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BRAZIL TRADE DIRECTORY ON DISK




BRAZIL - OVERSEAS BUSINESS REPORT -SUMMARY


Introduction
Trends in Industrial Development
Role of Government
Recent Government Actions
Marketing Considerations
Basic Import Regulations and Fees
Documentation
Imports Subject to Special Control
Labeling and Marking Requirements
Samples, Promotional Material, and Technical Literature
Special Customs Provisions
Import Channels
Transportation
Marketing Aids
Government Procurement
Credit
Investing in Brazil
Intellectual Property Protection
Guidance for the Business Traveler Abroad
Bibliography











               OVERSEAS BUSINESS REPORT -- MARKETING IN BRAZIL
                                  MAY 1992

                                  CONTENTS



Introduction
          Country Overview -- Brazil's Economic Importance; Trade Policy

Trends in Industrial Development

Role of Government

Recent Government Actions
          Privatization; 1988 Constitution

Marketing Considerations

Basic Import Regulations and Fees
          Registration and License Requirements; Services; Typical Import
          Steps; Basis of Duty Assessment; Advance Rulings on
          Classification; Customs Surcharges; Internal Taxes; Warehousing
          Charges; Hypothetical Cost Buildup for an Imported Product;
          Reductions and Exemptions from Import Regulations and Fees;
          Insurance; Export Credits; Preferential Import Duty Rates

Documentation
          Import Permit; Pro Forma Invoice; Required Shipping Documents;
          Fines and Penalties

Imports Subject to Special Control
          Import of Used Material; Sector Specific Controls

Labeling and Marking Requirements
          Labeling; Marking

Samples, Promotional Material, and Technical Literature
          Samples; Advertising Matter and Technical Literature;
          International Expositions and Fairs

Special Customs Provisions
          Entry, Transit, and Reexport; Parcel Post Shipments and Passenger
          Baggage; Transit Zones; Free Ports and Free Zones; Abandoned and
          Reexported Goods

Import Channels
          General; Agents and Distributors; Trading Companies

Transportation

Marketing Aids
          Market Research Studies
          Industry Sector Analyses; Other Services

Government Procurement
          Services

Credit
          Export-Import Bank of the United States; U.S. Banks in Brazil

Investing in Brazil
          Investment Climate; Registration of Foreign Capital; Restrictions
          on Foreign Investment; Repatriation of Capital and Earnings

Intellectual Property Protection

Guidance for the Business Traveler Abroad
          Entrance Requirements; Business Etiquette; Travel and
          Transportation; Time; Entertainment; Holidays; General Information

Bibliography
          Business Guides; Business Guides; Business Newsletters and
          Magazines; Business Newsletters and Magazines; Brazilian
          Statistical Sources; Other Information Sources; Other
          organizations with Current Information on Brazil


Overseas Business Report is available from the Superintendent of Documents,
U.S. Government Printing Office, Washington, D.C. 20402.


Introduction

This report is designed to acquaint the U.S. business community with
Brazil's economic and commercial environment and provide guidance on
exporting to Brazil.  Brazil's rules and regulations affecting trade and
investment are in a state of rapid change as the Brazilian government
implements various programs intended to stimulate economic competitiveness
through opening its traditionally restricted and protected markets to
greater foreign and domestic competition.

Considerable attention has been given to the details of Brazil's import
system because it is important to understand how the system operates.
Exporters must be familiar with Brazil's import procedures and documentation
requirements, which are stringently applied.  Non-compliance inevitably
results in delays and financial penalties.  Information is also provided on
Brazilian regulations affecting foreign investment.


Country Overview -- Brazil's Economic Importance

Brazil is the largest and most industrialized country in Latin America.  It
is the fifth largest nation in the world, about the same size as the
continental United States, and occupies 48 percent of the land mass of Latin
America (3,287,000 square miles).  Brazil is a democratic,
intermediate-income developing nation with the ninth largest economy in the
world.  It has a diversified industrial, agricultural, and services base; a
gross domestic product (GDP) of approximately $358 billion (1991) and a
wealth of resources, both human and material.  Brazil's current economic
structure breaks down into roughly 54 percent of GDP from services, 35
percent from industry, and about 11 percent from agriculture.

Principal industries are agriculture (coffee, soybeans, and orange juice),
minerals, steel, automobiles, footwear, textiles, capital goods,
electronics, and petrochemicals.  Brazil has a population of 146 million
(1991 census), with a growth rate of 2.5 percent per year.  Brazil has
become increasingly urbanized, with 72 percent of the population now living
in cities; S o Paulo, Brazil's industrial center, has 17 million inhabitants.

U.S. direct investment in Brazil at year-end 1990 was estimated at about $15
billion, accounting for approximately 32 percent of total foreign direct
investment in Brazil.

For 1991, Brazil's global trade reached almost $53 billion; $31.6 billion in
exports, and $21.0 billion in imports.  The United States is Brazil's major
trading partner, absorbing approximately 21 percent of Brazil's exports
during 1991.  The United States imported $6.7 billion from Brazil in 1991,
down about 18 percent from $7.9 billion in 1990.  U.S. producers supplied
$6.2 billion in
exports to Brazil in 1991, accounting for about 30 percent of Brazil's total
imports.  Principal U.S. exports to Brazil are aircraft, chemicals,
computers, electronic components, office equipment/parts, coal,
telecommunications equipment, and fertilizers.  Leading U.S. imports from
Brazil are footwear, automotive parts, petroleum products, orange juice
concentrate, iron and steel, and coffee.


Trade Policy

After nearly four decades of following an inward looking economic
development model emphasizing import substitution policies to foster growth
of the domestic industry, Brazil has changed its economic development
approach to favor policies focusing on attaining greater economic
competitiveness through better incorporating Brazil into the world economy.
To accomplish this, the Brazilian government is implementing an ambitious
program of economic and trade liberalization.

Over the last three years, most of Brazil's non-tariff barriers to trade,
such as import quotas, import prohibitions, restrictive import licensing,
and local content requirements, which for many years were the hallmarks of
Brazil's restrictive trade regime, were eliminated or drastically reduced.
Import duties were reduced from an average of about 50 percent in the
late-1980s to about 25 percent now, and will be reduced to a average of 14.2
percent and a maximum of 35 percent by mid-year 1993.  While the overall
level and pervasiveness of barriers to imports have been drastically
reduced, import duties remain high in comparison with most other countries,
and Brazil imposes several other taxes and fees on imports that add
significantly to the product's landed cost.


Trends in Industrial Development

Since World War II, the Brazilian Government has stressed the importance of
industrial growth as the key to general economic development.  Initially,
growth was generated almost exclusively by tariff-protected consumer goods
industries such as food processing and textile manufacturing.  Gradually,
high growth rates were maintained by shifting emphasis to more sophisticated
industries, including light capital and consumer durable goods
manufacturing.  In recent years, a relatively sophisticated capital goods
industry emerged and greater emphasis was placed on indigenous technological
development.

The evolution of Brazil's industrial sector was orchestrated by the
government through a system of incentives for production and export.
Industry represents a growing percentage of Brazil's GDP.  Economic
difficulties, prompted by the oil shock of the early 1970s and Brazil's debt
crisis, led the Brazilian Government to pursue a policy of import
substitution and export promotion.  To foster domestic production, the
Brazilian government established incentive programs to stimulate exports and
to assist import substitution.  However, most of these incentive programs
were abandoned as costly and inefficient in recent years.

Geographically, industrial growth in Brazil has been very uneven.  It is
heavily concentrated in the southeast region, principally the states of S o
Paulo, Rio de Janeiro, and Minas Gerais.  Though primarily agricultural, the
southern states of Paran , Santa Catarina, and Rio Grande do Sul, are
considered a part of the more developed, technologically advanced, dynamic,
and productive states in Brazil.

North and central Brazil have great potential for agro-industrial
development, but large capital investment will be required.  The Government
of Brazil has encouraged heavy agro-industry investment in this area.  It
also has toughened zoning restrictions in the state of S o Paulo in an
attempt to force industry to locate in the north.  However, U.S. firms
should also be aware that there are restrictions concerning the amount of
rural land that foreigners and foreign companies can own.  Exceptions to
this may be made on a case-by-case basis.

Economic activity in the northeast is primarily  agricultural,
notwithstanding periodic droughts in the semiarid back lands.  The northeast
has received considerable aid from the Brazilian Government, including
special fiscal incentives designed to promote development of new
industries.  While establishment of an industrial center and a petrochemical
area near Salvador has enhanced economic growth in the state of Bahia,
income in the region as a whole still remains well below the national
average.

The vast center-west and northern regions account for only 10 percent of
Brazil's total population.  The most important economic activity in the
center-west is open range cattle grazing.  Subsistence farming and rubber
gathering are predominant in the northern region.  Brazil's development
plans aim to stimulate activity in agriculture and mining in certain
selected areas of the north.


Role of Government

Under the development policies of previous Brazilian administrations, the
government established a tradition of being the dominant force in shaping
economic growth by means of planning and management.  Its influence was felt
not only directly through the day-to-day activities of government entities,
but also through governmental wage, price, and credit policies, and subsidy
and fiscal incentive programs.  While the central government still retains
an important economic role, the policies of the current administration focus
on reducing the role of the government in economic activities and
concentrating government activities on more traditional roles, such as
improving public health, safety, and education.  As a result, the government
is emphasizing creating greater economic opportunities for the private
sector through privatization, deregulation, and removal of impediments to
competition.


Recent Government Actions

Privatization

Since entering office in March 1990, the Collor Administration has
undertaken an effort to implement a sweeping program to privatize state
owned companies.  The program has broad public support, but got off to a
slow start because of opposition from labor and certain vested interests.
However, in 1991 with the sale of a major steel mill, the program began to
gain momentum.  Firms in the steel, transportation equipment, fertilizers,
and petrochemicals sectors have been successfully auctioned.  There are now
more than 20 companies on the list for privatization in sectors including
iron and steel, fertilizers, shipping, chemicals, petrochemicals, copper
mining, railways and aircraft manufacture.

The scope of the privatization program is limited by provisions of Brazil's
1988 Constitution which establish government monopolies for basic telephone
and telegraph services, electric energy production, and petroleum extraction
and refining.  These constitutional provisions effectively bar privatization
of Telebras (telephone company), Electrobras (electric Utility holding
company), Petrobras (petroleum company).  Constitutional amendments have
been introduced to allow privatization in these sectors.

Responsibility for implementation of the privatization program is delegated
to the National Bank for Economic and Social Development (BNDES), which
contracts for evaluation and sale of state-owned companies via auction.
Payment for company shares may be made in seven different currencies: cash
(cruzeiros or cruzados novos), agrarian debt bonds, national development
fund bonds (OFND), Siderbras debentures, Certificates of Privatization (CP),
matured securitized debts, and certain external debt credits and securities.

In an effort to attract more foreign investment, the government has amended
the rules for foreign participation.  The rules governing privatization
limit foreign ownership to 40 percent in the first sale of the state
enterprise, but foreign companies can buy up to 49% of the privatized firm
during a subsequent resale.  Foreign capital invested in a privatization
must stay in the Brazil for six years before it can be repatriated.


1988 Constitution

Brazil's current constitution, promulgated on October 5, 1988, enshrines
many of the nationalistic features of Brazil's economic and trade policies
common during the past several decades.  The 1988 constitution includes
provisions for government monopolies in key sectors of the economy, such as
petroleum extraction and refining, public telecommunications services, and
electrical energy generation.  The constitution allows for reserved markets
and other special treatment for Brazilian firms, and permits limitations on
foreign investment and trade in certain goods and services.

As part of its efforts to remove impediments to private sector initiative
and foreign investment in the Brazilian economy, the government of President
Collor introduced a package of constitutional amendments collectively called
the emend o, or "big amendment" to remove government monopolies and correct
other provisions causing economic distortions.  These amendments were
subsequently grouped together into five separate pieces of legislation which
are awaiting action by Brazil's congress.


Marketing Considerations

Potential exporters to Brazil should take into consideration the vast
geographic size of the country as well as the demographics and diversified
industrial base of the country.  In Brazil, these market factors have
traditionally been overshadowed by political-economic uncertainties.
However, with the advent of the Collor presidency in 1990, a policy is in
effect to stabilize the domestic economy and resolve the external debt
issue, as well as to liberalize the market to allow for greater imports.
These changes have had a positive effect on market opportunities for
American exporters in selected sectors.

With a marketing campaign focused on medium- to long-term growth,
experienced exporters and investors will benefit not only from Brazil's
sheer size but, as the market evolves, from the country's increased need for
capital equipment and foreign technology.  To enter this changing market, it
is essential that firms establish a relationship with a well-qualified
Brazilian partner.  The Brazilian representative should have proven
knowledge not only of the sector marketplace but of current government
policy.  Both U.S. and Brazilian participants must consider competitive
financing, distribution support and follow-on service and training, as well
as potential market growth.


Basic Import Regulations and Fees

Import duties in Brazil are levied according to a policy that weighs a
variety of factors bearing on the economic well-being of the country.  As
part of the government's trade liberalization and industrialization
policies, a schedule for the gradual reduction of tariff levels was
provided.  In general, the Brazilian government will reduce tariffs to an
average of 14.2 percent by year-end 1993.  However, U.S. exporters should
keep in mind that additional taxes and fees bring the landed cost of many
imports to double FOB prices.


Registration and License Requirements

Firms importing into Brazil must be registered with the Foreign Trade
Department (DECEX) of the Ministry of Economy and Planning.  DECEX plays a
central role through its implementation of directives issued by the National
Council of Foreign Trade (CONCEX), one of the national trade policy making
bodies.  Through the registration process, the government is able to monitor
companies that import.  The registration requirement does not apply to
government agencies and mixed (public and private) capital companies with
government-controlled import budgets.  Following registration with DECEX,
companies must apply for an import license, which allows them to proceed
with a planned shipment.


Services

Since at least 1975, the Brazilian National Industrial Property Institute
(INPI) has regulated contracting for foreign specialized technical services
by Brazilian companies.  INPI regulations apply the "Law of Similars"
concept to technical services.  That is, INPI does not authorize contracts
for foreign services when INPI believes there is a Brazilian firm capable to
provide the same services.  Approval to contract foreign technical services
is allowed in the absence of Brazilian domestic technical capabilities.
INPI's definition of "specialized technical services" is broad.  It includes
management studies, engineering services, technical training, industrial
research, and the development and use of computer systems or programs.  The
importation of design technology must be controlled by a Brazilian
engineering firm.


Typical Import Steps

There are numerous procedural requirements associated with importing into
Brazil.  They warrant careful consideration, as failure to comply with
regulations may result in fines and delays.  Typically a Brazilian importer
will follow the steps outlined below.

1.  The importer files an application for an import permit (pedido de guia
de importacao) for a specific transaction, accompanied by a foreign
supplier's pro forma invoice for the product(s) to be imported.

If the imported product(s) contains a computer or other digital technology,
the importer must also seek the approval of the Department of Informatics
and Automation Policy (DEPIN) concurrent with step (2), stating why the
imported product(s) is needed.  This step will not be necessary after
October 29, 1992.

2.  Once the application is approved by DECEX, the importer notifies the
supplier to ship the products(s) and to send all shipping documents and
commercial invoices along with the exporter's statement, certified by any
chamber of commerce or Brazilian consulate, that the prices quoted are those
prevailing for goods for export.  (Goods should not be shipped until DECEX
has granted an import permit.)

3.  The importer arranges for a Brazilian government licensed customs broker
to clear the goods and pay customs duties and other taxes (typically,
Industrial Products Tax (IPI) and Merchandise Circulation Tax (ICM)).

4.  A copy of the import license (pedido de guia de importacao) and the paid
customs declaration are sent to the importer's exchange broker, typically a
bank, for closing the foreign exchange transaction.

The average processing of these steps is one to four weeks, although
processing of digital products subject to DEPIN approval typically takes
longer.

An importer may deal with DECEX directly or through an expediter
(despachante).  It is generally advisable for an importer to retain an
expediter to assist in moving the import request through the bureaucratic
approval process with DECEX and the customs authority.

Many government companies, agencies, and the military import directly,
without DECEX or DEPIN authorization, and are exempt from all taxes and
duties.


Basis of Duty Assessment

On January 1, 1989, Brazil implemented the Brazilian Tariff Nomenclature,
known as the NBM (Nomenclatura Brasilera de Mercadorias), consistent with
the Harmonized System (HS) for tariff classification, as authorized by the
Brazilian Nomenclature Committee (CBN), Resolution Number 76, of August 31,
1988.

Since January 1, 1989, the HS has been the basis for tariff schedule
classification and the compilation of statistical data in Brazil.  Duties
are levied ad valorem on the c.i.f. value of the import.  The rates of duty
range from zero to 40 percent, with the majority in the 20 to 30 percent
bracket.

Brazil has implemented the Customs Valuation Agreement of the General
Agreement on Tariffs and Trade (GATT), but with certain reservations.  The
agreement distinguishes five methods for determining customs valuation -- a
primary basis and four additional methods that must be applied in
hierarchical order.  The primary basis is based on "transaction value," the
price that is actually paid or payable for goods by importers, plus certain
costs and expenses.


Advance Rulings on Classification

Based on a complete product description, a logical HS tariff classification
can often be determined by the company agent in Brazil or the U.S.
exporter's nearest U.S. Department of Commerce district office, located in
most major cities throughout the United States.  Brazilian customs brokers
are another valuable source for classification information.  However, the
ultimate authority is Brazilian customs.  If there is doubt about the
classification, a request for advance ruling may be presented to the
Internal Revenue Department (CST) of the Ministry of Economy and Planning,
preferably through a Brazilian representative.  Samples and specifications
should be included with the application.  A ruling in response to such
requests may take months.  An inquiry presented to DECEX is probably
preferable, but this does not ensure that CST, through customs, will
necessarily accept the DECEX classification.


Customs Surcharges

The Merchant Marine Renewal Tax is assessed at 25 percent of ocean freight
charges on import by sea, payable by the importer.

In addition to these taxes, the Brazilian government assesses the following
fees:

Syndicate Fee -- 2.2 percent of c.i.f. value

Brokerage Fee -- 1 percent of c.i.f. value

Warehouse Tax -- 1 percent of the import duty

Fee for Handling Charges -- varies according to value of produce from $20 to
$100

Administration Commission -- currently fixed at $50

Import License Fee -- 180 UFIRS (approximately $100)

Additional Port Tax -- two fees totalling 3 percent of c.i.f. value


Internal Taxes

The internal Brazilian taxes of consequence to U.S. exporters are the
Industrial Products Tax (Imposto Sobre Produtos Industrializados, or IPI)
and the Merchandise Circulation Tax (Imposto Sobre Circulacao de Mercador
as, or ICM).

The Industrial Products Tax (IPI) is a federal tax levied on most domestic
and imported manufactured products.  It is assessed at the point of sale by
the manufacturer or processor in the case of domestically produced goods,
and at the point of customs clearance in the case of imports.  The tax rate
varies by product and is based on the product's c.i.f. value plus duties; it
normally ranges from 0 to 15 percent.  In general, a relatively low tariff
rate carries a lower IPI tax rate and a relatively high tariff rate carries
a correspondingly higher IPI rate.  As with value-added taxes in Europe, IPI
taxes on products embodying several stages of processing can be adjusted to
compensate for IPI taxes paid at each stage.  IPI taxes have been
temporarily waived for a wide range of capital goods and industrial inputs.
Exports from Brazil are exempt from the IPI tax.  The regulations dealing
with the IPI tax are detailed in Decree Number 87.981, of December 23, 1982.

The Merchandise Circulation Tax (ICM) is a state government value-added tax
applicable to both imports and domestic products.  The ICM tax on imports is
assessed ad valorem on the c.i.f. value, plus duties, plus IPI.
Effectively, the tax is paid only on the value-added as the cost of the tax
is generally passed on to the buyer in the price charged for the
merchandise.  The ICM tax due to the state government is based on taxes
collected on sales, minus those paid in purchasing raw materials and
intermediate goods.  The ICM tax is levied on both intrastate and interstate
transactions and is assessed on every transfer or movement of merchandise.
The rate varies among states, with the predominant rate currently at 17
percent.  On interstate movements, the tax will be assessed at the rate
applicable in the state of destination.

Some sectors of the economy, such as construction services, mining,
electrical energy, liquid and gaseous fuels, and locally produced machinery
and equipment, are exempt from the ICM tax.  For the most part, Brazilian
exports are exempt.


Warehousing Charges

The former Ministry of Infrastructure (replaced in March 1992 by the
Ministry of Transportation) has established the following rates for maritime
shipping warehousing:  first 15 days after cargo unloading, 1 percent of
import duties; second 15-day period, 2 percent of import duties; third
15-day period, 3 percent of import duties; fourth 15-day period; 15 percent
of import duties; and thereafter, the rate increases by 4 percent per 15-day
period.

Air-shipped goods pay rates based on the calculated c.i.f. value for 15-day
periods:  first period, 2 percent of c.i.f. value; second period, an
additional 2 percent; and thereafter, the charge is increased by 4 percent
per subsequent 15-day period.  Warehousing of corrosive products,
explosives, flammables and oxidizers is charged at double the normal rate.

The following is a hypothetical cost buildup for imported industrial process
control equipment.  Due to all taxes/fees, an imported product at an f.o.b.
price of $10,000 and 45 percent duty will cost about 2.3 times its initial
f.o.b. price.


Hypothetical Cost Buildup for an Imported Product*

             Cost Buildup in $U.S.

FOB Price of Product                                   $10,000.00
Freight and Insurance                                   $1,000.00
(9% and 1%, respectively)
Total c.i.f. of Product                                $11,000.00
Bank Charges (90 days at                                $1,320.00
  4% per month)
c.i.f. Plus Bank Charge                                $12,320.00
Landing Charges
  AMMF (Merchant Marine Tax:
  25% of Ocean Freight)                                   $225.00
Import Duty  (20% of c.i.f.)                            $2,200.00
Port Costs (2.5% of import duty,
  including warehousing & expediters)                      $33.00
IPI (Manufactured Products Tax --
  12% on c.i.f. plus import duty)                       $1,584.00
ICM ** (Value-added Tax --
  17% on c.i.f. plus duty plus IPI)                     $2,513.28
Syndicate Fee (2.2% of c.i.f.)                            $242.00

TOTAL FINAL COST                                       $19,117.28

*  FOB value, insurance, freight, bank charges, IPI and duties are all
assumed numbers.

** ICM usually is 17 percent, but might be 10 percent or 12 percent in some
states.  If the product enters a state with 17 percent ICM, the difference
must be paid.


Reductions and Exemptions from Import Regulations and Fees

GOB's incentive for imports stresses locational rather than sectoral
criteria.  Import duty and federal IPI tax reductions and exemptions are
granted on products destined for the Manaus Free Trade Zone and export
processing zones (ZPEs).  Also eligible are imports for manufacture of
exports under the drawback system and certain production machinery.

Fiscal and credit incentives established to promote exports include
exemption from federal IPI (manufactured products) tax, state ICM
(value-added/merchandise circulation) tax, federal income tax, the "Sole
Tax" on lubricants and fuels, and other federal and local taxes.

Technical catalogs, pamphlets, and publications without intrinsic commercial
value and dealing with the operation, maintenance, repair or use of
machines, apparatuses, vehicles, and the like, may be imported duty free.
This exemption also applies to educational and scientific films; newspapers
and books; brochures; and similar printed matter for cultural, religious or
educational use.


Insurance

Brazil requires that import shipments be insured by companies (foreign or
domestic) established in Brazil and that policies be denominated in local
currency, which implies risk of exchange losses.  The import permit,
therefore, may not include margins for foreign insurance payments.  All
reinsurance in Brazil must be purchased from the government reinsurance
monopoly -- the Brazilian Reinsurance Institute (IRB).  In special cases,
the IRB may grant exceptions to these terms and allow insurance to be placed
abroad.


Export Credits

Although until recent years a major factor in Brazil's trade regime, export
incentives and subsidies have been largely eliminated as a result of the
economic reform measures of the current Brazilian administration.  In
response to complaints from Brazilian exporters that their international
competitiveness is affected by the lack of Brazilian export credit programs,
the government announced in February 1992 the expansion of the Proex program
designed to offset the difference between interest rates for export credit
available in Brazil and the rates prevailing in developed countries.


Preferential Import Duty Rates

In June 1989, Brazil, Argentina, Uruguay and Paraguay signed the treaty of
Asunci n to establish the parameters and schedule for formation of the
Southern Common Market, known by its Spanish acronym, Mercosul.  The Treaty
of Asunci n calls for the formation of a customs union with free internal
trade and a common external tariff.  Argentina and Brazil are to reduce
import duties for trade between themselves to zero by year-end 1994;
Paraguay and Uruguay are given an extra year to reduce import duties to
zero.  To arrive at the eventual elimination on inter-Mercosul import duties
by 1995, the member countries are reducing import duty rates in progressive
steps.

Under a special regional trade initiative, Brazil extends preferential
import duty rates and other benefits to certain imports from members of the
Latin American Integration Association (ALADI), formerly the Latin American
Free Trade Association (LAFTA).  Under ALADI, Brazil has bilateral trade
agreements with each of the other 10 members (Mexico and the nine South
American republics) and participates in many of ALADI's multilateral
industry agreements.


U.S. Export Administration

In addition to Brazilian import regulations, U.S. exporters must comply with
U.S. Government export controls.  Export Administration regulations are
issued by the U.S. Department of Commerce to implement the Export
administration Act of 1979.  A validated
export license is required for U.S. exports that fall into the following
categories:

1.  "Strategic" commodities to any destination -- Generally speaking, a
    "strategic" commodity is one that the U.S. Government believes can
    contribute significantly to the design, manufacture, or utilization of
    military hardware.

2.  "Short supply" commodities to any destination.  A "short supply"
    commodity is one which unrestricted exportation would excessively drain
    U.S. supplies and have a serious inflationary impact on the U.S. economy.

3.  Any other commodity to a destination in which there are foreign policy
    or national security concerns.

4.  "Unpublished" technical data to certain destinations.  The term
    "unpublished technical data" applies to technical information, generally
    related to the design, production, or use of a product that is not
    available to the public.  It is not described in detail in books,
    magazines, or pamphlets, nor is it taught in colleges or universities.
    It is know-how that cannot be released without a fee.

To determine whether an export product is subject to U.S. controls,
exporters should refer to the Commodity Control List (CCL) of the Export
Administration Regulations.

The official source of information on the details of U.S. export
administration is the Exporter's Service Staff, Bureau of Export
Administration, U.S. Department of Commerce:  Eastern Division, (202)
377-4811; Western Division, [phone].  Another convenient source is a
local Department of Commerce district office.


Documentation

Import Permit

The import permit (guia de importacao) is the single most important document
required for exporting goods to Brazil.  An import permit must be obtained
from DECEX by the importer for all but a very limited list of products.
Most of the information required for the permit must be provided by the
foreign supplier.

DECEX Portaria Decree No. 8 of May 1991 established the degree of import
regulation applied to specific products by categorizing them:

1.  Imports exempted from the import permit requirement are listed in Annex
    A of the appropriate DECEX Portaria No. 8;

2.  Imports under legislative or regulatory prohibition;

3.  Imports under special control.

Import permit requests must be accompanied by the foreign manufacturer's
catalogs or price lists covering the goods to be imported, unless such
material has already been filed with DECEX.  A local agent of a foreign firm
should update the information on file with DECEX regardless of whether a
shipment is pending.  If there are no published catalogs or price lists,
DECEX will accept a notarized statement by the exporter on the pro forma
invoice of the wholesale price.

An import permit specifies the period during which it is valid.  It
establishes the maximum time for embarkation of merchandise, or in certain
cases, for registering the Import Declaration.  Although the validity period
of an import permit generally ranges from 60 to 180 days, DECEX will examine
petitions for extensions required by special operations or pre-defined
exceptions.  Goods usually facing limits of 60 days include those subject to
special price controls imposed by DECEX, particularly on food and
agricultural products, metal, and other products with periodic and/or
seasonal price fluctuations, and display items imported under special
restrictions for exhibition.  Limits of 90 days are imposed on raw materials
and food items not under DECEX special price controls, and 180 days are
provided for other imports.

Under no circumstances should an exporter ship goods to Brazil without an
import permit.  The shipment could be impounded by Brazilian customs
authorities and may not be returned to the United States without payment of
fines equaling 20 to 100 percent of the c.i.f. value of the goods.  In
addition, to avoid clearance problems, any discrepancy between the actual
composition of a shipment and the terms of the corresponding import permit
should be immediately transmitted to the importer so that the importer can
request amendment of the permit prior to arrival of the goods in Brazil.


Pro Forma Invoice

In order to apply for an import permit, the Brazilian importer will require
a pro forma invoice (fatura proforma) and a published list of prices or
sales catalog from the supplier (if such exist).  The original copy should
be notarized, but need not be accompanied by a chamber of commerce
certification or consular visa.  The document must contain the following:

1.  The name and address of the manufacturer or exporter;

2.  A signed statement by the exporter or manufacturer verifying that the
    prices stated are current export market prices for destination to any
    country;

3.  If applicable, the name and address of the agent distributor,
    representative, or concessionaire in Brazil, and a statement of
    commission due.  This is not necessary when the agent has filed a
    general statement with DECEX of fees collected from a particular foreign
    firm.  If no representative exists, this must be so stated;


4.  Total f.o.b. price, unit price, gross and net weight, itemized freight
    and all other expenses, and total c.i.f. or c.i.f. value;

5.  If applicable, a statement declaring that published catalogs or price
    lists do not exist for the invoiced products.

Pro forma invoices issued by commercial enterprises, such as an export
trading company, can be used in lieu of a manufacturer's invoice for the
importation of parts, accessories, and other small articles.


Required Shipping Documents

Documents required by Brazilian laws and regulations for cargo shipments to
Brazil are the commercial invoice and bill of lading (or air waybill).
Inspection or sanitary certificates are also required for shipments of
certain goods.  These documents must carry the number of the DECEX-issued
import permit.  Generally, the document itself does not accompany the
shipment.

Commercial Invoice -- This document should give full details about the
merchandise shipment.  It should be prepared by the manufacturer or the
seller in the country of origin, not by a seller who is not established in
the country of shipment, or a buying agent of the Brazilian importer.  Good
business practice dictates that a commercial invoice include the full
address of the shipper, seller, and consignee, if other than seller; the
import permit number; other reference numbers; date of the order; shipping
date; delivery and payment terms; a complete description of the merchandise;
and export markings.

A declaration of origin that is combined with a declaration of correct
prices should be made on the commercial invoice, which in turn should be
certified by the foreign exporter or local chamber of commerce.  For a
letter of credit or other contractual agreement, chamber of commerce
certification is not required, but may be requested.  When in doubt,
exporters should contact their Brazilian importers.  A notarized
declaration, as follows, should
be made on the extra copy of the commercial invoice, which the exporter or
the chamber of commerce retains.


I (name, title, name of company), hereby swear that the prices stated in
this invoice are the correct market prices for any country for the
merchandise described herein, and the origin of  these goods is the United
States of America, and I accept full responsibility for any inaccuracies or
errors herein.

Legalized commercial invoices are not required.  To correct errors in
commercial invoices, the exporter should make out new invoices.  A detailed
letter of explanation stating corrections should be attached to the new
invoices, which should be sent at once to the exporter's principal in
Brazil.  Commercial invoice forms are available from commercial stationers.

Bill of Lading -- Attached to each copy of the commercial invoice is a
nonnegotiable copy of a numbered and dated bill of lading.  This may be an
ocean bill of lading or air waybill, depending on the mode of transportation
and/or terms of sale.  There are two basic types of bills of lading:
nonnegotiable and negotiable, or "shipper's order" bills of lading.  The
latter is used for sight draft or letter of credit shipments.

When shipments originate abroad and are cleared through the United States in
transit to Brazil, either an authentic copy of the "through" bill of lading
issued by the foreign carrier for the voyage from port of origin to the
United States must be attached to one copy of the invoice prior to shipment
from the United States.  Bills of lading and air waybills no longer require
the carrier's signature.  Consular registration and chamber of commerce
certification are not required.

The import license number and its expiration date must be shown on the bill
of lading or air waybill.  In rare cases, when no import permit is required,
the exemption should be clearly stated.  Freight charges must also be
clearly indicated in words and numbers.  Noncompliance with this regulation
will prevent the importer from closing or liquidating foreign exchange
contracts, and failure to detail information on import licensing will result
in considerable delays.

According to International Chamber of Commerce rules governing foreign trade
terms and documents, the only bill of lading that is acceptable on draft or
letter of credit shipments is one marked "Clean on Board."  This means that
the carrier has not taken any exception to the condition of the cargo or
packing and that the merchandise has actually been loaded aboard the
carrying vessel.

Special Documentation -- Various special documents are required on shipments
of certain commodities.  These special documents include sanitary
certificates from the Ministry of Agriculture for shipments of live plants
or parts thereof; health certificates for shipments of live animals and
animal products capable of transmitting disease; inspection certificates for
shipment of used merchandise, machinery, and equipment; and Ministry of the
Army authorization for armament shipments.  Industry-specific import and
documentation requirements are detailed in a separate section of this report
entitled "Imports Subject to Special Control."


Fines and Penalties

Brazil imposes fines and penalties for violation of customs, exchange, and
consular regulations.  These fines and penalties are severe, especially in
cases of fraud, and where the complicity of the exporting firm is proven.
Fines may be incurred for violations or errors in preparation of document
preparation.

When goods that require import permits are imported without this
documentation, there is a fine of up to 100 percent of the c.i.f. value of
the merchandise.  When a commercial invoice is absent, the fine is equal to
the customs duty.  If the original commercial invoice is not available for
presentation at customs, the importer can sign a guaranty of responsibility
that it will be presented within 120 days.  Failure to present the invoice
before expiration of the guaranty of responsibility could result in a fine
equal to the customs duty.

For under-invoicing, over-invoicing, or otherwise misrepresenting the value
of an import, there is a fine of up to 100 percent off the excess or
deficiency.  If the value declared by the importer is judged to be false,
there will be a fine of at least 50 percent of the difference between the
duty declared by the importer and that verified.  If the appraised value
exceeds the invoice value by more than 10 percent, there is a fine of 100
percent of the value of misrepresentation; the fine is 50 percent if the
value of misrepresentation is between 5 and 10 percent.  There is no fine in
cases of error in weight or quantity, but rules are strict.

Currency indexation of the amount of fines levied and not paid effectively
preclude the payer of a fine from taking advantage of high inflation in
order to profit from currency devaluations.  In addition, the Central Bank
does not allow remittance of foreign exchange to cover the excess except in
special cases.

It is essential that shippers prepare documents completely and carefully.
For instance, failure to make a separate declaration on the invoice of the
net weight and value of drums or other containers that have been used in
shipping the merchandise may subject Brazilian importers to heavy fines.

When customs officials challenge the declared value of imported goods, they
have eight days to establish a new valuation.  The importer then has 30 days
during which to protest the new value, and a decision must be rendered
within another 30 days.

While the value is in dispute, the importer's declared value is
provisionally accepted for the purpose of clearing the goods, but the
importer must post bond or make a deposit covering the claimed differences,
pending a final determination of the dutiable value.

Appeals concerning the valuation of imported merchandise are heard by
DECEX.  If the final decision is against the importer, a fine amounting to
between 50 and 100 percent of the difference between the declared value and
the verified value must be paid by the importer.


Imports Subject to Special Control

Import of Used Material

In accordance with provisions of DECEX (National Foreign Trade Department),
Portaria 8, of May 14, 1991, DECEX will accept for consideration requests
covering the importation of used machinery equipment or instruments
providing the following requirements are met in full:

1. The equipment is intended for the importer's own use and will play a
   direct role in the production process;

2. The goods are not of a type that can be produced within Brazil and cannot
   be substituted by other machines or equipment of Brazilian manufacture;

3. The goods are considered by the Brazilian government to be of interest to
   the Brazilian economy and can be applied in hastening the expansion of
   internal production programs or the rapid increase of exports.

4. The equipment is not intended for quality control;

5. The equipment has less than 10 years of use at the date of the request
   for importation in the following cases:  precision instruments intended
   for mass production or tooling, and equipment in which normal operation
   is performed under unfavorable conditions that accelerate its physical
   deterioration by corrosion, shock or vibration;

6. The equipment has less than 20 years of use at the time of presentation
   of the request for importation, in the following cases:  heavy equipment
   not used in tooling, and exceptionally large equipment used in tooling,
   but not for items which are mass produced.

In all such requests, DECEX will require the presentation of an inspection
and appraisal certificate signed by an international, specialized, and
qualified firm acceptable to local Brazilian consular authorities.
Brazilian consular authorities may in some cases accept a notarized
statement by the manufacturer.

The certificate should state the following regarding the used equipment:

1. Year of manufacture, reconditioning or overhaul, with indication of
   substituted parts and accessories and the total value;

2. That the used equipment's operational condition and tolerances that are
   required by technical norms in effect in the country or origin are
   identical to those of equipment units when new;

3. The technical differences between new units and those inspected;

4. The life expectancy of the used machinery;

5. The market value of a reproduction of the equipment and that of a similar
   unit technically updated;

6. Net weight.

In the case of imports of reconditioned parts and accessories for airplanes
originating in and proceeding from the United States, the inspection and
appraisal certificate should be issued by a company authorized by the U.S.
Federal Aviation Administration.

"Yellow tags" issued by authorized institutions in other countries will be
accepted in lieu of a certificate.

The requirement for certification may be waived in the following cases:

a) imports under the BEFIEX program (a Brazilian export-incentive program);

b) imports under temporary admissions;

c) imports under leasing, according to Brazilian legislation;

d) airplane imports approved by COTAC, Brazilian Air Ministry;

e) imports of ships and boats, approved by the National Department of Water
   Transportation of the Ministry of Infrastructure and by the Council of
   the Merchant Marine.

Inspection and approval of used machines, equipment, and instruments will be
carried out by DECEX.

Importation of used consumer goods will not be authorized.


Sector Specific Controls

Informatics - In October 1991, Brazil's Congress passed a law (Law Number
8248) to drastically modify Brazil's 1984 Informatics Law (Decree Law Number
7232).  The new 1991 Informatics Law provides that the broad powers given to
the government under the old 1984 informatics law to regulate trade,
investment, research, manufacturing, technology transfer, and marketing in
Brazil of "informatics" products or services will largely expire at the end
of October 1992.  (Informatics products are defined as goods or services
based on digital data processing technology.)  Under the old 1984 law, the
Ministry of the Economy's Department of Informatics and Industrial
Automation (DEPIN), formerly the Special Secretariat of Informatics (SEI),
protected Brazilian informatics firms by prohibiting imports and severely
restricting foreign investment in sectors of the market in which Brazilian
firms were technologically capable.  In practice, these policies were used
to "reserve" the lower end of the market -- small computers and many types
of components and peripheral equipment -- for Brazilian firms.

Under the new 1991 Informatics Law, beginning in November 1992, there will
be no more prohibitions or requirements for government prior review for
imports, investment, or manufacturing by foreign firms in Brazil.  However,
import duties will remain high (about 40 percent) on informatics products,
and Brazilian firms will receive preferential treatment in government
procurement and will have access to certain fiscal benefits, including tax
reductions.

Rules governing computer software are contained in Law 7646 (the "software
law") of December 1987 which provides copyright protection and establishes
rules for marketing computer software in Brazil.  Law 7646 extends existing
copyright legislation to cover software.  Copyright protection is granted
for 25 years from the date a program is first released in any country.
Copyright registration in Brazil is administered by the National Industrial
Property Institute (INPI).

The software law requires that all software be "cataloged" by DEPIN prior to
its commercialization in Brazil, and that software for use on Brazilian-
made equipment (i.e., small and medium-sized computers) must be distributed
through a Brazilian firm.  In the case of foreign software, cataloging can
be denied if DEPIN determines there is a similar program of Brazilian
origin.  DEPIN has 120 days to issue its decision regarding whether a
program will be granted or denied cataloging.  Once cataloged, a program can
be freely marketed in Brazil for a period of three years, at the end of
which cataloging must be renewed.  During the cataloging renewal process, a
test of similarity may be required.  A draft law has been introduced into
Brazil's Congress to eliminate the requirement for cataloging, the test of
similarities, and the requirement that software to run on Brazilian-origin
hardware must be distributed by a Brazilian firm.  This draft bill likely
will be voted on by mid-1992.

Additional information on Brazil's computer and software restrictions and
regulations can be obtained from the U.S. Commerce Department Brazil Desk at
[phone].

Petroleum Products - Bulk shipments of petroleum products to Brazil are
controlled by the DNC -- Departamento Nacional de Combustiveis (the National
Fuel Department), an agency of the Ministry of Mines and Energy.
Authorizations are determined in accordance with national needs assessments
conducted biannually by Petrobr s, the country's oil and gas monopoly.

Packaged Lubricating Oil and Petroleum - A request to import packaged
lubricating oil and petroleum must be submitted by the importer to the DNC
(National Fuel Department).  In turn, the DNC routes the request to Petrobr
s for confirmation that locally produced alternatives at competitive prices
are not available before the request is approved.

Arms and Ammunition - All imports of firearms, ammunition, and implements of
war, whether for personal, commercial, or government use, require a permit
issued by the Ministry of the Army.

Wheat - Purchases and imports of wheat are controlled by the government
Department of Wheat (CRTM), of the Banco do Brasil.

Other Products Requiring Special Approval/ Documentation - Imports of soft
drinks, flammables, airplanes, dangerous substances, chlorinated pesticides,
insecticides, other agricultural chemicals, and animal foodstuffs are also
controlled.

Additional current and detailed information may be obtained from A Basic
Guide to Exporting from the U.S. Department of Commerce and Dun and
Bradstreet International's Exporters Encyclopedia.


Labeling and Marking Requirements

Labeling

The Brazilian Consumer Protection Code, in effect since September 12, 1990,
requires that product labeling provide the consumer with correct, clear,
precise, and easily readable information about the product's quality,
quantity, composition, price, guarantee, shelf life, origin, and risks to
the consumer's health and safety.  Imported products should bear a
Portuguese translation of this information.  Since metric units are the
official measuring system, products should be labeled in metric units or
show a metric equivalent.

The United States Senate Concurrent Resolution No. 40, adopted July 30,
1953, invited U.S. exporters to inscribe, on external shipping containers in
indelible print of a suitable size: "United States of America."  Although
such marking is not compulsory under law, U.S. shippers are urged to follow
this procedure in publicizing American-made goods.


Marking

The essential identifying marks -- shipping marks, port of destination, and
package number (when required) -- must be prominently shown on the shipping
case and situated so that they will not be covered by any later strapping.
Any other markings should be placed in a less prominent place and should be
limited as much as possible to essential data.  Identifying marks used in
the bill of lading should also be shown on the shipping case.  A number may
be used as an identifying mark, provided that it is placed within a
geometric figure, i.e., a triangle, square, etc.


Samples, Promotional Material, and Technical Literature

Samples

An import permit is not required for samples up to a value of $1,000 which
have no commercial value.  The invoice must be marked "Samples, not for
Sale."  Samples of pharmaceutical products require the same documentation as
commercial shipments.

Commercial travelers may bring collections of samples into Brazil on a
temporary duty-exempt basis.  Brazilian customs authorities do not require
presentation of an import permit for merchandise entered duty-free in such a
fashion.  However, to guarantee withdrawal of the samples when the
commercial traveler leaves the country, a bond or cash deposit must be
posted in an amount equivalent to all duties, taxes, and fines that would
apply in case of failure to reexport the merchandise.  Use of international
"carnets" (a "passport" for merchandise accepted in countries in lieu of
posting a bond) has not been accepted as yet by Brazilian customs
authorities.

Samples and small parcels of minor commercial value, except those dutiable
in the country of destination, may be mailed from the United States without
U.S. shipping permits.

Advertising Matter and Technical Literature

Ordinary advertising matter, trade catalogs, prospectuses, and other printed
promotional materials, including posters of any kind and calendars) are
dutiable.  An import license must be obtained if the value exceeds $1000.
However, foreign catalogs, pamphlets, and similar publications of a
technical nature that are without commercial value and concern the
operation, maintenance, repair or use of machinery, vehicles, etc., may be
imported free of duty.  Newspapers, educational and scientific films, books,
brochures, and similar printed matter for cultural, religious or educational
use may also be imported free of duty.  Import licenses are not required in
the case of such technical and educational material.


International Expositions and Fairs

The importation of merchandise intended to represent foreign government
entities or private firms at international expositions and fairs must be
approved by the Ministry of Finance, and is administered by DECEX.

Materials that enter Brazil for use at the exhibition site (advertising
materials, food and beverages, standing frames, pamphlets, etc.) are duty
free.  However, this exemption cannot be applied to materials that can be
reused after the event.  An import license is not required for such
materials but the quantity and value are determined by the Finance
Ministry.  Imports of sample cases and merchandise typically identified as
advertising material (banners, catalogs, magazines, photographs, match
boxes, pencils, etc.) which exceed the quantity and value approved by the
Finance Ministry may be authorized by inserting a clause classifying the
nature of the event in the respective import permit.

The importation of merchandise to be exhibited is restricted to one unit of
each kind or a set of each type or mark.  Goods not sold must be returned to
the country of origin within the period determined by the customs officials
(usually 30 to 45 days from the date of customs clearance).  If sold, the
merchandise can be transferred from the exhibition site or bonded warehouse
to the purchaser only after the nationalization process (for formal transfer
of ownership) has been completed.  The importation of used merchandise and
products not originating from a country represented directly or indirectly
in the exposition is forbidden.

All material that is sold during the fair is subject to import duties and
taxes.  For material that is sold, tax charges are automatically transferred
to the Brazilian buyer.  Materials distributed free of charge are subject to
import taxes.

A special agreement between the United States and Brazilian governments
permits firms to exhibit under the auspices of the US&FCS in Brazil, as a
customs-free area.  U.S.&FCS Brazil should be contacted for shipment details.

The US&FCS conducts trade shows in Brazil; for these events U.S. exhibitors
enjoy waivers to some of the above requirements, facilitating the
demonstration of their wares.



Special Customs Provisions

Entry, Transit, and Reexport

In order to clear goods through customs without difficulty, Brazilian
importers must have all necessary documents with them.  Documents are often
delivered to importers against their acceptance of the exporters' bank
collection draft, as in open account shipments, unless otherwise
contracted.  When documents are sent by means other than the carrier on
which goods are shipped, they should be forwarded soon enough thereafter to
ensure timely arrival.

To clear merchandise through customs, importers or their agents must present
copies of the commercial invoice (fatura comercial), which includes a
declaration or origin of the merchandise (a separate certificate of origin
is acceptable but not required), the bill of lading, and the import permit
(guia de importacao).

It cannot be overemphasized that the documentation must be complete and
correct in all requirements in order to avoid heavy fines and penalties.
Exact weight and quantity of goods, including parts and accessories for
machines and apparatus in general, must be accurately and completely
supplied by the exporter to the importer on either the pro forma invoice,
the commercial invoice, or the price list.  The import license must contain
the accurate weight and quantity specifications.

While the importer may clear merchandise through Brazilian customs following
the steps outlined above, this job is often turned over to a "despachante,"
or freight forwarder.  Despachantes are often quite large organizations that
provide a wide range of services to anyone wanting to expedite their
dealings with the government.  The customs clearance fees charged by such an
organization are controlled by the Union of Despachantes.  Despachantes are
employed not only because they can clear goods through customs faster than
an importer, but also because they eliminate the need for permanent staff in
the importing firm to handle such matters.


Parcel Post Shipments and Passenger Baggage

A March 13, 1992 regulation (Normative Instruction 32) allows imports of
merchandise by mail, including mail order catalog shipments, up to a value
of $500 ($1000 for computer software) without the requirement of an import
license, provided the item is not for resale.  Items valued no more than $50
are duty free and are deliverable to the addressee; parcels above this value
can be picked up at the post office upon payment of import duties.  Imports
that are prohibited or subject to special regulations must comply with
applicable Brazilian government provisions.  Identical shipments from the
same source to the same person or address in Brazil within a 90 day period
are considered part of the same shipment and may be subject to confiscation
(medication is exempted from this restriction).  Payments can be made using
international credit cards, an international money order, or bank transfer.

Other merchandise that usually enters duty free includes items such as
newspapers, maps, books, and magazines.  Passenger baggage, such as personal
clothing and linen, jewelry, consumption goods and other objects for the
passenger's professional or domestic use, is exempt from import tax.
Souvenirs with a value not exceeding $500 or its equivalent in other
currencies are also duty free.  Personal effects of individuals transferring
residence to Brazil are duty free if accompanied by an authorization issued
by the Brazilian Embassy or Consulate at the country of origin.


Transit Zones

The tariff law provides that goods in transit through Brazilian national
territory, enroute to another country via customary channels of
international trade, are exempt from the payment of import duties.  Goods in
transit are granted maximum storage periods of three months in the case of
perishables and one year for other merchandise, extendable for an additional
six months.  The following Brazilian ports have been designated as transit
zones for the specified neighboring country.  Bel}m, for Peru and Bolivia;
Corumb , for Bolivia; Manaus, for Equador; Paranaga, for Paraguay; Porto
Velho, for Bolivia; and Santos for Bolivia and Pauaguay.

Other seaports or airports where federal customs officials are stationed may
also be used as transit zones for countries contiguous to Brazil even though
no special facilities have been created for transit shipments.


Free Ports and Free Zones

In 1967 the Brazilian government created the Free Trade Zone of Manaus in a
10,000 square kilometer area surrounding the city of Manaus, in the state of
Amazonas, in the north of Brazil.  However, it was in fact inaugurated by
decree ten years later, in 1967.  This decree established special incentives
for a period of 30 years for the creation of an industrial, commercial and
agricultural center in the heart of Brazilian Amazonia.  Later, these
incentives were extended to all western Amazonia, comprising the states of
Amazonas, Rondonia, Acre and Roraima, an area of 2.9 million square
kilometers, equivalent to 26 percent of the entire territory of Brazil.

The Brazilian Constitution of 1988 endorsed the fiscal benefits of the
Manaus Free Trade Zone and extended their applicability to the year 2013.
Free Trade Zone status implies that goods of foreign origin may enter into
the Manaus free port without payment of customs duties or other federal,
state or local import taxes.  In addition, the Industrial Product Tax on
certain commodities and the ICMS sales tax on most items are not applied.
Imported products used for processing, reexport or transshipment and which
are subsequently shipped to other parts of Brazil also qualify for these tax
exemptions (unless they are among a small group of exceptions).  The ICMS
sales tax is imposed on items produced in the free port when shipped out of
the free zone into Brazil.

Law No 8.387 of December 30, 1991, modified the regulations for the Manaus
Free Trade Zone by eliminating the previously existing import quota.  Now,
importers may bring in whatever they need, provided prior notification is
made to the Superintendent of the Manaus Free Zone (SUFRAMA).  The law also
allows free zone importers to supply foreign goods from their stock in
Manaus to other parts of the country regardless of quantity.  These goods,
however, are subject to all duties assessed under normal importation.

DECEX import licenses must be issued prior to shipment of goods destined for
the Brazilian marketplace.  These licenses are additionally subject to
authorization by the Superintendent of the Manaus Free Trade Zone (SUFRAMA),
the Manaus free zone authority.  Commercial invoices and bills of lading
must have "Free Zone of Manaus" typed on them, and one of the following
statements, as applicable: "Zona Franca de Manaus para Consumo" (Manaus Free
Zone for Consumption) or "Zona Franca de Manaus para Reexportacao" (Manaus
Free Zone for Reexport).

Brazilian restrictions on the informatics sector no longer apply to the
Manaus Free Trade Zone.  License and authorization requirements for
health/sanitary controls, national security interests, and environmental
protection remain in effect.

Each passenger leaving Manaus is allowed a quota of $2,000 (FOB value) of
goods of foreign origin.  Products manufactured in Manaus are not subject to
the quota.

In July 1988, the Brazilian government approved legislation to establish
export processing zones (ZPEs) -- free trade areas -- to encourage
production of goods for export in the northeast and other priority
development areas.  Law 8037 of December 30, 1991, created a ZPE in the new
state of Amap .  The free trade area will be set up in the city of Macap ,
capital of the state, and will be considered a comparable area of free trade
for imports and exports.  It will operates under the control of the
Superintendent of the Manaus Free Trade Zone.

Legislation regarding ZPEs establishes requirements that firms operating in
the zone export at least 90 percent of production.  Up to 10 percent of
production can be sold in the domestic market, and is subject to a duty of
75 percent ad valorem on the final price, minus the cost of imported
inputs.  Normal corporate income taxes apply to profits generated in the
zones.  Firms operating in the zones will be exempt from foreign exchange
regulations and will maintain dollar and local currency accounts; the
official Brazilian exchange rate must be used to convert dollar accounts for
local purchases.  Foreign firms established in the zones may use their own
hard-currency resources for tax-free imports of machinery and raw materials
from abroad.  Firms in the ZPE may not produce goods subject to export
quotas.

License and authorization requirements remain in effect in ZPEs for
health/sanitary controls, national security interests, and environmental
protection.


Abandoned and Reexported Goods

Goods imported into Brazil may be expressly or tacitly abandoned.  They may
be expressly abandoned in writing at any time prior to customs clearance.
Tacit abandonment occurs when the merchandise is not withdrawn within the
permissible warehousing period.  Although customs laws permit the
reexportation of merchandise that has entered the country legally, foreign
trade controls make reexport difficult.  Imported goods not cleared through
customs require authorization for reexport.

On goods already cleared through customs, for which foreign currency
payments were made, reexportation will not be authorized without
reimbursement of the foreign currency paid.  Once goods have been cleared
through customs, they are considered nationalized, and import duties are not
refunded if goods are reexported.

Goods shall be considered to be abandoned if they remain on customs premises
90 days after discharge; 60 days after the date on which clearance
procedures were halted because of an action or failure to act on the part of
the importer; and 45 days after the date of notification from customs.


Import Channels

General

All the customary import channels exist in Brazil:  agents, distributors,
import houses, trading companies, subsidiaries of foreign firms, etc.  The
typical import transaction is the importation of capital goods or raw
materials by an individual firm for its own use.

Brazilian import firms do not generally maintain stocks of capital equipment
or raw materials.  This is partly due to a shortage of working capital.
Additionally, should a buyer qualify for a duty reduction or exemption, an
agent or distributor cannot obtain a rebate for import duty already paid on
an item in stock.  Some flexibility in the maintenance of stocks in the
country has been opened up by legislation enlarging the operations of bonded
warehouses.  Implementing regulations are contained in Decree Law Number
71,866, dated February 26, 1973.)


Agents and Distributors

As in other countries, the selection of an agent in Brazil requires careful
consideration.  A unique factor in the Brazilian situation is that a
prospective agent may not be able to cover the entire country adequately.  A
regional orientation still prevails in Brazil, despite improved internal
transportation and communications.  A Sao Paulo-based agent, for example,
may want to split the commission with a subagent in Porto Alegre who would
cover southern Brazil.  This kind of arrangement is not always attractive to
an agent in Porto Alegre, who is accustomed to operating independently.

The ability of an agent to cover the country depends in large part on the
item being sold; certain types of sophisticated machinery may have only a
dozen or so potential buyers in Brazil, making marketing relatively simple.
On the other hand, less expensive equipment with a wide potential market and
the need for countrywide service facilities puts much greater organizational
demands on an agent.

Brazilian income tax may be levied on a foreign exporter if there is
evidence that the exporter is "present" in Brazil (Article 76 of Law Number
3470/58).  This presence is determined basically by two interrelated factors
-- the closing of sales contracts in Brazil and the existence of either an
express or tacit power of attorney granted to an agent or representative in
Brazil.  In such cases, the taxable income is estimated at 20 percent of the
total price of the product imported into Brazil.  The precise applicability
of this law to any particular transaction or agent-principal relationship is
best determined by a Brazilian tax lawyer.

Once the agent-principal contract is signed, a Brazilian agent is protected
by law from unilateral termination of the contract by the foreign principal
without "just cause."  The definition of just cause is limited to the
following:  the agent's negligence; the agent's breach of contract; acts by
the agent damaging to the principal; and conviction of the agent for a
serious criminal offense.  The legislation governing contract stipulations
and conditions for termination of agency agreements in Brazil is contained
in Articles 27-39 of Law Number 4886, of December 10, 1965.


Trading Companies

The trading company is another type of import marketing organization in
Brazil.  Although principally designed as an export promotion tool, trading
companies may play a role in importing through direct purchase or
countertrade activities.  The operation of Brazilian trading companies is
open to foreign as well as national interests.  Basic legislation defining
the operations of trading companies is contained in Decree Law Number 1248
of November 29, 1972.

Brazilian trading companies were modeled to some extent after foreign
trading companies, principally German and Japanese.  In Brazil trading
companies are called empressas comerciais exportadoras, companhias
comerciais, or companhias de comercio exterior.  They are set up to give
small and medium-sized manufacturers the same operational flexibility as
large manufacturers in promoting Brazilian exports, especially of
nontraditional exports.  Trading companies may act as principals, acquiring
goods from Brazilian producers for the specific purpose of exporting,
assuming all commercial risks and exporting under their own names.
Alternatively, trading companies may act as intermediaries.  In this role,
they operate as commercial agents, utilizing their functional structure to
provide complementary services.


Transportation

Of all the means available for transporting goods within Brazil, the highway
system is the most dependable.  The Brazilian government has channeled
considerable financial resources into improving and extending the road
network.  Some shipping is done by rail, but the railway system is limited,
and much slower than highway transport.  The government is trying to remedy
deficiencies in the railway system.  Coastal shipping is also deficient.
Goods shipped between the ports of Santos and Porto Alegre, for example,
have traditionally traveled by highway.  Air cargo service, domestic and
international is excellent; however, congestion does occur in ground
handling facilities in S o Paulo and other large cities.

The two most important seaports are Santos and Rio de Janeiro.  Both have
extensive facilities, including bonded and refrigerated warehouses, and
several grain installations.  They are undergoing improvements and
expansion.  Unfortunately, Brazilian ports are currently among the most
expensive in the world due to the near-monopolistic labor and managerial
situation prevailing there.  The Brazilian federal government has introduced
legislation to change this, but there is no timetable for passage, nor
certainty that the bill will pass unaltered by Congress.


Marketing Aids

Industry associations (sindicato or associacao) in Brazil can be of
assistance to U.S. exporters in identifying potential Brazilian importers,
especially if the products being sold are used by member firms.  An
association membership list can be a valuable marketing tool, since all
Brazilian firms are required by law to belong to a sindicato for their
respective industry.  Related industry sindicatos of a particular state in
Brazil are grouped together in a federation; state federations are in turn
represented by their national confederation.

The two independent American Chambers of Commerce in Brazil are located in
Rio de Janeiro and Sao Paulo.  The Rio Chamber has approximately 800
members, with a branch in the northern city of Salvador.

          American Chamber of Commerce
          Praca Pio X, 15/5th floor
          C.P. 916
          20040 Rio de Janeiro, RJ, Brazil
          Tel: [phone]

The Sao Paulo organization has approximately 2,000 members with membership
divided more or less along geographic lines.

          American Chamber of Commerce
          Rua Alexandre Dumas, 1976
          04717 Sao Paulo, SP, Brazil
          Tel: [phone]

Each chamber publishes a membership directory, which is a good source of
useful information on Brazil and the activities of U.S. firms in Brazil.

Market research, advertising and public relations activities have not
reached the same degree of sophistication in Brazil as in the United
States.  Numerous local and multinational advertising or marketing firms,
however, are available to advise U.S. suppliers on public relations and
marketing techniques which are compatible with the Brazilian marketplace.
These agencies have access to research institutes, film companies, printing
houses, sound recording companies, and direct-mail firms, all catering to
advertising firms.


Market Research Studies

Valuable market research is provided by the U.S. Department of Commerce,
International Trade Administration (ITA).  ITA's US&FCS staff at the U.S.
Embassy in Brazil prepares brief industry sector analyses (ISAs).  In
addition, ITA contracts full-scale international market research (IMR) for
certain target industries.  These studies on key sectors in Brazil are
available for the following subjects and may be requested through the local
Commerce/ITA district office, listed in the U.S. Government pages of your
local telephone directory.


Industry Sector Analyses (ISAs)

Textile Machinery (Jan 1990)
Computer Software CAD/CAM/CAE (Feb 1990)
Consumer Goods (March 1990)
Educational Training in U.S. (April 1990)
Telecommunications (April 1990)
Food Processing Equip. (May 1990)
Avionics and Air Traffic Control (June 1990)
Medical Equipment (June 1990)
Metalworking Machinery (July 1990)
Free Trade Zone - Manaus (July 1990)
Industrial Organic Chemicals (Sep 1990)
Printing and Graphic Arts (Sep 1990)
Computers and Peripherals (Oct 1990)
Elect. Production/Test Equip. (Oct 1990)
Oil and Gasfield Machinery (Nov 1990)
Analytical/Scientific Instruments (Sep 1990)
Avionics and Ground Support Equip. (Oct 1990)
Textile Industry (Jan 1991)
Security and Safety Equip. (Feb 1991)
Broad Woven Textile Fabrics (March 1991)
English Language Training (March 1991)
Mining Machinery Parts and Equip. (April 1991)
Distributed Control Digital Sys. (April 1991)
Franchising Services (April 1991)
Integrated Circuits (April 1991)
Discretionary Pleasure Travel to USA (May 1991)
Local Area Networks (May 1991)
Consumer Electronics (June 1991)
Computerized Systems for Apparel (June 1991)
Potentiometers (June 1991)
Data Communication Equipment (July 1991)
Material Testing and Quality Control Instruments (July 1991)
CASE Software (July 1991)
CAE Software (Aug 1991)
Aircraft and Parts (Aug 1991)
Offset Printing Machinery (Aug 1991)
Foundry & Rolling Mill Machinery (Aug 1991)
Broadcasting Equipment (Sep 1991)
Parts & Components For Air Conditioning and Refrigeration Equip. (Sep 1991)
Industrial Waste Treatment Equip. (Sep 1991)
Circuit Component Assembly Machines (Oct 1991)
Drill Bits (Nov 1991)
Turbines For Thermal Power Plants (Dec 1991)
Computers and Peripherals (Jan 1992)
Software and Services (Feb 1992)
Industrial Air Pollution Control Equip. (March 1992)
Desktop Publishing Software (March 1992)
Hybrid Integrated Circuits (April 1992)
Metal Cutting Machine Tools (April 1992)
Underground Mining Equipment (April 1992)


Other Services

The U.S. department of Commerce is an additional source of marketing
information and potential Brazilian business contacts.  The Comparison
Shopping Service (CSS) and Agent Distributor Service (ADS), available
through U.S. Department of Commerce District Offices, are important market
assessment and contact services designed to assist U.S. firms in identifying
potential agents, representatives, distributors and licensing or joint
venture contacts in foreign markets.




Government Procurement

Brazilian Government imports (direct and indirect) account for around 20
percent of Brazil's capital goods imports.  In part, this is due to the
considerable financial backing (domestic and international) given to
infrastructure projects such as highway construction, hydroelectric plants,
port improvement, subway construction, etc.  It is worth noting that the
Brazilian Government buys a preponderant share of total imports in at least
two product categories -- electric power generation and distribution and
telecommunications -- while other imports, such as petroleum are controlled
by government monopolies.

In cases of indirect importation, such as purchasing foreign goods through
local intermediaries, the government prefers to work through Brazilian
firms.  This policy is primarily to ensure the government's ease in taking
legal action against a supplier if necessary.  A Brazilian contractor with a
government agency may import duty free in the name of the agency.  In this
case, the equipment must remain in the country.  If the contractor later
uses the equipment in Brazil for private purposes, a prorated duty must be
paid.


Services

The Brazilian National Industrial Property Institute (INPI) regulates the
contracting of foreign specialized technical services through application of
the Law of Similars concept.  INPI's definition of "specialized technical
services" is broad, encompassing management studies, engineering services,
industrial research and development, and use of computer systems in programs.

In practice, it is almost impossible for foreign service firms to operate in
the public sector in Brazil unless work is performed in association with a
local firm.  To be considered Brazilian, a firm must have majority Brazilian
capital participation and decision making authority -- "operational
control."  As of mid-1989, it is unclear how the new constitution's
requirements for "Operational Control" will be applied.  A Brazilian state
enterprise is permitted to subcontract services to a foreign firm if
domestic expertise is not available for the specific task.  A foreign firm
may only bid for government contracts to provide technical services when no
qualified Brazilian firm exists.  Regulations governing this are contained
in Decree Law Number 64.345 of April 10, 1969.

In case of international bidding to supply goods and services for specific
government projects, successful bidders are required to have local
representation -- i.e., "legal presence" in Brazil.  Since the open period
for bidding is often as short as one month, it is highly advisable to have a
permanent resident in Brazil able to act on tenders as soon as they are
announced.

A U.S. supplier may find that including local purchases of Brazilian goods
and services within its bid, or significant subcontract association with a
Brazilian firm, will improve the chance for success.  Similarly, a financing
proposal that includes credit for purchase of local goods and services for
the same project will be more attractive than one that ignores local
business.

The US&FCS staff in Brazil advises U.S. exporters interested in supplying
goods and services for Brazilian Government projects that advance
descriptions of U.S. suppliers' capabilities can often be influential in
gaining a sale.  These early proposals can be effective even before the
exact terms of an investment plan are defined or the design of a project's
specifications is completed.  Such a proposal should include financing,
engineering, and equipment presentations.


Credit

Export-Import Bank of the United States

The Export-Import Bank of the United States (Eximbank) offers a range of
loan and loan guarantee programs to facilitate exports of U.S. goods and
services.  Eximbank's programs include Eximbank direct loans, commercial
lender working capital loan guarantees, commercial lender loan guarantees,
and intermediary loans.  Eximbank works in conjunction with the Foreign
Credit Insurance Association (FICA) to offer various export insurance
programs, including short- and medium-term export credit insurance,
multi-buyer insurance, letter-of-credit insurance, and lease insurance
policies.  Other Eximbank guaranteed export credits are available from the
Private Export Funding Corporation (PEFCO), which borrows in the commercial
market and re-lends for exports.  Additional information on Eximbank, FICA,
and PEFCO programs can be obtained from:

Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, DC  20571
[phone]

Eximbank Small Business Hotline:
[phone]


U.S. Banks in Brazil

Brazil has one of the most sophisticated financial systems in Latin
America.  U.S. commercial banks have been in Brazil since 1915, and numerous
American banks have a presence in Brazil today:

The First National Bank of Chicago
Sao Paulo

First Interstate Bank of California
Rio de Janeiro

Banco de Boston
The First National Bank of Boston
Sao Paulo (branch in Brasilia)

Citicorp Investment Bank
Citibank N.A.
Sao Paulo (branch in Brasilia)

Manufacturers Hanover Trust Company
Sao Paulo

American Express do Brasil
American Express
Sao Paulo (branch in Rio de Janeiro)

BankCal
The Bank of California

Banco Chase Manhattan S.A.
Sao Paulo

NorChem
Banco Noroeste Chemical de Investimento S.A.
Sao Paulo

Bank of American International
Sao Paulo

Bankers Trust Company
Rio de Janeiro (branch in Sao Paulo)

Chemical Bank
Noroeste-Chemical S.A. Leasing (Norchem)
Sao Paulo

Continental Bank International
Continental Illinois National Bank & Trust Co. of Chicago
Sao Paulo

Crocker National Bank
Sao Paulo

Morgan Guaranty Trust Company of New York
Sao Paulo

Pittsburgh National Corporation
Sao Paulo

T. Henry Schroder Bank & Trust Company
Rio de Janeiro (branch in Sao Paulo)

Security Pacific International Bank
Sao Paulo

Texas Commerce Bank N.A.
Sao Paulo

The Citizens & Southern National Bank
Rio de Janeiro

The Philadelphia National Bank Ltda.
Sao Paulo
Salomon Brothers, Inc.
Sao Paulo

Standard Chartered Bank
Rio de Janeiro



Investing in Brazil

Investment Climate

Brazil's basic legislation governing foreign investment has been in place
for about 30 years.  Under this basic legislation, foreign capital is
granted the same treatment as national capital, and foreign investment is
encouraged.  However, laws, regulations, and policies governing investment
were instituted during the past two decades that combined to create a very
complex, and in some sectors, restrictive investment climate.  To conform
with its overall economic objectives of promoting growth and development by
fostering economic modernization and greater international competitiveness,
the current Brazilian government is implementing reforms aimed at improving
the investment climate to attract greater foreign investment and inflows of
foreign technology.

Though prior Central Bank approval is required, foreign investors are
generally free to invest directly in legitimate ventures in sectors not
reserved for Brazilian companies.  Government policy discourages or
prohibits foreign investment in certain sectors of the economy, such as
petroleum production and refining, basic telecommunication services, and
most public utilities.  Government policy seeks to boost nationally owned
development of sectors such as informatics and telecommunications that are
perceived to be of "strategic importance" for long-term technological
development in Brazil.

Brazil's 1988 constitution contains certain provisions which pose, or
threaten to pose, restrictions on foreign investment.  The constitution
differentiates between majority Brazilian owned companies -- Brazilian
national capital companies (BNCC) -- and Brazilian companies with majority
foreign capital, such as subsidiaries of multinational firms.  A BNCC must
be permanently controlled by individuals domiciled in Brazil (or the
Brazilian Government) who retain majority ownership of the firm's voting
capital and decision making authority (Article 171.II).  Fiscal benefits and
preferential treatment in government procurement are granted to BNCCs.  The
1988 constitution provides for government monopolies in petroleum extraction
and refining and basic telecommunications services, and restricts foreign
participation in health services and mining.  The current administration has
proposed constitutional amendments to remove these and other restrictions on
foreign investment.  These proposed amendments will be considered in 1993 as
part of a scheduled constitutional plebescite.

Investors seeking to obtain information on sources of supply in Brazil
should contact the Brazilian Government Trade Bureau (551 Fifth Avenue,
Suite 201, New York, N.Y. 10176. Tel:  [phone]).


Registration of Foreign Capital

Capital, loans, and technology agreements must be registered to ensure
remittance rights.  Law Number 4131 of September 1962 regulates the
registration and repatriation of foreign capital and resultant profits.  The
provisions of this law and subsequent modifications were consolidated in
Decree Law Number 55.762 of February 1965.

In order to qualify for the remittance of profits, foreign capital must be
documented and registered with the Central Bank either by the foreign owner
or the local entity.  Investments can be made in the form of currency,
tangible goods, or intellectual property, provided it is registered with the
National Institute of Industrial Property (INPI).  In general, currency
investments can enter Brazil freely, but investments in the form of goods
require prior
authorization by the Central Bank.  Any new investment or increases must be
reported within 30 days.  Distinctions should be made for:

1. foreign capital invested through the remittance of cash or in the form of
   equipment;

2. reinvested profits; and

3. other increases in foreign capital (including approved credits for
   technology).

Reinvested profits in this context are defined as those profits earned in
Brazil on registered foreign capital which have been retained and
capitalized.  Registration of such capital must be made both in local
currency and in the currency of the country to which the profits could have
been remitted.

For remittance purposes, technology and related agreements must be
registered with INPI and with the Central Bank.  INPI registration of a
technology agreement involves an appraisal of the need for the services to
be rendered and the local availability of alternative technology.  In the
case of royalties, registration of the contract depends on proof that the
related patent or trademark is duly registered in Brazil and is still valid.

Brazilian regulations require that company balance sheets be adjusted for
inflation through the application of an official adjustment index (currently
the "TR") to net worth and permanent assets.  Increases in capital from
inflation adjustments are translated into the currency of registration.


Restrictions on Foreign Investment

Investment in certain sectors of the Brazilian economy is subject to
restriction and requires Central Bank approval.  This procedure allows the
government to control market access through investment restrictions and
prohibitions.  In addition to actively restricting foreign investment in
certain sectors for nationalistic or security reasons, foreign participation
is limited by extensive state ownership characteristic of Brazil.
Industries in which investment opportunities are reserved for Brazilian
nationals include:  petroleum and mineral exploration and refining, fishing,
domestic airlines, the merchant marine, information media, and most
utilities.  Foreign firms also have been barred from participation in the
country's program for producing alcohol as a gasoline substitute except on
an export-only basis.

Foreign investors are subject to restrictions, but are not barred from
participating, in other sectors such as petrochemicals, agriculture,
telecommunications, aircraft, and informatics.  In the
petrochemical sector, for example, the prevailing form of ownership is the
tripartite model in which the government-owned Petrobras, private Brazilian
investors, and foreign investors each take a one-third share in the
venture.  In the telecommunications industry, the government maintains a
monopoly on provision of basic telephone and telex services.  Under the 1988
constitution, all mineral resources are property of the state.  Exploration
of mineral resources can be undertaken only by Brazilians and only with
national capital.

In general, firms operating in communications, information media, and
certain capital goods sectors can expect to be pressured to take on minority
shareholders.  For most projects in basic sectors such as insurance, the
government seeks majority Brazilian ownership.  Foreign ownership in
financial institutions is restricted to minority control, and foreign banks
intending to open branch offices require Central Bank approval.

Direct or indirect foreign ownership of real estate is strictly regulated
and subject to limitations as to the amount of real estate owned.  Foreign
investors may not own property within 150 kilometers of Brazil's land
borders or coastlines.  In the Amazon Basin, considered a national security
area, foreigners may not own more than 3,500 hectares of land for any
purpose.  In addition, National Security Council permission is required for
a new foreign investment in approximately 75 other national security zones.
Purchases of large rural tracts are subject to the approval of the Ministry
of Agriculture or the Ministry of Industrial Development, depending on the
intended use.  Additionally, in 10 Sao Paulo municipalities, foreign
companies are allowed to purchase a maximum of 750 hectares.  This
requirement was imposed because of the heavy concentration of foreign firms
in the area.

Under the U.S.-Brazil Investment Guaranty Agreement, the U.S. Overseas
Private Investment Corporation (OPIC) insures U.S. investments in Brazil for
certain risks.


Repatriation of Capital and Earnings

Foreign capital (currency, capital goods, machinery, and intangible goods
such as patents and trademarks) must be registered with the Central Bank to
ensure the right to remit profits and repatriate the principal.
Registration of investment inflows must be applied for within 30 days of the
inflow and such funds should be directed to a local company established to
do business in Brazil.  Likewise, reinvestment should be registered with the
Central Bank to increase the effective "base" from which total investments
and profits may be repatriated.  Profits may only be remitted on capital
brought into Brazil or on reinvestment of profits derived from such capital.

As previously mentioned, Law Number 4131 of September 3, 1962 established
the basic criteria for repatriation of foreign capital and profits arising
from foreign investments.  This was later modified by Law Number 4390 of
August 29, 1964 and Decree Law Number 55.762 of February 17, 1965.

Capital (including reinvestment), up to the amount registered with the
Central Bank, may be repatriated without payment of tax nor limitation as to
period or amount.  Quantities in excess of the registered foreign currency
(i.e., capital gains) require special permission before being repatriated
and are subject to withholding tax.  Repatriation of quantities exceeding
registered capital is subject to a 25 percent income tax.

Dividends and branch profits on registered foreign investments are freely
remittable.  While there is no limit on the amount of profits remitted, an
income tax of 25 percent is with held.  Law number 8383 of December 30, 1991
reduces this income tax to 15 percent as of January 1, 1993 and, effective
January 1, 1992, eliminated supplemental taxes on remittance of "excess
profits."  Investment capital resulting from debt conversion must remain in
Brazil for a 12-year period before remittance is permitted.  Resultant
dividends may be freely remitted (according to basic profit remittance
regulations).

Remittances of royalties or technical service fees by a subsidiary
established in Brazil to its head office abroad are permitted under Law 8383
(not permitted for branch offices in Brazil) provided that the technology
agreement has been registered with INPI.  Payments of royalties or
technology fees abroad are deductible for income tax purposes by the
Brazilian subsidiary.

The minimum repayment period for foreign loans is eight to 10 years (when
qualifying for tax incentives), with a grace period of 30 months before the
first repayment of principal.  The loan may be repaid in equal installments
throughout the remainder of the period of the loan (5 1/2 or 7 1/2 years,
respectively).  Subject to these limitations, no restrictions are imposed on
the payment of loan principal, provided that the financial contract is
registered with the Central Bank.  Interest is freely remittable within the
terms of the registered loan contract.

Supporting documentation must be presented for approval of any remittance
abroad of any funds.  When profits or other forms of taxable income are
involved, proof must also be furnished that the appropriate withholding tax
has been paid.  Foreign businesspeople should not, in general, try to solve
their problems directly with the Brazilian Government, but rather work
through their attorneys or freight forwarders.  Legislation and regulations
affecting business in Brazil tend to be short-lived; the system is complex;
and a little knowledge may be worse than none.

The general rule is to comply strictly with the terms of import permits; do
not take advantage of technical errors or bona fide mistakes, since this can
create further complications.


Intellectual Property Protection

A major concern of foreign companies trading with Brazil is that protection
of intellectual property rights is often inadequate and uncertain.

Brazil is a signatory to the Paris, Berne, and Universal Copyright
conventions on intellectual property rights (IPR) protection.  Most of the
country's statutes on IPR are consistent with Western standards.  However,
serious gaps exist regarding patent protection for pharmaceuticals (current
laws do not provide for pharmaceutical patent protection), trademarks
(protection for well known marks is not universally granted), and trade
secrets (weak enforcement provisions).  Legislation is before Brazil's
congress to address most of these issues.

Brazil's technology-transfer regulations affect most IPR protection -- from
trade secrets to computer software.  By law, the Brazilian National
Industrial Property Institute (INPI) is required to approve all
transfer-of-technology agreements and all patent and trademark licenses.

Brazil does not have a statue that specifically provides protection to trade
secrets or know-how.  There is only an indirect form of protection, normally
of five-years' duration, derived from the unfair competition section of
Brazil's Industrial Property Code, Article 178, Item XII.  Brazil's
Copyright Law of 1973 is generally consistent with accepted Western
standards.

Issues of concern to foreign patent holders are INPI's slow processing of
patent applications; the federal judiciary's uncertain application of patent
law; the potential for arbitrary interpretation of compulsory licensing
requirements; and Brazil's statutory prohibition against either process or
product protection for pharmaceutical patents.  A bill is pending before
Brazil's congress which would address many of these concerns.  The bill's
projected date of passage is uncertain.


Guidance for the Business Traveler Abroad

Entrance Requirements

While foreign business visitors may enter Brazil with only a tourist visa,
Brazilian law requires that they must have a temporary (business) visa if
they plan to transact business.  "Business" would include signing legal
documents, engaging in financial or commercial transactions, and working or
engaging in research.

Visa status may be changed while in Brazil.  If the change is from a
temporary to a permanent visa, duty-free entry of personal effects is not
permitted.

Tourist visas are valid for 90 days.  A temporary business visa is valid for
90 days.  Transit visas are valid for 10 days and require travelers to enter
and exit through the same port.

Details regarding Brazilian visa procedures and requirements are provided in
literature available on request from the Consular Section, Embassy of
Brazil, 3006 Massachusetts Avenue, N.W., Washington, DC  20008.  Tel:  (202)
745-2828.


Business Etiquette

U.S. business visitors must become accustomed to several business conditions
that are specific to Brazil.  Compared to the United States, the pace of
negotiation is slower and is based much more on personal contact.  It is
rare for important business deals to be concluded by telephone or letter.
Many Brazilian executives do not react favorably to quick and infrequent
visits by foreign sales representatives.  They prefer a more continuous
working relationship.  The Brazilian buyer is also concerned with
after-sales service provided by the exporter.

The slower pace of business negotiation does not mean that Brazilians are
less knowledgeable in terms of industrial technology or modern business
practices.  In fact, one should be as prepared technically when making a
call on a Sao Paulo firm as on a Chicago firm.  In addition, a U.S. business
person is encouraged to learn as much about the Brazilian economic and
commercial environment as possible before doing business in that country.

While office hours in Brazil are generally 8:30 a.m. to 5:30 p.m., decision
makers begin work later in the morning and stay later in the evening.  The
best times for calls on a Brazilian executive are between 10 a.m. and noon,
and 3 to 5 p.m., although this is less the case for Sao Paulo where
appointments are common throughout most of the day.  Lunch is usually two
hours.  It is customary in Brazil to drink coffee during a business
appointment.

While many Brazilians may speak English, they may wish to conduct business
in Portuguese.  The non-Portuguese speaking U.S. executive may need an
interpreter on more than 50 percent of business calls.  Correspondence and
product literature should be in Portuguese, and English is preferred as a
substitute over Spanish.  Specifications and other technical data should be
in the metric system.

Travel and Transportation

Air Travel - Brazil has three major airlines, Varig/Cruzeiro, Vasp, and
Transbrasil.  These companies provide efficient service throughout the
country.  Brazilian regional airlines provide service to their respective
parts of the country.  Air taxi services are available at most airports.
Scheduled airline fares are comparable to those in Western Europe.

Business people, travelers, and residents spend a good deal of time among
the four most important cities -- Sao Paulo, Rio de Janeiro, and Brasilia
and Belo Horizonte.  Sao Paulo is Brazil's center for commerce and
manufacturing; Rio de Janeiro is important for its service industries and
several state companies; Brasilia is the seat of government and location of
foreign embassies.  An excellent air bridge (or "ponte aerea") service
facilitates travel among these three cities.  During rush hours, flights
between Rio de Janeiro and Sao Paulo leave every 15 minutes from
conveniently located downtown airports.  For weekend travel, return
reservations must be confirmed for Rio on Friday evening and for return to
Sao Paulo or Brasilia on Monday morning.

Local Transportation - Meter taxis, identified by roof lights, are plentiful
in urban areas.  However, getting about in Sao Paulo and other large cities
can still be a problem.  It is not always possible to rely on taxis when
making calls.  They are extremely difficult to find at certain hours of the
day and in certain sections of the city.  Fares are inexpensive, but
frequently readjusted to compensate for the high inflation rate.  A table
used to adjust fares is posted on the inside of the taxi's rear window.  It
is not necessary to tip.

Radio taxis are more expensive but convenient and reliable.  In Rio call:
270-1442, in Sao Paulo call:  251-1733, in Brasilia call:  224-3330 or
224-7474, and in Belo Horizonte call:  464-3999.

Rental cars are common, especially at airports.  They can be costly compared
with other forms of transportation.  Sao Paulo is very confusing for a
newcomer; driving is not recommended.


Time

Local time in Brazil is two hours ahead of Eastern Standard Time.  The
country observes daylight savings from December to February.  When daylight
savings is in effect in the United States, Brazilian time is one hour
ahead.  When daylight savings is in effect in Brazil, Brazilian time is
three hours ahead.


Entertainment

Cinemas in Rio and Sao Paulo show a wide variety of up-to-date foreign films
in the original language with Portuguese subtitles.  For those who
understand Portuguese, theater is lively, especially in Sao Paulo.   Music
and dance performances are also common is these two cities.  Nightclubs for
all tastes are plentiful in Rio and Sao Paulo.  Discos are found in many of
the better hotels.  Brasilia, by contrast, is less culturally sophisticated
than Rio and Sao Paulo.

In Rio, much of the entertainment is on the beaches.  Copacabana covers a 6
kilometer crescent and is the largest and most famous.  The beaches of
Ipanema and Leblon are more chic.  Further along the coast, beaches at Sao
Conrado and Barra tend to be less crowded.

Residents escape the pollution of Sao Paulo for a day at the beach with an
hour-long drive to Santos or Guaruja on the coast.


Holidays

The following holidays are designated by the Brazilian Government:

  New Year's Day - January 1

  Carnival* - Four nights and three days
   preceding Ash Wednesday Good Friday

  Easter Sunday

  Tiradentes Day - April 21

  Labor Day - May 1

  Corpus Christi - May 25

  Independence Day - September 7

  "Nossa Senhora Aparecida"
    (Our Lady Appeared) - October 12

  All Souls Day - November 2

  Proclamation of the
   Republic - November 15

  Immaculate Conception - December 8

  Christmas Day - December 25

In addition, various state holidays and other religious and federal holidays
are proclaimed throughout the year.  Some of these include:

  San Sebastian Day - January 20
   (Rio de Janeiro only)

  Anniversary of the Founding of the
   City of Sao Paulo - January 25
   (Sao Paulo only)

  "Nossa Senhora Dos Navegantes" - February 2
    (Porto Alegre)

*  Avoid arriving during Carnival unless reservations have been confirmed in
advance.


General Information

Foreign Exchange -- Banks are open from 10 a.m. until 4:30 p.m., Monday
through Friday, for purchases of local currency.  The Brazilian Government
has recently followed a policy of daily mini-devaluations of the currency.
When leaving Brazil, take only a minimum of local currency to cover taxi
fare to the airport, the exit tax (approximately $6) and any last-minute
purchases.  Remaining cruzados may be converted back into hard currency at
the official rate, provided official exchange receipts are shown.  As of
January 1989, there is a tourist exchange rate in Brazil that may differ
from the official rate.  The Brazilian Government has authorized the
purchase and sale of foreign exchange at free market rates for purposes
linked to tourism.  These transactions may be undertaken by banks, travel
agencies, exchange brokers, and hotels.

Souvenirs -- The best buys for souvenirs and gifts are probably lace from
the northeast, Amerindian arts, and loose precious stones bought from a
reputable dealer.  Manaus is an inland duty-free port where electronic
consumer goods can be purchased at excellent prices.

Street Crime -- In Rio de Janeiro, (particularly along Copacabana and
Ipanema beaches) and also in parts of Sao Paulo, muggings are common despite
police patrols.

Visitors should be as "street wise" as they would be in any large
metropolitan area and use common sense and take precautions.  These include
the following:  travel in groups as much as possible; walk only in
well-lighted areas; dress casually; do not carry more cash than you need for
the occasion; leave valuables -- including all rings, bracelets, watches,
etc. in the hotel safe; seek advice from your hotel porter on the local
areas to avoid; and videos and cameras brand you as a tourist -- take them
out only when necessary.

      * * * * * * * * * * * * * * * *

The information supplied in this report is not intended to serve in lieu of
legal counsel.  Such advice may be obtained from  attorneys in the United
States who specialize in foreign law.  A list of attorneys in Brazil may be
obtained from the U.S. Embassy in Brasilia or Counsulate General offices in
Sao Paulo or Rio de Janiero.



U.S. Diplomatic and Consular Posts in Brazil


American Embassy

Avenida das Nacaes, Lote No. 3
70403 - Brasilia, DF, Brazil
Tel.:  [phone]
Telex:  (55 61) 1091
FCS Fax:  [phone]


American Consulate General

Rio de Janeiro:
Avenida Presidente Wilson, 147
20030 Rio de Janeiro, RJ, Brazil
Tel.:  [phone]
Telex:  (55 21) 21466

Sao Paulo:
Rua Padre Joao Manuel, 933
01411 Sao Paulo, SP, Brazil
Tel.:  [phone]
Telex:  (55 11) 31574

Commercial and Agricultural offices at:
Avenida Paulista, 2439 - lo. andar
01311 Sao Paulo, SP, Brazil
Tel.:  [phone]
Telex:  (55 11) 25274
FCS Fax:  [phone]


American Consulate

Porto Alegre:
Rua Cel. Genuino, 421
90010 Porto Alegre, RS, Brazil
Tel.:  [phone]-4697
Telex:  (0512) 2292

Recife:
Rua Goncalves Maoa, 163
50070 Recife, PE, Brazil
Tel.:  [phone]
Telex:  (081) 1190


American Consular Agent

Bel}m:
Avenida Oswaldo
Rua Maceio, 62
69057 Manaus, Amazonas, Brazil
Tel.: [phone]

Note:     The Commerce Department's International Trade Administration has
          U.S. and Foreign Commercial Service offices in Brasilia, Sao
          Paulo, Rio de Janeiro, Bel}Belo Horizonte.



Bibliography


Business Guides  (in English)

1. American Firms Operating in Brazil.  A list of firms compiled by World
   Trade Academy Press, Inc., 50 East 42nd Street, New York, NY  10017;
   [phone].

2. Brazilian-American Who's Who.  Includes companies in the United States
   and their subsidiaries and affiliates in Brazil.  Available from the
   Brazilian-American Chamber of Commerce, Inc., 22 West 48th Street, New
   York, NY 10036-1886; tel:  [phone].

3. Brazil Company Handbook.  Contains data and information on major listed
   companies in Brazil. Also, Brazilian Privatization Program.  Provides the
   international financial and investment community with information and
   data on privatization in Brazil.  Order from the International Company
   Handbook, Gateway Lake Headquarters, 1280 S.W. 36th Ave. Suite 210,
   Pompano Beach, FL 33069-9826; tel:  [phone].

4. Foreign Business in Brazil -- A Practical Law Guide.  (2nd edition),
   Thomas Benes Felsberg, 336 pp. Order from IBDT:  Livereiros e Editores
   Ltda., Avenida Paulista, 1471, conj. 919, 01311 Sao Paulo, SP, Brazil.

5. Doing Business in Brazil. Pinheiro Neto & Co.  Binder of monthly
   updates.  Available for a yearly subscription from Matthew Bender
   Company, Customer Service Department, 1275 Broadway, Albany, NY 12201;
   [phone].

6. Information Guide:  Doing Business in Brazil (January 1991), Price
   Waterhouse & Company, International.  Order from Distribution Center,
   Price Waterhouse & Company, P.O. Box 30004, Tampa, FL  33630; (813)
   287-9000, or order from local branches.  Free of charge.

7. Investment in Brazil (1992).  Limited copies available from KPMG-Peat
   Marwick, Distribution Center, 3 Chestnut Ridge Rd., Montville, NJ, 07645,
   tel:  [phone].

8. Investing, Licensing and Trade Conditions Abroad:  Brazil.   Available in
   major libraries or from Business International, Subscriptions Department,
   One Dag Hammerskjold Plaza, 7th floor, New York, NY 10017; tel:  (212)
   460-0600.

9. Summary of Investment Legislation in Brazil.  Banco do Brasil, 118 pp.
   Order from Banco do Brasil, 550 Fifth Avenue, New York, NY 10036; tel:
   [phone].  Free of charge.


Business Guides (in Portuguese)

1. Anuario das Industrias.  Comprehensive list of Brazilian manufacturers by
   product area.  Order from Editora Pesquisa e Industrias Ltda., Rua da
   Consolacao 2043; 01031, Sao Paulo, S.P., Brazil; tel:  [phone].

2. Sao Paulo Yearbook.  Annual directory of members of Sao Paulo branch of
   the American Chamber of Commerce.  Order from the American Chamber of
   Commerce for Brazil; C.P. 12518; 04798, Sao Paulo, S.P., Brazil; tel:
   [phone].


Business Newsletters and Magazines (in English)

1. Brazilian News Briefs.  Summary of important items from the Brazilian
   press and other sources.  American Chamber of Commerce for Brazil;
   Avenida Rio Branco, 123, 21 andar; C.P. 916; 20000, Rio de Janeiro, R.J.
   Brazil.

2. Brazilian Business Trends.  A weekly report to management on the
   Brazilian economy.  Order from Analise Editora Ltda., Avenida Pedroso de
   Morais, 433; 05419 Sao Paulo, S.P. Brazil; tel:  [phone].

3. Brazilian-American Business Review/Directory (1991). Brazilian-American
   Chamber of Commerce, Inc., 22 West 48th Street, New York, NY  10036-1886;
   tel:  [phone].

4. Business Latin America.  Weekly newsletter containing business articles
   on Brazil and other Latin American countries.  Published by Business
   International,  Subscriptions Department, 215 Park Avenue South, 18th
   floor,New York, NY 10003; tel:  [phone].

5. Gazeta Mercantil (New York Weekly Edition). English excerpt from the
   Brazilian daily business newspaper, Gazeta Mercantil.  Order from Flavio
   Ebert, 220 East 42nd Street, room 930, New York, NY  10017; tel:  (914)
   665-9867.

6. News Bulletin.  A monthly review of Brazilian business and financial
   news.  Brazilian-American Chamber of Commerce, Inc.,  22 West 48th
   Street, New York, NY  10036-1886; tel:  [phone]. Free of charge to
   Chamber members.

7. Update.  A bilingual newsletter on the investment climate and economic
   conditions in Brazil.  Order from the American Chamber of Commerce for
   Brazil, C.P. 12518, CEP 04798, Sao Paulo, S.P., Brazil; tel:  (011)
   246-9199.


Business Newsletters and Magazines (in Portuguese)

1. Banco Central do Brasil.  Informativo Mensal.  Available on request from
   Economics Department, Banco Central do Brasil,  Setor de Autarquisas Sul,
   70070 Bras lia, D.F., Brazil;     tel:  [phone].

2. Banco do Brasil/Monthly letter.  Order from International Division
   (ASPLA), Banco do Brasil, C.P. 1150, 20000 Rio de Janeiro, R.J., Brazil.

3. Brazilian Business Trends.  Order from Rua Jos} de Freitas Guimaraes, 65,
   01237 - Sao Paulo - SP, Brazil;  tel:  [phone].

4. Carta Semprel de Brasilia.  Order from Setor Commercial Sul, quadra 06,
   Bloco A, No. 157 Edificio Bandeirantes, Salas 301/304, 70300, Brasilia,
   DF, Brasil;  tel:  [phone].

5. Conjuntura Economica.  A monthly magazine with in-depth articles on
   Brazil's economic, commercial, industrial and financial situation, and
   many statistical tables.  Order from: Fundacao Getulio Vargas, Praia de
   Botafogo 190, C.P. 9052, 22253, Rio de Janeiro, R.J., Brazil; tel: (021)
   551-1542.

6. Gazeta Mercantil.  A Brazilian daily business newspaper. Also, Balan o
   Anual.  A yearly business guide magazine with articles and statistical
   tables on Brazilian companies and industries.  Order both publications
   from:  Gazeta Mercantil S.A., Rua Major Quedinho 90, C.P. 6503, 01050 Sao
   Paulo, Brasil; tel: [phone].

7. Exame.  A monthly general business magazine.
   Veja. A weekly general interest news magazine. Order both from Editora
   Abril, Avenida Otaviano Alves de Lima, 800 Sao Paulo, S.P., Brazil.

8. Manchete. A weekly general interest magazine.
   Tendencia. A monthly business magazine.  order both from Bloch Editores,
   Rua do Russel, 766, 22210 Rio de Janeiro, R.J., Brazil.

9. Visio.  A weekly, general news magazine.
   Quem e Quem na Economia Brasileira.  An annual who's who of the Brazilian
   economy with sector analyses and financial data on the more important
   firms within each sector.  Subscriptions for both publications available
   from:  Visao Magazine, National Press Building, Room 735, 529 14th
   Street, N.W., Washington, DC  20045, [phone].

10. Electricidade Moderno (Electrical industry).
    Quimica e Derivados (Chemical industry); Transporte Moderno
    (Transportation) DeFilippes Company.  420 Lexington Avenue, Room 1760,
    New York, NY  10170, tel:  [phone].

11. Data News (A major computer industry publication in Brazil).  Anuario de
    Informatica CWB (Yearbook).  Order from:  C.W.B. Servicos e Pulicacaes,
    Rua Alcindo Guanabara 25, 10 andar; 20031 Rio de Janeiro, R.J., Brazil;
    tel:  [phone].

12. Panarama do Setor de Informatica (Special yearly).  Secretaria Especial
    de Informatica, SAS Lote 6, C.P. 040390, 70070 Brasilia, DF, Brazil,
    tel. [phone].

13. Letter.  Setor Comercial Sul, quadra 08, Bloco B-50, Sala 443, 70333 -
    Brasilia - DF, tel:  [phone].

Brazilian Statistical Sources (in Portuguese)

1.  Anuario Estatistico do Brasil.  Available from Fundacao IBGE  (Instituto
    Brasileiro de Estat stica), Avenida Franklin Roosevelt, 166, 20000 Rio
    de Janeiro, R.J., Brazil.

2.  Comercio Exterior do Brasil (import/export statistics).  Centro de
    Informac es Economico-Fiscais (CIEF), Secretaria de Receita Federal,
    Ministerio da Fazenda, 70000 Brasilia,   D.F., Brazil.

3.  Boletem do Banco Central do Brasil (banking and finance).  Banco Central
    do Brasil, Departamento Economico, C.P.  04-0170, 70000 Brasilia, D.F.,
    Brazil.

Other Information Sources

1.  Annual Report on Exchange Restrictions.  International  Monetary Fund.
    Approximately 500 pp.  Worldwide survey of  exchange regulations with
    section on Brazil.  Available from Publications Office,
    International Monetary Fund,
    Washington, DC 20431;
    [phone].

2.  Douanes, International Customs Journal:  Brazil, 1986.  Available from
    the International Customs Tariff Bureau, Rue de l'Association 38 - B,
    1,000 Brussels, Belgium.

3.  Manual de Atualizac o da Tarifa Aduaneira do Brasil,  (Brazilian tariff
    book).  Editora Agenco, Ltda.; Rua Senador Dantas, 75, 4 andar; 20037
    Rio de Janeiro, R.J., Brazil.

4.  Translations.  List of translations of official Brazilian Government
    measures, with prices, available from American Chamber of Commerce for
    Brazil;
    Avenida Rio Branco, 123, 21  andar;
    C.P. 916; 20000 Rio de Janeiro, R.J., Brazil.

5.  Country Labor Profile:  Brazil, Bureau of International Labor Affairs
    S-5015, U.S. Department of Labor, Washington,  DC 20210; [phone].

6.  Background Notes:  Brazil,
    Office of Brazilian Affairs, Room  4262,
    U.S. Department of State,
    Washington, DC  20520;
    [phone].


    Other organizations with Current Information on Brazil

l.  U.S. Chamber of Commerce,
    Room 619, International Division,
    1615 H Street, Washington, DC  20062.  Director of Latin American
    Affairs;
    [phone].

2.  Brazilian American Chamber of Commerce
    22 W. 48th Street, New York,  NY  10036; [phone].

3.  Council of the Americas
    1625 K Street, N.W., Suite 1200
    Washington, DC  20006; [phone]

4.  Brazilian Government Trade Bureau (Commercial Information)
    551 Fifth Ave., Suite 201
    New York, NY  10176;
    [phone]

5.  Brazil-Southern California Trade Association
    World Trade Center, #226
    350 South Aqueroa
    Los Angeles, CA  90071; [phone]

6.  Export-Import Bank of the United States, Annual Report  811 Vermont
    Avenue, N.W. Washington, DC  20571; [phone]