Marco Chuquimia reports for El Deber:
Private request 5 incentives on new Investment Law
The draft has 29 articles and raises a new law of conciliation and arbitration to resolve processes. There will be three months for regulations and the regulatory transition.
Security on the property; stability of the tax system; arbitration processes; incentives; and finally to have free attribution on income generated. These are five observations launched by the President of the National Chamber of Commerce, Fernando Cáceres, on the draft law of investments that the Government gave to the private sector, aiming to know the arguments that they may have.
“But comments go beyond those points and we would like to sit and see how to improve the investment for entrepreneurs. The Government should be happy; if the private sector can double their investment also wins society as a whole because there will be more jobs and less poverty”, said Caceres.
The draft refers, in its article 21, two types of incentives: the general and the specific. In the first case they apply by sector; for example, hydrocarbons and all the incentives that are approved will be applied to all the actors of this sector. In specific incentives will be taken into account the type of project and its impact to approve, by Decree, the preferred incentive.
These incentives will be effective from one to 20 years, depending on the activity and the recovery of the investment; however, the Ministry of Development Planning will have in its hands the possibility of promoting to the Executive the suspension of benefits to the companies or sector when they fail to meet the goals proposed in the contracts; for that, states the document, provisions must be established in detail.
The Government will give preference to investments that relate to three areas: strategic natural resources in oil, mining, energy, transport, generating added value; then the areas of tourism, agro-industry, textiles, and others that provide added value and generate knowledge in human capital; finally poles of development in areas of strategic interest for the country.
The head of sector, ministries will act as supervisors of investments made and which ones enjoy incentives; while the Ministry of Development Planning becomes a overministry that will receive the audit reports.
Article 26 states that “disputes arising out of relations between investors, be solved in the forms and conditions laid down within the framework of the conciliation and Arbitration Act”, concerns the document and adds that it should be ready three months after adopting this standard
The State promotes the investment that contributes to the exporting pattern change and boost industrialization processes.
All forms of economic organization shall enjoy legal equality before the law.
If the State does not develop economic activities other investors may do so.
Large national companies are the ones with the ALBA countries and national contributions.
The arbitration shall be in the country
Williams Bascope – Constitutionalist
It is clear that entrepreneurs can ask for exemption from certain taxes, but if the Government gives certain privileges, you should also require the fulfilment of obligations, but I don’t think it will achieve beyond the tax advantages.
As for arbitration, I do not think it will be resolved in international tribunals because the CPE indicates that in these issues of foreign investment arbitrations are made in the State.
Now, it could not be allowed investments to remain at the free discretion of international courts because there are large emporiums of transnational interests at stake, and we know it.
In terms of legal security: is the security that gives a status to any natural or legal person that is going to enforce the law and who will enforce the law; that’s part of the good faith and trust, be it a common citizen, entrepreneur or investor, all citizens give good faith and confidence to its authorities to enforce the law and, at the same time, the State must abide by these rules.
That the State undertakes to respect the rights of the citizen, that is called security, predictability, confidence and good faith; Therefore, all contracts and all citizen action has to have that security.
I believe this is no incentive that arbitration does not reach international courts… how do this government intends to attract foreign investment? To rely upon monies from the ALBA is a joke, a poor one…