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Internatiiona Law Internationall Law o comparison of the services offered against those offered by similar entities; • Be printed in at least 8-point type; • Include the type, amount and method for calculating interests and commissions, in compliance with the TILA requirements; • Include the total amount owed; • Comply with Profeco registration requirements with respect to timeshare purchase contracts; and • Include and describe a service cancellation process. The TILA Regulations also include a form of “cover page,” which TILA requires to be used for all timeshare purchase agreements. Note that some of the information to be included in this mandatory “cover page” should be further detailed by the Timeshare Entity in order to prevent litigation. For instance, the form states that, where the purchase price is denominated in a foreign currency, the parties should refer to the Mexico Central Bank Web site (www.banxico.org.mx) in order to determine the exchange rate. However, the form fails to recognize that the Central Bank publishes several rates and that such rates may vary during any day. Some of the different rates include (a) FIX rate, which is published at noon and determined based on the average rate of the currency exchange market for transactions payable within two (2) business days; (b) the FIX rate published that day on the Federal Official Gazette (i.e., the FIX rate published the preceding business day, at noon); and (c) the rate for making payment of obligations denominated in a foreign currency and payable in Mexico. The following chart shows how these different rates may vary: In the above example, assuming that the corresponding payment was due on October 8, 2008, the differences between rates could have resulted in a loss (or gain) of up to 10.8356%! Another relevant provision of the amended TILA requires Timeshare Entities (in financed transactions) to deliver statements to their clients by mail (or otherwise agreed-on means) on a regular basis and at no cost to the client. These statements shall be drafted in clear and simple terms, and reflect all information relevant to the transaction, so the client may perfectly understand it and compare the same against similar transactions. There are many timeshare entities which, for various reasons, continue to use outdated and/or incomplete or unregistered timeshare purchase agreements, thus exposing themselves to unnecessary risks. latter is a corporation organized and existing under the laws of Mexico. Thus, Timeshare Entities should explore whether a portfolio interest trust arrangement (or other type of structure) may be implemented as a convenient vehicle for dealing with this issue. It should be noted that, under certain circumstances, the implementation of a portfolio interest trust may also serve as a convenient financing vehicle, with the lender (a) being named a beneficiary of the trust, (b) accepting a pledge of the ownership interest of the beneficiary in and to the trust, and/or (c) accepting a pledge by the trustee of the individual notes receivables forming the corpus of the trust. Taxes and Financing Structures Because a large portion of timeshare purchasers are either citizens or residents of the United States, a withholding tax obligation on the part of such purchasers may be created when they remit interest payments to the Timeshare Entity if the Conclusion DATE 2/20/2009 2/19/2009 FIX 2/ 14.8163 14.5505 FIX (Official Gazette) 14.5505 14.6725 For Payments 14.6725 14.6118 Timeshare Entities should use well crafted documents in order to comply with the requirements of all applicable Mexican laws and regulations and avoid the risks of litigation. Unfortunately, there are many Timeshare Entities which, for various reasons, continue to use outdated and/or incomplete or unregistered timeshare purchase agreements, thus exposing themselves (and timeshare purchasers) to unnecessary risks. To minimize such risk exposure, Timeshare Entities should consult with experts in continued on page 59 These rates show a maximum difference of 1.8267%, which may seem irrelevant. However, on certain occasions, the difference may have a greater impact, as shown below: DATE 10/08/2008 10/07/2008 FIX 2/ 13.0417 12.1196 FIX (Official Gazette) 12.1196 11.7667 For Payments 11.7667 11.1188 Developments • October 2009

October 2009 Developments

Table of Contents for the Digital Edition of October 2009 Developments

October 2009 Developments - 1
October 2009 Developments - C1
October 2009 Developments - I1
October 2009 Developments - I2
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