NOTICES
DEPARTMENT OF COMMERCE
[C-351-006]
Certain Tool Products From Brazil; Final Results of Countervailing Duty
Administrative Review and Renegotiation of Suspension Agreement
Thursday, December 18, 1986
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AGENCY: International Trade Administration/Import Administration Department of Commerce.
ACTION: Notice of final results of countervailing duty administrative review and renegotiation of suspension agreement.
SUMMARY: On October 30, 1986, the Department of Commerce published the preliminary results of its administrative review and tentative determination to renegotiate or terminate suspension agreement on certain tool steel products from Brazil. We have renegotiated the suspension agreement and find that the revised agreement meets the requirements of sections 704(b) and (d) of the Tariff Act. The review covers the period May 1, 1983 through December 31, 1985 and 17 programs.
We gave interested parties an opportunity to comment on the preliminary results. After reviewing all of the comments received, we have determined the net subsidy to be 28.55 percent ad valorem for the 1983 period, 20.97 percent ad valorem for 1984, and 12.18 percent ad valorem for 1985.
EFFECTIVE DATE: December 18, 1986.
FOR FURTHER INFORMATION CONTACT:Richard C. Henderson or John D. Miller, Office of Compliance, International Trade Administration, U.S. Department of Commerce, Washington, DC 20230; telephone: (202) 377-2786.
SUPPLEMENTARY INFORMATION: .
Background
On October 30, 1986, the Department of Commerce ("the Department") published in the Federal Register (51 FR 39693) the preliminary results of its countervailing duty administrative review and tentative determination to renegotiate or terminate the suspension agreement on certain tool steel products from Brazil (48 FR 11731, March 21, 1983). We have now completed the administrative review in accordance with section 751 of the Tariff Act of 1930 ("the Tariff Act").
Scope of Review
Imports covered by the review are shipments of Brazilian certain tool steel products, limited to hot-finished tool steel, cold-finished tool steel, high speed tool steel, chipper knife tool steel, and band saw steel bars and rods. Such merchandise is currently classifiable under items 603.9300, 606.9400, 606.9505, 606.9510, 606.9520, 606.9525, 606.9535, 606.9540, 607.2800, 607.3405, 607.3420, 607.4600, 607.5405, and 607.5420 of the Tariff Schedules of the United States Annotated.
The review covers the period May 1, 1983 through December 31, 1985 and 17 programs: (1) CACEX export
financing; (2) an income tax exemption for export earnings; (3) the export credit premium for the IPI; (4)
CIC-CREGE 14-11 financing; (5) incentives for trading companies (Resolution 883); (6) accelerated
depreciation for Brazilian-made capital goods; (7) duty-free treatment and tax exemption on equipment used in
export production ("CDI"); (8) FINEX (Resolutions 68 and 509); (9) funding for expansion through IPI tax
rebates; (10) BNDES long-terms loans; (11) FINEP long-term loans; (12) BEFIEX; (13) CIEX; (14) FUNPAR;
(15) PROEX; (16) PROSIM: and (17) financing for the storage of merchandise destined for export (Resolution 330).
The review covers three producers and one trading company.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the preliminary results. We received comments from
the petitioner, the Speciality Steel Industry of the United States ("SSI"), and the Brazilian government.
Comment 1: The Brazilian government argues that the Department should use for its short-term loan
benchmark the annualized interest rate in effect on the date that each loan was obtained instead of the average
annual rate in effect during the review period. In a high-inflation economy, such as exists in Brazil, an average
rate calculated over the review period distorts the actual interest differentials. Further, since the number of loans
in this case is small, this approach will not create an unworkable administrative burden.
Department's Position: We disagree. An average benchmark over the review period may understate or
overstate the benefit on individual loans, but it will accurately reflect the aggregate benefit from preferential
loans over the review period because each company borrows at a more or less constant rate throughout the year.
Comment 2: The Brazilian government contends that the Department should use as its short-term loan
benchmark the average commercial bank lending rates published by Morgan Guaranty Trust Company in its
World Financial Markets instead of the average of weekly trade bill discount figures published in
Analise/Business Trends. Commercial bank lending practices are most similar to Resolution 674/882 financing,
the source of Morgan Guaranty's figures.
Department's Position: We disagree. The commercial bank lending rates published by Morgan Guaranty Trust Company are lending rates to prime borrowers. As stated in the Subsidies Appendix to the notice of final affirmative countervailing duty determination and order on certain cold-rolled carbon steel flat-rolled products from Argentina (49 FR 18006, April 26, 1984) ("The Subsidies Appendix"), we use a national average benchmark based on short- term financing available to all firms, not just to prime borrowers.
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We have found that trade bill discounting more accurately reflects the actual borrowing practice of most
Brazilian firms.
Comment 3: The Brazilian government argues that the Department overstated the short-term loan benchmark
by compounding monthly rates. If the Department continues to use the annual average for discounts of
accounts receivable, it should calculate a daily rate, compound it for a 30-day period and then multiply this rate
by 12 to annualize the benchmark. This calculation would take into account the monthly rollover of the principal.
Department's Position: We disagree. We have found that commercial lending in Brazil generally does not
exceed 30 days and that most loans are rolled over monthly. It is inappropriate to use compounded daily rates,
even if such rates were available, because loans are rolled over monthly, not daily.
Comment 4: Brazilian government believes that the Department should use the guideline interest rates
established by the resolution regarding the short- term preferential export financing programs instead of the
actual interest rates on each loan contract. Although the actual lending experience of certain firms may result in
interest rates that are lower than the guideline interest rates, the lower rates are the result of commercial
practices, such as the large volume of business conducted between certain firms and banks, and not any
government action. Furthermore, since a higher lending volume generates higher costs for the firm, the
Department should include these costs in calculating the effective preferential interest rate.
Department's Position: We disagree. Regardless of whether the costs of these loans are higher or lower than
the guideline rates, the benefit received by the companies borrowing under this program is the difference
between what they are paying and what they otherwise pay. Further, the Brazilian government has provided no
evidence that an increased volume of loans causes higher effective costs.
Comment 5: The Brazilian government claims that, in calculating the short-term interest rate benchmark, the Department should not include the tax on financing transactions ("the IOF"). The IOF is an indirect tax on the financing of physically incorporated inputs.
Considering the IOF tax to be an integral part of the commercially-available rate (i.e., considering exemption
from the tax to be a subsidy) is contrary to the General Agreement on Tariffs and Trade and U.S. law, both by
which permit the non-excessive rebate of indirect taxes.
Department's Position: We have considered and rejected this argument in other Brazilian countervailing duty
cases. See, e.g., Certain Castor Oil Products from Brazil (48 FR 40534, September 8, 1983).
Comment 6: The Brazilian government claims that the Department incorrectly allocated the benefits from the
income tax exemption for export earnings program over export sales instead of total sales. Since the program
rebates direct taxes, it is a domestic subsidy, which requires the Department to allocate the benefit over total sales.
Department's Position: We disagree. When the amount of benefit received under a program is tied directly or
indirectly to a company's level of exports, that program is an export subsidy. Under this program, exports are
necessary to receive a benefit, and the level of exports determines the level of benefit. Therefore, we will
continue to allocate benefits from this program over export sales instead of total sales.
Comment 7: The Brazilian government argues that CIC-CREGE 14-11 loans are not countervailable because
they are non-government loans granted in accordance with commercial considerations. Although the nominal
interest rates on these loans during the review period were somewhat below the commercial interest rates,
commission costs, collateral and foreign exchange requirements effectively increased nominal rates to the
range of commercial rates. Further, the Department should not calculate a cash deposit rate for this program
because the nominal rates on these loans now approximate commercial rates.
Department's Position: The Brazilian government has not provided adequate information to allow us to consider
this loan program to be provided without government direction or to be provided on terms consistent with
commercial loans.
Comment 8: The Brazilian government believes that the Industrial Development Council's ("CDI") Decree Law
1137, which provides for accelerated depreciation for Brazilian-made capital goods, and Decree Law 1428,
which allows import duty exemptions on Brazilian-made capital equipment, are not limited to an industry or
group of industries, and are therefore not countervailable.
If the Department maintains that Decree Law 1137 is countervailable, it should calculate a benefit only when
the amount of accelerated depreciation claimed exceeds the amount of accelerated depreciation "recaptured"
(i.e., added back to the net profit in an amount equal to that claimed in prior years), because the recapture
eliminates any net tax effect.
Department's Position: We disagree. We have found that CDI benefits are provided by the government to
specific industries. See, Certain Carbon Steel Products from Brazil (49 FR 17988, April 26, 1984).
We agree that we should calculate a benefit when the amount of recapture attributable to CDI is less than the
amount of accelerated depreciation attributable to CDI. However, the companies did not provide the relevant
verification documents that would allow us to make this calculation.
Comment 9: The Brazilian government believes that FINEX financing under Resolutions 68 and 509 is not
countervailable because the program is consistent with the Arrangement on Guidelines for Officially Supported
Export Credits ("the Arrangement"), which is not considered an illegal export subsidy under item (k) of the
Illustrative List of Export Subsidies annexed to the Agreement on Interpretation and Application of Articles VI,
XVI, and XXIII of the General Agreement on Tariffs and Trade ("the Subsidies Code").
Department's Position: We disagree. Since the FINEX loans in this case are short-term loans, they are not
covered by the Arrangement and, hence, do not fall within the second paragraph of item (k).
Comment 10: The Brazilian government contends that U.S. importers would normally obtain import financing at
LIBOR or the U.S. prime rate, not at the rates reported in the U.S. Federal Reserve Bulletin. Therefore, the
Department should change the benchmark for FINEX importer financing. If the Department continues to use the
Federal Reserve rate as a benchmark, the Brazilian government believes that the benchmark should not be
based on the upper limit of the interquartile range, but rather on the average of the upper and lower limits.
Department's Position: We disagree. The Federal Reserve rates are an appropriate measure of the national
average commercial rates available to U.S. importers. The Brazilian government has not provided any proof that
an average importer in the United States would have access to either trade or working capital financing at
LIBOR or U.S. prime rates.
In calculating the benchmark, we used the weighted-average interest rates on loans of less than one million
dollars, not the upper limit of the interquartile range.
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Comment 11: The Brazilian government contends that the Department should have used discounting
operations under Communication 331, rather than Resolution 63 loans, as the basis for the FINEX export
financing benchmark. The terms and commitments associated with Communication 331 discount operations
more closely approximate the FINEX export financing discounting operations.
Department's Position: We disagree. Communications 331 discount operations generally have a duration of
much less than 180 days. In contrast, Resolution 63 loans, with 180-day terms, more closely approximate the
terms, commitments, and duration of FINEX export financing.
Comment 12: The Brazilian government argues that the Department, in its calculation of benefits from importer
and exporter FINEX financing, should not have included the commission, which is paid to the lending bank by
CACEX. The Brazilian government believes that, since the commission is negotiated between the lender and
borrower at arm's length, it is governed by commercial considerations, and is therefore not countervailable.
Department's Position: We disagree. The benefit received by the companies borrowing under this program is
the difference between what they are paying and what they would otherwise pay. Therefore, we have included
the portion of the commission that is passed on to borrowers.
Comment 13: The Brazilian government argues that the IPI rebate program under Decree Law 1547 is not
countervailable. As originally enacted, the value-added tax was applied to all domestic sales transactions, but it
now applies to only fourteen industries, including steel. Because these industries are subject to the IPI while
others are not, the reduction of the IPI for any of those industries cannot be considered a subsidy.
Department's Position: We disagree. The IPI rebates do not directly reduce taxes paid by steel producers.
Instead, the same amount of IPI tax is applied to all steel products, but only companies that produce certain
priority products and companies whose expansion projects are government-approved may receive the rebates.
For example, manufacturers of steel products such as welded pipe and tube are not eligible for the rebates.
Therefore, there is no one-to-one correspondence between taxes paid and the IPI rebate. Moreover, we do not
have sufficient information on the amount of rebates in other industries or on the exceptions within those industries.
Comment 14: The Brazilian government contends that the Department has sufficient evidence to find the FINEP
long-term loan program generally available and, therefore, not countervailable. If the Department continues to
find these loans countervailable, the benchmark should be the company-specific long-term interest rate in effect
when the loans were taken out.
Department's Position: We disagree. During verification, we requested industry-specific FINEP loan information,
including data on the relative size of, and amounts received by, each industry for the past six years. Although
we obtained information on various industries that received FINEP loans, the Brazilian government did not
break down the amounts provided for those industries. Therefore, we do not have sufficient information to find
that FINEP long-term loans are not specifically provided to more than a specific enterprise or industry or group
of enterprises or industries.
We agree that a company-specific loan benchmark is appropriate. We have recalculated the benefit and find no
change in the subsidy rate.
Comment 15: The Brazilian government believes that, since sales from producers to trading companies are
made at arm's length, the Department inappropriately assumed that the subsidies given to producers also
confer subsidies on trading companies and service centers. If the Department believes that subsidies on this
merchandise were passed through from the producers to the trading companies and service centers, it should
have used an upstream subsidy test to determine the benefit. If the Department continues to assume that
subsidies given to producers also confer subsidies on trading companies and service centers, it should weigh
the benefits received by each trading company and service center by the amount purchased from each producer.
Department's Position: The upstream subsidy provision of the Act, 19 U.S.C. section 1677-1, only applies to
situations involving an input product. (See, final affirmative countervailing duty determination on live swine and
fresh chilled and frozen pork products from Canada (50 FR 25097, June 17, 1985)). The products which are
sold to the trading companies or the service center in this case are not inputs, rather they are products which
are at or near the final stage of processing. All the trading companies or the service centers do is prepare these
products for the next customer. The amount of value added by the trading company or the service center is
minimal. Thus, since we determine that this situation is not one involving inputs, we determine that the upstream
subsidy provision of the Act is not applicable. Nor does the fact that the sale from the producer to the trading
company is an arm's length transaction alter this conclusion.
Comment 16: The Brazilian government believs that the Department incorrectly determined that the suspension
agreement no longer meets the requirements of the Tariff Act. The Brazilian government has fulfilled the
conditions of the suspension agreement by appropriately collecting export taxes equal to the amount required
by the Department, and therefore, it has not violated the agreement. Neither the agreement nor the statute
requires retroactive comparison of the export tax with the net subsidy. Instead, a suspension agreement should
function prospectively since the statute only requires the review of the net subsidy. Therefore, there is no need
to renegotiate the suspension agreement. Further, it would be inappropriate to use the rate set in the final
determination of this case instead of the rate found in this review for a deposit rate for estimated countervailing
duties if an order were issued.
Department's Position: We disagree. Although the Brazilian government did not violate the suspension
agreement, the original agreement lacked a mechanism that would allow the complete elimination of the net
subsidy as required by the statute. Therefore, the agreement no longer met the requirements of section 704(b)
and (d) of the Tariff Act. The revised agreement now has an adjustment mechanism that allows for the complete
elimination of the net subsidy based on a comparison between actual export taxes paid during the period of
review and the net subsidy found during the same period. Therefore, the revised agreement conforms to both
the statute and the Department's practice to conduct reviews retrospectively.
Further, since we have not issued an order in this case, the issue of the appropriate cash deposit rate is moot.
Comment 17: The petitioner, the Speciality Steel Industry ("SSI"), argues that the Department lacks the
authority to renegotiate the suspension agreement. The SSI believes that, because the original agreement has
been violated and no longer meets the requirements of section 704 (b) and (d) of the Tariff Act, the Department
is required under section 704(i) to terminate the agreement and issue a countervailing duty order.
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Department's Position: We disagree. We made a preliminary determination that the original agreement no
longer meets the requirements of section 704 (b) and (d) because the amount of export taxes collected did not
fully offset the net subsidy. Section 355.32(b) of the Commerce Regulations allows the Department to
renegotiate suspension agreements, except in the event of intentional violations, which we do not find in this
case. Further, the statute does not prohibit renegotiation to bring an agreement into compliance with section 704
(b) and (d). Therefore, we believe that we have the authority to renegotiate the suspension agreement. Further,
we determine that the revised agreement meets the requirements of section 704 (b) and (d).
Comment 18: The SSI argues that the Department should terminate the agreement because of the Brazilian
government's past failures to collect the appropriate amount of export tax required by Brazil's tax resolutions.
The SSI believes that such incidents indicate a continuing failure to comply with the terms of the agreement.
Department Position: We disagree. Although there were some initial problems with implementation of the tax
resolutions governing the suspension agreement, we have found no further problems. The companies have paid
to the Brazilian Government all underpayments resulting from any difference between the export tax rate set by
the Brazilian government and the amount paid by the companies on specific shipments of this merchandise.
Therefore, we believe that the Brazilian government and the companies have made efforts in good faith to
comply with the terms of the agreement.
Comment 19: The petitioner argues that the revised suspension agreement should not forgive the difference
between the net subsidy and the amount of export taxes paid during the review period and 1986. The SSI
believes that the Department should rectify this difference by assessing additional countervailing duties or
requiring the Brazilian government to collect additional export taxes.
Department Position: We disagree. The original suspension agreement did not allow for the retroactive
correction of export taxes. Further, we have no authority to collect countervailing duties on imports covered by
the agreement. The revised agreement corrects this deficiency by including a mechanism which adjusts for any
under- or over-collection of export taxes on specific shipments. This mechanism will account for any differences
between the net subsidy and the amount of past export taxes paid.
Comment 20: The SSI argues that the revised agreement should include a provision for the treatment of any
differences between the export tax rate set by the Brazilian government and the amount paid by the companies.
The SSI believes that the absence of such a provision gives exporters an incentive to underpay. Such
undercollections should be treated as interest-free long-term loans.
Department's Position: We disagree. We do not believe it is necessary to include the export tax provisions
suggested by the SSI in the agreement because the Department has the authority to calculate a benefit which
corrects for any such discrepancies. If we find continuing problems with collection or payment of the export
taxes, we will terminate the suspension agreement and issue a countervailing duty order. Further, since all
payments for the review period have been appropriately made, the issue of the benchmark is moot.
Comment 21: The SSI argues that the revised agreement should correct for Brazil's inflation rate by specifying
how the dollar value of the cruzado- denominated subsidy is calculated. The SSI belives that if Brazil's inflation
rate exceeds the depreciation of the cruzado in relation to the dollar, the dollar value of the subsidies will be understated.
Department's Position: The SSI mistakenly believes that we can tie the benefits received by each firm from the
different subsidy programs to each shipment. The dollar value of benefits received by Brazilian companies from
one particular program on individual shipments may be, to a certain extent, "understand" or "overstated" by the
divergence between inflation and devaluation. However, the calculation of a countervailing duty would also
"understate" or "overstate" the benefit by the same amount. Since the effect of a suspension agreement and a
countervailing duty order is the same, there is no reason to calculate the benefits differently.
Final Results of Review: After reviewing all of the comments received, we determine that the revised agreement
now meets the requirements of sections 704(b) and (d) of the Tariff Act and that the net benefit be 28.55
percent ad valorem for the 1983 period, 20.97 percent ad valorem for 1984, and 12.18 percent ad valorem for
1985, the same as in the preliminary results. The Government of Brazil collected an average export tax of 18.56
percent ad valorem for the 1983 period, 19.83 percent ad valorem for 1984, and 10.81 percent ad valorem for
1985. In accordance with the adjustment mechanism in the revised agreement, we will instruct the Government
of Brazil to set an export tax rate of 12.18 percent on all shipments of this merchandise to the United States.
This administrative review and notice are in accordance with section 751(a)(1) of the Tariff Act (19 U.S.C.
1675(a)(1)) and § 355.10 of the Commerce Regulations (19 CFR 355.10).
Dated: December 12, 1986.
Gilbert B. Kaplan,
Deputy Assistant Secretary, Import Administration.
Revised Suspension Agreement
Certain Tool Steel Products from Brazil
Pursuant to section 704 of the Tariff Act of 1930, ("the Tariff Act"), and § 355.31 of the Commerce Regulations,
the Department of Commerce ("the Department") and the Government of Brazil enter into the following Revised
Suspension Agreement ("the Agreement"). On the basis of the foregoing, the Department shall continue to
suspend its countervailing duty investigation initiated on August 18, 1982 (47 FR 36874) with respect to
certain tool steel products from Brazil subject to the terms and provisions set forth below.
I. Scope of the Agreement
The Agreement applies to certain tool steel products manufactured in Brazil and exported, directly or
indirectly, from Brazil to the United States, ("certain tool steel products"). Certain tool steel products
includes hot- finished tool steel, cold-finished tool steel, high speed tool steel, chipper knife and
band saw steel bars and rods, currently classifiable under items 606.9300, 606.9400, 606.9505, 606.9510,
606.9520, 606,9525, 606.9535, 606.9540, 607.2800, 607.3405, 607.3420, 607.4600, 607.5405, and 607.5420
of the Tariff Schedules of the United States Annotated ("TSUSA").
II. Basis of the Agreement
The Government of Brazil hereby agrees to offset completely the net subsidy determined by the Department to
exist with respect to certain tool steel products exported directly or indirectly to the United States. The offset
shall be accomplished by the imposition and collection of an export tax.
A. Export Tax. 1. The Government of Brazil shall impose and collect an export tax equal to the value of the
"subsidy" found to exist, modified by an adjustment described in paragraph II.A.5. The export tax shall offset
completely any benefit received through the following programs:
(a) Export credit premium for the IPI;
(b) CACEX export financing;
(c) Accelerated depreciation for Brazilian-made capital goods;
(d) CIC-CREGE 14-11 financing;
(e) Funding for expansion through IPI tax rebates;
(f) Duty-free treatment and tax exemptions on imported equipment;
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(g) Incentives for trading companies;
(h) FINEX financing under Resolutions 68 and 509;
(i) Long-term loans under the FINEP program;
(j) BEFIEX;
(k) Income tax exemption for export earnings; and
(l) Any other benefits found countervailable in an administrative review in this proceeding.
2. The export tax will apply to certain tool steel products exported directly or indirectly from Brazil to the
United States on or after January 1, 1987.
3. The export tax shall be imposed and collected on or before the thirtieth day after the last day of the month of export.
4. The value of the "subsidy" referred to in paragraph II.A.1. shall be equal to the most recent rate of subsidy
found by the Department in this proceeding to exist with respect to exports of certain tool steel products.
5. The Adjustment referred to in paragraph II.A.1. shall be calculated as follows:
(a) The United States dollar amount of the subsidy found by the Department to exist during the course of the
most recent administrative review of this Agreement, minus
(b) The United States dollar amount of the export tax paid during the period reviewed in the most recent
administrative review of this Agreement.
6. The Department shall make best efforts to complete any administrative review initiated under section 751 of
the Tariff Act by November 30 of the year initiated. The effective date of any change in the export tax rate, as
determined in the final results of administrative review, shall be the earlier of January 1 of the year following the
issuance of the final results of administrative review or 30 days after issuance of the final results of
administrative review.
7. Any change in the export tax shall apply only to exports made on or after the effective date of that adjusted
export tax.
III. Additional Undertakings by the Government of Brazil
A. The Government of Brazil agrees to take such steps as are necessary to ensure that this Agreement is
implemented and monitored effectively, including:
1. Notifying the relevant authorities of the Government of Brazil of the terms of this agreement in order to ensure
action by those agencies consistent with the terms of this Agreement;
2. Supplying any information and documentation that the Department deems necessary to demonstrate full
compliance with the terms of this Agreement;
3. Permitting such verification and data collection as deemed necessary by the Department in order to monitor
this Agreement;
4. Notifying the Department if it becomes aware that any producer or exporter is transshipping certain tool
steel products through third countries to the United States; and
5. Notifying the Department if it alters or terminates its position with respect to any of the terms of this Agreement.
B. The Government of Brazil agrees to provide to the Department within 45 days of the end of each calendar
quarter, beginning with the quarter ending March 31, 1987, all information deemed by the Department to be
necessary to maintain this Agreement. The information shall include, but not be limited to:
1. A certification that the Government of Brazil continues to be in full compliance with this Agreement;
2. A certification (provided after consultation with each agency responsible for administering the programs in
section II) that the exporters have paid the appropriate export tax in a timely manner; and
3. A certification of the total amount of export taxes paid during the quarter and a listing of each shipment of
certain tool steel products to the United States identifying for each shipment:
(a) The name of the exporter;
(b) The volume and value of the shipment;
(c) The date of shipment;
(d) The amount of export tax paid; and
(e) The date the export tax was paid.
IV. General Provisions
A. The provision of section 704(i) shall apply if:
1. The Government of Brazil withdraws from this Agreement; or
2. The Department determines that this Agreement is being or has been violated or no longer meets the
requirements of section 704 of the Tariff Act.
B. By participating in this Agreement, the Government of Brazil does not admit that any of the programs
investigated or included in this Agreement constitutesubsidies within the meaning of the Tariff Act or the GATT
Subsidies Code.
VI. Effective Date
The effective date of this Agreement is the date of publication in the Federal Register.
Signed on this 1st day of December 1986, for the Government of Brazil.
Jose Artur Medeiros,
Minister Counselor, Embassy of Brazil.
I have determined, pursuant to section 704(b) of the Tariff Act, that the provisions of Section II completely
eliminate the subsidies that the Government of Brazil is providing with respect to certain tool steel products
exported, directly or indirectly, from Brazil to the United States. Furthermore, I have determined that the
suspension of the investigation is in the public interest, that the provisions of Sections II and III ensure that this
Agreement can be monitored effectively, and that this Agreement meets the requirements of the Tariff Act.
United States Department of Commerce.
Gilbert B. Kaplan,
Deputy Assistant Secretary, Import Administration.