Brazil-Export Financing Programme for Aircraft
Report of the Panel
I. INTRODUCTION
1.1 On 18 June 1996, Canada requested consultations
with Brazil under Article 4 of the Agreement on Subsidies and Countervailing Measures
("SCM Agreement") and Article 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU"), regarding "certain export
subsidies granted under the Brazilian Programa de Financiamento as Exportações
("PROEX") to foreign purchasers of Brazil’s EMBRAER aircraft." 1
1.2 Canada and Brazil held consultations on 22 and 25
July 1996 in Geneva, but failed to reach a mutually satisfactory solution. On 16 September
1996, Canada requested the establishment of a panel under Articles 4 and 30 of the SCM
Agreement and Articles 4 and 6 of the DSU 2.
In a communication dated 23 September 1996 and addressed to the Dispute Settlement Body
("DSB"), Brazil reserved its rights to invoke Article 27 of the SCM Agreement
before any panel that was established to examine the matter at issue, and requested that
the terms of reference proposed by Canada explicitly recognize Brazil's right to do so.
1.3 On 3 October 1996, Canada again requested the
establishment of a panel 3. That
request was subsequently withdrawn to allow the parties to seek a mutually satisfactory
solution to the problem.
1.4 On 10 July 1998, Canada again requested the
establishment of a panel under Article 4 of the SCM Agreement.
1.5 At its meeting on 23 July 1998, the Dispute
Settlement Body ("DSB") established a Panel in accordance with Article 4 of the
SCM Agreement with the following standard terms of reference:
"To examine, in the light of the relevant provisions of the SCM
Agreement, the matter referred to the DSB by Canada in document WT/DS46/5 and to make such
findings as will assist the DSB in making the recommendations or in giving the rulings
provided for in that agreement."4
1.6 The European Communities ("EC") and the
United States ("US") reserved their rights to participate in the panel
proceedings as third parties.5
1.7 On 16 October 1998, Canada requested the
Director-General of the WTO to determine the composition of the Panel, pursuant to Article
8.7 of the DSU. On 22 October 1998, the Director-General composed the Panel as follows:
Chairman: Mr. Dariusz Rosati
Members: Professor Akio Shimizu
Mr. Kajit Sukhum
1.8 The Panel met with the parties on 23/24 November
1998 and 14 December 1998. It met with the third parties on 24 November 1998.
1.9 The Panel submitted its interim report to the
parties on 17 February 1999. On 25 February 1999 both parties submitted written requests
for the Panel to review precise aspects of the interim report, and on 3 March 1999 each
party submitted written comments regarding the other's request. Neither party requested a
further meeting with the Panel. The Panel submitted its final report to the parties on
12 March 1999.
1.10 Given the nature of the dispute, and with the
agreement of the parties, special procedures were created by the Panel for handling
business confidential information. The special procedures are found in Annex 1 to this
report. Under paragraph VII:2 of these procedures, "[t]he Panel shall not disclose
Business Confidential Information in its interim and final reports, but may make
statements of conclusion drawn from such information." Thus, where Business
Confidential Information had been submitted by a party in support of a claim, it is
mentioned in the report, but details of such information are not disclosed.
II. FACTUAL ASPECTS
2.1 This dispute concerns payments under the interest
rate equalization component of the Programa de Financiamento as Exportações
("PROEX"), the export financing support programme of Brazil, on exports of
Brazilian regional aircraft. PROEX was created by the Government of Brazil on 1 June 1991
by Law No. 8187/91 and is currently being maintained by provisional measures issued by the
Brazilian government on a monthly basis 6.
PROEX provides export credits to Brazilian exporters either through direct financing or
interest rate equalization payments 7.
2.2 With direct financing, Brazil lends a portion of
the funds required for the transaction. With interest equalization, underlying legal
instruments provide that the "National Treasury grant[s] to the financing party an
equalization payment to cover, at most, the difference between the interest charges
contracted with the buyer and the cost to the financing party of raising the required
funds 8."
2.3 The financing terms for which interest rate
equalization payments are made are set by Ministerial Decrees. The terms, determined by
the product to be exported, vary normally from one year to ten years. In the case of
regional aircraft, however, this term has been extended to 15 years. The length of the
financing term, in turn, determines the spread to be equalised: the payment ranges from 2
percentage points per annum, up to 3.8 percentage points per annum for a term of nine
years or more9. The spread is fixed
and does not vary depending on the lender's actual cost of funds 10.
2.4 PROEX is administered by the Comitê de Crédito
as Exportações ("Committee"), a 13-agency group, with the Ministry of Finance
serving as its executive. Day-to-day operations of PROEX are conducted by the Banco do
Brasil. For applications for financing transactions not exceeding US$5 million, whose
terms otherwise fall within PROEX guidelines, Banco do Brasil has pre-approved authority
to provide PROEX support without requesting the approval of the Committee. All other
applications are referred to the Committee, which has the authority to waive some of the
published PROEX guidelines. In the case of regional jet aircraft, the most frequent waiver
has been to extend the length of the financing term from ten to fifteen years.
2.5 PROEX involvement in aircraft financing
transactions begins when the manufacturer requests a letter of approval from the Committee
prior to conclusion of a formal agreement with the buyer. This request sets forth the
terms and conditions of the proposed transaction. If the Committee approves, it issues a
letter of commitment to the manufacturer. This letter commits PROEX to providing support
as specified for the transaction provided that the contract is entered into according to
the terms and conditions contained in the request for approval, and provided that it is
entered into within a specified period of time, usually 90 days. If a contract is not
entered into within the specified time, the commitment contained in the letter of approval
expires.
2.6 PROEX interest equalization payments, pursuant to
the commitment, begin after the aircraft is exported and paid for by the purchaser. PROEX
payments are made to the lending financial institution in the form of non-interest bearing
National Treasury Bonds (Notas do Tesouro Nacional – Série I) referred to as NTN-I
bonds. These are denominated in Brazilian Reais indexed to the United States dollar. The
bonds are issued by the Brazilian National Treasury to its agent bank, Banco do Brasil,
which then passes them on to the lending banks financing the transaction. The bonds are
issued in the name of the lending bank which can decide to redeem them on a semi-annual
basis for the duration of the financing or discount them for a lump sum in the market.
PROEX resembles a series of zero coupon bonds which mature at six months intervals over
the course of the financing period. The bonds can only be redeemed in Brazil and only in
Brazilian currency at the exchange rate prevailing at the time of payment. If the lending
bank is outside of Brazil, it may appoint a Brazilian bank as its agent to receive the
semi-annual payments on its behalf.
III. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES
A. Findings of fact
3.1 Canada requests the Panel to make the
following findings of fact:
(a) That PROEX interest equalization payments are made
in the form of instalments or lump sums.
(b) That PROEX interest equalization payments have
been made in respect of the following transactions: (a) Brasilia 120 model
(Skywest, Great Lakes Airlines; Rio Sul and other unspecified transactions); (b) ERJ-145
model (American Eagle; British Regional; Portugalia; Regional; Rio Sul; Siv Am;
Wexford; Continental Express ("COEX"); Trans States; Luxair; City Airlines; and
other unspecified transactions).
(c) That the level of PROEX and BEFIEX expenditures
has increased since 1 January 1995 and, as a result, the level of Brazilian export
subsidies has increased since that date.
(d) That PROEX and BEFIEX, and therefore Brazilian
export subsidies, are not being phased out by 31 December 2002.
B. Findings of law
3.2 Canada requests the Panel to make the
following findings of law:
(a) That, as admitted by Brazil, PROEX interest
equalization payments are export subsidies within the meaning of Article 3 of the SCM
Agreement.
(b) That, more specifically, but without foregoing the
generality of the previous finding, PROEX interest equalization payments made in respect
of the following transactions are prohibited export subsidies: (a) Brasilia 120 model (
Skywest, Great Lakes Airlines; Rio Sul and other unspecified transactions); (b) ERJ-145
model (American Eagle; British Regional; Portugalia; Regional; Rio Sul; Siv Am;
Wexford; Continental Express ("COEX"); Trans States; Luxair; City Airlines; and
other unspecified transactions).
(c) That the first paragraph of Item (k) of Annex 1 of
the SCM Agreement does not provide an exception to Article 3.
(d) That, even if the first paragraph of Item (k) does
provide, through an a contrario inference such an exception, PROEX interest equalization
payments are not payments within the meaning of Item (k), or do provide a material
advantage in the field of export credit terms, and as such do not fall within the
exception.
(e) That Brazil does not meet the conditions set out
in Article 27.4 and that, as a result, it does not benefit from the eight year grace
period from the general prohibition on export subsidies in Article 3, provided for
developing countries under Article 27.2(b).
C. Recommendations
3.3 In its first written submission to the Panel, Canada
requested the Panel to make the following recommendations:
(a) "Brazil shall not grant new subsidies under
PROEX, including subsidies promised or committed, but not yet granted, on regional
aircraft not yet delivered";
(b) "Brazil shall no longer maintain existing
subsidies under PROEX and must terminate such subsidies no later than three months after
the adoption of the Report of the Panel by the DSB"; and
(c) "Brazil shall withdraw without delay PROEX
subsidies granted pursuant to transactions entered into following the composition of the
Panel on October 22, 1998."
In its second oral submission to the Panel, Canada further
requested the Panel to make the following recommendations:
(d) That, if the Panel finds that PROEX interest
equalization export subsidies are granted on an instalment basis at the time of the
periodic payment of the subsidies, the Panel recommend that such payments be terminated no
later than 3 months after the date of the adoption of the Panel’s Report by the
Dispute Settlement Body, in respect of aircraft that have already been delivered or in
respect of any aircraft delivered after that date.
(e) That, if the Panel finds that PROEX subsidies are
granted at the time of the delivery of the aircraft, the Panel recommend that no such
subsidies be granted in respect of any aircraft delivered after the date of the adoption
of the Panel’s Report by the DSB.
(f) That the Panel recommend that any PROEX interest
equalization export subsidies paid or granted in respect of any new orders of aircraft
between the date of the composition of the Panel on October 22, 1998 and the date that the
Panel Report is adopted by the DSB be withdrawn as prohibited export subsidies intended to
circumvent the Panel’s recommendations.
3.4 Brazil requests the Panel to find that
"PROEX is not inconsistent with Brazil's obligations under Article 3 of the Agreement
on Subsidies and Countervailing Measures."
IV. MAIN ARGUMENTS OF THE PARTIES
A.Preliminary Objection
4.1 Brazil raises a preliminary objection to
the Panel's consideration of certain measures listed in Canada's request for the
establishment of a Panel on the ground that the parties never consulted about these
measures. The measures with regard to which Brazil raises this objection are Provisional
Measures 1700/15 and 1629/13; Decree No. 2414 of 12/9/97; Resolutions of the National
Monetary Council Nos. 2490/98, 2452/97, 2381/97 and 2380/97; and MICT Orders 28/98, 23/98,
7/98, 121/97, 83/97, 53/97, 34/97 and 33/97.
4.2 Brazil submits that the parties consulted in
Geneva on 22 and 25 July 1996 and on 4 November 1996, and in Brasilia on 21-22 November
1996. However, since each of the identified measures was either enacted or implemented
after consultations were held, they could not have been the subject of consultations.
Brazil further argues that although the parties met in Rio de Janeiro on 8-9 June 1998 and
in Washington D.C. on 25-26 June 1998, they did not consult on the identified measures. In
any case, Provisional Measure 1700/15 was enacted on 30 June 1998 and, as such, post-dated
even the Washington meeting.
4.3 Brazil argues that it is the absolute right of
every Member to consult about a challenged measure before being required to defend it
before a Panel. Measures which were not consulted upon by the parties could not properly
be within the terms of reference of the Panel and as such should not be examined by the
Panel. If Members were to have the right to ask for the establishment of a panel without
having consulted about the measures, it would undermine the importance of consultations in
the WTO dispute settlement mechanism and undermine the practical significance of Article 4
of the DSU.
4.4 In response to a question from the panel, 11 Brazil stated that its preliminary
objection is grounded in both the provisions of the DSU and the SCM Agreement. Brazil
submitted that in Japan – Measures Affecting Agricultural Products 12, the parties disagreed as to whether
consultations occurred regarding the measure at issue. Japan argued that they had not
consulted, while the United States asserted that the parties in fact had consulted with
regard to the measure. 13
4.5 Brazil argues that this dispute is very different.
Brazil submits that in this dispute both Brazil and Canada agree that consultations did
not encompass the measures in issue. The assertion to the contrary in the request for the
establishment of a panel was an obvious and admitted error. Consequently, unlike Japan
– Agricultural Products, there is no question that consultations regarding these
measures did not take place.14
4.6 Brazil asserts that in Japan – Agricultural
Products, as well as in European Communities -Bananas15 , which is cited in that decision, the Panel was faced with an
inability to resolve a factual disagreement between the parties. Brazil submits that those
Panels had no way of determining what, in fact, had taken place at consultations. In these
circumstances, both Panels reasonably relied upon the text of the request for the
establishment of a panel which was incorporated in the terms of reference16. This Panel is not faced with the need
to resolve a factual dispute between the Parties concerning the subject matter of
consultations. It is faced, however, with the responsibility, stated by the Appellate Body
in Bananas, "to examine the request for the establishment of the panel very carefully
to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU17 ."
4.7 Brazil submits that pursuant to Article 30 of the
SCM Agreement, Article 6.2 of the DSU is applicable to the request for the establishment
of a panel in this proceeding. Article 6.2 of the DSU specifies that panel requests shall
indicate whether consultations were held and identify the specific measures at issue. Both
the letter and the spirit of Article 6.2 of the DSU require that consultations with regard
to the specific measures at issue must have taken place in order for a measure to be
properly within the terms of reference18.
Brazil further submits that Article 4 of the DSU requires that parties consult regarding a
matter before resorting to a panel. Article 4.4 of the DSU provides that if a Member does
not respond within a specific period of time "after the date of receipt of the
request, then the Member that requested the holding of consultations may proceed directly
to request the establishment of a panel." (emphasis in original.) Likewise, Article
4.7 provides that "If the consultations fail to settle a dispute … the
complaining party may request the establishment of a panel." (emphasis in original).
Finally, Article 6.2 requires that when requesting the establishment of a panel the
complaining party must "indicate whether consultations were held19."
4.8 Canada, which notes that the subject of its
challenge was "export subsidies paid under PROEX…on all exported Brazilian
regional aircraft, in whatever amount and regardless of the specific legislative
instrument that underlies the programme," accepts that the specific legislative
instruments which Brazil wants to exclude from consideration by the Panel were not
consulted about by the parties. In its response to a question from the Panel whether it
would regard its meetings with Brazil in Rio de Janeiro and Washington D. C. in the first
half of 1998 as consultations within the meaning of Article 4 of the DSU, Canada stated
that it "agrees with Brazil that the meetings…were not consultations within the
meaning of Article 4.4 of the DSU. The specific legislative instruments listed in Canada's
request for a Panel were not discussed during these negotiations, as these negotiations
were aimed at bringing the subsidies themselves under some form of discipline."
4.9 Canada urges the Panel, however, to reject
Brazil's argument that the contested measures are not properly within its terms of
reference on two main grounds.
4.10 First, Canada argues that Brazil's request
has no basis in the DSU, the SCM Agreement or WTO practice. The "matter"
referred to in its request for the establishment of a panel in accordance with Article 4.4
of the SCM Agreement was "the payment of export subsidies…under PROEX," and
this is the "same prohibited subsidy" on which the parties had consulted. The
legislative changes enacted in the period between the two requests did not fundamentally
change the character of the "prohibited subsidy" subject to the consultations.
4.11 Canada notes that the measures listed in Brazil's
preliminary objection are the specific legislative and regulatory instruments underlying
the prohibited subsidies with respect to which Canada requested consultations. These
specific measures were identified in Canada's request for establishment of a panel in
accordance with Article 4.4 of the SCM Agreement and Article 6.2 of the DSU. In Canada's
view, the question at issue is the nature and strength of the connection that must exist
between the "prohibited subsidy" in SCM Agreement Article 4.1 with respect to
which consultations have been requested, and the "matter" in the request for a
Panel, as set out in SCM Agreement Article 4.4. Canada asserts that the appropriate test
to be applied in determining whether the "matter" in the request for a Panel had
been subject to consultations is not whether the request for consultations and the request
for a Panel are in all respects identical.
4.12 Canada gives two reasons in support of this
proposition. It relies on the statement of the Appellate Body in India - Patents that
"the claims that are made and the facts that are established during consultations do
much to shape the substance and the scope of subsequent Panel proceedings." 20 Canada submits that this observation is
equally valid in respect of the facts that are established, and the measures identified,
in the period between the request for consultations and the request for a panel.
4.13 Canada's second reason for its proposition is
that a request for a Panel must meet the criteria set out in Article 6.2 of the DSU. Thus,
whereas it is necessary to list the "specific measures" at issue under Article
6.2 of the DSU, it is not necessary to do so in a request for consultations. Canada
acknowledges that Article 4.4 of the DSU is not a licence for a fishing expedition, as a
request for a panel cannot be on a matter on which no consultations have taken place.
There must be a connection between the two requests. The matter subject to the request for
a panel must be rationally connected to the prohibited subsidy subject to the
consultations and flow directly from it. Canada reiterated that the matter in its request
for a panel is the same as the prohibited subsidy on which consultations were requested.
The specific measures identified in the request for a panel in accordance with Article 6.2
of the DSU are rationally and directly connected to the prohibited subsidy on which
consultations were requested.
4.14 Canada also argues that the Brazilian challenge,
which seems to be based on Article 4 of the DSU, ignores the provisions of Article 4 of
the SCM Agreement, which is also cited in its request for consultations. As Article 4 of
the SCM Agreement contains special rules applicable to disputes concerning the grant of
subsidies and countervailing measures, it should be read together with the relevant
provisions of the DSU, as mandated by Article 1.2 of the DSU. The requirements for a
request for consultations are found in Article 4.2 of the SCM Agreement, which relevantly
provides that "[a] request for consultations…shall include a statement of
available evidence with regard to the existence and nature of the subsidy in
question," and Article 4.4 of the DSU, which relevantly provides that "[a]ny
request for consultations shall be submitted in writing and shall give the reasons for the
request, including identification of the measures at issue and an indication of the legal
basis of the complaint." Canada submits that the objectives of consultations as set
out in Article 4.3 of the SCM Agreement and in Article 4.5 of the DSU are virtually
the same. Under both Articles, the stated purpose is to enable the parties to clarify the
facts of the situation and to arrive at a mutually agreed solution. If consultations
should fail to settle the dispute, parties have a right under both Article 4.4 of the SCM
Agreement and Article 6.1 of the DSU to request the establishment of a panel. Canada
submits that there are no conflicts between the relevant provisions of the SCM Agreement
and the DSU and that they should be interpreted together in a manner that preserves the
comprehensive, integrated nature of the WTO dispute settlement system. 21
4.15 Canada submits that the facts of this case are
different from those in Argentina - Textiles and Apparel.22 There, the matter in dispute was specific duties on footwear
that had, by the time the matter came before the Panel, been revoked and replaced by
safeguard measures. The complainant, the United States, argued that Argentina was likely
to reintroduce the tariffs, and so the Panel should examine the revoked tariffs. Relying
on GATT and WTO jurisprudence, the Panel refused to examine a measure that had been
revoked even before the Panel was established and its terms of reference had been set. In
the present case, the matter at issue has not been revoked or replaced. It is still in
force and the legislative and regulatory instruments underlying the PROEX programme are
being re-enacted in the form of provisional decrees and ministerial orders on a periodic
basis.
4.16 Canada submits that the interpreter of a
treaty must avoid an interpretation that would lead to an unreasonable or absurd result.
Given that PROEX is now governed by a Presidential Decree that must be renewed every
month, Brazil's argument, if it were to prevail, would bar examination by the WTO of PROEX
altogether, as every request for consultations would be in respect of a specific measure
that would have been superseded by another measure at the time that a Panel would be
established, meaning that no WTO panel would be able to examine PROEX in its current form
at any given time. If Brazil's argument were to prevail, in every case subject to dispute
settlement, a responding party would be able to frustrate the WTO dispute settlement
system through the simple device of periodic re-enactments of impugned measures. Such an
outcome would be manifestly inconsistent with "predictability and security," the
central objectives of the WTO dispute settlement system. Brazil's argument would turn the
system into a procedural nullity.
B. Whether PROEX payments are subsidies within the
meaning of Article 1 of the SCM Agreement that are contingent upon export performance
within the meaning of Article 3.1 (a) of that Agreement
4.17 Canada submits that PROEX payments are
grants by the Government of Brazil to purchasers of exported Brazilian regional aircraft.
These payments reduce the purchaser’s net interest rate - sometimes by as much as
half of the interest rates available in the market - over the term of a financed
transaction. Alternatively, the bonds which are issued by the Brazilian government for
such payments may be discounted in the market for a lump sum to be received by the
purchaser in the form of a discount on the price of the aircraft. Either way, these
payments lower the cost of exported Brazilian regional aircraft for the purchaser. As
such, this financial contribution by the Government of Brazil confers a benefit and
constitutes a "subsidy" within the meaning of Article 1.1 of the SCM Agreement.
Canada further submits that since PROEX subsidies are paid only on the exportation of
products from Brazil, they are "contingent on export performance" and therefore
prohibited under Article 3.1 of the SCM Agreement.
4.18 Brazil concedes that "PROEX interest
equalization payments for aircraft constitute an export subsidy." It reaffirms this
view in its answer to a question from the Panel by stating that "Brazil has not
denied that PROEX interest equalization payments for aircraft fulfil the definition of a
subsidy within the meaning of Article 3.1(a). Brazil argues, however, that PROEX is exempt
from the prohibition of Article 3.1(a) by virtue of Article 27 and, totally apart
from Article 27, by virtue of item (k) of the Illustrative List."
1. Whether there is a financial contribution by the Brazilian
Government
4.19 Canada argues that PROEX payments are a
direct transfer of funds by the Brazilian government and as such constitute a financial
contribution within the meaning of Article 1.1(a)(1)(i) of the SCM Agreement. Canada
argues, in the alternative, that if the Panel should find that the issuance of treasury
bonds and payment by the Government of Brazil on the redemption of such bonds is not a
"direct transfer of funds" within the meaning of Article 1.1(a)(1)(i) of the SCM
Agreement, PROEX payments should be regarded as an indirect financial contribution by a
government through a funding mechanism or a private body entrusted or directed, in the
sense of Article 1.1(a)(1)(iv) of the SCM Agreement, to transfer payments made by the
Government of Brazil upon the redemption of treasury bonds issued under PROEX to the
ultimate beneficiaries.
4.20 Brazil does not contest that actual PROEX
payments constitute a financial contribution by the Brazilian government. In response to a
question from the Panel as to whether the "issuance, or commitment to issue, NTN-I
bonds represented a "potential direct transfer of funds or liabilities" within
the meaning of Article 1.1(a)(i) of the SCM Agreement," Brazil stated that in its
view the issuance of a PROEX commitment letter constitutes a "potential direct
transfer of funds." Brazil further maintains that since PROEX assistance begins with
the letter of approval, the Brazilian Government could be said to grant a subsidy within
the meaning of Article 1 of the SCM Agreement at the point when it "issues or enters
into a commitment to issue bonds in support of an export transaction
23." In this respect, Brazil agrees with the arguments
advanced by the European Communities as a third party in this dispute 24.
2. Time at which the financial contribution is made
4.21 Canada submits that the point at which a
subsidy is determined to exist can have a crucial impact not only on the total "level
of subsidies," but also on whether Brazil is meeting its obligations under Article 27
of the SCM Agreement. In this respect, Canada appears to be addressing the arguments
presented by the European Communities as a third party in this dispute, as adopted by
Brazil.25
4.22 Canada argues that the Brazilian government makes
a financial contribution at the point when the bonds are redeemed or, in the alternative,
at the point when the bonds are issued upon the delivery of the aircraft. It disagrees
with the European Communities and Brazil that the Brazilian government makes a financial
contribution when "it issues, or enters into a commitment to issue, bonds in support
of an export transaction."
4.23 Canada argues that simply entering into a
commitment to pay a subsidy at some point in the future cannot constitute a financial
contribution within the meaning of Article 1.1(a)(1)(i) of the SCM Agreement, although it
agrees with the European Communities that it is necessary to view each grant within the
context of the broader commitment under which it is made. That is, each periodic payment
under PROEX should be viewed in the context of the commitment in accordance with which
such payment is made. An acontextual examination of specific payments under a scheme could
make determining the existence of a subsidy impossible.
"Continue on to Main Arguments of the Parties, Section
4.24"
1 See Canada's
request for consultations, WT/DS46/1
2 WT/DS46/5; 13 July
1998.
3 WT/DS46/4; 4
October 1996.
4 WT/DS46/7; 28
October 1998.
5 5WT/DS46/6; 19
August 1998.
6 As of the date of
the request for the establishment of a panel, the relevant legal instrument was
Provisional Measure 1700/15 of 30 June 1998. It replaced Provisional Measure 1629-13 of 12
February 1998, which had replaced the basic law establishing PROEX, Law No. 8.187 of 1
June 1991, as amended by Resolution 2380 of 25 april 1997.
7 Law No. 8.187, 1
June 1991 (Exhibit Bra-3), replaced by Provisional Measure No. 1629, 12 February 1998
(Exhibit Bra-4).
8 See, for example,
Resolution 2380/97 of April 1997.
9 See Central Bank of
Brazil Circular Letter number 2.601 dated 29 November 1995. Prior to that date, the spread
to be equalised for financing for a term of nine years or more was 3.5 percentage points
10 Evaluation of
the Brazilian Export Program ("Finan Report") p. 2.7.
11 11Brazil's
Response to Questions From the Panel, No.3.
12 Japan - Measures
Affecting Agricultural Products, WT/DS76/R, para. 8.4., circulated to members on 27
October 1998. Japan notified its intention to appeal on 24 November 1998.
13Ibid.
14 Ibid.
15 European
Communities - regime for the Importation, Sale and Distribution of Bananas; WT/DS27?AB/R;
as modified by the Appellate Body report was adopted by the DSB on 25 September 1997.
16 Supra note 13.
17 Supra note 16,
WT/DS27/AB/R, para. 142.
18 Supra note 14.
19 Ibid.
20 India- Patent
Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, para 94,
report of the Appellate Body adopted 16 January 1998.
21 Guatemala-
Anti-Dumping Investigation Regarding Portland Cement from México, WT/DS60/AB/R, paras
64-67, report of the Appellate Body adopted on25 November 1998.
22 Argentina-
Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/R;
report of the Panel adopted on 22 April 1998.
23 Brazil's Second
Written Submission, para. 46 and Brazil's Response to Questions from the panel, No.32.
24 See, the third
party submission of the European
25 Ibid at para.
5.4.
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