Ecuador | Constitutional Court decides to provisionally suspend Executive Decree 754 that reformed the Regulations of the Organic Code of the Environment (Case 51-23-IN)

Ecuador | Constitutional Court decides to provisionally suspend Executive Decree 754 that reformed the Regulations of the Organic Code of the Environment (Case 51-23-IN)

The President of the Republic issued Executive Decree No. 754, published on June 2, 2023 (hereinafter “ Decree ”). The Decree reformed the Regulations of the Organic Code of the Environment. One of the main reforms that the Decree implemented was the Citizen Participation Process for Environmental Consultation in the environmental regularization process.

On June 13, 2023, certain indigenous groups presented a public action of unconstitutionality, due to the form and substance of the Decree, indicating that: (i) a Law and not an Executive Decree is required to regulate these aspects; (ii) failure to carry out the pre-legislative consultation; (iii) the prior consultation is confused with the environmental consultation, requesting the suspension of the Decree while the case is resolved.

On July 31, 2023, the Constitutional Court heard the request within case 51-23-IN, in which it decided:

•  Admit the public action of unconstitutionality to processing, without implying prejudgment.

•  Accept the request for provisional suspension of the entire Decree while the Constitutional Court analyzes and resolves the public action of unconstitutionality.

What are the next steps to follow in response to the claim of unconstitutionality of the Decree?

The Presidency, the Ministry of the Environment, Water and Ecological Transition (hereinafter “ MAATE ”), and the State Attorney General’s Office may challenge or defend its constitutionality within 15 days. Likewise, the Presidency has 15 days to send to the Constitutional Court the support on which the Decree was based.

Companies that have already initiated the environmental consultation process under the Decree could present  amicus curiae,  to report their arguments to the Court.

Deadlines that the Constitutional Court has:

At the moment there is no specific term for the Constitutional Court to rule on the merits of the public action of unconstitutionality. In the meantime, the Decree will continue to be suspended.

Relevant information:

The MAATE indicated that more than 150 projects have been paused due to the lack of implementation of the environmental consultation.

Possible scenarios:  Once the Constitutional Court analyzes the substance of the public action of unconstitutionality, there are 3 possible scenarios:

1. Scenario #1:  The Decree is declared unconstitutional in its entirety.

Effects Legal path to follow
Until the National Assembly issues the new law, the MAATE will not be able to continue with the environmental regularization processes. The Court must rule on the regularization processes initiated before the declaration of unconstitutionality. The National Assembly should issue an organic law that regulates the right to prior consultation and the right to environmental consultation.  

If the Court so determines, the pre-legislative consultation must be carried out previously.

 

2. Scenario #2:  The Decree is declared partially unconstitutional.

Effects Legal path to follow
The articles that the Constitutional Court determines are unconstitutional would be eliminated from the Decree, and the rest would remain in force. The Court must rule on the regularization processes initiated before the declaration of unconstitutionality. 

Until the National Assembly issues the new law, MAATE will not be able to continue with the environmental licensing processes.

 

The reasoning of the Constitutional Court must be followed, which could include the National Assembly issuing an organic law that regulates those issues that are declared unconstitutional. In turn, a pre-legislative consultation be carried out.  

 

3. Scenario #3:  the content of the Decree is declared to be constitutional.

Effects
The provisional suspension of the entire Decree is lifted and the environmental consultation processes are resumed. The conditional constitutionality of the Decree could also be declared, and it must be applied in the manner indicated by the Constitutional Court.

For more information contact:

Maria Rosa Fabara  | Partner Bustamante Fabara | mrfabara@bustamantefabara.com

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Uruguay | Ministry of Labor approves the regulation of electronic notifications

Uruguay | Ministry of Labor approves the regulation of electronic notifications

The Ministry of Labor, Employment and Social Security (MTEPS), through a ministerial resolution issued on February 16, 2024 (No. 176/2024), has determined the approval of the Regulation of notifications through electronic means.

The purpose of the approval of this regulation is to implement and regulate the notifications of administrative acts and actions issued by the MTEPS, in order to avoid violations to the parties involved, and to allow employers and workers to have full knowledge of all the procedures and procedures. socio-laboral.

This provision is applicable to all organizational units dependent on the MTEPS that use electronic means to make electronic notifications.

Types of electronic notification

  • Manual
  • Automatic

Notification log

The date and time of sending the notification must be recorded, whether in the form of manual or automatic electronic notification.

Computerized means of electronic notification

Electronic notifications may be made through the following authorized means:

  1. Email : indicated by the user, responsible third party or legal representative of the company or labor establishment in the private sector or public sector institutions.
  2. Cell phone line with the active Whatsapp application : indicated by the user, responsible third party or legal representative of the company or labor establishment in the private sector or public sector institutions.

User’s responsibility to receive notifications

It is established as the responsibility of the user, responsible third party or legal person responsible for the company or work establishment in the private sector and public sector institution, to share the electronic medium so that the corresponding MTEPS unit carries out electronic notifications, as well as the use and administration of your password.

Effectiveness of electronic notification

The notification will be considered valid with confirmation of its sending to the email or cell phone line with the WhatsApp application provided by the user, responsible third party or legal representative of the company or work establishment in the private sector and public sector institution.

The confirmation will be sufficient proof to prove the completion of the notification, which will be fully valid from its sending for the calculation of the administrative deadlines; regardless of whether the recipient assigns the corresponding “read” or “received” message to the message.

Days and hours to make notifications

Electronic notifications must be made on administrative business days and hours, that is, Monday to Friday, from 08:00 am to 16:00 pm, except for holidays.

Depending on the circumstances, and under duly substantiated reasons, non-working days and hours may be enabled.

Receipt of notification

The notification will be considered to have been made on the day and time in which the public servant sends it through electronic means.

The calculation of the deadlines will begin from the business day following the notification.

The scanned documents that form part of the notification must be attached to it.

For more information contact:

Carla Arellano  | Counselor Ferrere | carellano@ferrere.com

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United States | Federal Trade Commission Announces Largest Penalty Ever for US-Made Violations

United States | Federal Trade Commission Announces Largest Penalty Ever for US-Made Violations

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

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Ecuador | Constitutional Court decides to provisionally suspend Executive Decree 754 that reformed the Regulations of the Organic Code of the Environment (Case 51-23-IN)

Guatemala | Green Power: How ESG Practices Transform Corporations

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

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Peru | Annual Report of the Compliance Officer (IAOC)

Peru | Annual Report of the Compliance Officer (IAOC)

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

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Mexico | The decree that modifies the Securities Market Law and Investment Funds Law is published in the Official Gazette

Mexico | The decree that modifies the Securities Market Law and Investment Funds Law is published in the Official Gazette

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

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