Event Report

Guatemala’s pending competition legislation: Bill 5074 under the microscope.

There can be few legal events which involve the citing of a Nobel Prize winner for literature, but so it was at the Westin Camino when a group of leading GC’s and in-house counsel met to discuss the country’s pending competition legislation (Bill 5074). Said author was none other than Guatemala’s Miguel Ángel Asturias, and the reference to his magisterial El Señor Presidente, in which a key figure is that of the delator or informer: the context, of course being that of who, how and under what circumstances, individuals and companies are likely to whistle-blow on the anti-competitive practices or monopolistic behaviour of either the business they work for or its competitors.

With attendees from both multinationals such as Fox Networks, Citibank, Coca-Cola, MAPFRE, Tigo and Unilever, as well as local and regional entities including Banco Industrial, Banco Promérica, Banco G&T, Grupo Financiero Agromercantil, CACIF, Energuate, MultiEnergia, Cendis, Unopetrol Guatemala and Minera San Rafael, the discussion ranged across the spectrum of competition matters including price-fixing, relative anti-competitive practices and the establishment of notification thresholds, as well as examining which sectors were most likely to be affected by the proposed legislation; however, it constantly returned to the issue –or indeed, problem– of the lack of institutional solidity in Guatemala.

This issue, reflected in the recent and repeated corruption scandals that saw previous president Otto Molina removed from office and have subsequently dogged current President Jimmy Morales and numerous members of the country’s Congress, has the tendential-effect of undermining both judicial security in general as well as the functioning of specific laws such as the proposed competition legislation: few present were able to envisage a law that would operate effectively in the given juridico-political climate, despite the fact that the country is already overdue as regards implementation of the law as required by its international treaty obligations.

Despite this significant caveat, the conversation then moved on to discuss the proposed customs union between Honduras, El Salvador and Guatemala (which obviously requires the latter’s enactment of competition legislation as a fundamental pre-requisite), and its likely ramifications.

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