Background: On 18 December 2012, the Colombian legislature approved a new tax regimen which took effect 1 January 2013, with the goal of reducing income inequality and creating between 400,000 and 1 million new jobs.
Among the primary changes is the establishment of a new Alternative Minimum Income Tax (Impuesto Mínimo Alternativo Nacional, IMAN). Individuals earning less than US$15,612 annually will not pay any income tax. While tax rates decreased for individuals earning less than US$54,288 a year, they increased for those who earn more, especially for the wealthiest Colombians. Income taxes doubled for those who earn more than US$203,676 a year, and more than tripled for salaries above US$577,000 at a maximum effective rate of 27 percent. Health and retirement contributions will not be included in the calculation of income.

The changes cut corporate income tax from 33 percent to 25 percent, but the difference would be made up by assessment of an Equitable Income Tax (Impuesto sobre la Renta para la Equidad, CREE) of 8 percent of profits, climbing to 9 percent between 2013 and 2015. CREE funds will pay for health insurance, national technical education (Servicio Nacional de Aprendizaje, SENA), and for family welfare (Instituto Colombiano de Bienestar Familiar, ICBF). The Finance Ministry expects the temporary 1 percent CREE increase to produce an additional US$675 in the next three years.

Employers will contribute 13.5 percent less in payroll taxes, dropping from 29.5 percent to 16 percent, for employees who earn less than US$3,395 a month, or 10 times the minimum wage. Of that 16 percent, 12 percent is for employee pension contributions and 4 percent for unemployment insurance.
The bill modified the Value Added Tax (IVA) for consumers, reducing the number of IVA rate categories from seven to three – with rates of 0, 5, or 16 percent. In order to create economic incentive on the islands of San Andrés, Providencia, and Santa Catalina, no IVA will be assessed there, except on luxury goods like yachts and aircraft, which are subject to 8 percent IVA. 

Commentary: President Juan Manuel Santos pushed for tax reform to reduce income inequality, to create jobs, and to simplify the tax code. As passed, the recent reforms should address the first two goals, but it may not be as simple as hoped. The decrease in payroll taxes is likely to help bring more workers into the formal economy, though some economists express concerns about rising inflation in the short-term. Given Colombia’s steady growth and responsible monetary policy, we do not believe the current reforms will hinder Colombia’s economy in any way, although it will be difficult to determine whether they will stimulate it either. Colombia remains a friendly investment environment, especially for businesses that create jobs.

III. La jurisdicción y soberanía exclusivas sobre la zona marítima indicada, incluye también la soberanía y jurisdicción exclusivas sobre el suelo y subsuelo que a ella corresponde.
IV. En el caso de territorio insular, la zona de 200 millas marinas se aplicará en todo el contorno de la isla o grupo de islas.
Si una isla o grupo de islas pertenecientes a uno de los países declarantes estuviere a menos de 200 millas marinas de la zona marítima general que corresponde a otro de ellos, la zona marítima de esta isla o grupo de islas quedará limitada por el paralelo del punto en que llega al mar la frontera terrestre de los Estados respectivos.

III. The exclusive sovereignty and jurisdiction over the maritime zone indicated also includes exclusive sovereignty and jurisdiction over the sea floor and what lies beneath.
IV. In the case of island territory, the 200 nautical mile zone applies to the coast of the island or group of islands. If an island or group of islands belonging to one of the countries were within 200 nautical miles of the maritime zone of another country, the maritime zone of the islands would be limited by the parallel from the point where the sea meets the land border between the respective states.

Excerpt of 4 December 1954 Agreement on Special Maritime Border Zone (Convenio Sobre Zona Especial Fronteriza Marítima):

CONSIDERANDO: Que la experiencia ha demostrado que debido a las dificultades que encuentran las embarcaciones de poco porte tripuladas por gente de mar con escasos conocimientos de náutica o que carecen de los instrumentos necesarios para determinar con exactitud su posición en alta mar, se producen con frecuencia, de modo inocente y accidental, violaciones de la frontera marítima entre los Estados vecinos;
Que la aplicación de sanciones en estos casos produce siempre resentimientos entre los pescadores y fricciones entre los países que pueden afectar al espíritu de colaboración y de unidad que en todo momento debe animar a los países signatarios de los acuerdos de Santiago; y Que es conveniente evitar la posibilidad de estas involuntarias infracciones cuyas consecuencias sufren principalmente los pescadores;

CONVIENEN:
PRIMERO: Establécese una Zona Especial, a partir de las 12 millas marinas de la costa, de 10 millas marinas de ancho a cada lado del paralelo que constituye el límite marítimo entre los dos países.

CONSIDERING: That experience has shown that due to difficulties encountered by vessels crewed by those with insufficient nautical knowledge or inadequate equipment to determine their exact position in the high seas, there are frequent innocent and accidental violations of the maritime border between neighboring states;

That the application of sanctions in such cases produces resentment among fishermen, and friction between the countries that can affect the spirit of collaboration and unity that should always drive the signatory nations party to the Santiago agreement; and being that it is convenient to avoid the possibility of these involuntary infractions whose consequences primarily affect fishermen;

AGREE:
FIRST: To establish a Special Zone, starting 12 nautical miles from the coast, and which is 10 nautical miles wide on each side of the parallel that constitutes the maritime border between the two countries.

[Map courtesy of Political Geography Now. Excerpt translations by Southern Pulse.]

Commentary: On 12 November 2012 President of Ecuador Rafael Correa (Alianza PAÍS) formally confirmed his plans to run for re-election in the presidential elections taking place on 17 February 2013. Despite opposition from both the left and the right, Correa is popular; polls show that around half of likely voters plan to vote for him.
In the 2006 presidential campaign Correa presented himself as an environmentally-conscious populist, highly critical of neoliberal economic policies. Correa has more or less adhered to this image. Within the region, Correa is an heir apparent to the legacies of aging and ill socialist revolutionaries and anti-Yankee propagandists Fidel Castro and Hugo Chávez. Much like Chávez and Castro, criticism of Correa frequently cites his dictatorial leadership and oppression of free speech. Under Correa, government offices have filed dozens of civil and criminal lawsuits against opposition media and political opponents, most famously seeking three-year prison sentences for the journalists and US$80 million from El Universo in a case filed on 22 March 2011.

Yet under Correa’s administration, Ecuador’s GDP has grown every year (albeit very slightly during the global economic crisis of 2009), and it is anticipated to be between four and five percent in both 2012 and 2013. Poverty and unemployment have declined, and inflation is under control. Undoubtedly, much of this growth can be attributed to the fortunate fact more than eight billion barrels of oil reserves lie in Ecuador’s territory and oil prices were at historic highs for much of Correa’s tenure. But oil production has stalled at about 500,000 barrels per day under oppressive taxation and regulation by the government since Correa took power. Correa’s new running mate, Jorge Glas, is an electrical engineer who works on energy issues, and hopes to massively expand Ecuador’s hydroelectric sector.

Still, one of Correa’s key assets is his forceful personality, and willingness to “think outside the box.” In conjunction with economic advisers Correa urges for consideration of innovative ideas including the Yasuni-ITT initiative; a global carbon tax; and development of a regional currency.

In the current presidential race, there are three candidates poised to benefit if Correa should stumble: conservative Guillermo Lasso Movimiento Creando Oportunidades (CREO); moderate Lucio Gutiérrez Partido Sociedad Patriótica 21 de Enero (PSP); and leftist coalition candidate Alberto Acosta. 

Lasso, a former banker, promises to open Ecuador to foreign investors and lower taxes. While on the campaign trail in September 2012, Lasso asserted the need address poverty, and proposed increasing the Human Development Bonus (HDB), a government cash transfer to the country’s poorest households from $35 a month to $50 a month, though he said the means of funding the increase was still undecided. Correa took that idea and made it law. On 20 November 2012, Ecuador’s National Congress approved a Correa-backed bill to raise taxes on banks, and divert those funds to HDB recipients. Income taxes for banks, which are already heavily regulated, will rise from 13 percent to 23 percent, and bank revenue taxes will rise 3 percent.

Gutiérrez, a former President (2003-2005), was a military officer who took part in the coup against democratically-elected President Jamil Mahuad in January 2000. Gutiérrez was also ousted prematurely by Ecuador’s Congress on 15 April 2005 in the face of major demonstrations and questions surrounding his dismissal of the Supreme Court.

Acosta is an economist representing a left-wing coalition dissatisfied with Correa’s economic stance, which he characterizes as insufficiently revolutionary. Acosta’s base of support is most clearly aligned with the people who also support Correa.

Realistically, with a 30 percent cushion in polls, Correa is far enough ahead in the polls that none of these challengers poses a significant threat in the February 2013 election, though they are likely to run again in 2016.

Background: On 13 January 2010, police detained Milton Edgardo Millán with 39 kilos of cocaine base. On 5 November 2012, an appeals tribunal considered overturning his case based on an argument by his attorney, Federico Álvarez Petraglia, that the wiretaps used by police to monitor Millán were improper. Other defense lawyers, and even judges, have added their support to the complaint.
The attorneys, many of whom represent indicted drug traffickers, say that investigators merely change the name on a standardized wiretap warrant form which is routinely approved by judges, even without supporting evidence. A member of the judiciary, Luis Charles, confirmed that this is the case and that he is concerned with the erosion of privacy for ordinary citizens. Convictions based on wiretap evidence are now more common than confessions. Petraglia and his associates further allege that police frequently bug suspects’ phones, including illegally eavesdropping on privileged attorney-client communications and then request a wiretap warrant after the fact. If their legal challenge prevails, dozens of current indictments against members of organized crime could be reversed. 

Analysis: In most modern democracies, courts require substantial cause for suspicion to approve the use of wiretaps, which is usually more difficult than obtaining a search warrant. Many countries limit the crimes and circumstances for which a wiretap may be requested, but in Uruguay police may request communication surveillance for any crime. In Uruguay, Article 212 of the Penal Code and Article 5 of the Money-Laundering and Terrorist Financing Control and Prevention Act address the question of wiretapping to say that they may only be used with court order, and only for a limited period of time. However, Uruguayan law is silent on the question of total duration, so applicants simply apply for extension after extension, to continue eavesdropping in perpetuity. Most of the conversations do not relate directly to criminal activity, an undue infringement on the private communications of civilians. One man, who was later released, was detained after police recorded conversations in which he said “Bring potatoes and four bottles;” investigators imbued his words with an illicit double-meaning. Aside from actually violating civil rights, the widespread use of such spy techniques also causes paranoia. For instance, legislators Pedro Bordaberry and Jaime Trobo allege that high-level personnel from the executive branch bugged their telephones.
On the other hand, violent crime has been rising in Uruguay, and it is tempting for police to use new technology to nab culprits and secure evidence easily. Indeed, the Anti-Drug Unit of Uruguay’s Federal Police can execute up to 200 taps simultaneously. Yet societies erect barriers to government surveillance because citizens also want privacy; where the line between legitimate watchfulness and “Big Brother” falls isn’t a debate unique to Uruguay. The appellate court which is deciding Millán case must take into consideration the precedent they are setting. If they overturn the lower court’s ruling and nullify evidence gained by listening in on his calls Millán will go free. But perhaps more importantly, Millán’s mother and his mechanic and all the other people who speak with crooked acquaintances will not have their conversations recorded and analyzed. Police will improve their investigation techniques. No one is arguing that wiretaps should be outlawed, only that they be issued with substantial supporting evidence and consideration for the privacy rights of all.