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Latin Lawyer – IBM´s US$60 billion global spinoff calls on Latin American firms

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Latin Lawyer - IBM´s US$60 billion global spinoff calls on Latin American firms - CorralRosales - Lawyers Ecuador

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DATE: 18-10-2021

CORRALROSALES IN THE NEWS:

– Andrea Moya

– Edmundo Ramos

– Xavier Rosales

– Darío Escobar

– Edgar Bustamante

– Marta Villagómez

– Milton Carrera

– Ramón Paz y Miño

– Sofía Rosales

MEDIA: Latin Lawyer

Multinational technology company IBM has hired CorralRosales, along with other Latin American firms, to carve-out Kyndryl. It does so by establishing the managed infrastructure services unit as an independent business.

This carve-out, in which our team of experts has been working on and which has a global value of US$60 billion, was signed on September 1. The aim is for Kyndryl to become an independent company headquartered in New York by the end of 2022. 

On behalf of CorralRosales, the advisors in the transaction are partners Xavier Rosales, Edmundo Ramos, Andrea Moya; and associates Milton Carrera, Marta Villagómez, Sofía Rosales and Darío Escobar in Quito; and associates Ramón Paz y Miño and Edgar Bustamante in Guayaquil.

According to Latin Lawyer, “IBM’s Shareholders will receive at least 80.1% of Kyndryl’s common stock once the spinoff is complete, with IBM retaining the remaining stake. (…) While IBM and Kyndryl will be independent entities, at launch they will both be each other’s biggest clients and remain as strategic partners”.

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LexLatin – Acquisitions in Ecuador: the most important operations so far this year

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LexLatin - Acquisitions in Ecuador: the most important operations so far this year - CorralRosales - Lawyers Ecuador

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DATE: 29-09-2021

CORRALROSALES IN THE NEWS:

– Xavier Rosales

– Andrea Moya

MEDIA: LexLatin

Ágora, a tool that systematizes and orders data on acquisitions, outputs, and financing in Latin America, published the number of operations completed during January and August of this same year: 14, which translates into 3,836 million dollars, an amount that is 3,348 million dollars more than the accumulated during the same months of 2020.

Our partner, Xavier Rosales, participated in the most important operation in the first two quarters in Ecuador: the purchase of the Lumen business in Latin America by Stonepeak Partners. Countries such as the United States, Australia, Venezuela, Uruguay, Peru, Mexico, Costa Rica, Colombia, Argentina, Brazil, and Panama were also part of this operation.

“We have the pleasure of advising Lumen for several years,” said Rosales for the medium. He also emphasizes that CorralRosales “has participated in different operations related to change of ownership and business focus, adjusting to the needs of the business sector mainly served by Lumen”.

Without a doubt, working on this operation from Ecuador is a challenge since the transactions are subject to regulatory authorizations. Our partner points out that “the advantage is that the regulations applicable to these authorizations are clear, which allows adequate planning and predictability”, making it possible to obtain permits in the shortest possible time.

Andrea Moya, a partner at CorralRosales also participated in the transaction. She believes that “there are three key elements in the current Ecuadorian situation: the adverse effects generated by the pandemic on the liquidity of companies, which have forced many of them to seek foreign investors; the change of government, which meant a shift towards a favorable environment for investors, and last but not least, the success of the vaccination plan, which has allowed the reactivation of the economy”.

CorralRosales Operations

Our firm currently has 3 operations with $ 3,160,000,000 in total transactions.

Regarding the position in which CorralRosales finds itself, Moya explains that the number of clients has grown significantly. “We see it as a rebound from the pandemic and due to the need to adapt to a new reality. We also see it as an effect of the favorable environment that the new government has generated for business development”, he adds.

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LexLatin – CorralRosales Participates in The Purchase of Lumen in Latin America by Stonepeak Partners

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LexLatin - CorralRosales Participates in The Purchase of Lumen in Latin America by Stonepeak Partners - CorralRosales - Lawyers Ecuador

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DATE: 26-08-2021

CORRALROSALES IN THE NEWS:

– Xavier Rosales

– Ana Samudio

– Milton Carrera

MEDIA: LexLatin

In August, the US alternative investment company specialized in infrastructure, Stonepeak Partners, bought Lumen Technologies, a US fiber-optic provider and data operator.

The $ 2,700 million purchase was carried out with the participation of the AustralianSuper pension fund and with the help of CorralRosales in Ecuador. Our team of experts advised Level 3 Communications, Lumen’s Ecuadorian subsidiary, on Regulatory Law.

In addition to CorralRosales, the following firms also took part in the transaction:

  • Stonepeak Partners LP Advisors:
    • Simpson Thacher & Bartlett – United States (New York and Palo Alto)
    • Marval O’Farrell Mairal (Buenos Aires)
    • Gómez-Pinzón Abogados (Bogotá)
    • Consortium Legal – Costa Rica (San José de Costa Rica)
    • Rebaza, Alcázar & De las Casas Abogados (Lima)
    • Travieso Evans Arria Rengel & Paz (Caracas)
    • Creel, García-Cuéllar, Aiza y Enríquez, SC (Mexico City)
    • Pérez Bustamante & Ponce (Quito)
    • Mattos Filho, Veiga Filho, Marrey Jr. and Quiroga Advogados (São Paulo)
    • Barros & Errázuriz (Santiago de Chile)
    • Arias, Fábrega & Fábrega – ARIFA (Panama City
    • Guyer & Regules (Montevideo)
  • Advisors of Level 3 Communications, Inc .:
    • CorralRosales (Quito)
  • Advisors to AustralianSuper:
    • Skadden, Arps, Slate, Meagher & Flom – United States (Los Angeles, New York and Washington, DC)
  • Advisers to Lumen Technologies, Inc .:
    • Jones Walker LLP (New Orleans and Baton Rouge):

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Teleamazonas – The Government promotes a new mining policy to attract more investment

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Teleamazonas - The Government promotes a new mining policy to attract more investment - CorralRosales - Lawyers Ecuador

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DATE: 24-08-2021

CORRALROSALES IN THE NEWS:

–Rafael Serrano

MEDIA: Teleamazonas

Ecuador launched a new mining policy. From 2018 to 2020, this sector paid USD 1,300 million in taxes. So far, in 2021, it has paid USD 421 million, with a projection of up to USD 1,600 million. Teleamazonas invited our experienced senior associate Rafael Serrano, a specialist in Environmental Law, to discuss this new policy.

“A fundamental rule for the development of the sector demonstrates the will of the Government and that of the Ecuadorian State to promote this industry that, if administered correctly, can bring great benefits,” adds Serrano.

The National Government, through decree 151, ordered to issue “the Action Plan for the Mining Sector of Ecuador.” Article 2 adds that “the State will be the generator and coordinator of public policies that promote the development of the mining sector, national and foreign investment, and the increase in exports of mining products.” For experts in the topic, this is a big step within the mining sector.

Serrano adds that “the objective is the development of environmentally and socially responsible mining, which protects investment, both national and foreign.” And, to conclude, he adds that what is needed is “stability and clear rules of the game so that investors know where to invest. These are investments of hundreds of millions of dollars ”.

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Teleamazonas – CNT suffered a “highly sophisticated” cyberattack

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Teleamazonas - CNT suffered a "highly sophisticated" cyberattack - CorralRosales - Lawyers Ecuador

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DATE: 16-08-2021

CORRALROSALES IN THE NEWS:

–Rafael Serrano

MEDIA: Teleamazonas

In July, CNT (National Telecommunications Corporation) was the victim of a cyberattack, the intentions of which are still unknown. Nevertheless, the attack puts the cybersecurity policies that all companies and institutions must have under scrutiny, and the topic became a talking point in Ecuador.

Teleamazonas wanted to have the opinion of our senior associate, an expert in new technologies and information security, Rafael Serrano, to offer a vision of what changes should be made to avoid future attacks.

Serrano affirms that “CNT and all public institutions must begin to have cybersecurity policies” since no one is exempt from risk, and besides, there are ways to prevent it.

After the situation and the CNT having been declared in emergency, decisions will be made regarding the equipment, given that, according to Byron Zapata, CNT’s surrogate manager, there are resources available.

“The right thing to do is to have different systems that can secure and diversify the information,” says Serrano. He also adds that “in this way, if someone has an attack or finds a problem, they have a backup in other systems, and the entire State continues to function.”

To conclude the interview, Serrano affirms that “according to Ransomware, it is only an attack, an attempt. So, therefore, they can’t take the appropriate measures unless they identify what happened or what the attackers are asking for.”

All the information that has been violated is not yet known in detail.

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WTR World Trademark Review – Foreign Companies as Intellectual Property Holders in Ecuador

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DATE: 14-07-2021

PROFESSIONALS IN THE NEWS:

–Andrea Miño Moncayo

MEDIA: World Trademark Review

On July 14, 2021, World Trademark Review (WTR), the media specialized in Intellectual Property, published an article written by Andrea Miño Moncayo.  In her article, our associate comments on a pervasive problem in Ecuador regarding the appropriation of internationally recognized brands by third parties.

The appropriation is usually done through registration applications with the relevant authority and even by marketing products under these brands without proper authorization.

The arguments of the offenders are varied, and they particularly emphasize that the foreign companies in question are not domiciled in the country. Therefore, they could not carry out activities or defend their intellectual property rights in this particular case.

Miño Moncayo emphasizes in the article that, “to try to justify this (blatantly illegal) conduct, some lawyers have resorted to wrongly allege before the courts that the doctrine of the Superintendency of Companies will be applied, according to which a company established outside the country must be domiciled in Ecuador to be able to carry out activities in the country. “

Miño Moncayo then goes through international and local regulations applicable in this case, including the hierarchy of each of them, to demonstrate that the appropriation and use of these marks are illegal and are not justified within the Ecuadorian legal system.

She concludes by highlighting that “it is essential that the preliminary decisions issued by the Court of Justice of the Andean Community in these cases are specific and clear, to avoid erroneous arguments causing damage to the rights of foreign companies not domiciled in Ecuador.”

To see the full article (under registration), click here.

Latin Lawyer – Multiple Firms Help Dutch Paint Company Expand in Latin America.

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DETAILS

DATE: 16-07-2021

PROFESSIONALS IN THE NEWS:

Partners: Xavier Rosales and Andrea Moya

Associates in Quito: Milton Carrera, Ana Samudio, Marta Villagómez, Rafael Serrano, Maria Isabel Torres, Jimmy Rodríguez, Darío Escobar and Sofía Rosales

Associates in Guayaquil: Ramón Paz y Miño and Edgar Bustamante 

MEDIA: Latin Lawyer

On July 16, 2021, Latin Lawyer, the international media dedicated to the legal sector, shared the transaction involving the Dutch company AkzoNobel; this company specializes in decorative and industrial paint and chemical products. CorralRosales acted as a legal advisor in Ecuador.

Through this multinational transaction closed on June 29, AkzoNobel acquired the Orbis Group, a Colombian business conglomerate with several subsidiary companies dedicated to manufacturing paint and derived chemical products. This conglomerate operates in 16 Latin American countries.

The transaction is still pending regulatory approval in several countries and is expected to be finalized by the end of this year.

In addition to having the advice of CorralRosales in Ecuador, the following firms also contributed to the transaction:

AkzoNobel advisers: Baker McKenzie in Colombia, Arias in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.

Grupo Orbis Advisors: Posse Herrera Ruiz in Colombia, BLP in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and Robalino Law in Ecuador.

If you want to see the full article (under registration), click here.

Industria Legal – The Cannabis and Hemp Industry Generates Expectations in Ecuador

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DATE: 02-07-2021

CORRALROSALES IN THE NEWS:

–Felipe Samaniego

MEDIA: Industria Legal

December 2019 was a month of legal changes in Ecuador. First, the Organic Law Reforming the Comprehensive Organic Criminal Code was published. Still, it was not until June 2020 that it came into force, reforming the Organic Law for the Comprehensive Prevention of the Socioeconomic Phenomenon of Drugs and the Regulation and Control of the Use of Listed Substances Subject to Control. The magazine Industria Legal dedicates a page to the information offered about this matter by our expert partner in Regulatory Law, Felipe Samaniego since this reform gave way to Ecuador’s new cannabis and hemp industry.

The exclusion of substances subject to control to cannabis and hemp with less than 1% THC in dry weight and a term of 120 days for the Ministry of Agriculture and Livestock to issue the corresponding regulation are among the new reforms.

Not only that, but also, through this agreement, new guidelines are established applicable to the regime of seven licenses, different for each activity allowed in the non-psychoactive cannabis industry, hemp and hemp for industrial use, “from the import and production of seeds to the production and export of derivatives, biomass and/or flowers,” according to Samaniego.

Our expert ends his article stating that “the rapid development of the regulatory framework that regulates the activities of agroindustrial activities, by the Ministry of Agriculture and Livestock, caused that both the Ministry of Health and the National Agency for Regulation, Control, and Sanitary Surveillance (ARCSA) as well as the Agency for the Regulation and Control of Phytosanitary and Zoosanitary (AGROCALIDAD) issue the normative bodies that regulate finished products destined for human and veterinary use and consumption that have derivatives of non-psychoactive cannabis or hemp in their composition ”.

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PharmaBoardroom – Emerging cannabis and hemp industry in Ecuador

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PharmaBoardroom - Emerging cannabis and hemp industry in Ecuador - CorralRosales - Lawyers Ecuador

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DATE: 28-06-2021

CORRALROSALES IN THE NEWS:

–Felipe Samaniego

MEDIA: PharmaBoardroom

With the Criminal Law Reform enacted a year ago, the cannabis and industrial hemp industry has become an emerging industry in Ecuador. Our partner Felipe Samaniego writes about it for Pharma Boardroom.

Samaniego begins the article by writing about what’s new since the reforms now include decriminalizing the possession of drugs that contain cannabis or derivatives as an active ingredient for therapeutic, palliative, medicinal use, or alternative medicine.

The Law for Drug Use, Prevention, and Control is also modified with the change, which now excludes the control of non-psychoactive cannabis or hemp.

On October 19, 2020, the Ministry of Agriculture issued Ministerial Agreement No. 109-2020, which regulates the Import, Sowing, Cultivation, Harvest, Post-harvest, Storage, Transportation, Processing, Marketing, and Export of non-psychoactive cannabis or hemp and hemp for industrial use.

Samaniego adds that “this regulation establishes the requirements that must be met to obtain the seven types of licenses, which authorize the following activities only concerning cannabis or hemp with a THC concentration of less than 1%:

  1. License for Import and Marketing of Non-Psychoactive Cannabis or Hemp Seeds or Cuttings, or Hemp Seeds for Industrial Use.
  2. License for the Import and Commercialization of Non-Psychoactive Cannabis or Hemp Seeds, or Non-Psychoactive Cannabis or Hemp Cuttings or Hemp Seeds for Industrial Use.
  3. License for the cultivation of cannabis or non-psychoactive hemp.
  4. License to grow hemp for industrial use.
  5. License for the processing of non-psychoactive cannabis or hemp and production of non-psychoactive cannabis or hemp derivatives.
  6. License for Banks and Research of Plant Improvement and/or Germplasm.
  7. License for the Acquisition of Non-Psychoactive Cannabis or Hemp Derivatives and/or Biomass or Flowers, or Hemp Biomass for Industrial Use for Export.

As soon as this came into effect, the Ministry of Health and the Agency for Health Regulation, Control, and Surveillance had to develop regulations applicable to finished products. This happened because the Criminal Law “also opened the door to producing and importing finished products,” according to our partner.

Samaniego also adds that at the end of February of this year 2020, “the Health Regulation, Control, and Surveillance Agency issued a resolution with the ‘Sanitary Technical Regulations for the regulation and control of products for human use and consumption that contain cannabis non-psychoactive or hemp, or its derivatives.” This resolution makes it possible to legally produce, import, and commercialize the following finished products with the THC concentration specified in each category:

  • Less than 1% THC: general, natural pharmaceutical products processed for medicinal use and homeopathic. Also cosmetic products and medical devices; hygienic products for industrial use; pesticides for domestic use, for public health or for industrial use; household hygiene products and absorbents for personal hygiene.
  • Less than 0.3% THC: processed foods and food supplements.

On February 26, Ministerial Agreement No. 148-2021 was also issued after a meeting of experts developed regulations for the prescription, provision, and therapeutic use of medicinal cannabis and pharmaceutical products containing cannabinoids.

Samaniego concludes by pointing out that “the regulatory framework for cannabis / hemp has moved relatively quickly in Ecuador and has opened the eyes of many local and international investors. The authorities are aware of what this industry can generate for the country regarding research and investment. Ecuador is the only country in the region that has shown such openness; the players will be able to develop a myriad of producs as long as they abide by all the rules. As a result, this area is expected to become a research and development group for cannabis and hemp products to be sold worldwide.”

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LexLatin – Change of Government in Ecuador: investment opportunities

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LexLatin - Change of Government in Ecuador: investment opportunities - CorralRosales - Lawyers Ecuador

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DATE: 23-06-2021

CORRALROSALES IN THE NEWS:

–Andrea Moya

MEDIA: LexLatin

Ecuador has gone through the first month of Guillermo Lasso’s presidency and, as our partner specialist in Tax Law, Andrea Moya, says for LexLatin, “the basis of his administration have been established”. If we consider the benefits that were created during the last two governments with the proposals of the new president, and the return to ICSID, the outlook is very interesting for foreign investors.

CorralRosales is going through a moment in which a large number of foreign companies are requesting advice on investments in Ecuador and on Mergers and Acquisitions. It is important to know the incentives available if you want to invest in Ecuador and the different mechanisms to protect such investment.

Andrea points out that the most important tax benefits are the exemption from income tax (25%), which can be for 8 years or even 12 years, depending on the location of the investment, and the exemption from outflow tax on the import of commodities and capital goods necessary for the project.

It is also essential to know the scope of the investment contracts that may be entered into with the Ecuadorian government. These instruments allow to protect the investment, agree arbitration, and maintain immovable the applicable benefits, despite any subsequent legal reform.

In order to sign this contract, there is a fundamental requirement: the investment must be at least US$1 million and US$250,000 of this amount must be executed in the first year.

However, the most important thing to attract investments to Ecuador is to undertake a comprehensive reform to the tax and labor regimes.

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