Volume 6, Number 2, Page 7
RECENT DEVOLPMENTS
Consumer Law
Mexico
Standards, Measuring Regulations Published
SECOFI has published the regulations of the law of measures and standardization. The regulations give general rules regarding measuring units and devices. The regulations also cover rules regarding Mexican official technical standards as well as other standards and measures. Diario Oficial, 1/14/99.
Customs
Mexico
Customs Law Amended
SECOFI announced several amendments to the customs law. Among the amendments to the law are new rules for those who have a concession to provide the services of warehousing and custody of goods clearing customs. Also the procedure for paying antidumping duties on goods imported have been set forth in the amendments to the law. Diario Oficial, 12/31/99.
Decrees Related Establishing Preferential Tariffs Published
A list of preferential tariffs produced by the Agreement of Partial Reach Number 9 and the commercial agreements entered between Mexico and Brazil (according to the treaty of Montevideo of 1980) have been published by SECOFI. The list includes all of the decrees that have expired as of January 1, 1998. Diario Oficial, 1/5/99.
Special Program for Borders Set
A special customs program for several activities developing in the northern border region of Mexico has been published by SECOFI. The program is set forth by a decree with the purpose of establishing tariff categories offering total or partial exemption from the payment of import duties for goods imported into the border region. This region covers an area defined by the region running along the border of the U.S. to a parallel line 20 kilometers south of the border. Additionally, SECOFI has published a similar decree applicable to all international borders of Mexico. Diario Oficial, 12/31/98.
Tariffs Published
New tariffs for 1999 applicable to countries with which Mexico has free trade agreements have been published by SECOFI. The new tariffs are established via a listing that sets the tariff by category and country. Mexico currently has trade agreements with the U.S., Canada, Colombia, Venezuela, Costa Rica, Bolivia, Chile and Nicaragua. Diario Oficial, 12/31/99.
Import Duties Amended
SECOFI announced several amendments to the tariffs set forth in the Law of the General Tax on Imports. The amendments create, eliminate and modify different import duties. Several duties were increased with the purpose of increasing the revenue of the federal government. The increase in some tariffs does not affect those goods imported from countries with which Mexico has a trade agreement, such as the U.S., Canada and Chile. A second set of amendments were published the same day.
At the same time SECOFI announced amendments to the tariffs set forth in the Law of the General Tax on Exports. The amendments include several products of which the export from Mexico is prohibited. Diario Oficial, 12/31/98.
Clarification Announced
A clarification to the quota certificate forms published on Dec. 24, 1998 have been announced by SECOFI. The forms are for import and export quota certificates. The amendments add three bar codes to the forms. Diario Oficial,, 1/13/99.
Regional
Mexico-Chile FTA Ratified
The Mexican Senate announced the ratification of the free trade agreement between Mexico and Chile. The agreement will expand the 1991 economic complementation agreement between both countries. Diario Oficial, 12/30/98.
Fast Track, FTAA Update
The U.S. Senate Finance Committee plans to begin hearings on trade issues, including fast-track negotiating authority, in late January or February. Lesser trade bills, such as expansion of benefits for Caribbean Basin Initiative countries, are more likely to be seriously considered, since CBI expansion is seen as one way of providing hurricane relief to Central America.
The United States will host a World Trade Organization ministerial in November 1999. Speculation about a possible "Millennium Round" of WTO negotiations threatens to slow the progress of negotiations toward a Free Trade Area of the Americas (FTAA). Brazil considers the WTO a higher priority than FTAA, and many smaller nations would be hard- pressed to stretch resources to participate in both processes. If a WTO Millennium Round is scheduled, then attention and resources may be diverted to this process and away from FTAA negotiations.
Although actual negotiating on FTAA provisions began in 1998, the progress has been slow, in part due to delays in establishing FTAA infrastructure needed to support negotiations. The contract for an interim administrator expired on October 31, leaving funding in limbo.
Both the global financial crisis, including Brazil's precarious financial status, and the U.S. Failure to pass fast-track negotiating authority has further slowed negotiations. The FTAA process has, however, encouraged greater regional participation in groups like the Caribbean Community and the Andean Pact.
NAFTA & Inter-American Trade Monitor, January 1999.
Energy
Brazil
Privatization Might be Postponed
The Minister of Energy said that the Brazilian Government may postpone, as a consequence of the global financial crisis, the privatization of its electric power companies, although the sale would generate an estimated US$10 billion in revenue.
The privatization of these companies is the largest such action planned for 1999. The attraction to investors of these companies is that they have an active income-yield capacity with an annual growth of customer consumption at 6%.
The electric power generator companies for sale are Hydroelectric Company of San Francisco (Chesf), Eletronorte, Furnas – Electric Central (controlled by the federal government), and the Energy Company of Sao Paolo (CESP). A government study established a minimum sale price for these four companies at US$10.6 billion. According to an evaluation done by the American Company J.P. Morgan, the electric power generator companies are in excellent financial condition, although several have high amounts of debt accumulated.
Mexico
Radiation Related Standards Published
The Department of Energy (SE) has published technical standards dealing with the use of radioactive materials. NOM-032-NUCL-1997 establishes the technical requirements for the operation of certain treatment centers, as well as the requirements for the documentation and registry of the tests performed in such centers. Diario Oficial, 12/30/98.
Radioactive Waste Subject to Standards
Technical standards relating to the storage of radioactive waste have been published by the Department Of Energy. NOM-022/3-NUCL-1996 establishes requirements for the construction, operation, closure and control of sites created for the permanent storage of low level radioactive waste. Diario Oficial, 1/14/99.
Peru
Privatization Opposed
The Regional Assembly of Cusco will meet with local Congressmen with the objective of creating a model law that would stop the privatization of the Hydroelectric plant of Machu Picchu (CHM).
According to the coordinator of the Regional Assembly, Washington Román Rojas, the meeting will take place January 26, with the participation of Congressmen Daniel Estrada, Victor Ruiz Caro, Graciela Fernandez Baca, Máximo San Román Rigoberto Esquerra, Hube Chávez, Denis Vargas Marín among others.
Román stated that to come to a decision it will be necessary to increase debate on the issue. The Municipality of Cusco will issue a summary regarding all aspects of the decision on whether to privatize Central Hydroelectric of Machu Picchu.
Securities
Mexico
Rules for Futures Amended
The SHCP amended the rules for the establishment and operation of futures and options market. The rules also apply to companies and trusts that deal with futures and options. These rules were originally published on December 31, 1996. Diario Oficial, 12/30/98.
Taxes
MEXICO
Treaties Signed
A double taxation treaty between Mexico and Ireland was ratified by the Mexican Senate, as announced by the SRE. The treaty has the purpose of avoiding double taxation and preventing tax evasion with respect to income and capital gains taxes. The treaty was signed in Dublin on Oct. 22, 1998.
The same day the SRE announced the ratification by the Senate of a similar agreement with Chile. Diario Oficial, 12/30/98.
Revenue-Expenditure for 1999 Set
The SHCP has published what is known as the “Income Law for the Federation during the 1999 Fiscal Year.” Such law establishes the revenue that the federal government expects to collect for the year. According to the law, the federal government will collect around $1.03 trillion pesos. The revenue for income tax will represent $210.5 billion pesos, while sales tax will amount to $148.27 billion pesos.
At the same time, the SHCP published the budgeted expenditures for the 1999 fiscal year. On the executive branch, the largest expenditure of the budget that of the Department of Public Education (SEP) at 70.6 billion pesos. Diario Oficial, 12/31/99. Agriculture will receive $21.1 billion, Education and Health will receive around $17.1 billion each. Diario Oficial, 12/31/98.
Tax Laws Amended
Several tax laws have been amended as announced by the SHCP. Every year, the Mexican Congress reviews tax laws and makes adjustments for the following year. Thus far, the laws amended include: the Fiscal Code, Income Tax Law, Sales Tax Law, Special Tax on Production and Services Law and the Vehicle Tax Law. (for more information about the most important changes to these laws, please see article published in the January 15 issue of the InterAmerican Trade Report).
The SHCP has also announced amendments to the Law of Fees and Imposts. Diario Oficial, 12/31/98.
Tax Annexes Published
Several tax annexes have been published by SHCP. The annexes correspond to the seventh resolution establishing amendments to the tax rules for 1998. The annexes include a list of those companies authorized to print tax related invoices.
Additionally, the SHCP announced the eighth set of amendments to the tax rules for 1998. Diario Oficial, 1/6/99 and 1/8/99.
Transportation
Mexico
Cargo Storage Standards Set
The SCT has published technical standards related to the required safety conditions for cargo storage and securing in vessels on deck and in holds. NOM-030-SCT4-1996 is set to comply with the Code for Safety Practices for the Storage and Securing of Cargo (CISS Code) approved by the assembly of the International Maritime Organization through resolution A.714(17). Diario Oficial, 1/4/99.
