RECENT DEVELOPMENTS in Brief
Antitrust/Antidumping Cases
MEXICO
Safeguards Announced
The Department of Commerce and Industrial Development published safeguards applicable to two U.S. products in the Diario Oficial of 5/21/97. The safeguards apply a 20% duty on imports of products covered under tariff categories 0203.19.99 (certain kinds of pork meat) and 0808.10.01 (apples). Safeguards apply to these products because the established quota to enter Mexico with preferential treatment has already been exceeded.
Anti-Dumping Duties on Chinese Products Confirmed
In the Diario Oficial of 5/27/97, the Department of Commerce and Industrial Development published the resolution to an appeal on anti-dumping duties imposed on Chinese shoes and accessories.
The resolution confirmed the duties of up to 1,105 % imposed on products imported from China under tariff categories 6401, 6402, 6403, 6404, 6405 and 6406.
Peaches Subject to Anti-Dumping Investigation
The Department of Commerce and Industrial Development announced it has accepted requests to investigate anti-dumping practices on canned sliced peach imports from the Hellenic Republic. The peaches enter Mexico under tariff category 2008.70.01. The resolution was published in the Diario Oficial of 5/26/97.
Chemical Product to pay Anti-Dumping Duties
The final resolution of an anti-dumping investigation on ammonium sulfate from the U.S. was published by the Department of Commerce and Industrial Development in the Diario Oficial of 5/26/97.
Anti-Dumping Investigation Against U.S. Paper Announced
A resolution announcing the beginning of an antidumping investigation on bond paper imported from the U.S. was published by the Department of Commerce and Industrial Development in the Diario Oficial of 5/27/97. The paper is imported into Mexico under tariff category 4823.59.99.
In the same resolution, the Department announced that a claim on anti-dumping practices on paper imported under tariff category 4802.52.01 was withdrawn.
Banking & Credit
MEXICO
Rules on Foreign Bank Capital Set
In the Diario Oficial of 5/15/97, the Department of Treasury published new limits on the capital stock of foreign financial institutions established under the NAFTA.
The total capital stock of banks in Mexico as of December 1996 was $101.5 billion pesos. Foreign financial institutions in Mexico may have accounted for up to $12.3 billion pesos in capital stock. Individually, these may have a capital stock of up to $1.5 billion pesos.
The resolution includes limits on capital stock of other foreign entities, such as brokerage houses and insurance companies.
Futures Operations Regulated
The Department of the Treasury published rules for entities that deal with futures. The rules, published in the Diario Oficial of 5/26/97, were written by Mexico’s National Banking and Stock Commission.
Communications
MEXICO
Frequencies Opened for Bid
The Federal Commission of Telecommunications announced in the Diario Oficial the opening of a bid process for different concessions on radio-electric frequencies. Information on the bid process is available now at Bosque de Radiatas número 44, 3er. piso, Colonia Bosques de Las Lomas, Delegación Cuajimalpa, código postal 11700, Ciudad de México. Tel. (5) 261-4156 and (5) 261-4154.
The frequencies will be assigned in the beginning of August, just after the bidding process.
New Party Involved in Railroad Auction
The Department of Communications and Transportation announced a new party registered to participate in the bidding for Mexico’s Pacifico-Norte S.A. de C.V. railroad. The party is a group formed by Constructoras ICA, S.A. de C.V., Grupo Ferroviario Mexicano, S.A. de C.V. and Union Pacific Railroad Company.
Customs
MEXICO
NAFTA to Cover New Products
A list of products that will be affected by faster reduction on tariffs was published in the Diario Oficial of 5/22/97 by the Department of Commerce and Industrial Development. This list is a result of a tri-national meeting, held on 3/20/97, during which the governments of the three NAFTA countries agreed to speed up the process of eliminating tariffs on certain products.
Energy
MEXICO
Energy Commission Moves
In the Diario Oficial of 5/26/97, the Energy Commission (Comisión Reguladora de Energía) published a notice announcing that it is moving its headquarters. The Commission’s new address is Horacio No. 1750, Col. Polanco, Mexico D.F., C.P. 11510.
Standards on Insulation Proposed
The Department of Energy proposed technical standards that, if approved, will regulate thermic insulation for construction. NOM-018-ENER-1997 sets rules on testing methods and characteristics.
Standards on Lights Published
Rules on the energy efficiency of street lights and lights used on building exteriors were published by the Department of Energy in the Diario Oficial of 5/16/97 by the Department of Energy. The objective of NOM-013-ENER-1996 is to design and construct light bulbs that are energy efficient and utilize new technologies.
Environment
MEXICO
Forest Law Amended
The Department of Environment, Natural Resources and Fisheries published several amendments to the Forestry Law in the Diario Oficial of 5/20/97. The amendments were introduced to regulate the following three issues:
1. The illegal cutting of forests;
2. Non-regulated commercial forest plantations; and
3. Forestry technical services.
Standards to Control Forest-Product Commerce
Technical standards which apply to the use, transportation and storage of forest vegetation bark, stems and plants were published by the Department of Environment, Natural Resources and Fisheries. NOM-005-RECNAT-1997 was published in the Diario Oficial of 5/20/97.
Government Administration
MEXICO
Amendments to Standards Law Published
The Department of Commerce and Industrial Development published amendments to the Law of Measurement and Standardization in the Diario Oficial of 5/20/97. This law provides the legal framework for the creation, application and verification of technical standards and rules for measurement systems.
Non-Border Municipalities Listed
In the Diario Oficial of 5/21/97, the Department of the Treasury published a list of municipalities that are considered to be located outside of the border region. The list is based on consideration of the border region established in Article 27 section I of the Constitution. This provision established the basic property ownership rules for the region, which is 100 kilometers from the borders and 50 kilometers from the beaches.
Insurance
MEXICO
Insurance Companies Approved
A list of foreign insurance and re-insurance corporations authorized to operate in Mexico was published in the Diario Oficial of 5/14/97. The resolution, published by the Department of the Treasury, authorizes the operation of more than 30 insurance corporations. Included in the list are Lloyd’s, L’Union des Assurances de Paris, Metropolitan Life Insurance Company and Chicago Title Insurance Company. The authorizations to operate in Mexico are effective until 12/31/97.
Intellectual Property
COLOMBIA
Patent Treaty
A patent treaty that would simplify the legal procedures to protect foreign investment in Colombia and protect domestic inventions in the other treaty nations has been submitted to the Colombian Congress.
The proposed treaty takes into account the administration’s position that the promotion of investors plays an important role in the economic development process.
The Superintendency of Industry and Commerce presented the proposed treaty on behalf of the administration.
VENEZUELA
Trademarks: Ideological Similarity Confusing
The PTO (Bull. 407, Volume IV, Res. 11695) decided a case involving ideological similarity as grounds for rejection of trademark applications. A petition to cancel a registration was applied for on the basis of confusing ideological similarity with a prior registration.
The two registrations appeared to have peacefully coexisted for 16 years without causing confusion. The only appreciable difference between the two registrations is their nominative aspect.
Confusion arises because of the use of two synonyms. The senior registration includes the word "JOLLY" and the junior registration includes "HAPPY." The PTO found the existence of confusion and refused to register "HAPPY." It further stated that the coexistence over a prolonged time did not constitute an agreement when absolute voidness is at stake. Thus the doctrine of equivalencies appears to be applied when both graphic and phonetic similarity are absent.
Absolute Voidness After 11 Years
After 11 years in the Registry, trademark "SEVENELEVEN" for a commercial establishment registered in 1985 has been declared absolutely void in view of an identical preexisting registration secured by a U.S. company (Official Bulletin 407, Volume 4, page 139) and now discovered by the PTO.
Limits of Notoriousness
In a somewhat difficult decision, the PTO (Bull. 407, Volume 4, page 37) has made a significant declaration regarding the limits of notoriousness. A U.S. firm had petitioned to cancel a registration obtained in 1982 by a local party of the trademark GAP in national class 39 for clothing goods.
The petition was filed under Andean Decision 344 in which the cancellation of a registration is possible on the basis of notoriousness of the trademark at the time the application was filed. The petition was dismissed.
The PTO decided that if the provisions of Andean Decision 344 (applicable since 1/1/94) were to be enforced on a registration obtained in 1982, such enforcement would constitute a case of retroactivity.
Additionally, it decided that notoriousness was not even proven in Venezuela, although this statement conflicts with the concept of extraterritoriality of notorious marks. The PTO also did not apply the traditional concept of deceptiveness to cancel the registration, as was previously the practice.
Evidence of Use
In a petition to cancel a registration of the trademark PAM, the PTO (Bull. Nº 407, Volume IV, Res. 11740) has made two significant statements.
First, in an unusual but encouraging statement issued within a Civil Law system, the PTO called for the accommodation of market realities to the extent possible and following the legal doctrine currently in effect in Venezuela.
Second, the PTO accepted a listing of purchase invoices, among other things, as evidence of use to counter cancellation proceedings, rather than requiring the traditionally cumbersome evidence supplied through witness declaration. This action represents a considerable improvement.
Cancellation Based on Bad Faith
In an unusual decision (Official Bull. 407, Vol. IV, page 133), the PTO ordered the cancellation of a local company's 1988 trademark, MONT BLANC. The cancellation was based on the fact that the trademark of the local company represented a graphic-phonetic reproduction of trademark MONT BLANC of French origin, widely known in international markets.
The decision, based on considerations of unfair competition, applies the implicit principle of notoriousness retroactively to 1988, when the present legislation concerning notoriousness did not even exist. This decision appears to be inconsistent with the PTO’s decision in the trademark GAP dispute mentioned above.
Medicine & Health
MEXICO
Medicines Included in List
The Department of Health published in the Diario Oficial of 5/16/97 a list of five new medicines to be included in what is called a primary list (cuadro básico). This list include medicines used by Mexico's Social Security services.
Taxes
BRAZIL
Administrative Act Provides for Transfer Pricing
Administrative Act No. 38/97 of the Secretaria de Receita Federal (Brazilian Revenue Authority, or SRF) provides for transfer pricing and has been well accepted by the market. The purpose of the Act is to regulate the application of provisions concerning transfer pricing contained in Law No. 9.430/96, which modified the legislation related to corporate income tax. The Act establishes the criteria for enforcement of comparable uncontrolled prices (Arts. 6 to 11), cost-plus, profit margin stipulated at 20% (Article 13), and the resale price method between two related companies (Article 12).
MEXICO
IRA’s Commissions VAT Exempt
The Department of the Treasury published a decree on 5/15/97, amending the Value Added Tax Law. The amendment states that commissions charged by IRA administrators are exempt from VAT payments.
Tax Rules Amended
Amendments to the Fiscal Miscellany (Miscelanea Fiscal) of 1997 were published in the Diario Oficial of 5/16/97 and 5/26/97 by the Department of the Treasury. Several rules related to the payment of income tax, value added tax and other taxes were included.
Rules on Tax Debtors Amended
The Department of the Treasury announced changes to the rules of a decree which gives certain benefits to federal tax debtors. The decree was published in the Diario Oficial of 5/16/97.
Contributors to the Summaries: Bentata Abogados, Gomez Pinzon & Asociados, Graciela Molinelli, Noronha Advogados
