Volume 6, Number 17, Page 5
Recent Developments
AGRICULTURE, MINES & CATTLE INDUSTRY
Mexico
Procedures Listed
The Department of Agriculture, Livestock and Rural Development (SAGAR) has published a list of various procedures approved by the Department. The procedures are registered in the Federal Registry of Business Procedures (Registro Federal de Procedimientos Empresiales). Diario Oficial, 7/23/99.
Manual of Services Published
The Department of Commerce and Industrial Development (SECOFI) has published a manual of services to the public regarding the mining industry. Among other things, the manual points out the procedures and forms to request, notify, inform and notice the different issues and requirements established in the Regulation of the Mining Law. Diario Oficial, 7/28/99.
ANTITRUST/ANTIDUMPING
Mexico
Duties May Be Lifted
The Department of Commerce and Industrial Development (SECOFI) announced it is considering lifting antidumping duties on a chemical product from the U.S. The product,imported under tariff category 3903.19.02 and 3903.19.99, may be released from the payment of duties as of November 11. Diario Oficial, 7/26/99.
Antidumping Investigation Initiated
An antidumping investigation on steel imported from Ukraine has been initiated by SECOFI. The product entering the country under tariff categories 7213.91.01 and 7213.99.99 will be investigated. Diario Oficial, 7/27/99.
Decision On Duties Suspension Published
SECOFI published its final decision regarding research to determine the consequences of the cancellation of antidumping duties imposed on polyester fiber from Korea. In 1993, the Department imposed antidumping duties of up to 32 percent on such Korean products.
On June 19, 1998 SECOFI announced its intention to eliminate the above mentioned antidumping duties. Several Mexican companies requested from SECOFI an investigation of the possible effects of lifting the antidumping duties. SECOFI decided not to lift antidumping duties based on its belief that dumping practices would continue if said duties are canceled. Diario Oficial, 7/29/99.
Rules to Establish Country of Origin Amended
The rules to establish the country of origin in antidumping investigations were amended according to a resolution published by SECOFI. The original set of rules were published in August 30, 1994. Diario Oficial, 7/30/99.
Preliminary Decision Issued
The preliminary decision on an antidumping investigation on certain meat products imported from the U.S. was published by SECOFI. The request for the investigation was presented on June 30, 1998.
SECOFI resolved not to continue the investigation on antidumping of meat products imported under tariff category 0102.90.99. Preliminary antidumping duties of more than 200 percent were established. Diario Oficial, 8/2/99.
BANKING & CREDIT
Brazil
BACEN Adjusts Regulations on Foreign Exchange
On May 26, 1999, the Central Bank of Brazil (BACEN) published Resolutions 2606/99 and 2607/99, as well as Circulars 2891/99 and 2894/99 regarding foreign exchange regulations. Resolution 2606/99 establishes the limit for the total exposure of financial institutions and the other companies authorized by BACEN to operate in gold. The provisions are also valid for the companies directly or indirectly controlled by such companies. Additionally, the resolution establishes the limit for the total exposure of such companies in assets and liabilities linked to the foreign exchange variation. Circular 2894/99 establishes the procedures for the computation of such limit. Among other provisions, Resolution 2607/99 sets forth the minimum paid-up corporate capital and net worth of financial institutions and other companies authorized to operate by BACEN. Circular 2891/99 provides for deposit with BACEN of any excess amounts of long exchange positions, and consolidates the rules related to short foreign exchange positions.
BACEN released Circular 2896 on June 9, 1999, which modifies the regulations concerning foreign exchange contracts. The circular also modified the classification of the exchange transactions effected on the free exchange rate market and on the floating exchange rate market. Contributed by Pinheiro Neto Advogados, www.pinheironeto.com.br
Further Measures Implemented Against Money Laundering Operations
With the intention of preventing crimes involving money laundering and concealment of goods, rights and money, the President of the Financial Activities Control Council (Conselho de Controle de Atividades Financeiras – COAF) issued Resolutions 3 and 4 on June 2, 1999. These resolutions establish procedures to be complied with, respectively, by: (i) entities that directly or indirectly distribute money or any kind of assets or real estate properties through prize raffles or similar methods; and (ii) individuals or companies that deal with jewels or valuable stones and/or metals. Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Rules About Information Amended
The SHCP has published amendments to the information rules for entities operating IRA’s. Circular CONSAR 09-2 amends the rules for the information issued by the IRA’s administrators. Also published was Circular CONSAR 11-2, which amends the rules establishing information that must be included in the contract in order to operate an IRA. Diario Oficial, 8/3/99
CONSUMER LAW
Mexico
Measuring Devices Subject to Standards
Technical standards regarding metal measuring tapes have been published by SECOFI. NOM-046-SCFI-1994 establishes the specifications and testing methods of devices used for the measurement of length. Diario Oficial, 8/26/99
CUSTOMS
Brazil
Electronic Commerce
Further “Y2K” Guidelines Established by BACEN for Financial Operations
The Central Bank of Brazil (BACEN) issued Circular 2892/99 on May 26, 1999, concerning the millennium bug (Y2K), which establishes guidelines for implementation of planned solutions for financial operations. Such plans focus on the assurance of operational continuity and integrity of the information systems of Brazilian financial institutions, and other companies authorized to operate by BACEN. The provisions of Circular 2892/99 are also valid for consortium administrators. Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Vehicle Import Information Published
SECOFI published information regarding the import of cars, trucks and buses. The information provides is a list of the manufacturers, make and models of vehicles that may be imported to the border region. Diario Oficial, 8/26/99
New Free-Trade Agreement Published
Mexico and Chile have entered into a free-trade agreement according to a decree published by the Department of Foreign Relations. The text of the trade agreement was signed in Santiago de Chile on April 17, 1998, but until recently had not been approved by the Mexican Senate. Mexico and Chile had signed a previous trade agreement prior to NAFTA, but the new agreement covers new areas not included in its predecessor.
Thereafter, a notice concerning the trade agreement being into effect was published by SECOFI. The notice mentioned that as all of the requirements of the agreement have been met, the free trade agreement between Mexico and Chile entered into effect on August 1.
Also published was a resolution regarding customs matters of the trade agreement. The resolution published by the SHCP was followed by an Annex, which includes different forms such as a certificate of origin. Diario Oficial, 7/28/99 and 7/30/99.
Tax Rules on Foreign Trade Amended
A third set of amendments to the tax rules on foreign trade for 1999 were published by the SHCP. The original tax rules were published back on March 31. The rules deal with different issues such as the payment of import duties.
Also published on a different date were the annexes 1, 2 and 21 to the above mentioned tax rules. Diario Oficial, 7/30/99.
U.S., Canadian Products Subject to Duties
New import duties will be applied to several Canadian and U.S. products according to a notice published by SECOFI. The duties are established due to the fact that import quotas have been met, and NAFTA provides for import duties after such quotas are exceeded.
Various coffee products exported from Canada must now pay duties of 20 percent; while U.S. ham and other meat products will now pay a 20 percent import duty.
ENERGY
Mexico
Mexico to Drop Tariff on U.S. Natural Gas Imports
After the U.S. Department of Commerce (DOC) dismissed an oil-dumping case brought by a group of independent U.S. producers known as Save Domestic Oil, Mexico’s Department of Energy agreed on Tuesday to drop the four percent tariff on U.S. natural gas imports. No date has been set for the elimination of the natural gas tariffs, which have been in place since before the oil-dumping dispute erupted. Industry in northern Mexico should especially benefit from access to cheaper gas, as most of Mexico's natural gas imports come from the U.S.
On August 9, the U.S. DOC ruled against independent U.S. producers who accused, among other countries, Mexico and Venezuela of selling crude oil at unfair prices in the U.S. market. The DOC stated in their decision that Save Domestic Oil did not have the minimum amount of industry support required by U.S. law to initiate anti-dumping and countervailing duty investigations. Mexico had announced earlier this year plans to remove the natural gas tariff on July 1, but had reversed their decision on June 30 after the U.S. petitioners made their accusations. The U.S. is currently the leading market for Mexican crude oil exports.
GOVERNMENT ADMINISTRATION
Mexico
Constitution Amended
Several Amendments to the Mexican Constitution were published in two publications by the Department of the Interior (SEGOB). Amended were articles 58, 73, 74, 78 and 79. According to the new article 58, Senators must be at least 25 years of age the day of the election, lowering the required age from the 30 years previously required. Diario Oficial, 7/29/99 and 7/30/99.
INSURANCE
Mexico
Rules to present a summary of reserves from insurance companies has been issued in a circular published by the SHCP. Circular S-10.6.4 establishes the format to present a summary of the valuation of the reserve for obligations that must be met and have not been reported. Diario Oficial, 8/3/99.
LABOR LAW
Brazil
Anti-Gender Discrimination Measures Signed
On May 26, 1999, the President of Brazil signed Law 9799/99, whose main intent is to curb discrimination against working women. The measure adds various provisions to the Consolidated Labor Laws that specify and/or further elaborate upon previous provisions concerning access and protection of women on the labor market. Many provisions expressly included in the Consolidated Labor Laws had already existed in the Brazilian National Constitution and scattered laws. Pinheiro Neto Advogados, www.pinheironeto.com.br
TAXES
Mexico
New Tax Structure to Avoid Double Taxation on Maquiladoras
Mexico’s Executive Branch has proposed a new a regulatory framework for the maquiladora export industry that avoids double taxation and reduces the tax burden. U.S. companies operation in this sector are already paying an “operation burden” in Mexico, in addition to being subject to Rental Tax (ISR). U.S. tax authorities are now reviewing the pending points in order to avoid double taxation for North American companies that invested in the Mexican maquiladora export industry. Additionally, the import tariff on machinery and components will be eliminated or reduced starting November 1, 2000, in accordance with the programs aimed at promoting the electric and electronic sectors. Similar measures for export industries may also be initiated in the short term. The maquiladora industry as a whole has met projections for investment and job generation. In 1995 as well as the first trimester of this year, the number of establishments dedicated to export maquilas has grown more than 50 percent, from almost 2,100 to more than 3,200.
Rules Affecting Tax Payment Amended
The third set of amendments to the resolution giving tax breaks to those in the so called simplified regime have been published by the SHCP. The tax breaks are given, under certain conditions, to small contributors in the agriculture and fishing industries. Diario Oficial, 7/28/99.
TRANSPORTATION
Peru
Five Ports to be Sold in November
The president of Enapu Peru’s Board of Directors, Jose Dellepiane Massa, and the president of the Special Committee of Ports, Juan Lira Villanueva, met yesterday with regional investors and industrialists to stimulate local participation in the international public bidding process for the concession of the Ilo, San Martin (Pisco), Chimbote, Salaverry, and Paita seaports. In the meeting, the current situation of each port, as well as an account of the auction bases were disclosed. Lira Villanueva announced that the concession process for the ports were initiated August 2 with the sale of bases, and will proceed next with a pre-qualification of those bidders in accordance with the bases of the auction.
Pre-qualified companies will participate in the anticipated auction on November 24. Bidders must present two offers: a technical offer and an economic offer. The first contains the investment commitment in accordance with the necessities of each port and the eventual investments they intend to make. The second is the best economic offer by the right of concession, comprising more than 40 percent of the investment contained in their technical offer. El Comercio Peru, www.elcomercioperu.com.pe
REGIONAL
Border Development Plan between Peru and Ecuador Initiated
The Presidents of Peru and Ecuador announced a bilateral agreement that will inject over US$11 million into development of the Amazonia border region. In two months, the Peruvian army will initiate construction of a highway that will unite the border of Ecuador with Tiwinza. The agreement also includes locations where bridges are to be constructed for traffic between Peru and Ecuador. Approximately US$8 million in funding will be provided by the Andean Promotion Corporation, while the remaining US$3 million in resources come from private sector organizations and the Inter-American Development Bank, to be invested over a period of 10 years. Government representatives from both countries shall convene in November to discuss further development plans. El Universal.
