New Regulation on National Water Rights

July 8, 2011
New Regulation on National Water Rights

On May 27, 2011, a new regulation was published in the Official Journal of the Federation that aims to establishthe procedure to determine and pay the fee known as the “guaranty of no expiration fee” (cuota de garantía de nocaducidad) referred to in the National Water Law (Ley de Aguas Nacionales). The payment of the guaranty of noexpiration fee allows licensees or assignees of national water rights to avoid the termination of the licensebecause of expiration. This permits licensees to maintain their rights to use the volume of water licensed orassigned, or, when applicable, to fully carry out a permanent transfer of water rights to third parties. The newregulation contains the formula used to calculate the guaranty of no expiration fee that the licensee or assignee ofnational 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 aperiod of two consecutive years. Such fees may be paid each time any one of the mentioned events occurs. Theperiod of two years shall be calculated from the time the operation, use or appropriation of the national waterrights that were licensed or assigned ceases. Those who maintain licenses of national water rights shouldunderstand the details of such rights and the importance of taking measures to prevent their expiration.

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