News
Hugo Hernández-Ojeda, Hogan
Lovells
commitments - as members
of the International Labour
Organisation (the United Nations
agency that sets international
labour standards) - to workers’
rights to a ‘dignified workplace’.
USMCA stipulates labour
audits of employers to verify
outsourcing structures, among
other regulations. “As counsel
to employers, and with a vast
list of international companies
looking to do business in Mexico,
we anticipate more client work
regarding the commitments made
in USMCA,” Hernández-Ojeda
Alvirez says.
He adds that it is vital that
clients ensure their subcontracting
arrangements are in order as
this would mean avoiding
financial penalties. “We have
seen that rather than seeking
well implemented subcontracting
structures that provide employees
with benefits under the law,
authorities are rather seeking to
collect omitted tax contributions
and punish companies that save
money either by means of non-
compliance, or at the expense
of the employees’ minimum
rights.” Hernández-Ojeda
Alvirez continues: “One of our
clients’ hottest topics is the
assessment of their corresponding
subcontracting structures in order
to verify their compliance and
reduce contingencies of a fiscal or
labour nature,” he adds.
Difficult negotiations
Mexico’s automotive sector,
which assembles vehicles for
www.thelatinamericanlawyer.com
US, Japanese and European
automakers - as well as exporting
vehicles to its USMCA partners
- may have to increase workers’
salaries and benefits packages
by up to 600 percent, which
will be difficult for companies
to negotiate, according to
Hernández-Ojeda Alvirez.
Rules of origin for goods
manufactured within the free
trade area was another issue that
led to complications during the
the renegotiations.
Opening doors
Carolina Palma, a senior manager
in global trade and customs at
Ernst & Young, says the new
trade deal is much more complex
than its predecessor. “Companies
will need to seek expert counsel
to ensure they comply with the
new treaty’s requirements, such
as in vehicles’ rules of origin, as
companies not complying with
the minimum origin requirements
will be liable to sanctions,” she
explains.
Palma adds: “The level of
specialisation of the new treaty
means that counsel must be of the
highest level of professionalism
and precision so that the treaty
is a facilitator of trade and
companies can reap the maximum
benefits from it, but it requires
detailed study and analysis.
Companies will take advantage
of the trade agreement to open
doors and possibilities to increase
investment, but at the same time
face the challenges of applying the
agreed regulations.”
News in brief
Estudio Garrido advises
CryoHoldco on Biocells
purchase
Argentinian law firm Estudio
Garrido advised Mexico
City-based CryoHoldco
de Latinoamérica on its
acquisition of Biocells, one of
Argentina’s largest stem cell
banks. The details of the deal
were not disclosed. Biocells
distributes stem cells to clients
in Argentina, Uruguay and
Paraguay.
BLP advises on feasibility
studies for new Nicaraguan
port
Law firm BLP has advised
on feasibility studies being
carried out by Nicaragua’s
transport and infrastructure
ministry – in conjunction
with Dutch company
Arcadis Nederland – for the
construction of a new port
in Bluefields, Nicaragua.
The $275 million port will
be partly financed by a loan
from the Inter-American
Development Bank.
Lupicinio advises Kodysa on
Cuban poultry project
Madrid-based law firm
Lupicinio International has
advised Spanish engineering,
construction and agricultural
development company Grupo
Kodysa on its negotiations
with the Cuban government
for the development of an
agro-industrial programme
to supply chickens to the
island nation. Under the
agreement, the $56.5 million
programme would supply
Cuba with almost one-third of
the chickens consumed on the
island.
Carolina Palma, Ernst & Young
December 2018 • THE LATIN AMERICAN LAWYER •
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