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World Trademark Review – The fact that two marks cover different classes is not a determining criterion when examining the risk of confusion

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DATE: 30-09-2020

CORRALROSALES IN THE NEWS:

-Katherine González

MEDIA: World Trademark Review

Our associate Katherine González publishes an article in the specialized media World Trademark Review in which she comments on SENADI’s decision to reject Discovery’s opposition against the registration of the trademark DOKI MAS LOGOTIPO, based on its previous trademark DOKI. On appeal, the Intellectual Property Office ruled that the fact that two trademarks belong to different classes does not necessarily imply that there is no confusion between them and that there was a direct relationship between their goods and services.

In the text, González explains that, initially, SENADI granted the registration of the DOKI MAS LOGOTIPO brand for class 44 services; SENADI considered that there was no risk of confusion with the DOKI registered trademark, since the latter belonged to a different class. In the appeal to this registration, the Intellectual Property Office accepted the opponent’s arguments and established that the fact that two trademarks that belong to different classes is not a determining criterion to assess the risk of confusion between them.

“In the first instance, SENADI rejected the opposition and granted the registration because there was no risk of confusion or association for consumers. Despite the fact that the trademarks shared an identical word element, they covered products / services of different classes. Discovery appealed this decision presenting a clear and detailed list of the products and services in question and arguing that, despite the difference in classes, the trademarks were intended to protect the products and services that were directly related and complementary “, details our associate.

“The decision confirms the importance of carrying out a detailed and specific analysis in each case, in the event of possible trademark litigation,” adds González, who believes that this decision is very important due to the large number of products offered for sale online.

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

Teleamazonas – Veto to Health Code Does Not Affect the Cannabis Industry

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DATE: 30-09-2020

CORRALROSALES IN THE NEWS:

-Felipe Samaniego

MEDIA: Teleamazonas

The project of the Organic Health Code (COS) has been vetoed by the Executive affecting several sectors of Ecuador. One of those that has not been affected has been the cannabis sector; the news channel Teleamazonas interviewed our Partner and President of the Ecuadorian Association of Cannabis Industries Felipe Samaniego to provide his expert legal vision on this situation.

“This entire industry that is developing around cannabis and hemp definitely does not stop,” Samaniego said in this interview.

The Legal Secretary of Carondele Johana Pesántez argued the veto saying that the COS “contains an extensive development of technical issues in health matters that suffers from inaccuracies, erroneous definitions and an unclear health system structure in terms of competencies and responsibilities; it lacks a true update in terms of focus and content according to the requirements of society and the world “.

Last year, the National Assembly approved reforms to the COIP that allowed the production and distribution of products made from cannabis. This reform decriminalized the use of this plant for medicinal purposes, but the legal framework that allows its commercialization is still lacking.

With reference to this, Felipe Samaniego assures that there are two “authorities that must intervene. One for cultivation and the other for what is already the finished product. What the Ministry of Agriculture is doing is regulating what contains less than 1 % THC and the Ministry of Health must regulate what has 1% or more “, explains our Partner.

After the interview with Samaniego, the news published by Teleamazonas gathers the opinion of other experts who see in this veto an opportunity for the cannabis industry to continue growing. They also hope that this industry can advance with the production and generation of resources for Ecuador with the issuance of regulations with the respective legal framework.

If you want to see the video, click here

Tax regime for small businesses

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Resolution NAC-DGERCGC20-00000060 issued on September 29, 2020 and published in the Special Edition of the Official Registry 1100 on September 30, 2020, the Director of the Internal Revenue Service established the rules for applying the tax regime for small businesses.

1. Definitions

  1. Small business: It is a productive unit that has up to 9 workers and an annual revenue equal to or less than US$300,000.00. For classifying an enterprise as a small business, the amount of income will prevail over the number of workers.
  2. Main economic activity: The economic activity registered in the Tax Registry (RUC) which generates the higher amount of income during a fiscal year in comparison with the other activities.
  3. Commissioner: Individual, corporation or permanent establishment that habitually engages in the sale of goods, rights, or the provision of services in exchange for a commission.
  4. Capital gains: Profits derived from the placement of capital, shares, credits, and investments of any nature, as long as they do not involve productive processes, the provision of services or other work. For example, the lease of real estate.
  5. Self-employed individuals: Individuals who regularly performs an economic activity on his own account without a labor relationship and receives an income different from a salary or wage. Economic activities of liberal occupation are excluded.
  6. Professional services: Services provided by individuals who have a professional title and are directly related to that title. Including activities related to education, teaching and training related to the professional title.

2. Inclusion/exclusion from the microenterprise regime

The Internal Revenue Service will be able to include or exclude ex officio in the register of small businesses those taxpayers who fulfill or no longer fulfill the conditions to be considered as such. This registry will be published on the IRS website until September 30 of each year.

Taxpayers will be subject to this regime from the first day of the fiscal year following their inclusion of the registry.

The ex officio exclusion will be executed without the need for prior notice and will take effect from the first day of the fiscal year following that exclusion.

Taxpayers who have been subject to the regime for 5 years will cease to be part of it from the first day of the year following the date on which the maximum time was reached.

When taxpayers consider that their inclusion or exclusion from the regime is not appropriate, they are able to file a petition to have that decision reviewed in a term of 20 days counted from the publication of the registry.

3. Registration of new taxpayers

When obtaining the tax registry (RUC), the taxpayer must inform the Tax Authority all its economic activities, the income that might be derived from such activities and the number of workers.

If the taxpayer fulfills the conditions to be considered as a small business, it will be able to start its activity under the small business regime. Otherwise, he will begin its activity subject to the general regime and the authority is able to include the taxpayer in the regime ex officio.

4. Limitations to the regime for microenterprises

Taxpayers who exclusively develop one or more of the following activities will not be subject to the small business regime:

  1. Those taxpayers who are subject to the Simplified Tax Regime for Ecuador (RISE) and Simplified Tax Regime for the Organizations of the Popular and Solidarity Economy.
  2. International organizations, multilateral organizations, specialized international agencies, non-governmental organizations, government institutions and public enterprises.
  3. The financial institutions subject to the control of the Superintendence of Banks, and the organizations of the popular and solidary financial sector, subject to the control of the Superintendence of Popular and Solidary Economy.
  4. Those taxpayers who exclusively develop construction and urbanization activities.
  5. Those taxpayers who exclusively develop activities of liberal occupation, as well as individuals whose economic activity is the provision of professional services, notaries, and registrars.
  6. Those taxpayers who provide public transport services to passengers, as well as the services of commercial transport.
  7. Those taxpayers who exclusively obtain income from a labor relationship.
  8. Those taxpayers who exclusively obtain income subject to single income tax.
  9. Those taxpayers that exclusively obtain capital gains, including holding companies.
  10. Those taxpayers that carry out exploration, exploitation and/or transportation activities of non-renewable natural resources.
  11. Those taxpayers that receive income from international transport of passengers, cargo, express airlines, or couriers incorporated under foreign laws and that operate in the country through branches, permanent establishments, agents, or representatives.
  12. Distributors of hydrocarbon derivatives, liquefied petroleum gas, natural gas, and biofuels.

5. Taxpayer’s obligations

Taxpayers subject to the small business regime must comply with the formal and material obligations set forth in the law, including the following:

  1. Entities are required to keep accounting books in accordance with the regulations established by the controlling authorities. In the case of individuals, if they are required to keep accounting books, they must follow the International Financial Reporting Standards for SMEs.
  2. Taxpayers are required to issue invoices and withholding receipts and complementary documents in applicable cases. The documents must contain the caption “Small Business Taxpayer”.
  3. Taxpayers are required to file value added tax (VAT), excise tax (ICE) and income tax returns on a semester basis, in the months of July (first semester) and January (second semester).
    However, taxpayers may file the VAT and ICE tax return on a monthly basis, during the entire fiscal year.
  4. Taxpayers must file an annual income tax return, in addition to the semi-annual income tax returns in the following cases:
    • Entities and permanent establishments in all cases.
    • Individuals who receive income from sources different form the activities subject to the small business regime.
    • Individuals who request the reimbursement of income tax.
  5. Taxpayers who are required to file the Simplified Transaction Annex (ATS) must file it every six months. If they choose to file the VAT return on a monthly basis, the ATS must also be filed on a monthly basis.
  6.  Taxpayers who are required to file the excise tax annex must file it every six months. If they choose to file the excise tax return on a monthly basis, the annex must also be filed on a monthly basis.

6. Withholding taxes

Taxpayers subject to the small business regime are not required to withhold income tax or VAT, except if they are qualified by the IRS as special taxpayers or withholding agents and in other cases established by law.

<p style="text-align: justify;">However, taxpayers under the regime will be subject to income tax and VAT withholding. In the case of income tax, the withholding tax percentage will be 1.75% over the income derived from the business activities subject to the regime. If the taxpayer obtains revenue from sources other than the business activity subject to the regime, such revenue will be subject to the withholding percentages provided in the current tax regulations.

If taxpayers subject to the regime have made withholdings, they must declare and pay them as follows:

  1. Value added tax withholdings on a monthly or semi-annual basis, depending on the periodicity of the VAT return.
  2. Income tax withholdings on a semi-annual basis, in the months of July -first semester- and January -second semester-.
  3. If the taxpayer did not make any withholdings, the return must not be filed.

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DISCLAIMER: The preceding text has been prepared for general information purposes only. 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 given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Withholding agents – Income tax and VAT

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Regulation NAC-DGERCGC20-00000057 issued on September 14, 2020 by the General Director of the Internal Revenue Service and published in the Special Edition of the Official Registry 1024 on September 16, 2020 establishes the rules for the classifying, filing returns and paying taxes for withholding agents and special taxpayers.

1. Designation and Removal:

The amendments to the Internal Tax Regime Law introduced on December 31, 2019 established that only special taxpayers (“contribuyentes especiales”) and those designated as withholding agents by the Internal Revenue Service are required to withhold income tax and VAT.

  • Special Taxpayers: are designated by an administrative act and will be effective from the first day of the month following the date of the notice to the taxpayer.
  • Withholding agents: are designated by: (i) a general resolution that will be effective from the date established in such resolution; and, (ii) an administrative act that will be effective on the first day of the month following the date of the notice to the taxpayer.

In the following link you can verify the taxpayers that have been designated as special taxpayers or withholding agents:
https://www.sri.gob.ec/web/guest/catastros

The tax authority is able to revoke the designation of withholding agents and special taxpayers, this will be effective from the date established in the general resolution or from the first day of the month following the date the taxpayer was noticed with the administrative act.

2. Filing returns and payment of obligations:

Taxpayers designated as withholding agents will continue to file and pay their tax obligations on a regular basis.

Special taxpayers must:

  • File their tax returns and make the payment of income tax, withholding income tax, value added tax (VAT), excise tax (ICE), foreign exchange tax (ISD) and the international currency movement annex (MID), until the 9th day of the month in which each obligation is due.

Special taxpayers with residence in Galapagos will be able to file the return and pay their tax obligations until the 28th day of each month.

When these dates overlap with mandatory rest days or national or local holidays, the return must be filed on the last working day prior to the date the filing is due.

  • Pay their tax obligations through debit from their bank accounts or by using credit notes.

3. Other taxpayers:

Those taxpayers who have not been designated as withholding agents or special taxpayers must withhold income tax and value added tax until September 30, 2020.

Starting October 1st, 2020 such taxpayers must withhold taxes only in the following cases:

  • Income tax:
    1. Distribution of dividends and anticipated payment of dividends.
    2. Transfer of shares.
    3. Payments and refunds made abroad.
    4. Salaries and other payments made to their workers.
    5. Taxpayers whose activity is the related to public events.
    6. Credit or debit card entities.
    7. Organizers of lotteries, raffles, bets and similar.
    8. Those who make monetary donations.
    9. Taxpayers that pay interest or other financial gains.
    10. Taxpayers who commercialize mineral substances.
    11. Taxpayers who transfers hydrocarbon licenses.
    12. Taxpayers who issue liquidations of purchases of goods and provision of services, regarding such transactions.
    13. Taxpayers who make purchases of bananas and other musaceous plants from local producers.
  • Value added tax:
    1. Import of services.
    2. Taxpayers who issue liquidations of purchases of goods and provision of services, regarding such transactions.
    3. Taxpayers who withhold of presumptive VAT in the transfer of fuel.
    4. Entities of the financial system, for payments or credits made under collection or debit agreements.

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DISCLAIMER: The preceding text has been prepared for general information purposes only. 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 given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

The exhaustion of Instances by the State: A Problem in Intellectual Property

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The administrative authority and one or more private parties intervene in the vast majority of administrative procedures regarding Intellectual Property. Once this stage has been exhausted, resolutions issued by the National Intellectual Rights Service (SENADI) can be judicially challenged before the competent Administrative Contentious Court. The processes culminate with the sentence that agrees with one of the parties. With its execution, the mission of imparting justice is considered accomplished. However, the experience in intellectual property matters is different.

Once the client obtains a favorable ruling from the Contentious Administrative Court, SENADI usually files a cassation extraordinary appeal to prevent the execution of the Court’s ruling. This attitude is not justified because it is a dispute between private parties, in which the resources of the State are not compromised.

The competence of the aforementioned institution to appeal adverse decisions is not questioned, since we understand that it wants its criteria to prevail, however, it is necessary to consider that the filing of these appeals by SENADI is not always motivated to protect public interests.

In terms of intellectual property, there is no justification for SENADI in all cases to try to nullify the sentence so that its legal criteria prevail. With this attitude, state resources are wasted because the Supreme Court must allocate time to address these challenges. Worse still, in cases in which SENADI files an extraordinary protection action before the Constitutional Court.

It is very difficult for Intellectual Property clients to accept this behavior from the administrative authority, which seems to be destined to hinder the timely exercise of the corresponding rights. This reality is even worse in the case of patents, whose validity is 20 years from the filing of the application, since the administrative and judicial procedures can consume half of that time and in some cases the full term.

The justice system is saturated in Ecuador; responsibility, effective judicial protection and legal security do not go hand in hand with the principle of opportunity. The exhaustion of resources and actions by SENADI should not become the rule, since this causes the processes to be delayed, the execution of the sentences postponed and greater public and private resources spent.

Ruth Holguín
Associate at CorralRosales
ruth@corralrosales.com

New provisions of the Ministry of Labor

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On September 9th, the Ministry of Labor (“MdT”) issued the following provisions on labor matters:

1. Agreement MDT-2020-171: Exemptions on the application of Chapter III of Humanitarian Organic Law to support and combat the health crisis arising from Covid-19

  • Employers may not reduce the salary of the disabled or their substitutes by the implementation of agreements to preserve labor sources or working-day emergent reduction.
  • Disabled or substitutes employees must inform to the employer their condition within 7 days from the dated they were notified with the application of such measures. If the employee does not comply to inform, then he/she will not benefit from these exceptions.
  • Agreements to preserve labor sources or working-day emergent reduction applied to disabled or substitutes employees before September 9th, are no longer enforceable.
  • From the next salary payment, disabled or substitutes employees shall receive their full salary. This provision has no retroactive effect.

2. Agreement MDT-2020-174: Reform to Ministerial Agreement No.MDT-2020-077

  • In the event of force majeure or unforeseen circumstances, the employer may apply the emergent reduction, modification or suspension of the working-day provided within the Ministerial Agreement No.MDT-2020-077.
  • Emergent reduction, modification or suspension of the working-day ends by:
    • Mutual agreement between the parties.
    • Completion of the emergent working-day reduction term provided for in the Labor Code, article 47.1 (up to 12 months);
    • Completion of the emergent working-day modification term; or;
    • Ceasing of the cause that justified the emergent working-day suspension (Labor Code, article 60).

 

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DISCLAIMER: The preceding text has been prepared for general information purposes only. 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 given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Employee Leave of Absence in Ecuador

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According to Ecuadorian law employees are entitle to 8 legal leaves of absence, as detailed below:

LEAVE OF ABSENCE REASON DURATION Maternity Birth of a child (general rule) 12 weeks Multiple birth 10 additional days Child with disability or serious congenital diseases. 3 additional months Paternity Birth of a child 10 days Multiple birth or cesarean section 15 days Premature children or in conditions of special care 8days additional Birth of a child with a disease: degenerative, terminal, irreversible or with severe disability (75% or more) 25 days In the event of the mother’s death during childbirth or while on maternity leave, the father is entitled to enjoy all, or as appropriate, the remaining part of the period of leave corresponding to the mother Up to 12 weeks Unpaid leave for childcare After maternity or paternity leave employee may request a unpaid leave to care for the newborn 9 months in addition to maternity or paternity leave Adoption Adoptive parents are entitled to a leave from the date the child is legally delivered to them. 15 days Illness Medical rest for common or occupational illness Indeterminate Child Illness Care for  hospitalized child or with  degenerative disease 25 days (annually) Family leave for death Death of the spouse, common-law partner, relatives up to 2nd degree of consanguinity or affinity to the worker 3 days Education Employees with more than 5 years in the company that obtain a scholarship for studies abroad, in fields related to work activity, will be entitle to a leave of absence.

* Applies to employers with 15 or more employees and the number of scholarship holders does not exceed 2%. Up to 1 year, entitled to payment for 6 months.

Maternity and sick leave are subsidized by IESS, under the following conditions:

  • In case of maternity leave, IESS requires that the affiliate maintain at least 12 continuous contributions prior to childbirth and that the employer has not registered arrears during the mentioned period. In these cases,  IESS will pay the employee a cash allowance of 75% of the average remuneration the last 3 contributions paid to IESS, for the period of 12 weeks (the remaining 25% must be covered by the employer).
  • To access sickness allowance, according to the rest ordered by the physician, the affiliate must maintain at least 6 continuous contributions prior to the month in which the disability occurred and the employer must not register arrears during that period. If these conditions are met, as of the 4th day of disability, IESS will pay the employee a cash allowance for a period of up to 6 months, in the following proportions: (i) the first 70 days, employee will receive 75% of the average of the 3 last contributions; and, (ii) in the remaining period, 66% of the same average. The employer is only obliged to pay 50% of the remuneration during the first 3 days of disability.

The Labor Code also provides leave for domestic calamity or force majeure. Although the norm is not clear in which situations these types of leave should be granted, it gives the employer the power to qualify and authorize them. In this case, the worker maintains the right to receive his/her remuneration – or a percentage of it – for the duration of the leave.

Upon agreement of the parties, the employer may grant unpaid leave to cover different needs of the employee (e.g. studies abroad).

The main characteristic of this kind of leave is that the employment relationship continues and the employee does not lose his seniority in the company. Since the employee will not be receiving income during the leave, the obligation to make contributions to  IESS is not generated. Therefore, an exit notice must be filed in the Institution’s platform.

 

Marta Villagómez
Senior Associate at CorralRosales
mvillagomez@corralrosales.com

Income tax – Advance payment regulations

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Regulation NAC-DGERCGC20-00000054 issued by the General Director of the Internal Revenue Service on September 4, 2020 regulates the advance payment of income tax for the year 2020, ordered by Executive Decree 1137 of September 2, 2020.

The regulation confirms the content of Executive Decree 1137 y adds the following:

1. Amount of the advance payment:

In order to calculate the advance payment, the following formula must be applied:

IR = (85% of UC * 25%) – RFIR20

Where:

IR = Advance income tax.

UC = The profit derived from the result of operations carried out from January 1 to July 31, 2020, in accordance with the financial statements and accounting and financial regulations. In order to calculate the profit, the employees profit sharing must not be deducted.

RFIR20 = Income tax withholdings made to the taxpayer from January 1 to July 31, 2020, that the taxpayer is able to use as tax credit.

In order to calculate the advance payment, the taxpayer must issue the financial statements as of the closing of July 31, 2020.

2. Settlement the advance payment:

The settlement of the advance payment will be made through the Income Tax Advance Payment Form (form 115).

Taxpayers whose 2019 taxable income was higher than US$5,000,000.00, must file the return until September 11, 2020, even if: (i) the taxpayer does not generate an amount to be paid; or, (ii) if the taxpayer income in 2020 is considered exempt for income tax purposes.

If the taxpayer files the return once the term has expired, it would be required to pay a fine equal to 3% for each month or fraction of a month of delay. The fine will be calculated over the total of the advance tax or, over its profit if an advance payment is not generated.

The advance tax must be paid until September 11, 2020 through debit from the taxpayer bank account. If the payment is not made until this date, the taxpayer will be required to pay interests.

3. Tax credit:

The advance income tax will be regarded as tax credit for the payment of 2020 income tax.

If the value of the advance payment is higher than the income tax generated, the taxpayer may request the reimbursement or may use the excess as credit tax for the payment of income tax for the three following fiscal years.

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DISCLAIMER: The preceding text has been prepared for general information purposes only. 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 given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Income tax – Advance payment

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By Executive Decree 1137 issued on September 2, 2020, the President ordered the advance payment of income tax for the year 2020, to finance the expenses associated with the health emergency.

The previous Executive Decree 1109 issued on July 27, 2020 that established the same tax was not applied since it was declared unconstitutional by the Court.

The individuals, companies, and permanent establishments that comply with the following conditions are required to pay the advance income tax:

  1. Generate taxable income, except income derived from a labor relationship.
  2. In the year 2019 received gross income equal to or greater than US$5,000,000.00; and,
  3. During the period from January to July 2020, generated profits, with the exceptions of income and expenses derived from a labor relationship.

Taxpayers who are not included in the assumptions previously described are able to pay the advance income tax voluntarily.

The following taxpayers are not required to pay the advance income tax:

  • Micro, small, or medium size companies.
  • Taxpayers that are exempt from paying income tax on the fiscal year 2020.
  • Taxpayers that have registered the province of Galapagos as their tax address.
  • Taxpayers that are regular exporters of goods, or that 50% of their income derives from the export of goods; or,
  • Taxpayers with one of the following economic activities:
    • The operation of airlines.
    • The provision of accommodation and/or food services.
    • Activities of the agricultural and aquaculture sector.

In order to calculate the advance payment, the following formula must be applied:

IR = (85% of UC * 25%) – RFIR20

Where:IR = Advance income tax.

UC = The profit derived from the result of operations carried out from January 1 to July 31, 2020, in accordance with the financial statements and accounting and financial regulations.

RFIR20 = Income tax withholdings made to the taxpayer from January 1st to July 31, 2020, that the taxpayer is able to use as tax credit.

Taxpayers are able to pay the full amount of the advance income tax until September 11, 2020 and will not be able to request payment facilities. The late payment will generate interest and penalties.

The advance income tax will be regarded as tax credit for the payment of 2020 income tax.

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DISCLAIMER: The preceding text has been prepared for general information purposes only. 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 given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Bloomberg – Ecuador: Should You Register as a Nonresident Digital Service Provider?

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DATE: 28-08-2020

CORRALROSALES IN THE NEWS:

-Andrea Moya

MEDIA: Bloomberg

Our partner specialized in Tax, Andrea Moya, published an article in Bloomberg where she explains that starting September 16, 2020, digital services will be subject to 12% VAT due to an amendment made to the Internal Tax Regime Law. Additionally, she analyses some of the matters to be considered by the nonresident digital service providers.

Our partner explains “If the entity registers in Ecuador as a nonresident digital service provider, the entity will be required to collect the VAT from the consumer and pay the VAT to the tax authority. If the entity does not register in Ecuador as a nonresident digital service provider, and the payment is made through an intermediary, for example through a credit or debit card, the credit card issuer will be required to withhold the VAT from the consumer and pay the VAT to the tax authority. If the payment is not made through an intermediary, the consumer will be required to liquidate and pay the VAT to the tax authority.”

Moya point out that, in the case of sharing economy business models, the VAT taxable base is equal to the commission charged by the platform, however, in general, the VAT taxable base is equal to the price of the service.

Our partner explains “The process for registering as a nonresident digital service provider and to file the VAT returns must be regulated by the tax authority. Therefore, one of the challenges of the authority when issuing the regulations will be to establish a simplified process that enables the nonresident provider to comply with its obligations, whether directly or through third-party service providers”.

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