ANNOUNCEMENT 30 Jun 2015

In June 2015, the government of Brazil announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



BNDES, press release of 30 June 2015, 'BNDES renova programa de apoio a investimentos em design com or?amento de R$ 1 bilh?o ': http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Sala_de_Imprensa/Noticias/2015/Inovacao/20150630_prodesign.html

BNDES, 'Programa BNDES de Apoio a Investimentos em Design, Moda e Fortalecimento de Marcas - BNDES Prodesign': http://www.bndes.gov.br/apoio/prodesign.html

Associa??o Brasileira da Ind?stria T?xtil e de Confec??o (Abit), 31 July 2015, 'BNDES renova programa de apoio para empresas de moda e design': http://www.exportnews.com.br/2015/07/bndes-renova-programa-de-apoio-para-empresas-de-moda-e-design/


Inception date: 30 Jun 2015 | Removal date: 28 Dec 2016
Still in force

State loan

On 30 June 2015, the Brazilian Development Bank BNDES amended its Prodesign credit line which was launched in 2013 and grants loans to the creative sector (see measure no. 10216 under Related Measures).
 
The amendments include:

  • Duration: Prodesign was supposed to end on 31 December 2015, but was extended until 31 December 2016.
  • Funding: The original fund of 500 million Real (USD 159 million) was increased to 1 billion Real (USD 320 million).
  • Eligible sectors: Additional economic sectors are now eligible for Pordesign loans, including glasses, suitcases, bags, fashion accessories, sports material, sanitary utilities and other items used in civil construction. Previously, Prodesign only supported fashion, furniture, personal hygiene, perfumes, cosmetics, domestic supplies (including electronic supplies), toys, sanitary metals, jewelry, watches, packaging, and ceramic tiles.
  • Local content: Retailers have now to adhere to a national content of at least 60 percent.

 
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's long term interest rate was at 6 percent for the period of April to June 2015. The Central Bank's overnight interest rate however is at about 14 percent.
 
Besides this, the bank imposes local content requirements on goods (mainly capital goods), services and software financed through its credit lines.

Inception date: 30 Jun 2015 | Removal date: 28 Dec 2016
Still in force

Local sourcing

On 30 June 2015, the Brazilian Development Bank BNDES amended its Prodesign credit line which was launched in 2013 and grants loans to the creative sector (see measure no. 10216 under Related Measures).
 
The amendments include:

  • Duration: Prodesign was supposed to end on 31 December 2015, but was extended until 31 December 2016.
  • Funding: The original fund of 500 million Real (USD 159 million) was increased to 1 billion Real (USD 320 million).
  • Eligible sectors: Additional economic sectors are now eligible for Pordesign loans, including glasses, suitcases, bags, fashion accessories, sports material, sanitary utilities and other items used in civil construction. Previously, Prodesign only supported fashion, furniture, personal hygiene, perfumes, cosmetics, domestic supplies (including electronic supplies), toys, sanitary metals, jewelry, watches, packaging, and ceramic tiles.
  • Local content: Retailers have now to adhere to a national content of at least 60 percent.

 
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's long term interest rate was at 6 percent for the period of April to June 2015. The Central Bank's overnight interest rate however is at about 14 percent.
 
Besides this, the bank imposes local content requirements on goods (mainly capital goods), services and software financed through its credit lines.