10 economic changes in Ecuador that will mark 2017

1.- The agreement with the EU, since January

Since Sunday, January 1, 2017, the trade agreement with the EU is in effect, which allows that 99.7% of agricultural products and 100% of industrial and fishing goods enter the bloc without paying tariffs. Among the products are flowers, shrimp, tuna, and broccoli.

2.- The cadastre must be updated

This year, municipalities must obligatorily upgrade the cadastre, as established by the so-called Capital Gains Law, in force since December 30, 2016.

3.- USD 375, the new basic salary

Since January, the unified basic salary defined by the members of the National Council of Labor and Wages (CNTS) is in force. This is the lowest increase in the last 10 years.

4.- New rules in banking and cards

As of January 1, 14 banking services lowered their cost. For example, the home delivery of the bank statements and checks returned for insufficient funds is free. Customers had to pay USD 1.66 and 8.93, respectively.

5.- Increase of VAT 2 points, until June

The two additional points to the value-added tax (VAT) will run until June 2017. The Earthquake Solidarity Law increased the VAT rate from 12 to 14%. This contribution, which has been in force since June 1, 2016, was introduced to cover the expenses generated by the earthquake of April 16. Until last December 22, USD 329.5 million were raised.

6.- Adjustment for insurers

The Law on Prepaid Medicine, in force since October 17, introduced changes for clients and companies in this segment. From that date, companies have a year to increase their capital, reform their bylaws or make mergers, if applicable. Until February 2017, the Superintendence of Companies will approve – once the Ministry of Health has issued the regulations and other guidelines established by the law – the health plans and the rates offered by the companies of prepaid medicine and medical insurance.

7.- Gold reserves return to the country

In June 2014, the Central Bank of Ecuador (ECB) invested part of its gold reserves (465,619 ounces) in the international market through the US bank Goldman Sachs. The expiration date of the transaction, i.e., the return of the metal, is February 20, 2017.

8.- Production must be reduced

The agreement of the Organization of Petroleum Exporting Countries (OPEC) came into effect on January 1 to reduce daily crude production and stabilize the price. The agreement is valid for six months, but it may be extended for a similar period.

9.- Safeguard tariffs will apply until June

The dismantling of the safeguard tariffs for the balance of payments is planned for June 2017.

10. – Banks must bring capital

On November 24, 2016, the Monetary and Financial Board issued a resolution with which it modified the calculation of the Domestic Liquidity Coefficient (CLD), thus determining the proportion of money that banks should have in the country.