Category Archives: Bulletin

By Ministerial Agreement No. MAATE-2023-134, issued on November 22, 2023, and published in the Official Registry No. 490 on February 1, 2024, the Ministry of Environment, Water, and Ecological Transition issued the Technical Standard for the Implementation of the Extended Responsibility Principle in the Comprehensive Management of Medicines and Pharmaceutical Products (hereinafter referred to as the Standard).

The Standard applies to any entity engaged in the production, import, and initial placement on the national market. The term “initial placement on the market” refers to the introduction of medicines and pharmaceutical products into the market through any means, including national sale or donation through electronic or remote methods, i.e., when they are first distributed in the Ecuadorian territory.

Non-hazardous medicines and pharmaceutical products are excluded, as determined by the National Health Authority, as well as medical devices.

The main obligations of the producers are as follows:

1. Obtain the environmental administrative authorization for the manufacturing, storage, and transportation of medicines or pharmaceutical products.
2. Obtain the registration as a hazardous and/or special waste generator for medicines and pharmaceutical products that are out of specifications or expired within the scope of the producer’s extended responsibility and update it in case of any changes.
3. Develop and submit, individually or collectively, a Comprehensive Management Program (“CMP”). Report compliance with actions and goals established in the CMP in the first 10 days of March each year.
4. Inform the National Environmental Authority of emergency events, accidents, and incidents involving expired or out-of-specification medicines and pharmaceutical products within one (1) day of the occurrence, using any official means.

The main obligations of the distributors are:

1. Implement the CMP.
2. Deliver expired or out-of-specification medicines or pharmaceutical products to authorized waste managers.
3. Inform the Producer, within one (1) day of the occurrence of emergency events, accidents, and incidents involving expired or out-of-specification medicines and pharmaceutical products; and,
4. Provide the consumers with areas for the installation of collection points, equipped with measures for the safe handling and disposal of medicines and pharmaceutical products that are out of specifications or expired.

The CMP will have a validity of 5 years and must ensure that the management of expired or out-of-specification medicines is carried out in a technically sound manner with the lowest possible risk, incorporating gradual collection goals.

Rafael Serrano, partner at CorralRosales
rserrano@corralrosales.com
+593 2 2544144

On January 18, 2024, the National Assembly issued the Organic Law for Equal Pay between Men and Women, hereby the “Law”, published in the Supplement to the Official Gazette No. 481 of January 19, 2024, of which we highlight the following:

• Its objective is to guarantee equal remuneration and any other form of economic retribution between men and women.
• It establishes guidelines to determine that the work rendered is of equal value and obeys objective factors related to performance, competence, and qualifications, working conditions, effort, and responsibility.
• It imposes the following obligations on employers:a)    To continuously train their personnel both men and women in labor rights. These trainings will be registered and controlled by the Labor Authority.

b)    To report annually the actions oriented to achieve equal remuneration, which will be certified by the Labor Authority.

• The employers may denounce the non-compliance of their rights to equal remuneration, which must be answered by the employer in detail within a term of 15 days.
• If in a complaint process the violation of the right to equal remuneration is verified, the employer must make the payment corresponding to the difference in remuneration with retroactive effect and establish a new remuneration.
• Failure to comply with the obligations established by the Law will result in a penalty.

Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

The Law on Energy Competitiveness (“LOCE”) was published in the Second Supplement of the Official Registry on January 11, 2024. Below, we summarize the most important energy and tax matters:

1.    Projects included in the Master Plan for Electricity (“PME”) may be delegated to private entities through public selection processes in the following cases:

a.    When it is necessary to meet the public interest, or
b.    When the service cannot be provided by entities wholly or partially owned by the Government, according to the needs of the electric system.

2.    Projects not included in the PME based on unconventional renewable energies that have been identified by the private sector may be delegated to their promoter if the project does not exceed 10MW in power. Larger projects must be delegated through a public selection process, and benefits will be recognized for the promoter’s participation.

3.    The construction, operation, and maintenance of public lighting systems may be delegated to private companies.

4.    All projects delegated to the private sector must be developed by companies established in Ecuador.

5.    The delegation to the private sector of existing infrastructures financed with the General State Budget is prohibited. Entities wholly or partially owned by the Government Public shall be responsible for managing such infrastructures.

6.    Private entities may build new networks and distribution infrastructure to supply electricity for commercial and industrial clients isolated from the electric distribution grid. Expenses incurred for this purpose will be considered deductible for calculating the applicable income.

7.    Regulated and non-regulated consumers may install distributed generation systems for self-supply (“SGDA”). These systems must use unconventional renewable energies and can be owned by the consumer or a third party.

The depreciation and amortization value of the equipment, and technology acquired for SGDA implementation will be deductible with an additional 100% for income tax purposes.

8.    Energy block transactions may be conducted through the sale of energy via contracts signed by participants in the electric sector or through short-term transactions.

9.    Clients who make payments for public electricity and lighting services until June 30, 2024, will not be subject to interest payments. Clients located in Manabí and Esmeraldas will not be subject to paying any amount due for the services received during the state of emergency caused by the 2016 earthquake. These benefits do not apply to industrial clients.

10.    Other tax regime amendments include:

a.    0% VAT rate will apply to the transfer of equipment and accessories for solar photovoltaic generation and wastewater treatment plants.

b.    Electric vehicles are described as those propelled solely by electric power sources, with batteries charged exclusively using this type of energy and that produce zero direct polluting emissions. Electric vehicles shall not be understood as those that have self-generation systems with an internal combustion source.

c.    The remission regime is amended, payment must be made by July 31, 2024.

d.    The Foreign Trade Committee (COMEX) shall tax agricultural machinery that works with clean energy sources with a 0% tariff. This amendment must be carried out until May 10, 2024.

e.    Payments made abroad by private financial institutions for credits and financial returns from fixed-term deposits or investments, will not be exempt from the payment of Outflow Tax (ISD) until January 11, 2025.

The President of the Republic must issue the applicable regulations by February 10, 2024.

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

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

Edmundo Ramos, Partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

1. The Executive Decree 98 by which it is established that the outflow tax (ISD) rate will remain at 3.50% until December 31, 2024.
2. The Executive Decree 99 which amended the following regulations:

• The voluntary income tax advance payment may be performed until January 31 of each year. Before the reform, such payment was allowed until December 31.
• Veterinary services are included as health services subject to 0% Value Added Tax (VAT).
• It is clarified that taxpayers must keep the documents that support the accounting for 7 years.

• Taxpayers classified as Large Taxpayers must include the legend “Large Taxpayer” in their invoices.

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

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

On November 14, 2023, the Labor Ministry by means of the Ministry Agreement No. MDT-2023-056 order:

–    To suspend and interrupt all terms and deadlines related to the registration of employment contracts, termination minutes, sanction resolutions, inspection files, inspection receipts, and thirteenth and fourteenth registries for the year 2023, as of 15 December 2023. This suspension includes any procedures that depend on the computer systems of the Labor Ministry.

–    The terms and deadlines will be resume when the computer systems of the Labor Ministry are enabled, which shall be communicated through the available electronic means, and the fines resulting from the failure to register information in these systems will not be imposed.

–    The following procedures may be submitted to the counters set up for this purpose by the Labor Ministry:

a)    Inspections request.
b)    Legal termination of the employment relationship (visto bueno) request.
c)    Legal termination of the employment relationship (visto bueno) response.
d)    Petitions.
e)    Collective bargaining agreement request.
f)    Employees associations notification.
g)    Unique ballot.
h)    Legal termination of the employment relationship (visto bueno) suspension consignation.
i)    Termination of the labor relationship consignations (provided that the minutes are registered in the SUT beforehand).

–    The termination minutes or employment contracts may be concluded or registered before the labor inspector of the respective jurisdiction. However, once the Labor Ministry computer services are regularized, registration may be formalized.

Edmundo Ramos, Socio en CorralRosales
eramos@corralrosales.com
+593 2 2544144