Category: Public Policy

Afterwards, Federico Goudie, discussed the opportunities of doing business in Brazil and Chile.  Both countries are very popular to invest in, and will remain so for some time.  Chile’s business climate is very favorable and investments are encouraged.  Although Brazil is making great strides in growing its economy, Brazil still faces obstacles in terms of attracting foreign investment.  The source of that difficulty is found in transparency issues and with the tax code.  It was also highly suggested that when doing business in Brazil or with a Brazilian company, include an arbitration clause as part of your agreement.

Roberto Pupo discussed Columbia’s and Venezuela’s business climate. It was an interesting case study of two neighboring countries going in opposite directions in terms of economic growth.  Currently, Columbia is the third largest economy in Latin America.  The respect for rule of law and the recently signed free trade agreement with the U.S. are major causes for this economic boom.  Mr. Pupo continued by explaining new trends in Columbia with private/public partnership and with a new form of corporate structures.

Venezuela is the fourth largest economy in Latin America.  Despite this fact, foreign investment has been lagging due to three factors.  The first factor is increasing government regulations.  The second factor is the use of nationalization by the Venezuelan government.  Although there is a compensation mechanism in the Venezuelan law, compensation is a lengthy process and very limited.  The third and final factor is that Venezuelan law has a strict repatriation of profits for foreign companies.  One can infer that Venezuela’s economic ranking will be dropping if there are no changes to these obstacles.

The final speaker was Pedro Freyre, who spoke regarding Cuba.  Mr. Freyre described Cuba as a country that will be perpetually known as the country of the future.  One whose potential will be realized in the future but with no timetable as to when will the future come.  Currently, Cuba is in the process of shifting from a charismatic leadership to a collective institution as seen in China or in Vietnam.  Recently, Raul Castro named Miguel Diaz Canel as his successor.  In terms of an economy, Cuba aspires to become like Venezuela.  Mr. Freyre did point out to some market reforms in the small markets or “timberiche” as it is called.  In terms of sectorial opportunities, look at the biotechnology, agriculture, healthcare, housing, and energy.  However, Cuba faces three challenges in demographics, budget, and with Helms-Burton, which calls for a democratic Cuba.

The presentation concluded with a Q & A session. The panelists were asked only question, “Which other emerging market should one keep an eye on?”  The answer was Peru.

The session was good and could have continued for another day. There is a lot to talk about in this arena and there are many U.S. companies looking to expand the sale of products and services throughout the Western Hemisphere. While there are many business opportunities, there are also legal and political matters that need to be addressed when working in the Americas. If your company has never done so, be sure to consult with people that are familiar with the business, regulatory, and political climate in the region.

Please do not hesitate to contact the Law and Public Policy Office of Poblete Tamargo to assist you researching the market and investment opportunity in both Latin America and the Caribbean.

 

This proposal could impact the business and operations of public companies and, some argue, could discourage corporate and individual participation in the political process. The Committee’s proposal would not apply to privately held companies. If this petition develops into a proposed rule, a public comment period and opportunities for stakeholders to share their concerns for the proposed rule will be provided as the SEC considers the petition.

The Congress may look in to this matter during the upcoming fall session. It is worth noting that publicly held companies are allowed to make political contributions in twenty-eight (28) states.

We suggest that interested companies and individuals remain aware of the developments with regard to this issue. If you would like further information or advice specific to your business, please contact us. Please follow this link to download a copy of the Committee’s petition.

 

 

 

HR 1905 appears to build upon the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), which was signed into law by President Obama in July 2010, and which strengthened and expanded U.S. sanctions against Iran. According to a press release issued by the Committee: 

“U.S. policy towards Iran has offered a lot of bark, but not enough bite. This new bipartisan legislation would bring to bear the full weight of the U.S. by seeking to close the loopholes in existing energy and financial sanctions laws, while increasing the type and number of sanctions to be imposed.

“Given the grave nature of the Iranian threat, it is my hope that my colleagues will support further strengthening the bill as it moves through the legislative process and not fall into the trap of enabling the Executive Branch to ignore U.S. law. Failing to move expeditiously to close these loopholes, and allowing the continued failure of successive administrations to vigorously enforce the sanctions currently on the books, strengthens Iran while leaving the U.S. and our allies more vulnerable.”

H.R. 1905, the Iran Threat Reduction Act (ITRA), closes loopholes in both energy and financial sanctions and counters the Iranian regime’s efforts to evade them.

The bill eliminates some waivers, resulting in a mandate to impose sanctions on those who provide the Iranian regime with the materials, technologies, and other assistance to pursue its nuclear, chemical, biological, and missile programs.

The bill also creates a new higher standard for waiver of energy sanctions by requiring the President, before waiving, to notify Congress and certify that failure to waive would pose an unusual and extraordinary threat to the national security interests of the U.S.

HR 1905 is available for download here.

The study focused on products and services in the following markets: engineering, computers, the physical sciences, and the life sciences. “Foreign businessmen,scientists, engineers, and academics from countries of concern have gained unauthorized access to controlled dual-use technologies in the United States, according to intelligence and law enforcement sources,” says the GAO report. While the countries of concern are not listed but based on prior reports, China is likely at the top of the list. There were 13 countries reviewed.

Under U.S. law, companies and universities need to secure U.S. Government approval before releasing controlled dual-use technology or source code “subject to the EAR” to a foreign national who is either (1) not a permanent resident of the United States; or,  (2) a member of certain groups of protected individuals such as asylum holders. Because there is a supposed shortage of qualified U.S.-born engineers and scientists, or so the argument goes, companies and research universities must turn to foreign sources to remain competitive.

The GAO made some interesting but not earth shattering conclusions. It states that in “2002 we reported that the deemed export licensing system did not provide adequate assurance that U.S. national security interests were protected from countries that gather information on dual-use technologies to build weapons systems. This conclusion remains relevant today.”

From a regulatory compliance standpoint, it is not an easy matter. These days companies need to focus on numerous regulatory regimes in these cases to move the process along including export controls as well as immigration rules. To the Obama Administration’s credit, it has tried to move the reform process forward and has made some interesting changes that may improve the regulatory system; however, there will always be disagreement in this area as to how much control will be necessary.

While there is no silver bullet, information-sharing amongst the key agencies and robust law enforcement will go a long way in improving the system. For the private sector and academia, it needs to continue stepping up contribute to that process by having solid compliance programs in place.

The GAO report is available here.