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Greater Brazil Plan

The Ministry of Development, Industry and Foreign Trade (MDIC) launched this month the Plan called the “Greater Brazil Plan”, scheduled for the period between 2011 and 2014. The goal of this plan when it comes to Foreign Commerce/International Trade is to increase the competitiveness of the domestic industry, through the diversification of exports (products and markets), and to promote the internationalization of the Brazilian companies.

The measures for the development of the Foreign Commerce/International Trade targets were divided into four main groups, namely: (i) Unburdening of Exports; (ii) Trade Remedies; (iii) Exports Financing and Guarantee; and (iv) Commercial Promotion.

Exports have just been incentivized by the so-called REINTEGRA, the Special Regime for Tax Values Reintegration for the Exporting Companies, regulated by MP 540, published on August 2nd, 2011. The REINTEGRA allows a producer and exporter of manufactured goods to claim a tax reimbursement for taxes paid in cascade during the production chain and not relived as VAT credits.

The expansion of the reimbursement of VAT credits to the exporters will also contribute to the exports competitiveness. This system already exists, but it will be done in a more quickly manner, by means of the automatic processing of orders, and payment within 60 days for companies that already have a electronic book keeping, which is mandatory since March 2012.

With regard to Trade Remedies, some measures of protection will be either adopted or strengthened.

In the existing anti-dumping, safeguard and countervailing duties systems, the deadlines for the investigations and for the imposition of preliminary duties will be reduced.

Also, the Government will counter (i) circumvention, with the extension of antidumping or countervailing duties to imports whose goal is to reduce the effectiveness of ongoing measures; (ii) false certificates of origin, by rejecting the import license; (iii) undercutting prices, with inspection strengthening; and (iv) violation of intellectual property and compulsory certification, by a cooperation Agreement between the Ministry of Justice and the Ministry of Development, Industry and Foreign Trade.

In addition, the Government will support a proposal for the creation of a mechanism to allow the increase of Import Duties under the MERCOSUL; the requirements for compulsory certification will be increased; the so called ex-tarifário (temporary reduction of import duties for capital goods, IT and telecommunication goods) for used machinery and equipment will be suspended; and the number of Trade Remedies investigators will quadruple.

The government also ensured the creation by the Bank of Brazil of a private fund named Fund of Export Financing MPME - Proex Financing, for companies with revenues of up to $ 60 million reais.

The Federal Government will be the main shareholder, as it will make the initial investment, although other institutions may join the fund in the future. Another advantage of MPME - Proex Financing will be the export credit insurance/FGE, a computerized system for the online issuance of policies of the Bank of Brazil or BNDES.

Another fund will be created – the FGE Guarantee Fund to the Exports, with a R$50 million per year limit for exports of manufactured goods. Payment of the loan opens balance for new transactions.

The commercial promotion will start with the “Ata Carnet” program, a system that will facilitate the movement of goods under the temporary admission regime without the levy of taxes, and also by means of the National Strategy of Exports, a measure to promote priority products/services in selected markets and the adoption of the Foreign Trades Maps by State.

The “Greater Brazil Plan” was not regulated yet, but according to the Minister Fernando Pimentel, it will be announced later this year some complementary measures, and by the end of the year a Provisional Presidential Decree will be issued and then voted into law.

Gilberto Ayres Moreira, Mariana Belisário dos Santos and Florence von Urban Coscarelli Antonini

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