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SECEX opens request for comments about Decree of safeguards

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12/20/2017 12:00 AM Demarest News

SECEX opens request for comments about Decree of safeguards

Today, the Secretariat of Foreign Trade (SECEX) initiated a public request for comments so that parties present, within 30 days, submissions about the Decree that regulates the administrative procedures related to the application of safeguard measures, in view of the provisions established in the World Trade Organization (WTO) Agreement on Safeguards.

The safeguard is a trade remedy instrument that allows the imposition of an additional duty or a quantitative restriction on the imports of a certain product, regardless the origin, once it is proven the domestic industry is suffering injury because of the surge of imports.

Currently, the procedure is regulated by the Decree 1488, of May 11th, 1995.

Among the proposed changes by the new Decree draft, we highlight:

  • The possibility of decisions based on public interests, granting the  right of defense to the domestic industry;
  • Standards for the injury analysis, such as the actual decline or sales potential, profits, production and productive capacity, market share, productivity, price analysis and negative effects on jobs;
  • Standards for the analysis of causal link that includes other factors, such as import volume, demand contraction, competition between national and foreign producers, technological progress, export performance and captive consumption;
  • Setting criteria for domestic industry share and the possibility of loosening the requirements in the case of fragmented industry;
  • Determination of the deadline of 12 months with possibility of extension, in exceptional cases, to 18 months.
  • Application of definitive measures that can vary between: ad valorem, or specific rate, or, of the combination of both; quantitative restrictions; partial or full suspension of other obligations undertaken by Brazil in the scope of GATT 94; or combination of the previous hypotheses; and
  • Establishment of the scope review, in order to determine if a product is actually subject to a safeguard measure.

The concerned parties can use this opportunity to expose to the Brazilian government their views about the safeguard instrument in Brazil.

Demarest Advogados

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