Mexico updates

Banking

Contributed by Hogan Lovells BSTL SC
Fintech and innovation bring potential amendments to bank AML rules
  • Mexico
  • 08 March 2019

In March 2018 the Fintech Law, which aims to mitigate the risk of money laundering and terrorist financing, was published in the Federal Official Gazette. Subsequently, in January 2019 the National Commission for Regulatory Improvement published draft amendments to the anti-money laundering rules which apply to the traditional banking industry in order to incorporate the new concepts created by the Fintech Law.

New cybersecurity rules for banks
  • Mexico
  • 18 January 2019

The Ministry of Finance and Public Credit recently published a resolution in the Official Gazette modifying the general regulations that apply to banks. The resolution responds to the need to strengthen the regulatory framework applicable to banks, particularly with regard to cybersecurity and technological infrastructure. It also aims to guarantee the confidentiality, integrity and availability of customer information.

New judicial guidance reinforces traditional view on trusts
  • Mexico
  • 14 September 2018

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.

What can banks expect from the new president?
  • Mexico
  • 20 July 2018

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?

Numerous cyberattacks breach Banxico's Interbank Electronic Payments System
  • Mexico
  • 01 June 2018

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.


Competition & Antitrust

Contributed by SAI Law & Economics
COFECE amends recommendations to foster competition in gasoline and diesel markets
  • Mexico
  • 21 February 2019

In January 2019 the new government implemented several measures to counter and reduce gasoline and diesel theft, which generated fuel shortages in some of Mexico's main cities. To address these issues, the Federal Economic Competition Commission recently issued a follow-up to its 2016 recommendations which aimed to foster competition in the gasoline and diesel markets in order to address the new administration's concerns.

COFECE approves commitments to restore competition in pharmaceutical market
  • Mexico
  • 13 December 2018

In 2017 the Federal Economic Competition Commission initiated an investigation into an unlawful concentration between Marzam – a major pharmaceutical product distributor in Mexico – and its main competitor, which had come to light following the release of the Panama Papers. However, before the investigation concluded, Moench Coöperatif (which had acquired control over Marzam) and one of its shareholders proposed a series of commitments in order to restore free competition in the pharmaceutical market.

Competition authorities celebrate 25th anniversary amidst signing of USMCA
  • Mexico
  • 06 December 2018

In 2018 the Federal Economic Competition Commission (FECC) and the Federal Institute of Telecommunications (IFT) celebrated their 25th anniversary. Both authorities have made good progress in carrying out their various functions throughout the years and have been recognised globally for their positive effect on the country's economy. However, it will be interesting to see how the US-Mexico-Canada Agreement contributes to Mexican competition policy once implemented by the FECC and the IFT.

FECC issues Competition Agenda for Public Procurement
  • Mexico
  • 30 August 2018

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.

Legal privilege stands: FECC must guarantee its applicability
  • Mexico
  • 10 May 2018

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.


Energy & Natural Resources

Contributed by Hogan Lovells BSTL SC
CRE endorses retailers' use of benefit and loyalty programmes
  • Mexico
  • 14 January 2019

The Energy Regulatory Commission recently confirmed that certain business models used by retailers of refined products (eg, diesel and gasoline) are valid and stimulate competition in the market to the benefit of customers. As such, retailers can develop loyalty programmes based on bonuses, credits, subscriptions, memberships or exclusive offers, among other things, to be offered by various petrol stations. However, these programmes must be made available to all customers and cannot be discriminatory.

New president bans fracking
  • Mexico
  • 24 December 2018

In his inaugural address, President Andrés Manuel López Obrador confirmed that fracking will be prohibited in Mexico. As Mexico is highly dependent on the natural gas potential of basins located in the northern part of the country, this prohibition will deny it access to resources which it needs to achieve energy sufficiency. Thus, both the executive and legislative branches should instead consider appropriate regulation (rather than a simple ban) that allows for the rational use of oil and gas resources.

New administration confirms suspension of bidding rounds
  • Mexico
  • 17 December 2018

President Andrés Manuel López Obrador recently confirmed that bidding rounds organised by the National Hydrocarbons Commission will be suspended for at least three years until the contracts awarded during the previous administration result in effective investment and, most importantly, new oil and gas production. The new president has further affirmed that production will be increased through additional investment in Pemex, which will ultimately result in the national oil company's rescue.

Energy regulatory bodies to lose independence under new government
  • Mexico
  • 12 November 2018

A member of the House of Representatives recently introduced a legislative proposal that seeks to amend the Organic Law of the Federal Public Administration. The proposed reform aims to grant the central government significantly more control over the public administration, including with regard to the energy sector. Essentially, the National Hydrocarbons Commission and the Energy Regulatory Commission will no longer be independent from a technical and operational standpoint.

Will Mexico suspend bidding rounds and farm-outs?
  • Mexico
  • 15 October 2018

The 2013 energy reform significantly opened up the energy sector to private participation, thus ending the state's decades-long monopoly. However, the newly elected administration has pledged to revisit the reform and grant the state greater control of the sector. Although there have been mixed messages in this regard, the new administration has confirmed that the third bidding round for granting exploration and production licences and share production agreements will be suspended indefinitely.


Environment & Climate Change

Contributed by Hogan Lovells BSTL SC
Environmental liability for damage caused by pipelines and storage terminal operations
  • Mexico
  • 11 March 2019

In view of recent policy changes relating to hydrocarbons and gasoline distribution via pipelines, liability for the remediation of soil and water contamination derived from hydrocarbon spills and leaks at storage terminals and pipelines has become a hot topic. These policy changes have largely been aimed at tackling criminal activities that have contributed to soil and water contamination, such as fuel and hydrocarbon theft.

President elect publishes new environmental agenda
  • Mexico
  • 29 October 2018

President Elect Andrés Manuel López Obrador has already published his environmental agenda, which sets out the objectives to be met and the strategies to be implemented during his six-year term. Under the agenda, a number of regulatory changes regarding air emissions, environmental impact assessments and coastal and marine zones will be introduced. In addition, Mexico will keep working towards its goals under the Paris Agreement and its administrative offices will undergo significant changes.

New forest regulation aims to improve resource management
  • Mexico
  • 20 August 2018

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.

New guidelines concerning recovery of expired water concessions for exploitation of national waters
  • Mexico
  • 30 April 2018

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.

Draft amendments to official standard apply to wastewater discharges into national waters
  • Mexico
  • 05 March 2018

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.


Healthcare & Life Sciences

Contributed by Sanchez DeVanny Eseverri SC
Traditional indigenous medicine: historic asset or mere political move?
  • Mexico
  • 20 March 2019

Traditional medicine is still a primary health resource for millions of people who do not have access to so-called 'modern medicine'. However, traditional medicine and knowledge are not covered by the general legal provisions which govern human health or specifically recognised by the Mexican health authorities. In some cases, traditional medicine has even been deemed illegal and attempts have been made to outlaw its practice and promotion.

Medical investigations: can regulation keep up with technology?
  • Mexico
  • 12 December 2018

It is well known that the law often struggles to keep up with new products and activities. In many cases, the legal provisions which apply to regulated activities lose their applicability due to the speed with which technology enables parties to operate outside the scope of the law or the jurisdiction of the relevant authorities. This is particularly true for physical research involving humans, as advancements in communication and the transfer of data have significantly broadened the scope of such research.

The great hemp debate: marijuana or not?
  • Mexico
  • 19 September 2018

Although Mexico has some of the most stringent regulations regarding the growth, use and marketing of marijuana, this position has recently changed, as evidenced by the amendments to the General Health Law which permit the health authorities to design and execute public policies regarding the use of pharmacological derivatives of marijuana. However, the question remains as to whether hemp constitutes a narcotic under the General Health Law.

Evolution of medical marijuana regulation
  • Mexico
  • 05 September 2018

Mexico has some of the most stringent regulations regarding the growth, use and marketing of marijuana and marijuana-based products. Over the past few decades, considerable resources have been devoted to combating all activities relating to psychoactive plants. However, the government's position on the use of marijuana from a medical or pharmaceutical perspective has changed in recent years.

Pharmaceutical and medical device company M&A: regulatory and tax implications
  • Mexico
  • 22 August 2018

What happens to marketing authorisations (MAs) or sanitary registrations for pharmaceutical and medical devices may be one of the biggest questions to consider before, during and after a merger or acquisition of a legal entity active in the pharmaceutical or medical device industry. Parties undertaking a merger or acquisition which involves the transfer of an MA are advised to undertake a comprehensive analysis beforehand, as bundling the MA with other actual assets could trigger tax issues or exposure.