| Foreign Investment Law |
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Chapter IV - Violations & Sanctions Article 46 - Violations
ARTICLE 46 1 Without prejudice to the provisions of other legal documents, acts of non compliance, malicious or negligent. with the legal obligations to which the foreign investor is liable, constitute violations. 2. Specifically, the following acts shall constitute violations: a) use of funds originating from foreign sources for purposes other than those which have been authorized; b) practice of commercial activities outside the scope of the authorized objective; c) invoicing practices that permit the outflow of capital or which evade the obligations to which the company or association is liable, specifically those of a tax nature; d) failure to carry out training activities or failure to replace foreign workers with domestic workers, under the conditions and within the time limits provided for in the investment proposal. ARTICLE 47 1. Without prejudice to other sanctions specifically provided for by law the violations referred to in the previous Article shall be subject to the following sanctions: a) fines ranging from the equivalent of one thousand to one hundred thousand U.S. dollars, with the minimum and maximum to be increased by a factor of three in the event of a repeat violation; b) loss of tax incentives; c) revocation of authorization for the investment. 2. Failure to implement the project within the time limits set for it in the authorization or extension is liable to the sanction provided for in line c) of the previous section. ARTICLE 48 1. The sanctions provided for in lines a) and b) of the previous Article shall be applied by the Ministry of Planning and Economic Coordination when the investment had been approved by the Minister of Planning and Economic Coordination; in cases provided for by line c) and in all cases in which approval was granted by the Council of Ministers, this will decide on the sanctions to be applied. 2. Foreign investors must obligatorily be heard prior to the application of any sanctions. 3. In determining the sanction to be applied, all circumstances surrounding the violation or degree of culpability, the intended benefits and the benefits obtained by committing the violation/ and the damage resulting therefrom, must be taken into conside ration. 4. Foreign investors may file claims against, or appeal, against the sanctions under the terms of current legislation.
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