Transcript Mexico`s Fiscal and Legal Reform 2014

Mexico’s Fiscal and Legal Reform 2014
U.S.-Mexico Chamber of Commerce
Chicago
January 23, 2014
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Mexico’s Fiscal and Legal Reforms 2014
Hugo Dubovoy, Manuel Padron
January 23, 2014
Chicago, Illinois
U.S.-Mexico Chamber of Commerce
© 2014 Baker & McKenzie LLP
1. Mexican Fiscal and Legal Reform
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Unprecedented level of legislative activity since
President Pena Nieto took office.
He took office on December 1, 2012, and that same
day the Labor Law Reform took effect.
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1. Mexican Fiscal and Legal Reform
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Then:
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Anti-money laundering laws
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Education Reform
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Political Reform
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Telecommunications Reform
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Financial Reform
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Energy Reform
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Tax Reform (including Customs Law)
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2. Telecommunications Reform
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Via Amendments to the Mexican Constitution (June
2013).
Acknowledges telecommunications, broadcasting and
access to information as Constitutional rights.
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100% foreign investment allowed in
telecommunications and satellite communications
(before limited to the State or 49%).
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49% foreign investment allowed in broadcasting
(before no foreign investment allowed).
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2. Telecommunications Reform
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This has been an industry controlled by a few huge
companies. So, one of the main objectives of the
reform is to increase competition.
At least two new TV chains with national coverage.
New government agencies (Federal Economic
Competition Commission and Telecommunications
Federal Institute) with augmented authority.
New federal courts specialized in competition,
broadcasting and telecommunications.
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2. Telecommunications Reform
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Expand the use of broadband and transition to digital
TV.
Implementing legislation.
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3. Energy Reform
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History and prior contracting system.
Via Constitutional Amendments published on
December 20, 2013 (a few paragraphs, and most in
the “Transitory” Articles).
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Oil, gas and power generation.
The basic petrochemical industry will no longer be
reserved to the State, and non-governmental
companies may now engage in oil processing and
refining activities (with a permit).
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3. Energy Reform
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Implementing legislation to:
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Within 2 years, have the state-owned giants Pemex and
CFE convert into “productive companies of the State”.
Pemex will have the right to select certain projects,
provided that it proves that it has sufficient technical,
financial and execution capacity.
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3. Energy Reform
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Within 120 days (approximately April 20, 2014), regulate
the new kinds of contracts for the oil and gas industry,
which will include (i) services agreements, (ii) profit
sharing agreements, (iii) production sharing agreements,
and (iv) license agreements (including the sale of oil and
gas).
Non-state-owned companies will now be allowed to
include in their financial statements the corresponding
contracts and expected benefits (oil barrels).
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3. Energy Reform
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Within 120 days, regulate the issuance of bids and
award of contracts for the exploration, production,
storage, transportation and distribution of oil and gas.
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Within 120 days, revise the legal framework as
necessary for the National Hydrocarbons Commission
and the Energy Regulatory Commission to become
coordinated regulatory agencies with operational and
technical autonomy.
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3. Energy Reform
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Once the regulation of the new kinds of contracts for the
oil and gas industry is issued (120 days), during 2014,
the Mexican Oil Fund for Stability and Development will
be created. It will receive all revenue arising from the
contracts issued by the Government. There will be rules
regarding the application of such revenue. This Fund
will start operations in 2015.
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3. Energy Reform
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Within 12 months from the entry in effect of the Law
Regulating Article 27 of the Constitution on Oil Matters,
the National Center for the Control of Natural Gas will be
created. It’ll will be in charge of the operation of the
national system of transportation ducts and storage.
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Within 120 days, create the National Agency of Industry
Safety and Environmental Protection of the
Hydrocarbons Sector.
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3. Energy Reform
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Within 120 days, regulate the “productive companies of
the State”.
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Within 120 days, regulate the issuance of permits for
power generation.
Only the planning and control of the national electric
system, and the public service of transmission and
distribution will remain reserved to the Government (but
it may contract with non-governmental companies).
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3. Energy Reform
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Within 12 months from the entry into effect of the law
that will regulate the power industry, issue the decree of
creation of the National Energy Control Center. It will be
in charge of the operational control of the national
electric system, of operating the wholesale power
market, and of the open access to the transmission and
distribution infrastructure.
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Within 120 days, issue a law to regulate the exploration
and production of geothermal resources to use energy
from the subsoil to generate power.
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3. Energy Reform
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By December 2014, issue or amend laws to increase
energy use efficiency, reduction of greenhouse gases,
natural resource use efficiency, and reduce the
generation of waste, emissions and the carbon footprint.
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By December 2014, develop a transition strategy to
promote the use of cleaner technologies and fuels.
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4. Financial Reform
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Similar to Tax Reform, and unlike Telecomm and
Energy Reforms, hundreds of pages of legal changes
were published (January 10, 2014).
It includes the issuance of a new Financial Groups
Law.
Amendments to thirty-some laws, including the Code of
Commerce, the banking law, the negotiable
instruments and credit transactions law, the foreign
investment law, the bankruptcy law, the law that
regulates non-bank banks and other financial
institutions, and the Securities Market Law.
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4. Financial Reform
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Also amendments to the law that regulates mutual
funds and other investment funds, the credit unions
law, the insurance and bonding companies laws, the
Central Bank's law, the credit bureaus law, the National
Banking and Securities Commission Law, the organic
laws of various development banks, the laws for the
protection of users of financial services, the Organic
Law of the Judicial Power, and the Federal Code of
Criminal Proceedings.
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4. Financial Reform
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Some components of the Financial Reform:
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Expanding the granting of credit, and less costly credit,
through, among other measures:
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Giving more authority to various governmental agencies
that supervise financial institutions.
Changes to the laws regulating development banks.
Reducing costs and losses for lenders, like through
making more efficient the system for granting and
enforcing guaranties.
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4. Financial Reform
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Expanding the granting of credit, and less costly credit,
through, among other measures:
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New federal courts specialized in lending and other
commercial matters will be created (within 1 year).
Increasing competition among financial institutions.
Giving users of financial services greater ease in choosing
and replacing their lenders and providers of other financial
services.
Amendments to the bankruptcy law in favor of creditors
(limiting rights of holding companies against their bankrupt
subsidiaries, potential increased liability for D&O of
insolvent companies, etc.)
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4. Financial Reform
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Expanding the granting of credit, and less costly credit,
through, among other measures:
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Making more efficient the regulation of investment funds,
non-bank banks, bonded warehouses, and the securities
market.
Some other components of the Financial Reform are:
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Strengthening financial institutions through measures
like increased capitalization requirements, more efficient
corporate governance, and fraud-prevention measures.
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4. Financial Reform
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Foreign Investment
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Foreign-government participation permitted by exception.
Without governmental approval, up to 100% foreign
investment is now allowed in insurance companies, surety
bond companies, foreign exchanges, and bonded
warehouses (before, limited to 49%).
Without governmental approval, up to 100% foreign
investment is now allowed in credit bureaus, securities
rating firms and insurance brokers (before, unless
governmental approval, limited to 49%).
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5. Relevant Changes to the Customs Law
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Implementation of a customs electronic system
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Optional use of Customs Broker
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Repeal of in-house customs broker, creates legal
representative for customs clearance – Special
requirements
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Repeals substitute customs broker
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Promotes inspections with non-intrusive technologies
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5. Relevant Changes to the Customs Law
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Rectification of any field of the pedimento (customs
declaration)
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Change of customs regime without previous
authorization
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Spontaneous regularization of goods without the
payment of fines
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50% reduction in formal fines, provided the payment is
made before the final resolution
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5. Relevant Changes to the Customs Law
Electronic Notifications (personal)
CES
After opening the administrative act
the acknowledgment is generated
with the date and time.
Notice of availability of notification
(administrative act)
5 days
CES
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Thank you!
Hugo Dubovoy
Baker & McKenzie, Chicago
[email protected]
Manuel Padron
Baker & McKenzie, Juarez
[email protected]
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