All foreign investors have become familiar with CPMF when they make foreign direct investments in Brazil. CPMF is a tax imposed on all bank account debits and is levied at 0.38% of each amount debited. It is, therefore, a cost which no one can escape from.

CPMF was conceived to be temporary and the term for its collection has been extended several times. In 2002, the collection of CPMF was extended to December 31, 2007.

Although the Federal Government had included projected public revenues deriving from CPMF in the 2008 budget, Congress did not approve this new extension. In a dramatic scenario in which the Executive Power claimed support from Congress, most senators denied such support and did not approve another extension for collecting CPMF. Accordingly, CPMF will no longer be imposed after December 31, 2007.

Although the end of CPMF is being celebrated, the Federal Government indicates that certain changes in the tax legislation will be enacted with the support of the Brazilian Congress. Such changes will offset the loss of the CPMF revenues, but will only be known in the beginning of 2008.

Felsberg e Associados will continue to follow-up the congressional battles revolving around the end of the CPMF and the Federal Government's actions to revert the shortfall in revenues arising therefrom. Further information on the above may be obtained directly from Antonio Amendola at antonioamendola@felsberg.com.br.

The Special Courts installed at Congonhas (São Paulo) and Cumbica (Guarulhos) airports by the National Justice Council (CNJ), and which are structurally supported by the Regional Federal Court of the 3rd Region, will be turning three months old on January 7, 2008. It now appears that despite there being plans for the courts to cease their activities on January 31, 2008, their future is now uncertain, it now being possible that the date may be extended, even though there has still been no official discussion over the suggestion.

The main purpose of these Courts, set up in emergency and experimental forms, is to stimulate the occurrence of conciliation on the more common complaints from passengers, such as delays or cancellations on flights, and loss or tampering with luggage.

The complaints are submitted to a conciliatory session. There being no agreement, the plaintiff may from that moment on request the remittance of their complaint to the Court nearest their home, even if it is in a different State, where, after the presentation of the defendant, there will be a summary judgment.

Further information on the above-mentioned matter may be obtained directly from Marcus Gomes at marcusgomes@felsberg.com.br.

Since 1947, multilateral trade negotiations have been tackling the reduction of tariffs with the main objectives of regulating, liberalizing and stimulating trade among countries. WTO Members had to adjust and report their industrial policies, convert all quotas into tariffs, bind their tariffs, and stop blocking imports by means of high tariffs – all actions aiming the opening of trade through the removal of import barriers. Despite eight negotiation rounds, no one could anticipate an imminent obstacle for trade developed by creative minds: export restraints.

Globalization creates excellent grounds for a boost in countries’ exports as it increases demand. The positive scenario produced by the growth of the demand is now provoking price peaks and thus affecting domestic inflations. The fast and cheap solution - or rather lucrative for governments - to remedy this situation is to tax exports.

As a concrete example, the price of wheat this year reached the highest level since 1997. Among the biggest wheat producers and exporters, Russia and Argentina felt that their domestic economies could be affected by the boom in wheat prices. The Russian government, through Resolution 660, of October 10, 2007, raised the export tariff for wheat by 10%. Argentina, in turn, applied an export tax of 20%on wheat in 2002, and, recently, on November 9, 2007, issued Resolución 369/2007, which increased the custom duty for wheat exports to 28%.

Export taxes or bans, as well as regulated or supervised exports, are not on the radar of international trade legislation, neither in the Doha negotiations. WTO Agreements do not prohibit the use of export tariffs; the only restriction is Art. 12 of the Agreement on Agriculture, which requires Member Countries to notify such export prohibitions or restraints to the Committee on Agriculture and be vigilant with the constraint effects on the food security of importers. Apart from the WTO, regional agreements are more emphatic in making export restraints illegal, such as the Mercosur, which prohibits trade limitations amongst its member countries.

The real motives for the imposition of export prohibitions may vary: governments might want to avoid price volatility, increase government revenue, or stimulate exports of higher value-added goods; regardless of their reasons, the effects are well known: the encouragement of inefficiencies in the world economy and distortion of prices.

Delegates in the Doha Round are focusing on gaining access to other markets, but the real problem, in the future, might be access to essential foreign goods.

Further information on the above-mentioned matter may be obtained directly from Roberto Kanitz at robertokanitz@felsberg.com.br.

The Rio de Janeiro Oil & Gas Department of Felsberg, Pedretti, Mannrich e Aidar Advogados ("Felsberg e Associados"), coordinated by partner David L. Meiler, has advised Mike Mullen Energy Equipment Resources, Etesco Drilling Company B.V. and Etesco Construções e Comércio Ltda. during direct negotiations with Petroleo Brasileiro S.A. ("Petrobras") for the extension of the charter and services contracts for the drill ship Peregrine 1.

Such deals represent a potential revenue of approximately USD 580 million in daysrates, throughout the extension of the contracts.