Mexico Hits Back Against U.S. Steel and Aluminum Tariffs

Mexico/US TariffThe Mexican Government announced a series of retaliatory tariffs on a diverse group of U.S. products in reaction to tariffs imposed by the United States on imports of steel and aluminum.

The response from Mexico comes after more than a year of developments in the bilateral trade relationship.  In April 2017, the Trump Administration self-initiated two separate investigations under Section 232 of the Trade Expansion Act of 1962, on the grounds that imports of steel and aluminum pose a threat to U.S. national security.  This resulted in the Department of Commerce finding that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232.

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Mexico’s Anticorruption Legislation: New Compliance Program Requirements (PART 3)

ComplianceMinimizing Risks

In our two previous posts, we discussed the general outline of the Mexican National Anticorruption System, and highlighted some aspects of the General Law of Administrative Responsibility and the Federal Criminal Code that affect legal entities. We now turn our attention to what these laws refer to as an “Integrity Policy” and the ways entities can avoid, limit or minimize liability.

Burden and Standard of Proof

Under both the Federal Criminal Code and the General Law of Administrative Responsibility, there is a presumption of innocence, and the burden of proof rests with the government. Mexican procedural rules generally do not define different standards of proof applicable to determine liability in criminal, administrative and civil cases. That is, while Mexican law is clear that the burden of proving liability rests with the government, it makes no distinction between civil, administrative and criminal standards of proof.[1]

Exclusion of Liability

When we discussed corporate liability, we noted that under the National Code of Criminal Procedure failure to have or follow internal controls is required for a finding of liability. Similarly, the Federal Criminal Code reduces the applicable penalty if the entity has an internal compliance body that helps mitigate damages. Finally, the General Law of Administrative Responsibility establishes that a legal entity’s Integrity Policy (i.e. Compliance Program) “will be taken into consideration” to determine a company’s liability. While the criminal and procedural codes do not establish what internal controls are required or detail the characteristics of a “dedicated compliance body”, the General Law of Administrative Responsibility does.

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Mexico’s Federal Criminal Code and the new General Law of Administrative Responsibility (PART 2)

Mexican Gavel & Law Book

On our previous blog post we provided the general outline and background behind Mexico’s National Anticorruption System. On this post, we will go further into the weeds of both the 2016 amendments to the Federal Criminal Code and the compliance provisions of the General Law of Administrative Responsibility as these laws apply to legal entities. Although these amendments are generally discussed separately, we believe that these laws, as amended, complement each other and the provision of one can help understand the other. This bifurcated enforcement is in some ways similar to how the FCPA is enforced by the DOJ and the SEC in the U.S. (i.e. through separate but complementary criminal and civil/administrative actions).

With this in mind, we turn our attention to how these laws impact legal entities.

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Mexico’s Anticorruption Legislation and its Impact (PART 1)

Washing Mexican Flag

Beginning in 2015, Mexico has been promulgating sweeping anticorruption legislation. Mexico first laid the groundwork with amendments to the Federal Constitution that created the National Anticorruption System. Then in 2016, Congress passed the National Anticorruption System’s implementing legislation through a series of new laws and important amendments to existing ones.

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Western Hemisphere – An Evolving U.S. Policy

Earth Night LightsDuring his trip to the Western Hemisphere in early February 2018 – which included stops in Mexico City, Mexico; San Carlos Bariloche and Buenos Aires, Argentina; Lima, Peru; Bogotá, Colombia; and Kingston, Jamaica – U.S. Secretary of State Rex Tillerson stressed the continued importance of the region to the United States. In a speech that he made in Texas before travelling south, Secretary Tillerson highlighted the benefits of increased hemispheric energy trade, which may be the lens through which the Trump Administration views its policy for the Western Hemisphere:

“Building greater prosperity by integrating the wealth of energy resources within the hemisphere is an opportunity that is unique in the world to the Americas.”

Secretary Tillerson further stressed: “By 2040, North America is expected to add more oil production to the global markets than the entire rest of the world combined and more gas production than any other single region. … Our continent has become the energy force for this century, thanks in large part to rapid expansion in natural gas and tight oil production.”   He also called for opening energy market economies in the hemisphere, saying:

“Between now and 2030, Latin America is expected to spend at least $70 billion on new electric power generation plants to fuel economic growth. … By building out a more flexible and robust energy system in our hemisphere, we can power our economies with affordable energy. … And we can make our hemisphere the undisputed seat of global energy supply.”

Energy, however, is not the only driver for improved circumstances in the Western Hemisphere, as Secretary Tillerson advocated for more market-based economies in general. He spotlighted Argentina’s recent reforms, including its own tax overhaul, as opening the Argentine economy, driving down the high inflation rate, and attracting investments. The Secretary recognized that economic development and security are not mutually exclusive.

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Protection of personal data in the EU and Mexico

Data ProtectionProtecting the personal data of individuals has become a major concern worldwide. As a result, several countries have adopted new regulations that aim to provide or enhance such protection. Here, we will briefly present some of the most relevant features of the data protection regulations recently adopted by the European Union (“EU”) and Mexico, two important business partners to the United States.

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Costa Rica Elections: Populism vs. Establishment

Costa Rican Ballot BoxThere were 13 candidates in the running for the presidency in Costa Rica until last Sunday, when Costa Ricans narrowed the pool two candidates. Among the 13 presidential candidates were several lawyers who are also politicians, including:

  • Antonio Álvarez (National Liberation Party) – Lawyer, businessman and veteran legislator who twice served as President of the Costa Rican Legislative Assembly (1995-1996; 2016-2017). As a lawmaker, he is known for having promoted legislation against sexual harassment, domestic violence, smoking, and protecting people with disabilities.
  • Juan Diego Castro (National Integration) – A defense lawyer by profession, Castro served as Minister of Public Safety (1994-1997) and later Minister of Justice (1996-1997). Castro positioned himself as an anti-establishment and anti-corruption candidate.
  • Rodolfo Piza (Social Christian Unity Party) – A lawyer, former justice of the Costa Rican Supreme Court (2009-2013), and Executive President of the Costa Rican Department of Social Security (1998-2002), Piza was the candidate of the Social Christian Unity Party.
  • Otto Guevara (Libertarian Movement Party) – Lawyer, professor, and founder of the Libertarian Movement Party. He previously served in the legislature between 1998-2002 and again since 2014.

None of the aforementioned, however, remain in the presidential race. Last Sunday, a quarter of Costa Ricans that went to the polling booths voted for Fabricio Alvarado, a non-politician who is a former television anchor and influential evangelical singer. Another 22% voted for Carlos Alvarado, a politician who previously served as Minister of Labor and Social Security (2016-2017) and secured the nomination of the Citizens’ Action Party, which is the political party of outgoing Costa Rican President Luis Guillermo Solís.

Fabricio Alvarado’s rise in the polls is largely attributed to his campaign rhetoric against an Inter-American Court of Human Rights (IACHR) advisory opinion that notes member states “must recognize and guarantee all the rights that are derived from a family bond between people of the same sex.”[1] His meteoric rise appears to have tapped a dormant wellspring of conservatism among Costa Rica’s voters that heeded the call to defend the country’s sovereignty against external foreign tribunal decisions.

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Puerto Rico Announces Plan to Privatize Its Power Utility

Puerto Rico PowerThe government of Puerto Rico announced its plan to privatize the Puerto Rico Electric Power Authority (PREPA) as part of a 18-month process that is expected to culminate with the sale of PREPA’s generation facilities and a private concession to operate and manage its transmission and distribution facilities. PREPA is the government-owned utility with sole authority to provide electric power in Puerto Rico, and has been at the center of attention and controversy since Hurricane Maria devastated Puerto Rico last year.

Governor Ricardo Rosselló announced the government’s plan to privatize PREPA in a televised speech on January 21, promising that PREPA would “cease to exist as it deficiently operates today.” The process described by the governor would take place in three stages within an 18-month period:

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The ICC’s Expedited Procedure- How can Latin America Benefit?

South America PopulationThe ICC’s Expedited Procedure found under Article 30 and Appendix VI of the ICC Rules of Arbitration generally applies to arbitration agreements concluded after March 1, 2017; where the amount in dispute does not exceed US $ 2 million; and where the parties have not formally opted-out. However, parties are also allowed to opt-in, regardless of the date of the agreement or the amount in dispute. It is on that opt-in basis that many parties last year started requesting the “Expedited Procedure.”

While Latin American parties were not the first to take advantage of the Expedited Procedure,[1] they can benefit from some of the changes. Accordingly, we will discuss the new provisions and their potential appeal to Latin American parties:

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Dominican Republic’s Law No. 57-07 and it’s Incentives for the Development of Renewable Sources of Energy

Solar PanelSince the enactment of Law No. 57-07 on incentives for the development of renewable sources of energy on May 2007 (“Law No. 57-07”), the Dominican Republic has experienced a significant surge of investments in the renewable energy sector. For example, from 2011 to 2016, the country’s National Interconnected Electric System (“SENI”) added1,018 megawatts (“MW”) of new installed generation capacity, 19% of which came from renewable energy sources.[1] Moreover, the Minister of Energy and Mining recently indicated that the SENI generates approximately 800 MW of power exclusively from non-conventional energy sources such as from hydropower, wind power, solar-photovoltaic power, and biomass.[2]

It is important for potential investors to determine which power-related investments fall within the scope of Law No. 57-07 and which incentives apply to such investments. Pursuant to the law, all public, private, mixed, corporate and/or cooperative power or bio-fuel production projects can benefit from the incentives if they fall under one or more of the following categories:

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