by Juan Manuel González | Feb 27, 2024 | Noticias-en
On January 25, 2024, the Federal Trade Commission (FTC) announced a $2 million civil fine against a farm equipment company for violating the FTC’s Made in USA (MUSA) rule, the largest fine for violations. of MUSA to date. Here is what you need to know:
FTC Made in USA Rule
- The FTC regulates US origin claims in advertising and labeling under Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices.” Claims of American origin may be expressed (e.g., “Made in the USA” or “Made in the United States”) or implied, that is, specific to the context and generally involving the use of American symbols, such as flags or references to US locations
- The MUSA Rule prohibits unqualified claims that a product, service, or component is manufactured in the U.S. unless: (1) final assembly or processing occurs in the U.S.; (2) all significant processing performed on the product occurs in the U.S.; and (3) all or substantially all ingredients or components are manufactured and sourced in the U.S. Both express representations that the products are “made,” “manufactured,” or “constructed” in the U.S. and representations implied fall within the scope of the Rule.
- The FTC began imposing larger civil penalties in 2020, indicating that violations of the MUSA Rule would face stricter enforcement. Although the FTC’s enforcement of MUSA violations remains slow (the FTC only brought four cases in 2023 that resulted in monetary penalties), this is the second sanction against a publicly traded company since 2020.
The order.
According to the FTC complaint, the farm machinery company labeled thousands of separately sold replacement parts for its products as “Made in the USA,” even though they were manufactured entirely outside the U.S. since at least 2021, the company allegedly packaged parts manufactured abroad. products in boxes with “Made in USA” printed.
The company is a repeat violator of the MUSA Rule. In 1999, the company entered into an Order with the FTC for MUSA violations, which expired in 2019. This prior application indicates that the manufacturer was aware of the MUSA Rule but failed to comply with it.
Under the latest Order, the company owes a $2 million civil penalty. The Order also requires the company to cease its deceptive labeling practices and creates compliance monitoring and recordkeeping and reporting obligations for the company.
Food for take away
Consider “qualified” MUSA claims . Given the very high standard applicable to non-qualified US origin claims and the increasingly real risk of financial penalties for non-compliance, the use of qualified US origin claims is sometimes more appropriate and worth considering. Examples of permitted qualified claims include: (1) claims indicating the existence of foreign content (“Made in the USA with American and Turkish parts”); (2) claims specifying the amount of US content (“50% US content”); and (3) statements indicating the presence of imported parts (“Made in the USA from imported cotton”).
We hope that the real threat of sanctions will encourage others to report false or misleading claims about American origin. If companies are concerned that their competitors are engaging in deceptive labeling practices, they can file complaints with the FTC. The FTC prioritizes enforcement against willful, repeat, or egregious violators.
For more information contact:
Jeffrey Lehman | Partner Miller & Chevalier | jlehtman@milchev.com
by Juan Manuel González | Feb 21, 2024 | Noticias-en
Currently, ESG (Environmental, Social, and Governance) practices are becoming increasingly important. These three pillars, ranging from environmental sustainability and social responsibility to ethics in corporate governance, represent a change in how companies evaluate and conduct their operations.
ESG practices are not just isolated or complementary initiatives; They are becoming essential components of business strategy. Its integration into the business model is a reflection of a more conscious and responsible approach towards a company’s operating environment, its community and its internal processes. In this sense, ESG represents an evolution in corporate thinking, where sustainability and social responsibility are seen as indispensable factors for business success and longevity.
This growing relevance of ESG practices in the corporate sphere is due to a combination of factors. On the one hand, there is a broader recognition that business activities have a significant impact on the environment and society. On the other hand, consumers, investors and regulators are increasingly demanding that companies act responsibly and transparently. Thus, the adoption of ESG practices is becoming a distinctive element for companies that seek not only to excel in their field, but also to contribute positively in the area in which they operate.
What are ESG Practices?
ESG practices, an acronym for Environmental, Social, and Governance, represent a set of criteria that companies use to guide their operations and policies in a way that is socially responsible, ethically managed and environmentally sustainable. These criteria not only reflect corporate responsibility, but can also significantly influence the long-term profitability and sustainability of a company. For clarity, below is a breakdown of each component and practical examples of how they are applied in the corporate environment:
Environmental: The environmental component focuses on how a company interacts with the environment. This includes managing natural resources, reducing pollution and carbon emissions, and developing sustainable practices. For example, a company could implement policies to reduce its carbon footprint through the adoption of renewable energy, improve the energy efficiency of its operations, or practice waste reduction and recycling.
Social: The social dimension of ESG refers to how the company manages relationships with its employees, suppliers, customers and the communities in which it operates. This ranges from ensuring fair and safe working conditions to getting involved in and supporting community projects. An example of this would be implementing diversity and inclusion programs, offering training and professional development to employees, or participating in corporate social responsibility initiatives that benefit local communities.
Governance: Governance relates to the internal direction of a company, its leadership, compensation, audits, internal controls, and transparency in decision-making. Effective governance practices ensure that a company is run in a way that is ethical, legal and in line with the interests of its shareholders. This can range from implementing anti-corruption policies and transparent reporting systems to ensuring that boards of directors are diverse and act in the best interests of the company and its shareholders.
Why Adopt ESG Practices?
The integration of ESG practices into corporate strategies is not simply a passing trend; It is an essential component to ensuring the long-term success and relevance of any company. The adoption of these practices not only reflects a commitment to sustainability and social responsibility, but has also become a determining factor in competitiveness and perception in the market.
The main reason for companies to adopt ESG practices is the growing evidence that these practices lead to better performance in the long term. Companies that prioritize environmental sustainability, social responsibility and strong governance tend to have better risk management, greater attractiveness to investors and consumers, and a greater ability to innovate and adapt to changes in the market. Additionally, with an increasing focus on corporate responsibility by regulators and the public, ESG practices have become a crucial aspect of maintaining a positive corporate image and fostering consumer trust.
From a business sustainability point of view, ESG practices help companies operate more efficiently and with a lower environmental impact. This includes everything from reducing energy consumption and implementing cleaner production processes to adopting policies that promote diversity and inclusion within the organization. These practices not only reduce costs in the long term, but also put the company in a more favorable position in the face of increasingly strict environmental and social regulations.
In terms of social responsibility, ESG practices allow companies to actively contribute to the well-being of the communities in which they operate. This may include participating in community development initiatives, implementing fair labor practices, and contributing to projects that address important social challenges. Such actions not only improve the company’s reputation, but also create a more positive and sustainable environment for doing business.
ESG practices are critical for companies seeking to thrive in a business environment increasingly aware of social and environmental impacts. By adopting these practices, companies not only secure a place in the current market, but also contribute to building a more sustainable and fair future.
Corporate Transformation through ESG
The adoption of ESG (Environmental, Social, and Governance) practices by corporations is driving significant changes not only in their operations, but also in their organizational culture. This movement towards a more sustainable and responsible approach is redefining what it means to be a successful company in the current century.
ESG practices are influencing companies at multiple levels. Environmentally, they are promoting the adoption of more sustainable processes and the reduction of negative impacts on the environment. Socially, they are promoting a more fair and ethical approach in the treatment of employees, suppliers and the communities where they operate. In terms of governance, they are encouraging greater transparency and accountability in decision-making.
This change goes beyond simple adjustments in operations; represents a transformation in corporate mentality. Companies no longer focus solely on profit maximization, but also seek to generate a positive impact on society and the environment. This is reflected in a corporate culture that values sustainability, social responsibility and business ethics.
Practical Tips for Integrating ESG
The incorporation of ESG practices in companies is not only a strategy to improve their public image, but a comprehensive transformation that affects all levels of the organization. For this integration to be effective, it is important to follow a series of steps and have appropriate tools.
To successfully integrate ESG (Environmental, Social, and Governance) practices into a company, it is important to start with a detailed assessment of the organization’s current practices in relation to ESG criteria. This initial analysis is essential to identify both areas of improvement and development opportunities. Subsequently, it is important to define specific and achievable ESG-related objectives, such as setting goals for reducing carbon emissions or improving diversity in the workforce.
A key aspect in this process is the training and engagement of employees at all levels of the organization. It is essential to educate workers about the importance of ESG and how they can contribute to these goals in their everyday roles. Furthermore, it is vital that ESG is integrated into the company’s overall strategy and not simply an add-on. This means incorporating ESG principles into decision-making, strategic planning and operational processes.
To monitor progress and ensure the effectiveness of these practices, it is necessary to carry out continuous monitoring and establish clear metrics. It is also important to maintain transparent communication about the progress and challenges in ESG implementation, both internally within the company and with external stakeholders.
In terms of tools and resources, it is beneficial to use software specialized in ESG management, which allows the collection, analysis and reporting of data related to these practices. Additionally, it can be very helpful to work with ESG consultants for expert advice and guidance. Additionally, joining networks and collaborations with other companies and organizations that promote ESG practices can facilitate the exchange of knowledge and experiences.
By adopting these approaches, companies can ensure a more effective and consistent implementation of ESG practices, which will not only benefit their performance and reputation, but also contribute positively to society and the environment. Implementing ESG represents an essential step towards building a sustainable and responsible business model.
The impact of ESG practices in the business area extends beyond simple sustainable measures or social responsibility; represents a true transformation in the way companies operate and are perceived in society. Integrating ESG into operations and corporate culture not only improves long-term profitability and sustainability, but also strengthens relationships with stakeholders and positions companies as leaders in a market increasingly aware of global challenges. .
By Rodolfo Salazar, Partner BLP Guatemala | rsalazar@blplegal.com
For more information you can contact:
Juan Carlos Tristán | BLP Partner | jtristan@blplegal.com
by Juan Manuel González | Feb 8, 2024 | Noticias-en
This February 15, 2024 is the deadline to submit the IAOC, here are the main aspects that must be considered:
WHAT IS THE IAOC?
It is the report that includes compliance with the policies and procedures of the Money Laundering and Terrorism Financing Prevention System -SPLAFT that the Obligated Subject has implemented during the year prior to its presentation.
WHO SHOULD SUBMIT THE IAOC?
Those natural and legal persons who, in accordance with the regulations, have the status of Obligated Subjects, including the following:
- Companies in the financial system and the insurance system.
- Credit card issuing companies.
- Savings and credit cooperatives.
- Those dedicated to the purchase and sale of vehicles, boats and aircraft.
- Those who are dedicated to construction activity and/or real estate activity.
- Real estate agents.
- Those dedicated to the exploitation of casino games and/or slot machines, and/or remote games using the Internet or any other means of communication, in accordance with the regulations on the matter.
- Those who are dedicated to the exploitation of remote sports betting using the internet or any other means of communication, in accordance with the regulations on the matter.
- Those dedicated to the exploitation of lottery games and similar.
- Customs agents.
- Notaries.
- Mining companies.
- Those dedicated to the trade of jewelry, precious metals and stones, coins, art objects and postage stamps.
- Laboratories and companies that produce and/or market chemical inputs and controlled goods.
- Companies that distribute, transport and/or market chemical inputs that can be used in illegal mining, under the control and supervision of SUNAT.
- Virtual Asset Service Providers (PSAV).
WHAT DOES THE IAOC CONTAIN?
The IAOC must contain the following information:
- General Information of the Obligated Subject
- Annual Operations Statistics
- Main activities carried out to comply with the regulations relating to the Registry of Operations (RO)
SPLAFT Policies and Procedures
- Training on issues related to SPLAFT
- ML/TF Risk Prevention and Management Manual and Code of Conduct for ML/TF Prevention.
- Others
WHAT SHOULD I DO BEFORE SUBMITTING THE IAOC?
The IAOC must be reported to the Board of Directors or equivalent body, or to the General Manager.
TO WHOM SHOULD THE REPORT BE SENT?
It must be sent to the FIU through the Portal for the Prevention of Money Laundering and Financing of Terrorism – PLAFT.
In the case of Obligated Subjects that have other supervisory bodies, a copy of the report may be sent to them.
WHAT HAPPENS IF I DO NOT COMPLY WITH SUBMITTING IT?
Failure to send the IAOC is considered a serious infraction that can lead to a fine of up to 20 UIT (S/103,000.00 one hundred three thousand soles).
For more information contact:
Mario Pinatte | CPB Partner | mpinatte@cpb-abogados.com.pe
by Juan Manuel González | Feb 6, 2024 | Noticias-en
Around the end of 2023, the decree that reforms, repeals and adds various provisions of the Securities Market Law and the Investment Funds Law was published in the Official Gazette of the Federation, which came into force on the 29th. December 2023.
To read more about these modifications, please consult the following links:
INITIATIVE WITH DRAFT DECREE BY WHICH ARE REFORMED, REPEALED AND ADDED VARIOUS PROVISIONS OF THE STOCK MARKET LAW AND THE INVESTMENT FUND LAW – BASHAM
CHAMBER OF DEPUTIES APPROVES BY UNANIMOUS VOTES THE DRAFT DECREE WHICH REFORMS, REPEALS AND ADDS VARIOUS PROVISIONS TO THE STOCK MARKET LAW AND INVESTMENT FUND LAW. – BASHAM
In summary, these modifications will benefit the Mexican economy by facilitating the active participation of individuals and small and medium-sized companies (SMEs) in the stock market and various investment funds in a safe manner. The introduction of new forms of investment, such as hedge funds, is expected to contribute positively to the Mexican Stock Market.
It is important to highlight that the CNBV must issue the general provisions mentioned in the decree, placing special emphasis on the changes made to both laws. We will be attentive to these publications to delve deeper into this topic.
The lawyers in the Banking and Finance area are at your service to resolve any questions regarding the above.
For more information contact:
Juan José López de Silanes | Partner Basham, Ringe and Correa | lopez_de_silanes@basham.com.mx