On 1 September 2026, Ministerial Agreement No. MAE-VM-2026-0001-AM, signed by the Vice Minister of Mines on 13 August 2026, was published in Fourth Supplement No. 359 to the Official Gazette. The instrument establishes a prior control mechanism for certain domestic trading and export transactions involving processed mineralized material, through sampling and technical verification, in order to confirm that the declared value reflects actual market conditions and to protect the revenues due to the State.
- Background and purpose of the control
The Agreement is based on the powers of the State and the Sectoral Ministry to administer, regulate and control the mining sector, as well as to regulate the trading and export of minerals and verify their traceability, quality and valuation for purposes of determining the royalty calculation base.
As the economic basis for the measure, the Ministry points to the increase in international demand for gold and copper associated with the energy transition and cites projections of a global copper supply deficit. It further maintains that price formation under market conditions is necessary to correctly determine the royalty calculation base and that the governing authority is responsible for verifying the traceability and actual valuation of the mineral, without prejudice to the powers of the Ecuadorian Internal Revenue Service (Servicio de Rentas Internas, “SRI”) regarding the assessment and collection of royalties.
The Agreement identifies as risk factors the existence of corporate affiliations or related-party relationships and, as a heightened risk, cases in which the purchaser of gold- or copper-bearing material, or its ultimate controller, is subject to foreign state ownership or control. It also cites, as background, the concentration of purchases among a limited number of buyers.
In particular, the Agreement cites information from the Mining Regulation and Control Agency (Agencia de Regulación y Control Minero, “ARCOM”), according to which, during the first half of 2026, 94,73 % of the copper concentrate exported by Ecuador and 53,87 % of the gold concentrate were destined for the People’s Republic of China. It further states that China’s share of Ecuador’s total mining export volume increased from 52,60 % in 2025 to 83,40 % during the first half of 2026.
- Purpose and scope of application
The purpose of the Agreement is to require sampling and technical verification prior to the export and trading of processed mineralized material whenever any of the risk scenarios established in the instrument applies. Its expressly stated purpose is to ensure that the declared value reflects actual market conditions and to protect the revenue due to the State.
Article 2 provides that the Agreement applies to domestic trading and export transactions involving processed mineralized material destined for the People’s Republic of China and under any customs export regime, without distinction between the ordinary regime and special regimes, until laboratory results validated by ARCOM are obtained.
Although the recitals refer specifically to gold- and copper-bearing material, the operative provisions generally use the term “processed mineralized material.” The Agreement does not provide its own definition of this term or specify in its operative provisions which products or tariff classifications are covered.
- Circumstances triggering the control
The control is not automatically triggered for every transaction. Under Article 3, at least one of the following objective circumstances must apply: (i) there is a corporate affiliation or related-party relationship between the parties to the transaction, as defined in the Regulations for the Application of the Internal Tax Regime Law (Reglamento para la Aplicación de la Ley de Régimen Tributario Interno); or (ii) the purchaser, or its ultimate controller, is subject to foreign state ownership or control, in which case the Agreement presumes a heightened risk to free price formation.
According to the instrument, these criteria apply without distinction between domestic transactions and export transactions.
- Control procedure and ARCOM’s role
ARCOM is responsible for carrying out the control, pursuant to an express delegation from the Ministry. The control must be performed before customs clearance for export or, in the case of a domestic trading transaction, before the transaction is perfected.
The control includes sampling and determination of the mineral’s grade and purity. The Agreement provides that this determination will be carried out by accredited laboratories operationally authorized by ARCOM and establishes that their results will be binding for purposes of valuing the transaction.
The instrument does not yet address matters such as concentration thresholds, detailed sampling methodology, number of samples, chain of custody, counter-samples or other operational parameters. These elements must subsequently be developed through a technical instruction issued by ARCOM.
- Suspension of the transaction
When ARCOM verifies any of the risk scenarios established in Article 3, the export or domestic trading transaction is immediately suspended until the results of the sampling and corresponding technical verification are obtained.
Accordingly, the Agreement establishes the control as a prerequisite to completion of the transaction, rather than merely as a subsequent verification.
- Prior requirement for export and retention of the goods
For exports, the Agreement expressly provides that processed mineralized material may not leave the country unless sampling and technical verification of the mineral’s grade and purity have first been carried out.
Without the corresponding verification record, shipment may not be authorized and the goods may not be released by customs. The absence of such record constitutes sufficient grounds for retaining the goods until the requirement is satisfied.
The retention contemplated by the Agreement is a direct consequence of failure to comply with the prior requirement; the instrument does not expressly characterize it as an administrative sanction.
- Coordination with other authorities
ARCOM must coordinate with the National Customs Service of Ecuador (Servicio Nacional de Aduana del Ecuador, “SENAE”) the actions necessary to verify compliance with the prior export requirement, within the scope of each entity’s respective powers.
Additionally, when application of the control reveals indications of practices that could affect free competition, the Ministry must refer its findings to the Superintendency of Economic Competition (Superintendencia de Competencia Económica). This is without prejudice to the SRI’s own powers regarding transfer pricing.
Accordingly, depending on the results obtained, the mechanism may lead to subsequent actions not only by the mining and customs authorities, but also by the competition and tax authorities.
- Deadline for issuance of the technical instruction
The sole transitional provision requires ARCOM, within 30 days, to issue a technical instruction establishing the concentration thresholds, sampling protocols and other operational parameters necessary to apply the mechanism.
This technical instruction will be particularly relevant to the practical implementation of the Agreement, since the instrument itself does not contain those technical parameters.
- Obligations by stakeholder
For operators subject to the control, the principal effect is that the transaction must undergo sampling and technical verification whenever any of the criteria in Article 3 applies, and the corresponding results must be awaited before the domestic trading transaction may be perfected or the export clearance process may continue. For exports, there must also be a verification record before shipment and customs release of the goods may proceed.
ARCOM is responsible for carrying out the control, validating the results, coordinating with SENAE, issuing the technical instruction, and overseeing the Agreement’s implementation, notification and general follow-up. It must also report to the Vice Ministry of Mines on the actions taken to ensure compliance.
The Ministry must refer to the Superintendency of Economic Competition any findings that may indicate effects on free competition, while the SRI’s powers regarding transfer pricing remain expressly preserved.
- Express exceptions and limitations
The Agreement does not establish express exceptions based on volume, transaction value, type of operator, company size, mining regime or customs regime. On the contrary, for exports falling within its scope, it expressly provides that it applies under any customs regime, whether ordinary or special.
The principal limitation on the control is that at least one of the objective criteria established in Article 3 must apply. The Agreement also does not provide an exception, waiver or special authorization procedure allowing the transaction to continue while the results are pending.
- Sanctions and consequences of non-compliance
The Agreement does not create an autonomous sanctioning regime or establish specific fines. The expressly provided consequence is the immediate suspension of the transaction while the verification results are obtained and, for exports, the inability to authorize shipment or customs release without the corresponding verification record, with the goods potentially being retained until the requirement is satisfied.
The results of the control may also result in referrals to the Superintendency of Economic Competition or actions within the SRI’s powers regarding transfer pricing.
- Transitional, general and final provisions
The sole general provision requires coordination between ARCOM and SENAE to monitor compliance with the prior export requirement. The sole transitional provision grants ARCOM 30 days to issue the technical instruction that will establish the concentration thresholds, sampling protocols and other operational parameters.
The final provisions entrust ARCOM with the implementation, notification and follow-up of the Agreement; the Ministry’s General Secretariat with the steps required for its publication in the Official Gazette; and the Ministry’s Social Communication Directorate with disseminating the Agreement to the entities and areas involved.
Finally, the Agreement provides that it entered into force upon its execution, i.e., on 13 August 2026, without prejudice to its subsequent publication in the Official Gazette on 1 September 2026.
This bulletin contains a summary of legal developments of interest and therefore should not be construed as legal advice. If you have any questions, please contact the AVL team.