Source: https://www.ascecuba.org/asce_proceedings/some-issues-raised-by-felipe-pazos-on-foreign-investment-in-cuba-during-its-transition-to-a-free-market-society/
Timestamp: 2019-04-26 15:46:21+00:00

Document:
No puedo decir a ustedes, porque no he pensado con suficiente detenimiento en el problema, cuales deberían ser las reglas para canalizar las entradas de capital en los primeros tiempos, pero si puedo indicarles que, a mi juicio, estas deberían orientarse en la dirección de abrir las puertas al capital que venga a aumentar la producción de bienes y servicios, y cerrarlas al que pretenda entrar con el solo propósito de adquirir activos ya existentes. Este criterio no resuelve enteramente el problema, porque las inversiones dirigidas a aumentar la producción necesitan adquirir activos ya existentes—terrenos, edificios ya construídos—pero nos ayuda a decidir en sentido afirmativo o negativo, según la mayor importancia de uno u otro propósito.
My assignment is to examine the continued vitality, in light of developments in Cuba since his paper was written in 1990, of Dr. Pazos’ assessment of the issues that will be raised during Cuba’s transition by foreign investment.
• The potential acquisition of Cuban economic assets by foreign investors at “bargain basement” prices due to deteriorated economic conditions in the island.
• The measures, if any, that the transition government should take to preclude the acquisition of Cuban economic assets by foreign investors at much below their real value.
• What forms of foreign investment should be favored (e.g., investment in new productive enterprises vis-à-vis acquisition of existing ones).
• To what extent should interests in state-owned enterprises should be conveyed to foreign investors.
• Potential competing claims to state-owned enterprises by the State, former owners, workers, and foreign investors. • The role of Cubans living abroad in investment in the island during the transition.
Mere enumeration of these issues shows the depth of Dr. Pazos’ appreciation of the complexity of the problems that will be raised by the resurgence of foreign investment in Cuba. What Dr. Pazos could not have predicted was the extent to which these issues, all of which remain unsolved, have become further complicated by events in Cuba since his paper was written.
In the early 1990s, upon the collapse of Communism in the Soviet Union and Eastern Europe and the attendant steep decline in the Cuban economy, Cuba started to move to attract foreign capital.6 In order to draw investment to the island, the government liberalized somewhat its investment practices. Amendments to the Cuban Constitution in 1992 eliminated important restrictions on foreign investment, permitting property ownership by mixed enterprises and the transfer of state property to joint ventures with foreign capital.7 These constitutional amendments enabled the institution of a less restrictive foreign investment regime.
The present state of Cuba’s foreign investment law is not unlike that of similar laws in Central and Eastern European countries, such as Hungary, the former Czechoslovakia, and Poland, prior to their transition to free-market economies.16 Like the Socialist governments in those countries, Cuba’s leadership is still imposing constraints on foreign investment in order to control the investment process.
1. Joint ventures, in which a Cuban partner and a foreign partner invest jointly in a project. (This option includes management contracts, in which the foreign venturer provides the management skills to run the enterprise, and the Cuban partner provides all or most capital assets—an arrangement particularly common in the tourism industry.) While the foreign investor has generally not been allowed to assume a majority interest in a joint venture, there have been instances in which majority ownership by the foreign venturer was approved.
Almost 400 enterprises have been established since 1990 utilizing one of these forms of foreign investment. 19 The most commonly used format has been the formation of joint ventures between the foreign party and a Cuban enterprise, which is either an existing state instrumentality or a “private” company controlled by the State.
As a consequence of the above described intervening events in Cuba, two new factors need to enter the analysis of foreign investment issues during the transition: the likely presence of significant foreign investments in place in Cuba at the start of the transition, and the existence of a somewhat imperfect but potentially usable foreign investment code. In particular, Law 77 (assuming it remains in effect at the time the transition takes place) provides a good starting point to address foreign investment issues, yet imposes constraints on the transition government’s initial steps towards dealing with those issues.
Another issue that follows from what forms of foreign investment should be allowed is whether there should be any restrictions on foreign equity participation in Cuban enterprises. Such restrictions are designed to ensure direct or indirect state control over the enterprises, particularly in socialist countries.28 In free-market countries, these restrictions (typically in the form of mandatory percentages of local equity participation in foreign-owned enterprises) are most often imposed in “strategic” industries such as utilities or telecommunications companies.
All equity participation restrictions should be abolished in Cuba, since they tend to deter foreign investment. Foreign investors should be able to use the same forms of business organization available to nationals, without equity participation restrictions.
The fourth and the fifth issues raised by Dr. Pazos are again related: to what extent should be stateowned enterprises be transferred to foreign investors and how should potentially competing claims to such enterprises by former owners, workers, foreign investors and the state itself should be resolved. Both issues revolve around the question of privatization of state-owned enterprises (“SOEs”), and how and to what extent should it be allowed to take place in a transition-period Cuba.
Privatization is a very broad topic that has been addressed at length by many analysts. There seems to be a consensus (at least, outside the island) that, in its transition to a free-market system, Cuba will need to privatize some, if not all, of its SOEs. There are five categories of issues that are raised in connection with the potential privatization of Cuba’s SOEs: (1) what SOEs should be subject to privatization, (2) whether the privatization should be full or partial, (3) whether the privatization process should be fast or slow, (4) who should become the owner of privatized SOEs, and (5) what methods should be used to accomplish the privatization.
On the second issue, it is possible to envision partial privatization schemes in which the State retains some interest (majority or minority) in the SOEs. Partial privatization has been undertaken, most notably, in China, where there has been a transfer of limited ownership interests in SOEs to private parties through the formation of corporations and the sale of stock in the SOEs, with the State retaining control over the management of the enterprise.31 In the case of a transition period Cuba, however, use of partial privatization methods would only seem appropriate where the State feels that the enterprise is sufficiently important that the State, while willing to relinquish some degree of ownership, feels it is necessary to maintain operational control.32 As noted above, such instances should be rare.
The third issue is a mixture of political and economic factors. A privatization program may be designed to occur gradually, or to take place as rapidly as the circumstances permit. Gradual privatization is used in countries which seek to retain a centrally-planned economic system. China, for example, is implementing a gradual privatization program designed to be completed over a long period of time; the program has been proved awkward and bound by political constraints. A rapid privatization program is one whose goal is to turn SOEs over to the private sector as quickly as practicable. Rapid privatization methods attract private investors and foster the re-emergence of a domestic enterprise sector. They are, therefore, the most appropriate methods for handling the transition from a state-controlled to a free-market economy.
The fourth issue is to whom should SOEs devolve. Setting aside the property claims resolution question, the issue becomes to whom should the enterprise be conveyed. A number of Cuban citizens living in the island may have, at the time of the transition, accumulated sufficient wealth to be able to purchase interests in some of the SOEs (particularly the smaller ones) once these are offered for sale to private parties. However, for the most part the decision should be among (1) conveying the property to the enterprise workers and managers, or (2) conveying it to foreign investors, as the only actors with sufficient resources to be able to pay even a fair value for the enterprise and its assets. While there have been instances in which enterprises have been “privatized” through essentially their takeover by their managers and employees, 33 such instances have typically led to the complete loss of the value of the asset to the State and the unfair enrichment of a few at the expense of the national patrimony.34 For that reason, there are advantages to conveying state-owned enterprises to foreign investors as part of the privatization process. Foreign investors bring with them capital resources, management skills, business know-how, and improved technology, plus the ability to incorporate local enterprises into the global networks of production and commerce. Allowing foreign investors to participate in the privatization of state-owned enterprises also enables the country to earn much-needed foreign exchange, an important consideration for what will certainly be a cash-strapped Cuba. Encouraging the participation by foreign investors, therefore, should be an important goal of the Cuban privatization program.
On the other hand, it is likely that foreign investors will be most interested in large or medium-sized enterprises. This will create a tension between the desire to turn those assets over to the private sector and a potential concern over the country’s “crown jewels” being taken over by foreigners.
One other factor that complicates the privatization issue are the above mentioned claims by U.S. nationals, Cuban Americans, and Cubans living in the island for the uncompensated expropriation of their assets after the Cuban Revolution.35 Those claimants and their successors in interest may seek restitution of the confiscated assets in lieu of compensation or other remedies.36 To the extent that any expropriation claims are resolved through restitution of the assets to their former owners, privatization of those properties will automatically occur. On the other hand, the existence of outstanding claims may seriously impede SOE privatization.
The fifth privatization issue is what form should the process take. The question has two parts: (a) who will conduct the privatization, and (b) what mechanisms and processes will be used to carry it out. Again, a full discussion of these issues is beyond the scope of this paper. Suffice it to say that the most successful privatization experiences have occurred in countries where the policy-making and implementation functions were separated, so that policy issues were resolved at a political level while the implementation was carried out by an independent administrative agency.37 This separation of functions ensured that the privatization program did not get bogged down in political debate, and avoided corruption and the misuse of political influence.
The second part of the issue is what process should be used to carry out the privatization. A number of methods are available to privatize an enterprise, including negotiated sales, auctions, tenders, stock offerings, and “voucher” or coupon privatizations. There is probably no single method that works best for all SOEs, thus one of the functions of the privatization agency would be to select in each instance the mechanism that is most suitable in light of the nature and condition of the enterprise and the State’s objectives in seeking to sell it.
As the above summary of the issues suggests and as Dr. Pazos made clear in his paper, one of the great challenges in Cuba’s transition to a free-market society will be to reverse the process that brought under state control all the capital assets in the country. That process reduced to vastly simplified forms the economic structures that existed at the time of the revolution. It stands to reason, therefore, that to undo what the revolution wrought will be complex and time consuming.
There is no single or preferred recipe for privatizing Cuba’s SOEs. It is not even necessary in every case that ownership pass from the state to a private party immediately: interim devices such as management contracts, leases, and concessions can be used to bridge the gap between state and private ownership and allow the state time to better prepare itself for the eventual divestiture of the enterprise. Once such a process gets under way, however, the difficult issues of ownership, compensation and related subjects will need to be faced.
The Cuban Constitution provides that Cuban citizenship is lost by becoming a citizen of a foreign country, and holding a dual citizenship is not allowed. 40 Thus, unless the new constitution or other transition period statute provides otherwise, those Cuban émigrés who have become naturalized citizens of other countries, including the United States, will have to renounce the other country’s citizenship and apply for reinstatement of their Cuban citizenship if they want to be treated as Cubans.41 If they fail to do so they will probably be deemed foreign nationals and will be in no different footing than other foreign investors with regard to the issues discussed here.
Whether as reinstated Cuban citizens or as resident aliens, a large number of Cuban expatriates, mainly Cuban-Americans, are likely to want to settle permanently on the island. This raises the question of whether the Cuban economy will be able to accommodate a mass return of expatriates. However, unlike other groups of returning émigrés, Cuban-Americans have largely achieved a high standard of living and are unlikely to become a burden on Cuba’s economy, and instead will be capable of bringing with them capital to invest in Cuba. Nonetheless, a transition Cuban government will need to impose admission criteria based on absence of criminal record and financial self-sufficiency before allowing Cuban-Americans or other foreign nationals to settle permanently in the island.42 The government may also have to decide to what extent the presence of a large number of Cuban expatriates, now turned into enterprise-owning investors, may create social tensions and what measures, if any, will need to be implemented to facilitate the absorption of th ese new arrivals into the Cuban society.
As this paper and others presented in our panel discussion demonstrate, the lessons that Dr. Pazos left with us and the issues he identified over a decade ago remain as valid as they are difficult. One can only hope that, once the transition process gets under way in Cuba, the country’s leaders will look back at Dr. Pazos’ work and let it serve as a guide in their governance efforts.
1. Felipe Pazos, Cátedra Carlos F. Díaz-Alejandro: Problemas Económicos de Cuba en el Período de Transición, in CUBA IN TRANSITION—PAPERS AND PROCEEDINGS OF THE FIRST ANNUAL MEETING OF THE ASSOCIATION FOR THE STUDY OF THE CUBAN ECONOMY 246 (August 1991).
3. For a general discussion of foreign investment in Cuba at the present time and during Cuba’s free-market transition, see Matias Travieso- Diaz, The Laws and Legal System of a Free-Market Cuba (Westport, Connecticut: Quorum Books, 1996) [hereinafter LAWS AND LEGAL SYSTEM], Chapter 5.
4. Business International Corporation, DEVELOPING BUSINESS STRATEGIES FOR CUBA 23 (1992) [hereinafter BUSINESS STRATEGIES FOR CUBA].
5. The first joint venture between the socialist regime and a capitalist firm since the Revolution was negotiated with the Spanish hotel chain of Sol-Meliá and resulted in the opening of a hotel in Varadero Beach in 1990. That hotel is 50% owned by the Spanish chain. BUSINESS STRATEGIES FOR CUBA, supra 4, at 24.
6. Cuban officials began to recruit foreign investors publicly in 1992. Thus, in an October 1992 interview with the Mexican news agency Notimex Carlos Lage, the Secretary of the Executive Committee of Cuba’s Council of Ministers, affirmed that “the Cuban government is open to foreign capital and to the creation of enterprises whose capital could be 50, 80, or 100% foreign capital.” Gillian Gunn, CUBA IN TRANSITION—OPTIONS FOR U.S. POLICY 34 (Gillian Gunn, ed., 1993) [hereinafter CUBA IN TRANSITION].
7. See CONSTITUCIÓN DE LA REPÚBLICA DE CUBA (1992) [1992 Constitution], published in Gaceta Oficial (Aug. 1, 1992) at 36 [hereinafter CONSTITUCION DE 1992], art. 23.
8. Council of State’s Lage on Expanding Foreign Investment, PRENSA LATINA, Oct. 30, 1994, available in F.B.I.S. (LAT-94-210), Oct. 31, 1994 at 12-13. Despite these broad assertions, the areas of the economy available for foreign investment have remained limited. Vice Minister for Foreign Investment Octavio Castilla has described the limits on foreign investment as follows: “The open features [of the new foreign investment law] do not commit in any case the capital or assets of sugar mills, railroads, machinery or even less the land. In other words, the country is still ours, under the old or the new legislation.” RADIO PROGRESO, Aug. 22, 1995 broadcast, on file with author. Cuba has made little change in these broad policies since they were first announced in 1995.
9. See, e.g., Banco Central de Cuba, INFORME ECONÓMICO 2000 [hereinafter INFORME ECONÓMICO 2000] at 37.
10. LEY NÚMERO 77 DE LA INVERSIÓN EXTRANJERA, published in Gaceta Oficial, September 6, 1995.
11. Law 77, art. 21(1). The Executive Committee of the Council of Ministers retains the sole power to approve the most important types of new foreign investments, including those in which the total capital contribution is in excess of $10 million; those in the form of enterprises with wholly foreign capital; those involving public works or services; those in which the foreign enterprise has foreign government participation; those involving the exploitation of natural resources; those involving the transfer of state assets or state-owned real estate; and investments involving military-owned enterprises. Id., art.21(2).
12. Id., art. 23(6). The law does not specify how that 60-day approval deadline is to be enforced, particularly against the Executive Committee of the Council of Ministers; nor does it state the consequences of that deadline being missed. The law also does not address the pre-application process of negotiations between the investor and the authorities. Foreign investment application approvals are contained in “investment authorizations,” which are official documents that set forth the conditions to which the investment is subject, and the objectives and authorized duration of the investment. Id., art. 24. The investor may seek clarification from MINVEC as to the conditions for the investment’s approval. Id., art. 25. The process of negotiating the terms of the venture and securing the investment authorization has been and remains extraordinarily dilatory. Mark Frank, Cuba Adopts Two-Track Foreign Investment Policy, REUTERS, Aug. 26, 2001 [hereinafter TWO TRACK POLICY].
13. Law 77, art. 33(3). MINVEC is to designate an “employing enterprise” which will be responsible for hiring workers and contracting them out to the foreign investor. Id.
14. Id., art. 34(1). However, in the event employee claims are settled by the labor supply agency, the agency has the right of indemnification against the foreign venturer. Id., art. 34 (2).
15. Minister Explains Foreign Investment Law, LA VANGUARDIA, Oct. 8, 1995, available in F.B.I.S. (LAT-95-198), Oct. 13, 1995, at 6- 7. Currently, the exchange rate is 26-27 Cuban pesos to the U.S. dollar. Top Econ Planner: Cuba Won’t See Another Major Crisis, ASSOCIATED PRESS, Oct. 29, 2001.
16. For example, up to 1988 foreign investors could only operate in Hungary as minority partners in joint ventures with domestic enterprises. Zbigniew Dobosiewicz, FOREIGN INVESTMENT IN EASTERN EUROPE 45 (1992).
17. See TWO TRACK POLICY, supra note 12.
18. CUBA IN TRANSITION, supra note 6, at 33.
19. The Cuban Central Bank reports that, as of the end of 2000, a total of 392 enterprises with foreign participation had been established. INFORME ECONÓMICO 2000, supra note 9, at 37.
20. Cuba’s socialist Constitution and the policy of the Cuban Government prohibit the transfer of title to Cuban economic assets to private parties. Typically, what foreign investors get is an usufructo (right to use) the properties for a period of up to 25 years, the maximum allowed by law. See 1992 CONSTITUTION, art. 15; Código Civil (Civil Code) (1987), Art. 208.1.
21. The current importance of foreign investment to the overall Cuban economy should not be overstated. Foreign investment represented as of 1999 only 7 percent of the gross fixed capital formation (capital created for the production of goods and services). It provides, however, a much higher percent of invested capital in the industries mentioned above. Nancy San Martin, Helms-Burton Law Fails To Stifle Investment In Cuba, UF Study Says, MIAMI HERALD, Aug. 26, 2001, p. E1.
22. See LAWS AND LEGAL SYSTEM, supra note 3, Chapter 4, for a discussion of the Cuban property expropriation issue.
23. See TWO TRACK POLICY, supra note 12.
24. Law 77, Art. 10.
26. Cheryl W. Gray et al., EVOLVING LEGAL FRAMEWORKS FOR PRIVATE SECTOR DEVELOPMENT IN CENTRAL AND EASTERN EUROPE (World Bank Discussion Paper No. 209) 8 (1993).
27. Zbigniew Dobosiewicz, FOREIGN INVESTMENT IN EASTERN EUROPE 45 (1992).
28. M. Sornarajah, THE INTERNATIONAL LAW ON FOREIGN INVESTMENT 104-107 (1994).
29. For a fuller discussion, see, e.g., LAWS AND LEGAL SYSTEM, supra note 3, Chapter 6.
30. See, e.g., Paul R. Krugman & Maurice Obstfeld, INTERNATIONAL ECONOMICS 262-283 (1991).
31. See, e.g., Fan Liufang, China’s Corporatization Experiment, 5 DUKE J. COMP. & INT’L. L. 149, 151 (Spring 1995). 32. It could be said that to some degree, partial privatization is happening in Cuba at the current time thanks to Law 77 and the government’s effort to bring in foreign investment. However, it should be kept in mind that the current foreign investment regime in Cuba prohibits the transfer of title to the underlying enterprise assets to the foreign investor, thus in that sense it does not amount to privatization but is only the conveyance of a limited interest in the use of the assets.
33. This has happened, most notably, in Hungary, whose 1989 Transformation Law failed to unambiguously establish ownership rights in either the state or natural persons. The law instead devolved ownership rights to the enterprise itself, “denationalizing” the assets and sanctioning self-management. Farid Dhanji & Branko Milanovic, PRIVATIZATION IN EASTERN AND CENTRAL EUROPE: OBJECTIVES, CONSTRAINTS, AND MODELS OF DIVESTITURE 22 (1991). “Spontaneous privatizations” resulting in the takeover of the enterprise by its former managers have also occurred in several former Soviet republics, most notably Russia and Ukraine. Simon Johnson, Heidi Kroll & Santiago Eder, Strategy, Structure, and Spontaneous Privatization in Russia and Ukraine, in CHANGING POLITICAL ECONOMIES: PRIVATIZATION IN POST-COMMUNIST AND REFORMING COMMUNIST STATES (Vedat Milor, ed., 1994).
34. Michael Mandelbaum, INTRODUCTION, in MAKING MARKETS: ECONOMIC TRANSFORMATION IN EASTERN EUROPE AND THE POST-SOVIET STATES (Shafiqul Islam and Michael Mandelbaum eds., 1993), at 181-82. Although Cuban employees of SOEs should not be given the right to initiate or veto their enterprise’s transformation, they may still be granted limited ownership rights in their enterprises. Some former communist states have allowed workers to purchase shares adding up to a minority interest in the company at a steep discount. Richard M. Phillips & Marian G. Dent, Privatizing Eastern Europe: A Challenge for the Nineties, in JOINT VENTURES AND PRIVATIZATION IN EASTERN EUROPE 448 (Practicing Law Institute Commercial Law and Practice Course Handbook Series No. 575 (1991). The same situation may take place in Cuba, and fashioning transformation laws that make the employees owners or part owners of the privatizing enterprise deserves serious consideration.
35. See, e.g., Matías F. Travieso-Díaz, Some Legal and Practical Issues in the Resolution of Cuban Nationals’ Expropriation Claims Against Cuba, 16 U. PA. J. INT’L BUS. L. 217 (1995); Matías F. Travieso-Díaz, Alternative Remedies in a Negotiated Settlement of the U.S. Nationals’ Expropriation Claims Against Cuba, 17 U. Pa. J. Int’l. Bus. L.659 (1996); Matias F. Travieso-Diaz, Legal and Practical Issues in Resolving Expropriation Claims, NEW YORK L.J., February 20, 1996.
36. Cuba may need, for political reasons, to provide comparable remedies to claimants living in the island to those given to Americans and Cubans living abroad. See, e.g., Matias F. Travieso-Diaz and Steven R. Escobar, Cuba’s Transition to a Free-Market Democracy: A Survey of Required Changes to Laws and Legal Institutions, 5 DUKE J. COMP. & INT’L L. 379, 412 (1995); Rolando H. Castañeda and George P. Montalván, Economic Factors in Selecting an Approach to Expropriation Claims in Cuba, presented at the Shaw, Pittman, Potts & Trowbridge Workshop on Resolution of Property Claims in Cuba’s Transition, Washington, D.C. 16 (January 1995).
37. United Nations, LEGAL ASPECTS OF PRIVATIZATION IN INDUSTRY 35-36 (1992).
38. Charles Vuylsteke, TECHNIQUES OF PRIVATIZATION OF STATE-OWNED ENTERPRISES, The World Bank (1988).
39. On immigration issues, see generally, Matías F. Travieso-Díaz, Immigration Challenges And Opportunities In A Post-Transition Cuba, 16 Berkeley J. Int’l L. 234 (1999).
40. Under Cuba’s constitutions, both pre- and post-revolution, a Cuban citizen who becomes a citizen of another country loses his Cuban citizenship. CONSTITUCIÓN DE LA REPÚBLICA DE CUBA (1940) [CONSTITUTION], art. 15 (CUBA), reprinted in 1 CONSTITUTIONS OF NATIONS 610 (Amos J. Peaslee ed. & trans., 2d ed.); see 1992 CONSTITUTION, supra note 7, art. 32. See also Reglamento de Ciudadanía (“Citizenship Regulations”), Gaceta Oficial (Mar. 3, 1944), Art. 33 [hereinafter REGLAMENTO].
41. It has been argued, based on the presumed continued vitality of Cuba’s 1940 Constitution (which in Art. 15(a) states that those Cubans who acquire another country’s citizenship lose their status as Cubans) that the automatic loss of citizenship provided by Art. 15(a) should not apply to Cuban exiles who have opted to become citizens of their country of residence because to do so would bar the exiles from “participating in the Cuban political process.” José D. Acosta, El Marco Jurídico-Institucional de un Gobierno Provisional de Unidad Nacional en Cuba, in CUBA IN TRANSITION—PAPERS AND PROCEEDINGS OF THE SECOND ANNUAL MEETING OF THE ASSOCIATION FOR THE STUDY OF THE CUBAN ECONOMY 61, 82 (August 1992). However, the opposite argument appears more persuasive: it is precisely to protect the Cuban political process from undue influence by those who have sworn allegiance to a foreign country that the automatic loss of Cuban citizenship provision for those who opt to become citizens of another country should remain in effect. In this context, it is instructive to recall that the process for regaining Cuban citizenship that was in place before 1959 was anything but automatic. It required a formal re-application for citizenship, followed by one year of continuous residence in Cuba, followed by another formal appearance before a public official, in order for the reinstatement of citizenship to become effective. REGLAMENTO, supra note 41, Art. 35.
42. While it may be argued that Cuba may not deny admission into the country to those of its nationals residing abroad, it would appear that, at least with respect to those who have lost their Cuban citizenship, Cuba has the right to impose and apply immigration standards to keep unfit persons from settling in the country. Indeed, before the Revolution, Cuba denied the right to acquire its ci tizenship to individuals who had been convicted of a felony, those of “dubious morality,” and those who advocated doctrines or principles “incompatible with the current organization of the Cuban state or with its democratic regime and form of government.” REGLAMENTO, supra note 6, Art. 25, 29.

References: art. 23
 art. 21
 art.21
 art. 23
 art. 24
 art. 25
 art. 33
 art. 34
 art. 34
 art. 15
 Art. 208
 Art. 10
 art. 15
 art. 32
 Art. 33
 Art. 15
 Art. 15
 Art. 35
 Art. 25