Mexico, Hogan Lovells BSTL SC updates

Banking

Contributed by Hogan Lovells BSTL SC
Cashless money transactions – Mexico's new payment method
  • Mexico
  • 19 July 2019

Digital collection (CoDi) is the latest electronic payment method developed by the Mexican Central Bank, designed to reduce the use of cash and promote competition, while incorporating larger sections of the population into the formal financial sector. It seems that Mexico is moving forward in financial technologies, such as CoDi, and using these developments to promote larger inclusion, competition and transparency for every sector in the country.

Supreme Court clarifies use of choice-of-jurisdiction clauses in adhesion contracts
  • Mexico
  • 17 May 2019

Under Mexican commercial regulations, contracting parties have traditionally been free to determine in their corresponding agreement the jurisdiction in which disputes must be resolved. However, a new binding precedent from the Supreme Court challenges this traditional approach with regard to banking adhesion contracts and is a good example of how Mexico is advancing its consumer protection regulations.

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.


Energy & Natural Resources

Contributed by Hogan Lovells BSTL SC
Upcoming reporting obligations for oil and gas permit holders
  • Mexico
  • 08 July 2019

The Energy Regulatory Commission has received clearance from the Federal Commission for Regulatory Improvement to publish the general administrative provisions (GAPs) that set out the Guidelines for the Statistic Registry of Commercial Transactions Arising from Regulated Activities Performed with Natural Gas and Oil. The GAPs establish the natural gas and oil registry system and provide new reporting obligations for permit holders.

CRE loosens metering obligations for petroleum, petroleum product and petrochemical terminals
  • Mexico
  • 13 May 2019

The Energy Regulatory Commission (CRE) recently issued a resolution which has clarified the scope of the general administrative provisions on metering that apply to holders of permits to store petroleum, petroleum products and petrochemicals. In issuing the resolution, the CRE has further relieved applicable permit holders from their obligations to comply with specific requirements.

CFE separation rules relaxed
  • Mexico
  • 06 May 2019

The 2013 energy reform ordered the legal separation of the Federal Electricity Commission (CFE) in order to guarantee equal competition for all industry players. Accordingly, in 2016 the Ministry of Energy issued the CFE separation rules to foster open access, efficient operation and competition within the industry. As these rules resulted in several inefficiencies within CFE generation companies, the ministry recently relaxed them in order to maximise resources and reduce power prices for end users.

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.


Environment & Climate Change

Contributed by Hogan Lovells BSTL SC
ASEA introduces provisions to regulate waste management in hydrocarbons sector
  • Mexico
  • 10 June 2019

The National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently published NOM-001-ASEA-2019 (NOM-001) in the Federal Official Gazette. NOM-001's main aims are to establish criteria to classify the special types of waste produced in the hydrocarbons sector and establish which of these must be subject to a management plan, as well as determine the contents of special management and hazardous waste management plans.

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.


Insurance

Contributed by Hogan Lovells BSTL SC
CNSF sets out requirements for fintech ventures in insurance industry
  • Mexico
  • 28 May 2019

The National Insurance and Bonding Commission recently amended the Sole Insurance and Bonding Rules to include the process for securing a temporary authorisation to operate as a regulated company in the insurance sector using 'technologically novel models' (ie, tools or technological media that do not exist in the market and help in the rendering of financial services). This process aims to allow start-ups to offer and test novel models without having to fully comply with the applicable legal framework.

Civil liability insurance made mandatory for all motor vehicles
  • Mexico
  • 22 January 2019

In 2014 the federal government announced that civil liability insurance would be required for motor vehicle owners who travel on federal roads, avenues and bridges in order to guarantee third parties relief for any damages caused to themselves and their property. This measure was gradually rolled out under the Law of Federal Roads, Bridges and Transportation and, as of 1 January 2019, now applies to all motor vehicles.

Insurers' and bonding companies' obligations regarding sensitive user information amended
  • Mexico
  • 02 October 2018

The National Insurance and Bonds Commission recently amended the Sole Provisions on Insurance and Bonds, removing the obligation for insurers and bonding companies to inform the commission when their users' sensitive information is altered, extracted, lost, deleted or suspected of having been accessed without authorisation or compromised. Now, insurers and bonding companies must immediately conduct an investigation and notify affected users of a data breach within three working days.

New government to eliminate private medical insurance for public officials
  • Mexico
  • 18 September 2018

The recently elected government administration has publicly announced that it intends to eliminate the private medical insurance currently granted to public officials as part of their benefits. This measure aims to encourage public officials to use state medical services and reduce government expenditure. If the cancellation of this benefit is confirmed, a significant number of officials are likely to seek major medical expenses insurance, which will present an opportunity for various companies in the sector.

Amendment to Insurance Law mandates insurers to offer products for disabilities
  • Mexico
  • 14 August 2018

A recent amendment to the Insurance Law has mandated medical expenses insurers to offer insurance products that cover risks which can cause disabilities in individuals. The amendment decree also revised the General Law for the Inclusion of Disabled Individuals, which prohibits any type of discrimination against individuals with any type of disability.


Tech, Data, Telecoms & Media

Contributed by Hogan Lovells BSTL SC
Cybersecurity (or lack thereof) under new administration
  • Mexico
  • 02 August 2019

The administration recently issued its National Development Plan 2019-2024, which – despite the previous administration's plans – does not mention cybersecurity. Although there are still hopes that cybersecurity will be addressed in the soon-to-be-released Communications and Transports Sectorial Programme 2019-2024, it appears that the present administration has no intention of implementing a cybersecurity strategy.

Internet for everyone?
  • Mexico
  • 07 June 2019

The Federal Electricity Commission recently published draft terms of reference for a new tender procedure in which 50,000km of two strands of dark fibre will be allocated for the provision of free internet services to all citizens under the so-called 'Internet for All' project. Specialist opinions on the project's feasibility have been mixed, and the president has stated that if no winner is published in the near future, he will create a government agency to provide internet services throughout the country.

Excessive fines deemed unconstitutional in landmark Supreme Court of Justice declaration
  • Mexico
  • 22 March 2019

The Supreme Court of Justice recently declared that an article of the Federal Telecommunications and Broadcasting Law – which provided that the minimum fine for any violation of the law not otherwise expressly penalised in another law was 1% of the offender's annual income – to be unconstitutional. This declaration may signal that the court intends to participate more regularly in shaping Mexico's legal framework in order to rectify deficiencies created by Congress.

IFT files constitutional challenge against budget cuts
  • Mexico
  • 01 February 2019

One of the first actions that the new federal government administration undertook after taking office in December 2018 was to prepare the expenses budget in accordance with the new president's austerity principles. After heated discussions, the budget was finally approved on 24 December 2018. Shortly after, the Federal Telecommunications Institute filed a constitutional challenge in which it claimed that the budget will affect its ability to perform its constitutional regulatory functions.

IFT fully liberates 600MHz band
  • Mexico
  • 21 December 2018

Mexico recently became the first country to liberate the 600MHz band after the Federal Telecommunications Institute approved the relocation of the last two channels that transmitted therein in order to free it up for 5G broadband services. This transition will enable Mexico to make the band available to the market through a bidding process and exploit international mobile telecoms applications for 5G mobile broadband services.


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