IMPLEMENTATION LEVEL

NFI

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 23 Oct 2013 | Removal date: 23 Jun 2015
Still in force

Localisation incentive

On 23 October 2013, the Brazilian Development Bank BNDES announced a new credit line for the creative sector, called BNDES Prodesign. The fund is worth 500 million real (USD 230 million).
 
The funds are directed at investments in design, fashion, product development, and branding strategies. Thus, its main beneficiaries are producers of fashion, furniture, personal hygiene goods, perfumes, cosmetics, domestic supplies (including electronics), toys, sanitary metals, jewelry, watches, packaging, and ceramic tiles.
 
Eligible items are mainly costs related to R&D, packaging, industrial design and fashion design, ergonomy, concepts, comport and style, vocational training, trade fairs, as well as the acquisition of software of national production.
 
Subsidies and local content requirements
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
 
The measure is considered discriminatory since, in general, the Brazilian Development Bank provides credits with below-market interest rates only to legal persons (private or public) based in Brazil. BNDES Prodesgin credits have an interest rate of 5.9% plus a risk premium, whereas the Central Banks overnight interest rate is at about 9.4 percent.
 
Besides this, the bank imposes local content requirements on goods (mainly capital goods), services and software financed through its credit lines.
 
Update
On 23 June 2015, BNDES extended Prodesign program until 2016. It was supposed run out in December 2015. Also, the bank increased the funds' budget and added new sectors as well as lending requirements to the credit line. Please, consult measure no. 10154 under Related Measures.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

Please report this page in case you detect an inaccuracy in its content.