WORLD TRADE
ORGANIZATIONWT/DS183/1
G/L/334
G/AG/GEN/39
G/LIC/D/30G/VAL/D/2
25 October 1999
(99-4599)
Original:  English
BRAZIL - MEASURES ON IMPORT LICENSING AND MINIMUM IMPORT PRICES
Request for Consultations by the European Communities
The following communication, dated 14 October 1999, from the Permanent Delegation of the
European Commission to the Permanent Mission of Brazil  and to the Chairman of the Dispute
Settlement Body, is circulated in accordance with Article 4.4 of the DSU.
_______________
On behalf of the European Communities, I request hereby consultations with the Federal
Republic of Brazil pursuant to Article 4 of the Understanding on Rules and Procedures Governing theSettlement of Disputes, Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT
1994), Article 19 of the WTO Agreement on Agriculture, Article 6 of the Agreement on Import
Licensing Procedures and Article 19 of the WTO Agreement on Implementation of Article VII of the
GATT 1994, on a number of Brazilian measures, pr ocedures and practices which are seriously
restricting trade and causing damage to EC exporters.
The measures in question include, but are not limited to, creating unjustified import licensing
regimes and imposing minimum prices on several imported products and notably on textile products,
Sorbitol and Carboxymethylcellulose (CMC).  These minimum prices are established by the
Government of Brazil (Ministry for Development,  Industry and Commerce) under request of and after
consultations with the national industry, and are systematically applied at the border by the customs
authorities either (1) in order to obtain an import licence or (2) as the basis on which to calculate the
customs value.
In particular, in some cases products are subject to non-automatic licensing regimes through
the Integrated Foreign Trade System (SISCOMEX).  However, these regimes do not correspond in
scope or duration to any measure they are used to implement and are administered in an unfair andnon-equitable manner.  In practice, applications for non-automatic licenses remain indefinitely
pending, without formal reply, and thus imports ar e stopped while the Brazilian customs authorities
advise the importer informally of the existence of a minimum price.
In other cases, the Brazilian customs authorities ignore the transaction price on which the
customs duties should be applied but instead apply a minimum price to calculate the duties.
Minimum prices imposed at the time of the import declaration are to be seen in the framework of the
implementation of the new Brazilian legislation on customs valuation enacted in February 1998.
./.WT/DS183/1, G/L/334
G/AG/GEN/39, G/LIC/D/30
G/VAL/D/2
Page 2
Moreover, the measures imposing the minimum prices have not been published anywhere and
the non-automatic licensing regimes are not transparent. For example, until August 1998, Annex II of
the Comunicado 37/17 listed the products submitted to non-automatic licensing.  Comunicado 23 of23 August 1998 provides that the products submitted to non-automatic import licensing are no longer
published, but only encoded in a field ("tabela administrativa") of the SISCOMEX, to which only
authorized and registered users have access.  Finally, the above-mentioned measures create an
unjustified and disproportionate burden on EC imports.
The Brazilian non-automatic licensing system and the minimum pricing practice are also
applied to agricultural products (e.g. Sorbitol) in a way contrary to Article 4.2 of the WTO Agreementon Agriculture which provides that members shall not maintain, resort to or revert to measures such as
minimum import prices and discretionary import licensing procedures.
The European Communities considers that the above measures breach Brazil's obligations
under several WTO Agreements and in particular:
- Articles II, VIII, X and XI of the GATT;- Article 4.2 of the Agreement on Agriculture;
- Articles 1, 3, 5 and 8 of the Agreement on Import Licensing Procedures;
- Articles 1 through 7 of the Agreement on Implementation of Article VII of the GATT
1994.
I look forward to receiving you reply to this  request from the European Communities and to
setting a mutually convenient date for these consultations.
__________