WORLD TRADE G/SCM/N/1/BRA/2
8September 1997
ORGANIZATION(97-3575)
Original: English Committee onSubsidies
andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS
UNDER ARTICLE 32.6OFTHE AGREEMENT
BRAZIL
Thefollowing communication, dated 19August 1997, hasbeenreceived fromthePermanent
Mission ofBrazil.
_______________
TABLE OFCONTENTS
Page
TitleI Subsidies andProcedures fortheApplication ofCountervailing Measures ....3
Chapter I Principles .......................................3
Chapter II Subsidies .......................................4
Section I Definition ofaSubsidy .........................4
Section II Actionable Subsidies ...........................4
Section III Non-Actionable Subsidies ........................6
Chapter III TheCalculation oftheAmount ofActionable Subsidy ...........7
Chapter IV Determination ofInjury ..............................10
Chapter V Definition ofDomestic Industry .........................12
Chapter VI TheInvestigation ..................................13
Section I Petitions ...................................13
Section II Opening anInvestigation ........................15
Section III Conduction theInvestigation ......................17
Sub-section IEvidence .............................17G/SCM/N/1/BRA/2
Page2
Page
Sub-section IITheDefence ...........................18
Sub-section IIIFinal Procedures Concerning theConduction of
theInvestigation .........................19
Section IV Provisional Countervailing Measures .................19
Section V Undertakings ................................20
Section VI Concluding theInvestigation ......................21
Chapter VII TheImposition andCollection ofCountervailing Duties ..........22
Section I Imposition .................................22
Section II Collection ..................................23
Section III Productions Subject toProvisional Measures ............23
Chapter VIII TheDuration andReview ofCountervailing Measures and
Undertakings .....................................25
Chapter IX Public Notice ....................................26
Chapter X Formalities Related toActsandProcedural Terms .............26
Chapter XI TheDecision Making Process ..........................27
TitleII Special Procedures ......................................28
Chapter I Agricultural Products ...............................28
Chapter II On-the-Spot Investigations ............................29
Chapter III UseofInformation from Secondary Sources .................29
Chapter IV General Provisions .................................30
Annex I Illustrative ListofExport Subsidies ...........................32
Annex II Guidelines onConsumption ofInputs intheProduction Process ..........34
Annex III Guidelines intheDetermination ofSubstitution Drawback Systems as
Export Subsidies .......................................36
Annex IV Developing Countries Members ..............................38
Annex V ListofAgricultural Products ................................39
Annex VI Domestic Support: TheBasis forExemption from theReduction
Commitments .........................................40G/SCM/N/1/BRA/2
Page3
DECREE Nº1.751, 19DECEMBER 1995.
Regulates thenorms which control
administrative procedures forthe
applicationofcountervailingmeasures.
TheVICE-PRESIDENTOFTHEREPUBLIC,actingasPRESIDENTOFTHEREPUBLIC,
byvirtue ofthepowers thatarevested inhimbyArticle 84,Sections IVandVI,oftheConstitution,
andtakingintoconsiderationtheprovisionsoftheAgreementonSubsidiesandCountervailingMeasures,
theAgreement onAgriculture andtheGeneral Agreement onTariffs andTrade 1994 -GATT 1994,
approved byLegislative Decree Nº30,dated 15December 1994, and,andpromulgated byDecree
Nº1.355 dated 30December 1994, andbyLawNº9.019, dated 30March 1995,
DECREES:
TITLE I
SUBSIDIES AND PROCEDURES FOR THE APPLICATION OF
COUNTERVAILING MEASURES
Chapter I
PRINCIPLES
Article 1º. Countervailingmeasuresmaybeappliedwiththeobjectiveofcompensationforsubsidies
thataregranted, directly orindirectly, intheexporting country, tothemanufacture, production, export
ortransport ofanyproduct, whose export toBrazil causes injury todomestic industry.
§1º. Countervailingmeasuresshallbeappliedinaccordancewithinvestigationsinitiatedandconducted
according totheprovisions ofthisDecree. Agricultural products arealsosimultaneously subject to
theprovisions ofChapter IofTitleII.
§2º. Inkeeping withtheprovisions setforthinparagraph 5ofArticle VIofGATT/1994, theimport
ofaproduct maynotbesubject simultaneously totheapplication ofcountervailing measures and
anti-dumping measures, which arereferred tointheAgreement ontheImplementation ofArticle VI
ofGATT 1994, tocompensate forthesame situation.
§3º. Theterm“exporting country ”means thecountry oforigin orexportation towhere thesubsidy
isgranted. Incasetheproducts arenotexported directly toBrazil from theexporting Country, but
from anintermediate country, theprocedures referred tointhisDecree willbeapplied, andthe
transactions inquestion willbeconsidered tohaveoccurred between theexporting country andBrazil.
Article 2º. TheMinisters ofState ofIndustry, Trade, andTourism andofFinance, have the
competence toapply, through ajointact,provisional countervailing measures ordefinitive measures
andratify undertakings, based onfindings oftheSecretariat ofExternal Trade -SECEX. oftheMinistry
ofIndustry,TradeandTourism,whichconfirmtheexistenceofsubsidiesandofinjuryarisingtherefrom.
Article 3º. SECEX isresponsible forconducting theadministrative proceedings regulated bythis
Decree.G/SCM/N/1/BRA/2
Page4
Chapter II
SUBSIDIES
Section I
Definition ofaSubsidy
Article 4º. Forpurposes ofthisDecree, subsidy shallbeconsidered toexistwhen abenefit is
conferred infunction ofthefollowing hypotheses:
I. Ifthereisintheexporting country anyformofincome orpricesupport thatcontributes,
directly orindirectly, totheincrease ordecrease ofexports ofanyproduct; or
II. Ifthere isfinancial contribution bythegovernment orbyapublic organ within the
territory oftheexporting country, henceforth referred toas“government ”,where:
(a) thepractice ofthegovernment involves adirect transfer offunds (e.g.grants, loans
andequity infusion), potential direct transfers offunds orliabilities (e.g. loan
guarantees);
(b) government revenue thatisotherwise dueisforegone ornotcollected (e.g. fiscal
incentives). Inaccordance withArticle XVIofGATT 1994 andAnnexes Ithrough
IIIoftheAgreement onSubsidies andCountervailing Measures, theexemption ofan
exported product from duties ortaxes borne bythelikeproduct when destined for
internal consumption, ortheremission ofsuchduties ortaxes inamounts notinexcess
ofthose thathaveaccrued, shallnotbedeemed tobeasubsidy;
(c) thegovernmentprovidesgoodsorservicesotherthangeneralinfrastructure,orpurchases
goods;
(d) thegovernment makes payments toafunding mechanism, orentrusts ordirects aprivate
body tocarry outoneormore ofthetypeoffunctions illustrated intheprevious
paragraphs, which would normally bevested inthegovernment andthepractice, in
norealsense, differs from practices normally followed bygovernments.
Soleparagraph. Theterm“likeproduct ”istobeunderstood asaproduct identical inallaspects
totheproduct thatisbeing examined orintheabsence ofsuchaproduct, another product that,although
notexactly thesame, hascharacteristics closely resembling those oftheproduct under consideration.
Section II
Actionable Subsidies
Article 5º. Forpurposes ofthisDecree, asubsidy, asdefined intheprevious Article, willbe
denominated actionable, subject tocountervailing measures, ifthesame isspecific, withtheexception
ofthose foreseen inArticles 11,12,and13.
Article 6º. Asubsidy isspecific where thegranting authority, orthelegislation pursuant towhich
thisauthority operates, explicitly limits access tothissubsidy toanenterprise, ortoagroup of
enterprises, within thejurisdiction ofthatauthority, heredenominated “certain enterprises ”.G/SCM/N/1/BRA/2
Page5
1º. Specificity willnotoccur when thegranting authority, orthelegislation pursuant towhich this
authority operates, establishes objective conditions orcriteria thatdetermine eligibility forsubsidies
andtheamounts tobegranted, provided thattheeligibility isautomatic andthatsuchcriteria arestrictly
adhered to.Thecriteria andconditions stipulated bylaw,regulation orother normative act,mustbe
strictly respected andtheirverification shallbemade.
§2º. Theexpression “conditions orobjective criteria ”means neutral conditions orcriteria thatdo
notfavour certain enterprises overothers, thatareeconomic innature andhorizontal inapplication,
suchasnumber ofemployees orthesizeoftheenterprise.
§3º. Incases where there isnot,apparently, specificity intheterms of§§1ºand2,butthere are
reasons tobelieve thatthesubsidy inquestion isinfactspecific, other factors maybetaken into
consideration, suchas:theuseofasubsidy programme byalimited number ofcertain enterprises,
predominant useofasubsidy programme bycertain enterprises, thegranting ofdisproportionately
largeamounts ofsubsidy tocertain enterprises, andthemanner inwhich discretion hasbeenexercised
bythegranting authority inthedecision togrant asubsidy.
§4º. Forpurposes of§3º,thefollowing shallbetaken intoaccount:
(a) information about thefrequency withwhich applications forsubsidies arerefused or
approved andthereasons which ledtothese decisions;
(b) thediversification ofeconomic activities within thejurisdiction ofthegranting authority,
aswellastheperiod oftimeduring which theprogramme ofsubsidies wasinforce.
Article 7º. Subsidy willbespecific ifitislimited tocertain enterprises located inside ageographic
region situated inside thejurisdiction ofthegranting authority.
Soleparagraph. Thesetting orchange ofgenerally applicable taxrates byalllevels ofthe
government withcompetence todoso,shallnotbedeemed tobeaspecific subsidy.
Article 8º. Notwithstanding theprovisions ofArticles 6ºand7º,subsidies willbespecific, for
purposes ofinvestigation, iftheyfallwithin thedefinition ofprohibited subsidies, intheterms of
Article 3oftheAgreement onSubsidies andCountervailing Measures, asfollows:
I. Subsidies contingent, inlaworinfact,whether solely orasoneofseveral other
conditions, upon export performance, including those illustrated inAnnex I.This
standard willbemetwhen itisdemonstrated thatthegranting ofasubsidy, without
having beenmade legally contingent uponexport performance, isinfacttiedtoactual
oranticipated exportation orexport earnings. Themerefactthatsubsidies aregranted
toexport enterprises, shallnotforthatreason alone beconsidered asanexport subsidy.
II. Subsidies contingent, whether solely orasoneofseveral other conditions, upon the
useofdomestic overimported goods.
Article 9º. Anydetermination ofspecificity inaccordance withtheprovisions ofthissection, shall
beclearly based onpositive proof.G/SCM/N/1/BRA/2
Page6
Section III
Non-Actionable Subsidies
Article 10. Forpurposes ofthisDecree, asubsidy, asdefined inArticle 4º,willbeconsidered
non-actionable, notsubject tocountervailing measures, when:
I. Itisnotspecific asdefined inarticles 6ºand7º,
II. Itisspecific asdefined inArticles 6ºand7º,butmeets theconditions enumerated in
Articles 11,12,and13.
Article 11. Assistance granted forpurposes ofresearch, withtheexception ofthatrelated tocivil
aircraft, isnotsubject tocountervailing measures, asdefined in§1ºofthisarticle, when carried out
byfirms, orbyhigher education orresearch establishments onacontract basis withfirms ifthe
Assistance covers uptoamaximum of75%ofthecostsofindustrial research, asdefined inparagraph
§3º,or50%ofthecostsofpre-competitive development activities, defined in§4º.These permitted
levels ofnon-actionable Assistance willbeestablished byreference tothetotaleligible costsincurred
overtheduration ofaproject andprovided thatsuchassistance islimited exclusively to:
I. Personnel costs ofthose employed exclusively intheresearch activity, such as
researchers, technicians, andother supporting staff.
II. Costs ofinstruments, equipment, landandbuildings, usedexclusively andpermanently
fortheresearch activity, except when disposed ofonacommercial basis.
III Costs ofconsultancy andequivalent services usedexclusively fortheresearch activity,
including bought-in research, technical knowledge, patents, etc.;
IV. Additional overhead costs incurred directly asaresult oftheresearch activity.
V. Other running costs, suchasthose ofmaterials, supplies andthelike,incurred directly
asaresult oftheresearch activity.
§1º. Theterm“research ”doesnotinclude fundamental research activities carried outindependently
byhigher education orresearch establishments.
§2º. Theterm“fundamental research ”means anenlargement oftechnical-scientific knowledge not
linked toindustrial andcommercial objectives.
§3º. Theterm“industrial research ”means planned research orinvestigation aimed atthediscovery
ofnewknowledge thatmaybeuseful tothedevelopment ofnewproducts, processes orservices, or
inbringing about asignificant improvement toexisting products, processes orservices.
§4º. Theterm“pre-competitive development activity ”means thetranslation ofindustrial research
findings intoaplans, blueprint ordesign fornew,modified orimproved products, processes orservices,
whether intended forsaleoruse,including thecreation ofafirstprototype which would notbecapable
ofcommercialization. Itmayfurther include theconceptual formulation anddesign ofproducts,
processes, orservices alternatives andinitial demonstration orpilotprojects, provided thatthesame
projects cannot beconverted orusedforindustrial application orcommercial exploitation. Theterm
doesnotinclude routine orperiodic alterations toexisting products, production lines, manufacturing
processes, services andother on-going operations even though those alterations mayrepresent
improvements.G/SCM/N/1/BRA/2
Page7
§5º. Inthecaseofprogrammesthatspanindustrialresearchandpre-competitivedevelopmentactivity,
theallowable levels ofnon-actionable assistance shallnotexceed thesimple average oftheallowable
levels ofnon-actionable assistance applicable toeachoneofthetwocategories referred tointhecaput
ofthisarticle, calculated onthebasis ofalleligible costs assetforth initems ItoVofthisArticle.
Article 12. Assistancetoadisadvantagedregionwithintheterritoryofanexportingcountrypursuant
toageneral framework ofregional development andnon-specific, inaccordance withtheprovisions
ofArticles 6ºand7º,isnotsubject tocountervailing measures provided that:
I. Each disadvantaged region mustbeaclearly designated contiguous geographical area
withadefinable economic-administrative identity;
II. Theregion isconsidered asdisadvantaged onthebasisofneutral andobjective criteria,
clearly expressed inlaw,regulations orother normative acts,insuchawayastopermit
verification, andthatsuchverification demonstrates thatthedifficulties ariseoutof
more thantemporary circumstances.; and
III. Thecriteria shallinclude ameasurement ofeconomic development verified during a
period ofthree years, andbased onatleastoneofthefollowing indicators:
(a) oneofeither income percapita orhousehold income percapita, orGDP percapita,
which must notbeabove 85%oftheaverage fortheterritory concerned;
(b) unemployment rate,which mustbeatleast110% oftheaverage fortheterritory under
consideration.
§1º. Theeconomic development measure referred toinitemIII,mayalsobetheresult ofacomposite
measure oftheindicators referred toinparagraphs “a”,“b”andmayalsoinclude others notmentioned.
§2º. ”General framework ofregional development ”means thatregional subsidy programmes are
partofaninternally consistent andgenerally applicable regional development policy andthatregional
developmentsubsidiesarenotgrantedtogeographicallyisolatedareas,withoutanyoralmostnoinfluence
onthedevelopment ofaregion.
§3º. ”Neutral andobjective criteria ”means criteria thatdonotfavour certain regions beyond what
isnecessarytoeliminateorreduceregionaldisparities,withintheframeworkoftheregionaldevelopment
policy.
§4º. Forthepurposes setforthintheprevious paragraph, regional subsidy programmes shallinclude
ceilings ontheamount ofassistance which canbegranted toeachsubsidized programme which shall
bedifferentiated according tothedifferent levels ofdevelopment ineachassisted region, andmust
beexpressed interms ofinvestment costs orcostofjobcreation.
§5º. Within suchceilings, theassistance distribution shallbesufficiently broad andeventoavoid
thepredominant useofonesubsidy by,orthegranting ofdisproportionately largeamounts ofsubsidy
to,certain enterprises, inaccordance withtheprovisions ofSection IIofthisChapter.
Article 13. Assistance granted topromote theadaptation offacilities inoperation foratleasttwo
years before theimposition ofnewenvironmental requirements imposed bylaworregulations which
result ingreater constraints andfinancial burden onfirms arenotsubject totheapplication of
countervailing measures, provided thatsuchassistance:G/SCM/N/1/BRA/2
Page8
I. Isaone-time non-recurrent measure;
II. Islimited to20%ofthecostofadaptation;
III. Does notcover thecostofreplacing andoperating theassisted investment, which must
befullyborne byfirms;
IV. Isdirectly linked andproportionate tothereduction ofnuisance andpollution planned
bythefirmanddoesnotcover anymanufacturing costssavings which maybeachieved;
V. Isavailable toallfirms which canadopt thenewequipment and/or production processes.
Chapter III
THE CALCULATION OFTHE AMOUNT OFACTIONABLE SUBSIDY
Article 14. Inorder toapply countervailing measures, theamount oftheactionable subsidy shall
becalculated byunitofsubsidized goods exported toBrazil, based onthebenefits utilized during the
period ofinvestigation ofactionable subsidies, asper§1ºofArticle 35.
Soleparagraph. Theterm“subsidized product ”willbeunderstood asaproduct thatbenefits
from anactionable subsidy.
Article 15. Thefollowing shallnotbeconsidered asconferring abenefit:
I. Government provision ofequity capital, unless theinvestment decision canberegarded
asinconsistent withtheusual investment practice (including fortheprovision ofrisk
capital) ofprivate investors intheterritory oftheexporting country;
II. Governmentloans,unlessthereisadifferencebetweentheamountthatthefirmreceiving
theloanpays onthegovernment loanandtheamount thefirmwould payona
comparable commercial loanthatcould havebeenobtained onthemarket. Inthiscase
thebenefit shallbethedifference between these twoamounts.
III. Aloanguarantee byagovernment, unless there isadifference between theamount
thatthefirmreceiving theguarantee paysonaloanguaranteed bythegovernment and
theamount thatthefirmwould payonacomparable commercial loan, without the
government guarantee. Inthiscase,thebenefit shallbethedifference between thetwo
amounts, adjusted foranydifferences infees.
IV. Theprovision ofgoods orservices orpurchase ofgoods bythegovernment, unless
theprovision ismade forlessthanadequate remuneration, orthepurchase formore
thanadequate remuneration. Theadequacy ofremuneration shallbedetermined in
relation tomarket conditions prevailing forthegood orservice under consideration
inthecountry ofprovision orpurchase, including price, quality, availability,
marketability, transportation, andother conditions ofpurchase orsale.
Article 16. Inthedetermination oftheamount, thefollowing items maybededucted fromthetotal:
I. Expenses incurred necessarily toqualify forthesubsidy ortobenefit from it.G/SCM/N/1/BRA/2
Page9
II. Taxes towhich theproduct hasbeen submitted upon exportation toBrazil, when
specifically designed toneutralize subsidies.
Soleparagraph. When aninterested party orgovernment requests adeduction, theyhave
topresent proof thatthededuction isjustified.
Article 17. When thesubsidy isnotgranted onthebasisofthequantities manufactured, produced,
exported, ortransported, theamount ofactionable subsidy shallbecalculated ifappropriate, dividing
inanadequate waythetotalvalue ofthesubsidy bythevolume manufactured, produced, forsaleor
forexport oftheproduct which isreferred to,during theperiod ofinvestigation during which subsidy
existed.
Article 18. When thesubsidy isgranted forthepresent orfuture acquisition offixed assets, the
amount oftheactionable subsidy shallbecalculated andpro-rated foraperiod thatcorresponds to
thenormal depreciation ofsuchassets intheindustry which isbeing considered. Theamount thus
calculated, relative totheperiod ofinvestigation oftheexistence ofactionable subsidy, including the
amount derived fromtheacquisition offixed assets inprevious periods, itshallbedivided asperthe
previous article.
Soleparagraph. Incaseofassets notsubject todepreciation, thesubsidy shallbeconsidered
aloanatzerointerest rateandevaluated aspertheitemIIofArticle 15.
Article 19. When thesubsidy cannot berelated totheacquisition offixed assets, theamount of
assistance received during theinvestigation oftheexistence ofsubsidy shallbeattributed tothisperiod
anddivided asperArticle 17,unless thereexistexceptional circumstances thatjustify attributing them
toadifferent period.
Article 20. Thegeneral rulewillbethedetermination ofanindividual amount ofactionable subsidy
foreachoneoftheknown exporters, orproducers oftheproduct under investigation.
§1º. Incasethenumberofexporters,producers,importersknownortypesofproductsortransactions
under investigation besoexpressive thatthedeterminations ofthe“caput”become impractical, the
examination maybelimited to:
(a) areasonable number ofinterested parties, transactions orproducts, determined bya
statistically valid sample based ontheinformation available atthetimeofselection;
or
(b) tothelargest volume ofproduction, sale,orexportation, thatisrepresentative andmay
beinvestigated taking intoaccount thedetermined deadlines.
§2º. Anyselection ofexporters, producers, importers, types ofproducts ortransactions, which is
made aspertheprevious paragraph, shallbeeffected afterthegovernments oftheexporting countries,
theexporters, theproducers orimporters, havebeenconsulted andtheirapproval hasbeenobtained,
provided thattheyhaveprovided information necessary fortheselection ofarepresentative sample.
§3º. Incaseoneormoreoftheselected enterprises donotprovide theinformation requested, another
selection shallbemade. Ifthereisnotenough timetomake anewselection orifthenewfirms selected
alsofailtoprovide therequested information, thedetermination ordecision shallbebased onthe
information available, pursuant totheprovision ofArticle 79.G/SCM/N/1/BRA/2
Page10
§4º. Theindividual amount ofactionable subsidy shallbedetermined foreachexporter orproducer
whowasnotincluded intheselection, butwhopresents thenecessary information intimefor
consideration during theinvestigation, withtheexception ofsituations inwhich thenumber ofexporters
orproducers issoexpressive thattheanalysis ofindividual cases would result inadisproportionate
burden which would impede theconclusion oftheinvestigation within thedesignated timelimit.
Voluntary replies shallbeencouraged.
Chapter IV
DETERMINATION OFINJURY
Article 21. Fortheeffects ofthisDecree, theterm“injury ”shallmean material injury orthreat
ofmaterial injury toadomestic industry already established ormaterial retardation oftheestablishment
ofsuchanindustry.
§1º. Determination ofinjury shall bebased onpositive evidence andshallinclude anobjective
examination of:
a) thevolume ofimports ofthesubsidized product;
(b) itseffect ontheprices ofthelikeBrazilian product;
(c) theconsequent impact ofthese imports onthedomestic industry.
§2º. Withregard tothevolume ofimports ofthesubsidized product, itshallbeconsidered whether
there hasbeenasignificant increase insubsidized imports, either inabsolute terms orrelative tothe
production orconsumption inBrazil.
§3º. Forpurposes ofthisinvestigation, theterm“negligible ”shallnormally beunderstood tomean
thevolume ofimports coming from aspecific country, lessthan3%ofthetotalimports ofthelike
product, unless thecountries thataccount for,individually, lessthan3%,account forcollectively,
more than7%ofthetotalimports ofthelikeproduct.
§4º. Fordeveloping countries, negligible shallbeunderstood tomean thevolume ofimports when
thisaccounts forlessthan4%ofthetotalimports ofthelikeproduct, unless thesecountries thataccount
for,individually, lessthan4%,account for,collectively, more than9%ofthetotalimports ofthe
likeproduct.
§5º. Inregard totheeffect ofimports ofsubsidized products ontheprices ofthisproduct, itshall
beconsidered whether there hasbeenasignificant price undercutting bythesubsidized imports as
compared withtheprice ofalikeproduct ofBrazil, orwhether theeffect ofsuchimports isotherwise
todepress prices toasignificant degree ortoprevent price increases, which otherwise would have
occurred.
§6º. None orseveral ofthese factors cannecessarily givedecisive guidance.
§7º. When imports ofaproduct originating from more thanonecountry aresimultaneously
investigated, theeffects ofsuchimportations shallbedetermined cumulatively, ifitisdetermined that:G/SCM/N/1/BRA/2
Page11
(a) theamount ofsubsidization established inrelation totheimports ofeachoneofthe
countries, isnotdeminimis ,andthatthevolume ofimports ofeachcountry isnot
negligible.
(b) thecumulative assessment oftheeffects ofthese imports isappropriate inviewofthe
conditions ofcompetition between theproducts imported andtheconditions of
competition between these products andthelikedomestic product.
§8º. Theamount oftheactionable subsidy shallbeconsidered asdeminimis when itislessthan
1%advalorem .
§9º. Theamount oftheactionable subsidy shallbeconsidered asdeminimis fordeveloping countries
when theglobal levelofactionable subsidies granted fortheproduct inquestion doesnotexceed 2%
advalorem .
§10. Fordeveloping countries Members whohaveeliminated subsidies forexports, before theperiod
ofeight years counting from thedatetheMarrakesh Agreement Establishing oftheWorld Trade
Organization(WTOAgreement),thevaluementionedinthepreviousparagraphshallbe3%advalorem.
Thisprovision shallbeapplied starting from thedateofnotification oftheelimination oftheexport
subsidy totheCommittee onSubsidies oftheWTO, andforthewhole period inwhich export subsidies
havenotbeengranted bythedeveloping country Member which hasnotified.
§11. Theprovisions oftheprevious paragraph shallexpire eight years aftertheWTO Agreement
hasentered inforce.
§12. Fordeveloping countries Members, which arereferred toinAnnex IV,theamount mentioned
in§9ºshallbe3%advalorem .
§13. Theexamination oftheimpact ofimports ofthesubsidized product onthedomestic industry
shallinclude evaluation ofallrelevant economic factors andindices having abearing onthestateof
theindustry, including actual andpotential decline inoutput, sales, market share, profits, productivity,
return oninvestments, orutilization ofcapacity, aswellasfactors thataffect domestic prices, actual
andpotential negative effects oncashflow, inventories, employment, wages, growth, ability toraise
capital orinvestments and,inthecaseofagriculture, whether there hasbeenanincreased burden on
government assistance programmes.
§14. Thelistcontained intheprevious paragraph isnotexhaustive, norcanoneorseveral ofthese
factors necessarily givedecisive guidance.
Article 22. It’snecessarytodemonstratedecausalrelationshipbetweenimportsofsubsidizedproducts
andtheinjury tothedomestic industry based onanexamination of:
I. Relevant evidence; and
II. anyknownfactors,otherthanthesubsidizedimports,whichatthesametimeareinjuring
thedomestic industry ,andtheinjuries caused bythese other factors willnotbe
attributed tothesubsidized imports.
1º. Therelevant factors inthisrespect, include, among others, thevolumes andprices of
non-subsidized imports oftheproduct inquestion, theimpact ofthealterations inimport tariffs on
thedomestic prices, contraction indemand orchanges inthepatterns ofconsumption, traderestrictiveG/SCM/N/1/BRA/2
Page12
practices ofandcompetition between foreign anddomestic producers, developments intechnology
andtheexport performance andproductivity ofdomestic industry.
§2º. When theavailable datapermit theseparate identification ofdomestic industrial production
ofthelikeproduct, theeffect oftheimports ofthesubsidized product shallbeassessed onthebasis
ofsuchcriteria astheproduction process, producer ’ssalesandprofits.
§3º. Ifsuchseparate identification ofthatproduction isnotpossible, theeffects ofimports onthe
subsidized product shallbedetermined byanexamination oftheproduction ofthenarrowest group
orrange ofproducts, which includes thelikeproduct, forwhich thenecessary information canbe
provided.
Article 23. Thedetermination oftheexistence ofthethreat ofmaterial injury shallbebased on
factsandaconvincing motive. Thechange incircumstances which would create asituation inwhich
thesubsidy would cause injury must beclearly foreseen andimminent.
§1º. Inmaking thedetermination oftheexistence ofthreat ofmaterial injury, thefollowing factors,
among others, shallbeconsidered:
(a) thenature ofthesubsidy orsubsidies inquestion andthetrade effects likely toarise
therefrom.
(b) asignificant rateofincrease ofsubsidized imports, indicative ofthelikelihood ofa
substantially increased importation;
(c) sufficient freely disposable, oranimminent, substantial increase in,capacity ofthe
exporter, thatindicates thelikelihood ofsubstantially increased subsidized exports to
Brazil, taking intoconsideration theavailability ofother possible markets thatcould
absorb thepossible increase ofexports.
(d) imports entering atprices thatwillhaveasignificant depressing orsuppressing effect
ondomestic prices, andthatwillprobably increase thedemand forimports.
(e) inventories oftheproduct under investigation.
§2º. None ofthefactors of§1ºbyitselfshallgivedecisive guidance, butthetotality ofthefactors
willleadtotheconclusion thatadditional imports ofthesubsidized products areimminent andthat
unless protective action istaken, material injury willoccur.
Chapter V
DEFINITION OFDOMESTIC INDUSTRY
Article 24. Forthepurposes ofthisDecree, theterm“domestic industry ”shallbeunderstood as
referring tothedomestic producers ofthelikeproduct, ortothose whose collective output ofthe
mentioned product constitutes amajor proportion ofthetotaldomestic production, except when:
I. Theproducers arerelated totheimporters orexporters orarethemselves importers
oftheallegedly subsidized product oralikeproduct originating inother countries. In
thiscase, theexpression “domestic industry ”shallbeinterpreted asreferring tothe
restoftheproducers; or:G/SCM/N/1/BRA/2
Page13
II. Inexceptional circumstances, Brazilian territory maybedivided intotwoormore
competing markets, andtheterm “domestic industry ”shall beinterpreted asthe
producers ofoneofthose markets.
§1º. Toapply thedetermination ofitemI,producers shallbeconsidered toberelated toexporters
ortoimporters onlyif:
(a) oneofthem, directly orindirectly, controls theother;
(b) bothofthem are,directly orindirectly, controlled byathirdparty;
(c) together theycontrol, directly orindirectly, athirdparty.
§2º. Thesituations oftheprevious paragraph shallonlybeconsidered iftherearegrounds tobelieve
orsuspect thattheserelations maycause theproducer tobehave differently fromnon-related producers.
§3º. Control, forpurposes ofthisparagraph, willbeconsidered toexistwhen theformer isinlegal
oroperational conditions toexercise restraint ordirection overthelatter.
§4º. Forpurposes ofthatdetermined initemII,theproducers ineachoneofthemarkets, maybe
considered domestic industry when:
(a) theproducers active inthismarket, sellalloralmost alloftheirproduction ofthelike
product inquestion inthissame market; and
(b) thedemand inthismarket isnottoanysubstantial degree supplied byproducers of
thelikeproduct located elsewhere intheterritory.
§5º. Inthesituation of§4ºofthisarticle, theinjury maybefound toexistevenwhere amajor
portion ofthetotaldomestic industry isnotbeing injured, provided there isaconcentration inthat
market ofthesubsidized imports, andthatthese arecausing injury totheproducers ofalloralmost
alloftheproduction within suchmarket.
Chapter VI
THE INVESTIGATION
Section I
Petitions
Article 25. With theexception ofthatprovided forinArticle_33, theinvestigation todetermine
theexistence, thedegree, andtheeffect ofanyalleged subsidy, shallberequested bythedomestic
industry, orinitsbehalf, bymeans ofpetition, inwritten form, inaccordance withtheprocedures
established bySECEX.
§1º. Thepetition shallinclude evidence oftheexistence ofasubsidy, andifpossible, theamount,
theinjury andthecausal linkbetween theimports ofthesubsidized product andtheinjury alleged,
andthefollowing data:
(a) theidentity ofthepetitioner, adescription ofthevolume andvalue ofthedomestic
production bythepetitioner, orincasethepetition hasbeenpresented onbehalf ofG/SCM/N/1/BRA/2
Page14
thedomestic industry, thename oftheindustry onwhose behalf thepetition was
presented withthename ofthedomestic producers represented aswellasthevolume
andvalue oftheproduction accounted forbysuchproducers.
(b) anestimate ofthevolume andvalue ofthetotalnational production ofthelikeproduct.
(c) alistofknown domestic producers ofthelikeproduct, which arenotrepresented in
thepetition, andasfaraspossible, anindication ofthevolume andvalue ofdomestic
production ofthelikeproduct which corresponds tothose producers, aswellastheir
position concerning thepresentation ofthepetition.
(d) acomplete description oftheproduct allegedly subsidized, thename oftherespective
country orcountries oforigin orofexport, theidentity ofeachknown exporter or
foreign producer, andalistoftheknown importers oftheproduct inquestion;
(e) acomplete description oftheproduct manufactured bythedomestic industry;
(f) evidence withregard totheexistence, amount, andnature ofthesubsidy inquestion;
(g) evidence oftheevolution ofthevolume andvalue ofimports oftheallegedly subsidized
product, oftheeffects ofsuchimports onprices ofthelikeproduct inthedomestic
market andtheconsequent impact oftheimports ondomestic industry, asdemonstrated
byfactors andindices having abearing onthestateofthedomestic industry.
§2º. Incasethepetition contains confidential information, theprovisions ofArticle 38shallapply.
Article 26. Apetition shallundergo apreliminary examination todetermine whether itiscontains
thenecessary elements, orifcomplementary information isnecessary. Thepetitioner shallbeinformed
oftheresults ofthisexamination within twenty daysoffiling thepetition.
§1º. When complementary information isrequested, anewexamination shalltakeplacetodetermine
ifnewinformation isnecessary orifthepetition isproperly presented. Thepetitioner shallbeinformed
oftheresults ofthisexamination within twenty daysfrom thesubmission ofthecomplementary
information.
§2º. Twenty daysfromthedateofthepresentation ofthenewinformation, thepetitioner shallbe
informed whether thepetition isproperly presented orifitwasconsidered definitively notacceptable.
§3º. Thetimelimitforsupplyingcomplementaryinformationornewinformationshallbedetermined
bySECEX,inaccordancewiththenatureoftheinformation,andshallbecommunicatedtothepetitioner.
§4º Thepetitioner shallhavetendaysfromthetimeofbeing informed thatthepetition isproper,
topresent asmany copies ofthenon-confidential summary ofthepetition andoftheresume asper
§1ºofArticle 38,asthere areproducers, known exporters, andgovernments ofexporting countries
listed.
§5º. Ifthenumber ofproducers andexporters, referred toin§4º,isespecially high, copies of
thepetition maybeprovided inanumber sufficient onlyforsending togovernments ofcountries listed
andthecorresponding representative associations.G/SCM/N/1/BRA/2
Page15
Section II
Opening anInvestigation
Article 27. Assoonaspossible aftertheacceptance ofthepetition, asperArticle 26and,inany
case,always before opening theinvestigation, thegovernments, whose products maycome tobesubject
oftheinvestigation, shallbeinvited forconsultation withtheaimofclarifying thesituation astothe
matters referred toinArticle_25 andforarriving atamutually satisfactory solution.
§1º. Thegovernment oftheexporting country shallbenotified ofthepetition fortheopening of
thesubsidies investigation andshall have atimelimit oftendaystomanifest interest inholding
consultations, which shalltakeplace within thirty days.
§2º. Thedeadlines referred tointhisArticle willbecounted from thedateofthenotification to
theexporting countries concerning theinvitation forconsultations.
Article 28. Theevidence ofboth subsidy andinjury shallbeconsidered simultaneously, inthe
decision whether ornottoinitiate aninvestigation.
§1º. Theaccuracy andadequacy oftheevidence contained inthepetition shallbeexamined based
oninformation from other sources readily available inorder todetermine theexistence ofsufficient
motives tojustify theinitiation ofaninvestigation.
§2º. SECEX shallproceed withtheexamination ofthedegree ofsupport oropposition tothepetition
expressed bytheother domestic producers ofthelikeproduct, withtheobjective ofdetermining if
thepetition waspresented byoronbehalf ofthedomestic industry. Inthecaseoffragmented industries
involving anexceptionally highnumber ofproducers, support oropposition maybedetermined through
theuseofstatistically valid sampling techniques.
§3º. Apetition shallbeconsidered tohavebeenpresented “byoronbehalf ofthedomestic industry ”
ifpresented byproducers responsible formore than50%ofthetotaldomestic production ofthelike
productmadebytheportionofdomesticindustrythathadexpressedsupportoroppositiontothepetition.
Article 29. Aninvestigation maybeopened withaviewtoverifying ifthealleged subsidies are
specific interms ofArticles 6ºand7º,orincasetheyarerelated toresearch activities, regional
development, orenvironmental requirements, iftheymeettherequirements established inArticles 12,
13,or14,respectively.
§1º. Aninvestigation willnotbeopened when thesubsidy hasbeengranted inthecontext ofa
programme considered non-actionable bytheexporting country, which hasnotified itinadvance to
theCommittee onSubsidies andCountervailing Measures oftheWTO.
§2º. Theexception covered bytheprevious paragraph willnotbeapplied, however, tocases in
which thecompetent bodyoftheWTO, orprocedures oftheCommittee onSubsidies andCountervailing
Measures, conclude thataviolation oftheprovisions contained inSection IIIofChapter IIofthisDecree
exists.
Article 30. Thepetitionerwillbenotifiedofapositiveornegativedeterminationregardinginitiation
ofaninvestigation within fiftydaysfollowing thedateofdispatch ofthedetermination thatthepetition
isproperly presented.G/SCM/N/1/BRA/2
Page16
§1º. Thepetition shallberejected andthecaseclosed, when
(a) there isnosufficient evidence ofexistence ofasubsidy, orofinjury caused byit,that
justifies theinitiation ofaninvestigation;
(b) thepetition hasnotbeenpresented byoronbehalf ofthedomestic industry; or
(c) thedomestic producers, whosupport thepetition, account forlessthan25%ofthe
totalproduction ofthelikeproduct produced bythedomestic industry.
§2º. Inthecaseofapositive determination, theinvestigation shallbeopened andanactcontaining
suchdetermination shallbepublished inthe“Diario Oficial ”(Official Gazette). Theinterested parties
andgovernments shallbenotified andgiven atimelimitoftwenty days, counting from thedateof
publication ofthisdetermination, inorder torequest qualification ofotherparties whomanifest interest,
along withtheirlegalrepresentatives, asperthepertinent legislation.
§3º. Foreffects ofthisDecree, interested parties shallbeconsidered:
(a) thedomestic producers ofthelikeproduct ortheassociation which represents them;
(b) theimporters orconsignees ofthegoods which aretheobject ofinvestigation orthe
associations which represent them.
(c) theexporters orforeign producers ofthegoods referred toortheassociations which
represent them;
(d) other parties, national orforeign, considered bySECEX asinterested parties.
§4º. Assoonastheinvestigation isinitiated, thecomplete textofthepetition shallbeprovided to
theknown producers andexporters, andtotheauthorities oftheexporting country, and,shall, ifso
requested, beplaced atthedisposal ofother interested parties involved intheinvestigation. Incase
thenumber ofproducers andexporters isespecially large, thenon-confidential version ofthepetition
shallbeprovided onlytotheauthorities oftheexporting country andtothecorresponding representative
association. Dueregard shallbepaidtotheprotection ofconfidential information.
Article 31. Theinitiation oftheinvestigation shallbecommunicated bySECEX totheSecretariat
oftheFederal Revenue oftheMinistry ofFinance, sothatitmaytaketheappropriate steps which,
shallitbethecase, willprovide fortheimposition ofthedefinitive countervailing measures tothe
imports oftheproduct which istheobject oftheinvestigation, asperArticle_64.
Soleparagraph. Thearrangements adopted bytheSecretariat oftheFederal Revenue, asper
thisarticle, shallnothinder theprocedures ofcustoms clearance.
Article 32. Before theinitiation oftheinvestigation, theexistence ofthepetition willnotbe
publicized, except asperthedirectives ofArticle 27.
Article 33. Inexceptional circumstances, theFederal Government, exofficio, mayinitiate an
investigation, aslongasthere issufficient evidence oftheexistence ofasubsidy, ofinjury, andof
acausal relationship between them, thatjustify theinitiation.G/SCM/N/1/BRA/2
Page17
Section III
Conduction oftheInvestigation
Article 34. Inthecourse oftheinvestigation, opportunity shallbegiven tothecountries whose
products aretheobject oftheinvestigation, toholdconsultations withaview toelucidate thefacts
andreach amutually satisfactory solution.
Article 35. Theevidence oftheexistence oftheactionable subsidy andoftheinjury shall be
considered simultaneously during theinvestigation.
§1º. Theperiod ofinvestigation oftheexistence oftheactionable subsidy shallinclude thetwelve
month period immediately preceding thedateoftheinitiation oftheinvestigation. Itmayretroact
uptothebeginning ofmostrecently concluded fiscal yearoftherecipient forwhich trustworthy financial
information andother relevant dataareavailable. Under exceptional circumstances, theperiod of
investigation canbeoflessthantwelve months, butnever lessthansix.
§2º. Theperiod ofinvestigation oftheexistence ofinjury shallbesufficiently representative topermit
theanalysis towhich Chapter IVrefers toandshallnotbeoflessthanthree years andwillnecessarily
include theperiod ofinvestigation oftheexistence oftheactionable subsidy.
Sub-section I
Evidence
Article 36. Theinterestedpartiesandgovernmentsandthepartiesintheinvestigationtobeinterested
shallbegiven notice withregard totherequired information andshallhaveample opportunity topresent
inwriting theevidence theyconsider relevant withrespect totheinvestigation being considered.
Soleparagraph. Whatever difficulties theinterested parties, especially small enterprises, have
insupplying therequested information, willbetaken intoconsideration, andtheywillbegiven any
assistance practicable.
Article 37. Theinterested parties andgovernments oftheexporting countries shall receive
questionnaires destined fortheinvestigation andshallhaveatimelimitoffortydaystoanswer them,
counting from thedayoftheirdispatch.
§1º. Requests forextension ofthetimelimitoffortydaysshallbeconsidered, andincasenecessity
isdemonstrated, theextension maybegranted, when practicable, foraperiod nottoexceed thirty
days, taking intoaccount thetimelimits established fortheinvestigation.
§2º. Additional orcomplementary information mayberequested oraccepted, inwriting, during
thecourse oftheinvestigation. Thetimelimitforfurnishing therequested information shallbestipulated
infunction oftheirnature andmaybeextended bysuitably justified requests. Thetimelimits forthe
investigation shall betaken intoaccount, forthesupply ofadditional information, aswellasfor
consideration oftheadditional information presented.
§3º. Incaseeither oftheparties orgovernments refuse access tothenecessary information, donot
provide itwithin thetimelimit determined, oryet,impede theinvestigation, preliminary orfinal
determinations maybemade based onthefactsavailable, asperArticle 79,keeping inmind thetime
limits oftheinvestigation.G/SCM/N/1/BRA/2
Page18
Article 38. Information which isconfidential bynature orisprovided onaconfidential basis by
parties andgovernments interested intheinvestigation, shallbetreated assuch, ifjustified, andwill
notbedisclosed without express permission oftheparty supplying it.Information classified as
confidential willbetheobject ofaseparate process.
§1º. Interested parties andgovernments which provide confidential information, shallpresent a
non-confidential summary ofthesame, thatwillpermit areasonable understanding oftheinformation
provided. Incases inwhich itisnotpossible topresent thesummary, theparties orgovernments shall
justify suchthissituation inwriting.
§2º. Incaseitisconsidered thattherequest forconfidentiality isnotwarranted, andifthesupplier
oftheinformation refuses tomake itpublic inwhole orinsummary format, suchinformation may
bedisregarded, unless itisdemonstrated inaconvincing manner andfrom appropriate sources that
theinformation iscorrect.
Article 39. Opportunity shallbegiven totheindustrial users oftheproduct under investigation,
andrepresentatives ofconsumer organizations, incases where theproduct iscommonly soldatthe
retail level, toprovide information which isrelevant totheinvestigation. Thisinformation willbe
considered inthedeterminations ordecisions.
Article 40. Inthecourse oftheinvestigation, theaccuracy oftheinformation provided bythe
interested parties andgovernments willbeverified.
§1º. Investigations maybecarried outintheterritory ofother countries, ifthegovernments have
beendulynotified andhavenotobjected. Theenterprises located inother countries mayalsobeequally
investigated andhavetheirrecords examined, iftheirapproval isobtained, andtherepresentatives
ofthegovernment ofthecountry inquestion havebeennotified anddonotobject totheinvestigation.
Theprocedures described inArticle 78shallbeapplied intheinvestigations oftheenterprises.
§2º. Investigations maybecarried outintheenterprises involved which arelocated inBrazilian
territory, ifprevious authorization hasbeenobtained.
§3º. Theresults oftheinvestigations, carried outinaccordance withtheprovisions ofparagraphs 1º
and2ºofthisarticle, shallbeattached totheprocess, withdueregard being given totheright to
confidentiality.
Sub-section II
TheDefence
Article 41. During theinvestigation, theparties andtheinterested governments shallhaveample
opportunity todefend theirinterests. Incaseitisrequested, within thetimelimitindicated intheact
thatinitiates theinvestigation, hearings willbeheldwhere opportunity willbegiven tothose whohold
opposing views insuchawaythatopposing interpretations andarguments maybeexpressed.
§1º. Theparties orinterested governments whohaverequested thehearing shallprovide, along
withtherequest, alistofspecific issues thataretobediscussed.
§2º. Theinterested parties andgovernments shallbeinformed ofthehearing, andoftheaspects
tobediscussed, within aminimum ofthirty daysprevious tothemeeting.G/SCM/N/1/BRA/2
Page19
§3º. Attendance shallnotbeobligatory andabsence ofanyparty shallnotbeusedtoagainst their
interests.
§4º. Theinterested parties andgovernments shallindicate theirlegalrepresentatives whowillbe
present inthehearing, atleastfivedaysbefore itisheld, andsendinwriting, atleasttendaysbefore
itisheld,thearguments tobepresented intheoccasion. Theinterested parties andgovernments, may,
ifadequately justified, present additional information orally.
§5º. When appropriate, dueaccount shallbegiven totheneedtoprotect confidentiality.
§6º. Thefactthathearings arebeing heldshallnotimpede SECEX from reaching apreliminary
orfinaldetermination.
Article 42. Whatever decision ordetermination ismade shallbebased onlyontheinformation
anddocuments thatarepartofthecaseandthatareavailable toallinterested parties andgovernments,
dueaccount having beengiven totheneedtoprotect confidential information.
§1º. Information provided orally shallonlybetaken intoconsideration if,within tendays, thesame
isreproduced inwriting andplaced atthedisposal ofother interested parties andgovernments.
§2º. Theinterested parties andgovernments mayrequest, inwriting, toseetheinformation that
isrelevant tothelegal proceedings, which shallbeplaced attheirdisposition withtheexception of
confidential information andtheinternal Government documents. Opportunity shallbegiven forthe
parties todefend theirinterests, inwriting, based onsuchinformation.
Sub-section III
Final Procedures Concerning theConduction oftheInvestigation
Article 43. Before preparation oftheopinion which willleadtothefinaldetermination, SECEX
willholdahearing inwhich theinterested parties andgovernments willbeinformed oftheessential
factsunder examination thatform thebasis oftheopinion. Theinterested parties andgovernments
willhavefifteen days, counting from thedateofthehearing, topresent theirviews inthisregard.
§1º. TheNational Agricultural Confederation (“CNA”),theNational Industrial Confederation
(“CNI”),theNationalCommercialConfederation(“CNC”),andtheBrazilianForeignTradeAssociation
(“ABE”)willbeequally informed oftheessential factsunder examination thatforms thebasisofthe
SECEX opinion.
§2º. When thetimelimitdetermined inthe“caput”hasexpired, theconduction oftheprocess will
havebeenfinalized andreceived latershallnotbeconsidered inreaching thefinaldetermination.
§3º. Theprovisions contained inparagraphs_3º, 4º,and5ºofArticle_41 alsoapply tothisArticle.
Section IV
Provisional Countervailing Measures
Article 44. Provisional Countervailing Measures mayonlybeapplied if:
I. Theinvestigation hasbeeninitiated aspertheprovisions ofSection IIofChapter VI,
theactthatcontains thedetermination oftheinitiation waspublished andtheinterested
parties andgovernments havebeenoffered adequate opportunity topresent theirviews;G/SCM/N/1/BRA/2
Page20
II. Anaffirmative preliminary determination hasbeenmade thatanactionable subsidy
exists andthatthere isinjury tothedomestic industry asaresult ofimports ofthe
subsidized product;
III. Theauthorities referred toinArticle 2ºhavedecided thatsuchmeasures arenecessary
toprevent injury during theinvestigation; and
IV. Atleastsixty dayshavepassed since thedateoftheinitiation oftheinvestigation.
§1º. Theamount oftheprovisional countervailing measure shall notexceed theamount ofthe
actionable subsidy previously calculated.
§2º. Provisional countervailing measures shall beapplied intheform ofprovisional measures
guaranteed bycashdeposit orbankguarantees.
§3º. Interested parties andgovernments shall benotified ofthedecision toapply provisional
countervailing measures andtheactcontaining suchdecision shallbepublished inthe“Diario Oficial ”
(Official Gazette).
§4º. TheSecretariat oftheFederal Revenue shalldecide theform which theguarantee shalltake.
§5º. Therelease from customs ofthegoods which aretheobject ofprovisional countervailing
measures shalldepend onthepresentation oftheguarantee.
§6º. Thevalidity oftheprovisional countervailing measures shallbelimited toaperiod which shall
notexceed fourmonths.
Section V
Undertakings
Article 45. Theproceedings maybesuspended without theapplication ofprovisional countervailing
measures orcountervailing measures, ifthegovernment oftheexporting country agrees toeliminate
orreduce thesubsidy, oradopts other measures concerning itseffects, oriftheexporter accepts
voluntarily satisfactory undertakings torevise theprices oftheexports destined forBrazil, ifthe
authorities referred toinArticle 2ºbecome convinced thatthereferred undertaking eliminates the
injurious effect ofthesubsidy.
§1º. Theincrease inprices inkeeping withtheundertaking withtheexporter shallnotexceed that
amount necessary tocompensate theamount oftheactionable subsidy, andmaybelimited tothat
necessary toremove theinjury caused tothedomestic industry.
§2º. Thegovernment oftheexporting countries andtheexporters shall onlypropose oraccept
undertakings, afterSECEX having arrived atanaffirmative preliminary determination oftheexistence
ofactionable subsidy andofinjury, andinthecaseofanundertaking from theexporters, thatthey
obtain consent ofthegovernment oftheexporting country.
§3º. Thegovernment oftheexporting country andtheexporters arenotobliged topropose
undertakings, norwilltheybeforced toaccept thoseoffered. These factsshallnotharmtheconsideration
ofthecasenorshalltheyalterthepreliminary determination which hasbeenreached.G/SCM/N/1/BRA/2
Page21
§4º. Theright isgranted toSECEX torefuse undertakings, ifsuchacceptation isconsidered
inappropriate.
§5º. Where practicable, incaseofrefusal, thereasons forconsidering inappropriate theacceptance
oftheundertaking shallbeprovided tothegovernments andtheyshallbegiven anopportunity tomake
comments thereon.
Article 46. Once theundertaking isaccepted ,theactwhich contains itslegalratification shallbe
publishedinthe“DiarioOficial”(OfficialGazette),andshallcontain,dependingonthecase,thedecision
astocontinue ortosuspend theinvestigation. Interested parties andgovernments shallbenotified.
Soleparagraph. Theinvestigation ofsubsidy andinjury shallproceed, incasethegovernment
oftheexporting country sodesires ortheauthorities referred toinArticle 2ºsodecide.
Article 47. Thegovernment oftheexporting country ortheexporter withwhom thecompromise
agreement wasestablished, shallprovide, periodically, ifrequested, information relative tocompliance
withtheagreement andpermit theverification ofthepertinent data.
Soleparagraph. Thefailure tocomply withtheterms ofthisArticle shallbeconsidered a
violation oftheundertaking.
Article 48. Inthecaseofaviolation oftheundertaking, actions maybetaken viewing immediate
application, bytheauthorities referred toinArticle 2º,ofprovisional countervailing measures using
thebestinformation available andtheinvestigation thathadbeen suspended shall recommence
immediately.
Soleparagraph. Theinterested parties andgovernments shallbenotified about thetermination
ofthecompromise agreement andtheapplication ofprovisional countervailing measures andtheact
containing suchdecision shallbepublished inthe“Diario Oficial ”(Official Gazette).
Section VI
Concluding theInvestigation
Article 49. Investigations shallbeconcluded within oneyearofinitiation, except inexceptional
circumstances, when thetimelimitmaybeuptoeighteen months.
Article 50. Thepetitionermay,atanytime,requesttheclosingofthecase.Iftherequestisaccepted,
theinvestigation shallbeterminated. IfSECEX decides tocontinue theinvestigation, thepetitioner
shallbeinformed inwriting.
Article 51. Theinvestigationshallbeterminated,withouttheapplicationofcountervailingmeasures,
if:
I. There hasnotbeensufficient evidence oftheexistence ofanactionable subsidy orof
injury resulting therefrom;
II. Theamount oftheactionable subsidy wasdeminimis asprovided inparagraphs 7º
to12ofArticle 21;
III. Thevolume ofimports, actual orpotential, ofthesubsidized product ortheinjury caused
wasnegligible, asper§§3ºand4ºofArticle 21.G/SCM/N/1/BRA/2
Page22
Article 52. Theinvestigation shall beconcluded withapplication ofmeasures, when SECEX
completes thepertinent procedures ofconsultations, arrives atafinaldetermination oftheexistence
ofanactionable subsidy, ofinjury andofacausal linkbetween them.
Soleparagraph. Thevalue ofcountervailing measures maynotexceed theamount ofthe
actionable subsidy, aspertheterms ofArticle 14.
Article 53. Inasituation where theinvestigation iscontinued aftertheacceptance ofanundertaking:
I. Theundertaking shallautomatically lapse andtheinvestigation terminate, ifSECEX
arrives atanegative determination ofactionable subsidization orofinjury resulting
therefrom, except incases where suchadetermination isdueinlarge parttothe
existence ofanundertaking. Insuchcases theundertaking maybemaintained fora
reasonable period oftimeinconformity withtheprovisions ofthisDecree;
II. Iftheauthorities referred toinArticle 2ºconfirm theexistence ofanactionable subsidy
andinjury resulting therefrom, based ontheSECEX opinion, theinvestigation shall
beclosed andtheapplication ofdefinitive measures shall besuspended while the
undertaking isineffect, itbeing understood thattheterms under which theundertaking
wasestablished, andtheprovisions ofthisDecree, arerespected.
§1º. Forthepurposes ofthisArticle, theprovisions ofArticle 47apply.
§2º. Incaseofviolation oftheundertaking, action maybeadopted withaviewtotheimmediate
application, bytheauthorities referred toinArticle 2º,ofcountervailing measures having asabasis
thedetermination oftheinvestigation thatwascarried out.
§3º. Theinterested parties andgovernments shallbenotified about thelapse oftheundertaking
andabout thecountervailing dutyapplied. Theactcontaining suchdecision shallbepublished inthe
“Diario Oficial ”(Official Gazette).
Article 54. Theactthatcontains thedetermination orthedecision toclose theinvestigation, in
thecases foreseen inthisSection, shallbepublished inthe“Diario Oficial ”(Official Gazette). The
interested parties andgovernments shallbenotified oftheclose oftheinvestigation.
Soleparagraph. Inthecaseofadecision toconclude theinvestigation, withtheapplication
ofcountervailing measures, theactcontaining suchadecision shallindicate theproducer orproducers
oftheproduct inquestion, withthemeasures applicable toeachone.Incasethenumber ofproducers
isespecially high,theactshallcontain thenames oftheproducing countries involved, withtherespective
applicable measures.
Chapter VII
THE IMPOSITION AND COLLECTION OFCOUNTERVAILING DUTIES
Section I
Imposition
Article 55. Fortheeffects ofthisDecree, theexpression “countervailing measures ”means the
amount ofmoney equal toorlessthantheamount ofactionable subsidy determined, calculated asperG/SCM/N/1/BRA/2
Page23
Article 14andapplied inconformity withthisarticle, withtheobjective ofremoving theinjury caused
bytheactionable subsidy.
§1. Thecountervailing measures, provisional ordefinitive, shallbecalculated bymeans ofthe
application ofadvalorem orspecific duties ,fixed orvariable, orbyacombination ofboth.
§2. Theadvalorem duties shallbeapplied tothecustoms value ofthemerchandise, onthebasis
ofthec.i.f. value, verified interms ofthepertinent legislation.
§3. Thespecific dutyshallbefixed indollars oftheUnited States ofAmerica andconverted into
national currency, interms ofthepertinent legislation.
Article 56. Countervailing measures, applied toimports originating from known exporters or
producers thathavenotbeenincluded intheselection treated inArticle 20,butwhohaveprovided
theinformation requested, maynotexceed theweighted average ofthesubsidy amount established
fortheselected group ofexporters orproducers.
§1. Forpurposes provided forinthisarticle, zeroamounts ordeminimus amounts willnotbe
taken intoaccount northeamounts established inthecircumstances towhich §3ºofArticle 37refers.
§2. TheauthoritiesreferredtoinArticle2shallapplymeasurescalculatedindividuallytotheoriginal
imports ofanyexporter orproducer notincluded intheselection, whohasprovided theinformation
requested during theinvestigation, asprovided in§4ºofArticle 20.
Article 57. Forpurposes ofapplication oftheprovisions ofitemIIofArticle 24,countervailing
measures shallbeapplicable onlytoproducts destined forfinalconsumption inthemarket thathas
beenconsidered domestic industry, forpurposes oftheinvestigation, inaccordance with §4ºof
Article 24.
Section II
Collection
Article 58. Countervailing measures applied toaproduct shallbecollected, independent ofany
other taxobligations relative toisimportation, intheappropriate amounts ineach case, ona
non-discriminatory basis, ontheimport oftheproduct from allsources which havebeenconsidered
tobesubsidized andcausing injury tothedomestic industry, whatever maybeitsprovenance.
§1. Measures willnotbecharged onimports proceeding fromororiginating incountries thathave
renounced anysubsidies inquestion, orwhose undertakings havebeenaccepted.
§2. Customs clearance ofgoods which aretheobject ofdefinitive compensatory measures shall
depend ontheirpayment.
Section III
Products subject toProvisional Measures
Article 59. Except forthecases foreseen inthisSection, provisional countervailing measures may
onlybeapplied toproducts which havebeendispatched forconsumption afterthedateofpublication
oftheactthatcontains thedecisions foreseen inArticles 44and52.G/SCM/N/1/BRA/2
Page24
Article 60. Inthecaseofafinalnegative determination concerning theexistence ofanactionable
subsidy orofinjury resulting therefrom, theamount oftheprovisional countervailing measures, if
guaranteed bydeposit, shallberefunded, or,inthecaseofbankguarantee, itshallbeannulled.
Article 61. Incasethefinaldetermination isthatthere isthreat ofinjury ormaterial retardation,
without injury having occurred, theamount oftheprovisional countervailing measures, ifguaranteed
bydeposit, shallberefunded, orinthecaseofbankguarantee, itshallbeannulled, unless itbeverified
thatthesubsidized imports, intheabsence ofprovisional countervailing measures, would haveled
toadetermination ofinjury, inwhich casetheprovisions ofArticles 62and63willapply.
Article 62. Incasethefinaldetermination isthattheactionable subsidy exists andthatitisresulting
ininjury, inthesituation ofguarantee bydeposit:
I. Theexcess amount shallbereimbursed when thevalue ofthemeasures applied bythe
finaldecision arelessthanthevalue oftheprovisional measures guaranteed bydeposit.
II. Thedifference shallnotbecollected when thevalue ofthemeasures applied aremore
thanthevalue ofthemeasures provisionally applied bydeposit.
III. Theamount shallbeautomatically converted intodefinitive measures when thevalue
applied bythefinal decision isequal tothevalue ofthemeasures provisionally
determined.
Article 63. Incasethefinaldetermination confirms theexistence oftheactionable subsidy and
injury resulting therefrom, inthesituation ofabankguarantee:
I. Theamount corresponding totheguaranteed value shallbeimmediately collected when
thevalue ofthedefinitive measures isgreater thanorequal tothevalue ofthemeasures
provisionally determined.
II. Onlytheamount equivalent tothevalue determined byfinaldecision willbecollected
when thisvalue islessthanthevalue ofthemeasures provisionally determined.
Soleparagraph. Thecollection oftheamounts referred tointheopening paragraph willlead
totheconsequent extinction oftheguarantee. Inasituation ofbreach ofcontract, theguarantee shall
beautomatically executed, independently ofjudicial orextrajudicial notice, inaccordance withthe
pertinent legislation.
Article 64. Definitive countervailing measures maybecollected forsubsidized imported products
thathavebeendispatched forconsumption uptoninety daysprevious tothedateoftheapplication
ofprovisional countervailing measures, whenever itisdetermined that,withrelation totheproduct
inquestion, thattheinjury iscaused bymassive imports, within arelatively short period oftime, and
willleadtotherecurrence ofsuchinjury.
Soleparagraph. Measures willnotbecollected forproducts which havebeendispatched for
consumption before theopening dateoftheinvestigation.
Article 65. Incasesofviolation ofundertakings, definitive countervailing measures maybecharged
onimported products dispatched forconsumption uptoninety daysbefore theapplication ofprovisional
countervailing measures, foreseen inArticle 48,except fortheproducts which hadbeendispatched
before theviolation oftheagreement.G/SCM/N/1/BRA/2
Page25
Chapter VIII
THE DURATION AND REVIEW OFCOUNTERVAILING
MEASURES AND UNDERTAKINGS
Article 66. Countervailing measures andundertakings mayonlyremain inforce aslongasand
totheextent necessary tocounteract theactionable subsidy which iscausing theinjury andshallbe
terminated within amaximum period offiveyears, afterapplication oraftertheconclusion ofthemost
recent revision which hasconsidered theactionable subsidy andtheresulting injury.
Article 67. Thetimelimitfortheaction towhich theprevious Article refers maybeextended after
revision, bymeans ofpetition formulated bythedomestic industry oronitsbehalf, byorgans orentities
oftheFederal Public Administration, orbyinitiative ofSECEX, ifitisdemonstrated thatthewithdrawal
ofthemeasures would leadtocontinuation orrecurrence ofsubsidization andinjury.
§1º. Thepetition referred tointheopening paragraph shallbepresented within atimelimitoffive
months before theendoftheapplication period ofmeasures referred toinArticle 66.Thesame time
limitwillapply when theinitiative istaken bySECEX.
§2º. Ifitisconfirmed thatthere isevidence thatwould justify arevision, itshallbeinitiated and
willfollow theprovisions ofSection IIIofChapter VIandshallbeconcluded within aperiod of12
months counting from thedateofinitiation. Theactswhich contain thedetermination toinitiate and
theconclude therevision shallbepublished inthe“Diario Oficial ”(Official Gazette) andtheinterested
parties andgovernments shallbenotified.
§3º. Themeasures andundertakings shallremain inforce pending theoutcome oftherevision.
Article 68. Arevision ofpartorofalloftheelements ofdecision relative totheapplication of
countervailing measures willbeconducted attherequest oftheinterested parties orgovernments, or
ofanorgan orentity oftheFederal Public Administration, orSECEX, aslongasaminimum period
ofoneyearhaselapsed fromthedateofimposition ofdefinitive countervailing measures andsufficient
evidence hasbeenpresented that:
I. Theapplication ofmeasures ceased tobenecessary tooffset theactionable subsidy;
II. Itisunlikely thattheinjury willcontinue orrecur ifthemeasures were removed or
varied; or
III. Theexisting measures arenotorhaveceased tobesufficient tooffset theactionable
subsidy causing theinjury.
§1º. Inexceptional cases ofsubstantial change ofcircumstances, orwhen inthenational interest,
revisions maybemade atshorter intervals, attherequest oftheinterested parties orgovernments,
orofanorgan orentity oftheFederal Public Administration, orbySECEX.
§2º. Ifitisconfirmed thatthere isevidence thatjustifies therevision, itshallbeinitiated andthe
actwhich contains suchdetermination shallbepublished inthe“Diario Oficial ”(Official Gazette) and
theinterested parties andgovernments shallbenotified.
§3º. Therevision shallbeconcluded within twelve months counting from itsinitiation andshall
follow theprovisions ofSection IIIofChapter VI.G/SCM/N/1/BRA/2
Page26
§4º. Themeasures shallbemaintained inforce pending theoutcome oftherevision.
§5º. Theauthorities referred toinArticle_2º, based ontheresults oftherevision andinconformity
withtheevidence collected inthecourse oftherevision, mayterminate, maintain, oralterthe
countervailing measures. Ifitisfound thatthemeasures inforce aregreater thanwhatisnecessary
tooffset theinjury tothedomestic industry orarenolonger justified, adequate reimbursement shall
bedetermined.
§6º. Theactwhich contains thedetermination toterminate therevision shallbepublished inthe
“Diario Oficial ”(Official Gazette) andtheinterested parties andgovernments shallbenotified.
§7º. Theprovisions ofthisArticle_apply totheundertakings accepted inconformity withSection V
ofChapter VI.
Article 69. When aproduct issubject tocountervailing measures, ifrequested, anexpedited review
shall beinstituted immediately toinorder forindividual countervailing measures tobepromptly
established foranyexporters orproducers thathavenotinfactbeeninvestigated forreasons other
thantherefusal tocooperate withtheinvestigation.
Article 70. Countervailing measures maybesuspended, onthebasis ofatechnical opinion, for
aperiod ofoneyear, which canbeextended foranequal period, incasetemporary alterations occur
inmarket conditions, aslongastheinjury doesnotrecur ordoesnotsubsist asaresult ofthesuspension
andaslongasdomestic industry hasexpressed itsviews.
Soleparagraph. Themeasures maybereapplied, atanymoment, ifthesuspension isnolonger
justified.
Chapter IX
PUBLIC NOTICE
Article 71. Theactsresulting from thedecisions oftheauthorities referred toinArticle 2º,and
thedeterminations ofSECEX, shallbepublished inthe“Diario Oficial ”(Official Gazette) andshall
contain detailed information about theconclusions reached regarding eachmatter offactandoflaw
considered pertinent, inkeeping withtheterms ofArticle 22oftheAgreement onSubsidies and
Countervailing Measures.
Soleparagraph. _For purposes ofnotification, acopy oftheactsmentioned inthefirst
paragraph ofthisArticle shallbesenttothegovernment ofthecountry orcountries thatexport the
products thathavebeentheobject ofinvestigation, andalsotoother theknown interested parties.
Chapter X
FORMALITIES RELATED TOACTS AND PROCEDURAL TERMS
Article 72. Theinterested parties andgovernments shallobserve thenorms ofthisDecree andthe
instructions ofSECEX intheelaboration ofpetitions anddocuments ingeneral, since documents will
notbeattached totheprocess incaseofdisregard ofnorms andinstructions..G/SCM/N/1/BRA/2
Page27
§1º. Theonlyinstructions thatmustbeobserved arethose thathavebeenmade public before the
beginning oftheprocedural process orhavebeenspecified incommunications directed totheparties.
§2º. Theactsandprocedural terms shallbewritten andthehearings andconsultations reduced to
written terms. Thetranslation toPortuguese, byanofficial translator, oftextsinother languages is
mandatory.
§3º. Theprocedural actsarepublic andtherighttoconsult theminutes andtorequest certificates
about theproceedings isrestricted totheparties, togovernments andtheir attorneys, withdue
consideration being given totheprovisions ofthesoleparagraph ofArticle 42,which regard therespect
forconfidentiality ofinformation andinternal documents oftheGovernment.
§4º. Requests forcertificates related totheproceedings willonlybeaccepted thirty daysafterthe
opening oftheinvestigation orfrom thelastrequest foracertificate bythesame party.
Chapter XI
THE DECISION MAKING PROCESS
Article 73. Thedeterminations ordecisions, preliminary orfinal, relative totheinvestigation, shall
beadopted based onthefindings ofSECEX.
§1º. SECEX shallpublish, within twenty daysfrom thedateofreception ofthefindings bythe
Foreign Trade Secretary, anactthecontains thedetermination to(a)openaninvestigation; (b)extend
thetimelimitofaninvestigation; (c)terminate acasebyrequest ofthepetitioner; (d)initiate arevision
processofdefinitivemeasures,orundertakings;or(e)terminatinganinvestigationwithouttheapplication
ofmeasures.
§2º. Anactshallbepublished, within twenty daysfromreception ofthefindings bytheMinisters
ofStateofIndustry, Trade, Tourism, andofFinance, which contains thedecision to(a)apply provisional
countervailing measures; (b)accept orreject anundertaking; (c)terminate aninvestigation withthe
application ofmeasures; (d)suspension ofdefinitive measures; (e)theresult ofarevision ofdefinitive
measures orundertakings.
§3º. Inexceptional circumstances, notwithstanding evidence oftheexistence ofanactionable subsidy
andinjuryresultingtherefrom,theauthoritiesreferredtoinArticle2ºmaydecide,forreasonsofnational
interest, tosuspend theapplication ofmeasures ornottoratify undertakings, oreven, inaccordance
withtheprovisions ofthesoleparagraph ofArticle 52,toapply measures ataamount from thatwhich
wasrecommended, and, inthiscasetheactshallcontain thegrounds fortheirdecision.G/SCM/N/1/BRA/2
Page28
TITLE II
SPECIAL PROCEDURES
Chapter I
AGRICULTURAL PRODUCTS
Article 4. Theprovisions ofthisChapter apply toagricultural products, included inAnnex V,
during aperiod ofnineyears beginning on1January 1995.
Soleparagraph. Inthecaseofdeveloping countries, theperiod isoftenyears.
Article 75. Non-actionable subsidies arethose measures ofdomestic support thatmeetthecriteria
established inAnnex VI,which maybeverified byopening aninvestigation todetermine iftheyare
incomplete conformity withthatAnnex.
Article 76. Inorder toinitiate aninvestigation ofactionable subsidies, itshallbeverified ifthey
areinconformity tothereduction commitments, interms ofdomestic support andexport subsidies,
asspecified inPartIVofthelistofeachcountry andinother documentation annex totheAgreement
onAgriculture.
Soleparagraph.Intheinitiationofinvestigationstoexamineactionablesubsidiesforagricultural
products, which fallwithin theprovisions ofthecaput orthecriteria forexemption ofreduction
commitments, theprovisions ofArticle 13oftheAgreement onAgriculture willbeobserved.
Article 77. Thefollowing areexport subsidies subject tothereduction commitments:
I. Theprovision bygovernments ortheir agencies ofdirect subsidies, including
payments-in-kind, toafirm, toanindustry, toproducers ofanagricultural product,
toacooperative orother association ofsuchproducers, ortoamarketing board,
contingent onexport performance.
II. Thesaleordisposal forexport bygovernments ortheiragencies ofnon-commercial
stocks ofagricultural products ataprice lower thanthecomparable price charged for
thelikeproduct tobuyers inthedomestic market;
III. Payments ontheexport ofanagricultural product thatarefinanced byvirtue of
governmentalaction,whetherornotachargeonthepublicaccountisinvolved,including
payments thatarefinanced from theproceeds ofalevyimposed ontheagricultural
product concerned oronanagricultural product from which theexport product is
derived;
IV. Theprovision ofsubsidies toreduce thecosts ofmarketing exports ofagricultural
products (other thanthewidely available export promotion andadvisory services)
including handling, upgrading andother processing costs, andthecostsofinternational
transport andfreight;
V. Internal transport andfreight charges onexport shipments, provided ormandated by
governments, onterms more favourable thanfordomestic shipping;
VI. Subsidiesonagriculturalproductscontingentontheirincorporationinexportedproducts.G/SCM/N/1/BRA/2
Page29
Chapter II
ON-THE-SPOT INVESTIGATIONS
Article 78. Once theinvestigation isinitiated, theauthorities oftheexporting country shallbe
informed oftheintention tocarry outon-the-spot investigations, asper§1ºofArticle 40.
§1º. Inexceptional circumstances, when thereistheintention ofincluding non-governmental experts
intheinvestigation team, theauthorities oftheexporting country andtheinterested enterprises shall
beinformed. Thenon-governmental experts willbesubject tothesanctions provided forinArticle 325
oftheBrazilian Penal Code.
§2º. Explicit agreement shallbeobtained fromtheenterprises concerned intheexporting country,
before thevisitismade.
§3º. After obtaining theagreement referred tointheprevious paragraph, theauthorities ofthe
exporting country shallbeimmediately notified ofthenames andaddresses oftheenterprises tobe
visited, aswellasthedates agreed on.
§4º. Theenterprises involved shallbenotified ofthevisitwithsufficient advance notice.
§5º. Visits withthepurpose ofexplaining thequestionnaire canonlytakeplace attherequest of
theproducer orexporter firm, andthismayonlyoccur ifSECEX notifies therepresentative ofthe
government inquestion andthere arenoobjections tothevisit.
§6º. Visits shallbemade afterthereturn ofthequestionnaire, unless theenterprise agrees otherwise
andthegovernment oftheexporting country hasbeenpreviously notified andhasnotobjected.
§7º. Before thevisit,thegeneral nature oftheinformation requested shallbebrought totheattention
oftheenterprises involved andtheanswers totherequests forinformation orquestions formulated
bytheauthorities orenterprises oftheexporting country, essential forthegoodresult oftheon-the-spot
investigation shall, whenever possible, beprovided, before thevisittakes place.
§8º. Requests forsupplementary clarification maybemade during thevisit,based ontheinformation
obtained.
Chapter III
USEOFINFORMATION FROM SECONDARY SOURCES
Article 79. Assoon astheinvestigation isinitiated, andwhenever necessary, theinformation
requested oftheinterested parties andgovernments shallbespecified indetail, aswellasthetimelimits
forresponse andtheform inwhich theinformation shallbestructured inthereply.
§1º. Theparties andgovernments shallalsobenotified thatthefailure toprovide therequested
information orthepartial submission ofinformation requested, within thetimelimits established, will
allow fordeterminations tobemade onthebasis ofavailable factsandthattheresults obtained may
belessfavourable tothatparty, thantheywould havebeeniftheparty hadcooperated.
§2º. SECEX mayrequest thatpartofthereply beprovided incomputer language.G/SCM/N/1/BRA/2
Page30
§3º. Whenever aparty doesnotmaintain computerized accounting, orthedelivery ofthereplies
insuchformwould represent anadditional burden, withunjustified increase incosts anddifficulties,
thispartymaybeexempt fromtheobligation topresent thereplies intheformmentioned intheprevious
paragraph.
§4º. Whenever SECEX doesnothavespecific means toprocess theinformation, byhaving received
itinacomputer language incompatible withitsoperational system, theinformation shallbeprovided
inwritten form.
§5º. Informulating determinations, verifiable information thathasbeenpresented within schedule,
butwhich isnot,however, inallaspects adequate, maybeused.
§6º. IncaseSECEX doesnotaccept certain information, itshallcommunicate immediately tothe
party themotive fortherefusal, sothattheparty maysupply clarifications, within thetimelimits
established, keeping within thelimitestablished fortheinvestigation. Incasetheadditional clarifications
arenotsatisfactory, thereasons forrefusal shallfigure intheactsthatcontain anydetermination or
decision.
§7º. Inasituation inwhich itisproved thattheinformation isfalseortendentious, theinformation
shallberejected andthedeterminations shallbebased ontheavailable facts.
§8º. Intheformulation ofdeterminations, ifsecondary sources ofinformation areused, including
those provided inthepetition, independent sources ofinformation andinformation fromother parties
shallbeusedforcomparative purposes.
Chapter IV
GENERAL PROVISIONS
Article 80. Theprovisions oftheAgreement onSubsidies andCountervailing Measures relative
toprohibited andactionable subsidies, contained inParts IIandIIIrespectively, maybeinvoked
simultaneously withthose relative tocountervailing measures treated inthisDecree.
Soleparagraph. Inregard totheeffects ofasubsidy onthedomestic market, onlyoneform
ofcompensation maybeapplied, oracountervailing measure, ifthenecessary requisites aremet,or
aremedyfallingwithinthescopeofArticles4ºand7ºoftheAgreementonSubsidiesandCountervailing
Measures.
Article 81. Theprovisions oftheAgreement onAgriculture shallbeapplied simultaneously with
those ofthisDecree.
Article 82. Thetimelimits foreseen inthispresent Decree, shallbecalculated incalendar days
andmaybeextended foroneadditional equal period, except forthose which already haveanextension
established.
Article 83. Actspractised contrary withtheprovisions ofthisDecree, shallbenullunder law.
Article 84. Theprocedures established inthisDecree shallnotimpede thecompetent authorities
foracting expeditiously inrelation toanydecisions anddeterminations andshallnothinder customs
clearance.G/SCM/N/1/BRA/2
Page31
Article 85. Foreffects ofthisDecree, theterm “industry ”alsoincludes activities related to
agriculture.
Article 86. Theprovisions ofthisDecree shallbeapplied toinvestigations andrevisions initiated
after30December 1994.
Article 87. TheMinisters ofStateofIndustry, Trade andTourism andofFinance shallissue the
complementary norms fortheexecution ofthisDecree.
Article 88. ThisDecree shallenter intoforce onthedateofitspublication.
Brasilia, 19December 1995; 174th ofIndependence and107th oftheRepublic.
MARCO ANTONIO DEOLIVEIRA MACIEL
Sebasti ãodoRego Barros Netto
Pedro Malan
JoséEduardo deAndrade Viera
Dorothea Werneck
Andreia Sandro CalabiG/SCM/N/1/BRA/2
Page32
ANNEX I
ILLUSTRATIVE LIST OFEXPORT SUBSIDIES
(a) Theprovision bygovernments ofdirect subsidies toafirmortoanindustry contingent upon
export performance.
(b) Currency retention schemes oranysimilar practices which involve abonus onexports.
(c) Internal transport andfreight charges onexport shipments, provided ormandated by
governments, onterms more favourable thanfordomestic shipments.
(d) Theprovision bygovernments ortheir agencies either directly orindirectly through
government-mandated schemes, ofimported ordomestic products orservices fortheusein
theproduction ofexported goods, onterms orconditions more favourable thanforprovision
oflikeordirectly competitive products orservices foruseintheproduction ofgoods for
domestic consumption, if(inthecaseofproducts) suchterms orconditions aremorefavourable
thanthose commercially available onworld markets fortheirexporters.
Theterm“commercially available ”means thatthechoice between domestic andimported
products isunrestricted anddepends onlyoncommercial considerations.
(e) Thefullorpartial exemption orremission ordeferral specifically related toexports, ofdirect
taxes, orsocial welfare charges paidorpayable byindustrial orcommercial enterprises.
“Remission ”oftaxes includes therefund orrebate oftaxes.
Deferral neednotamount toanexport subsidy when, forexample, appropriate interest charges
arecollected.
Theterm“direct taxes”means taxesonwages, profits, interests, rents, royalties, andallother
forms ofincome, andtaxes ontheownership ofrealproperty.
Prices forgoods intransactions between exporting enterprises andforeign buyers under their
orunder thesame control should, fortaxpurposes, betheprices which would becharged
between independent enterprises acting atarm’slength.
Thisitemdoesnotinclude measures thatavoid double taxation offoreign-source income.
(f) Theallowance ofspecial deductions directly related toexports ortoexport performance, over
andabove those granted inrespect toproduction fordomestic consumption, inthecalculation
ofthebaseonwhich direct taxes arecharged.
(g) Theexemption orremission, inrespect oftheproduction anddistribution ofexported products,
ofindirect taxes inexcess ofthose levied inrespect oftheproduction anddistribution oflike
products when soldfordomestic consumption.
Theterm“indirect taxes”means taxesonsales, excise, turnover, value added, franchise, stamp,
transfer, inventory andequipment taxes, border taxes, andalltaxes other thandirect taxes,
referred toinletter “e”andimport charges, referred toinletter “i”.
(h) Theexemption, remission ordeferral ofprior-stage cumulative indirect taxes ongoods or
services usedintheproduction ofexported products inexcess oftheexemption, remissionG/SCM/N/1/BRA/2
Page33
ordeferral oflikeprior-stage cumulative indirect taxes ongoods andservices usedinthe
production oflikeproducts when soldfordomestic consumption; provided, however, that
prior-stagecumulativeindirecttaxesmaybeexempted,remittedordeferredonexportedproducts
even when notexempted, remitted ordeferred onlikeproducts when soldfordomestic
consumption, iftheprior-stage cumulative indirect taxesarelevied oninputs thatareconsumed
intheproduction oftheexported product (making normal allowance forwaste). Thisitem
shallbeinterpreted inaccordance withtheguidelines onconsumption ofinputs intheproduction
process contained inAnnex II.Theprovisions ofthisitemdoesnotapply tovalue-added tax
systems andborder-tax adjustment inlieuthereof; theproblem ofexcessive remission of
value-added taxes isexclusively covered byitem“g”.
“Prior-stage ”indirect taxes arethose levied ongoods orservices useddirectly orindirectly
inthemaking ofaproduct. “Cumulative ”indirect taxes aremulti-staged taxes levied where
there isnomechanism forsubsequent crediting ofthetaxifthegoods orservices subject to
taxatonestage ofproduction areusedinasucceeding stage ofproduction.
(i) Theremission ordrawback ofimport charges inexcess ofthose levied onimported inputs
thatareconsumed intheproduction oftheexported product (making normal allowance for
waste); provided, however, thatinparticular cases afirmmayuseaquantity ofhome market
inputs equal to,andhaving thesame quality andcharacteristics as,theimported inputs asa
substitute fortheminorder tobenefit formthisprovision iftheimport andthecorresponding
export operations bothoccur within areasonable period oftime, nottoexceed twoyears.
Thisitemshallbeinterpreted inaccordance withtheguidelines onconsumption ofinputs in
theproduction process contained inAnnex IIandtheguidelines inthedetermination of
substitution drawback systems asexport subsidies contained inAnnex III.
"Remission ordrawback ”includes thefullorpartial exemption ordeferral ofimport charges.
Theterm “import charges ”means tariffs, duties, andother fiscal charges notelsewhere
enumerated inthisAnnex thatarelevied onimports
(j) Theprovision bygovernments (orspecial institutions controlled bygovernments) ofexport
credit guarantee orinsurance programmes, ofinsurance orguarantee programmes against
increases inthecostofexported products orofexchange riskprogrammes, atpremium rates
which areinadequate tocover thelong-term operating costs andlosses oftheprogrammes.
(k) Thegrantbygovernments (orspecial institutions controlled byand/or acting under theauthority
ofgovernments) ofexport credits atratesbelow those which theyactually havetopayforthe
funds soemployed (orwould havetopayiftheyborrowed oninternational capital markets
inorder toobtain funds ofthesame maturity andother credit terms anddenominated inthe
same currency astheexport credit), orthepayment bythemofallorpartofthecostsincurred
byexporters orfinancial institutions inobtaining credits, insofarastheyareusedtosecure
amaterial advantages inthefieldofexport credit terms.
Provided, however, thatifaMember oftheWTO isaparty toaninternational undertaking
onofficial export credits towhich atleasttwelve original Members totheAgreement on
Subsidies andCountervailing Measures areparties asof1January 1979 (orasuccessor
undertaking which hasbeenadopted bythose original Members), orifinpractice aMember
country applies theinterest ratesprovisions oftherelevant undertaking, anexport credit practice
which isinconformity withthoseprovisions shallnotbeconsidered aprohibited export subsidy.
(l) Anyother charge onthepublic account constituting anexport subsidy inthesense ofArticle
XVIofGATT 1994.G/SCM/N/1/BRA/2
Page34
ANNEX II
GUIDELINES ONCONSUMPTION OFINPUTS INTHE PRODUCTION PROCESS
(A) Inputs consumed intheproduction process arethose incorporated physically, energy, fuels
andoilsusedintheproduction process andcatalysts which areconsumed inthecourse oftheir
usetoobtain theexported product.
(b) Indirect taxrebate schemes canallow forexemption, remission, ordeferral ofprior-stage
cumulative indirect taxes levied oninputs thatareconsumed intheproduction oftheexported
product (making normal allowance forwaste ).Similarly, drawback schemes canallow for
theremissionordrawbackofimportchargesleviedoninputsthatareconsumedintheproduction
oftheexported product (making normal allowance forwaste ).
(c) TheIllustrative ListofExport Subsidies inAnnex Imakes reference, initems “h”and“I”,
totheterm“inputs consumed intheproduction oftheexported product ”.Pursuant toitem
“h”,indirect taxrebate schemes canconstitute anexport subsidy totheextent thattheyresult
inexemption, remission, ordeferral ofprior-stage cumulative indirect taxes inexcess ofthe
amount ofsuchtaxes actually levied oninputs thatareconsumed intheproduction ofthe
exported product. Pursuant toitem“i”,drawback schemes canconstitute anexport subsidy
totheextent thattheyresult inaremission ordrawback ofimport charges inexcess tothose
actually levied oninputs thatareconsumed intheproduction oftheexported product. Normal
allowance forwaste willbemade infindings regarding consumption ofinputs intheproduction
oftheexported product. Inthecaseforeseen initem“i”,substitution maybemade when
appropriate.
(d) forpurposes ofsubsidy investigations, SECEX willproceed inthefollowing manner when
examining themechanism ofrebate:
(d.1) where itisalleged thatanindirect taxrebate scheme, oradrawback scheme, conveys
assubsidy byreason ofover-rebate orexcess drawback ofindirect taxesorimport charges
oninputsconsumedintheproductionoftheexportedproduct,SECEXwillfirstdetermine
whether thegovernment oftheexporting Member hasinplace andapplies asystem or
proceduretoconfirmwhichinputsareconsumedintheproductionoftheexportedproduct
andinwhat amounts. Where suchsystem orprocedure isdetermined tobeapplied,
SECEX willthenexamine thesystem orprocedure toseewhether itisreasonable,
effective forthepurpose intended, andbased ongenerally accepted commercial practices
inthecountry ofexport. SECEX mayconsider itnecessary torealize, inaccordance
withparagraph 1ofArticle 40oftheDecree thatregulates thenorms ofapplication of
countervailingmeasures,certainpracticaltestsinordertoverifyinformationandcertifying
thatthesystem orprocedure isbeing effectively applied.
(d.2) when suchasystem orprocedure doesnotexist, orwhen itisnotreasonable, orwhen
though itexists, itisnotbeing applied ornotapplied effectively, afurther examination
bytheexporting Member based ontheactual inputs involved would needtobecarried
outinthecontext ofdetermining whether anexcess payment occurred. IfSECEX
considers itnecessary, afurther examination willbecarried out,inaccordance withthe
previous item.
(d.3) SECEX shall treatinputs asphysically incorporated ifsuchinputs areused inthe
production process andphysically present intheexported product. ItisnotnecessaryG/SCM/N/1/BRA/2
Page35
thattheinput bepresent inthefinalproduct inthesame form inwhich itentered the
production process.
(d.4) indetermining theamount ofaspecific input thatisconsumed intheproduction ofthe
exported product, a“normal allowance forwaste”should betaken intoaccount, and
suchwaste should betreated asconsumed intheproduction oftheexported product.
Theterm“waste”refers tothatportion oftheparticular ofagiven input which does
notserve anindependent function intheproduction process, isnotconsumed inthe
production oftheexported product (forreasons suchasinefficiencies), andisnot
recovered, usedorsoldbythesame manufacturer.
(d.5) ondetermining whether theclaimed allowance forwaste is“normal ”,SECEX willtake
intoaccounttheproductionprocess,theaverageexperienceoftheindustryintheexporting
country, andother technical factors, asappropriate. SECEX willtakeintoaccount that
animportant question iswhether theauthorities oftheexporting country havecalculated
reasonably theamount ofwaste, when suchanamount isintended tobeincluded inthe
taxordutyrebate orremission.G/SCM/N/1/BRA/2
Page36
ANNEX III
GUIDELINES INTHE DETERMINATION OFSUBSTITUTION
DRAWBACK SYSTEMS ASEXPORT SUBSIDIES
(a) Drawback systems canallow fortherefund ordrawback ofimport charges oninputs which
areconsumed intheproduction process ofanother product andwhere theexport ofthislatter
product contains domestic inputs having thesamequality andcharacteristics asthosesubstituted
fortheimported ones. Pursuant toitem“i”oftheIllustrative ListofExport Subsidies in
Annex I,substitution drawback systems canconstitute anexport subsidy totheextent thatthey
result inanexcess drawback oftheimport charges levied initially ontheimported inputs for
which drawback isbeing claimed..
(b) Forpurposesofsubsidyinvestigations,SECEXwillproceedinthefollowingmannertoexamine
anysubstitution drawback system:
(b.1) Item“i”oftheIllustrative Liststipulates thathome market inputs maybesubstituted
forimported inputs intheproduction ofaproduct forexport provided suchinputs are
equal inquantity to,andhavethesamequality andcharacteristics as,theimported inputs
beingsubstituted.Theexistenceofaverificationsystemorprocedureisimportantbecause
itenables thegovernment oftheexporting Member toensure anddemonstrate thatthe
quantity ofexports forwhich drawback isclaimed doesnotexceed thequantity ofsimilar
products exported, inwhatever form, andthatthere isnotdrawback ofimport charges
inexcess ofthose originally levied ontheimported inputs inquestion.
(b.2) where itisalleged thatasubstitution drawback conveys asubsidy, SECEX willfirst
proceed todetermine whether thegovernment oftheexporting Member hasinplace
andapplies asystem orprocedure ofverification. Where suchasystem orprocedure
isdetermined tobeapplied, SECEX willexamine thesystem orprocedures ofverification
toestablish ifthese arereasonable, effective forthepurpose intended andbased on
generally accepted commercial practices oftheexporting country. Totheextent these
procedures aredetermined tomeetthistestandareeffectively applied, nosubsidy shall
bepresumed toexist. Itmaybedeemed necessary forSECEX tocarry out,inaccordance
with paragraph 1ofArticle 40oftheDecree which regulates theapplication of
countervailing measures, certain practical teststoverify information ortocertify that
theverification procedures arebeing effectively applied.
(b.3) when there arenoprocedures ofverification, orwhen theyarenotreasonable, oryet,
when theprocedures existandwereconsidered reasonable, buthavenotbeenactually
applied orwitheffectively, theremaybeasubsidy. Insuchsituations itshallbenecessary
fortheexporting country tocarry outafurther examination based ontheactual
transactions involved inorder todetermine ifthere havebeenexcessive payments. If
SECEX deems itnecessary, afurther examination willbecarried outinaccordance
withtheprevious item.
(b.4) Theexistence ofasubstitution drawback provision under which exporters areallowed
toselect particular import shipments onwhich drawback isclaimed should notofitself
beconsidered toconvey asubsidy.G/SCM/N/1/BRA/2
Page37
(b.5) Anexcess drawback ofimport charges inthesense ofitem“I”ofAnnex Iwillbedeemed
toexistwhere governments paidinterest onanymonies refunded under theirdrawback
schemes, totheextent oftheinterest actually paidorpayable.G/SCM/N/1/BRA/2
Page38
ANNEX IV
DEVELOPING COUNTRIES MEMBERS
Developing countries Members which arereferred toinparagraph 12ofArticle 21ofthe
Decree which regulates thenorms fortheapplication ofcountervailing measures, arethefollowing:
(a) Least-developed countries designated assuchbytheUnited Nations, thataremembers ofthe
World Trade Organization.
(b) Eachofthefollowing developing countries which areMembers oftheWTO shallnotbesubject
totheprovisions ofthisAnnex when GNPpercapita hasreached $1,000 perannum: Bolivia,
Cameroon, Congo, Côted’Ivoire, Dominican Republic, Egypt, Ghana, Guatemala, Guyana
India, Indonesia, Kenya, Morocco, Nicaragua, Nigeria, Pakistan, Philippines, Senegal, Sri
Lanka andZimbabwe.G/SCM/N/1/BRA/2
Page39
ANNEX V
LIST OFAGRICULTURAL PRODUCTS
01 Products inChapters 1to24oftheHarmonized System (“HS”),lessfishandfishproducts,
plus
02HSCode 2905.43 (mannitol)
HSCode 2905.44 (sorbitol)
HSHeading 33.01 (essential oils)
HSHeadings 35.01 to35.05 (albuminoidal substances, modified
starches, glues)
HSCode 3809.10 (finishing agents)
HSCode 3823.60 (sorbitol n.e.p)
HSHeadings 41.01 to41.03 (hides andskins)
HSHeading 43.01 (rawfurskins)
HSHeadings 50.01 to51.03 (rawsilkandsilkwaste)
HSHeadings 51.01 to51.03 (wool andanimal hair)
HSHeadings 52.01 to52.03 (rawcotton, waste andcotton carded or
combed)
HSHeading 53.01 (rawflax)
HSHeading 53.02 (rawhemp)
Theproduct description inround brackets arenotnecessarily exhaustive. Thevaliddescriptions
aretobefound intheMercosur Common Nomenclature.G/SCM/N/1/BRA/2
Page40
ANNEX VI
DOMESTIC SUPPORT: THE BASIS FOR EXEMPTION
FROM THE REDUCTION COMMITMENTS
1. Domestic support measures forwhich exemption from thereduction commitments shallmeet
thefundamental requirement thattheyhaveno,oratmostminimal, trade distorting effects oreffects
onproduction. Accordingly, allmeasures forwhich exemption isclaimed shallconform tothefollowing
basic criteria:
(a) thesupport inquestion shallbeprovided through apublicly-funded government programme
(including government revenue foregone) notinvolving transfers from consumers; and
(b) thesupport inquestion shallnothavetheeffect ofproviding price support toproducers.
Besides thebasiccriteria, themeasures shallmeetthecriteria andtheconditions relative tospecific
governmental policies, asfollows:
2. General Services
Policies inthiscategory involve expenditures (orrevenue foregone) inrelation toprogrammes
which provide services orbenefits toagriculture ortotheruralcommunity. They shallnotinvolve
direct payments toproducers orprocessors. Such programmes, which include butarenotrestricted
tothefollowing list,shallmeet thegeneral criteria mentioned initem1andtheconditions relative
tospecific policies inthefollowing cases:
(a) research, including general research, research inconnection withenvironmental programmes,
andresearch programmes relating toparticular products.
(b) control ofpestanddisease, including general andproduct-specific pestanddisease control
measures, suchasearly warning systems, quarantine anderadication;
(c) training services, including bothgeneral andspecialist training facilities.
(d) extension andadvisory services, including theprovision ofmeans tofacilitate thetransfer of
information andtheresults ofresearch toproducers andconsumers.
(e) inspection services, including general inspection services andtheinspection ofparticular products,
forhealth, safety, grading orstandardization purposes.
(f) marketing andpromotion services, including market information, advice andpromotion relating
toparticular products butexcluding expenditure forunspecified purposes thatcould beusedby
sellers toreduce theirselling price orconfer direct economic benefit topurchasers; and
(g) infrastructural services, including: electricity reticulation, roads orother means oftransport,
market anddockfacilities, water supply facilities, damsanddrainage schemes, andinfrastructural
works associated withenvironmental programmes. Inallcases theexpenditure shall bedirected
totheprovision orconstruction ofcapital works onlyandwillexclude thesubsidized provision
ofon-farm facilities other thanthereticulation ofgenerally available public utilities. Itshall
notinclude subsidies toinputs oroperating costs, orpreferential usercharges.G/SCM/N/1/BRA/2
Page41
3. Public stockholding forfoodsecurity purposes
Expenditures (orrevenue foregone) inrelation totheaccumulation andholding ofstocks of
products which formanintegral partofaprogramme offoodsecurity identified innational legislation.
Thismayinclude governmental aidtoprivate storage ofproducts aspartofsuch programme.
Thevolume andaccumulation ofsuchstocks shallcorrespond topredetermined targets related
solely tofoodsecurity. Theprocess ofstock accumulation anddisposal shallbefinancially transparent.
Thepurchase offoodbythegovernment shallbemade atcurrent market prices andsalesfromfood
security stocks shallbemade atnolessthanthecurrent domestic market price fortheproduct and
quality inquestion.
Governmental stockholding forfoodsecurity purposes indeveloping countries whose operation
istransparent andconducted inaccordance withofficially published objective criteria shallbeconsidered
tobeinconformity withe theprovisions ofthisitem, including programmes under which stocks of
foodstuffs forfoodsecurity purposes areacquired andreleased atadministered prices, provided that
thedifference between theprice ofacquisition andtheprice ofexternal reference isaccounted forin
theAMS, asdetermined byAnnex 3oftheAgreement onAgriculture.
4. Domestic foodaid
Expenditures (orrevenue foregone) inrelation totheprovision ofdomestic foodaidtosection
ofthepopulation inneed.
Eligibility toreceive foodaidshallbesubject toclearly defined criteria related tonutritional
objectives. Suchaidshallbeintheformofdirect provision offoodtothose concerned ortheprovision
ofmeans toallow eligible recipients tobuyfoodeither atmarket oratsubsidized prices. Foodpurchases
bythegovernment shallmade beatcurrent market prices andthefinancing andadministration ofthe
aidshallbetransparent.
Forpurposes ofitems 3and4ofthisannex, theprovision offoodstuffs atsubsidized prices with
theobjective ofmeeting foodrequirements oftherural andurban poorindeveloping countries ona
regular basisatreasonable prices shallbeconsidered inconformity withtheprovisions ofthisparagraph.
5. Direct payments toproducers
Support provided through direct payments (orrevenue foregone, including payments inkind)
toproducers forwhich exemption fromreduction commitments isclaimed shallmeetthebasic criteria
established initem1,plusspecific criteria applying toindividual types ofdirect payment assetout
initems 6through 13.Where exemption from reduction isclaimed foranyexisting ornewtypeof
direct payment other thanthose specified initems 6through 13,itshallconform tocriteria specified
initems “b”to“e”ofitem6,inaddition tothegeneral criteria established initem1.
6. Decoupled income support
(a) Eligibility forsuchpayments shallbedetermined byclearly defined criteria suchasincome,
status asaproducer orlandowner, factor useorthelevelofproduction inadefined andfixed
baseperiod.
(b) Theamount ofsuchpayments inanygiven yearshallnotberelated to,orbased on,thetype
orvolume ofproduction (including livestock units)undertaken bytheproducer inanyyearafter
thebaseperiod.G/SCM/N/1/BRA/2
Page42
(c) Theamount ofsuchpayments inanygiven yearshallnotberelated to,orbased on,theprices,
domestic orinternational, applying toanyproduction undertaken inanyyearafterthebaseperiod.
(d) Theamount ofsuchpayments inanygiven yearshallberelated to,orbased on,thefactors
ofproduction employed inanyyearafterthebaseperiod.
(e) Noproduction shallberequired inorder toreceive suchpayments.
7. Government financial participation inincome insurance andincome safety-net programmes
(a) Eligibility forsuchpayments shallbedetermined byanincome loss,taking account onlyincome
derived fromagriculture, which exceeds 30%ofaverage gross income ortheequivalent innet
income terms (excluding anypayments fromthesameorsimilar schemes) inthepreceding three
yearperiod orathreeyearaverage based onthepreceding fiveyearperiod, excluding thehighest
andlowest entry. Anyproducer meeting thiscondition shallbeeligible toreceive thepayments.
(b) Theamount ofsuchpayments shallcompensate forlessthan70%oftheproducer ’sincome loss
intheyeartheproducer becomes eligible toreceive theassistance.
(c) Theamount ofanysuchpayments shallrelated solely toincome; itshall notrelate tothetype
orvolume ofproduction (including livestock units) undertaken bytheproducer; ortotheprices,
domestic orinternational, applying tosuchproduction; ortothefactors ofproduction employed.
(d) Where aproducer receives inthesameyearpayments described inthisitemandinitem8(relief
fromnatural disasters), thetotalofsuch payments shallbelessthan100% ofthetotallossof
theproducer.
8. Payments (made either directly orbywayofgovernment financial participation incropinsurance
schemes) forrelief from natural disasters.
(a) Eligibility toreceive suchpayments shallariseonlyfollowing aformal recognition bygovernment
authorities thatanatural orlikedisaster (including disease outbreaks, pestinfections, nuclear
accidents, andwarontheterritory oftheMember concerned) hasoccurred orisoccurring;
andshallbedetermined byaproduction losswhich exceeds thirty percentoftheaverage of
production inthepreceding three-year period orathree-year average based onthepreceding
five-year period, excluding thehighest andthelowest entry.
(b) Payments made following adisaster shallbeapplied onlyinrespect oflosses ofincome, livestock
(including payments inconnection withtheveterinary treatment ofanimals), landorother
production factors duetothenatural disaster inquestion.
(c) Payments shall compensate fornotmore thatthetotalcostofreplacing suchlosses, andshall
notrequire orspecify thetypeorquantity offuture production.
(d) Payments made during adisaster shallnotexceed thelevelrequired toprevent oralleviate further
lossasdefined inthecriteria established in“b”ofthisitem.
(e) Where aproducer receives inthesame yearpayments described inthisitemandintheprevious
item(income insurance andincome safety-net programmes), thetotalofsuchpayments shall
belessthan100% ofthetotallossoftheproducer.
9. Structural adjustment assistance provided through producer retirement programmesG/SCM/N/1/BRA/2
Page43
(a) Eligibility forsuchpayments shall bedetermined byreference toclearly defined criteria in
programmes designed tofacilitate theretirement ofpersons engaged inmarketable agricultural
production, ortheirmovement tonon-agricultural activities.
(b) Payments shallbeconditional upon thetotalandpermanent retirement oftherecipients from
marketable agricultural production.
10. Structural adjustment assistance provided through resource retirement programmes
(a) Eligibility forsuchpayments shall bedetermined byreference toclearly defined criteria in
programmes designed toremove landorother resources, including livestock, frommarketable
agricultural production.
(b) Payments shallbeconditional upontheretirement oflandfrommarketable agricultural production
foraminimum ofthreeyears, andinthecaseoflivestock, onitsslaughter ordefinitive permanent
disposal.
(c) Payments shallnotrequire orspecify anyalternative useforsuchlandorother resources which
involves theproduction ofmarketable agricultural products.
(d) Payments shallnotberelated toeither thetypeorquantity ofproduction ortotheprices, domestic
orinternational, applying toproduction undertaken using thelandorother resources remaining
inproduction.
11. Structural adjustment assistance provided through investment aids
(a) Eligibility forsuchpayments shall bedetermined byreference toclearly defined criteria in
government programmes designed toassist inthephysical orfinancial restructuring ofaproducer
operations inresponse toobjectively demonstrated structural disadvantages. Eligibility forsuch
programmesmayalsobebasedonaclearlydefinedgovernmentprogrammeforthereprivatization
ofagricultural land.
(b) Theamount ofsuchpayments inanygiven yearshall berelated to,orbased on,thetypeor
volume ofproduction (including livestock units), undertaken bytheproducer inanyyearafter
thebaseperiod, except forthatprovided forinby“e”below.
(c) Theamount ofsuchpayments inanygiven yearshallnotberelated, orbased on,theprices,
domestic orinternational, applying toanyproduction undertaken inanyyearafterthebase
period.
(d) Payments shallbegiven onlyfortheperiod oftimenecessary fortherealization oftheinvestment
inrespect ofwhich theyareprovided.
(e) Thepayments shallnotmandate orinanywaydesignate theagricultural products tobeproduced
bytherecipients except torequire them nottoproduce aparticular product.
(f) Thepaymentsshallbelimitedtotheamountrequiredtocompensateforthestructuraldisadvantage.G/SCM/N/1/BRA/2
Page44
12. Payments under environmental programmes:
(a) Eligibility forsuch payments shall bedetermined aspartofaclearly defined government
environmental orconservation programme andbedependent onthefulfilment ofspecific
conditions under thegovernment programme, including conditions related toproduction methods
orinputs.
(b) Theamount ofpayment shallbelimited totheextracostsorlossofincome involved incomplying
withthegovernment programme.
13. Payments under regional assistance programmes
(a) Eligibility forsuchpayments shallbelimited toproducers indisadvantaged regions. Eachsuch
region mustbeaclearly designated contiguous geographical areawithdefinable economic and
administrative identity, considered asdisadvantaged onthebasisofneutral andobjective criteria
clearly speltoutinlaworregulation andindicating thattheregion ’sdifficulties ariseoutofmore
thantemporary circumstances;
(b) Theamount ofsuchpayments inanygiven yearshallnotberelated to,orbased on,thetype
orvolume ofproduction (including livestock units), undertaken bytheproducer inanyyearafter
thebaseperiod other thantoreduce thatproduction;
(c) Theamount ofsuchpayments inanygiven year, shallnotberelated to,orbased on,theprices,
domestic orinternational, applying toanyproduction undertaken inanyyearafterthebaseperiod;
(d) Payments shallbeavailable onlytoproducers ineligible regions butgenerally available toall
producers within suchregions;
(e) Where related toproduction factors, payments shallbemade atadigressive rateabove athreshold
levelforthefactor concerned;
(f) Thepayments shall belimited totheextra costs orlossofincome involved inundertaking
agricultural production intheprescribed area.