Volume 6, Number 22, Page 3
Recent Developments
AGRICULTURE, MINES & CATTLE INDUSTRY
Brazil
Prohibition on Lead Foil Food Packaging
On September 14, 1999, the Executive Branch sanctioned Law No. 9832, which prohibits the use of tin-and lead-foiled packages for food products, except for dry or dehydrated products (DOU-I of September 15, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Coconut Palm Seeds Subject to Standards
The Department of Agriculture, Livestock and Rural Development (SAGAR) has published technical standard NOM-067-FITO-1999, establishing the guidelines to manufacture and produce the special type of coconut palm seeds, pollen and the hybrid plant of coconut that resists the plague known as “amarillamiento letal.” Diario Oficial, 10/14/99.
ANTITRUST/ANTIDUMPING
Mexico
Antidumping Duties on EU Meat under Examination
The Department of Commerce and Industrial Development (SECOFI) has published a notice initiating a study, to determine the consequences of eliminating antidumping duties on meat entering Mexico from the European Union (EU). On April 26, SECOFI announced the possible elimination of the antidumping duties, allowing for petitions from parties interested in maintaining the duties. In response, the National Confederation of Livestock Producers among other associations requested an investigation on the possible consequences of eliminating such duties. SECOFI accepted the Confederation’s request and will evaluate eliminating an antidumping duty of 45.74 percent on certain types of meat from the EU, established by SECOFI through a resolution published on June 3, 1994. Diario Oficial, 10/11/99.
Chinese Toy Import Appeal Resolved
SECOFI has resolved an appeal to a previous decision regarding toys imported from China. On November 25, 1994, SECOFI issued a resolution imposing antidumping duties ranging from 2.58 to 351 percent depending on the type of toy, while several toys from two Chinese manufacturers were excluded from the imposition of duties. On September 14, 1998, SECOFI announced a procedure where, for certain products, an importer may request an authorization to import goods without paying any antidumping duties. Casa de Lloyd, S. de R.L. de C.V. requested on October 7, 1998, to import certain toys from China without paying antidumping duties. SECOFI denied permission to Casa de Lloyd, and the company appealed SECOFI’s decision on January 28, which was later affirmed.. Diario Oficial, 10/13/99.
Elimination of Duties on Several Chinese Products under Consideration
SECOFI has announced an investigation into whether eliminating certain antidumping duties will cause the resumption of antidumping practices of bicycles, bicycle tires, locks, pencils and other products from China. Existing duties may be eliminated if SECOFI decides dumping practices for such imported goods have discontinued. SECOFI’s notice includes a list of the tariff categories of the products being evaluated. Diario Oficial, 10/18/99.
U.S. Pork Decision Issued
SECOFI has published its final decision on an antidumping investigation on U.S. pork entering into Mexico. After an extensive analysis, SECOFI has decided to impose an antidumping duty of US$ 0.351 per kilogram of a pork entering Mexico under tariff category 0103.92.99. Diario Oficial, 10/20/99.
BANKING & CREDIT
Brazil
Authorization for Energy Related Bank Accounts Denominated in Foreign Currency
On September 10, 1999, the Central Bank of Brazil (BACEN) issued Resolution No. 2644, authorizing the opening and operation of bank accounts denominated in foreign currency in Brazil, when related to projects in the following areas: (i) prospecting, production, operation, processing and transportation of oil and gas; and (ii) generation and transmission of electric power. Companies in charge of the setup and development of these projects may open and operate such foreign currency-denominated accounts in banks duly accredited by BACEN to deal in foreign exchange (DOU-I of September 13, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Rules Affecting Bonds Institutions Published
The Department of the Treasury (SHCP) published a circular establishing new rules for the operation of bond institutions. Circular F-3.3.2 establishes the maximum retention limits for such institutions and gives the interpretation for the accumulation of liabilities for each person under bond. At the same time, the SHCP published two other circulars establishing a system to overview bond and insurance institutions. Diario Oficial, 10/13/99.
CONSUMER LAW
Mexico
Building Materials Subject to Standards
SECOFI has published technical standards related to the sale of building materials. NOM-135-SCFI-1999 establishes commercial information requirements that must be provided to consumers in establishments that sell building materials. The standards also establish minimum information requirements for inclusion in purchase orders, in order to provide consumers adequate information when purchasing such goods. Diario Oficial, 10/19/99.
CUSTOMS
Argentina
Import Measures Set for High Strength Polyester Textile Products
Argentina’s Ministry of Economy has established minimum standards for the import of products specified as High Strength Polyester Textiles, in line with MERCOSUR tariff category 5906.99.00. The new standards shall take effect March 5, 2000, with a five percent (5%) import limit during the interim. Boletín Oficial, Resolución 1101/99, 9/14/99
Brazil
Fines Promulgated for Imports Not Complying with BACEN Regulations
On August 23, 1999, Brazil’s National Congress promulgated Law No. 9817, establishing fines for irregular import transactions. Pursuant to Law 9817/99, importers are subject to payment of a daily fine to the Central Bank (BACEN), under the following conditions: (a) execution of exchange transactions in disagreement with the terms established by BACEN; (b) payment, in Brazilian currency, of imports slated for payment in foreign currency; (c) untimely payment of licensed imports payable in Brazilian currency; and (d) nonpayment of imports within 180 days counted from the first day of the month after the date scheduled for import payment as stated in the respective Import Declaration (Declaração de Importação – DI) (DOU-I of August 24, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
New Regulations for Import/Export of Goods for Oil & Gas Research Purposes
Brazil’s Executive Branch signed Decree No. 3161 on September 2, 1999, instituting a special system for customs and tax treatment of imports and exports involving goods intended for oil and gas research and prospecting activities (REPETRO). Subsequently, on September 6, 1999, the Federal Revenue Office issued Normative Ruling No. 112, establishing regulations for REPETRO’s customs and tax treatment (DOU-I of September 3 and 9, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Regulations of Customs Law Amended
The SHCP has published a decree amending the Customs Law Regulations. These amendments basically introduce several new articles to the Regulations, related to special authorizations that the Tax Administration Service may give to individuals or corporations to electronically process information required by the Service. Diario Oficial, 10/18/99.
ENERGY
Ecuador
Evaluation of Electric Sector Privatization Underway
A banking consortium including Salomon Smith Barney, Hagler Bailly, KPMG Peat Marwick, and Citibank has signed a contract with Ecuador’s privatization committee Conam to start the evaluation and eventual sale of electric power companies in Ecuador. The consortium will spend nine months presenting technical, operational and financial reports on each company, conducting valuation of their shares, designing a sale strategy and promoting the sale internationally, while the sale itself will take up the remaining six months of the contract. Strategies already under consideration are the grouping together of the companies on the basis of size, profitability or geographical location. The consortium will be paid a US$2mn fee plus 0.2799% of every company it sells, payable by the investor.
Among the companies that the consortium will be entrusted to sell are the Thermoelectric generation plants Termopichincha, Termoesmeraldas and Electroguayas; the Hydroelectric generation plants Hidropaute, Hidroagoyan and Hidropucara; the transmission company Compania Nacional de Transmision Electrica (Transelectric); and distributors Empresa Electricas Ambato, Azogues, Bolivar, Cotopaxi, Centro Sur, El
Oro, Emelgur, Esmeraldas, Emelnorte, Emelmanabi, Emelrios, Loja, Milagro, Morona Santiago, Quito, Regional del Sur, Riobamba and Sucumbios.
ENVIRONMENT
Brazil
New Sanctions for Statutory Polluters
On September 21, 1999, the Brazilian Executive Branch signed Decree No. 3179, which enumerates a new regimen of sanctions to be imposed against conduct and activities that cause environmental damage. All actions or omissions that violate the environmental statutory rules will be treated as an administrative breach, punishable with penalties ranging from a simple warning to restriction of rights, without prejudice to other penalties prescribed by law (DOU-I of September 22, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Organic Compost Standards Clarified
The Department of the Environment, Natural Resources and Fisheries (SEMARNAP) has published a clarification to technical standards related to volatile organic composts. NOM-123-ECOL-1998 establishes the limits of such composts in the manufacture of certain types of paints. The technical standard was first published on June 14. Diario Oficial, 9/29/99.
Program to Grant Subsidies for Commercial Forestry
SEMARNAP has announced the rules for granting subsidies under the Program for the Development of Commercial Forestry Plantations. The program seeks to temporarily grant subsidies to compensate for certain costs to establish and maintain commercial forestry plantations, in efforts to develop a sustainable model for such type of plantations and contribute to decrease the degradation of the ground in Mexico. Diario Oficial, 10/12/99.
INSURANCE
Mexico
Pension Funds Subject to New Rules
The SHCP published a circular establishing the forms for the valuation of the technical reserves of pension funds. According to the circular, among other things, insurance companies will have to present a briefing of the results of their current portfolio valuations within 20 days following the closure of each month. Diario Oficial, 10/15/99.
MEDICINE & HEALTH
Brazil
Further Restrictions Imposed on Alcohol, Tobacco, Medicine Advertising
Brazil’s Executive Branch signed Decree No. 3157 on August 27, 1999, which modifies Decree 2018/96 and regulates Law 9294/96, both dealing with restrictions on use and advertising of tobacco products, alcoholic beverages, prescription drugs and other medicines, as well as agricultural pesticides. Article 5 of Decree 3157/99 was also added as a rider, permitting smoking in Brazilian airplanes and other vehicles intended for passenger transportation only one hour after departure (DOU-I of August 28, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br
Mexico
Epidemics Vigilance System in Force
The Department of Health (SSA) has published a standard related to the application of a national system to overview epidemic illnesses in the country. NOM-017-SSA2-1994 establishes the guidelines and operation procedures for the National System of Epidemic Vigilance, and set up the criteria for the system’s application in the events or emergency situations that could affect or risk the public health. Diario Oficial, 10/11/99.
SECURITIES
Mexico
Rules Regarding Information Published
The SHCP published several provisions regarding information that must be presented to the Banking and Securities National Commission, to public investors and in certain cases to the stock exchange. According to the publication by the SHCP, the rules tend to follow international practices. Diario Oficial, 10/14/99.
TAXES
Argentina
VAT Modified for Financial Loans, Industrial Promotion
Argentina’s Federal Administration of Public Revenue has recently issued modifications to existing Value Added Tax (Impuesto al Valor Agregado – IVA) provisions. Resolution 680/99 allows tax exemption of interest payments on home-improvement or construction loans, as per Article 7 of the 1997 Value Added Tax Law. Resolution 672/99 modifies the tax credit formula for industrial promotion activities, previously set forth in General Resolution No. 4212. Boletín Oficial, Resoluciones Generales 672/99, 9/3/99; 680/99, 9/17/99
Mexico
Further Annexes to Tax Rules Published
Several annexes to the tax rules for 1999 have been published by the SHCP. Foremost among the published tax annexes are 2, 5 and 7, which list the establishments authorized by the SHCP to print invoices as well as those companies that may print their own invoices, and also lists stocks, bonds and other securities considered by the SHCP as publicly traded. The SHCP subsequently published Annexes 8, 14, 15, 17 and 18 a few days later. Diario Oficial, 10/11/99; 10/12/99; 10/15/99; 10/18/99.
Seventh Amendment to 1999 Tax Rules Published
The SHCP published a clarification to the amendments of the tax rules for 1999. The clarification basically deals with a typo from the sixth set of amendments to the tax rules for 1999 published on September 8. The SHCP has also published the seventh set of amendments to the tax rules. Diario Oficial, 9/30/99; 10/8/99.
