The decision of the Constitutional Court (CC) to issue a positive opinion on the draft Regulation on the organic law for strengthening the family economy and unfavorable on the Reform Regulation on the organic law on attracting and promoting investments for productive development raises questions for the entity, especially regarding the creation of free zones.

According to experts, the Court evaluated what was urgent, when its role was different, they even point out that they made a “political decision” regarding the law on investments, and it was not considered that the goal of this project was to create jobs and attract capital to the country , and there are also those who indicate that the subject went to the most basic and that, for example, in the opinion favorable to the tax reform it says “a lot of lights“.

The Constitutional Court gives the green light to the tax reduction proposed by the Government, but leaves the initiative of free zones without restrictions

“It seems to me that the Constitutional Court has decided to evaluate what is urgent and what is not, when the characteristic of urgency is a technical-economic issue that is not within the scope of the Court, because it is about economic urgency, and that depends on an economic analysis to determine whether something is urgent or not… Economic urgency is not a legal decision, economic urgency is the specialty of economists,” explains Alberto Acosta Burneo, editor Weekly analysis.

He confirms that the constitutional control body “made a political decision by rejecting” the Regulation on the reform organic law to attract and promote investments for productive development, which in his opinion “sought to create new jobs”; However, for the CC, job creation was “not a priority” and decided to put it on hold until the next Assembly for consideration.

“The issue of employment is one of the most critical issues, which concerns citizens the most, but it is not urgent for the Constitutional Court,” he says.

What are free zones and which sectors would benefit from the decree that President Guillermo Lasso sent to the Constitutional Court?

For tax lawyer Napoleón Santamaría, the same argument that gave the Court a positive opinion on the tax reform was used to reject the one on free zones, but with “backward analysis” and “that’s what worries me the most”, he assures.

Santamaría points out that in tax reform the Court says “a lot lights” and explain the reason for your criteria. “The CC says: ‘Yes, I accept because I saw that the effects are immediate’, that is, the income tax reduction will be immediate, in fact, from July.”

Tax reform now depends on the Government, which will issue regulations to implement the changes in the coming weeks

However, for free zones, he points out that the subject in the analysis indicates that it will be long-term, 10, 15, 20 years, and thus – according to Santamaria – the message between the lines is Executive. They say to him, ‘President, don’t deal with it any more, deal with the urgent, emerging and critical issues you have in the remaining time, plus all the remaining consequences that follow, and that’s why they’re telling you it’s not urgent.’ . Between the lines, what they are telling you is something terrible, ‘President, you are almost, almost removed, you are leading the Presidency in a state of emergency.’ The most terrible is the reading which, in my opinion, is given in two opinions”, the lawyer claims.

Also, he believes that the unfavorable opinion on the issue of free zones is “quite a fatal blow for foreign investments”.

Both the draft Decree on the Organic Law to strengthen the family economy and the Decree on the Reform Organic Law to attract and promote investment for productive development were sent as an emergency by President Guillermo Lasso within the regime of death on the cross who dissolved the Assembly and called for elections for a new president and new representatives.