Volume 6, Number 14, Page 3
Recent Developments
Agriculture
MEXICO
The Department of Agriculture, Livestock and Rural Development (SAGAR) has published standards applicable to the importation of vegetables. NOM-044-FITO-1995 establishes the fito-sanitary requirements for the importation of processed, dehydrated and dried vegetable products to avoid the introduction of diseases. Diario Oficial, 6/21/99.
Antitrust & Antidumping
MEXICO
Appeal Resolved
The Department of Commerce and Industrial Development has published its decision on the appeal of an antidumping investigation on steel imported from Russia and Ukraine. On April 4, 1997 AHMSA requested the initiation of an antidumping investigation on the above mentioned products. Preliminary antidumping duties of up to 67.99 percent were imposed and later confirmed in SECOFI’s final decision. The company exporting the product from Russia, presented an appeal on February 3, which SECOFI resolved by confirming its final decision. Diario Oficial, 6/21/99.
Chemicals Products from China Investigated
SECOFI has published its preliminary decision on the revision of a case involving a chemical product from China. The product imported under tariff category 2941.90.16 was subject to antidumping duties of 208.81 percent on October 18, 1994. A revision of the decision by SECOFI was requested by Schering-Plough, S.A. de C.V. on October 30, 1998. No decision has been taken by SECOFI who announced it will continue the revision of the case. Diario Oficial, 6/23/99.
Banking & Credit
BRAZIL
Government to issue eurobonds
Brasília, 07/01/99 - Dresdner Kleinwort Benson and Credit Suisse First Boston on Tuesday got the green light from the Brazilian government to begin a new sovereign issue of eurobonds. The Central Bank (BC) issued a short statement on Wednesday evening, announcing that the placement on the European market would occur in the next few days. The decision was announced as soon as rises in taxation and interest rates in the US were confirmed, with the consequent change on the international scene favoring in the stock of developing countries, such as Brazil. The BC's communication gave no information as to the probable date or the volume of the issue of Brazilian bonds denominated in euros. The only outstanding feature is that the principle objective will be to serve as a point of reference for future Brazilian private sector issue. (Azelma Rodrigues, InvestNews - Translated by Daniel Cooke)
Reserve Requirement for 30-day FIFs and Minimum Period for Applications Eliminated
The National Monetary Council and the Central Bank of Brazil have approved changes in nearly all applications in fixed income. The reserve requirement for 30-day FIFs and short-term FIFs (those which mature daily)—previously 5% and 50% of capacity, respectively—has been eradicated, releasing close to R$4 billion into circulation. The applications currently in 30-days FIFs will gain immediate rentability. The minimum term for applications of fixed income—which had been one month in the case of certificates of bank deposits (CDBs), RDBs, letters of exchange, loans, and pre-fixed financing—will be eliminated, along with the period of privation on investment funds. To facilitate the transition, the Federal Revenue Office has introduced a table of a diminishing Financial Operations Tax (IOF) that will be collected on all applications (CDBs, investment funds, etc.) After the 29th day of application, capital may be extracted without taxation.
Jornal do Brasil, 7/1/99.
MEXICO
Rules for IRA Administrators Amended
The Department of the Treasury (SHCP) has published circular CONSAR 27-4 amending the rules for individual retirement account administrators. The circular amends the rules for services provided to workers that have not chose an IRA by companies authorize to administer those kinds of accounts and also companies that operate the national database of IRA’s.
Rules for the transfer of funds from accounts were also amended as well as for the consolidation of accounts. Diario Oficial, 6/18/99 and 6/25/99.
Bankruptcy
PERU
Law Establishing Greater Sanctions Against Fraudulent Acts in Bankruptcy Procedures and Patrimonial Restructuring
The Peruvian Executive has issued a new law increasing pecuniary sanctions and introducing penal sanctions against acts of fraud within bankruptcy procedures (No. 27145), at the same time modifying the Patrimonial Restructuring Law (Legislative Decree 845). Under the new law, the National Institute of the Defense of Competition and of the Protection of Intellectual Property (INDECOPI) may impose increased financial sanctions and other penalties against those who commit fraudulent acts which result in the injury of creditors, debtors, liquidators, administrators, etc. involved in the bankruptcy process. The law establishes that tax debts may not be forgiven nor converted into equity, and proposes that when the claimants agree on capitalization of the debt or forgive the same, the portion of the tax debt equivalent to that of the creditors least affected will be paid after four pre-defined categories of preferred creditors have been paid.
In reference to the bankruptcy process, the law establishes that when an application for bankruptcy is filed by the indebted firm, the bankruptcy proceedings will begin when at least two-thirds of the firm’s oustanding debts remain unpaid for at least 30 days; or when it has accumulated losses equal to more than two-thirds of its paid-in capital.
The law grants INDECOPI the ability to declare the nullity of claimants’ agreements which are illegal or abusive. INDECOPI may also impose fines of up to 100 UITs (Unidades Impositivas Tributarias) on the debtors, administrators, liquidators, or creditors who commit fraudulent acts which inhibit the progress of the proceedings and the ability to recover the claimants.
The law also modifies the Penal Code, legalizing imprisonment as punishment for violators of the Patrimonial Restructuring Law.
6/25/99, El Gestion.
Consumer Law
ARGENTINA
Obligations regarding Y2K when commercializing certain products.
Regulation 173/99 was enacted by the Argentine Secretary of Industry, Commerce and Mining in March 18th 1999. It will be in force from May 17th 1999 to June 31st 2000. It establishes that anyone who commercializes computer equipment, computer software, programming tools and applications, and any other electric or electronic equipment that depends for its performance on date/time variables shall declare whether such product will be affected by the change of millenium. Each product shall be provided with a tag which shall read “Year 2000 Ready” or “Year 2000 Not Ready”. Also, a warranty valid until March 31st, 2000 shall be provided with the Year 2000 Ready product. The Regulation establishes as well, that related advertisement shall include a legend that reads as follows: “Check Your Product Ability In Regards To Year 2000. Check The Scope Of Your Warranty”. The parties involved in the commercialization of such products (includes all the chain from the manufacturer to the final distributor) will be subject to high administrative fines if they do not comply . Boletín Oficial 3/18/99. Contributed bythe law firm of Estudio Millé, Gonzalo Zorrilla.
MEXICO
List of Arbitrators Updated
SECOFI published an updated list of arbitrators that are recognized by the Department to act in controversies between suppliers and consumers. The list was originally published on June 1, 1998 and has been amended in several occasions. Diario Oficial, 6/21/99.
Standards To Go Into Effect
Technical standards will soon go into effect according to a notice published by SECOFI. NOM-058-SCFI-1995 and NOM-064-SCFI-1995 will be enforced 30 days after June 23. Compliance with such standards can be demonstrated with the corresponding certificate issued by an authorized verification entity. Diario Oficial, 6/23/99.
Customs
BRAZIL
Tariff Agreement Signed with Andean Community
Brazil signed an agreement with the Andean Community (CAN) which will reduce the tariffs imposed on a list of over 3,000 products. The agreement with the Andean Community—a commercial alliance composed of Bolivia, Ecuador, Peru, and Venezuela—is temporary, to last only one year. The most heavily-debated items to be tariff-preferenced include agriculture, metals, textiles and electronics. Within the month, CAN will negotiate a similar agreement with MERCOSUR. The agreement with MERCOSUR will involve nearly 1,300 products and proposes the creation of a free trade zone by January of 2000. The figures CAN has put forth indicate the creation of a market of over 310 million inhabitants with the Andean alliance, with the potential for an Internal Gross Product of $1.2 billion.
El Tiempo, 6/30/99; Jornal do Brasil, 6/19/99.
BOLIVIA
Regulation of Customs Practices Begun
After 18 months of deliberation and drafting, an Interinstitutional Comission in Bolivia has prepared a new General Customs Law, fufilling objectives of the governmental Operative Plan of Action 1997-2002. The Executive issued a decree (No. 25414) on June 11th, 1999 to begin customs reform, according to which customs agencies and transporters of international cargo have one-hundred-and-twenty days to regulate the transit of goods which, having been documented with customs entites, does not in fact take place (tránsitos inconclusos). The same decree allows thirty days for the admission and evaluation of documented unloading, which began on June 23rd and will end July 23rd. After the reception and processing of the documented unloadings, customs officials will have from the July 26th until October 15th to put into effect the regulation of inconclusive transits which may include the payment of taxes and fines, conforming to the standards and proceedures issued.
The law will create a National Customs Council to which the Customs Service will answer. The council is to be headed by the President of the National Treasury and include a representative from the Executive Office, the Viceminister of Tributary Policy, the presidents of the chambers of Industry, Trade, and Customs Departments, and the Customs Director, who is to have a voice but no vote.
7/1/99, El Diario.; 7/3/99, El Diario.
MEXICO
Foreign Trade Rules Amended
For the second time this year, the SHCP has published a list of amendments to the 1999 Foreign Trade Rules. At the same time Annexes 1, 13, 20 and 22 were amended. Diario Oficial, 6/29/99.
Energy
BRAZIL
Privatization of Electricity Lines Announced
The Brazilian Government began the privatization of its electric energy transmission lines on July 2nd. The National Agency of Electric Energy (Aneel) has published the first concession contract for the auction of the transmission line Tucuruí-Vila do Conde, in Pará. The transmission line, to be constructed by the highest bidder, will be 323 kilometers in length and will require investments of R$ 120,840 million. The concession contract is for 30 years, and operations are expected to commence in June of 2000. Aneel will sell three other tranmission lines this month in the states of São Paulo, Santa Clara and Minas Gerais, with investments expected to total R$ 2.1 billion.
Jornal do Brasil, 7/2/99.
BOLIVIA
Bolivia-Brazil Gas Duct Opened
The first Bolivia-Brazil gas duct commenced operations on July 1. Built by the Brazilian gas company PETROBRAS, the 3,056-kilometer duct will be used to export 2.2 cubic meters of Bolivian gas to neighboring Brazil. The duct is under the management of the Trans-Bolivian Gas Company (GTB), which has been granted a 120-day operating license.
6/30/99, El Diario.
CHILE
Chile-Argentina Gas Duct Opened
A gas duct extending from Salta, Argentina to Antofagasta, Chile commenced operations on July 1. The 941-kilometer duct has a final capacity of 8,500,000 cubic meters daily, sending gas from the Regulating Entity of Argentina Gas (ENARGAS) to Chile’s largest electricity complex, the Central Nopel in Mejillones. The duct crosses the Cordillera of the Andes to an altitude of 5,093 meters above sea level, making it the highest in the world.
7/2/99, El Diario.
MEXICO
New Regulations Published
The Department of Energy (SE) published new regulations of LP Gas. The regulations regulate the sale, transportation, storage and distribution of LP Gas. Diario Oficial, 6/28/99.
Environment
MEXICO
Standards Effectiveness Extended
The Department of the Environment, Natural Resources and Fisheries announced that the application of two technical standards will be extended. Extended were NOM-EM-127-ECOL-1998 which establishes the maximum permissible limits of emissions to the air for cars using gasoline and NOM-EM-132-ECOL-1998 which also establishes emissions limits for automobiles using gasoline, gas and other alternative types of fuel. Diario Oficial, 6/24/99
Foreign Investment
CHILE
Maritime Ports Privatized
The Chilean Government has announced the transfer of the ports of Valparaiso, San Antonio and San Vicente to the private sector. The sale will occur on July 29 and is expected to gross US$40 million. The government is also receiving propositions for the construction and administration of a fourth port, Mejillones; preparations are also being made for the auction of the Iquique and Arica ports.
Government Administration
MEXICO
New Bylaws Published
The Department of Public Education (SEP) published its new bylaws. The bylaws list all the departments and divisions of the SEP as well as their main duties. Diario Oficial, 6/23/99.
Intellectual Property
DOMINICAN REPUBLIC
Judiciary Begins Piracy Inspections due to Possible US Sanctions
Threatened by possible sanctions from the US, the Dominican judiciary has begun inspecting firms in Santo Domingo for violations of intellectual property laws. The inspections are at the request of the International Intellectual Property Alliance (IIPA), which has submitted a petition to the Office of the United States Trade Representative. The petition proposes to sanction the Dominican Republic with the suspension of benefits from the Caribbean Account and the Generalized System of Preferences (SGP), in accordance with IIPA regulation.
6/30/99, Listin Digital.
PANAMA
Piracy Cases Opened
The Business Software Alliance, through the Civil Branch of Panama’s Ninth Circuit Court, has begun the first of several judicial inspections of software usury firms. The first firms to be inspected were Central de Filtros y Mangueras, SA and Electro Diesel, SA. Authorities found fourteen unlicensed programs in use, including such programs as Windows 95, Windows 98, Office 97 Pro, MS-Dos 5.0, Fox Pro 2.6 and Front Page. The Court has ordered the seizure of the unlicensed programs and of all computers in which the programs have been installed.
7/2/99, El Pasa.
Medicine & Health
MEXICO
Standards Published
The Department of Health (SSA) published technical standards related to lead content on the blood. NOM-EM-004-SSA1-1999 establishes the testing criteria and methods that should be considered when determinating the concentration of lead in the blood of kids and preagnat woman and any individual that is not exposed to lead in their occupation. Diario Oficial, 6/25/99.
Taxes
VENEZUELA
Double Taxation Treaty with US Postponed
The Venezuelan Chamber of Deputies has delayed ratification of a treaty that would avoid double taxation of foreign individuals in Venezuela while preventing the evasion of taxes related to income and inheritance. The treaty replaces the previously established period of twelve months required to qualify for permanent establishment in the country, requiring instead a period of 183 days. The treaty was successfully passed in the Senate but delayed in the Chamber due to a lack of specific information concerning the treaty’s contents.
6/23/99, Venezuela OnLine News.
Details of the treaty: http://www.conapri.org/legal.htm
Transportation
MEXICO
More Airports for Sale
The Department of Communications and Transportation (SCT) has been authorized to sell the stock of Grupo Aeroportuario del Sureste, S.A. de C.V. Such company operates the airports of Cancún, Cozumel, Huatulco, Mérida, Minatitlán, Oacaca, Tapachula, Villahermosa and Veracruz. The operation is part of the restructuring of all the airports in Mexico. Diario Oficial, 6/24/99.
