The Banco Nacional de Desenvolvimento Econômico e Social (BNDES), in collaboration with the Financier of Studies and Projects (Finep), has launched a public call for proposals to attract, establish, and expand Research, Technological Development, and Innovation (R&D&I) Centers in Brazil. This initiative is a key component of the "New Industry Brazil" strategy, a national policy aimed at fostering reindustrialization and technological advancement through six priority missions defined by the National Council for Industrial Development (CNDI).

Objectives

This public call seeks to enhance Brazil’s position as a center for scientific and technological development by promoting collaboration between public institutions, universities, research centers, and private enterprises. The program is designed to:

Drive research and technological innovation in key industrial sectors Strengthen Brazil’s competitiveness in science and technology Attract foreign investment in research and development Support the development of advanced infrastructure Foster the growth of highly skilled professionals in strategic areas

Eligibility

The call is open to:

Brazilian companies engaged in or planning to undertake R&D&I activities Foreign companies interested in establishing or expanding R&D&I centers in Brazil, subject to legal and administrative formalization in the country

Scope of Eligible Projects

The initiative supports the creation and expansion of laboratories, pilot plants, demonstration facilities, and innovation hubs dedicated to research and technological development.

Minimum requirements for participation:

Physical infrastructure New centers: Minimum area of 500 m² Expansion projects: Minimum area of 250 m² or a 20% increase over existing facilities Technical workforce New centers: At least 50 employees, of whom at least 10 must hold a master’s or doctoral degree Expansion projects: At least 25 employees, of whom at least 5 must hold a master’s or doctoral degree Investment thresholds Minimum R$10 million for centers in the North and Northeast regions Minimum R$20 million for centers in other regions Project implementation period: Up to 36 months

Funding and Strategic Impact

The initiative is supported by a total budget of R$3 billion, reinforcing Brazil’s commitment to technological advancement, industrial competitiveness, and economic development.

Application Process and Selection Criteria

Deadline for proposal submission: June 30, 2025 Evaluation criteria: Alignment with the objectives of the public call Financial capacity in relation to the proposed investments Contribution to the New Industry Brazil policy and its strategic missions

Further Information

This initiative provides a significant opportunity for institutions seeking to play a leading role in Brazil’s technological and industrial development. By participating, organizations will contribute to the country’s innovation ecosystem and the expansion of its research infrastructure.Public Call for selection of proposals for attracting, implementing or expanding research, technological development and innovation centers - english version

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Public Call for selection of proposals for attracting, implementing or expanding research, technological development and innovation centers - Portuguese version

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What is the Clean Industrial Deal?

Initiative of the European Commission Aims to transform decarbonization into a growth driver for European industries Seeks to combine climate and competitiveness Main focus on energy-intensive industries and the Clean-Tech sector Priority on circularity – the EU aims to be a leader by 2030 Six business drivers: Affordable energy Lead markets Financing Circularity and access to materials Global markets and international partnerships Skills

Access to affordable energy

Foundation of competitiveness Prices in Europe are much higher compared to trading partners The EU must advance to a fully integrated single energy market An Action Plan for Affordable Energy is adopted with goals: Lowering energy bills through agreements, counter guarantees, lower taxes, building networks, and state aid Accelerating the rollout of clean energy and electrification by cutting permitting times for the deployment of the grid, energy storage, and renewables projects with concrete measures in the upcoming Industrial Decarbonisation Accelerator Act Ensuring well-functioning gas markets, as the price of imported natural gas directly impacts gas and electricity prices. Therefore, a Gas Market Task Force was set up to scrutinize markets, and gas storage refilling will be better coordinated

Lead markets

Concrete measures are required on the demand side too, and the CID will put in measures for the demand to emerge Non-price criteria in public procurement and incentives for private purchases The future Industrial Decarbonisation Accelerator Act (IDAA) will introduce resilience and sustainability criteria to foster clean European supply in energy-intensive sectors The IDAA will develop a voluntary label on the carbon intensity content of industrial products based on methodology with ETS data with ongoing revision of the CBAM methodology Promote the uptake of renewable and low-carbon hydrogen Hydrogen has a central role in decarbonizing the EU energy system. The Commission will soon adopt a delegated act on low-carbon hydrogen

Public and private investments

The clean transition will require major investments. The EU needs to increase annual investments in energy, industry, and transport systems by around 480 billion EUR compared to the previous decade. Mobilizing and leveraging private capital are key. Strengthening EU-level funding The Innovation Fund has proven reliable for financing industrial decarbonization. The Commission will also propose a facility for industrial decarbonization based on the ETS Leveraging private investment InvestEU is the main EU-level tool to leverage private funding. The Commission is putting forward an amendment to increase its risk-bearing capacity. Work with the EIB on new initiatives will also take place. Clean Industry State Aid Framework Simplified rules will allow quick approval of state aid measures for decarbonization and clean-tech projects. Tax policies should not give fossil fuels an advantage over clean energy. Tax measures will be paired with further actions to scale down and phase out fossil fuel subsidies.

Circularity

Europe should be more strategic about procuring critical raw materials to drastically reduce exposure to unreliable suppliers and prevent supply disruptions Fast implementation of the Critical Raw Materials Act The Commission will set up a demand aggregation and matchmaking mechanism for critical raw materials As a second step, the Commission will set up a dedicated EU Critical Raw Material Centre Circular economy The Commission will adopt a Circular Economy Act in 2026, which will accelerate the circular transition enabling the free movement of circular products, secondary raw materials, and waste

Global markets

Achieving the objectives of the CID is closely linked to the ability to act internationally. The EU cannot realize its clean industrialization objectives without partnerships on the global stage. Clean Trade and Investment Partnerships The EU continues to sign, conclude, and fully implement pending Free Trade Agreements and takes forward ongoing negotiations for new ones. Clean Trade and Investment Partnerships (CTIPs) will complement these agreements Improving the Carbon Border Adjustment Mechanism The Carbon Border Adjustment Mechanism (CBAM) ensures that the EU’s industry emission abatement efforts are not undermined by carbon-intensive imports of goods produced outside the EU and incentivizes decarbonization and carbon pricing globally. In the second half of 2025, a comprehensive review of CBAM will be presented Promoting and protecting EU industry The EU needs to remain an attractive place to do business. The Commission will adopt guidelines by January 2026 on key concepts underpinning the Foreign Subsidies Regulation The Commission will continue to make fast and efficient use of Trade Defence Instruments such as anti-dumping or anti-subsidy duties where necessary

Skills and quality jobs

Every person, community, and business should benefit from the clean transition. CID therefore commits to delivering quality jobs Skills and quality jobs Industry needs better access to skills. The Commission will lay out a Union of Skills as an overarching skills strategy to support the development of a more resilient and adaptable education A Skills Portability Initiative will help ensure that a skill acquired in one country is recognized in another Supporting workers in transition To support workers in transition, the Commission will create a European Fair Transition Observatory The Commission will assess if the use of training and skills conditionalities for public support of the industrial transition can be increased Social leasing for clean products To ensure all Europeans benefit from the clean transition without adverse distributional effects and to help stimulate demand for clean products, the Commission will develop Guidance to Member States on social leasing for electric vehicles, heat pumps, and other clean products.

Implementing CID across sectors

The CID will serve as a framework for engaging in a dialogue with industries to develop sectoral transition pathways The Industrial Action Plan for the Automotive Sector will be adopted on March 5th. A steel and metals action plan will also be launched in March. A Chemicals Industry Package set for adoption in late 2025 will recognize the strategic role of the chemicals sector as the industry of industries and propose initiatives for the sector’s competitiveness. A Sustainable Transport Investment Plan will outline short-term measures to support specific renewable and low-carbon fuels for aviation and waterborne transport. The Commission will also propose a Bioeconomy Strategy to improve resource efficiency and tap the significant growth potential of biobased materials substituting fossil-based materials.

Reactions

"I am not sure how quickly the Deal can drive down energy prices," said Elisabetta Cornago, a senior research fellow at the think tank CEPS. The draft text acknowledged that gas will be the price-setter for power prices for years to come, and here Bruegel's research analyst Conall Heussaff sees a structural problem. Europe relies almost entirely on gas imports which are “always going to be expensive,” he said, citing the extra costs of liquefying and transporting gas compared to the US, which directly extracts its own shale gas and uses it domestically. The experts all believed that more renewables and an integrated European grid will ultimately reduce prices, but this will not happen anytime soon. Heussaff sees this shift happening in the 2030s.

TAX LAW

AGREEMENT TO PREVENT DOUBLE TAXATION BETWEEN CHILE AND THE UNITED STATES

This agreement positions Chile in an advantageous place compared to its South American peers and gives it tax benefits for trade with the world's leading economy. But almost a year after its implementation, it is still little known in the country, so the corporate and investment structures it offers are not being used well.

ENTRY INTO FORCE

After almost fourteen years of rest in the US Senate, the long- awaited agreement between Chile and the United States that put an end to double taxation came into force. Indeed, since February 4, 2010, when it was signed in Washington D.C., and having passed through our country five administrations, its application is now a reality. This positions Chile in an advantageous place compared to its South American peers, while trading with the world's leading economy, which complements the current Free Trade Agreement.

However, since its entry into force on January 1, 2024, it is striking that legal and accounting advisors, and the business fabric, with some exceptions, have made little use of it, in circumstances that this agreement represents 10.9% of Chilean foreign investment, and can be used from large-scale capital to mere personal service providers.

MAIN BENEFITS

Among the main benefits is the mitigation of the tax impact. In figures, the US federal system establishes a corporate tax of 21%. With the remaining 79%, a difference occurs with the agreement. Previously, there was a Withholding of 30%, which is now reduced to 5%. Thus, the final tax burden decreases from 44.7% to 24.95%. If we compare it with the complementary global tax of 35%, there is an advantage of just over 10 points. Of course, it will be necessary to make case-by-case analyses, such as State Tax Rates, but the advantage is abysmal.

NEED TO REVIEW LEGAL STRUCTURES

In the first place, it is necessary to review the current investment structures. Among the current cases, we find someone who wants to invest in real estate in the United States. One way is through direct investment, without corporate structures. In this case, there will be three types of problems; Estate Tax, with the colossal inheritance tax; Firpta, a law that taxes the sale of real estate by foreigners with 15%; and, finally, the null option of claiming expenses for the complementary global tax.

However, this situation could be improved with the agreement if the investor is structured through a Limited Liability Company (LLC) -with a check the box (CTB)-, thus avoiding the payment of Estate Tax and Firpta, and being owned by an SpA or SRL, both considered corporations for US purposes. In summary, the agreement would allow the benefit of the aforementioned 5% withholding.

A similar application of the agreement could be used by investors with investment accounts. Therefore, it is necessary to review the investment cases, since heavy structures could generate high costs, and in return, light structures could produce tax carelessness and civil exposure.

INCENTIVE FOR INVESTORS

The spirit of the treaty is to encourage investments, but without Treaty Shopping or abusive conduct. Proof of this are the authorizations of article 24, which, although it establishes a limitation on benefits, by LOB clause, allows its use through “qualified person”; tests, with the substance of the operation predominating. Therefore, by complying with the established requirements, it would allow access to foreign investors, encouraging international trade.

CURRENT BENEFITS

In summary, we appreciate that the agreement provided legal certainty through the establishment of clear and permanent rules, essential for long-term wealth planning. From this we derive the necessary review and rethinking of current corporate structures, so that they can be used by all investment ranges, including those on a smaller scale.

Finally, the agreement and current times require legal and accounting teams to have an adequate understanding of foreign regulations and even the formation of alliances with foreign firms, in order to provide a comprehensive service and thus determine the most suitable structures to prevent potential legal and tax conflicts and to guarantee relations on a transnational horizon.

The European Commission has unveiled a comprehensive set of initiatives designed to enhance the competitiveness and resilience of European industry, address soaring energy costs, and streamline sustainability obligations for businesses. Below is an overview of the pivotal measures introduced:

Clean Industrial Deal

As part of its commitment to fostering industrial innovation and climate leadership, the Commission has launched the Clean Industrial Deal. This ambitious plan aims to bolster Europe’s industrial competitiveness while expediting the transition to a decarbonized economy.(Press Release).

Action Plan on Affordable Energy Prices

Recognizing the critical impact of energy costs on economic performance, this action plan outlines a set of targeted measures to mitigate volatility, ensure market stability, and fortify Europe’s global industrial positioning. (Press Release).

First Sustainability Omnibus Package

This legislative package introduces key regulatory adjustments to simplify corporate sustainability compliance and enhance legal clarity:

Revisions to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD); Deferral of CSRD reporting requirements for companies in waves 2 and 3 (2026 and 2027), alongside an extension of the transposition deadline and initial implementation of the CSDDD to 2028; Targeted reform of the Carbon Border Adjustment Mechanism (CBAM), exempting small importers, particularly SMEs and private entities; Amendments to the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts, currently open for public consultation. Second Omnibus Package on Investment Simplification

This initiative is set to optimize access to key European financial instruments, including InvestEU, EFSI, and other major investment mechanisms. By reducing administrative burdens and enhancing resource allocation, this package seeks to foster a more dynamic and efficient investment landscape. (Press Release)

For further insights into these landmark initiatives, please refer to the official press releases of the European Commission.

NEW BUDGET 2025 IN BOLIVIA: TAX BENEFITS FOR INDUSTRY AND COMMERCE

The Bolivian Law No. 1613, enacted on January 1, 2025, approves the General State Budget (PGE) for the fiscal year 2025 and introduces several provisions that may be of interest to businesses and economic actors in Bolivia. These measures aim to promote industrialization, import substitution, and economic reactivation.

Key Provisions:

Tax Incentives for Industrialization: To encourage industrialization and reduce import dependency, the PGE 2025 establishes an exemption from the Value Added Tax (VAT) and customs duties for the importation and commercialization of capital goods and industrial plants. This benefit applies to sectors such as agriculture, industry, construction, and mining, facilitating the acquisition of machinery and equipment necessary for productive development. VAT Exemptions on Hydrocarbon Imports: To ensure the supply of fuels in the domestic market, the importation of crude oil, gasoline, and diesel oil is exempted from VAT. This measure aims to mitigate the impact of international prices and ensure the continuous supply of these essential resources. Incentives for Profit Reinvestment: The PGE 2025 introduces incentives for foreign companies to reinvest their profits in the country. Depending on the percentage of reinvestment, partial exemptions are granted on the Corporate Income Tax for Foreign Beneficiaries (IUE-BE). For instance, a reinvestment of 25% to 49.99% of profits results in a 10% exemption on the corresponding tax. Use of Virtual Assets by Public Companies: Public companies are authorized to use virtual assets to fulfill contractual obligations. This provision allows greater flexibility in financial transactions and could influence how payments and contracts are managed in the public sector.

These provisions of the PGE 2025 present both opportunities and legal challenges for businesses and economic stakeholders in Bolivia.

For the official text of Law No. 1613, please refer to the Gaceta Oficial del Estado Plurinacional de Bolivia.

TAX

AGREEMENT BETWEEN ECUADOR AND THE UNITED KINGDOM FOR THE ELIMINATION OF DOUBLE TAXATION AND THE PREVENTION OF TAX EVASION

The government of Ecuador and the United Kingdom of Great Britain and Northern Ireland have signed an agreement whose primary objective is to eliminate double taxation on income and capital gains affecting individuals and legal entities operating in both countries. Additionally, it aims to prevent tax evasion and avoidance through information exchange and the implementation of anti-abuse regulations. Finally, the agreement seeks to promote investment and bilateral trade by ensuring a predictable and fair tax treatment.

Scope and Application of the Agreement

The agreement covers individuals and legal entities residing in Ecuador and the United Kingdom, including territories under the fiscal control of these states. Income and capital gains taxes are considered to include all taxes levied on total income, including those derived from the disposal of movable and immovable property. The taxes covered by the agreement are:

Ecuador: Income tax United Kingdom: Income tax, corporate tax, and capital gains tax

Methods for Eliminating Double Taxation

To prevent double taxation, the following measures are established:

In Ecuador, the tax credit method will be adopted, allowing taxes paid in the United Kingdom to be deducted from Ecuadorian tax liabilities. In the United Kingdom, a tax credit mechanism will be implemented, enabling taxes paid in one country to be deducted in the other. Additionally, an exemption method will be applied in certain cases, depending on the type and origin of the income. This method will apply to dividends from Ecuador and profits generated by permanent establishments in the country.

Methods for Eliminating Double Taxation

To prevent double taxation, the following measures are established:

In Ecuador, the tax credit method will be adopted, allowing taxes paid in the United Kingdom to be deducted from Ecuadorian tax liabilities. In the United Kingdom, a tax credit mechanism will be implemented, enabling taxes paid in one country to be deducted in the other. Additionally, an exemption method will be applied in certain cases, depending on the type and origin of the income. This method will apply to dividends from Ecuador and profits generated by permanent establishments in the country.

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NEW GUIDELINES FROM ECUADOR'S TAX AUTHORITY FOR THE APPLICATION OF THE FOREIGN CURRENCY EXIT TAX STARTING IN 2025

The Ecuadorian Internal Revenue Service (IRS) has issued new rules regarding the Foreign Currency Exit Tax (FCET), which are taking effect this year. Here are the key points:

Elimination of tax credits: As of January 1, 2025, FCET paid in the past can no longer be used to reduce Income Tax. Options for FCET paid until 2024: Those who paid FCET until the end of 2024 may use it to reduce Income Tax, deduct it as an expense, or request a refund, according to previous regulations. Requirements for reduced rates: Taxpayers wishing to apply reduced FCET rates (2.5% or 5%) must complete a form and submit it to the financial institution or withholding agent. Obligations for withholding agents: Those responsible for withholding FCET must issue electronic receipts and ensure compliance with the regulations. IRS system updates: The IRS will update its systems to ensure the correct FCET rates (0%, 2.5%, 5%) are applied to money transfers abroad.

These measures are available this year and will impact both businesses and financial institutions.

ECONOMICS

Ecuador and Canada Conclude Negotiations for a Trade Agreement

The Free Trade Agreement between Canada and Ecuador strengthens trade relations between both countries following a negotiation process that began in April 2024. The conclusion of the negotiations resulted in a comprehensive agreement covering goods, services, and investment treatment, with provisions in key areas such as the environment, labor rights, Indigenous peoples, dispute resolution, agriculture, intellectual property, financial services, gender equality, and support for small and medium-sized enterprises. Below are the main aspects of this agreement:

Investment

The Investment chapter ensures a fair and predictable environment, including non-discrimination rules, protection against expropriation without fair compensation, and minimum standards of treatment. The Parties retain the right to regulate strategic sectors such as health, security, the environment, Indigenous rights, and cultural diversity. Additionally, it establishes rules for investor-State dispute settlement (ISDS), with strengthened commitments to transparency and fair access to procedures.

Dispute Resolution

The treaty includes a binding dispute settlement mechanism, prioritizing consultations and alternative solutions before arbitration. It ensures clear rules for panel selection, report implementation, and public access to proceedings for transparency.

Cross-Border Trade in Services

The agreement ensures market access, non-discriminatory treatment, and legal certainty for service providers. It includes an Annex on Professional Services to facilitate future Mutual Recognition Agreements and adopts a negative-list approach for non-conforming measures, ensuring regulatory predictability and transparency.

Competition Policy

The agreement fosters a fair and predictable business environment, ensuring due process and transparency in law enforcement. It encourages cooperation between competition authorities and protects confidential information. While not subject to dispute resolution, it allows for bilateral consultations on competition concerns.

Industrial Goods

The agreement eliminates tariffs on all Canadian industrial exports, with 89% of tariff lines becoming duty-free immediately and full liberalization within ten years. Key exports include metals, chemicals, machinery, textiles, fertilizers, and natural gas, averaging $316.7 million annually (2019–2023). Tariff removal on products like helicopters, drilling machinery, chemicals, cosmetics, and IT technology enhances Canada’s competitiveness in Ecuador.

Fish and Seafood Products

The agreement eliminates all tariffs on Canadian fish and seafood exports, with 95% becoming duty-free immediately and the remaining 4.9% phased out within three years. Between 2019 and 2023, Canada’s exports to Ecuador in this sector averaged $68,000 annually, while imports from Ecuador to Canada averaged $45.1 million, highlighting growth potential for Canadian exporters.

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PRIVATE INVESTMENT IN ECUADOR REACHED $1.304 BILLION IN 2024

According to the Ministry of Production, Foreign Trade, Investments, and Fisheries, private investment in Ecuador reached $1.304 billion in 2024 through 39 investment contracts across various productive sectors.

At the beginning of 2025, the Strategic Committee for Investment Promotion and Attraction (CEPAI) confirmed this amount, including contract approvals, amendments, and transitions to the new Free Zone regime.

In comparison, investment contracts in 2023 amounted to $1.161 billion. The main sectors for investment in 2024 included commerce, renewable energy, mining, real estate, and aquaculture. Additionally, amendments to investment contracts in the last quarter of 2024 increased investment by $93.5 million.

CEPAI also approved the transition of two Special Economic Development Zones (ZEDE) in Santa Elena and Guayas into Ecuador's first Free Zones, under the Economic Efficiency and Employment Generation Law. These projects involve over $2 million in investment and will create 69 direct jobs over 30 years.

On October 17, 2024, the Ministry of Production issued a ministerial agreement outlining the transition process for ZEDEs and free zones under the new legal framework.

Foreign Direct Investment (FDI)

Ecuador recorded $120 million in FDI in the first half of 2024, a 12.2% decrease compared to the same period in 2023. The main sectors for FDI were mining, transportation, and manufacturing, with $92 million in positive flows. The top investing countries were the U.S., Switzerland, and Peru, contributing $78 million.

Meanwhile, 100% of approved investment contracts in early 2024 focused on agriculture, manufacturing, and real estate/construction.

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ECUADOR STARTS EXPORTING CANNED TUNA TO CHINA

Ecuador began exporting canned tuna to China, following the implementation of a free trade agreement that removed the 5% tariff on the product. The deal, which came into effect last year, has also enabled other Ecuadorian products like shrimp, coffee, cacao, and bananas to enter the Chinese market without tariffs. Bilateral trade between Ecuador and China has grown by an average of 23% annually over the past five years, with China overtaking the United States as Ecuador's top non-oil trading partner in 2022.

However, Ecuador's exports to China fell nearly 12% by November 2024, largely due to a drop in shrimp prices (with China being Ecuador's main shrimp buyer) and an electricity crisis that led to daily blackouts and halted industrial mining activities. As of November 2024, Ecuador's exports totaled $2.97 billion, a 17.3% decrease from the previous year. Copper exports were also down by 7.7%.

Consumer Protection Law

In 2008, Honduras enacted the Consumer Protection Law to safeguard, promote, and enforce consumer rights while ensuring compliance with fair trade practices. This legislation governs consumer transactions related to the purchase of goods and services, establishing procedures, rights, obligations, violations, and sanctions within this framework.

In October 2024, Decree No. 75-2024 introduced amendments to Article 68, incorporating five new provisions in response to consumer complaints about malpractice and deficiencies in telecommunications and internet services.

Among the most significant changes, the decree limits contract durations to a maximum of six months. Additionally, consumers dissatisfied with their service may terminate their contract by paying only for the services used. In cases of service disruption, consumers are entitled to receive credit for the days the service was non-operational.

A key aspect of the reform mandates that all fees and charges be expressed in local currency, protecting consumers from exchange rate fluctuations and preserving household financial stability. Furthermore, unexpected bill increases are strictly prohibited. The Consumer Protection Directorate (DGPC) is responsible for overseeing compliance and enforcing sanctions where necessary.

Additionally, under Article 2, the reform redefines the role of the National Banking and Insurance Commission (CNBS), which manages the Credit Information Center (CIC). With this amendment, telecommunications companies can no longer report delinquent customers to the CIC. Moreover, the CNBS is now required to rectify and immediately restore the credit ratings of individuals whose financial reputations were negatively impacted due to arrears in telecommunications payments.

This reform marks a significant step forward in strengthening consumer rights in the telecommunications sector, ensuring greater transparency, fairness, and accountability in the provision of essential services.

Regulation on Fee Exemptions for Senior Citizens in Financial Transactions

The National Banking and Insurance Commission (CNBS) has enacted the Regulation on Fee Exemptions for Senior Citizens in Financial Transactions, as per Circular CNBS No. 023/2024, in compliance with Legislative Decree No. 34-2024. This regulation aims to protect senior citizens' financial rights, ensuring that individuals in the third and fourth age groups are not subjected to additional fees for personal financial transactions.

The regulation applies to banks, insurance companies, financial institutions, and cooperatives, granting fee exemptions for the following transactions:

Withdrawals from deposit and savings accounts Electronic payments and transfers Issuance of cashier’s checks, certified checks, traveler’s checks, or similar financial instruments Replacement of savings passbooks, debit, and credit cards Issuance, recovery, or replacement of account numbers, PINs, passwords, and other credentials required for digital banking

The regulation also prohibits financial institutions from introducing alternative fees or increasing rates to offset lost revenue. Additionally, it bars them from denying financial services to senior citizens unless a proper risk assessment and due diligence process has been conducted.

Financial institutions have four months to adjust their systems from the regulation’s effective date. Any undue charges applied since October 5, 2024, must be immediately refunded to affected clients.

This initiative aligns with Legislative Decree No. 59-2023, which amended the Comprehensive Protection Law for Senior Citizens and Retirees of Honduras. The amendment introduced a range of discounts and financial benefits for senior citizens, whether retired, pensioned, or non-retired, to enhance their quality of life and financial well-being.

Banks and financial institutions are already working on the necessary adjustments to comply with this regulation, which represents a major milestone in securing financial rights for senior citizens and improving their economic security and access to essential services.

Executive Decree PCM 40-2024: Financial Relief for Honduran Families

On December 20, 2024, the Honduran government issued Executive Decree PCM 40-2024, published in La Gaceta, to provide financial relief for housing loans, liquidity injection, and capital requirement reductions. This initiative is backed by the Honduran Bank for Production and Housing (BANHPROVI), the National Banking and Insurance Commission (CNBS), and the Central Bank of Honduras (BCH).

Under this decree, BANHPROVI is authorized to grant financial relief to more than 15,000 families impacted by rising interest rates on housing loans, which fluctuated between 0.5% and 8.7% since January 2023. This relief will be applied retroactively from that date.

To streamline implementation, CNBS will provide BANHPROVI with a list of affected borrowers, ensuring an efficient allocation of financial assistance.

Meanwhile, the Central Bank of Honduras will develop monetary policies to support economic, productive, and housing-related activities, including:

Government securities auctions to stabilize financial markets Review of the minimum daily legal reserve requirements for private banks to ease lending conditions

Additionally, the CNBS will reduce capital reserve requirements for banking institutions, enabling them to extend relief to borrowers with overdue payments of 15 to 30 days. This measure will inject approximately 1.53 billion lempiras in liquidity, benefiting 124,000 borrowers across key sectors, including housing.

These strategic interventions aim to mitigate the economic strain on thousands of Honduran families affected by rising mortgage rates. By adjusting financial policies and providing targeted relief, the government seeks to foster economic stability, protect homeownership, and promote long-term financial resilience.

USE OF DIGITAL MEDIA FOR THE ISSUE OF INVOICES AND OTHER DOCUMENTS IN VENEZUELA

The National Tax Administration in Venezuela recently decided to regulate the use of digital media for the issuance of invoices and other tax documents, aiming at adapting taxation to new technologies. 

The application of the technology to invoicing must be implemented by certain entities, which must file a request for authorization with the National Superintendence of Internal Taxes of the National Tax Administration; that is, said entities must be duly authorized. To that end, their request must be accompanied by the requirements established in the new tax regulation and will be approved or denied by the Superintendence in a period of 30 business days.

The entities subject to the obligation to implement the digital invoicing, according to the new tax regulation, are the following: (i) entities that perform commercial operations solely through electronic means or web portals; and (ii) entities bound to use tax machines and which simultaneously perform commercial operations through electronic means or web portals. In addition, the entities that are not subject to use tax machines may choose to use this type of invoicing.

A three-month transition period was established for implementing this type of invoicing, for purposes of adaptation to the same and in order to meet the requirement of request for authorization from the National Tax Administration.

With the implementation of this new regulation, the National Tax Administration seeks to couple tax rules on invoicing with the technological development of the last years, aiming to adapt the national taxation to the new economic and technological realities and assure a greater efficiency in tax processes.

1. Introduction to Mercosur

The Southern Common Market, commonly known by the Spanish abbreviation Mercosur, is a regional trade bloc founded in 1991 that currently includes Argentina, Brazil, Paraguay, and Uruguay.

The goal of Mercosur is that of promoting free trade and economic integration among its members, as well as between its members and third countries. For this purpose, Mercosur enters into specific bilateral agreements, called Economic Complementation Agreements (ACE), such as those entered by other South American countries like Peru, Chile, Colombia and Mexico. Such agreements generally entail tariff reductions on goods traded between the signatory countries, rules of origin, and trade facilitation measures, including customs procedures and dispute resolution mechanisms.

Interestingly, Mercosur:

has 268 million consumers (not considering ACE countries); accounts for approximately 70% of South America’s GDP; and its key sectors of production include (i) agriculture (meat, dairy products and fruits); (ii) industry (automotive and machinery) and (iii) services (financial, telecommunications and IT). 2. The relations between Mercosur and the European Union until now

Mercosur is a big market for EU exports and, until now, it was the only major trading partner in Latin America with which the EU lacked a preferential trade agreement. At the same time, the EU is Mercosur’s second-biggest good trading partner, after China and ahead of the United States.

The thriving nature of the trade relations between Mercosur and the EU is represented in the following table.

EUMercosurTrade in Goods (2023)Exports to Mercosur: €55.7 billionExports to EU: €53.7 billionTrade in Services (2022)Exports to Mercosur: €28.2 billionExports to EU: €12.3 billionTop Export CategoriesMachinery and appliances (26.7%)Chemicals and pharmaceuticals (25%)Transport equipment (11.9%)Mineral products(29.6%)Foodstuffs, beverages, tobacco (19.2%)Vegetable products (17.9%)

Despite the above, Mercosur’s economies are highly protected, and European firms face many trade barriers when exporting there, which makes it hard for them to compete under fair conditions. These barriers include, among other, high import duties, burdensome procedures, as well as technical regulations and standards, which differ from international ones.

3. The EU-Mercosur Agreement

The negotiations for a comprehensive trade agreement between the EU and Mercosur were launched in June 1999. After a suspension, talks resumed in 2010. The protracted negotiations gained renewed momentum in 2016, and, in 2019, the European Union and Mercosur concluded the talks following new tariff-reduction offers.

Eventually, on December 6, 2024, both parties reached a political agreement to enhance the deal and address concerns related to sustainable development (the “EU-Mercosur Agreement” or more generally the “Agreement”).

The Agreement, which is composed of a political and cooperation pillar and a trade pillar, has not come into force yet. The conclusion of negotiations marks only the first step in the process toward finalizing the Agreement (see, Section 5 below).

In terms of content, the Agreement addresses several issues. Its key themes include:

Market Access – The Agreement foresees significant reductions in tariffs, especiallyin key sectors (like those of automobiles, chemicals, and raw materials), with a focus on supporting small and medium-sized enterprises (SMEs). Services – To open new opportunities for growth and enhance competition, broader access will be granted to service providers across industries such as telecommunications, financial services, and transport. Sustainability and Environment – In the context of their shared environmental goals, both parties reaffirmed their commitment to the Paris Agreement, with specific attention to deforestation and sustainable trade practices. The Agreement could also be suspended if these goals are not met. Agriculture and Food – One of the most pressing issues is the regulation of agricultural products, a pivotal area that influences not only the future of EU farmers but also the protection of sensitive sectors and the safeguarding of rigorous food safety standards. Rules of origin and Intellectual Property – To safeguard respective products and sensitive markets, the Agreement regulates the protection of Geographical Indications (e.g. Parmesan and Champagne) and the harmonization of technical standards. It also enhances intellectual property protections. Government Procurement – With the aim of creating new opportunities and a stronger collaboration, the two blocs are opening government procurement markets, enabling companies to bid for public contracts in each other’s regions. Social Rights – The parties assessed the economic, social, and human rights impacts of the Agreement’s trade provisions, ensuring that neither side can promote trade or investment by ignoring or failing to enforce labour laws and social impacts. Dispute Resolution – The commitments on Trade and Sustainable Development will be enforceable through a dispute settlement mechanism involving an independent panel of experts, civil society participation (including employers and trade unions), and the expertise of international bodies. Economic and Political Cooperation – Political dialogue and cooperation will be further strengthened in areas such as migration, green technologies, raw material sourcing, research, and the fight against money laundering and cybercrime. Review and Monitoring –Regular reviews of the Agreement’s impact are to be conducted, incorporating stakeholder input to ensure transparency and facilitate progress.

The most significant key issues under the Agreement are (i) tariff reductions and their implementation timelines (see Sub-Section 3.1 below); (ii) sustainability and environmental protection commitments (see Sub-Section 3.2 below); and (iii) changes in services and professional mobility (see Sub-Section 3.3 below).

3.1. What types of tariff reductions are provided for under the Agreement?

Mercosur’s starting tariff levels are considerable[1] and EU tariffs are also very high, especially on agri-food products[2]. Therefore, EU-Mercosur Agreement establishes a tariff elimination schedule, gradually liberalizing trade across various sectors with specific timelines and percentages for different products.

Generally, the Agreement eliminates tariffs on more than 90% of bilateral trade. Under the Agreement, the EU would indeed remove import duties on 92% of Mercosur goods exported to the EU, while  Mercosur would eliminate customs duties on 91% of EU goods exports to Mercosur.

Under the Agreement, depending on the product type, tariff reductions are implemented in the form of (i) immediate tariff eliminations (i.e. elimination within the first year); (ii)    gradual reductions (i.e. reduction over a period of 4 to 10 years); or (iii) quota reductions (i.e., phased-in reductions over periods ranging from 5 to 10 years depending on the product).

For example:

Industrial Goods – The EU will eliminate duties on all industrial goods over a transitional period of up to 10 years. Tariffs on EU cars and automotive parts will be eliminated over a period of 18, 25, and 30 years, depending on the specific product, making it easier for European firms to export to Mercosur countries. Agricultural Products – The EU will liberalize 82% of Mercosur agricultural imports and Mercosur will remove tariffs on 93% of tariff lines for EU exports. For some products, the Agreement introduces tariff rate quotas (TRQs), allowing a specified volume of imports at reduced tariff rates. Once these quotas are filled, the standard tariffs will apply.

High tariffs on EU agri-food exports will be removed. This includes key products like olive oil, wine, malt. For some dairy products, zero duties will gradually apply within quotas. The EU will grant very limited access to its market to imports of agri-food products. For sensitive products like beef, poultry or sugar, access to the EU market will be limited through gradually implemented quotas (beef: a quota of 99,000 tonnes, subject to a 7.5% duty; poultry: quota of 180,000 tonnes, phased in over five years; sugar: duty-free quota of 180,000 tonnes).

Lastly, a bilateral safeguard clause can be applied in case increased imports cause or even only threaten to cause serious injury to the relevant sectors.

Raw materials – The deal will lower EU tariffs on critical raw materials and their processed products, making exports to the EU easier and imports cheaper. It will also eliminate tariff escalation, incentivizing Mercosur to develop local production of value-added products. Brazil will retain some taxes on exports of certain materials, but the EU would benefit from a ceiling on them. For Argentina, all export taxes on minerals are waived. 3.2. What are the sustainability and environmental protection commitments included in the Agreement?

Under the Agreement, with regards to sustainability and environmental protection, the EU and Mercosur:

Commit to implementing the United Nations Framework Convention and the Paris Agreement on climate change, with possible suspension of benefits if a party does not do so. Undertake to support existing climate and environmental standards and not lower or dilute them. The Agreement prohibits either side from encouraging trade and investment by derogations from or not enforcing environmental laws. Commit to promote sustainable fisheries and sustainable forest management, among others. The deal will also open opportunities for supply chains of products that are produced in a way that helps conserve the environment.

The commitments on trade and sustainable development will be enforceable through a dispute settlement mechanism that includes (i) external review by an independent panel of experts, (ii) role for civil society at all stages, and (iii) calling on the expertise of international bodies.

3.3. What will the Agreement mean for services and investments?

The Agreement will make it easier for EU companies to offer their services in Mercosur and vice versa, whether by setting up locally or providing services across borders. Additionally, it will reduce discrimination and create new opportunities for service providers and investors from both regions.

Many sectors, such as business services, financial services, telecommunications, maritime transport, and postal and courier services, are expected to benefit from these measures.

The EU and Mercosur will still regulate their service markets fairly and without discrimination and the Agreement will not liberalize public services like healthcare or state-funded education. Furthermore, it will ensure that regulators, both foreign and domestic, can continue to establish and enforce non-discriminatory rules to protect health, safety, the environment, and consumers while ensuring high-quality services and workers’ rights.

4.The Economic Impact Expected to Originate from the Agreement

The EU-Mercosur Agreement is expected to significantly increase bilateral trade by up to 37% in the long term, while the negative effect on trade with other regions will be limited[3]. Several studies have assessed the Agreement’s impact on GDP, with one predicting a €10.9 billion increase for the EU (0.1% of GDP) and a €7.4 billion one for MERCOSUR (0.3% of GDP) by 2032[4].

4.1. What are the benefits for European companies investing under the Agreement?

European companies stand to gain several advantages from the Agreement, namely:

Significant cost savings – The removal of high Mercosur tariffs will result in over €4 billion in annual savings on customs duties for EU exporters. Streamlined exports – The immediate tariff elimination for approximately 70% of goods will facilitate smoother market entry. Moreover, simplified and more efficient customs procedures will reduce administrative burdens and improve the speed of trade. Access to a large market – The Agreement will open access to a combined market of more than 700 million consumers (Mercosur and EU together), enhancing opportunities for expansion. Support for small and medium-sized enterprises (SMEs) – The Agreement includes a section focused on helping SMEs with the specific challenges they face in trade and investment. This is important, as over 30,000 European SMEs currently export to Mercosur, and this number is likely to increase due to easier market access. Equal access to public contracts – EU companies will be able to bid for public contracts on the same terms as Mercosur businesses. Sector-specific opportunities – The Agreement will open substantial opportunities for EU companies in key sectors such as the automotive industry. Employment and economic growth – Increased foreign investments are expected to drive job creation and economic development. Encouragement of strategic investments – The Agreement will promote investments in South America’s infrastructure and sustainable technologies, creating new opportunities for European companies. Political and strategic advantages – The Agreement will fortify political and economic relations with Latin America, offering a strategic response to rising global protectionism. It will ensure long-term stability by preventing discriminatory trade practices and creating a more predictable and secure environment for both EU and Mercosur businesses. 4.2. What are the benefits for medium-sized European companies partnering with Mercosur firms?

In addition to the benefits already mentioned, medium-sized European companies partnering with Mercosur firms will also gain a range of additional advantages:

Full access to resources – The Agreement provides preferential access to critical raw materials and green goods, strengthening supply chains and competitiveness. Stronger competitiveness – Improved standards in areas such as intellectual property and environmental protection ensure compliance and predictability, while investment incentives promote local operations, boosting competitiveness. Opportunities for collaboration and innovation – The Agreement encourages joint ventures with local companies, leading to innovative products tailored for local markets. Support for sustainable practices – By aligning with sustainability goals, the Agreement helps enhance brand reputation and strengthens the corporate social responsibility profile. 5. The ratification process and the entry into force of the Agreement

The ratification process for the EU-Mercosur Agreement involves several complex stages. Specifically:

, after initial approval, the Agreement must be ratified by the parliaments of all four Mercosur countries (i.e., Argentina, Brazil, Paraguay, Uruguay) as each country has its own legislative process. , the process is more complex.

The text of the Agreement was published on the European Commission’s website, and it will now be checked by lawyer linguists and translatedinto all official EU languages.

Then, the Commission will transmit a proposal to the Council (where EU countries are represented by their Trade Ministers) and the Parliament for the signature and conclusion of the Agreement. This stage requires a qualified majority: 55% of Member States (15) representing at least 65% of the EU population must be in favour. It means that a minimum of four States representing at least 35% of the EU population could block the Agreement.

Lastly, the Agreement must be ratified by the national parliaments of all 27 EU member states.

The legal structure of any final EU-Mercosur deal, and therefore the ratification procedure, will be decided only after the negotiations between the EU Institutions are completed. Two main models are likely to be used:

In the most optimistic scenario, the full ratification process is expected to take between 12 to 18 months as of the signing date, which is not known yet. However, delays are a frequent challenge in trade agreements. To put it into perspective, it took about nine years for the agreement between the European Union and Canada to be fully ratified from its signing in 2014 until final approvals were completed in 2023. For the purpose of clarity, signing an international treaty does not give it any legal force, only its ratification does.

6. The Challenges and Opposition Faced by the Agreement

The EU-Mercosur Agreement was reached in December 2024, but there are still significant challenges and obstacles before it can take effect. Along the complex signing and ratification process, political tensions in EU play a critical role. Indeed, some EU countries are concerned about the impact on local industries (especially agriculture) and the environment, and this is leading to political divisions. These divisions could make the ratification process more difficult and may result in further delays.

6.1. What are the political tensions originated by the Agreement inside the EU?

The Agreement has caused major political tensions within the European Union. Specifically:

Supporters – The European Commission president Ursula von der Leyen, Germany and Spain strongly support the Agreement, which would diversify trade and strengthen their economies, seeing it as an important achievement and a geopolitical win.

The Agreement is expected to bolster the German automotive sector (Volkswagen, BMW, Mercedes-Benz) and chemicals industry (companies like Bayer), by reducing tariffs and opening markets in South America.

Spain is predicted to gain from the deal, with its manufacturing, chemicals, and pharmaceutical sectors benefitting. Exports are expected to grow by 37%, boosting GDP by 0.23% and creating jobs.

Critics – Numerous aspects of the deal have given rise to objections, but two issues stand out: farming and the environment. France is strongly against it since it worries that cheap imports, like poultry and beef, could harm its farmers. Paris has gathered support from other countries, including Poland, Austria, and Ireland (the latter is the fifth-largest beef exporter in the world), to block the deal unless certain conditions are met. The Netherlands and Belgium have only expressed reservations about the deal.

European farmers (particularly from France, Ireland, Belgium and Poland) fear unfair competition, especially from beef, poultry, and sugar imports, which could be produced at lower costs in Mercosur countries, where food safety, animal welfare, and environmental regulations are less stringent. The stricter EU standards make farmers in the EU face higher costs. They also point out that cattle in Mercosur countries may be treated with hormones or chemicals that are banned in the EU. There are also concerns about the possible environmental effects of the deal, especially related to deforestation in the Amazon rainforest because of the higher demand for products like beef and soy.

Middle Ground – Italy stands in the middle, acknowledging potential benefits for industries like automotive, engineering, fashion, and regional foods (e.g. Parmesan cheese). However, there are also concerns regarding the broader economic implications, especially for sectors that could face competition from the Agreement. Remarkably, Italy, as a large EU Member State, could have enough voting power to stop the Agreement or allow it to prosper at the European level. 6.2.  What strategies are being considered to facilitate ratification?

The Commission is examining the opportunity of splitting the EU-Mercosur Agreement into two separate agreements: one covering only the areas of exclusive EU competence and the other covering areas of mixed competence with Member States[5].

In Mercosur’s case, the EU might consider separating the political and cooperation agreement, including issues like labour standards, the environment, and transport, from the main trade agreement that would require only a simple majority for approval. The idea is to approve the parts within the exclusive EU competence, allowing some trade benefits to be enjoyed sooner.

However, splitting the Agreement could weaken the deal’s overall impact and ambition. Also, Mercosur might not agree to splitting the deal and may prefer a single, comprehensive agreement.

7. Conclusions

Mercosur is a dynamic economic bloc, and the EU-Mercosur Agreement represents a significant opportunity for EU and Mercosur companies to expand their business operations in Latin America, respectively Europe.

As a short summary of things, if and when fully ratified, the Agreement will remove over 90% of tariffs between the two regions, offering annual savings of €4 billion, particularly benefiting sectors like automotive, machinery, chemicals, and pharmaceuticals. It also encourages investments in infrastructure and sustainable technologies, thereby enhancing competitiveness across various sectors. Finally, the Agreement is also a pioneering deal for sustainability, with commitments to combat climate change, deforestation, and uphold workers’ rights.

In summary, the combination of market access, cost savings, and potential for growth makes investing in Mercosur an attractive option for European companies looking to diversify their operations and capitalize on emerging opportunities in a rapidly evolving global landscape.

Useful links

Text of the Agreement: link

European Commission website on EU-Mercosur Agreement: link

Questions and answers on the EU-Mercosur Agreement: link

Factsheets and guides on the EU-Mercosur Agreement: link

Sincere gratitude is extended to José María Allonca, Leticia Mariz Schweizer,

Stefano Bianchi, and Chiara Pieraccini for their significant contribution to this informative document

[1] The tariffs are up to 35% on automobiles, 18% on components, 20% on machinery, 18% on chemicals, 14% on pharmaceuticals and 35% on clothing and footwear; in agriculture, up to 28% on dairy products, 25% on beverages and soft drinks, 27% on wines and 20% on confectionery.

[2] For instance, the EU tariffs are, up to 35% on wines, 20% on alcoholic beverages, and compound tariffs equivalent to an ad valorem rate of up to 62% on out-of-quota meat.

[3] Real Instituto Elcano. (2020). Why does Latin America matter? Elcano Royal Institute. Available at: link.

[4] LSE Consulting. (2020). Sustainability Impact Assessment in support of the Association Agreement negotiations between the EU and Mercosur: Final report. London School of Economics and Political Science. Available at: link.

[5] Martin, D., & Ford, G. (2025, January 15). Commission plans for Mercosur deal split may not pass Parliament test. Borderlex. Available at: link.