Posted in Arbitration International Arbitration UNCITRAL

X CAI Costa Rica 2019: Developments and Challenges in International Arbitration

By: Marlon Meza

Originally posted on the Kluwer Arbitration Blog.

The X CAI Costa Rica held by the Costa Rican Chapter of the ICC and its Arbitration Commission, took place in San Jose, Costa Rica between February 24 and 27, 2019. Ten years have led to its consolidation as one of the most important ICC events in the region. This year’s intensive program included several academic panels and practical workshops, as well as a meeting of young arbitrators ICC-YAF. The event brought together more than 50 high-level speakers from the U.S. and other countries in Latin America and Europe.

Read more here.

Posted in Argentina Mexico Tax

Argentina: new double taxation treaties in force with United Arab Emirates and Mexico

By Augusto Mancinelli

The double tax treaty between Argentina and the United Arab Emirates is now in force, joining the recently signed DTT between Argentina and Mexico.

New DTT: Argentina – United Arab Emirates

The Argentina – UAE DTT is applicable to the income tax, presumed minimum income tax and personal assets tax collected by Argentina, and to the income tax and corporate tax collected by the United Arab Emirates.

This DTT is one of the most beneficial ones of all the DTTs signed by Argentina.

Read more here.

Posted in Energy Oil and Gas Venezuela

US government sanctions Petróleos de Venezuela, authorizes US persons to engage in certain limited transactions

By: Ignacio E. Sanchez and Melanie Garcia

The United States government has issued new sanctions in response to the growing unrest in Venezuela. On January 23, the United States recognized Juan Guaido as the new interim President of Venezuela. Nonetheless, Nicolas Maduro has refused to step down. US Secretary of State Mike Pompeo stated that the latest US sanctions related to Venezuela’s state producer of oil are meant to “preserve the core pillar of Venezuela’s national assets for the people and a democratically elected government.”

On January 28, 2019, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Petróleos de Venezuela S.A. (PdVSA) as a Specially Designated National (SDN). With this designation, US persons, including US entities, their foreign branches and US citizens or permanent residents located anywhere in the world, are now prohibited from engaging in any transactions with PdVSA or any entity owned 50 percent or more by PdVSA, unless otherwise authorized. This designation has wide-ranging impacts, as PdVSA owns or is part of joint ventures around the world, including several within the United States.

OFAC has sought to limit these potential wide-ranging impacts on US persons by concurrently issuing a series of General Licenses authorizing US persons to engage in certain transactions with PdVSA and/or certain of its 50 percent or more owned subsidiaries. These General Licenses, described further below, create a complex web of limited authorizations for US persons with various expiration dates.

Whether a General License authorizes a particular transaction is highly dependent on the specific facts and circumstances of that transaction. These summaries should not serve as a substitute for a review of the language and requirements of the actual General Licenses.

Read more here.

Posted in Arbitration

ICC update – Conduct of Arbitration

By: Ben Sanderson and Silvia Farre

On 1 January 2019, new updates to the Note to the Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration (the Note) became effective. According to the ICC Court President, Alexis Mourre, the updates, “reflect the Court’s continuous efforts … to provide more transparency in its practices, increase the efficiency of our arbitrations and offer an ever wide range of services to users“. The most significant updates are set out at the link below:

Read more here. 

 

Posted in chile Energy

CHILE: TDLC rejects request to eliminate restrictions on the integration in the electricity market

By: Felipe Bahamondez and Carolina Bawlitza

Chile’s Tribunal for the Defense of Free Competition (TDLC) rejected the plea of Celeo Redes Chile Limitada, which had requested that the government modify “the legal precepts necessary to introduce a greater degree of competition in the generation, distribution and electric transmission markets.” In particular, the requested regulatory amendment sought to:

• Eliminate the prohibition against companies that own or operate national transmission systems from participating in electricity generation or distribution activities and
• Eliminate the restriction against generating companies, distributors and non-price-fixing customers from participating individually in a maximum of 8 percent and, as a whole, up to 40 percent of the total investment value of the national transmission system.

The TDLC considered that, given the position adopted by the Ministry of Energy in the process, which “not only noted the proposal…. but also spoke openly in its favor,” the recommendation to the government is inofficious.

Given the above, the indicated restrictions shall remain in force as long as the National Congress of Chile does not approve a bill aimed at eliminating them.

Posted in Labor Puerto Rico Tax

Changes to reporting requirements for severance payments in Puerto Rico

By: Mariana Muniz and Juan Carlos Feliciano

 

For tax year 2018, employers in Puerto Rico will be required to report certain severance payments, as discussed further below, as “exempt wages” on Withholding Statement Form 499R-2/W-2PR (the Puerto Rico equivalent of the US W-2 Form – PR Form W-2),as opposed to Form 480.6D.

Under Section 4.3 of Act 4-2017, known as the Labor Transformation and Flexibility Act, which amends Section 1 of Act No. 80 of May 30, 1976 (Act No. 80), known as the Unjust Dismissal Act, severance payments as well as any equivalent voluntary payment made by the employer to employees on account of their dismissal, are excluded from the definition of gross income and as such are not subject to Puerto Rico income tax, whether such payment is made at the time of their dismissal or later, or whether it is made by reason of a settlement agreement or pursuant to a judgment or administrative order.

The amount of the severance payment excluded from the definition of gross income, and not subject to Puerto Rico income tax, is equal to the severance payment that would be payable pursuant to the provisions of Act No. 80. Severance payments that are made in excess of such amount are subject to Puerto Rico income tax.

Read more here.

 

Posted in Arbitration Brazil ICSID Infrastructure P3

PPP projects in Latin America: resolving disputes through investor-state arbitration

By: Alison Fagan, Maria Pereira, Silvia Farre

Public-private partnership (PPP) projects in Latin America are on the rise. There is a great need for infrastructure investment across the region, but often, Latin American governments cannot commit public finances to fund the huge investment costs such projects entail.

PPPs offer a solution – harnessing the power of private finance to provide multiple public services. However, in the course of such projects disputes may sometimes emerge. Investment protections may be found in the PPP contracts, but also under international law. Indeed, except in Brazil, investors find they may be able to settle disputes around PPP projects via investor-state arbitration, the use of which may increase as the number of PPP projects in the region grows.

Read more here.

This article is also available in Spanish.


 

Posted in Mexico

Corporate reporting obligations in changes of shareholders of Mexican subsidiaries

By Maria Eugenia Rios and Abelardo Acosta

Based on recent modifications to Articles 73 and 129 of the Mexican Corporate Law (Ley General de Sociedades Mercantiles, LGSM) published on June 14, 2018 and effective as of December 15, 2018, transfers in ownership of a Sociedad de Responsabilidad Limitada (SRL) or a Sociedad Anonima (SA) must be reported with the Ministry of Economy through an online notice. Article 50 Bis of the Commerce Code (Codigo de Comercio, CC) regulates this obligation.

From a Mexican corporate perspective, an SA is treated as a per se corporation, and an SRL has similarities with a US limited liability company (LLC).

As of now, the LGSM sets out obligations to register changes in ownership of a Mexican entity in its corporate books; however, these new online reporting features tend to have a broader scope, and continue the trend on electronic reporting and compliance obligations with federal authorities in Mexico.

In case of an SRL, the information that must be reported to the Ministry of Economy is not public; nevertheless, an interested party with a rightful claim may have access to the shareholders registry. For an SA, the name, nationality and domicile of the shareholder provided under the reporting notice must be kept as confidential unless the information is requested by a judicial or administrative authority.

Apart from tax-related consequences and reporting obligations in case of a group restructuring, this new disclosure requirement should also be considered, because the change in ownership of a Mexican subsidiary must be reported to the Ministry of Economy on top of existing tax-related notifications.

For more details or information, contact authors Maria Eugenia Rios  maria.rios@dlapiper.com or Abelardo Acosta abelardo.acosta@dlapiper.com.

Posted in chile

Upcoming Crimes: Bribery Between Individuals and Unfair Administration

By: Diego Noguera, Matías Zegers and Mauricio Halpern

On November 20, 2018, Law No. 21,121 was published in the Official Gazette, modifying the Criminal Code regarding bribery, and Law No. 20,393 about criminal liability of legal entities.

In addition to increasing the penalties for bribery crimes, the aforementioned amendment of the Criminal Code criminalizes bribery between individuals and unfair administration, setting forth penalties of deprivation of liberty, fines and seizure of the profits that would have been unlawfully obtained by individuals.

Specifically, bribery between individuals is typified as a crime committed by those who, exercising a position or function in the private sector, request or accept money or other benefit, for themselves or for a third party, or offer, give or consent to give money or other benefit, as compensation for violating their duties or for refraining from acting in accordance with their duties, in favoring a contract with one offeror over another.

On the other hand, unfair administration is typified as a crime committed by those who, being in charge of the custody or management of all or part of the assets of another person, cause harm to that person, either by abusively exercising powers to dispose of those assets or forcing the disposition of assets, or by acting inappropriately or abstaining from acting in a way manifestly contrary to the interests of the owner of the assets.

In conclusion, in both cases it is possible to perceive that the legislature sought to prevent illicit situations that could trigger, among others, acts of unfair competition or abuse of trust, by punishing those who request or offer a bribe.

In our opinion, this amendment should contribute to greater care and thoroughness in the structuring of prevention and risk control models, as well as in resolving potential conflicts of interest and in defining policies to eradicate influence peddling and any type of corruption.

 

 

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