IA TR - December 11, 1998 - Page 4 - National Law Center for Inter-American Free Trade®

Volume 5, Number 25, Page 4

Recent Developments in Brief

Agriculture, Mines & Cattle Industry

Mexico

Disease Free Zones Defined by New Standard

The Department of Agriculture, Natural Resources and Fisheries (SAGAR) published new standards related to plague-free zones. NOM-069-FITO-1995 establishes the requirements to determine, establish and recognize plague-free zones. The standard will allow vegetables and related produce grown in disease-free zones to be moved without the need to apply any other phyto-sanitary measures.

Antitrust/Antidumping Cases

Mexico

Decision on Greek Peaches Announced

The Department of Commerce and Industrial Development (SECOFI) published a final decision on an antidumping investigation of canned peaches imported from Greece. On December 6, 1996 and February 19, 1997 Conservas La Torre, S.A. de C.V. requested SECOFI to conduct an antidumping investigation; on December 9, 1997 SECOFI imposed preliminary duties of 43.51 percent.

Banking & Credit

Mexico

Rules on Bond Institutions Reserves Amended

The Department of the Treasury (SHCP) announced several amendments to the rules for the creation, increase and valuation of the technical reserves for bond institutions. The original rules were published on July 1. Diario Oficial, 11/18/98.

Consumer Law

MEXICO

Technical Clocks Subject to Standards

Technical standards applicable to clocks used for technical or official time measurements were published by SECOFI. NOM-048-SCFI-1997 sets new requirements and testing methods for several clocks used for time tracking. The new standard replaces standard NMX-J-382-1980. Diario Oficial, 11/30/98.

Standards on Talavera Set

SECOFI announced technical standards to a special ceramic manufactured in Mexico and known as talavera. The ceramic is a denomination of origin as stated in the General Declaration for the Protection of the Denomination of Origin Talavera, published on September 11, 1997. NOM-132-SCFI-1998 establishes several requirements for talavera. Diario Oficial, 11/25/98.

Customs

MEXICO

New Instruction Regulates the Payment of Charges for Utilization of the SISCOMEX System

The Instruction determines the amount to be paid for utilization of the SISCOMEX system which is payable on registration of the Import Declaration. The amount payable is R$ 30,00 (thirty reais) per Import Declaration, with R$ 10,00 (ten reais) to be paid for additions to the same. The tax will be paid through automatic debit in a bank account indicated by the importer in the respective Import Declaration. The full text is published in the Official Gazette of 13 November 1998. Normative Instruction nº 131 of 11 November, 1998

Peru

300 Million Dollars Saved by New Customs Reform

Approximately 300 million dollars yearly are being saved in the foreign trade, as a result of the modernization process in customs implemented by new reforms, which facilitate and simplify services with the new Virtual Customs, the newest product of restructuring going on in Peruvian customs administration.

The denominated Virtual Customs allow those engaging in foreign trade to make their customs operations from their own headquarters, without documentation, by simply sending the necessary information electronically, saving warehouse and rental costs.

This process has improved the competitiveness of national products and allows problems to be corrected through electronic means, without presenting documents, or wasting man-hours in administrative negotiations.

Regional

Rules for Agreement Amended

SECOFI announced the amendment to the rules for the application of an agreement between Mexico, Guatemala, Honduras and El Salvador. The bilateral agreements with these countries were published in 1997. The agreements establish tariff related preferential treatment for those countries.

At the same time, SECOFI published the rules for the application of an agreement between Mexico and Panama. Diario Oficial, 11/23/98.

Energy

Mexico

Standards on Gas Pipelines Proposed

The Department of Energy (SE) has proposed a standard applicable to gas pipelines. If adopted, NOM-007-SECRE-1998 will establish security requirements for the materials, pipelines, equipment, devices and other related materials for the construction, operation, maintenance, inspection, security of pipelines used to transport natural gas. Diario Oficial, 11/25/98.

Personnel Standards Proposed

The SE proposed standards applicable to personnel of nuclear electric plants. NOM-034-NUCL-1998 proposes the criteria for the selection and training of the personnel operating nuclear electric plants. Diario Oficial, 11/27/98.

Environment

Mexico

Standards Affecting Mining Published

The Department of the Environment, Natural Resources and Fisheries (SEMARNAP) has published standards that affect mining operations. NOM-120-ECOL-1997 establishes requirements for environmental protection of mining operations in protected natural zones. Diario Oficial, 11/19/98.

Environmental Regulations for Power Line Operation and Construction Published

SEMARNAP has published standards applicable to power lines. NOM-115-ECOL-1998 establishes the guidelines for environmental protection regulations to be observed in the planning, design, construction, operation and maintenance of power lines located in urban, rural and other areas. Diario Oficial, 12/23/98.

Rules on Seismological Exploration Published

SEMARNAP has published new Technical Standards for seismological exploration. NOM-116-ECOL-1998 establishes the environmental protection requirements for seismological exploration in agricultural areas. SEMARNAP also published NOM-117-ECOL-1998 which sets environmental protection standards for pipelines transporting or distributing petrochemicals and hydrocarbons. Diario Oficial, 11/24/98.

Fishing Ban Announced

SEMARNAP announced a fishing ban on yellow tail tuna in federal waters of the Pacific Ocean. It has also established a ban of the fishing of the tuna by ships with a Mexican flag in certain international waters of the Pacific Ocean. Diario Oficial, 11/25/98.

Insurance

Mexico

Rules for Foreign Reinsurance Companies Amended

The SHCP announced several amendments to the rules for establishing representative offices of foreign reinsurance companies. The rules were originally published on March 4. A definition of what is considered an office of a foreign reinsurance company was amended. Reinsurance companies currently operating in Mexico will have 90 days to comply with the new requirements established by the amendments. Diario Oficial, 11/18/98.

Labor Law

Brazil

Brazil Amends Labor Legislation Regarding the Suspension of Employment Contract

A new Provisional Measure facilitates the suspension of employment contracts for a period of between two and five years to enable the employee to participate in courses or professional training offered by the employer. Such suspension is depends on the prior existence of a collective labor agreement and the agreement of the employer.

The referred suspension can be repeated provided there is a minimum period of sixteen months between such suspensions. The granting of monthly compensation, which will not be considered as salary, remains at the option of the company. The company faces a fine in the event that the employee is dismissed in the suspension period or in the three months following his return.

The full text of the Provisional Measure is published in the Official Gazette of 4 November 4, 1998. Provisional Measure nº 1.726 of November 3, 1998.

Medicine & Health

Mexico

The Department of Health (SSA) published technical standards related to medical products. NOM-137-SSA1-1995 sets labeling requirements for several kinds of medical products and equipment both manufactured in Mexico and imported into the country. Among the labeling requirements is that the information be in Spanish. Diario Oficial, 11/18/98.

Containers for Blood Subject to Standards

The SSA published standards applicable to certain types of blood containers. NOM-140-SSA1-1995 establishes the sanitary requirements that must be met by certain types of blood containers. The standard establishes testing methods to verify compliance with the requirements. Diario Oficial, 11/25/98.

Taxes

Brazil

Declaration of Tax Debits and Credits Established

Legal entities are now obliged to present, on a quarterly basis, a Declaration of Tax Debits and Credits. The Declaration is to be prepared in centralized form by the parent company. The Declaration must then be submitted to the requisite Tax Office by the fourteenth day of the second month following the end of the quarter. In cases of dissolution, liquidation, merger the Declaration will be due on the final working day of the month following that in which the event occurs.

The following will not be required to file the Declaration: “Micro-companies” and small companies subject to the "SIMPLES" regime; legal entities exempt from the monthly payment of taxes and contributions whose value is less than R$10,000 (ten thousand reais); dormant entities; and governmental organizations, agencies and authorities.

The Declaration should contain information on the following federal taxes and contributions: Corporate Income Tax (IRPJ); Income Tax withheld at source (IRRF); Tax on Manufactured Products (IPI); Tax on Financial Operations (IOF); Tax on Rural Properties (ITR); Social Contributions on Profit (CSLL); Contribution for the Social Integration Programs (PIS/PASEP); Contribution for the Financing of the Social Security System (COFINS); Tax on Financial Transactions (CPMF).

The Declaration should be submitted on computer disc. Failure to deliver the declaration will result in a fine of R$57,34 (fifty-seven reais and thirty-four centavos), for each overdue month. The full text of the Normative Instruction is published in the Official Gazette of November 5, 1998. Normative Instruction nº 126 of 30 October, 1998

Brazil

The Combined Declaration of Economic and Tax Information for Legal Entities is Established.

Decree nº 2.124, of June 13, 1984, together with the Administrative Ruling nº 118, of June 28, 1984, grants the Ministry of Finance the necessary authority to introduce complementary obligations in relation to federal taxes. Pursuant to the same, the Internal Revenue service has introduced the Combined Declaration of Economic and Tax Information (DIPJ) to be submitted by legal entities. The DIPJ should be submitted annually by 30 September, either on disk or through the Internet, beginning in 1999 and the first return is due by 30 September. The declaration is obligatory for all legal entities except those subject to the SIMPLES regime and governmental organizations, agencies and authorities.

The following will be extinct beginning in 1999: (i) the Tax Declaration of Legal Entities taxed on the real, estimated or arbitrated basis; (ii) the declaration of Information of Tax on Manufactured Products, except for beverages; (iii) Declaration of Tax on Rural Property; (iv) Declaration of Contributions and Federal Taxes; and (v) Statement of the presumed IPI Credit.

Rules for the compensation of Corporate Income Tax Stipulated

On 10 September, 1998, Declaratory Act nº 14, permitted legal entities to compensate the credit balance of Income Tax retained at source (IRRF), against the balance due of Corporate Income Tax (IRPJ).

The full text is published in the Official Gazette of November 10, 1998. Declaratory Act nº 17, of 9 November, 1998

Transportation

Mexico

Guidelines for Air Transportation Published

The Department of Communications and Transportation (SCT) published several guidelines applicable to domestic air transportation. The guidelines set the form by which those interested in obtaining a concession from the SCT to provide air transportation services, may prove compliance with the requirements established by the Civil Aviation Law. Passenger, cargo and mail air transportation are covered by the guidelines. Diario Oficial, 11/27/98.

Panama

Upcoming Privatization of Tocumen International Airport

The Civil Aviation Authority is currently coordinating the privatization of Panama's main airport facility, the Tocumen International Airport. The transfer will probably be accomplished under a 20 to 40-years (LOT) operating concession.

A consortium of advisors completed a preliminary assessment of Tocumen, concluding that the airport can continue to grow in its present location, up to double the current capacity for passengers and cargo. Panama's strategic location at the midpoint of the Americas, the presence of the Colón Free Zone, and the maritime shipping lanes flowing through the Canal create a natural hub location.

The Director of the Coordinating Unit for the Privatization Process of the Ministry of Finance and Treasury has mentioned that eight companies are interested in operating the airport. The Cabinet Council is scheduled grant their approval before the end of September 1998. The pre-qualification (RFQ) invitation should be released by mid-November, 1998.