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What makes a successful board?
Authored By: Lena Beck Roervig & Laura Espriu

Would you like a board where board members are participating actively in every meeting, come up with constructive unique ideas, constructive critique, follow-up and monitors to? Board members that use and respect each other’s skills and competencies?

Then you are looking for a High Performance Board.

The law and good governance gives the basis for the board’s work, but to develop into a High Performance Board requires that the board has:

  • The right Leadership
  • The right competencies
  • Constant Development

Leading a board is a multifaceted job. It is highly different from being a leader in a company. The board only meets a few times during the year, the members normally have several other priorities in their life and last, and but not least the members do not work closely together on a daily basis making ‘team-work’ more challenging.
Utilizing all the skills and knowledge the board members have can be a challenge and requires leadership that balance structure and routine with empathy and teambuilding skills.

There is no ‘one size fit’s all’ when discussing competencies on a board. The competencies you have on your board should reflect your mission, your strategy and goals. Further you have to take into consideration what challenges and opportunities you have. E.g. growth, internationalization or downsizing.
When looking for members for the board it is a natural tendency to immediately start thinking about WHO we know. The right way to 1) define WHAT competencies are needed and then 2) WHO has those competencies.

For many boards the actual work overshadow the work of developing the board itself. It is natural to focus on what needs to be done, but equally important is to focus on WHO should be doing it and what competencies are required to fulfill the future needs.
Setting up a structure and a method to develop the board and the competencies on the board will ensure that there is a pipeline of potential candidates and all board members contribute to the board development.

When you have the right leadership, the right competencies and you develop your board according to strategy and challenge’s, the last thing you need to ensure is that the board work as a team. Constructive critique, follow-up and monitor to improve requires that the board members trust each other and they can voice their ideas and worries in an encouraging environment. Good teamwork do not appear out of nowhere. It is a process that has to be actively worked with and nurtured on a constant level.

At Beck Global Consulting we offer four types of services helping to develop and form your High Performance Board.

Please let us know if you need assistance with your board development.

Author Biographies: 
Lena Beck Roervigis the Co-founder & CEO of Beck Global Consulting and has worked with executives from manager to board level, with significant individual P&L’s, across industries worldwide. She believes that great leadership produces outstanding performance and results. Her own success and the client’s success are naturally closely linked and she has the ability to make the clients follow through to reach their goals from the initial first conversation to transformation and implementation.

Lena has an international background, with a master’s degree from Copenhagen Business School and executive management education from INSEAD in France and Singapore and Henley Business School in England.  She is also engaged in pro-bono work for nonprofits.
Before starting her own consultancy business she worked in global companies within the industries banking, IT, oil, real estate, TV & Film Production and medical device. Further she has consulted within the businesses of railroad, housing administration, art, management consulting, PR, fashion and last but not least non-profits.

Laura Espriu is a Consultant at Beck Global Consulting.  Laura has a BA in Psychology, a Masters in Human Resources and a Certification as an Executive Coach. She is an active member of the International Coach Federation and the Organizational Development Network in NY.
Her professional experience has been across different geographies and cultures in various international markets. This has allowed her to realize that working on diversity themes is something that she loves as she takes advantage of her ability to build and maintain relationships and face new challenges with a great attitude.
Laura has recently been working on initiatives to empower Women and Leadership Development. As a woman, she truly believes that finding her own balance and raising her voice is essential to achieve success.

Her greatest achievement is to make people reach their full potential by inspiring them to discover their passion. She enjoys supporting organizations to identify talent and develop people’s skills that will contribute to the sustained growth of the company. Laura promotes growth with passion as the key for success.

Mexican Peso Weakens
Authored By: Lorena Reategui

The Mexican peso reached uncharted territory in mid-August 2015, falling to 16.90 per dollar, a nearly 15% decline year-to-date, making it one of the worst performers in emerging markets this year, alongside the Brazilian real which has fallen 25% in 2015 to 3.56 per dollar.  The slide is in reaction to falling oil prices, expectations that the U.S. Federal Reserve will raise interest rates, a local economy that has failed to meet growth expectations, and weakening emerging-market economies after China devalued the yuan.  The country’s central bank, the Bank of Mexico, recently cut its economic growth outlook for 2015 to between 1.7% and 2.5% from the previous range of 2.0% to 3.0%.

In response, Mexico has substantially bolstered its intervention program and policy makers have started spending international reserves (currently at approx. US $188 billion) to calm volatility and ensure liquidity amid peso lows and a strengthening dollar.  Indeed, in late July, the nation’s currency commission, run jointly by the finance ministry and the Bank of Mexico, decided to increase daily dollar auctions to US $200 million per day from US $52 million to support the peso.  It is also offering an additional US $200 million in auctions when the peso falls more than 1.0% in a single day.  Bank of Mexico Governor Agustín Carstens believes the currency intervention program has been effective in maintaining order in the exchange market by avoiding an artificial shortage of foreign currency.
Internal factors have also contributed to the peso’s slide.  Disappointment with the nation’s first oil auction, which missed government expectations and failed to attract sufficient investor interest, as well as public spending cuts, are adding to the pressure in currency markets.  The government lowered planned spending earlier this year by US $8.3 billion in response to falling oil prices and reduced economic growth.  It is expected that President Enrique Peña Nieto’s administration will prepare deeper cuts when it submits the 2016 budget plan to Congress in September.

Thus far, the peso depreciation has not had a major effect on inflation, which is currently at a four-decade low of 2.7%.  Lower energy and telecommunication costs resulting from the government’s strategic reforms have helped keep consumer prices at bay.  However, should the falling peso put upward pressure on inflation, the Bank of Mexico cautioned that it could raise interest rates despite the negative effect this would have on the economy’s fragile growth.  The Bank of Mexico has kept its benchmark interest rate at 3.0% since June 2014, but is widely expected to match any increases in U.S. rates.  Finance Minister Luis Videgaray maintains the country will remain vigilant of any necessary measures needed to support liquidity in the peso market.

Author’s Biography:
Lorena Reategui is an Associate at Frontera Capital Advisors, LLC where she brings analytical and research skills to each client project.
Ms. Reategui provides comprehensive financial and research analysis on client engagements and research projects throughout the Latin American region. She has developed complex databases and financial models for companies across a range of sectors, including but not limited to, real estate, hospitality, manufacturing, infrastructure and telecom.  Ms. Reategui conducts in depth due diligence and evaluation of transaction targets during the course of M&A deals. She also contributes to the development and execution of all published marketing materials at Frontera.

Prior to joining Frontera, Ms. Reategui graduated from Fordham University’s Fordham College at Lincoln Center with a B.A. double major in International Studies and Spanish Language and Literature. She obtained a Master of Arts from New York University’s Center for Latin American and Caribbean Studies (CLACS). Ms. Reategui is fluent in Spanish.

In addition to her work contributions, Ms. Reategui is an active volunteer in local charities and community organizations such as Camillus House – Women’s Shower Program, Educate Tomorrow, and Habitat for Humanity.

How Bombardier makes NAFTA work

The transportation giant uses the 20-year-old trade pact to design, build and assemble jets and railcars in Canada, the United States and Mexico.

When a Montreal, Canada startup began making snowmobiles in 1942, nobody could have guessed the company would become one of the world’s leading transportation manufacturers.

Today, Bombardier Inc. is the world's only manufacturer of both railcars and airplanes, with annual revenue of $9.4 billion CAD. The company employs more than 76,000 employees at 79 production and engineering sites.

Much of the company’s growth occurred in the past two decades. The expansion coincides with the 1994 passage of the North American Free Trade Agreement (NAFTA), which eliminated most tariffs on trade between Canada, Mexico and the United States, and established infrastructure for telecommunications and transportation among the three countries. NAFTA also allows certain types of employees to move freely across borders, and created a more unified business climate across the countries.

The groundwork NAFTA laid made it easier for Bombardier to link development, manufacturing and sales operations across three countries. Before the trade agreement, Bombardier did some manufacturing and sales in the United States. But NAFTA provided a structure of cooperation that supported the company's growth in neighboring countries, says Pierre Pyun, the company's vice president of government affairs.

“We are very active in both the United States and Mexico, and we see our presence and facilities in those countries as part of a highly integrated North American platform that allows us to do business not only in the region but also globally,” Pyun says.

NAFTA made it easier for Bombardier to sell more products in the region. The Canadian company sells jets and railcars all over the world, but its closest neighbor accounts for the largest percentage of its customers. The United States also represents 31 percent of Bombardier's revenue, and is its largest market for aerospace products, Pyun says. Bombardier has about 300,000 commercial aircraft seats and 200,000 business aircraft seats operating in the United States, as well as a number of specialty aircraft. Bombardier forecasts that U.S. customers will demand more than 12,000 additional aircraft seats in the coming years, so the country will remain Bombardier’s largest aerospace market for the foreseeable future, he says.

North America is equally important for Bombardier’s railcar business. NAFTA countries represent a $13 billion market for railcars, one that is expected to reach $16 billion in the next few years, Pyun says. In addition to long-distance railcars, Bombardier produces subway and metro railcars for cities including San Francisco, Chicago, New York, Vancouver and Montreal. The company also is “quite bullish" about the Mexican market for railcars, he says.

The United States and Mexico are important markets for Bombardier products, but are also home bases where the company manufactures products, does service work and ships out finished products to customers around the world, Pyun says. Because NAFTA made it easier to access resources in neighboring countries, Bombardier has been able to create an integrated, regional value chain as a base for doing business globally, he says. “Our operations in all three countries are highly linked and intertwined, and we export from our North American platform to countries around the world,” he says.

The Bombardier Lear jet is an example of teamwork across the company’s integrated North American operation. Most jet design and engineering work takes place in Montreal. Flight components such as the fuselage, wiring harnesses and wings are produced in Bombardier’s manufacturing facility in Queretaro, Mexico. Final assembly and flight testing takes place in Wichita, Kansas.

Building Bombardier's metro railcars also involves all three countries. The cars are assembled in Plattsburgh, New York, with parts produced in Canada and Mexico. The company’s new Global 7000 and Global 8000 aircraft are designed in Montreal and built in Texas with components made in Mexico.

Being able to design and build across three countries allows the company to take advantage of the specialty skills and resources of each, Pyun says. The trade agreement also provides for labor mobility, allowing employees to move across borders when necessary. “Sometimes we need to send Wichita engineers to Montreal to work with the team there,” he says.

While the structure NAFTA established more than 20 years ago helped build Bombardier’s business, the company supports updating the agreement. For one, the list of professions NAFTA allows to cross borders for work is dated and doesn’t reflect current business realities, Pyun says. Engineers are approved for cross-border work, but flight test pilots are not.

“NAFTA has facilitated our movement forward,” he says. “NAFTA needs to be modernized, and all the partner governments should come together to strengthen the platform.”

Read full article here https://globalconnections.hsbc.com/us/en/articles/how-bombardier-makes-nafta-work

The Medical Tourism Phenomena in Mexico
Authored by: Adrián del Paso & Denisse Blanck

Medical Tourism is a new trend that has drawn considerable attention worldwide, being one of its biggest markets from and in Mexico. “Medical tourism” refers to traveling outside one’s area of residence or country seeking health care, mainly because of lower prices in services, access, or even better results. An increasing number of American citizens travel to the US-Mexico border in order to get different sorts of medical treatments.

Certain private medical institutions have become aware of this and have placed several medical facilities in Mexican Northern states, precisely to serve the American medical tourist community, who seek access to innovative and in some cases controversial services otherwise unavailable or restricted in their home country, or due to significant differences in costs. These services include in-vitro fertilization (IVF), surrogate motherhood, sperm/egg donation, sex selection and an array of cosmetic and plastic surgical procedures, among others. Even though these services have become relatively common, the underlying medical, social, ethical and legal consequences appear to be, to a certain extent, unnoticed.

Mexican law insufficiently addresses the phenomena. In the case of surrogate motherhood, only two States, Tabasco and Sinaloa, have statutorily acknowledged and recognized this practice, while Federal law is silent. This situation is a double edge sword, as biotech companies get to launch and offer their products to interested patients, who get the products or services on a legal basis. On the other side, the absence of regulation comprises important risks to users and to society as a whole.

With regard to sex selection, it is known that the United States impose restrictions on the use of these procedures, presumably because of the high rate of abortions in case the procedure turns out to be unsuccessful­ -as everything in science and medicine carries its own risk-, or because of discrimination concerns (among other reasons). Conversely, Mexico has not taken a stance in this regard, and thus, whatever not prohibited is then deemed permitted. In light of this, there is an important debate as to whether the Mexican legislature is oblivious to the situation or if there are underlying reasons. Interested groups urge the government to take action and create effective legislation to avoid misuse and abuse from both national and foreign individuals. Meanwhile, medical tourists try to get the most of it.

IVF and sperm/egg donation do not seem to be as controversial as the latter, but health and legal complications may still arise as a result of misuse due to lack of regulation. IVF is globally common, yet what differentiates IVF in Mexico from the United States follows economic reasons. Donation, on the other hand, is less popular as it entails complex characteristics and hurdles. Furthermore, the waiting time to get a sperm or egg may be considerable, hence reducing the possibilities for the benefited party. This is why Mexico is a valuable resource, as the requirements are not too complicated and the time and access may be more reasonable.

It is not a surprise that these and other related services will become more common in the years to come, hand in hand with medical tourism. There are important organizations, such as the National Commission of Bioethics (Comisión Nacional de Bioética), as well as the Congress’ Legislature Commission on Health and Human Rights, who have launched interesting analyses on these and other related topics, still to be implemented or reflected at the legal framework. Development of international legal instruments (treaties, protocols and more) also face a challenge for improving communication and coordination between governments and medical institutions.

Author’s Biography: Adrián del Paso and Denisse Blanck steer the Health Law, Life Sciences, and Environmental legal practices at Ibarra, del Paso, Gallego y Berezowsky, S.C. Ms. Blanck holds an LL.M. in Health Law from University of Washington, Seattle, and is an active legal researcher on Health, Genomics, and related innovative topics in Mexico and the NAFTA region.

Challenges Faced by Aerospace and Defense Organizations
Authored By: Alejandro Bravo

In this era of continuous change and transformation, Aerospace and Defense (A&D) organizations would be well-advised to sharpen their focus on exploiting a handful of clear opportunities rather than chasing growth for growth’s sake. This will require A&D organizations to first understand where their best opportunities for growth lie and then focus on ensuring they have the right portfolio, business model and supply chain to achieve those goals.

Maintaining a competitive business model is the biggest challenge that 38% of executives of Aerospace and Defense (A&D) sector say for the next two years. With mature defense, markets of the US and Europe continuing to stagnate, A&D organizations are under extreme pressure to meet expectations of investors and shareholders to deliver growth in new areas and emerging markets according to survey results KPMG International’s Global Aerospace and Defense Outlook 2015.

For the next 12 to 24 months, keeping the business model competitive is the biggest challenge for A&D organizations (38%). 53% of respondents to the KPMG A&D Outlook point out sales growth as their top strategic priority for the next one to two years. This is followed by reducing cost structures (47%) and increasing cash flow from operations and improving risk controls (equal at 28 percent).

Many are looking to foreign markets for their next round of growth. More than a quarter of respondents say they will enter into new geographic markets. A further 13% say they consider rebalancing their global footprint a top priority. And, while just 7% say they will exit unprofitable business lines, recent actions demonstrate that divestitures and consolidation will be much more prevalent than the data suggests. 

For the coming years, we expect to see significant consolidation in the sector. In part, this trend will be driven by necessity, particularly for any small-to-medium sized organizations and suppliers that are not able to win major contracts. But it will also be driven by organizations looking to reshape their portfolios with new products, services and technologies; in Mexico we see that the industry will continue to gain importance in the economic outlook, with double-digit growth, as being a global industry, is not immune from these global trends.

Five of ten executives say they are focusing on adopting new manufacturing technologies and innovation as their primary strategy for advancement. Indeed, 46% say that the substance behind their technological advancements will come via placing more dollars into R&D (Research & Development). Furthermore respondents mention that they will spend in excess of 6% of revenues on R&D over the next year, increase by 13% to 41%.

Those strategies are key to enter into new geographic markets or adapt existing products into adjacent markets should work closely with both traditional and new partners to take advantage of their local or functional expertise. However, new relationships often tend to turn supply chains into increasingly complex operations and can become a drag on agility and competitiveness.

In today’s disruptive and fast-changing A&D environment, new threats and competitors are emerging every day. Yet, for the A&D industry in general, the challenge has less to do with spotting new threats and more to do with how individual organizations react and respond to them. This scenario fully applied to Mexico, which must continue to adapt to the new requirements of the industry, in all sectors, private, public and social, to continue and maintain the pace of growth experienced in recent years.

Mexico: Amendments to the Legal Working Age
Authored By: Monica Schiaffino & Tania Terrazas

On June 12, 2015, Mexico amended the Federal Labor Law (“FLL”), adopting the increase in the legal working age that was enacted through a constitutional amendment in 2014.  (Click here to read our discussion of the 2014 constitutional amendment).  The FLL – the country’s employment law code – codifies the constitutional amendment that increased the legal working age from 14 to 15 years old and from 16 to 18 years old (where applicable).

With the amendment, only individuals who are 15 years old and older can be employed.  Additionally, employees who are under 16 years old must obtain authorization from their parents or legal guardian.  In the absence of a parent or legal guardian, the employee can obtain authorization from his or her union, the Labor Board, the Labor Inspector or the applicable Political Authority.

Employees under 18 years old who have not completed the mandatory basic education cannot be employed, unless they are first approved by the appropriate labor authority.  Among the factors to be considered, the labor authority is required to determine whether the applicant’s work and studies will be compatible.

To protect the health and safety of employees in this age group, as well as foster their development, the amendment to the FLL modified the requirements for minors to render their services inside and outside the family circle. If the labor authorities find that a minor under the age of 15 had been employed outside of his or her family circle, the employer can be subjected to a penalty of one to four years imprisonment and a fine ranging from MXN$17,525.00 to MXN$350,500.00 (currently, approximately USD$1,130.00 to USD$22,600.00).

Lastly, with the amendments, employees 15 years old and older can join unions and participate in the management of the unions.  Prior to the amendment, these activities were limited to employees older than sixteen years old.

Employers should verify compliance with these new requirements to avoid fines and penalties.

Mexico: New Outsourcing-Related Obligations in Amendment to INFONAVIT Law
Authored By: Monica Schiaffino & Tania Terrazas

On June 4, 2015, the National Workers Housing Fund Institute Law (the “INFONAVIT” law) was amended, to incorporate Article 29 bis as an additional layer of regulations over the practice of outsourcing.  Generally, INFONAVIT requires employers to contribute an amount equal to 5% of the employee’s daily earnings to the national housing fund, to provide subsidized housing to employees, as well as loans at low interest rates for building a home or for home improvements.  The addition of Article 29 bis appears to be designed to ensure that the national housing fund receives the required contribution from an outsourcing arrangement, regardless of whether the contribution is made by the contractor or the company benefiting from the services.

Specifically, Article 29 bis provides that, within the context of an outsourcing arrangement, where the contractor that provides the personnel to perform services fails to make the contributions into the INFONAVIT national fund or otherwise fails to fulfill its obligations as an employer, the beneficiary of the services—here, the company that hired the contractor for the services—must make the contributions.  The beneficiary of the services will be liable for such contributions only if the INFONAVIT governmental agency had already notified the contractor of its employment-related obligations and the contractor had failed to comply with them. 

Indeed, this amendment is in line with the amendments made to the Social Security Law in 2009 and the Federal Labor Law in 2012.  Such amendments also imposed joint and several liability on the beneficiary of the outsourcing services where the contractor failed to fulfill the employment obligations it owed to the personnel that performed the outsourced work.

Additionally, Article 29 requires the parties in an outsourcing arrangement – here, the contractor and the company contracting for the services – to inform the INFONAVIT governmental agency of all outsourcing agreements they have entered into and update the information on a quarterly basis.  As part of the information to be provided to INFONAVIT, the parties must include:

  • copies of all services provider agreements entered into between the parties;
  • purpose of the agreement;
  • duration of the agreement;
  • job classifications or positions involved;
  • description of the specialized work to be performed, explaining justification for outsourcing;
  • estimated number of employees that will be made available to the beneficiary per month; and
  • Information identifying the actual beneficiary of the services for each worker who performs outsourcing work on behalf of the contractor.

Accordingly, employers participating as contractors or beneficiaries of the services should report the above-mentioned information to the INFONAVIT, just as they would report it to the Mexican Social Security Institute.

Mexico Bidding Round 1.2 – Key Take Aways
Authored By:  Eliecer Palacios

The Mexican government held the second bidding call for five development offshore blocks in the Gulf of Mexico (aka Round 1.2). The results were very encouraging and surprising despite the low commodity price environment and the initial poor results of the inaugural bidding round last July.
We attribute this success to: a) release of the minimum government take ahead of bidding, b) more attractive fiscal terms to work around and, c) more relaxed bidding requirements.  We think the government took the right steps to make this round more attractive to investors.

We would like to highlight a few relevant issues to consider for this and future offshore bidding rounds:

1. Bidding Outcome Review: 
Block 1: Received participation from all 9 bidders and all bids were well above minimum government take of 34.80%. The average government take for this block was 62.3%. Eni was the winner with 83.75%, or 2.4x the minimum take. This block was closest to the shore and with potential geological reads into onshore fields.
Block 2: Received 5 bids or 56% participation. Again, well above minimum government take of 35.9%. This field is also nearby Pemex infrastructure and a potential read into Tajon onshore field to be auctioned in December 15.
Block 3: No bids. This block had lowest minimum take and was least attractive in terms of geology and crude oil quality. This block was contiguous to 4 of the exploratory blocks auctioned last July (see chart below). 
Block 4: Awarded to a consortium with a Mexican startup, Petrobal. This block had Pemex infrastructure around and perhaps the one with greatest "edge" for the Petrobal team who was the only bidder.
Block 5: No bids. This is an indication that minimum government takes should be lowered further to make it attractive for participants given current commodity downturn.

2. Notable NOC/IOC Participation: The majority of bids were submitted by NOCs (44%), followed by IOC/independents (33%) and the remainder by private equity backed ventures (22%). This large participation of NOC/IOCs can be explained by the high capital and production requirements to qualify in this bidding round. However, we think these blocks should be the domain of the large/mid independents.

3. Increased Private Equity Participation: The success of Fieldwood Energy and Petrobal is an eye opener for local and international institutional investors that there's an opportunity to allocate private capital into new oil & gas ventures focused on Mexico E&P. Petrobal is a perfect example of how a startup E&P backed by local Mexican entrepreneurs can execute on strategy. In all sense of the words, Petrobal is truly "Mexico's first independent exploration & production company".

4. State Participation Remains High: Government minimum take remains high for global standards, particularly when accounting from additional royalties and corporate taxes. Average state participation was 75.92% across all 3 blocks awarded. Block 1 yielded the highest take at 83.75%, followed by Block 4 with 74% and Block 2 with 70%. With this high taxes, for the operators, their bet is an eventual recovery in commodity prices.

5. Minimum Capital Requirements Are Too High: For this Round, the government's request for at least $10bn in assets or $1bn in equity capital along with 15,000 bbl/d of production was an obstacle for many international operators that were ruled out of the process evidenced by the absence of independent E&P that usually participate in these type of offshore development. NOCs bids were notable, however, we think that both Rounds 1.1 and 1.2 should have been the domain of the independents. Minimum capital requirements could be raised even higher for the deepwater round that would rule out the best and most successful independents.

6. Pre-qualification Requirements Remain Tight: Tight rules for participation forced operators to make decisions in a difficult commodity price environment, the easiest move was not to participate and watch from the sidelines in preparation for deepwater bids. Initially, there were 26 companies that had applied for pre-qualifications, among them large independents and NOC/IOC, however, only 14 showed up to the bidding. Some items that could be improved in this process are: a) extend deadlines for dataroom requests and pre-qualifications and, b) increased flexibility in deadlines to form consortia with financial players, c) more relaxed corporate guarantees.

7. Global Competition for Offshore Developments: For these shallow water blocks, the government still require operators to provide onerous parent company guaranties which could be deal-breaker for many who are still skeptical about Mexico versus other oil provinces that don't require such guarantees thus allowing easier flow of capital into the country (e.g. West Africa countries). For Mexico, with severe above-ground-risks in many onshore regions, offshore activities are still preferred for many participants.

8. Improved Contract Terms: The government did a timely job at correcting earlier miscalculations in from the inaugural round. Leaders of industry have been very public about the lack of attractiveness of contract terms versus rest of the world. We are in a new oil price environment where "lower for longer" oil prices could be the new benchmark. Mexico needs to compete with other equally, if not more attractive resource provinces in a very difficult environment for the industry that threatens to last longer than expected.

9. Geology/Seismic Data: Out of the initial 35 companies that purchased the CNH data, only 26 companies seek to pre-qualify, and from those, only 14 submitted bids (or 40% of original 35 interested companies), perhaps signaling that data wasn't a contributing factor. This, however, represents a great opportunity for the seismic contractors (CGG, PGS & TGS among many) who have been working in the country to shoot and reprocess data. Round 2 should be a much better round as more recent, higher quality studies would be available. 

Things you need to know before an international move

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Lockbox Accounts in Mexico
Authored by: John E. Rogers & Francisco Perez

A lender to a Mexican borrower can require that the borrower’s accounts receivable be paid directly into a blocked bank account, frequently known as a “lockbox account in U.S. parlance. Under this arrangement, the lender usually requires the borrower issue a standing instruction requesting that funds in the account be automatically transferred to the lender for application to payments due on the loan.

This practice is intended to reduce the risk that the borrower will use accounts receivable payments for purposes other than servicing the loan. The arrangement also lessens the chance that the borrower’s other creditors will attach payments on such receivables and apply them towards the borrower’s other obligations. Lockbox arrangements are often linked to collateral arrangements under which the borrower grants the lender a security interest in the borrower’s accounts receivable.
 
Establishing lockbox accounts in Mexico is complicated. Under Mexican law, the depositary bank is deemed a “trustee.” Accordingly, the borrower must establish a trust, a process that is considerably more complex than a lockbox agreement in the U.S. A “technical committee” (typically consisting of representatives of the borrower as well as the lender) must administer Mexican trusts. The presence of the borrower’s representative on the technical committee creates an obvious risk that such representative will block the issuance of the payment instructions, thereby thwarting the entire purpose of the lockbox arrangement.

Lenders can lessen this risk, however. For example, a lender can consider having the trust agreement—or unanimous resolutions adopted by the technical committee upon signing of the trust agreement—delegate the task of issuing instructions on behalf of the committee to specified members (i.e. the members appointed by the lender). This step should substantially reduce the risk of the borrower blocking transfers to the lender. If the trustee requires that the committee issue separate instructions for each transfer from the lockbox, then (depending on the frequency of transfers desired by the lender) it may be necessary to have instructions issued multiple times during the life of the lockbox account.

The trust agreement, technical committee resolutions, and instruction letters must be in Spanish. Lenders based outside of Mexico should be prepared to work with Spanish language documents, and it is advisable to obtain trustworthy translations into the lender’s working language. In addition, as first beneficiary of the trust, the lender must satisfy the stringent “know your customer” (KYC) requirements established by Mexican regulators to reduce the risk of money laundering. There are multiple steps required to achieve KYC compliance and, depending on the domicile of the lender, different documents required.

The process of establishing a lockbox account in Mexico is more complex than the equivalent process in the U.S. However, in appropriate cases a lender may find it worthwhile to navigate the process in order to obtain the substantial advantages of secure access to a borrower’s accounts receivable.

Read full article here http://www.strasburger.com/lockbox-accounts-in-mexico/

Author’s Biography:John Rogersconcentrates his practice in the areas of banking, corporate, international, insolvency matters, and foreign investment law, with a focus on Latin American banks and companies. He is a member of the New York bar (not admitted in Mexico), is Of Counsel to Strasburger & Price LLP, and is in charge of the firm’s office in Mexico City. Formerly chief counsel of Bank of America in Mexico, Mr. Rogers has broad experience in bank lending transactions and loan workouts, project finance, joint ventures, private equity, acquisitions, securitization, and international bondholder representation. He is a graduate of Harvard College and Columbia Law School.

Francisco Perez is a founding partner of Struck, Palafox y Pérez Ortega, S.C. and a partner of Strasburger & SPPO, S.C. in Mexico City. He is member of the International Bar Association and the Barra Mexicana Colegio de Abogados. His practice areas include corporate law, mergers and acquisitions, capital and debt markets, infrastructure, real estate, and foreign investment. He is a graduate of the Law School of the Universidad Iberoamericana and obtained a postgraduate diploma in Commercial Law from the Escuela Libre de Derecho. He received an LL.M. degree from Northwestern University School of Law and a Graduate Diploma in Business from Kellogg School of Management.

Web Enhancement and Digital Visibility
Authored by: Jorge Mejia

Understanding exactly what "Web Enhancement" and "Digital Visibility" are, is paramount to leveraging a company’s online presence to work in an organization’s favor and, depending on the digital marketing goals, resulting in specific ROI.  First, what do "Web Enhancement" and "Digital Visibility" actually mean?

Web enhancement is the process of enhancing an organization’s holistic digital presence with measurable qualitative improvements for the particular industry segment and applicable KPI’s.

Digital visibility is the ease of finding information about a brand as it relates to the underlying goals of the organization, specifically referring to the presence across the entire digital web. (i.e. a company with a high digital visibility is one whose message is easily accessible by the target consumer.)

On a scale of 1-5, Surgo Group is able to determine the digital visibility of your company, and create a strategy to increase it to an impactful level.  Four core focus areas are listed below:

  1. Digital Company Visibility – such as Search Perception Impact (SPI)
  2. Industry Press
  3. General Press
  4. Social Media Presence


These 4 focus areas vary from industry to industry

For Example; in the film industry this might cover reviews, press and individual movie websites while for financial institutions it might cover digital lead generation.

Given individual complexities between social, search, mobile etc. it’s difficult to define a turnkey solution, and instead requires a customizable, individualized offering.

A study of over 1,000 US marketers by Adobe found that 48% of digital marketers (marketers who perform primarily digital-focused roles) feel highly proficient, while a whopping 9% don’t believe their digital marketing efforts are even working.

If these feelings sound familiar, or similar to your own – then check out our Whitepaper on how Web Enhancement and Digital Visibility can help push your digital marketing efforts ahead of your competitors – resulting in noticeable,and measurable ROI.

Read more at
http://news.surgogroup.com/web-enhancement-definition/#66ZS2Y60gF8WVGTe.99


Author’s Biography: Jorge joined Surgo Group in 2013 and has led its expansion into Latin American markets, specifically, Mexico, Ecuador, Peru, Colombia and Venezuela.  As a member of the Business Development team, Jorge has been instrumental in conducting research, vetting partnerships and creating marketing collateral.

Jorge has also been an important asset to Surgo Group’s Digital Marketing team. His skills have been important to planning, executing, and reporting on email marketing campaigns; this includes web analytics (Google Analytics and Google AdWords) and direct response marketing efforts. His expertise has helped clients achieve their digital visibility and lead generation goals.

Easy Steps to Significantly Improve Your Company’s Cybersecurity 2015
Authored by: Michael DeVito, Partner

Businesses are increasingly moving towards cloud-based platforms for their operational and financial systems. Many companies also allow their employees to work remotely through some sort of virtual private network. While these decentralized, virtual systems can reduce costs related to the purchasing and maintenance of physical servers, other hardware, and software, they also increase the risk of fraud and security breaches.
Businesses need to be aware of the security measures necessary to effectively safeguard this information, many of which are not costly, and devote the time and resources to enact them:

  • Stronger Passwords – This is a very easy, inexpensive way of enhancing security. The use of alpha-numeric passwords which include the use of at least one symbol, and a password of 8 or more characters can significantly reduce the risk of unauthorized access. There are many instances where passwords are never updated or only changed with basic type fields that are common and typically the first attempts used by unauthorized users. Users should periodically update their passwords and, of course, not share them with anyone. Many cloud-based platforms can also be accessed by smartphones and similar devices. These devices also need to have strong passwords to prevent unauthorized access. Smartphones and other tablet type devices are constantly being targeted for theft. If strong passwords are not used to prevent the use of these devices, data can be compromised.
  • Data Encryption – Another strong security measure is having all company computers encrypted. This means having information coded in such a way that only authorized users can read or access it. Encryption insures against the loss or theft of these devices by virtually prohibiting access to their stored data.
  • Cyber Insurance – Companies should also consider obtaining cyber insurance, which can cover them for any financial losses in the event of a breach of security by an unauthorized user. These policies are not expensive and could prove to be insignificant compared to the time and cost if confidential information is obtained by unauthorized users.

There are also other safeguards that companies can use to protect themselves, many of which are listed on the official website of the Department of Homeland Security, including:

  • Never click on links in emails or open the attachments. Most legitimate e-mails will not contain attachments.
  • Do not give out any personal information. Emails may look legitimate, but in reality are “phishing” for personal information. Phishing is any attempt to acquire confidential or sensitive information, including, but not limited to, passwords, credit card information, etc. under the cover of a trustworthy entity through electronic communication.

There are many aspects of fraud that business owners and companies may be exposed to, both from within the company as well as externally. Being aware of some of the cyber threats that exist can help in safeguarding assets and sensitive information.
Full article:
http://weisermazars.com/images/Made_in_the_USA_-_The_Resurgence_of_American_Manufacturing.pdf

 

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