RECENT DEVELOPMENTS

 

AGRICULTURE, MINES & CATTLE INDUSTRY

Argentina

Meat Export Regime Modified

Argentina's Department of Agriculture, Livestock, Fishing, and Alimentation has issued several resolutions involving the importation of frozen beef products. The Department has allocated quotas for export to the European Union and the United States through June 2000 among national exporters. In addition, a tribunal was established to review the evaluation and selection of joint ventures between exporting firms and livestock breeding associations and producers. As of December 1999, the tribunal had approved the "Hilton Quota" methodology for the selection of new joint ventures. Boletín Oficial, Resoluciones 726/1999, 11/22/99; 780/1999, 11/30/99; 772/1999, 12/2/99; 830/1999, 12/15/99

Protected Mining Export List Expanded

The Department of Industry, Commerce and Mining has expanded the list of mining exports which fall under the protection of Law No. 24.196, amending the ex-Department of Mining Resolution No. 8/1994 and subsequent modifications. A list of protected MERCOSUR tariff categories was published by the Department, including but not limited to raw materials such as aluminum oxide, calcium cyanide, natrual cement resins, and diethylamine. Boletín Oficial, Resolución 859/99, 11/22/99

Quotas Assigned for Various Peanut Products Imported to U.S.

The Department of Agriculture, Livestock, Fishing, and Alimentation has modified requirements for the exportation of various peanut products to the United States. Exporting firms are now required to have complied with all tax obligations before soliciting the authorization to use their share of the U.S. export quota. Quotas on peanut "paste" and confectionary (candied) peanuts were then divided, assigned and published to various firms for export during 2000. Boletín Oficial, Resoluciones 720/1999, 11/18/99; 783/1999, 12/1/99; 16/1999 & 17/1999, 1/3/2000

ANTITRUST/ANTIDUMPING

Argentina

Dumping Investigation of Korean Textile Exports Opened

Argentina's Department of Industry, Commerce and Mining announced the start of an investigation into the alleged dumping of dyed acetate textiles originating from South Korea under MERCOSUR tariff category 5408.22.00. On September 7, 1999, the Foreign Commerce Office requested the investigation, determining that sufficient allegations of harm were raised by the numerous solicitations from Argentine firms, who are seeking a duty of 14.47 to 39 percent. Firms under investigation have sixty (60) days to file the proper certificates of origin with the Customs Office. Boletín Oficial. Resolución 880/1999, 12/2/99

Investigation into Italian Ceramics Completed

The Department of Industry, Commerce and Mining has completed an investigation into the alleged dumping of ceramic floor tile originating from Italy under MERCOSUR tariff category 6907.90.00. Upon the solicitation of Argentine firm Cerámica Zanon S.A.C.I. y M., an investigation was opened on September 22, 1998 by the department. After the National Commission of Foreign Commerce determined in September of 1999 that the national ceramic floor tile industry suffered harm from Italian exports, the Ministry of Economy and Public Works & Services rendered their final decision, establishing minimum FOB export values ranging from US$ 7.80 to 10.90 per square meter. Exporters declaring an FOB price below the minimum value shall be assessed and antidumping duty equivalent to the difference between the declared price and the minimum value. Boletin Oficial, Resolución 1385/99, 11/17/99

Bolivia

Response to Chile's Protection of Vegetable Oil Imports Under Contemplation

The effects of Chile's imposition of provisional safeguards on the importation of vegetable oils, among other products, have begun to emerge. Bolivian soy export sales dropped US$1.2 million within the first month of implementation. Notwithstanding the hurdle that these Chilean safeguard measures represent for Bolivian oils, exporters have not rejected the possibility of redirecting the sale of the products, which in 1999 registered a sales volume of US$8.5 million, to other foreign markets capable of absorbing domestic products without trade restrictions. In spite of the threat, however, Bolivia has not yet taken diplomatic action to resolve the issue. Representatives of Bolivia's Ministry of Foreign Commerce and of the affected sector argue against Chile's decision to impose a unilateral measure that is not upheld by the framework of the ACE 22, through which Bolivia is granted 100% preferential treatment for a US$10 million quota of refined oils. La Razón

Mexico

Decisions Rendered on Hydrogen Peroxide Imports from U.S.

Two separate decisions were rendered by Mexico's Department of Commerce and Industrial Development (Secretaria de Comercio y Fomento Industrial - SECOFI) relating to hydrogen peroxide imports originating from the United States under tariff category 2847.00.01. A final decision revoking compensatory duties for peroxide exports from Degussa Huls Corporation and Solvay Interox, Inc. was affirmed, while a preliminary decision which imposed a compensatory duty of 34.5 percent on exports from FMC Corporation was revoked. Diario Oficial, 1/20/2000

U.S. Pork Antidumping Appeals Resolved

SECOFI has denied two separate administrative appeals for revocation of provisional antidumping duties on pork imports originating from the United States under tariff category 0103.92.99. Provisional duties of US$ 1.08 per kilogram were previously imposed in preliminary decisions on two antidumping investigations, which were later reduced to approximately US$ 0.35 per kilogram in clarifications published June 16 and 23, 1999. Diario Oficial, 1/25/2000

BANKING & CREDIT

Argentina

Term Limits in Central Bank Charter Modified

In efforts to maintain stability in Argentina's financial market, the Executive Branch approved modifications of Articles 7 and 36 of Law No. 24.144, Charter of the Central Bank, relating to the nomination, selection, term, removal and qualifications of central bank directors and trustee. A term of six years was set for each director, while trustees were limited to a service term of four years, both of whom must now be confirmed by the Argentine Senate. Boletín Oficial, Decerto 1373/99, 11/29/99

Dominican Republic

Bonds Project and Monetary Code Passed

Recently the Dominican House of Representatives approved two finance proposals aimed at providing greater financial stability. One authorizes the Executive Branch to print, issue and negotiate bonds with a value of RD$5 billion, destined to refinance the internal debt of the State and the independent State institutions within the private sector, subject to credit verification. Another, the Monetary and Financial Code project, passed after more than six years of rumbles in the Dominican Senate. The Code regulates the operation of the Multibanks System and the new financial organizations resulting from globalization. Opponents of the bill included the Association of Foreign Investment Companies, who maintain that the bill's limitation on free transfer of funds prevents the country from being recommended securely in the context of free monetary convertibility; as such this bill was vetoed by the Dominican President. Russin, Vecchi & Heredia Bonetti

COMMUNICATIONS

Argentina

Regulations for Radio Station Operations Augmented

Argentina's Department of Communications has published additional norms and regulations concerning authorization of the installation and operation of radio stations with broadcast frequencies of approximately thirty (30) Mhz. These norms complement previous Resolution 1600/1992, which set forth basic norms of the operation of such radio services and systems. Boletín Oficial, Resolución 3205/1999, 11/25/99

Mexico

Radio Station Operating Norms Modified

Mexico's Department of Communications and Transportation (Secretaria de Comunicaciones y Transportes - SCyT) has modified NOM-01-SCT1-93, which sets forth specifications and requirements for the installation and operation of radio stations. Modifications primarily address the transmission equipment and frequency emission specifications, in efforts to reduce interference between competing transmissions. Diario Oficial, 1/31/2000

CUSTOMS

Argentina

Commercialization and Personal Transport of Domestic Agricultural Products Authorized

In recognition of the increased international movement of people and goods, Argentina's National Agroalimentary Quality and Sanitation Service has authorized the commercialization of agricultural products to people traveling from Argentina to other countries. Such products must be directly sold in Argentina for personal use, cannot be subsequently resold outside Argentina, and are to be transported via personal luggage. Upon filing of solicitations by commercial firms, the Service will determine within sixty (60) days the necessary requirements and procedures for selling each product to consumers intending to bring said product outside of Argentina, in compliance with the present resolution. Boletín Oficial, Resolución 1310/1999, 12/6/99

Safeguard Measures on Taiwanese Polyester Imports Amended

Argentina's Ministry of Economy and Public Works & Services amended Resolution No. 1293/99 on November 12, 1999, which applied safeguard measures on polyester thread originating from Taiwan under MERCOSUR tariff categories 5402.33.00, 5402.42.00, 5402.52.00, 5402.59.00, 5402.62.00 and 5402.69.00. The amendment sets an annual kilogram quota on imports under each category.

A separate investigation initiated by the Department of Industry, Commerce, & Mining into providing similar safeguards to new rubber bicycle tire exports was closed for lack of foundation. Boletín Oficial, Resoluciones 851/1999 & 1386/1999, 11/19/99

ENERGY

Dominican Republic

Electricity Law Modifications Passed to Senate

After more than five years of deliberation, the Dominican Congress was to pass the General Law of Electricity bill with modifications to the Senate within the 60 days extension approved by the legislative chambers. Approval of this project will enhance transparency in the national energy power system after the capitalization process, leaving for debate whether contracts for privatization of the Dominican Electrical Corporation need Congressional ratification. Russin, Vecchi & Heredia Bonetti

Mexico

Natural Gas Norms Published

Mexico's Department of Energy (Secretaria de Energia - SE) published two norms relating to the distribution of natural gas. NOM-006-SECRE-1999 requires the odorization of natural gas, while NOM-008-SECRE-1999 sets forth minimum external corrosion limits for the steel pipeline used to transport natural gas, for both submerged and above-ground pipelines. Diario Oficial, 1/27/2000

Venezuela

Infrastructure Concessions Agreement with Brazilian Company Surprises Venezuelan Firms

Venezuelan companies were taken aback by the government's decision to select Odebrecht, a Brazilian firm, as the sole private sector candidate for a domestic infrastructure development agreement valued at several US$ billion. The domestic private sector contends that the projects, which include a major gas compression contract, should have been allocated through public bidding. In addition, the government had promised local capitalists participation in the Sercogas project, which will call for US$5 billion over the next ten years. El UniversAL

SECURITIES

Chile

Chilean Stock Exchange to Commence International Operations

The Santiago Stock Exchange (Bolsa de Comercio de Santiago - BCS) announced that it will begin to trade shares and certificates of deposit (CD) of foreign entities on February 15, 2000. For such purposes, Chilean stockbrokers were issued a copy of Public Notice #1.488 dated February 9, along with an Operations Manual of the Foreign Stock Market approved by the Stocks and Securities Superintendency (Superintendencia de Valores y Seguros - SVS) on December 10, 1999. The "off-shore" market is considered to be outside of Chile for all regulatory purposes, so Chile's restrictions on the entry and exit of foreign capital and taxes on the capital earnings of foreign investors will not apply. The creation of an international stock market within the BCS will allow the public offering, pricing and trading of foreign securities such as stocks, shares of international investment funds and CDs. American Depository Receipts of Chilean firms will also be traded. El Mercurio

TAXES

Brazil

Tax on Trade Promotions Reduces Foreign Participation

Brazilian companies' foreign trade promotions (industrial fairs, market research, advertising, etc) are paying 15% in income tax at the source. As a result, domestic firms such as Santa Terezinha, a Brazilian manufacturer of electronic parts which exports $4 million per year, are forced to reduce their participation in international events. This regimen is a strong contrast to the government debate over export incentives. Export conglomerates in the garment sector are also very most concerned, as working plans consisting of three-year spending forecasts will have to be revised. Gazeta Mercantil

Colombia

SBE's Decry Imposition of New VAT Regime

Reclassification of specified commercial establishments proposed by Colombia's Department of Internal Revenue and Customs (Dirección de Impuestos y Aduanas Nacionales - DIAN) is opposed by small business owners, who claim the transition from a simplified tax regime to a common tax regime would be very detrimental to some commercial operations. The resale sector was among the first to express its concern to the DIAN, addressing the uncertainty of how they're expected to invoice and charge the 15% value-added tax. Although aware of the impossibility of eliminating the proposal, the National Wholesaling Association announced that some merchants might present a lawsuit before Colombia's administrative court if they consider themselves to be classified incorrectly. The private sector maintains that allowing the DIAN to estimate merchants' revenues will lead to arbitration. Shopkeepers who are not used to invoicing will be most affected by the reclassification. However, the DIAN's intentions are not to go after small business proprietors in the lower income brackets, but those who avoid collection of the value-added tax. The agency is targeting well-known restaurants, independent professionals, merchants and large-scale shopkeepers complying with the income level and administrative requirements of the common tax regime. El Tiempo

Peru

Elimination of Fuel Sales Tax Proposed for Foreign Purchasers

A consultant representing the Peruvian Airline Enterprise Association (Asociación Peruana de Empresas Aéreas - APEA) proposed a sales tax elimination on fuel purchases made by foreign commercial airlines to improve the competitiveness of services offered by Peruvian firms. In accordance with Peru's General Sales Tax Law, foreign airlines exclusively providing international cargo transportation services to and from Lima are currently the only firms exempt from this tax. Citing Legislative Decree 775 (published in December 1993), cargo transportation service providers with flights to and from the country's exterior and providers of complementary services are exempt from this sales tax, so long as the purchases are made within the primary customs area. Therefore, the law shelters only those airlines with cargo vessels, which only represent about 5 or 6 international airline firms. In addition, Cielos de Peru is the only domestic firm currently benefitting from the law; however, two foreign airlines (Aeroméxico and Lan Chile) recently benefited from a ruling by Peru's Judicial Authority obligating Petroperú to supply them with Turbo A1 fuel tax-free, so long as it is consumed on international flights. APEA concluded that the sales tax exemption should be granted to all other foreign airlines offering single-vessel passenger and cargo transportation services, so as not to create tariff discrimination. Expreso Online