President Macri’s Reforms

Argentina Financial CrisisDuring a recent visit to Washington, DC, Argentina’s Minister of Production and Labor, Miguel Braun, stated that Argentina’s government continues to strengthen its economy by focusing on increasing foreign direct investment to the country.

Minister Braun also stated that, while preparing for presidential elections in October 2019, President Mauricio Macri will continue to implement economic and fiscal reforms and work on simplifying institutional bureaucracy in order to improve the business environment in Argentina.  For example, Macri’s administration is reforming ministries, such as the Ministry of Agriculture and Foreign Affairs, in order to streamline processes and create a more competitive market that further facilitates exports. A new digital trade system is expected to expedite exports in various sectors and make foreign investment easier.

Minister Braun further reinforced that President Macri is committed to strengthening economic growth, tightening fiscal policies and developing national infrastructure. In an effort to restore investor confidence and boost Argentina’s economy, President Macri agreed on a lending package from the International Monetary Fund for $57 billion. Argentina has already received $15 billion and will have access to another $35 billion by the end of 2019.

Brazil Strengthens Battle Against Corruption

Washing Brazilian FlagBrazil has taken another important step towards the battle against corruption. In August 2018, Brazil enacted Decree-Law No. 9,468/18, which provides broader power to the Public Transparency and Anti-Corruption Council, public entity subject to the Secretary of Transparency, Supervision and Control of Brazil.

Under the law, the Council’s purpose is to discuss ideas and suggestions to improve policies and strategies aimed at combating corruption and impunity within the Federal Public Administration. The Council must also provide transparency and access to public information, promote ethics within private and public sectors, and encourage social control over public spending.

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H.R. 4606 – A Bill Aiming to Increase U.S. Exports of Natural Gas to the Caribbean and Latin America Clears the House of Representatives and is Now Headed to the Senate

LNG TanksOn Thursday, September 6, 2018, the United States House of Representatives passed H.R. 4606 – Ensuring Small Scale LNG Certainty and Access Act (the “Bill”) by a vote of 260-146 largely along party lines with 37 Democrats joining 223 Republicans. The Bill amends Section 3(c) of the Natural Gas Act (15 U.S.C. 717b(c)) (the “NGA”) to provide that the importation or exportation of natural gas shall be deemed in the public interest and an application for such importation and exportation shall be granted by the Department of Energy (the “DOE”) without modification or delay, if:

(1) the volume of natural gas to be imported or exported does not exceed 0.14 billion cubic feet per day (Bcf/D); and
(2) the approval of such application by the DOE would not require an environmental assessment (an “EA”) or environmental impact statement (an “EIS”) under the National Environmental Policy Act of 1969 (the “NEPA”) (i.e., a categorical exclusion applies).

Currently, only those applications for the importation or exportation of natural gas (including liquefied natural gas) from or to countries with which the United States has a free trade agreement are deemed by the NGA to be in the public interest and thus subject to approval without delay or modification.

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Brazil Adopts General Data Protection Law

On August 14, 2018, after eight years of debates and drafting in the National Congress, Brazilian President Michel Temer sanctioned Law No. 13.709/2018, which regulates the General Data Protection in Public and Private Sectors.

The General Data Protection Law is the first legislation in the country that provides for the data protection of individuals and private and public legal entities. The law was largely inspired by the European Union’s General Data Protection Regulation (“GDPR”). Among other important provisions, Law No. 13.709/2018:

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The Future of Telecommunications Service in Latin America: What are the Challenges? What are some Proposed Solutions? Prominent Telecommunications Attorney, Eduardo Guzman, Explains.

Fiber Optic WorldEarlier this year Squire Patton Boggs hosted the International Institute of Communications’  (IIC) Telecommunications and Media Forum (TMF), which took place in Miami.  The IIC is an international non-profit organization that brings together regulators, policy-makers and industry representatives to promote open dialogue and shape the public policy agenda in the telecommunications, media and technology sector. The TMF was a two-day conference that focused on Latin America and examined the policy frameworks that can best promote infrastructure deployment, investment, and innovation for the digital economy in that region. In attendance were representatives from regulatory agencies from across Latin America; the Federal Communications Commission; the International Development Bank; other regional organizations; carriers; broadband providers; and telecom equipment manufacturers who are invested in Latin America.[1]

One of the panels at the TMF focused on digital infrastructure and the policy choices that can lead to sustained investment and innovation at the network, service and applications level. SPB partner Eduardo R. Guzmán, a member of the firm’s global Communications Group, participated as a panelist in that discussion. He focused his remarks on the state of wireless network infrastructure in Latin America and the need for reforms to lower the costs of deploying the infrastructure that Latin American providers will need to expand coverage and set the table for 5G networks. Below is a Q&A with Eduardo that summarizes the key points he made at the TMF on this critical issue for the evolution and expansion of telecommunications service in Latin America.

Why is discussing barriers to wireless infrastructure deployment critical in Latin America?

Because wireless networks will be they key drivers of broadband deployment in Latin America. Mobile devices connected to wireless networks already are by far the preferred mode of access to the Internet in the region, and smartphone adoption is only expected to increase that trend. At the same time, Latin America still faces significant challenges when it comes to extending connectivity in rural and remote areas, and 4G adoption and coverage are still lagging behind when viewed in terms of total usage, coverage or in comparison to smartphone adoption rates (which are steadily increasing in Latin America). And stagnant average revenue per user and real limitations at the customer base level to pay for premium services has historically affected investment in the region and is likely to delay the rollout and adoption of 5G. In this climate, reducing the costs of infrastructure deployment is critical and needs to be discussed more broadly.

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Mexican President-Elect Lopez Obrador and Possible Impacts to the U.S.-Mexico Bilateral Relationship

Successful LeaderThe left-leaning 64-year old Andres Manuel Lopez Obrador “known as AMLO,” who represents the MORENA Party, won the Mexican presidential election on July 1, 2018. This victory comes after two unsuccessful presidential campaigns in 2006 and 2012. AMLO’s pledge to end corruption, reduce violence and decrease poverty resonated this time with Mexican voters. He will be sworn-in on December 1, 2018.

AMLO will be taking the helm of a country with a weakened economy facing slow growth, amid ongoing security issues. One of his primary challenges will be persuading foreign investors to continue investing in Mexico. To do this, he will need to foster an attractive business environment and yet balance any abrupt changes to the current economic policy.  Mexico’s energy reform policies, if sustained, will continue to be a beacon for foreign investments in the oil and gas sector.

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Polarized Colombia Elects a New President

Voting in ColombiaLike the United States, Colombia has similarly become very polarized over the past few years. Simply put, this dichotomy involves (1) those who support the former two-term President, and now senator, Álvaro Uribe Vélez (“Uribe”) and his political polices, and (2) those who do not support him or his policies. Colombia’s newest President-elect, Iván Duque (“Duque”), falls in the Uribe camp.

By way of background, Uribe’s supporters are characterized as right wing conservatives and are primarily concentrated in the City of Medellin in the department of Antioquia. “Uribismo”, as the term has become known, refers to these supporters of Uribe, his administration and his policies, and is what led to the founding of the political party “Centro Democratico” in 2013. The Centro Democratico party, despite its newness, is now the strongest party in Colombian politics. It holds the majority of seats in the Senate and a high number of the seats in Congress. The non-supporters of Uribe includes people characterized as being on the hard left (liberals) or centrists that are supporters of former president Juan Manuel Santos (“Santos”). These individuals are primarily found in the Capital City of Bogotá, which is Colombia’s most liberal city, as well as in some of the poorest regions of the country.

Colombia’s polarization became most evident during Santos’ negotiation of the peace agreement and peaked when the peace agreement was put to a popular vote. Most were expecting a resounding “yes,” only to be taken back when the “no” vote prevailed. The “no” movement was led primarily by Uribe, who criticized the agreement as being too lenient and generous to the FARC. Although a slightly modified version of the peace agreement with the FARC guerilla group still went forward despite the popular vote, the criticism of the peace agreement and efforts to undo some parts of it, continued. One of person who advocated for rolling back some of the more lenient provisions of the agreement was Duque, who on Sunday, June 17, 2018 was elected Colombia’s new president with 54% of the vote.

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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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