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Doing Business in Latin America: Business Opportunities and Key Legal Issues

Legal issues of investment protection in Latin American countries were discussed by the experts of the VII St. Petersburg International Legal Forum on Friday, 19th of May.

The session was co-moderated by Denis Kamyshev, First Vice-President of Gazprombank, and Juan Diehl Moreno, Partner at Marval, O'Farrell & Mairal. Among the participants of the discussion were German Carlos Garavano, Minister of Justice and Human Rights of Argentina, Francisco Werneck Maranhão, Partner at Pinheiro Neto Advogados, Jose Visoso Lomelin, Partner at Galicia Abogados, and Gonzalo Corder, Partner at Morales & Besa.

At the beginning of the discussion its moderator Denis Kamyshev noted that the discussion embraces representatives of the countries with the diverse experiences in investment protection: Mexico, Chili, Brazil, and Argentina.

As German Carlos Garavano, Minister of Justice and Human Rights of Argentina, explained, Argentina wants to work on and develop cooperation with Russia. “Argentina is back to the leadership track in the world and we want to increase trade exchange and attract investment. We aim to strengthen the rule of law,” he told. According to the Argentinian Minister of Justice, in order to attract and protect investment his country is using pre-trial conflict settlement mechanisms, means to overcome bureaucratic hurdles, and investors support. Besides, Argentina is seeking better transparency in business area.

Juan Diehl Moreno, Partner at Marval, O'Farrell & Mairal, told his colleagues that Argentina is undergoing profound changes that should impact on investment protection. “Argentina has three-level protection. First, we have a special law that protects foreign direct investment. The Constitution says that the rights of foreign investors should be respected as the rights of any Argentinian citizens and we can see that it’s what’s happening. Of course, we have some negative experience from the past, but the transformation process is already ongoing and we can see light at the end of the tunnel. Besides, an investor knows that investment can be made without any warranty from the Government,” the expert explained.

Francisco Werneck Maranhão, Partner at Pinheiro Neto Advogados, told that Brazil has been putting efforts to attract investments for 20 years already. “It’s hard to say that Brazil’s economy is open for foreign investment, but a lot of measures have been taken to strengthen the financial system, establish solid law and attract investment. Above all, considering investment protection in Brazil, we should remember that both investment in- and outflows are protected. For all that to happen no state warranty is needed. One should only register in the Central Bank, but it’s a very easy procedure that can be done electronically without any approval of rights,” the Partner at  Pinheiro Neto Advogados noted.

Jose Visoso Lomelin, Partner at Galicia Abogados, told that Mexico has signed a number of international agreements on mutual protection of investment. “As you know, those agreements essentially signify good faith towards foreign investment. They safeguarded good relationships with foreign investors. International arbitration is also used as a tool to settle various disputes and disagreements. It’s very effective,” the speaker explained.

According to Gonzalo Corder, Partner at Morales & Besa, Chili is an important beneficiary of foreign investment. “From the middle of the 1970-s Chili has been changing its economy, liberalizing it to make it more market-oriented, so that we could receive foreign investment. All the main domains of Chilean economy – banking sector, insurance, telecom and energy  – have foreign presence. In general, legislation on non-discrimination, possible profit and dividends repatriation for foreign investors have big room for improvement, but we are working on that,” Partner at Morales & Besa added.

Concluding the discussion its moderator Denis Kamyshev explained that all the countries represented in the session have investment opportunities. He wished Mexico good luck with their ongoing privatization. As for Argentina, the moderator has said that investors there should be acting instead of waiting. According to the expert, high turbulence in Brazil should end up with economic stability, and Chili has already been attracting investors proactively instead of passively waiting for them.