New Decree regulating subsidy investigations and the application of countervailing measures published


The Brazilian government published Decree No. 10.839/2021 last week. This Decree brings forth the new regulations on subsidy investigations and the imposition of countervailing measures. The new Decree had already been submitted to public consultation in June of this year. It seeks to update the rules to the WTO dispute settlement body’s guidelines and the practice of the Brazilian authorities as developed over the years.

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.