DECREE NO 5,556, DE October 5, 2005

Regulation the transitional safeguards, object of art. 16 of the Protocol of Acession of the People's Republic of China to the World Trade Organization.

THE PRESIDENT OF THE REPUBLIC, in the use of the assignments conferring you the art. 84, inciso IV, of the Constitution, and

Considering that the Constitutional Agreement of the World Trade Organization and its Annexes, between them the General Agreement on Tariffs and Trade-GATT 1994 and the Agreement on Safeguards, were signed by Brazil on April 12, 1994 and approved by the National Congress, by means of Legislative Decree n o 30 of December 15, 1994, promulgated by Decree n o 1,355 of December 30, 1994 ;

Considering that by Decision dated November 10, 2001, the Ministerial Conference of the World Trade Organization-WTO has approved the access of the People's Republic of China to the World Trade Organization, under the terms and conditions set out in the Protocol of Acession of the People's Republic of China to the WTO, incorporated into the planning legal courtside by means of Decree n o 5,544, September 22, 2005 ;

Considering the commitments reflected in the Working Group's Inform on the Acession of the cited country, which integrate the respective Acession Protocol ;

Considering that the Acession Protocol establishes a transitional safeguard mechanism for Chinese products that are imported by any member of the World Trade Organization-WTO in such quantity and under such conditions that cause or threaten to cause a market disorganization in the importing country ;

Consideration that the Acession Protocol provides that measures against diversion of trade, when actions adopted by the People's Republic of China or another member of the World Trade Organization, in the milestone of paragraphs 2, 3 or 7 of Article 16 of the Acession Protocol, cause or threaten to cause an important deviation from trade for the importer country market ;

Considering that the implementation of such measures requires the adoption of special procedure that should follow the standards and commitments made by WTO Members ;

Considering the high level of understanding achieved by bilateral relations with China and the intensification of commercial exchange for the benefit of both parties ;

Having present that safeguard measures can be applied only after depleted the procedures for consultations, constituting a last resort to avoid market disorganization ;

D E C R E T A:

CHAPTER I

DAS CONDITIONS OF APPLICATION

Art. 1º In accordance with the provisions laid down in this Regulation, transitional safeguard measures may be applied in cases where imports of products from the People's Republic of China are increasing in quantities and under such conditions as they cause or threaten to cause market disorganization for domestic producers of similar or directly competing products to imported ones.

Art. 2º Competes to the Exterior Chamber of Commerce -CAMEX the decision to apply provisional safeguard measure, closure of the investigation with application of measures, modification, extension, suspension or revocation of the measures disciplined by this Regulation

Single Paragraph. The application of safeguard measure will be preceded by research, conducted by the Office of Foreign Trade-SECEX, Ministry of Development, Industry and Foreign Trade.

Art. 3º Competes for SECEX to draw up an opinion evaluating the existence of market disorganization or threat of market disorganization.

Art. 4º The procedure for applying or extending safeguard measure may be initiated from office by SECEX, provided that the conditions laid down in the art are fulfilled. 16, or under prior request:

I-of the other organs and entities of the Federal Government ; or

II-of companies or representative associations of companies that produce the product object of the request.

Single Paragraph. The decision on commencement of investigation will be the subject of Circular of SECEX, published in the Official Journal of the Union.

Art. 5º Competes to the Foreign Ministry to notify the relevant information to the World Trade Organization's Committee of Safeguards.

Art. 6º Within thirty days of thirty days after the opening of the investigation, importers, exporters and other interested parties will be able to expose, in writing, their views and evidence on the appropriateness of the proposed measure and whether, in the assessment of the interested, will result in the benefit of the public interest.

CHAPTER II

DA PRELIMINARY CONSULTATION AND CONSULTATION

Art. 7º Given the opportunity to conclude preliminary consultations and consultations, with the People's Republic of China, in order to arrive at a mutually satisfactory solution, including an evaluation as to whether to conduct procedure under the Decree n o 1,488, of May 11, 1995.

Art. 8º Admitted the petition and prior to the publication of the Circular SECEX giving initiation the investigation, the Government of the People's Republic of China will be invited to hold bilateral preliminary consultations, with the aim of clarifying the facts and evidence presented in the petition or obtained from office by the investigator authority and to arrive at a mutually satisfactory solution.

§ 1º The Government of the People's Republic of China will be notified of the intention of initiating research and will have ten-day time to express their interest in the conduct of the preliminary consultations, which are to be held within thirty days.

§ 2º The time limits referred to in this article shall be counted from the date of dispatch of the notification.

Art. 9º Open the investigation with a view to determining the existence of market disorganization, stemming from increased imports of imports, will ask for consultations with the aim of reaching a mutually satisfactory solution.

§ 1º The request for consultations shall be deemed to be received by the authorities of the People's Republic of China seven days after the date of dispatch of the respective correspondence.

§ 2º The consultations referred to in the caput of this article are to be concluded within thirty days counted from the date of receipt of the mentioned request for consultations.

§ 3º The requests for consultations will be notified immediately to the Committee of Safeguards of the WTO.

Art. 10. If the consultations do not result in a mutually satisfactory solution, within sixty days, counted from the date of receipt of the request for consultations by the authorities of the Government of the People's Republic of China, they may, in the case of the products investigated, be applied safeguard measures in the proportion required to prevent or repair market disorganization.

Art. 11. In the hypothesis of significant increase in imports stemming from trade diversion, consultations will be held within thirty days counted from the notification of these to the WTO Safeguards Committee.

Art. 12. If the consultations you treat the art. 11 shall not allow to reach an agreement between the People's Republic of China and the Brazilian or Members of the WTO involved in the matter, within sixty days after the notification, Brazil may, in relation to the product subject of the consultations, withdraw concessions agreed, or otherwise limit imports from the People's Republic of China, in the proportion necessary to prevent or repair such diversion of trade.

Art. 13. The measures applied to the amparo of the arts. 10 and 12 will be promptly notified to the WTO Safeguards Committee.

CHAPTER III

DA DEREGISATION OF THE MARKET

Art. 14. For the purposes of this Regulation, there will be market disorganization whenever imports of a product from the People's Republic of China are increasing rapidly, in absolute or relative terms, so that they are a significant cause of material damage or threat of material damage to the domestic industry of the similar or directly competing product.

Art. 15. For the determination of market disorganization stemming from the increase in imports from the People's Republic of China, the investigator authority should consider objective factors, including:

I-the volume and growth rate of the product's imports of the object of analysis, in terms absolute and relative ;

II-the share of the domestic market serviced by imports ;

III-the consequential impact on the domestic industry of the like products or directly competitors evidenced by the changes in economic factors such as: production, capacity utilized, stocks, sales, market share, prices, profits and losses.

Single Paragraph. None of the factors listed in this article, assessed in isolation or together, will necessarily be considered as decisive indication of market disorganization.

CHAPTER IV

DA INITIATION AND INSTRUCTION OF THE PROCESS

Art. 16. Applications for application of safeguard measure shall be formulated in writing, instructed with indications of market disorganization or threat of market disorganization and directed to SECEX.

Single Paragraph. If the application occurs before the minimum interstice of one year after the end of the last measure for the same product, SECEX will examine whether there is sufficient justification for new measure application, in the art terms. 23.

Art. 17. All information presented in a sensitive character by the interested parties will be, upon prior justification, classified as such by SECEX and may not be disclosed without the express consent of the party who provided it.

§ 1º The information presented in classified character should be accompanied by non-sigylous summary and on the assumption that the information cannot be summarized, the reason for the impossibility of presentation of the summary should be explained.

§ 2º Case to SECEX understand that a sigylous treatment application is not justified and if the party that submitted the information not to wish to make it public, nor to authorize its disclosure, in whole or in part, SECEX reserves the right not to consider the information presented, unless it has been demonstrated, in a convincing manner and by reliable source, that the same is correct.

Art. 18. The investigations will be completed within up to eight months, counted as of the date of its opening.

CHAPTER V

DA APPLICATION OF PROVISIONAL SAFEGUARD MEDIAS

Art. 19. Without prejudice to the provisions of the art. 9, in critical circumstances, in which any delay in the implementation of the measure may cause hardly repairable damage, it may be adopted as a provisional safeguard measure, after a preliminary determination that imports cause or threaten cause an under-market-greater gain.

§ 1º Soon after application, the provisional safeguard measure will be notified to the Committee of WTO safeguards and will submit request for bilateral consultations.

§ 2º The provisional safeguard measure will have maximum duration of two hundred days.

§ 3º Once the definitive safeguard measure has been adopted, the application deadline of the measure in character provisional will be computed for full duration of the same.

§ 4º Interim safeguard measures will be applied by the imposition of additional to the External Fee Common TEC, in the form of ad valorem aliquot, specific aliquot or combination of both.

CHAPTER VI

OF THE APPLICATION OF DEFINITIVE SAFEGUARD MEASURES

Art. 20. The definitive safeguard measures will be applied in the proportion necessary to prevent or repair the market sorganization, as follows:

I-by the imposition of additional to TEC, in the form of ad valorem aliquot, specific aliquot or the combination of both ;

II-quantitative restriction ; or

III-the combination of the earlier incisos.

Art. 21. The duration of a definitive safeguard measure will be limited to the period necessary to prevent or repair market disorganization for domestic producers of similar or directly competing products suffering material damage or threat of material damage.

§ 1º If the duration of a measure applied as a result of a relative increase in the imports exceed two years, will be an attack on the provisions of the art. 30.

§ 2º If the duration of a measure applied as a result of an absolute increase in the imports exceed three years, will be an attack on the provisions of the art. 30.

Art. 22. The deadlines laid down in art. 21 may be extended upon petition duly substantiated in the terms of the arts. 4 o and 16, provided that it has been shown that the maintenance of the measures follows being necessary.

Single Paragraph. The petition that it treats the caput of this article should be filed within up to four months before the date of the expiry of the measure.

Art. 23. Unless there is sufficient justification, before one year of the end of the period of duration of the safeguard measure is passed, the application of new measure on a same product is vetoed.

CHAPTER VII

DO TRADE DIVERSION

Art. 24. There will be trade diversion when a measure applied by a third WTO member country to a particular product imported from the People's Republic of China to prevent or remedy a disorganization of that country's market cause or threaten to cause a increase in exports from the People's Republic of China destined for Brazil.

Art. 25. Admitted to the petition and prior to the publication of the Circular SECEX giving initiation to the investigation, the Government of the People's Republic of China will be invited to hold bilateral preliminary consultations, with the aim of clarifying the facts and evidence presented in the petition or obtained from office by the investigator authority and to arrive at a mutually satisfactory solution.

§ 1º The Government of the People's Republic of China will be notified of the intention of initiating research and will have ten-day time to express their interest in the conduct of the preliminary consultations, which are to be held within thirty days.

§ 2º The time limits referred to in this article shall be counted from the date of dispatch of the notification.

Art. 26. Open the investigation, if demonstrated that a safeguard measure applied by a third country causes or threatens to cause a major diversion of trade to the national market, Brazilian authorities will be able to request consultations with the Popular Republic of China and / or with the country applicator of the measure.

Art. 27. For the determination of the existence of significant trade deviation, the investigator authority will monitor imports and should consider as reasonable evidence, among others, the following factors:

I-the actual or imminent increase in the participation of imports of products from the People's Republic of the China at the Brazilian market ;

II-the nature or extension of action adopted or proposed by the People's Republic of China or third parties member countries of the WTO ;

III-the actual or imminent increase in the volume of imports from the People's Republic of China due to measure adopted or proposed by the People's Republic of China or third member countries of the WTO ;

IV-conditions of supply and demand in the Brazilian market for the product in question ; and

V-the volume of exports of the People's Republic of China intended for the member or members of the WTO which apply a provisional or definitive safeguard measure.

Art. 28. The measure adopted to prevent or remedy market disorganization stemming from significant trade diversion will lose its effectiveness thirty days after the expiry of the measure that has given cause to trade diversion.

Single Paragraph. In the modification hypothesis of the measure that has given cause to trade diversion, the investigating authority should examine whether the trade diversion continues to exist and whether it is necessary to modify, withdraw or maintain in effect the measure applied.

CHAPTER VIII

DO DECISION MAKING

Art. 29. The determinations for the purposes of implementing the measures that it treats this decree will be adopted on the basis of opinion of SECEX.

Art. 30. CAMEX's decision to apply safeguards measures by higher time limits to those provided for in art. 21 will consider the possibility of the People's Republic of China suspending the application of substantially equivalent concessions or obligations.

Art. 31. During the duration of the measure and in exceptional circumstances, the Board of Ministers of CAMEX may deliberate, for reasons of public interest, for the suspension of applied measure and, in this case, the act should contain the reasons that substantiated the decision.

CHAPTER IX

DAS FINAL PROVISIONS

Art. 32. The supplementary standards for the implementation of this decree will be expedited by CAMEX and / or by the Foreign Secretary of the Ministry of Development, Industry and Foreign Trade, respecting their respective competences.

Art. 33. The duration of the safeguards mechanism, the object of this Decree, will extinguish on December 11, 2013.

Art. 34. This Decree shall enter into force on the date of its publication.

Brasilia, October 5, 2005 ; 184º of the Independence and 117º of the Republic.

LUIZ INACIO LULA DA SILVA

Celso Luiz Nunes Amorim

Antonio Palocci Filho

Roberto Rodrigues

Ivan John Guimarães Ramalho

Paulo Bernardo Silva

Miguel Soldatelli Rosseto

Dilva Rousseff