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Editorial

Legal market overview

Ecuador has been riding a steady wave of economic growth since the global financial crisis in 2009, yet a 50% drop in oil export prices – petroleum resources account for at least 50% of the country's export earnings and roughly two-fifths of public sector revenue – are slowing down the heavily-oil-dependent nation. After eight years in power, left-leaning president Rafael Correa is set to further extend his period in office with the help of a constitutional-reform initiative that seeks to remove presidential term limits. Even though public debt has risen quite substantially, Finance Minister Fausto Herrera vowed to refrain from public spending cuts and so Ecuador has turned, once more, to China for loans, this time totalling $7.5 billion.
‘The Law for Labour Justice and Recognition of Work from Home’, an overhaul of the 1938 labour code, accounts for the most significant legislative change this year. The reform, which has already passed the National Assembly, establishes that all new labour contracts signed as of January 1, 2016 will be indefinite rather than fixed-term. It is hoped that the reform will help reduce public debt since it includes the removal of a government subsidy meant to cover almost half of state pensioners’ monthly payments. While the reform provoked conflict between Ecuador’s biggest trade union, United Workers’ Front, and the employers’ side, it has generated considerable advisory work for law firms and observers note the reform has increased the flexibility of a historically entrenched market, bringing a positive impact on the economy. Certainly Ecuador’s law firms are looking to bolster their labour departments in order to deal with an increased volume of work. Among other relevant legislative changes is the upcoming enactment of a single General Procedural Code, which will simplify and modernise contentious practice in Ecuador by replacing the numerous litigation codes with a single unified one, and also allowing virtual file access. Jaramillo Dávila Abogados acted as the main advisor to the government in the conceptualisation of the code, which has already been approved by the National Assembly.
Well-established firms Fabara AbogadosBustamante & Bustamante and Pérez Bustamante & Ponce stand at the forefront of loan-agreements between foreign lenders and the Ecuadorian government. Bustamante & Bustamante, for example, provided initial advice to state-entity PetroEcuador on a $1bn loan from Noble Americas, with Fabara Abogados susbsequently acting as local counsel for the closure of the deal as well as provided relevant legal opinions; Pérez Bustamante & Ponce meanwhile, advised the Export-Import Bank of China on a $510m loan agreement to the Republic of Ecuador. The likes of Corral Rosales Carmigniani Pérez and Coronel & Pérez follow suit in key mid-market positions. Arguably the most significant market movement is the arrival of originally-Uruguayan firm Ferrere, which has added an Ecuadorian office to those in Uruguay, Bolivia and Paraguay; much of the firm comes from the division of the former Paz Horowitz Roablino Garcés into Paz Horowitz Abogados, on the one hand, and Ferrere, on the other – although it has also recruited individuals from other market leading firms. At the boutique-end of the spectrum, there are key players in each of the ‘transversal’-market sectors: Jaramillo Dávila Abogados in the labour sector; Bermeo & Bermeo Law Firm in intellectual property; and Tax & Legal Advisors in the fiscal arena.

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  • Lower VAT On Hotel Services In Montenegro

    An important piece of regulation has been introduced in Montenegro recently, through the reduction of VAT on catering services in four stars hotels (in the north of the country) and five-star hotels (on the seaside), which will be effective from 2018. According to media reports, Olivera Brajović, General Director of Tourism Development and Standards in the Ministry of Sustainable Development and Tourism, pointed out that these reduced tax rates on services of preparing and serving food and drinks are expected to raise the overall competitiveness in the hospitality sector, while at the same time contribute to the combat against grey economy.
  • Karanović & Nikolić Joins The NextLaw Global Referral Network

    Karanović & Nikolić is pleased to announce that it has joined the NextLaw Global Referral Network, created by global law firm Dentons. We are particularly excited by the fact that Nextlaw presents a new type of network, with a unique invitation-only approach in their selection, ensuring that all of its members have the highest quality standards and a proven track record of excellence.
  • Sweet Smell Of Success - Serbian Sugar Industry Consolidates Its Forces

    After more than a four months and a Phase II (in-depth) investigation, the Competition Commission gave conditional approval, to Sunoko's acquisition of the Star Šećer company and its subsidiary Te-To - the owner of the sugar factory in Senta. No divestments have been required from Sunoko.
  • New Bridge Over Danube To Be Built In Belgrade

    News reports are informing us that Belgrade will gain another bridge over the Danube river in the near future – this one at the Ada Huja island and over three kilometres long.
  • Nikola Tesla Airport To Acquire Sava Centar?

    Media outlets have recently been reporting on the possibility that Nikola Tesla Airport will acquire Sava Centar (SC), with the purpose of turning it into its company headquarters. This acquisition would be followed by an investment of over EUR 30 million in the next three years for the building's reconstruction and adaptation. Such a decision would result in Sava Centar changing its name to "Congress Centre Nikola Tesla Airport", with an expanded array of facilities, including a tower, a shopping mall, and a hotel. The funds for the investment in question will be hailing from the Airport's own assets.
  • Too Big To Hide – European Commission Sanctions Truck Cartel

    Global competition law circles have recently been shaken by the European Commission's record-setting fine of EUR 2.93 billion for collusion on the automotive market, imposed against Volvo, Daimler, Iveco and DAF trucks. The sanctions in question varied amongst the accused parties, with Daimler facing the largest penalty in the amount of more than EUR 1 billion on its own. Iveco's fine was set at EUR 494 million, DAF's at EUR 752 million, and Volvo's fine has been set at EUR 670 million.
  • Cartel Office ensures greater competition in rail sector

    The German railway company Deutsche Bahn must allow for more competition. The Bundeskartellamt, Germany’s Federal Cartel Office, found that the company had abused its dominant market position with respect to the sale of rail tickets.
  • ETERNA LAW IS PLEASED TO ANNOUNCE START OF THE COOPERATION WITH PUBLIC ASSOCIATION "ACADEMY OF PREVE

    Eterna Law (representative office in Almaty) announces the beginning of co-operation as a legal adviser with the Public Association "Academy of Preventive Medicine of Kazakhstan."
  • LAG Sachsen-Anhalt on video surveillance at the workplace

    Video surveillance at the workplace does not inevitably give rise to claims for damages. That was the verdict of the Landesarbeitsgericht (LAG) Sachsen-Anhalt [Regional Labour Court of Saxony-Anhalt] (Az.: 6 Sa 301/14).
  • Final stretch for loan withdrawal

    Those who still want to withdraw from real estate loans concluded between 2002 and 2010 should take action now while the right of withdrawal is on its last legs. This get-out-of-jail-free card is set to lapse shortly.