DECREE NO. 4,386, September 25, 2002

Disposes on the execution of the Quadragumth Additional Protocol to the Economic Supplementation Agreement No. 18, between the Governments of the Federative Republic of Brazil, of the Argentine Republic, of the Republic of Paraguay and the Eastern Republic of Uruguay, of July 31, 2002.

THE PRESIDENT OF THE REPUBLIC, in the use of the assignment that gives it the art. 84, inciso IV, of the Constitution,

Considering that the Treaty of Montevideo of 1980, which created the Latin American Integration Association (ALADI), firmed by the Republic of Brazil on August 12, 1980 and approved by the National Congress, through the Legislative Decree No. 66 of November 16, 1981, provides for the modality of Agreement of Partial Reach of Economic Supplementation;

Whereas the Partial Reach Agreement of Economic Supplementation No. 18, of November 29, 1991, between the Governments of the Federative Republic of Brazil, the Argentine Republic, the Republic of Paraguay and the Eastern Republic of Uruguay, was promulgated by Decree No. 550 of May 27 1992;

Considering that the Plenipotentiaries of the Federative Republic of Brazil, of the Republic Argentina, of the Republic of Paraguay and the Eastern Republic of Uruguay, on the basis of the Treaty of Montevideo of 1980, signed, on July 31, 2002, in Montevideo, the Quadragtieth Additional Protocol to the Economic Supplementation Agreement No. 18 (CMC Decision 04/02-General Regime of Origin), between the Governments of the Federative Republic of Brazil, the Argentine Republic, the Republic of Paraguay and the Eastern Republic of Uruguay;

D E C R E T A:

Art. 1º The Quadragth Additional Protocol to the Economic Supplementation Agreement No. 18 of July 31, 2002 between the Governments of the Federative Republic of Brazil, of the Argentine Republic, the Republic of Paraguay and the Eastern Republic of Uruguay, apensed by copy to the present Decree, will be executed and fulfilled as entirely as it contains.

Art. 2º This Decree goes into effect on the date of its publication.

Brasilia, September 25, 2002; 181º of Independence and 114º of the Republic.

FERNANDO HENRIQUE CARDOSO

Luiz Augusto Saint-Brisson de Araújo Castro

ECONOMIC COMPLEMENTATION AGREEMENT NO. 18, CONCLUDED BETWEEN ARGENTINA, BRAZIL, PARAGUAY AND URUGUAY

Quadragumth Additional Protocol

The Plenipotentiaries of the Argentine Republic, of the Federative Republic of Brazil, of the Republic of Paraguay and of the Eastern Republic of Uruguay, accredited by their respective Governments second powers bestowed in good and due form, deposited opportunely at the General Secretariat of the Latin American Integration Association (ALADI),

HAVING IN A VIEW TO Decision N ° 04/02 of the Common Market Council of MERCOSUR,

CONVVE IN:

Single Article: Replace Chapter VI of the General Regime of Origin of Economic Supplementation Agreement No. 18, registered in Annex I of the Eighth Additional Protocol, by the text that figure as an Annex to the present Additional Protocol.

Renumber articles 22, 23, 24º and 25º of the Chapter VII of the said Annex I of the Eighth Additional Protocol by 44, 45, 46e 47, respectively.

The General Secretariat of ALADI will be depositary of this Protocol, of which it will send duly authenticated copies to the signatory Governments.

IN FÉ DO WHAT, THE RESPECTIVE PLENIPOTENTIARIES SIGN the present Protocol in the city of Montevideo, at the thirty-one days of the month July two thousand and two, in an original in the Portuguese and Spanish languages, being both texts being equally valid.

JUAN CARLOS OLIMA

By the Government of the Argentine Republic

Bernardo Pericás Neto

By the Government of the Federative Republic of Brazil

José María Casal

By the Government of the Republic of Paraguay

Elbio Rosselli Frieri

By the Government of the Oriental Republic of Uruguay

CHAPTER VI

Control and Verification of the Certificate of Origin

ARTICLE 18

Notwithstanding the submission of a certificate of origin under the conditions established by the present Regulation of Origin, the competent authority of the State Party of the importing Party may, in the event of a reasoned doubt, require the competent authority of the State Party to provide additional information with the purpose of veriing the authenticity of the questioned certificate and the veracity of the information in it constant, without prejudice to the application of the corresponding MERCOSUR standards and / or of the respective national laws on customs unlawful.

The request for information effected on the basis of this Article should be limited to the records and documents available in the official repartitions or in the entities enabled to issue the MERCOSUR certificates of origin. In addition, you will be able to request copy of the documentation required for the issuance of the certificate. The provisions of this Article do not limit the exchanges of information provided for in the Customs Cooperation Agreements.

The consultations will take place in need, in a clear and concrete way, the reasons that justified the doubts as to the authenticity of the certificate or the veracity of its data. Such consultations will take place through a single body of the competent authority designated by each State Party for that purpose.

The competent authority of the State Party importer shall not detain the import tramites of the goods, and may require the provision of warranty, in any of its modalities, to preserve the tax interests, as a precondition for the customs disembarkation of the commodity.

The amount of the guarantee, when this is required, will not be able to exceed a value equivalent to that of the incident tributes on the said commodity, if the latter were imported since third-countries, in accordance with the legislation of the importing country.

ARTICLE 19

The competent authority of the State Party exporter should provide the requested information in application of the provisions of Article 18 within a period of 30 days, counted as of the date of receipt of the respective application.

ARTICLE 20

A information obtained in amparo of the provisions of this Chapter will have confidential character and will be used exclusively to clarify the case in question by the competent authority of the State Party importing.

ARTICLE 21

In cases where the information requested to amparo from Article 18 is not provided within the time limit set out in Article 19 or is insufficient to clarify doubts about the origin of the merchandise, the competent authority of the State Party of the importing Party may determine open investigation of the case, within the full time limit of 40 days, counted from the solicitation of information. Otherwise, if it is due to release the warranty provided for in Article 18 within a maximum period of 30 days.

ARTICLE 22

Once initiated the investigation, the competent authority of the State Party importer shall not detain the tramites of new imports referring to identical goods from the same exporter or producer, and may, however, require the provision of warranty, in any of its modalities, to preserve the tax interests, as a precondition for the customs disembarkation of these goods.

The amount of the warranty, when this is required, will be established in the terms set out in Article 18.

ARTICLE 23

The competent authority of the State Party of the importing Party shall immediately notify the commencement of the source investigation to the importer and the competent authority of the State Party exporter, triggering the procedures set out in Article 24.

ARTICLE 24

During the investigation process the competent authority of the State Party importer may:

a) require, through the competent authority of the State Party exporter, new information and copy of the documentation in possession of who has issued the certificate of origin questioned in accordance with Article 18, necessary to verify the authenticity of the same and the veracity of the information contained therein, stating the number and date of issue of the certificate of origin that is being investigated.

When you treat yourself to check the content of value added local or regional value, the producer or exporter should facilitate access to information and documentation allowing to see the CIF import value of the inputs from extra-area used in the production of the subject goods research.

When it comes to checking the characteristics of certain productive processes required as specific requirements of origin, the exporter or the producer should facilitate access to information and documentation that allow to see such processes.

b) send to the competent authority of the State Party Part exporter written questionnaire for the exporter or the producer, indicating the certificate of origin investigated;

c) to request that the competent authority of the State Party exporter carries out the relevant issues in order to be able to carry out visits to the producer's premises, with the aim of examining the productive processes and the facilities used in the production of the goods in issue.

The competent authority of the State Party exporter will follow up the visit held by the authorities of the State Party importer, which may include the participation of specialists who will act in the condition of observers. The specialists should be identified beforehand and should be neutral and have no interest in the research. The State Party importer will be able to deny the participation of such specialists when they represent the interests of the companies or entities involved in the investigation.

Completed the visit, will be firmed up, by all participants, an Ata in which to let consign that visit has transran in accordance with the conditions set out in this Chapter. They should appear in the Ata, in addition, the following information: date and place of achievement of the visit; identification of certificates of origin that have initiated the investigation, identification of the specifically questioned and the participants, with indication of the organ or entity they represent, and an account of the visit carried out.

The State An exporter party will be able to request the postponement of a verification visit by a term not exceeding 30 days.

d) carry out other procedures that accrore the States Parties involved in the case under investigation.

ARTICLE 25

The competent authority of the State Party shall provide the information and documentation requested in application of Article 24 (a) or (b) in a 30-day time frame consigned from the date of receipt of the request.

ARTICLE 26

In relation to the procedures laid down in Article 24, the competent authority of the State Party importer may to request the competent authority of the State Party to export the monitoring or advising of specialists in the matter in question.

ARTICLE 27

In cases where the information or documentation required by the competent authority of the State Party exporter is not provided within the stipulated time, or if the answer does not contain sufficient information or documentation to determine the authenticity or truthfulness of the certificate of origin presented, or still, if there is no concordance with respect to the holding of a visit by the producers, the competent authority of the State Party of the importing Party may consider not met the requirements of origin, and may, in consequence, denigrating preferential tariff treatment to the goods to which reference the object certificate of the investigation initiated pursuant to Article 21, giving by way of completing it.

ARTICLE 28

The competent authority of the State Party of the importing Party undertakes to make every effort to terminate investigations within no more than 45 days' corridors counted from the date of receipt of the information obtained to the amparo of Article 24.

Case are necessary new representations or information, the competent authority of the State Party of the importing Party shall report the fact to the competent authority of the State Party exporter. The time frame for the realization of these new representations or for the submission of the additional information requested should not extend for more than 75 days, counted from the date of receipt of the initial information requested for the amparo of the Article 24.

If within a period of 90 days counted from the beginning of the investigation, the same is not completed, the warranty will be released, without prejudice to the continuity of the investigation.

ARTICLE 29

A competent authority of the State Party importer shall communicate to the importer and the competent authority of the State Party exporter the closure of the investigation and the measure adopted in relation to the origin of the goods, exposing the reasons that determined the decision.

The competent authority of the State Party of the importing Party shall give the competent authority of the State Party exporter possibility of view of the autos of the corresponding investigation process in accordance with the procedures laid down in the legislation of each State Party.

ARTICLE 30

During the investigation process should be taken into account possible modifications to the production conditions effected by the companies under investigation.

ARTICLE 31

Completed research with the qualification of the origin of the commodity and with the validation of the origin criterion relied on in the certificate of origin, the guarantees will be released required in Articles 18 and 22, within a time no longer than 30 days ran.

ARTICLE 32

Completed the investigation with the disqualification of the origin criterion of the goods invoked in the certificate of origin questioned, whether they will carry out the tax incidents on the commodity as if it were imported from third countries and whether the penalties provided for in the MERCOSUR normative and / or the corresponding ones in the current legislation apply in each State Part.

Completed the investigation with the disqualification of the origin of the merchandise, if shall carry out the incidental tributes on the commodity as if it were imported from third countries and shall apply the penalties provided for in the MERCOSUR normative and / or the corresponding ones in the prevailing legislation in each State Party.

In that latter case, the competent authority of the importing State may denigrate preferential treatment for the customs disembarasation of new imports referring to identical goods from the same producer, until it is demonstrated that the production conditions have been modified in order to comply with the rules of the MERCOSUR Origin Scheme.

Once the competent authority of the State Party exporter has remitted the information to demonstrate that the conditions of production have been modified, the competent authority of the State Party importer shall have 30 days gone by, from the date of receipt of this information to communicate a decision in that respect, or up to a maximum of 60 days rails, in the case where a new in-situ verification visit is required at the producer's premises, as per Article 24 (c).

Case the competent authorities of the States Parties importer and exporter do not loom consensus on the modification of production conditions, will be able to resort to the procedure established as of Article 35 of this Chapter or the MERCOSUR controversies solution procedure.

ARTICLE 33

A State Party may request another State Party Part research on the origin of merchandise imported by the latter from other States Parties when it has grounds for suspecting that it is suffering competition from imported products with preferential treatment that do not comply with the MERCOSUR Source Regime.

For such effects, the competent authority of the State Party requesting the investigation will forward to the competent authority of the State Party importer information concerning the case within a period of 30 days rushed, counted from the solicitation. Received that information, the State Party importer will be able to trigger the procedures set out in this Chapter, giving notice to the State Party that requested the initiation of the investigation.

ARTICLE 34

The control and source verification procedures provided for in this Chapter, will be able to apply, including, to already nationalized goods.

ARTICLE 35

Within 60 days, counted from the receipt of the communication provided for in Articles 29 or in the third paragraph of Article 32, should it consider the inappropriate measure, the State Party exporter can:

a) submit a Consultation at the MERCOSUR Trade Commission in the form provided for in the CCM Guideline N ° 17/99, exposing the technical grounds and normative grounds that would indicate that the measure adopted by the competent authorities of the State Party importer does not adjust to the MERCOSUR normative in matters of origin; and / or

(b) request to appear technical in order to determine whether the goods in issue comply with the requirements of MERCOSUR origin.

ARTICLE 36

Case the State Party exporter requests to appear technical in the terms of the previous Article, will communicate the Pro Presidency Tempore, at least ten days in advance at the date of the next meeting of the MERCOSUR Trade Commission, with the background to the case.

ARTICLE 37

The opinion technical will be, in principle, drawn up by an expert in the matter in question, designated by common agreement by the parties involved, at the meeting to which reference Article 36, which shall be elected from a list of four experts submitted for that end by the States Parties not involved in the matter in advance of the meeting. In the lack of agreement to designate the specialist, this one will be chosen, by draw held by the MERCOSUR Administrative Office among the experts appearing on that list, in that same meeting.

If there is no agreement between the States Parties involved in the issue for the elaboration of opinion by a single expert, the opinion will be drawn up by three experts designated one by each State Party involved in the matter and the third by the MERCOSUR Trade Commission, at the meeting to which reference Article 36, among a list of four experts indicated by the States Parties not involved in the matter, in advance of the meeting. In the lack of agreement to designate the third specialist, this one will be chosen, by draw held by the MERCOSUR Administrative Office among the experts appearing on that list, in that same meeting.

The costs pertaining to the drafting of the opinion will be in charge of the applicant, when the opinion is drawn up by a specialist and will be divided by the Parties involved in the matter when the opinion is drawn up by the group of three experts.

ARTICLE 38

The experts will act on a personal basis and not on the quality of representatives of a Government and not should have specific interests in the present case. The States Parties shall refrain from exerting any influence on their acting.

ARTICLE 39

O (s) expert (s) will decide on the case in the light of the MERCOSUR source requirements for the product in question, and may give opportunity to the States Parties involved in the matter to expose the technical fundamentals of their positions.

In this sense, the designated specialist (s) will be able to request the competent authorities of the States Parties involved in the matter the information it considers (m) necessary. The non-presentation of requested information will imply presumption in favour of the other party.

ARTICLE 40

The opinion technician, which will be issued by a majority when issued by three experts, is to be submitted to the MERCOSUR Trade Commission, via the "Pro Tempore Presidency", within not more than 30 days rushed, from the convocation of the expert (s).

At the meeting following the receipt of the opinion, the Commission of Trade of MERCOSUR will give by completed the procedure in question, based on the opinion of the specialist (s). In order for the MERCOSUR Trade Commission to rechace the opinion, it should pronounce itself by consensus. Not being reared, will be considered accepted.

ARTICLE 41

According to what is solved in the Trade Commission of MERCOSUR, the measure adopted in relation to the origin of the merchandise, provided for in Article 32, shall be confirmed or revised; the guarantees required in application of Articles 18 and 22, shall be effective or released; and the import duties collected in application of Article 28 shall be confirmed or returned, in the term of 30 days ran since the date of the meeting of the MERCOSUR Trade Commission in which the technical dictate is accepted.

ARTICLE 42

The procedures before the MERCOSUR Trade Commission provided for in this Chapter shall not preclude the States Parties involved in the matter from being able to resort at any time to the mechanisms for the solution of the prevailing controversies in MERCOSUR.

ARTICLE 43

All the deadlines mentioned in this Chapter correspond to days gone by.