Mexico

Final Decisions Issued on Galvanized Steel Imports

SECOFI has published the final decision on an antitrust investigation into galvanized steel plate imports to Canada, originating or exported from Mexico, Russia, China, and South Africa, as rendered by a binational panel constituted under Article 1904 of the NAFTA. The majority decision from an earlier investigation by the Canadian International Trade Tribunal (CITT) was affirmed, which held that no material harm to national industries from alleged predatory practices occurred. This decision was later clarified to apply towards imports of carbon steel sheets as well. Diario Oficial, 1/26/2000; 2/8/2000

Investigation into Beer Monopoly Practices Initiated

Mexico's Federal Competition Commision has initiated an investigation into possible monopolistic practices in the domestic beer retail market, as authorized under Article 27 of the Federal Economic Competition Law. Allegations made by the commission focus on price fixing agreements between competitors in the distribution and commercialization phases. The investigation shall proceed for a period between 30-90 days, starting from the date of publication in the Diario Oficial, during such time aggrieved parties can present evidence which substantiate allegations of harm. Diario Oficial, 1/24/2000

BANKING & CREDIT

Brazil

BACEN Lifts Limits on Foreign Loans for Financial Institutions

On December 29, 1999, the Central Bank of Brazil (BACEN) issued Resolution No. 2.683, allowing financial institutions to raise funds abroad for purposes of on-lending on the domestic market. Before the issuance of Resolution 2683/99, financial institutions were generally limited as to how they could use funds raised abroad on the domestic market; the present resolution lifts all such limits. BACEN's main purpose is to simplify the procedure for on-lending and also give access for domestic companies to lower interest rate financing, thereby forcing domestic interest rates down.

In addition, BACEN issued Circular No. 2.956 and Circular Letter No. 2.889 on December 29 and 30, 1999, simplifying the registration procedures for direct loans taken out by Brazilian companies abroad. The new regulations aim at facilitating access to cheaper funding for Brazilian companies abroad. (DOU-I, December 30 and 31, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br

Rules for Equity Participation in Brazil and Abroad Modified

The Central Bank of Brazil (BACEN) issued Resolution No. 2.674 on December 21, 1999, establishing new rules for equity participation (including opening of branches and representative offices) in Brazil and abroad by Brazilian financial institutions. Generally speaking, under these rules consolidation of such participation abroad and in Brazil on the financial statements of the financial institution is now required. Also, BACEN will have access to information regarding such investment, especially if such equity participation is located in a tax haven. The purpose of Resolution 2674/99 is to afford greater transparency to equity investments made by financial institutions (DOU-I, December 23, 1999). Pinheiro Neto Advogados

COMMUNICATIONS

Mexico

Requirements for Radio and Television Broadcasting Operations Modified

Mexico's Department of Communications and Transportation (Secretaría de Comunicaciones y Transportes - SCT) has modified the specifications and requirements for the operation of FM radio stations and VHF & UHF television stations. Modifications to NOM-02-SCT1-93 correspond with those made to NOM-01-SCT1-93 regarding the allowable frequency emission and interference levels for AM radio stations, while similar modifications to NOM-03-SCT1-93 were adopted regarding control over transmission sites, coverage ranges, channel frequencies, and audio specifications for VHF and UHF television broadcasts. Diario Oficial, 2/1/00; 2/2/00

CONSUMER LAW

Mexico

Quality Control Standards for Tequila Enhanced

In efforts to improve quality control of nationally produced alcoholic beverages, as well as to protect the product's distinct reputation, SECOFI has modified NOM-006-SCFI-1994 relating to minimum quality assurance standards for Tequila. SECOFI is now authorized to conduct periodic on-site inspections of Tequila producers and bottlers, so as to provide on-site verification of compliance with existing quality control procedures. Diario Oficial, 2/1/2000

CUSTOMS

Brazil

Regulations on Temporary Admission System for Imported Goods Enacted

The Secretary of the Federal Revenue Department signed Normative Ruling No. 150 on December 23, 1999, regulating the temporary admission of imported goods. Specifically, the ruling applies to goods that are imported on a temporary basis for fulfillment of a special purpose, such as project financing. Under this ruling, goods that are imported under the temporary admission system are exempt from payment of all import taxes and duties otherwise due in a normal importation. Normative Ruling 150/99 also sets forth the conditions that qualify an import as a temporary admission (DOU-I, December 23, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br

Mexico

Further Designations of Steel Tariff Categories Subject to SECOFI Permission
In conjunction with previous such resolutions, SECOFI has published modifications to the list of tariff categories which are subject to SECOFI review. Merchandise imported or exported from Mexico under these designated categories are subject to additional SECOFI permit requirements. Current designations target several laminated steel products originating from Brazil, China, India, and Turkey among several other Pacific Rim and Middle Eastern countries. Diario Oficial, 1/21/2000

Venezuela

Chamber of Commerce Supports Free Port Vehicle Amnesty Petition

The president of Venezuela's Chamber of Commerce, Production and Free Port (Cámara de Comercio, Producción y Puerto Libre - CCPPL) confirmed the Chamber's full support of Nueva Esparta, Venezuela's most industrial state, in their amnesty petition for extension of the presentation term for cars and other vehicles included in Article 13 of the new Regulatory Decree. This decree affects 2,500 automobiles and hundreds of motorboats and sailing vessels. This announcement was made during a meeting with the technical coordinator of the Pro-Amnesty Committee for Free Port Vehicles (Comisión Pro-Amnistía para los vehículos del Puerto Libre - CPPL). Numerous petitioners visited the headquarters of Aziza Motors to sign the document that will be delivered to the Customs Director and then go before the National Legislative Assembly (Asamblea Legislativa Nacional - ALN) for final approval. La Hora Digital

ENERGY

Brazil

New Oil Import Regime Established

Brazil's Executive Branch signed Decree No. 3.312 on December 24, 1999, instituting the special customs regime for the import of crude oil and its derivatives, slated for export or re-export. Under this new regime, companies authorized by the Brazilian Petroleum Agency (Agência Nacional de Petróleo - ANP) to import and export oil and its derivatives may avoid the assessment of taxes when importing crude oil and its derivatives for export or re-export.
This tax regimen will apply for 90 days, extendable only once and for the same period. Noncompliance with this term will trigger assessment of all applicable taxes, plus legal surcharges and applicable penalties. The enactment of Decree No. 3.312 will benefit not only those companies authorized to operate by the ANP, but also certain project financing carried out by PETROBRAS, the Brazilian state-owned oil company (DOU-I, December 27, 1999). Pinheiro Neto Advogados

ENVIRONMENT

Mexico

Protection Standards for Fiber Optic Network Installations

Mexico's Department of Environment, Natural Resources, and Fisheries (SEMARNAP) has published a draft version of pending environmental protection standards for the design, construction, operation and maintenance of fiber optic network installations. PROY-NOM-130-ECOL-1999 has already been approved by the National Advisory Committee for the Standardization of Environmental Protection, and would prescribe strict standards for both surface and subterranean installations of fiber optic cables. Diario Oficial, 2/2/2000

GOVERNMENT ADMINISTRATION

Colombia

Expedited Entry into NAFTA Sought

The Colombian Government has decided to accelerate the process to become part of the North American Free Trade Agreement (NAFTA). Officials from various different public entities are working to draft promptly the petition that will be officially presented to each of the member states (Canada, the United States and Mexico) in March 2000 - much earlier than had first been announced. The Colombian President introduced the initiative as a proposal to Colombian industrialists on February 11 at the close of the Second National Conference on Industrial Competitiveness in Cali. Government spokesmen recently indicated that due to the electoral environment of the United States, it would take at least one year to find a more suitable atmosphere in which to formalize the petition. In accordance with the rules that govern NAFTA transactions, when a non-member state seeks to become a party to the agreement, it must reveal this intention to each of the three member states. Colombia will not receive a quick response because Canada, the United States and Mexico must subject the petition to a variety of internal procedures and formalities, including lengthy discussion between proponents and opponents of Colombia's integration. El Tiempo

Mexico

Federal Lending Regime Modified

Mexico's Executive Branch recently signed a decree which modifies portions of the Government Coordination of Registration of Federal and Municipal Obligations and Loans Law relating to publication requirements for lending institutions. Development bank institutions are now required to make timely public disclosures of all contracted loan operations involving local governmental entities. Diario Oficial, 1/28/2000

GOVERNMENT PROCUREMENT

Brazil

Construction Consortium will Dispute Privatization of Sabesp and Cedae
Several Brazilian construction companies, including Carioca Engenharia/Developer, Cowan, EIT and Quiroz Galvão have decided to join forces to dispute privatizations of Sabesp, the basic sanitation company of São Paulo, and Cedae, the Rio de Janeiro water and sewage company. In January 2000, these companies joined to form the Águas do Brasil holding company, which will participate in the two auctions that will combine five sanitation and three freeway concessions. The holding company will have R$1.5 billion in equity and up to R$800 million in operations. Gazeta Mercantil

Nicaragua

Telecommunications Privatization Scheduled

Bidding for the privatization of Nicaragua's state-owned telecommunications company ENITEL has been slated for April of 2000, according to government sources. Three companies have been pre-qualified to bid as of January 2000, including two Mexican entrants. The winning bidder will acquire 40 percent of ENITEL's shares, as well as administrative control of the company for 20 years.

INTELLECTUAL PROPERTY

Brazil

Pharmaceutical Patent Registration Procedures Changed

On December 14, 1999, the Brazilian Executive Branch signed Provisional Measure No. 2006/99, altering provisions that regulate patent registration for chemical and pharmaceutical products in Brazil. Under the measure, new applications for patent registration of chemical and pharmaceutical products must be submitted to the Brazilian Sanitation Surveillance Agency (Agência Nacional de Vigilância Sanitária - ANVS), an agency created by the Ministry of Health responsible for overseeing chemical and pharmaceutical products (DOU-I, December 15, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br

LABOR LAW

Brazil

Domestic Employees Now Eligible for FGTS and Unemployment Insurance

Brazil's Executive Branch has adopted Provisional Measure 1986/99, allowing household maids to opt to be a part of the Employee Guarantee Fund (Fundo de Garantia por Tempo de Serviço - FGTS) and the Unemployment Compensation Fund (unemployment insurance). FGTS funds are used when an employee decides to retire or cannot continue to work. The Unemployment Compensation Fund, on the other hand, can be used by an employee who was fired, and lasts only for a specific period of time. Both funds are co-sponsored by the employee and the Federal Government. Until enactment of Provisional Measure No. 1.986 on December 13, 1999, maids belonged to a class of employees that did not have coverage or protection under the FGTS and Unemployment Compensation Funds (DOU-I, December 14, 1999). Pinheiro Neto Advogados, www.pinheironeto.com.br

MEDICINE & HEALTH

Brazil

Efforts to Increase Generic Medicine Imports Initiated

Brazil's Ministry of Health recently announced plans to stimulate imports of generic medicines, primarily through clarification of labeling requirements per Law 9.787/99 - Generic Medicines. Corresponding measures include the elimination of expensive bioequivalence testing requirements, as well as revisions to the Procurement Law.