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With the new Basle capital accord due by the end of the year, the committee has turned its attention to securitization and issued a working paper discussing risk sensitive and ratings-based approaches. Mark Nicolaides and Emma Dmitriev of Mayer Brown Rowe and Maw, London, review the implications

Whether it is by means of a corporate acquisition, the formation of a joint venture or the creation of a Mexican subsidiary or branch, foreign enterprises doing business in Mexico always face the need to send foreign nationals to oversee their investments or operations in Mexico. The economic slowdown has now brought the need for some of these entities to lay off or reduce the workforce of their business ventures in Mexico. This has raised a very significant issue as to whether or not the foreign expatriates are entitled to severance payments under the labour laws of Mexico. Although the Mexican labour laws are federal in nature, the labour courts are local and do not form part of the judiciary, but rather of the state or local executive branch. Their decisions are not public or published and, unless this issue is taken by means of constitutional review to the federal circuit courts, there is no possibility of looking for a court precedent. In fact, even if a circuit court takes a particular view on the topic, such a precedent is, in general terms, not binding on any other circuit courts within the country. We have not found any circuit court precedent that may give some guidelines on the issue at stake. As surprising as it may seem, foreign expatriates rendering services in Mexico on account of foreign companies have been opting to sue in the Mexican labour courts against: (i) the Mexican entity; and (ii) the foreign parent and/or sister entity, claiming severance payments under the labour laws of Mexico.

A new law was introduced on June 21 2001 to regulate international arbitration proceedings in Turkey. The new International Arbitration Law No 4686 is a supplement to the existing domestic arbitration regulation, which is set out in the Code of Civil Procedure (CCP). The Arbitration Law was enacted in parallel with the general trend towards liberalization of international arbitration legislation globally.

On October 11 2001, the House of Lords handed down judgment on eight appeals relating to claims by banks for possession of marital homes under mortgage. In each case the security was granted by a wife to secure her husband's debts. The wives were claiming that the security was unenforceable because they had signed under the undue influence of their husbands.

The Superintendency of Securities has issued resolution 0933 dated December 21 2001, which provides the new applicable framework for the public offering of securities in Colombia issued by multilateral credit entities. Before the enactment of this resolution, offerings undertaken by multilateral credit entities had the same applicable regime as ordinary foreign entities (ie foreign corporations and financial institutions). In accordance with the new regulation, this type of offering has much simpler requirements. An automatic approval process has been established, provided that the multilateral credit entity complies with the general requirements established below.

In the August issue of IFLR, our article contained an omission that we would like to amend. Where the article read: "as such the Portuguese Securities Market Commission holds that, considering that until the options are exercised there is no obligation on the part of the employee, there is no reason (...) to extend protection (...) to the employee in his capacity as beneficiary of the option, prematurely, as long as he remains the recipient of a (potential) future stock option". It should have read: "as such the Portuguese Securities Market Commission sustains that, considering that until the options are exercised there is no obligation on the part of the employee, there is no reason (...) to extend protection (...) to the employee in his capacity as beneficiary of the option, prematurely, as long as he remains the recipient of a (potential) future stock offer".

The trend to mould the Commercial Code of Japan to business needs continues. From April 1 2002, amendments to the Commercial Code will dramatically relax the restrictions on voting rights of shareholders of Japanese joint-stock companies (kabushiki kaisha).

Maheen Pfeffer of Afridi Angell & Khan, Islamabad, assess the prospects for foreign investment and growth in the power industry

Like in many other European countries, Belgian companies have recently been setting up captive reinsurance companies in Luxembourg or Ireland to avoid or reduce taxes.

Clifford Chance and Allen & Overy have acted on the SFr 580 million ($342 million) management buy-out of the Swiss airport company Swissport International. European buy-out specialist Candover has bought the company from the bankrupt Swiss airline SwissAir. Clifford Chance partners David Pearson and Ian Bagshaw led the team advising Candover, while Allen & Overy banking partner Jacqueline Evans and corporate partner Jeremy Hunt advised Royal Bank of Scotland, the leader of a syndicate of five banks including ING, West LB, HypoVereinsbank and HBOS.