Volume 6, Number 5, Page 3

Interview with Professor Ramiro Rengifo

Ramiro Rengifo is author of several books on comparative and commercial law. Professor Rengifo's career has included service with the United Nations as a Senior Legal Officer with UNCITRAL and as an election observer during South Africa's transition to democracy. Professor of Law at the University of Antioquia in Colombia, Professor Rengifo has written extensively on commercial law, comparative law, negotiable instruments and finally sovereign debt.

Inter-American Trade Report: What have been the major developments in Colombian Commercial Law over the past three years?

Ramiro Rengifo: In 1995, Law No. 222 created significant changes in Corporate Law. The same law made fundamental changes in bankruptcy proceedings and reorganization procedures as well as the banking regulatory infrastructure.

Law 222 modernized and regulated mergers and relationships between companies and their parent corporations. As for Bankruptcy reorganization proceeedings, the Law's purpose was to streamline such procedures and to move jurisdiction from the judiciary branch to an administrative body.

Other changes produced by this law relate to the preparation of financial statements and disclosure requirements.

Finally, capital markets have been under constant legal reform in order to fine tune them in relation to the needs of transparent and reliable markets.

IATR: In which areas of the Law do you expect future changes?

Rengifo: Changes are going to continue to be made in the area of capital market and banking law with the aim of attracting foreign investment. These changes in commercial law will also be complimented with the changes in labor law that took place in the early 90's. These early changes were intended to liberalize labor law to facilitate the creation of new foreign firms in Colombia. The laws were made more flexible towards this end.

IATR: How is Colombian Commercial Law developing (i.e., is it becoming more or less restrictive?).

Rengifo: Instead of making things more restrictive, Colombia is working towards opening the markets further and creating more competition among all firms, whether domestic or foreign.

IATR: What further changes in the legal framework of Colombia would you recommend to facilitate foreign lending and investment?

Rengifo: The above changes in labor law, corporate law, banking law and further changes in the tax code are necessary precedents for investors to be willing to invest in Colombia. So, I envision future changes in the tax code and Banking regulatory framework to be along these lines.

These changes should create a more healthy banking system.

IATR: Currently, what are the major legal impediments to foreign investment into Colombia?

Rengifo: We in Colombia have been working hard to modernize our legal infrastructure to make it more attractive to foreign investors. I perceive a continued willingness on the part of the Colombian authorities towards further improvements. Unfortunately we have political problems that are hindering our efforts to reform the legal infrastructure.

We have, as you know, a leftist insurgency and now the right-wing paramilitary groups have begun to present grave concerns to the stability of the country. Such instability is obviously a major concern to foreign investors.

IATR: Can you identify any countries that could serve as a model legal infrastructure?

Rengifo: As a matter of practice, Colombia has tried to track the best legal infrastructure to adopt depending on the issue to be regulated. In other words, no one legal system has served as our model, but rather we have drawn upon several. Let me give you an example. To create a legal framework for newly created pension funds, we just adopted the regulation already enacted in Chile because we considered their regulation an excellent model. On the other hand, on unfair competition and restricted practices we adopted Spanish legislation. And so, it depends on the law and the issue at hand.

IATR: How can Colombia and other Latin American Governments utilize the private sector to better manage their national debt?

Rengifo: The private sector's financial needs, particularly their need for foreign financial resources (i.e. loans), should be approved by the government in accordance with government's own plans or programs for soliciting foreign loans. This allows for the coordination of the private and public sectors.

In other words, the private sector should have to present detailed re-payment plans in order to gain governmental authorization to receive foreign loans. The government should not allow any entity in the private sector to receive loans if it does not think such activity viable or that such activity would improve competition and industrial input.