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A recently published law approves the treaty executed between Venezuela and China on cooperation for long-term financing. The treaty establishes that representatives from China will grant a line of credit to Venezuela to a maximum of $10 billion and Rmb70 billion. The Venezuelan representatives will pay for the line of credit through the sale of crude.

Only two consortia presented offers to participate in the incorporation of mixed companies that will develop the fields subject to the Carabobo Project bidding process. As such, the consortia were awarded the blocks for which they bid. The process has progressed rapidly and the National Assembly recently approved the incorporation of two mixed companies and established the main conditions for their incorporation.

The government has announced that the national interconnected power system is beyond its capacity and certain measures must be imposed in order to reduce power use. The measures include a compulsory 20% power reduction, regulated opening and working hours, scheduled electricity cuts and a ban on the use of incandescent or halogen lamps and light bulbs in advertisements.

Companies that are participating in the Carabobo Project bidding procedure (a project that involves upstream activities in the Orinoco Basin to produce extra heavy crude and its transport and upgrading) were recently invited to attend a meeting with the Ministry of the Popular Power for Energy and Petroleum. The purpose of the meeting was to reactivate the project, which was put on hold in June 2009.

The new Organic Law for the Development of Petrochemical Activities was published recently. The law imposes important restrictions on a sector that until now was fully open to foreign or national private investment. As a result of the law, new projects in this area cannot be carried out by entities that are not mixed companies with a state participation of at least 50%.

The organic law that reserves to the state the goods and services linked with hydrocarbon primary activities recently entered into force. As a result, the assets and services of oil service contractors that are required to carry out primary activities will be owned or carried out only by the state, PDVSA and its affiliates, and mixed companies controlled by the state. The possible impact of this law on private companies could be significant.

The Pro-competition Superintendency has approved TIM International NV's sale to Telvenco of the shares of the corporate capital of Digitel (the third-largest mobile phone operator in Venezuela) and the merger of Digitel with regional telephony service providers Digicel, Infonet and Digital Celular.

The draft Law Against Monopolies, Oligopolies and Unfair Competition is undergoing a period of public consultation. It incorporates significant amendments to the Law to Promote and Protect Free Competition, which is currently in force, and the various previous draft competition laws that had been presented for consideration to the National Assembly in the last few years.

The Pro-competition Superintendency has held that an advertising campaign to launch a new brand of the main mobile telephony operator in Venezuela did not constitute an act of unfair competition. The decision confirms the superintendency's view that the mere simulation or imitation of an advertising initiative is not sufficient to prove unfair conduct.

The Pro-competition Superintendency has recently ruled on cartel practices by the two major Venezuelan television broadcasting companies. It found clear evidence of concerted conduct between the two broadcasters in the sale of advertising space in open television.

The Pro-competition Superintendency has announced that it is investigating several complaints received recently. Among these is a complaint filed by the National Chamber of Communication Centres against telephone company CANTV, alleging that CANTV abused its dominant market position and restricted free competition.

The National Telecommunications Commission has refused to approve the acquisition by CANTV of the shares owned by TIM International BV in Corporación Digital CA. The Pro-competition Superintendency had previously held that the transaction would restrict competition.

Generally there is no minimum capital or equity requirement for companies wishing to do business in Venezuela. The aim of non-regulation is to foster commercial activity in times of domestic economic stability.

A recent Supreme Court decision may affect the commercialization structures of many multinational manufacturing companies. The decision establishes that shareholders and officers of companies that distribute manufacturers' products are deemed to be employees of the manufacturer, rather than owners of independent businesses.

Including: Foreign Investments; Foreign Exchange; Price Controls; Labour Legislation; Privatization; Shareholder Agreements; Doing Business; Domiciliation

The most recent amendment of the Income Tax Law has resulted in a restructuring of investment vehicles in Venezuela. Foreign investors will have to find other corporate structures that will permit the economic feasibility of large infrastructure projects.

The trend in Venezuelan law in the last decade to give companies and individuals the chance to request confidential treatment for the information they give to administrative authorities could change because of a new constitutional provision.