Four Internet of Things (IoT) related tax relief provisions are due to expire on December 31, 2025. Two bills were introduced in Brazil’s National Congress to extend these provisions and are currently in debate under a fast-track rule. Companies that provide and implement IoT projects can engage congressional leaders to
Continue Reading Brazil’s Internet of Things Tax Relief Due to Expire in 2025
New Artificial Intelligence Legislation in Mexico
Since 2020, over 60 bills have been introduced in the Mexican Congress seeking to regulate artificial intelligence (AI). In the absence of general AI legal framework, these bills have sought to regulate a broad range of issues, including governance, education, intellectual property, and data protection. Mexico lacks a comprehensive national
Continue Reading New Artificial Intelligence Legislation in MexicoBrazil’s Digital Policy in 2025: AI, Cloud, Cyber, Data Centers, and Social Media
Executive Summary
- Artificial intelligence (AI), social media, and instant messaging regulation will be a hot topic in Brazil in 2025, with substantial activity in Congress and the Supreme Court.
- Cloud, cybersecurity, data centers, and data privacy are topics that could also see legislative or regulatory action throughout the year at different policymaking stages.
- Technology companies will also be affected by horizontal and sector-specific tax policy-related measures, and Brazil’s digital policy might be impacted by U.S.-Brazil relations under the new Trump administration.
Analysis
2025 is shaping up to be a key year for digital policymaking in Brazil. It is the last year for President Luiz Inácio Lula da Silva’s administration to pursue substantial policy change before the 2026 general elections. It is also the first year for the new congressional leadership, in particular the new Speaker of the House and President of the Senate, to put their stamp on key legislation before their own reelection campaigns next year.
Existing Legal Framework: LGT, MCI and LGPD
Brazil’s current approach to digital policy is based on three key federal statutes. The first one is the General Telecommunications Act of 1997 (“LGT”). LGT established the rules for the country’s transition from a state-owned monopoly to a competitive, private sector-led telecommunications market. It is the bedrock of Brazil’s digital economy infrastructure regulation as, among other aspects, it sets rules for radio spectrum and orbit uses.
The second key statute is the Civil Rights Framework for the Internet Act of 2014 (“MCI”). MCI sets the principles, rights and obligations for internet use, including the net neutrality principle and a safe harbor clause protecting internet service providers from liability for user-generated content absent a court order to remove the content. The statute also established the first layer of data privacy provisions as well as rules for the federal, state, and local governments internet-related policies and actions.
The third key federal statute is the General Personal Data Protection Act of 2018 (“LGPD”). LGPD sets rules for the treatment of personal data by individuals, companies, state-owned and state-supported enterprises, and governments. It slightly amends MCI and adds a more robust layer of data privacy protection.
Each statute has its own regulator, respectively the National Telecommunications Agency (“ANATEL”), Brazil’s Internet Management Committee (“CGI.br”), and the National Data Protection Authority (“ANPD”).
Hot Topics in 2025: AI, Social Media, and Instant Messaging
Two agenda items will likely dominate the policy debate in Brazil in 2025. The first one is the creation of a new legal framework for AI. After years of intense debate, the Senate approved its AI bill in December 2024. The bill sets rights and obligations for developers, deployers, and distributors of AI systems, and takes a human rights, risk management, and transparency approach to regulating AI-related activity. It also contains contentious provisions establishing AI-related copyright obligations. In 2025, the House will likely debate and try to approve the bill, which is also a priority for the Lula administration.Continue Reading Brazil’s Digital Policy in 2025: AI, Cloud, Cyber, Data Centers, and Social Media
Mexico’s Election Business Environment Implications
- Mexico’s new political configuration gives current president Andrés Manuel López Obrador, president-elect Claudia Sheinbaum, and their party (Morena) ample margin to advance legislation (including constitutional reforms) starting in September when the new Congress is in place.
- Sheinbaum will take office in October, leaving López Obrador a one-month window to use Morena’s new margin in Congress to implement policies he was previously unable to enact, including important constitutional reforms, such as a full overhaul of the Judiciary.
- So far, Sheinbaum has voiced broad support for her predecessor’s policies. Markets (the dollar-peso exchange rate and interest rates) have thus far reacted negatively, reflecting a perception of increased political and regulatory risk, as well as a potential deterioration of the overall business environment.
- Companies with business interests in Mexico, including those seeking to nearshore operations in response to U.S. trade measures, should closely monitor political developments in the country, and assess if their investments are adequately protected by an effective investment treaty.
The recent election resulted in an unambiguous win for president López Obrador and his Morena party. As his designated successor, Scheinbaum received 60 percent of the vote, allowing her to become Mexico’s first woman head of state. In addition, Morena also secured seven of the nine contested governorships, a qualified (two thirds) majority in the Chamber of Deputies (365/500 seats), and is just two seats shy of holding a majority in the Senate (83/128 seats). Morena also will hold a majority in 27 of the 32 state legislatures.Continue Reading Mexico’s Election Business Environment Implications
Recent Developments in Mexico’s Supreme Court
Key Points
- Mexico’s Supreme Court (“SCJN”) has decided or will decide on the fate of key policies promoted by President López Obrador.
- Lacking a super majority in Congress to amend the Constitution, López Obrador has seen several of his legislative bills declared unconstitutional, like an overhaul of the electoral system, while others are still pending full review by the SCJN, such as the Electric Power Industry Law.
- Open confrontation between the President and the SCJN has become more evident this year. A slate of candidates summited early November by the President to fill an open seat in the SCJN heralds closer alignment with Morena—the President’s party—and reflects how the SCJN is central for cementing the future of López Obrador’s self-described “Fourth Transformation of Mexico.”
- The composition of the SCJN will play a decisive role well beyond the end of the López Obrador administration (September 2024) in areas that are critical for the overall business climate, such as energy, tax policy, antitrust, the role of the armed forces in public security, telecom, cybersecurity and artificial intelligence regulation, among others.
López Obrador and the SCJN
On November 7, 2023, the former President of Mexico’s SCJN, Arturo Zaldívar resigned prematurely, a year before the end of his term and after serving in the Court for 14 years. The day after his resignation, Mr. Zaldívar joined the campaign of López Obrador’s favored candidate to succeed him as president, Claudia Sheinbaum. Mr. Zaldívar’s resignation caused a political uproar and was widely perceived as a move that allows López Obrador to get a new SCJN Minister for a full new term. The Constitution only permits ministers to resign for “serious reasons,” and it is expected that Zaldívar will have a prominent role in a future Morena administration, including that of Attorney General after the two-year cool-off period required by the Constitution.
Out of 11 magistrates on the SCJN, four have entered the bench during López Obrador’s tenure, following Senate confirmation: Juan Luis González Alcántara y Carrancá (12/2018), Yasmín Esquivel Mossa (03/2019), Ana Margarita Ríos Farjat (12/2019), and Loretta Ortiz Ahlf (12/2021). This new vacancy in the Court allows the President to nominate a fifth Supreme Court minister, who will serve for a 15-year term.
The President accepted Zaldívar’s resignation and, on November 15, 2023, sent to the Senate his slate of candidates to replace him. The candidates are all women who currently work in his administration, are members of his Morena party and are aligned to his political ideology and government program. Two of them are also related to important members of the party (one is the sister of the Interior Minister and the other is the sister of the Major of Mexico City).Continue Reading Recent Developments in Mexico’s Supreme Court
Brazilian Government Opens Consultation on New Foreign Trade Strategy
The Government of Brazil has initiated a public consultation offering companies, business associations or civil society organizations an opportunity to comment on the country’s proposed new foreign trade strategy.
The consultation was initiated by the Foreign Trade Board (CAMEX), Brazil’s federal government interagency mechanism to coordinate the country’s trade policy.
Continue Reading Brazilian Government Opens Consultation on New Foreign Trade StrategyGlobal Spotlight: the IRA’s Implications for Key U.S. Allies
Funding incentives under the U.S. Inflation Reduction Act of 2022 (IRA) to transition to a clean energy economy are unleashing opportunities for key U.S. allies and partners around the world. In particular, tax credits exceeding 10% of the price of average electric vehicle (EV) sold in the United States are leading to new investments in Mexico and Canada, and have triggered high-level political negotiations from U.S. partners such as the European Union and Japan.
IRA Tax Credits for EV Critical Minerals and Battery Components
Under the IRA, EVs and batteries produced in North America (including Mexico and Canada) may qualify for significant tax breaks. Partial tax breaks are also available for EVs with batteries utilizing critical minerals extracted or processed in countries with which the U.S. has a free trade agreement (FTA).
As we previously discussed in greater technical detail, the IRA amended the Clean Vehicle Credit under section 30D of the U.S. tax code to provide a $7,500 consumer tax credit for the purchase of a qualified vehicle such as an EV. This consists of $3,750 for vehicles meeting the “critical minerals” requirements and $3,750 for those meeting the “battery components” requirements.
- Under the critical minerals requirements, a share of critical minerals contained in the battery of a qualified vehicle must have beenextracted or processed in the U.S. or in a country with which the U.S. has an FTA, or recycled in North America. The applicable share is at least 40 percent for vehicles placed in service in 2023, and increasing by 10% per year until reaching 80% for vehicles placed in services after 2026.
- Under the battery components requirements, final assembly must have occurred in North America and the percentage of the value of the components contained in such battery that were manufactured or assembled in North America must be equal to or greater than the “applicable percentage,” i.e., “60% for 2024 and 2025 vehicles, and going up 10% per year till past 2028 at 100%.”
Continue Reading Global Spotlight: the IRA’s Implications for Key U.S. Allies
Mexico: Proposed Changes to Mining, Environmental, and Administrative Laws Increase Regulatory Risk, Impact Private Participation in Regulated Sectors, and Could Lead to Investment Claims
Bottom Line
Mexican President Andrés Manuel López Obrador submitted bills to Congress intended to further curtail the rights of private investors in the mining sector and beyond. As part of his resource nationalism agenda, on display in the energy sector at first, López Obrador has also nationalized lithium reserves and created a state‑owned company to lead development of those reserves. The new bills, which target other minerals and concessions in the country, have been met with shock and disappointment. If passed as drafted, and to the extent the proposed amendments are implemented to restrict vested rights arising from pre-existing mining and potentially other concessions, these bills may result in the expropriation of foreign investments and other breaches of Mexico’s obligations under applicable international investment agreements.
Legislative Process
On Tuesday March 28th, López Obrador sent to the Chamber of Deputies a bill seeking to reform the Mining Law, the National Water Law, the General Law of Ecological Equilibrium and Environmental Protection, and the General Law for Prevention and Integral Management of Waste Residues (the “Mining Bill”).
The Mining Bill will be discussed and reviewed by four Committees in the lower house – three of them presided over by López Obrador’s party, MORENA, or allied parties – giving it a relatively easy path forward. The Mining Bill requires a simple majority to be approved, and MORENA and its allied parties have the required votes to pass it. Considering that the current legislative session ends on April 30th, it is possible that the bill will move fast through the Chamber of Deputies.
In the Senate, the Mining Bill might face some opposition but probably not enough to make substantial changes as most of the commissions where it will be discussed are also presided over by MORENA or its allies.
Around the same time, López Obrador also sent to the Chamber of Deputies a bill that includes sweeping changes to administrative regulations, including rules for concessions, permits and other authorizations, which could impact the mining, infrastructure and energy sectors, among others (the “Administrative Law Bill”). While MORENA has enough votes to pass the Administrative Law Bill as well, it may face more resistance, particularly in the Senate.Continue Reading Mexico: Proposed Changes to Mining, Environmental, and Administrative Laws Increase Regulatory Risk, Impact Private Participation in Regulated Sectors, and Could Lead to Investment Claims
Colombia in 2023: A Crucial Year for Petro’s Reform Agenda
Executive Summary
In this alert, we look at Colombian President Gustavo Petro’s first months in office and the outlook for his reform agenda in 2023. We discuss the implications for U.S.-Colombia relations and for doing business in the country.
- Petro’s election has led to a reconfiguration of power structures in Colombia and a change in the way policies are designed and implemented. The administration has a statist bent and views the private sector’s role as less prominent than prior administrations. There is less emphasis on attracting investment.
- This year will be crucial for Petro’s reform agenda and for his party, Pacto Histórico. The government’s energy transition policy and labor, health care, and pension reforms will shape Colombia’s economy in the decades to come and companies will need to be on notice that coming changes may be profound.
- The Biden and Petro administrations have made efforts to find common ground. But the change of leadership in the House of Representatives, the proximity of the 2024 U.S. presidential election, an emboldened Florida GOP, and implementation of controversial reforms in Colombia could test the relationship in 2023.
- Security remains a key concern for companies doing business in Colombia and conditions have deteriorated in the past few years. Progress on peace negotiations and the government’s new crime and drug policies will determine whether conditions improve.
Petro’s First Months in Office
“Today begins the Colombia of the possible. Today begins our second opportunity,” Petro told a cheering crowd in Bogotá on August 7. His inauguration as President of Colombia, he said, marked the end of Gabriel García Márquez’s One Hundred Years of Solitude for the Colombian people. The election and orderly transition to a left-wing former guerrilla president and the first Afro-Colombian vice president in the country’s history showed the strength of Colombia’s democracy, one of the oldest and most stable in the Americas.Continue Reading Colombia in 2023: A Crucial Year for Petro’s Reform Agenda
USMCA Labor-related provisions: An assessment after 20 months
EXECUTIVE SUMMARY
Since entry into force of the U.S.-Mexico-Canada Agreement (“USMCA”) in July 2020, the United States has brought two known complaints against Mexico under the Agreement’s Facility-Specific Rapid Response Labor Mechanism (“RRM”), concerning allegations that workers at two different factories in Mexico were being denied their fundamental right to
Continue Reading USMCA Labor-related provisions: An assessment after 20 months