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Law No. 5882/2017 on Integral Management of Batteries and Batteries for Domestic Use came into force in March 2018, and presents a much more extensive and detailed regulation than the previous one -Law No. 3107/2006-. Like the previous one, the new law sets caps on the amounts of cadmium, lead and mercury that batteries may contain. In addition to this, it extends its scope of application to rechargeable batteries, determines new obligations for all those involved, establishes penalties and appoints new enforcement authorities. However, the relevant regulations have not yet been issued by the responsible institutions, which would replace the contrary provisions of Decree 4926/2010 and Resolution 970/2010 of the Ministry of Industry and Commerce (MIC).

While the previous law designated the MIC as the sole enforcement authority, the current law expands the responsible authorities:

• The MIC continues to be responsible for ensuring compliance with the law in the import process, extending its intervention to the manufacturing, assembly and commercialization processes, in addition to working in coordination with the National Quality System Agencies, implementing the Registry of Manufacturers, Assemblers and Importers of Batteries and Batteries for Domestic Use -not yet implemented to date- and establishing a system of prior import licenses;
• The Secretariat of the Environment (SEAM) is in charge of establishing regulation, control, monitoring and oversight mechanisms for the proper management and protection of the environment, and is responsible for preparing the Comprehensive Environmental Management Plan for Batteries and Cells -which is still pending despite the entry into force of the law- and the Registry of Operators for the recycling, elimination and final disposal of batteries and cells;
• The different municipalities should implement mechanisms for the transport, collection, treatment and final disposal of batteries and accumulators in their jurisdictions.

The law also establishes new obligations for all those involved in the private sector, both for manufacturers, assemblers, importers and marketers -who must guarantee and certify that their batteries comply with the law, provide suitable containers for collection at points of sale, make the batteries available to the municipalities, include warnings about the contamination caused by the product in their advertising campaigns, register with the MIC, among others- and also for users -who must verify that the batteries are in good condition at the time of purchase, and register with the MIC, among others-, include warnings about the contamination caused by the product in their advertising campaigns, register with the MIC, among others-, as well as for users -who must verify the good condition of the batteries at the time of purchase, dispose of them only at the collection points and not manipulate the structure or disassemble the batteries-.

Since the new law is in force, compliance with it is imperative despite the lack of relevant regulations, especially considering that non-compliance carries penalties ranging from fines (from fifty to one thousand minimum daily wages) to confiscation of products, cancellation of registration, prohibition to sell batteries and batteries and a written warning. This requires that companies involved in the trade of batteries and accumulators be aware of the operative provisions of the law that are already applicable without the need for additional regulation.

For more information about the changes brought by the new Law on Batteries and Batteries, and how to apply it, do not hesitate to contact Rodrigo Fernandez (rfernandez@vouga.com.py)

The bill approving the Agreement for the construction of the international road bridge between Carmelo Peralta (Paraguay) and Puerto Murtinho (Brazil) was approved on Wednesday, May 9 by the Chamber of Deputies and awaits enactment by the Executive. The Brazilian Chamber of Deputies approved the same agreement in a session held last March. The bridge, which will cross the Paraguay River, will be strategic to make the International Bioceanic Road Corridor viable. The project also includes complementary infrastructure works, accesses and border posts.

The Agreement creates a Paraguayan-Brazilian Joint Commission composed of representatives from each country, in charge of approving the Binational Bidding Terms and Conditions, the studies, projects and other documents or procedures necessary for the construction of the bridge, as well as awarding the result of the bidding and supervising the construction until its completion.

The bridge will not only connect Central-West Brazil, Northern Paraguay and deep water ports in Chile -with strategic access to the Atlantic and Pacific Oceans- but it is also linked to the construction of the first asphalt road in Alto Paraguay, which will represent an important support for the development of the entire Paraguayan Chaco, raising the quality of life of the inhabitants. The construction of the Paraguayan section of the Bioceanic Corridor between Carmelo Peralta and Loma Plata -which will cover 277 kilometers- is set to take forty months from the start of the work, whose award contract has already been signed in favor of the Consorcio Corredor Vial Bioceánico, made up by the company Constructora Queiroz Galvao S.A. of Brazil and Ocho A S.A. of Paraguay.

The Foreign Affairs Committee of the Chamber of Deputies advocates for the implementation of the Agreement and for the bidding processes to be brought forward, in order to inaugurate the bridge as soon as possible and connect the Paraguayan section of the Bioceanic Corridor.

For more information about public tenders and investment opportunities for this and other public projects, please do not hesitate to contact Walter David Vera (wvera@vouga.com.py) or Marco Colmán (mcolman@vouga.com.py) 

The bill which proposes an ambitious plan to reactivate the “Presidente Carlos Antonio López” Railway -one of Paraguay's emblematic institutions- was approved by the Chamber of Deputies last Wednesday, May 9, and is now before the Executive. The proposal came from the Executive Power itself, which, through Ferrocarriles del Paraguay S.A. (FEPASA) -a Paraguayan State company holding the concession for the provision of railway services in the Republic-, has been working on the rehabilitation of the railroad, in a first section which will be under the modality of “commuter train” and would mobilize thousands of Paraguayans every day.

The main features of the reactivation plan, which could be in place by 2020, would be as follows:

• The section would run some 44 kilometers from the central station at Plaza Uruguaya in Asunción to Ypacaraí;
• It would total eight main stations and between 12 and 15 stops;
• The trains would be all-electric (non-polluting), and would have a single body and three to four joints;
• It would depart every five minutes during peak hours, carrying up to 280 passengers at a time.

The railroad rehabilitation plan would also contemplate the relevant social solutions for those who currently occupy the railroad tracks, as well as the protection of the cultural heritage, which would not be affected by the installation of the system but, on the contrary, it is intended to revalue it.

With respect to investment, the business model governed by Law 117/91 of joint venture or risk-sharing. In this way, it would seek to have the support of private investors to cover operating costs, recovering investments over the 30-year term of the contract, in addition to a reasonable profit from payments made by users. Should this not be sufficient, they would receive a subsidy from the State for each ticket sold. The pre-qualification process for interested parties began in 2015 and four groups of companies have already been pre-qualified, although the company is seeking to attract more interested parties.

Should you have any questions about this project or other projects, please do not hesitate to contact us. 

In its latest report, issued last April, Fitch Ratings maintained the country's credit rating at “BB”, which leaves it steps away from obtaining investment grade. The report highlights that real GDP increased 4.3% in 2017, which is the highest rate in South America and above the average of similarly rated countries. Fitch's outlook is positive, projecting similar growth in 2018 and 2019 under the new government administration.

The debt-to-GDP ratio also remained lower than that of other countries with similar ratings. Thanks to compliance with the Fiscal Responsibility Law, the central government deficit at 1.4% of GDP was one of the lowest in the last two years. Likewise, the new administration's intention to reform the judicial system and to increase the efficiency of public institutions is seen as a factor that could improve indicators at the country level. In addition, some of the variables surrounding the country's credit profile could improve following an upcoming revision of GDP data upwards - as an improvement in nominal GDP would increase GDP per capita and reduce the debt-to-GDP indicator.

Fitch expects that a continuity of economic policies by the new administration - with low fiscal deficits and debt levels, improved governance indicators, as well as solid and sustained GDP growth rates with lower volatility - could improve Paraguay's credit rating.

If you would like to know more about Paraguay's credit information, please do not hesitate to contact us. 

By means of Decree No. 8819, of April 23, 2018, the image and logo of the “Country Brand” were approved, whose use will be mandatory by State agencies and entities, dependent on the Executive Branch, Corporations in which the State is a majority shareholder and Binational Entities in its Paraguayan Part. The approval of this material is a consequence of an exhaustive research to define the strategy of the “Country Brand” of Paraguay, carried out between 2016 and 2017, due to the fact that, nowadays, both business sectors and governments have the need to create their own identity in front of international markets, with the purpose of capitalizing the reputation of the country and its image.

According to the manual of use, the Country Brand is formed from what is called “Central Idea”, which is the fact by which a country wants to be known. In the case of the “Paraguay Country Brand”, the objective is to make known the development and progress that the country is experiencing and the Central Idea is then related to the notion of an economically fertile country, with potential for investment and growth. The final objective with the “Country Brand” is to create a collective awareness so that the concept of a fertile country is internalized, thus transforming the perception both domestically and internationally.

Three groups of icons were created to represent the Paraguayan ecosystem, each with six variables:

• GROWTH: economy, low indebtedness, legal certainty, political will, low taxes and transparency;
• OPPORTUNITY: industry, infrastructure, logistics, geography, quality of life and purity;
• WEALTH: commitment, energy, hospitality, water, climate and fertile land.

The image and logo of the Paraguay Country Brand will be managed jointly by the Ministry of Industry and Commerce and the Secretariat of Information and Communication, and will be used, in general, in both printed and electronic materials.

In order to establish a regulatory order with a scope according to the current situation of the sector, the Executive Branch issued Decree No. 8785/2018, countersigned by the Minister of Public Works and Communications, which constitutes the new regulation to the Hydrocarbons Law -Law No. 779/1995-. This decree encompasses and leaves without effect the previous decrees No. 2003/2014, 2673/2014 and 4476/2015, with the purpose of simplifying all the regulation in a single legal body and avoiding normative dispersion. The same also clarifies certain articles and establishes deadlines and obligations.

According to Article 2 of the Annex to Decree 8785/2018, the regulation is mandatory for all individuals or legal entities applying for rights for prospecting, exploration and exploitation of hydrocarbon deposits in their solid, liquid and gaseous states, as well as for holders of permits and concessions, and public officials involved in processes tending to the granting of the aforementioned rights. Regarding the scope of the new regulation, Article 160 provides that it will be applicable to applications for permits and concessions that are submitted as of the effective date thereof, or that as of the date of its publication in the Official Gazette - April 17, 2018, Official Gazette No. 72 - are in process and have not yet been approved by the Evaluating Committee.

According to the representatives of the MOPC, this new regulation constitutes one more achievement to achieve a better organization and ensure that Paraguay's hydrocarbon cadastre is occupied by serious and committed companies, and responds to the need for PETROPAR, in charge of carrying out the prospecting, exploration and exploitation of hydrocarbon deposits on behalf of the Paraguayan State, to have legal and technical tools that allow it to carry out such activities on its own or in association with other specialized companies. It is also intended that the Office of the Vice-Ministry of Mines and Energy may have the necessary tools to regulate and supervise such activities.

If you would like to know more about the exploitation of hydrocarbons in Paraguay and the regulations applicable to this activity, please do not hesitate to contact: Marta Martínez (mmartinez@vouga.com.py)

Taking into account the multiple benefits obtained with the implementation of the Electronic Legal Procedures System, the National Public Procurement Directorate (DNCP) issued Resolution No. 718/18 at the end of February, enabling a new module called “Electronic Investigations”, which came into force last March 15. It allows citizens to submit their complaints through the Electronic Investigations Module SICP in the institution's portal (www.contrataciones.gov.py).

As a result of the implementation of this new module, complaints will be processed through an electronic file, allowing the traceability of events and knowing the exact status of the investigation. Therefore, also the complaints submitted in writing to the Intake Desk will be digitized and processed electronically. In this case, the complainant must provide an e-mail address in order to have access to the system and receive the relevant notifications. Another aspect worth highlighting is that the module has the option of submitting complaints with identity protection, which is intended to encourage the submission of as many complaints as possible.

The Electronic Legal Procedures System also has two other modules that have been successfully used, streamlining procedures and increasing their transparency, providing the parties with the convenience of not having to go to the institution to inquire about the status of their procedures. In this regard, it should be noted that, thanks to the implementation of the system, physical notifications have decreased by 40%, representing an optimization of the State's resources through savings in both time and money.

If you would like to know more about procedures before the Dirección Nacional de Contrataciones Públicas, please contact Perla Alderete (palderete@vouga.com.py) or Walter David Vera (wvera@vouga.com.py) 

The renowned directory Chambers & Partners, dedicated to the publication of guides that identify and rank the best lawyers and law firms in the world, has distinguished Vouga Abogados, specifically in the person of its partner Cynthia Fatecha, with a nomination for the Women in Law 2018 awards, in its Latin American edition.

Chambers' Women in Law awards recognize those pioneers who have promoted the advancement of women within the legal sphere. The awards seek to highlight these achievements, empower the people behind women's innovative initiatives and give greater visibility to gender diversity. They represent the culmination of extensive research on gender diversity in Latin America and celebrate those who promote equal opportunities for women in the region.

The awards ceremony will be held on Thursday, May 10, in Santiago, Chile.

This nomination fills us with pride and reaffirms our commitment to continue promoting a diverse team where equal opportunities are a reality, which enriches the vision we can offer our clients.

In our eagerness to always provide our clients with the best service in the legal field and complying with the highest ethical standards, we continue to constantly reinforce our team, so we are pleased to announce the incorporation of RODRIGO FERNÁNDEZ DE NESTOSA to the Corporate area, to which he will contribute with his experience in intellectual property, litigation and contracts.

Rodrigo is a graduate in Law and Notary Public from the Universidad Nacional de Asunción and holds an LL.M. in Business & Trade Law from the Erasmus Universiteit Rotterdam. He also holds an LL.M. in Comparative Law from the University of Miami, and is fluent in English, Portuguese and Italian, in addition to Spanish.

We welcome Rodrigo and wish him success in his new role.

If you would like to know more about our Corporate area, please do not hesitate to contact Rodrigo at his e-mail address (rfernandez@vouga.com.py).

Eusebio López, associate of Vouga Abogados, participated as speaker in the International Conference organized by the International Chamber of Commerce called “Arbitrators: Superheroes?” in Quito, Ecuador, on March 23rd. He spoke on the procedural principle Iura Novit Curia, analyzing the positions for and against its application in International Arbitration.

Vouga Abogados participates in the most important academic spaces of international arbitration, always aiming to provide the best service to its clients.

More information about the event: https://iccwbo.org/event/icc-yaf-arbitrators-superheroes/#1479467112259-d5b2b420-b616aba1-b1becc7e-5a0dece0-8b5e4357-bde48474-13102a34-e8d5

If you would like to know more about our International Arbitration practice, please contact Eusebio López (elopez@vouga.com.py) or Mirtha Dos Santos (mdsantos@vouga.com.py)