Volume 5, Number 15, Page 5
Recent Developments in Brief
Agriculture, Mines & Cattle Industry
MEXICO
Vaccine Subject to Standard
The Department of Agriculture, Livestock and Rural Development (SAGADAR) published a technical standard related to the manufacture of vaccines. NOM-055-ZOO-1995 establishes the requirements for producing vaccines to control a specific type of influenza. Diario Oficial, 6/29/98.
PEMEX Suspends Exploration Projects
Three federal budget cuts this year will force the suspension of 42 Gulf of Mexico oil exploration projects. The suspended projects are located off the coasts of Veracruz, Tabasco and Campeche. The suspension is expected to result in a three to five percent reduction in the reserves of Petroleos Mexicanos (Pemex). Reforma, p.1A, 7-10-98
PERU
Cobriza Contract Awarded
U.S.-based Doe Run Resources won the mining contract for the Peruvian copper and silver mine, Cobriza. Doe Run was the sole bidder, offering one US dollar over the minimum price of US$ 7.5 million. Wall Street Journal Americas, 7/13/98.
Antitrust/Antidumping
BRAZIL
Investigations Concluded
An anti-dumping investigation was conducted into the importation of bisodium carbonate from Bulgaria, Poland and Romania. The investigation was concluded upon publication of Interministerial Notice MICT/MF No. 13, published in the Brazilian Official Gazette (Diário Oficial da União) on June 30, 1998. No countervailing duties were ordered.
An anti-dumping investigation was also conducted into the importation of dense, synthetic and naturally-occurring bisodium carbonate from Spain and the United States. The conclusions of the investigation were published in Circular SECEX No. 23, published in the Brazilian Official Gazette (Diário Oficial da União) on June 30, 1998. No countervailing duties were ordered. Source: Alcides Jorge Costa e Advogados Associados, 7/10/98.
Canada Seeks WTO Decision
Canada has requested the World Trade Organization (WTO) to render a decision resolving Canada’s dispute with Brazil regarding subsidies that the Brazilian government provides to airplane manufacturer Embraer. Canada has alleged that the subsidies are illegal and that they have had a detrimental impact upon Bombardier. Wall Street Journal Americas, 7/13/98.
MEXICO
Decision on Antidumping Case Announced
The Department of Commerce and Industrial Development (SECOFI) published its decision concluding an antidumping investigation into an imported pigment. On Oct. 7, 1987, Pigmentos y Oxidos, S.A. submitted a complaint regarding the importation of the pigment from the U.S. and Germany. On June 10, 1988, SECOFI imposed a countervailing duty of US$ 6.42 per kilo of pigment imported from Buffalo Color Corporation, except when the price LAB is above US$ 19.36 per kilo. SECOFI has now eliminated the countervailing duties. Diario Oficial, 6/23/98.
SECOFI Decisions On Appeal
On Dec. 23, 1993, SECOFI published a decision imposing a 34.5 percent countervailing duty on hydrogen peroxide imported from the U.S. On Sept. 2, 1997, SECOFI modified its previous decision and eliminated countervailing duties on imports from Solvay Interox and Degussa Corporation. SECOFI affirmed that ruling on appeal.
In a different antidumping case, SECOFI affirmed its decision on appeal regarding clothing imported from Hong Kong. Diario Oficial, 6/24/98.
Alleged Monopolies Under Investigation
The Federal Competition Commission announced that it will investigate alleged monopolistic practices in connection with the transmission of world and regional events. The investigation was initiated upon request by a company prevented from transmitting the France 1998 World Cup. Any company that considers itself to be affected by the alleged practices may submit a complaint to the Commission.
The Commission also announced that it will investigate alleged monopolistic practices with regard to the sale of regional business directories. Diario Oficial, 6/22/98 and 6/26/98.
Countervailing Duties Eliminated
SECOFI announced the elimination of several countervailing duties it had previously imposed. Countervailing duties will be lifted on various goods, including kitchen products from Taiwan and starch from the Netherlands. Most of the countervailing duties will be eliminated as of July 28, 1998. Diario Oficial, 6/19/98.
Preliminary Decision Clarified
SECOFI clarified its preliminary decision in an antidumping investigation into steel sheets imported from Russia and the Ukraine. SECOFI’s ruling was published on March 20, 1998. Diario Oficial, 6/22/98.
Banking & Credit
BRAZIL
Banco do Brasil Won’t Privatize
The Cardoso Administration has declined to privatize Banco do Brasil, the country’s largest state-run bank. Government officials cited the importance of the bank in the implementation of government policies. BrazilTradeMiami, July 1-15, 1998.
MEXICO
Inspection Fees Published
The Department of the Treasury (SHCP) published the inspection fees to be paid by specified institutions. Fees were published for financial institutions, savings and loan companies, foreign financial institutions and real estate financing companies. Diario Oficial, 6/29/98.
IRA Rules Amended
The SHCP amended rules applicable to companies administering individual retirement accounts. The amendments involve reports presented in electronic format to the National Commission on the Retirement Savings System. Diario Oficial, 6/30/98.
VENEZUELA
New Bank Crisis
In 1994-1995, Venezuela’s banking system suffered from 18 bank closures. It could undergo another crisis if interest rates continue to climb. Rates on the Central Bank’s short-term debt rose to 52 percent last week, up from 18.5 percent in mid-January. Rates could surpass the 60 percent mark. The Central Bank hiked rates to protect the domestic currency as Venezuelans flocked to buy dollars out of concern that the government would devalue the currency to increase the value of its dollar-earned revenue.
Francisco Natera, president of the Federation of Chambers of Commerce (Fedecámaras), said soaring interest rates are taking their toll on businesses at all levels in Venezuela. He said high interest rates could “generate problems” within the nation’s financial system, as many businesses have reported sharp decreases in sales and increases in production costs. El Nacional, 7-10-98, Miami Herald, 7/8/98.
Communications
MEXICO
Telmex Cuts Off Avantel
Teléfonos de México (Telmex) has cut off several private interconnections for competitor Avantel, claiming that Avantel has not paid for the service for more than one year. In turn, Avantel has charged that Telmex cut off its service in violation of Mexico’s Federal Telecommunications Law. Service was restored after Avantel appealed to the government’s Federal Telecommunications Commission. El Economista, 7/9/98.
Consumer Law
MEXICO
Federal Competition Commission Rules Against Sinaloa
The Federal Competition Commission has ruled that the state of Sinaloa has engaged in unlawful restraint of trade. The Commission conducted an investigation into limitations placed by the Sinaloan government on the importation of chicken eggs from the states of Sonora and Durango. The Commission concluded that the restrictions constituted restraint of trade in violation of the competition laws. Diario Oficial, 6/19/98.
SECOFI Standards Published
SECOFI published the following new standards:
- NMX-E-021-1998-SCFI - Testing methods for determining the size of plastic pipelines.
- NMX-E-208-1998-SCFI - Testing methods for establishing the strength of plastic pipelines.
- NMX-B-028-1998-SCFI - Specs for cold-laminated steel sheets.
- NMX-B-248-1998-SCFI - Specs for hot-laminated steel sheets.
- NMX-B-267-1998-SCFI - Specs for cold-laminated steel sheets used for stamping.
At the same time, SECOFI published amendments to the 1998 standardization program published on April 15, 1997. Diario Oficial, 6/18/98.
Customs
MEXICO
Quotas Published
SECOFI published quotas for importing and exporting the following products:
- Import and export quotas for textile products under NAFTA;
- Import and export quotas for textile products under the Mexico-Bolivia Free Trade Agreement;
- Import and export quotas for textile products under the Mexico-Colombia-Venezuela Free Trade Agreement;
- Quotas for exports to the U.S. of cheese, lactose products, milk and different types of creams under NAFTA;
- Quotas for exports to the U.S. of brooms under NAFTA;
- Quotas for imports under the WTO.
Diario Oficial, 6/17/98.
New Duties Published
SECOFI published duties for importing certain products that are in excess of official quotas. New tariffs were published for ham, potatoes and apples imported from the U.S. Duties on those imports are now 20 percent. Diario Oficial, 6/29/98.
REGIONAL
Rules on Mexico-Nicaragua FTA Published
The SHCP published a set of customs rules applicable to the Mexico-Nicaragua FTA. The rules include provisions related to national treatment and certificates of origin and contain copies of approved certificate of origin formats, instructions for completing the certificate and declaration of origin. Diario Oficial, 6/30/98.
Energy
MEXICO
Standards on Electrical Engines Published
The Department of Energy (SE) published standards applicable to electrical engines. NOM-016-ENER-1997 establishes testing methods and efficiency requirements for several types of electrical engines. The standards apply to all types of electrical engines sold in Mexico. At the same time, the SE published clarifications regarding standard NOM-015-ENER-1997, which establishes testing and labeling requirements for refrigerators and freezers. Diario Oficial, 6/17/98.
New Standards for Fluorescent Lamps
The SE published technical standards for compact fluorescent lamps. NOM-017-ENER-1997 establishes testing methods for determining the energy efficiency of such lamps. Diario Oficial, 6/22/98.
Foreign Investment
MEXICO
Foreign Investment in Mexico Is Up
The Mexican Department of Commerce announced that direct foreign investment in Mexico grew to US$ 1.16 billion during the first four months of 1998. The Department noted, however, that this amount could total US$ 2.6 billion once the government has received notice of other investments made during the same period. Wall Street Journal Americas, 7/13/98.
Government Procurement
MEXICO
Airports For Sale
The Department of Communications and Transportation (SCT) announced a schedule for the privatization of several airports in southern Mexico. Nine airports will be privatized through the bidding process, including the airports in Cancún, Mérida, Huatulco and Veracruz. Interested parties should contact the SCT no later than August 7, 1998. Diario Oficial, 6/29/98.
Immigration
BRAZIL
Immigration Law Amended
Law No. 9.675 provides for the registration of aliens who entered Brazil prior to the date of the law and remained illegally. This law, published on June 29, 1998, amends Article 1 of Law No. 7.685, published on December 2, 1988. Alcides Jorge Costa e Advogados Associados, 7/10/98.
Securities
MEXICO
List of Securities Published
The SHCP published a list of securities registered with the National Registry of Securities and Intermediaries. The list includes securities issued by various companies, banks and insurance companies. Diario Oficial, 6/22/98.
Information Rules Amended
The SHCP published Circular 11-23 Bis 1, which amends information requirements for corporations issuing stocks registered in subsection “B” of the Securities Section of the National Securities Registry. The rules set forth the information that such corporations must provide to the National Banking and Securities Commission, to investors and to the Mexican Stock Exchange. Diario Oficial, 6/29/98.
Taxes
PERU
New Tax Law Requires Declaration of Assets
The National Department of Tax Administration has issued a ruling requiring all taxpayers to submit asset information for 1997.
Department Resolution No. 058-98 SUNAT, published on July 8, 1998, requires all natural persons and marital communities to submit a declaration of assets to the Tax Authority if, during the 1997 calendar year, they have received income greater than or equal to S/. 240,000.00 (approximately US$ 85,000.00) or assets with a value greater than or equal to S/. 516,000.00 (approximately US$ 176,000.00).
All natural persons or marital communities not domiciled in Peru as of December 31, 1997 must nevertheless submit a declaration of assets if they own property located in Peru or are holders of obligations undertaken for the purpose of acquiring, expanding or improving said property, or where they are creditors of Peruvian residents. The declaration must be submitted from September 1-16, 1998. Bufete Barreda Moller, 7/15/98.
REGIONAL
Double Taxation Treaty Signed
The Department of Foreign Relations (SRE) published a double taxation treaty signed by Mexico and Argentina. The treaty establishes rules for the payment of income taxes on income arising from the operation of ships and planes used in international transportation. On the same date, the SRE announced that the Mexican Senate has approved an agreement between Mexico and the Corporación Andina de Fomento (CAF) permitting the CAF to operate in Mexico. Diario Oficial, 6/19/98.
Transportation
MEXICO
Standards Proposed
The SCT has proposed two standards related to the transportation of hazardous materials and chemical products. The first proposed standard, NOM-025-SCT4-1995, would establish requirements for fire extinguishing systems on ships transporting chemicals and petrochemical products. The second standard, NOM-027-SCT4-1995, would establish requirements for the transportation of hazardous materials on ships. On a different date, the SCT proposed technical standard NOM-028-SCT4-1996, which would establish documentation requirements for the transportation of hazardous materials on ships.
Subsequently, the SCT proposed standards NOM-030-SCT4-1996, NOM-031-SCT4-1996 and NOM-032-SCT4-1996, which would establish safety requirements for transportation by ship. Diario Oficial, 6/17/98; 6/18/98 and 6/22/98.
Tribasa Buys Rail Lines
The Department of Communications and Transport (SCT) has given final approval for Grupo Tribasa’s purchase of railway lines in southern Mexico. Tribasa, a Mexican construction company, made the successful bid to purchase the railway lines in June, with an offer of US$ 324 million. Wall Street Journal Americas, 7/13/98.
Various
MEXICO
Mexico and European Union Begin Trade Talks
The Mexican government has announced that free-trade agreement negotiations between Mexico and the European Union will begin on July 14. The Mexican Senate and the European Parliament have approved an interim agreement on which the negotiations will be based.
Total Mexico-European Union trade reached US$ 14 billion last year, placing the EU second only to the United States among Mexico’s largest trading partners. However, the European nations have been losing market share in Mexico, especially in the wake of NAFTA, which removed trade barriers between Mexico, the United States and Canada.
Tariffs and higher shipping costs have reduced the competitiveness of European goods in Mexico. Miami Herald, 7/6/98.
Steel Companies Hit By Asian Crisis
Mexican steel companies are feeling the impact of Asian currency devaluations as they lose U.S. market share to inexpensive Asian exports. Steel companies in particular are expected to show weak results in the second quarter due to Asian competition, which has resulted in a considerable reduction in exports. El Economista, 7/9/98, p. 38.
