Tax on internet purchases, more control of imports considered; Prisoner transfers analyzed; Generator purchase is investigated; City tree policy explained

Martes, 17/12/2024

Hola, Todos –

Actividades –

De El Mercurio del lunes, 16/12 (2 articles):
“Alegría del Mundo, evento de fin de año (Joy of the world, a year end event) – The Escuela Frances de Cuenca will celebrate the 10th edition of the traditional end of the year event, “Alegría del Mundo” el martes, 17/12 with 2 performances at 17:00 & 18:30 in the Teatro de la Casa de la Cultura. The event will showcase the creativity and talent of its students. <The audience will probably be the kids’ families and whatever friends they can pressure to attend. Although many years ago, I saw a performance of The Nutcracker produced by a dance academy that starred the child of a friend, and it was very good.> Cost: $5.00.

The government is considering applying an IVA tax to online purchases. In Colombia and Chile, such purchases are taxed at a rate of 19%.

Regresa a los cines “Al Otro Lado de la Niebla” (“On the Other Side of the Fog” returns to theaters) – This documentary by Quiteño filmmaker Sebastián Cordero will return to theaters this month. The film premiered in 2023 and was one of 85 preselected to compete in the Oscars for the Best Full-Length film in 2025. The movie is about the trip of famous mountaineer Iván Vallejo who went with Cordero to the Everest Base Camp. The documentary is a tribute to Vallejo who climbed Everest without supplemental oxygen. The screenings will be at the Multicines in Batán Shopping on the 15, 16, & 17/12 with shows at 19:00 and at 21:00. The last show will be el 18/12 at 15:10.

Titular –

Árboles en riesgo, bajo monitoreos (Trees at risk, under monitoring) – The Empresa Pública de Aseo Municipal (EMAC – <the garbage company which also maintains parks and public spaces>) cuts down trees in public spaces that are in danger of falling. It cuts down about 500 each year. Nelson Diaz, director of Áreas Verdes (Green Areas) at EMAC EP, said a falling eucalyptus is difficult to predict in spite of inspections and complying with safety protocols. Atfer a long period of drought followed by intense rains, trees can fall, above all, along riverbanks. The soil is very dry, and after it gets saturated with water, it produces mini-landslides which can weaken roots.

When there are inspections that identify trees at risk of falling, the tree service that has the contract is contacted. But no one can know which tree is going to fall at what moment. What can be anticipated are those trees at greatest risk due to their inclination, roots, if they are dry, affected by road openings and other factors. Also, the age of the tree is taken into account with eucalyptus having life expectancies from 40 -150 years.

When a tree falls suddenly, the Fire Department will be at the first inspection to facilitate first response if there is damage to homes or people injured. The removal of the tree has to comply with Ministerio del Ambiente (Ministry of the Environment) regulations which say that all the wood will go for use in public spaces. Fallen trees can not be sold. EMAC keeps insurance for damage to 3d parties which covers damage caused by the tree if it fell from a space considered part of EMAC’s jurisdiction. Although cutting 500 trees a year seems high it’s small compared to the number of trees along the rivers. Also all of the trees can’t be cut since they are part of the landscape and environment. <The trees definitely add more to the park experience than rivers running through concrete channels with none of the plants in the park taller than your dachshund.> The sectors with larger risks of falling eucalyptus are Puertas del Sol, the corridor along av. Primero de Mayo, av. 24 de Mayo, and calle Roma – along the riverbanks.

Cuenca –

De El Mercurio del lunes, 16/12 (2 articles):
Retención de tricimoto (Retention of motorized tricycle) – Agents of EMOV proceeded with the retention of a tricimoto in Cuenca since the use and circulation of these vehicles is prohibited in the city. The sanction for using them is for the vehicle to be taken to the impound lot. In addition to the tricimotos, mototaxis and other 3 wheeled vehicles are not allowed. <Is that why I haven’t seen those little 3 wheeled electric cars lately? And how would they treat the Harley trike? I can imagine it would go to the impound lot over the owner’s dead body.>

Analizan el cobro de IVA en las compras en línea (Applying IVA to online purchases analyzed) – Illegal trade, informality, and unfair competition are some of the main worries for the productive sector of Cuenca. During an early deciembre meeting between Luis Alberto Jaramillo, Minister of Production, Foreign Trade, Investments and Fishing and the Cámera de Comercio Ecuatoriano-Americana, business representatives pointed out the difficulties they are facing due to platforms such as Temu and Shein that operate without fiscal or technical regulations, generating unfair competition. Jaramillo said the Government is evaluating the possibility of charging the IVA tax on on line purchases. He mentioned that Colombia has already applied a 19% IVA to platforms such as Amazon, Temu, Shein, Alibaba & AliExpress; and Chile will start charging 19% IVA on purchases from Shein, Temu and AliExpress starting in octubre, 2025.

Jaramillo is analyzing doing the same thing which needs to be approved by the Asamblea Nacional. He recognized that the control of paquetería rápida (express delivery – your word for the day) will face limitations due to the capacity of customs, especially in Guayaquil. He said improving the infrastructure for customs is needed as well as eliminating consolidation of packages which makes monitoring harder. There have been talks with Amazon, the source for about 50% of the packages, about developing a logistical infrastructure in Ecuador. <That would be an economic boost – making Ecuador the shipping center for Amazon in Latin America.>

For the productive sector, there is also a problem that lies in the lack of control of items of poor quality from other countries such as under-invoiced products or with a triangulation of trade and including exploitation of the labor market. This merchandise, much of it coming from China, arrives in the country without complying with regulations or approvals and competes with lower prices making the sustainability of local businesses more difficult.

The traffic in cigarettes was also addressed in the meeting with Minister Jaramillo calling the problem global, very delicate, and complex. He said that 85% of the cigarettes in the country have illegal origins and involve drug cartels <like Phillip Morris?> and organized crime. It’s gotten to the point where the boxes of cigarettes are labeled to identify which group it belongs to. Cartons of cigarettes have been seized this year, but not a whole containerful.

For Augusto Tosi, president of the Corporación Mucho Mejor Ecuador, illegal trade, informality and unfair competition cause large losses to local industry. Imports from China arrive via platforms that aren’t subject to taxes while local industries pay IVA, ICE and duties on primary materials and more. The Corporación is a group of over 690 brands with over 300 businesses with their footprints on more than 350 million Ecuadorian products each month.

Sucesos –

Comisión de Seguridad analizará traslados de reos a cárcel de Turi (Security Commission to analyze transfers of inmates to Turi prison) – On el viernes, 20/12, a security committee of the Asamblea Nacional will meet in Cuenca to discuss problems of insecurity, especially the transfer of prisoners from different parts of the country to the prison in Turi. The Mayor of Cuenca, Prefect of Azuay, representatives from the Chambers of Production, and others have also been invited with the director of the Servicio Nacional a Personas Adultas Privadas de la Libertad y a Adolescentes Infractores (SNAI – National Service for Adults Deprived of their Liberty and Adolescent Offenders) confirming his attendance. The assemblyman for Azuay, Leonardo Berrezueta, said they will ask the Government to coordinate and that there not be transfers, as in the last case, of people involved in the attack on the director of the Machala prison.

Local authorities want to know about the issue of transfers, and if the local entities are placing checkpoints in the area around the prison, security arches and surveillance devices. They want the prison to be regional as it was originally considered and not national. Insecurity indexes in the city are low, and this could change with the transfer of very dangerous prisoners.

Nacional –

Generadores de empresa Progen abren controversia (Progen generators open controversy) – The Government of Pres. Noboa signed 2 contracts for $149.1 million with Progen Industries LLC, headquartered in Florida to provide motors to generate 150 megawatts (MW). But the company only fulfilled part of the first agreement for which it recieved $69 million. The two contracts have delays. The 1st, in Salitral, should have started operating el 30/11 with the delivery of 100 MW and for this the Government paid 70% of the agreed amount. The 2nd, in Quevedo should have started delivering 50 MW energy el 5/11.

According to statements from Inés Manzano, ministra de Energía y Minas, the directors of Progen have lied to the country <I guess slander laws are different in the US so she can call them liars without getting sued for defaming their honor. Maybe honor isn’t in their lexicon to begin with.>. After fulfilling part of the contract, Progen was paid $69 million but in exchange they only delivered 23 of the 29 motors purchased which arrived incomplete without the equipment needed for them to function. She said that following the company’s refusal to allow a visit to where the motors were, the process to declare a default on the two contracts was started. This would imply the applications of fines up to 5%, and if the company doesn’t comply, declaring Progen in default hasn’t been ruled out with a unilateral termination of the contract. <Hmmm – Progen has the money and Ecuador doesn’t have s**t. All I can see is a Chevron sort of lawsuit dragging on until, as Chevron said, until hell freezes over with the fight continuing on the ice.>

After Manzano’s statements were made public, the Comptroller’s Office started a special investigation on the preparatory, precontractual, contractual, execution, and payment phases of the 2 contracts between Termopichinca, the Corporación Eléctrica del Ecuador (CELEC), and Progen. The case is also in the Attorney General of Ecuador’s office. Lenín Barreto, an assemblyman, presented a crime report for alleged overcharging in the purchase which caused the loss of $130 million to the country. Progen had the best bid with $980,000 per motor when the market price was $600,000. But in reality, according to Barreto, it was used and discontinued equipment which should have cost no more than $500,000.

Progen denied the accusations saying that CELEC refused to send a verifier to Tampa, which should have taken place 5 days after the contract was signed. In addition, the delivery of 23 motors fulfilled 79% of the contract, and the 6 remaining motors were not delivered due to events due to force majeure such as hurricanes Milton and Helen which hit Florida in noviembre and diciembre. The company called a unilateral termination of the contract an irresponsible decision which would carry serious legal and financial consequences for Ecuador plus more delays.

De El Mercurio del lunes, 16/12 (2 articles):
Contratos con Progen están bajo indagación (Progen contracts under investigation) – The national Comptroller’s Office started a special investigation into the Contracts that the Corporación Eléctrica del Ecuador (CELEC) made with the Progen company. CELEC bought $149 million worth of generators, the delivery and installations of which have not been completed. The period being looked at is from el 1/1/2023 to el 12/12/2024. Inéz Manzano, Minister of Energía y Minas, said the possibility of fining the company is being analyzed and throwing out the contract and declaring the contractor in default has not been ruled out. <A lot of questions raised by this article should have been answered by martes’s article above). But I spent a lot of time translating this article on lunes and am not going to erase it.>

Inicio de operación de Toachi Pilatón avanza (Start-up of Toachi Pilatón operation advances) – The Ministerio de Energía y Minas announced that the sychronization of the first 68-megawatt generator was done in the Alluriquín hydroelectric plant in the Toachi-Pilatón complex in Santo Domingo de los Tsáchilas, The project has 3 plants that will supply 204 MW when they become operational. This will happen gradually until febrero, 2025. The project should have been delivered 12 years ago, but the start of the operation has been constantly postponed due to legal and contractual problem. <Like those with Progen in the above article? 12 years doesn’t bode well for alleviating the current drought.>

And that’s all for today so hasta ? –

Jeanne