Yearly Archives: 2025

CorralRosales > 2025

Airport Incentives in Ecuador: A Strategic Opportunity for New International Routes

Posted on

Airport Incentives in Ecuador: A Strategic Opportunity for New International Routes

Ecuador has developed an incentive scheme aimed at attracting new airlines and promoting international connectivity from both publicly and privately managed airports. In a context where cost reduction and efficient operational expansion are key to airline growth, these incentives serve as a valuable tool.

What types of incentives are offered?

The incentive plan implemented by the General Directorate of Civil Aviation (DGAC) applies to new international routes operating to and from non-concessioned airports and offers significant benefits:

  1. 40% Discount on Fuel Prices
    Under Executive Decree No. 204, a 40% discount is granted on the terminal sale price of aviation fuel for routes operating from airports managed by the DGAC or delegated to municipal governments, provided they have not been concessioned.
  2. Reduction in Air Travel Fees
    Through regulations published in the Official Register, two key fees for international passenger traffic have been reduced:
  • EcoDelta: from USD 50 to USD 5
  • Ecuador Potencia Turística: from USD 10 to USD 1
    These reductions apply to new international airlines or to new routes operated by already authorized carriers.
  1. Exemption from the Currency Outflow Tax (ISD)
    Executive Decree No. 182 establishes a 0% ISD rate for foreign airlines officially designated to operate international passenger or cargo services in Ecuador. This measure enhances financial efficiency and the profitability of international operations.

It is worth noting that some private concessionaires have implemented similar incentives to increase operations.

 

Requirements to Access the Benefits

To be eligible, airlines must meet the following conditions:

  • Hold a Regular Operating Permit and an Air Operator Certificate (AOC) issued by the DGAC.
  • Operate a route that includes an airport managed by the DGAC or a municipal authority, without concession to private operators.
  • Commit to maintaining operations for the minimum period required by the incentive plan.

 

Strategic Considerations

These incentives offer airlines the opportunity to:

  • Explore new markets with reduced financial risk.
  • Lower key operating costs.
  • Improve their competitive position compared to other carriers.
  • Strengthen their regional route network under favorable conditions.

 

Specialized Legal Advice to Maximize These Benefits

At CorralRosales, we have a specialized aviation law practice that advises both passenger and cargo airlines on all legal aspects of their operations in Ecuador. Our team has extensive experience in:

  • Managing permits and regulatory processes before the DGAC.
  • Implementing new routes and conducting operational feasibility analyses.
  • Structuring and negotiating aviation and commercial contracts.
  • Leasing, purchasing, and financing aircraft.

We support our clients from initial planning through to operational execution, ensuring regulatory compliance and maximizing the available benefits.

For more information on how your airline can access these incentives, contact us.

 

Verónica Olivo
Associate at CorralRosales
volivo@corralrosales.com

FREE COMPETITION OR REGULATORY INTERVENTION? LIMITS TO STATE INTERVENTION ACCORDING TO THE PRELIMINARY RULING 13-IP-2023 OF THE TJCA.

Posted on

On June 5, 2025, the Court of Justice of the Andean Community (“Court” or “TJCA”) issued a preliminary ruling that reconfigures the delicate balance between state regulation and free competition within sub-regional air transport[1]. The consultation was formulated by the Colombian Council of State, in the context of a dispute over the legality of Resolution 890 of 2010, issued by the Colombian Civil Aeronautics (“Aerocivil”). This regulation obliges airlines to publish their fares also in travel agencies, at the same price as in their direct sales channels.

 

This ruling redefines the scope of action of member states in three key dimensions:

 

  • States’ remedial powers under Article 94 of the Cartagena Agreement.
  • Tariff regulation in the air transport sector under Decision 582[2].
  • The regulatory limits derived from the obligation not to distort free competition under Article 36 of Decision 608[3].

 

  1. Resolution 890/2010 and its controversy

 

On February 23, 2010, the Aerocivil issued Resolution 890/2010 with the intention of guaranteeing fare transparency and avoiding discriminatory practices between sales channels. However, this measure was challenged in 2021 by Avianca and 18 other airlines on the grounds that:

 

  • It implied an unjustified intervention in contractual freedom.
  • It limited competition by preventing differentiated tariff practices by channel.
  • Violated Article 94 of the Cartagena Agreement, which imposes restrictions on corrective measures that may affect free regional competition without the authorization of the General Secretariat of the Andean Community.

 

Aerocivil responded by defending its regulatory competence in a public service such as air transportation, arguing that the resolution pursued legitimate public policy goals such as transparency and consumer protection.

 

  1. Corrective Measures and State Power: Legitimate Intervention or Prohibited Distortion?

 

One of the main questions resolved by the TJCA was whether Resolution 890/2010 could qualify as a “corrective measure” under the terms of Article 94 of the Cartagena Agreement, which prohibits member countries from adopting such measures without prior authorization from the General Secretariat of the Andean Community.

The Court held that the concept of “remedy” must be read in a systematic way with Decisions 283[4], 284[5], 285[6] and 457[7], which define its scope with respect to practices such as dumping, subsidies and other distortions to subregional competition. In the TJCA’s opinion, Resolution 890 does not fall within this framework, since:

 

  • It was not intended to correct a cross-border distortion.
  • It was a national rule aimed at homogenizing prices in order to protect consumers, within the legitimate sphere of State intervention.

 

This approach clearly delimits the scope of application of Article 94, preventing any state intervention from being seen as a distortion per se, and grants States a wider margin of domestic regulation than some economic operators had argued. In this sense, the ruling recognizes that free competition is not absolute and that the public interest -such as tariff transparency or equitable access to services- may justify sectoral regulations, if they do not imply undue discrimination or barriers to Andean trade.

 

With respect to the determination of air fares, the TJCA reaffirmed that Decision 582 grants each State the power to set its own fares, if this does not contradict the principles of the Community system or affect free sub-regional competition. In this case, the obligation imposed by Aerocivil to match prices in all sales channels (including travel agencies) may limit the possibility of differentiated commercial strategies, which represents a barrier to competition.

 

  • Article 36 of Decision 608: the new standard for regulatory compatibility

 

Finally, the Court ruled on the functional limit imposed by Article 36 of Decision 608, according to which no public policy measure may “prevent, hinder or distort” competition in the subregional market. In the TJCA’s view, this principle does not imply an absolute restriction on state intervention, but rather requires such intervention:

 

  • Does not introduce unjustified barriers to the entry of operators from other member countries.
  • Does not discriminate between Andean economic agents.
  • And it does not substantially alter the conditions of effective competition in the regional market.

 

This standard requires States to evaluate proportionality and economic impact before adopting sectoral regulations. It is not a total prohibition to intervene, but a call for regulatory coherence with the principles of the Andean market, which can be exemplified by the following tripartite test to assess the validity of state measures against free competition:

Criteria Andean Community Legality of the purpose pursued Legitimate non-economic public interest (transparency, equity). Proportionality of the measure No more restrictive than necessary. Non-discrimination No preference for national operators.

 

  1. Conclusion

 

Preliminary ruling 13-IP-2023 represents a clear warning: regional integration requires member countries to harmonize their domestic regulations with Andean Community law. Although States retain regulatory powers, these are not absolute when they affect the subregional market.

 

The TJCA ruling reaffirms the need to request prior authorization from the General Secretariat of the Andean Community for any national corrective measure that has a potential impact on regional competition, even if it is applied exclusively in the territory of the member state. It also highlights the role of the Andean Committee for the Defense of Free Competition as a technical body for the evaluation and recommendation of policies.

[1] Court of Justice of the Andean Community (2025). Prejudicial Interpretation 13-IP-2023 of June 5, 2025. Official Gazette of the Cartagena Agreement, Year XLI, No. 5660, pp. 8-26.

[2] Andean Community (2004). Decision 582 – Rules for the provision of air transport services in the Andean Community. Official Gazette of the Cartagena Agreement, No. 1180.

[3] Andean Community (1999). Decision 608 – Rules for the protection and promotion of free competition in the Andean Community. Official Gazette of the Cartagena Agreement, No. 314.

[4]  Andean Community. (1991). Decision 283: Regime to prevent or correct distortions of competition caused by dumping and subsidies [Commission Decision]. General Secretariat of the Andean Community.

[5] Andean Community (1991). Decision 284: Procedures for the application of the regime on unfair trade practices [Commission Decision]. General Secretariat of the Andean Community.

[6]  Andean Community (1991). Decision 285: Regime for the settlement of disputes on unfair trade practices [Decision of the Commission]. General Secretariat of the Andean Community.

[7] Andean Community (1999). Decision 457: Rules to prevent or correct distortions of competition caused by restrictive practices to subregional trade [Decision of the Commission]. General Secretariat of the Andean Community.

 

Christian Razza
Associate at CorralRosales
crazza@corralrosales.com

CANCELLATION AND TRANSMISSION OF SALES RECEIPTS

Posted on

 

By Resolution No. NAC-DGERCGC25-00000014 dated June 27, 2025, the Tax Authority (SRI) amended the provisions regarding the cancellation and transmission of sales and withholding receipts, and supplementary documents.

 

  1. Cancellation:

 

Sales and withholding receipts, and supplementary documents may be canceled through the SRI platform until the 10th day of the month following their issuance. If this date falls on a rest day, cancellation may be made on the next business day.

 

If this period has passed, sale receipts may only be canceled by issuing a credit note within 12 months following the issuance of the affected receipt.

 

For the cancellation to proceed, the recipient of the receipt must accept it through the SRI platform within 5 business days from the date of the request. If no response is received, the receipt will remain valid.

 

Invoices issued to final consumers, as well as sales and withholding receipts supporting tax refunds, may not be canceled.

 

  1. Transmission of receipts:

 

The four-business-day period for transmitting receipts to the Tax Authority is eliminated. From the effective date of the reform, transmission must be carried out at the time of generation.

 

The reform will take effect on August 1, 2025.

 

 

 

Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

Mateo Bravo, Associate at CorralRosales
mbravo@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
NOTA: EL texto anterior ha sido elaborado con fines informativos. CorralRosales no es responsable de ninguna pérdida o daño ocasionado como consecuencia de haberse actuado o dejado de actuar en base a la información contenida en este documento. Cualquier situación determinada adicional requiere la opinión y concepto específico de la firma.

CORRALROSALES

LAW ON PUBLIC INTEGRITY

Posted on

The Law on Public Integrity (“LOIP”), published in the Official Register Third Supplement No. 68 on June 26, 2025, amends several legal frameworks. Below is a summary of the reforms in tax, financial, and public procurement matters.

 

Tax

 

  1. A remission of interest, fines, costs, and surcharges is established on the full or partial payment of tax obligations generated up to December 31, 2024. Payment must be made by December 31, 2025. This measure applies to taxes administered by the Internal Revenue Service (SRI), except for income tax corresponding to fiscal year 2024.

 

2. Interest paid in tax refund procedures will accrue from the date the request is submitted until its resolution. The interest rate is reduced to 50% of the 90-day benchmark lending rate set by the Central Bank of Ecuador, compared to 100% prior to the reform.

 

3. If the tax authority initiates a determination process within the framework of an administrative refund claim, the duration of that process will not be considered for the calculation of interest.

 

Financial

 

  1. The Financial Policy and Regulation Board and the Monetary Policy and Regulation Board are merged into the new Monetary and Financial Policy and Regulation Board (JPRMF).

 

2. The JPRMF’s main responsibilities include the development of monetary, credit, financial, securities, insurance, and prepaid healthcare policy and regulation.

 

3. Within 90 days of its formation, the JPRMF must identify savings and credit cooperatives that must be transformed into private financial sector corporations, which will then fall under the supervision of the Superintendence of Banks.

 

Public Procurement

  1. The principle of best value for money is incorporated into public procurement.

 

2. The acquisition of medicines, strategic goods, and related services by entities providing healthcare services will be carried out under a special regime. Previously, related services were not included under this regime.

 

3. Maintaining outstanding obligations with the SRI or entities with coercive powers is now grounds for suspension of the RUP (Unified Registry of Suppliers).

 

4. During the preparatory phase of procurement processes, contracting entities may conduct preliminary market consultations. Participation in these consultations will not preclude suppliers from participating in the pre-contractual phase.

 

5. Consulting services will be contracted through a public tender when the reference budget exceeds US$10,000. If equal to or less, they may be contracted through direct contracting.

 

6. SERCOP may authorize purchases outside the electronic catalog if two conditions are met: (i) the external supplier offers the same standards and conditions as catalog suppliers; and (ii) the price is at least 5% lower than the catalog price.

 

7. The contract administrator will be responsible for processing and following up on payments to the contractor. If the contracting entity unjustifiably delays payment, it may not require the contractor to comply with or advance contract execution.

 

8. At any stage of execution, contracting entities must respond to contractor requests or petitions within the timeframe set in the contract, which may not exceed 10 business days.

 

9. Construction contracts must include a clause for the immediate replacement of the inspector if they fail to perform their duties.

 

10. Penalties for delays will be calculated per day on the unfulfilled obligation, according to parameters to be established in the LOSNCP regulations. The entity may set a maximum penalty percentage.

 

11. Before final payment or settlement, the contracting entity will offset amounts owed with firm debts owed to the Office of the Comptroller General. This does not apply if the debts are under administrative or judicial appeal.

 

12. Procedures, claims, and contracts initiated before June 26, 2025, will be governed by the rules in force at the time of their initiation, filing, or execution, respectively.

 

13. The President must issue the new LOSNCP regulations by August 10, 2025.

 

 

Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

Juan Fernando Riera, Associate at CorralRosales
jriera@corralrosales.com
+593 2 2544144

Mario Fernandez, Associate at CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
NOTA: EL texto anterior ha sido elaborado con fines informativos. CorralRosales no es responsable de ninguna pérdida o daño ocasionado como consecuencia de haberse actuado o dejado de actuar en base a la información contenida en este documento. Cualquier situación determinada adicional requiere la opinión y concepto específico de la firma.

CORRALROSALES

REGULATORY CHANGES IN THE MINING CONTROL FRAMEWORK

Posted on

 

The Board of Directors of the Mining Regulation and Control Agency (“ARCOM”), through Resolutions No. ARCOM-002/25, No. ARCOM-004/25, and No. ARCOM-005/25 has amended the regulations governing control and oversight in the mining sector.

 

These reforms aim to address key challenges in the mining industry, particularly regarding transparency, traceability, and efficiency in administrative processes. They also establish the requirements, documentation, and procedures necessary to obtain the “Certificate of Export of Mining Products,” which is required for the legal export of metallic and non-metallic minerals by small-, medium-, and large-scale mining operations in Ecuador.

 

Below is a summary of the most important changes introduced by the three resolutions:

 

Resolution No. ARCOM-002/25 – INSTRUCTIONS FOR THE MINING REGISTRY OF THE MINING REGULATION AND CONTROL AGENCY

 

  1. Technological modernization of the registry. All registrations must be carried out through standardized technological systems, according to the guidelines set by the Ministry of Telecommunications.

 

  1. Designation of registry officers in each District Directorate. Each office must have qualified personnel legally responsible for processing registrations. These officers must meet specific requirements (law degree, 3 years of experience, Ecuadorian nationality).

 

  1. Strict deadlines and accountability. Registry officers will have three (3) days to process applications. Failure to do so without justification will trigger disciplinary proceedings.

 

  1. Creation of the Digital Record Book. This electronic book will be the sole valid method to log applications, replacing physical records. ARCOM will soon publish a Methodological Guide for its use.

 

  1. Detailed contents of the new Mining Registry. The updated registry must include:

 

  1. Concessions, amendments, objections, and relinquishments.
  2. Suspensions, expirations, and nullifications.
  3. Licenses for mineral trading and export.
  4. Authorizations for processing and beneficiation plants.
  5. Mining associations and cooperatives.
  6. Succession-based effective possession.
  7. Other actions as determined by ARCOM’s Board.

 

  1. Processing procedures initiated before May 2023. These will continue under the previous regulation. Physical registry books must be submitted to the Executive Director within 3 days and fully digitized within 12 months.

 

  1. Purpose of the new instruction. This new instruction reflects ARCOM’s commitment to a more orderly, modern, and supervised mining sector. By digitizing the registry and assigning individual responsibility for recorded data, it protects state assets, combats informality, and strengthens legal certainty.

 

 

Resolution No. ARCOM-004/25 – REGULATION FOR THE CONTROL OF MINERAL EXPORTS

 

  1. The regulation applies to holders of mining rights operating under small, medium, and large-scale mining regimes. Both individuals and companies must comply with its provisions if they intend to export minerals from Ecuador.

 

  1. Production Certificate. Issued by authorized mining titleholders, this document must detail the volume, origin, mineral type, purity, and other technical data. Only analyses conducted by laboratories accredited by the Ecuadorian Accreditation Service (“SAE”) will be valid.

 

  1. Packing List. A detailed inventory of each shipment, including weights, destination, port of exit, and other verification data. This document must be electronically signed.

 

  1. Certificate of Export of Mining Products. Issued exclusively by ARCOM, this certificate legally authorizes the export of minerals. No exports may proceed without it.

 

  1. Fee structure. Medium- and large-scale mining companies must pay an annual fee for certificates, while small-scale miners will pay a fee per export.

 

  1. Laboratory requirements. All chemical analyses (purity, concentration, moisture, penalizing metals, etc.) must be conducted by accredited and registered laboratories. Results must be delivered within 25 days. Labs must retain witness samples for up to 6 months and report the presence of mercury or other elements in the samples.

 

  1. Conditions for export approval. ARCOM will not authorize exports if the mining titleholder:

 

  • Has failed to update their tax domicile.
  • Has a suspended or untraceable RUC (tax ID).
  • Submits unclear, false, or incomplete information.

 

This regulation strengthens state control over mining and exports, establishing clear rules to ensure minerals leave the country with proper technical, legal, and tax documentation. It also promotes transparency, protects the environment, and improves institutional coordination.

 

Resolution No. ARCOM-005/25 – INSTRUCTIONS FOR THE PREPARATION OF CADASTRAL REPORTS AND CERTIFICATIONS

  1. This instruction facilitates the issuance of reports and certifications related to the National Mining Cadaster, which is a critical component of all concession and permit processes in the mining sector.

 

  1. Target audience. The instruction applies to all institutions and individuals involved in mining administration, including the Ministry of Energy and Mines, Decentralized Autonomous Governments (GADs), and mining concessionaires.

 

  1. Key regulated aspects:

 

  1. Standardized formats for cadastral reports and certifications.
  2. Validation of geometries and coordinates (PSAD56 and WGS84 systems).
  3. Unique cadastral codes for each mining right.
  4. Validity periods and deadlines (30 days for issuance, 30-day validity).
  5. Review of overlaps with environmentally, culturally, or strategically sensitive areas.

 

  1. Differentiated reporting. The instruction outlines how to prepare reports for various types of mining: artisanal and subsistence mining, small-scale mining (metallic minerals), medium-scale mining, large-scale mining, and small-scale mining (non-metallic minerals).

 

  1. Mandatory nationwide use. The instruction applies nationwide and must be used by ARCOM officials, the Ministry of Energy and Mines, GADs that manage construction materials, and individuals or companies handling mining rights under any regime (artisanal, small-, medium-, or large-scale mining).

 

Purpose of the instruction. This regulation provides Ecuador with a modern and robust tool that will help reduce conflicts, improve the quality of technical information, and streamline administrative procedures.

Carlos Torres, Senior Associate at CorralRosales
ctorres@corralrosales.com
+593 2 2544144

© CORRALROSALES 2025
NOTA: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito/Guayaquil, Ecuador.

CORRALROSALES

CORPORATE AMENDMENTS INTRODUCED BY THE ORGANIC LAW OF NATIONAL SOLIDARITY

Posted on

The Organic Law of National Solidarity (the Law) was published in the Official Registry Supplement No. 56 on June 10, 2025. Its purpose is to establish a special legal framework in the context of the internal armed conflict, ensuring the continuity and stability of the country’s economic and productive activities.

Within the corporate sphere, the Law introduces the following reforms:

 

a) Restrictions on Simplified Stock Corporations (SAS):

Simplified Stock Corporations (SAS) are prohibited from engaging in activities related to financial operations, securities markets, insurance, operations linked to strategic sectors, mining, or activities associated with these sectors, as well as other activities subject to special regulation under applicable law.

Pursuant to Article 313 of the Constitution, strategic sectors include energy in all its forms, telecommunications, non-renewable natural resources, transportation and refining of hydrocarbons, biodiversity and genetic heritage, the radio spectrum, and water resources.

However, the Law does not determine whether this restriction applies to existing SAS or whether such entities must change to a different corporate type. This matter, along with the scope of what constitutes linked operations, may be clarified through the regulation issued under the Law.

 

b) Creation of the sports corporation (sociedad anónima deportiva):

The Law creates the sports corporation (sociedad anónima deportiva), a high-performance, profit oriented legal entity of a commercial nature, whose capital is divided into negotiable shares contributed by shareholders who are liable only up to the amount of their individual shares. It may be formed through a contract, a unilateral act, or other forms provided by law, and it shall engage exclusively in sports activities within a single discipline. The profit-oriented nature of professional sports corporations shall not disqualify them from being considered a sport organization.

Sports clubs or teams participating in professional sports may transform into sports corporations.

 

 

Milton Carrera, Partner at CorralRosales
mcarrera@corralrosales.com
+593 2 2544144

 

© CORRALROSALES 2025
NOTA: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito/Guayaquil, Ecuador.

CORRALROSALES

AMENDMENTS TO THE REGULATIONS OF THE ELECTRICITY LAW

Posted on

By means of Executive Decree No. 32 of June 15, 2025 (the “Decree”), published on June 18, 2025, in the Official Register No. 62, the General Regulations to the Law on Public Electricity Service (“RGLOSPEE”) were amended. The Decree entered into force on June 18, 2025.

 

Below is a summary of the main amendments:

 

  1. High-voltage Disconnection. The National Electricity Operator is authorized to disconnect high-voltage consumers from the National Interconnected System (“SNI”) during periods of power generation deficit or rationing.

 

  1. Mandatory Generation. High-voltage consumers will be required to implement power generation systems to cover their demand by December 18, 2026. Any surplus energy may be injected into the SNI, subject to the regulations issued by the Electricity Regulation and Control Agency (“ARCONEL”).

 

  1. Direct Delegation. The Ministry of Energy and Mines (“MEM”) may directly delegate to the private sector the execution of electricity generation projects using non-conventional renewable sources (e.g., solar, wind, geothermal, small-scale hydro) or transitional sources (e.g., natural gas, nuclear, green hydrogen), provided such projects are not included in the Electricity Master Plan (“PME”) and their nominal capacity does not exceed 100 MW.

 

  1. Simplified Procedure. Private electricity generation projects using non-conventional renewable sources (with capacities between 10 and 100 MW) or transitional sources (up to 100 MW), not included in the PME and incorporating energy storage and interconnection networks, may be directly delegated through a simplified procedure.

 

  1. Public Selection Processes. The private sector may submit proposals to the MEM for electricity generation projects exceeding 100 MW or transmission projects that are not contemplated in the PME. These may be awarded through a public selection process (“PPS”), in which the proponent may participate and improve its bid under the terms of the respective PPS.

 

  1. Self-generation. Private self-generation projects will not require prior approval from the Ministry of Economy and Finance (“MEF”).

 

  1. Payment Guarantees. The State and/or public electricity distributors (the “Distributors”) may guarantee the payments to the private sector arising from concession contracts and/or regulated contracts through trusts, liquidity guarantees, contingency funds, or other similar mechanisms. In any case, approval by the MEF will be required.

 

  1. Payment Priority. Payments derived from commercial transactions related to regulated demand must adhere to the order of priority established by ARCONEL, with private generators and transmitters occupying the first position. Distributors must establish trusts to comply with this order by December 15, 2025.

 

  1. Assignment to financiers. Concession contracts may be assigned to financiers: (i) due to serious breach of payments and obligations by the concessionaire under the financing contracts; or (ii) due to breaches by the concessionaire of the concession contract. Financiers may assume the position of the concessionaire directly or through a third party approved by the MEM.

 

  1. No reversion. The assets of generators installed for self-supply, self-generators, cogenerators, and non-conventional renewable energy generators with a capacity of up to 10 MW will not be required to revert to the State.

 

Carlos Torres, Senior Associate at CorralRosales
ctorres@corralrosales.com
+593 2 2544144

 

Mario Fernández, Associate at CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

 

© CORRALROSALES 2025
NOTA: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito/Guayaquil, Ecuador.

CORRALROSALES

MANDATORY APPLICATION OF STANDARD-TYPE TERMS OF REFERENCE FOR ENVIRONMENTAL COMPLIANCE AUDITS

Posted on

On June 13, 2025, the Ministry of Environment, Water and Ecological Transition (“MAATE”), through the Undersecretariat of Environmental Quality, issued Circular No. MAATE-SCA-2025-0010-C (“Circular”), addressed to companies in the hydrocarbons, mining, electricity, telecommunications and other activities subject to environmental control. The Circular states that:

  • All Environmental Compliance Audits (“AAC”) shall be prepared solely based on the Terms of Reference (“TORs”) Type-Standard, contained in Annex 9 of Ministerial Agreement MAATE-MAATE-2024-074-A, issued on November 20, 2024 (“Agreement”).
  • Customized TDRs will not be required to be submitted to or pre-approved by MAATE.
  • Audits must be submitted within 90 days after the end of the audited period.
  • Failure to submit the audits within the established deadline will be administratively sanctioned.
  • The audit report shall expressly state that it was prepared in accordance with the Agreement and Annex 9.

The Circular applies generally and directly to all operators subject to environmental audits, within the framework of the procedures initiated before and after the entry into force of the Organic Environmental Code and its secondary regulations. The legal basis for this measure is found in the Agreement that approves the “Instrument for the immediate approval of Environmental Audits of Compliance and Conjunction, Terms of Reference and Environmental Compliance Reports”.

This Agreement is framed within the principles established in the Organic Law for the Optimization and Efficiency of Administrative Procedures, such as simplicity, celerity and subsequent control, which determines in the Third Transitory Provision that if the operator does not submit the withdrawal of its TDR process within 30 days from the entry into force of the Agreement, it will be obliged to use the Standard-Type TDRs.

Determined by the Agreement and the Circular:

  • Review if you have previous active TDR proceedings and evaluate submitting a waiver if applicable.
  • Plan the preparation of your Environmental Compliance Audit, ensuring its delivery within 90 days.
  • Adapt your technical and legal procedures to the mandatory use of the standard format (Annex 9).
  • Include the required regulatory reference in the background of the report to avoid observations.
  • Train your environmental and legal staff on the new requirements to ensure effective implementation.

The Circular is a mandatory instruction of immediate application for all operators subject to environmental control. Compliance with it not only guarantees the validity of audits but also avoids delays and penalties. This measure represents a step towards the standardization and efficiency of environmental procedures in the country.

 

 

Carlos Torres, Senior Associate at CorralRosales
ctorres@corralrosales.com
+593 2 2544144

 

© CORRALROSALES 2025
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito/Guayaquil, Ecuador.

CORRALROSALES

From Law to Practice: The Non-Registrability of Trademarks on Grounds of Unfair Competition in Ecuador

Posted on

Within the framework of the common industrial property regime of the Andean Community, of which Ecuador is a member state, Decision 486 establishes in Article 137 an important rule for national IP offices:

“When the competent national office has reasonable grounds to infer that a registration has been applied for in order to perpetrate, facilitate, or consolidate an act of unfair competition, it may refuse such registration.”

Among the scenarios that may constitute unfair competition is the following:

“Any act capable of creating confusion, by any means, with respect to the establishment, products, or industrial or commercial activity of a competitor.”

Although this provision has been in force since the year 2000, its application by the Ecuadorian IP Office (SENADI) has historically been limited. The authority has traditionally prioritized other grounds for refusal, such as lack of distinctiveness—whether inherent or acquired—or bad faith, especially where there was a prior relationship between the applicant and the rightful trademark owner.

For years, the grounds of unfair competition were dismissed and considered by some as a matter exclusively governed by antitrust or competition law, outside the scope of trademark registration. However, in recent years, there has been a gradual shift in the IP Office´s administrative interpretation of this provision.

Jurisprudential Evolution: The “CARMEX” Case

A significant illustration of this change is found in a recent decision rejecting the registration of the mark CARMEX for goods in Class 03, including bleaching preparations, soaps, cosmetics, and essential oils, among others.

The application, filed by an Ecuadorian citizen in 2020, was opposed by the owner of the CARMEX trademark in multiple foreign jurisdictions, including the US, UK, Brazil, Mexico, and China. The opposing party alleged that the application constituted an act of unfair competition and a breach of the principle of good faith.

In a decision issued in May 2025, the Ecuadorian IP Office ruled as follows:

  • The argument concerning foreign registrations was dismissed on the basis of the principle of territoriality, enshrined in trademark law.
  • The opposition was upheld, recognizing that the use of the applied-for mark constituted an act of unfair competition through imitation, considering the prior use of the CARMEX mark in other markets. This could potentially mislead consumers and unduly benefit from the opponent’s reputation.

The IP Office concluded that granting the registration would run contrary to the principles governing fair market competition. It emphasized that the intellectual property system must protect not only the trademark owner´s interests, but also those of consumers and market balance.

Legal Implications

This decision marks a significant shift in Ecuadorian administrative practice, as it effectively incorporates the analysis of unfair competition as an autonomous ground for refusal. It aligns with the principles of integrity in the industrial property system and commercial loyalty.

The resolution also reflects a more flexible interpretative approach, more consistent with the globalized nature of commerce, acknowledging that the principle of territoriality, though still valid, should not be rigidly applied when it results in the improper appropriation of well-known or widely used marks.

Final Reflection

The recognition of unfair competition as a legitimate ground for refusal of trademark registration is a meaningful step toward a more comprehensive application of trademark law. In a landscape where commercial practices evolve constantly, IP Offices must adopt dynamic criteria that provide effective protection against practices that distort the market and undermine legitimate rights.

Ecuador’s experience in this case sets a valuable precedent not only at the national level, but also as a regional reference for Andean countries and other jurisdictions facing similar challenges at the intersection of trademark law and competition law.

Such decisions -and any that help guarantee and uphold the rights of trademark owners- are a welcome development.

 

María Cecilia Romoleroux
Socia en CorralRosales
maria@corralrosales.com

 

Katherine González
Asociada senior en CorralRosales
katherine@corralrosales.com

TAX EFFECTS OF DONATIONS OF EQUIPMENT TO THE NATIONAL POLICE AND ARMED FORCES

Posted on

 

Through Official Register No. 56, Sixth Supplement, dated June 11, 2025, the Law of National Solidarity was published. This law introduces financial, tax, and security reforms aimed at ensuring national economic stability and promoting economic recovery.

Regarding the tax regime, the law establishes a benefit consisting of a reduction of the generated income tax, equivalent to the value of new equipment and supply donations made in favor of the National Police and/or the Armed Forces. This reduction may not exceed 30% of the tax and is not subject to reimbursement.

I.e., the law allows taxpayers to pay up to 30% of the income tax due through donations to the National Police and/or Armed Forces. For reconciliation purposes, this reduction would result in a lower calculation base for the profit-sharing payments to employees, as illustrated in the following example:

This new benefit will apply starting from fiscal year 2026.

 

 

Andrea Moya, Socia en CorralRosales
amoya@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
NOTA: EL texto anterior ha sido elaborado con fines informativos. CorralRosales no es responsable de ninguna pérdida o daño ocasionado como consecuencia de haberse actuado o dejado de actuar en base a la información contenida en este documento. Cualquier situación determinada adicional requiere la opinión y concepto específico de la firma.

CORRALROSALES

1 2 3 4 5 6