Organic Reform Law To The Mining Act, The Reform Law For The Tax Equity In The Ecuador And The Organic Law Of Tax

Original Language Title: Ley Orgánica Reformatoria a la Ley de Minería, a la Ley Reformatoria para la Equidad Tributaria en el Ecuador y a la Ley Orgánica de Régimen Tributario Interno

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Read the untranslated law here: http://www.asambleanacional.gob.ec/es/system/files/ley_organica_reformatoria_a_la_ley_de_mineria_a_la_ley_reformatoria_para_la_equidad_tributaria_en_el_ecuador_y_a_la_ley_organica_de_regimen_tributario_interno_tramite_no.pdf



CONSIDERING: That the paragraph 11 of article 261 of the Constitution prescribes that the Central State take exclusive powers over energy resources, mineral and hydrocarbon;

That the Constitution of the Republic of Ecuador establishes in article 408, that "they are unattachable, imprescriptible and inalienable property of the State non-renewable natural resources and in general, products of the subsoil, mineral and deposits of hydrocarbons, substances whose nature is distinct from the soil, even those that are in the areas covered by the waters of the territorial sea and maritime zones; "as well as the biodiversity and its heritage genetic and the spectrum radio"; That, them resources natural not renewable is considered a sector strategic, as it sets the article 313 of the Constitution of the Republic of the Ecuador, on which the State is book the right of manage, regulate, control and manage said sector, low them principles of sustainability environmental, caution, prevention and efficiency; as well as also, delegate in an exceptional way to private initiative and the popular and solidary economy, in accordance with the provisions of article 316 of the Constitution of the Republic of Ecuador; That the new regulatory framework for mining activity began with the mining law, enacted in the supplement of the registry official No. 517 of January 29, 2009; That, under cover of the norms and principles of due process, collected as right to constitutional protection in article 76 of the Constitution of the Republic of Ecuador, it is necessary to guarantee this right in the processes of expiry of mining concessions established by the Mining Act; That the State must encourage the development of economic activities by means of a legal and political institutions that promote them, promote and defend through the observance of the Constitution Act andthe; That, current mining legal framework and administrative practice point out that that is insufficient yno adequately respond to national interests, so it is necessary to reform legal provisions; That, because natural resources are owned by the State, this should be seen adequate benefits, which should be regulated by national mining laegislacion; and, that, through registration official No. 242, on December 29, 2007, legislation was enacted reform tax equity in the Ecuador. In exercise of it Faculty referred in the numeral 6 of the article 120 of the Constitution of the Republic, issued it following: law organic REFORMATIVE to it law of mining, to it law REFORMATIVE for it equity tax in the ECUADOR and to it law organic of regime tax internal second supplement-record official No. 37-Tuesday 16 of July of 2013-3 Art. 1.-replace is the article 1 of the law of mining by the following : "Article 11.-directory of the Agency of regulation and Control miner-the Agency of regulation and Control mining will have a directory formed by three members that not will have relationship of dependence with this entity." It will be composed of: to) the sectoral Minister or his permanent delegate, who will preside over it and will have a casting vote; (b)) the National Secretary of planning or his delegate; and, c) a delegate of the President of the Republic. The directory shall appoint a Director Executive and will establish, by resolution, the structure administrative and financial of the Agency of regulation and Control miner. The Executive Director shall be responsible to comply with the resolutions of the Board; It shall exercise legal representation of the Agency and shall have the powers and duties assigned to the governing body." Article 2.-replace the article 16 of the law of mining by the following: ' article 16.-domain of the State mines and deposits-are inalienable, imprescriptible, unattachable and inalienable property of the State non-renewable natural resources and, in general, the subsoil products, minerals and substances whose nature is distinct from soil, even those that are in the areas covered by the waters of the territorial seas. " The domain of the State on the underground will be exercised independently of the right of ownership over the surface land covering mines and deposits. The exploitation of natural resources and the exercise of the mineral rights will adhere to the National Development Plan, to the principles of sustainable development, the protection and conservation of the environment and participation and social responsibility, and must respect the natural and cultural heritage of the exploited areas. Its exploration and rational exploitation will be made based on national interests, by natural or legal persons, public companies, mixed or private, national or foreign, granting mining rights, in accordance with this law. "The exploration and exploitation of them resources miners will be based in a strategy of sustainability environmental public that prioritize the control, Comptroller, regulation and prevention of the pollution and remediation environmental, as well as the promotion of the participation social and the oversight citizen." Article 3.-Article 26 of the Mining Act be replaced by the following: of the Ministry of the environment, the respective environmental license duly granted; " and, b) of the single water authority, with regard to the possible harm to bodies of surface or underground water and of compliance with the order of priority over the right of access to water. Additionally, the dealer miner will present to the Ministry sectoral a statement sworn made before notary in which express know that those activities mining not affect: roads, infrastructure public, ports enabled, beaches of sea and funds marine; telecommunications networks; military installations; oil infrastructure; aeronautical facilities; networks or infrastructure electric; or vestiges archaeological or natural and cultural heritage. Falsehood in the Declaration of the previous reference shall be punished in accordance with the penalties for the crime of perjury. If the maximum authority of the mining sector of ex officio or at the request of part concludes that the activities of the applicant may affect the concerned property or heritage, it shall request the respective authorization to the competent authority, which shall issue their statement at the end of thirty days. Not to do so is time, means that opposition, no impediment to the start of mining operations there is no, and the officer will be dismissed. Respect to the issuance of the reports of such administrative acts shall apply to the application of the rules of the administrative legal procedure of the Executive function. Municipal governments and metropolitan, in the exercise of its powers, by Ordinance, shall regulate, authorize and control the exploitation of arid and stony materials." Article 4.-subsection 1 below. of the Art. 29 of the law of mining to merge the following: "except for auction or public auction, processes mentioned in the preceding paragraph, the granting of mining concessions, as article 31 of this law, perform the State through the sectoral Ministry, with respect to areas which stated, through delegation to foreign State-owned enterprises or its subsidiaries ", companies mixed economy or consortia that they have majority stake, for which State must observe the principle of transparency in the allocation, applying constitutional norms and criteria previously laid down in the Act, its regulations and the previous agreements to its granting." Article 5.-replace the fourth subparagraph of article 34 of the law of mining with the following: "establishing a patent, annual conservation for the simultaneous activities of exploration - exploitation that is 4 - second supplement - Registro Oficial Nº 37 - Tuesday 16 July 2013"


carried out under the special scheme for small-scale mining equivalent to 2% of the unified, per hectare mining monthly salary." Article 6.-in the last paragraph of article 36 of the law on mining after the phrase "economic assessment" add the word "comprehensive". And at the end add the phrase "which will include main, secondary minerals and others that have economic value." Article 7.-at the end of the article 40 of the law of mining incorporated the following subparagraph: "the conclusion of contracts for the provision of services between the State through the sectoral Ministry and foreign State-owned companies or consortia that they have majority participation, may be directly, on the basis of previous agreements to parties which have come." Article 8.-Add is the following subsection to the article 41 of the law of mining: "the State may agree with them dealers miners the payment of incomes yregalias generated by the use of minerals metal, with the product refined of his exploitation in clamping to it willing in the present law." Article 9.-join the end of the article 45 of the law of mining the following: "holders of benefit plants that processed ores other mining concessions and, generate tailings containing mineral products, must pay a royalty corresponding to 3% of the alienation any security, mineral products obtained from the tailings when they are recovered." Article 10.-Article 49 of the Mining Act be replaced by the following: 'article 49.-right of free-market holders of mining concessions can be marketed freely their production inside or outside the country. However, in the case of gold from artisanal mining legally authorized, the Central Bank of Ecuador will be marketing directly or through financial institutions duly authorized by the Central Bank." Article 11.-replace the article 57 of the law of mining with the following: "article 57.-sanctions for illegal mining activity-illegal mining activity exerted by natural or legal persons or groups of persons, national or foreign, without titles, authorizations, permits, or licenses, shall be punished under the provisions of this article, without prejudice to those applicable in the fields of environmental" tax or criminal, to any place.

The goods, machinery, equipment, supplies and vehicles that are used in illegal or unauthorized exploitation, benefit or processing, smelting, refining and illegal marketing of mineral substances, will be object of: special confiscation, seizure, detention, destruction, demolition, disablement or neutralization, depending on the case, running the Agency for regulation and Control mining counting on the collaboration of the police national and secondarily for the armed forces. Who is responsive authors of such activities or owners of such goods, were sanctioned by the mentioned Agency, with a fine of two hundred to five hundred basic remuneration unified depending on the severity of the offence, without prejudice to the payment of a value equivalent to the total of illegally extracted minerals, as well as the obligation of restoring ecosystems and compensation to persons and affected communities. Them fines to which is concerns the present law, will be paid to the Agency of regulation and Control Miner, in the term of five days counted starting from the date n that the resolution cause State. If the infringing sanctioned administratively not comply with the obligation of payment, such agency, shall be the collection in exercise of the jurisdiction coercive attributed in the present law. Fines collected by the Agency for regulation and Control mining, will be aimed at the fulfilment of the purposes inherent to its competition. The impact on the environment and damage to the ecosi theme and biodiversity produced as a result of the illicit exploitation or invasions, will be considered as aggravating circumstances at the time of giving the rulings with respect to the administrative amparo. Procedures that give effect to these measures, indicated in the General regulations of this law." Article 12.-below of the article 57 of the law of mining, do is recorded the following article innumerado: "art...." Sanctions holders that allow illegal mining activities in their areas.-Notwithstanding the revocation of the delegation carried out by the State, through the Declaration of expiration of the concession, authorization, permit or license, apply the same penalties provided for in the preceding article holders d rights mining granted by the Ecuadorian State, enabling the Commission of illegal mining activities by third parties not legally authorized to do so or lack of the respective environmental license for their mining activities in their respective areas or places of operation."

Article 13.-in articles 62, 71, 72, 94 and 95 of the Mining Act, replaced the expression "sector Ministry" by the expression "the Agency regulation and Control mining."

Article 14.-be replaced with article 78 of the mining law the following: Second Supplement - Registro Oficial Nº 37 - Tuesday 16 July 2013 - 5 'holders of mining rights, prior to the initiation of activities, shall elaborate ypresentar studies or environmental documents, in order to prevent, mitigate, control and repair the environmental and social impacts resulting from its activities; studies or documents which must be approved by the competent environmental authority, with the respective environmental licensing. The environmental regulations for mining activities, which will issue the Ministry of industry, will establish the requirements and procedures for the application of article est.

For the procedure of presentation and rating of them studies environmental, plans of handling environmental and granting of licenses environmental, the limits permissible and parameters technical enforceable will be those established in the normative environmental mining applicable.

Mining activities prior to the respective environmental administrative authorization, require the submission of certain economic guarantees in the legislation applicable environmental mining.

Mineral rights holders are required to present this year's have been issued environmental license, an environmental compliance audit that allows the entity's control monitor, monitor and verify compliance with applicable environmental regulations and environmental management plans. Subsequent to this, them audits environmental of compliance will be presented every two years, without prejudice of this, them guarantees environmental must keep is current each year.

Artisanal mining regime, will be required in chips environmental approval, while, under the regime of small-scale mining, l environmental license should be granted for simultaneous exploration/exploitation operations shall have to effect with simplified and specific environmental studies.

In medium and great mining, for the initial exploration period, regimens is r querira environmental chips for advanced exploration approval a declaration environmental, while, for the exploitation phase and phase subsecuent s require environmental, same studios that must be modified or updated depending on the results. On the basis of these instruments, the relevant environmental licenses will be awarded.

Once them holders of reported to us within miners, met of way satisfactory with them requirements established in the normative applicable, the approval of them documents, studies or licensing environmental, must grant is in the term maximum of six months counted starting from its presentation. Do not do so within that period, means that opposition, no impediment to the beginning of the mining activities there is no. The official whose failure allowed the positive administrative silence will be dismissed." Article 15.-replace the last paragraph of article 79 of the law of mining with the following:


"Depending on the degree of non-compliance with this provision, it may be provided temporary or definitive suspension of mining activities, whose effect will be followed the procedure laid down in this Leyy its general regulation." Art. 16.-replace is the article 85 of the law of mining by the following: "Art. 85.-closing of operations mining.-them holders of concessions mining and plants of benefit, foundry and refining must include in their studies of impact environmental for them activities mining of exploitation, benefit, casting or refining, the planning of the closing of their activities, built-in in the Plan of management environmental and with its respective warranty;" planning that must begin in the stage of pre-feasibility of the project and continue during all the life useful, until the closing and abandonment final. The closure of mining operations plan, will be reviewed and updated periodically in programs and annual environmental budgets and environmental audits of compliance with information of investments or estimates of the costs of closure, activities for the closure or partial or total abandonment of operations and for the rehabilitation of the area affected by the mining exploitation activities benefit, smelting or refining. Also, within the period of two years prior to the expected from the project, for mining exploitation activities, completion benefit, smelting or refining, mining dealer must be lodged the national environmental authority, for its approval, the closure Plan of final operations including recovery of the sector or area, a plan for verification of compliance, social impacts and its compensation plan and updated warranties set forth in the applicable environmental legislation; "as well as, a plan of incorporation to new forms of development sustainable." Article 17.-then the article 86 of law of mining, add the following innumerado article: "art...." Ban on the use of mercury in mining operations.-without prejudice to the application of the environmental mining regulations, prohibits the use of mercury in the country in mining activities, according to the mechanisms the national environmental authority established for the purpose, in conjunction with institutions with legal authority over the matter. Failure to observe this prohibition will be sanctioned with revocation of the mining law, without prejudice to the criminal sanctions to any place." Article 18.-Article 93 of the Mining Act be replaced by the following: "article 93.-royalty to the exploitation of minerals.-the economic benefits for the State shall be subject to the provisions of article 408 of the Constitution of the 6 - second supplement - Registro Oficial Nº 37 - Tuesday, July 16, 2013 Republic;" i.e., that the State will participate in the benefits of the exploitation of these resources in one amount of not less than the dealer, who are exploited. To this effect the mining licensee paying a royalty equal to a percentage of the sale of the main ore and secondary minerals, not less than 5% on sales and, in the case of gold, copper and silver, no greater than 8%, in addition to the payment of the tax income; of the percentage of profits attributed to the State as this law; extraordinary income tax; and tax the value added determined current tax legislation. The evasion of the payment of royalties, will be causal of expiration, without prejudice of those effects civil and criminal to give place. 60% of the royalty will be destined for social investment projects primarily to cover unmet basic needs and productive, or territorial development through the national Government or the autonomous decentralized Governments. The investments involved in the decentralized autonomous governments must be funneled through the State Bank so that disbursements are carried out. When the case warrants, 50% of this percentage would correspond to instances of Government of indigenous communities or constituencies. These resources will be distributed prioritizing the needs of the communities that is found in areas of influence affected directly by the activity mining. Them holders of rights miners of small mining, will pay by concept of royalties, the 3% of the sales of the ore main and them minerals side, taking as reference the standards of the market international. The percentage of royalties for the exploitation of non-metallic minerals and construction materials shall be calculated based on the costs of production. Total royalties provenites of aggregates and stone materials will be aimed at the municipal and metropolitan decentralized autonomous governments where they are generated. The regulations under this law and contract mining will establish parameters for the purposes of the payment of royalties, as well as the requirements for distribution. The General Regulation of this law, shall include the provisions necessary for the application of article 408 of the Constitution of the Republic of Ecuador." Article 19.-Article 108 of the Mining Act be replaced by the following: "article 108-lapsing of mineral rights-the sectoral Ministry in the exercise of its jurisdiction may declare the forfeiture of the mineral rights, in the case of that owners hayn in the grounds for revocation laid down in articles 69, 79, 81, 93 and 125" , and this chapter, and more provisions of this Act. In all proceedings for a declaration of revocation shall ensure the right to due process which includes the basic guarantees enshrined in article 76 of the Constitution of the Republic of Ecuador. The Declaration of revocation process can be started automatically by the sectoral Ministry, by a third party complaint properly based and researched by the sectoral ministry or at the request of other ministries that relate to mining activity. The administrative procedure shall be subject to the provisions of this Act and its General Regulation. Technical report on the basis of fact that may serve as sustenance for the Declaration of expiration, will be conducted by the Agency for regulation and Control mining. The sectoral Ministry will be transfer to the holder with the technical regulation and Control mining agency report, to at the end of 45 days, accrediting compliance with its obligations or present their disclaimers and the evidence supporting his defense. If sectoral Ministry finds no basis to continue with the process of aging or the causal has been disproven by the concessionaire in that term, it will declare it concluded ydispondra the record file. If instead, there is compliance, by duly motivated administrative resolution, outstanding obligations will order the dealer to remedy the non-compliance in 60 days. The sectoral Ministry may request the motivated statement by other State entities in the process of Declaration of expiration. If the dealer not remedied within the period the breach within the period specified, the sectoral Ministry declared invalid reasoned ruling the forfeiture of the mineral rights. Only for the Declaration of expiration by the grounds envisaged in article 17 of this law, it will be necessary to previously having an enforceable court judgement. The dealer may bring the actions and administrative and judicial remedies provided in Ecuadorian legislation. Initiated an administrative procedure for declaration of revocation, the mining licensee may not waive the mining concession."

Article 20.-replace article 109 of the Mining Act with the following: "article 109.-effects of revocation-c ducidad extinguishes the mining rights conferred by the State, by means of concessions, authorizations, permits or licences referred to in this law." The Declaration of expiration of the mining concession firm will produce the following effects: Second Supplement - official record No. 37 - Tuesday, July 16, 2013 - 7


(a) the revocation of the outstanding delegation conferred by the State for the exercise of mining activities and the return of the area field of the concession to the same, without payment or compensation of any kind to the former holder Miner, together with all accessories and pertaining to the same goods, including those intended by the concessionaire to mining in all phases. The Agency for regulation and Control mining will be entitled have motivated way dealer clearance, at cost of the same, of goods which they believe are not suitable for mining. Notwithstanding the above, State will exercise his teacher faculty in such mining concessions, permits, licenses and other mineral rights, in accordance with this Act and its general regulation, duration of the expiration process. (b) the termination of mining on the concession expired, when there is a signed contract. "However the effects specified in the preceding paragraphs, in the event of a declaration of revocation, will remain the responsibility of the former owner, for environmental damage involving also the obligation of restoring ecosystems and compensation to individuals and communities, if pay." Article 21.-Article 122 of the Mining Act be replaced by the following: ' article 122.-right of property on mining assets.-except as provided for in article 109 of this Act in relation to the forfeiture of concessions, by the extinction of mining rights the former holder does not lose his right of ownership of buildings, machinery, installations and other elements of work " ", which may be retired to their own cost, with the authorization of the Ministry sector." Article 22.-Article 127 then added the following innumerado article. "Art...." Transfer of shares -the direct or indirect transfer of the shares or participations or any other right of a similar nature in the social capital of mineral dealers, and that together they represent more than 10% of them with voting rights, must register in the registry. For this purpose, the legal representatives of the dealer companies, within the term of 30 days from the registration of transfers in the corresponding social books, shall inform the sectoral Ministry transfers have made shareholders or partners, representing more than 10% of the shares or participations with voting rights, for which purpose shall enter data in the form that will prepare the Ministry and pay the record corresponding to the one right by cent (1%) of the value of the transaction. Transactions that are transferred indirectly the percentage of rights referred to in previous paragraph on a mining concession in stock in the Ecuador or overseas will also be subject to the mentioned registry and the payment of the respective right. In case of doubt on the value of the transaction, the dealer shall submit to the Ministry sectoral them documents related with the respective business legal to this determine the amount of the right of registration. If the transaction involves mining projects in several jurisdictions, the sectoral Ministry only take into consideration those projects and existing in the Ecuador mining activities." Article 23.-then of title VIII, merge one innumerado with the following lines. "TITLE..." MEDIUM and great mining - Chapter I - the medium mining art.... The medium mining - is considered medium-sized mining which, because of the size of the deposits depending on the type of metallic and non-metallic minerals, it has come to quantify resrvas allowing to carry out exploitation of them by the volume of processing set for the special regime of small-scale mining and the volume laid down in the following articles. They can decide the modality of medium mining, who having started its operations under the regime of small-scale mining, the evolution of their simultaneous work of exploration and exploitation have come to the quantification of resource and mineral reserves that allow the increase of the production. As indicated in the previous paragraph, the sectoral Ministry, with the technical and economic report of the Agency for regulation and Control mining, will adopt the administrative actions that may be necessary with respect to the modification of the regime of small-scale mining by the medium mining preserving the interests of the State and fostering the development of this sector. To the features and conditions, mentioned in the first subsection of this article, les are inherent which correspond to the amount of investment, volume of exploitation, capacity installed of benefit processing, and conditions technological, in accordance with the standards of the regulation of this law. The holders of concessions in this regime, will be exempted from the contracts of exploitation referred to in article 41 of the law on mining, but forced to submit to the sectoral Ministry, the manifestos of production, in the same terms as those laid down in this law. National or foreign investment that takes place in medium-sized mining activities, is subject to the provisions of the organic code of production, trade and investment. The payment of the annual patent from conservation medium mining mode, shall be carried out subject to 8 - second supplement - official record No. 37 - Tuesday, July 16, 2013 set out in article 34 of this law, except its subsection, applicable to the special arrangements for small-scale mining. Article... State involvement.-dealership miner in the form of medium mining must pay a royalty equal to a percentage of the four (4) per cent on the sale of the main mineral and secondary minerals, in addition to the payment corresponding to the income tax and value added tax. In the case of workers linked to the mining activity, they will receive 5% of the share of utilities and the remaining 10% will be paid to the State, which allocated it, exclusively, to local development projects. Article... Volumes of production-production in the form of medium mining volumes, will be subject to the following ranges: to) for metallic minerals: from 301 up to 1000 tons per day in underground mining; 1001 up to 2000 tons per day in open pit mining; and from 1501 to 3000 cubic meters per day in alluvial mining; (b) for non-metallic minerals: from 1001 to 3000 tonnes per day; and, c) for building materials: from 801 up to 2000 cubic metres for mining in alluvial terraces; and, from 501 to 1000 metric tons in pit mining open at hard rock (Quarry). Article... Mining on a large scale-is considered to scale mining, that exceed the maximum volumes set to medium mining mode." Article 24.-Art. 134 of the Mining Act be replaced by the following: ' article 134.-artisanal mining-for purposes of application of this law and in accordance with the rules of the organic law of the Popular ySolidaria economy and the Financial Sector people and solidarity, the designation of "artisanal mining" understands and applies to the popular economic units " , sole proprietorships, family and domestic undertakings carrying out work in free areas. In artisanal mining activities are characterized by the use of machinery and equipment with limited capacities of load and production in accordance with the instructions approved by the Board of the Agency of regulation and Control mining intended for obtaining minerals, whose marketing in general allow the needs of the community, people or family group that makes them only, within the territorial circumscription to which the corresponding permission is given. By its nature, the activities of artisanal mining, are not subject to the payment of royalties or patent, but if subject to the tax regime, to ensure revenues that correspond to the State.

The sectoral Ministry may grant permits for a period of up to 10 years for artisanal mining, renewable for equal periods always that there is request written prior to maturity and have favourable report from the Agency for regulation and Control mining and the Ministry of the environment. Artisanal mining permissions may not affect the rights of a dealer Miner with a current title; However it earlier, them dealers miners may authorize the realization of works of mining craft in the area of its concession, through the celebration of contracts of operation regulated by the Ministry sectoral.


In the event that in exercise of the power of the State to regulate, control and manage the strategic mining sector, the sectoral Ministry, considers suitable and necessary to the granting of the permits referred to in the foregoing paragraph in concession areas, with the exception of the subject to the special arrangements for small-scale mining, it will confer them, prior favourable report from the Agency for regulation and Control mining. In these cases, the compliance with the obligations of environmental character, mining, labour, social security, tax and more that they contemplated in the regulation of the special regime of small-scale and artisanal mining, will be the exclusive responsibility of their beneficiaries, without them, nor the effects of non-compliance, the holders of mining concessions may be attributed.

The permissions that are granted for underground workings of artisanal mining, may not exceed 4 mining hectares, or 6 hectares for opencast workings. Is prohibits in form express the granting of more than one permission to a same person, for activities in mining craft, as well as also, the realization of workings in form direct or by brought people outside to them locations in which is made such labors.

The procedures of character administrative that must perform is in the Ministry sectoral and their entities assigned, for the granting, administration, extinction and record; in any case they must be simplified and no cost to the applicant. Similarly and for purposes of notarial order permissions that confer to artisanal mining shall be taken as of undetermined amount.

For purposes of control and proper environmental management of artisanal mining permissions granted for exploitation of metallic minerals, with exc Rene's exploitation of alluvial deposits, shall be limited to extract. "Its processing must make is in plants that have with the due authorization for its installation and operation, also with the license environmental that the case requires." Article 25.-then Art. 134, of the Mining Act. incorporate the following innumerados articles.

"Art...." Production capacity yprocesamiento.-considering the different nature and concentration of minerals and depending on the distribution of mineralization, as well as methods of exploitation and/or processing technically selected for its second supplement - Registro Oficial Nº 37 - Tuesday 16 July 2013 - 9 rational use, establish the following production capacities under the regime of artisanal of mineralized material (: a) for metallic minerals: up to 10 tons per day in underground mining and 120 cubic meters per day in alluvial mining; (b) for non-metallic minerals: up to 50 tons per day; (c) for building materials: up to 100 cubic meters per day for mining of alluvial or materials not consolidated; and, 50 tons metric by day in mining to heaven open on rocks hard. Article... Exercise of State authority.-in exercise of the State power manage, regulate, control and manage the strategic mining sector, the sectoral Ministry, with the technical and economic report of the Agency for regulation and Control mining, adopt administrative actions that may be necessary with regard to the granting, conservation yextincion of the rights granted under the regime of artisanal mining , including in the modify the permissions system and opt for the concession provided for small-scale mining mode, preserving the interests of the State and fostering the development of this sector. In this case may make is the accumulation of areas mining granted low it mode e permissions for mining craft, without prejudice of that the Ministry sectoral, in application of them standards of them Articles 313 and 316 of the Constitution of the Republic of the Ecuador, of trade, can redefine them areas matter of the granting of concessions, conferring titles of concessions in replacement of them permissions for mining craft. In exercise of the same power, comes also the accumulation of mining areas in the case of small and medium mining large-scale, within the limit of the size of concessions laid down in this law." Article 26.-replace the article 138 of the law of mining by the following: 'article 138.-small mining-is considered small-scale mining that, because of the characteristics and geological condition mining of deposits of mineral substances, metal, non-metal and materials of construction, as well as their technical and economic parameters, is made viable rational direct exploitation Notwithstanding that precede you exploration work, or that work in exploration and exploitation are carried out simultaneously. To Agency conditions of the sites listed in the paragraph above, suitable for the development of work in small-scale mining, and various mining activities on a larger scale, and the features are inherent to them which correspond to the area of concessions, to the amount of investment, volume of exploitation, installed capacity of benefit or processing, and technological conditions, in accordance with the rules of the regulation of the special regime of small-scale and artisanal mining."

Article 27.-following of the article 138 of the law of mining incorporate is them following articles innumerados: "art...." Production capacity under the regime of small-scale mining.-depending on the degree of concentration of the minerals in the fields and according to the way how the mineralization is distributed, as well as of the methods of exploitation and/or processing technically selected for their rational exploitation, the following ranges of production are established for each operator: a) for metallic minerals : up to 300 tons per day in underground mining; until 1000 tons per day in open pit mining; and, up to 1500 cubic meters per day in alluvial mining; (b) for non-metallic minerals: up to 1000 tons per day; and, c) for building materials: up to 800 cubic meters for mining in alluvial terraces; and 500 metric tons per day in hard rock (Quarry) open-pit mining. Within this regime, for each mining area may be one or more mining operations, part of its holder or their legally authorized operators for doing so, as features or mining technical conditions justify it. Article... Manifestos and reports production.-holders of concessions in small-scale mining, will be exempted from the contracts of exploitation referred to in article 41 of the law on mining, but forced to submit to the sectoral Ministry, manifestos and reports of production, by affidavit made before a notary, which shall indicate the number of hectares mining exploration and exploitation , respectively. The duly audited annual reports of production will be presented until March 31 of each year the sectoral Ministry, in accordance with the guidelines elaborated for the purpose by the Agency for regulation and Control mining. Falsehood in the Declaration of the previous reference shall be punished in accordance with the penalties for the crime of perjury. The lack of presentation of the manifests of production or their updates, shall be punished with temporary activity suspension until it is satisfied with the presentation of these manifestos. The delay in the presentation of them indicated documents not may exceed to the term of ninety days, expired which is will produce the suspension final of activities. Them manifest of production and more statements of them holders of rights miners, made by declaration sworn made before notary, must consist in the text of the requests, requests and more documents of pending or procedural.

10-second supplement-registration official No. 37-Tuesday 16 of July of 2013


For all purposes, including fiscal and tributary, order the Agency for regulation and Control mining, establish amounts of extraction, processing and export of minerals and its contents or law. The regulations under this law shall define the General, technical and statistical parameters for the exercise of this power." Article 28.-Article 149 of the Mining Act be replaced by the following: ' article 149.-purchases of gold.-purchases of gold by the Central Bank of Ecuador directly or through financial institutions authorized by the Bank itself, will be taxed by tax on the value added rate zero. " Article 29.-at the end of the mining law 150 article add the following subparagraph: "any procedure for granting, management and extinction of mining rights, shall have the technical report prior Agency of regulation and Control mining, which must be issued within one period not exceeding thirty (30) days, counted from the date of receipt of the request or requirement. If not issued within the term referred, the sectoral Ministry shall take the reasoned ruling that the case requires." Article 30.-Article 165 of the reform law for the tax equity in the Ecuador be replaced by the following: 'article 165.-concept of extraordinary income-for purposes of this tax, are considered revenue windfalls to those perceived by the companies generated sales at prices above the base price has been agreed or provided in the respective contracts and contracting. They are considered as extraordinary income only those collected after the month in which pre operational preparation and investment development in the area of contract or grant me was carried out before the start of production, declared by the competent body hayn been completely recovered from a financial perspective. By resolution of a general nature in the field of its competences, the internal revenue service will establish the procedures, conditions and requirements for the calculation of extraordinary income received." Article 31.-at the end of article 168 of the reform law in the Ecuador tax equity, add the following subparagraph: "the tax corresponding to the months of the fiscal year in which the investment, has recovered completely will be declared and paid within the month of may of the immediately following year, according to the ninth digit of the RUC, in accordance with the resolution of general character that for this purpose issue the revenue service internal."

"Article 32-A continuation of the paragraph 15 of article. 55 of the law of internal tax system, add the following: "16-gold when it is acquired by the Central Bank of Ecuador directly or through financial institutions authorized by the Bank itself." Article 33.-the third General provision of the Mining Act be replaced by the following: "the State is the owner of the royalties, patents, business profits attributable to the State in the percentage that corresponds according to this Leyy of adjustment that is necessary to comply with article 408 of the Constitution, which will be raised through the internal revenue service which for these purposes is vested in all the faculties and powers granted the tax regulations in force and this Act."

PROVISIONS GENERAL FIRST. -Holders of mining concessions, in the event of benefit from the provisions of article 46 of the law on mining and opt for the installation of the plants mentioned, should include ensus environmental studies and environmental management plans concerning the installation and operation of such plants of benefit.

SECOND.-the Ecuadorian State may delegate participation in strategic mining to private initiative and the popular and solidary economy, by way of exception, in compliance with the provisions contained in the second paragraph of article 316 of the Constitution of the Republic of Ecuador; through the granting of rights in the form referred to in this law, and it is forbidden any other modality, not foreseen or recognized by them and their regulations. Equal ban is established for the registration of mining titles in the mining registry, in charge of the Agency's regulation and Control mining, that lacking of origin in the outstanding delegation, under the administrative concession modality, are found not registered in the registry.

THIRD.-in order to safeguard the interests of the State, in all those cases where is evident the existence of gold in the beds of rivers, lakes, lagoons, sea beaches and quarrying and have been granted titles of concessions in ore non-metal s or materials of construction, the Ministry of natural resources not renewable, with the report of the Agency of regulation and Control mining and geological research National Institute , Mining, metallurgical, ex officio, shall be ordered reform of the title of the concession or change of the object of concession modality that allows the use of resources.

Fourth.-the losses suffered in a mining concession may not be compensated or consolidated with the profit of other mining concessions granted second supplement - official record No. 37 - Tuesday, July 16, 2013 - 11 to the same holder. Of equal way, such losses or earnings nor may be compensated with them obtained in the realization of other activities economic different of the mining carried out by said holder. Fifth.-the suspension of mining activities established in this law and its regulations, will be exclusively ordered by the sectoral Ministry, by a motivated resolution. Notwithstanding the foregoing, the suspensions based on environmental matters as preventive or corrective action, with respect to legal or illegal mining activities, must be carried out by the national environmental authority in accordance in the article 396 of the Constitution of the Republic of the Ecuador. SIXTH.-the processes of qualification or registration under the special scheme for small mining and artisanal mining are subject to the pre-existence of the mining property. SEPTIM a.-not mineral rights will be recognized to persons natural or legal, national or foreign, having as partners, shareholders or partners directly or indirectly to businesses domiciled, established or located in a tax haven. EIGHTH.-the State through the sectoral Ministry, the Instituto Nacional de Investigaciones geological, mining and metallurgic and the Ministry of the environment, develop training and technical assistance programmes for artisanal miners and small miners, those who will be periodic. Similarly, the State through public banks will seek to create financial products for the acquisition of modern technology yamigable the environment.

TRANSITIONAL PROVISIONS FIRST. -The applicable rules on mining with respect to procedures and processes for the granting, conservation and extinction of mining rights, as well as also, the pertaining to international administrative protections, oppositions, invasions, easements, expiration dates, annulments, acts interim, temporary suspensions or closure of activities, fines, increases in production volumes, revocation of permissions, processes of formalisation, concessionary mode, jurisdiction and administrative changes the sectoral Ministry and the Agency for regulation and Control mining, shall be entered in the General regulations of this law and in the regulations establishing the Agency. SECOND.-in the term of six months starting from the force of the present law, the directory of the Bank Central of the Ecuador, issued them regulations of its competition, necessary for the marketing of the gold, especially


the required to offer logistical and operational facilities requiring such marketing to the mining holders. THIRD.-for the Elimination of the use of mercury in mining activities, natural or legal persons, national or foreign, and holders of mining rights, starting from the entry into force of this Act and for the period of two years, shall apply alternative methods that allow to eliminate the substance in a progressive way in the processes of recovery of ore. Fourth.-in the event of that them people certain in it available General seventh of this law is found covered to the time in them conditions indicated in that, must cambi r its domicile in the term of a year, starting from the force of it present law, leaving exempted of them rates of transfer in accordance with the normative tax existing. Fifth.-them activities mining that is develop in areas with regard to which its holders have effected workings with adjustment to them provisions of them articles 37 and 38 of the law of mining and that of equal form have evidenced before the Ministry sectoral his interest by negotiate and celebrate contracts of exploitation mining as them articles 39 and 41 of such law they may not qualify for the special scheme for small-scale mining or medium mining. SIXTH.-in the case of persons performing work of artisanal mining, identified in the Census of the year 2010 and that, up to the date of enactment of this Act, have not been regularized, the sectoral Ministry within a period up to 180 days will culminate its legalization under the rules of the mining law and the present reform. SEPTIM A: the sectoral Ministry, through the fulfilment of powers granted him under this law, will prevent the concessions contract situations of monopoly or concentration occur. To the effect, in the regulation General to this law, is established the rules that prevent monopolies or concentrations.



DISPOSAL this law shall enter into force following its publication in the official register. Given and signed at the headquarters of the National Assembly, located in the Metropolitan District of Quito, Pichincha province, nine days after the month of July of two thousand thirteen. f.) GABRIELA RIVADENEIRA BURBANO, President. f.) Dr. Libya RIVAS O., Secretary General.