Originally published in the February 17 edition of World Tax Daily (Copyrights Tax Analysts)
Brazil’s official gazette of February 11 published Provisional Measure No. 482/2010, which opens the door for Brazil to apply trade sanctions arising from disputes at the WTO but does not provide for the imposition of taxes as retaliation for U.S. cotton subsidies.
In August 2009 the WTO authorized Brazil to retaliate against U.S. cotton subsidies and also allowed Brazil in some circumstances to “cross-retaliate” against goods other than cotton, or even against services or intellectual property. Some government officials had expected the legislation to include tax-related measures, such as the imposition of the royalty tax, that could be applied as retaliation.
Provisional Measure 482/2010 addresses WTO-granted authority to retaliate in the intellectual property field, as in the Brazil-U.S. cotton dispute. The executive branch must still issue related regulations.
Specific sanctions must be decided and approved by the council of Brazil’s Foreign Trade Chamber (CAMEX).
Among the possible sanctions provided by the measure are:
- suspension of intellectual property rights;
- limitation of intellectual property rights;
- changes to measures for protection of intellectual property rights;
- changes to measures for recognition and maintenance of intellectual property rights;
- temporary suspension for remittances of royalties or compensation related to intellectual property rights; and
- imposition of trade sanctions over compensation paid to owners of intellectual property rights.
Sanctions may be imposed cumulatively.
The measure lists the intellectual property rights that may be subject to sanctions, such as literary, artistic, and scientific works; computer programs; trademarks; industrial design; patents; and confidential information.
David Roberto R. Soares da Silva