10 Int'l Fin. L. Rev. 47 (1991)
Latin America

handle is hein.journals/intfinr10 and id is 343 raw text is: ...........

The 30 largest business groups are
each required, in consultation with
their main creditors, to select three
core companies from their sub-
sidiaries. These selected core com-
panies will be entitled to exemption
from these new 'self-support' regula-
tions and from basket control on
borrowings from banks.
The selection of the 30 biggest
conglomerates to be placed under
tightened credit controls was made
on the basis of their total bank loans.
Total bank loans to these business
groups should not exceed those in
the previous year.
Kim & Chang
Seoul
MONGOLIA
First banking law
approved
The Small Hural, Mongolia's
lower house of parliament, has
approved the country's first banking
law, with effect from May 1. The law
gives the central bank authority to
issue currency and implement policy
in currency and credit. The bank will
also organise accounting practices
among banks and supervise the
activities of special banks.
BIICL Bulletin

BRAZIL

Constitutionality
of Collor Plan
Questions have been raised con-
cerning  the  constitutionality  of
several provisions of the Collor Plan,
especially regarding the freeze, on
financial assets. Many judicial ac-
tions have been filed by people who,
stating that the deposit of their
money with the Central Bank of
Brazil was unconstitutional, re-
quested the immediate return of
their confiscated funds.
When deciding on an appeal filed
International Financial Law Review July 1991

earlier this year by the Central Bank
of Brazil, the plenary panel of the
Federal Regional Court of the 5th
Region unanimously held that the
deposit of funds with the Central
Bank of Brazil imposed by Law 8024
of April 12, 1990 constituted a
compulsory loan, and as such was not
allowed by the Constitution. The
appellant Central Bank was ordered
immediately to release the money on
deposit.
For the same reasons the plenary
panel of the Federal Regional Court
of the 3rd Region unanimously held
recently that articles 5, 6, 7 8 and 9 of
Law 8024 are unconstitutional, and
sentenced the Central Bank to return
the moneys on deposit to the
plaintiff.
Both decisions have created prece-
dents which further encouraged
thousands of people to seek court
release of their funds on deposit with
the Central Bank. The Federal
Supreme Court is expected to have
the final word on the matter, as it is in
charge of examining cases in which
constitutional provisions are being
discussed.
Legal letter
Pinheiro Neto
Sdo Paulo
ARGENTINA
Sale of Treasury bills and
Bonex
On May 24 1991 Central Bank
issued Communication 13742 which
establishes the procedure through
which the Bank puts for sale
External Dollar Bonds 89 (Bonex)
and Treasury bills in dollars at 90,
120,150 and 180 days maturity and in
australes at 180 days maturity as of
May 28 1991.
As to Bonex 89 Central Bank may
not offer more than five per cent of
the daily average of the total amount
negotiated the month before.
Communication 'A': 1839 states
that Central Bank may receive daily
purchase offers for Treasury bills in
dollars and australes on its portfolio
in accordance with the information
to be released from time to time.
The purchasers must be financial
entities covered by law 21256 (Bank-
ing Law) registered as Open Markets
Agents, and Stock Exchange brok-

ers. Third parties must purchase the
bills through such entities. The
amount should be a multiple of lbn
australes or US$100,000.
Claudio Onetto
Onetto & Asociados
Buenos Aires
PERU
Banking law on interest
rates
A new law recently promulgated
by the President allows financial
institutions to set their own interest
rates, previously fixed by the Central
Reserve Bank. The law reopens the
country to foreign banks and lets
public sector companies become
clients of private banks.
New provisions, requiring banks,
finance and insurance houses to
constitute themselves as limited
companies within three months,
attempt to reduce the number of
parallel or informal banks. Institu-
tions will have, however, two years
in which to meet the minimum
capital requirements under the new
regulations.
BHCL Bulletin
INTERNATIONAL
Santiago
Initiative
The Council of Europe's Latin
America/Caribbean-Europe En-
counter recently adopted the 'San-
tiago Initiative' aimed at giving
greater impetus to cooperation be-
tween the two regions. The partici-
pants at the meeting called for: more
balanced financial flows between the
two regions and a critical reappraisal
of European investment in Latin
America to encourage sustainable
development that does not endanger
natural resources; more efficient
democratic control of multilateral
trade and financial institutions; the
extension of cooperation between
Europe and Latin America and the
Caribbean to the level of a 'quadrilo-
que' involving (i) governments, (ii)
parliamentarians, (iii) cities and
local or regional authorities and (iv)
non-governmental organisations.
BIICL Bulletin

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