By announcing the working group and the future Guide V, CADE follows the international trend of competition authorities to delve deeper into the discussions related to vertical mergers.

For example, authorities from the USA plan to revise the Vertical Mergers Guideline. This guide, which was launched jointly by the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in 2020 and revoked in 2021, addressed the main practices and techniques of applying competition policy in cases involving vertical integrations.

The European Commission has just released a new version of its Guideline on vertical restraints in May of this year. This Guide was launched together with the Vertical Block Exemption Regulation (VRBER) after a long review process, which also involved the launch of an impact assessment and a public consultation to collect subsidies.

O conteúdo Cade announces working group on vertical mergers aparece primeiro em Grinberg Cordovil Advogados.

The Electronic Commerce Work Program, created in 1998, aims to explore the relationship between existing WTO Agreements and electronic commerce. Within the framework of this work program, the WTO Councils for Trade Services, for the Trade of Intellectual Property Goods, and for Intellectual Property Aspects review and reporting on the aspects of the trade of electronic goods, within the scope of the Service Agreements, the GATT 1994, and Intellectual Property, respectively. In addition, the Trade and Development Committee analyzes and reports on the development implications of Electronic Commerce for developing countries, by taking into account economic, financial, and developmental aspects.

At the Trade and Services Council meeting on the 16th, the members had the opportunity to share their own strategies for digital development in the context of this work program. The members reported that the continuation of the discussions within the Work Program is related to the necessity of extending the agreement between members for the non-imposition of import taxes on electronic transmissions (moratorium on e-commerce). This could be discussed at the next Ministerial Conference (the 12th Ministerial Conference, which will be held in June 2022 in Geneva).

Another important topic of discussion was the implementation of a waiver to the WTO Services Agreement, in order to favor the lesser developed countries. Given that one of the objectives of the Services Agreement is to increase the participation of countries classified as less developed in trade services, the waiver would allow preferential treatment of services and the service suppliers from lesser developed countries, favoring the achievement of this goal.

Fifty-one (51) WTO member countries have already notified the guarantee of preferential treatment for less developed countries through means of  the waiver up till now. Expanding the adoption of this waiver is one of the priorities already mentioned in the 12th Ministerial Conference.

Besides these two topics, the Russian delegation also expressed concern about the restrictions that are being imposed on the Russian service sector, as a result of the invasion of Ukraine. The members emphasized that the restrictions are a consequence of the invasion, which is condemned by the majority of the members.

Finally, member countries also mentioned five other concerns, which have already been addressed in previous meetings, involving cyber security, location of service consumers, and others.

O conteúdo Council on Trade and Services of the World Trade Organization aparece primeiro em Grinberg Cordovil Advogados.

Decisions to terminate anti-dumping investigations without a merit analysis by the Brazilian authority are uncommon, yet not unprecedented, whether it be a sunset review or an original. In the last five years,[2] four other investigations have been terminated for the same reasons, besides the recently terminated investigation.

In 2020, an original investigation against Brazilian imports of phthalic anhydride (NCM 2917.35.00), originated from Israel and Russia, was also terminated without a merit analysis. However, in this case, the authority concluded on the termination without a merit analysis, due to the nullity of the administrative act that initiated the investigation. According to Circular SECEX nº 28/2020, the initiation of the investigation was based on incomplete data, which was incapable of informing the authority about the merits of the request to open the investigation. This was a result of the petitioner not presenting information regarding the sales made by the company in their initial petition, referring to the complete period under analysis.

Additionally in 2020, the investigation into the application of bilateral safeguards against the importation of non-wovens for application in personal hygiene products (NCM 5603.11.30, 5603.12.30, 5603.91.20, and 5603.92.20), originated from Israel, was also terminated with no merit analysis, considering the inconsistency of the data presented by the petitioner.[3]

In 2021, two more investigations were terminated without a merit analysis: the original investigation against Brazilian imports of rolled stainless steel 304 (NCMs 7219.32.00, 7219.33.00, 7219.34.00, 7219.35.00, and 7220.20.90) from South Africa and Indonesia[4] and the original anti-dumping investigation against the importation of socks (classified under title 6115 in all of its 24 sub-items, and 6111 in all of its four sub-items), originated from China, Paraguay, and Hong Kong.  In both cases, the investigations were terminated due to the lack of accuracy of the data presented by the domestic industry.[5]

Therefore, the absence of a merit analysis is noteworthy, especially more recently, and it has been justified by the insufficiency or inaccuracy of the information presented.  Furthermore, despite the absence of merit analysis being more common in original or initial investigations, it also occurs in reviews, as in the process recently terminated.

[1] Circular SECEX nº 11/2022.

[2] As a research methodology, all SECEX Circulars published between 01/01/2017 and 02/24/2022 were analyzed.

[3] Circular SECEX nº 63/2020.

[4] Circular SECEX nº 75/2021.

[5] Circular SECEX nº 54/2021.

O conteúdo Investigations terminated without a merit analysis at SDCOM aparece primeiro em Grinberg Cordovil Advogados.

The Ordinance brings updates to the rules of safeguard processes that have already been introduced in dumping and subsidies investigation processes, as well as presenting certain innovations that aim to create predictability and facilitate the representation of foreign parties.

The Ordinance’s provisions focus on the rules of the treatment of confidential information, counting of procedural deadlines, and presentation of information in a foreign language.

Treatment of confidential information: There are no substantial changes, nevertheless, the new Ordinance provides for greater detail, in regards to certain points when compared to Circular Secex n. 59/2001. For example, the listing of information that will not be considered confidential, and the confirmation that confidential numerical information must be presented in the form of index numbers.

Counting deadlines: The Ordinance also applies rules already established for anti-dumping and subsidies procedures to safeguard procedures, like the presumption of receipt notifications within certain deadlines after their issuance by the authority. According to the Ordinance, notification is understood to be a period of up to five days after the date that an official document was sent or transmitted, if the parties are nationals, or a period of up to ten days, if the parties are foreigners. In the case of documents transmitted electronically, the period of notification will be three days.

Information in a foreign language: In accordance with Law no. 12,995/2014, documents prepared in the official languages of the WTO may be incorporated into records. In the case of documents prepared in a foreign language without a public translator in Brazil, translations prepared by the official representation of the exporting origin in Brazil will be accepted. Additionally, the Ordinance brings an innovation, which is allowing translations made by the legal representative of the interested party to be accepted, provided that they are accompanied by official communication attesting to authorship, accuracy, and reliability.

Initial Petition Guide: The Ordinance also establishes, in its Only Attachment, a new and updated guide of minimum information necessary to submit a plea for the application of safeguards, which must be submitted through the Electronic Information System of the Ministry of Economy (SEI/ME).

SECEX Ordinance no. 169/2022 goes into effect on February 1, 2022 and can be accessed in full here.

O conteúdo Publication of Ordinance regulating procedures for the application of Safeguards aparece primeiro em Grinberg Cordovil Advogados.

Among the main changes proposed in the draft of the Ordinance is the update of legislation according to technological advances. Following the implementation of the SISCOMEX Single Portal, it has been confirmed that licensing can take place through the new module (LPCO Importation) or through the old one (SISCOMEX Importation), due to the recognition that not all licensing governmental bodies are able to use the most recent module. The definition of the usage of each module will be up to the licensing governmental body, combined with the compatible customs modality.

Moreover, the Ordinance eliminates the possibility of creating licensing requirements, without a due published act of the competent authority, by only including the product in SISCOMEX. This proposal redeems the current government’s discussion against the changes in administrative treatment, which allowed the establishment of a minimum prices policy for the importation of certain products – a practice deemed not in line with WTO rules.

Also, considering the provisions of the Agreement on Trade Facilitation of the World Trade Organization, the draft simplifies the licensing modalities, so that imports are only subject to automatic licensing or non-automatic licensing (eliminating the current modality of imports exempt from licensing).

The draft of the Ordinance proposal was made available by SECEX on its website, and any interested parties from the private sector can submit their comments and suggestions until March 14, 2022.

O conteúdo Public Consultation for Draft of New Law on Import Licensing aparece primeiro em Grinberg Cordovil Advogados.

Below, we highlight some of the main changes brought forth by the new Decree:

• Introduction of additional procedures: specific rules were established for the conduct of particular procedures related to the countervailing measures already in force: anticircumvention review, refund review, scope review, and redetermination.  The possibility of conducting a “so-called” accelerated review was also regulated; this review will allow the determination of individual subsidy amounts for foreign producers or exporters that have not been individually investigated on the previous investigation/sunset review.

• Greater clarification on the definition of elements: the Decree brings a non-exhaustive list of the elements that will be considered for the analysis of the occurrence of injury, threat of injury, and causal link, among others. Additionally, in relation to the definition of domestic industry, criteria were defined that make it easier to identify the existence or not of a relationship between the Brazilian producer and the foreign producer under investigation.

• Greater procedural and deadline clarity: while the old decree granted greater discretion for the definition of applicable deadlines, the new regulation establishes and changes the deadlines for various points of investigations and reviews, such as those applicable for the supplementation of the initial claim, manifestation of foreign governments, response to questionnaires, and for on-the-spot verifications.  Moreover, the new Decree also determines that the period of investigation of material injury will be 60 months (previously established as never less than three years).

• Qualification of the domestic industry: the new Decree brings new rules for the qualification of the domestic industry to subsidy investigations; these are similar to those adopted by the Antidumping Decree, yet also establish rules for the case of fragmented industry.

• End of the final hearing: according to the new Decree, the essential facts under trial will now be disclosed by means of a technical note and no longer through a hearing.

• Statistical monitoring of imports: the new Decree further provides that the imported product will be subject to detailed statistical monitoring, in order to ensure the effectiveness of the countervailing measures in place.

The new Decree will come into effect on February 16, 2022, and it will only apply to investigations and reviews whose petitions have been filed as of this date forward.

The complete Portuguese version of the Decree can be accessed by clicking here.

O conteúdo New Decree regulating subsidy investigations and the application of countervailing measures published aparece primeiro em Grinberg Cordovil Advogados.

These measures aim to strengthen the fight against the practice of disguised price increases. This practice consists in the reduction of the weight or volume of the product by the supplier, without a proportional reduction of price, frequently without the consumer being aware of the changes.

The duty to inform the consumer regarding the characteristics, quality, quantity, composition, and other data of the product in a clear, precise, and ostensive manner in Portuguese is established in art. 31 of the Brazilian Consumer Defense Code (“CDC” – its acronym in Portuguese). As the practice of concealing or making the quantitative changes in products unclear was becoming frequent, the Ministry of Justice started to regulate the requirement of displaying information about changes in quantities of units or net weight in each package on product labels for a certain period of time, thus ensuring that the consumer is informed of the changes.

Before this point, the informative rules were given by the Ministry of Justice’s Ordinance No. 81/2002, which brought forth simpler obligations for suppliers, requiring the packaging to indicate the change for a period of only three months.  After the new ordinance goes into effect,  Ordinance No. 81/2002 will be revoked, within 180 days from its publication.

The new Ordinance, No. 392/2021, is more detailed concerning how the communication should be made and the places that the information should be available. It also extends the period in which the ad must be posted and details the extension of its application to products sold in e-commerce.

Below, we summarize the main obligations instituted by Ordinance No. 392/2021:

1. Quantitative change information must be displayed for a minimum of six months: the first and most important change brought forth by Ordinance No. 392/2021 was the extension of the period – from three to six months – for displaying information regarding quantitative changes on the packaging. According to the Ministry of Justice, the “objective of the change is to minimize the risk of the product being offered to the consumer in two versions simultaneously – one of them without the proper declaration.

2. Content of the quantitative alteration information to be included on the product label remains the same: as in the previous Ordinance, No. 392/2021, it determines that the supplier must state the quantitative alteration on the label of the product offered for sale:

i) the change in the quantity of the product;

ii) the quantity that was in the package before the change;

iii) the quantity after the change; and

iv) the quantity of decrease or increase in absolute and percentage terms.

3. Definition of the location where the information must be displayed on the packaging and specific rules for artwork: the new Ordinance makes the rules clearer on how the information must be displayed on the packaging:

i) Quantitative change information must be placed on a highly visible location of the modified packaging label, being clearly legible and prohibited from being concealed or difficult to see, such as in places where the packaging seals or twists.

ii) The characters must follow the following formatting requirements:

• Uppercase wording;
• bold;
• contrasting color from the background of the label;
• minimum height of 2mm, except for packages with a main panel area equal to or less than 100cm², whose minimum character height is then 1mm.

iii) In the case of not having enough space, the supplier may only inform the occurrence of the change in the product’s quantity. In this case, the complete information can appear on the secondary packaging, if there is any.

iv) Detailed information about the change must also be made available by other means to ensure that the consumer is properly informed. The Ordinance suggests information via SAC or QR codes that refer to the information made available virtually, as an example, among other means and technologies.

Failure to comply with the Ordinance subjects the supplier to the penalties provided in the CDC and Decree No. 2.181/1997, which regulate the application of these penalties, such as fines, seizure of products, manufacturing bans, revocation of the establishment’s license or activities, amongst others.

It is important to emphasize that the consumer defense agencies are aware of these changes. Recently, the Department of Consumer Protection and Defense of the National Consumer Secretariat (“DPDC/Senacon”, its acronym in Portuguese) has opened preliminary investigations to verify evidence of non-compliance with these regulations.

The fines for violations of consumer protection rules are high, and at least until 2013 (i.e.: in a little over a decade of the old ordinance), the Ministry of Justice had already applied approximately 94 fines for noncompliance, totaling about R$ 35 million in punishments to suppliers, at that time. The amount of the fine is estimated by the economic size of the company, the seriousness of the infraction, and the benefit, according to the CDC.

It is worth highlighting that the Superior Court of Justice also expressed itself on this subject in a Special Appeal in an important case in 2013,[1] recognizing the  violation as a hypothesis of objective liability of the supplier (lato sensu) for inaccurate product quantity and violation of the consumer’s right to this information. On another occasion, in 2015, it also confirmed the decision of DPDC, in which it understood that the information about the change in quantity available on the packaging of a product, although present, was not complete, accurate, and clear, during an administrative proceeding. According to the Superior Court of Justice, the way the information was provided was “extremely discreet” and did not meet the duty of ostentatious information.

The Ordinance will take effect on March 29, 2022 (180 days after publication).

[1] Superior Court of Justice. Special Appeal No. 1.364.915- MG (2013/0021637-0), Rel. Min. Humberto Martins, DJe 24/05/2013.

O conteúdo The Ministry of Justice published Ordinance No. 392/2021, presenting new rules on informing quantitative changes of packaged products, including for e-commerce aparece primeiro em Grinberg Cordovil Advogados.

The Guide mentions the most common strategies, such as coverage and suppression of proposals, market division, rotation between companies in the position of bids’ winners, blocking in on-site biddings and subcontracting.

The Publication covers markets’ characteristics that can contribute to cartels, such as the existence of few players, goods and services with little differentiation, the existence of barriers to entry and of contractual ties or family relationships between competitors’ companies. Also addresses aspects of the very nature of the public bidding procedures that facilitate collusion, such as transparency, which ends up revealing information, like prices charged by competitors value and content of the proposals. Another element is the predictability of public purchases, since, often, the bidding entity has a constant plan of demands, which facilitates an eventual division of the market between competing companies.

Elements and characteristics indicating the existence of collusion could be identified in the proposal phases, in the behavior of companies during the bidding process, and even in the results of the bids. Among them, proposals from different companies with similar formatting or wording; identical authentication or postage stamps; identical typing or calculation errors; proposals sent from the same e-mail or IP address, or from the same addresses and with the same contact details or representative; or even proposals that have the same prices, but different from the reference value.

In the behavior of companies, similar prices in percentual or absolute terms proposed by different companies; uniform increase in competitors’ prices, without a corresponding increase in costs; significant and unjustified variation in the price of proposals from the same company, in different bids; unjustified withdrawal of suppliers from submitting documents or proposals; presentation of proposals that would hardly be able to win; subcontracting bidders who lost bids by the winning bidders; hiring the same consulting or accounting firm, by competing companies, to assist in the preparation of proposals; references to industry guidelines such as suggested prices or price lists prepared by unions or associations; companies that complain about new entrants.

Concerning bids’ results, a small group of companies alternates as winners in the bids of the same public entity, or even the same company wins the bids of a certain public entity; the winning proposals present a geographic distribution pattern; sudden and unjustified decrease in the number of bidders; and sudden price alignment between competitors.

Among the recommendations, it is worth highlighting giving preference to the disclosure of reference values ​​after the end of the competitive phase of the public bidding process, avoiding creating opportunities for potential bidders to meet, creating incentives for new companies to participate in the competitions, avoiding including qualification requirements in the notice unnecessary and restrictive, carefully use of qualification certificates that require participation in previous public bids, control and monitor subcontracting, and reduce costs for preparing proposals and participating in public bids.

The investigation of cartel cases involving public bids by Cade has become increasingly common and involves the most diverse markets, such as contracting of public works and medical orthotics and prostheses. Companies convicted of this type of practice may face various cumulative sanctions, such as the payment of high fines and the impossibility of contracting with the public administration.

The Guide is available here.

O conteúdo Guide on cartels in public bidding aparece primeiro em Grinberg Cordovil Advogados.

In general, the analyses show that the agreements had a positive impact on all macroeconomic variables, in addition to bringing potential beneficial effects to final consumer prices, which have shown a downward trend.

The negotiated agreements are embedded into a larger context of promoting the international insertion of the Brazilian economy. In this context, the studies also analyzed the relationship between Brazil and Indonesia and Vietnam, concluding that both countries are important trade partners for Brazil.

The full studies can be accessed on the SECEX website (available here in Portuguese).

In order to ensure greater transparency in Brazilian trade negotiations, the Brazilian Government opened Public Consultations, in addition to the impact assessment studies, which will allow the society to express itself regarding any interests and concerns related to the execution of the agreements. Interested parties may submit comments until July 19, 2021. Public Consultations can be accessed on the SECEX website (available here).

O conteúdo The impact of the Free Trade Agreements negotiated by Mercosur with Indonesia and Vietnam aparece primeiro em Grinberg Cordovil Advogados.

According to the Ministry of the Economy, the Guide was based on the agreements signed by Brazil and the Brazilian legislation that is currently in force. It does not intend to exhaust the topic, but rather to make information related to antidumping procedures in Brazil more accessible.

The consolidated version of the Guide clarifies fundamental points, concerning anti-dumping investigation procedures and sunset reviews. It adopted some suggestions from those collected during the public consultation procedure. The Guide clarifies issues related to the qualification of legal representatives, a casual damage analysis, the calculation of the dumping margin, the selection of foreign producers or exporters, the difference between the analyses carried out by SDCOM in the hypotheses of continuation and the resumption of dumping, among others. It also includes clarifications regarding special procedures adopted by SDCOM during the COVID-19 pandemic and about the use of the DECOM Digital system.

The consolidated version of this Guide is now available on the Ministry of the Economy’s page and can be accessed through the following link.

O conteúdo Consolidated Guide to Antidumping Investigations aparece primeiro em Grinberg Cordovil Advogados.