Suframa, the agency in charge of the Manaus free trade zone, has issued for public comment and review a set of proposals on what are known as Basic Productive Processes (Portuguese-language acronym PPBs) for the manufacturing of digital television receivers. The PPBs will say what stages of the production process must take place in Brazil for manufacturers to be eligible for exemption from excise tax (IPI). The draft will be open to public consultation for 15 days starting September 19, when it was published in the Federal Register (Diário Oficial da União). Comments and contributions must be delivered to Suframa. The final text will be published in about two and a half months. The draft rules were announced by Benjamim Sicsú, executive secretary (equivalent to deputy minister) of the Ministry of Development, Industry & Commerce, to which Suframa is subordinated.
Royalties
The PPBs cover the following six items: HDTV system-on-chip (SOC); HDTV set-top box; DTV tuner-demodulator subsystem; HDTV receiver; SDTV receiver; SDTV set-top box. The draft determines that SOCs, chips with hardware and software, must be designed in Brazil but no one is currently producing such integrated systems here so this may end up being negotiated as part of a reciprocity package when the DTV standard is chosen. According to Benjamim Sicsú, the aim of making SOC architecture design in Brazil compulsory is to minimize payment of royalties. He said there are separate PPBs for the tuner-demodulator subsystem and standalone monitor to enable these components to be manufactured and sold separately. Thus consumers will be able to replace an existing monitor with a larger model without needing to buy a new TV set as they do today with analog receivers. This idea also takes into account the convergence of broadcasting, telecommunications and computers. The only significant process not required to be local is chip manufacturing, but according to Mr Sicsú it could be added to the list during or after the public consultation if a company announces a project to set up a chip factory in Brazil. He said Samsung is commencing feasibility studies for the implementation of a semiconductor plant in Brazil.
