Updates from Latin American Law & Business Report

Published by WorldTrade Executive, a Thomson Reuters Brand
for more information see Latin American Law & Business Report

Brazil Moves To Speed Up Resolution of Tax Controversies
Brazilian legal practitioners and the business community have long been critical of the local court system for being incredibly slow. An ordinary lawsuit may require ten years or more of litigation before a final decision is awarded to the parties. One key factor in tying up the courts is that tax inspectors and public attorneys have been required to keep litigating matters even though similar matters had been decided. Now Normative Opinion No. 492/10 has been issued to authorize all federal public attorneys to cease further litigation with respect to matters already decided by the Supreme and Superior Courts by means of the repercussão geral and the recurrssos repetitivos rules. See May 2010 Practical Latin American Tax Strategies p. 1

Recent Developments in Latin American Labor Law
The continuing growth of labor protections in South America raises ongoing challenges to existing businesses and potential buyers. For example, unlike the case in the U.S., it is not possible for a buyer in South American countries to exclude the labor liabilities of the target company in the purchase of substantially all of the assets of a business by using an asset purchase structure. Rather, in general, the buyer will be deemed a successor for labor purposes and shall be held liable for the labor liabilities of the target company.

It is also important for potential buyers to carefully review contracting or other outsourcing agreements, as well as any other agreements that might be construed as outsourcing (even if they are temporary) for purposes of possible joint and several liability of the target company in relation to liabilities of the workers of the outsourcing supplier rendering services at the target company.

See May 2010 Latin American Law and Business Report p. 3 for an analysis of important labor law developments in Chile, Peru, Argentina, and Uruguay.

China and Latin America: The Art of the Deal
With a focus on natural resources, China looks for business and investment opportunities in Latin America. Chinese business entities tend to be very patient negotiators in transactions, with their long-term perspective, unfamiliarity with the region and lack of trust. May 2010 Latin American Law and Business Report p. 12 takes a look at the process of Latin American firms negotiating with Chinese entities.