights, except plant varieties prot ection.  Patent law violation may constitute civil 
and criminal offences;  penalties of imprisonment gene rally vary from three months to a year, but may 
be increased according to the infringement and the infringer.  The authorities note that, because IPRs 
are private rights, they are not  obliged to act ex-officio. 
348. The Copyright Law establishes which acts are c onsidered civil offences, while crimes are 
described in the Criminal Code.  Penalties vary from three months to four years imprisonment and/or a fine.  Infringement of software copyright is a ci vil and criminal offence, punishable with detention 
from six months to four years, plus a fine depe nding on the infringement, and possible seizure of the 
copies produced or commercialized in violation of copyright.  Only State Courts have jurisdiction 
over criminal acts of infringement of intellectual property rights. 
349. Law No. 10,695 of July 2003 reinforced Brazil's enforcement regime by increasing the types 
of copyright infringement considered as felonies, setting harsher penalties, introducing more stringent 
provisions with respect to the media through whic h counterfeit material can be distributed, and 
reinforcing the power of judges to order, at the requ est of the affected party, the destruction of the 
production or reproduction seized in certain circumst ances.  Enforcement activities have also been 
strengthened with the establishment of the Nationa l Council on Combating Piracy and Intellectual 
Property Crime (CNCP) in the Ministry of Justi ce in 2004, and the Contraband and Customs Evasion 
Repression Division-(DIREP) in the Secretariat of  Fiscal Revenue (SRF) in February 2005.  
A National Plan on Combating Piracy, consisting of 99 specific initiatives was introduced in 2005.
252  
As a result of the measures, seizures have increased.  For example, from January through 
                                                      
250 Associação Brasileira de Música e Artes;  Associ ação de Músicos, Arranjadores e Regentes;  
Sociedade Brasileira de Autores, Compositores e Es critores de Música;  Sociedade Independente de 
Compositores e Autores Musicais;  Sociedade Brasileira de  Administração e Proteção de  Direitos Intelectuais;  
União Brasileira de Compositores;  Associação Brasileira de Autores;  Compositores,  Intérpretes e Músicos;  
Associação Nacional de Autores;  Compositores, Intérprete s e Músicos;  Associação de Intérpretes e Músicos;  
and Sociedade Administradora de Direitos de Execução Musical do Brasil.  This information was gathered by 
the authorities directly from the websites kept by those associations, since there is no State guardianship in collective management of copyrights.  Similarly, these as sociations do not  need governmental authorization for 
their establishment nor are they obliged to provide the State with information regarding their activities. 
251 WTO document IP/N/6/BRA/1, 24 March 2000. 
252 National Council on Combating Piracy (2007). Brazil WT/TPR/S/212 
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September 2006, the SRF undertook 1,025 repression ope rations in 10 fiscal regions, and there was a 
54.73% increase in merchandise seizures compared with the same period in 2005, to a record 
R$602.8 million (US$377 million).  Enforcement activiti es have been particularly intensified along 
the common border of Brazil, Paraguay, and Argent ina;  from January through September 2006, the 
Sealed Border ( Fronteira Blindada ) Operation carried out in that area resulted in seizures amounting 
to about US$57 million, a 31.4% increase over 2005 (US$43.4 million).