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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The Concept of Salary under Dominican Law

Termination of EmploymentThe salary under Dominican law is not limited to the financial compensation regularly paid to employees for their services. Instead, under Dominican law, the salary also includes all fixed benefits that employees recurrently receive from their employer (e.g. cost of living, diet, telephone, gas and others).

Moreover, under Dominican law, upon termination of a labor contract, the employer must pay to the employee the severance provided by law. The two main factors taken into consideration when calculating the employee’s severance package are the duration of the contract and the “ordinary salary”. In a global and changing business world, with diverse employment areas, it is important to understand the concept of “ordinary salary” in order to avoid errors in the calculation of severance.

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Key Aspects of Sales Representation, Agency and Distribution Agreements in Brazil

Brazil in Business

Agency, distribution and sales representation agreements are commonly used means for a business to expand its geographical reach without setting up a permanent establishment in a foreign country. While there are many elements to creating a successful commercial relationship, from a legal standpoint, knowledge of the legal framework in each target jurisdiction is essential to lower the risks of producing unintended consequences, which may ultimately affect the success of the relationship and create additional liability to your company. This becomes even more important in Latin American countries, such as Brazil, due to protective laws affecting the relationship with distributors, agents and sales representatives.

In Brazil, agency and distribution relationships are governed by Chapter XII of the Brazilian Civil Code, whereas the Brazilian Sales Representation Law (Law No. 4,886/65, amended by Laws No. 8,420/92 and No. 12,246/10), governs a sales representation relationship.

When determining the nature of the relationship, Brazilian courts will look at the facts, and not at the title of the agreement. For that reason, understanding the legal definition and characteristics of each category is fundamental.

An agency relationship will exist when an agent assumes, in a non-occasional basis and without any dependency, the obligation to promote, on behalf of another person, in exchange for remuneration, the performance of certain transactions, within a given area. A distribution relationship will exist when the agent is in the possession and control of the item to be transacted.

In contrast, a sales representative is legal entity or individual, without an employment relationship, who acts as an intermediary, in a non-eventual basis, on behalf of one or more people, for the conduct of commercial transactions, soliciting and mediating proposals or orders, to transmit them to principals, whether carrying out acts related to the performance of the transactions.

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The ICC’s New Brazil Office and The Success of the ICC Miami Conference: A Sign of Things to Come for ICC Arbitration in Latin America?

Miami SkylineThere is no doubt that Latin America has generally seen a rise in the use of arbitration in the last decade. Continuing with that trend, in 2016 the International Chamber of Commerce (ICC) reported that Latin America saw a 15% rise in the number of parties participating in ICC Arbitration,[1] with Brazil and Mexico both making it to the top ten.

This year, the opening of the new ICC Court’s case management office in Brazil and the success of the 15th ICC Miami Conference on International Arbitration both suggest that the region’s use of ICC Arbitration will continue to grow.

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Trademark Registration in Mexico

Trademark StampSeveral factors must be considered prior to filing a trademark application in Mexico. These factors include: a) prior use of the trademark; b) prior trademark registrations or applications in other countries; c) searches of identical or similar trademark registrations or applications; and, the d) accurate determination of the goods and services to be protected by the registration; among others.

Some countries, such as the United States (US), require proof of prior use of the trademark in the country where registration is sought, but that is not the case in Mexico.

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Ecuador BusinessmanLast week, a group of Ecuadorian government officials and business stakeholders traveled to Washington, DC, to encourage increased trade and investment ties between the United States and Ecuador.  The delegation, which was led by Foreign Trade Minister Pablo Campana Sáenz, is seeking to revive US trade with, tourism to, and investment in Ecuador.

During his visit, Minister Campana highlighted a number of key trade priorities for Ecuador.  He encouraged the revival of the U.S.-Ecuador Trade and Investment Council, a bilateral panel originally established in 1990 to encourage discussion on trade and investment matters.  Minister Campana also emphasized the importance of the Generalized System of Preferences (GSP), a trade preference program that allows beneficiary developing countries to import select products into the U.S. duty-free.  The Ecuadorian Government is seeking to expand duty-free treatment to broccoli, roses, artichokes, and tuna.

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Upcoming Event: Key Issues in International Agency and Distribution Agreements

September 19, 2017 – Paula Galhardo, Of Counsels at Squire Patton Boggs, will participate on a panel discussion on “Key Issues in International Agency and Distribution Agreements: Focus on Brazil, Colombia, Mexico and U.S.” at the Houston Bar Association’s Corporate Counsel Section Luncheon. Panelists will review the areas that most directly affect distribution and agency agreements: anti-corruption, termination, penalties, applicable law, among other provisions.

For additional information concerning this event, please see the full agenda.