On February 10, 2010, the President of Brazil, Luiz Inácio Lula da Silva, issued Executive Order 482, which provides for “measures to suspend concessions or other obligations of the country related to intellectual property rights and others, in cases of noncompliance with multilateral obligations by a Member of the World Trade Organization – WTO.”
The Executive Order concerns a dispute that began in 2002 between Brazil and the United States before the WTO over subsidies the US Government grants to its cotton industry. (See previous Client Update, “Brazil Cotton – Important WTO Decision Makes Trade Retaliation Operational,” September 2009.) The WTO ruled in favor of Brazil and allowed it to impose measures to compensate for the economic damages caused by the subsidies.
The sanctions established by the Executive Order include limitation and suspension of intellectual property rights; alteration of measures to protect, apply for and maintain them; a temporary block of royalties remittance; and taxation. Next month, the government will define how the compensation measures will apply.
Executive Order 482 comes into force as of the date it was published, February 11, 2010.