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July 15, 2022
2022-1078

Uruguay's Administrative Contentious Court strikes down portion of decree regulating free trade zones

  • Companies that operate in free trade zones, but are allowed to carry out complementary activities outside of free trade zones, are prohibited from promising to sell goods and services outside of free trade zones.
  • With the TCA's ruling, companies may be able to enter into a preliminary contract for the sale of goods and services in non-free trade zone territory.

Uruguay's Administrative Contentious Court (Tribunal de lo Contencioso Administrativo, TCA) held "the promise of the sale of goods and services" should be struck from Article No. 17 of Decree No. 309/018 because it exceeds what is established in Law No. 19,566, which establishes the rules for free trade zones.

Article No. 17 of Decree No. 309/018 establishes the complementary activities that the free trade zone users located outside the metropolitan area may perform in non-free trade zone territory, while maintaining the benefits granted by Law No. 19,566.

Specifically, Article No. 17 prohibits companies from conducting sales of goods and services or promising sales of goods and services in non-free trade zone territory. Law No. 19,566, however, only mentions the sale of goods and services, not the promise of their sale.

As a result, the TCA held that the promise of the sale of goods and services should be eliminated from Article No. 17 because it exceeds what is contained in Law No. 19,566. The TCA found the promise of the sale is a preliminary contract to the sale.

Ruling No. 366/021 has not yet been published on the TCA's website.

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Contact Information
For additional information concerning this Alert, please contact:
 
EY Uruguay
   • Martha Roca (martha.roca@uy.ey.com)
   • María Inés Eibe (ines.eibe@uy.ey.com)
Latin American Business Center, New York
   • Lucas Moreno (lucas.moreno@lan.ey.com)
   • Ana Mingramm (ana.mingramm@ey.com)
   • Pablo Wejcman (pablo.wejcman@ey.com)
   • Enrique Perez Grovas (enrique.perezgrovas@ey.com)
 

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