Many loans involve the transfer of assets to a collateral or payment-source trust, especially (but not exclusively) when dealing with cash-generating assets, such as long-term contracts or receivables. A 2016 federal collegiate circuit court decision could jeopardise these structures in the context of insolvency proceedings. However, new judicial guidance was recently issued to reinforce traditional considerations regarding trusts.
Andrés Manuel López Obrador was elected president on 1 July 2018 and will take office on 1 December 2018. Not only did López Obrador obtain more than 50% of the votes (approximately 30 million), his party and coalition also won an absolute majority in both the House of Representatives and the Senate. This is the first time in 20 years that a president will govern with this level of power. But what will this mean for the banking sector?
The funds of some participants of the Interbank Electronic Payments System (SPEI) were recently affected by a series of unprecedented cyberattacks. The Mexican Central Bank revealed that approximately $15 million (Ps300 million) had been involved in diverse irregular transfers, subject to investigation. The cybercriminals had identified a flaw in the system that permitted receivers of SPEI transfers to withdraw cash almost immediately after receiving the transfer so that the money could not be traced.
The president recently enacted the Financial Technology Institutions Law. The Senate had unanimously approved the bill on the law in December 2017 and sent it to Congress, which made no changes. The law seeks to build a regulatory framework that will encourage the development of innovative financial services, increase the level of competition and financial inclusion and place Mexico at the forefront of the industry.
There were a number of court precedents in 2017 concerning financial transactions. For example, a recent non-binding collegiate court precedent broadened the scope and source of information that judges should use to analyse and determine the existence of usury, while another validated judges' authority to use the annual interest rate published by companies that engage in vehicle financing. Further, a binding Supreme Court precedent dealt with the maturity date of promissory notes.
The Federal Competition Commission (FECC) recently issued its Competition Agenda for Public Procurement, in which it presented its findings regarding competition issues that can arise during the public procurement process. In the agenda, the FECC also proposed certain courses of action (both administrative and legislative) to promote effective competition in public procurement.
After two years of litigation, the First Collegiate Tribunal on Administrative Matters Specialised in Economic Competition, Broadcasting and Telecommunications has finally issued a final ruling acknowledging that the Federal Economic Competition Commission breached the attorney-client privilege principle during a dawn raid. The tribunal's ruling is relevant, as it demonstrates the possible outcomes of a violation of attorney-client privilege by the antitrust authorities.
The Federal Economic Competition Commission (FECC) recently issued its Annual Working Plan. In it, the FECC recognised that one of its strategic goals is to communicate to economic agents how anti-competitive practices will be investigated and which actions agents may adopt to prevent potential risks. In particular, the FECC declared that one of its goals for 2017 would be to launch a project to develop guidelines for the analysis of collaboration agreements between competitors.
Corn tortillas are a fundamental source of nutrition for Mexican families, and artificial price increases have a significant effect on the consumer economy. Given the importance of the corn tortilla market, it has come under the scrutiny of several authorities – for example, the Federal Economic Competition Commission, which recently fined three individuals a total of Ps394,508 for the commission of an absolute monopolistic practice in the market for the production, distribution and marketing of corn tortillas.
The Federal Economic Competition Commission (FECC) recently released a study on competition in the expired patent drug market, in which it analysed the level of competition in various drug markets following the expiry of an original drug's patent. According to the FECC, several obstacles to competition exist, which ultimately discourage possible new competitors from developing generic versions of drugs and entering the market.
The decree amending several provisions of the Constitution with regard to labour justice, freedom of association and collective bargaining was recently published in the Federal Official Gazette. Key amendments include the abolishment of the conciliation and arbitration boards and the establishment of a new federal agency which will be responsible for the registration of collective bargaining agreements and trade union organisations, as well as all related administrative processes.
Under the Federal Labour Law, fixed-term employment agreements can be validly entered into only when the temporary and extraordinary nature of a job requires it or an employer must temporarily replace an employee. Failure to apply fixed-term agreements in accordance with the law may result in a temporary employment relationship being classified as an employment relationship for an indefinite term and a finding that its termination was unjustified.
The National Minimum Wages Commission (CONASAMI) recently published a resolution increasing general and professional minimum wages. CONASAMI first increased the general minimum wage by Ps4, resulting in a rate of Ps77.04 per day, with the objective of gradually and steadily improving the purchasing power of employees who earn the minimum wage. Immediately thereafter, it increased both general and professional minimum wages by 3.9%, resulting in a rate of Ps80.04 per day.
Italian energy company Enel Green Power recently launched a qualified energy supplier subsidiary in Mexico, through which it intends to acquire at least 150 large customers. Enel plans to make a substantial bid to commercialise electric power, clean energy certificates and energy solutions for commercial and industrial users. This type of private investment is a clear example of how the Mexican energy reform has led to the emergence of new players that were previously unable to participate in this sector.
The National Hydrocarbons Commission (CNH) recently announced the tender for the commercialisation of hydrocarbons that the state obtains as consideration in exploration and extraction contracts. The CNH indicated that the tendered services will consist of the company that wins the tender selling the hydrocarbons when they are delivered by the private company that extracted them. This action is another example of the new business opportunities that the recent energy reform has introduced.
Following the latest energy reform and the enactment of the new Hydrocarbons Law in 2014, a new legal concept regarding the legal servitude of hydrocarbons has been introduced. This concept aims to replace direct expropriation by giving landlords more options when negotiating the ownership of properties used by public utilities in the acquisition of land needed for hydrocarbon activities.
According to its recent press release, the Ministry of Energy, in conjunction with the National Hydrocarbons Commission, plans to increase substantially the number of areas offered in future oil tenders. This will increase national production of oil and gas, as well as future reserves. In addition, the energy secretary has stated that it will help to consolidate Mexico as one of the world's most attractive investment destinations in the hydrocarbons field.
The execution of major energy projects has been affected by social opposition from various communities, including individual landowners and indigenous communities, among others. The magnitude of this problem is best addressed from a human rights perspective, as the complex structure of international and regional organisations of which Mexico is a member has resulted in a vast number of international treaties relating to the human rights of communities affected by energy projects.
In recent years, Mexico has seen the significant deterioration of its forest resources, making it one of the 10 worst countries in terms of deforestation. To combat this issue, the New General Law for Sustainable Forest Development was recently published in the Federal Official Gazette. The law is an attempt to focus Mexico's forestry regulation on better management of resources, while also safeguarding human rights and social involvement.
The Ministry of Environment and Natural Resources recently published a decree granting administrative benefits for the issuance of new concession titles for exploiting national waters to persons that hold a title which expired after January 1 2004. Notably, the decree allows for the issuance of new concession titles even if the zone or specific aquifer from which the original concession title was authorised to extract water is now considered a restricted or banned zone or aquifer.
The National Waters Commission recently submitted to the Federal Regulatory Betterment Commission its draft revision of the Mexican official standard which establishes the maximum permissible levels of pollutants in wastewaters discharged into national waters or properties. The draft aims to modernise the standard by including additional terms and definitions, pollutants and parameters regarding wastewater discharges into federal waters, as well as new sampling and reporting frequency obligations.
The National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently filed a draft emergency Mexican official standard before the Federal Regulatory Betterment Commission. The draft establishes the criteria for classifying types of special and hazardous waste derived from the hydrocarbons sector, determines which types of waste are subject to a waste management plan and details the procedures for formulating such a plan.
Following the expansion of shale oil extraction projects and the discovery of unconventional hydrocarbon deposits, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently commenced a public consultation process to enact applicable water protection guidelines. The draft guidelines provide a glimpse of the authorities' preliminary approach to shale oil projects with regard to water resources and environmental protection.