Common use of Payments to Affiliates Clause in Contracts

Payments to Affiliates. In the event the expenditures incurred by the Contractor in transactions with Affiliated legal entities exceed the national and international market prices for the same services and properties, under free competition conditions, one of the effective methods provided for in the Applicable Laws and Regulations, especially those described in article 18 of Law No. 9,430/1996, shall apply to calculate the amount acceptable for recognition as Cost Oil. In case the amounts ascertained according to the applicable methods exceed the amounts effectively disbursed, the recognition as Cost Oil shall be limited to the disbursed amount. In the event more than one method is used for price determination, the lowest amount ascertained shall be considered for purposes of recognition as Cost Oil, pursuant to the provisions in the preceding paragraph. Expenditures not included in Cost Oil Expenditures disbursed with the following shall not be recognized as Cost Oil: Royalties;