Country Commercial Guides can be ordered in hard copy or on diskette
from the National Technical Information Service (NTIS) at (800)
553-NTIS. U.S. exporters seeking general information and assistance or
country-specific commercial information should consult their nearest
Export Assistance Center, the U.S. Department of Commerce's Trade
Information Center at (800) USA-TRADE, or one of the following web
sites: [www.buyusa.com](http://www.buyusa.com/),
[www.export.gov](http://www.export.gov/), or
[www.tradeinfo.doc.gov](http://www.tradeinfo.doc.gov/).

###### Table of Contents

[Chapter 1. Executive Summary](#__RefHeading___Toc44490145) 3

[Chapter 2. Economic Trends and
Outlook](#__RefHeading___Toc44490146)............................................................4

Major trends and outlook

Principal growth sectors

Government's role in the economy

Balance of payments situation

Infrastructure

Regional Economic Integration

[Chapter 3. Political Environment 8](#chapter-3.-political-environment)

Nature of political relationship with the U.S.

Major political issues affecting business climate

Relations between federal, executive and state leaders

Brief synopsis of political system, schedule of elections and
orientation of major political parties

[Chapter 4. Marketing U.S. Products and Services
10](#chapter-4.-marketing-u.s.-products-and-services)

Distribution and sales channels

Use of agents/distributors - Finding a local partner and attorney

Checking the bona fides of banks, agents, business partners, contractors

Franchising

Direct marketing

Joint ventures licensing

Establishing a local office

Selling factors and techniques

Advertising and trade promotion

Product pricing

Sales support and customer service

Selling to the government

Protecting your product from intellectual property right (IPR)
infringement

Chapter 5. Leading Sectors for U.S. Exports and
Investments................................14

Best prospects for non-agricultural goods and services

Best prospects for agricultural products

Significant investment opportunities

Major infrastructure development projects

[Chapter 6. Trade Regulations Customs and Standards
17](#chapter-6.-trade-regulations-customs-and-standards)

Trade barriers, including tariff and non-tariff barriers

Customs regulations and contact information

Customs valuation

Tariff rates

Import taxes

Import licenses

Export Controls

Import / export documentation requirements

Temporary entry of goods

Labeling, marking requirements

Warranty and non-warranty repairs

Prohibited imports

USG--imposed export controls

Standards

Free trade zones/warehouses

Special import provisions

Membership in free trade arrangements

Customs contact information

[Chapter 7. Investment Climate](#__RefHeading___Toc44490151) 21

Openness to foreign investment

Conversion and transfer policies

Expropriation and compensation

Dispute settlement

Performance requirements and incentives

Right to private ownership and establishment

Protection of property rights

Transparency of the regulatory system

Efficient capital market and portfolio investment

Political violence

Corruption

Bilateral investment agreements

OPIC and other investment insurance programs

Labor

Foreign trade zones/free ports

Foreign direct investment statistics

Chapter 8. Trade and Project
FinancingTrade...................................................28

The banking system

Foreign exchange controls affecting trade

General availability of financing

Availability of GSM credit guarantees

How to finance exports/methods of payment

Types of available export financing and insurance

Available project financing, including lending from multilateral
organizations

Types of projects receiving financing support

List of banks with correspondent U.S. banking arrangements and contact
information

U.S. financial /lending institutions operating in the local economy

[Chapter 9. Business Travel 31](#chapter-9.-business-travel)

Business customs

Travel advisory and visas

Holidays

Work Week

Business infrastructure

Temporary entry of goods

[Chapter 10. Economic and Trade Statistics](#__RefHeading___Toc44490154)
33

Appendix A: Country data

Appendix B: Domestic economy

Appendix C: Trade statistics

[Chapter 11. U.S. and Country Contacts
34](#chapter-11.-u.s.-and-country-contacts)

[Chapter 12. Market Research 39](#chapter-12.-market-research)

[Chapter 13. Trade Event Schedule 39](#chapter-13.-trade-event-schedule)

### Chapter 1. Executive Summary

This Country Commercial Guide (CCG) provides a comprehensive look at
Uruguay's commercial environment, using economic, political, and market
analysis. The CCGs were established following a recommendation by the
Trade Promotion Coordinating Committee (TPCC), a multi-agency task
force, on the need to consolidate various reporting documents prepared
for the U.S. business community. Country Commercial Guides are prepared
annually at U.S. Embassies and include the combined efforts of several
U.S. Government agencies.

Uruguay is a founding member of MERCOSUR \-- the Southern Cone Common
Market also composed of Argentina, Brazil and Paraguay. Uruguay\'s
capital, Montevideo, which is the seat of the MERCOSUR Secretariat, is
located at the geographical center of MERCOSUR's most populated and
wealthiest area. As such, it is a convenient hub for firms looking to
service the MERCOSUR region.

Uruguay is a market-oriented economy in which the state still plays an
important role. The economy performed well during most of the 1990s but
went through a nearly five-year recession starting in late 1998 due to a
devaluation in Brazil, economic problems in Argentina, and an outbreak
of foot-and-mouth disease. A sharp devaluation of the peso and a banking
crisis in mid-2002 aggravated the recession and led to an historic 10.8%
fall in GDP. In dollar terms, per capita GDP has fallen from \$6,800 in
1998 to \$3,500 in 2002. In mid-2002, the IMF and other international
financial institutions approved significant support for the GOU to
address its balance of payments problems, banking crisis, and social
issues. In 2003, the GOU signed a stand-by agreement with the IMF that
is valid until March 2005. While a tentative recovery started in the
second quarter of 2003, GDP is expected to fall a further 1.5% for the
year.

In June 2002, the GOU abandoned its long-standing exchange rate band,
permitting the peso/dollar exchange rate to float freely. Although the
depreciation of the peso has fostered exports, it has hurt dollar
debtors' ability to honor their obligations and increased the inflation
rate to 26%. Uruguay's sovereign debt was rated "Investment Grade"
between 1997 and 2001, but was downgraded several notches in 2002-2003
to near default levels. In May 2003, the government implemented a
successful voluntary debt exchange that has led to a significant
improvement in the country risk rating.

The economic crisis has had a negative impact on Uruguay's traditionally
strong social indicators and provoked substantial emigration. Although
Uruguay's social indicators are still good by Latin American standards,
recent government statistics show that poverty surged from 11% of
households in 1998 to 15% in 2002.

The U.S. is Uruguay's fourth largest trading partner after Brazil,
Argentina, and the European Union. The U.S. exports mostly
high-technology goods to Uruguay (machinery and computers), and imports
mostly commodities (meat, wool, and leather). In 2002, the U.S. supplied
8% of Uruguay\'s total imports, a significant reduction from the 12%
peak of 1998. The administration of President Jorge Batlle strongly
favors expanding trade with the U.S. and other NAFTA countries. A
U.S.-Uruguay Joint Commission on Trade and Investment was established in
2002 to broaden bilateral discussion and cooperation on economic and
trade-related issues.

The best prospects for U.S. products continue to be chemicals (including
agricultural), manufactured goods and machinery, transport equipment,
food processing machinery, computer hardware and software, office
machinery, environmental technologies, telecommunications, and medical
and laboratory equipment. Uruguay\'s growing elderly population is a
good market for geriatric equipment and services. The growth of tourism,
forestry, and agribusiness (especially off-season fruit growing) also
provide excellent opportunities for expanding U.S. exports. Similarly,
opportunities for sales of equipment or services and investment exist in
the construction and operation of power plants, airports, and
forestry-related projects. Recent security concerns have led to
increased demand for home safety deposit boxes and surveillance
equipment.

Country Commercial Guides are available for U.S. exporters from the
National Trade Data Bank's CD-ROM or via the Internet. Please contact
stat-usa at 1-800-stat-usa for more information. Country Commercial
Guides can be accessed via the World Wide Web at http://www.state.gov
and www.mac.doc.gov. Uruguay's CCG may be accessed on the Embassy's web
page at http://uruguay.usembassy.gov. They can also be ordered in hard
copy or on diskette from the National Technical Information Service
(NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export
information/assistance and country-specific commercial information
should contact the U.S. Department of Commerce's Trade Information
Center by telephone at 1-800-usa-trade. End Executive Summary.

######## Chapter 2. Economic Trends and Outlook

######## Major Trends and Outlook

Uruguay continues to suffer from its longest economic recession in
recent history. Gross Domestic Product (GDP) has declined continuously
since the last quarter of 1998. GDP fell 17% in real terms (46% when
measured in dollar terms) from September 1998 through December 2002, and
per capita GDP dropped from \$6,800 to \$3,500 in the same period.

The crisis was triggered in late 1998 by the devaluation of the
Brazilian real, low commodity prices, a severe drought, and uncertainty
in an electoral year. In 2001-2002, the upheaval in neighboring
Argentina and an outbreak of foot-and-mouth disease deepened the slump.
The situation deteriorated further in 2002 with a banking and debt
crisis, leading GDP fall by 10.8%. The economy continued to contract in
the first quarter of 2003, but as of mid-year, appears to be recovering
slightly, fueled by exports and higher commodity prices.

After the \"corralito\" was imposed, most Argentine depositors in
Uruguayan banks withdrew their funds and Uruguayans followed suit
shortly thereafter. Since the Central Bank nearly exhausted its
international reserves propping up the banks, the government was forced
to abandon its decade-long exchange rate band regime and allow the peso
to float freely. Since Uruguay\'s financial sector was over 90%
dollarized, this led to the drying up of credit and severe hardship for
dollar debtors. The government declared a four-day bank \"holiday,\"
froze time deposits, and eventually closed four banks. \$3 billion in
loans from the international financial institutions \-- helped by a
\$1.5 billion bridge loan from the U.S. \-- saved the financial system
from total collapse.

As of July 2003, the situation in the banking sector has improved. The
state-owned BROU was able to release the first tranche of frozen
deposits, and deposits are gradually returning. A new state-owned bank,
the Nuevo Banco Commercial, subsumed three of the four closed banks.
(Refer to Chapter 8 for a more detailed description of banking sector
developments.)

From 1997 through 2002, Moody's, Standard & Poor's and Fitch Ratings
rated Uruguay's long-term, foreign currency-denominated sovereign debt
"investment grade." However, lax budget discipline, falling tax
revenues, and the 2002 peso devaluation increased the debt burden to
such an extent that the rating agencies downgraded Uruguay several
notches to near default levels. In April 2003, the government proposed
exchanging the bonds of creditors for new ones with longer maturities to
eliminate short and medium-term financing gaps and to create the
conditions for economic growth. A vast majority of investors accepted
the proposal, helping the GOU avoid a default. As a result, Standard and
Poor's and Fitch upgraded their ratings for Uruguay from CCC to B- and
country risk dropped from 2,300 basis points (bp) in April 2003 to 740
bp in June. Under the IMF stand-by agreement Uruguay must exercise
extremely tight budget discipline and generate a primary surplus of 3%.
This goal will be difficult given increased demand for social services
and the need to spur economic growth.

The devaluation of the peso drove inflation up from 3.6% in 2001 to 26%
in 2002. Inflation is expected to decline to about 20% in 2003 and drop
further to approximately 10% in 2004. Real salaries fell 10% in 2002 as
inflation outpaced nominal wages. The number of unemployed grew from
124,000 in 1998 (10%) to 211,000 (17%) in 2002, and has continued to
rise in 2003. (Please refer to the Investment Climate/Labor Market
Section for a fuller description of the labor market.)

The economic crisis has impacted Uruguay's traditionally strong social
indicators and provoked substantial emigration, especially to the U.S.,
Spain and Italy. Although Uruguay's social indicators are still good by
Latin American standards, recent government statistics show that poverty
has grown from 11% of households in 1998 to 15% in 2002.

**Principal Growth Sectors**

Uruguay's economy is heavily based on services (which account for over
60% of GDP.) Industry and agriculture comprise 16% and 9%, respectively,
of Uruguay's GDP. The economic crunch has hit most sectors, except
utilities and financial services. While total GDP dropped 17% from 1998
through 2002, the fall in three major sectors (industry, construction
and commerce, restaurants and hotels) was as much as 30%.

Electricity, Gas and Water Utilities (EGW) and Banking and Insurance
Services were the only two sectors to escape the economic crunch,
growing 1.5 and 2.0%, respectively in 1998-2002. EGW should continue to
grow due to rising natural gas imports from Argentina, reconversion of
firms from fuels to gas usage, and the interconnection of MERCOSUR power
grids.

######## Government Role in the Economy

Uruguay's economy is based on free enterprise and private ownership,
although investors are often faced with cumbersome bureaucratic
procedures. In spite of some demonopolization and privatization over the
past ten years, the state continues to play a major role in the economy,
owning either fully or partially, companies in insurance, water supply,
electricity, telephone service, petroleum refining, airlines, postal
service, railways, and banking. These activities generate about 18% of
GDP and employ about 17% of the labor force.

At roughly 4% of GDP, Uruguay's budget deficit was high from 1999-2002.
The Uruguayan Government passed two budget adjustment laws in 2002 in an
effort to reduce the deficit. However, instead of cutting expenditures,
the adjustments focused on raising taxes. The government finds it hard
to slash expenditures since 63% of total spending is allotted to public
sector salaries and pensions.

Privatization of state-owned companies and their association with
private sector capital is widely opposed by large segments of the
population. In December 1992, 72% of voters overturned substantial parts
of a state-enterprise privatization law that had been previously
approved by Congress. Although the GOU wants to foster economic
efficiency through demonopolization and the elimination of red tape,
little progress has been made. The 2001 budget law provided for the
demonopolization of telecommunications and certain types of insurance,
but basic telephony and workers' compensation insurance remain a
monopoly. The law also created the framework for the regulatory agencies
for telecommunications (URSEC) and electricity (UREE), and theoretically
levels the tax treatment of public and private firms. However, neither
URSEC nor UREE has had much influence in enforcing regulations. In
December 2001, the government passed a law to demonopolize oil refining
activities as well as imports of crude and refined oil. However, as of
July 2003, no advances have been made, and the law may be repealed
through a public referendum. Previous administrations gave the private
sector access to areas formerly reserved for the state, including
insurance and mortgages, road construction and repair, piped-gas
distribution, water sanitation and distribution, cellular telephony and
airline transportation. A law on energy sector reform that allows for
the private generation of energy was approved in 1997. Transmission and
distribution rights (wheeling rights) nevertheless remain a state
monopoly.

######## Balance of Payments Situation 

The trade deficit for goods and services (\$447 million in 2001) turned
into a surplus of \$195 million in 2002 as a result of a greater
decrease in imports compared to exports \-- 36 and 10%, respectively. In
2002, imports and exports of goods and services dropped to \$2.5 billion
and \$2.7 billion, respectively.

In 2002, Uruguay's principal trading partners (exports plus imports)
were, in descending order, Brazil, Argentina, the European Union, and
the U.S. The leading suppliers of Uruguayan imports in 2002 were
Argentina (\$541 million), Brazil (\$390 million), the European Union
(\$345 million\--mainly Germany and France), and the U.S. (\$164
million). Uruguay\'s leading 2002 export markets were the European Union
(\$493 million\--mainly Germany and Italy), Brazil (\$435 million), the
U.S. (\$135 million) and Argentina (\$113 million). Uruguay\'s exports
are highly concentrated in a few products. Meat, rice, wool, dairy
products, and leather account for roughly half of overall exports.

The U.S. purchased 7% of Uruguay\'s exports and provided 8% of its
imports in 2002. U.S. sales to Uruguay fell 64% from 1998 through 2002
as a consequence of Uruguay's prolonged and sharp economic contraction.
The U.S. share of imports has, however, increased slightly over the last
decade. The Batlle administration vigorously favors expanding trade with
the U.S. and the rest of NAFTA. MERCOSUR\'s market share was 48% in
2002.

For most of the 1990s, Uruguay had current account deficits. However, in
2002, it experienced a \$190 million surplus (about 1.5% of GDP.) The
change was mostly due to a collapse in domestic demand, which drove
imports down.

### Infrastructure

Land Transportation: Located between two Latin American giants, Uruguay
is the geographical center of MERCOSUR's most densely populated zone.
MERCOSUR integration has fostered trade among its partners, and
transportation-related infrastructure is expected to continue growing
once the present regional downturn is over. Uruguay is in the middle of
a land corridor that connects the Pacific and the Atlantic Oceans
through Santiago de Chile, Buenos Aires, and Sao Paulo. Investment in
regional road systems is underway, with the active participation of the
private sector. Except for approximately 200 miles of highway connecting
the southern cities of Colonia to Punta del Este, all other roads are
single lane. A study is underway on the rehabilitation of certain
stretches of the railway network to transport lumber from the country's
interior to its seaports.

Water Transportation: Uruguay is the natural gateway to the 1.2 million
sq. mile Paraná-Paraguay River transportation system used by 40 million
people. The waterway goes north to Paraguay and Bolivia and deep into
Argentina and Brazil. A major seaport is located in Montevideo. Small
ports are located in the free zones of Nueva Palmira and Colonia and in
the towns of Piriápolis, Punta del Este and La Paloma. The Nueva Palmira
port is experiencing steady growth due to its status as the terminal
port of the Paraná-Paraguay waterway and its usage as an alternative
port for the embarkation of lumber and grains.

Air Transportation: Uruguay is connected to the rest of the world via an
international airport located in Montevideo that is serviced by
approximately eight regularly scheduled foreign airlines and one
"national" airline. Privately operated air service to the interior has
recently become a viable, yet little-used, alternative to land
transport.

## 

Telecommunications: Uruguay has one of the most advanced
telecommunications infrastructures in Latin America. Its teledensity
(main lines per 100 people) was 43 in 2001. In 1997, Uruguay became the
first country in the Americas and the sixth country in the world to
become fully digital. Internet penetration is estimated at 12% and
growing rapidly. Approximately 20% of the population has access to
cellular phones.

Energy: The basic source of primary energy in Uruguay is hydroelectric.
The limitations of the country's hydroelectric potential and increasing
energy demands have led to the construction of a 250 km-long gas
pipeline from Argentina. The pipeline will transport approximately 2-2.5
million cubic meters per day.

Water: A steady supply of potable water (which complies with the World
Health Organization's standards) is permanently available throughout the
country. The state-owned water and sanitation company, OSE, is
continually improving the system.

######## Regional Economic Integration

Uruguay is a founding member of MERCOSUR (the Southern Cone Common
Market composed of Argentina, Brazil, Uruguay, and Paraguay with Chile
and Bolivia as Associate Members) and the geographical center of the
bloc's most densely populated and richest area. Its capital, Montevideo,
is the seat of the MERCOSUR Secretariat. MERCOSUR integration fostered
regional trade in the 1990s, with Uruguayan exports to the bloc growing
from 35% of overall exports in 1990 to 55% in 1998. However, MERCOSUR
has faced serious problems since late 1998, and exports to the bloc
currently account for only 33% of Uruguay's overall exports. MERCOSUR's
problems stem mostly from the economic crisis in Argentina, the
devaluation of Brazil\'s currency in early 1999, ineffective
macroeconomic coordination, the lack of an effective dispute settlement
mechanism, and the lack of supranational institutions. The recently
elected presidents of Brazil and Argentina have demonstrated a strong
interest in MERCOSUR\'s reinvigoration. In 2001, the U.S. and MERCOSUR
began a dialogue on ways to address regional and global trade issues of
mutual concern under the U.S.-MERCOSUR ("Four-Plus-One") Council on
Trade and Investment.

# **Chapter 3. Political Environment**

**Nature of Political Relationship with the U.S.**

Relations between the United States and Uruguay are excellent. Uruguay
is a constructive participant in international fora. The government of
Uruguay took an active role in the 1994, 1998 and 2001 Summits of the
Americas and follow-up working groups, and vigorously supports the
establishment of a Free Trade Area of the Americas. The U.S. and Uruguay
cooperate on a wide range of issues, including counter-narcotics,
technology, defense, and the environment. In 2002, they established a
Joint Commission on Trade and Investment to explore ways to facilitate
the expansion of trade and investment.

### Major Political Issues Affecting Business Climate

Upon taking office on March 1, 2000, the centrist government of
President Jorge Batlle (Colorado Party/Lista 15) introduced an extensive
legislative program to address some of the country's most pressing
problems. The principal opposition to the government's programs comes
from the Encuentro Progresista - Frente Amplio (EP-FA), a grouping of
leftist parties and factions, and from the national labor confederation,
PIT/CNT. However, all of the major parties are committed to democratic
principles and a mixed economy with private sector participation.

### Relations between Federal, Executive and State Leaders

In general, relations between the Executive Branch and the departmental
governments (Intendencias) are good. Departmental governments have the
ability to set local tax rates, and receive assigned portions of the
national budget submitted to Congress for approval by the Executive
Branch. Intendentes, the leaders of the departmental governments,
regularly meet to share ideas and to decide on specific issues to be
negotiated with the Executive Branch. Thirteen out of nineteen
Intendencias are held by the Blanco Party, five are affiliated with the
Colorado Party, and the Intendente of Montevideo is from the EP-FA
Party.

**Brief Synopsis of Political System, Elections and Orientation of Major
Political Parties**

Uruguay is a constitutional democracy with an elected president and
parliament. The country is divided into nineteen departments (states),
including Montevideo, the capital.

National elections are held every five years. The next general elections
are scheduled for October 2004. The first round of national elections,
in which the president, vice president, senators and deputies are
elected, is held on the last Sunday in October of the election year. To
win, a presidential candidate must obtain a minimum of 51% of all votes
cast. The system provides for a run-off to be held on the last Sunday in
November if no presidential candidate obtains a simple majority in the
first round. Elections for the Intendentes of the departmental
governments take place on the second Sunday in May in the year following
a national election year. Up to two candidates per party may be
nominated.

The president may not stand for immediate re-election, but may be
re-elected after at least one term out of office. Intendentes may be
re-elected only once in a row. There is no limit on the number of times
that senators and deputies can be re-elected. All elected offices are
for a five-year term. A five-member Supreme Court heads the Judiciary,
one of the most independent in Latin America. Departmental governments
have budgetary independence from the central government, and may set
local tax rates.

The 1999 election results produced a parliament divided among the three
main political forces. The two traditional parties, Colorado and Blanco
(National), have existed in their present form for almost one hundred
years. The third, Encuentro Progresista - Frente Amplio (Progressive
Encounter - Broad Front), a leftist coalition of various parties and
factions, was founded in 1971. Factionalism within parties makes
defining their orientations somewhat difficult. Nevertheless, the
following general observations hold true:

Colorado Party: The Colorado Party was the traditional party of the
urban areas, including Montevideo, and, until it was usurped by the
EP-FA, the party of the working class. President Jorge Batlle, who
belongs to the party's Lista 15 faction, supports free market economics
and less government participation in the economy. Ex-President Julio
Maria Sanguinetti, a self-proclaimed social democrat who advocates
gradual economic reform while protecting basic Uruguayan sectors such as
agriculture, leads the party's largest faction, the Foro Batllista.
Contrary to the party's traditional principles of upholding state-owned
and state-controlled enterprises, recent Colorado administrations have
opened the economy to foreign investment, offering state services on a
private concession basis, and eliminating some state monopolies.

National (Blanco) Party: The National Party is the traditional party of
Uruguay's rural interior, and has been in the minority for most of its
existence. There were only three Blanco administrations in the 20th
century, with the 1990-95 administration of President Luis Alberto
Lacalle being the most recent. The Lacalle administration unsuccessfully
attempted to privatize a number of state-owned enterprises. While party
ideology runs from fiscal conservatism to populism, the largest faction
favors economic reform and free enterprise. The National Party fared
poorly in the 1999 presidential and parliamentary elections, but later
won local elections in 13 of the 19 departments.

Encuentro Progresista-Frente Amplio (EP-FA): The leftist coalition,
which captured 40% of the vote in 1999, advocates a redistribution of
wealth through the reduction of the value-added tax (now 23%) combined
with the institution of a personal income tax. It supports the retention
of state enterprises, but wants to reduce their size through attrition.
It favors weakening the country's bank secrecy laws and increasing bank
supervision. The party favors strengthening MERCOSUR for both economic
and political reasons. The EP-FA won the capital's municipal government
for the first time in 1989, and its candidate was reelected in 1994 and
1999. During its administration of Montevideo, the EP-FA has raised land
and property taxes significantly, and has contracted out services such
as garbage collection, and park maintenance to private companies on a
concession basis.

# **Chapter 4. Marketing U.S. Products and Services**

**Distribution and Sales Channels**

All the customary import channels exist in Uruguay \-- agents,
distributors, importers, trading companies, subsidiaries and branches of
foreign firms, among others. Sales outlets are usually traditional
storefronts and supermarkets. No discount general merchandisers operate
in Uruguay.

### Use of Agents/Distributors - Finding a Local Partner and Attorney

A foreign supplier should be thorough in its selection of a local agent
or representative. For this purpose, the supplier may wish to take
advantage of the export promotion services provided by the U.S.
Department of Commerce through the U.S. Embassy in Montevideo. One
service, the International Partner Search (IPS), helps identify
pre-screened and qualified partners, agents and/or distributors. The
supplier should make clear in the contractual agreement between the
parties whether the relationship is that of employer-employee or merely
commission-based. Failure to do so could result in supplier liability
for severance and related benefits if he or she decides to end the
relationship. A full list of services provided on behalf of the U.S.
exporter is found at www.usatrade.gov. Another useful site for U.S.
exporters is www.export.gov.

### Need for a Local Attorney

It is advisable to obtain the services of a local attorney before
setting up operations or carrying out substantial business transactions
in Uruguay. Local attorneys can be very helpful in sorting through
bureaucratic red tape, which may otherwise be frustrating for a
newcomer. A free list of local attorneys may be obtained from the U.S.
Embassy\'s Consular Section (Tel: 5982 418-7777 ext. 2362) or by e-mail
at montevideo.office.box@mail.doc.gov.

### Checking Bona Fides of Banks / Agents / Business Partners

Credit reports on Uruguayan firms may be obtained though the U.S.
Embassy's International Company Profile (ICP) service for a \$500 fee.
To receive full details on how to order this service, please contact the
Commercial Section in U.S. Embassy Montevideo by phone at (5982)
418-7777 ext. 2322, by fax at (5982) 418-8581, or by e-mail at
montevideo.office.box@mail.doc.gov.

### Franchising

Franchising in Uruguay has to date been largely limited to food-related
outlets, hotels, car rental companies and some retail clothing stores.
There are no legal restrictions on operating a franchise in Uruguay. The
Uruguayan Franchising Association may be contacted at Tel/Fax: (5982)
418-5189 or by e-mail at milbea@adinet.com.uy.

### Direct Marketing

U.S. exporters may sell and ship directly to Uruguayan consumers.
Courier packages containing CDs, DVDs, books, and personal items valued
at \$50 or less are exempt from import tariffs. The relevant
regulations, however, are not always uniformly applied and are changed
periodically. Telemarketing and e-mail campaigns are on the rise. Direct
marketing is also popular in heavily transited street corners where
hired promoters distribute flyers and samples of all types of products
and services. Inserts in the Sunday edition of major newspapers are also
a popular form of direct marketing. Catalog sales are not common as
Uruguayan shoppers prefer to window shop and personally choose the goods
to be purchased.

### Joint Ventures/Licensing

Both joint ventures and licensing are common in Uruguay and generally
involve procedures similar to those practiced in most other countries.

### Steps to Establishing an Office

The formation of a new enterprise or the acquisition of an existing
Uruguayan company can be done freely. Shell corporations already formed
but with no operations are also available for acquisition and can be
purchased for about \$2,500. It is advisable to contract an experienced
attorney who can provide guidance in completing the legal paperwork
required. The foreign investor is free to adopt any desired legal
organization structure. The most usual form is a corporation or a
branch, but a personal partnership is also possible.

### Selling Factors and Techniques 

Foreign manufacturers with sustained sales in Uruguay generally use the
services of an agent or distributor. Practically all
importers/distributors are based in Montevideo, although some maintain
sales networks in the interior of Uruguay. A U.S. firm with a local
representative has the advantage of keeping up-to-date with local market
conditions as well as any changes in policies affecting trade.

Uruguay is a good market for both new and used equipment and machinery.
Equipment often considered obsolete in the U.S. may still be marketable
to local industry. When making purchase decisions, Uruguayan consumers
consider quality, price, payment terms, delivery time, after-sales
servicing and compatibility with existing systems.

U.S. manufactured products are generally regarded as high in quality and
competitive in price. However, they are sometimes rated low when it
comes to financing, which is an important factor in sales in Uruguay.
American manufacturers offering flexible, innovative, and competitive
credit terms will overcome a difficult hurdle in achieving export sales
to Uruguay.

### Advertising and Trade Promotion

The cost of advertising in Uruguay has dropped in dollar terms following
the peso's June 2002 devaluation. It is advisable to work with a local
advertising agency. \"El Pais\" and \"El Observador\" are the leading
newspapers in terms of circulation; \"Busqueda\" and \"Crónicas
Economics\" are highly respected weekly journals. Several major
international advertising agencies maintain offices in Montevideo.
Television and radio advertising are also popular. During the summer
months of December-March, light aircrafts with banners are commonly used
to promote new products along the coast. Several local ad agencies
produce TV commercials for clients abroad.

The Embassy periodically hosts industry-specific catalog exhibitions and
trade missions. It also participates with a commercial booth in some
trade fairs. Details concerning these fairs may be obtained from the
Commercial Section, American Embassy Montevideo, UNIT 4510, APO AA
34035; Tel: (5982) 418-7777, ext. 2325; Fax: (5982) 418-8581; or by
e-mail at montevideo.office.box@mail.doc.gov.

### List of Major Newspapers and Business Journals

Busqueda: Danilo Arbilla, Editor; Av. Uruguay 1164, Montevideo, Uruguay;
Fax: (5982) 902-2036; e-mail <busqueda@adinet.com.uy>. Web page not
available.

El Observador: Ricardo Peirano, Editor; Cuareim 2052, Montevideo,
Uruguay;

Fax: (5982) 924-7498; e-mail: elobservador@observador.com.uy; web page:
[http://www.observa.com.uy](http://www.observa.com.uy/).

El Pais: Martin Aguirre, Editor; Plaza Cagancha 1162, Montevideo,
Uruguay; Fax: (5982) 908-2946; e-mail: cartas@elpais.com.uy; web page:
[http://www.diarioelpais.com](http://www.diarioelpais.com/).

Crónicas Económicas: Jorge Estellano, Editor; Av. Libertador 1532;
Montevideo, Uruguay; Fax: (5982) 902-0759; e-mail:
cronicas@netgate.com.uy;

web page: [http://www.cronicas.com.uy](http://www.cronicas.com.uy/).

### Pricing Product

The Uruguayan market price structure reflects world market prices plus
import tariffs and transportation costs. In addition to tariff
advantages, products from nearby MERCOSUR countries like Argentina and
Brazil enjoy significantly lower transportation costs than do products
from the U.S., Europe and Asia.

A typical price structure for an item imported from the U.S. is as
follows (in this case safety boxes HTSUS 83.03.00.00):

  ------------------------------------------ -------------- --------------
  **Price (CIF)**                                           **500**

  Import tariff                              9.5%           47.50

  IMADUNI                                    8.0%           40.00

  Bank Charges                               3.0%           15.00

  VAT (recoverable on sale)                  33.0%          193.87

  Import surcharge (COFIS)                   3.0%           21.45

  Consular tax                               2.0%           10.00

  TSA                                                       1.00

  **Total Surcharges**                                      **328.82**

  Final equipment price                                     828.82

  Profit margin:                             10.0%          82.88

  **Final Sale price:**                                     **911.70**
  ------------------------------------------ -------------- --------------

### Sales Support / Customer Service

Uruguayans consider sales support and customer services important
factors when deciding which products to buy. U.S. manufacturers should
seriously consider using an agent in Uruguay to provide customer support
services. Company representatives resident in neighboring countries are
less effective. A local U.S. firm is selling warranty protection that
supplements that provided by the original equipment manufacturer.

### Selling to the Government

Although U.S. companies may sell directly to the Uruguayan government,
it is useful to have a registered local representative. Registration
takes place once a year during a specified period in which interested
parties may inscribe themselves in the list of official government
suppliers. Companies should consider providing product literature and
price quotations to selected government purchasing offices and the
different state-owned entities; these offices and entities frequently
refer to literature on hand when drafting the specifications for their
procurement tenders. Government entities usually do their own
procurement. Uruguayan law requires that there be public bids for large
purchases. Nevertheless, procurement by negotiation is permitted in
certain cases. A G2B website
([http://www.comprasestatales.gub.uy](http://www.comprasestatales.gub.uy/))
has been established to increase transparency and reduce government
procurement costs. Because of severe budget cutbacks, however, most
government procurement has been put on stand-by.

### Protecting Your Product from Intellectual Property Right (IPR) Infringement

Please refer to the section on Intellectual Property Rights in Chapter
7.

**Chapter 5. Leading Sectors For U.S. Exports and Investments**

**Best Prospects for Non-Agricultural Goods and Services**

The U.S. exports high technology products to Uruguay. Almost 20% of U.S.
exports to Uruguay in 2002 belonged to items falling within chapters 84
(mainly automatic data processing machines, parts and accessories --
\$33 million, down from 98 million in 2001); 85 (mainly
telephony-related equipment -- \$6.7 million, down from \$14 million in
2001); and 90 (mainly medical equipment -- \$7.2 million, up from \$16
million in 2001) of the Harmonized Tariff Schedule. U.S. sales of high
technology products may increase as a result of government proposals to
create a \"Uruguayan Silicon Valley\" and potential telecommunications
liberalization.

Few U.S. products experienced increased exports to Uruguay in 2002.
Among the few that showed growth are items within chapters 72 (iron and
steel); 49 (books and periodicals); 47 (paper and pulp); 24 (tobacco);
62 (articles of clothing); and 07 (fruits and vegetables).

Uruguay\'s proportionally large elderly population may be a good market
for geriatric equipment and services in the near future. Tourism and
forestry are high in the government\'s development plans, and represent
excellent opportunities for U.S. exports.

The 2002 banking crisis led to a general mistrust of the local banking
system. Many depositors who previously held their savings in banks
withdrew their money and are keeping their savings at home or in safety
deposit boxes. This attitudinal change has led to a remarkable increase
in the purchases of home safety deposit boxes and general security and
surveillance equipment.

Uruguay ranked sixth in the most recent update of the Environmental
Sustainability Index (the U.S. ranked 45th), although mostly due to its
low population density. Best sales prospects in the environmental
technologies sector include equipment and consultancy services for solid
and hazardous waste management, hospital waste management, environmental
monitoring and assessment (ISO 14001 standards), water pollution control
and avoidance (including water concession and wastewater treatment
systems), air pollution control and avoidance (including motor vehicle
pollution), and soil pollution control and avoidance (particularly site
remediation and restoration of lead contaminated soils). Uruguay also
represents an interesting market for greenhouse gas-reducing
technologies and services, such as the sale of small-scale wind and
solar power generators.

######## Best Prospects for Agricultural Products

Exports of food products to Uruguay have good potential. Imported food
products for mass consumption are typically purchased from Argentina,
Brazil, and Chile, while imports from Europe and the United States are
aimed at the middle and higher income sectors. U.S. companies with
competitive prices should consider tapping the mass market through the
development of the private label concept.

**Significant Investment Opportunities**

Uruguay receives loans and grants for major projects and programs from
the Inter-American Development Bank, the World Bank, and other
multilateral institutions. The Embassy continually reports on major
investment opportunities in Uruguay for U.S. contractors and
manufacturers. Significant investment opportunities exist in the areas
of forestry, agro-industry, tourism, services (including
infrastructure), environmental technologies and software.

######## Major Infrastructure Development Projects

Paraná-Paraguay river transportation system \-- The governments of
Uruguay, Argentina, Brazil, Paraguay, and Bolivia are jointly working
together on what has become the largest Latin-American \"regional
integration\" project \-- the joint use of the 2,500-mile long
Paraná-Paraguay-Uruguay rivers for the transportation of goods from the
five countries to the Atlantic Ocean. The ongoing project calls for
investments in civil construction, dredging and maintenance, ports
(including equipment) and fleet. Further opportunities for U.S.
involvement lie in the development of the administration of the
waterways. Information on the status of this project may be obtained
from Jorge Sanguinetti, President, Comisión Hidrovia, Tel: (5982)
915-6226, Fax: (5982) 916-5044.

Colonia-Buenos Aires bridge \-- If the bilateral treaty to construct the
bridge is ratified by Argentina (it was ratified by Uruguay in 1999),
the Colonia-Buenos Aires Bridge Administration hopes to issue the tender
to construct this 24-to-32-mile long bridge joining Buenos Aires,
Argentina, and Colonia in 2004. Possibilities for U.S. involvement will
exist in all aspects of this multi-billion dollar bridge project.
Current plans are for the bridge to be constructed and operated by a
private concession under a build-operate-transfer (BOT) regime. Further
information on this project may be obtained by contacting Ing. José
Serrato, Presidente, Comisión Binacional Puente Buenos Aires - Colonia,
Tel: (5982) 902-0876, 900-7801, 900-7437, Fax: (5982) 902-0876.

Southern Cone highway hub \-- This toll speedway, in the early planning
stages, will connect Sao Paulo, Brazil with Buenos Aires, Argentina,
covering a distance of over 2,500 Km. This is a supplementary project to
the Colonia-Buenos Aires bridge.

Information on ongoing or planned power projects may be obtained by
logging onto the Internet at
[http://www.ute.com.uy](http://www.ute.com.uy/), or by contacting Ing.
Enrique Patiño, Director Técnico, Dirección Nacional de Energía,
Ministerio de Industria, Energía y Minería, Tel: (5982) 908-5929,
901-2968, Fax: (5982) 901-9382.

Port renovations \-- The National Port Administration occasionally
issues tenders for projects related to port renovation, channel
deepening, and warehouse construction.

Montevideo Port is eager to join the U.S. Container Security Initiative
and will likely issue a tender for non-intrusive container inspection
equipment and other port security measures by the end of 2003.

Information on the renovation of La Paloma Port may be accessed in the
Internet at www.port-uruguay.org/agrandes-frames.htm. Further
information on port upgrades may be obtained from Ing. Luis Loureiro,
President, Administración Nacional de Puertos ANP, Tel: (5982) 916-1007,
Fax: (5982) 916-1704, e-mail: anppresi@adinet.com.uy.

CerroFreePort, a management and holding company involved in
communications, transportation, agriculture, fishing and processing, is
constructing a new commercial deep-sea international port in Montevideo.
The port is being developed on a site of approximately 100 hectares
owned by the firm. Atenil is currently seeking investors, constructors
and operators for the port facilities. The project includes container
terminals and facilities to handle timber, automobiles, and fish.
INSERVEX BBV concluded the economic and financial feasibility studies
for this project in May 2000. Atenil has obtained all permits required
by the Uruguayan Government and the Municipality of Montevideo for this
project. For technical information directly related to the port project,
the point of contact at Atenil is John Mowris, Vice President,
CerroFreePort S.A., Tel: (5982) 311-1205, Fax: (5982) 311-7443, E-mail:
jmowris@atenil.com.uy (or visit the www.cerrofreeport.com.uy website.)

Telecommunications \-- as a result of deregulation and demonopolization
of the telecommunications sector (except for basic telephony), there may
be some interesting projects in this sector in the near future. The
state-owned cellular service provider, ANCEL, will be migrating towards
GSM technology throughout 2004. The rapid growth and increasing
penetration of the Internet (currently estimated at 12% of the
population) should also provide opportunities for U.S. firms in related
sectors. A newly created software development center has been attracting
worldwide attention. Information on these projects may be obtained from
Ing. Gabriel Gurméndez, President, ANTEL, Daniel Fernandez Crespo 1508,
piso 9, Tel: (5982) 400-4585, Fax: (5982) 402-0208.

Environmental Technologies \-- The local market also represents
promising export opportunities for U.S. environmental technology
companies, offering the possibility of acting as an entry point for
other MERCOSUR countries. Although Uruguay's market for environmental
technologies is still relatively small, it is expected to grow
significantly. The most likely clients for U.S. environmental products
and services include governmental agencies and private industrial
companies. Best sales prospects include technologies and consultancy
services for the following:

1.  Solid and hazardous waste management.

2.  Hospital waste management.

3.  Environmental monitoring and assessment, including ISO 14001
    standards.

4.  Water pollution control and avoidance, including water concession
    and wastewater treatment systems.

5.  Air pollution control and avoidance, including motor vehicle
    pollution.

6.  Soil pollution control and avoidance, particularly site remediation
    and restoration of lead contaminated soils.

7.  Recycling.

[]{.mark}

Uruguay also represents an interesting market for GHG-reducing
technologies and services, particularly in the areas of:

1.  Energy supply sector \-- fuel switching, natural gas combustion, and
    renewable energy technologies.

2.  Commercial and residential sectors \-- energy-efficient lighting.

3.  Transportation sector \-- vehicles with improved fuel efficiency
    features, clean fuel vehicles, and related equipment.

4.  Agricultural sector \-- sustainable agricultural practices, no
    tillage systems, and methane emissions from rice cultivation and
    livestock.

5.  Waste management \-- recovery and use of methane.

The Government of the United States acknowledges the contribution that
outward foreign direct investment can make to the U.S. economy. U.S.
foreign direct investment is increasingly viewed as a complement or even
a necessary component of trade. Nearly 60% of total U.S. exports
originate with American firms with investments abroad. Recognizing the
benefits that U.S. outward investment bring to the U.S. economy, the
Government of the United States undertakes initiatives such as Overseas
Private Investment Corporation (OPIC) programs, bilateral investment
treaty negotiations, and business facilitation programs that support
U.S. investors.

According to a 1999 GOU study, the U.S. is the largest foreign investor
in Uruguay, accounting for 33% of total foreign direct investment.
Approximately one hundred American firms operate in Uruguay.

# **Chapter 6. Trade Regulations, Customs and Standards**

# 

**Trade Barriers, including Tariff and Non-Tariff Barriers**

Tariffs on non-locally-produced raw materials, intermediate goods and
consumer goods range from 2%-6%, 8%-16% and 10%-20%, respectively

Quotas were eliminated in the mid-1970s and non-tariff barriers,
including reference and minimum import prices, were substantially
reduced in the 1990s. Certain imports (e.g. firearms, radioactive
materials, fertilizers, vegetable products and frozen embryos) require
special licenses or customs documents. Bureaucratic delays may also add
to the cost of imports, although importers report that a
"de-bureaucratization" commission has improved matters.

Reference prices and a few remaining minimum export prices were
eliminated in 1994 and 2002, respectively. In 2002 and 2003, Uruguay
imposed specific import duties and inconvenient financing terms to
discourage some imports from Argentina.

Uruguayan importers are required to pay a 4% ad valorem tax on all
freight arriving via foreign-registered airlines. Freight that arrives
by the national airline, PLUNA-VARIG, is exempt from the tax. A civil
aviation agreement between Uruguay and the United States provides for
equal treatment between U.S. and Uruguayan airfreight carriers. U.S.
carriers are therefore also exempt from this tax. (Sectors in which
foreign equity participation requires prior governmental approval are
discussed in Chapter 7.)

**Customs Regulations and Contact Information**

**Customs Valuation**

Uruguay\'s tariff structure follows the \"HS\" or harmonized system of
tariff nomenclature. All customs duties, surcharges, service and other
charges are consolidated in a customs unified rate or \"tasa global
arancelaria\" (TGA).

The Office of the Director General of Customs may apply customs
valuation when there is a question concerning a supplier\'s
classification and/or valuation. Valuation criteria are those followed
by the World Trade Organization (WTO). Over or under invoicing, false
declarations as to the quantity, quality, or types of goods, or
incorrect classifications under the harmonized code are considered fraud
and subject to legal penalties.

### Tariff Rates

Goods entering from MERCOSUR countries generally pay no tariffs.

MERCOSUR member countries agreed on a Common External Tariff (CET) in
December 1994. On January 1, 1995, the CET entered into effect on
imports from non-member countries, with rates ranging (with some
exceptions) between 0 and 20%. The maximum CET was raised to 23% at the
end of 1997, and stands at 21.5% as of July 2003.

All MERCOSUR countries have requested exceptions to the CET. Uruguay
applies preferential tariffs on the import of vehicles and supplies for
agriculture, forestry, and hotels. The Uruguayan Government also gives
special treatment to imports of raw materials for the production of
export goods. Moreover, in December 2001, the Uruguayan Government
unilaterally decided not to increase tariffs on capital goods as
mandated by the MERCOSUR convergence schedule for the CET. Finally,
MERCOSUR partners may apply tariffs different from the CET in a number
of telecommunication and informatic goods until 2006. In the vast
majority of the exceptions being requested by Uruguay, the Uruguayan
Government applies import tariffs that are lower than the bloc's CET.

### Import Taxes

In addition to tariff rates, a (refundable) value-added tax of 33%
(23+5+5) is applied over customs valuation plus import surcharges.
Import duties range from zero to 23%.

### Import Licenses

Certain imports require special licenses or customs documents. Among
these are pharmaceutical drugs, certain medical equipment and chemicals,
firearms, radioactive materials, frozen embryos, livestock, bull semen,
anabolics, sugar, seeds, hormones, meat and wheat.

### Export Controls

Other than permits for the export of certain works of art or antiques,
there are no export controls currently in force. The export sales of
certain domestic products enjoy tax exemptions and special credits.

### Import/Export Documentation Requirements

Only commercial firms, industrial firms or individuals listed in the
registry of importers may legally import products into Uruguay. No
uncommon documents are required to import merchandise.

### Temporary Goods Entry

Products may be imported under temporary admission or drawback
provisions. Products imported under temporary admission provisions are
exempt from import duties but must be re-exported within 18 months.

### Labeling, Marking Requirements

Labeling and marking requirements are set and controlled by two federal
agencies and several municipal offices. Basically, labels must contain a
Spanish-language description of the main ingredients of the product, its
country of origin, expiration date, net weight, and the full name and
address of the Uruguayan importer (plus validity and cooking
instructions in the case of foodstuffs). Imported products may include
the original label of the country/language of origin but should have a
sticker/label attached to the package with the information requested
above. Manuals, product literature, and other written materials, while
not required, will be more useful if written in Spanish. A new consumer
defense law, approved in 2000, regulates labeling requirements.

### Warranty and non-warranty repairs

Few outfits offer "satisfaction guaranteed" proposals. Money is rarely,
if ever, refunded, but an exchange for another good is usually offered.
After 48 hours, defective appliances must be sent to the service
facilities of the importer, as the seller will no longer exchange the
malfunctioning article. A consumer defense office was recently set up
and is growing in popularity. However, the office's capability to
resolve problems is limited. Consumer satisfaction is a concept that
needs developing.

### Prohibited Imports

From time to time, the government bans the importation of certain food
articles originating from areas declared by the World Health
Organization to be unfit. The municipality of Montevideo imposes strict,
and at times, outdated and arbitrary regulations regarding the
composition of food articles (e.g. dyes, etc.). Imports of used cars are
banned.

### USG-imposed Export Controls

Most export transactions do not require specific approval from the U.S.
Government. In order for certain export transactions to take place
legally, however, an exporter must obtain a special export license in
advance. Licenses are required in certain situations involving national
security, foreign policy, short supply, nuclear non-proliferation,
missile technology, chemical and biological weapons, regional stability,
crime control, or terrorist concerns. Additional information may be
obtained at www.bxa.doc.gov/reslinks.htm

### Standards

Uruguay uses the metric system of weights and measures. The Laboratorio
Tecnologico del Uruguay (LATU -- www.latu.org.uy) is the officially
approved agency that controls standards and quality control of imports
and exports. A national quality committee reviews and recommends
issuance of ISO 9000/9001 certificates, if warranted. The Uruguayan
Institute of Technical Norms (UNIT -- www.unit.org.uy) carries out
certification and elaborates technical norms. It is the exclusive
representative of ISO, IEC, and the World Quality Council (WQC) in
Uruguay.

### Free Trade Zones/Warehouses

Please refer to the section on free zones in Chapter 7.

### Special Import Provisions

There are no special import provisions or restrictions. All goods may be
imported except for a very limited list of goods that may require
special authorization.

######## Membership in Free Trade Arrangements

Uruguay is a member of the World Trade Organization (WTO) and the Latin
American Integration Association (ALADI). It holds numerous bilateral
trade agreements with ALADI partners. The Uruguayan Government is
currently trying to broaden a comprehensive trade agreement signed with
Mexico in 1999. Uruguay is a founding member of MERCOSUR, the Southern
Cone Common Market also composed of Brazil, Argentina and Paraguay,
which has Chile and Bolivia as Associate Members. Montevideo is the
headquarters of MERCOSUR´s Secretariat. Uruguay also holds separate
trade arrangements for certain products with Brazil and Argentina
(called PEC and CAUCE, respectively) that are periodically renewed.

Customs Contact Information

#### Dr. Hector Nilo Perez

National Customs Director (Director Nacional de Aduanas)

Rambla 25 de Agosto de 1825 s/n

Montevideo, Uruguay

Tel: (5982) 916-2141; Fax: 916-4691

http://www.aduanas.gub.uy

**Chapter 7. Investment Climate**

**Investment Climate**

**Openness to Foreign Investment**

The Government of Uruguay recognizes that foreign investment plays an
important role in the continuing development of the economy, and
maintains a favorable investment policy through a number of incentives.
It grants equal treatment to both national and foreign investors, and
foreign investors do not receive any additional benefits. Aside from a
few sectors in which foreign investment is not permitted, there is
neither de jure nor de facto discrimination towards investment by source
or origin.

In 1998, the Uruguayan Government approved an investment promotion and
protection law (no.16906) that declares that the promotion and
protection of national and foreign investment is in the nation's
interest. The main aspects of the law are that foreign and national
investments are treated alike, that investments are allowed without
prior authorization or registration, that the Government does not
prevent the establishment of investments in the country, and that
investors may freely transfer abroad their capital and profits from the
investment. There are no restrictions on technology transfer. In June
2003, the government established a single-window mechanism to channel
all investment requests. 100% foreign ownership is permitted, except
where restricted for national security purposes.

The Uruguayan Government does not generally require that a firm have
specific authorization to set up operations, import and export, effect
deposits and banking transactions in any currency, or obtain credit. No
screening mechanisms apply on foreign or national investments. No
special government authorization is needed for access to capital markets
or to foreign exchange.

Uruguay has a history of maintaining state monopolies in a number of
areas in which direct foreign equity participation is prohibited by law.
Privatization and association with private capital is widely opposed by
the population and the opposition parties. Several state-owned entities,
however, have contracted with foreign-owned companies to provide
specific services for a given period of time under
Build-Operate-Transfer (BOT) regimes. Although private power generation
is now allowed, the state-owned power company, UTE, still holds a
monopoly on wheeling rights. The state-owned oil company, ANCAP, remains
the only importer and refiner of petroleum products. Despite commitments
to the IMF, the Uruguayan Government has yet to demonopolize oil
refining and telecommunications (basic telephony). Cellular service is
provided by ANTEL (through its subsidiary ANCEL) and a private firm
(BellSouth) regulated by ANTEL. Local wireless loop systems, the
installation and maintenance of public telephones, data transmission,
and some value-added services are open to the private sector. While many
port services were privatized in 1992, all Uruguayan ports are operated
and administered by the National Port Administration, ANP. A state
enterprise, OSE, controls most water and sewage services except in some
resort areas on the coast. 51% of the state-owned airline PLUNA was sold
to the private sector in 1996. The GOU had planned to sell the rest in
2002. The insurance and mortgage sectors were demonopolized in 1996.
However, workers' compensation insurance remains a government monopoly.
Foreign investors are treated as nationals in privatization and
concession programs and are allowed to participate in any stage of the
process.

A budget law approved on February 2001 created the legal basis for the
establishment of regulatory offices for telecommunications (URSEC) and
electricity (UREE), and levels the tax treatment of public and private
firms.

Although U.S. firms have not encountered major obstacles in Uruguay's
investment climate, some have been frustrated by the length of time it
takes to complete bureaucratic procedures and by the numerous changes in
rules or new taxes since 2001.

######## Conversion and Transfer Policies

Uruguay has maintained a long-lasting tradition of imposing no
restrictions on the purchase of foreign currency or the remittance of
profits abroad. Foreign exchange can be freely obtained.

**Expropriation and Compensation**

In the event of expropriation, the Uruguayan constitution provides for
the prompt payment of fair compensation. There have been no
expropriation actions taken in the recent past.

There are no laws that force local ownership, except in the areas
reserved for the State.

######## Dispute Settlement

The investor is given the option of choosing between arbitration and
recourse to the courts for the settlement of disputes. Although Uruguay
is not a member of the ICSID (International Center for the Settlement of
Investment Disputes), the Uruguayan Government has requested that
Parliament agree to membership. Uruguay\'s legal system is based on a
civil law system derived from the Napoleonic code. There are effective
means for enforcing property and contractual rights. There is no
government interference in the court system. The Judiciary is
independent, but sometimes slow.

There are both commercial and bankruptcy laws. In the case of
bankruptcies, creditors with real guarantees collect first, followed by
the firm\'s employees and the government. Local firms usually wait too
long to implement bankruptcy proceedings. Consequently, only few firms
that enter into bankruptcy manage to pay their debts, and the majority
close after some years.

######## Performance Requirements/Incentives

There are no specific performance requirements on which foreign
investment is conditioned. The current investment law treats local and
foreign investors equally, and does not provide preferential tax
deferrals, grants, or special access to credit to foreign investors.
There are no discriminatory or excessively onerous visa, residence, or
work permit requirements inhibiting foreign investors. There is no
requirement that nationals own shares, that the share of foreign equity
be reduced over time, or that technology be transferred on certain
terms. There are no government-imposed conditions on permission to
invest.

By law, the government has established certain asset, value-added, and
internal tax benefits, as well as social security payments and tariff
reductions to certain activities. In addition, it provides preferential
treatment for capital good imports and tax deferrals for exports. No
export or import quotas are applied. Investments in sectors such as
forestry, hotels, and agro-industries receive additional specific
incentives.

A government decree establishes that local products or services of equal
quality that are no more than 10% more expensive than foreign goods or
services be given preference in government tenders. U.S. and other
foreign firms are able to participate in government-financed or
subsidized research and development programs on a national treatment
basis.

######## Right to Private Ownership and Establishment

There are no restrictions on private ownership, the establishment of a
business or engaging in any form of remunerative activity, except in
areas declared to be of national security interest, or those in which
the government maintains a legal monopoly (see Openness to Foreign
Investment.)

######## Protection of Property Rights

Secured interests in property, both movable and real, are recognized and
enforced. Mortgages exist, and there is a recognized and reliable system
of recording such security interests. Uruguay has a legal system that
protects the acquisition and disposition of all property rights,
including land, buildings, and mortgages. Execution of guarantees is,
however, usually a slow process.

In mid-2003, several political factions attempted to pass a bill that
would alleviate the payment burden of Uruguayan dollar debtors who had
been adversely affected by the peso's devaluation. The law would have
forced banks to re-negotiate the terms of their loans. However, the GOU
opposed the initiative and succeeded in getting the country's political
parties and banks to agree to an "administrative solution." This allowed
for extending loan maturities and allowing debtors to make smaller
payments on a negotiated basis. The government also eliminated the
value-added tax on interest.

Protection of Intellectual Property Rights: Uruguay is a member of the
World Intellectual Property Organization (WIPO) and a party to the Bern
and Universal Copyright Conventions. It is also a member of the Paris
Convention for the Protection of Industrial Property. In 2002,
coordinating closely with U.S. and international IPR organizations,
Uruguay passed new TRIPS-compliant copyright legislation. Previously in
1998 and 1999, Uruguay had passed trademark and patent legislation.

\-- Copyrights: The new copyright law represents a significant
improvement over the 1937 law, leading USTR to upgrade Uruguay from
"Priority Watch List" to the "Watch List" in 2003. However, USTR
believes that the lack of effective enforcement against widespread
piracy still represents an obstacle for copyright owners in Uruguay. In
its 2003 report, USTR also urged the Uruguayan Government to improve
border controls, especially given Uruguay\'s role in the transshipment
of pirated and counterfeit goods from other countries in Latin America,
especially Paraguay. In 2000, the local Phonogram Chamber, the Uruguayan
Video Association, and the Motion Picture Association launched
aggressive anti-piracy campaigns that resulted in the prosecution and
imprisonment of several people. Uruguay adhered to the WIPO Copyright
Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) in
1997, and should complete the ratification process by the end of 2004.

\-- Patents: Patents are protected by Law No. 17164, which was passed on
September 2, 1999. Invention patents have a twenty-year term of
protection from the date of filing. The patents for utility models and
industrial designs have a ten-year term of protection from the date of
filing and may be extended once for five more years. The law provides
for a lax definition of compulsory licensing and a vague determination
of the \"adequate remuneration\" to be paid to the patent holder. Some
U.S. industry groups are unhappy with the law and believe that its
compulsory licensing requirements are not TRIPs consistent.

\-- Trademarks: The Uruguayan Government approved a trademark law on
September 25, 1998 that upgrades trademark legislation to TRIPS
standards. Under this law, the registration of a trademark lasts ten
years and can be renewed as many times as desired. It also provides
prison penalties of six months to three years to lawbreakers. It is no
longer possible to register a foreign trademark without proof of a legal
commercial connection with the trademark. Enforcement of trademark
rights is adequate, and has improved during the current administration
as a result of an intense anti-smuggling campaign.

######## Transparency of the Regulatory System

Laws and procedures regulating foreign investment are transparent and
streamlined. However, from time to time, the government allows debtors
(especially those in the agriculture and mortgage sectors) to refinance
their debts on very favorable terms and conditions. These kinds of
regulations are unfair to other debtors who pay on time, and are a
disincentive for them to honor their debts. This practice also forces
well-managed firms to compete with those that do not pay their debts and
taxes in a timely manner.

######## Efficient Capital Markets and Portfolio Investment

Foreign investors have easy access to credit on market terms. Although
the private sector has access to a variety of credit instruments, access
to long-term credits in the local banking sector may be difficult.
(Please see Chapter 8 for a detailed description of the banking sector.)

Uruguay\'s capital market is underdeveloped and concentrated on public
paper. There is no effective regulatory system to encourage and
facilitate portfolio investment. Although there are two stock exchanges,
operations with stocks are practically non-existent (only 17 firms are
registered at one of the exchanges.) In 1996 and 1997, there was a boom
in the issuance of commercial paper, but the market soon stalled. In
2002, only six firms issued obligations, and transactions involving
commercial paper accounted for only 2% of total transactions in the
secondary market. The vast majority of agents operating with investment
funds are national, and the funds are mostly invested in Uruguayan
public paper. Risk rating firms first established a presence in Uruguay
in 1998.

There are no \"cross shareholding\" or \"stable shareholder\"
arrangements used by private firms to restrict foreign investment. There
are also no practices by private firms to restrict foreign investment,
participation, or control of domestic enterprises.

######## Political Violence

There have been no significant incidents involving politically motivated
damage to property or installations. Uruguay is a stable democracy where
respect for the rule of law is the norm and where most of the population
is committed to non-violence.

######## Corruption

Uruguay has strong laws to prevent bribery and other corrupt practices.
In 2002, Uruguay was ranked 32nd in Transparency International's
Corruption Perception Index (second best after Chile in Latin America).
A new law against corruption in the public sector was approved in 1998.
Acceptance of a bribe is a felony under Uruguay\'s penal code. Money
laundering is penalized with sentences of up to ten years (this also
applies to Uruguayans living abroad). U.S. firms have not identified
corruption as an obstacle to foreign direct investment. Several former
Uruguayan officials and one judge were prosecuted in 2002 and early
2003.

######## Bilateral Investment Agreements 

Uruguay has signed bilateral investment treaties with China, Spain,
France, Great Britain, Chile, Belgium, Luxembourg, Hungary, Italy,
Mexico, Panama, The Netherlands, Poland, Rumania and Switzerland.
Bilateral investment treaties with Israel, Malaysia, Portugal, the Czech
Republic, Sweden, and Venezuela are pending parliamentary approval. In
addition, Uruguay signed Double Taxation Agreements with Germany, Korea
and Hungary.

Uruguay does not have a bilateral investment treaty with the United
States. However, a working group on investment under the Joint Trade and
Investment Council created in April 2002 is reviewing the possibility of
negotiating an agreement.

######## OPIC and Other Investment Insurance Programs

The Uruguayan Government signed an investment insurance agreement with
the Overseas Private Investment Corporation (OPIC) in December 1982. The
agreement allows OPIC to insure U.S. investments against risks resulting
from expropriation, inconvertibility, war or other conflicts affecting
public order. OPIC programs are currently used in Uruguay.

On June 20, 2002 the Uruguayan Government eliminated its decade-long
exchange rate regime policy and allowed the peso to float freely. (The
previous regime consisted of a 12%-wide band in which the peso-dollar
exchange rate floated and permitted a de-minimis annual depreciation of
33%.) The action was in response to recent economic problems. There is
no black market for currency exchange. The U.S. Embassy uses the
official rate when purchasing local currency.

### Labor 

The Uruguayan labor force of some 1.2 million is well educated and adept
in the application of modern industrial techniques. The government has
instituted technical training programs to help meet industry\'s skilled
labor requirements. At 97%, Uruguay's literacy rate is the highest in
Latin America and on par with that of the United States.

Uruguay's social security overhead is high and increases an employer's
basic wage costs by almost 50%. A law approved in May 1998 provides
incentives for companies that hire young people, including a reduction
of between 12-18% in employer social security and healthcare
contributions. In May 2001, the Uruguayan Government passed a bill that
permits further reductions in social security payments by employers in
several sectors. The social security system currently allows for
retirement at age 60 for both men and women. Workers who become disabled
on the job receive a monthly payment from the government equal to 70% of
their salaries plus free medicine and medical care. The value of local
manufactured goods reflects a relatively high percentage of labor
content. Legislated labor and social security benefits add significantly
to a firm\'s cost structure.

According to official statistics, the latest unemployment rate
(Feb-April 2003) was 18.9% (approximately 200,000 people). The
employment rate for the same period was 47.2%, and the activity rate was
58.2%. GDP contraction and an investment slump have been the key factors
behind the unemployment rate. The unemployment rate has also increased
as a result of several firms terminating their operations or
implementing technical reconversion programs that made them more
capital-intensive. The government provides six months of unemployment
benefits for workers who have been laid off, and is examining the
possibility of spreading the same amount of benefits out over a period
of nine months. Real salaries contracted 0.3 and 10.7% in 2001 and 2002,
respectively.

Uruguay has ratified a large number of ILO conventions that protect
worker rights, and generally adheres to their provisions. The Uruguayan
constitution guarantees workers the right to organize and strike, and
union leaders are protected by law against dismissal for union
activities. Labor unions are independent of government and political
party control. Sympathy strikes are legal. The level of unionization in
the private sector has steadily decreased since the return of democracy
in 1985 due to: 1) a loss of jobs in the industrial sector; 2) an
increase in jobs in the informal sector and in smaller companies where
it is more difficult to form unions; and 3) a lack of Ministry of Labor
initiative in regulating labor negotiations. There is no collective
bargaining activity, and there have been no major labor union
achievements since 1985. Current labor concerns include those related to
salaries, the reinstatement of collective bargaining mechanisms,
housing, job creation, and opposition to the government\'s economic
policies. A February 2003 public opinion poll indicated that 52% of the
population distrusts the leaders of the labor umbrella movement
(PIT/CNT).

### Foreign Trade Zones (FTZ) / Free Ports

All types of commercial, industrial, and service activities can be
performed within the free trade zones. Activities carried out in a free
trade zone are considered as taking place outside of the national
territory. When goods from a free trade zone are introduced into the
rest of the country, they are treated as "imports."

Law No. 15921 of December 17, 1987 regulates the operation of FTZs
within the country. The law allows storage and warehousing,
manufacturing, and financial and data processing, and related activities
to take place within FTZs. Nine FTZs are located throughout the country
(one public, one mixed ownership, and seven private.) As MERCOSUR
regulations treat products manufactured in all member state FTZs as
extra-territorial, products manufactured by Uruguayan or foreign firms
in Uruguayan FTZs are not eligible for MERCOSUR certificates of origin.
Products manufactured in FTZs do not benefit from any MERCOSUR customs
union advantages and must pay the MERCOSUR common external tariff when
entering any MERCOSUR member country.

Both local and foreign-owned industries operating in an FTZ enjoy
several advantages. They are exempt from all domestic taxes in effect or
which may be created. There are two groups of exemptions \-- customs
duties and tax exemptions. The first group is applicable to the entry
and exit of goods, while the second group is exclusively granted to the
entities which have become free trade zone tenants and whose contracts
the General Trade Authority -- Free Trade Zone Department has duly
approved. The only tax not covered by these exemptions is the employer
contribution to social security for Uruguayan employees. Uruguayans must
comprise 75% of the labor force employed by a user of the zone. The
employer is free from payment of social security taxes for non-Uruguayan
employees if those employees waive coverage under the Uruguayan social
security system.

Goods, services, products or raw materials of foreign and Uruguayan
origin may be brought into the zones, held there, processed, and
re-exported without payment of Uruguayan customs duties and import taxes
(goods of Uruguayan origin re-entering into FTZs will be treated as
Uruguayan exports for all tax and other legal purposes.) Goods that
enter Uruguayan customs territory from FTZs are subject to customs
duties and import taxes. Industrial or commercial government monopolies
are not honored within FTZs.

######## Foreign Direct Investment Statistics

Foreign direct investment (FDI) in Uruguay has been low (even by Latin
American standards) in part because of the country's small market size,
the lack of major privatizations, and the small number of firms that
base their MERCOSUR-wide operations locally. At 1.1%, Uruguay\'s FDI/GDP
ratio for the 1997-2001 period is well below the Latin
American/Caribbean average and that of its Southern Cone neighbors
(Latin America/Caribbean 3.8%, Chile 7.5%, Brazil 4.4%, Argentina 3.9%,
Paraguay 2.1%. Source: World Bank Development Indicators)

Since investments need not be registered, official statistics are not
very reliable. According to the Central Bank, the stock of FDI declined
from \$2.4 billion in December 2001 to \$1.4 billion in December 2002,
mostly as a result of the fall in the asset value of foreign-owned banks
and firms following the sharp 2002 economic contraction and devaluation.

A 1999 study by the Uruguayan Government identified 756 foreign
companies, including firms with foreign capital participation. FDI in
the non-financial sector amounted to \$2.4 billion in the 1995-1999
period. The overall stock of FDI added up to \$5.6 billion as of 1999.
The study has not been updated.

According to the study, the United States was the largest single
investor in Uruguay (33% of overall FDI), followed by Argentina and
Spain. North America, Europe and MERCOSUR each accounted for one-third
of the FDI. Various US firms have ceased operating in Uruguay since the
beginning of the economic crisis in 1999, and there have been few new
U.S. entrants.

Although figures on investment by sector are unavailable, most foreign
investment in recent years has gone into forestry-related activities,
industry, construction (i.e. hotels, office buildings and
infrastructure), and mining.

Host country contact information for investment-related inquiries

Mr. Victor Angendscheidt

Executive Director

Uruguay XXI

Direccion de Promocion de Exportaciones e Inversiones

Plaza Independencia 831, of. 611

Montevideo, Uruguay

Tel: (5982) 900-2912 / 900-0318; Fax: (5982) 900-8298

E-mail: uruxxi@adinet.com.uy; web page:
[http://www.uruguayxxi.gub.uy](http://www.uruguayxxi.gub.uy/)

**Chapter 8. Trade and Project Financing**

**Brief Description of Banking System**

Uruguay's banking system is composed of 4 government-owned banks
(including the Central Bank), 16 private banks, 7 financial
institutions, 7 offshore banks, and 5 savings and loans organizations.

The public banking system consists of the Central Bank, Banco de la
República Oriental del Uruguay (BROU), Banco Hipotecario del Uruguay
(BHU), and Nuevo Banco Comercial. The Central Bank formulates monetary
and exchange policies in coordination with the Executive Branch, issues
currency, and manages the country's international reserves. It also
supervises banks and insurance firms. It has no retail operations.

BROU is Uruguay's largest bank, and offers loans at the lowest rates and
best terms. As of November 2002, it held 40% of overall private sector
deposits and had provided over one-third of total credits to the
resident private sector. As a result of the banking crisis, in August
2002, BROU froze dollar-denominated time deposits and established a
schedule for their repayment in annual installments over a three-year
period (25% of the deposit in the first year, 35% in the second and 45%
in the third). In 2003, BROU unfroze the first tranche of time deposits
almost two months ahead of schedule. Nevertheless, the vast majority of
depositors kept their savings at the bank.

The mortgage bank, BHU, is the leading supplier of housing loans. During
the banking crisis, the government transferred BHU's dollar-denominated
time deposits to BROU. The Uruguayan Government has agreed with the IMF
to restructure and strengthen BHU as a result of BHU's severe financial
difficulties.

Insurance provision was a government monopoly until the mid-1990s. In
1996, a law was passed to demonopolize the insurance sector, except for
workers´ compensation. Private firms are now allowed to compete with the
government-owned provider, Banco de Seguros del Estado (BSE).

The 2002 banking crisis resulted in the closure of four banks (Banco
Comercial, Banco de Credito, Banco Montevideo and Banco Caja Obrera) and
the creation of a new one (Nuevo Banco Comercial), which is comprised of
the assets and liabilities of all of the closed banks except for Banco
de Credito. Although Nuevo Banco Comercial is 100% government-owned, it
is privately operated. Banco de Credito (formerly 51% owned by the
government and 49% by the Moon Group) has been permanently closed.

Private banks supply Uruguay\'s private sector with short-term,
dollar-denominated credit and receive mostly dollar-denominated deposits
(almost 95% of the private sector\'s deposits in the private commercial
banking system are dollar-denominated.) Most private banks, including
US-owned ones, successfully weathered last year's banking crisis and
honored all their deposits in a timely manner.

Uruguay had traditionally been regarded as a safe-haven for Argentine
depositors, and before the 2002 banking crisis, they held about 40% of
total deposits. However, many Argentine depositors withdrew their
deposits in 2002 and their share dropped to about 30% by the end of
2002.

Offshore financial institutions operate with limited functions \-- e.g.
they may neither accept resident deposits nor offer checking account
services.

(Please refer to Section 2 of Chapter 2 for a detailed description of
2002's banking crisis.)

### Foreign Exchange Controls Affecting Trading

There are no foreign exchange controls which affect trading.

### General Availability of Financing

The Inter-American Development Bank provides major project financing.
Other entities such as the World Bank and Eximbank also operate in
Uruguay. In addition, foreign investors have ready access to local
financing sources such as the Banco de la República, other banks,
government securities and the use of repatriated funds. Debt-equity swap
arrangements are also in use.

The current economic situation has led to a decrease in credit offered
by local commercial institutions. As of July 2003, private institutions
charged first-line and over-the-counter customers dollar-denominated
interest rates of 11% and 15%, respectively. Interest charged on credit
card balances averaged 21%.

GSM 102/103 credit assistance programs are available to the Uruguayan
private sector. These credit guarantee programs reduce the risk of
nonpayment to U.S. banks that extend credit to Uruguayan banks for the
financing of U.S. agricultural exports.

**How to Finance Exports/Methods of Payment**

The international banking departments of major U.S. banks and special
programs under Eximbank, Overseas Private Investment Corporation, and
the Small Business Administration generally finance U.S. exports.
Exports are usually financed through export letters of credit, sales on
open account or drafts on foreign buyers. There are no foreign currency
restrictions in Uruguay. Payment for any kind of imports can be made in
cash or on the terms agreed by the parties (i.e. a letter of credit or a
sight draft with deferred payment.)

### Types of Available Export Financing and Insurance

The Overseas Private Investment Corporation (OPIC) offers investors
insurance against currency inconvertibility, damage or interruption of
operations from war, expropriation and political risk. OPIC also
provides U.S. lenders with protection against both commercial and
political risk by guaranteeing repayment of the principal and interest
on loans made to eligible investors.

Available project financing, including lending from multilateral
organizations

Some of the major sources of project financing include:

A. Export-Import Bank (Eximbank): Eximbank provides U.S. exporters with
several financing programs, including working capital guarantees, export
credit insurance, commercial bank guarantees, medium-term credits, small
business credits, direct loans to foreign purchasers, and financial
guarantees. Eximbank finances all types of U.S. goods and services as
long as they contain at least 50% U.S. content and are not
military-related. Further information on Eximbank\'s programs may be
obtained at 1-800-565-exim. Eximbank's Uruguay Desk Officers may be
contacted by phone at 202-565-3913, by fax at 202-565-3931, or at
www.exim.gov.

B. Overseas Private Investment Corporation (OPIC): OPIC\'s programs
include loans and loan guarantees, investment funds, and political risk
insurance (currency inconvertibility, expropriation, and loss of assets
or income caused by political violence). OPIC may be contacted at
202-336-8400 or at www.opic.gov.

C. Commodity Credit Corporation (CCC): The CCC finances exports of U.S.
agricultural commodities. The CCC may be reached by phone at (202)
720-6301 or by fax at (202) 690-0727.

D. Small Business Administration (SBA): SBA\'s export revolving line of
credit loan helps small businesses export their products. SBA may be
contacted at 1-800-827-5722 or at www.sba.gov.

E. World Bank and Inter-American Development Bank: Both banks offer
programs that allow U.S. companies to compete in major international
infrastructure projects. The public information centers of both banks
may be contacted through 202-458-5454 (or www.worldbank.org) and
202-623-2096 (or www.iadb.org) respectively.

F. Trade and Development Agency (TDA): TDA has invested several million
dollars in Uruguay for feasibility studies and other activities that
support infrastructure development and modernization projects. TDA may
be contacted at 703-875-4357 or at www.tda.gov.

Several States also have their own export financing programs.

### Types of projects receiving financing support

Most government tenders receive financing support.

### List of banks with correspondent U.S. banking arrangements

All local banks have correspondent banking arrangements with some major
U.S. bank.

**U.S. Financial / Lending Institutions Operating in the Local Economy**

American Express Bank

Tel: 5982-916-0092, Fax: 5982-916-2245;

web: [http://www.americanexpress.com/privatebank]{.underline}

Citibank

Tel: 5982-915-5687; Fax: 5982-916-0645; web:
[http://www.citibank.com.uy](http://www.citibank.com.uy/)

BankBoston

Tel: 5982-916-0076; Fax: 5982-916-2209; web:
[http://www.bankboston.com.uy](http://www.bankboston.com.uy/)

# **Chapter 9. Business Travel**

**Business Customs**

Business dress and appearance, as well as one\'s general approach to
business relations, should be very conservative. An advance appointment
for a business visit is usually necessary and considered a customary
courtesy. Punctuality is generally observed. Typically, business is
discussed after social amenities. Business cocktails and lunches are
common. Business breakfasts, while not unheard of, are uncommon.

### Travel Advisory and Visas

U.S. citizens need a valid American passport, but visas are not required
for holders of regular passports. Those traveling on diplomatic or
official passports must have a valid visa in addition to the passport.
Travel advisories, if any, can be accessed at
[http://uruguay.usembassy.gov](http://uruguay.usembassy.gov/) or
[http://travel.state.gov](http://travel.state.gov/)

Business and tourist stays are limited to 90 days and may be extended
for an additional 90 days.

No inoculations are currently necessary for entry. International
travelers are advised to contact their local public health department,
physician or travel agent at least two weeks before departure to obtain
current information on health requirements.

**Holidays**

Jan. 1 New Year\'s Day

Jan. 6 Epiphany

Feb/Mar. Two days for Carnival (6 weeks before Holy Week)

Mar/Apr. Five days for Holy Week (dates vary from year to year)

Apr. 19 Landing Day of the \"33 Orientales\"

May 1 Labor Day

May 18 Battle of Las Piedras

Jun. 19 Birthday of Artigas

July 18 Constitution Day

Aug. 25 Independence Day

Oct. 12 Columbus Day

Nov. 2 All Saints Day

Dec. 25 Christmas

Note: Some holidays that fall on a Tuesday, Wednesday, or Thursday are
transferred to the preceding Monday or following Friday.

### Work week

Normal business hours are Monday through Friday from 9:00 a.m. -- 7:00
p.m. Banks' public hours are Monday through Friday from 1:00 -- 5:00
p.m. Stores are also open on Saturdays from 9:00 a.m. to 1:00 p.m.
Shopping centers are open every day from 10:00 a.m. until 10:00 p.m.

### Business Infrastructure

International telephone and fax services are efficient but expensive.
Uruguay\'s telephone system is fully digitized. There is widespread use
of cellular phones. International phone cards with \"dial-USA\"
features, such as ATT, MCI and Sprint, are accepted.

Montevideo has several five-star category hotels. There are five
U.S.-managed hotels in Montevideo (Sheraton, Radisson, Holiday Inn, Best
Western, Days Inn) and four in the seaside resort of Punta del Este
(Conrad-Hilton, Days Inn, Best Western, Choice).

Several airlines have service to Montevideo\'s Carrasco International
Airport from Europe and other parts of Latin America. There are
currently two daily U.S.-carrier (American Airlines and United Airlines)
flights to and from the U.S. Both flights have a stopover in Buenos
Aires. Internal transportation is mainly by car or bus. Within
Montevideo, bus and taxi services are extensive, safe and inexpensive.

Uruguay observes standard time (GMT-3), which is either one or two hours
ahead of Eastern Standard Time depending on U.S. Daylight Savings Time.

Electrical current is alternating 50-cycle, 220 volts, single and triple
phase. Specially requested electric power supply to industry may be
three-phase, 380 or 415 volts, 50 cycles. Some hotels offer dual
voltage.

### Temporary Entry of Goods

There are no restrictions on the temporary entry of business-related
equipment (i.e. laptops, etc.) Refundable deposits may be required and
are payable at the point of entry.

U.S. business travelers are encouraged to obtain a copy of the \"Key
Officers of Foreign Service Posts: Guide for Business Representatives\"
available for sale by the Superintendent of Documents, U.S. Government
Printing Office, Washington, D.C. 20402. Tel: (202) 512-1800, Fax: (202)
512-2250. Business travelers seeking appointments with U.S. Embassy
Montevideo officials should contact the Commercial Section in advance.
The Commercial Section can be reached by telephone at (5982) 418-7777
ext. 2325, fax (5982) 418-8581, or e-mail at
montevideo.office.box@mail.doc.gov.

# 

**Chapter 10. Economic and Trade Statistics**

**Appendix A: Domestic Economy**

(\$millions, except where noted)

> **Source 2003**
>
> **of data 2001 2002 Proj.**

GDP 1/2 19,800 12,321 10,500

GDP Growth Rate (%) 1/2 -3.1 -10.8 -1.5

GDP per Capita (\$) 1/2 5,585 3,500 3,100

Central Government

Spending As % of GDP 1/2 25 27 25

Inflation (%) 1/2 3.6 25.9 20.0

Unemployment (%) 3 15.2 16.7 18.3

Central Bank Net

International Reserves 1/2 2,323 777 1,400

Average Exchange

For \$1.00 1/2 13.3 21.26 28.8

Public Debt

(% of GDP) 1/2 54.1 88.6 106.2

U.S. Economic Assistance 4 N/A 6.4 7.4

(of which)

INL - 4 N/A 0.1 0.1

Humanitarian Support (in kind) 4 N/A 0.6 1.6#

Military - 4 N/A 5.1 5.1

Public Diplomacy - 4 N/A 0.6 0.6

######## Appendix B: Trade

Trade (\$millions, except where noted)

**Source 2003**

> **of data 2001 2002 Proj.**

Total Country Exports of

Goods and Services 1/2 3,276 2,658 2,845

Total Country Imports of

Goods and Services (CIF) 1/2 3,273 2,463 2,150

Imports of Goods

from U.S. (CIF) 1/2 271 164 120

Exports of Goods

to U.S. (FOB) 1/2 171 135 150

Sources of data:

1 - Central Bank of Uruguay (CB)

2 - Embassy calculations based on CB data, Uruguayan Government economic
program submitted to IMF and estimates

3 - National Institute of Statistics (INE)

4 - Embassy Offices

\# - Increase due to urgent humanitarian needs caused by 2002 economic
crisis

# **Chapter 11. U.S. and Country Contacts**

# 

**U.S. Embassy Trade-Related Contacts**:

Joyce Wong

Economic/Commercial Officer

American Embassy Montevideo

UNIT Econ 4510

APO AA 34035

Tel: (5982) 418-7777 ext. 2329

Fax: (5982) 418-8581

E-mail: WongJS3@state.gov

or <Montevideo.office.box@mail.doc.gov>

[http://www.buyusa.gov/en]{.underline}

American Chamber or Bilateral Business Councils

Dr. Nicolás Herrera

President

American Chamber of Commerce

Plaza Independencia 831, of. 209

Tel: (5982) 908-9186

Fax: (5982) 908-9187

e-mail: <info@ccuruguayusa.com>

[http://www.ccuruguayusa.com](http://www.ccuruguayusa.com/)

Country Trade or Industry Associations in Key Sectors

Cr. Daniel Soloducho, President

Union of Exporters

Rincón 454, piso 2

Montevideo, Uruguay

Tel: (5982) 917-0105; Fax: (5982) 916-1117

[http://www.uruguayexporta.com](http://www.uruguayexporta.com/)

Ing. Diego Balestra, President

Chamber of Industries

Av. Libertador Lavalleja 1672

Montevideo, Uruguay

Tel: (5982) 901-5000; Fax: (5982) 902-2567

[http://www.ciu.com.uy](http://www.ciu.com.uy/)

Mr. Horacio Castells Jr., President

Uruguayan Chamber of Commerce

Rincón 454

Montevideo, Uruguay

Tel: (5982) 916-1277; Fax: (5982) 916-1243

[http://www.camaradecomercio.com.uy](http://www.camaradecomercio.com.uy/)

Country Government offices that deal with key sectors and/or significant
trade-related activities

Ministry of Industry, Energy and Mining

Dr. Pedro Bordaberry, Minister

Rincón 747

Montevideo, Uruguay

Tel: (5982) 900-0231; Fax: (5982) 902-1245

[http://www.miem.gub.uy](http://www.miem.gub.uy/)

Ministry of Economy and Finance

Dr. Alejandro Atchugarry, Minister

Colonia 1089, piso 3

Montevideo, Uruguay

Tel: (5982) 902-1017; Fax: (5982) 901-3820

[http://www.mef.gub.uy](http://www.mef.gub.uy/)

Ministry of Tourism

Dr. Pedro Bordaberry, Minister

Av. del Libertador 1409, piso 4-6

Montevideo, Uruguay

Tel: (5982) 900-4148; Fax: (5982) 902-1624

[http://www.turismo.gub.uy](http://www.turismo.gub.uy/)

Ministry of Transport and Public Works

Ing. Lucio Cáceres, Minister

Rincón 561

Montevideo, Uruguay

Tel: (5982) 915-7386; Fax: (5982) 916-2893

[http://www.mtop.gub.uy](http://www.mtop.gub.uy/)

Ministry of Agriculture and Fishing

Ing. Agr. Martin Aguirrezabala, Minister

Constituyente 1476

Montevideo, Uruguay

Tel: (5982) 418-2256; Fax: (5982) 409-9623

[http://www.mgap.gub.uy](http://www.mgap.gub.uy/)

Country Market Research Firms

Aim/Burke-Add

Ing. Francisco Elices, Director

Colonia 933, piso 4

Montevideo, Uruguay

Tel: (5982) 902-6470; Fax: (5982) 902-1911

PricewaterhouseCoopers

Dr. Alberto Faget, Principal Partner

Cerrito 461, 1st floor

Montevideo, Uruguay

Tel: (5982) 916-0463; Fax: (5982) 916-0605

Equipos Consultores

Cesar Aguiar, Director

Bulevar Artigas 1098

Montevideo, Uruguay

Tel: (5982) 708-6362; Fax: (5982) 708-6599

Ernst and Young

Cr. Ricardo Villarmarzo, Partner

18 de Julio 984, piso 4

Montevideo, Uruguay

Tel: (5982) 902-3147; Fax: (5982) 902-1331

KPMG

Cr. Miguel Larrimbe, Partner

Plaza Cagancha 1335, Piso 7

Montevideo, Uruguay

Tel: (5982) 902-4546; Fax: (5982) 902-1337

Oikos Consultora

Cr. Elbio Scarone, Director

Soriano 898, esc. 401

Montevideo, Uruguay

Tel: (5982) 900-1504; Fax: (5982) 901-3975

### Country Commercial Banks

U.S. banks operating in Uruguay include:

[American Express Bank International Banking Corp.]{.underline}

Mara Mattozo, General Manager

Rincón 477, 8^th^ Floor

Montevideo, Uruguay

Tel: (5982) 916-0092, Fax: (5982) 916-2245

<http://www.americanexpress.com/privatebank>

##### BankBoston

Horacio Vilaró, General Manager

Zabala 1463

Montevideo, Uruguay

Tel: (5982) 916-0076; Fax: (5982) 916-2209

[http://www.bankboston.com.uy](http://www.bankboston.com.uy/)

##### Citibank 

Constantino Gotsis, General Manager

Cerrito 455

Montevideo, Uruguay

Tel: (5982) 915-5687; Fax: (5982) 916-0645

http://[www.citibank.com.uy](http://www.citibank.com.uy/)

Other banks include: (list includes only central offices in Montevideo,
Uruguay)

+------------------------+----------------------+---------+----------+
| Bank                   | Address              | Phone   | Fax      |
|                        |                      | 011     |          |
|                        |                      | (598+2) | 01       |
|                        |                      |         | 1(598+2) |
+------------------------+----------------------+---------+----------+
| ABN/AMRO               | Avda. 18 de Julio    | 9       | 900-9798 |
|                        | 999                  | 03-1073 |          |
+------------------------+----------------------+---------+----------+
| ACAC                   | Blvd. Artigas 1952   | 4       | 916-4230 |
|                        |                      | 80-5957 |          |
+------------------------+----------------------+---------+----------+
| Banca Nazionale de     | 25 de mayo 575       | 9       | 916-2005 |
| Lavoro                 |                      | 16-2030 |          |
+------------------------+----------------------+---------+----------+
| Banco Republica (BROU) | Cerrito 531          | 9       | 916-1276 |
|                        |                      | 15-0205 |          |
+------------------------+----------------------+---------+----------+
| BBVA                   | Avda 18 de Julio     | 9       | 916-1675 |
|                        | 1099                 | 02-9339 |          |
+------------------------+----------------------+---------+----------+
| Nuevo Banco Comercial  | Cerrito 400          | 9       | 915-3569 |
|                        |                      | 16-0541 |          |
+------------------------+----------------------+---------+----------+
| Discount Bank          | Rincon 473           | 9       | 916-0890 |
|                        |                      | 15-5923 |          |
+------------------------+----------------------+---------+----------+
| Banco Santander        | Cerrito 449          | 9       | 916-3685 |
|                        |                      | 16-0656 |          |
+------------------------+----------------------+---------+----------+
| HSBC Bank              | Ituazingo 1389       | 9       | 916-0125 |
|                        |                      | 15-3393 |          |
+------------------------+----------------------+---------+----------+
| Banco Surinvest        | Rincon 530           | 9       | 916-0241 |
|                        |                      | 16-0177 |          |
+------------------------+----------------------+---------+----------+
| Banco Galicia          | L.A. de Herrera 1248 | 6       | 628-3989 |
| (suspended by the      | P22                  | 28-1230 |          |
| Central Bank as of     |                      |         |          |
| July 2003)             |                      |         |          |
+------------------------+----------------------+---------+----------+
| Banco Sudameris        | Rincon 500           | 9       | 916-4292 |
|                        |                      | 15-0095 |          |
+------------------------+----------------------+---------+----------+
| Lloyds TSB Bank        | Zabala 1500          | 9       | 916-1262 |
|                        |                      | 16-1370 |          |
+------------------------+----------------------+---------+----------+
| Banco de la Nacion     | Juan C. Gomez 1372   | 9       | 9164582  |
| Argentina              |                      | 16-0078 |          |
+------------------------+----------------------+---------+----------+

Multilateral Development Bank Offices in Country

Inter-American Development Bank (IADB)

Martin Stábile, Representative

Andes 1365

Montevideo, Uruguay

Tel: (5982) 902-0444; Fax: (5982) 901-6583

Others (in the U.S.):

TPCC (Inter-Agency Trade Promotion Coordinating Committee)

Trade Information Center in Washington D.C.

Tel: 1-800-USA-TRADE

U.S. Department of Commerce

Dondi Ojeda

Uruguay Desk Officer

Tel: (202) 482-0703; Fax: (202) 482-4157;

E-mail: <dondi.ojeda@mail.doc.gov>

[http://www.ita.doc.gov](http://www.ita.doc.gov/)

[http://www.usatrade.gov/website/website.nsf]{.underline}

U.S. Department of State

Joni Scandola

Uruguay Desk Officer

Tel: (202) 647-2296; (202) -736-7376

http://www.state.gov/p/wha/ci/c2901.htm

U.S. Department of State

Office of the Coordinator for Business Affairs:

Tel: (202) 746-1625; Fax: (202) 647-3953

[http://www.state.gov/e/eb/cba/]{.underline}

U.S. Department of Agriculture

Foreign Agriculture Service

Trade Assistance and Promotion Office

Tel: (202) 720-7420

[http://www.fas.usda.gov](http://www.fas.usda.gov/)

[http://www.usda.gov]{.underline}

Or

Philip Shull

Agricultural Attaché

American Embassy Buenos Aires

Tel: (5411) 4777-8054; Fax: (5411) 4777-3623

E-mail: shullp@fas.\$a.gov

# **Chapter 12. Market Research** 

The Embassy does not prepare complete market research reports but can
arrange with a private contractor to do so at a client's request. The
Embassy reports International Market Insights (IMI) on the U.S.
Department of Commerce's system and they can be accessed on
[http://www.buyusa.com](http://www.buyusa.com/) or
[http://www.usatrade.gov](http://www.usatrade.gov/). The following
Market Overview Reports (MORs) are available from the Commercial Section
in Montevideo and include best prospects sectors for U.S. exports:
Forestry, Telecommunications, Medical equipment, Computer Software and
Hardware Equipment, Tourism, Ports, and Environmental Technologies.
Interested parties may access these reports by contacting the Embassy's
Commercial Section Tel: (5982) 418-7777 ext. 2325 or by e-mail at
montevideo.office.box@mail.doc.gov.

# **Chapter 13. Trade Event Schedule** 

U.S. firms interested in participating in fairs in Uruguay should
contact the Embassy's Commercial Section
(<montevideo.offcie.box@mail.doc.gov>,Tel: (5982)418-7777, ext. 2325) or
check in [http://www.buy.usa.com](http://www.buy.usa.com/). The nearest
Department of Commerce district office can also provide the latest
information or help arrange individual trade programs. The
[www.buyusa.gov/uruguay/en](http://www.buyusa.gov/uruguay/en) web page
also lists trade events taking place in Uruguay.