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Provisional Measure No. 2219, 4 September 2001

Original Language Title: Medida Provisória nº 2.219, de 4 de Setembro de 2001

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PROVISIONAL MEASURE NO. 2,219, OF September 4, 2001

Establishes general principles of the National Cinema Policy, creates the Higher Council of Cinema and the National Film Agency- ANCINE, establishes the National Film Development Support Program-PRODECINE, authorizes the creation of National Motion Picture Industry Funding Funding-FUNCINES, changes the legislation on the Contribution to the Development of the National Film Industry and gives other arrangements.

THE PRESIDENT OF THE REPUBLIC, in the use of the assignment that confers it on art. 62 of the Constitution, adopts the following Provisional Measure, with force of law:

CHAPTER I

DAS DEFINITIONS

Art. 1º For the purposes of this Provisional Measure is understood to be:

I-audiovisual work: product of the fixation or transmission of images, with or without sound, that has the purpose of creating motion printing, regardless of the capturing processes, of the support used initial or later to set them or transmit them, or of the means used for their vehiculation, reproduction, transmission or diffusion;

II-cinematographic work: audiovisual work whose original matrix of caption is a film with emulsion photosensitive or digital capturing matrix, whose targeting and display is primarily and initially the market of display rooms;

III-videofonographic work: audiovisual work whose original capturing matrix is a magnetic medium with information storage capacity that translates into moving images, with or without sound;

IV-cinematographic work and independent production videography: the one whose company producing, majority holder of the patrimonial rights on the works, does not have any association or link, direct or indirect, with broadcasting service companies of sounds and images or carriers of mass electronic communication by signature;

V-works film and Brazilian videophone: the one that meets one of the following requirements:

a) be produced by Brazilian producing company registered in ANCINE, noted the provisions of the paragraph unique, and to be authored by Brazilians and directed by Brazilian or foreign director resident in the Country more than five years ago, utilizing for its production, at the very least, two-thirds of Brazilian artists and technicians or residents in Brazil there are more than Five years;

b) to be carried out by Brazilian producing company registered at ANCINE, in association with companies from other countries with which Brazil maintains cinematic co-production agreement and in consonance with the same.

VI-industry: markets of display rooms, home video in any support, broadcasting of sounds and images, electronic mass communication by signature, audiovisual advertising market or any other markets that have been conveying cinematographic and videographical works;

VII-film or short film videophone: the one whose duration is equal to or less than fifteen minutes;

VIII- film works or medium-film videography: the one whose duration is more than fifteen minutes and equal to or less than seventy minutes;

IX-cinematographic work or feature film videography: the one whose duration is higher than seventy minutes;

X-cinematographic work or serial videography: the one that, under the same title, is produced in chapters;

XI-telefilme: documentary, fictional or de- animation, with a minimum of fifty and at most one hundred and twenty minutes duration, produced for first display in electronic means.

Single paragraph. For the purposes of the inciso V of this article, it is understood by Brazilian producing company that constituted under Brazilian laws and that has its registered office and administration in the Country, whose majority of the total and voting capital is of direct entitlement or indirect of Brazilian physical persons, cream or naturalized more than ten years ago, which they must exercise, in fact and in law, the decision-making power of the company.

CHAPTER II

OF THE NATIONAL POLICY OF THE CINEMA

Art. 2º The national film policy will be based on the following general principles:

I-promotion of the national culture and the Portuguese language by stimulating the development of the national film and audiovisual industry;

II-guarantee of the presence of national cinematographic and videographical works in the various market segments;

III-programming and distribution of audiovisual works of any origin in the electronic media of mass communication under mandatory editorial responsibility of Brazilian companies;

IV-respect for the copyright on national audiovisual works and Foreign.

CHAPTER III

OF THE TOP COUNCIL OF THE CINEMA

Art. 3º It is created the Superior Council of Cinema, collegiate body integral to the structure of the Civil House of the Presidency of the Republic, to which it competes:

I-define the national politics of cinema;

II-approve general policies and guidelines for the development of the national film industry, with views promoting its self-sustainability;

III-stimulate the presence of Brazilian content in the various market segments;

IV-follow up on the implementation of the policies referred to in the incisos I, II and III;

V-establishing the distribution of the Contribution to the Development of the Cinematographic Industry-CONDECINE for each intended target in law.

Art. 4º The Superior Council of Cinema will be integrated:

I-by the Ministers of State:

a) of Justice;

b) of Foreign Relations;

c) da Fazenda;

d) of Culture;

e) of the Development, Industry and Foreign Trade;

f) of the Communications; and

g) Head of the Civil House of the Presidency of the Republic, who will chair it.

II-by five representatives of the national film and videophone industry, who enjoy high concept in their field of specialty, to be designated by resolution, for two-year term, allowed a redrive.

§ 1º The internal regiment of the Higher Council of Cinema will be approved by resolution.

§ 2º The Council shall meet whenever it is convened by its President.

§ 3º The Council shall act upon resolutions, by a simple majority of votes, present, at the minimum, five members referred to in the inciso I of this article, among them their President, who shall exercise a quality vote in the case of tie-up, and three members referred to in the Inciso II of this article.

§ 4º In cases of urgency and relevant interest, the President will be able to deliberate ad referendum of the remaining members.

§ 5º The President of the Council will be able to invite to participate in the technical meetings, personalities and representatives of public and private bodies and entities.

CHAPTER IV

OF THE NATIONAL FILM AGENCY-ANCINE AGENCY

Section I

Of the goals and competencies

Art. 5º It becomes created the National Agency of the Cinema-ANCINE, special municipality, linked to the Ministry of Development, Industry and Foreign Trade, observed the provisions of the art. 62 of this Interim Measure, the organ of fomenting, regulation and surveillance of the film and videography industry, endowed with administrative and financial autonomy.

§ 1º The Agency will have headquarters and venue in the Federal District and central office in the city of Rio de Janeiro, and may establish regional offices.

§ 2º The Civil House of the Presidency of the Republic will supervise the activities of ANCINE, and may conclude management contract.

Art. 6º The ANCINE will have for goals:

I-promote the national culture and the Portuguese language by stimulating the development of the national film and videophone industry in its area of acting;

II-promoting the programmatic, economic and financial integration of government activities related to the film and videophone industry;

III-increase competitiveness of the film industry and national videophone industry by fostering production, distribution and display in the various market segments;

IV-promoting the self-sustainability of the national film industry aiming at the increased production and display of Brazilian cinematographic works;

V-promoting the articulation of the various links of the productive chain of the national film industry;

VI-stimulate the diversification of national film and video-based production and the strengthening of independent production and regional productions with views to the increment of its bid and the permanent improvement of its quality standards;

VII-stimulate the universalization of access to cinematographic and video-based works, in particular national ones;

VIII-guarantee the diverse participation of cinematographic and videophonetic works foreign in the Brazilian market;

IX-guarantee the participation of the national production and videographical works of production in all segments of the domestic market and stimulate it in the external market;

X-stimulate the empowerment of human resources and the technological development of the national film and videophone industry;

XI-ensure respect for the copyright on audiovisual works national and foreign.

Art. 7º The ANCINE will have the following competencies:

I-execute the national policy of fomenting cinema, defined in the form of the art. 3º;

II-scrutinize compliance with legislation referring to national and foreign film and videographic activity in the various segments of markets, in the form of the regulation;

III-promote combating piracy of audiovisual works;

IV-apply fines and penalties, in the form of the law;

V-regular, in the form of the law, the activities of fomenting and protection of the film industry and national videophone, resguarding the free manifestation of thought, creation, expression and information;

VI-coordinate government actions and activities concerning the film industry and videophonographic, reaping the competences of the Ministries of Culture and Communications;

VII-articulate with the competent bodies of the federated people with views to optimize the achievement of their goals;

VIII-managing programs and mechanisms of fostering the national film and videographic industry;

IX-setting criteria for the application of fomenting resources and funding to the film industry and national videophone;

X-promoting the participation of national cinematographic and videographical works at international festivals;

XI-approve and control the execution of co-production projects, production, distribution, display and technical infrastructure to be carried out with public resources and tax incentives, resourced the competences of the Ministries of Culture and Communications;

XII-provide the Certificates Brazilian Product to the cinematographic and videographical works;

XIII-provide Certificate of Registration of production contracts, co-production, distribution, licensing, assignment of exploitation rights, vehiculation and display of cinematographic and videographical works;

XIV-managing the information system for the monitoring of the activities of the film and videophone industry in its various means of production, distribution, display and diffusion;

XV-articulate with organs and entities aimed at the fostering of production, programming and distribution of cinematographic and videographical works of the Mercosur member states and too many members of the International community;

XVI-providing technical and administrative support to the Higher Council of Cinema;

XVII-update, in line with technological developments, the definitions referred to in art. 1º of this Provisional Measure.

Single paragraph. The basic organization and competencies of ANCINE's units will be established in an act of the Executive Power.

Section II

From Structure

Art. 8º The ANCINE will be directed at regime of collegiate by a board made up of a Director-President and four Directors, with non-coincidental mandates of four years.

§ 1º The members of the Board will be Brazilians, of illiberal reputation and elevated concept in their field of specialty, chosen by the President of the Republic and by him appointed after approval by the Federal Senate, under the terms of paragraph (f) of the inciso III of the art. 52 of the Federal Constitution.

§ 2º The Chief Executive Officer of the ANCINE will be chosen by the President of the Republic among the members of the Colegiated Board.

§ 3º In case of vacancy in the course of the member mandate of the Colegiated Directorate, this will be completed by successor vested in the form provided for in § 1º of this article, which will exercise it by the remaining time.

§ 4º shall integrate the structure of the ANCINE an Attorney General, which the will represent in judgment, an Ouvidoria-General and an Audit.

§ 5º The replacement of the leaders in their impediments will be disciplined in regulation.

Art. 9º Compete to the Colegiated Board of ANCINE:

I-exercise your administration;

II-edit norms on matters of your competency;

III-approve your internal regiment;

IV-comply with and enforce the policies and guidelines approved by the Superior Council of Cinema;

V-deliberating on your budget proposal;

VI- determine the disclosure of half-yearly reports on the activities of the Agency;

VII-decide on the sale, assignment or rental of integral goods of your estate;

VIII-notify and apply the sanctions provided for in the legislation;

IX-judging appeals against decisions by members of the Board;

X-authorize the hiring of third-party service in the form of the current legislation;

XI-authorize the celebration of contracts, arrangements, and agreements;

Single paragraph. The Collegiate Board will meet with the presence of at least three directors, among them the Director-President, and will deliberate by a simple majority of votes.

Art. 10. It is incumbent upon the Director-President of ANCINE:

I-exercise the legal representation of the agency;

II-chair the meetings of the Colegiated Board;

III comply with and enforce the decisions of the Board Collegiate;

IV-exercise the quality vote, in the event of a tie in the deliberations of the Colegiated Board;

V-nominate, exonerate, and fire servers and employees;

VI-prover the positions in committee and the functions of trust;

VII-approve bidding editions and homologation awards;

VIII-refer to the supervisory body the budget proposal of ANCINE;

IX-sign contracts, agreements and arrangements, previously approved by the Colegiated Board;

X-order expenses and practice the necessary management acts within reach of ANCINE's objectives;

XI-suggest the purposeful of public civil action by ANCINE, in the cases provided for in law;

XII-exercise the function of the Executive Secretary of the Higher Council of Cinema;

XIII-exercise others activities necessary to the management of ANCINE and the implementation of the decisions of the Superior Council of the Cinema.

Section III

Das Recipes and the Heritage

Art. 11. Constitute revenue of ANCINE:

I-part of the proceeds of the Contribution fundraising for the Development of the National Motion Picture Industry-CONDECINE, of which it treats Chapter VI of this Interim Measurment;

II-up to three percent of the resources to which the "c", "d", "e" and "j" of the art are referred to. 2º of Law No. 5,070 of July 7, 1966, observed the annual maximum limit of thirty million reais;

III-the proceeds from the collection of the fines resulting from the exercise of their assignments;

IV-the product of the disposal of goods, objects and instruments used for the practice of infractions, as well as of the patrimony of offenders, seized upon the exercise of the power of police and incorporated into the patrimony of ANCINE, pursuant to judicial decision;

V-the product of the execution of its active debt;

VI-the appropriations consigned to the Union's General Budget, special credits, additional credits, transfers and re-passes that are conferred;

VII-the donations, legacies, grants and other resources that are intended for it;

VIII-the values ascertained in the sale or rental of movable and immovable property of their property;

IX-the values ascertained in applications in the financial market of the revenue provided for in this article;

X-proceeds from the collection of emoluments by services provided;

XI-resources from agreements, arrangements or contracts concluded with entities, bodies or companies, public or private, national and international;

XII-proceeds from the sale of publications, technical material, data and information, including to public bidding purposes;

XIII-any other revenues affected to the activities of their competence, not specified in the previous incistions.

Art. 12. It is the ANCINE authorized to divest movable or immovable property of its estate that is not intended for the performance of the functions inherent in its institutional mission.

Section IV

Of Human Resources

Art. 13. The ANCINE Effective Personnel Framework will be composed of up to two hundred and fifty public jobs and is to be created in specific law.

Art. 14. ANCINE will be able to hire specialists for the execution of work in the technical, administrative, economic and legal areas, by limited projects or deadlines, observing the legislation in force.

Art. 15. ANCINE will be able to request, with onus, organ servers and integral entities of the direct, local, municipal public administration, whatever the attributions to be exercised.

CHAPTER V

OF THE INDUSTRY ' S INFORMATION AND MONITORING SYSTEM

CENEMATOGRAPHIC AND VIDEOFHONOGRAPHIC

Art. 16. It is created the Information and Monitoring System of the Cinematographic and Videofonographic Industry, of responsibility of ANCINE, and may for its elaboration and execution be conveniently or contracted entity or company legally constituted.

Art. 17. Every room or public display space intended for the exploration of cinematographic work in any support should use the box office revenue control system, as defined in regulation by ANCINE.

Art. 18. The exhibition companies are expected to issue report enumerating the Brazilian and foreign cinematographic works displayed in the period by the cinemas of their exhibition network, number of exhibition days, number of spectators and box office income, as defined in regulation, and this information shall be remitted to ANCINE.

Art. 19. The company distributors and locators of cinematographic works for video, domestic or for direct sale to the consumer, in any support, are expected to issue semester report enumerating the Brazilian cinematographic works distributed in the period, number of foreign works and their relationship, number of copies distributed by title, as defined in regulation, owing to this information being remitted to ANCINE.

Art. 20. It may be established, by law, mandatory periodical provision of information on vehiculation or diffusion of cinematographic and videographical works for operating companies in other industries beyond those indicated in the arts. 18 and 19.

Art. 21. The copies of the cinematographic and videographical works intended for sale, assignment, loan, exchange, leasing, display, with or without profit, as well as the film works and advertising videographies should contain in their support indelible and irremovable trademark with the identification of the holder of the copyright in Brazil, with all the information identifying him, as a model approved by the ANCINE and the Registry of the Federal Revenue Ministry of the Ministry of Finance, without prejudice to the that treats Law No. 9,610, of February 19, 1998, and the Decree No. 2,894, December 22, 1998.

Art. 22. It is mandatory the registration of the production, distribution, display of national or foreign cinematographic and videographical works at ANCINE, as disposed of in regulation.

Single paragraph. To benefit from public resources or tax incentives intended for film activity or videofonographic activity the company must be registered in ANCINE.

Art. 23. Production in Brazil of cinematographic work or foreign videography is to be communicated to ANCINE.

Single paragraph. Production and adaptation of cinematographic work or foreign videofhonographic, in Brazil, should be performed upon contract with Brazilian producer company, who will be the production responsible under Brazilian laws.

Art. 24. The technical services of copywriting and reproduction of arrays of cinematographic and videographical works that are intended for commercial exploitation in the Brazilian market are to be performed in laboratories installed in the Country.

Single paragraph. Cinematographic works and foreign videophonographic works are exempted from the requirement for mandatory copying in the Country, up to the limit of six copies in any format or system.

Art. 25. Any and all foreign advertising works or videographical works can only be conveyed or transmitted in the country, in any market segment, after submitting the process of adaptation, carried out by Brazilian producer company, of agreement with the standards that will be established by ANCINE, and after payment of the Contribution to the Development of the National Motion Picture Industry-CONDECINE, of which it treats art. 32.

Art. 26. The company producing cinematographic or videographical works with public resources or arising from tax renunciation should deposit in the Brazilian Cinema or entity accredited by ANCINE a low-contrast, interpositive copy or digital matrix of the works, for its due preservation.

Art. 27. The cinematographic and videographical works produced with public resources or tax renunciation, after decorations ten years of their first commercial display, will be able to be displayed in educational channels held with public resources in the services of broadcasting of sounds and images and in the channels referred to in the "b" to the "g" of the inciso I do art. 23 of Law No. 8,977 of January 6, 1995 and in public educational establishments, in the form defined in regulation, respected existing contracts.

Art. 28. Every Brazilian cinematographic and videographical work should, prior to its display or commercialization, apply to ANCINE the Brazilian Product Certificate-CPB.

Art. 29. Registration of the co-production contracts, assignment of commercial exploitation rights, exhibition, licensing, distribution, marketing and export of cinematographic works and videophonographic works on any support or vehicle is mandatory in ANCINE and the substantiation, in the act of its registration, of the payment of the CONDECINE, for each industry to which the contract refers, as per regulation.

Art. 30. For awarding the indicative age classification of cinematographic and videographical works will be required by the responsible body to substantiate the payment of the CONDECINE in the industry to which the indicative age classification is to be referred.

Art. 31. The contracting of the programming generated abroad by the carriers should always be done by means of Brazilian company, which will take responsibility for the content of the programming, observing the devices of this Interim Measuring and the legislation Brazilian pertinent.

Single paragraph. Brazilian companies responsible for the content of the programming of the channels of the mass electronic communication services by subscription, whether they are generated in Brazil or abroad, are expected to provide ANCINE with their programming, including titles or chapters of serial works and advertising works.

CHAPTER VI

OF THE CONTRIBUTION TO THE DEVELOPMENT OF THE INDUSTRY

NATIONAL CINEMATOGRAPHIC-CONDECINE

Art. 32. The Contribution to the Development of the National Motion Picture Industry-CONDECINE will have in fact generator the vehiculation, production, licensing and distribution of cinematographic and videofonographic works with commercial purposes, by segment of market to which they are targeted.

Single paragraph. CONDECINE will also focus on payment, credit, employment, remittance or delivery, to producers, distributors or overseas intermediaries, of importances concerning income arising from the exploitation of cinematographic works and videofonography or by its acquisition or import, at fixed price.

Art. 33. CONDECINE will be due a single time every five years for each industry, by:

I-title or cinematographic or video-game chapter aimed at the following market segments:

a) display rooms;

b) home video, in any support;

c) service of broadcasting sounds and images;

d) mass electronic communication services by signature;

and) other markets, as attached.

II-title of cinematographic or videographical advertising work, for each market segment to which it is intended;

§ 1º A CONDECINE will correspond to the values of the tables set out in Annex I to this Provisional Measure.

§ 2º In the hypothesis of the single paragraph of the art. 32, the CONDECINE will be determined upon the application of eleven percent aliquot over the importances there.

Art. 34. The product of the CONDECINE fundraising will have the following destinies:

I-costing the activities of ANCINE;

II-activities of fostering cinema and audiovisual developed by the Ministry of Culture;

III-transfer to the National Cinema Development Support Program-PRODECINE, of which it treats art. 47 of this Provisional Measure.

Art. 35. CONDECINE will be due by the following taxable persons:

I-holder of commercial or licensing rights in the Country, as the case may be, for the market segments provided for in the "a" and "of the inciso I" of the art. 33;

II-producing company, in the case of national work, or holder of the licensing for display, in the case of foreign work, in the hypothesis of the inciso II of the art. 33;

III-the person responsible for the payment, credit, employment, shipping or delivery of the importances referred to in the single paragraph of the art. 32.

Art. 36. CONDECINE is to be collected to ANCINE in the form of the regulation:

I-on the date of the registration of the commercial exploitation rights assignment contract for the markets of display and domestic video rooms in any support;

II-on the date of the registration of the commercial exploitation rights assignment contract or the licensing agreement for the broadcasting services market of sounds and images and other markets, as attached;

III-on the date of the request of the Brazilian Product Certificate for cinematographic work or national advertising videography for each market segment;

IV-on the date of the record of the contract of licensing for the cinematographic work or foreign advertising videography;

V-on the date of the registration of the licensing or commercial exploitation contract, or in the request of the Brazilian Product Certificate, for cinematographic and national videographic work for the broadcasting services market of sounds and images and electronic mass communication by subscription;

VI-on the date of payment, credit, employment, shipping or delivery of the importances referred to in the single paragraph of the art. 32;

VII-on the date of the granting of the indicative classification certificate in the remaining cases.

Art. 37. The non-pick-up of the CONDECINE within the term shall subject the taxpayer to the penalties and moratory accruals provided for in the arts. 44 and 61 of Law No. 9,430 of December 27, 1996.

Single paragraph. The physical or legal person promoting the display, transmission, diffusion or conveyance of cinematographic and videography that has not been the subject of the CONDECINE pick-up responds solidly by that contribution.

Art. 38. The CONDECINE fundraising and watchdog activities will be exercised by ANCINE.

Single paragraph. The provisions of this article do not preclude the jurisdiction of the Registry of the Federal Revenue Office to have a tax matter concerning the incidence of which they treat the single paragraph of art. 32 and the § 2º of the art. 33.

Art. 39. They are exempt from the CONDECINE:

I-the cinematographic and videographical work intended for the exclusive exhibition at festivals and samples, provided that previously authorized by ANCINE;

II-the cinematographic work and journalistic music video, as well as the sporting events;

III-the calls of the programmes and the publicity of cinematographic and videographical works conveyed in the broadcasting services of sounds and images and in the mass electronic communication services by subscription;

IV-the film works and videographical videographies of production cost less than R$ 500.00.

V-the export of works cinematographic and Brazilian videographers and the Brazilian programming broadcast abroad;

VI-the Brazilian audiovisual works, produced by the broadcasting services companies of sounds and images and companies of electronic mass communication services by subscription, for display in their own industry segment or when transmitted by law or regulation in another industry, noted the provisions of the single paragraph.

Single paragraph. Brazilian audiovisual works, produced by the broadcasting service companies of sounds and images and companies of mass electronic communication services by subscription, will be subject to the payment of the CONDECINE if they come to be commercialized in other market segments.

Art. 40. The values of the CONDECINE are reduced to:

I-twenty percent, when it comes to the cinematic work or non-advertising Brazilian videophones;

II-thirty percent, when it comes to:

a) works deemed to be of relevant artistic or cultural interest, in the form of the regulation;

b) cinematographic and videographical works aimed at the vehiculation in broadcasting services of sounds and images and whose production was carried out more than twenty years prior to the record of the contract in the ANCINE;

III-half percent, when it comes to the Brazilian film works or advertising video-game.

CHAPTER VII

OF THE INDUSTRY FUNDING FUNDS

NATIONAL CINEMATOGRAPHIC-FUNCINES

Art. 41. Funding Funds of the National Motion Picture Industry-FUNCINES will be constituted in the form of closed condo, with no legal personality, and administered by financial institution authorized to operate by the Central Bank of the Brazil.

§ 1º The patrimony of the FUNCINES will be represented by quotas issued in the scriptural form, divested to the public with the intermediation of the administrating institution of the Fund.

§ 2º A administrator will be responsible for all the obligations of the Fund, including those of tax character.

Art. 42. It is incumbent upon the Securities Commission to authorize, discipline and scrutinize the constitution, operation and administration of the FUNCINES, observed the provisions of this Interim Measment and the standards applicable to investment funds.

Single paragraph. The Securities Commission shall communicate the constitution of the FUNCINES, as well as the respective administrators to ANCINE.

Art. 43. The resources capped by the FUNCINES will be applied, in the form of the regulation, in projects and programs which, meeting the criteria and guidelines established by ANCINE, are intended for:

I-cinematographic works Brazilians of independent production;

II-construction, reform and recovery of the exhibition rooms;

III-acquisition of shares of domestic open capital companies constituted for the production, marketing, distribution or exhibition of Brazilian cinematographic works of independent production;

IV-cinematographic work or serial videograph produced with minimum three and maximum twenty-six chapters and Independent production Brazilian telephone hotlines.

§ 1º Broadcasting service companies of sounds and images and electronic mass communication by signature will not be able to hold the stock control of the companies referred to in the inciso III of this article.

§ 2º The FUNCINES should maintain, at the very least, eighty per cent of their equity applied in ventures of the species listed in this article, observed, in relation to each species of destination, the minimum percentage to be set out in regulation.

§ 3º The share of the Fund's equity not committed to the applications of which it treats this article, shall consist of securities issued by the National Treasury or by the Central Bank of Brazil.

§ 4º It is vetted the application of FUNCINES resources in projects that have a majority share of the Fund's own quotist.

§ 5º The cinematographic works and videophonography of an advertising or journalistic nature will not be able to benefit from the FUNCINES or PRODECINE, of which it treats art. 47 of this Interim Measure;

§ 6º The cinematographic and videographical works produced with resources of the FUNCINES will have their final cut and editing approved for display by their principal and principal producer.

§ 7º In the cases of the incisos I and IV there should be guarantee of vehiculation and diffusion of the works.

Art. 44. Until the period of ascertainment relating to the calendar year 2010, inclusive, legal persons subject to taxation based on actual profit will be able to deduct from the income tax due share of the value corresponding to the amounts applied in the acquisition of quotas of the FUNCINES.

Single paragraph. The deduction referred to in this article may be used alternatively to that of which it treats art. 1º of Law No. 8,685 of July 20, 1993, until the calendar year 2006, when this benefit will be extinguished.

Art. 45. The deduction that it treats art. 44 will focus on the tax due:

I-in the quarter to which they refer to investments, for legal persons who ascertain the quarterly real profit;

II-in the calendar year, for legal persons which, having opted for the pick-up of the tax per estimate, ascertains the annual real profit.

§ 1º The share to be deducted will be calculated by applying for percentage corresponding to the sum of the aliquots of the people's income tax legal and social contribution on net profit, including additional, on the value of acquisition of shares of FUNCINES, limited to three per cent of the tax due and observed the provisions of the inciso II of the art. 6º of Law No. 9,532 of December 10, 1997.

§ 2º The values that exceed the limits set out in § 1º will not be able to be used in a period of later ascertaining.

§ 3º The full value of the investments effected in the form of this article could be deducted from the net profit, in the determination of the actual profit, in the following percentage:

I-one hundred percent, in the years-calendar 2002 a to 2005;

II- fifty percent, in the years-calendar from 2006 a to 2008;

III-twenty-five percent, in the years-calendar years 2009 and 2010.

§ 4º The legal person who alienates the quotas of FUNCINES will only be able to consider as cost of acquisition, in determining the capital gain, the values deducted in the form of § 3º in the hypothesis where the disposal occurs after five years of the date of its acquisition.

§ 5º In any hypothesis, it will not be deductible the ascertained loss in the disposal of the quotas of the FUNCINES.

§ 6º The provisions of § § 3º to 5º applies, too, to the social contribution on net profit.

Art. 46. The net and capital gains and earnings earned by the portfolio of FUNCINES stay exempt from the income tax.

§ 1º Income, capital gains and net gains arising from application in FUNCINES they subject themselves to the tax standards applicable to the remaining securities in the capital market.

§ 2º Ospeeding bailout of FUNCINES quotas, due to the expiry of the term of the duration or the settlement of the fund, on the income of the quotist, consisting of the positive difference between the ransom value and the cost of acquisition of the quotas, will focus income tax on the source to the twenty per cent aliquot.

CHAPTER VIII

OF THE TOO MANY INCENTIVES

Art. 47. It is established the National Film Development Support Program-PRODECINE, aimed at capturing and applying necessary resources to the fostering of production, distribution, marketing and exhibition projects of cinematographic works and Brazilian videographers of independent production, as well as technical infrastructure projects for the film activity, inclusive payment of the Additional Income Award that treats art. 54, in the form of the regulation.

§ 1º PRODECINE resources could be object of application to lost fund, in the specific cases provided for in the regulation.

§ 2º The ANCINE will establish general criteria and guidelines for the application and the supervision of PRODECINE resources.

Art. 48. They are sources of PRODECINE resources:

I-percent of the proceeds from the Contribution fundraising for the Development of the National Motion Picture Industry-CONDECINE;

II-the product of the fundraising of fines and interest, arising from the decompliance of the funding standards by the beneficiaries of PRODECINE's resources;

III-the remuneration for the funding granted;

IV-the donations and other aports unspecified;

V-the appropriations consigned to the budgets of the Union, the states, the Federal District and the Municipalities;

Art. 49. The abatement of the income tax at the source, of which it treats you art. 3º of Law No. 8,685, 1993, shall apply, exclusively, to projects previously approved by ANCINE in the form of the regulation.

Single paragraph. The option for the predicted benefit in the caput deviates the incidence of the provisions of § 2º of the art. 33 of this Provisional Measure.

Art. 50. The deductions provided for in the art. 1º of Law No. 8,685, 1993, stay extended until the financial year 2006 inclusive, and the projects to be benefited by these incentives will be approved in advance by ANCINE.

Art. 51. The art. 5º of Law No. 8,685, of 1993, passes the vigour with the following essay:

" Art. 5º The values not applied in the form of the previous article, within the period of one hundred and eighty days counted from the date of the deposit, will be intended for ANCINE, for application in projects of fostering the national film industry, as disposed of regulation ". (NR)

Art. 52. From 1º January 2007, the "a" section of the inciso II of the art. 3º of Law No. 8,313 of December 23, 1991 will pass the vigour with the following essay:

" a) production of records, videos, short film works and medium films and documentary films, preservation of the acquis cinematographic well as well as other works of music video playback of cultural character; " (NR)

Single paragraph. The Higher Council of Cinema will be able to bring forward the entry into force of the provisions of this article.

Art. 53. The § 3º of the art. 18 of Law No. 8,313, of 1991, passes the vigour with the following essay:

" Art. 18. ......................................................................................................................................

...............................................................................................................................................................

§ 3º The donations and the sponsorships in the production cultural, as referred to in § 1º, will exclusively meet the following segments:

a) performing arts;

b) books of artistic, literary or humanistic value;

c) erudite music or instrumental;

d) visual arts exhibitions;

e) donation endowments for public libraries, museums, public archives and cinematography, as well as personnel training and procurement of equipment for the maintenance of these hits;

f) production of cinematographic and videographical works of short and medium film and preservation and diffusion of the audiovisual acquis; and

g) preservation of the material cultural heritage and immaterial. " (NR)

Art. 54. The Additional Income Prize is hereby instituted, calculated on the rents of ticket offices earned by the Brazilian film works of independent production of independent production, which will be awarded to producers, distributors and exhibitors, in the form that we dispose of the regulation.

Art. 55. For a period of twenty years, counted as of September 5, 2001, the proprietary, locatary or leasing companies of rooms, spaces or commercial public display venues will display Brazilian film works of long films, by a number of days fixed, annually by decree, heard the representative entities of the producers, distributors and exhibitors.

§ 1º The display of Brazilian cinematographic works will be afforded proportionally, in the semester, and may the exhibitor anticipate the schedule of the following semester.

§ 2º The ANCINE will, semestrally, comply with the provisions of this article.

§ 3º The cinematographic works and the telefilms that are displayed in electronic means prior to the commercial display in rooms will not be computed for the purposes of the fulfillment of the caput.

Art. 56. For a period of twenty years, counted as of September 5, 2001, domestic video distribution companies are expected to have an annual percentage of Brazilian cinematographic and videographical works among their titles, obliging themselves to to launch them commercially.

Single paragraph. The percent of releases and titles referred to in this article will be fixed annually by decree, heard the entities of national character representative of the activities of production, distribution and marketing of cinematographic works and videophonography.

Art. 57. It could be established, by law, the obligatory vehiculation of Brazilian cinematographic and videographical works of independent production in other market segments beyond those indicated in the arts. 55 and 56.

CHAPTER IX

DAS PENALTIES

Art. 58. The exhibitor companies, the distributors and video rental companies, should be autuised by ANCINE in the cases of non-compliance with the provisions of this Interim Measment.

Art. 59. The defulfillment of the compulsion that it treats art. 55 will subject the offender to a fine corresponding to five percent of the average daily box office income, ascertained in the semester prior to the infraction, multiplied by the number of days when the mandatory was not fulfilled.

Single paragraph. It is understood by middle-income that obtained after deducting gross box office collection from the value of municipal, state, federal, and copyright taxes that incl over the value of the ticket to the public.

Art. 60. The defulfillment to the provisions of the arts. 17 a 19, 21, 24 a 26, 28, 29, 31 and 56 of this Provisional Measure subject the offenders to fines of R$ 2,000.00 (two thousand reais) to R$ 2,000,000.00 (two million reais), in the form of the regulation.

§ 1º In any hypothesis the fines will be limited to:

I-one tenth per cent of gross revenue, for the provisions of the arts. 18, 19, 21, 26, 28, 29 and in the single paragraph of the art. 31.

II-three tenths per cent of gross revenue, for the willing in the arts. 17, 24, 25 and 56;

III-five tenths per cent of gross revenue, for the provisions of the caput of art. 31.

§ 2º The case is not possible to ascertain the value of the gross revenue referred to in the caput for lack of information, ANCINE arbitra it in the form of the regulation, which will observe, isolated or jointly, among others, the following criteria:

I-the gross revenue regarding the last period in which the legal person kept deed in accordance with the commercial and tax laws, updated monetarily;

II-the sum of the current, long-term and permanent asset values, existing on the last known balance sheet, updated monetarily;

III-the value of the constant capital of the last known balance sheet or registered in the acts of constitution or alteration of the society, updated monetarily;

IV-the value of the net worth constant of the last known balance sheet, updated monetarily;

V -the value of purchases of goods effected in the month;

VI-the sum, in each month, of the payroll values of the employees and purchases of raw materials, intermediate products and packaging materials;

VII-the sum of the values due in the month to employees; and

VIII-the monthly value of the rent due.

§ 3º Applied, secondarily, to the provisions of this article, the norms of arbitrage of profit provided for under the federal tax legislation.

Art. 61. The disclaimer of the projects executed with resources received from PRODECINE and FUNCINES, the non-effectivation of the investment or its realization at odds with the statuary imply the return of the increased resources from:

I -Moratory interest equivalent to the benchmark rate of the Special Settlement and Custody System-SELIC, for federal securities, accrued monthly, calculated from the first day of the subsequent month to the receipt of the proceeds up to the month prior to that of the payment and one percent in the month of payment;

II-fine of twenty percent calculated on the total value of the resources.

CHAPTER X

PROVISIONS TRANSITIONAL

Art. 62. During the first twelve months, counted as of September 5, 2001, ANCINE will be bound by the Civil House of the Presidency of the Republic.

Art. 63. ANCINE shall constitute, within twenty-four months, from the date of its deployment, its own personal framework of staff, by means of the holding of public tender of evidence, or evidence and titles.

Art. 64. During the first twenty-four months subsequent to its installation, ANCINE will be able to requisition, with onus, servers and employees of organs and integral entities of the public administration.

§ 1º Transcurring the deadline to which refers to the caput, will only be ceded to the ANCINE servers by it requisitioned for the exercise of positions in commission.

§ 2º During the first twenty-four months subsequent to its installation, ANCINE may supplement the remuneration of the requested server or public servant, up to the limit of the remuneration of the effective office or permanent employment occupied in the organ or the entity of origin, when the requisition involves in reduction of that remuneration.

Art. 65. ANCINE will be able to hire professionals who are indispensable to the achievement of their work, while not completing their own staff framework, by a specified time and not more than twenty-four months counted from their deployment, vetoed to re-hiring before decorating twenty-four months of the termination of the contract.

§ 1º Temporary hiring will be made for a definite time, and observed the maximum term of twelve months, and may be extended, provided that its duration does not exceed the final term of the authorization that it treats the caput of this article.

§ 2º The remuneration of the hired staff temporarily, shall have as reference the values set out in joint act of the Agency and of the central body of the Civil Personnel System of the Federal Administration-SIPEC.

§ 3º Applies to the staff hired temporarily by the Agency, the provisions of the arts. 5º and 6º, in the single paragraph of the art. 7º, in the arts. 8º, 9º, 10, 11.12 and 16 of Law No. 8,745, of December 9, 1993.

Art. 66. Is the Executive Power authorized to:

I-transfer to ANCINE the technical and patrimonial hits, obligations and rights of the Registry Division of the Registry for Development of the Audiovisual of the Ministry of Culture, as well as those corresponding to other activities assigned to the Agency by this Provisional Measure;

II-remanejar, transpose, transfer, or use, from the installation of the ANCINE, the budgetary allocations approved in the Budget Law 2001, consigned to the Ministry of Culture, referring to the assignments transferred to that municipality, maintained the same budget classification, expressed by category of programming at its lowest level, noted the provisions of the § 2º of the art. 3º of Law No. 9,995 of July 25, 2000, as well as the respective detailing by budget sphere, expense groups, resource sources, application modalities and usage identifiers.

Art. 67. Within a maximum of one year, counted from September 5, 2001, there should be redacted regulation available on the form of transfer to ANCINE, of the processes concerning the approval of projects on the basis of Law No. 8,685, of 1993, and Law No 8,313, from 1991, inclusive of those already approved.

Single paragraph. Until the processes referred to in the caput are transferred to ANCINE, their analysis and follow-up will remain in charge of the Ministry of Culture.

Art. 68. In the first management of ANCINE, a director will have a two-year term, one of three years, one of four years, one of five years and one of six years, to implement the system of non-coincidental mandates.

Art. 69. It is up to the Advocate-General of the Union for representation in the judicial proceedings in which ANCINE is a party or stakeholder, until the deployment of its Attorney General.

Single paragraph. The Ministry of Culture, through its Legal Consultancy, will promote, within the period of one hundred and eighty days, counted as of September 5, 2001, surveying the ongoing legal proceedings involving matter whose competence has been transferred to ANCINE, to which it will replace it in the respective processes.

Art. 70. The installation of ANCINE will give itself in up to one hundred and twenty days, starting from September 5, 2001 and the beginning of the exercise of its competences from the publication of its regimental structure in act of the President of the Republic.

CHAPTER XI

GENERAL AND FINAL PROVISIONS

Art. 71. It is vetted to the employees, the requisitioned, the occupiers of commissioned office and the ANCINE leaders the exercise of other professional activity, including operational management of company, or politico-partisan direction, excepted cases admitted into law.

Single paragraph. In the event that the ANCINE leader is a partner-controller of company related to the film and videographical industry, he / she is the same barred from using public resources or tax incentives during the period in which the leader is in the exercise of its functions.

Art. 72. They are set up for exercise in the ANCINE the commissioned posts laid out in Annex II of this Interim Measlant.

Art. 73. The quantitative of requisitioned servers or employees, plus the Effective Personnel Framework, the temporary contractors and the occupiers of commissioned positions will not be able to exceed the number of jobs set for ANCINE in the art. 13 of this Provisional Measure.

Art. 74. The Executive Power will stimulate the association of national and foreign capital cities, including through the mechanisms of converting external debt, to finance to companies and projects aimed at the activities of which it treats this Measure Provisional, in the form of the regulation.

Single paragraph. The deposits on behalf of foreign creditors to the order of the Central Bank of Brazil will be released by their face value, in amount to be fixed by that Bank.

Art. 75. This Interim Measure will be regulated by the Executive Power.

Art. 76. The inciso II of the art is revoked. 11 of the Decree-Law No. 43 of November 18, 1966, the Decree-Law No. 1,900 of December 21, 1981, and Law No. 8,401 of January 8, 1992.

Art. 77. This Interim Measure takes effect on the date of its publication.

Brasilia, September 4, 2001; 180º of Independence and 113 of the Republic.

FERNANDO HENRIQUE CARDOSO

Sérgio Silva do Amaral

Francisco Weffor

Pedro Parente

ANNEX I

Art. 33, inciso I:

a) MARKET OF DISPLAY ROOMS (except advertising work)

-Film or videophonographic film of up to 15

R$ 300.00

-Film or videograph of duration at 15 and up to 50

R$ 700.00

-Film or videofhoneographic duration at 50

R$ 3,000.00

b) DOMESTIC VIDEO MARKET, IN ANY SUPPORT (except advertising work)

-Film or videofhoneography from up to 15

R$ 300.00

-Film or videophone-based video higher than 15 and up to 50

R$ 700.00

-Film or videophone-Obra With duration to 50 or set of audio-visual works of each Metre and / or medium metering recorded in one same support lasting longer than 50

R$ 3,000.00

- film or serial videofhoneography (by chapter or episode)

R$ 750.000

c) BROADCASTING SERVICES MARKET OF SOUNDS AND IMAGE (except advertising work)

-Film or videofhoneography from up to 15

R$ 300.00

-Obra cinematic or videophonographic of upper duration to 15 and up to 50

R$ 700.00

-Film or videophonographic duration of more than 50

R$ 3,000.00

-Film or videofonographic film seriada (by chapter or episode)

R$ 750.00

d) MARKET OF MASS ELECTRONIC COMMUNICATION SERVICES BY SUBSCRIPTION (except advertising work)

-Film or videophonographic from up to 15

R$ 200.00

-Film Obra or videofonographic duration of more than 15 and up to 50

R$ 500.00

-Film or videophonographic works of more than 50

R$ 2,000.00

-Film or videofonographic film seriada (by chapter or episode)

R$ 450.00

and) OTHER MARKETS (except advertising labor)

-Film or videofhoneography from up to 15

R$ 300.00

-Obra cinematic or videophonographic of upper duration a15 minutes and up to 50

R$ 700.00

-Film or videophonographic duration of more than 50

R$ 3,000.00

-Film or videofonographic film seriada (by chapter or episode)

R$ 750.00

Art. 33, inciso II

CINEMATIC WORK OR VIDEOGRAPHY FOR DISPLAY FOR DISPLAY IN EVERY INDUSTRY

-Film film or advertising videograph with duration of up to 15

R$ 50,000.00

-Film film or advertising videophones with duration higher than 15 and up to 30

R$ 70,000.00

-Film film or advertising videograph lasting longer than 30

R$ 100,000.00

ANNEX II

Framework of commissioning posts of ANCINE

DIRECTION

CD-I

1

CD-II

3

XX_ENCODE_CASE_ONE executive GERD

CGE-I

4

CGE-II

12

CGE-III

10

CGE-IV

6

ASSESSORING

CA-I

8

CA-II

6

CA-III

6

ASSISTANCE

CAS-I

8

CAS-II

8

TECHNICIANS

CCT-V

8

CCT-IV

12

CCT-III

10

CCT-II

12

CCT-I

12

TOTAL

126