Resolution No. 19/2013 of the Brazilian Oil, Natural Gas, and Biofuels Agency (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis - "ANP") went into effect on June 17, 2013, replacing Resolution No. 36/2007 with regard to local content certification.

Important changes to the local content requirements include the following:

Revision of old definitions and insertion of new conceptsANP excluded various definitions and included others, such as the concepts of "product family" and "series products", as well as limitations for items that may be considered to be "goods" or "material" for local content calculation purposes.

  • Transition stage. This resolution establishes that contracts for purchase or provision of services signed before September 11, 2008, which were not amended after such date in order to modify their purpose or term, shall observe the transitional rules set forth in Article 59. In general, during the transitional stage, only the values stated by concessionaires in the quarterly reports shall be considered for local content proof purposes.
  • Foreign goods and systems. Foreign goods and systems will not be subject to certification, except (i) if such goods or systems are manufactured in Brazil and are in Brazil under the "REPETRO" regime, or (ii) systems which are refurbished in Brazilian shipyards or in Brazil.
  • Impossibility of local content certification. ANP established restrictions on the investments that may be considered for purposes of the local content calculation, such as: overhead and expenses incurred with governmental agencies regarding licensing of projects or other fees. 
  • Certification of goods of concessionaire′s property. If the concessionaire uses its own material, equipment, or labor, the concessionaire must hire a certification entity in order to issue the local content certificate.
  • Certification of periodic partial billing. For service contracts under periodic partial billing, the local content certificate may be issued on a consolidated basis, at the end of such provision, with the consolidation of all invoices issued during such period, even if delivered by different companies belonging to the same economic group. However, concessionaires may also choose the partial certificate. ANP recommends that the minimal reporting period be quarterly.  

Annexes to Resolution 19/2013 (i.e., the revised local content booklet, as well as the local content certificate model) were not disclosed by ANP, but the official text of such resolution, as published in the Brazilian Official Gazette, is available here.

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