On October 19, 2020, the United States and Brazil agreed to an updated protocol for the 2011 Agreement on Trade and Economic Cooperation (ATEC) with three new annexes:  Customs Administration and Trade Facilitation, Good Regulatory Practices, and Anticorruption.  U.S. Trade Representative Robert Lighthizer said that the protocol “uses the existing ATEC to establish common standards for the two countries on efficient customs procedures, transparent regulatory development, and robust anti-corruption policies that will create a strong foundation for closer economic ties between our two countries.”  In a joint statement, representatives of both countries agreed that “these provisions demonstrate the countries’ mutual commitment to the fundamental elements necessary for a fair shake on trade – publishing information, giving stakeholders an opportunity to provide input on the rules, providing transparent and efficient processes at the border, and being vigilant against corruption.”

The full text of the U.S.-Brazil ATEC Protocol on Trade Rules and Transparency can be found here.  Key provisions of the three new annexes include:

Annex I: Customs Administration and Trade Facilitation – expanding on the multilateral WTO Trade Facilitation Agreement, including:

  • Online publication of customs and other border information
  • Single window for import, export and transit
  • Electronic systems and electronic documentation for traders, including submission of customs declaration and related documentation
  • Broad scope for advance rulings, including classification, valuation, origin, and application of quotas, and mechanisms for consistent customs treatment
  • Disciplines on penalties, including no penalties on minor errors (unless part of a consistent pattern) and procedures to allow correction of errors without penalties

Annex II: Good Regulatory Practices – providing greater transparency about Brazilian regulatory procedures, including:

  • Online publication and comment periods of draft regulations
  • A web site with information about plans for regulating, regulations being developed, and regulators’ specific responsibilities
  • Encouragement of the use of a Regulatory Impact Assessment to evaluate draft regulations
  • Review of regulations to assess effectiveness of regulations and identify opportunities to reduce regulatory burden
  • Encouragement for regulatory authorities to use reliable high quality information and to be transparent about the source of information used

Annex III: Anticorruption – new commitments include:

  • Obligations to adopt and maintain measures to prevent and combat bribery and corruption
  • Provisions to preclude the tax deductibility of bribes and establish measures regarding the recovery of proceeds of corruption and the denial of a safe haven for foreign public officials who engage in corruption
  • Effective sanctions for corrupt acts, as well as effective policies and procedures to promote accountability of public officials
  • Rules for integrity in maintaining financial records, including financial statement disclosure and auditing requirements
  • Procedures to report corrupt acts and protection for persons who report corruption (whistleblowers)

The U.S. and Brazilian governments will review implementation and operation of these annexes on an annual basis.  If either party has concerns with the implementation of a provision of the annexes, it may request consultations to seek a mutually satisfactory resolution.  Either party to the protocol may terminate it by providing written notice, and termination will take effect on a date agreed to by the parties or 180 days after the date of delivery of the notice of termination.