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Manaus, Friday, July 04, 2008
Destaque
FREE TRADE ZONE

The initial idea, a Free Trade Port in Manaus, came from Deputy Francisco Pereira da Silva and was subsequently formalized by Law No. 3.173 on June 6, 1957. The project was approved by the National Congress on October 23, 1951 under No. 1.310 and regulated by Decree No. 47.757 on February 2, 1960. It was then amended by rapporteur Maurcio Jopper, engineer, who by agreement with the original author, justified the creation of a Free Trade Zone instead of a Free Trade Port.

For the first ten years the ZFM (Manaus Free Trade Zone) was located in a warehouse rented from Manaus Harbour, in the Port of Manaus, and relied on federal funds. It was perhaps due to this lack of its own resources that there was little credibility in the project.
On February 28, 1967, President Castello Branco signed Decree-Law No. 288, whose draft accompanied the Exposition of Motives. Decree-Law No. 288 amended the provisions of Law No. 3.173/57 and redefined the Manaus Free Trade Zone in more concrete terms. The new Decree-Law stipulated that the Manaus Free Trade Zone would have a radius of 10,000 km with an industrial centre as well as an agricultural center and that these would be given the economic means to allow for regional development in order to lift the Amazon out of the economic isolation that it had fallen into at that time. Decree No. 61.244 of August 28, 1967 created the Manaus Free Trade Zone Superintendence - SUFRAMA, an autarchy with its own legal status and assets and having financial and administrative autonomy.

Tax incentives and the subsequent complementary legislation created comparative advantages in the region with respect to other parts of the country and as a result the Manaus Free Trade Zone attracted new investment to the area. These incentives constituted tax exemptions administered federally by SUFRAMA and SUDAM.

In the first few years after its redefinition, the Manaus Free Trade Zone served as a huge shopping centre for all Brazilians. The military regime at the time prohibited imports and Brazilians were not allowed to leave the country. Thus, the Free Trade Zone became an escape pod for those with the greatest buying power; in Manaus they could find imported novelties from all over the world. In light of this shopping spree, the city expanded its services. According to data from the Amazonas Registry of Commerce, in 1967 alone, 1,339 new companies were registered.

During this time, there were no limits on imports and only five restrictions were in place as stipulated by Decree-Law 288/67: weapons and ammunition, tobacco, alcoholic beverages, passenger cars and perfume. Imports of these items could only be done by paying all taxes.

In 1976, the Federal Government affixed a baggage quota for passengers leaving the ZFM. Tourists whose sole purpose for visiting was shopping slowly lost interest in the ZFM due to the increased cost of flights, lodging and transportation.

With mounting pressure from domestic industry, the ZFM began to import only those products which were not yet manufactured in Brazil. This was done to protect industry in other regions of the country, mainly the Southeast, which had embarked upon a campaign to put an end to the ZFM. While fighting the constant attack of the media, the Manaus Free Trade Zone model proved to be an example of hard work and dedication not only devoted to helping the North, but the whole country.

Towards the end of 70s, the ban on international flights out of the country was lifted and foreign baggage into the country, up to 100 dollars, was once again permitted. Tourism, which had been predominantly domestic, returned to the region's natural resources. Tourists from abroad were attracted by the prospect of fishing and travelling up and down the mighty Amazon River.

The tax incentives of the Manaus Free Trade Zone were extended up until the year 2013 by Article 40 of the Brazilian Constitution Transient Constitutional Provisions Act approved on October 5, 1988 and amended by the Constitution's rapporteur, Deputy Jos Bernardo Cabral.

The first industrial projects of the ZFM began to take shape in 1972, similar to how it occurred in many other places: the finished product was imported, as parts or unassembled pieces, which were then assembled by Amazonian workers to be put out onto the domestic market.

In 1967, when the Free Trade Zone was officially set up, Manaus was a quiet city with stone paved streets and a population of around 245 thousand inhabitants. Today, the old pavement has been covered by asphalt, the narrow roads have given way to large avenues and the large colonial style houses are slowly being replaced by skyscrapers.

World famous products on the International Market can be found bearing guarantees of origin and quality. Products include audio, video, and computing equipment as well as clothing and perfume.

Each tourist is allowed to carry the equivalent of US$ 2,000 in his/her accompanying baggage and couples are allowed to carry double that amount. For up to US$ 500.00, there are no quantitative limits per product and each passenger is permitted an additional US$ 50.00 in food products. Baggage declarations must be submitted along with tax receipts when requested to do so at the airport.

This is but one of the many reasons why it's worth visiting and enjoying Amazonas. Despite many hardships, it's a state that's surviving and developing, thanks to human efforts.

 


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