Volume 5, Number 9, Page 5
Agriculture, Mines & Cattle Industry
ARGENTINA
Agricultural Development Loan Program Approved
An agricultural loan agreement reached between Argentina and the International Bank of Reconstruction and Development (BIRF) was approved by Presidential Decree. The agreement establishes a loan program to be administered by the Ministry of Economy, Infrastructure and Public Services, through which US$ 75 million will be designated for the Ministry’s Small Farming Producer Development Project. Boletín Oficial, Decreto 391/98, 4/14/98.
MEXICO
Rules of Subsidy Program Published
The Department of Agriculture, Livestock and Rural Development (SAGADAR) published rules for its subsidy program called PROCAMPO; this program grants subsidies by hectare to qualifying individuals and will apply to the 1998 spring-summer period. Diario Oficial, 4/6/98.
List of Labs Published
The SAGADAR published a list of laboratories it has approved for the diagnosis of animal plagues and illnesses, pursuant to published technical standards. Diario Oficial, 4/17/98.
Antitrust/Antidumping Cases
MEXICO
Antitrust Investigations Announced
The Federal Competition Commission announced that it will initiate two antitrust investigations. The first investigation relates to the failure to notify the Commission of an alleged “merger” of businesses. The document did not disclose any specific information on the case. A second antitrust investigation deals with the banking and credit market. This investigation will focus on various banks which signed an agreement in order to create a network that charges commissions for the use of ATMs.
Decision to be Revised by SECOFI
The Department of Commerce and Industrial Development (SECOFI) announced that it will revise its previous decision imposing antidumping duties on a Chinese chemical product. On Oct. 18, 1994, SECOFI imposed antidumping duties of 208.81 percent on several Chinese chemical products. Sanofi Winthrop, S.A. de C.V. requested the revision of the decision.
The company requested that such revision should be done with respect to only one product. Any interested company may present its opinion at Unidad de Prácticas Comerciales Internacionales, Insurgentes Sur número 1940, planta baja, Col. Florida, C.P. 01030, México, D.F., Tel. (52-5) 229-61-00, ext. 3105 and 3106, fax 229-65-02. A public hearing on this case will take place on Oct. 23 at the above address. Diario Oficial, 4/8/98.
Banking & Credit
ARGENTINA
Bank Merger Announced
The Republic of Argentina Central Bank announced that Banco Frances del Rio de la Plata S.A. has absorbed the Argentine Bank of Credit S.A., and changed their name to Banco Frances S.A., effective March 5, 1998. This merger grants authorization to the Banco Frances S.A. to operate all of the previous subsidiaries of the Argentine Bank of Credit S.A. Boletín Oficial, Comunicación “B” 6304-27/3/98, 4/7/98.
Mutual Fund Investment Modified
Argentina’s National Securities Commission issued a resolution concerning investment in mutual funds listed in the Buenos Aires Stock Exchange and the Electronic Open Market S.A. The resolution modifies Article 22 of Book II, Chapter 10 “Mutual Investment Funds,” establishing uniform criteria for the determination of periodic and closing prices of all stock shares, stock rights, convertible negotiable stock and small business negotiable stock, for the purpose of calculating the daily closing value of mutual funds comprised of such stock. Boletín Oficial, Resolución General 307/98, 4/13/98.
Government Bonds to be Sold in U.S.
The Secretary of the Treasury has arranged for the registration before the United States Securities and Exchange Commission of US$2 billion in Argentina Government Bonds, to be issued during the current fiscal year and beyond. These bonds will be issued to service Argentina’s National Debt, and represent a continuance of a policy where government bonds have been sold in the U.S. Boletín Oficial, Resolución 142/98, 4/14/98.
New Standards for Risk Analysis
Risk analysts in Argentina will face more objective and rigid criteria for performing analysis and rendering opinions. A general resolution was passed by the National Securities Commission which intends to eliminate consideration of subjective factors by risk analysts by making public the criteria for risk appraisals. Boletín Oficial, Resolución General 306/98, 4/13/98.
More Foreign Currencies Allowed
The Ministry of Economy, Infrastructure and Public Services passed a decree which allows public credit transactions to be conducted in the respective currencies of the European Union, including the British pound, German mark, Spanish peseta, French franc, Swiss franc, Austrian schilling, Italian lira, Dutch guilder and EC units. The decree covers contracts realized in federal and state courts located in the corresponding European capital cities as well as New York City. Boletín Oficial, Decreto 363/98, 4/7/98.
BRAZIL
Interest Rates Dropping
The Committee of Monetary Policy of Brazil (Copom) resolved to lower interest rates. Copom lowered the basic rate (TBC) from 28% to 23.25%, due in part to the Central Bank money supply returning to the same level before the Asian Crisis. Other factors that influenced the reduction were the recovery of the Brazilian monetary reserve, the massive increase in foreign investments registered in the first months of 1998, an inflation rate under control, and the need to stimulate the economy.
MEXICO
Capital Requirements
Established
The Department of the Treasury announced capital requirements for the so-called auxiliary credit institutions. These institutions include factoring, leasing and credit union companies. Currently, factoring companies must have a minimum capital of US$2.6 million. The new minimum capital requirements must be met by companies by Dec. 31 of this year.
In a separate document, the Department published new minimum capital requirements for bonding companies. Such companies must comply with the new requirements by June 30. Diario Oficial, 4/3/98.
Communications
ARGENTINA
Telecommunications Price
Regulations Modified
Argentina’s Secretary of Communications announced modifications to Regulation of Value Added Services for Long Distance Phone Calls, previously approved by Resolution No. 2464/97, which places price restrictions on what telecommunications companies can charge for added services and requires such companies to inform the public in their advertising of all charges, including taxes, applied to each service offered. Boletín Oficial, Resolución 1024/98, 4/13/98.
Consumer Law
MEXICO
Public Registry to Modernize
The Department of Commerce and Industrial Development (SECOFI) and the state of Nuevo Leon signed an agreement to modernize the state’s Public Registry. The project consists of the following three steps: 1) design and development of a computer system for the real property and mercantile registry; 2) development of a strategy that will allow transfer from the present method of registration to the new system, without suspending the service; and 3) launch of a pilot program to make appropriate adjustments for a software program to be licensed to all the states. Diario Oficial, 4/7/98.
Subsidies for Sugar Set
Subsidies on sugar inventories were announced by SECOFI. Six hundred thousand tons of sugar will receive a subsidy of $195.22 pesos per ton; the total amount of subsidies granted by the federal government will be $117.13 million pesos. Diario Oficial, 4/16/98.
Standards to be Revised
Announced
SECOFI published a list of various technical standards to be amended. Divided by department, the list includes all standards to be altered and the estimated time it will take to approve such changes. Diario Oficial, 4/15/98.
Standards Proposed
A list of several proposed standards was published by the SECOFI. The proposed standards relate to plastic products and may be obtained from Dirección General de Normas, Puente de Tecamachalco número 6, Lomas de Tecamachalco, Sección Fuentes, Naucalpan de Juárez, Estado de México. Any comments about the proposed standards may be submitted within 60 days following the publication. Diario Oficial, 4/3/98.
Tire Standards Amended
SECOFI published several amendments to a technical standard applicable to rubber tires. Standard NOM-121-SCFI-1996 was published on June 11, 1997 and establishes testing and safety specifications for rubber tires. Diario Oficial, 4/8/98.
Commercial Information Standard Proposed
Technical standards relating to commercial information applicable to electronic equipment were proposed by SECOFI. NOM-024-SCFI-1998 establishes commercial information for packaging, instruction manuals and warranties for electrical products. Diario Oficial, 4/8/98.
VIN Standards Proposed
SECOFI proposed technical standards for vehicle identification numbers. The standards were developed with the participation of various companies, including General Motors, Ford, Chrysler and Honda. Diario Oficial, 4/8/98.
Standards Published
SECOFI published a list of standards applicable to electrical products. The standards were developed by the National Association of Standardization and Certification of the Electrical Sector. A copy of the standards may be obtained from SECOFI at Dirección General de Normas, Puente de Tecamachalco número 6, Lomas de Tecamachalco, Sección Fuentes, Naucalpan de Juárez, Estado de México. Diario Oficial, 4/6/98.
Certification Agency Approved
An agency to certify compliance with different technical standards was approved to operate by SECOFI. Almacenadra Regional del Golfo, S.A. de C.V., located in Cordoba, Veracruz, was authorized to certify compliance of standards NOM-050-SCFI-1994, NOM-051-SCFI-1994, NOM-004-SCFI-1994 and NOM-024-SCFI-1994. Diario Oficial, 4/6/98.
Customs
MEXICO
Import-Export Requirement Changes
A list of products needing a permit from SECOFI when imported or exported was amended. The original list of products was published on Aug. 29, 1997 and amended on Dec. 31, 1997. The amendments include products used to build ships and boats. Diario Oficial, 4/3/98.
Energy
BRAZIL
Eletropaulo Privatized
The Brazilian state recently sold the largest electric distributor in Latin America, Eletropaulo, which accounts for 22% of the national electricity production. In order to facilitate transactions, Eletropaulo was divided into four companies: two distributors (of which 74.8% will be sold), one transmitter (of which 36.69% will be sold), and a generator (which will remain entirely in state hands). As a result of the privatization of Eletropaulo, 70% of the electricity distribution in Brazil will now be privately owned.
MEXICO
Gas Distribution Region Designated
The Energy Regulation Commission announced an area open for private natural gas distribution. The cities of Celaya, Salamanca, Irapuato, Silao and Leon in the state of Guanajuato were designated as open for private natural gas distribution. Various U.S. and Mexican companies have expressed interest in distributing natural gas in that region. Diario Oficial, 4/13/98.
REGIONAL
Energy Declaration
Brazil and Bolivia have signed the Santa Cruz de la Sierra Declaration, the purpose of which is to foster commercialization and integration of the countries’ electric energy sectors. As a result of this declaration, Bolivia is guaranteed a market in Brazil for 1,500 “megavatios”, which will generate more than US$300 million yearly for the Andean nation.
This cooperative effort will entail active participation from the Bolivian private sector in order to ensure that the amount of energy promised will be supplied. Increased cooperation and development of contacts between Brazilian and Bolivian private energy sectors are also being strongly promoted and encouraged.
Environment
MEXICO
Rules on Environmental License Amended
The Department of Environment, Natural Resources and Fisheries amended the rules to obtain an environmental license. On April 11, 1997, it published the procedure to obtain a Sole Environmental License. The license has the purpose of obtaining environmental permits in one step. Diario Oficial, 4/9/98.
Government Administration
MEXICO
Congress Creates Public Finance Committee
The House of Representatives announced the creation of a special committee to analyze public finances. The committee will analyze the reports regarding Mexico’s economic situation and government debt. Several features of the new committee are established in the document published by the House. Diario Oficial, 4/15/98.
Insurance
ARGENTINA
Insurance Laws to be Amended
The insurance market in Argentina will be affected by various provisions announced by the Department of Economy. Insurance companies will have to increase by 450% their minimum capital. This will result in the closing or merging of several companies. Beginning Oct. 16, new insurance companies will be permitted to operate when the prohibition on new insurance companies will be lifted. Also the 8.5% tax on certain insurance policies is expected to be repealed in the near future.
MEXICO
Capital Requirements Set
The Department of the Treasury (SHCP) announced capital requirements for insurance corporations. The document published by the SHCP sets capital requirements for corporations providing life, accident and damage insurance. Diario Oficial, 4/3/98.
Rules to Increase Reserves Published
The SHCP amended rules related to the increase of reserves of insurance companies. Amended were rules establishing the procedure to increase reserves by insurance companies providing earthquake or related insurance. The amendments also incorporate a clause authorizing the National Commission of Insurance and Bonds to establish rules for insurance companies to report and prove reserve increases.
On the same day, the SHCP published reserve rules for reinsurance operations. Diario Oficial, 4/7/98.
Labor Law
MEXICO
Textile Industry Labor
Agreement Published
The Department of Labor and Social Services published a new labor agreement for the textile industry. The labor agreement establishes the minimum requirements for all textile industries in Mexico. A new daily minimum wage of $50.71 pesos was established by the contract. Diario Oficial, 4/3/98.
Medicine & Health
ARGENTINA
Social Health Loan Approved
The renewal of a loan agreement was approved by the National Social Health Administration (ANSSAL) and the National Social Services Institute for the Retired & Pensioned (INSSJP), in order to guarantee the offering of health services to the INSSJP beneficiaries. Boletín Oficial, Decreto 370/98, 4/8/98.
Real Property
MEXICO
Time-Share Related Standards Proposed
SECOFI proposed standards related to time-shares. NOM-029-SCFI-1997 sets requirements for providers and users of time-shared properties. The stated purpose of the standards is to protect the user of these types of properties. Diario Oficial, 4/6/98.
Taxes
ARGENTINA
Tax on Earnings Revised
Revisions to Argentina’s Tax Law were passed by The Federal Administration of Public Income. The revisions relate to tax on earnings for limited liability companies. The changes to Decree No. 2353/86 will allow limited partnerships and joint-stock companies to transfer the sum of their liquidations originating prior to September 28, 1996, including losses, withholdings, monies received, collected rents, collected taxes and payments on accounts, into consideration for their earnings tax calculations. Boletín Oficial, Resolución 166/98, 4/7/98.
MEXICO
Tax Annex Rules Amended
The Department of the Treasury published amendments to the tax rules for 1998. Since the tax rules for 1998 were amended, the Department also changed annexes. Included in the amendments to the annexes are the approved tax forms. Diario Oficial, 4/6/98 and 4/16/98.
Various
MEXICO
Diario Oficial Index Published
The index of everything published in the Diario Oficial during the month of March was published by the Department of the Interior. The index lists the publications by Department. Diario Oficial, 4/13/98.
REGIONAL
Impact of the Asian Crisis
The International Monetary Fund stated in a recent report that Latin America, due to its sound and conservative macroeconomic policy, effectively withstood the Asian Crisis. Even though Latin American economies did not suffer as much as other parts of the world as a result of the crisis, the projected growth in this area was not achieved; it dropped from 5% to 3.5%. Brazil was singled out as the country with the lowest growth rate at 1.5%, while Chile will experience the most growth at 6%. Latin America, however, is not alone in its declining growth rates; the global growth rate was also projected to drop from 4.3% to 3.1%.
The Asian Crisis has also meant lower prices for raw materials, especially petroleum. The upside to the crisis is that the flow of capital into Latin America from private Asian investors has increased.
Venezuela & U.S. Trade Accord
The Protection & Reciprocal Promotion of Investments Accord between the United States and Venezuela will be signed this summer. Delayed for almost five years, it was recently revisited. The goal of this accord is to allow both countries to work together to create stable and trusting conditions, reducing risks and fostering an environment conducive to trading, according to Hector Maldonado Lira, Venezuelan Minister of Industry and Commerce.
