CCN MEXICO REPORT

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Issue #
69
 – 
September 2009

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Mexico Invites Public Comment on Proposed Amendments to Rules of Origin Provisions of Numerous Free Trade Agreements Signed By Mexico

September 12, 2009

All Free Trade Agreements (FTA’s) executed by Mexico provide the mechanics for determining the origin of multiple products through compliance with Specific Rules of Origin (SRO). These SRO’s are determined by the parties as part of the execution of any FTA, and over long periods of time often remain unchanged, typically until dynamics in the market or supply chain change in the region comprising the countries signing such FTA’s. The FTA’s executed by Mexico foresee groups or technical committees that work in an integrated fashion, staffed by the authorities of each Party. The groups or committees have the capacity to submit proposals to amend the SRO’s of a particular FTA, primarily on products that could benefit, or sectors that could grow, based on certain amendments of such SRO’s. On September 8, 2009, the Mexican Department of Economy published a notice inviting all individuals or entities who are manufacturers of products to file comments and suggest amendments to the SRO’s of the following FTA’s: (i) Exhibit 401 of the North American Free Trade Agreement; (ii) Exhibit 6-03 of the FTA between México, Colombia and Venezuela (currently excluding Venezuela); (iii) Exhibit to Article 5-03 of the FTA between the Mexico and Bolivia; (iv) Exhibit 4-03 of the FTA between the México and Chile; (v) Appendix II of Exhibit III of the European Union – Mexico FTA; (vi) Exhibit to Article 3-03 of the México – Israel FTA; (vii) Appendix 2 of Exhibit I of the FTA between the European Free Trade Association and México; (viii) Exhibit 4-03 of the México – Uruguay FTA; (ix) and Exhibit 4 referred to in Chapter 4 in the Agreement for the Strengthening of the Economic Association between México and Japan. Suggestions for amendments to SRO’s must be filed in writing within 45 days after September 8, 2009. CCN’s International Trade practice group is available to provide assistance in preparing comments to the proposed SRO’s, or any other support required in regard to the proposed new SRO’s.

New Regulations to the Law of Renewable Energy

September 12, 2009

On September 2, 2009 Regulations to the Law of Usage of Renewable Energy and Financing of Energy Transition were published in the Official Journal of the Federation. The new Regulations establish criteria under which the Department of Energy will promote the utilization of various sources of renewable energy, as well as promote research and development of clean energy technology. In addition, the Regulations call for the integration and operation of a Consultative Council for Renewable Energy and provide for the formalization of collaborative agreements among the Department of Energy and agencies of the Mexican federal government in order to implement the National Strategy and Special Program for Usage of Renewable Energy, as well as for the establishment and updating of the National Renewable Energy Inventory.

Environmental

New Rules for Registry of Real Property Guaranties in the Public Registry of Commerce

September 12, 2009

On August 27, 2009 reforms and additions to various provisions of Mexico’s Commerce Code (Código de Comercio) were published creating a new “Real Property Guaranty Single Registry” as an additional section within the Public Registry of Commerce. The Real Property Guaranty Single Registry will allow for the registration of all types of guaranties and encumbrances affecting real property, as well as decisions from commercial law cases through which such guaranties may be created, amended, transferred or cancelled. The reform seeks to create an automated system allowing Mexican notaries public to directly and through electronic means register or amend real estate guaranties within the commercial record file (folio mercantil) of the business person or entity involved, attempting to facilitate the process of recording such guaranties. The reform clearly establishes that a priority or preference will exist for guaranties granted in conformity with the commercial record file of the registry. It is important to mention that the reform establishes a registration term of one year for real property guaranties, which may be renewed, which will require creditors and debtors to closely monitor the status of guaranties they have registered in order for such not to expire, and thus extinguish the guaranteed obligation. The reform entered into force on the date following its publication, but the Department of the Economy granted a term of one year in order to organize and launch the new Registry.

Constitutional Amendments Regarding Maximum Salaries of Public Servants

September 12, 2009

After much discussion, amendments to articles 75, 115, 116, 122, 123 and 127 of the Political Constitution of the United Mexican States were published on August 24th, which establish, without limitation, that no federal, state or municipal public official may receive compensation in excess of the amount paid to Mexico’s president, and that no public servant may earn a salary that is equal to or greater than that of their immediate supervisor. Note that the reform contains an exception in cases of currently serving public servants, whose salaries may not be reduced by constitutional mandate, as is the case with the Mexican Supreme Court of Justice, the magistrates of the Electoral Tribunal of the Mexican Federal Judiciary, Circuit Court magistrates, Federal District judges, counselors on the Federal Judicial Counsel (Judicatura Federal) and members of the General Counsel of the Federal Electoral Institute, as well as those magistrates and judges working for the various state judicial branches. The salary limits contained in the reform will apply to new public servants who occupy such posts, once the current occupants of these positions depart. In any case, additional compensation, such as honoraria, prizes, reimbursements, bonuses, stimulus payments, etc., will be added to compensation, which may not exceed the maximum presidential salary referred to above.