US embassy cable - 04GUATEMALA1313

UNCLAS GUATEMALA 001313 
 
SIPDIS 
 
PASS OPIC FOR INSURANCE OFFICER STEPHANIE M. DOWNEY 
 
E.O. 12958: N/A 
TAGS: EINV, GT 
SUBJECT: COLITE APPLICATION FOR BILLBOARD CONSTRUCTION 
 
REF: A. STATE 127407 
 
     B. GUATEMALA 01783 
 
1. Summary:  Embassy has no objections to Colite Outdoor's 
application for OPIC insurance for its billboard operation 
but recommends caution in defining what is covered due to the 
vagueness of Guatemalan law with respect to "visual 
pollution."  End Summary. 
 
2.  The construction of billboards in Guatemala is regulated 
by Legislative Decree 34-2003, the Law of Advertisements in 
Urban, Suburban and Other Roads.  This law was put in place 
because the prior laws (43-95 and 144-96) were declared 
unconstitutional by the Supreme Court for multiple reasons. 
Copies of the national laws and court rulings are being 
mailed to OPIC, Attn. Mr. Rivera Montes (documents are not 
suitable for faxing). 
 
3.  Companies must obtain permission from the landowner and 
the local municipality.  They may not construct on road 
rights of way.  Tax rates are uniform across the county. 
Foreign firms are taxed at the same rate as domestic ones. 
The location of (urban, rural, etc) and size of the signs 
impact the tax rate. 
 
4.  The two fundamental norms regulating posting of 
billboards are found in Article four of Decree 34-2003: 
"--a) All necessary means should be taken to obtain the best 
appearance in urban, suburban and other roads, in order to 
avoid danger and facilitate the free circulation of vehicles 
and pedestrians, thus reducing to a minimum the visual 
pollution of the environment. 
"--b) Respect for the liberty of industry, commerce, and 
work, which one will attempt to stimulate and encourage, 
except in the case of legal limitations and social 
inconviences." 
 
5.  More specific regulations are found in Chapters two and 
four.  The prohibition of primary concern is Article 17, Part 
B: 
 
"It is prohibited to place advertisements that impede views 
of legitimate tourist interest..." 
 
The local municipalities, which are part of the approval 
process, define what is a view of legitimate tourist interest. 
 
6.  Embassy is not aware of any cases of forcible removal of 
billboards that might be interpreted as expropriation, but we 
recommend caution in defining insurance coverage so that a 
reasonable application of Guatemalan law does not require 
payment of insurance benefits. 
HAMILTON