On September 28, 2026, the Vice Ministry of Mines issued Agreement No. MAE-VM-2026-0002-AM, which amends Ministerial Agreement No. MAE-VM-2026-0001-AM, dated August 13, 2026, concerning the control of processed mineralized material through sampling and technical verification. Among other considerations, the reform responds to the fact that the initial period granted to the Mining Regulation and Control Agency (“ARCOM”) to issue the corresponding technical guidelines had elapsed without such guidelines having been issued, which hindered the operational implementation of the control mechanism.
The instrument seeks to maintain technical control and export traceability without disrupting the logistics and export chain while the definitive technical guidelines are issued. To this end, it maintains prior sampling but allows laboratory results to be obtained and assessed after the vessel’s departure, while preserving the possibility of subsequent verification and royalty reassessments.
- Purpose and Scope
The reform replaces the purpose of the original Agreement and establishes a technical verification and traceability control system for the commercialization and export of processed mineralized material. The system is intended to ensure that declared values reflect market conditions, safeguard State revenues and, at the same time, ensure the continuity and fluidity of foreign trade operations.
The mechanism is linked to the proper determination of the basis for calculating mining royalties through verification of the grade, purity and presence of associated or secondary minerals in the exported material. ARCOM is responsible for carrying out the technical verification, without prejudice to the powers of the Ecuadorian Internal Revenue Service (“SRI”) with respect to the assessment and collection of royalties and transfer pricing.
- Suspension of the Operation and Sampling
When any of the circumstances provided for in Article 3 of the original Agreement is verified, the export or domestic commercialization of the mineral will be immediately suspended until sampling has been carried out. The reform therefore modifies the point up to which the suspension remains in effect: continuation of the operation is no longer necessarily conditional upon obtaining the final laboratory results.
According to the technical background to the reform, the objective is to preserve the representativeness, identification, custody and traceability of the samples, while allowing the analysis and assessment of the results to take place after the vessel’s departure.
- Post-Departure Verification and Royalty Reassessment
A new Article 8 is incorporated, providing that ARCOM will analyze the laboratory results after the vessel’s departure. If differences are identified between the grade initially declared and the grade actually verified, or if secondary minerals are identified, ARCOM will issue the corresponding assessment for royalty differences and notify the SRI for the relevant purposes.
The issuance of these subsequent assessments will not suspend or affect the holder’s future export operations, except in cases of repeated non-compliance or failure to pay the assessments within the prescribed deadlines. The Agreement does not establish a specific fine under this reform, nor does it expressly determine the specific consequence applicable in either of these two circumstances.
- Secondary Minerals
The reform introduces a specific rule for secondary minerals identified through mineralogical testing. These must be assessed using the market price of the relevant commodities in effect on the date of issuance of the final export invoice.
Accordingly, mineralogical testing becomes relevant not only for verifying the grade of the principal mineral, but also for identifying other minerals present that may affect the determination of royalties.
- Inter-Institutional Verification and Coordination
The public entities involved, within the scope of their respective powers, in the control process must verify strict compliance with the Agreement. Such actions will be carried out without prejudice to the inter-institutional coordination mechanisms provided for in the instrument itself.
In particular, the reform provides for coordination between ARCOM and the SRI to implement a joint mechanism for the permanent verification of the circumstances established in Article 3 of the original Agreement.
- ARCOM Technical Guidelines
The reform replaces the previous transitional provision and grants ARCOM a new period of sixty (60) days from the execution of the reformed Agreement to issue the technical guidelines that must establish concentration thresholds, sampling protocols and other operational parameters necessary for implementation of the control mechanism.
These guidelines must address the technical aspects of sampling, representativeness, preparation, custody, analysis and validation of results that, according to the background to the Agreement itself, remained pending regulation.
- Transitional Procedure for Exports to China
Until ARCOM and the SRI implement the joint permanent verification mechanism, exports destined for the People’s Republic of China must comply with a specific transitional procedure.
First, the exporter must submit a written request to ARCOM for sampling and the corresponding mineralogical test, bearing the related cost. The tests may be performed by laboratories other than the laboratory that carried out sampling at the mine, provided that they hold a valid accreditation from the Ecuadorian Accreditation Service (“SAE”) and are registered with ARCOM.
The documents evidencing the sampling and mineralogical test must then be submitted to ARCOM, including, among others, the sampling record, laboratory acknowledgment of receipt and sample receipt. Once these requirements have been met, ARCOM will lift the suspension of the export of the processed mineralized material.
The text of this provision expressly refers to “Article 8” in connection with lifting the suspension; however, the new Article 8 introduced by the reform governs post-departure verification. This Alert merely notes the reference as it appears in the instrument, without replacing or interpreting it.
- Duration of the Transitional Regime
The transitional procedure will cease to apply upon the occurrence of whichever of the following events occurs first: (i) ARCOM and the SRI implement the joint verification mechanism; or (ii) ARCOM issues the technical guidelines provided for in the First Transitional Provision. From that point onward, Articles 3 through 10 of the Agreement will apply in full.
Accordingly, the regime applicable to exports to China during this stage is expressly temporary, and its duration is not determined solely by a specific date, but also by the occurrence of either of these two regulatory milestones.
- Main Obligations by Actor
ARCOM must carry out sampling and technical verification within the scope of its powers, analyze laboratory results, issue the corresponding assessments for royalty differences, notify the SRI, lift the suspension once the transitional requirements have been met, and issue the technical guidelines within the sixty-day period.
Exporters shipping to China must request the sampling and mineralogical test, bear the related cost, and provide documentary evidence of their completion to ARCOM before the suspension may be lifted.
The SRI retains its powers with respect to royalties and transfer pricing and must coordinate with ARCOM in implementing the joint permanent verification mechanism.
The other public entities involved must verify compliance with the control mechanism within the scope of their respective statutory powers.
- Consequences of Non-Compliance
The reformed Agreement does not create a standalone system of fines or introduce new expressly quantified penalties. The principal consequences provided for are the immediate suspension of the export or domestic commercialization until sampling is carried out, the subsequent assessment of royalty differences where discrepancies or secondary minerals are identified, and the possibility that future exports may be affected in cases of repeated non-compliance or failure to pay the assessments within the prescribed deadlines.
The instrument also does not define the number or type of breaches that constitute “repeated non-compliance”; accordingly, this matter is not further developed in the reform.
- Continued Effect of the Original Agreement
All provisions of Ministerial Agreement No. MAE-VM-2026-0001-AM that have not been expressly amended by the new instrument remain in force.
Accordingly, this reform must be read together with the original Agreement and not as a standalone regime that replaces it in its entirety.
- Effectiveness and Final Provisions
The reformed Agreement entered into force upon execution, i.e., on September 28, 2026, without prejudice to its subsequent publication in the Official Gazette. The Ministry’s General Secretariat must undertake the necessary actions for such publication, and ARCOM must notify the instrument to mining operators and the other entities involved.
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