MERCOSUR approves expansion of LETEC by 50 additional codes

In brief

Last Wednesday (June 25), MERCOSUR published CMC Decision No. 1/2025[1] allowing MERCOSUR State Parties to extend the List of Exceptions to the Common External Tariff (LETEC) by 50 additional NCM codes, provided specific conditions are met. This is a temporary measure implemented as a way of adapting to the new international context[2].

In more detail

As a MERCOSUR State Party, Brazil applies the Common External Tariff (TEC) to determine import duty rates on imported goods, though certain exceptions exist. One of the most relevant exceptions is the List of Exceptions to the Common External Tariff (LETEC), a mechanism that allows member countries to adjust tariff rates for specific products, either reducing them to boost competitiveness or increasing them to protect sensitive sectors[3].

CMC Decision No. 01/2025 establishes different procedures for tariff increases and reductions for the 50 additional NCM codes. For increases, the previous procedure has been maintained. For reductions, the following criteria must be met: (i) demonstration, by the country granting the tariff reduction, that no other MERCOSUR State Party has supplied, on average, 20% or more of the FOB value of its imports of the product in the previous three years; and (ii) reductions are limited to 30% of the new codes per NCM Chapter, to avoid concentration in economic sectors. In situations of non-compliance, another State Party may request, based on substantiated information, that the code be removed from the list.

CMC Decision 01/2025 needs to be incorporated into the Brazilian legal system in order to come into effect, by means of a GECEX Resolution[4].

[1] Amends CMC Decision No. 58/10 which regulated the List of Exceptions to the Common External Tariff (LETEC).

[2] The temporary lists would remain in effect until December 31, 2028 for Argentina and Brazil, December 31, 2029 for Uruguay, and December 31, 2030 for Paraguay. These timelines mirror those of the existing LETEC, which will remain in force under its current terms.

[3] This instrument is regulated by CMC Decision 58/2010, updated by CMC Decision 11/2021, which sets different limits for each country: Brazil and Argentina can include up to 100 NCM codes in their lists, while Paraguay and Uruguay have broader lists (649 and 225 NCM codes, respectively).

[4] With the publication of the new decision, CMC Decision No. 11/2021 is repealed, but all other provisions of CMC Decision No. 58/10 remain in effect. From the date of publication, the act is considered valid pursuant to Article 37 of the Ouro Preto Protocol, and the period for incorporation by the Member States begins.