Copyright (c) 2013 Cacheaux, Cavazos & Newton, L.L.P http://www.ccn-law.com CCN is an international law firm with offices in Texas (San Antonio and the Rio Grande Valley) and throughout Mexico, including Mexico City and Monterrey . At CCN we are dedicated to serving clients engaged in business transactions within the NAFTA region and throughout Latin America. The firm is comprised of both Mexico-licensed and U.S.-licensed attorneys who work in an integrated, bilingual environment. CCN represents U.S. and other foreign investors doing business in Mexico, as well as Mexican and other international investors doing business in Texas and the U.S. CCN specializes in international law, Mexican law and Texas law, representing clients in various sectors, including manufacturing, automotive law , real estate, and a wide variety of additional practice areas . en-us 05/20/2013 04:28:56 AM 60 http://www.ccn-law.com/en/news?nid=1351 The April 2013 edition of the CCN Mexico Report has been released and can now be seen on the Mexico Report™ website. The CCN Mexico Report™ contains exclusive commentaries and views from CCN's attorneys and professionals. This month's edition covers the President Obama's visit to Mexico, Mexico's new Amparo law and a potential consitution for Mexico City. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicoReport.com and follow us on Twitter at @MexicoReport. Tue, 14 May 2013 12:02:44 CDT http://www.ccn-law.com/en/news?nid=1351 http://www.ccn-law.com/en/news?nid=1342 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that Ruth Cerdan has been named an associate in the firm's San Antonio office. Her practice focuses on advising clients from the U.S. and Mexico on domestic and international transactions, particularly with respect to the cross-border legal issues involved in such transactions. Ms. Cerdan received her law degree from the Universidad Iberoamericana and her Master´s in Humanities from Universidad Anahuac del Norte, both in Mexico City. Before joining CCN, Ms. Cerdan worked as an attorney in both the private and public financial sectors in Mexico. Her experience includes significant work in Mexican financial, corporate, civil, notarial and commercial areas.Cacheaux, Cavazos & Newton, L.L.P. is an international law firm with offices in San Antonio, McAllen, Austin and throughout Mexico in Mexico City, Monterrey, Reynosa, Querétaro, Ciudad Juárez and Matamoros. The firm features attorneys licensed to practice in the United States and Mexico. With an in-depth understanding of the legal issues facing clients in the U.S., Mexico and Latin America, CCN's attorneys advise clients on how to conduct business in the increasingly complex and interconnected North American market. This expertise extends from the world's largest multi-national corporations to smaller, closely held enterprises.***CCN***This news release and in-depth information about CCN may be found at the CCN website: www.ccn-law.com . To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com.  Thu, 18 Apr 2013 12:23:35 CDT http://www.ccn-law.com/en/news?nid=1342 http://www.ccn-law.com/en/news?nid=1323 Cacheaux, Cavazos & Newton, L.L.P. is pleased to announce that Dr. Mario Melgar-Adalid, of counsel to Cacheaux, Cavazos & Newton, L.L.P. has been featured in the Winter 2013 edition of Primerus Paradigm Magazine. The featured piece entitled "The Supreme Courts of Justice in Mexico and the United States" details the similarities and differences in the roles that the Supreme Courts play in their respective justice systems as well as the historical developments that led to the composition of the Courts. The full article can be seen on the Primerus Paradigm website for free . For more coverage of Mexican political, business and legal topics please visit Mexicoreport.com . Wed, 20 Feb 2013 11:36:51 CST http://www.ccn-law.com/en/news?nid=1323 http://www.ccn-law.com/en/news?nid=1311 Cacheaux, Cavazos & Newton, L.L.P. is pleased to announce that the bi-monthly publication MexicanAutomotiveTM is now being translated into Japanese. MexicanAutomotiveTM features reports written by CCN's attorneys and professionals on general Mexican automotive industry topics, as well as economic, financial and legal issues affecting the North American automotive industry. In order to receive future editions of the translation please send your e-mail and contact information to crodriguez@ccn-law.com and follow us on Twitter at @MexicanAuto. Fri, 25 Jan 2013 04:26:02 CST http://www.ccn-law.com/en/news?nid=1311 http://www.ccn-law.com/en/news?nid=1310 The November-December 2012 edition of MexicanAutomotive has been released and is now available at MexicanAutomotive.com. MexicanAutomotive features reports written by CCN's attorneys and professionals on general Mexican automotive industry topics, as well as economic, financial and legal issues affecting the North American automotive industry. This edition covers Mistubishi's new plans in Mexico, the comparative advantages of Mexico's automotive industry and Mexican automotive statistics for 2012. In order to receive future editions by e-mail, please subscribe to the free newsletter at MexicanAutomotive.com and follow us on Twitter at @MexicanAuto. Tue, 08 Jan 2013 03:21:13 CST http://www.ccn-law.com/en/news?nid=1310 http://www.ccn-law.com/en/news?nid=1309 On November 30, 2012, the Decree containing the so called "Labor Reform" consisting of the first significant update to the Federal Labor Law in over 30 years was published.  While the Labor Reform may not be perfect or complete (it is almost silent on issues of union transparency), it is without doubt a step in the right direction that will likely contribute to the development and improvement of employment relationships in Mexico.   These in turn will help attract foreign investment, promote formal employment and serve to improve working conditions.  Given the significance of the Labor Reform, one should stay tuned to how the new changes will be interpreted by the Mexican labor authorities and competent courts.  The following is a summary of the most relevant aspects of the Labor Reform.  The attorneys of Cacheaux, Cavazos & Newton would be pleased to answer any questions and/or comments with respect to this special edition of the CCN Mexico ReportTM. The most significant aspects of Mexico's new Labor Reform include the following: 1.- General Principles of the Federal Labor Law. The Federal Labor Law provides the following general principles: (a) dignified employment, which refers to no discrimination in the workplace based on ethnicity or nationality, gender, age, disability, socioeconomic status, citizenship, health, religion, sexual preference or marital status, including freedom of association, the right to strike, and freedom of collective bargaining; (b) equality between men and women, and access to the same opportunities given their biological, social and cultural differences; (c) promoting applicable competency certifications, productivity, quality and a good work environment; (d) prohibition against harassment in the workplace, and punishment of abuses of power; and (e) regulation of outsourcing where a contractor or third party performs work or provides services with its employees for the benefit of the contracting party that requests such work to be performed by the contractor and supervises its performance and execution.  It should be noted that in order to legally justify the use of outsourcing, the nature of expertise required in the service provided must be proven, and such must not be the same or similar to the activities performed by the employees of the contracting party, with the written services agreement serving as evidence of such fact.  Contractors must have proper and sufficient means to meet their obligations and contracting parties will be required to provide supervision from the time the outsourcing begins, with the further requirement that parties requesting outsourcing services continually oversee the contractor's compliance with applicable legal obligations. In the event of failure to comply with such obligations, the contracting party will be deemed to be the employer.  If it is proven that the party contracting for outsourcing services has deliberately transferred its employees to a contractor, the contracting party will be subject to a fine of between 250 and 500 times the Mexican minimum daily salary in effect in Mexico City. 2.- Individual Employment Relationships. Relevant aspects of the chapter on individual employment relationships include: (a) a prohibition against hiring minors under 14 years of age, with potential jail terms of between one and four years, and fines of between 200 and 5,000 times the daily minimum salary in effect in Mexico City for employers who violate this provision; (b) the obligation to establish in a written employment agreement the nature of the employee's hiring (fixed project or fixed time, indefinite time, temporary, initial training, for a trial period or for a unit of time (per hour) in the individual employment agreement); (c) the establishment of requirements for Mexican employees who render services outside Mexico but who are hired in Mexico; and (d) requirements for Mexican employees recruited in Mexico to render services outside Mexico through procedures agreed to by the Mexican government with foreign governments. It is important to highlight these new forms of individual employment agreements with respect to hiring by unit of time or per hour, the hiring of employees for a trial period and for initial training.  It is expected that this flexibility in hiring employees, so that employees will no longer automatically receive indefinite employment agreements, without liability to the employer or the need to provide indemnification, will create jobs in Mexico.  Furthermore, this should put an end to many abuses and unfair practices for both employees and employers. 3.- Term of Employment Relationship. Hiring for fixed project or time and for indefinite time will remain unchanged.  However a new form of hiring is included for both indefinite time agreements and fixed project/ time agreements lasting more than 180 days (six months), a "Trial Period" which may be extended only one time, for 30 days.  These agreements may be extended for 180 days (six months) only for employees in management positions or who perform general managerial functions (better known as executive employees) and those who perform specialized technical or professional work.  The Labor Reform provides that in order for the employer to terminate such trial period at its own discretion without incurring any liability, it must consider the opinion of the Mixed Commission for Productivity and Training (which must be created by the employer), as well as the nature of the work and employment position.   A second new form of hiring is included known as "Initial Training", which may also be renewed or extended only once, during which time the employee may obtain the knowledge and abilities necessary to perform his or her job functions, for a term of three to six months for employees in management positions or managerial functions and for those who perform specialized technical or professional functions. In order for the employer to terminate the employment agreement without incurring any liability, based on an employee failing to demonstrate his/her capacity for the job, as determined by employer's discretion, the employer must take into account the opinion of the Mixed Commission for Productivity and Training , as well as the nature of the employment position in question.  Finally, a third new form of hiring is included in indefinite term employment agreements consisting of temporary or seasonal employment arrangements which do not require the rendering of services for the entire week, month or year. 4.- Suspension of Employment Relationship. The Labor Reform provides for a suspension of the employment relationship in the event of an event or contingency affecting safety in the workplace during which employers must pay the minimum daily salary for the duration of the contingency, for a period of up to one month. 5.- Termination of Employment Relationship. In regard to employment terminations, the Labor Reform establishes the following: (a) a new ground for termination without liability to the employer or employee has been added, as applicable, for harassment and/or sexual harassment.  (b) Notice of termination of the agreement in writing may now be delivered personally to the employee or communicated to the corresponding Labor Board of Conciliation and Arbitration within five business days following the date of termination, in order for labor authorities to serve notice of the termination, however, the employer must ensure that the employee is notified, otherwise, the statute of limitations for the employee to file a claim for wrongful termination will not commence. (c)  If the employer does not prove the grounds for termination in the event of a lawsuit, the employee will have the right to recover the corresponding lost wages (wages not received throughout the duration of the lawsuit) until the date payment is made for a maximum period of 12 months, however, if the lawsuit continues, the employee must receive the interest generated on the amount of 15 months of salary at the rate of 2% per month, compounded at the time of payment.  If the employee dies, the calculation of lost wages ceases at death.  This amendment to the Federal Labor Law is very important because it limits the amount of possible indemnification payments paid to employees after a lawsuit alleging wrongful termination has been filed, which is then postponed or prolonged. This limitation will help eliminate litigation delay tactics with the sole purpose of increasing the financial liability of employers who are unable to prove the grounds for termination of the employment relationship.  This will result in an expedited and efficient administration of justice for labor matters. 6.- Employment Conditions. The possibility for employees to perform work that is related to or complimentary to their main work is established with the payment of the corresponding salary. 7.- Salary. The following is established: (a) The possibility of salary payment for a unit of time (per hour), as long as such is indicated in the agreement and the maximum legal work schedule is not exceeded. In this case, payment may not be less than that corresponding to a daily work schedule. (b) When an employee grants his/her consent, payment by any electronic means will be allowed at no cost to the employee. 8.- Profit Sharing. The Labor Reform establishes that the employees of a company form part of such for profit sharing purposes. 9.- Employer Obligations. This chapter establishes the following employer obligations: (a) employers must have adequate facilities for persons with disabilities when the employer has more than 50 employees; (b) employers must have medication and first-aid supplies on hand in the event of workplace accidents; (c) employers must disclose information on labor risks and dangers that employees may be exposed to in the workplace; (d) employers must make deductions and payments for alimony; (e) employers must grant men five days of leave for the birth or their children or for the adoption of an infant; (f) employers must not discriminate against employees; (g) employers are prohibited from  demanding evidence that a female employee is not pregnant (certificate of no pregnancy), firing or forcing female employees to resign as a result of being pregnant, changing their marital status, or as a result of having to care for minor children. 10.- Productivity and Training of Employees. The most relevant aspects of this chapter are: (a) The obligation for employers to provide job training and for employees to accept such during work hours, except for that consisting of commencing, continuing or finishing basic, intermediate and advanced schooling; (b) The obligation for employers with more than 50 employees to create a Mixed Commission for Productivity and Training, which must have the same number of employee and employer representatives; and (c) The obligation for employers to implement systems in order to determine the form and amount of incentives, bonuses and commissions for employees who contribute to increasing the company's productivity. 11.- Preferential Rights. A chapter is established on preferential rights which provides an obligation for employers to prefer Mexican employees over others, those with greater seniority, those responsible for families with a sole source of income, those with the minimum level of education required, those who are best qualified and those with the best abilities and knowledge. 12.- Women in the Workplace. This chapter establishes: (a) The option for expectant mothers to use up to four weeks from their six week maternity leave prior to delivery until after the delivery with the prior authorization of their attending physician and taking into account the opinion of the employer; (b) When adopting an infant, mothers will have the right to enjoy six weeks of paid leave as of the date they receive the infant; and (c) The nursing period will be for a maximum of six months with two 30 minute breaks per day and reducing the work day by one hour pursuant to prior agreement with the employer. 13.- Minor Employees. An obligation is established for minors to have a work authorization and a medical certificate evidencing their capacity for work.  Work hours and types of work that may and may not be performed by minors are also regulated. 14.- Field Workers. The type of employment agreement that field workers can have is regulated (whether permanent, temporary or seasonal) as long as they work in rural areas, with employers having the obligation to execute an agreement in writing. 15.- Work from Home. This category is included, defined as that work which is performed from home or a distance using information technology and communication. 16.- Domestic Employees. The following are established: (a) Obligation upon employers to give domestic employees one daily break that is a minimum of nine continuous hours, in addition to a minimum three hour break between morning and evening work. (b) The right to one weekly day and a half of rest that is uninterrupted, preferably on Saturdays and Sundays each week.  17.- Mining Workers. A specific chapter is included that regulates rights and obligations for applicable employers and employees in this industry. 18.- Unions, Associations and Leagues. With respect to such: (a) the election process for its leadership positions is regulated; and (b) rules are established for accountability of leaders to their members 19.- Employment Hazards. The following are noteworthy from this chapter: (a) An obligation for employers to assume responsibility for the safety and hygiene and the prevention of employment risks and hazards; (b) The payment of indemnification by the employer to beneficiaries of a deceased employee is increased from 730 to 5,000 days of minimum salary if the employee was not registered with the Mexican Institute of Social Security (IMSS); and (c) the employer may give notice in writing or by electronic means within the 72 hours following an accident to the Labor Conciliation and Arbitration Board, the Department of Labor and Welfare and the labor Inspector. 20.- Local Conciliation and Arbitration Board. This chapter establishes that: (a) the acting president must be a licensed attorney, over 30 years of age and have experience in labor matters; and (b) the presidents of the special boards, clerks, assistants and the conciliation officials and clerks must be attorneys with a good reputation. 21.- Labor Procedural Law. The following is noteworthy from this section: (a) The attorneys-in-fact for the parties to a labor lawsuit must be licensed attorneys with their respective professional identification card or law clerks with the authority to appear granted from the competent government authority.  (b) When unions make an appearance by means of a legal attorney-in-fact, the latter must be a licensed attorney or law clerk, although the Conciliation Boards may not require these degrees if they are convinced that the individual does in fact represent the union, association or league. (c) During any part of the proceeding, the parties may, through conciliation, enter into an agreement that brings the lawsuit to an end. (d) Now, agreements executed before Labor Conciliation and Arbitration Boards to terminate employment relationships will have the plenary legal effect of a final judgment or award. 22.- Evidence. The following is included in the chapter on evidence: (a) Cinematographic films, fingerprint records (especially to prove work attendance), audio and video recordings, different forms of information and communication such as computer systems, electronic optic means, fax, e-mail, digital documents, electronic signatures or passwords.  It is important to note when offering these types of evidence that the party offering such evidence must provide the Conciliation Board with the instruments, equipment or elements necessary so that it may assess the content of such records and reproduce the sounds and images for the time necessary for the presentation of evidence, and only in the event that the offering party properly demonstrates the impossibility of providing such instruments or equipment will the Board provide such. The Labor Reform defines the following concepts: certifying authority, access code, digital certificate, password, private key, public key, recipient, digital document, issuer, electronic signature, advanced electronic signature, signatory, means of electronic communication, electronic means, data message, personal identification number (NIP) and information system; (b) The party offering this type of evidence must present a copy or copy of the digital document and include the minimum information for the identification of the digital document on the electronic medium in which it appears and the labor board will designate the expert(s) required to make the necessary determination. (c) The obligation upon employers to evidence the regular and special work schedule when such does not exceed nine hours. 23.- Development of Labor Lawsuits. The Labor Reform establishes that in order to appear at a hearing, a representative or attorney-in-fact for the employer must have the authority to undertake the conciliatory resolution that binds its principal. 24.- Individual Social Security Conflicts. In the chapter on special proceedings, there is a new chapter called individual social security conflicts, which is intended to allow employees, insured parties, retirees or beneficiaries to file a claim for benefits in cash or in kind, deriving from the Social Security (IMSS) Law or the National Fund for Worker Housing (INFONAVIT) Law, directly from such institutes or directly from the pension fund management service companies (AFORES) or those that arise from the collective bargaining agreements or legal agreements that provide for social security benefits. 25.- Fines. The number of minimum daily salaries due by employers for violations is increased and may vary between 250 and 5000 times the daily minimum salary depending on the violation.  26.-  Term. Finally, it is important to note that the first transitory article of the Labor Reform establishes that the new changes will come into effect on the day following their publication in the Official Journal of the Federation, except for the adaptation of facilities for individuals with disabilities (36 months later) and the affiliation with the National Fund for Worker Consumption (FONACOT) (12 months later).  In our view, the above changes comprise the most relevant amendments to the Federal Labor Law.  Other provisions were amended and may be reviewed with our firm's Mexican labor law attorneys, if required.  Although many of the provisions of the law were amended, others still remain pending and, in time, will likely be incorporated into a total reform that will likely further Mexico's competitiveness in the global labor market by providing transparency in the operation of labor unions. Fri, 30 Nov 2012 05:20:45 CST http://www.ccn-law.com/en/news?nid=1309 http://www.ccn-law.com/en/news?nid=1299 The October-November 2012 edition of MexicanAutomotive has been released and can now be seen on MexicanAutomotive.com. MexicanAutomotive features reports written by CCN's attorneys and professionals on general Mexican automotive industry topics, as well as economic, financial and legal issues affecting the North American automotive industry. This edition covers Puebla's close ties with the German automotive industry, the possible production of electric vehicles in Mexico and questions on the Official Mexican Standard 163 and its continued suspension. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicanAutomotive.com and follow us on Twitter at @MexicanAuto. Fri, 02 Nov 2012 05:43:15 CDT http://www.ccn-law.com/en/news?nid=1299 http://www.ccn-law.com/en/news?nid=1287 Cacheaux, Cavazos & Newton, L.L.P. is pleased to announce the publication of the new book ‘The Supreme Court in the United States, Ciaroscuro of Justice' written by Dr. Mario Melgar-Adalid (drmelgar@ccn-law.com), of counsel to Cacheaux, Cavazos & Newton, L.L.P. The new book is co-edited by Mexico's National Autonomous University (UNAM) and the Editorial Porrua publishing house. It features a description of the historical and legal developments within the institution that has played a definitive role in the political, economic and social life of the United States. It is one of the first books on the U.S. Supreme Court written by a native Spanish speaker and published in Spanish. The book has comparative references to Mexican law throughout, and, in particular, a chapter dedicated to a comparison of the essential elements of the U.S. Supreme Court and Mexican Supreme Court, which serve as a platform for future comparative law analysis. The book will aid readers in understanding not only the legal aspects of the U.S. Supreme Court, but also the social and historical context of an institution responsible for maintaining the rule of law and Democracy in the U.S. Melgar Adalid, Mario, La Suprema Corte de Justicia de la Nación, Claroscuro de la Justicia, UNAM, Legal Research Institute, Editorial Porrúa Publishers, México, 2012. Tue, 18 Sep 2012 10:29:31 CDT http://www.ccn-law.com/en/news?nid=1287 http://www.ccn-law.com/en/news?nid=1286 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that CCN partner Robert Barnett will be speaking at the Free Trade Alliance business seminar in Mexico City on September 20th. The seminar will focus on how to successfully plan and introduce your products and services to the United States market. The objectives of the seminar are to: expand your business and sell your products and services, learn to export and/or establish a business and advice on best practices for legal, fiscal, and logistics topics. For more information please e-mail Rogelio Garcia from the Free Trade Alliance or for reservations please e-mail Javier Herrera from Casa San Antonio or call (01) 800-001-5555. Thu, 13 Sep 2012 01:17:58 CDT http://www.ccn-law.com/en/news?nid=1286 http://www.ccn-law.com/en/news?nid=1277 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that CCN partner Robert Barnett will be speaking at the Invest in Texas event sponsored by the State of Texas on August 29, 2012 in Mexico City. The Invest in Texas event addresses professionals in Mexico with an interest in establishing businesses in Texas to access the U.S. market. The event will focus on a variety of issues and feature multiple sections including: information on tax and finance incentives, sections on commercial strategies, information on immigration and contact with economic development organizations. Space for the event is limited, for more information or to register please e-mail nancy.galicia@governor.state.tx.us or call (0155) 5514-9626. Fri, 24 Aug 2012 12:58:17 CDT http://www.ccn-law.com/en/news?nid=1277 http://www.ccn-law.com/en/news?nid=1276 San Antonio, Texas will host the NAFTA20 North America Summit on November 15th and 16th, celebrating the 20th anniversary of the North American Free Trade Agreement (NAFTA). NAFTA20 will gather some of the world's top business and political leaders to speak on topics related to strengthening cross-border business, the evolution and impact of the NAFTA, as well as future business trends and opportunities in key sectors. The Summit will take place at the Westin La Cantera Hill Country Resort and will feature keynote speakers such as Mayor Julián Castro of San Antonio, former Mayor and HUD Secretary Henry Cisneros, who currently serves as Chairman of the San Antonio Economic Development Foundation, Curt Anastasio, the President and CEO of NuStar Energy, Jaime Serra Puche, who currently serves as Chairman of SAI Consultores and Enrique Berruga, Mexico's former Ambassador to the United Nations. The NAFTA20 North America Summit is a part of the larger Las Américas Summit Week, celebrating the close relationship that exists between the United States and Mexico, hosted in San Antonio during the week of November 15 - 23 . For more information on the NAFTA20 Summit or the Las Américas Summit Week, or to register for an event, please visit this website . Fri, 17 Aug 2012 12:35:01 CDT http://www.ccn-law.com/en/news?nid=1276 http://www.ccn-law.com/en/news?nid=1267 The June 2012 edition of MexicanAutomotive has been released and can now be seen on the MexicanAutomotive website . MexicanAutomotive reports on general Mexican automotive industry topics, as well as economic, financial and legal issues affecting the North American automotive industry from CCN's attorneys and professionals. This month's edition covers the success of the Mexican motorcycle market, Volkswagen's production records and the Latin American auto industry. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicanAutomotive.com and follow us on Twitter at @MexicanAuto. Tue, 10 Jul 2012 04:18:54 CDT http://www.ccn-law.com/en/news?nid=1267 http://www.ccn-law.com/en/news?nid=1266 The June 2012 edition of the CCN Mexico ReportTM has been released and can now be seen on the Mexico ReportTM website . The CCN Mexico ReportTM contains exclusive commentaries and views from CCN's attorneys and professionals. This month's edition covers the Mexican Presidential election, the sale of products in Mexico by maquiladoras and if mechanic lien's exist in Mexico. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicoReport.com and follow us on Twitter at @MexicoReport. Mon, 09 Jul 2012 10:04:00 CDT http://www.ccn-law.com/en/news?nid=1266 http://www.ccn-law.com/en/news?nid=1256 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that CCN attorneys will be speaking at the Export Leaders session sponsored by the Free Trade Alliance in San Antonio that is scheduled for Thursday, June 21st. The topic for this Export Leaders session is Doing Business Abroad: Getting Paid, Export Financing and Legal Issues. The session will be located at Citibank 2338 N. Loop 1604 W. Bldg. 2, San Antonio, TX 78248. The Export Leaders, is now in its 12th year and has assisted over 110 small and medium sized businesses develop their export strategy and expand globally. This year's participants are predominately all owners and/or Presidents & CEO's of their companies with the industries ranging from medical supplies, automotive paint films, logistics companies, software and construction materials. ***CCN***This news release and in-depth information about CCN may be found at the CCN website: www.ccn-law.com . To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Mon, 18 Jun 2012 11:40:58 CDT http://www.ccn-law.com/en/news?nid=1256 http://www.ccn-law.com/en/news?nid=1246  The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that CCN attorneys will be speaking at the "Select USA" seminars in Mexico from June 6-8. The seminars will be held in Mexico City, Guadalajara and Monterrey. The cost for this seminar is US$50 and includes breakfast, a coffee break, seminar and expo attendance. To obtain more information and register: http://www.buyusa.gov/mexico/selectusa.asp. Full information on the seminar can be seen below:  The U.S. Embassy is organizing a series of "Select USA" seminars in Mexico City (June 6), Guadalajara (June 7), and Monterrey (June 8).  These seminars will include presentations by various experts in areas related to Investment in the United States such as investor visas and the United States legal and tax system, among others. Various U.S. state and local economic development organizations will be in attendance and available to share information on the different opportunities for investment in their regions. The cost for this seminar is US$50 and includes breakfast, a coffee break, seminar and expo attendance. To obtain more information and register: http://www.buyusa.gov/mexico/selectusa.asp For questions related to the event:June 6, Mexico City:  Martha.sanchez@trade.gov, 55-5140-2621 June 7, Guadalajara: Alicia.zayas@trade.gov, 33-3615-1140 ext. 102 June 8, Monterrey:    Yazmin.rojas@trade.gov, 81-8047-3290 Mexican investment in the United States has grown by more than 35% in the last five years.  Investing in the U.S. offers many advantages.  The work force in the United States is categorized among the most productive, skilled and innovative in the world.   For business, the United States offers a transparent and predictable legal system, infrastructure, and access to the most profitable consumer market in the world. We invite you to participate in the "Select U.S.A." seminar to learn more about the investment possibilities for your company in the U.S. Wed, 23 May 2012 09:47:55 CDT http://www.ccn-law.com/en/news?nid=1246 http://www.ccn-law.com/en/news?nid=1245 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that Carrie Osman has been named Of Counsel to the firm in CCN's Monterrey office. Carrie Osman is licensed in Texas and has more than 12 years' experience living and working in Mexico. Ms. Osman's practice focuses on assisting U.S. clients doing business in Mexico, as well as advising individual and corporate clients from Mexico on a variety of Texas legal matters. Ms. Osman frequently collaborates on writing projects with the Centro de Estudios sobre la Enseñanza y el Aprendizaje del Derecho, A.C. (CEEAD), a non-profit institute based in Monterrey that is dedicated to improving legal education in Mexico. She received her undergraduate degree from the University of Texas and obtained her law degree from St. Mary's University School of Law.Cacheaux, Cavazos & Newton, L.L.P. is an international law firm with offices in San Antonio, McAllen, Austin and throughout Mexico in Mexico City, Monterrey, Reynosa, Querétaro, Ciudad Juárez and Matamoros. The firm features attorneys licensed to practice in the United States and Mexico. With an in-depth understanding of the legal issues facing clients in the U.S., Mexico and Latin America, CCN's attorneys advise clients on how to conduct business in the increasingly complex and interconnected North American market. This expertise extends from the world's largest multi-national corporations to smaller, closely held enterprises.***CCN***This news release and in-depth information about CCN may be found at the CCN website: www.ccn-law.com . To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Thu, 10 May 2012 05:21:34 CDT http://www.ccn-law.com/en/news?nid=1245 http://www.ccn-law.com/en/news?nid=1244 The April 2012 100th edition of the CCN Mexico Report™ has been released and can now be seen on the Mexico Report™ website . The CCN Mexico Report™ contains exclusive commentaries and views from CCN's attorneys and professionals. This month's edition covers the release of the 100th edition of the CCN Mexico Report™, the Mexican Presidential election and how to protect equipment temporarily consigned to Mexican companies. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicoReport.com and follow us on Twitter at @MexicoReport . Mon, 07 May 2012 02:13:15 CDT http://www.ccn-law.com/en/news?nid=1244 http://www.ccn-law.com/en/news?nid=1233 The San Antonio Express News on Friday, April 13, 2012, featured an article on the CCN Mexico Report's™ 100th edition toast at the Latin American Caribbean Forum monthly breakfast. The toast was offered by several Cacheaux, Cavazos & Newton lawyers and the Free Trade Alliance San Antonio President and CEO Kyle Burns. The full article can be seen at the San Antonio Express News website . If you would like to subscribe to the CCN Mexico Report™ before the 100th edition is released please visit the Mexico Report website . Tue, 17 Apr 2012 02:40:13 CDT http://www.ccn-law.com/en/news?nid=1233 http://www.ccn-law.com/en/news?nid=1232 The March 2012 edition of the CCN Mexico ReportTM has been released and can now be seen on the Mexico Report website. The CCN Mexico ReportTM contains exclusive commentaries and views from CCN's attorneys and professionals. This month's edition covers U.S. Vice President Joe Biden's trip to Mexico, the effects of recording documents in the Public Registry in Mexico and other political, business and legal topics. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicoReport.com and follow us on Twitter at @MexicoReport . Mon, 26 Mar 2012 02:17:41 CDT http://www.ccn-law.com/en/news?nid=1232 http://www.ccn-law.com/en/news?nid=1222 The February 2012 edition of the CCN Mexico ReportTM has been released and can now be seen on the Mexico Report website . The CCN Mexico ReportTM contains exclusive commentaries and views from CCN's attorneys and professionals. This month's edition covers customs transfers by maquiladoras, the Mexican automotive industry in 2011 and other political, business and legal topics. In order to receive future editions by e-mail please subscribe to the free newsletter at MexicoReport.com . Tue, 28 Feb 2012 02:17:32 CST http://www.ccn-law.com/en/news?nid=1222 http://www.ccn-law.com/en/news?nid=1212 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that CCN partner Robert Barnett has been featured in the Association of Mexican Entrepreneurs' ("AEM") recent article about international lawyers in Texas. The full article in English and Spanish can be seen at the AEM website located here: www.empresariosaem.com Fri, 10 Feb 2012 03:15:56 CST http://www.ccn-law.com/en/news?nid=1212 http://www.ccn-law.com/en/news?nid=1210 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that Jorge Sánchez Cubillo of the firm's Mexico City office has become a Partner of CCN. Jorge has been with CCN for over ten years and has been instrumental in building CCN's litigation practice. Mr. Sánchez Cubillo currently heads the firm's civil and business litigation area in Mexico. His practice includes civil, business, banking, insurance, surety bond, and criminal litigation, in which he has more than ten years of experience. In 2003, he participated in the XII World Congress on Procedural Law held in Mexico City. He is a graduate of the Escuela Libre de Derecho in Mexico City where he graduated with honors for his professional thesis, "Legal Issues Regarding Conflicts of Civil Law Rules in the Mexican Federal System". Mon, 30 Jan 2012 09:24:19 CST http://www.ccn-law.com/en/news?nid=1210 http://www.ccn-law.com/en/news?nid=1199 Recently, the Fourth Collegiate Court on Administrative Matters of the First Circuit issued legal opinion number I.4o.A. J/102 (9a.), titled "Intellectual Property. Characteristics of Descriptive Trademarks and Reasons to Prohibit their Registration." In its legal opinion, the Court held that a mark is descriptive when it refers to the quality, characteristics or properties corresponding to the product or service offered in the marketplace, the differentiation of which is intended. Additionally, the Court determined that foreign words will have such characteristic "only when the consumer, by means of the products or services referred to, directly perceives the descriptive character or function of such name designation." The foregoing is in consideration of that fact that the legislature's intent is to avoid unfair competition between manufacturers or merchants by preventing the individual appropriation of common expressions that everyone has the right to use. Accordingly, the Fourth Collegiate Court on Administrative Matters of the First Circuit determined that the prohibition against registering descriptive marks is supported precisely by their lack of a distinctive characteristic in providing the public information on the properties and characteristics of the product, and the need to maintain such descriptive language available so that it may be freely used by those who operate in the corresponding market segment. Wed, 18 Jan 2012 10:43:29 CST http://www.ccn-law.com/en/news?nid=1199 http://www.ccn-law.com/en/news?nid=1198 In practice, it is very common to confuse a savings fund with an employees' savings and loan association. Consequently, it is important to clarify the differences that exist between such figures from a labor perspective. The savings fund is an optional benefit not provided by the Federal Labor Law. Therefore, it is not mandatory for employers, since it was created as a form of social welfare to encourage employees to create a habit of saving, an additional benefit for the provision of their services and a benefit for employers since it is deductible if they comply with certain requirements provided by the Social Security Law and the Income Tax Law and its regulations. For the formation of a savings fund, it is necessary to create a "plan" and/or "bylaws" that establish its objectives, to whom it applies, beneficiaries, the amounts to be paid by the employees and the employer, the procedure to follow in order to receive a distribution of the funds, when it will be paid out, and how it will be administered, etc. On the other hand, an employee savings and loan association is an association formed by the employees of a company, without any intervention or obligation by the company, the purpose of which is to save and/or grant loans to the employees who formed it, with low interest rates, using the contributions made to such savings and loan association by the employees. Since the purpose of employee savings and loan associations is to provide economic assistance to their members, their formation and operation is not regulated by any law or regulation. As a result, members of the association must create regulations or bylaws containing the rules so that such association may operate. In this case, and unlike savings funds, the company operates only as an intermediary retainer and informant with respect to employee contributions. Even though employee savings and loan associations are not regulated by any legal provisions, the association should comply with the requirements established by the Federal Labor Law and the Income Tax Law for its proper operation. Wed, 18 Jan 2012 10:29:49 CST http://www.ccn-law.com/en/news?nid=1198 http://www.ccn-law.com/en/news?nid=1189 During the recent annual summit of the Asia-Pacific Economic Cooperation (APEC) Forum in Hawaii, the President of the United States, Barak Obama, reiterated the interest of the United States in participating in the Trans-Pacific Partnership (TPP). The TPP is a multilateral free trade agreement between various members of APEC. Mexico, a member of APEC since 1993, has now expressed an interest in joining the TPP and actively participating in the negotiations currently underway. The Secretary of the Economy of Mexico has indicated that negotiations have begun with the countries that are members of the TPP, as well as with national industry sectors, in order to participate in this initiative. Mexico expects that its participation in the TPP will promote greater economic growth, investment and export possibilities. In addition to Mexico, Canada and Japan have also expressed an interest in joining the TPP, the same which shows a welcome and renewed interest for greater free trade between the members of APEC. Tue, 06 Dec 2011 04:23:49 CST http://www.ccn-law.com/en/news?nid=1189 http://www.ccn-law.com/en/news?nid=1188 The results of the election for governor of Michoacan were highly awaited throughout Mexico owing to the likely effect they will have on the upcoming presidential election. The three contending political parties, the National Action Party (PAN), the Institutional Revolutionary Party (PRI) and the Party of the Democratic Revolution (PRD), made good use of their political assets in this election. For the PRD, Michoacan is considered a stronghold since the last two governors have been PRD members. Furthermore, Michoacan has been historically governed by the Cardenas family. General Lazaro Cardenas, probably the most prominent Mexican politician of the 20th century, ruled Michoacan, as did his brother Damaso, his son Cuauhtemoc and his grandson Lazaro Cardenas Batel. The PAN had notable growth in areas other than those which have traditionally been strongholds for the PAN, as Michoacan is the birthplace of President Felipe Calderon. In fact, Calderon was a candidate for governor of the State and lost to the PRI in 1995. In this election, his sister, Luisa Maria Calderon, ran in the election and lost by a very narrow margin. The PRD candidate lagged behind the winning PRI candidate and the PAN candidate who came in second place. There are several implications which will affect the presidential election, especially in a presidential system like that of Mexico, where it would seem inconceivable that the sister of the current President of the Republic, the PAN candidate, would lose an election. Furthermore, it also seemed unlikely that the PRD would lose power after 12 years of occupying the governorship and the majority of the municipal mayoralties in Michoacan. The PRI, for its part, is headed toward the 2012 presidential election on the heels of a triumph of great significance. The positive news is that despite the closeness of these elections, the PRD and the PAN have acknowledged the triumph of the PRI. Tue, 06 Dec 2011 04:21:14 CST http://www.ccn-law.com/en/news?nid=1188 http://www.ccn-law.com/en/news?nid=1179 The motorcycle boom is not a phenomenon exclusive to Mexico, but rather a global movement due to various reasons. Among these reasons is heavy traffic in large cities, less contamination by motorcycle engines as opposed to those in automobiles, low gasoline consumption, and shorter travel times. Motorcycles have seen increased popularity in major Mexican cities, not only for sports purposes, but also as a means of transportation. This phenomenon is evident by the fact that 76,961 new motorcycles were sold at the end of 2010 in Mexico, while as of September 2011, the figure has almost been surpassed since statistics show that 76,680 motorcycles have been sold. Taking into account that the last months of the year usually see a notable increase in the sale of vehicles, it is estimated that the increase will be greater than 20% in comparison to the previous year. While the sale of motorcycles has logically increased in the major Mexican cities of Mexico, Guadalajara and Monterrey, urban concentrations throughout Mexico have also experienced this phenomenon, since the motorcycle is an agile, rapid and efficient alternate means of transportation. It is very common to see motorcycles on the street with low cylinder capacity, including work scooters and motorcycles such as those used by food delivery personnel and messenger services. The majority of motorcycles sold (80% of the total amount) have 51 to 125 cubic centimeter cylinder capacities. Lower prices, accessible financing plans and greater use as a means of transportation are the reasons behind this boom in transportation. Tank Sports, a Mexican assembler, has grown 16 times its size from 2001 to 2005, as it recorded an annual cumulative increase in sales of 105% and assembled more than 22,000 motorcycles and a similar number of bicycles. How can the Mexican market take advantage of this boom in motorcycles? It can take advantage of this boom by having a greater number of motorcycle distributors, especially because exporters request distributors. The sales of parts and accessories for motorcycles create a real opportunity since every motorcycle sold requires storage batteries, tires, spark plugs, accessories, tail lights, pedals, screws and grills. Drivers also need safety helmets which are required throughout Mexico, protective gear and clothing, eye wear, and boots or shoes to drive on two wheels. In the same manner, good repair shops specialized in motorcycles are a good business opportunity in light of the motorcycle boom. Tue, 29 Nov 2011 01:19:41 CST http://www.ccn-law.com/en/news?nid=1179 http://www.ccn-law.com/en/news?nid=1177 By: Dr. Mario Melgar-Adalid The Panamerican Games (the "Games") amount to a preview of the Olympic Games for the participating countries. The Games take place every four years on the year prior to the Olympic Games and encompass competitions in almost all team and individual sports. In addition to a large financial investment in infrastructure, the Games require a significant level of logistical and technical organization. The city of Guadalajara has been hosting the 2011 Panamerican Games, which had been held in Mexico on two prior occasions, with the participation of 42 countries from the Americas. The Games provide an opportunity to show the rest of the world a different image of Mexico, one unrelated to the ongoing war against organized crime, violence or drug trafficking. The Games are joyful, successful and full of splendor, just as its venue, the beautiful City of Guadalajara. Safety during the competitions was a key concern of the international sport authorities prior to the Games. The Federal government, and the governments of the State of Jalisco and municipalities that comprise the metropolitan area of Guadalajara, have guaranteed the safety of the spectators and athletes with an intelligent action plan. The citizens of Guadalajara have cooperated with enthusiasm and supported the authorities in charge of maintaining order and proudly showcased the beauty of their city in a joyful and congenial manner. The Games represent an opportunity for the City of Guadalajara to reinforce its social fabric and economy, which is the origin of Mexican symbols such as the "mariachi" (traditional music and musicians), "charreria" (traditional rodeo events), country folklore and music, regional cuisine and Tequila. The image of Mexico has improved thanks to the enthusiastic effort of the City of Guadalajara, which deserves to be congratulated. Wed, 16 Nov 2011 11:36:27 CST http://www.ccn-law.com/en/news?nid=1177 http://www.ccn-law.com/en/news?nid=1176 On October 12, 2011, the Mexican Department of Finance and Public Credit published the Decree, in the Official Journal of the Federation, by which the tax subsidies granted to the maquiladora industry are extended until December 31, 2013. Such tax subsidies were the result of the Decree granting various tax benefits with respect to income tax and the single rate business tax published on November 5, 2007. The tax incentive granted to the maquiladora industry is in the form of a tax credit applied against the final accumulated single rate business (IETU) tax due by the taxpayer for the fiscal year. This tax incentive was originally in place from 2008 through 2011, but the new Decree extends the tax benefits throiugh 2013. It is important to mention that such tax incentive, in accordance with the terms of the Tax Subsidy Decree, will apply only to maquila entities that comply with their tax and customs obligations, including, among others, their transfer pricing obligations, by using the maquiladora transfer pricing methods set forth in article 216 Bis of the Income Tax Law. Consequently, if the maquila entity does not use such methods or has a transfer price authorization issued by the Mexican government which uses a different method, that maquila entity may not obtain the benefits of this new tax incentive. Wed, 16 Nov 2011 11:31:33 CST http://www.ccn-law.com/en/news?nid=1176 http://www.ccn-law.com/en/news?nid=1168 September 2011 edition of the CCN Mexico Report™ Wed, 21 Sep 2011 04:46:29 CDT http://www.ccn-law.com/en/news?nid=1168 http://www.ccn-law.com/en/news?nid=1159 August 2011 edition of the CCN Mexico Report™ Wed, 24 Aug 2011 03:52:28 CDT http://www.ccn-law.com/en/news?nid=1159 http://www.ccn-law.com/en/news?nid=1151 President Felipe Calderón issued a Decree for regulating the permanent importation of used vehicles. This topic has been the subject of debate between the different actors in the Mexican automotive industry, the government, manufacturers and the dealerships of new and used cars. In fact, the Decree, published in the Official Journal of the Federation and which came into force on July 1, 2011 and will remain in force until January 31, 2013, forms part of a series of presidential Decrees that regulate the importation of used cars. The North American Free Trade Agreement (NAFTA) states that starting January 1, 2009 and gradually until 2019, Mexico will not be allowed to adopt or maintain any prohibition or restriction on the importation of used vehicles originating from Canada or the United States of America, depending on the model year and, in turn, provides for a staged elimination of tariffs on NAFTA-originating goods, including used vehicles. The progressive reductions in tariffs on NAFTA-originating goods are limited to those vehicles that comply with specific rules of origin and that such is backed up with a valid certificate of origin. The characteristics to prove the origin of used motor vehicles, in terms of NAFTA, create the risk that certificates with false, altered or inaccurate information will be issued to importers acting in good faith, and that these practices could cause great damage to the property rights of used vehicle owners. In order to provide legal certainty to the importers or owners of the used motor vehicles, and to avoid any liability for them for the improper use of NAFTA benefits, it is essential to specify that the certificate of origin must be issued by the producer of the vehicle that deals with or is issued by the exporter based on information given directly by the producer.The purpose of this is to guarantee the authenticity of the information contained in the certificate relating to the origin of the vehicle. Additionally, the Decree considers it appropriate to gradually allow, given the year of the car, the permanent importation of used vehicles, which have a Vehicle Identification Number (VIN) corresponding to a vehicle manufactured or assembled in Mexico, the United States, or Canada, as well as establishing an option to import vehicles with a reduced tariff, without requiring a prior import permit and without the need to present a certificate of origin; The geographic proximity of Mexico to the U.S. and the northern border and region offer economic features that differ from the rest of the country, so the Federal Executive Decree considered it advisable to continue to provide a preferential program for late model light and heavy used cars than the rules that apply elsewhere in the country, and which has a Vehicle Identification Number corresponding to a vehicle manufactured or assembled in Mexico, the United States or Canada.  In this way such vehicles can be imported to permanently stay in those areas with reduced tariffs, without requiring a prior import license and without the need to present a certificate of origin. The Decree considers it very important for Mexico to prevent the permanent importation into Mexico of those used vehicles that, in the country of origin, due to their physical features or technical issues, are restricted or prohibited from being in circulation, as well as when a vehicle has been reported stolen. Furthermore, the Decree seeks to regulate air pollution from all types of emission sources in order to ensure satisfactory air quality for the Mexican general population and to maintain ecological balance.  Thus, the permanent importation of vehicles into Mexico must be subject to any applicable legal provisions for the protection of the environment. It is necessary for the federal government to continuously update information on market trends for used vehicles, thus the Decree considers it essential for importers of used cars to declare their imports to the proper authority. In order to fight crime and protect the citizenry, it is also essential that vehicles permanently imported into Mexico be registered in accordance with the Law of the Public Registry of Vehicles. In accordance with Article 124 of the Amparo Law, Statutes of Articles 103 and 107 of the Constitution of the United Mexican States, the public interest will be considered damaged or public policy provisions will be considered violated when, among others, goods are allowed into the country whose entry is in any of the cases set forth in Article 131, second paragraph of the Constitution. The Second Chamber of the Supreme Court of Mexico has held, in jurisprudence among contradictory decisions, (case number 166/2009, published in the Judicial Weekly of the Federation and its Gazette XXX from October 2009), that it shall not grant suspension on the basis of amparo of the requirements and the ad valorem tariffs found in the Presidential Decrees issued in accordance with Article 131, second paragraph of the Constitution, for the definitive importation to the country of used vehicles, on the basis that it finds that this would create damage to the public interest and the public policy provisions would be violated, much like the objectives set out in the Decree of the Treasury Department of the federal government.   Original article from MexicanAutomotive Wed, 10 Aug 2011 03:25:00 CDT http://www.ccn-law.com/en/news?nid=1151 http://www.ccn-law.com/en/news?nid=1150 Besides winning the contest to manufacture the new taxi for New York City, Nissan Mexicana enjoyed its highest sales in nine years. Nissan has now been the leader in the industry for 24 months straight. Nissan Mexicana placed 16,255 units in the market and attained a 23.7% market share in the country. According to a marketing report of the first five months of 2011, the automaker remains in first place with 24.2% market penetration in the sector, selling 83,565 units in that period (14.7% more than the same period in 2011). The Japanese company announced the start of the execution of the Strategic Innovation Plan 1, in which the company plans the launch of more products during the second half of the year.  Original article from MexicanAutomotive Wed, 10 Aug 2011 03:20:04 CDT http://www.ccn-law.com/en/news?nid=1150 http://www.ccn-law.com/en/news?nid=1149 Nissan reported that its NV200 vehicle, which will be manufactured in its plant located in the city of Cuernavaca, won the contest put on by the Taxi and Limousine Commission of New York City. Nissan was awarded a contract to supply taxis to the Big Apple for a period of ten years. The announcement was made by the president of Nissan Americas, Carlos Tavares, in the presence of the mayor of New York, Michael Bloomberg. The new New York taxi will be a minivan, which will replace the most common model among the 13,200 New York taxis that circulate in the city: Ford’s famous Crown Victoria, which was recently discontinued. Bloomberg stated that, “The new taxis will be custom-designed to meet the specific demands of carrying 600,000 passengers a day.” Nissan won out against strong competitors such as the Turkish manufacturer Karsan Otomotiv and Ford to receive the city contract, which is estimated to total billions of dollars. Nissan said that it would deliver up to 26,000 taxis during the term of the contract. The Nissan NV200, manufactured in Mexico, will be a modified version of the one currently available in Japan, Europe and China, with enough space for four passengers and their luggage, a horn with low noise pollution, and improved air quality in the cabin, among other features. It will cost $29,000. Nissan said it will train the taxi operators to be able to perform routine repairs and services. Additionally, Nissan will work with all New York taxi owners in a trial program to study the use of electric vehicles as taxis. “Nissan will supply up to six Nissan Leaf, 100 percent electric cars, for the taxi owners to test in 2012, as well as supply them with the charging stations to support their use,” the company said. The Nissan plant in Cuernavaca manufactures the Tsuru and the Chasis Largo pickup. This is the first time that New York has worked directly with car companies to design a new model for taxis. This news has received wide news coverage in important press media including The New York Times which published a sizeable report on this good news for the Mexican automotive industry.    Original article from MexicanAutomotive Wed, 10 Aug 2011 03:14:09 CDT http://www.ccn-law.com/en/news?nid=1149 http://www.ccn-law.com/en/news?nid=1148 Mazda announced that it would construct its first plant in Mexico, which will be operational in the second half of 2013. The Mexican plant will be the fourth plant it operates outside of Japan. Manufacturing of finished vehicles will begin as soon as the construction of the new plant is completed. The project is designed for the production of compact vehicles, to be sold initially in the Mexican and South American markets, and then be introduced in the U.S. market. This news confirms previous editions reporting that Mazda planned to construct the new plant outside of Japan.  Original article from MexicanAutomotive Wed, 10 Aug 2011 03:07:31 CDT http://www.ccn-law.com/en/news?nid=1148 http://www.ccn-law.com/en/news?nid=1147 In 2012, the Annual Automobile Title Registration Fee (tenencia) will be removed at the federal level, as stated by President Felipe Calderón Hinojosa, who pointed out that the legislatures of every state in the country would determine whether or not this would apply to their states.  In fact, some states have decided not to apply this fee. The President stated that, “Since 2007, under the Tax Reform for the Low Income People, my government proposed to repeal this tax completely. In fact, my government no longer receives a single penny from this tax, since all the proceeds go directly to the coffers of the state governments.” This proposal encountered much resistance and obstacles from the start, but as a result of legislative debate and discussion, the initiative was approved and was postponed to December 31 of this year. The nation’s President claimed that the next package of the Law of Income and Budget of Expenditures of the Federation will be one that clearly puts an end to the Annual Automobile Title Registration Fee. Since June of 2010, the government has supported consumers who decide to buy a new car with the payment of the Annual Automobile Title Registration Fee. President Calderón explained that this measure continues to be in force and will continue throughout this year for new vehicles and, starting in 2012, such will apply to all vehicles. The President pointed out that, solely in 2010, automobile production in Mexico increased 50% to a manufacturing record high of almost 2,300, 000 vehicles. He also said that exports rose 52%, reaching a new record of nearly two million vehicles sold in international markets. Mexico has become the ninth largest vehicle manufacturer in the world and the sixth largest vehicle exporter.  Original article from MexicanAutomotive Wed, 10 Aug 2011 02:58:49 CDT http://www.ccn-law.com/en/news?nid=1147 http://www.ccn-law.com/en/news?nid=1146 by: Mario Melgar-Adalid - Mexico remains against capital punishment. In contrast, with the exception of a dozen U.S. states, most states in the U.S. have adopted capital punishment, though some states seldom implement it. For instance, the State of New Jersey has not executed an inmate on death row since 1976. Furthermore, the State of California has nearly five hundred inmates on death row, but carries out executions only sporadically. On the other hand, other states have been more active in implementing capital punishment sentences. For example, Texas carries out the most number of executions, which account for one- third of all the executions of inmates sentenced to death in the U.S. In Mexico, the current debate on the death penalty carries an important political dimension. On the one hand, proponents of the death penalty submit to voters the notion that such punishment will help them "enforce the law," and, on other the other hand, opponents to the death penalty argue that it should not be adopted for humanitarian reasons. The Mexican U.S. governments have recently attempted to postpone the execution of a Mexican on death row in Texas. The United Nation's Office of the High Commissioner on Human Rights, along with the governments of Brazil, Honduras, El Salvador and Switzerland, and various non-governmental organizations, have also attempted to stop such execution. In 2003, Mexico resorted to the International Court of Justice (ICJ) at the Hague to present 51 cases of Mexicans sentenced to death who had not been given access to consular support and were not notified of their rights to such support. The ICJ held that such sentences must be suspended until procedural shortcomings were cured. Nevertheless, the U.S. Supreme Court held that the ruling from the ICJ lacked jurisdiction in U.S. territory. In the most recent case of a Mexican death row inmate scheduled for execution, only Governor Rick Perry had the power to commute such sentence to one of life in prison. The debate continues in Mexico, where the majority of public opinion is against capital punishment. However, Mexico's Green Party and some citizens concerned about the insecurity and violence that persists in Mexico, have rekindled the debate for the adoption of capital punishment in Mexico.Original article from the CCN Mexico Report™ Tue, 09 Aug 2011 02:58:02 CDT http://www.ccn-law.com/en/news?nid=1146 http://www.ccn-law.com/en/news?nid=1145 by: Rene Cacheaux - Mexican laws are diametrically opposed to those of the U.S. when it comes to the liability of shareholders or owners of a business entity. In the U.S., there is a risk that courts may pierce the so called "corporate veil" and hold shareholders of a company individually liable for the company's obligations in cases involving inappropriate capitalization, fraud, co-mingling of assets owned by the company with those owned by the company's owners or when shareholders use the corporate structure to carry out their own activities. These implications are included in the prevailing laws in the U.S., but by no means is such the case in Mexico. In accordance with Roman Law, corporate independence was established between the obligations of business entities and the personal obligations of its shareholders. These companies have their own legal identities, assets and liabilities apart from those of their owners or shareholders. It is from this principle that the general rule that shareholders are not liable for the obligations and responsibilities of the entities they own derives. Business entities are liable for obligations up to the value of the assets they own. Shareholders have no liability arising from corporate obligations not covered by the assets of such companies. This principle was passed on from Roman Law to Italian Law and, from there, it has been incorporated into Mexico's General Law of Business Associations (Ley General de Sociedades Mercantiles). For this reason, Mexican courts may not hold shareholders liable for the obligations and debts of the companies they own. This begs the following question: Is there any exception in Mexico to this principle of corporate protection that may serve as the basis for shareholders to be held liable for corporate debts? In limited circumstances, Mexican legal provisions allow shareholders to be held liable for company obligations by applying the legal concept of joint and several liability without piercing of the corporate veil. In accordance with the principles of joint and several liability, a person may be jointly liable for the obligations of another person or entity, , but both are fully and individually liable for the same obligation. In Mexico, these limited circumstances include the following: (i) in the case of unperfected entities, shareholders are liable for corporate obligations when they carry out corporate activities through such unperfected entities. Unperfected entities are those which are organized, but their articles of incorporation are never registered with the Public Registry of Commerce (Registro Publico de Comercio); (ii) in the case businesses acquisitions by multiple parties, those acquiring the business become jointly and severally liable for unpaid taxes by the entity that conducted such business. The acquisition of a business occurs when a person or group of persons acquires all elements of production (including assets) or of provision of services, without acquiring the shares of the company that controls such elements of production or provision of services; and (iii) in the event the business entity is not registered with the Mexican Federal Taxpayer Registry (Registro Federal de Contribuyentes or RFC)), if it changes its domicile without providing the required notice of change of domicile to tax authorities, when audits are initiated or when the business entity does not maintain tax records for accounting purposes or attempts to hide them, with respect to federal taxes due and not fully paid with assets of the business entity. Therefore, in cases (i) and (iii) above, the individual shareholders can be held jointly and severally liable for payment of the resulting balance from the tax debt owed by the business entity, when such is not paid off with corporate assets; while under scenario (ii) the acquiring individual or entity, although not its shareholders, would be jointly and severally liable for the unpaid taxes of the acquired businesses.Original article from the CCN Mexico Report™ Tue, 09 Aug 2011 02:48:02 CDT http://www.ccn-law.com/en/news?nid=1145 http://www.ccn-law.com/en/news?nid=1144 by: Antonio Campero -  Mexico's Intellectual Property Law (Ley Industrial de Propiedad) provides for many cases in which a trademark may not be registered. In this note we highlight those names, three-dimensional figures and forms that are the same or similar to a mark that the Mexican Institute of Intellectual Property (Instituto Mexicano de la Propiedad Intelectual (IMPI)) considers as, or has declared to be, "notably recognized" or "famous," with respect to products or services. A mark is considered "notably recognized" in Mexico when a certain populace or business sector of the country recognizes that mark as a result of economic activities conducted in Mexico or abroad by a person or entity who uses this mark with respect to its products or services through promotional efforts or publicity of such. This implies that in order to achieve this status or level of recognition, a mark should at least be highly recognized in a specific sector. For example, a mark may be "notably recognized" in the world of aquatic sports, but unknown in other areas. For example, the names "Swatch" or "Lacoste" are highly recognized in their specific market segments, but not necessarily in all markets. It is understood that a mark is famous provided that it is recognized by the majority of consumers. Clearly, far fewer marks meet this characteristic of being recognized by the majority of the population, as is the case, for example with the names "Coca-Cola" or "McDonalds." It is noteworthy that in 2005 the Intellectual Property Law introduced a process through which the authorities may declare the fame or notoriety of a mark by allowing the interested party to employ all evidence that is necessary to prove such status. The fact that the owner of a brand does not try to follow the established process to obtain a declaration of fame or notoriety does not rule out that the authorities may independently attempt to determine such status; however, obtaining a declaration offers a sense of legal protection for the owner. Many companies with globally recognized marks have slowly obtained declarations of fame or notoriety for their marks, to the effect that subsequent studies are not necessary (at least during the active period of the declaration, which is ten years), which precludes others from registering identical or similar marks. In the case of marks that are "notably recognized" this means securing exclusive rights on products or services that belong to a related market. For "famous" marks, this means securing exclusive rights on any type of product or service.Original article from the CCN Mexico Report™ Mon, 08 Aug 2011 04:55:00 CDT http://www.ccn-law.com/en/news?nid=1144 http://www.ccn-law.com/en/news?nid=1143 On May 27, 2011, a new regulation was published in the Official Journal of the Federation that aims to establish the procedure to determine and pay the fee known as the "guaranty of no expiration fee" (cuota de garantía de no caducidad) referred to in the National Water Law (Ley de Aguas Nacionales). The payment of the guaranty of no expiration fee allows licensees or assignees of national water rights to avoid the termination of the license because of expiration. This permits licensees to maintain their rights to use the volume of water licensed or assigned, or, when applicable, to fully carry out a permanent transfer of water rights to third parties. The new regulation contains the formula used to calculate the guaranty of no expiration fee that the licensee or assignee of national water rights may choose to pay in order to avoid total or partial expiration of a license or assignment when such party ceases to operate, use or appropriate all or part of the volume of water licensed or assigned for a period of two consecutive years. Such fees may be paid each time any one of the mentioned events occurs. The period of two years shall be calculated from the time the operation, use or appropriation of the national water rights that were licensed or assigned ceases. Those who maintain licenses of national water rights should understand the details of such rights and the importance of taking measures to prevent their expiration.Original article from the CCN Mexico Report™ Mon, 08 Aug 2011 04:50:03 CDT http://www.ccn-law.com/en/news?nid=1143 http://www.ccn-law.com/en/news?nid=1142 On May 25, 2011, Mexico's new Immigration Law was published in the Official Journal of the Federation and became partially effective as of May 26, 2011. This new law introduces the concept of "Status of Stay" (Condición de Estancia), which refers to the status assigned to a foreigner with intent to reside in Mexico, when the activities he or she carries seeks to carry out so allow, or to the status assigned to a foreigner allowed to reside in Mexico based on humanitarian criteria. Additionally, a residency card was introduced, which in certain aspects substitutes for the immigration documents that have applied to Temporary Visiting Non-Immigrants, Immigrants and Permanent Residents. The new law replaced the more than thirty statuses and characteristics provided by the General Population Law (Ley General de Población) that formerly categorized immigration status as non-immigrant, immigrant and permanent resident, with the following three large "Status of Stay" groups: (i) Visitor, (ii) Temporary Resident, and (iii) Permanent Resident. The new Immigration Law establishes that, in certain cases, foreigners who intend to enter the country must present one of the visas referenced by the new law. It is worth noting that none of these visas grant the right to work for payment, unless such visa states so. On the other hand, the new immigration law restricts the discretion of immigration authorities to refuse the issuance of visas, legal entry into Mexico or the presence of foreigners in Mexican territory. One of the fundamental values adopted in such immigration law is its respect for the human rights of immigrants - nationals and foreigners alike - irrespective of their origin, nationality, gender, ethnicity, age or immigration status. The new law is consistent with the equality between nationals and foreigners set forth in the Mexican Constitution, especially when it comes to the observance of their individual rights. Prior to entering Mexico, it is advisable to seek legal advice to determine applicable visa requirements, and if a visa is required, which type would apply, including a determination of the correct status of stay that applies to each individual case. Original article from the CCN Mexico Report™ Mon, 08 Aug 2011 04:44:16 CDT http://www.ccn-law.com/en/news?nid=1142 http://www.ccn-law.com/en/news?nid=1141 Although "subdivision" (subdivisión) and "urban development" (fraccionamiento) appear to be similar terms, from a Mexican legal standpoint, they are different. According to the General Law of Human Settlements (Ley General de Asentamientos Humanos), Mexican states have the authority to legislate in the area of human settlements and urban developments. Consequently, differences between both concepts should be reviewed according to the local laws on urban development. Nevertheless, the following provides some of the principal differences generally accepted in local laws. Subdivision implies the partition of property into two or more sections, with each of the sections having access to public roads. Each of the subdivided lots must comply with the minimum surface area established by the urban development plans applicable to such location. Depending on local law, the subdivision of real property may trigger the obligation to relinquish or pay for municipal land areas, while some legal ordinances allow for the deferment of this obligation. In subdivisions, there may be a need for infrastructure for utility services that may be fulfilled by works performed by the particular entity or individual requesting the subdivision. As a general rule, the requirements and response times to obtain an authorization for a subdivision are shorter than those applicable to urban developments. An urban development implies a division of property which requires the establishment of public access roads, in addition to the establishment of infrastructure for utility services (water, gas, sewage, electricity, paving, etc.). In this case, developers must assign or donate land to the municipalities and utility entities in order for such municipalities and utility entities to provide their respective services to owners of the lots resulting from the urban development project. Various types of urban developments exist, including residential, industrial, commercial or mixed purposes. Each type of urban development has different specific requirements that apply to it, according to local laws, including those related to the establishment of green and recreational areas which, as a general rule, must be assigned or donated to the municipality. The procedure to authorize an urban development entails compliance with significant requirements, such as road surveys, public comment, the obligation to construct infrastructure improvements for utility services, as well as compliance with particular legal requirements in accordance with the local official urban development plan. When analyzing the acquisition of real property, it is important to consider these differences in the due diligence process, in addition to determining the condition and availability of utility infrastructure and compliance with all legal requirements that apply to land use and the type of development. Original article from the CCN Mexico Report™ Mon, 08 Aug 2011 04:38:22 CDT http://www.ccn-law.com/en/news?nid=1141 http://www.ccn-law.com/en/news?nid=1130 By: Rene CacheauxAgreement in default (Pacto Comisorio) is a technical concept in Mexican law contained in all the Civil Codes of the States of the Mexican Republic and in the Federal Civil Code.  This concept is generally applicable to all contracts, including those of a commercial nature.  This concept, inherited by Mexico from French law, is an agreement contained in reciprocal obligations, whereby both parties bind one another and, in the event of default, the non-defaulting party may: (i) demand specific performance of the contract; or similarly (ii) declare the obligation breached and require payment of damages.  The main function of the agreement in default is to determine which party may declare the contract breached: may the affected non-defaulting party do so or must it seek judicial determination that the contract has been breached to require the defaulting party to perform or pay damages?  The Mexican Federal Constitution contains a constitutional guaranty providing that no party may take justice into its own hands, implying that only established tribunals may impart such justice.  At one point, federal courts established that the provisions of the Civil Code with respect to the agreement in default were unconstitutional, as this would mean that one of the parties would be taking justice into its own hands without seeking judicial intervention.  Nevertheless, new decisions by federal courts have upheld the validity of the agreement in default in contracts.  The relevance of this agreement in default in contracts, especially in a commercial context, is that if the contracting parties specifically and expressly provide for such, in the event of default, the affected party that has complied with its obligations may validly declare that the contract is terminated and subject to the payment of damages, without the need to seek a judicial determination.  This is very important, because if the right to declare the contract breached by a non-defaulting party is not expressly stated, an affected party must seek a judgment from the court declaring whether or not the contract was breached after a lengthy legal proceeding.  A practical recommendation for commercial contracts is that they should always include a specific clause granting the right to anticipatory repudiation by the affected party, in the event of default, without the need to go to court.  If such a clause is not provided in a contract and default occurs, an affected party will not be able to declare the contract terminated and must seek judicial intervention to obtain a declaration of termination or default after a costly and lengthy proceeding.  The ensuing problem is the status of the contract while the respective court proceeding is under way, since such contract may not be deemed terminated until a court renders judgment.  When the contract involves the possession of real property, caution must be exercised regarding the use of the agreement in default to ensure that conversion does not occur upon trying to recover possession of the real property resulting from a unilateral declaration of default by the affected party.  In these cases, a qualified attorney should be consulted to determine whether it would be best to seek the assistance of the court to resolve the issue in the face of the default.Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 04:28:30 CDT http://www.ccn-law.com/en/news?nid=1130 http://www.ccn-law.com/en/news?nid=1129 by: Dr. Mario Melgar-Adalid The global scandal surrounding Dominique Strauss Khan, or DSK, as the press now calls him, and the recent vacancy he left in the presidency of the International Monetary Fund (IMF), has brought about Mexico’s nomination of the Governor of the Bank of Mexico, Agustín Carstens, as a candidate for the IMF presidency. Before becoming the Governor of the Bank of Mexico, Carstens was Mexico’s Secretary of Finance and Public Credit. Pursuant to an unwritten tradition, a “Gentlemen’s Agreement” has existed since the creation of the IMF and the World Bank in Bretton Woods, New Hampshire, wherein the presidencies of the IMF and the World Bank have been filled by a European and an American, respectively. This time, the voice of emerging countries and economies has been heard, as Carstens is now a contender in the election for the new President of the Fund. It is not a sure victory, as the French Minister of Economic Affairs, Finance and Industry, Christine Lagarde, has received the support of European countries. Lagarde is a very strong contender and a remarkable candidate with a very unusual background. She has been a national champion in synchronized swimming, as well as a successful attorney in the United States, where she practiced for 25 years. Kenneth Rogoff, an economics professor at Harvard and an economist with the IMF, has said that Lagarde is treated like a “rock star” at high level meetings around the world. Though he may not have the charisma of a “rock star,” Carstens’ impressive experience, skills and training, as an economist, places him among an elite group of top level Mexican government officials who are known worldwide for their professional and technical expertise. While Carstens may not have been a competitive swimmer, he was an outstanding first baseman in Mexico’s amateur baseball league. His academic and professional credentials compete with the world’s best. Regardless of the outcome of the election, Carstens is a strong candidate and a worthy representative of Mexico.Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 04:21:21 CDT http://www.ccn-law.com/en/news?nid=1129 http://www.ccn-law.com/en/news?nid=1128 by: Antonio CamperoSince 2007, and as mentioned in the January 2010 edition of this publication, Mexico has been an active participant, along with Canada, the United States of America, Japan, the European Union, Switzerland and New Zealand, among others, in drafting and ratifying the Anti-Counterfeiting Trade Agreement (ACTA). Mexico’s reasoning is grounded in the statement that "the illicit trade incounterfeit and pirated goods has negative effects on the national economy by decreasingincentives that foster creativity and innovation and by threatening legitimate businesses”.  Similarly, that “such activities may also affect the health and safety of Mexican consumers and have been linked to organized crime." It is well known that the problem of piracy and counterfeiting has grown to global proportions and requires international solutions, which is why the involvement of many countries and governments from around the world in entering trade agreements to help each other is of utmost importance. ACTA aims to set new standards for the enforcement of intellectualproperty rights to efficiently combat the prolific growth of trade in counterfeit and pirated goods, particularly through the exchange of information between enforcement authorities, including customsand other agencies of the different member countries. After many rounds of negotiations, in April 2010 the eighth round took place in Wellington, New Zealand. In this round, the treaty parties, which included Australia, Canada, the European Union and its member states, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States, agreed that it was time to make a consolidated text available, as a result of these negotiation rounds. Thus, there is now a final draft of the text ready for approval, which could possibly be signed by each party involved in the negotiations by the end of the year. The treaty is expected to be extremely useful in combating piracy and counterfeiting of goods on an international level.Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 04:13:14 CDT http://www.ccn-law.com/en/news?nid=1128 http://www.ccn-law.com/en/news?nid=1127 Just one month away from elections in the State of Mexico, the political temperature of the country rose to more than 100 degrees Fahrenheit with the arrest of Jorge Hank Rhon. The controversial politician and businessman was arrested in the city of Tijuana, charged with possession of firearms reserved for the exclusive use by the army. Interest in the ex-mayor of Tijuana’s arrest lies mainly in the importance of the Hank family in Mexican society. Jorge Hank became a wealthy businessman as a result of his business endeavors in gaming, finance, transportation and professional sports.  Many times he has been in the eye of the storm for various reasons. At one point, he was detained for trying to export to Japan a substantial amount of garments made from the fur and hides of protected and endangered species. On other occasions, his associates and bodyguards have been arrested stemming from accusations of murder. Published reports state that he has been banned from entering the United States owing to an ongoing investigation relating to narcotics trafficking. The number of firearms that the Mexican Army found in his house in Tijuana is not negligible. Such included almost 90 firearms, 43 of which were high caliber, and 9,298 cartridges. Nevertheless, if this is the only charge against him, much of the Mexican public will believe this to be a mere political stunt to influence the crucial election in the State of Mexico on July 3. Jorge Hank Rhon’s father Carlos Hank Gonzalez was a professor, a founder and leader of a very important political group (the “Grupo Atlacomulco”), a powerful governor of the State of Mexico, the mayor of Mexico City, and the Secretary of Tourism and Agriculture for many different administrations from the 1960’s through the 1990’s. He never ran for the Mexican presidency because, during that time, the Mexican Constitution prohibited any Mexican not born of a Mexican father and mother from assuming the presidency. An amendment to the Constitution now allows anyone born in Mexico of a Mexican mother or father to seek the presidency. Also, Professor Hank accumulated a large fortune throughout his lifetime. The political relevance of this arrest centers on the fact that his membership in the Grupo Atlacomulco is attributed to Enrique Peña Nieto, the current governor of the State of Mexico and the frontrunner in the upcoming 2012 presidential election. If famed businessman Hank Rhon was in fact arrested for the alleged possession of illegal firearms, then the Mexican people expect to see an investigation proving whether the many rumors regarding his business practices and wealth accumulation have any legal, fiscal or ethical merit. While the political temperature rose sharply, the polls seem to have been unaffected, as they predict that the PRI candidate will become the next governor of the State of Mexico. Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 04:04:44 CDT http://www.ccn-law.com/en/news?nid=1127 http://www.ccn-law.com/en/news?nid=1126 The Mexican Supreme Court (Suprema Corte de Justicia de la Nación) recently approved case decision number 2ª./J.48/2011, which reads: “Seniority Bonus. The amount must be determined based on the salary earned by the employee at the termination of the labor relationship.” In the case decision, the Mexican Supreme Court asserts that considering the Seniority Bonus is a benefit that presumes termination of the labor relationship and is payable upon the termination of such, the amount of the bonus must be determined based on the exact salary earned at the time of termination, whether due to resignation, death, disability or retirement, and must not exceed two times the general or professional salary in effect at that time. This case decision was upheld among contradictory case decisions.Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 03:44:21 CDT http://www.ccn-law.com/en/news?nid=1126 http://www.ccn-law.com/en/news?nid=1124 In many cases, it is easy to question the role of the notary public in formalizing the sale of real estate in Mexico, which leads us to analyze the scope of the notary’s services and the legal certainty provided by notaries public in transactions of this nature. The notary public in Mexico isa lawyer who receives an additional license as a notary public, which allows him/her to be a notaryin different types of transactions and legal acts, including those relating to real estate sales transactions. The notary participates in the legal transaction, that is, he/she renders his/her signature to formalize a contract, drafts the contract or revises the legality of the contract provided by the parties. The notary’s primary functions, include: (i) identifying the needs and intentions of each party; (ii) identifying the property’s chain of title and making the appropriate references in the public instrument; (iii) requesting and obtaining any certificate(s) of liens or no liens regarding the property from the Public Registry of Property (Registro Público de la Propiedad) and presenting it to each party; (iv) verifying that the property has no outstanding debts in regards to property tax or water supply services; (v) identifying the parties to the transaction and, when applicable, their legal representatives, as well as their legal capacity to enter into the contract; (vi) calculating and performing necessary acts for the return and paymentof taxes accruing to the parties as a result of the sale; and (vii) filing the deed of purchase with the Public Registry of Property that corresponds to the property’s location. At first glance, this may seem like a very extensive process for real estate sales transactions; however, it is important to mention some of the relevant aspects of the responsibilities of a notary public: 1.      The notary certifies the legality of the transaction and the legal capacity of the parties to enter into it, that is, that one party is the seller and the other the buyer. It is worth mentioning that the notary public may not individually represent either party.2.      The notary checks the seller’s legal title and obtains a certificate of no liens from the Public Registry of Property; though they have no obligation to review the property’s chain of title in addition to the seller’s title, it is recommended that this be checked for the period of at least the previous 20 years. 3.      Unless the transaction directly involves the sale of communal property (ejido), the notary does not check the previous condition of the property or the fulfillment of all legal requirements.4.      The notary does not verify the zoning/land use of the property and its compatibility with the buyer's specific project. 5.      The notary does not check or verify the availability of public utilities on the property; he/she merely confirms that there is no balance owed for the water supply services and any property taxes, in accordance with the law. 6.      The notary checks neither the environmental condition of the property nor the requirements for the development and use of property.In conclusion, the involvement of a notary public in real estate purchases is a legal requirement in Mexico, and its function is of great importance in the execution of the transaction. However, in some transactions it is an essential but complementary service to the role of various specialists,including outside counsel, engineers, environmental consultants, surveyors, etc. Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 03:33:12 CDT http://www.ccn-law.com/en/news?nid=1124 http://www.ccn-law.com/en/news?nid=1123 After many years, in which different individuals have discussed the need to substantially amend the constitutional writ of amparo, Mexico’s President  has finally signed the Decree amending and adding articles 94, 103, 104 and 107 of the Mexican Constitution.  A significant step was taken as the amendment was published in the Official Journal of the Federation (Diario Oficial de la Federación) on June 6 and scheduled to take effect 120 days after publication.  With the constitutional framework resolved, the process initiated years ago to amend different laws, particularly the Amparo Law, will continue.  These amendments were begun in 1999, when the Supreme Court (Suprema Corte de Justicia de la Nación) assembled a work group to prepare a draft bill amending the Amparo Law. Two years later, this draft bill, which was submitted for the approval of the Supreme Court, was discussed at a national conference in the city of Mérida.  Years later, several legislators reintroduced the issue and submitted a draft for consideration by the Senate.  Such new draft distorted the main purpose of adequately changing the Amparo Law, and the effort was discarded.  According to a statement by Justice José Ramón Cossío in a newspaper article, as a result of influence by federal legislators and the Supreme Court itself, efforts for the promulgation of a new Amparo Law were reintroduced three years ago.  Considering that the Supreme Court does not, as part of its federal judicial power, have the legal capacity to draft legislation, as do other supreme courts, such as in Spain, the scope and prestige of its judicial influence were definitive factors in keeping the idea of an amendment to the Amparo Law alive. The uncertainty that still remains among the legislature, the judiciary, and Mexican academia is whether amendments to the Amparo Law are enough, or whether a completely new Amparo Law, and everything else that this would imply, must be promulgated. The question that legislators will have to answer is whether the amparo will serve as a means of protecting individual constitutional guaranties.  This would mean that nothing would change: an amparo may only be filed by a person who has been affected by an authority and the amparo’s effects will be limited only to that person who files for and obtains the protection of an amparo, as is presently the case. According to others, the amparo is a process and a way by which to secure the protection of fundamental rights.  Consequently, the Amparo Law should be substantially amended to ensure that its implications are general (erga omnes). The legislative branch is currently at that crossroads as its members must now discuss and approve new laws deriving from the constitutional amendments that have been promulgated.  The purpose of this amendment, among others, is to stop the abuse resulting from the suspension of the act claimed by the amparo. The amendment is intended to prevent someone from using the amparo as a way to evade justice or to serve as a means to make the process difficult for authorities.  Suspensions via an amparo may be granted or denied only when it is clear that theis not being used to evade the law.  Amparos shall be considered as properly filed only when rights guaranteed by law have been violated.  It is mentioned that the rights arising from Mexican law are not the only ones subject to protection.  Those rights deriving from international treaties that have been ratified and considered to be law in the country are also included.  The new capacity of the Supreme Court to issue declarations regarding the unconstitutionality of laws and general standards is of great significance. A declaration of unconstitutionality with general or collective validity may be issued when such jurisprudence is affirmed, 90 days have transpired, and no authority has corrected any omissions. In addition, the constitutional amendment that gives the Supreme Court the capacity to establish panels considering the number and specialization of the constitutional amparo circuits by general agreement is also relevant.  These panels, comparable to panels used in appellate courts in the United States to resolve matters in a collegiate manner, will allow the presidents from each circuit panel to resolve contradictory case decisions that may arise.  This will allow the Supreme Court to resolve and have more time to attend to amparo proceedings, constitutional controversies and unconstitutional acts, which will be a top priority when one of the houses in Congress or the executive branch indicates that an urgent matter is in the best interests of the public pursuant to the constitutional amendment promulgated.Original article from the CCN Mexico Report™ Tue, 21 Jun 2011 03:25:32 CDT http://www.ccn-law.com/en/news?nid=1123 http://www.ccn-law.com/en/news?nid=1122 June 2011 edition of the CCN Mexico Report™ PDF Mon, 20 Jun 2011 04:38:33 CDT http://www.ccn-law.com/en/news?nid=1122 http://www.ccn-law.com/en/news?nid=1113 For months the topic of the State of Mexico’s upcoming election for governor has been a favorite of the Mexican “commentocracy,” a term generally used to refer to political analysts. The election for governor of the State of Mexico is the most important gubernatorial election in Mexico and believed to be a precursor to the 2012 presidential election. Given the gubernatorial election results in the states of Oaxaca, Puebla and Sinaloa, where the Institutional Revolutionary Party (PRI) was easily defeated by coalitions formed between the National Action Party (PAN) and the Party of the Democratic Revolution (PRD), it was believed that attempts to form a similar alliance in the State of Mexico election would once again prove politically advantageous. With victories over the PRI resulting from these types of coalitions, there has been speculation that nothing would stand in the way of an alliance between the right and left in a presidential election. Notwithstanding the prior success, no alliance was formed in the State of Mexico, given that the PAN and PRD were not able to agree on the terms of the previously announced alliance as was also the case in Nayarit. In the State of Mexico, Alejandro Encinas, the PRD candidate, who is a congressman and former mayor of Mexico City, stated that he would not enter into an alliance with the PAN for ideological reasons. The left’s most visible leader, Andres Manuel Lopez Obrador, has also systematically opposed alliances with the PAN, the party that defeated him in the past presidential election. On its behalf, the PAN nominated Luis Felipe Bravo Mena, a mid-level, traditional PAN party member who has proposed the creation of a “citizens’ alliance” in light of the failure of the anticipated alliance with the left. The PRI nominated Eruviel Avila, the charismatic mayor of Ecatepec, a municipality with a dense urban population. The selection of this candidate has created a great sense of unity among the members of the PRI. It had been speculated that if Avila did not receive the PRI nomination, he could have been the candidate of an eventual PAN/PRD alliance following the examples of the Oaxaca, Puebla, Sinaloa and Guerrero state elections where former PRI party candidates were successful at the head of an opposing alliance. Polls now show that Eruviel Avila is a strong contender. Currently, he has 55% support from among those voters polled, while Encinas of the PRD has 24%, and Bravo Mena of the PAN has 21%. Unless something very dramatic occurs in the upcoming weeks of the campaign, all signs indicate that in the gubernatorial election for governor of the State of Mexico this July, the PRI will continue governing the state, as it has since the PRI was created. The political thermometer indicates that the presidential candidate for the PRI and outgoing governor of the State of Mexico, Governor Peña Nieto, will sail through the presidential election with tranquility and ease. It appears that the PRI has learned the political lesson that it is easier and safer to compete as a united, rather than a divided, party. Thu, 02 Jun 2011 05:11:52 CDT http://www.ccn-law.com/en/news?nid=1113 http://www.ccn-law.com/en/news?nid=1112 On May 4, 2011, the Technical Council of the Mexican Social Security Institute (Instituto Mexicano del Seguro Social or IMSS) published Decree No. ACD0.SA3.HCT.270411/120.P.DIR in the Official Journal of the Federation in which such council approved the use of the Advanced Electronic Signature (Firma Electrónica Avanzada or FIEL) and its respective digital certificate, so that authorized public accountants may review compliance with employer obligations in Social Security matters, carry out corresponding transmittals regarding employer registrations, and present notices for the review and audit of Social Security matters before the IMSS. The cited Decree also approves guidelines for the adoption of the FIEL issued by the Taxpayer Administration System (Administración Tributaria or SAT) of the Mexican Department of Treasury, in those electronic transmittals that authorize public accountants to carry out matters before the IMSS. Overall, the approved guidelines establish that: 1) the FIEL replaces the handwritten signature and certifies the validity of the document; 2) the IMSS will issue an electronic receipt notice, which will be the means of evidencing the filing; 3) authorized public accountants must advise the IMSS of any changes in a company’s registration, subject to penalties including the revocation of the FIEL for failure to do so; 4) information provided remains the responsibility of those public accountants who utilize such; and, 5) a public accountant may at any time cancel the company’s FIEL registration before the IMSS. Thu, 02 Jun 2011 04:59:16 CDT http://www.ccn-law.com/en/news?nid=1112 http://www.ccn-law.com/en/news?nid=1111 Article 27 of the Mexican Constitution establishes that the right to own private property is subject to “measures as dictated by the public interest…,” in the manner that competent authorities, at the federal, state and municipal levels, deem necessary in order to impose the “necessary measures to maintain order in human settlements and establish adequate provisions, uses, reservations and purposes for land, waters and forests…” The Mexican territory is subject to a complex legal framework with coordination deficiencies among the different levels of government and gaps in the implementation of laws in this area. The foregoing entails the need to carefully review land use and zoning authorizations in commercial, industrial, tourist, residential and all other types of real estate projects. The Mexican Federal Government primarily intervenes in the determination of land use when establishing urban development plans and in the approval of land uses subject to environmental matters arising from the nature of the project itself or the environmental impact that may result from developing property on forest land. Mexican states have the authority to establish urban development laws applicable within their territorial limits which establish the types of land use permitted, and the rules for approval of specific land uses, among other matters.  This legal framework is the starting point for municipalities to create urban development plans within their jurisdictions which includes the assignment of specific land uses pursuant to zoning regulations, compatibility, construction density, and other aspects. In the majority of cases, state urban development laws and municipal urban development plans have provisions establishing that any action contrary to a determined land use contained in an urban development plan is invalid. This underscores the importance of confirming compatibility of land use with the applicable urban development plan, and obtaining the specific land use approval corresponding to a project. The foregoing should be done concurrently with the determination of environmental implications and compatibility of the project with the respective local and federal environmental authorities. Thu, 02 Jun 2011 04:21:49 CDT http://www.ccn-law.com/en/news?nid=1111 http://www.ccn-law.com/en/news?nid=1094 by: Dr. Mario Melgar-AdalidThe documentary film “Presumed Guilty” (“Presunto Culpable”) has stirred great controversy. The film exposes the flaws of Mexico’s judiciary in criminal cases. The order issued by a district judge to temporarily suspend the screening of the film generated even more attention to this matter. In Mexico, this documentary film has been a blockbuster. Opinion polls conducted in Mexico show the public has a negative perception and superficial knowledge of Mexico’s judicial system when it comes to criminal cases. Confusion exists in the general population regarding the distinction between federal and state court systems, and between the investigation and the accusation stages of a case. The public does not clearly understand the role of the attorney general as a prosecutor, and the role of judges, whose role is to be the official intermediary between the accused and the prosecutor.  A reputable international organization, World Justice Project (WJP), conducted a public opinion study and sent questionnaires to legal experts in various countries, including Mexico. As of today, over 35,000 people and nearly 900 experts have participated in the study. The purpose of the WJP’s study is to identify the ways in which the population of a country perceives the rule of law. Mexico’s ranking among the 35 countries studied included is as follows: effectiveness of the judicial system, 34th; limits to the power of government, 21st; corruption, 32nd; clear, well publicized and stable laws, 17th; efficacy of justice in criminal cases, 34th. Nevertheless, Mexico did not rank poorly in all the study’s findings, ranking second among all of the Latin American countries studied in the area of government openness. Mexicans have better access to official information, legislative documents and government contracts than, for example, the Austrians or the Spaniards. The film “Presumed Guilty” and the results of this international opinion poll, however, confirm that Mexico must undertake an extraordinary effort to improve the judicial system in criminal cases and, consequently, the negative perception that Mexicans have as to the administration of justice in Mexico. Thu, 19 May 2011 05:05:40 CDT http://www.ccn-law.com/en/news?nid=1094 http://www.ccn-law.com/en/news?nid=1093 On April 4, 2011, on the same date as the “Day of Competition 2011,” the Mexican Federal Competition Commission (Comisión Federal de Competencia or COFECO) published new reference documents, guides and criteria regarding economic competition. The new documents released at such event are the following: (i) reference document concerning the definition of “relevant markets;” (ii) reference document concerning the determination of “substantial power in the market;” (iii) guide for providing notice of economic concentration; and (iv) draft of technical criteria for the imposition of fines in economic competition matters. Prior to issuing these documents, the COFECO had already prepared and published a guide concerning its immunity and sanctions reduction program, a guide for compliance by associations, business chambers and professional associations, as well as a reference document for the taking of surveys, so that these new documents become part of a series of actions that have been undertaken by COFECO for the purpose of making its activities more transparent and achieving greater certainty with respect to its resolutions, all in benefit of those economic parties who are regulated. These measures are based on the results of public consultations on transparency carried out between February and April 2010, which show that  key players in the economy, have expressed their interest in obtaining from the authorities published guides, criteria and instructions that track those from the leading competition regulators of the world, such as those from the United States of America and the United Kingdom. In addition to these documents, and taking as a reference the results obtained through the public consultation process, the COFECO has also improved its database for providing public access by Internet to all cases in process and the history of resolutions it has taken. The authorities have also implemented modifications to the format of their resolutions in order to enable parties to see how the commissioners voted and how measures tending to equalize access and protection of confidentiality and information within their files have been implemented. It is worth noting that the COFECO has stated that in the near future it will publish other documents adding to those referred to above, for the purpose of completing the actions proposed to improve its regulatory mandate. Among the documents that are expected is one regarding collaboration between competitors and vertical market restrictions. Finally, note that none of these documents creates legal rights or obligations, but instead serve only as sources of reference or guides not intended to substitute the text of the applicable competition law, and thus such simply explain and add to the available information for the benefit of the public. Therefore, under special circumstances merited in a case, the COFECO would be completely authorized to depart from the contents of such documents, so long as the COFECO’s action is based expressly on provisions of the applicable competition law. At CCN, we are available to discuss any questions regarding these topics, and we also inform our readers that the above documents and recently published guides may be reviewed directly at the webpage of the COFECO at: http://www.cfc.gob.mx/index.php/HOME-carousel/dia-de-la-competencia-506.html Thu, 19 May 2011 04:56:53 CDT http://www.ccn-law.com/en/news?nid=1093 http://www.ccn-law.com/en/news?nid=1092 by: Rene CacheauxThis question does not have an easy answer. In reality, the validity of agreements that include a provision restricting competition in its various forms depends on a specific analysis of each case. Unlike other countries, Mexico does not have clear guidelines in this area. There are, however, legal principles that do regulate the personal and commercial activity of individuals and entities. Non-compete agreements have varying levels and scope of application. Such non-compete agreements exist both at the individual level and between businesses or corporations. Furthermore, competition restrictions exist based on territory or time periods. These agreements are of a very diverse nature and each one requires a detailed analysis. A non-compete agreement with identical language can be analyzed from a different angle simply by reason of its term/time period. A non-compete agreement with a one year term is not the same as an identical agreement that runs for twenty years. In Mexico, restrictive rules exist at all hierarchical levels of legislature, from the highest level in Mexico’s Federal Constitution, through ordinary federal and state statutes. Federal laws are very clear in the sense that all individuals have the right to freely exercise a profession, carry out a job or dedicate themselves to the business or industry of their choice. This right may not be restricted without just cause and through a judicial resolution. This individual right represents a severe impediment to the enforceability of non-compete agreements signed by individuals. For example, a non-compete agreement to be signed by an executive of a company, which prevents such individual from working for competing businesses, would be considered as an illegal contract. The same would occur if the same employee were to be restricted from working in the same profession, job, business or industry within a territorial radius of a fixed place defined by the parties. In the case of agreements signed by individuals, it is very difficult to find a formula to support the validity of a non-compete agreement if the agreement implies restrictions on an individual person. With respect to businesses and corporations, the situation is different, although challenges still exist regarding the validity of these types of contractual provisions. Mexican federal laws establish that agreements and contracts that limit or restrict the distribution, sales, processing and fabrication of products and services may be considered as impermissible monopolistic practices. The Mexican Federal Economic Competition Commission exists in order to determine which processes are monopolistic or which restrict free competition. Such Commission has issued various guidelines in relation to this topic, even if all of these are not completely clear and precise. For example, non-compete agreements entered into by competitors within the same industry or business in order to restrict production or provide services are, in the majority of cases, considered as impermissible monopolistic practices. Additionally, corporate non-compete agreements for a term of greater than five years could fall into the same classification of monopolistic practices. Given that it is impossible to establish clear and specific criteria regarding the validity of these types of agreements, it is worth mentioning that each case should be analyzed according to its own merits and small variations in language could be the elements that determine the validity or invalidity of these agreements. Because of the restricted validity of such agreements, it is recommended that their terms and conditions be reviewed by a qualified attorney before formulating and inserting them into an agreement. Wed, 18 May 2011 05:06:48 CDT http://www.ccn-law.com/en/news?nid=1092 http://www.ccn-law.com/en/news?nid=1091 Mexico’s aerospace industry has seen a notable increase in growth over the last five years. Mexican exports in this sector have grown significantly. In the last three years, investment in the aerospace industry surpassed three billion dollars, and it is estimated that, according to data from the Mexican Aerospace Industry Federation (Federación Mexicana de la Industria Aeroespacial or FEMIA), this year 800 million additional dollars will be added to this total. One of the explanations for this success is the link to low production costs in Mexico, which are estimated to be between 28 and 34 percent less than other countries with developed aerospace industries, including France and Brazil. The head of the Promotion, Investment and International Business Unit of Mexico’s Business Promotion Agency (Promexico), Luis Olive, declared that in five years the aerospace parts industry will create 35,000 jobs, which is more jobs than those that currently exist in the sector. In Mexico there are more than 190 companies in the aerospace industry, the majority of which are foreign. These companies employ around 30,000 people and have generated more than three billion dollars in exports over the last year. Presently 80% of Mexican aerospace industry companies are dedicated to manufacturing items such as components, cables and harnesses, landing system parts, plastic injection molding parts, and precision machining, among others. Companies focusing on engineering, design and training represent 10% of aerospace industry companies. Companies dedicated to maintenance and repair operations (MRO) represent 10% of the total and are focused principally on the maintenance of engines and turbines, auxiliary power units, fuselages, electronic systems and landing systems. In accordance with a study conducted by the consulting firm AeroStrategy, with respect to investments between 1992 and 2008, of the fifty largest countries in the world, Mexico has attracted more investment in the area of aerospace manufacturing, passing countries such as China, Russia, the United States of America, India, Malaysia and Turkey. With respect to investments in creating research and development capacity, Mexico is in sixth place, following only Russia, India, the United States of America, the United Kingdom and China. The experience and success of Mexico in developing industry sectors, such as automotive and electronics, provide a platform of specialized methodologies and infrastructure that favors the development of the aerospace industry in Mexico. In addition, such permit the optimization of supply chains, mutual support programs and advantages of synergy. Currently, Mexico graduates close to 90,000 students in engineering and technology related to this sector. This represents a highly attractive contribution of talent to the aerospace sector. As mentioned above, Mexico is also a country with competitive operating costs in the aerospace industry. According to a study entitled “Competitive Alternatives 2008,” conducted by KPMG, Mexico allowed for  cost savings of 30% in comparison to other leading countries in the industry. The states of Chihuahua, Baja California and Queretaro have been the preferred destinations of the aerospace sector. According to experts, Baja California was selected by English manufacturers based on its proximity to California. Chihuahua also takes advantage of its border with the United States of America, and thus has seen executive aviation aircraft manufacturers develop an important network of suppliers. According to the data from the Office of Promotion and Economic Competitiveness of the State of Chihuahua, published in the newspaper Reforma, one of every four jobs that has been created in Chihuahua has been in this industry. In Queretaro, the Canadian company, Bombardier, has established a facility, and such state has also attracted Safran, General Electric, ITR and Eurocopter. According to data from the government of the state of Queretaro, companies in the aerospace sector have created 4,800 jobs and invested $650 million dollars. Wed, 18 May 2011 04:51:59 CDT http://www.ccn-law.com/en/news?nid=1091 http://www.ccn-law.com/en/news?nid=1090 Everything is almost ready for the upcoming gubernatorial election in the State of Mexico. The only pending issue is whether the National Action Party (Partido Acción Nacional or PAN) and the Party of the Democratic Revolution (Partido de la Revolución Democrática or PRD) will form an alliance to run against the Institutional Revolutionary Party (Partido Revolucionario Institucional or PRI), which itself has entered into separate alliances with the Ecological Green Party (Partido Verde Ecologista de México) and the Party of the New Alliance (Partido Nueva Alianza or PANAL). After much speculation, the PRI has designated its candidate. The PRI showed that it has learned the lessons from the states of Oaxaca, Puebla, Sinaloa and Guerrero, where PRI candidates who were not totally accepted by the party suffered defeats at the hands of candidates put forth by the PAN and PRD alliance, when the candidates of the PRI were not nominated by the party itself. The same was about to happen in the State of Mexico, as all signs indicated that the PRI candidate to run for governor of the State of Mexico would be Alfredo del Mazo III, as the PAN and PRD had, respectively, been mentioning. Alfredo del Mazo, mayor of Huixquilucan, is the son and grandson of two PRI Governors from the same state who also shared the same name. In the end, the candidacy of Eruviel Avila, mayor of Ecatepec, was put forward. It has been said that the selection represents a triumph for the culture of hard work (Eruviel) and not that of privilege (del Mazo). If Eruviel Avila had not been selected by the PRI, it is highly likely that he would have been the candidate of a PAN/PRD alliance. Now, the PAN/PRD alliance in the State of Mexico seems to be at a breaking point. The strongest PRD prospective candidate, Alejandro Encinas, has stated that he will not accept an alliance with the PAN, a party he says is opposed to his political and ideological convictions. For its part, the main PAN prospective candidate, Luis Felipe Bravo Mena, likely does not have the necessary support to contend against two strong candidates such as Avila and Encinas. Everything turned out well for the current Governor of the State of Mexico, Enrique Peña Nieto, who is seeing in this election how his candidacy for the presidency of the Mexican Republic may play out. For now, political polls continue to show the PRI in the lead. If the presidential election were held today, 33% of those polled would vote for the PRI, 22% for the PAN and 12% for the PRD. According to a poll published in the Reforma newspaper, if names are attached to the contending parties, Enrique Peña Nieto would garner 71% of the vote and win the presidency. Fidel Herrera, ex-governor of Veracruz, has 10% support and Manlio Fabio Beltrones, just under 7%. Among PRD supporters polled, Andres Manuel Lopez Obrador has more than 75% support. The head of government in the Federal District,  Marcelo Ebrard, is far behind with 18%. Among PAN sympathizers, Santiago Creel has 25% support, followed by Josefina Vazquez Mota with 14% and Manuel Espino with 9%. Non-PRI supporters are betting everything on the defeat of Peña Nieto in the upcoming election in the state he currently governs. A victory by the PRI in the most economically, socially and politically important state in Mexico would pave the way for his candidacy in 2012. One thing is clear; the political thermometer can suddenly rise, but it can also fall amid stormy conditions. Tue, 26 Apr 2011 03:34:48 CDT http://www.ccn-law.com/en/news?nid=1090 http://www.ccn-law.com/en/news?nid=1081 If it is true that the next presidential election will take place in 2012, it is also true that the process to succeed president Calderon has already begun. Mexican politics has already arrived at this topic. Various developments have come together to raise the political temperature. Upon taking possession of his post as new president of the Institutional Revolutionary Party (PRI) thousands of priistas met in the city of Queretaro. The most relevant feature was the core group who never failed to shout “Enrique Presidente” referring naturally to the Governor of the State of Mexico, Enrique Peña Nieto. Hours later, President Felipe Calderon appeared before the Political Counsel of the National Action Party (PAN) as a member of such counsel. He exhorted the panistas to select the best candidate. This exhortation was not really that important, but only signified that the President would seek the best of those candidates, whether or not they were or were not members of the National Action Party. The President of the PAN party, Emilio Madero, reacted immediately stating that within the PAN there were excellent candidates. In fact, ten potential PAN candidates have been mentioned. Madero also declared that the next PAN candidate would be 99.9% sure a PAN member. What is certain is that the President’s statement has created much speculation. In addition, the unwelcomed criticism that has resulted, at least in the eyes of the President, is that within his party there is not the best candidate to contend for the Presidency. The new president of the PRI, Humberto Moreira, reacted by stating that president Calderon had left the ten potential candidates “out in the cold” the most serious criticism, according to Moreira, is that the President should “take care of his position as the Head of State and not assume a partisan posture”. According to Moreira, the PAN is taking desperate measures to keep the PRI from winning the presidency. If it is true that the presidential elections will take place in July, 2012, with more than a year to go, these developments could be considered as a sign of a major election. In the State of Mexico, the election for Governor will take place in 2011. The PAN and Party of the Democratic Revolution (PRD) have consulted with the Mexican general population in order to determine whether or not an electoral alliance should present a single candidate. Independent of the results of such consultations, Alejandro Encinas, one of the strong men of the PRD who is tied to Andres Manuel Lopez Obrador and a potential candidate of the PRI for Governor of the State of Mexico, has declared that he would not accept the results of the party’s public opinion polls, given that such would present a betrayal of his party’s principles. All of this and more is creating a rising temperature of the Mexican political thermometer. Tue, 29 Mar 2011 05:01:54 CDT http://www.ccn-law.com/en/news?nid=1081 http://www.ccn-law.com/en/news?nid=1080 by: Antonio Campero In addition to Industrial Property Rights known throughout the world, such as patents, utility models and industrial designs and trademarks, commercial names, commercial notices and names of origin, the concept of industrial or trade secrets exist in Mexican law as “Information of industrial or commercial application that is safeguarded by a company or individual in confidential form that signifies the opposition or maintenance of a competitive or economic advantage against third parties in carrying out economic activities and with respect to which the owner had adapted means or sufficient systems to preserve its confidentiality and restrictive access to same”. Certain industrial and commercial companies have developed techniques, methods or production processes, these are forms of distribution, which signify competitive advantages against other companies, which has caused such techniques, methods or forms to be subject to a system of reservation and confidentiality that Mexican law protects as legal rights. One of the requirements in order to obtain protection under Mexican law is that trade secrets must be kept confidential. Trade secrets protected by law must be contained in objective form, such as documents, electronic or magnetic media, optical discs, microfilm, motion pictures and other similar forms. The information contained in such expressions may not be divulged, unless the persons receiving such information are required to have it in order to do their jobs and such individuals must maintain the information they receive as confidential. Mexican law contains sanctions against the improper appropriation of industrial or trade secrets and provides for payment of damages and penalties, including criminal penalties for violators who reveal secrets or who could benefit from illicit revelation of such information.   Tue, 29 Mar 2011 04:02:06 CDT http://www.ccn-law.com/en/news?nid=1080 http://www.ccn-law.com/en/news?nid=1079 Capacitation is the learning process through which individuals improve their professional or technical skills, while training is understood as the teaching of abilities and skills. Capacitation and training have as their purpose the improvement of the general performance of labor. Capacitation has fallen upon the employer as an obligation and has been converted into an important factor of productivity. Its importance is such that the Mexican Constitution establishes an obligation on employers, in whatever the activity may be, to provide its employees with the capacitation or training in the workplace. The Mexican Federal Labor Law (Ley Federal del Trabajo) itself contains detailed regulations for complying with this obligation, which among other purposes seeks to prevent workplace accidents. In order to comply with this obligation, employers are required to form within their operations missed commissions of capacitation and training that oversee the correct implementation and operation of the training system, as well as procedures that must be implemented in order to improve capacitation and training of employees. These commissions, based on their mixed character must be made up of equal numbers of representatives of the employer and the employees, who are required to meet in order to ensure compliance with and development of company capacitation and training program. The proper application of such regulation, in addition to raising productivity and improving professional and technical career formation, may serve to free the employer of various legal liabilities. Tue, 29 Mar 2011 03:16:43 CDT http://www.ccn-law.com/en/news?nid=1079 http://www.ccn-law.com/en/news?nid=1067 U.S. President Barack Obama and Mexican President Felipe Calderon reached an agreement on the protracted dispute over cross-border trucking. The deal, announced at a news conference during President Calderon's final visit to Washington, will allow for half of punitive Mexican tariffs to be lifted without delay. The deal will create a test program that will allow for Mexican trucks to transport goods inside the U.S. as long as the truckers adhere to tests regarding safety, driver abilities, and language competency administered by the U.S. Department of Transportation. Additionally, cross-border trucks will be required to install advanced electronics for the purpose of maintaining compliance with U.S. trucking laws. According to the deal, Mexico will remove half of the tariffs when the agreement is officially signed by both countries, pending an almost guaranteed passing by the U.S. Congress in the near future. The second half of the tariffs will be removed by Mexico once the U.S. government begins authorizing Mexican trucking companies to begin cross-border service. The ban on cross-border trucking began amid concerns of safety regarding trucks operating on both sides of the border and has continued for nearly two decades. Wed, 09 Mar 2011 03:08:27 CST http://www.ccn-law.com/en/news?nid=1067 http://www.ccn-law.com/en/news?nid=1066 CCN partner Robert M. Barnett was quoted last week in the San Antonio Express News and Houston Chronicle weighing in on the continued strengthening of the Mexican peso against the U.S. Dollar. The Mexican peso has experienced nearly a 10% strengthening against the U.S. Dollar since this past August, a result of "low Mexican federal debt levels, historically high foreign reserves and relatively low inflation" according to Barnett. Click here to continue reading the article. Thu, 24 Feb 2011 01:41:42 CST http://www.ccn-law.com/en/news?nid=1066 http://www.ccn-law.com/en/news?nid=1064 by: Rene Cacheaux One of the main characteristics of any country's legal system includes the peculiarities in litigation proceedings that may exist in such country. Differences in the structural elements of legal systems are reflected in the cultural and historical traditions of the countries to which such legal systems belong. Legal systems in anglosaxon countries, such as the United States of America, are based on a tradition of creating law through the precedents embodied in judicial decisions; in the existence of oral trials; and one that is strongly rooted in the jury system. In countries whose systems are influenced by the European legal system - particularly the Roman system - as is the case in Mexico, the judicial process is traditionally based on pre-existing rules and laws, statements submitted in written form and resolutions issued by judges without the intervention of juries. In Mexico, judicial practices differ from the practices of other countries that have different legal traditions. When dealing with a conflict between parties involved in a litigation dispute, the attorneys hired by the parties do not communicate with each other, nor do the parties send letters containing their demands; rather, the plaintiff's attorney simply files a written petition before the competent Mexican court. Neither do mediation, conciliation or arbitration procedures generally exist to resolve potential litigation cases, except in very specific areas such as Mexican labor law, or when the parties have agreed by contract to submit their disputes to such alternative dispute resolution. Upon filing their lawsuit with the court, attorneys are subject to the jurisdiction of the court and do not have control of any pre-trial procedures, such as the gathering of evidence (discovery), as such exist in the U.S. legal system. While legal proceedings in Mexico have traditionally been carried out through written documents, hearings and written statements, in some parts of the Mexican Republic oral trials and procedures now exist. At the federal level, thanks to a very recent reform of applicable rules, oral trials will be introduced in commercial litigation cases in order to attempt to reduce litigation time and increase the efficiency of litigants' legal filings. In addition, the formal requirements to file a lawsuit, and the need to strictly comply with requirements governing the authority of legal representatives and powers of attorney, are very particular characteristics of Mexican litigation. The terms and legal deadlines are very strict, and are essentially fixed and non-renewable, so that litigants and their attorneys must adequately prepare themselves. The prevailing language of the country where litigation takes place also plays a very important role since the correct use and technical meaning of the language will be reflected in the results of the case. In Mexico, litigation matters have various stages that may be carried out before different types of courts. The first stage of a lawsuit is carried out before a local or state court, but later and final stages are carried out before federal courts based on the constitutional writ of amparo, which proceedings are determined by federal courts exercising their review of federal legal issues and constitutional provisions. In contrast to other countries, in Mexico litigants and their attorneys, in a large majority of cases, are generally prepared to exhaust all stages of a lawsuit, including appeals and writs of amparo. The vast majority of decisions are issued by appellate courts. This characteristic of Mexican litigation means that litigation cases last a long time, with the majority of cases taking at least a few years to resolve. While undue influence and corruption may be present in some cases, these destructive practices are not widely found, notwithstanding what may be said or thought of in regard to litigation in Mexico. Litigation taking place in small cities and towns is more likely to be subject to undue influence and control of local attorneys. In Mexico, the parties are allowed, in a majority of cases, to voluntarily or contractually agree on the jurisdiction of courts in other cities. Finally, another peculiar characteristic of litigation in Mexico is the strong reaction of the party that has lost a final judgment in a litigation case. Everyone knows that no one likes to lose; however, losing a litigation case in Mexico often represents a lasting stigma to the losing party. Thu, 17 Feb 2011 02:31:43 CST http://www.ccn-law.com/en/news?nid=1064 http://www.ccn-law.com/en/news?nid=1062 by: Dr. Mario Melgar-Adalid The members of Mexico's Supreme Court (SCJN) have elected Juan Silva Meza as their next Chief Justice. Additionally, a vacancy in the SCJN's bench will be filled to replace the late Justice Jose de Jesus Gudino Pelayo. Mexico's Senate will review, for the second time, the slate of three candidates submitted by President Felipe Calderon. The SCJN is comprised of 11 justices. In contrast with the United States, where the executive branch nominates justices for the U.S. Supreme Court, in Mexico the Court's Chief Justice is elected by the rest of the justices of the SCJN without ratification by Mexico's legislative branch. The Chief Justice's term lasts four years. Vacancies in the SCJN's bench may occur by the expiration of a justice's term, which lasts 15 years, or as a result of the resignation or death of a SCJN justice. Mexico's President sends a slate of three candidates to Mexico's Senate, which in turn selects an individual from such slate of candidates who will fill a vacancy in the SCJN's bench. If the Senate rejects the slate of three candidates submitted by the President, which recently occurred, the President must send another slate of three candidates. If such second slate is rejected, the President has the authority to directly appoint one of the candidates from the proposed slate as a SCJN justice. As noted, the procedure to fill vacancies in Mexico's SCJN is different from the process that occurs in the U.S., where the President nominates a justice to the U.S. Supreme Court, which must then be ratified by the U.S. Senate. In Mexico, the process of selecting a SCJN justice in the Senate involves proceedings before the Senate's United Justice and Legislative Research Commissions ("Commissions"). The Commissions verify that the proposed candidates meet the requirements mandated by Mexico's Constitution. Once the constitutional requirements for each candidate have been reviewed, SCJN justice candidates appear before the Commissions. The Commissions then submit a review of each candidate to Mexico's Senate. Finally, the SCJN justice candidates appear before the Senate. Mexico's Senate must approve any prospective SCJN justice by a two-third's vote of the senators present in the Senate chamber at the time the vote takes place. The three candidates proposed recently - Jorge Higuera Corona, Alberto Perez Dayan and Jorge Mario Pardo Rebolledo - all come from the federal judicial branch of Mexico's government. The candidate that was finally appointed by the Mexican Senate was Jorge Mario Pardo Rebolledo. He is known for his ability, integrity and knowledge. He should be a valuable and dignified member of the SCJN. Thu, 17 Feb 2011 02:16:16 CST http://www.ccn-law.com/en/news?nid=1062 http://www.ccn-law.com/en/news?nid=1061 by: Antonio Campero Intellectual property law grants protection to holders of trademarks and various distinctive symbols through the granting of an exclusive privilege over such marks. However, it is also true that in Mexico the law aims to protect the general public, particularly those who acquire products or services based on their knowledge of such a trademark or distinctive symbol. Previous IP Notes articles have referred to the various impediments established by the Mexican Industrial Property Law (Ley de Propiedad Industrial) to registering trademarks, such as when the proposed marks are, for example, merely descriptive, generic, widely-known, famous, etc. In addition to these, another types of mark exists that are not subject to registration, including: "those names, figures or three-dimensional forms that are likely to mislead the general public or cause errors, including, for such purposes, marks with false indications or information concerning the nature, components or qualities of the products or services such marks seek to cover." It is not uncommon for parties to seek the registration of marks that appear to be maps or names of places or seem to be descriptive or generic, without really being so, all the while generating confusion as to the nature, components, quality, etc. of the products or services covered, in an attempt to mislead consumers and the general public.These would fall within the limitation described above and, to the extent they create confusion in the market, should not be protected. Thu, 17 Feb 2011 02:00:32 CST http://www.ccn-law.com/en/news?nid=1061 http://www.ccn-law.com/en/news?nid=1052 Cacheaux, Cavazos & Newton, L.L.P. (CCN) is pleased to announce that several articles featured in the CCN Mexico Report™ were published by Thomson Reuters in the North American Free Trade & Investment Report and the Latin American Law & Business Report. The articles, written by Rene Cacheaux, Antonio Campero and other CCN lawyers, cover the topics of arbitration, intellectual property, labor, and politics. These featured articles and much more can be seen in full at mexicoreport.com .  Mon, 07 Feb 2011 02:02:11 CST http://www.ccn-law.com/en/news?nid=1052 http://www.ccn-law.com/en/news?nid=1050  By: Rene CacheauxMany are asking what has happened to Mexico’s maquila program, now so elegantly called the IMMEX program. New amendments to the Decree that governs operation of IMMEX programs were recently published in Mexico. This is the program that thousands of companies have used to establish manufacturing operations in Mexico, mainly along the U.S./Mexico border. The rules have changed so much that some are asking what is the real usefulness of the IMMEX program. Curiously, the maquila program (now IMMEX) did not begin as an industrial development program, but has its origin in the 1960s when the Mexican government responded to the U.S. government’s cancellation of the Bracero program and the Mexican government’s concurrent efforts to create a program to employ Mexican workers who could no longer enter the U.S. for Bracero program work, or who were deported or continued to live in the border zone of northern Mexico, creating overpopulation problems across the northern Mexico border region. The Bracero program had tried to create work for these migrants. The maquila program began this way as well, and necesitated a series of amendments to the Mexican Customs Code (Código Aduanero) then in force. In the beginning, the maquila program would require the industrial plant, called a maquiladora, to obtain import permits for each item, part and component used in the industrial operation. All of the production had to be exported, and strong inventory controls applied. The program really existed only for industrial manufacturing operations established on the border zone of northern Mexico. In later years, during the era of President Echeverría, a nationalist and centralist policy of import substitution was adopted, which highly restricted dependence on foreign economies. In the customs area, the importation of many types of goods was restricted and tariffs were increased to high levels on all imported goods. Many products were subject to tariff rates of 100% or more of the value of the imported item. The maquila program was an essential instrument for allowing foreign investment in Mexico, since maquiladora companies represented a privileged exception allowing for 100% foreign investment during a time when the Mexican Foreign Investment Law required Mexican investors to hold a majority interest in any other business in Mexico. In the 1980s, Mexico began to change its policy yet again toward industrial integration, issuing a series of programs that would be administered by the then Mexican Department of Commerce and Industrial Development, or SECOFI (now the Economy Department or SECON), as it was then known. From this resulted an almost innumerable list of development programs seeking to create foreign investment opportunities in Mexico. From this round of reforms the PITEX, ECEX, ALTEX programs, as well as the reimbursement of import duties, Mexican special tax zones, the Border Program (Programa Fronterizo) and others, resulted. The principal objective of these programs was to eliminate or reduce the impact of customs duties for goods being imported into Mexico as part of the production of articles for export. Pursuant to the globalization and integration measures promoted by President Salinas de Gortari (1988-1994), Mexico joined other countries promoting free trade, and this resulted in Mexico joining the U.S. and Canada in the North American Free Trade Agreement in 1994. Mexico agreed to reduce its tariff rates on non-sensitive goods over a period of ten years and offered to eliminate existing export programs. However, Mexico kept its Maquila and PITEX development programs, which functioned in a parallel manner with the reduction of tariff rates on imported and exported goods. In addition, and under certain conditions, maquiladoras began to be able to sell a small percentage of their production in the Mexican domestic market. Ten years of the transitory period for reducing import and export duties passed, yet the export development programs in Mexico continued. As a result of achieving the reduction of import and export duties, a fundamental question was asked: If the majority of tariffs on products and equipment being used in industrial transformation activities had been reduced to zero percent, or a de minimis number, what is the necessity of maintaining the export development program? In fact, these programs are contrary to the spirit of fair trade and international competitiveness on a level playing field, which are widely promoted in free trade agreements. With the advent of the new century, Mexico’s PITEX program was eliminated. The PITEX program had been utilized principally in the automotive industry, to promote the domestic sale of a larger percentage of finished goods in the Mexican domestic market. The same benefit was implemented in the maquila program. Turning to the modern epoch, the IMMEX program has various goals and purposes. Not only is it utilized to reduce import duties on the few products that still carry such duties and allow for temporary importations exempt of the value added tax on imports, but it has also been used as an instrument of fiscal stimulus to allow for regulations on the guaranteed payment of minimum amounts of income tax (the so-called safe-harbor rule); as a mechanism of speeding the reimbursement of value added tax payments; as a mechanism for eliminating the impact of non-tariff barriers such as in the case of labeling, quality certification, laboratory analysis and other industrial regulations; and the sale of products in Mexico with deferred taxation treatment. With these latest amendments, the IMMEX decree finally eliminates the ECEX and ALTEX programs, which in reality have become largely irrelevant in their role of facilitating imports. The maquila program has changed so much, and the Decrees that created it have been amended so widely, as to create a totally different instrument. It is only a matter of time, with the continued reduction of customs duties, that the IMMEX program will be eliminated. For now, it will continue to be a development instrument for various dutiable and non-dutiable products. The trend will be for companies operating on the border to learn to operate competitively with domestic companies that have not had access to participation in the maquila program, or the program now called IMMEX. Wed, 26 Jan 2011 02:45:18 CST http://www.ccn-law.com/en/news?nid=1050 http://www.ccn-law.com/en/news?nid=1049 by: Dr. Mario Melgar-AdalidJP Morgan Chase, a financial group of notable influence in the world economy, has issued an encouraging outlook on perspectives for the Mexican economy in 2011. Its bulletin contrasts with news reports about Mexico that invariably mention problems related to violence and the high cost of the battle against organized crime. The JP Morgan Chase report allows one to maintain hope that 2011 will be better than the year before, and that it could be the start of a sustained economic recovery. For starters, approval of the “Bush Era” tax cuts in the U.S. has allowed for a forecast growth in gross domestic product (GDP) of 3.3% for 2011, replacing the 2.5% figure previously forecasted. According to the JP Morgan Chase report, adjustments in the forecast reflect an increase in manufacturing production to 4.6%, from the previously forecasted 3.3%. Manufacturing is the most solid link between the Mexican and U.S. economies. Projections of higher growth in the U.S. will mean that Mexico: (a) will have greater internal demand; (b) will see a strengthening of its important automotive industry; (c) will see improved prospects for increased lending and the extension of credit; and (d) will start new infrastructure construction projects, which in turn generate economic development. Among these impacts, the automotive sector is particularly noteworthy. In reality, economic conditions in Mexico have caught the interest of automobile and auto parts makers around the world to relocate part of their production to Mexico. The benefits of exporting when the Mexican peso is weak, a qualified labor force and Mexico’s geographic location continue to drive the automotive industry in Mexico. These advantages will also extend to other industrial sectors such as aviation and domestic appliances. As the former Ambassador of the United States to Mexico, Tony Garza, recently said, what is good for the U.S. is good for Mexico. For now, this good news confirms that Mexico is certainly something more than a battleground for competing criminal groups. Wed, 26 Jan 2011 02:38:01 CST http://www.ccn-law.com/en/news?nid=1049 http://www.ccn-law.com/en/news?nid=1047 One of the pending provisions of the North American Free Trade Agreement (NAFTA) is the current hold on Mexican trucks being able to enter the U.S. to provide cross-border cargo services of goods exported from Mexico. U.S. authorities have raised seeminingly endless barriers to impede cross-border trucking. As recently reported in the CCN Mexico Report©, Mexico now imposes countervailing duties on certain agricultural and other goods supplied by the U.S. Many leading promoters of free trade, various producers and sectors of the Mexican economy, led by the Mexican government, voices in academia and social networks, have lobbied for the lifting of such barriers to allow Mexican trucks to circulate freely in U.S. territory. In San Antonio, Texas, organizations such as the Free Trade Alliance (www.freetradealliance.org) have been particularly vocal in calling for an end to the prohibition. With the coming of a new year, good news has arrived. The governement of President Barack Obama has prepared a plan proposing a solution to this conflict. The proposal was well received by Mexican government officials and appears to coincide proposals that have been formulated by Republican congressional representatives and various business community leaders in the U.S. However, many union and organized labor groups continue to oppose the opening of cross-border trucking. The plan prepared by the U.S. Secretary of Transportation, Ray LaHood, is contained within a document that establishes that Mexican trucks requesting permits to operate in the U.S. may do so provided they comply with applicable safety, insurance and other inspection requirements. The plan does not include a proposal for transportation of hazardous waste and materials. It is likely that, if the plan is implemented, the Mexican government will decide to withdraw the countervailing duties currently imposed on U.S. goods being imported into Mexico. This development is just the initial step toward arrival at a complete solution of the cross-border trucking issue, but at least progress is being made to remove this regrettable stain from the NAFTA. Tue, 25 Jan 2011 05:34:53 CST http://www.ccn-law.com/en/news?nid=1047 http://www.ccn-law.com/en/news?nid=1032   Important amendments to Mexico's Decree for the Development of the Manufacturing, Maquiladora and Export Services Industry (IMMEX Decree) were published on December 24, 2010. The main purposes of these amendments to the IMMEX Decree are (i) to restrict the use of the IMMEX license and immediately penalize through suspension or cancelation of the import licenses of IMMEX companies that fail to comply with the obligations set forth in the IMMEX Decree; (ii) to change article 33 of the Decree concerning the definition of IMMEX operations, even as the Decree continues to include the concept of service IMMEX licenses; (iii) to restrict on the temporary importation of steel components and parts defined in the exhibits of the IMMEX Decree; and (iv) to adjust the concepts included in the IMMEX Decree so such better comport with applicable Mexican tax provisions, The following is a summary of the most relevant new provisions of the IMMEX Decree:  §                     Definition of IMMEX Operations:  The new definition of IMMEX operations includes the transformation or repair of raw materials and components supplied by a non-Mexican resident pursuant to a maquila agreement, whereby such raw materials and components are temporarily imported and the finished products returned to their source (including through virtual operations) or are exported from Mexico. §                     Scrap and Waste: The IMMEX Decree confirms the customs rules whereby it is not necessary for waste and scrap to be exported. It may be disposed of or sold in Mexico provided corresponding legal requirements are met.            §                     Broadening of the Definition of Transformation or Repair: Under the IMMEX Decree's new amendments, certain processes that may not qualify exactly as transformation or repair are nonetheless included in the definition of such terms, as follows: dilution by water or other substances; washing or cleaning, including the removal of rust, grease, paint or other coatings; the application of preservatives, including lubricants, protective encapsulation or paint used for preservation; adjusting, filing or cutting; separating into dosages; packing, repacking, wrapping or re-wrapping; submission to testing, as well as marking, labeling or classifying, and the development of a product or improvement in quality of same, except in the case of trademarks, commercial notices and commercial names. Some of the new concepts that qualify as transformation or repair were included in the concept of service IMMEX activities. Expansion of the concept of transformation will promote new IMMEX activities. Service IMMEX activities continue to be regulated and defined by a decree issued by the Mexican Department of Economy (SECON).  §                     Service IMMEX Activities: The new rules state that all service IMMEX licenses will be subject to compliance with a particular investment plan approved by SECON. Such investment plan mustl include details of the applicant's investment in capital equipment, project location, employment figures, and the value of importations and exportations.  §                     Textile Importations: SECON will determine by a decree published in the Mexican Official Journal of the Federation (DOF) the maximum amounts of imported textile and garment confection parts and components, as well as specific importation restrictions applicable to textile importations.   §                     Notice to SECON: In the future, all IMMEX companies will be required to submit a notice to SECON regarding any changes in company shareholders, associates or legal representatives. Failure to file the required notice may result in suspension or cancellation of a company's IMMEX license.  §                     Ownership of Raw Materials: Non-Mexican residents (including a foreign principal) are permitted to enter into a maquila agreement with an IMMEX company when the raw materials are owned by a "third party" foreigner, so long as said third party has a commercial manufacturing relationship with the foreign principal. §                     Domestic or Permanently Imported Items: When IMMEX companies incorporate Mexican domestic raw materials and components and permanently imported non-Mexican items into their production processes, such items must be exported or returned together with the production output. §                     Ownership of Equipment and Machinery: IMMEX activities must be carried out with machinery, equipment, tools, instruments, molds and parts used in the production process which comply with the following characteristics: a)                  Such items should be owned by a non-Mexican foreign resident with which the maquiladora operation has entered into a maquila agreement, so long as they are not owned by the IMMEX company or a related party resident of Mexico. b)                  Use of the equipment and machinery owned by the foreign resident may be complemented with machinery and equipment owned by a third party foreign resident which has a commercial manufacturing relationship with the foreign resident, which foreign resident in turn has a maquila agreement with the IMMEX company in Mexico. c)                  Equipment and machinery owned by the IMMEX company, or equipment and machinery leased from unrelated third parties, may be utilized.  d)                  At least thirty percent (30%) of the value of equipment and machinery utilized in the maquila operation must be owned by the foreign resident with which the IMMEX company has entered into a maquila agreement. Valuation rules for these purposes will be issued by Mexican tax authorities (SAT). The new rules concerning machinery and equipment will not apply to IMMEX companies which, as of December 31, 2009, have an IMMEX license and have complied with their income tax obligations as stipulated in article 216 Bis of the Income Tax Law (safe harbor and income tax reporting obligations). §                     Sales or Transfers in Mexico: The new rules clearly and definitively state that IMMEX companies' production output sold in Mexican territory shall not be considered as an IMMEX related operation, so these Mexican sales do not qualify for the safe harbor rules. All other regular transfer pricing tax rules will apply to these Mexican sales.  §                     IMMEX License Cancellation: One of the most relevant rules implemented in the IMMEX Decree relates to penalties and sanctions in connection with violations of the obligations imposed upon IMMEX companies.  Causes of suspension and/or cancellation of an IMMEX license include the following: I.                    Failure to comply with any of the obligations set forth in the IMMEX Decree; II.                 Failure to maintain required documentation covering its foreign trade operations, or not demonstrating the legal importation or possession of imported items in case a tax assessment has been rendered against the importer of record, in an amount greater than four hundred thousand pesos; or the value of the items for which the legal importation or possession is not demonstrated is greater than 5% of the total value of the items temporarily imported by the IMMEX company in the preceding six-month period. III.               Failure to provide notice of a new domicile or change of the address listed in the IMMEX license, or in case such domiciles are non-existent.  IV.              Items that were temporarily imported are not located at registered domiciles; V.                 If the SAT determines that temporarily imported items never physically entered Mexico; VI.              Filing false or altered documents, including documents with false data, or when the SAT determines that the name or tax domicile of the supplier or producer, or the foreign recipient or purchaser, designated in customs declarations or invoices is false, non-existent or unable to be located; VII.            If the IMMEX company files a notice of cancellation of its registration with the Federal Taxpayer Registry or fails to file annual federal tax returns, and  VIII.         In case SECON determines that the IMMEX company's shareholders and/or partners are connected to any company that has had its IMMEX license cancelled pursuant to the new IMMEX Decree. SECON, itself directly or at the request of the SAT, will initiate a proceeding to cancel the IMMEX license and, among other things, will order the immediate suspension of the IMMEX license, thereby blocking further importation and exportation activities until the corresponding violation has been cured, and will grant to the holder of the IMMEX license a period of ten (10) working days to offer evidence and arguments to resolve alleged irregularities. Suspensions of IMMEX licenses by SECON during this review process is likely to run contrary to other legal principles in Mexico, so it is expected that Mexican courts will define whether or not the above process complies with such other legal principles. If the holder of the IMMEX license does not offer evidence or provide arguments in its defense, or such evidence and arguments fail to resolve the causes that led to the cancellation of the IMMEX license, the SECON will proceed to issue a definitive cancellation of the IMMEX license in question. Companies whose IMMEX licenses are cancelled based on the causes referred to in sections III, IV, V, VI and VIII above, along with the owners and partners connected to such companies, will be ineligible to obtain approval of any other IMMEX license for a period of five (5) years. It is important to mention that certified IMMEX companies will not be penalized in the same manner. In order to suspend or cancel an IMMEX license held by a certified IMMEX company, the SECON must use a much more restricted process.  §                     Definition of IMMEX Activities for Purposes of Value Added Tax: For purposes of Mexico's Value Added Tax, an IMMEX operation shall be considered as a manufacturing operation conducted by companies under the terms of the IMMEX Decree, as amended, and operations shall be considered as a sub-maquila when sub-manufacturing activities are carried out according to the terms of the IMMEX Decree. §                     Term for Reimbursing Value Added Tax: Companies with IMMEX Licenses that export merchandise will have the right to a reimbursement of value added tax credits that shall occur within a term not to exceed twenty (20) working days, except in the cases set forth in rules published by the SAT, when the reimbursement shall take place in a term not to exceed five (5) working days, so long as the taxpayer has complied with the provisions established by the SAT in such rules. §                     Sensitive Items: The new amendments to the IMMEX Decree also include measures for greater control over IMMEX operations through the addition of Annex I BIS, TER, II and III, with respect to steel products designated as "sensitive products" or "sensitive raw materials". While IMMEX companies have been exempt from filing a notice of the extension or modification of their license to include the products established in article 4 (that is, fuels, lubricants and other materials to be consumed during the productive process, as well as raw materials, parts and components that will be incorporated into manufactured products, etc.), by virtue of the proposed modifications, this benefit is included in the IMMEX Decree and will not apply to sensitive products.  In such case, one will be required to apply for an IMMEX license extension in order to be able to import such sensitive items. §                     Cancellation of ALTEX and ECEX: The ALTEX and ECEX Decrees have been eliminated, although the validity of authorizations granted under the ALTEX or ECEX licenses will not be cancelled as long as the holders of such licenses present an annual report no later than the last working day of May of each year regarding the foreign trade activities it carried out during the prior fiscal year.  Entry into Force of the Amended Decree:  Ninety (90) calendar days following publication of the amendments, except for article 33 (definition of IMMEX operations) which entered into force on January 1, 2011.  This communication contains information from the Cacheaux, Cavazos & Newton law firm that is confidential and/or privileged.  The information contained in this communication is for the use of the person(s) to which it is directed.  If you are not the intended recipient, you are notified that disclosing, copying, distributing and/or using such information is prohibited.  If you have received this communication in error, please notify us immediately by sending an e-mail to tshaw@ccn-law.com and eliminate this communication from your computer.  Pursuant to Department of Treasury Circular 230, this communication is not intended to be used, and may not be used, by the recipient(s) for the purpose of avoiding United States federal tax penalties.  In addition, any tax advice contained in this communication may not be used to promote, market or recommend a transaction to another party.  In compliance with that set forth in the current Mexican Federal Tax Code, we inform you that the contents of this communication may constitute tax advice that may vary from the criteria of Mexican tax authorities.  Notwithstanding the contents of this communication, in order to be valid, all tax opinions of the Cacheaux, Cavazos & Newton law firm must be issued or confirmed in writing and on the law firm's letterhead. © Copyright 2011, Cacheaux, Cavazos & Newton. All Rights Reserved.  Fri, 14 Jan 2011 11:21:43 CST http://www.ccn-law.com/en/news?nid=1032 http://www.ccn-law.com/en/news?nid=1030 By: Rene Cacheaux  When considering transactions involving guaranties of legal obligations, Mexico has a rather strict and rigid legal framework. Both personal and contractual guaranties exist under Mexican law, such as in the case of a guaranteed obligation in which a person or entity contractually assumes the obligation of paying on the same terms and at the same level as the primary obligor. In addition, real guaranties exist, which imply the encumbrance of a specific asset to guarantee compliance with what is basically the obligation to pay an amount or amounts owed by the debtor. This is the case of a mortgage given in relation to a guaranty of real property and a pledge in relation to a guaranty of personal property and rights. Mexico does not have a simplified system for registering security interest in personal property, such as in the case of the Uniform Commercial Code (UCC) in the United States. Even though Mexico has discussed the benefits of the UCC system that applies in the U.S., such system may not be implemented until a uniform registry of property and vehicles, which is complete and reliable, is in place. Through a recent legislative amendment, Mexico reformed the General Law of Credit Instruments and Transactions in order to introduce the legal figure of a guaranty trust. This type of trust represents a very flexible method of guaranteeing obligations, and has the significant virtue of creating a legal vehicle with specific and distinct purposes that protect ownership of the asset serving as the guaranty with respect to any eventual commercial foreclosure in order to repay an existing debt. Basically, the debtor who is obliged to comply with an obligation and who is the owner of the property (real or personal) given as a guaranty transfers to a Mexican banking institution legal title to the property so that such banking institution may serve as trustee and maintain legal ownership of the collateral provided to guarantee compliance with the obligation to pay a creditor, who is the beneficiary of the guaranty trust. Ownership of the property that is the subject of the guaranty remains under the protection of the trustee and subject to a series of instructions in order to ensure the obligations of the debtor, which form part of the purposes of the guaranty trust itself. Another fundamental advantage of this legal figure is that, in case of breach of the obligation guaranteed in this type of trust, the trustee may carry out a non-judicial foreclosure and transfer title to the property pursuant to the execution procedures set forth in Mexican law and supplemented by the contractual provisions contained in the trust agreement. In traditional real guaranties such as mortgages or pledges, if the debtor failed to comply with the obligations being guaranteed, the creditor was required to proceed through Mexico’s judicial system in order to enforce the guaranty, which caused many delays in executing the guaranty in order to obtain payment of the guaranteed obligation. In Mexico, all private trusts are contracts, and do not imply the creation of a separate legal person (such as a corporation, partnership or trust in the U.S.). In actuality, guaranty trusts have been demonstrated to be efficient mechanisms for guaranteeing payment obligations, representing an important level of flexibility in regard to designing the structure and rules for parties assuming obligations in a trust. Creditors and debtors, whether Mexican or from outside Mexico, may serve as parties to a Mexican guaranty trust. A Mexican guaranty trust may be combined with other instruments and methods to ensure compliance with obligations, such as the case of isolated bank accounts for collection (“lock box accounts”) and assignments of collection rights as assets that may be placed in a guaranty trust. When creditors who are owed payment obligation analyze possible instruments for guaranteeing such obligations, such creditors should necessarily review the virtues and practical efficiency of utilizing a Mexican guaranty trust.***CCN*** This news release and in-depth information about CCN may be found at the CCN website: http://www.ccn-law.com. To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Mon, 20 Dec 2010 03:17:38 CST http://www.ccn-law.com/en/news?nid=1030 http://www.ccn-law.com/en/news?nid=1029 By: Dr. Mario Melgar-Adalid  The recent Wikileaks document releases have captured the world’s attention. Reaction in Mexico has not been, with some exceptions, one of condemnation, but rather of curiosity. The document releases have not revealed any new information, or anything that has not been commented on in political columns, television news or in the media. For example, there is nothing new about the news that some Mexican governmental officials working in the public safety sector spoke with officials of the U.S. Embassy in Mexico about seriously exploring the idea of the governments of Mexico and the U.S. joining forces to initiate plans to rescue cities such as Tijuana, Ciudad Juarez or others, to give a signal to the rest of the country that the war against organized crime can indeed be won. It is relevant that the document leaks have not damaged what is most important: the relation between Mexico and the United States. In this sense, U.S. Ambassador to Mexico, Carlos Pascual, stated that the relationship between the United States and Mexico is the most intense and vitally important relationship it has in the world.  This will not change as a result of what has appeared in Wikileaks.  With regard to Mexico, current Secretary of Foreign Relations, Patricia Espinoza, indicated that the Mexican government knew the leaks would be released and that such information will not have significant consequences. It is clear that the leaks do not reflect the official position of the United States. It would be interesting to have the complete picture, knowing the diplomatic cables exchanged between diplomatic agents communicating between Mexico and the United States. Without question, such would reflect that the information being leaked is only partially complete, and in any event without any legal or political value. The official responses of the respective governments confirm that the relationship between the two countries is currently passing through a positive moment of trust and respect.  ***CCN*** This news release and in-depth information about CCN may be found at the CCN website: http://www.ccn-law.com. To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Mon, 20 Dec 2010 03:02:50 CST http://www.ccn-law.com/en/news?nid=1029 http://www.ccn-law.com/en/news?nid=1028 Recently, Mexico’s Supreme Court of Justice (SCJN) published in the Judicial Weekly of the Federation case decision I.5o.C.J/10 captioned “Invoices. Evidence of a commercial act, receipt of the merchandise by the purchaser and services that are the subject of a commercial transaction.” In such case decision, the SCJN held that the Mexican Commercial Code (Código de Comercio) does not contain any provision whatsoever regarding the evidentiary value of invoices. Through experience in commercial customs and practices, this class of documents has been given the place of serving as a basis for deeming that merchandise or merchandise involved in a commercial transaction, including when such has not been duly objected to, considering that the acquisition of merchandise ordinarily is accompanied by invoices or receipts documenting such transaction, which are delivered to the acquiring party to prove receipt and, as the case may be, payment for the merchandise. The SCJN also concluded that the above reasoning “is supported even more if one takes into account that in accordance with Mexican tax law, the invoices meet tax law requirements, and thus serve as evidence of the purchase and sale of the goods and services of a commercial transaction.” ***CCN*** This news release and in-depth information about CCN may be found at the CCN website: http://www.ccn-law.com. To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Mon, 20 Dec 2010 02:46:57 CST http://www.ccn-law.com/en/news?nid=1028 http://www.ccn-law.com/en/news?nid=921 The law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") is pleased to announce that Dale A. Kimball, Jr. has become Of Counsel to the firm, and will open CCN's presence in the Dallas-Fort Worth Metroplex. Mr. Kimball is licensed in Texas, and brings 20 years of legal and international business experience to his new position. Mr. Kimball previously served as Vice President & General Counsel, Latin America, of Cadbury plc, and more recently as Cadbury's Regional Legal Director, Europe. In his European position, he was based near Geneva, Switzerland and was responsible for all Cadbury legal matters in continental Europe, Turkey, Russia and the CIS countries. At CCN, Kimball expects to focus his practice on international business transactions involving Latin America, and on representing foreign companies doing business in Texas. Mr. Kimball's appointment is a welcomed homecoming, as he was a partner at CCN during the 1990's prior to taking a position with firm client Fruit of the Loom.  A graduate of the University of Texas School of Law and Brigham Young University, Mr. Kimball has lived and worked in Argentina, Brazil and Switzerland and speaks fluent Spanish and Portuguese. Prior to working at Cadbury, he served as Nokia's head of legal affairs for Latin America and negotiated that company's first major telecommunication networks deals in the region in Venezuela, Peru, Bolivia and Brazil. He also supported Nokia's Latin American handset division during a time of unprecedented growth and activity. Kimball has extensive experience creating and managing in-house legal departments, and as such will bring a practical understanding of corporate clients' needs and challenges, including in the areas of Risk Management and Legal Compliance. Kimball also draws upon his sector-specific work in the food & beverage, consumer goods, technology and apparel/textile industries, with experience in major merger/acquisitions and joint venture transactions. Cacheaux, Cavazos & Newton, L.L.P. is an international law firm with offices in San Antonio, the Rio Grande Valley, and throughout Mexico in Mexico City, Monterrey, Reynosa, Querétaro, Ciudad Juárez, San Luis Potosi and Matamoros. The firm features attorneys licensed to practice in the United States and Mexico. With an in-depth understanding of the legal issues facing clients in the U.S., Mexico and Latin America, CCN's attorneys advise clients on how to conduct business in the increasingly complex and interconnected North American market. This expertise extends from the world's largest multi-national corporations to smaller, closely held enterprises. Since its founding in 1994, CCN has built a practice emphasizing international business transactions in the United States, Mexico and Latin America. The firm relies on both Spanish-speaking U.S. attorneys and Mexican lawyers who are fluent in English to provide clients with legal advice and strategy. This combination of U.S. and Mexican-licensed attorneys enables CCN to serve clients efficiently, with information provided promptly, in understandable terms. ***CCN*** This news release and in-depth information about CCN may be found at the CCN website: http://www.ccn-law.com. To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Thu, 04 Feb 2010 03:53:21 CST http://www.ccn-law.com/en/news?nid=921 http://www.ccn-law.com/en/news?nid=790 On January 24, 2009, the law firm of Cacheaux, Cavazos & Newton, L.L.P. ("CCN") will celebrate its 15th anniversary. Since its founding on the same date in 1994 the firm has grown to become one of the largest law firms in the U.S. and Mexico dedicated to serving clients in both countries. The firm now has 44 attorneys working in two U.S. and seven Mexico offices. All nine of the firm's offices will participate in a firm-wide celebration on January 23rd, which will feature a webcast message from managing partner Joseph B. Newton and a special video presentation commemorating the firm's 15 years of operations.  CCN has also named Mario Melgar and Francisco Peña as partners of the firm. Mario Melgar is originally from Mexico City and is licensed to practice law in Mexico. He holds a law degree from Mexico´s National Autonomous University (Universidad Nacional Autónoma de México or UNAM) and a doctoral degree in international law from the Pompeu Fabra University in Spain. Mr. Melgar has worked in CCN's San Antonio office since 2003 and advises U.S. and other foreign investors doing business in Mexico on general corporate, real estate, automotive and biotechnology matters. He chaired the International Section of the San Antonio Bar Association in 2008.Francisco Peña is an attorney licensed to practice law in Mexico. He graduated from Monterrey Tech University (Instituto Tecnológico y de Estudios Superiores de Monterrey). He has extensive experience working with foreign investors doing business in Mexico and his areas of expertise include labor, employment and environmental law, with a specialty in health and safety matters. Mr. Peña has worked in CCN's Rio Grande Valley office in McAllen since 2000. He works frequently with manufacturing clients along the Texas-Mexico border and with economic development agencies in the Rio Grande Valley.Cacheaux, Cavazos & Newton, L.L.P. is an international law firm based in San Antonio, with additional offices in the Rio Grande Valley, and throughout Mexico in Mexico City, Monterrey, Reynosa, Querétaro, Ciudad Juárez, Matamoros and San Luis Potosí. The firm features attorneys licensed to practice in the United States and Mexico. With an in-depth understanding of the legal issues facing clients in the U.S., Mexico and Latin America, CCN's attorneys advise clients on how to conduct business in the increasingly complex and interconnected North American market. This expertise extends from the world's largest multi-national corporations to smaller, closely held enterprises.Since its founding in 1994, CCN has built a practice emphasizing international business transactions in the United States, Mexico and Latin America. The firm relies on both Spanish-speaking U.S. attorneys and Mexican lawyers who are fluent in English to provide clients with legal advice and strategy. This combination of U.S. and Mexican-licensed attorneys enables CCN to serve clients efficiently, with information provided promptly, in understandable terms.***CCN***This news release and in-depth information about CCN may be found at the CCN website: http://www.ccn-law.com. To receive the latest CCN News Releases and the firm's monthly review of Mexican business, political and legal developments, the CCN Mexico Report®, please contact Robert M. Barnett at rbarnett@ccn-law.com. Tue, 27 Jan 2009 03:51:41 CST http://www.ccn-law.com/en/news?nid=790 http://www.ccn-law.com/en/news?nid=127 {mosimage}The law firm of Cacheaux, Cavazos & Newton, L.L.P. (“CCN”) is pleased to announce that Dr. Mario Melgar has become Of Counsel to the firm, working out of CCN’s San Antonio and Mexico City offices. Dr. Melgar is a licensed Mexican attorney who brings more than 30 years of legal and public policy experience to his new position, having most recently served as Rector of the National Autonomous University of Mexico (UNAM) campus in San Antonio.  He expects to focus his practice on international law and relations, including providing legislative counsel to clients doing business in Mexico.A native of Mexico City, Dr. Melgar has lived and worked in Mexico and the U.S., where he has held a number of high level administrative posts.  He previously served on the Mexican Federal Judicial Council (Consejero de la Judicatura Federal) and was appointed by Mexico’s President to Mexico's Ministry of Health. Along with his extensive work at the UNAM in both Mexico and San Antonio, Dr. Melgar has published seven books and written more than 100 articles on topics such as public administration, education and law.  He currently is a weekly columnist for the Mexican daily newspaper, Excelsior.Cacheaux, Cavazos & Newton, L.L.P. is an international law firm based in San Antonio, with additional offices in the Rio Grande Valley, and throughout Mexico in Mexico City, Monterrey, Reynosa, Querétaro, Ciudad Juárez and Matamoros.  The firm features attorneys licensed to practice in the United States and Mexico.  With an in-depth understanding of the legal issues facing clients in the U.S., Mexico and Latin America, CCN’s attorneys advise clients on how to conduct business in the increasingly complex and interconnected North American market.  This expertise extends from the world’s largest multi-national corporations to smaller, closely held enterprises.Since its founding in 1994, CCN has built a practice emphasizing international business transactions in the United States, Mexico and Latin America.  The firm relies on both Spanish-speaking U.S. attorneys and Mexican lawyers who are fluent in English to provide clients with legal advice and strategy.  This combination of U.S. and Mexican-licensed attorneys enables CCN to serve clients efficiently, with information provided promptly, in understandable terms.***CCN***This news release and in-depth information about CCN may be found at the CCN website: http://www.ccn-law.com.  To receive the latest CCN News Releases automatically by email, including important developments in Mexican and U.S. law, please contact rbarnett@ccn-law.com    Tue, 15 Jul 2008 12:00:00 CDT http://www.ccn-law.com/en/news?nid=127 http://www.ccn-law.com/en/news?nid=612 Many taxpayers have filed amparo lawsuits in protest of the controversial Single Rate Business Tax Law (Ley del Impuesto Empresarial a Tasa Única or “IETU”), which entered into force on January 1, 2008.In our view, sufficient justification exists to protest the constitutionality of the IETU and its concepts of non-deductibility and denial of credits, which is why we remind readers that this will be their only opportunity, through a possible favorable amparo ruling, to avoid potential negative effects of the IETU that may occur now or in the future on their Mexican companies. The deadline for filing a constitutional amparo lawsuit is approaching. Under Mexican law, favorable constitutional amparo rulings granting protection to a taxpayer protect only the applicant taxpayer, and not other entities or taxpayers that have not filed their own amparo lawsuits. We urge all companies affected to protect their rights, as many other companies are doing, by filing an amparo protest against the IETU.Please contact us if you have any questions about the process to file an amparo lawsuit against the IETU, or to discuss any other question or comment you have regarding this communication. Feel free to contact Miriam Name (mname@ccn-law.com) at 011-52-55-5093-0712 or Sergio Ostos (sostos@ccn-law.com) at (210) 222-1642. Thu, 14 Feb 2008 11:46:33 CST http://www.ccn-law.com/en/news?nid=612 http://www.ccn-law.com/en/news?nid=128 A new Tax Subsidy Decree was published in Mexico’s Official Journal of the Federation (Diario Oficial de la Federación) on November 5, 2007 and provides the maquiladora industry with a tax incentive in the form of a tax credit against final accumulated Flat Rate Tax (IETU) and income tax due. This tax credit has been implemented to buffer the negative effects of the recently enacted IETU. Such tax incentive will apply from 2008 through the end of 2011. Please keep in mind that it is quite likely that the Mexican government will amend the Tax Subsidy Decree and the rules by which it will be implemented.    The tax incentive will work as follows:    a. There will be a tax credit against a taxpayer’s final accumulated IETU and income tax due equal to 16.5%, based on the net taxable income resulting from one of the three authorized transfer pricing methods available to maquiladoras pursuant to Article 216 Bis of the Income Tax Law. During 2009 the tax incentive rate will be 17%, and during 2010 and 2011 the tax incentive rate will be 17.5%.    b. The tax credit will be offset against the final accumulated IETU and income tax due to the extent the net tax credit is lower than such accumulated IETU and income tax obligations.    c. In order to compute the tax credit, taxpayers that use safe harbor rules may not reduce their net taxable income by applying the tax subsidy granted to the maquiladora industry by President Fox in 2003.    d. In the case of taxpayers using the machinery and equipment book value plus a 1% mark-up transfer pricing method provided by Section I of Article 216 Bis of the Income Tax Law, in order to compute the tax incentive, such taxpayers must use the percentage of 1.5% based on the book value of machinery and equipment used for the assembly of the maquiladora products, instead of the 1% figure contained in the Income Tax Law.    e. Taxpayers will be able to take a proportional credit of the tax incentive while computing their IETU and income tax advance payments. The Tax Subsidy Decree provides special rules to make this computation.    f. The tax credit will apply only to maquila activities carried out by the maquiladora, so in cases where these entities engage in domestic sales or other non-maquila activities, the tax credit will apply only to the percentage of income that relates to the maquila activities. There are also special rules to make this computation.    g. Taxpayers must file an information return along with the annual tax return due each March, in which they must determine their maquila and non-maquila activities, their final IETU and income tax burdens, the amount of taxable income and authorized deductions, the value of assets used by the maquiladora, the amounts of operating costs and expenses and the tax base resulting from the use of either one of the transfer pricing methods contained in Article 216 Bis of the Income Tax Law.It is important to mention that the new tax incentive contained in the Tax Subsidy Decree applies only to those maquila entities that comply with their transfer pricing obligations by using the maquiladora transfer pricing methods set forth in Article 216 Bis of the Income Tax Law. If the maquila entity does not use these methods, or has an advance pricing agreement (APA) with the Mexican government that uses a different transfer pricing method, such maquila entity may not receive the benefits afforded by the new tax incentive. Mon, 05 Nov 2007 12:00:00 CST http://www.ccn-law.com/en/news?nid=128 http://www.ccn-law.com/en/news?nid=53 On September 14, 2007 Mexico’s Congress approved a fiscal reform designed to increase the collection of taxes which, among other elements, includes the controversial Single Rate Business Tax (Impuesto Empresarial a Tasa Única -- “IETU”) that will take effect on January 1, 2008.  The IETU replaces Mexico’s Asset Tax (Impuesto al Activo), which will no longer apply beginning on such date.Individuals and entities with tax residence in Mexico, along with foreign parties that have a permanent establishment in Mexico (for income attributable to such permanent establishment), will be subject to the IETU for the following: (i) selling or transferring property, (ii) providing independent services, or (iii) granting the temporary use or benefit of assets to third parties.  Those not subject to the new tax include the Mexican Federal Government, Mexican states, municipalities, political parties, unions, tax-exempt organizations and income received by individuals or entities from agricultural, ranching, forestry or fishery activities that are exempt from the payment of income tax, as well income accidentally received by individuals.The tax basis for calculating the IETU will be income effectively received by the taxpayer, less authorized deductions for expenses actually made.  The IETU rate will be 16.5% in 2008, 17% in 2009 and 17.5% from 2010 onward.The definition of a sale or transfer of property, providing independent services, and the granting of temporary use or benefit of assets will be determined in accordance with the existing standards contained in the Value Added Tax Law (Ley del Impuesto al Valor Agregado).  It is important to note, however, that if the granting of temporary use or benefit of assets between related parties residing in Mexico or abroad is not considered to be an activity subject to the tax, payments of any kind for the granting of temporary use or benefit of industrial, commercial or scientific equipment will be considered as income, and subject to payment of the IETU without regard to the classification applied to such payments.The tax will be due upon receipt of the payment to which the tax applies has occurred. With respect to taxes for the sale or transfer of property, or providing independent services for export, to determine the time the income was effectively received, in case such income is not received during the 12 months following when the exportation of services took place, such income will be deemed as having been received on the last day of such 12 month period.Taxpayers may take, among others, the following deductions, which are effective once paid and if they are strictly necessary for carrying out the taxpayers' business, provided they comply with the deductibility requirements set forth in the Income Tax Law (Ley del Impuesto Sobre la Renta):    a.) Expenses for the acquisition of property, independent services or the temporary use or enjoyment of property that give rise to income on which the IETU must be paid;    b.) Payments on behalf of a taxpayer made in Mexico, except the IETU itself, income tax, cash deposits, social security contributions and those other similar items provided by law;    c.) The return of property, discounts or bonuses already granted as well as deposits or advance payments returned to the original payer originating from income that is subject to the IETU;    d.) Indemnification payments for damages, losses, and conventional penalties in certain cases;    e.) Amounts paid to insurance companies by insured parties or their beneficiaries for risks covered by insurance policies, as well as amounts paid to bonding institutions for coverage of the payment of claims;    f.) Non-remunerative tax exempt donations, according to the terms and limits established in Mexico’s Income Tax Law; and    g.) Losses from bad debts, in certain cases.The IETU will be calculated on an annual basis and will be paid pursuant to an annual tax return covering the same period established for filing the taxpayer’s annual income tax (ISR) return.  Taxpayers will make provisional monthly payments to an IETU account within the same term established for filing provisional income tax payments.Taxpayers may use the following credits to reduce their IETU payment during a given tax year:    a.) The amount that results from applying the IETU rate to the difference when authorized deductions are greater than taxable income. Such credit may also be applied against the ISR;    b.) Taxable salaries actually paid and Social Security contributions made by employers, up to certain limits; and    c.) The ISR for the respective fiscal year.Please note that taxes withheld on payments to non-Mexican residents may not be credited.By virtue of the fact that the IETU is not technically an income tax, bilateral tax treaties to avoid double taxation do not apply.Another debatable aspect of the new tax is the characterization of payments of IETU for possible international tax credits outside Mexico, including the United States of America.  Mexico’s Asset Tax, which operated as an alternative minimum income tax, was never considered as an income tax for purposes of obtaining certain international tax credits.The IETU will very likely have a negative effect on maquiladora and export companies because the IETU will increase their tax burden and work against transfer pricing and safe harbor rules that, together with the presidential decree for reducing the taxation on these industries, have served as instruments to promote direct foreign investment and export activities in Mexico.It is expected that some taxpayer groups will file constitutional lawsuits (Juicios de Amparo) claiming the IETU violates Mexican constitutional guaranties of proportional and fair taxation.  Mexican federal courts will determine if the new tax does effectively violate the fiscal rights of IETU taxpayers.  Businesses affected by the IETU should project their income and expenses in order to determine if, in addition to paying Mexican ISR, they will be required to pay the new IETU. Fri, 14 Sep 2007 12:14:07 CDT http://www.ccn-law.com/en/news?nid=53