Volume 4, Number 28, Page 5

RECENT DEVELOPMENTS in brief

Antitrust/Antidumping Cases

MEXICO

Binational Panel Affirms Antidumping Decision

A binational panel established under Article 1904 of NAFTA resolved a case dealing with antidumping duties imposed by the U.S. on the importation of Mexican flowers. The panel resolved that the U.S. decision was made properly. Diario Oficial, 8/4/97.

Preliminary Decision on

Chinese Tools Published

A preliminary decision on an appeal to a decision imposing antidumping duties on Chinese tools was published by the Department of Commerce and Industrial Development. On Nov. 11, 1994, the Department imposed antidumping duties of 312% on tools imported from China under different tariff categories of sections 8201, 8203, 8204, 8205 and 8206. The Department decided to uphold the imposed antidumping duties until a final decision is made. Diario Oficial, 7/31/97.

Antidumping Investigation of Steel Initiated

The Department of Commerce and Industrial Development published a resolution accepting and initiating an antidumping investigation of steel sheets imported from Russia and the Ukraine. The products are imported into Mexico under tariff categories 7208.51.01 and 7208.52.01. Interested parties may submit an investigation report, available from Unidad de Prácticas Comerciales Internacionales, Insurgentes Sur 1940, planta baja, Col. Florida, C.P. 01070, México, D.F., Tel. (52-5) 229-6100, ext. 3105 and 3106, Fax (52-5) 229-6502 and 229-6503. Diario Oficial, 7/23/97.

Banking & Credit

MEXICO

Changes to Structure of

GE Capital

Several resolutions related to the operations of GE Capital in Mexico were published by the Department of the Treasury. The first resolution authorized the operation of GE Capital Grupo Financiero, S.A. de C.V. to operate as a financial group. GE Capital Financiamento al Consumo, S.A. de C.V. was subsequently approved to operate as a financial corporation, as was GE Capital Financiamiento de Infraestructura S.A. de C.V. Several days later, GE Capital Financiamiento Automotriz, S.A. de C.V. was approved to operate.

Separately, the Department revoked the authorization for GE Capital Financiamiento Corporativo S.A. de C.V. to operate. Diario Oficial, 7/28/97, 7/29/97, 7/30/97 and 8/1/97.

Central Bank Bylaws Amended

The Central Bank, Banco de Mexico, announced amendments to its bylaws. The amendments include new functions of several directors, and a new hierarchy. The General Directorate of Internal Administration will now have control over the administration, comptroller, legal and security departments. Diario Oficial, 7/24/97.

Business Organizations

COLOMBIA

Federation Created for

Small Business

The first of its kind in the region, the Federation of Foundations for Small Business (Fedecaribe) was officially created on August 15, 1997 to support small business development along Colombia’s Caribbean coast. Fedecaribe will facilitate joint programs and promote greater cooperation among ten existing foundations in the region which support small business. El Heraldo, 8/15/97.

Communications

MEXICO

Regulations on Satellite

Communication Published

The Department of Communications and Transportation published the regulations applicable to satellite communications. Pursuant to the regulations, the Department may grant concessions for the use of satellite orbits designated for Mexico. Such concessions will be issued by government procurement. Clarifications to the regulations were published subsequently. Diario Oficial, 8/1/97 and 8/4/97.

Satellite System Open for Bids

A bidding process to obtain a concession to purchase 60% of the State-owned company Satelites Mexicanos, S.A. de C.V. was announced by the Department of Communications and Transportation. The winner of the bidding process may acquire an additional 15% of the stock under the same conditions and prices established in the winning offer.

Satelites Mexicanos owns the satellites Morelos II, Solidaridad I and Solidaridad II, as well as the rights to the contract for the construction and launch of the satellite replacing Morelos II.

Documentation related to the bidding process may be obtained from Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Director General Adjunto de Negocios, Paseo de la Reforma número 10, pisos 21, 22 y 23, Torre Caballito, Col. Tabacalera, C.P. 06030, México, D.F., Tel. (52-5) 327-3333.

The authorization given to the Department to sell the stocks was published a few days later, even though it was issued before the announcement of the public bidding process. Diario Oficial, 8/1/97 and 8/6/97.

Microwave Transmission Permits Opened for Bids

The announcement of the bidding process for a concession to operate restricted television and radio through microwaves 2,500 to 2,690 Mhz was announced by the Telecommunications Federal Commission. The schedule for the bidding process is as follows:

August 18 w Distribution of auction tender rules and the qualifying application form

October 1 w Receipt of documentation (by appointment)

November 10 w Granting of the qualifying statement

December 1 w Auction begins

More information about the process may be obtained at the Commission’s Internet site, http://www.cofetel.gob.mx/ Diario Oficial, 7/2597.

Consumer Law (CS)

MEXICO

Verifying Entities Designated

The Department of Commerce and Industrial Development published a list of approved entities to verify different measuring instruments, including gas pumps and taxicab meters. Diario Oficial, 7/21/97.

Customs

CHILE

Chile to Lower Tariffs

Chile’s Finance Minister, Eduardo Aninat, announced a proposal that would reduce foreign trade tariffs from 11% to 8%. The IVA tax on stamps, alcohol, cigarettes and gasoline could be increased to compensate for this reduction. The Chilean Congress plans to decide on the proposal by the end of August 1997. Diario Estrategia, 8/12/97.

Energy

MEXICO

Energy Regulations Amended

The Regulations of the Law of the Public Service of Electric Energy were amended by a decree published by the Department of Energy. The amendments regulate the import of electricity and the purchase of energy produced by private entities. On a different date, the Department announced amendments to its own bylaws for the purpose of creating a new structure of the Department. Diario Oficial, 7/25/97.

Standards Proposed

Standards regulating storage of L.P. gas and the storage and transportation of radioactive materials were proposed. NOM-001/2-SEDG-1997 would include rules for the design and construction of gas storage tanks. Standard NOM-029-NUCL-1997 would set radiation limits in class "E" packages, which are used to transport small amounts of radioactive materials.

Separately, the Department proposed technical standards dealing with the transportation of low-level radioactive materials. Several days later, the Department published testing methods for solid radioactive waste included under technical standard NOM-021-NUCL-1996. Separately, the Department published NOM-024-NUCL-1995, which establishes rules regarding the calibration of instruments used to measure certain types of radiation. Diario Oficial, 7/25/97, 7/28/97, 8/4/97 and 8/5/97.

Gas Distribution Permit Granted

The Energy Regulation Commission announced that Gasoductos de Chihuahua was granted authorization to transport natural gas from Hudspeth, Texas to Samalayuca, Chihuahua. Gaseoductos de Chihuahua is a joint venture between PGPB, El Paso Energy International Company and El Paso Natural Gas Company.

Environment

MEXICO

Fishing Standards Amended

Technical standards dealing with shrimp fishing in federal waters were amended by the Department of Environment, Natural Resources and Fisheries. NOM-002-PESC-1993 was originally published on 12/31/93. Separately, the Department published technical standards NOM-014-SSA2-1994, dealing with tuna fishing in the Gulf of Mexico and the Caribbean. Diario Oficial, 7/30/97.

Standards to Conserve Water Published

The Department of Environment, Natural Resources and Fisheries published new technical standards aimed at conserving water. NOM-005-CAN-1996 deals with specifications and testing methods for several toilet components. Diario Oficial, 7/25/97.

Pallets to be Regulated

Sanitary standards dealing with pallets and other storage devices made of wood were proposed by the Department of Environment, Natural Resources and Fisheries. NOM-015-SEMARNAP/SAGAR-1997 will apply to pallets used in temporary and permanent imports. Diario Oficial, 7/21/97.

Standards to Regulate Use of Fire for Forests and Farmland

The Department of Environment, Natural Resources and Fisheries proposed technical standards to regulate the use of fire in forests and on farmland. Slash and burn practices to clear land for farming are very common in Mexico. Diario Oficial, 7/21/97.

Foreign Investment

BRAZIL

Spanish Invest in Brazil

Three Spanish companies have recently increased their investment activity in Brazil. Telefónica, a Spanish telephone company, has won a public contest for the privatization of the Brazilian company, Río Grande do Sul. Iberdola won its bid for 65% of the electric company Coelba, in the state of Bahía, at an estimated cost of $1.5 billion. Renfe signed a contract with the Sao Paulo Metropolitan Train Company for the sale of 48 used trains for $82 million. During 1996, Renfe won $70 million in foreign contracts for markets in Argentina, Chile, France and Tunisia. El Pais edición digital, 8/11/97.

COLOMBIA

Investment Restrictions

Suggested

Colombia should establish greater restrictions on direct foreign investment, according to the president of the country’s Banking and Financial Entities Association, César González Muñoz. He stated that this move would not be inconsistent with the country’s strategy of economic globalization and pointed out that Chile’s investment restrictions are higher than the ones he is proposing. The proposal comes amid concerns about the stability of Colombia’s currency and serious problems with contraband and organized crime. El Mundo, 8/15/97.

Insurance

MEXICO

Rules on Foreign Reinsurance Companies Published

The Department of the Treasury published reserve rules for bonds applicable to foreign reinsurance companies. Companies that back up bonds through a foreign reinsurance company not registered in Mexico under Art. 34 of the Federal Law of Bond Institutions must grant a reserve as collateral for any obligation they may have. Diario Oficial, 7/30/97.

Labor Law

ARGENTINA

Strikes Against

Economic Policies

Opposition union members went on strike Aug. 14 in Buenos Aires and many of the provinces to protest Pres. Menem’s economic and labor policies. The work stoppages affected transportation, schools and mining companies nationwide. Incidents of violence were reported.

MEXICO

Labor-Related Procedures Simplified

As part of the federal government’s efforts to simplify public administration procedures, the Department of Labor and Social Services published a list of the different procedures and their associated deadlines. The list also includes all of the required paperwork and information with respect to such procedures. Diario Oficial, 7/31/97.

Rules on Pension Insurance Published

The Department of the Treasury published rules regarding the documentation necessary to process pension insurance according to social security laws. The document includes several bitmap files containing examples of the required forms and documents. Diario Oficial, 7/24/97.

Miner Safety Protected

New technical standards establishing safety requirements for laborers working in mines were published by the Department of Labor and Social Services. NOM-121-STPS-1996 applies to all mining activities, except those related to the exploration and exploitation of petroleum, natural gas and radioactive materials, among others. Diario Oficial, 7/21/97.

Medicine & Health

MEXICO

Health Department Bylaws Published

The Health Department’s new structure is included in new bylaws published by the Department. The Department’s previous bylaws were published on 12/31/92. Diario Oficial, 8/6/97.

List of Minor Health Risk Establishments Published

The Department of Health published a list of minor health risk establishments. The three types of establishments must advise the Department of their operations: high health risk (which require a license from the Department of Health); minor health risk (which need only advise the Department); and no health risk. Diario Oficial, 7/29/97.

Securities

PERU

Stock Regulation

Amendments Proposed

On August 13, four proposed amendments to the law regulating the stock market were presented for public discussion by Conasev, the National Supervising Commission of Corporations and Stocks. The proposed changes are related to public stock offerings, the purchase of stocks and bonds, and accounting standards for mutual funds and investment funds.

Taxes

MEXICO

Tax Rules for 1997 Amended

The Department of the Treasury announced amendments to the tax rules for 1997, as well as to annexes 2, 3, 5, 7, 9, 11 and 14. The Department annually publishes the rules related to taxes and foreign trade. Diario Oficial, 8/1/97.

Rules to Support Tax Debtors Amended

A decree giving certain support to federal tax debtors was amended by the Department of the Treasury. On Jan. 15, 1997, the Department issued several provisions to help those who owe money to the federal government. The decree extends the application of the benefit program through December. Diario Oficial, 7/31/97.

Tax Breaks Amended

The Treasury Department announced amendments to a resolution providing tax breaks to certain individuals. The program, originally published on March 14, 1997, includes tax breaks for individuals working in agriculture, cattle raising and fishing. Diario Oficial, 7/25/97.

Transportation

MEXICO

Railroad Lines Open for Bids

Three short railroad lines will be auctioned, pursuant to several notices by the Department of Communications and Transportation. The three lines being auctioned are the Coahuila-Durango, the Nacozari and the Tijuana-Tecate. Diario Oficial, 7/31/97.

Ports Designated

The Department of Communications and Transportation announced the opening of several ports throughout Mexico. The list includes more than two dozen ports in both the Pacific Ocean and the Gulf of Mexico. Diario Oficial, 7/21/97.

Various

COLOMBIA

End to Recession Anticipated

Colombia’s National Bank is confident the country’s recession will be over by year’s end. Bank official Miguel Urrutia Montoya said that indicators for industry, auto sales and telecommunications have improved in recent months. He also stated that if during two consecutive months indicators for industrial production and sales show signs of recovery, as they have been, this could signal that an end to the recession is near. Urrutia added that adjustment policies which ended the credit "boom" between 1990 and 1995 allowed the National Bank to avoid a collapse similar to the one in the late 1980s. El Pais, 8/15/97.

CHILE

Efforts to De-index Economy

The president of Chile’s Central Bank, Carlos Massad, affirmed the country’s need to de-index its economy from outside markets and political variables in order to guarantee more flexibility in relative prices and to reduce inflation. Massad stated that while price indexation has many benefits, the resultant costs include inflationary inertia and inflationary effects from adverse price shocks. He also indicated that Chile may be the most indexed economy in the world. Diario Estrategia, 8/12/97.

MERCOSUR

Progress in Trade Negotiations Between Mexico and Mercosur

Most primary and agro-industrial goods will be included in the free trade pact between Mercosur and Mexico, according to the new subsecretary of Integration and Mercosur of the Argentine Chancellery, Alfredo Morelli. Mercosur’s trade preferences with Mexico under ALADI will expire on September 30, 1997. According to the Secretary of International Economic Relations of the Argentine Chancellery, Jorge Campbell, the relationship between Mexico and Mercosur could be finalized by year’s end. Trade between Mercosur and Mexico in 1996 reached $2.5 billion, with a surplus for Mexico of $500 million. El Pais, 8/13/97.

Auto Industry

Argentina’s Secretary of Industry, Commerce and Mining, Alieto Guadagni, confirmed that Mercosur’s automotive sector provisions will expire on December 31, 1999. He also declared his opposition to the implementation of a "forbidden zone" to protect Argentina’s auto industry from non-Mercosur competitors after such a zone was proposed by the country’s Association of Auto Manufacturers (ADEFA). El Pais, 8/13/97.