Uruguay has long owned and operated state monopolies in petroleum, rail freight, telephone service and port administration. However, passage of port reform legislation in April 1992 allowed for privatization of various port services. The state-owned natural gas company was privatized in late 1994. Government procurement practices are well defined, transparent and closely followed. Bid awards, however, often are drawn out and caught up in controversy.
Tenders are generally open to all bidders, foreign and domestic.
A government decree, however, establishes that local products or services of equal quality to, and no more than ten percent more expensive than foreign goods or services, shall be given preference. Among foreign bidders, preference will also be given to those who offer to purchase Uruguayan products. These are applied to neutralize unfair trade practices that threaten to damage national production activity or delay the development of such activities, and are primarily directed at Argentina and Brazil. The government provides a nine-percent subsidy to wool fabric and apparel producers using funds from a tax on greasy and washed wool exports. Certain provisions of the recently-passed patent law appear to be TRIPs inconsistent and Uruguay's failure to pass a new copyright law is also a problem.