Brazil's SECEX Ordinance No. 292 of December 29, 2023 establishes the criteria for exemption quotas for importing Photovoltaic Modules with Import Taxes reduced to zero.

The Ex-tariffs of the equipments included in the Ordinance are going to be revoked on February 15th. With the publication of the ordinance, Panel's Import Licenses can be applied for the quota regime.

Furthermore, the quota will be divided into two installments:

• I: 30% distributed to companies that historically import modules in large volumes (you can check which are in this link, under the "Cotas de Importação" menu);
• II: 70% distributed in order of registration of Import Licenses requests in SISCOMEX.

Brazil's GECEX Resolution No. 541/2023 disclosed the quota values ​​per period as follows:

• 01/01/2024 to 06/30/2024 – US$ 1,130,560,000 (FOB);
• 07/01/2024 to 06/30/2025 – US$ 1,014,790,000 (FOB);
• 07/01/2025 to 06/30/2026 – US$ 717,410,000 (FOB); That's it
• 07/01/2026 to 06/30/2027 - US$ 403,200,000 (FOB).

In the resolution, the Import Tax for NCM 8541.43.00 of Photovoltaic Modules was increased from 6% to 9.6%.

Initially, each company will be granted the maximum amount of value, allowing each importer to obtain more than one import license, as long as the sum of the quantities informed is less than or equal to the established limit.

Import Licenses requests for Item I must be made by April 30, 2024. If the Import Licenses requests do not reach the 30% limit, the quota will be redistributed until May 2, 2024 to the portion corresponding to 70% of global quota.

Furthermore, for Item II there is an initial maximum limit per company in the amount of US$17,500,000 (FOB) and new concessions are subject to customs clearance of previously issued Import Licenses.

This means that Import Licenses can be requested until this amount is reached.

In this modality, the Import Licenses now has the consent of 02 bodies:

• INMETRO, which checks the regularity of the product; and now it includes;
• DECEX, which analyzes the request to use the quota to reduce I.I. a 0%.

The deferral of the Import Licenses may be conditioned on the presentation of the Bill of Lading and respective Process Invoice.

If there is a balance of quotas and the importer has already consumed his quota in USD, he may request new Import Licenses. These will be directly linked to an already cleared Import Declaration Import License, limiting the quantity in USD of this import License.

As previously stated, the effective granting of the quota will be subject to the company presenting the required documentation in the Siscomex electronic document attachment module, with the appropriate linking of the dossier to the import license within 30 days, counting from the demand formulated in Siscomex , observing the validity period of the quota.

Despite being a Licensing analysis by DECEX, there will be no restriction on shipments to importers, which facilitates the operation (for example, if there is a delay in the ship's docking, we will be able to evaluate the issuance of a new Import License).

As this is a new procedure and because there have been other TEC products with the same condition, we are currently unable to measure the time taken to grant this Import License.