Volume 6, Number 18, Page 3
Recent Developments
AGRICULTURE, MINES & CATTLE INDUSTRY
Argentina
Opposition to U.S. & E.U. Agricultural Subsidies Intensifies
Grupo Cairns, a coalition of 15 agricultural nations headed by Argentina and Australia, wants the issue of agricultural subsidies to be addressed at the Worldwide Organization of Commerce’s Millenium Round of negotiations to take place on November in Seattle. Claiming losses of US$360 billion due to the recent decline in agricultural prices that have provoked agricultural subsidies by the European Union, United States, and Japan, Grupo Cairns has asked for the “elimination of the subsidies on exports and for internal aid measures that distort commerce.”
The crisis has acquired global proportions, as Brazilian producers petition their Congress for a remission of its debts, something already obtained by Argentine farmers after several protests and marches. Meanwhile, Uruguayan producers remain on strike. Other members of Grupo Cairns include Canada, Columbia, Chile, Fiji, the Philippines, Indonesia, New Zealand, Malaysia, Paraguay, Thailand, and South Africa. Clarín, 8/30/99, http://www.clarin.com/diario/99-08-30/o-01401d.htm
ANTITRUST/ANTIDUMPING
Mexico
Appeal Resolved
The Department of Commerce and Industrial Development (SECOFI) has resolved an appeal to an antidumping investigation on peaches imported from Greece. On November 25, 1998 SECOFI published its final decision on an antidumping and countervailing duties investigation, deciding not to impose duties on the Greek products. On February 15, Conservas La Torre, S.A. de C.V. appealed SECOFI’s resolution. SECOFI confirmed this final decision under tariff category 2008.70.01. Diario Oficial, 8/5/99.
SECOFI’s Decision on Chinese Toy Imports Affirmed
An appeal of a previous SECOFI decision requiring several Chinese imports to first pay antidumping duties before entering the country has been resolved. On November 25, 1994, SECOFI published its final decision on an antidumping investigation imposing duties on several products imported from China, comprised mostly of toys. The resolution imposed antidumping duties to several products but also made exceptions to imports from certain companies.
On October 7, 1998 Casa de Lloyd, S. de R.L. de C.V. requested SECOFI’s authorization to import different products from China that were not subject to the antidumping duties. Under notice UPCI.310.98.1999, SECOFI decided not to authorize the importation of several products from China without the due payment of antidumping duties. Casa de Lloyd appealed the notice. Thereafter, SECOFI decided to uphold its decision. Diario Oficial, 8/6/99.
Mexico
Proposed Cancellation of Antidumping Duties for Chinese Steel Products Denied
SECOFI published a final decision based on a study to determine the consequences of the cancellation of antidumping duties on several products from China. On April 15, 1993 SECOFI applied antidumping duties on several steel products from China. On April 29, 1998 a Mexican company requested that SECOFI examine the possible consequences of this cancellation of antidumping duties. After a hearing, SECOFI decided not to cancel the antidumping duties. Diario Oficial, 8/9/99
Binational Panel Consultations Dismissed
Two consultations dealing with requested binational panel revisions in two different antidumping cases were dismissed by SECOFI. On June 14 SECOFI published a notice of consultation to the parties in a case regarding hot rolled steel, since LTV Steel Company, Inc. had requested a binational panel to review the case under the rules of NAFTA. Later the company withdrew its request for the panel revision and SECOFI dismissed the notice for consultation. A similar notice of consultation was dismissed on a antidumping case involving rolled steel. Diario Oficial, 8/10/99.
BANKING & CREDIT
Brazil
Import Payment Regulations Modified
Circular 2898/99 was published by the Central Bank of Brazil (BACEN) on June 23, 1999, which alters the regulation for payments of long-term Brazilian imports. The regulation affects all imports with terms of up to 360 days (DOU–I, June 25, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Rules for Money Exchange Agencies Published
Mexico’s Central Bank published new rules for money exchange agencies. The rules relate to the operations by money exchange agencies dealing with foreign currencies and also precious metals. Diario Oficial,
COMMUNICATIONS
Brazil
Licensing Procedures Approved
The Ministry of Culture issued Ordinance 193/99 on June 11, 1999, approving procedures for the licensing and registration of cable TV system programmers who develop programs for exhibition on a channel broadcasting independently produced Brazilian movies and films (DOU–I, June 17, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
CONSUMER LAW
Mexico
List of Labs and Other Certification Agencies Amended
SECOFI published an amendment to a list of different entities with certification authorities. The list was originally published on June 7 and 11, 1999. The list includes certification agencies, testing labs, calibration labs and verification unites credited and approved by SECOFI until January 14. Diario Oficial, 8/11/99.
CUSTOMS
Brazil
Eligibility Requirements for Simplified Regimen Clarified
In efforts to further simplify the customs tax regimen, Brazil’s Ministry of Finance issued Ordinance 156/99 on June 24, 1999, establishing the eligibility requirements and conditions for the Simplified Tax Regimen ("Regime de Tributação Simplificada – RTS") instituted by Law Decree No. 1804 of September 3, 1980. Pursuant to the measure, the RTS may be used at customs clearance for import of goods included in postal orders or international offshore air remittances addressed to individuals or legal entities, with a value up to US$ 3,000.00 or the equivalent amount in other currency, upon payment of the import duty ("Imposto de Importação – II") calculated at the rate of 60 percent, regardless of the tax classification of such goods (DOU–I, June 25, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Quota Rules Published
SECOFI published the 1999 quota rules for importing certain lactose products. The products covered by the quota rules enter Mexico under tariff category 1901.90.03. Form SECOFI-03-011-1 must be filled out and presented to SECOFI in order to be assigned part of the quota. Also published were the minimum quota to import under NAFTA powdered milk from the U.S., as well as regulation for importing duty-free powdered milk from member countries of the WTO. Diario Oficial, 8/4/99.
Natural Gas Import Duties Eliminated
According to a decree published by SECOFI, import duties for natural gas are to be eliminated. The General Import Tax Law had established duties of ten percent on natural gas, but according to the decree, the duties will be eliminated. Eliminated are the duties for natural gas imported under tariff category 2711.21.01 of the General Import Tax Law. Diario Oficial, 8/16/99.
ENVIRONMENT
Mexico
Emissions Standards Published
The Department of Environment, Natural Resources and Fisheries (SEMARNAP) published technical standards dealing with emissions from automobiles. NOM-041-ECOL-1999 establishes the maximum permissible levels of emissions of carbon monoxide and other components to the air from automobiles using gasoline. Diario Oficial, 8/6/99.
INSURANCE
Mexico
Rules for Permit Published
The SHCP published new rules to obtain a permit to be registered as a reinsurance agent. Parties interested in obtaining the permit should present several documents listed in the rules at the Comisión Nacional de Seguros y Fianzas, Oficialía de Partes, Fernando Villalpando 18, Col. Guadalupe Inn, Delegación Alvaro Obregón, México, D.F. 01020.
Another circular was published concurrently, establishing the rules which require reinsurance agencies to present to the National Commission on Insurance and Bonds a copy of an insurance contract issued by the reinsurance agencies against possible errors in its operations. Also published was a list of the agencies involved in rating reinsurance and insurance companies. Diario Oficial, 8/20/99.
TAXES
Brazil
Double Taxation Treaty with Portugal Terminated
On June 17, 1999, the Secretary of the Federal Revenue Department issued Declaratory Act /99, which terminated the convention to avoid double taxation signed between Portugal and Brazil, as approved by Decree No. 69393 of October 21, 1971. Under this declaratory act, the convention will expire on January 1, 2000. As a result, the tax treatment provided for in this declaratory act will no longer apply for: (i) income subject to withholding taxation to be paid or credited on or after January 1, 2000; and (ii) amounts to be received or credited on or after January 1, 2000 related to the income tax assessment on other income (DOU–I, June 30,1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Financial Transaction Taxation Measures Modified
Brazil’s Ministry of Finance has issued a series of measures aimed at taxation of financial transactions. First, Ordinance 134/99 was issued on June 11, 1999, providing for the Provisional Contribution on Financial Transactions ("Contribuição Provisória sobre Movimentação ou Transmissão de Valores e de Créditos e Direitos de Natureza Financeira – CPMF"). According to the ordinance, the CPMF required of individuals and legal entities listed in Article 5 of Law 9311/96 will be: (i) assessed daily or on each transaction; (ii) verified through consideration of the generating facts occurring as from the prior Thursday to the current week’s Wednesday; and (iii) paid on or before the third working day of the week subsequent to the end of the accrual period (DOU–I, June 11, 1999). In conjunction, the Secretary of the Federal Revenue Department issued Normative Rulings 66/99 and 67/99 on June 14, 1999, providing respectively for: (i) the collection of CPMF; and (ii) the exemption of CPMF for nonprofit social welfare entities (DOU–I, June 15, 1999).
Ordinance 264/99 was issued on July 1, 1999, which establishes that the Tax on Financial Transactions (Imposto sobre Operações de Crédito, Câmbio e Seguro, ou Relativas a Títulos e Valores Mobiliários – IO") will be assessed on assets, bonds and securities transactions at the rate of 1 percent per day, to be assessed on the redemption, assignment or rollover value, limited to the total income, and subject to the term of the transaction, as per the table attached to the ordinance (DOU–I, July 2, 1999). Ordinance 157/99 was issued on June 24, 1999, establishing that the provisions of Ordinance 56/99--which altered the rates of the Tax on Financial Transactions for exchange transactions--will apply to triggering events on or before December 31, 1999 (DOU–I, June 25, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
TOURISM
Cuba
Hotel Operations in Cuba under Investigation
On August 12, the Spanish hotel group Sol Melia announced they were under investigation from the U.S. State Department for operations in Cuba, under the provisions of the Helms-Burton Act. The State Department confirmed that the investigation began last month.
A Sol Melia spokesman speaking in anonymity said U.S. authorities so far have only requested information for what was deemed a "routine" matter, which has been going on since 1996, and added that Sol Melia doesn't own the hotels it manages in Cuba. Sol Melia manages 54 hotels in the Latin American region, 12 of which are in Cuba.
The 1996 law punishes foreign companies that conduct business in Cuba involving seized U.S. property. Possible sanctions could include denial of U.S. entry visas for Sol Melia executives. The U.S. has regularly waived the sanctions since the law went into effect in March 1996. If the U.S. does decide to punish Sol Melia, it would likely spark a diplomatic row with Spain and the European Union, which remain opposed to the Helms-Burton Act. Sol Melia already enjoys the support of both the Spanish government and the EU Commission, according to their spokesman.
TRANSPORTATION
Brazil
Port Infrastructure Project to Receive Financing from IFC
The International Finance Corporation (IFC), an arm of the World Bank, is financing the construction of a container terminal at the Rio Grande port, situated in the southern state of Rio Grande do Sul. The project is valued at US$31 million. It is the first deal of its type at a Brazilian port, according to Wilson Sons, the leader of a consortium with the rights to the container terminal. Wilson Sons will administrate the project along with the IFC. A total of $51 million will be invested in the Rio Grande project, with the first installmen of, $17 million released by IFC last week. The loan will be paid out over nine years at the London Interbank Lending Rate (Libor). (Lívia Ferrari, Gazeta Mercantil - Translated by Ana Paula Mano)
VARIOUS
Chile
Bilateral Pact Negotiations On Track
Negotiations for a bilateral commercial pact between the US and Chile have begun in earnest with the recent visit of the U.S President’s special envoy, John MacKay. Formal negotiations will start in September with a meeting of the Forum of Cooperation of Pacific-Asia (APEC). The agenda will cover all themes related to commercial negotiations, including focus on sensitive topics such as the environment and labor relations, two areas that previously have caused difficulty with the “fast track” negotiations between the two nations. El Mercurio, 8/23/99.
