Change in method for applying anti-dumping duties
New procedure for opening up anti-dumping investigations
Amendment to anti-dumping act
Improvement of anti-circumvention legislation

In August 2011 the government presented its new industrial, technological and foreign trade policy in the Plano Brasil Maior. The majority of the measures established by the plan aim to intensify trade defence policies. The following measures have recently been adopted by the authorities, in regard to the competitiveness of imported products.

Change in method of applying anti-dumping duties

In the past, Brazil opted to apply anti-dumping duties only to the extent sufficient to compensate exclusively for the damage suffered by the domestic industry (ie, the lesser duty). The Secretariat of Foreign Trade (SECEX) will now give preference to the adoption of the full margin, making the duties applied in anti-dumping investigations harsher. This change was the subject of discussion during the meeting of the Chamber of Foreign Trade (CAMEX) held on May 17 2011.

New procedure for opening anti-dumping investigations

On October 13 2011 SECEX published Administrative Rule 35/11, which altered the standard form for anti-dumping investigation applications by domestic industry.

The new form advances the request for information that was previously provided by the domestic industry only after the initiation of the investigation. In future investigations, the petitioner of an investigation will be required to gather all necessary information and data before the authority's analysis of dumping, injury and causal link, and therefore before initiating the anti-dumping process. With the modification, the investigators intend to complete the investigation in a shorter period than the 18 months prescribed by law.

With the prior supply of all information from the domestic industry and the market of the investigated product, the authorities will no longer have to alter the period of analysis of injury or to update the investigation data. Therefore, after the investigation is initiated and on the basis of the data offered by the petitioner before the initiation, the SECEX Trade Defence Department will be able to arrange on-the-spot verifications more expeditiously, with a view to making preliminary determinations within 120 days, applying, in cases of positive determination, provisional anti-dumping duties. This new format aims to enable anti-dumping investigations to be concluded within the maximum period of 10 months.

The new standard form for the initiation of investigations will become effective on January 1 2012.

Amendment to anti-dumping act

On August 25 2011 SECEX published a public consultation in the Official Gazette with the aim of receiving suggestions for the amendment of Decree 1602/95 (the act that regulates the anti-dumping investigation procedure in Brazil). This is another government initiative to reformulate measures that combat unfair trade practices. The implementation of these changes in the current political climate may result in stricter regulations that offer greater protection to domestic industry.

Improvement of anti-circumvention legislation

On August 17 2010 CAMEX introduced Resolution 63/10, disciplining the extension of anti-dumping and countervailing measures. Article 2(IV) of the resolution provided that anti-circumvention measures could be applied to "any other practice that frustrates the effectiveness of the application of the trade defence measures in force". On May 5 2011 CAMEX introduced Resolution 25/11, which rightly revoked the item, as it afforded a very broad scope to the anti-circumvention legislation, giving room for discretionary interpretation of the rule by the investigating authorities.

Since the amendment of the legislation in May 2011, two anti-circumvention investigations have been opened in Brazil. On May 10 2011 SECEX Circular 20/11 was published, detailing the initiation of an investigation to ascertain a suspected circumvention on imports of blankets from Paraguay and Uruguay and parts and components from China, in a possible attempt to evade the anti-dumping duty in force against blankets imported from China. On October 4 2011 SECEX Circular 48/11 was published, detailing the opening of an investigation to ascertain suspected circumvention on imports of footwear from Indonesia and Vietnam and parts and components (soles and uppers) from China, in a possible suspected evasion of the anti-dumping duty in force against imports of footwear from China.

The new trade defence regime and the improvement of the existing legislation reflect a desire from the domestic industry for the government to take stronger action when dealing with trade remedies.

For further information on this topic please contact Marina Amaral Egydio de Carvalho or José Eduardo Skibelski Edelstein at Barretto Ferreira, Kujawski e Brancher - Sociedade de Advogados (BKBG) by telephone (+55 11 3897 0300), fax (+55 11 3897 0330) or email ([email protected] or [email protected]).