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.
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.
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.
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.
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.
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.
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.
Throughout his campaign, and now as president elect, Andrés Manuel López Obrador has sent mixed messages with respect to various core reforms implemented by the outgoing administration, including the energy reform adopted in late 2013. Although the incoming administration has publicly stated that it will reverse the reform where possible, it is likely to adopt a more central position once it takes office and faces the actual challenges that must be overcome.
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.
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.