RESTRICTED
WORLD TRADE G/ADP/W/281
G/SCM/W/291
ORGANIZATION 2February 1996
(96-0408)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
REPLIES TOQUESTIONS POSED BYHONG KONG1
CONCERNING THE NOTIFICATION OFLAWS AND
REGULATIONS OFBRAZIL2
Thefollowing communication, dated 23January 1996, hasbeenreceived fromthePermanent
Mission ofBrazil.
_______________
Questions Anti-Dumping Legislation
General
Q. (a) What isthelegal effect oftheincorporation oftheWTO A-DAgreement intothe
Brazilian legal system? Would thisgivetheWTO A-DAgreement theforce oflawin
Brazil? AretheBrazilian authorities obliged bylawtoabide bytheprovisions ofthe
WTO A-DAgreement?
1. TheBrazilian notification under Article 18.5oftheWTO A-DAgreement, asreproduced in
theWTO Document G/ADP/N/1/BRA/1, provides that:
(a) theMarrakesh Agreement anditsAnnexed Agreements hasbeenincorporated intotheBrazilian
legal system, intheirfulltext,byDecree No.1355, of30December 1994;
(b) Provisional Measure (PM) No.926of1March 1995 hasbeen introduced toreflect the
incorporation oftheWTO A-DAgreement intotheBrazilian legal system; and
(c) Brazil ispresently drafting anewregulation inaccordance withtheprovision oftheWTO A-D
Agreement.
A. Having beenincorporated intotheBrazilian legalsystem bymeans ofaPresidential Decree
(Decree No.1355, dated 30December 1994), theWTO Agreements havethesamehierarchical
levelaslaws, andaresubordinate onlytotheFederal Constitution. TheDecree No.1355/94
promulgated theLegislative Decree No.30/94, dated 15December 1994, which approved
theWTO Agreements. Assuch, ithasadistinct character from other subsequent legal
instruments(decrees,ministerialorders),havingprecedenceoverthem.Thecompetentauthorities
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responsible fortheapplication ofthepertinent legislation arethose specified inLawNo.9019,
dated30March1995,whichresultedfromtherepublicationofProvisionalMeasureNo.926/95.
They actaccording tothelegislation ineffect and,inconsequence, arebound tofollow Decree
No.1355/94 andtheregulation ("implementing legislation") oftheAgreements, which isbased
onthem, fortheapplicable cases, which areinvestigations andrevisions initiated withbasis
onpetitions presented since 31December 1994.
Q. (b) Would Brazil explain therelationship between theWTO A-DAgreement, Provisional
Measure No.926andtherelevant regulations? Which takes precedence incaseof
inconsistency? Would theBrazilian authorities taketheWTO A-DAgreement asthe
primary source ofauthority inA-Dmatters? Orwould theyonlyrefer toitasa
supplement totheProvisional Measure and/or other domestic regulations orasalast
resort?
A. DecreeNo.1355,dated30December1994,incorporatedtheWTOAgreementsintotheBrazilian
legal system. LawNo.9019, dated 30March 1995, complements theDecree. ThisLaw
established thejuridical nature oftheanti-dumping duties andofthecountervailing measures,
eliminating linkswiththeimport tax,anddefined theauthorities thatarecompetent toconduct
anti-dumping andsubsidies investigations, aswellasfortheapplication ofmeasures andreceipt
ofduties.
Q. (c) What isthelegislative timetable fortheregulation under preparation? Would the
legislationbringtheBrazil'sexistinglawintoconformitywiththeWTOA-DAgreement?
A. Inwhatconcerns thenewregulations, which arealready ineffect through Decree No.1602,
dated 23August 1995, relative toanti-dumping measures, andDecree 1751, dated 19December
1995, relative tocountervailing measures, theyestablish procedures fortheapplication ofanti-
dumping andcountervailing measures andhaveasabasis Decree No.1355/95, which has
precedence overtheabove-mentioned twodecrees.
Provisional Measures No.926
2. Article 3(PMNo.926)-Amount ofprovisional measure
Question: What ismeant by"total value oftheobligation"? Howisitcalculated? What are
thepossible "other legal charges"? Isitpossible thattheguarantee offered bythe
importer would exceed theprovisionally estimated margin ofdumping?
Article 7.2oftheWTO A-DAgreement provides thatprovisional measures maytaketheform
ofaprovisional dutyorasecurity equal totheamount oftheA-Ddutyprovisionally estimated, being
notgreater thantheprovisionally estimated margin ofdumping.
Article 3ofPMNo.926provides foranofferbytheimporter ofaguarantee equivalent to
thetotalvalue oftheobligation andother legal charges, either intheformofadeposit inmoney or
bankguarantee.G/ADP/W/281
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3. Article 3.1(PMNo.926)-Correction forinflation
Question : Would Brazil explain thepractical effect ofArticle 3.1?
Article 7.2oftheWTO A-DAgreement provides thatprovisional measures maypreferably take
theformofasecurity equal totheamount oftheA-Ddutyprovisionally estimated.
Article 3.1ofthePMrequires theguarantee toensure thesamelevelofcorrection forinflation
usedforthepurposes offederal taxes, including interest, starting fromthedateprovisional duties were
imposed.
4. Article 4(PMNo.926)-Undertakings
Questions: (a) Would Brazil explain howanundertaking maybeentered intowiththe
government oftheexporter 'scountry anditsoperation?
(b) When suchanundertaking hasbeenentered into,willindividual exporter be
abletoreject theundertaking without prejudice totheconsideration ofitscase?
(c) Does thelesser dutyruleapply inthecaseofundertaking?
Article 8oftheWTO A-DAgreement provides forthesuspension ortermination ofA-D
proceedings without theimposition ofprovisional duties upon receipt ofsatisfactory voluntary
undertakings fromanyexporter. Theundertakings mayalsobesuggested bytheauthorities ofthe
importing country.
Article 4ofPMNo.926provides thatanundertaking maybeentered intowiththeexporter
orwiththegovernment oftheexporter 'scountry.
Answers 2,3and4
Inrelation toQuestions 2,3and4itshould bestressed thateven though Provisional
Measure 926/95, republished asLawNo.9019/95, makes reference toprovisional measures and
undertakings, thedefinition ofsuchmeasures aswellastheconditions fortheiradoption aredefined
intheregulation oftheAgreements (Decrees 1602/95 and1751/95). Weconsider thatthediscussion
ofthese points should occur during theexamination ofthenewlegislation.
5. Article 12-Administrative process referred toinArticles 1to5
Question: Would theregulation under preparation bring theResolutions intoconformity with
theWTO A-DAgreement? AreResolution provisions inconsistent withtheWTO A-D
Agreement applicable pending amendment?
Article 12provides thattheadministrative process referred toinArticles 1and5shallcomply,
where applicable, withtheprovisions ofResolution 1227 of14May1987, withtheamendments of
Resolution 1582 of17February 1989 which areyettobebrought intoconformity withtheWTO A-D
Agreement.
A. Thenewregulation, ashasalready beenmentioned, hasasitsbasis Decree No.1355, dated
30December 1994, which incorporated theWTO Agreements intotheBrazilian legalsystem,
andisapplicable toinvestigations andrevisions opened withbasis onpetitions presented asG/ADP/W/281
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of31December 1994. TheDecrees which incorporated theTokyo Round codes (Legislative
Decrees No.20and22,dated 5December 1986, promulgated byDecrees No.93941, dated
16January 1987, and93962, dated 22January 1987) andtheirregulations (CPA Resolution
00-1227, dated 14August 1987) willremain inforce during thetransition period, andwill
beapplied onlytotheinvestigations andtherevisions initiated frompetitions presented before
31December 1994, thedateinwhich Decree No.1355 entered intoforce.
KeyIssues intheWTO A-DAgreement which arefound silent intheBrazilian Legislation
6. TheBrazilian legislation seems tobesilent onanumber ofkeyissues onwhich therearespecific
provisions intheWTO A-DAgreement. Notable examples areasfollows:
- determination ofnormal value andexport price (Article 2.1-2.3)
- comparison method (Article 2.4)
- determination ofinjury (Article 3)
- standing requirement forpetitioner (Article 5.4)
- standards fortermination ofacasei.e.deminimis dumping margin, negligible volume
ofdumped imports andnegligible injury (Article 5.8)
- sampling (Article 6.10)
- newcomer review (Article 9.5)
- judicial review (Article 13)
- procedures foron-site verification (Annex I)
- public notice requirements (Article 12)
Question: Would Brazil confirm thatitwould follow strictly therelevant provisions intheWTO
A-DAgreement onthese issues? Would Brazil introduce relevant specific provisions
intoitsnewRegulation?
A. InwhatconcernstheUruguayRoundAgreements,complianceisguaranteedbytheincorporation
totheBrazilian legislation oftheAgreement onImplementation ofArticle VIofGATT 1994
andtheAgreement onSubsidies andCountervailing Measures, which wasmade through Decree
No.1355/94. Inwhatconcerns theregulation ("implementing legislation") ofbothAgreements,
ithasbeenmade through Decree No.1602, dated 23August 1995, relative toanti-dumping
measures, andDecree 1751, dated 19December 1995, relative tocountervailing measures.
Bothregulations arebased onDecree 1355andinclude allaspects referred tointhequestions
except for"judicial review". Theexclusion ofthistopic fromtheregulations isexplained by
thefactthatjudicial review related toanti-dumping andcountervailing actions issecured through
recourse totheBrazilian judiciary system.