WT/TPR/S/146 Trade Policy Review 
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III. TRADE POLICIES BY MEASURE 
(1) OVERVIEW  
1. Since its previous Review in 1997, Paraguay h as taken steps to streamline and modernize its 
trade regime, in particular through the adoption of the WTO definition of transaction value, the 
abolition of preshipment inspection, the establishmen t of a single registry for exports and the entry 
into force of a new Customs Code in January 2005.  In addition, steps have been taken to address 
management and control problems at Customs.  Howe ver, product-specific registries are still used for 
imports and, although steps are being taken to address this issue, export procedures appear 
cumbersome and time consuming. 
2. Tariffs are the main instrument of border prot ection and an important source of fiscal revenue 
(around 20 per cent of annual tax collection).  All tariffs are ad valorem .  The simple average applied 
MFN tariff in 2004 was 8.9 per cent, down by 7 percentage points from 1997;  however, the average 
was higher in 1999 and 2000, when applied tariffs were temporarily increased.  The average applied 
MFN tariff is 9.9 per cent for agricultural prod ucts (WTO definition) and 8.8 per cent for non-
agricultural products.  Paraguay applies MERCOSUR 's Common External Tariff (CET) with some 
exceptions, resulting in an average tariff lower than MERCOSUR's average CET.   
3. Paraguay has bound its entire tariff schedule, thus  increasing the predictability of its trade 
regime.  However, the gap between applied and bou nd tariffs remains relatively wide as the average 
bound tariff is 32.6 per cent.  A number of bound ra tes are below MERCOSUR's agreed tariff levels, 
but the authorities have noted that in thes e cases Customs applies the bound rates.   
4. In addition to tariffs, certain other duties and ch arges are applied exclusively to imports.  All 
imports are subject to a "valuation fee" of 0.5 per cent on the c.i.f. value.  Consular fees are collected for document registration ( visación ).  Additionally, a fee equivalent to 7 per cent of the consular fee is 
charged for the financing of the National Indigenous  Institute.  A service fee of 1 per cent to the 
Directorate of Civil Aeronautics, and of between 0.75 per cent and 3 per cent to the National Shipping 
and Ports Administration are paid on imports handled by these two agencies.   
5. As regards domestic taxes, for the most part  imports and domestically produced goods receive 
the same treatment.  However, since 1998 Paragu ay has increased by 20 per cent, 30 per cent or 
50 per cent the taxable value of certain imported pro ducts subject to excise taxes.  This increase was 
20 per cent in the case of beer and cigarettes.  
6. Fiscal incentives to exports are granted under different regimes, such as temporary admission, 
free zones, in-bond processing (maquila), investme nt regimes, the raw material regime or the 
Automotive Regime of Paraguay.  Paraguay has notifi ed that it does not grant subsidies as defined in 
the WTO Agreement on Subsidies and Countervailing Measures.   
7. Export taxes on bovine leather and soybeans were introduced in 2002 and 2004 to encourage 
local processing;  they were abolished on 1 March 2005.   Exports of bovine leather are also subject to 
prior authorization to guarantee supplies for the dom estic industry;  in 2003, the same requirement 
was introduced for exports of certain metals.  Th e export of unprocessed and semi-processed wood is 
prohibited.   
8. Prior authorization and prohibitions are used fo r health, environmental or security reasons.  
Import restrictions and prohibitions can also  be imposed with the objectives of economic 
development, balance of payments or safeguard s, as well as to protect domestic production from Paraguay WT/TPR/S/146 
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imports.  Paraguay has notified the WTO that it imposed two anti-dumping measures during the 
period under review but no counter vailing measures or safeguards.   
9. Since its previous Review, Paraguay has impo sed a number of sanitary and phytosanitary 
measures and technical regulations and has notified a sanitary measure to the WTO.   
10. Paraguay has no specific domestic legislati on governing competition policy, although certain 
statutes contain related provisions.  A draft comp etition law submitted to Congress in 2003 is still 
under consideration.  State-owned companies engage  mainly in the provision of services, with some 
operating under monopoly conditions.  Although the weak  financial position of some such companies 
prompted the preparation of privatization plans, Congress indefinitely halted the privatization process 
due to a lack of public trust.   
11. Paraguay provides a series of incentives, mostly fiscal, to investment and production.  Some 
benefits are conditional on the use of domestic capital goods or the involvement of Paraguayan 
consultants.  Official credit programmes are also  in place, some targeting specific sectors (see 
Chapter IV).  The automotive industry benefits fro m a special regime, last revised in 1998, that 
requires an increasing use of national components.   Under the provisions of the Agreement on 
Subsidies and Countervailing Measures, Paraguay h as notified that it does not grant subsidies.  
Paraguay has made no notifications under the Agreem ent on Trade-Related Investment Measures.   
12. Paraguay is not a signatory to the WTO Plurila teral Agreement on Govern ment Procurement.  
A new public procurement law was enacted in 2003 to make the procurement process more 
transparent and predictable.  International bidding is used only when no local suppliers are deemed to 
exist, or a treaty so requires.  Participation by  foreign firms may also be conditional on their home 
countries providing reciprocal treatment to Paraguayan firms.   
13. Since its previous Review, Paraguay has adopted  a number of new laws and regulations to 
enhance the protection of intellectual property right s, particularly in such spheres as patents, 
trademarks and copyright.  Paraguay's intellectua l property legislation was reviewed by the WTO 
TRIPS Council in 2000.  Notwithstanding the significan t efforts made to impr ove enforcement, this 
issue remains a source of concern to bo th Paraguay and its trading partners.  
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Procedures, registration and documentation 
14. The Ministry of Finance, through the National Customs Directorate, is the institution 
responsible for administering import procedures.  Th ese procedures are codified in the Customs Code, 
Law No. 2.422 of 5 July 2004, which was regulated  by Decree No. 4.672/05 that entered into force on 
11 January 2005 and replaced the previous Code (Law No. 1.173/85).  The new Customs Code 
includes the requirement that all importers register with the National Customs Directorate.1  Importers 
that have registered their companies through the SOFIA computerized system are exempted from this 
requirement.2  In order to register, importing companies mu st be entered in the trade register with a 
business registration certificate ( Matrícula de Comerciante ).  There are simplified procedures for 
imports effected under the maquila or other special regimes. 
15. In addition, importers of cer tain specific products are re quired to be registered under 
provisions other than the Customs Code (Table III.1). 
                                                      
1 This requirement was previously contained in Resolution No. 239/00. 
2 Resolution No. 1/02 of 7 January 2002. WT/TPR/S/146 Trade Policy Review 
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Table III.1 
Registration requirements for im porters and imported products 
Products Entity Period Legal basis 
Food products and beverages MSPBS  5 years Law No. 836 of 15 December 1980 (Health Code), as 
amended by Law No. 115 of 4 January 1991 
Sugar (HS 1701) MIC Annual  Resolution No. 251/02 of 9 January 2002 
Substances that deplete the ozone layer  MAG Annual Decree No. 3.980 of 6 July 1999 
Mate [Hierba mate] MIC Annual Decr ee No. 17.595/02 of 17 June 2002 
Medicines, proprietary pharmaceuticals 
phytotherapeutic and homeopathic)  MSPBS 5 years Law No. 1.119 of 21 August 1997;  
Decree No. 7.442/00 
Hygiene products for domestic use and 
cosmetics MSPBS 5 years Law No. 836 of 15 December 1980 (Health Code), as 
amended by Law No. 115 of 4 January 1991 
Toxic or dangerous substances of the type used 
in domestic sanitary products (Risk 1) MAG Once Law No. 836 of 15 December 1980 (Health Code), as 
amended by Law No. 115 of 4 January 1991 
Agri-chemicals (pesticides, fertilizers and related substances) SENAVE Once  Law No. 123/91;  MAG Resolution No. 1.000/94  
Lubricant oils and fats for automotive and 
industrial uses MIC Annual  Resolution No. 87 of 18 March 2002 
Petroleum by-products MIC Once for 
each import  Decree No. 10.911 of 25 of October 2000 
Raw materials or machinery to produce 
compact disks, as well as audiovisual materials and software RISMOMPP, 
at the MIC Annual Decree No. 1.175 of 27 January 1999, as amended by 
Decrees No. 10.106/00 of 22 August 2000 and No. 603/2003 of 20 October 2003 
Medical, odontological and laboratory instruments, equipment and devices MSPBS 5 years  Law No. 836 of 15 December 1980, as amended by 
Law No. 115 of 4 January 1991 
Cement MIC Annual Decree No. 18.352/02 of 26 August 2002 
Used vehicles MIC Annual  Decree No. 17.554 of 17 June 2002 
 
Note: MAG – Ministry of Agriculture and Livestock;  MIC – Ministry  of Industry and Trade;  MSPBS – Ministry of Public Health an d 
Social Welfare;  RISMOMPP – Register of Importers of Magne tic and Optic Media and Raw Ma terials for their Production;  
SENAVE – National Plant and Seed Quality and Health Service. 
 
Source : WTO Secretariat. 
 
16. Customs clearance requires the intervention of a customs broker who is authorized to make 
payments of customs duties and other charges.3  Customs clearance requires the presentation of a bill 
of entry or arrival declaration, supplemented by th e commercial invoice, the bill of lading, the airway 
bill (or air consignment note), the declaration of valu e, together with special documents according to 
the type of goods, and the certificate of origin where necessary.4  Since 2001, a value declaration has 
been required for all imports with a value above US$500.5 
17. Goods covered by tariff preferen ces require a certificate of origin in order to receive 
preferential treatment (see section 2 (iv)(d)).  The re quirements for products subject to sanitary, safety 
or other controls include, inter alia , prior authorizations, sanitary, phyt osanitary or health certificates 
(section (2)(iv) and (viii)). 
18. Other documents that may be required, de pending on the products imported, are the 
following:  import authorization , subject to pr ecautionary measures, from the Attorney General's 
Department, in the case of brand products for whic h provisional authorization has been obtained by a 
representative in the country;  RUA (single automotive  register) registration certificate for importers 
using the special inward clearance regime for vehi cles in an irregular situation;  aeronautical 
certificate from the National Directorate of Civil Aeronautics for products placed on the list of exceptions for the aeronautical sector;  taxi federation certificate from the Association of Paraguayan Taxi Drivers in the case of vehicles to be used as taxis;  CNEA (National Atomic Energy 
                                                     
 
3 Article 22 of Law No. 2.422. 
4 MERCOSUR Decision No. 16/94;  Article 79 of Law No. 2.422/04. 
5 Decree No. 13.721/01. Paraguay WT/TPR/S/146 
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Commission) certificate for radioactive products;  DINAR (National Directorate of Narcotics) 
authorization for products controlled by the anti -narcotics law (such as chemical precursors);  
DIMABEL (Directorate of War Materials) author ization for imports of firearms, munitions, 
explosives and the like;6 and SEAM (Environmental Secretariat) certificate for goods containing 
substances that could harm the environment.7 
19. In 2001, a document entitled "Despacho de Im portaciones Menores" was introduced for the 
customs clearance of small imports (up to US$2, 500 f.o.b.).  Under the regime, only commercial 
invoices are required by the National Customs Direct orate as proof of purchase.  However, when 
other institutions are involved, other types of documents may be required, such as sanitary and 
phytosanitary certificates or certificates of origin  for goods to which tariff preferences apply.  
Importers of agricultural and horticultural products  (with the exception of potatoes, onions, pears, 
peppers, garlic, plums, apples, peaches and nectarines, in their different plant varieties) are not eligible for this regime.
8 
20. The introduction of a single customs docum ent (DUAM) at MERCOSUR level has been 
under discussion for some years.  The 1997 report pr epared for the first Trade Policy Review referred 
to the imminent introduction of a DUAM.  Howeve r, in February 2005, the adoption of the DUAM 
had still not become a reality.  In this connection,  the authorities indicated that the ad hoc group for 
the establishment of the DUAM had finished draf ting a definition of the common data which the 
document was to contain and that its introduction would be placed on the agenda of the MERCOSUR 
Trade Commission for 2005. 
21. In 1999, the preshipment inspection (PSI) require ment was abolished and contracts with the  
two specialized PSI agencies, SGS ( Société Générale de Surveillance ) of Switzerland and BIVAC 
International ( Bureau Veritas Group) of France, were cancelled.9  The abolition of the PSI has not 
been notified to the WTO.   
22. The National Customs Directorate controls impor ted products through a system of channels.10  
The new Customs Code incorporates the channel syst em and defines the cha nnels explicitly:  goods 
passing through the green channel are cleared immedi ately, without documentary, physical or customs 
value controls;  goods passing through the red chan nel are subject to such controls and those going 
through the orange channel are subject to documentary control only.11  According to the authorities, 
80 per cent of imports currently pass through the red and orange channels. Risk profiles, such as the 
nature of a product, the exporting country or the im porter, are not taken into account when defining 
the channels for goods clearance.  A small propor tion of imports go through the pilot customs post 
(Aduana Piloto ) introduced in 2003, where 50 per cent of im ports are passed through the red channel.   
In order to facilitate trade, the authorities intend to increase the percentage of goods going through the 
green channel to 80 per cent.   
23. All claims by importers (including disagre ements regarding product classification or 
valuation or the payment of taxes) have to be addressed to the Customs Administrator before the 
goods leave the customs warehouses and within three working days from the date of notification of 
the customs operation.  Once removal from the cu stoms warehouses has been completed, the only 
claims that are admissible relate to formal errors , i.e. wrong figures and errors in the text of the 
                                                      
6 Resolution No. 143 of 17 June 1993. 
7 Documents required by the SOFIA computer system. 
8 Decree No. 13.749/01 of 6 June 2001, as amended by Decree No. 16.675/02 of 14 March 2002. 
9 Decree No. 2.003 of 19 February 1999. 
10 MERCOSUR Decision No. 16/94;  Law No. 2.422/04. 
11 Article 124 of the new Customs Code (Law No. 2.422). WT/TPR/S/146 Trade Policy Review 
Page 36 
 
 
customs clearance documents or other evidentiary ma terial.  The resolutions issued by the Customs 
Administrator in open summary proceedings may be appealed to the National Director of Customs within five working days from the date of notifica tion.  The National Director of Customs is required 
to take a decision within a period of 20 worki ng days, which in exceptional circumstances may be 
extended for a further 20 days. The decisions of the National Director of Customs are appealable  to 
the Court of Audit Department.
12  According to the authorities, most claims have to do with valuation, 
classification and rules of origin. 
24. In recent years, steps have been taken to im prove the customs administration and resolve the 
existing problems of governance, including the appoin tment of new officials as heads of the tax and 
customs administrations.  In September 2003, many customs checkpoints were closed, and this seems 
to explain in large part the 40 per cent increase in tax and customs revenue.   
(ii) Customs valuation 
 
25. Since the adoption of Decree No. 13.721 of 3 Ju ly 2001, Paraguay has fully applied the WTO 
Agreement on Customs Valuation, after having benef ited from a six-year delay for the application of 
certain provisions and having invoked the reser vation concerning the use of minimum values.13  
Decree No. 13.721/01, notified to the WTO in 2004,  established supplementary regulations to Laws 
Nos. 260/93 and 444/94, by which the WTO Agreem ent on Customs Valuation was ratified, and was 
made the applicable standard for establishing the customs value of imports.  In addition, the new 
Customs Code (Law No. 2.422) introduced a sp ecial reference in Arti cle 261 to international 
agreements and the regulations thereto, which ar e to be taken into account when examining the 
declaration of value. 
26. In order to combat unfair practices, false declar ations of value and ta x evasion, in March 2004 
Paraguay introduced minimum reference values for impor ts of apparel, footwear and sports balls of 
Asian origin or imported from certain Asian countries.14  According to the authorities, the reference 
values are employed as high selectivity criteria (red ch annel) for the purpose of a detailed analysis of 
the value declared to Customs.   If the declared va lue is lower than the reference value, the National 
Customs Directorate must be provided with a guara ntee equal in value to the difference between the 
taxes payable on the basis of the reference value and those payable on the basis of the declared value.  
The guarantee is to be returned or credited upon ju stification by the importer of the reason for the 
price difference.15 
27. In 2003, the institutional structure of the Nati onal Customs Directorate was modified through 
the establishment of the Customs Valuation Depart ment to replace the Technical Valuation Unit.  
Among other functions, the Departme nt is responsible for supervis ing compliance with the Customs 
Valuation Agreement and settling claims or  disputes relating to its application.16  Cases of customs tax 
payment shortfalls are punishable by a fine equivalent  to 50 per cent of the amount of the shortfall to 
the Treasury.17 
                                                      
12 Law No. 2.422/04 and its Regulatory Decree (No. 4.672/05). 
13 WTO documents G/VAL/2/Rev.3, 15 April 1996 and WT/Let/1/Rev.2 of 2 May 1995. 
14 Resolution No. 83 of 26 March 2004, as amended by Resolutions No. 129 of 13 May 2004 and 
No. 403 of 21 September 2004 (lowering certain prices established in Resolution No. 83). 
15 Law No. 2.422/04 (Article 284). 
16 Resolution No. 15 of 5 February 2003. 
17 Article 328 of Law No. 2.422/04. Paraguay WT/TPR/S/146 
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(iii) Rules of origin 
 
28. Paraguay has notified the WTO that it has no non-preferential rules of origin.18 
29. Paraguay's preferential rules of origin are set within the context of the Latin American 
Integration Association (LAIA)19, including MERCOSUR.20  Under LAIA agreements which do not 
have their own rules of origin, general LAIA rules of origin apply.  Under these rules, origin is 
conferred:  (a) if the products are processed in th e territory of one of the signatory countries using 
only materials from other signatory countries; or (b) where non-originating materials are used, if a 
change in the tariff heading takes place;  or (c) where this criterion cannot be met, if the c.i.f. value of 
inputs from third countries does not exceed 50 per cent of the f.o.b. value of the final product.  For 
Paraguay, as a relatively less developed country, the proportion of local content is increased to 60 per 
cent.  In the case of assembly operations, the c.i.f. value of inputs from third countries is allowed to 
exceed 50 per cent of the f.o.b. value of the final product. 
30. MERCOSUR agreements and a number of other agreements concluded by Paraguay within 
the LAIA framework have their ow n rules of origin, such as the MERCOSUR agreements with Chile 
and Bolivia and Paraguay's bila teral agreements with Colomb ia, Ecuador, Mexico, Peru and 
Venezuela in the MERCOSUR framework.  In the case of the agreement with Cuba, the general 
LAIA rules apply (see also section (2)(iv)(d)).   
31. MERCOSUR rules of origin are either general or specific.21  Under the general rules, in order 
for origin to be conferred on imported products from other MERCOSU R countries:  (a) the products 
must have been wholly obtained or produced in  MERCOSUR;  (b) a change of tariff heading must 
take place when materials originating in third count ries are used in the production of the good, or the 
f.o.b. value of the final product must not contain more than 30 per cent of inputs from third countries (c.i.f. value).  This requirement also applies to assembly operations.  Howeve r, Paraguayan exports to 
other MERCOSUR countries are subject to a lower domestic or regional content requirement of 
40 per cent until 2008, which means that  up to 60 per cent of inputs may be from third countries.  The 
requirement will be 50 per cent from 2009 until 2014, and 60 per cent from 2014 (section (2)(iv)).  
Specific rules apply to chemical products, footwear, steel, telecommunication products and information technology products. 
32. Under the MERCOSUR agreement with Chile, the change in tariff classification is used as a 
general criterion for determining origin;  otherwise origin is conferred if the c.i.f. value of the 
materials originating from third countries does not exceed 40 per cent of the f.o.b. export value of the 
final product.  Special rules of origin are establis hed for products in HS Chapters 28 and 29.  These 
products must fulfil the general requirement of a change in tariff classification and must also be 
obtained from a production process which introduces a molecular modification resulting from a substantial transformation and cr eating a new chemical identity.
22  For certain goods (listed in 
Appendix 1(c)), regional content must account for at l east 60 per cent of the f.o.b. value.  A number of 
goods (including telecommunication and informati on technology products) are subject to specific 
rules of origin based on originating input materials (Appendix 3) or specific production processes (Appendix 4). 
                                                     
 
18 WTO document G/RO/N/21, 20 July 1998. 
19 LAIA Resolutions No. 78 of 24 November 1987 and No. 252 of 4 August 1999. 
20 WTO document G/RO/N/12, 1 October 1996. 
21 MERCOSUR Decisions Nos. 6/94, 23/94, 16/97 and 3/00, and Resolution No. 27/01, applied in 
Paraguay through Decrees No. 17.326/02 of 29 May 2002 and No. 17.549/02 of 13 June 2002. 
22 Appendix 1(a) of  the Agreement. WT/TPR/S/146 Trade Policy Review 
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33. Under the MERCOSUR agreement with Bolivia, if use of the change of tariff heading method 
is not applicable, origin is conferred when the c.i.f.  value of the material originating in third countries 
does not exceed 40 per cent of the f.o.b. value of  the final product.  In the case of assembly 
operations, any change in tariff heading notwithstandi ng, the 40 per cent rule must be followed.  The 
agreement allows specific rules of origin for certain  products (listed in Appendix 1 to the agreement). 
34. Paraguay's bilateral partial sc ope agreements with Colombia  (see section (2)(iv)(d)) contain 
specific rules for products such as oilseeds, sugar and coffee.  The agreement with Mexico contains 
specific rules for products such as dairy products, oi ls, sugar and confectionery, juices, cigarettes and 
essential oils.  The agreement with Peru contains sp ecific rules for products such as oils, textiles and 
clothing, footwear and steel, zinc and copper prod ucts.  The agreement with Venezuela contains 
specific rules for products such as oils, petroleum and petroleum by-products.23 
35. Certificates of origin are valid for 180 days.  Th ey must be issued by authorized government 
bodies in each country.  In Paraguay, the following entities are authorized to issue certificates of 
origin:  the Paraguayan Industrial Union, the National Chamber of Commerce and Services of Paraguay, the Paraguayan Chamber of Exporters of Cereals and O il Crops, the Paraguayan Chamber 
of Cotton Producers and the Paraguayan Federation of Timber Producers.
24 
(iv) Tariffs 
(a) Structure 
36. The Paraguayan applied tariff has 9,750 lines (at eight digit level) and comprises rates ranging 
from 0 to 30 per cent.  The tariff schedule is based on the Harmonized Commodity Description and 
Coding System (HS) and was updated to the HS 20 02 in 2002.  The simple average applied MFN 
tariff in 2004 was 8.9 per cent, down by 7 percenta ge points from 9.6 per cent in 1997.  However, 
between 1997 and 2000 the average increased, reaching 11.5 per cent in 1999 and 2000.  From 2000, 
it decreased gradually, falling to 8.9 per cent in  2004.  This change reflects the increase and 
subsequent decrease in the Common External Tari ff (CET) (see below).  Moreover, in the period 
1997-2002, as a result of convergence towards the CET,  an increase was noted in the nominal tariff 
for most of the products included in the exception li sts.  The average applied MFN tariff is 9.9 per 
cent for agricultural products (under the WTO de finition) and 8.8 per cent for non-agricultural 
products (Table III.2).  All tariffs are ad valorem  and are levied on the c.i.f. value of the imported 
product.  Paraguay grants at least MFN treatment to all its trading partners.  It does not impose 
temporary or variable import levies, but did appl y seasonal tariffs to certain agricultural products up 
to 2000.  The products affected by temporary levi es were mainly products associated with fruit and 
vegetable production in the natural state.  These levi es ceased to be applied at the end of the period of 
validity of the MERCOSUR adjustment schedule in 2000 (see below). 
                                                      
23 For further details, see http://www.aladi.org 
24 Decrees No. 13.960/96 of 28 June 1996 and No. 19.225 of 31 October 2002. Paraguay WT/TPR/S/146 
 Page 39 
 
 
Table III.2 
Summary analysis of Paraguay's MFN tariff, 2004  
   MFN  
Product description N° of lines Average 
(%) Section 
(%) Coefficient of 
variation Bound tariffs 
Averagea 
(%) 
Total 9,750 8.9 0 - 30 0.8 32.7 
       
HS 01-24 1,044 10.1 0 - 30 0.5 33.3 
HS 25-97 8,706 8.7 0 - 28 0.8 32.6 
       
WTO categories      
Agricultural products (WTO) 959 9.9 0 - 30 0.5 33.2 
 - Animals and products of animal origin 112 8.2 0 - 16 0.5 32.4 
 - Dairy products 34 15.1 12 - 16 0.1 34.1 
 - Coffee and tea, cocoa, sugar, etc. 171 14.0 0 - 30 0.3 34.5 
 - Cut flowers, plants 54 5.7 0 - 25 0.8 35.0 
 - Fruit and vegetables 195 9.9 0 - 14 0.4 31.9 
 - Cereals 35 6.2 0 - 12 0.8 32.7 
 - Oilseeds, oils and fats and products thereof 111 7.9 0 - 12 0.4 33.9 
 - Beverages and spirits 42 16.6 10 - 20 0.2 30.0 
 - Tobacco 18 14.7 10 - 20 0.2 24.7 
 - Other agricultural products n.e.s. 187 7.1 0 - 14 0.6 33.9 
Non-agricultural products (WTO) (including 
petroleum) 8,791 8.8 0 - 28 0.8 32.6 
 - Non-agricultural products (WTO) 
 (excluding petroleum) 8,765 8.8 0 - 28 0.8 32.6 
 - - Fish and fishery products 200 9.9 0 - 16 0.3 34.7 
 - - Mineral products, stones 454 7.3 0 - 20 0.8 33.7 
 - - Metals 769 11.0 0 - 18 0.5 34.5 
 - - Chemicals and photographic goods 3,092 7.0 0 - 18 0.8 32.6 
 - - Leather, rubber, footwear a nd travel goods 240 12.3 0 - 25 0.4 34.9 
 - - Wood, wood pulp, paper and furniture 364 10.7 0 - 18 0.5 33.4 
 - - Textiles and clothi ng 1,001 17.4 2 - 25 0.2 33.7 
 - - Transport equipment 198 8.5 0 - 28 0.9 30.1 
 - - Non-electrical machinery 1,137 3.0 0 - 20 1.7 31.4 
 - - Electrical machinery 591 7.6 0 - 22 1.0 30.2 
 - - Non-agricultural products n.e.s. 719 10.8 0 - 20 0.8 31.8 
 - Petroleum 26 0.7 0 - 6 2.4 35.0 
      
ISIC sectorsb      
Agriculture and fishing 421 7.1 0 - 25 0.6 32.8 
Mining 139 3.3 0 - 10 0.6 34.1 
Manufacturing industries 9,189 9.0 0 - 30 0.8 32.6 
      
HS Sectors      
  01  Live animals;  animal products 342 9.0 0 - 16 0.4 33.7 
  02  Vegetable products 362 7.7 0 - 25 0.5 33.3 
  03  Fats and oils 71 9.6 4 - 12 0.2 33.3 
  04  Prepared foodstuffs, etc.  269 14.7 2 - 30 0.3 32.9 
  05  Mineral products 214 2.5 0 - 6 0.7 34.4 
  06  Products of the chemical or allied 
industries 2.933 6.6 0 - 18 0.8 32.4 
  07  Plastic and rubber 406 11.2 0 - 18 0.5 34.8 
  08  Raw hides and skins 121 11.1 2 - 20 0.5 35.0 
  09  Wood and articles of wood 107 7.9 2 - 14 0.5 34.7 
  10  Pulp of wood, paper, etc. 230 11.2 0 - 16 0.4 32.5 
  11  Textiles and textile articles 976 17.2 2 - 25 0.3 33.6 
  12  Footwear, hats and othe r headgear 62 19.5 16 - 25 0.1 35.0 
  13  Articles of stone 210 10.4 0 - 20 0.4 34.4 
  14  Precious stones, etc. 64 9.6 0 - 18 0.6 32.9 
  15  Base metals and articles of  base metal 739 11.7 0 - 20 0.4 34.5 
Table III.2 (cont'd) WT/TPR/S/146 Trade Policy Review 
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   MFN  
Product description N° of lines Average 
(%) Section 
(%) Coefficient of 
variation Bound tariffs 
Averagea 
(%) 
  16  Machinery and mechanical appliances 1,765 4.8 0 - 22 1.4 30.8 
  17  Transport equipment 211 8.2 0 - 28 0.9 30.4 
  18  Precision instruments 476 8.2 0 - 20 1.0 31.4 
  19  Arms and ammunition 21 20.0 20 - 20 0.0 34.7 
  20  Miscellaneous manufactured articles 164 17.3 0 - 20 0.2 34.7 
  21  Works of art, etc. 7 4.0 4 - 4 0.0 33.6 
       
By stages of processing      
First stage of processing 911 6.6 0 - 25 0.7 33.4 
Semi-processed products  3,704 8.7 0 - 30 0.7 34.2 
Fully processed products  5,135 9.4 0 - 28 0.8 31.4 
a The bindings relate to the HS 96 classification and the rates applied to HS 2002;  consequently, there may be discrepancies 
between the number of lines  included in the analysis. 
b ISIC (Rev.2), excluding electrical goods (one line). 
Source : WTO Secretariat estimates, based on data supplied by the Paraguayan authorities. 
37. Paraguay's tariff structure shows relatively low dispersion, as measured by a coefficient of 
variation of 0.8.  Fourteen per cent of all tari ff lines are duty free (Table III.3) and the share of non-
duty free lines to which rates of 5 per cent or less are applied represents almost 25 per cent of total 
lines (Chart III.1).  The highest tariffs (22 per cent and above) concern 66 lines.  Tariffs over three 
times the average value affect onl y five lines that stand at 28 and 30 per cent.  The product groups 
with the highest average tariffs in 2004 were cane  and beet sugar (30 per cent), motor vehicle parts 
(28 per cent), cotton, articles of apparel and footwear  (25 per cent).  Since its last Review, Paraguay's 
11-tier tariff has been transformed into a 23-tier tariff.25   
Table III.3 
Paraguay's MFN Tariff Structure, 1997 and 2004 
(Per cent) 
  1997 2004 
1. Total number of lines 9,105 9,750 
2. Non- ad valorem  tariffs (% of tariff lines) 0.0 0.0 
3. Non- ad valorem  tariffs with no AVEs (% of tariff lines) 0.0 0.0 
4. Tariff quotas (% of tariff lines) 0.0 0.0 
5. Duty-free tariff lines (% of tariff lines) 6.1 14.0 
6. Average lines above zero (%) 10.3 10.3 
7. Domestic tariff  "peaks"  (%  of all tariff lines) a 0.0 0.1 
8. International tariff  "peaks" (%  of all tariff lines)b 26.2 22.7 
9. Bound tariff lines (% of tariff lines) 100.0 100.0 
a Domestic tariff peaks are defined as those exceeding th ree times the overall simple average applied rate.   
b International tariff peaks are defined as those exceeding 15 per cent  
Source : WTO Secretariat calculations , based on data provided by the Paraguan authorities. 
                                                      
25 The rates are 0, 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 22, 25, 28 and 30 per cent.  
In 1997, the tiers were:  0, 2, 4, 5, 6, 8, 10, 12, 14, 16, 18 and 20 per cent.  Paraguay WT/TPR/S/146 
 Page 41 
 
 
38. The tariff shows signs of escalation in most industries, with imports of raw materials being 
subject to a lower average tariff (6.6 per cent) th an semi-processed (8.7 per cent) and fully processed 
(9.4 per cent) products. Exceptions to this are th e chemical industry and fa bricated metal products 
(Chart III.2).   
39. Paraguay has applied MERCOSUR's Common Exte rnal Tariff (CET) since 1995;  exceptions 
to the CET (see below) represent around 24 per cent of tariff items.  The adoption of CET rates and gradual convergence thereto are expected to lead to an increase in nominal average tariff protection.  
In 1994, Paraguay's tariff rates were expected to converge to the CET by 2006;  however, in 2003, 
Paraguay and Uruguay were gran ted an extension until 2010.
26   
 
 
                                                      
26 MERCOSUR Decisions Nos. 31/03 and 34/03. (0.6%)(22.0%)
(18.3%)(20.5%)  
(14.0%)  (24.5%)  
(0.1%) 
0 500 1,000 1,500 2,000 2,500 3,000 
Duty free  
 >0-5 >5-10 >10-15 >15-20 >20-25 >25 0 10 20 30 40 50 60 70 80 90 100 Chart III.1   
Frequency distribution of  MFN tariff rates, 2004      
Number of tariff linesa    Percentage  
Cumulative per cent 
Number of lines  (% of total)  
The total number of ad valorem  lines is 9,750.
 WTO Secretariat calculations, based on data provided by the authorities of Paraguay.a 
Source  :  WT/TPR/S/146 Trade Policy Review 
Page 42 
 
 
 
40. Until 1997, CET levels were included in a range  of 0–20 per cent, with some exceptions.  
However, these levels, excluding specific levels  in the exceptions list, underwent a transitional 
increase of 3 per cent in November 1997, raising the CET ceiling from 20 to 23 per cent.27  In 2001, 
the tariff increase was lowered to 2.5 percentage28,  and from 1 January 2002, was reduced from 2.5 to 
1.5 percentage.29  It was initially planned to phase out the 1.5 per cent increase by 31 December 2002, 
but Decision CMC No. 21/02 extended it to 31 D ecember 2003, when it wa s eliminated.  Goods 
included in the list of capital goods, the basic list of exceptions, the information technology and telecommunications list, sugar and automotive pr oducts, as well as a number of other products 
included in the List of Products Exempt from the Temporary Tariff Increase, annexed to the Common 
External Tariff (the "exclusion list") were excluded from the transitional increase.
30 
41. Paraguay, like the other MERCOSUR Members,  has established the following lists of 
exceptions to the CET:  the list of capital goods (B K list), which contains 1,188 tariff items at the 
8-digit tariff line level, with tariffs of 0 and 6 per cent, lower than the CET;  the list of information 
technology and telecommunication goods (BIT), which contains 427 items with tariffs of 0 and 2 per 
cent, lower than the CET;  and the list of nationa l exemptions, known as the basic list of exceptions 
(LBE), which contains 459 items, 96 per cent of which are subject to tariffs lower than the CET, while 
the remaining 4 per cent carry tariffs equal to the CET.31  There is a further list of exceptions, valid 
                                                      
27 MERCOSUR Decision No. 15/97 and Decree No. 2.376 of 12 November 1997. 
28 MERCOSUR Decision No. 67/00. 
29 MERCOSUR Decision No. 06/01. 
30 Decree No. 19.931/98 of 13 February 1998. 
31 Information provided by the Paraguayan authorities.  The basic list of exceptions chiefly comprises 
such products as certain semi-processed agricultural g oods, tobacco, chemicals, medicines, fertilizers, dyeing 0 5 10 15 20 25 
Raw materials Semi-processed Fully processed  Chart III.2   
Tariff escalation by ISIC 2-digit industry, 2004   
Percent  
  Source :  WTO Secretariat calculations, based on data provided by the authorities of Paraguay  Food, 
beverages Textiles,
apparel   
 Wood 
products   Paper, 
printing Chemicals, 
plastics  
 Non-metallic 
mineral 
products 
 
 Basic metal 
products   
  Fabricated 
metal 
products 
NOT APPLICABLE  Paraguay WT/TPR/S/146 
 Page 43 
 
 
until 31 December 2005, which comprises 100 tariff items for each MERCOSUR Member State.  
Alterations of up to 20 per cent of the codes can be made to the list every six months.  In the case of 
Paraguay, the authorities reported that 49 per cent of items are subject to tariffs lower than the CET, 
and 51 per cent to tariffs higher than the CET.   Apart from the 100 items mentioned above, the 
MERCOSUR regulations allow Paraguay to maintain 150 additional tariff items as exceptions to the 
CET;  these exceptions are valid until 2010.32  The list of exceptions under the intra-MERCOSUR 
adjustment regime was eliminated on 31 December 1999.33 
42. The MERCOSUR common regime for the automo tive sector was not yet in force in 
February 2005.  In the meantime, the automotive tariffs applied to imports from outside MERCOSUR 
were established by Decree No. 19.943/02, wh ich replaced Decree No. 12.038/95 establishing a 
temporary regime for that sector pending approval of the MERCOSUR common regime.34 
43. The MERCOSUR countries were expected to ag ree on a common regime (including the CET) 
for sugar by 2001, but this did not happen.  Sin ce the last Review, Paraguay has been applying a 30 
per cent tariff on sugar imports (HS 1701) irrespec tive of origin, including imports from countries 
outside MERCOSUR.  Initially, this tariff was in troduced in 1995 on a temporary basis, but its 
application was extended in 2001 pending the adoption of a common MERCOSUR regime for 
sugar.35  In 1999, the customs value for the applicat ion of tariffs on sugar (HS 1701) was set at 
US$0.31/kg.  This fixed value was expected to re main in force until 31 December 1999, but it was 
extended several times, and finally eliminated on 31 December 2000.36 
44. In November 1998, and up to 31 December 1999, Paraguay adopted minimum specific import 
duties (DIEM) on certain agricultural products, certain  flat-rolled iron or steel products, certain items 
of furniture, crown corks, certain articles of appa rel and clothing accessories, and certain types of 
footwear, in order to "counteract distortions of trade affecting the domestic economy".  The level of 
duties varied between 300 and 5,000 Guaraníes pe r kilo, or between 2.80 and 3,000 Guaraníes per 
unit, depending on the product.37  In July 2001, in order to "counteract distorting effects on the 
domestic economy and maintain the competitivene ss of domestic products", Paraguay adopted a 
temporary import measure (METI) on certain product s, affecting some 330 tariff lines.  The METI 
consisted of a 10 per cent duty applied on the taxable value (i.e. the c.i.f. import value) of the goods 
listed in the Annex to Decree No. 13.835/01.  This  measure was amended in September 2001, so as to 
apply either the 10 per cent tax or the customs levy ( gravamen aduanero ), whichever was higher.38  
The measure was repealed on 31 December 2003.39 
45. Under the new Customs Code, customs duties and ot her tax credits are paid  to the account of 
banks legally authorized for the purpose.40  Previously, such payments we re made in cash or by means 
                                                                                                                                                                     
materials, cosmetics, paper, textiles, footwear, article s of iron and steel and copper, electrical appliances 
(including audiovisual equipment), watches, games and toys. 
32 MERCOSUR Decision No. 68/00, extended by MERCOSUR Decision  No. 31/03.  Available on line 
at:  http://www.mercosur.org.uy/pagina1esp.htm 
33 The adjustment regime schedule comprised 288 8-digit items, including meat, milk, honey, eggs, 
tomatoes, carrots, bananas, processed rice, vegetable oil,  jam, coffee, cigarettes, cement, leather, wood and 
wood products, articles of paper, bags, articles of cotton, footwear, containers and furniture. 
34 The intra-MERCOSUR regime was established by Decrees No. 17.596/02 and No. 19.899/02. 
35 Decree No. 15.975/01 of 31 December 2001. 
36 Decrees No. 3.916 of 25 June 1999 and No. 7.804 of 8 March 2000. 
37 Decree No. 1.133/98 of 27 November 1998. 
38 Decree No. 14.527/01 of 4 September 2001, as amended by Decree No. 16.031 of 9 January 2002. 
39 Decree No. 21.641/03 of 16 July 2003. 
40 Law No. 2.422/04 (Article 274). WT/TPR/S/146 Trade Policy Review 
Page 44 
 
 
of a cheque certified by the banking institution.  Following the introduction of the new Customs Code 
regulations, the customs agent is required to have  a bank account certified by the authorized bank. 
46. Import duty revenue in 2003 amounted to a total of 665.1 billion Guaraníes, equivalent to 
10.8 per cent of tax revenue and 4 per cent of the value of imports. 
(b) Tariff bindings 
47. During the Uruguay Round, Paraguay bound all its tariff lines at a uniform rate of 35 per 
cent.41  Including its pre-Uruguay Round commitments , Paraguay's average bound tariff is 32.6 per 
cent, and both agricultural and non-agricultural produc ts (WTO definition) have been bound at this 
same average rate.  Bindings are reported in accord ance with the HS 96 classification and all lines are 
ad valorem .  Market access commitments for agri cultural products are free from tariff quota 
limitations. 
48. In October 1996, Paraguay transposed its pre- Uruguay Round bindings from HS 92, in which 
they had originally been recorded, to HS 96.  These changes were submitted to the WTO Secretariat 
in 1996.  In that connection, the authorities provi ded assurances that the changes had not led to 
Paraguay failing to fulfil its binding obligations.42  Paraguay held successful consultations with the 
countries which made comments. 
49. Paraguay's MFN schedule, as provided by the Pa raguayan authorities in the context of this 
Review and used for the statistical calculations c ontained in this report, comprises 47 tariff lines for 
which applied duties are higher than bound rates, ta king into account only lines strictly comparable 
between HS 96 and HS 2002.  These tariff lines in clude headings such as tobacco, pharmaceutical 
products and some woven fabrics, as well as magnetic  tape recorders.  The authorities stated that, 
when the applied rate is higher than the bound rate, customs officers apply the bound rate. 
50. In November 1996, the MERCOSUR countries notif ied to the WTO their intention to hold 
consultations with interested parties, with a vi ew to examining the cha nges introduced by the CET 
and the maintenance of the general level of concessions.43  The consultations were to be held jointly 
by the MERCOSUR member countries on dates to be agreed  with the interested parties.  At the end of 
2004, the consultations had not been completed. 
(c) Tariff concessions 
51. Tariff exceptions are available under different customs regimes (see section (3)(iv)), the 
investment regimes (Chapter II(3) and section (4)(iii)) or the raw materials regime.  The Automotive Regime of Paraguay, established in 1998, provides tariff exemptions for various inputs used in the 
automotive industry and grants tariff reductions to a range of automotive products (see section (4)(iii) 
below).  Tariff concessions are also granted under th e tourism regime discussed in Chapter IV(5)(vii). 
52. The raw materials regime, introduced in 1997, grants agricultural and industrial enterprises a 
tariff exemption for imports of raw materials and other inputs used in production.
44  The regime was 
initially due to end on 1 January 1999;  however, it h as been extended several times, and the planned 
                                                      
41 Before the Uruguay Round, a nd upon accession to the GATT, Paragu ay bound its customs tariff at 
rates varying between 10 and 35 per cent. 
42 WTO document G/MA/TAR/2/R ev.5, 19 Dece mber 1996. 
43 WTO document WT/COM/TD/1/Add.5/Rev.1, 6 November 1996. 
44 Decree No. 16.416/97 of 27 February 1997. Paraguay WT/TPR/S/146 
 Page 45 
 
 
date of termination is now 31 December 2005.45  Decree No. 11.771/02 introduced a minimum import 
value of US$1,500 for goods to qualify for this regime. 
53. Other tariff-exempt imports include:  capita l goods;  goods exempted under international 
treaties;  baggage of international travellers;  baggage and household eff ects of immigrants and 
Paraguayan citizens returning to the country;  goo ds intended for cultural purposes;  samples with no 
commercial value;  certain medicines (e.g. insuli n);  and printed material (books, magazines, 
newspapers). 
54. In order to ensure regular supplies of raw materials and inputs, the MERCOSUR regulations 
provide for a temporary reduction for one year (rene wable) of CET rates to 2 per cent for twenty 
eight-digit HS headings (MERCOSUR nomenclature) (as selected by each Member).46  Members may 
make these reductions provided that supplies of these products are not available at the MERCOSUR 
level and that the tariff cuts do not distort trade fl ows or affect the conditions of competition in the 
region.  Paraguay made use of these provisions for Japanese mint essence47 and polyester film in 
1996, and for phosphate fertilizers in 1997;  imports at  the reduced rates were subject to quantitative 
limitations.48  The authorities have indicated that there have been no further tariff reductions since 
1997.   
(d) Preferences 
55. As at January 2005, Paraguay granted tariff preferences to imports originating from 
Argentina, Brazil and Uruguay under the MERCO SUR framework, from Bolivia and Chile under 
Economic Complementarity Agreements Nos. 35 and 36, respectively;  and from Colombia, Cuba, 
Ecuador, Mexico, Peru and Venezuela under the Re gional Tariff Preference (RTP) system and the 
partial-scope agreements signed by each of tho se countries in the LAIA framework;  (see 
Chapter II (4)(ii) and section (2)(iv)).   
56. Under LAIA's RTP system, members accord a 20 per cent preferential tariff reduction on 
imports from other members at the same level of development, a smaller reduction on imports from 
relatively more developed members, and greater re ductions on imports from relatively less developed 
countries.49  As a relatively less developed member ther efore, Paraguay grants a reduction of 20, 12 
and 8 per cent to other members, according to thei r level of economic development.  The exceptions 
list of relatively less developed member countries ma y contain up to 1,920 items; the Paraguayan list 
contains 1919 items of the LAIA nomenclature (NALADI) and mainly covers products such as 
organic chemicals, wood, wood charcoal and arti cles of wood, inorganic chemicals, animal or 
vegetable fats and oils, and apparel and clothing accessories.50 
57. Among the different partial-scope agreements  applied in November 2004, the MERCOSUR 
agreements with Chile and Bolivia and Paraguay's b ilateral agreement with Ecuador have the highest 
product coverage.  Paraguay's ag reement with Mexico has medium coverage (15 per cent of 
                                                      
45 Decree No. 16.416/97 of 27 February 1997, as amended by Decrees No. 19.339/97 of 
12 December 1997, No. 19 .932/98 of 13 February 1998, and No. 11.771/00 of 29 December 2000. 
46 MERCOSUR Resolutions No. 22/95, No. 37/95 and No. 69/96. 
47 Decree No. 12.169/96 of 17 January 1996. 
48 Decree No. 15.417/96 of 8 November 1996 and Decree No. 14.141/96 of 15 July 1996. 
49 In the LAIA framework, countries are divided into three groups according to their economic 
development:  relatively less economically developed countries (Bolivia, Ecuador and Paraguay);  countries at 
an intermediate level of development (Colombia, Chile, Peru, Uruguay and Venezuela); and other member 
countries (Argentina, Brazil and Mexico).  
50 Regional Agreement No 4, second amending protocol. WT/TPR/S/146 Trade Policy Review 
Page 46 
 
 
Paraguayan and 31 per cent of Mexican tariff lin es), and other agreements  have relatively low 
coverage.51 
58. At the end of 2004, under the MERCOSUR agreem ent with Chile, Paraguay granted duty free 
entry to all goods of Chilean origin except " sensitive" products52 which accounted for 2.2 per cent of 
all tariff lines.  Goods in the lists of sensitive products and speci al sensitive products (Annexes 2 and 
3, including products such as flowers, some vegeta bles, chocolate and beer, wood, plastic, chemicals, 
glass, electrical appliances and toys) carry in 2005 a preferential margin over MFN rates of 90 per cent and 86 per cent, and cover 519 items.  The Pa raguayan list of automobile parts (Annex 4) 
enumerates preferences to be granted to imports of these items from Chile.  The preferential Annex 4 
margins in 2004 ranged from 10 to 35 per cent, and it is planned to grant a 100 per cent preference by 
2008.  The products in the list of quotas for sens itive products (Annex 5) were granted temporary 
waivers for the application of lower rates of reducti on or no reduction pending their incorporation in 
Annexes 2 or 3.  Consequently, imports from Chile of  a range of agricultural products (such as garlic, 
avocados, nectarines and cocoa powder) and some ma nufactured products included in the list received 
no preference on the part of Paraguay in 2004.  Pr oducts such as meat and other foodstuffs, motor 
vehicles, cements, some chemicals, books and some  articles of paper (Annex 6, 139 items) will be 
subject to tariff reductions starting in 2006 and ending in 2011.
53 
59. Under the MERCOSUR-Bolivia agreement, imports  of all products (including a range of 
agricultural products, clothing and capital goods ) should be duty free in 2006;  for 2005, the 
preferential margin granted for these products varies between 80 and 96 per cent.  For products such 
as agricultural goods, textiles and clothing, machin ery and equipment, and motor vehicles, tariff 
reductions start in 2005 and shou ld reach 100 per cent in 2011 and 2014 (the latter year concerns 
agricultural products only). 
60. The coverage and timetable of tariff reductions under the partia l-scope agreements concluded 
by Paraguay in the LAIA framework vary from one agreement to another.  However, no bilateral 
agreement provides for full trade liberalization.  Pa raguay grants preferential treatment, in decreasing 
order of coverage to:  Ecuador, in respect of 6,9 33 tariff lines, with a preferential margin of 40 per 
cent;  Mexico, in respect of 950 lines, for whic h the preferential margin varies between 10 and 
100 per cent;  Cuba, in respect of 337 lines, with preferential margins of 50, 75 or 100 per cent;  
Venezuela, in respect of  192 lines, with a pr eferential margin which varies between 34 and 100 per 
cent;  Peru, in respect of 75 lines, for which th e preferential margin varies between 30 and 100 per 
cent;  and Colombia, in respect of 35 tariff lin es, with preferences of 20 to 100 per cent.54 
61. Paraguay, as a party to MERCOSUR, approved the Protocol for the Accession of 
MERCOSUR to the Agreement on the Global Syst em of Trade Preferences among Developing 
Countries (GSTP)55  The authorities stated that Paraguay  will grant GSTP preferences when the law 
ratifying MERCOSUR's accession to the system ente rs into force, which is conditional on accession 
and ratification by Argentina and Uruguay. 
                                                      
51 The LAIA system of preferences, 28 June 2002, available on-line at: 
http://www.aladi.org/nsfaladi/estudios.nsf/438f22 281c05235303256848005ea465/fb19b13eab06a54f03256c310
05a963b/$FILE/128rev2.pdf 
52 Products included in Annexes 6, 8 and 9 of Economic Complementarity Agreement No. 35.  
53 Full lists of products and tariff reductions are available on-line at:  
http://www.sice.oas.org/ Trade/msch/mschind.asp 
54 The LAIA system of preferences, 28 June 2002, available on-line at: 
http://www.aladi.org/nsfaladi/estudios.nsf/438f22 281c05235303256848005ea465/fb19b13eab06a54f03256c310
05a963b/$FILE/128rev2.pdf 
55 MERCOSUR Decision No. 51/00. Paraguay WT/TPR/S/146 
 Page 47 
 
 
(v) Other charges affecting imports 
62. Value-added tax (VAT) is levi ed on both imported and local goods and services.  In 2005, 
VAT was applied at a uniform rate of 10 per cent.  However, as a result of the changes introduced in 
2004 by Law No. 2.421/04 (administrative reorga nization and fiscal adjustment), and following its 
entry into force with respect to VAT (on 1 January 2006), a reduced rate of 5 per cent will be applied 
to the sale of certain household products such as rice,  noodles, maté, edible oils, milk, eggs, raw meat 
and flour, iodized salt, agricultural products, firewood, round logs, pharmaceuticals, books, 
magazines, newspapers and othe r printed matter, loans and fina ncing, and contracts for the 
assignment of assets or the disposal of real estate.56  In all other cases, the rate will be 10 per cent.  
Two years after the entry into force of Law No. 2. 421/04, the Executive is authorized to increase the 
VAT applied to products subject to the 5 per cen t rate (with the exception of contracts for the 
assignment of assets and the disposal of real estate) by a maximum of one per cent per year, up to a level of 10 per cent (but not earlier than seven years after its entry into force). 
63. In the case of imports, VAT is calculated on the customs value (c.i.f. value) expressed in 
foreign currency and determined by the Customs Va luation Service, plus customs duties (even if 
products benefit from tariff exemption) and all othe r charges levied prior to customs clearance and 
domestic taxes.
57  Some products that are mostly sold to  tourists and persons  travelling to other 
countries are subject to a special payment regime and a reduced basis of assessment amounting to 
15 per cent of the value referred to above.58 
64. Exemptions from the payment of VAT under Law No. 2.421/04 apply to agricultural products 
in their natural state or products that have not b een subjected to processing, such as green and other 
vegetables in their natural state, fish and game, magazines of educational, cultural and scientific 
interest, books and newspapers.  In addition, sal es of capital goods produced by local manufacturers 
for direct use in industrial or agricultural produc tion, when made by investors covered by Law 
No. 60/90, are also exempt from the payment of VAT.  Certain previously exem pted products, such as 
crude petroleum and fuels derived from petroleum will be subject to VAT following the entry into 
force of the amendments incorporat ed by means of Law No. 2.421/04. 
65. VAT collection has been increasing steadily, in monetary terms, since 1998 (Table I.3) and 
remains an important source of tax revenue, accounting for more than a quarter of total tax revenue in 
2003. 
66. As its name indicates, the selective consumption tax ( Impuesto Selectivo al Consumo ) applies 
only to certain products, whether imported or produced locally.  Th e rates for this tax are set by 
Executive Decree, taking into account the maximum ra tes for each product under Law No. 2.421/04.  
Decree No. 4.344/05 lays down the rates currently applicable:  10 per cent in the case of tobacco 
products, 12 per cent for cigarettes;  5 per cent for non-alcoholic aerated beverages;  8 per cent for 
beer;  10 per cent for wine and liqueurs, with the exception of champagne or equivalent, to which a 
                                                      
56 Article 78 of Law No. 2.421/04 defines enajenación  (disposal) as:  any operation for value or 
without consideration which involves the handing over of goods with transfer of ownership, or which gives the 
recipients the right to dispose of them as if they were  the owners.  Available on-line at the following address:  
http:// www.hacienda.gov.py/sset/disposiciones/2004/ley_2421_04.htm 
57 Law No. 125/91. 
58 The goods concerned are listed in Decree No. 15.199/96 of 21 October 1996, as amended by Decree 
No. 16.067/97 of 20 January 1997 and Decree No. 10.624/00 of 25 September 2000. WT/TPR/S/146 Trade Policy Review 
Page 48 
 
 
rate of 12 per cent applies.  In the case of petrol eum fuels, the applicable rate varies between 1 and 
38 per cent depending on the product.59 
67. From 2005, some new products are subject to th e selective consumption tax, at rates of 1 or 
5 per cent.  They include perfumes, toilet waters a nd beauty and make-up products;  precious or semi-
precious stones and pearls;  watches;  and arms, am munition and parts thereof, which are subject to a 
rate of 5 per cent.  Certain air-conditioning machin es and appliances;  electrical (household and other) 
appliances;  data processing machines;  magnetic or  optical readers;  photocopying machines;  and 
recorders, televisions, video monitors and pr ojectors, cellular telephony devices and portable 
terminals are subject to a rate of 1 per cent.  Musi cal instruments and parts thereof, as well as toys and 
games, are also subject to the new tax, but they carry a zero per cent rate. 
68. In the case of imported articles, excise taxes ar e calculated on the basis of the customs value 
expressed in foreign currency, as determined by the Customs Valuation Service, plus customs duties, 
even where the products are exempt, as well as othe r taxes payable before customs clearance, apart 
from VAT.  For domestic products, the basis of calcula tion is the factory sales price less VAT.  The  
basis of assessment for the application of indirect  taxes is subject to certain adjustments in some 
cases, depending on the product.  In 1998, Para guay increased the base value for certain imported 
products subject to excise taxes as follows:  by 50 per cent for imports of unleaded 95 octane petrol (HS 2710.00.29);  by 30 per cent for beer;  and by 50 per cent for cigarettes.
60  In 1999, the increase 
on cigarettes was lowered from 50 per cent to 20 per cent.61  Decree No. 4.344/05 introduced an 
assessment basis determination system which modi fied the conditions previously applicable to 
products subject to a special valuation regime.  U nder this Decree, the assessment basis is determined 
as follows:  (a) in the case of gas oil, taking into account the official retail sales price set by the 
Executive for the quantity of litres imported;  (b) in  the case of beer and cigarettes (tariff heading 
2402.20.00), the assessment basis normally indicated is  increased by 20 per cent;  (c) in the case of 
regular grade petrol ( motonafta ), petrol and alcohol mixture ( alconofta ) and premium grade petrol 
(supernafta ), account is taken of the average retail outlet price corresponding to the brand of the 
imported quantity of litres.   
69. In 2003, excise tax collection yielded approxima tely G/ 800,000 million (13 per cent of the 
total collected), more than three quarters of which re lated to tax on fuels, which has increased almost 
four-fold since 1998.62 
70. A consular fee is applied for the compulsory endorsement of requisite import documents such 
as:  commercial invoice;  certificate of origin;  or bi lls of lading for maritime, river, land, air or rail 
transport consignments.  The consular fee vari es between US$0.10 and 30 with the exception of 
imported cattle on the hoof, where the rate is 0.15 per cent.63  The consular fee is collected by 
                                                      
59 A 38 per cent rate is applied to unleaded nafta  (petrol) of 97 octanes or more;  a 34 per cent rate is 
applied to leaded or unleaded motonafta  (regular grade petrol) and alconafta  (petrol and alcohol mixture) of 
85 octanes or more, as well as to leaded or unleaded supernafta  (premium grade petrol) of 95 octanes or more;  
a 20 per cent rate is applied to aviation fuel;  14.3 per cent for gas oil (diesel);  10 per cent for kerosene, fuel oil 
and liquid gas;  1 per cent for turbo fuel.  The exceptions include a rate of 0.25 per cent for fuel oil imported by the National Cement Industry, until a quota of 55 thousand cubic metres has been filled (under Decree 
No. 282/03), and a 1 per cent rate for the deodorized propellant gas isopropyl butane (tariff heading 
2711.19.90).  
60 Decree No. 235 of 28 August 1998. 
61 Decree No. 2.698/99 of 28 April 1999. 
62 Ministry of Finance (2004). 
63 Law No. 1.844/01, as amended by Law No. 2.533/04. Paraguay WT/TPR/S/146 
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Paraguayan consulates abroad.  In 2004, the tax re venue from this levy amounted to US$7.4 million, 
compared with US$2.5 million in 2000. 
71. An additional duty equivalent to 7 per cent of the consular fee is levied to finance the 
National Indigenous Institute (INDI).64  This duty is levied only on the endorsement of the following 
documents:  cargo manifest, ballast manifest, comm ercial invoice and bill of lading for maritime, 
river, rail, land or air transport consignments. 
72. Imports, including those from other MERCOSUR countries, are also subject to a "valuation 
fee" ( tasa de valoración ) of 0.5 per cent on the taxable value (transaction value).65  The revenue from 
this tax is included in the General Budget of the Nation and is used to defray the expenses of the 
General Directorate of Customs. 
(vi) Import prohibitions, restrictions and licensing 
73. In 2003, Paraguay notified to the WTO its  domestic legislation on import licensing.66  
Paraguay has not, however, provided replies to the questionnaire on import licensing procedures. 
74. For products subject to health, environmental, safety and other controls, prior authorizations 
from the appropriate government agency are require d, which serve as import restrictions (see also 
section (2)(viii)).  According to the authorities, a ll prior authorizations ar e non-automatic.  Import 
restrictions and prohibitions may also be im posed for economic reasons relating to economic 
development, balance of payments or safeguard , as well as to protect domestic production from 
harmful imports (see also minimum specific import duties (DIEM) and the special temporary import measure (METI) in section (2)(iv)).
67  Imports of products that ma y jeopardize national security, 
public order, public health, animal and plan t health, or public morals, are prohibited.68 
75. Since the last Review, prior authorizations or licences have been introduced for various 
products such as firearms, ammunition and explosives;   food products;  substances that deplete the 
ozone layer;  raw materials or machinery used to produce CDs, as well as other audiovisual materials 
and computer software;  some petroleum by-products,  and sugar.  (Table III. 4).  In addition to the 
requirements described in the table, firearms , ammunition and explosiv es may only be imported 
through the customs office of "Silvio Pettirossi" In ternational Airport and other customs offices in 
Asunción.  Imports of substances that depl ete the ozone layer are subject to quotas. 
                                                      
64 Law No. 904/81 of 18 December 1981. 
65 Article 263 of Law No. 2.422/04. 
66 WTO document G/LIC/N/1/PRY/1, 12 June 2003. 
67 Article 9 of Law No. 1.095/84 of 14 December 1984. 
68 Articles 1, 6 and 9 of Law No. 1.095/84 of 14 December 1984. WT/TPR/S/146 Trade Policy Review 
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Table III.4 
Import licensing 
Document 
required Product Issuing 
authority Reason 
invoked Legal basis 
Prior 
authorization Firearms, ammunition, 
explosives and the like Directorate 
of War 
Materials National 
security Law No. 1.910/02 of 19 June 2002 
Prior 
authorization Insecticides and fungicides MAG Health Decree Law No. 8.051 of 31 July 1941 and 
Decree No. 10.189 of 22 December 1941 
(Agricultural Defence Regulations) 
Prior authorization Hypodermic syringes and 
needles MSPBS Health Law No. 1.340 of 22 November 1998, as 
amended by Law No. 68/92 of 17 July 1992, 
Decree Law No. 9/92 of 17 February 1992 and 
Law No. 1.881/02 of 24 June 2002 
Prior authorization Raw materials or machinery 
for producing CDs, as well as 
other audiovisual materials 
and computer software MIC Action to 
combat piracy Decree No. 1.175 of 27 January 1999, as 
amended by Decrees No. 10.106/00 of 
22 August 2000 and No. 603/03 of 
20 October 2003
 
Prior authorization Pesticides and related 
products MAG Phytosanitary 
protection Law No. 123 of 9 January 1992 
Prior 
authorization Food products MAG and 
MSBPS 
(INAN) Health Decrees No. 1.635/99 of 12 January 1999 and 
No. 15.298/01 of 13 October 2001 
Prior authorization Narcotic substances and 
dangerous drugs MSPBS and 
SENAD Health Law No. 1.340 of 22 November 1988, as 
amended by Law No. 68/92 of 29 
October 1992, Decree Law No. 9/92 of 
17 February 1992, and Law No. 1.881/02 of 
24 June 2002;  Decree No. 4.817 of 15 February 1990 
Prior licence Sugar MIC Action to 
combat 
smuggling Resolution  No. 251/02 of 9 January 2002 
Prior licence Certain petroleum by-
products MIC Environmental 
protection Resolution No. 760/01 of 12 December 2001 
Import licence Substances that deplete the 
ozone layer MAG Environmental 
protection Decree No. 3.980 of 6 July 1999 
Note: MAG:  Ministry of Agriculture and Livestock;  MIC:  Minist ry of Industry and Trade;  MSPBS:  Ministry of Public Health an d 
Social Welfare;  INAN:  National Food and Nutrition Institute;  SENAD:  Nationa l Anti-Drug Secretariat. 
Source : WTO Secretariat. 
76. Some new import prohibitions have also been introduced since the last Review for safety, 
sanitary and environmental reasons;  they concern products such as vehicles and articles of apparel 
and clothing accessories (Table III.5). 
Table III.5 
Import prohibitions 
Product Reason invoked Legal basis 
African bees ( Apis mellifera adansonil)  Health and environmental 
protection  Decree No. 25.045 of 
19 October 1987 
Swine, as well as semen, products, by-products and 
derivatives of domestic or wild  pigs originating from areas 
where there is African swin e fever and vesicular swine 
disease Human and animal health  Article 1 of MAG Resolution 
No. 175 of 21 June 1978 
Table III.5 (cont'd) 
 Paraguay WT/TPR/S/146 
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Product Reason invoked Legal basis 
Cloramphenicol Protection of human health MAG Resolution No. 21 of 
24 January 1989;  Decree 
No. 3.265 of 1 October 1989 
Used clothing and clothing accessories – clothing accessories 
and parts thereof and other:  articles of headings 6309 0010 
to 6309 0090, and 6310 1000 to 6310 9000 (MERCOSUR 
nomenclature) Health and environmental 
protection Decree No. 7084/00 of 
11 January 2000 
Methyl and ethyl parathion-based produc ts Protection of human health and 
the environment MAG Resolution No. 488 of 
16 June 2003 
Monocrotophos-based products in concentrations exceeding 
40 per cent and metamidophos exceeding 60 per cent Protection of human health and 
the environment MAG Resolution No. 493 of 
17 June 2003 
Organochlorine-based insecticides Protection of human health and 
the environment MAG Resolution No. 447 of 
24 May 1993 
Dangerous industrial or toxic waste Protection of health and the 
environment Law No. 42 of 18 September 1990 
Hormonal substances for the fattening of animals for human 
consumption Protection of human health Decree No. 22.444 of 8 June 1987 
Used motor vehicles and lorries of a capacity not exceeding 
20 tonss and tractor trucks more than 10 years old (calculated 
from the year of production) Consumer protection Law No. 2.018 of 
8 November 2002;  Law No. 2.153 
of 4 July 2003 
 
Source :  WTO Secretariat. 
 
(vii) Contingency measures  
(a) Anti-dumping and countervailing duties  
77. Paraguay's legislation regulating anti-dumpi ng measures and subsidies and countervailing 
measures comprises the WTO Agreements on Implemen tation of Article VI of the GATT 1994 and on 
Subsidies and Countervailing Measures, incorporated  into domestic legislation by Law No. 444/94.  
Decree No. 15.286/96 designates the Ministry of Indu stry and Trade and the Ministry of Finance as 
the agencies responsible for their application, an d establishes relevant administrative procedures.69 
78. Paraguay's legislation on anti-dumping measures and subsidies and countervailing measures 
has been notified to the WTO and was examined  by the Committee on Anti-Dumping Practices and 
the Committee on Subsidies and Countervailing Measures in 1997.70  Questions were asked by 
Canada;  Hong Kong, China;  Mexico;  and the United States.71 
79. Decree No. 15.286/96 established a Trade Defe nce Commission (see also section (2)(vii)(b)) 
made up of representatives of the Ministries of  Industry and Trade, Finance, Agriculture and 
Livestock, and External Relations, and chaired by th e representative of the Ministry of Industry and 
Trade.  The Commission is responsible for issui ng recommendations to the Ministries of Industry and 
Trade and of Finance concerning administrative proce dures and the appropriate measures to be taken.  
The Ministry of Industry and Trade is responsible fo r deciding whether to initiate an investigation and 
for carrying it out, and together with the Ministry of Finance, for the application or non-application of 
                                                      
69 Decree No. 15.286/96 of 28 October 1996 and Decree No. 1.827/99 of 29 January 1999.  
70 WTO document G/ADP/N/1/PRY/2, G/SCM/N/1/PRY/2, 3 March 1997.  
71 WTO documents G/ADP/Q1/PRY/5, G/SCM/Q1/P RY/5, 1 December 1997 (questions),  and 
G/ADP/Q1/PRY/6, G/SCM/Q1/PRY/6, 26 May 2000 (replies);  G/ADP/Q1/PRY/2, G/SCM/Q1/PRY/2, 
10 October 1997 (questions), and G/ADP/Q1/PRY/4, G/SCM/Q1/PRY/4, 25 November 1997 (replies);  
G/ADP/Q1/PRY/1, G/SCM/Q1/PRY/1, 8 October 1997 (questions), and G/ADP/Q1/PRY/4, G/SCM/Q1/PRY/4, 
25 November 1997 (replies);  and G/ADP/Q1/PRY/3, G/SCM/Q1/PRY/3, 8 October 1997 (questions), and 
G/ADP/Q1/PRY/4, G/SCM/Q1/PRY/4, 25 November 1997 (replies).  WT/TPR/S/146 Trade Policy Review 
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preliminary or definitive measures.72  The Ministry of External Relations is responsible for notifying 
the WTO of resolutions containing pre liminary and final determinations.   
80. Paraguay notified the WTO that it had not  had recourse to countervailing measures73 during 
the period 1997-2003.74  The authorities indicated that, since 1997, the Ministry of Industry and Trade 
has received three applications to initiate an investigation for the imposition of anti-dumping 
measures, and has acted on two of them.  In 1999, Paraguay initiated an investigation and imposed 
definitive anti-dumping duties of US$0.69 per 440 cc package on imports of Baygón Verde Ultra 
aerosol insecticides, and of US$0.43 per 440 cc p ackage on imports of Baygón Azul Ultra from 
Argentina.75  This measure was terminated in 2004.  In 2004, Paraguay imposed definitive anti-
dumping duties of US$0.066 per kilo on imports of cement from Brazil, produced by the Companhia 
de Cimento Portland Itaú SA .76 
81. According to Decree No. 15.286/96, a dump ing or countervailing duty investigation is 
initiated upon a written application to the Ministry of Industry and Trade by or on behalf of the 
domestic industry.  Under special circumstances, th e Ministry of Industry and Trade may initiate an 
investigation on its own initiative.77  The application may be made by domestic producers 
representing a major proportion of the domestic industr y considered to have been injured by dumped 
or subsidized imports.  No investigation is initia ted if the domestic producers expressly supporting the 
application account for less than 25 per cent of tota l domestic production of the like product.  In the 
case of investigation of subsidies, the Ministry of Industry and Trade allows consultations to be held, 
within a maximum of one month, between the Paraguayan authorities and the authorities of the 
countries from which the products under investigation are consigned.   
82. Once the application has been received, the Mi nistry of Industry and Trade has 30 days to 
reject or accept it, or to request further information.   If the application is accepted, the Ministry shall 
issue a resolution setting forth the reasons for its deci sion and order the initiation of an investigation.  
The resolution shall be published in the Official Ga zette within three days following the decision.  
The Ministry has seven days to notif y the interested parties of the r esolution and to provide them with 
the questionnaire and the forms used to obtain releva nt information.  The notification shall give the 
parties 40 days (extendable by 15 days) following r eceipt of the notification and the questionnaire to 
reply and to provide evidence.  Users from the pr oduction sectors of the pro ducts under investigation, 
and representative consumer organizations in cases wher e the product is sold at retail level, shall be 
given the opportunity to provide rele vant information.  The replies s ubmitted by the parties, as well as 
the accompanying documents, shall be in Spanish or , where this is not possible, shall be supplied 
together with an official translation.  
83. Within a maximum period of 90 days (extendable by 30 days) following the opening of the 
investigation, the Ministry may recommend the imposition (or non-imposition) of provisional 
                                                      
72 Decrees No. 15.286/96 and No. 1.827/99 of 28 October 1996 and 29 January 1999, respectively.  
73 WTO documents G/SCM/N/30/Add.1/Rev.2, 21 October 1998;  G/SCM/N/35/Add.1/Rev.2, 
20 October 1998;  G/SCM/N/40/Add.1/Rev.2, 20 October 1999;  G/SCM/N/47/Add.1/Rev.2, 20 October 1999;  
G/SCM/N/52/Add.1/Rev.2, 26 October 2000;  G/SCM/N/56/Add.1/Rev.1, 26 October 2000;  
G/SCM/N/75/Add.1/Rev.1, 23 April 2002;  G/SCM/N/98/Add.1/Rev.2, 26 October 2004;  and 
G/SCM/N/106/Add.1/Rev.1, 25 October 2004.   
74 WTO documents G/ADP/N/2/Add.1, 12 July 1995;  G/ADP/N/9/Add.1, 19 April 1996;  G/L/31, 
10 November 1995;  G/SCM/M/2, 25 September 1995;  G/SCM/N/12/Add.1/Rev.1, 25 July  1996.  
75 WTO documents G/ADP/N/53/PRY, 1 August 2002;  G/ADP/N/59/PRY, 1 August 2002.   
76 MIC Resolution No. 780 of 20 October 2004;  WTO document G/ADP/N/126/PRY, 
10 February 2005.   
77 This paragraph and most of the following paragraphs are based on WTO documents 
G/ADP/N/1/PRY/2 and G/SCM/N/1/PRY/2,  3 March 1997.   Paraguay WT/TPR/S/146 
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measures, if such measures are considered necessary to prevent further injury to the domestic industry 
during the investigation.  The Ministers of Industr y and Trade and of Finance shall have 15 days to 
decide on the imposition of provisional measures by i ssuing a reasoned joint ministerial resolution.  
The interested parties shall be informed and the r esolution shall be published in the Official Gazette.  
84. The imposition of provisional measures may be ordered only if a preliminary determination 
has been made that the increase in imports or th e existence of dumping or subsidization has caused 
injury to a domestic industry.  It may not be or dered before 60 calendar da ys have elapsed following 
the date of the publication initiating the investiga tion.  The provisional measure may not be greater 
than the provisionally estimated margin of dumping and shall not be applied for a period exceeding 
four months, extendable to six or nine months.  
85. The Ministry of Industry and Trade shall convene the Trade Defence Commission within a 
period of three months, extendable by thirty days, fo llowing the date of the joint ministerial resolution 
containing the preliminary determination, in orde r to submit the conclusions and recommendations of 
the investigation to the Commission for examination and discussion.  The Ministry of Industry and Trade shall issue its conclusions and recommendati ons within a maximum period of one month from 
the date on which the Commission was convened.  The Minister of Industry and Trade and the 
Minister of Finance shall then issue a reasoned join t ministerial resolution (within a period of thirty 
days) containing its final determination with respect to the imposition of duties.  The interested parties 
shall be notified of the said joint ministerial reso lution, which shall be published in the Official 
Gazette within three working days.  The imposition of definitive measure sh all be ordered only if 
there is sufficient evidence of dumping or subsidiza tion and resulting injury to the domestic injury.  A 
determination not to impose measures may be made when it is concluded that such measures would 
result in material injury to the national economy. 
86. Anti-dumping or countervailing duties shall be collected on a non-discriminatory basis on 
imports of a product from any source found to be dumped and causing injury, and such duties shall be applied in amounts equal to the margin of dumping or subsidization determined.  However, a lower 
duty may be established if it is sufficient to re move injury to the domestic industry.   
87. Provisional measures and anti-dumping or count ervailing duties shall only be applied to 
products which enter for consumption after the date of entry into force of the resolutions containing 
the preliminary and final determinations.  However,  definitive measures may be imposed retroactively 
for the period for which provisional measures have been  applied where a final determination of injury 
is made or, in the case of a final determination of a threat of injury, where the effect of the dumped or 
subsidized imports would, in the absence of the pr ovisional measures, have led to a determination of 
injury. 
88. In critical circumstances where the authorities find that injury which is difficult to repair is 
caused by massive dumped or subsidized imports carri ed out intermittently in relatively short periods, 
that there have been previous cases of dumping causing injury, and that the importer was (or should 
have been) aware that the exporter was practisi ng dumping, definitive duties may be assessed on 
products which were put on sale within the 90 da ys preceding the date of imposition of provisional 
measures.  In no case, however, may definitive duties be imposed prior to the date of publication of 
the resolution initiating the investiga tion in cases of dumping, or prior to the date of the invitation to 
hold consultations. 
89. Anti-dumping and countervailing duties shall apply as long as and to the extent necessary to 
counteract the dumping or subsidy which is causing inju ry.  However, any duty shall be terminated on WT/TPR/S/146 Trade Policy Review 
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a date not later than five years from its imposition, unless it is determined that the expiry of the duty 
would be likely to lead to continuation or recurren ce of the injury and of dumping or subsidization. 
90. Provided that a period of at least one year has elapsed since the imposition of the definitive 
duty, the Ministry of Industry and Trade shall, upon request by an interested party or on its own 
initiative, initiate a review procedure to examine the need for the continued imposition of the duty.  
The Ministry of Industry and Trade may decide to maintain, eliminate or modify the duty. 
91. The investigations shall be concluded not la ter than 12 months, extendable up to 18 months, 
from the date of the resolution ordering the initiati on of the investigation.  Resolutions may be 
appealed through the administrative courts. 
92. As at February 2005, there were still no common MERCOSUR regulations on countervailing 
duties and anti-dumping measures.  Such regulations have been under preparation since the previous 
Review.  In this connection, the authorities stat ed that, at the request of the MERCOSUR Committee 
on Trade Defence and Safeguards, the regulations w ould be finalized at the end of June 2005 under 
the Paraguayan pro tempore presidency.   
(b) Safeguards 
93. Paraguay's legislation relating to safegua rds is the WTO Agreement on Safeguards 
incorporated into domestic legislation by Law No. 444/94.  Decree No. 1.837/89 designates the Ministries of Industry and Trade and of Finance as the agencies responsible for the application of 
safeguard measures, establishes administrative pr ocedures for their application and extends the 
functions of the Trade Defence Commission (see above) in order to set up a Trade Defence and 
Safeguards Commission.
78 
94. Paraguay notified the WTO that it had not ha d recourse to safeguard measures during the 
period 1997-2003.79  The authorities also stated that, up to the beginning of 2005, no applications for 
the initiation of investigations have been received. 
95. Decree No.1827/99 defines the procedures for the effective implementation of the Agreement 
on Safeguards.80  These procedures are similar to those for the imposition of anti-dumping and 
countervailing measures and involve the same instituti ons.  Under the Decree,  the application for the 
imposition of a safeguard measure must be submitted to the Ministry of Industry and Trade by the 
enterprises or the entities representing them, together  with sufficient evidence of increased imports, 
serious injury or threat thereof and a causal link between the two, and an adjustment plan which 
improves the domestic industry's ability to compete with imports. 
96. The Ministry of Industry and Trade shall examine the admissibility of the application within a 
maximum of twenty days from its receipt, and sha ll conduct the investigation in order to determine 
increased imports of the product concerned, the existe nce of serious injury or threat thereof to the 
domestic industry producing like or directly co mpetitive products, and a causal link between 
increased imports and serious injury or threat thereof.  If the application is accepted, the 
Undersecretariat of State for Trade of the Ministry of Industry and Trade shall prepare and submit to 
                                                      
78 Decree No. 1.827/89 of 29 January 1999, notified to the WTO in WTO document  
G/SG/N/1/PRY/2 of 20 August 1999. 
79 WTO Documents G/ADP/N/2/Add.1, 12 July 1995; G/ADP/N/9/Add.1, 19 April 1996;  G/L/31, 
10 November 1995;  G/SCM/M/2, 25 September 1995 and G/SCM/N/12/Add.1/Rev.1, 25 July 1996. 
80 This and most of the following paragraphs are based on WTO Document G/SG/N/1/PRY/2, 
20 August 1999. Paraguay WT/TPR/S/146 
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the Minister of Industry and Trade, within a ma ximum of 40 days, a report on the appropriateness of 
initiating an investigation.  The Minister shall have 20 days from the date of receipt of the 
Commission's opinion, to decide on the initiation of  an investigation, by issuing a ministerial  
resolution.  The resolution shall be published in th e Official Gazette within 10 days of its being 
issued. 
97. The duration of an investigation for the application of a safeguard measure shall not exceed 
nine months, extendable by two months, from the in itiation of the investigation.  In the event of 
provisional measures being applied, the maximum dur ation of the investigation shall be 200 days 
from the date of application of such measures.   Governments of exporting countries, domestic 
producers of the like or directly competitive product, importers or consignees of the said product, 
foreign producers and/or exporters and other parties,  domestic or foreign, who, in the judgement of 
the Ministry of Industry and Trade, have a substantial interest in the investigation, shall be deemed to 
be interested parties. 
98. In the investigation to determine whether increas ed imports have caused or are threatening to 
cause serious injury to a domestic industry, the re levant factors defined in the WTO Agreement shall 
be evaluated.  In addition, Decree No. 1.827/89 in troduces other factors to be considered, such as 
import prices, in order to determine whether there has been significant price undercutting in relation 
to the price of the like product in the domestic mark et, and the trend of domestic prices for the like or 
directly competitive products, in or der to determine whether they woul d have fallen or whether price 
increases which would otherwise occur did not take place.   Moreover, if a threat of serious injury is 
suspected, in addition to the above-mentioned factors,  consideration shall be given to whether it can 
be foreseen that a particular situation is likely act ually to develop into serious injury.  For this 
purpose, account may be taken of such factors as the rate of increase of exports to the domestic 
market and export capacity in the country of origin  or exportation, actual or potential in the near 
future, and the probability of that capac ity being used to export to Paraguay. 
99. If the application includes a request for the app lication of provisional measures, the applicant 
must demonstrate the existence of critical circ umstances due to there having been a substantial 
increase in imports within a relatively short period a nd to this increase having created conditions for 
domestic producers such that any delay in the appl ication of measures would result in the serious 
injury or threat thereof being difficult to repair.  The Minister of Industry and Trade and the Minister 
of Finance may apply a provisional safeguard measur e (by means of a joint ministerial resolution) 
pursuant to a preliminary determination that there is  clear evidence that increased imports have caused 
or are threatening to cause serious injury to th e domestic industry, and based on an opinion of the 
Commission on its application.  The joint ministeria l resolution shall be published in the Official 
Gazette within 10 days of the issuing of the said resolution.  The provisional safeguard measures shall 
take the form of increases in import duties additiona l to the Common External Tariff which may be:  
ad valorem  duties;  specific duties, or a combination of the two. 
100. Definitive safeguard duties are also applied by m eans of a joint ministerial resolution, and the 
same conditions of publication and time apply.  Th ey may take the same forms as provisional duties, 
as well as the form of quantitative restrictions.  Sa feguard measures shall be adopted only for such 
period of time as may be necessary to prevent or remedy  serious injury and to facilitate the adjustment 
of the domestic industry.  The period may be exte nded provided that the safeguard measure continues 
to be necessary to prevent or remedy serious injury and that there is sufficien t evidence to show that 
the industry is adjusting. 
101. Safeguard measures may not be applied against a product originating in a developing country 
as long as its share of imports of the product concerned in Paraguay does not exceed 3 per cent, WT/TPR/S/146 Trade Policy Review 
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provided the developing countries with less than 3 per cent import share collectively account for not 
more than 9 per cent of total imports of the product concerned. 
102. Pursuant to Decree No. 1.827/99, in the cases of agricultural and textile products, the 
safeguard measures provided for in the WTO Agreem ents on Agriculture (Article 5) and on Textiles 
and Clothing (Article 6) may be applied.  While Paraguay retained the right to use the transitional 
safeguard mechanism under the provisions of the WTO Agreement on Textiles and Clothing81, it has 
not, however, reserved the right to use the speci al safeguards provided for in Article 5 of the 
Agreement.  The authorities indicated that Paraguay has not to date used the transitional safeguard 
mechanism. 
103. The common MERCOSUR regulation concerning safeguards applied to third countries is 
based on the WTO Agreement on Safeguards.82  The regulation establishes the procedure for the 
application of safeguard measures by MERCOSUR (as a single entity) and by individual member 
States.  Safeguard measures are not applied to other MERCOSUR countries.  Regarding safeguards 
adopted under WTO rules, the products covere d by safeguard measures are subject to the 
MERCOSUR rules of origin in intra-MERCOSUR trade.83  Under the MERCOSUR agreements with 
Chile and Bolivia, safeguard measur es may be applied for up to two years, until the implementation of 
the agreements is completed.  They may take the fo rm of the removal or elimination of preferences, 
but the application of WTO provisions is not preclude d.  Once the agreements are fully implemented, 
safeguard measures must not be applied between the parties. 
(viii) Standards and other technical requirements (including SPS) 
(a) Standards, testing and certification 
104. The National Institute for Technology and Standa rdization (INTN), an autonomous entity of 
the MIC, has the task of setting standards at the national level.84  The INTN prepares and approves 
Paraguayan standards through its 42 technical comm ittees, and is in charge of mandatory product 
certification, provided that this is required by a re gulatory entity.  Although the application of the 
INTN's standards is not mandatory, they are often us ed by other governmental institutions as a frame 
of reference for the elaboration of technical regulat ions (see below).  The INTN is also the agency 
responsible for metrology and for the establishm ent and functioning of the National Metrology 
Laboratory.85  Technical regulations for products of vege table origin are established by SENAVE (see 
Section 2(viii)(b) below). 
105. The INTN is a member of the Internationa l Organization for Standardization (ISO), the 
International Electrotechnical Commission (IE C), the Pan American Standards Commission 
(COPANT), the MERCOSUR Standardization Committee (CMN), the Ibero-American Programme of Science and Technology for Development (CYTED ), the Joint FAO/WHO Codex Alimentarius 
Commission, the International Organization of Le gal Metrology (OIML) and the Inter-American 
Metrology System (SIM).  It is also the focal poi nt and Permanent Executive Secretariat of the Codex 
Alimentarius for Paraguay. 
                                                     
 
81 This was notified pursuant to Article 6.1 of the WTO Agreement on Textiles and Clothing.  The 
notification is contained in WTO document G/TMB/N/31, 6 March 1995. 
82 MERCOSUR Decision No. 17/96, " Reglamento relativo a la aplicación de medidas de salvaguardia 
a las importaciones provenientes de países no miembros del MERCOSUR ".  (Regulation on the application of 
safeguard measures to imports from MERCOSUR non-member countries). 
83 Decree No. 1.827/99 of 29 January 1999. 
84 Law No. 862 of 26 June 1963. 
85 Law No. 937 of 13 September 1982 and Decree No. 1988 of 16 February 1999. Paraguay WT/TPR/S/146 
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106. The National Accreditation Body (ONA) was estab lished in 1998 within the framework of the 
National Council for Science and Technology (CONCYT).86  The ONA is a member of Inter-
American Accreditation Cooperation (IAAC). 
107. In 2003, Paraguay notified the WTO of the IN TN's acceptance of the code of good practice 
annexed to the WTO Agreement on Technical Barriers to Trade.87  Paraguay has not, however, 
notified its national enquiry point or any technical  regulations adopted since its last Review (see 
below). 
108. Paraguayan standards are elaborated by the INTN, usually at the request of the private sector.  
Upon receipt of a request, the INTN convenes the appropriate technical committee, or where none 
exists, establishes a new committee to entertain the request, draw up a draft standard, carry out the 
necessary studies and approve the draft.   The draf t is submitted to a public enquiry for a period of 
60 days, following which the standard is transmitted to  the competent Ministry responsible for giving 
it a national voluntary dimension.   
109. Technical regulations (i.e. mandatory standa rds) are issued by different government 
institutions, such as the Ministry of Industry and Tr ade, the Ministry of Public Health and Social 
Welfare, the Ministry of Agriculture and Livestock,  and other ministries, which declare by decree or 
resolution that an INTN national standard or a regi onal or international standard is mandatory.  They 
are also empowered to draw up their own techni cal regulations where necessary.  All technical 
regulations have to be published in the Official  Gazette.  The authorities stressed that technical 
regulations apply on a non-discriminatory basis to  imports and domestic producers. The compliance 
of imports is verified at the border.   
110. At the end of 2004, there were some 505 Para guayan standards, 22 Paraguayan technical 
regulations based on Paraguayan standards, and 87  based on MERCOSUR resolutions (mainly for the 
protection of health, medicines and foodstuffs).  The technical resolutions adopted since the last Review concern products such as cement
88, measuring instruments and apparatus89, steel rods or bars 
for use in concrete structures and metallic building structures90, liquefied petroleum gas91, and maté92;  
others concern safety signs;  protective equipment for the eyes;  hand tools for electrical installations; 
insulating carpets;  welders' screens;  and protective equipment for the respiratory tract.93 
111. INTN certification is required for products subj ect to Paraguayan technical regulations.  The 
authorities stated that the monitoring of complianc e with technical regulations is conducted at the 
points of entry or through retail trade inspecti ons.  Paraguay has concluded no mutual recognition 
agreements.   
112. Specific labelling requirements apply to products such as malt beer94, grape and wine growing 
products95, fertilizers and related products96, textile products and footwear97, medicines98, insecticides 
                                                      
86 Decree No. 20.660 of 20 April 1998. 
87 WTO document G/TBT/CS/N/151, 25 April 2003. 
88 Decree No. 18.352 of 26 August 2002. 
89 Decree No. 1.988 of 16 February 1999. 
90 Decree No. 8.811 of 22 May 2000. 
91 Decree No. 15.124/01 of 24 October 2000. 
92 Decree No. 17.595/02 of 17 June 2002. 
93 Decree No. 9.052/95 of 26 May 1995. 
94 Decree No. 18.567 of 1 October 1997. 
95 Decree No. 18.953 of 5 November 1997. 
96 Law No. 123 of 9 January 1992. 
97 Decree No. 18.568 of 1 October 1997. WT/TPR/S/146 Trade Policy Review 
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and fungicides99, and pesticides and related products.100  Non-specific requirements for compulsory 
labelling are described in the Law on consumer and user protection.101 
113. Efforts to harmonize standards (including animal  and plant health standards) have been made 
by the MERCOSUR countries.  The regional instit ution responsible for this task is the MERCOSUR 
Standardization Association (AMN) which su cceeded the MERCOSUR Standardization Committee 
(CMM) in 2000.  The AMN is composed of the national standardization bodies of MERCOSUR  members;  the national standardization bodies of Bolivia and Chile are gu est members.  As at 
November 2004, 480 MERCOSUR standards had been  adopted, 118 were the subject of a national 
voting procedure and 17 were in the process of bei ng approved.  There were 615 further projects in 
the work plan.
102  The adoption of MERCOSUR standards as national standards technical regulations 
by each member country is voluntary.   
(b) Sanitary and phytosanitary regulations 
114. Sanitary and phytosanitary measures are govern ed by domestic legislation and the WTO SPS 
Agreement (see below).  Paraguay has notified to the WTO its national enquiry point – Livestock 
Protection Directorate and Plant Protection Directorate (DDV)103 of the Ministry of Agriculture and 
Livestock (MAG), and the body responsible for notif ication, which is the Ministry of External 
Relations.104  The agencies responsible for risk analysis  are the DDV for pest s and plant diseases, and 
the Under-Secretariat for Livestock, for animal diseases. 
115. Various government agencies have competence in  the area of sanitary and phytosanitary 
measures.  The Sanitary Surveillance Directorate (DNVS ) of the Ministry of Public Health and Social 
Welfare (MSPBS) is responsible for regulating me dicines for human use, chemical products and 
reagents for the pharmaceutical and non-pharmaceu tical industry, cosmetics and household products, 
as well as syringes and needles for human use.  The authorities indicated that depending on the 
products concerned, the import (and export) offices re quire an MSPBS institution to intervene prior to 
customs clearance.  The DNVS intervenes in the case of the a bove-mentioned products, the National 
Food and Nutrition Institute (INAN) in the case of f ood products and beverages, and the Directorate 
of Establishments and Professions (DEP) in the c ase of medical, dental and laboratory apparatus, 
instruments, equipment and appliances. 
116. The Plant Protection Directorate, which from April 2005 will be replaced by SENAVE (see 
below), is responsible for phytosanitary protecti on at national level throug h the implementation of 
quarantine systems, the control and inspection of im ported plant products, the certification of exported 
plant products and the supervision of pes ticide residue levels in plant products. 
117. Up until the beginning of 2005, various MAG ins titutions were concerned with animal health, 
as well as supervising the quality and safety of foods of animal origin and international trade in 
animals and animals products.  The Fisheries Protection Directorate (DPP) protected and preserved the health of animals through a network of laboratories which, inter alia , performed the diagnosis and 
quality control of products and inputs used in the fisheries sector.  The DPP was also responsible for 
                                                                                                                                                                    
 
98 Law No. 1.119 of 21 July 1997. 
99 Decree No. 10.189 of 22 December 1941 (Agricultural Defence Regulation). 
100 Law No. 123 of 9 January 1992. 
101 Law No. 1.334/98 of 18 June 1998, Chapter III (information on supply of goods and services). 
102 MERCOSUR Standardization Association,  available for consultation on-line 
at: http://www.amn.org.br 
103 WTO document G/SPS/ENQ/4, 15 May 1996. 
104 WTO document G/SPS/NNA/7, 20 October 2004. Paraguay WT/TPR/S/146 
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sanitary inspections at entry points.  The Directorate of Control Standards for Foods and By-products 
of Animal Origin (DINACOA) had the task of de veloping quality control programmes for foods and 
by-products of animal origin.  The National Anim al Health Service (SENACSA) was charged with 
the control and eradication of the main animal diseases.105  In February 2005, these operational units 
of the MAG were replaced by a new entity, th e National Animal Quality and Health Service 
(SENACSA), which took over the functi ons of the above-mentioned institutions.106 
118. Another new entity due to begin operations in  April 2005 is the National Plant and Seed 
Quality and Health Service (SENAVE), created by the merger of the DDV, the Seeds Directorate 
(DISE), the Cotton and Tobacco Inspectorate (OFAT) , and the Department of Marketing Standards 
for Plant Products and By-Products of  the MAG's Marketing Directorate.107  Among other things, the 
SENAVE will deal with the application of national policy in respect of plant health and quality, seed 
production and the protection of new plant varieties, and plant products derived from biotechnology.   
119. Table III.6 summarizes the sanitary and phytosanitary measures in force in Paraguay at the 
end of 2004, as identified by the WTO Secretariat.   Since its last Review, Paraguay has adopted a 
number of SPS measures and has notified the WTO of the prohibition of the importation, distribution 
and marketing of animals and animal products  from Belgium, the Netherlands and France.108  T h e  
authorities indicated that all imports of animals and/or plants must be accompanied by a health certificate and consigned in accordance with the rele vant international standards, for example, those 
of the International Plant Protection Conventio n (IPPC) and the World Organization for Animal 
Health (OIE).  SENAVE and SENACSA verify th e conformity of imports with sanitary and 
phytosanitary measures at the border. 
Table III.6 
Sanitary and phyto sanitary requirements for imports 
Products Requirement Legal basis 
Animals and anim al products 
Queen bees, swarms or any 
living material Prior authorization Decree No 25.045 of 19 October 1987 
(MAG) 
Animals, products and by-
products of avian origin Specific sanitary requirements fo r imports which, among other 
things, prohibited imports of poultry derived from sanitary disposal and/or production and the introduction of products and 
by-products processed more than 90 days earlier. Resolution No 458/02 of 
5 December 2002 
Animals and animal 
products or preparations 
from Belgium, Netherlands 
and France  Ban on the import, distribution and marketing of animals and 
animal products (headings 0101 to 0511 and 23.09 of the 
MERCOSUR nomenclature;  in 2000 the ban was repealed and 
replaced by the requirement of a sanitary certificate attesting 
that these products were free of dioxins Decree No. 3.605/99 of 15 June 1999, 
as amended by Decree No. 4.640/99 
of 1999 of 11 August 1999;  Decree 
No. 10.021/00 of 16 August 2000 
Live animals, bovine, 
ovine and caprine genetic 
material, products and by-
products Ban on imports (products of HS Chapters 01, 02, 05, 15, 16 and 
23) from countries infected with bovine spongiform 
encephalopathy (BSE);  in 2003 the ban on embryos and semen 
was rescinded  Decree No 12.126/01of 
7 February 2001;  Decree No. 21.517 
of 21 July 2003  
Live animals, genetic 
material, products and by-
products of the ovine and 
caprine species Ban on imports from countries where scrapie is prevalent or 
where no information on the matter is available Resolution No. 2/2001 of 
19 January 2001 
  Table III.6 (cont'd)  
                                                      
105 Law No. 675 of 29 December 1977, as amende d under Law No. 99/91 of 16 December 2004. 
106 Law No. 2.426/04 of 28 July 2004. 
107 Law No. 2.459 of 4 October 2004. 
108 WTO document G/SPS/N/PRY/1, 19 August 1999. WT/TPR/S/146 Trade Policy Review 
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Products Requirement Legal basis 
Live birds, products, by-
products and genetic 
material Ban on imports likely to be inf ected with highly pathogenic 
avian influenza, initially from Ja pan, Chinese Taipei, Thailand, 
Hong Kong, China and Laos, a nd subsequently from all 
countries affected by the disease  Resolution No. 08/2004 of 
3 February 2004, as amended by 
Resolution No. 023/2004 of 19 May 2004 
Birds and bird products Sanitary certificate issued by th e country of origin Decree No. 21.945/98 of 17 July 1998 
(MAG) 
Birds, products and by-
products which may carry 
the Newcastle disease virus  Special sanitary requirements (including introduction of 
international sanitary certificate) for imports Decree No. 11.524/00 of 
15 December 2000 
Birds  Prior authorization Decree No. 21.945/98 of 17 July 1998 
(MAG) 
Bovine or other animals 
for breeding susceptible to 
tuberculosis  Sanitary certificate issued by th e country of origin:  sanitary 
inspection by SENASA Decree No. 18.613/97 of 
6 October 1997 
Pigs Certificate of vaccination and diagnosis for pigs older than two 
months, issued by the country of origin and authenticated, 
attesting that they display no clinical sign of classical swine 
fever and that farms are regularly inspected by the sanitary 
authorities of the country. Decree No. 21.946/98 of 17 July 1998 
(MAG) 
Bovine and ovine livestock 
from Argentina, Brazil and 
Uruguay Certificate of vaccination against foot and mouth disease, 
issued by the country of origin;  imports are subject to sanitary 
inspection and quarantine Resolution No. 306/87 of 
30 October 1987 (MAG) 
Frozen semen and embryos 
of animal origin Sanitary certificate issued by the country of origin;  imports are 
subject to quality and health controls Resolution No. 44/87 of 
5 February 1987 (MAG) 
Products of plant origin 
Wild and exotic species of flora and fauna Prior authorization Law No. 96/93 of 24 December 1993 
Products of plant origin Prior authorization;  phy tosanitary inspection Law No. 123/92 of 9 January 1992 
Wine sector products Compliance with MERCOSUR regulations concerning grape 
growing and wine maki ng (MERCOSUR Resolution 
No. 45/96);  subject to analysis and certificate permitting 
marketing of the product, issued by the MAG Decree No. 18.953/97 of 
5 November 1997(MIC)  
Seeds Prior authorization Law No. 385/94 of 5 July 1994;  Law 
on Seeds and Protection of Cultivars 
Other products 
Food products Sanitary registration of products (including imports) with the 
MSPBS; registration is valid for five years, but all imports 
(including those from MERCOSUR) are controlled Law No. 836/80 of 15 December 1980 
(Sanitary Code);  Decree No. 1.635/99 
of 12 January 1999 
 The MAG and MSPBS are authorized to approve and register 
entities (including importing en tities) dealing with food 
products, beverages and additiv es for human consumption Decree No. 16.611/02 of 
7 March 2002 
Salt for human and animal 
consumption Importers, producers and wholesalers of salt and related 
products have to be registered with the MSPBS;  sanitary 
registration is also mandatory for the salt itself;  labelling 
requirements for non-edible salt  Law No. 836/80 of 15 December 1980 
(Sanitary Code);  Decree No. 3.597/99 
of 11 June 1999 
Note: MAG:  Ministry of Agriculture and Livestock;  MIC:  Minist ry of Industry and Trade;  MSPBS:  Ministry of Public Health an d 
Social Welfare. 
Source : WTO Secretariat. 
120. With regard to genetically modified organi sms (GMOs), the authorities indicated that the 
import of GMOs is not prohibited but that, as in the case of plant and animal products, it is subject to 
a risk evaluation.  In 1997, the Biosafety Commission, a multi-sectoral and inter-institutional 
technical body, was set up by Decree No. 18.418/97.  It is responsible, inter alia , for ensuring that the 
persons and institutions that work with GMOs comp ly with the safety measures relating to their use, 
handling and release into the environment, and aut horizing their entry into the national territory.  
Regarding the cross-border movement of GMOs, Paraguay ratified the Cartagena Protocol on Paraguay WT/TPR/S/146 
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Biosafety to the Convention on Biological Diversity109 by means of Law No. 2.309/03.  As far as 
hormone use is concerned, Decree  No. 19.268/66 prohibits the use of hormones in animals used to 
produce meat for human consumption;  however, the Decree only refers to hormones used to grow 
and fatten animals, not hormones for veterinary use.   There is no explicit prohibition on the import of 
meat containing growth hormones. 
121. Efforts are being made at MERCOSUR level to harmonize sanitary and phytosanitary 
measures with the aim of facilitating trade betw een the States parties.  In 1996, MERCOSUR 
members decided to revoke the MERCOSUR Sanitary  and Phytosanitary Agreement (ACSAFIM) and 
to adopt the WTO SPS Agreement in its place.110  Pursuant to the recommendations of the Regional 
Phytosanitary Committee (COSAVE), Paraguay appli es the system of phytosanitary accreditation for 
imported plant products (AFIDI).111  Since 1994, Paraguay has adopted a series of MERCOSUR 
harmonized sanitary and phytosanitary measures fo r plant products and li ve animals, seeds and 
agro-chemicals, food products, packaging and e quipment, and grape and wine-growing.  At the 
bilateral level, in October 2000, the MAG Under-Secretariat of State for Livestock and 
Under-Secretariat of State for Agriculture and the Chilean Agricultural and Livestock Service signed 
a Technical Cooperation Programme with the objectiv e of establishing a frame of reference for inter-
institutional technical cooperation in subject area s of special interest, such as phytosanitary and 
animal health protection, food safety and biosafety.  
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures and documentation 
122. Export procedures are codified in the Customs Code (Law No. 2.422/04), which entered into 
force on 11 January 2005, replacing Law No. 1.173/ 85 of 17 December 1985.  The new Code, 
regulated by Decree 4.672/05, incorporates the requir ement that all exporters be registered in the 
National Exporter Documentation Register (RNE), a single compulsory register which has been in 
force since November 2004.  Exporters who have  registered their companies through the SOFIA 
computerized system are exempted from this requirement until April 2005.112  With the entry into 
force of Law No. 2.422/04 and the regulation theret o, the validity of RNE entries corresponds to the 
period of validity of the documentation submitted. Under the previous system, entries had to be 
renewed every year, irrespective of the period of validity of the documents registered. 
123. Prior to the entry into force of Decree No. 3.358/04 of 14 September 2004, which established 
the RNE, and of Resolution No. 821/04 of 11 No vember 2004, regulating the RNE, exporter firms 
and natural persons also had to register with diffe rent institutions, depending on the product exported.  
Such registration was required in the following cases:  products and by-products  of plant origin (with 
the Plant Protection Directorate of the Ministry of the Agriculture and Livestock);  products and by-products of forestry origin (with the National Fo restry Service of the same Ministry);  chemicals 
(with the Division for Sanitary Surveillance of Drugs , Medicines and Related Products of the Ministry 
of Public Health and Social Welfare);  handicraf ts (with the Handicraft Promotion Service);  and 
industrial and manufactured products (with the Indus trial Registry Division of the Ministry of 
Industry and Trade.
113  In 2003, another register (maintained by the Foreign Trade Department of the 
                                                      
109 Law No. 2.309/03 of 3 December 2003. 
110 MERCOSUR Decision No. 6/96. 
111 Decree No. 139 of 3 September 1993. 
112 Resolution No. 1/02 of 7 January 2002. 
113 ALIANZA Consultores:  Trámites de exportación en el Paraguay .  (ALIANZA Consultants:  Export 
formalities in Paraguay).  Available for consultation on-line at:  http://www.leyes.com.py/documentaciones/informaciones_interes/indice.html WT/TPR/S/146 Trade Policy Review 
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Ministry of Industry and Trade) was established for exports of waste and scrap of aluminium or 
copper and of copper/tin-based alloys (bronze).114  These registers for specific products were 
eliminated when the RNE entered into force.115  
124. Customs clearance requires an export declar ation, submitted electronically (through the 
SOFIA system), or if that is not possible, through contingency manual processes.  The commercial 
invoice has to be submitted, and where appropria te, a sanitary, phytosanitary or animal health 
certificate may also be required.  An insurance polic y may be required for temporary exports, but this 
is not applied in practice. At the end of 2004, 100  per cent of exports were subject to total control 
under the red channel regime (see section (2)(i)).  Th e selective controls applied to imports in pilot 
customs houses are also applicable to export formalities (section (2)(i)).  
125. In 2001, an analysis was made of the legal aspects of the export process under the previous 
Customs Code (Law No. 1.173/85).  The analysis concluded that export procedures were cumbersome 
and slow, for example requiring exporters to carry  out formalities in several institutions, sometimes 
involving considerable travel time.116  Other problems identified were:  the absence of computerized 
registries;  the impossibility of processing certificat es simultaneously;  local authorities asking for 
documents not required elsewhere;  direct contact re quired with the officials responsible for issuing 
certificates;  payment of fees for services not provided;  and the lack of simplified procedures for small exports.  It has been estimated that the cost  to exporters of such procedures may sometimes be 
higher than 10 per cent of the c.i.f. value of exports.
117 
126. In 2002, the Government of Paraguay signed a technical cooperation agreement with the 
IADB in order to set up an Export Procedures F acilitation Programme, also known as the "Exporter's 
Single Window" ( Ventanilla Única del Exportador  –VUE ).  Responsibility for the programme and for 
establishing the VUE lies with the Under-Secretariat of Trade of the Ministry of Industry and Trade.
118  The VUE comprises two elemen ts:  the National Exporter's Register (see above) and export 
processing.  The authorities indicated that the processing function will be operational at the end of 2005. 
(ii) Export taxes, charges and levies  
127. No export taxes were levied be tween 1997 and 2001.  An export tax of 12 per cent on fresh or 
salted bovine hides was introduced in 2002.
119  Initially, the tax was applied on the f.o.b. value of 
exports, but Decree No. 20.135/03 established a mi nimum unit value for customs purposes of US$35 
for exported hides, and the tax is applied on this value, irrespective of the place of destination.  
Exporters of these items are also required to make an  advance income tax payment of 3 per cent of the 
minimum export value.  Payment must be paid to  the customs office before departure of the goods.120 
128. An export tax of 4 per cent on soybeans, concerning the 2003/2004 harvest121, and 
irrespective of the place of destination, was introdu ced in 2004.  The dutiable value is set at US$80 
per ton exported.  Exporters of soybeans and soya by-products are also required to make an advance 
                                                      
114 Decree No. 21.003/03 of 2 May 2003. 
115 Decree No. 3.358/04 of 14 September 2004 and Resolution No. 821/04 of 11 November 2004. 
116 Ministry of Industry and Trade (2002). 
117 Ministry of Industry and Trade (2002). 
118 Decree No. 13.652/01 of 27 June 2001. 
119 Decree No. 17.256/02 of 22 May 2002, replaced by  Decree No. 20.135/03 of 22 January 2003.  
120 Decree No. 17.256/02 of 22 May 2002, replaced by  Decree No. 20.135/03 of 22 January 2003.  
121 Decree No. 1.668/04 of 6 Februa ry 2004, replaced by Decree No. 1. 836/04 of 27 February 2004.  Paraguay WT/TPR/S/146 
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income tax payment of 1 per cent of the transac tion value (determined from the commercial invoice) 
to the customs office, prior to customs clearance.122 
129. The declared purpose of the taxes on hides and so ybeans is to promote the local processing of 
those products.  In both cases, the main reason cited fo r their application is the lack of raw materials 
for the domestic processing industry and the increas e in exports of unprocessed products, taking into 
account, according to the Paraguayan authorities, the distortion created in subregional trade by the 
taxes on hide exports applied by Argentina and Uruguay.   
130. The resources generated by the export tax on soybeans are earmarked for rural poverty 
eradication projects and the enhancement of family  farm productivity, as well as for the financing of 
other social, environmental, health or education projects.  The revenue from the export tax on hides 
goes into consolidated revenue.   
131. Taxes on agricultural products in the natura l state were abolished as from 1 March 2005, 
pursuant to Decree No. 2.939/04 of 26 July 2004.   
(iii) Export prohibitions, restrictions and licensing  
132. The new Customs Code (Law No. 2.422/04) and its regulatory decree provide for the 
possibility of export restrictions or prohibitions unde r the existing regulations referred to below.  The 
new Customs Code does not specify the reasons fo r export prohibitions, unli ke the previous code, 
which provided for the adoption of laws prohibiting  exports in order to protect public health and 
safety, the national economy or morals.   
133. In 1991, Paraguay prohibited the export of f our species of tropical sawn wood (cedar, 
tabebuia, myrocarpus and cordia trichotoma).123  In 1994, the prohibition was extended to cover 
exports of all unprocessed and semi-processed w ood (roundwood, logs or beams) of any species.124 
134. Law No. 96/92 prohibits the hunting, commercial exploitation and export of wild animals in 
order to guarantee the adequate protection, conserva tion and rational use of Paraguay's biodiversity;  
this prohibition applies only to wildlife speci es not covered by express authorization of the 
Environmental Secretariat.  Law No. 1.340/88, updated by Decree No. 18.425/02, prohibits 
trafficking, marketing and elaboration of dangerous drugs and narcotics.   
135. Exports of Petit Grain essential oil are regulated by Law No. 268/71 and Decree 
No. 26.067/72.  The industrialization of part of the national production of Petit Grain  essential oil is 
made compulsory by Law No. No. 268/71;  up to 60 per cent of national production may be exported 
in unprocessed form, and the remaining 40 per cent mu st be pre-refined.  The authorities noted that 
Paraguay does not apply temporary measures on export s of agricultural products for reasons relating 
to domestic supply, except in the case of hides.  The Ministry of Industry and Trade established a 
prior licensing requirement in 2003 for exports of waste and scrap of aluminium or copper and 
copper/tin based alloys (bronze).   
136. Prior authorization is also required to satisfy  the requirements of multilateral environmental 
agreements (MEAs) ratified by Paraguay, such  as the Convention on International Trade in 
Endangered Species of Wild Flora and Fauna (CIT ES) and the Basel Convention on the Control of 
Transboundary Movements of Hazardous Wastes and their Disposal.  The competent authorities for 
                                                      
122 Decree No. 1.668/04 of 6 Februa ry 2004, replaced by Decree No. 1. 836/04 of 27 February 2004.  
123 Decree No. 8.463/91 of 28 January 1991.  
124 Law No. 515/94 of 9 December 1994.  WT/TPR/S/146 Trade Policy Review 
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the granting of licences are:  the Administrative Au thority of the Environmental Secretariat (SEAM), 
for CITES;  the War Materials Directorate, the Na tional Technology and Standa rdization Institute, the 
National Environmental Sanitation Service, the Under-Secretariat of State for Agriculture, the 
National Atomic Energy Commission, or the Envir onmental Secretariat, depending on the nature of 
the products concerned, for the Basel Convention.  W ith regard to forestry products, the forest guides 
(i.e. certificates identifying the forestry product and the stages in its processing), which guarantee 
compliance with environmental standards, are require ments for home market sales and export.  Forest 
guides are issued subject to the prior granting by the SEAM of the relevant environmental licence.   
137. All products of plant origin need a phyt osanitary export certificate (section (viii)(b)).125  A 
sanitary certificate is required for the export of chemicals, pharmaceuticals and industrial products;  
and an animal health certificate is required for all animal products and by-products.   
138. The authorities indicated that licensing is never automatic.   
(iv) Tax concessions, free zones and other fiscal benefits  
(a) Tax concessions 
139. The new Customs Code, like th e earlier Law No. 1.173/85, establishes regimes of temporary 
admission and temporary admission for inward processing (under Law No. 1.173/85, the two regimes 
are considered as one:  temporary admission).  The new Code, like the previous one, also establishes a 
duty refund regime, known as drawback in Paraguayan le gislation, which enables exporters to recover 
all or part of the customs import tax paid on the impo rted product, in respect of goods incorporated in 
the product or consumed during its production.  Under the previous code, the Executive was 
empowered to determine which produc ts were covered by the drawback  regime;  however, this regime 
had still not been regulated at the beginning of 2005.  The temporary admission regime allows the entry of foreign goods into Paraguay for "defined purposes", by totally or partially suspending the 
payment of import duties, subject to their s ubsequent re-exportation w ithout modifications.  
According to the authorities, the te rm "defined purposes" in the law refers to the elaboration of a 
finished product by the industries established in  the country (such as the ready-made clothing, 
tobacco, tanning, plastic and meat packing indu stries), fully identifiable from raw materials and 
inputs, or from parts and components used for assembly, repair or finishing.   
140. The new Customs Code explicitly introduces th e concept of temporary admission for inward 
processing.  This regime allows for the full or pa rtial suspension of duties on products to be refined 
(through transformation, preparation, repair, rest oration and finishing, conditioning, packing or 
packaging), provided that the final product is exported.  
141. At the beginning of 2005, the authorities were processing the available information on the use 
of the different tax concession regimes, with a view to streamlining and simplifying their management.  
142. Articles 84 and 104 of Law No. 125/91 exem pt exported products from VAT and the 
selective consumption tax.  The taxes (VAT and,  since January 2005, the selective consumption tax 
also)
126, paid on goods or services to be used for the production of export pro ducts may be recovered 
as tax credits (section (2)(v)).   
                                                      
125 Law No. 123/92 of 9 January 1992.  
126 Law No. 2.421/04.  Paraguay WT/TPR/S/146 
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(b) Free zones and free ports  
143. The legal framework regulating the establishmen t and operation of free zones for trade, 
industry (processing or assembly) and services (equipmen t and machinery repairs and maintenance) is 
composed of Law No. 523/95127, as amended by Law No. 2.421/04 (see below) and the decrees 
enacted in 1996 (Decree No. 15.554/96, author izing and establishing the regime), 2002 (Decree 
No. 19.461/02, approving the rules of operation), and 2003 (Decree No. 20.395/02, on administrative 
measures to broaden the regulati ons on imports from free zones, a nd Decree No. 21.309/03, amending 
certain provisions of the earlier decrees in order to facilitate transit to free zones).128  According to 
Law No. 723/95, free zones must be established a nd operated by the private sector.  Law No. 523/95 
set up a National Council of Free Zones, composed of representatives of the Ministries of Finance, 
Industry and Trade, Public Works and Communicat ions, one representative of the concession holder 
and one representative of the user enterprises.  Up to the end of 2004, Paraguay had not notified any 
of these laws and regulations to the WTO (Table AII.1).  
144. In 2002, free zone con cessions were granted to Consorcio Trans Trade S.A. y Asociados  and 
to Zona Franca Global del Paraguay S.A.C.S , for 30 years in each case.129  Both zones became 
operational in 2003.  The free zone assigned to Consorcio Trans Trade S.A. y Asociados  had 57 users  
at the end of 2004;  import taxes levied dur ing the period from 2 January to 30 November 2004 
on imports into the Paraguayan customs territory  from the free zone amounted to G/48 billion 
(US$8.1 million).  Commercial, industrial and servi ce-related activities are authorized in the free 
zone.  The zone assigned to Zona Franca Global del Paraguay  had 37 users at the end of 2004;  
the import taxes levied between 2 January and 30 November 2004 amounted G/68 billion 
(US$11.6 million)130. Commercial and service-related activities are authorized in that free zone.  The 
authorities indicated that, at the beginning of 2005, the users of the free zones did not export goods but were only involved in service activities.   
145. Enterprises operating in the free zones benefit from simplified commercial procedures.  They 
also receive tax breaks, including exemptions from national, departmental a nd municipal taxes (direct 
and indirect) on imports of all goods (with the excep tion of charges on services actually provided (see 
section (2)(v));  taxes on remittances of profits;  royalties, commissions, interest or other charges 
levied on payments for services, technical assist ance, technology transfer, loans and leasing of 
equipment or services from abroad.  All capital goods entering the free zone are exempt from all taxes 
(including goods on hire with an option to buy).  Enterprises engage d exclusively in export activities 
pay a single free zone tax at a rate of 0. 5 per cent of the gross revenue from exports.
131   
146. Enterprises engaged in commercial activities which,  in addition to exporting, make sales to 
the Paraguayan customs territory, are required to pay income tax on the share of their commercial activities in total gross revenue, with the possibilit y of a proportional deduction of costs, without 
prejudice to payment of the single free zone tax on exports to third countries.
132  Enterprises engaged 
in commercial, industrial and service activities may sell finished goods and services to the Paraguayan 
customs territory for a maximum amount equal to 10 per cent of the enterprise's gross sales revenue, 
                                                      
127 Law No. 523/95 of 16 January 1995.  
128 Decree No. 15.554 of 29 November 1996;  Decree No. 19.461 of 22 November 2002;  and 
Decree No. 21.309 of 10 June 2003.  
129 Decree No. 17.003/00 of 24 April 2002. 
130 Information provided by the National Council of Free Zones. 
131 Law No 523/95 of 16 January 1995. 
132 Law No. 523/95 defines commercial activities as those in which the users bring goods into the 
national territory for purposes of intermediation, without those goods undergoing any type of transformation or modification. WT/TPR/S/146 Trade Policy Review 
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paying only the single free zone tax (Article 16 of  Law No. 523/95).  If a commercial, industrial or 
services enterprise effects, in addition to exports to third countries, sales to the Paraguayan customs 
territory exceeding 10 per cent of the enterprise's gross sales income, it shall be liable for income tax 
on the share of its sales to the customs territory in  its total gross revenue, with the possibility of 
deducting its costs in the same proportion, and without prejudice to payment of the single free zone 
tax on exports to third countries (Article 17).  Th is reflects one of the two amendments to Law 
No. 523/95 introduced by Law No. 2.421/04 , since pr eviously enterprises which sold more than 
10 per cent to the customs territory benefited from a 70 per cent reduction in the income tax payable 
on their sales to the Paraguayan customs territo ry.  The second amendment to Law No. 523/95 
eliminated the possibility for enterprises to choose between paying the single fre e zone tax and paying 
income tax on their commercial, indus trial or service-related activities. 
147. All exports to Paraguay's customs territory eff ected by enterprises locat ed in the free zones 
are subject to the payment of import taxes (includi ng tariffs) (section (2)(v)), with the exception of 
industrial products that comply with the re quirements of the rules of origin in force.133  According to 
the authorities, no such exceptions have arisen in practice. 
148. Under the MERCOSUR Agreement, without prejudi ce to the laws in effect in each country, 
exports from free zones in any member country to its national territory or to the territory of any other 
member country are subject to the payment of the Common External Tariff or, in the case of 
exempted products, the national tariff in force.134 
(c) Maquila 
149. Maquila (in-bond processing) was introduced in 1997 by Law No. 1.064/97 on the maquila 
export industry (as subsequently amended by Law No. 2.421/04 (see below)), and regulated in 2000 
by Decree No. 9.585/00.135  The system became operational in March 2001, when the National 
Council of Maquila Export Industries (CNIME) (see below) approved the first eight maquila programmes.  In 2001, a Chamber of Maquila Enterp rises was set up to promote the development of 
Maquila enterprises and provide impetus to bonded assembly activities in the country. 
150. At the end of 2004, 20 enterprises were ope rating under the Maquila regime, and exports 
during the period 2001-2004 totalled US$19 million.  The goods they produce include non-traditional 
items, such as made-up articles, orthopaedic and sports articles, mattresses, coffee, soluble barley and tea, footwear, parquet flooring, particle board and mouldings of wood, pharmaceutical chemicals, 
dental equipment and software.  The principal markets are Brazil, Canada, the United States, the 
Netherlands and Mexico. 
151. The maquila regime is available to natural or  legal persons, both fo reign and Paraguayan, 
domiciled in Paraguay and author ized to undertake commercial activities, which register as 
maquiladoras (in-bond processing companies) with the CNIME and submit a maquila programme to 
the Council for approval.
136  The CNIME is composed of representa tives of the Ministry of Industry 
and Trade, the Ministry of Finance, the Central Bank, the Technical Secretariat of Planning for 
Economic and Social Development and the Ministry  of External Relations.  Maquila programmes 
have to be approved by a joint resolution of the Ministry of Industry of Trade and the Ministry of Finance. 
                                                     
 
133 Article 20 of Law No. 523/95. 
134 MERCOSUR Decision 08/94. 
135 Law No. 1.064/97 of 13 May 1997 and Decree No. 9.585/00 of 17 July 2000. 
136 Law No. 1.064/97 of 13 May 1997. Paraguay WT/TPR/S/146 
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152. Maquila activities are based on a contract between a foreign company and a maquiladora.  
Under the maquila regime, the foreign company supplies the maquiladora with goods or services for 
the latter to perform certain value-added activiti es such as transformation, elaboration, repair, 
assembly or industrial processing.  The Law also allows maquiladoras to subcontract some industrial 
processes to local companies and, if the subcontractor so requests and the maquila programme is 
approved, the status of "submaquiladora" (maqu ila subcontractor) is conferred together with 
entitlement to specific treatment under the Law. 
153. The final products or services of maquiladoras must  be exported.  However, the legislation 
allows sales in the Paraguayan market under the fo llowing conditions:  satisfaction of local demand 
for goods;  no production of the goods concerned in the local market;  or compliance with the 
requirement of a balanced foreign exchange budget.137  Sales to the domestic market are subject to 
CNIME authorization and to the payment of the duties and taxes required for placing the product on 
the domestic market and of income tax on the shar e sold in the domestic market, according to a 
"profitability coefficient" estab lished by the tax authority;  sales may not exceed 10 per cent of the 
previous year's exports. 
154. Maquiladoras pay a single maquila tax of on e per cent on the value added in Paraguayan 
territory (goods purchased, services contracted a nd wages paid in the country) or, since the 
amendment introduced by Law No. 2.421/04, on the value of the invoice issued by the maquiladora to the account and order of the contracting foreign company, whichever is higher.  Maquiladoras are 
exempt from all other national, departmental or municipal taxes;  VAT on internal operations is 
recovered through negotiable credit certificates.  Th e payment of VAT, tariffs and taxes on temporary 
imports is suspended, and the ma quiladora is required to provide a guarantee for the value of any 
applicable charges;  the guarantee may take the fo rm of a mortgaged or pl edged real asset or of 
insurance policies issued by natio nal companies.  The submaquila contract (contract for the sub-
contracting of maquila services) is subject to a singl e tax of one per cent by way of income tax;  this 
tax applies to the amount of the invoice for submaquila services. 
155. If the product satisfies the MERCOSUR rules of or igin (Chapter III(2)(iii)), it is exempted 
from payment of the Common External Tariff in the MERCOSUR regional market.
138 
(d) Export subsidies 
156. Paraguay has notified the WTO that it provided no export subsidies for agricultural products 
during the period from 1997 to 2003.139 
157. Pursuant to its notification obligations under Article XVI of the GATT and Article 25 of the 
Agreement on Subsidies and Countervailing Measures, Paraguay has also notified that it did not grant 
any subsidy, within the meaning of Article 1, paragraph 1, of the Agreement on Subsidies and 
Countervailing Measures, in 1995 , 1996, 1997, 1998, 1999 and 2000.140  The free-zone and maquila 
regimes have not been notified as providing export subsidies.  As a devel oping country, Paraguay had 
until 2003 to bring its legislation into line with WTO provisions.  Paraguay never sought the extension 
that could have been granted pursuant to the Doha Ministerial Declaration. 
                                                      
137 Decree No. 9.585/00 of 17 July 2000. 
138 MERCOSUR Decision No. 01/04. 
139 WTO documents G/AG/N/PRY/5, 19 October 1999;  G/AG/N/PRY/7, 30 May 2001;  
G/AG/N/PRY/9, 8 August 2002; and G/AG/N/PRY/11, 6 September 2004. 
140 WTO documents G/SCM/N/38/PRY, 12 June 1 998;  and G/SCM/N/3/PRY, G/SCM/N/16/PRY, 
G/SCM/N/25/PRY, G/SCM/N/48/PRY, G/SCM/N/ 60/PRY, G/SCM/N/71/PRY, 19 April 2001. WT/TPR/S/146 Trade Policy Review 
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(v) Export promotion, finance, insurance and guarantees 
(a) Export promotion and marketing assistance 
158. The General Directorate for Export and Inv estment Promotion (PROPARAGUAY) is the 
only government institution directly  responsible for export promotion (see Chapter I(3)).  Its main 
current activity consists in providing commercial in formation and market intelligence.  In 2003, an 
on-line business portal for exporters was created, facilitating the establishment of links between 
exporters and fo reign importers.141  The Directorate has suffered budget reductions, from US$700,000 
in 1995 to US$200,000 in 2003 and US$180,000 in 2004. 
159. The Ministry of Industry and Trade regards th e development and application of instruments 
and measures to improve Paraguay's competitiveness as a central pillar of its trade policy strategy.  Its 
national export strategy, established by Decree (RED IEX) No.4.328, was still at the preparatory stage 
at the end of 2004.  The key elements of the strate gy identified by the Ministry include activities such 
as diversification of export markets, improving th e legal regime for export-related investment, and 
conducting studies to promote the processing of raw materials and increase the added value of exports.
142 
160. The purpose of Law No. 90/90 was to establish an export promotion regime for non-
traditional and manufactured products that add value to local or imported raw materials by using local 
factors of production and energy.  The authorities in dicated that Law No. 90/90 was not made subject 
to implementing regulations and therefore never entered into force in practice. 
(b) Export finance, insurance and guarantees 
161. The National Development Bank (BNF) provides ex port and import financing by means of its 
own resources and by channelling the resources of international organizations.  The authorities 
indicated that the BNF does not grant preferential conditions for export financing (see also Chapter IV(5)(iii)(a)).  Up to the end of 2004,  the BNF granted export finance loans, under Law 
No. 2.100, of up to G/ 100 million or its equivalent  in United States dollars (US$16,800 in 2004) with 
one-year maturities;  of up to G/ 300 million or its equivalent in United States dollars, with maturities 
of up to 3 years;  and of up to G/ 700 million or its  equivalent in United States dollars, with maturities 
of five years or more.  In December 2004, Law No. 2.502/04 increased the ceiling for such loans to 
US$150,000.  This ceiling applies to natural and legal persons that are not cooperatives;  there is no 
ceiling for industrial cooperatives.
143  Loans drawn from the resources of international organizations 
are governed by their respective regulations.  In 2004, loans to finance export operations accounted 
for approximately 5 per cent of the BNF's total loan  portfolio.  Table III.7 shows the amount of BNF 
export financing for the period 2001-2004. 
                                                      
141 See the PROPARAGUAY home page at:  http://www.proparaguay.gov.py 
142 Ministry of Industry and Trade (undated).  Decree No. 4.328/04 of 20 December 2004. 
143 Law No. 2.502/04 of 30 December 2004. Paraguay WT/TPR/S/146 
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Table III.7 
BNF export financing, 2001-2004 
Year Export financing by  and through BNF 
(US$) Financing by BNF 
(%) 
2001 7,500,000 80 
2002 8,575,000 70 
2003 6,060,000 15 
2004 6,500,000 0 
Source : National Development Bank (BNF). 
 
162. The Industrial Development Fund (FDI) runs a special scheme called FONDEX, which grants 
loans to finance preshipment operations for non-tr aditional products through intermediary financial 
institutions.  Loans are granted to provide operatio nal capital for the purchase of  inputs required for 
the production of goods already committed for sale abro ad by a contract or firm order;  for the 
production of goods that have a direct link to export  items, and for maritime, air and road freight, if 
effected by a Paraguayan carrier.  A minimum of 50 per cent of local goods, factors of production or 
services must be included in the cost of the prod ucts concerned.  The lo an ceiling is US$300,000 for 
each export transaction, financing up to 70 per cent of the total cost of produc tion and export.  Loans 
are usually granted for one year.  According to th e authorities, little use has been made of FONDEX, 
and intermediation has been limited to US$1,418,12 7 from its establishment in December 2000 until 
its most recent disbursement in January 2003.  This  reflects, among other factors, the high costs of 
intermediation, bureaucratization, unfamiliarity with  the product and the fact that the product is 
limited to the financing of non-traditional manuf actures.  The authorities indicated that, at the 
beginning of 2005, Congress was considering new le gislation to dissolve the FDI and set up a new 
Development Finance Agency (AFD) intended inter alia  to promote medium and long-term 
development programmes (see Chapter IV(5)(iii)(a));   the AFD should be operational in 2006. 
163. Export insurance is provided by private insurance companies.  However, according to the 
authorities, there is no significant demand for expor t insurance, which is only used for specific 
products such as electro-mechanical components.  They also indicated that, in practice, export 
insurance, when needed, is contracted abroad. 
164. The authorities indicated that the Government offers no export guarantees. 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Legal framework for business activity, including registration 
165. Private companies established in Paraguay may ta ke one of the following legal forms:  public 
limited liability companies ( sociedades anóminas – SA ), private limited liability companies 
(sociedades de responsabilidad limitada – SRL ), capital-based and industrial companies ( sociedades 
de capital e industria - SCI ), comercial partnerships ( sociedades colectivas - SC ) or limited 
partnerships ( sociedades de comandita simple - SCS ).  Law No. 1.034 of 6 December 1983 (Traders' 
Law) stipulates that individual limited liability enterprises ( empresas individuales de responsabilidad 
limitada - EIRL ) are commercial entities for legal purposes.  Cooperatives have legal personality and 
are defined as non-profit enterprises.144 
166. The articles of incorporation of legal persons th at engage in commercial activity (apart from 
cooperatives) are registered in the Public Regist er of Legal Persons a nd Associations (RPPJA), 
                                                      
144 Law No. 438 of 21 October 1994. WT/TPR/S/146 Trade Policy Review 
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established by Law No. 879 of 19 November 1981.  The Civil Code of Paraguay requires any public 
limited liability company (SA) to be registered in  the RPPJA in order to acquire legal personality.145  
Under the Civil Code, (Article 1.196) the subsidiari es of foreign firms are also made subject to the 
same statutory registration requirements as companies "resembling their corporate set-up most 
closely".  Entry in the RPPJA is subject to the pa yment of a judicial fee and, in the case of public 
limited liability companies (SA), the nationa lity of the partners must be disclosed.146. 
167. All taxable companies in Paraguay must be re gistered in the Singl e Taxpayers' Register 
(RUC), which was established by Law No. 1.352 of  13 December 1998 and is administered by the 
Ministry of Finance.  Registration in the RUC is free of charge and requires submission of a copy of 
the identity card of the partners in order to regist er an SRL, natural and legal persons engaging in 
agricultural activities, foreign subsidiaries and agenci es (in the latter two cases, the identity card of the 
representative is required)147  Companies have 30 days in which to register in the RUC after 
commencing operations;  in the case of public and private limited liability companies (SA and SRL) the time-limit is 30 days following registration in th e Public Trade Register (RPC).  In practice, the 
minimum length of time for registration in th e RUC is approximately 7 working days.   
168. Entry in the RPC, which was establishe d by Law 879 of 19 December 1981 and is 
administered by the Directorate of Public Registers,  is compulsory for all companies that engage in 
trading activities, EIRLs, subsidiaries of foreign companies that have been set up in Paraguay and 
whose corporate set-up resembles any Paraguayan company.
148  Registration is free of charge and the 
partners are not required to possess a Paraguayan iden tity card.  In practice, registration in the RPC 
takes roughly four to five weeks.   
169. Enterprises involved in manufacturing, import, export and wholesale activities (including 
handicraft establishments producing exportable goods) ar e also required to register in the Permanent 
Register of Economic Activities (RTAE).  This register was established by Law No. 29.326 of 
14 November 1972 and is administered by the Minist ry of Industry and Trade (MIC).  Registration is 
conditional on submission of a copy of the RU C and the payment of G/200,000 for purposes of 
technical assistance and auditing.  Processing of th e registration is completed within a minimum of 
one week, but it may take longer depending on the tim e required to evaluate the application.  In 
practice, the minimum period for registration or rene wal formalities is approximately two weeks if all 
the requirements are satisified. 
170. Law No. 117 of 17 December 1992, which establis hed the SCIs (capital-based and industrial 
companies), does not require their registration in the RPPJA.  However, failure to so register creates 
unlimited legal liability on the part of the partne rs with regard to third parties (Article 11). 
171. In order to register an SA or a subsidiary, app lication must be made to the first instance civil 
and commercial court (JPICC) which orde rs registration in the RPPJA and RPC.149  Once the 
application is accepted by the JPICC (which has the power to reject it if the conditions laid down for 
the constitution of the SA or subsidiary are not me t), the latter orders the General Directorate of 
Public Registers to implement the necessary registration procedures. 
                                                      
145 Civil Code, Article 1.050, as amended by Law No. 388 of 18 August 1994. 
146 Law No. 388 of 8 July 1994, Article 4. 
147  Information available on-line at http://www.leyes.com.py 
148 Law No. 1.034 (Traders Law) of 6 December 198 3 and Articles 1.013 and 1.196 of the Paraguayan 
Civil Code. 
149 Civil Code of Paraguay, Article 1.051, as amended by Law No. 388 of 18 August 1994. Paraguay WT/TPR/S/146 
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172. A foreign company wishing to do business in Paraguay may do so by setting up an SA, an 
SRL or an SCI, by establishing a joint venture with  a Paraguayan enterprise or through a subsidiary, a 
representative, a distributor or an agent.150  The conclusion of a joint venture contract does not confer 
legal personality, hence the rights and obligations of  the parties are determined exclusively by the 
contract.  A subsidiary of a foreign company must be  certified by a public official of the Chamber of 
Commerce, as long as the parent company is legally registered in the country of origin. 
173. Law No. 194 of 17 June 1993, approving and amending Decree Law No. 7 of 27 March 1991, 
regulates the contractual relations between forei gn companies and representatives, distributors or 
agents in Paraguay.  The foreign company may cancel, revoke, modify or refuse to prolong the 
contractual relationship between itself and the repres entative, distributor or agent without paying any 
compensation, provided that it demonstrates (before th e courts and tribunals of Paraguay) that there 
was just cause for taking any of the actions referre d to above.  Otherwise, the company is liable for 
any compensation to be paid to the representative, di stributor or agent, which shall be proportional to 
the duration of the contractual relationship between  the two parties and to the average gross annual 
profits earned by the representative, distributor or agent.  The law requires the foreign company to 
allow the representative, distributor or agent a peri od of 120 days (except in cases of fraud or breach 
of trust) to solve the problem that warranted any of  the actions referred to above.  No regime similar 
to the one laid down by Law No. 194 is applicable  to Paraguayan enterprises.  The authorities noted 
that this regime is designed to protect domestic enterprises.   
174. The Paraguayan Tax Code, regulated by Law No. 125 of 28 December 1991, taxes income 
earned in Paraguay exclusively.  The main taxes levied on all enterprises are the income tax on 
commercial activities (IRACIS), the tax on agricultu ral activities (IMAGRO), value added tax (VAT), 
and the immovable property tax (II).151  At the beginning of 2005, the IRACIS and IMAGRO were 
levied at 20 and 10 per cent, respectively, of net in come, VAT at 10 per cent and the II at 1 per cent of 
the fiscal value. 
175. A foreign enterprise which earns income from Paraguayan sources must pay income tax under 
the system of "presumptive determination of net inco me", and is liable, subject to specific exceptions 
and without contrary evidence being admissible, for 100 per cent of the income generated in 
Paraguay.152  Foreign companies operating through subsidia ries, agents, representatives, distributors, 
SAs, SCIs or SRLs pay the IRACIS in most cases, while payment of the IMAGRO is the main substitute for payment of the IRACIS.
153  Law No. 2.421 abolished all the IRACIS exemption 
schemes enjoyed by foreign companies except fo r those applicable to free zones and maquila 
activities. 
                                                      
150 The establishment of joint ventures is auth orized by Law No. 117 of 6 December 1991. 
151 The regulations defined in Law No. 125 were developed by means of subsequent legislation.  In the 
case of the IRACIS and the IMAGRO, the most important are Decree No. 14.002 of 23 June 1992 (IRACIS) and Decree No. 10.800 of 3 October 1995 and Resolution No. 429 of 17 April 1996 (IMAGRO). 
152 The exceptions are:  insurance and re-insurance bonuses, international freight, assignment through 
the use of containers, production and distribution of films or magnetic tapes, services of international news agencies or radiogram and pass enger services from Paraguay. 
153 Exceptions to the payment of the IRACIS, apart from the IMAGRO, are the following:  mining 
royalties, hydrocarbon production royalties, news di ssemination earnings and income generated by specific 
transport activities. WT/TPR/S/146 Trade Policy Review 
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(ii) Competition policy and price controls 
176. Paraguay's 1992 Constitution guarantees freedom of competition in Paraguayan markets.154  
As at October 2004, however, there was no specific competition legislation governing the domestic 
market.  Nevertheless, the Traders' Law provides some general guidelines regarding market 
competition.  The authorities noted that the lack  of specific competition regulations does not mean 
that the constitutional rules are in applicable, since the Constitution itself provides that the lack of 
regulations may not be relied upon to deny constitutional rights or guarantees. 
177. The Traders' Law specifies that, where trad e practices are defined as acts of unfair 
competition and are sanctioned by court decision, th is necessarily means that the repetition of such 
acts of unfair competition is prohibited, and measure s are adopted to eliminate their effects and to 
remedy any injury caused.155  The authorities noted that the ca ses of unfair competition envisaged by 
the Traders' Law are dealt with by a decision of th e JPICC circuit judge.  The same law provides that 
free competition may be exercised as long as national economic interests are not harmed (the Traders' Law does not specify those interests).  The Trader s' Law authorizes the conclusion of agreements 
limiting competition where they are restricted to a given area and specific activities, they are not 
designed to harm third parties and they have a dur ation of no more than five years (Article 106). 
178. The General Directorate of Consumer Protection (DGDC) was established by Resolution 
No. 394 of 31 December 1997 and is answerable to the Under-Secretariat of State for Trade of the 
MIC.  The DGDC deals with claims and compla ints and provides information and guidance to 
citizens in the area of protection of consumers' and users' rights.
156  The MIC also administers the 
Enhanced Consumer Protection Programme, which supplements the Integrated National Consumer 
Protection System set up by Decree No. 20.572 of 10 March 2003.  The system is designed to provide 
information, guidance, conciliation, mediation, ar bitration, investigation,  inspection and dispute 
settlement services for consumers under Law No. 1.33 4 of 18 June 1998 (Cons umer and User Law). 
179. Prices of goods and services are not subject to control except in the case of the rates for 
telecommunication services, water and electricity, and the price of gas oil (see Chapter IV(5)(ii) and 
Chapter IV(4). 
180. In 2003, a draft law for the defence of comp etition was submitted to the National Congress, 
where it was still under consideration as at October 2 004.  The draft focussed on the determination of 
permissible forms of competitive behaviour, incl uding the possible conquest of a market based 
exclusively on greater efficiency.157  Companies with Paraguayan equity participation that have 
registered offices outside Paraguay would be subject  to the provisions contained in the preliminary 
draft law, to the extent that thei r activities affect economic activity at the national level.  The draft law 
also authorizes agreements between companies that improve the standard of living in poor areas, 
improve the quality of services and increase exports, provided that market competition is not prejudiced. 
181. A competition policy regulating the commercial re lations between enterprises with registered 
offices in Paraguay and those with registered o ffices in the other MERCOSUR countries was in the 
initial stages of implementation at the end of 20 04.  Specifically, Law No. 1.143 of 3 July 1998 
ratified the MERCOSUR Competition Defence Protocol (PDC) in Paraguay.  The Protocol laid down 
                                                     
 
154 National Constitution of Paraguay, Article 107. 
155 Law No. 1.034, Articles 109 and 110. 
156 Resolution No. 394 of 31 December 1997 and Law No. 1.334 of 15 September 1998. 
157 Dios (2002). Paraguay WT/TPR/S/146 
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the principles governing intra-MERCOSUR compe tition.  With its ratification in Brazil158, the PDC 
has legal force in Brazil and Paraguay. 
182. The first regulation to the PDC was adopted at the end of 2004.  It lays the foundations for the 
Committee for the Defence of Competition an d establishes rules governing the Committee's 
relationship with the national agencies for the defence of competition.159  This first regulation had not 
been adopted as domestic legislation in Paraguay.   The Paraguayan authorities noted that, as at 
October 2004, the second regulation to the PDC concer ning control of instruments and documents and 
of economic concentrations that harm competition was under negotiation.  However, at that same 
date, Paraguay did not have a body responsible for implementing the rules of the PDC.  Under Law 
No. 1.143, first-instance responsibility for dealing with claims concerning co mpetition-related issues 
at MERCOSUR level lay with the national bodies for the defence of competition in each member country.
160 
(iii) Incentives and other government supports 
183. Paraguay provides various incentive schemes  for investment supplementing certain 
government supports targeting specific activities.  Law No. 60 of 20 December 1990 establishes the 
general framework for invest ment incentives in Paraguay.  Among other things, the Law 
simultaneously calls for both import substitution and export promotion. 
184. Law No. 60/90, regulated by Decrees No. 15.657 of 30 November 1992, No. 7.692 of 
23 February 2000, No. 22.031 of 14 August 2003 and by Law No. 2.421 of 25 June 2004, lays down the conditions for the granting of tax exemptions  to both Paraguayan and foreign investors.  
Exemptions under Law No. 60/90 apply, inter alia , to investments in:  financing, capital goods, 
marks, designs and technology transfer in general,  specialized technical assistance, mining, the hotel 
trade, leasing of capital goods, provision of air cargo and passenger transport services, river transport, 
land freight transport in general, public passenger transport, health, ra dio, television, press, fixed rural 
and urban telephony, mobile telephony, scientific re search, silos, warehousing and data transmission 
services. 
185. The benefits provided for by Law No. 60/90 (including the amendments thereto) are the 
following: 
 - Exemption from the payment of VAT on th e purchase of imported capital goods used in the 
first phase of installation for industrial and ag ricultural production, provided that there is no 
domestic production.  From 2006, the exempti on will also cover capital goods produced in 
Paraguay. 
  - Exemption from the payment of all taxes levi ed on the formation, listing or registration of 
companies and enterprises. 
 
 - Exemption from the payment of internal duties and taxes on imports of capital goods, raw 
material and inputs for use in investment  projects for the manufacture of capital goods. 
  - Exemption from taxes or other levies on rem ittances and payments abroad in respect of 
interest, commissions and capital payments, where the investment is financed from a foreign 
country and amounts to at least US$5 million. 
                                                     
 
158 WTO (2004). 
159 Decree No. 01/03 of the MERCOSUR Trade Commission. 
160 Law No. 1.143 of 3 July 1998. WT/TPR/S/146 Trade Policy Review 
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 - Exemption from the payment of taxes on divi dends and profits genera ted over a period of ten 
years, where the project entails an investment of at least US$5 million. 
 
186. If the cost of the project is US$5 million or higher, it must be drawn up by technicians and/or 
consultant enterprises established in Paraguay. 
187. The MIC and the Ministry of Finance (MH), by joint resolution, are the bodies which grant 
the benefits provided for by Law No. 60/90, s ubject to approval by the Investment Council ( Consejo 
de Inversiones ).161  The Council, an advisory body to the MIC and the MH, is responsible for 
evaluating, making recommendations and approving i nvestment projects sanctioned by Law No. 60.  
The Council is chaired by a member of the MIC, an d its other members are single representatives of 
the MH, the Ministry of Agriculture and Livestock,  the Technical Secretariat for Economic and Social 
Development, the Central Bank of Paraguay, the primary production sector and the industrial or 
secondary production centre.  All members are appoint ed by the Executive.  The Investment Council's 
recommendations are geared to the following objec tives:  increased production of goods and services, 
expected employment generation, export promo tion and import substitution,  incorporation of new 
technologies and investment and re-inve stment of profits in capital goods. 
188. The Industrial Development Fund (FDI), created  by Decree No. 1.562 of 14 December 1993, 
as amended by Decree No. 2.110 of 8 March 1999, acts as a second-tier bank, channelling internal 
and external resources through intermediary financia l institutions.  Financing is focussed on industry 
(including micro-enterprises) and is used to re plenish and modernize equipment and physical 
facilities, to provide operating capital to finan ce increases in the inventory of inputs and raw 
materials, and to implement new investment projects.   According to the authorities, loans are granted 
at market rates in Dollars or Gu araníes, taking into account the repayment capacity of producers.  
Loan amortization periods are three to ten years (including a grace period of three years) for the purchase of fixed assets, and three years for "working capital" (including a grace period of six 
months).  The FDI finances up to 70 per cent of the value of each investment, depending on the 
resources available at the time of project evaluati on.  Most loans have been used for catering 
services
.162  During the period from 1997 to 2003, 251 loans were granted with a total value of 
US$67.8 million. 
189. Incentives are also provided fo r investment in forestation or reafforestation (see 
Chapter IV(2)). 
190. The motor vehicle industry also benefits from investment incentives.  Decree No. 21.944 of 
16 July 1998 establishes the Automotive Regime of Paraguay, which was expanded by Decree No. 406 of 16 July 1998.  The regime establi shes benefits for all enterprises that manufacture 
motor vehicles, tractors, cycles and parts and acc essories thereof.  Capital goods, raw materials, 
components, kits, parts and manufacturing inputs used in the production of motor vehicles, auto parts 
and auto components are exempt from the payment of internal duties and taxes specifically applicable, 
while the basis of assessment for VAT is 20 per cen t of the total value of the finished product.  
Enterprises covered by this regime are entitled to import motor vehicles, auto parts and auto components with a 50 per cent tariff reduction (Artic le 8 of Decree No. 21.944 and Article 2 of 
Decree No. 406, respectively). 
191. At the beginning of 2005, investments covered by Decree No. 21.944 also qualified, for a 
period of ten years, for all the benefits provided by Law No. 60/90 (see above), including exemption 
                                                     
 
161 Law No. 60, Article 17. 
162 MIC (2004).  Information available on-line at: http://www.mic.gov.py Paraguay WT/TPR/S/146 
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from charges on foreign interest payments, commis sions and capital;  payment of all taxes on the 
formation or registration of companies;  and pa yment of taxes on dividends.  Pursuant to Law 
No. 2.421/04, these benefits will cease to be applicable from August 2005. 
192. In order to qualify for the benefits of the Automotive Regime, the following requirements 
must be satisfied:  increased production of goods an d services, creation of new sources of permanent 
employment, export promotion and/or import substitu tion, incorporation of new technologies serving 
to enhance efficiency in the use of resources and investment in plants for the production and/or 
assembly of the goods defined in the regime.  Decree  No. 21.944 specifies that beneficiary enterprises 
must "gradually and increasingly incorporate lo cally produced components" and that the 
"implementing authority shall establish the methodology for measuring local content, the minimum 
percentage required for the first year, the sc ope and the modalities of this requirement". 
193. To apply for the above-mentioned benefits, a me morandum must be addressed to the Minister 
of Industry and Trade to initiate registration in the National Automotive Regime Register, and an 
investment project must be submitted which includes:  (a) a detailed plan for the gradual incorporation 
of Paraguayan inputs and components in the producti on process;  (b) a detailed plan of the industrial 
plant;  (c) a programme of incorporation and specification of goods for the product to be 
manufactured;  and (d) documents establishing the numb er of workers to be given direct employment 
and their functions. 
194. All enterprises eligible for benefits under Decr ee No. 21.944 prior to 31 December 2001 were 
subject to the following programme of gradual inco rporation of domestic components during the first 
six years:  0 per cent (first year), 4 per cent (second year), 6 per cent (third year), 10 per cent (fourth 
year), 15 per cent (fifth year) and 20 per cent (six th year).  As from 31 December 2001, beneficiary 
enterprises were subject to the fo llowing programme of incorporation of national components during 
the first five years:  4 per cent (first year), 6 pe r cent (second year), 10 per cent (third year), 15 per 
cent (fourth year) and 20 per cent (fifth year). 
195. Paraguay has submitted no notification to the WTO Committee on Trade-Related Investment 
Measures. 
196. In 1998, Paraguay notified the WTO Committee on Subsidies and Countervailing Measures 
that Paraguay grants no subsidies as defined in the Agreement on Subsidies and Countervailing 
Measures (see also section (3)(iv)).163  This notification prompted questions from the European Union 
concerning the rate of corporate income tax and th e possible existence of tax or other incentives to 
companies located in certain regions of Paraguay.164  Paraguay's reply to this question made specific 
and detailed reference to th e provisions of Law No. 60.165 
(iv) State trading, public corporations and privatization 
197. In 1998, Paraguay submitted three notificati ons to the WTO concerning State trading 
enterprises within the meaning of Article XVII of  the GATT 1994.  The State trading enterprises 
notified were the Central Bank of Para guay (BCP) and the Tourism Directorate166;  in the context of 
the current Review, the authorities observed that these notifications were made for the sake of 
transparency and that neither of the two institutions should be considered as a State trading enterprise.  
                                                      
163 WTO document G/SCM/N/38/PRY, 12 June 1998. 
164 WTO document G/SCM/Q2/PRY/1, 24 July 1998. 
165 WTO document G/SCM/Q2/PRY/2, 25 November 1998. 
166 WTO Documents G/STR/N/4/PRY, 5 Octo ber 1998 and G/STR/N/4/PRY/Suppl.1, 
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Paraguay also notified the WTO of the privatization, in 1996, of Fertilizantes Paraguayos .167  In 
1998, notification was given that there were no St ate trading enterprises promoting or marketing 
agricultural products.168 
198. There are few public corporations in Paraguay;  most of them are concentrated in the energy 
and services supply sector.  The National Electricity Administration (ANDE) has the sole right to 
distribute and transmit electricity (see Chapter IV(4) for more details).169  The Compañia Paraguaya 
de Comunicaciones  and Petróleos Paraguayos  have de facto monopolies in fixed telephony and oil 
refining (see sections (6)(ii) and (5), respectively).  The State also has stakes in various banks and 
State funds (see Chapter IV(6)(i) for more details).   The municipalities are empowered to choose the 
way in which they provide water and sewage services (by means of a public entity or by 
concession).170 
199. Paraguay has no general legislation concerning th e administration of State-owned enterprises, 
except for rules on the tax and registration requireme nts applicable to entities set up as companies (see 
section (4)(i) above).  Virtually all public enterprises are administered by an administrative board.  The charters of banks, public financ ial entities and the ANDE stipulate that they are required to draft 
annual reports on their financial situation. 
200. A 2001 study found that many public corporations  lack the necessary financial resources to 
finance the investments required to expand thei r operations, become competitive and satisfy the 
demand that they face.
171 
201. A first stage of privatization was initiated in  1991 with the enactment of Law No. 126 of 
30 December 1991.  Under the Law, a number of State trading enterprises were privatized, including 
the Administración Paraguaya de Alcoholes , Fertilizantes Paraguayos, Fl ota Mercante del Estado,  
Aceros Paraguayos S.A . and Líneas Aéreas Paraguayas S.A .  During the last Review of Paraguay, 
Members noted that the privatization process had moved forward slowly.172 
202. A second stage of privatization was started in 2000 with the enactment of Law No. 1.615 of 
31 October 2000, repealing Law No. 126.  Law No. 1.615 establishes the aim of "reforming and 
transforming" the National Telecommunications Administration, the Sanitary Services Corporation 
and Ferrocarril Carlos Antonio López .  It was thus hoped to make t hose firms more efficient (reform 
phase) and then to privatize them (transformation phase).173  However, concern about possible job 
losses and claims regarding the c onstitutionality of the bidding process paralyzed the privatization 
process.  In June 2002, Congress enacted Law No . 1.932 of 5 June 2002, which indefinitely 
suspended the effects of Law No. 1.615 and the pr ivatization process, citing problems of "citizens' 
confidence" in the process (see Ch apter IV(6)(ii)).  Consequently, at  the end of 2004, Paraguay had no 
legal framework regulating the privatization process. 
(v) Government procurement 
203. The total estimated value of government pr ocurement carried out by the Ministries, 
independent State agencies, State trading en terprises and provincial governments in 2001 was 
                                                      
167 WTO Document G/STR/N/4/PRY/Suppl.2, 26 November 1998. 
168 WTO Document G/STR/N/4/PRY/Suppl.2, 26 November 1998. 
169 Law No. 966 of 12 August 1964. 
170 Law No. 1.294 of 18 December 1987. 
171 Insfrán Peloso, J.A. (2001). 
172 WTO (1997), Minutes. 
173 Law No. 1.615, Article 2. Paraguay WT/TPR/S/146 
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US$800 million;  goods and services accounted for 75 per cent of the total expenditure and capital 
investment for 25 per cent.174  The amount budgeted for government procurement in 2004 is 
US$1,300 million, including externally financed procurement, while the corresponding amount for 2005, excluding State-owned companies, is US$1,450 million. 
204. Paraguay is not a party to the WTO Plurilatera l Agreement on Government Procurement, nor 
is it an active participant in the Working Group on  Transparency in Government Procurement.  The 
authorities noted that they are working with various  international and non-go vernmental organizations 
to strengthen transparency in procurement procedures. 
205. Law No. 2.051 of 21 January 2003 (Law on G overnment Procurement (LCP)), regulated by 
Decree No. 21.909 of 11 August 2003, establishe s the statutory provisions governing all public 
procurement in Paraguay.  Law No. 1.533 of 4 January 2000 (Public Works Law), which governed  
procurement of public works and related services until the enactment of the LCP, was superseded by 
the LCP in all matters except the provisions c oncerning liability, measurement, inspection, 
implementation and certification of public works by the contractors.  The LCP was enacted in 
pursuance of the anti-corruption campaign obj ectives of the National Integrity Plan ( Plan Nacional de 
Integridad ).
175 
206. The principles governing the LCP, as defined in th e text, are decentralization, efficiency, open 
participation, equality and free competition, and simplification and modernization of procedures.176  In 
addition, the LCP established detailed rules for th e tendering process, reduced the freedom afforded 
by exceptions to the process and established specifi c procedures for the procurement of advisory 
services.  However, a World Bank study of Janua ry 2003 (thus pre-dating enactment of the LCP 
implementing decree) identified various points in th e LCP that should be amended, together with 
others that would require detaile d regulation (Box I).  The authorities noted that, at the beginning of 
2005, additional regulations on government procur ement were under consideration with a view to 
enactment. 
207. The LCP provides for the establishment of a Procurement Operational Unit (UOC) in each 
agency dealing with public contracts, which would be responsible for implementing annual planning, 
preparing the budget and carrying out the public pr ocurement procedures of the agency.  As at 
February 2005, UOCs had been set up in approxim ately 97 per cent of public institutions.  Each 
agency has an Evaluation Committe e (CE) which is constituted when ever a procurement operation is 
conducted.  The CEs may include members from outside  the agency, appointed on an ad-hoc basis.  
Each CE issues an opinion based on the recomme ndations of the corresponding UOC, which serves as 
the basis for the award of the contract by the "higher authority" of each agency. 
208. Decree No. 21.909 lays down the standards used by the CE and, in particular, requires the 
submission of comparative studies justifying its recommendation.  According to Decree No. 21.909, the contract shall be awarded to the bid which:  (i) fulfils all the legal requirements;  (ii) is qualified 
and can provide the good or service;  and (iii) offers the lowest price estimate.  In case two or more 
companies offer the same price, the higher authority of the agency shall decide at its own discretion 
which company is awarded the contract.  Paragua yan companies whose products have more than 
50 per cent local content may be granted a margin of  preference of up to 10 per cent (Article 18 of 
Law No. 2.051). 
                                                     
 
174 World Bank (2003b). 
175 Council for the Promotion of the National Integrity  Plan (2004).  Informa tion available on-line at: 
http://www.pni.org.py 
176 Law No. 2.051, Article 4. WT/TPR/S/146 Trade Policy Review 
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Box I:  World Bank Recommendations on Public Procurement in Paraguay 
 
Recommendations for amendment of Law No. 2.051 
 
- Article 18:  Use international competitive bidding in a greater number of cases. 
- Article 53:  Specifically establish that the selection of consultants is carried out on the basis of a request for 
bids from a limited number of qualified firms, and not on the basis of open competition. 
- Article 54:  Make selection methods more specific.   
- Article 67:  Transfer to the MIC or other specialized  agency responsibility for certification of "electronic 
identification" (currently borne by the Central Policy and Technical Unit for procurement (UCNT)). 
- Article 85:  Eliminate the requirements for respons es to complaints concerning the bidding process. 
- Article 86:  Assign responsibility for resolving contract disputes to an independent entity, not to the 
UCNT, thereby avoiding conflicts of interest. 
 
Points to be considered in detail for future regulation 
 
- Article 5:  Guarantee the independence of the UCNT. 
- Article 17:  Develop specific guidelines for the implementation prequalification, two-stage procurement 
and other procedures. 
- Article 20:  Improve transparency by requiring the same date and time for bid opening and receipt of bids. 
- Article 33:  Make the definition of "technical and emergency reasons" as narrow as possible in order to 
prevent the abuse of procedures based on those reasons. 
- Increase to more than 4 the minimum number of days, prior to the deadline for submission of bids, for 
making amendments to the bidding documents, so as to give bidders sufficient time to make the necessary 
adjustments. 
 
Source :  World Bank (2003),  Republic of Paraguay:  Country Procurement Assessment Review . 
 
209. The General Directorate of Public Procurement (DGCP), an arm of the Ministry of Finance, 
establishes government procurement policy, superv ises the procedures and practices used by the 
agencies, administers the public procurement system (SCP) and maintains a register of suppliers and 
contractors debarred from partic ipating in public procurement.177  The SCP includes an internet portal 
providing information on procurem ent, tender documents, awards and the mechanisms for submitting 
complaints.178  The authorities noted that the implementation of the new public procurement regime 
had resulted in significant savings and greater participation by small and medium-sized enterprises.   
210. Invitations to tender are published in at least one newspaper for a period of three days.  The 
relevant resolutions are published through the SC P portal.  In the case of domestic competitive 
bidding, 20 days are allowed for the preparation and submission of bids from the date of publication 
of the last invitation to tender, and 40 days for international competitive bids under the same 
conditions.  The DGCP is also responsible for drafting and disseminating handbooks on government 
procurement procedures, although in practice inform ation has mainly been disseminated through the 
internet portal.   
211. There are four methods of public procurement179, namely:  (i)  public or open tendering used 
for procurement exceeding the equivalent of 10,000 mi nimum wage units;  (ii)  offer bidding used for 
procurement involving amounts of between 2,000 a nd 10,000 minimum wage units;  (iii)  direct 
contracting (shopping) for procurement involving am ounts of less than 2,000 minimum wage units;  
and (iv)  fixed price procurement (by the agency) for purchases amounting to less than 20 minimum 
                                                      
177 Resolution No. 1, Article 4. 
178 For more information see on-line:  http://www.contratacionesparaguay.gov.py 
179 Law No. 2.051, Article 16.   Paraguay WT/TPR/S/146 
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wage units.180  The first two methods entail competitiv e bidding while the latter two require an 
invitation to tender (direct contracting) or dir ect purchase (fixed price).  Technical or emergency 
reasons may relieve the agencies of the obligatio n to follow government procurement procedures 
(Article 33). 
212. The authorities indicated that, in value terms,  the most widely used method is that of 
public/open tendering (both local and international).  They also indicated that most public contracts 
are implemented by means of direct contracting or shopping, since in many cases the budgets of the institutions fall below the threshold for this moda lity;  accordingly, efforts are being made in 
cooperation with the UOCs to promote the use of ope n tendering instead of various forms of direct 
contracting.  
213. The above-mentioned World Bank study estimated  that, in the case of public/open tendering 
and offer bidding, an average of between 270 and 550 days was required from the date of authorization to conduct the tender process until the contract was signed.
181  The same study found 
that shopping and direct purchase were much mo re expeditious, requiring be tween 15 and 106 days to 
complete the same process.  These estimates were ma de prior to the enactment of Decree No. 21.909, 
which regulates the LCP.  Since the introduction of  the new government procurement regime, the time 
taken by the procurement process has varied betw een 10 and 20 days for direct purchases, between 
25 and 40 days for offer bidding and 60 days for public/open tendering. 
214. The LCP classifies public tendering as either local or international.182  The former is limited 
exclusively to natural or legal persons domiciled in Paraguay, while the latter is open to participation 
by natural or legal persons, whether or not they ar e domiciled in Paraguay.  International tenders are 
used only in one of the following cases:  (i) where re quired by an international treaty;  (ii) where 
stipulated in agreements with international organi zations;  (iii) where, following investigation by the 
UOC, no Paraguayan suppliers are found to supply goods and services of the quality required or 
where the price of such goods or services is not "s uitable";  or (iv) where no proposal has been 
submitted in a local tendering procedure. 
215. The LCP makes it possible for a natural or le gal person not domiciled in Paraguay to be 
barred from participating in the process if that person's country of origin does not grant reciprocal treatment to Paraguayan suppliers.  The authorities ob served that this reciprocity rule has not been 
applied.  Participants in international bidding  procedures are also required to declare to the 
corresponding UOC whether their product has benef ited from subsidies or discriminatory pricing. 
216. The Auditor-General's Office of the Executiv e Power is the agency responsible for 
investigating any claim, either upon application or on its own initiative, concerning government 
procurement.  To that end, the UOCs together w ith the DGCP give support to the investigation, the 
competent UOC being the body responsible for notif ying the parties concerned of the investigation 
under way.  The parties are entitled to have recourse to  arbitration, subject to prior agreement to that 
effect in the contract. 
                                                     
 
180 As at September 2004, the minimum wage in Paraguay was roughly US$100. 
181 World Bank (2003b). 
182 Law No. 2.051, Article 18. WT/TPR/S/146 Trade Policy Review 
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(vi) Intellectual property rights 
 
(a) Overview 
217. Paraguay's constitution, which has been in for ce since 1992, explicitly guarantees intellectual 
property rights.  Article 110 of the Constitution stipulates that every author, inventor, producer or 
trader shall enjoy exclusive ownership of his work, invention, mark or trade name, in accordance with 
the law.  Paraguay is a member of the World Intellectual Property Organization (WIPO) and has 
ratified a number of international agreements on intellectual property rights (IPRs) (Table III.8). 
Table III.8 
International agreements ratified by Paraguay 
International agreement Law and date of ratification 
Paris Convention Law No. 300 of 10 January 1994 
World Intellectual Property Organization (W IPO) Law No. 1.224 of 23 December 1986 
Agreement on Trade-Related Aspects of Intellectual Pr operty Rights (TRIPS) Law No. 444/94 of 10 November 1994 
Buenos Aires Protocol on the Harmonizati on of Intellectual Property Rules within 
MERCOSUR with Regard to Trademarks, Indi cations of Origin and Appellations of 
Origin  (DEC GMC 8/95) Law No. 912 of 1 August 1996 
Rome Convention for the Protection of Performers, Producers of Phonograms and 
Broadcasting Organizations Law No. 1.038 of 11 October 1969 
Convention for the Protection of Producer s of Phonograms Against Unauthorized 
Duplication of their Phonograms, Geneva, 1971 Law No. 703 of 8 August 1978 
Berne Convention for the Protection of Lite rary and Artistic Works (Paris Act of 
1971, as amended in 1979) Law No. 12 of 23 August 1991 
International Convention for the Protection of New Varie ties of Plants (UPOV) Law No. 988 of 14 November 1996 
WIPO Copyright Treaty (WCT) (1996) Law No. 1.582 of 6 October 2000 
WIPO Performances and Phonograms Treaty (W PPT) (1996) Law No. 1.583 of 6 October 2000 
 
Source : Notifications submitted by Paraguay to the WTO Secretariat and information provided by the  Paraguayan 
authorities. 
 
218. Since ratifying the Uruguay Round Agreements , Paraguay has introduced a series of new 
legislative provisions to bring domestic legisla tion into conformity with the TRIPS Agreement 
(Table III.9).  Paraguay's legislation on industrial property rights was reviewed by the Council for 
TRIPS in November 2000.183 
219. The Ministry of Industry and Trade (MIC) is r esponsible for IPR policy.  The Directorate of 
Industrial Property (DPI) is respons ible for overseeing matters relati ng to industrial property, while 
the National Directorate of Copyright is in charge of copyright-related matters.  The DPI deals with 
applications relating to patents for inventions an d utility models, the registration of trademarks and 
industrial designs, and renewals, as well as objections, changes in ownership, licences for use, 
trademark transfers, and registration of industrial pr operty agents.  Trademarks and industrial designs 
are registered for a minimum period of six months, while patents are granted for a minimum period of 
three years.184 
                                                      
183 WTO documents IP/Q/PRY/1, IP/Q2/PRY/1, IP/Q3/PRY/1 and IP/Q4/PRY/1, of 23 January 2002. 
184 Ministry of Industry and Trade, information available on-line at: 
http://www.mic.gov.py/propiedad_intelectual/marcas.html 
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Table III.9 
Overview of the protection of intellect ual property rights in Paraguay, 2005 
Law/Coverage  Duration  Observations, limitations and exclusions  
Copyright and related rights    
Law No. 1.328/98 on Copyright and Related Rights.  
Decree No. 5.159/99 regulating Law No. 1.328/98 
 
Coverage: Any original literary, scientific or artistic 
product capable of being disclosed or published by 
any means or process, regardless of its type, form of expression, the nationality or place of residence of its 
author or right holder , or the place of publication.  
Related rights include the moral and patrimonial rights of performers, producers of phonograms, and 
broadcasting organizations. Patrimonial rights:  lifetime of 
the author (or last co-author) plus 
70 years.  For collective, anonymous, pseudonymous, 
audiovisual and broadcast works, 
and computer programs: 60 years from date of disclosure or initial 
publication. Registration is not a condition of protection. 
 
The use of works without gainful intent or for educational or research purposes is not 
considered to be a violation of copyright. 
 Ideas, procedures, official texts, news and 
data are not protected. 
Patents    
Law No. 1.630 of 21 November 2000.  Regulatory 
Decree No. 14.201 of 2 August 2001. 
 Coverage:  Any invention, whether product or 
procedure, that is new, involves an inventive step 
and is industrially applicable; pharmaceutical products since January 2005. 20 years from filing date of 
application.  Non-extendable. Plants, animals and essentially biological 
processes are not patentable,  nor  are  
inventions whose commercial exploitation must be prevented in order to protect public 
order, morality, human, animal or plant life 
or health and the environment.  Compulsory licences may be granted if a 
patent has not been exploited within three 
years of being granted, or within four years of the application being filed.  They may 
also be granted for reasons of public 
interest, an emergency, or national security considerations. 
Industrial designs    
Law No. 868 of 2 November 1981.  Regulatory 
Decree No. 30.007 of 5 January 1982. 
 
Coverage: Upon registration, new designs (not available to the public be fore the filing date).  
Industrial designs must be intended to give a special 
appearance to an industrial or craft product and be used as a model for its manufacture. Five years from filing date of 
application.  Renewable for two 
consecutive periods of the same 
duration. Industrial designs may not be registered if 
they are not new, are used solely for 
technical purposes, or are contrary to public 
order, morality and proper practice. 
Utility models    
Law No. 1.630 of 21 November 2000.  Regulatory 
Decree No. 14.201 of 2 August 2001. 
 
Coverage: Provisions on the form, configuration or arrangement of an object th at enable it to function 
better or differently or that give it a usage or 
technical effect that it did not previously have.  They must be industrially applicable and novel. Ten years from filing date of 
application.  Non-extendable. Protection conferred by a utility model 
patent. 
 
The following are not considered to be utility models:  processes,  substances and 
compositions, including those of a chemical 
and metallurgic nature, and materials excluded from patent protection. 
Layout designs (topographies) of integrated 
circuits    
Through registration.  Layout designs must be 
original. 
 
TRIPS (no domestic legislation exists). Ten years from filing date of 
application. Layout designs in commercial use for over 
two years anywhere in the world may not be 
registered.  Rights may only be asserted 
against acts carried out for industrial or commercial purposes. 
Table III.9 (cont'd)  WT/TPR/S/146 Trade Policy Review 
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Law/Coverage  Duration  Observations, limitations and exclusions  
Trademarks    
Law No. 1.294/98 (Law on Trademarks).  Decree 
No. 22.365/98 regulating Law No. 1. 294/98 on 
Trademarks. 
 
Coverage:  Upon registrati on, any sign serving to 
distinguish products or services in the market, 
including names, commerci al slogans, certification 
marks and collective marks.  Prior use is not a condition for registration.   Includes protection 
against the use and registration of well-known 
distinctive signs. Ten years from the date of 
registration, renewable indefinitely for further ten-year periods. 
 
In general, the use of a mark is compulsory.  However, through 
judicial means and at the request of 
the party concerned, registration of a mark may be cancelled in the 
following cases:  (a) where its use 
has not commenced within five years following its registration;  
(b) where its use has been 
suspended for more than five consecutive years;  (c) where, 
during the periods specified in the 
two preceding subparagraphs, it has been used with substantial 
changes in its original distinctive 
character. Signs may not be registered as trademarks 
(a) if they reproduce, imitate or contain a protected appellation of origin;  (b) when 
their use could create a risk of confusion or 
of association with the appellation or might imply an unfair appropriation of its 
reputation;  (c) if they contain a protected 
appellation of origin for wines and spirits,  or (d) if they consist of a geographical 
indication likely to lead to confusion, inter 
alia. 
Geographical indications    
Law No. 1.294/98 (Law on Trademarks) 
 
Coverage:  Signs which identify a product as originating in a region, country, locality or other 
place, when its reputation or other characteristics are 
essentially attributable to its geographical origin.  Not specified. It is  forbidden to use a geographical 
indication to identify products of the same 
type which do not originate in the place designated by the indication. 
New plant varieties    
Law No. 988/96 approving the International 
Convention for the protection of New Varieties of 
Plants.  Law No. 385/94 on Seeds and Protection of 
Cultivars.  Regulatory Decree No. 7.797/00.  
Coverage:  New, uniform, distinct and stable plant 
varieties. 15 to 20 years depending on the 
species:  currently 15 years for 
agricultural species; 18 years for 
forest species, vines and fruit trees. Protection by means of breeders' 
certificates.  Plant breeders' certificates do 
not confer on the holder the right to prevent 
third parties from using the protected variety, when such use is made for 
non-commercial purposes, experimental 
purposes, or to obtain and exploit a new variety. 
 
Source :  WTO Secretariat 
 
(b) Patents and utility models 
220. Since its last trade policy review in 1997, Pa raguay has enacted a new law on patents, Law 
No. 1.630 of 21 November 2000 (regulated by Decree No. 14.201 of 1 August 2001), which supersedes Law No. 773 of 23 December 1925.  This new law also provides protection for utility models (Table III.9).  In Paraguay, patentability foll ows the principle of unity of invention, whereby 
each patent application can relate to only one invention;   groups of interrela ted inventions are only 
allowed under the same application if they constitute a single inventive concept. 
221. The new Law on Patents has introduced the possi bility of granting patent s to sectors that had 
previously received no protection at all, such as pharmaceutical products.  Law No. 1.630 of 2000 
provided that pharmaceutical products would receive protection as of 1 January 2003, but this date 
was later put back to 1 January 2005 by Law No. 2.047 of 19 December 2002.  Up until 
1 January 2005, it was possible to file an pate nt application for pharmaceutical products under the 
"mailbox" procedure provided for in Article 70 of the TRIPS Agreement.  It was also possible to 
obtain exclusive marketing rights.  The dates of such  applications are valid for future priority-related 
claims.  It was also possible to obtain ex clusive marketing rights until 1 January 2005. Paraguay WT/TPR/S/146 
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222. Patent applications must be filed with the DPI.  Once filed, an application undergoes an 
examination of form and, following its publication, of substance.  After the examination of form, a 
period of 60 working days is granted for making co rrections.  Instructions are given to publish the 
application and it is officially made public 18 mont hs after being filed; the applicant can, however, 
request that it be published sooner.  In the peri od between the publication of the application and the 
examination of substance, interested third parties may comment on and even challenge the 
application. 
223. Although Paraguay is not a signatory to the Patent Cooperation Treaty (PCT), the DPI is 
authorised to recognise, on the basis of an examinat ion of the relevant documents, the results of the 
novelty and patentability examinations conducted by other industrial property offices as being 
sufficient to demonstrate fulfilment of patentabilit y conditions in Paraguay.  In the case of foreign 
applications, translated versions of the documents may be required in order to verify patentability. 
224. Pursuant to Law No. 1.630 of 2000, patents are valid for a non-extendable period of 20 years; 
under the previous law, patents were valid for 15 ye ars.  Annual fees must be paid to maintain the 
validity of a patent.  Law No. 1.630 provides for the po ssibility of patent transfers;  for transfers to 
have legal effect against third parties they must be  registered with the DPI.  Voluntary licences for the 
exploitation of inventions must be registered with  the DGPI in order to be valid, and cannot contain 
clauses that restrain competition.  Voluntary licences are non-exclusive, since the licensor is able to 
grant several licences for the utilisation of his patent in Paraguay. 
225. Law No. 1.630 provides that the DPI may approve the use of a patent without the holder's 
permission when applicants have made unsuccessful e fforts to obtain such authorization directly from 
the patent holder on reasonable commercial terms an d conditions.  If an application concerns sectors 
which were unprotected in Paraguay on the date La w No. 1.630 entered in force, and the patent 
applied for covers the raw material  from which the final product is to  be developed, the licensee is 
obliged to buy that raw material from the patent holder or from whomever the patent holder specifies, 
at the international market price.  Should a preferen tial price exist, the patent holder must offer it to 
the licensee.  However, the licensee may buy the raw material from a third party if the price is at least 
15 per cent lower than that offered by the patent ho lder, and in doing so must prove that the raw 
material acquired has been lawfully put on the domestic or international market. 
226. Law No. 1.630 also provides for the possibility of applying for a compulsory licence three 
years after a patent has been granted or four years after an application has been filed, providing that 
the invention has not been exploited, that no effec tive preparations have been made to exploit it or 
that the exploitation of the invention has been in terrupted for more than one year for reasons not 
attributable to force majeure .  Importing is recognised as exploita tion, whenever it is carried out by 
the patent holder.  Compulsory licences may also be granted in order to eliminate anti-competitive 
practices or for reasons of public interest, such as a health emergency or national security or defence, 
or to foster economic development in certain strategic sectors.  The patent holder must receive remuneration for the use of the patent.  Com pulsory licences are non-exclusive and are granted 
predominantly for the supply of the domestic market. 
227. Utility models are protected through the granting of utility model patents (Table III.9).  Utility 
models must be registered with the DPI.  They ar e subject to the same procedure as applications for 
patents. 
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(c) Trademarks 
228. The protection of product and service marks is now governed by Law No. 1.294 of 
6 August 1998 and Regulatory Decree No. 22.365 of  14 August 1998 (Table III.9).  The new Law on 
Trademarks introduced some important elements into  Paraguayan legislation in this field, such as 
protection for famous (well-known) marks, provi sions on border measures, procedures for the 
implementation of precautionary measures and criminal penalties, and rules for the protection of geographical indications.  The new law also permits th e registration of any type of sign, regardless of 
whether it is visually perceptible or not, thus enabling sound and smell marks to be registered.  
Furthermore, it lays down rules regarding the oblig atory nature of trademark use and the registration 
of collective and certification marks.
185 
229. In order to obtain protection, marks must be registered in the DPI Register of Trademarks; 
registration grants the right to the exclusive use of  a particular mark.  Registered trademarks are 
published each week in the information bulletin Revista de la Propiedad Industrial .186  Trademark 
rights may be renewed before expiry and may be  transferred by contract or inheritance. 
230. Objections to the registration of a mark mu st be submitted in writing to the DPI within 
60 working days of the final publication of the regi stration application.  The registration of a mark 
renders its use obligatory, and use is a prerequisite  to retaining the property right to a mark.  The 
owner of a mark must begin using it within five y ears of its registration and not interrupt its use for 
more than five years.  In the case of well-known marks, protection is possible without registration.  Foreign trademarks enjoy the same guarantees as nati onal marks; their protection is ensured through 
registration with the DPI, for which the applicant or  his representative must be domiciled in Asunción. 
231. The owner of a registered mark may grant a licence for its use; the Paraguayan legal 
framework also provides for the possibility of assigni ng or transferring a registered mark or a mark 
that is the subject of a registration application.  The exclusive right to a trade name is acquired 
through its first public commercial use, since regist ration with the DPI is not a requirement for the 
protection of this right. 
(d) Copyright and related rights 
232. In Paraguay, copyright and related rights ar e also protected under Article 110 of the 1992 
Constitution.  The Law on Copyright and Related Rights (Law No. 1.328/98) and 
Decree No. 5.159/99 set out and regulate this protection (Table III.9).  They give the author of a work, 
by virtue of its creation, the original ownership of  a right that is enforceable against all persons.  
Registration procedures are carried out by the Nati onal Registry of Copyright and Related Rights of 
the National Directorate of Copyright.  A work does not have to be registered in order to receive 
protection under the above-mentioned Law;  above all, registration provides proof of recorded facts 
and procedures, unless evidence to the contrary exists ;  foreign registrations are also accepted as 
proof. 
233. Law No. 1.328/98 grants the right holder both mo ral and patrimonial rights.  Moral rights 
(disclosure, paternity, integrity, and withdrawal  of the work from the market) are perpetual, 
inalienable, unattachable, unrenounceable and imprescrip tible, since they are exer cised by the author's 
heirs following his death.  Patrimonial rights (public reproduction, communication and  distribution, importation and translation) may be exercised in a ny manner or form beneficial to the author.  The 
                                                     
 
185 WTO document IP/Q/PRY/1 of 23 January 2002. 
186 Ministry of Industry and Trade, information available on-line at: 
http://www.mic.gov.py/propiedad_intelectual/marcas.html Paraguay WT/TPR/S/146 
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protection covers all the author's works, regardless of their type, form of expression, merit or purpose, 
and without distinction as to the nationality or place of  residence of the author or right holder, or the 
place of publication of the work.  The Law contains special provisions for audiovisual and broadcast works, computer programs, architectural and three-dimensional works, and news articles. 
234. A patrimonial right remains in effect for the entire lifetime of the author and for 70 years 
following his death.  With the adoption of the ne w Law, works and other productions which passed 
into the public domain on expiry of the term provided for in the repealed legislation have returned to 
the private domain until such time as the ne w term provided for in the Law expires. 
(e) Other intellectual property rights 
235. Geographical indications are protected under the provisions of the Law on Trademarks 
(Articles 57 to 60).  The Law provides that only producers carrying out their activities in the place designated by the geographical indication may use the indication in trade.  The misuse of a geographical indication may be the subject of legal action. 
236. Legislation on the protection of industrial desi gns is provided by Law No. 868 of 2 November 
1981, regulated by Regulatory Decree No. 30.007 of 5 January 1982.  To benefit from this protection, 
such designs must be registered with the DPI.  I ndustrial designs may be registered if they are new, 
are not used solely for technical purposes, and are not contrary to public order, morality and proper 
practice. 
237. The protection of new plant varieties is provided for in Law No. 385/94 on Seeds and 
Protection of Cultivars, which established the Seeds Directorate (DISE) as the technical body 
responsible for enforcing the law, and in the regul ations thereto, contained in Decree No. 7.797/00.  
Law No. 385/94 also created the National Registry  of Protected Cultivars within the DISE to 
safeguard the rights of plant breeders.  Any natura l or legal person who produces a new plant variety 
is entitled to apply for registration thereof in  the DISE register, once the requirements of 
distinctiveness, homogeneity, stability, novelty, and denomination have been fulfilled.  Protection 
does not extend to any product obtained through app lication of the variety.  The International 
Convention for the Protection of New Varieties of Plants (UPOV) was approved by Law No. 988/96.   
The National Plant and Seed Quality and Health Se rvice (SENAVE), which is to replace the DISE in 
April 2005,  was established under Law No. 2.459/04 (Section (2)(viii)(b)).  
238. At the end of 2004, no specific legislation ex isted for the protection of layout designs 
(topographies) of integrated circuits or undisclosed information.  A draft law, however, had been 
prepared by the authorities and was to be submitted to the national parliament. 
(f) Parallel imports  
239. Paraguayan legislation permits pa rallel imports in the case of industrial property rights.  The 
Law on Patents contains provisions (Article 34(c) ) on the international exhaustion of industrial 
property rights, as does the Law on Trademarks (Artic le 17).  Paraguayan legislation stipulates, in 
both cases, that a right holder in Paraguay may not prevent parallel imports from another country in 
which goods liable to be imported have been put on the market by the right holder or with his 
authorization. 
240. Contractual restrictions that may exist in the case of exclusive licences or distribution 
contracts cannot prevent parallel imports, since these contracts are not valid for third parties.  If a 
modification is made to a product to  which IPRs relate, or to its packaging, without authorization 
from the right holder, the latter may oppose the parallel import of the product. WT/TPR/S/146 Trade Policy Review 
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241. In the case of copyright, parallel imports are not permitted.  Article 29 of the Law on 
Copyright and Related Rights grants the right holder the exclusive right to authorise, or refuse, the 
entry into Paraguay of copies of a work which have not been specifically authorised for distribution 
there, regardless of whether or not he has authori sed the making of copies in the country of origin.  
This right prevents free circulation at borders, but does not stop the import of individual copies for 
personal use.  It also covers the electronic transmission of works.187 
242. In a joint communication to the TRIPS Counc il, Paraguay, together with other WTO 
Members, defended the importance for developing count ries of being able to incorporate legislation 
on the international exhaustion of rights.188 
(g) Enforcement of inte llectual property rights 
 243. The National Council for the Protection of In tellectual Property Rights, established by 
Decree  No. 14.870 of 26 September 1996 and bringing together the Ministries of Industry and Trade, 
the Interior, Finance, Foreign Affairs and the Offi ce of the Attorney General,  is responsible for 
coordinating activities relating to the protection of IPRs at national level,  negotiating technical 
cooperation and assistance agreements and preparing draft laws.  To support the Council's work,  the 
Attorney General has set up prosecution department s specializing in IPRs in Asunción and in the 
frontier towns of Encarnación and Ciudad del Este, wh ich deal exclusively with the judicial aspects of 
combating piracy. 
244. The enforcement of IPRs may be the subject  of administrative and criminal procedures.
189  
Judges have the authority to issue measures to pr event imported products that infringe IPRs from 
entering the country.  Moreover, customs authorities, at  the request of an interested party, may apply 
precautionary border measures, with the authority to  retain for up to ten days goods that violate 
trademark rights and copyright, without any intervention from the courts. 
245. The Law on Copyright provides for fines or prison sentences, which, depending on the 
gravity of the offence committed, range from six months to three years.  The compensation for 
material damage and injury provided for by the la w covers the amount the right holder ought to have 
received, plus a minimum surcharge equivalent to  100 per cent of the said amount.  Other remedies 
available under Law No. 1.328/98 are the confiscati on, seizure and destruction of the infringing goods 
and of all materials and accessories used.  La w No. 1.294/98 on Trademarks also prescribes 
administrative and criminal proceedings.  
246. Time limits exist for initiating procedures ag ainst IPR infringement.  The time limit for 
criminal procedures is three years.  For civil pr ocedures, the time limit is two years from when the 
right holder first became aware of the infringeme nt, or four years from the last time it occurred.190  In 
order to establish criminal liability, proof of the IP R infringement is a necessary condition, yet it is not 
the only requirement; an element of intention, establis hed by the Office of the Attorney General, must 
also exist.191 
247. Decree No. 603 of 20 October 2003 introduced speci al measures for the prevention of piracy 
and counterfeiting, and the protection of copyright.  It established the Register for Importers of 
                                                      
187 Berkemeyer (2004). 
188 WTO document IP/C/W/296 of 29 June 2001. 
189 See WTO document IP/Q/PRY/1 of 23 January 2002 for additional information. 
190 International Association for the Protection of Intellectual Property, information available on-line at:  
http://www.aippi.org/reports /q169/q169_paraguay_e.html. 
191 Berkemeyer (2004). Paraguay WT/TPR/S/146 
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Magnetic and Optical Media and Raw Materials used in the Production Thereof (RISMOMPP), 
overseen by the DGPI, and gave the Intelligence Division of the Audit Department of the General Directorate of Customs the authority to guarantee the fulfilment of the IP Rs for products cleared 
through customs.  Decree No. 603/03 makes it compul sory for the following to be registered in the 
RISMOMPP:  natural or legal pers ons engaged in the import, recording or marketing of audiovisual 
materials and software; importers of industrial recording equipment comprising more than three parts 
and raw materials used in the manufacture of magnetic media, compact discs and blank or recorded DVDs; and producers and distributors of audiovisual works, compacts discs and software.  Registration is annual and is a pr erequisite for obtaining prior impor t authorization (non-automatic), 
which is required for blank products under tariff subheadings 85.23.11 and 85.23.13 (magnetic tapes), 
85.23.20 (magnetic discs) and 85.24.90 (other pr oducts) of the MERCOSUR Common Nomenclature 
(NCM).
192 
248. Although significant efforts have been made to  improve the enforcement of IPRs, it is a 
matter that remains of concern both to the Paragua yan authorities and those of neighbouring countries, 
as well as to other WTO Members, particularly as Pa raguay is a transit point and illicit production site 
for unauthorised copies of software, sound record ings and films.  In keeping with the above-
mentioned institutional efforts,  the Government  of Paraguay has intensified search activities and 
increased the number of seizures since the last trade po licy review in 1997.  Within the context of the 
review of its IPR legislation by the TRI PS Council in November 2000, Paraguay submitted 
information testifying to its IPR enforcement efforts for the 1998-2000 period.193  
249. With regard to the problem of transit and manufacture of pirate copies, the authorities 
estimate that more than 270 million blank CD-Rs were imported in 2004, compared to less than 30 million in 2000.  Much of this transit is presumed to be destined for the Brazilian market.  In an 
attempt to tackle this problem , the Brazilian authorities issued Instrução Normativa  No. 448 of 
6 September 2004, which prohibits the transit through customs of blank CD-Rs destined for 
neighbouring countries.
194  In November 2003, Paraguay, for its  part, reduced the number of border 
entry points for blank CD-Rs from 17 to 7, so as to  exercise more effective control over cross-border 
trade.  In September of the same year, the Minist ry of Industry and Trade signed an agreement with 
the record industry which stipulated that any do cumentation endorsing imports  of blank CD-Rs would 
be referred by the Ministry of Industry and Trade to the phonographic industry for analysis.  It was 
reported that as a result of this action, some  11 million blank CD-Rs were seized in 2004.195 
250. In 1998, the Office of the US Trade Represen tative (USTR) identified Paraguay as a Priority 
Foreign Country as part of a "Special 301" out-of-cycle review.196  The USTR has continued to 
identify Paraguay as a Priority Foreign Country ever since.  In its annual "Special 301" report for 2004, the USTR noted that Paraguay "has taken some positive steps with regard to enforcement, but a 
                                                     
 
192 Available on-line at:  http://www.leyes.com.py/todas_disposiciones/2003/decretos/decreto_603-
_2003.htm 
193 WTO document IP/Q/PRY/1 of 23 January 2002. 
194 Instrução Normativa SRF  No. 38 of 19 April 2001 had already introduced the same measure for 
CDs and recorded tapes. 
195 IIPA (2005). 
196 "Special 301" reports identify the countries that the US authorities believe are infringing intellectual 
property rights.  Countries classified as Priority Fore ign Countries are those whose policies are considered to 
have the greatest or most adverse impact on US right holders or products. WT/TPR/S/146 Trade Policy Review 
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great deal of improvement still needs to be made". 197  Moreover, Paraguay is one of two countries 
whose enforcement of IPRs is monitored un der Section 306 of the 1974 US Trade Act.198 
251. The USTR's identification of Paraguay as a Pr iority Foreign Country in 1998 led to the 
signing, that same year, of a memorandum of understanding on the protection of IPRs.  On 
30 March 2004, Paraguay conclude d a new memorandum of understanding on IPRs with the United 
States.  The Memorandum of Understanding seeks to  enhance IPR legislation, administration and 
enforcement in Paraguay, while focusing primar ily on increasing the Government's capacity to 
combat copyright piracy and trademark counterfeiting.199  Specific actions to be taken by Paraguay 
include:  to improve the legal instruments used by  prosecutors and judges;  to introduce new legal 
provisions on trademark protection and the destructi on of counterfeit goods;  to exercise the utmost 
effort to ensure that, by 1 January 2005,  pate nts are granted for the greatest possible number of 
pharmaceutical products for whic h applications are pending200;  to take measures to apply exclusive 
marketing rights for patents201;  to adopt legislation to protect undisclosed information;  and to 
improve statistics and da ta collection methods.202  This was done by setting up the Centre for 
Intellectual Property Statistics under Resolution No . 144 of 22 March 2004.  In July 2004, on the 
basis of the memorandum of understanding concluded that year, the US Government announced that 
it was to give the Government of Paraguay US$ 320,000 to assist the implementation of reforms 
relating to the intellectual property regime.203 
 
                                                      
197 USTR (2004) Special 301 Report Section 306 , available on-line at:  
http://www.ustr.gov/Document_Library/Reports_Pub lications/2004/2004_Special_301/2004_Special_301_ 
Report_Section_306.html 
198 Section 306(a) of the 1974 US Trade Act provides that the USTR shall monitor the implementation 
of adopted measures or agreements that exist with othe r countries so as to enfor ce US rights under a trade 
agreement.   
199 Available on-line at:  http://www.state.gov/r/pa/prs/ps/2004/34619.htm 
200 This clause is conditional upon the receipt of tech nical assistance and training before 30 June 2004.  
Failing this, new negotiations between the United States a nd Paraguay are provided for in order to extend the 
deadline.  The authorities have pointed out that by February 2005 the said training had still not been received. 
201 Patents are currently excluded from exclusive marketing rights. 
202 Trade Compliance Center, information available on-line (in English) at:  
http://www.tcc.mac.doc.gov/cgi-bin/doit.cgi?226:64:213218650:1:185 
203 US Department of State (2004)