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Mexico City, October 04, 2021

The Executive Branch files a constitutional counter-reform regarding Energy Sector.

Dear clients and friends,

On September 30th, 2021, the President of the Republic submitted before the Chamber of Deputies, an initiative to amend the Mexican Constitution “Decree by which articles 25, 27 and 28 of the Mexican Constitution are amended” (the “Bill”), such Bill seeks to reverse the Constitutional Reform of December 2013 (“Energy Reform”), mainly in the electricity and mining sector.

The Bill presents a complete change in the electricity sector since it eliminates (on a large scale) the participation of the private sector, mainly by establishing that electricity is a strategic area that corresponds exclusively to the Nation, an activity that will be carried out through the Federal Electricity Commission (“CFE”).

With this modification, the Executive Branch reverts the structural reforms established in 2013, including (i) the elimination of competition within the electricity sector, through the endowment (or re-endowment) of CFE with powers for regulation and control over the sector, as well as the determination of tariffs for transportation and distribution, as well as tariffs of electricity for end-users; (ii) the elimination of regulatory bodies in energy matters – such as the Energy Regulatory Commission (“CRE”) and the National Hydrocarbons Commission (“CNH”) - and consequently, transferring their functions to the Ministry of Energy (“SENER”); (iii) the cancellation of Clean Energy Certificates, and (iv) pertaining to the mining sector, the exploitation of lithium and other minerals considered strategic for the Energy Transition are established as a strategic activity reserved to the State.

Additionally, the Initiative contemplates the following modifications:

(a) CFE changes from a State-Productive Company to a State Agency, which will operate throughout the electricity sector's value chain , absorbing the Subsidiary Productive Companies created in terms of the 2013 constitutional reform, except for CFE Telecomunicaciones e Internet para Todos, and subsidiaries CFEnergía, CFE International and CFE Capital; within the said absorption, the National Center for Energy Control (“CENACE”) is included.
(b) The cancellation of the electricity generation permits granted under the Electricity Public Service Law and the Electricity Industry Law, including the electricity purchase agreements executed with the private sector; as well as the automatic dismissal of the Permit applications currently pending before the CRE.
(c) Establish that CFE will provide the 54% of the electric power generation required by the country; consequently, only 46% of the electric power production would be allowed to come from private participation2, such participation shall be subject to planning and control of the CFE, so that the energy generated by the private companies will only be purchased by CFE, according to the contractual structures to be set forth by CFE.
(d) Power generation permits as Self-Supply and Independent Power Producers modalities will not be recognized or acquired by the CFE (to form part of the 46% private participation), when they are considered to have been granted in contravention of the applicable laws (fraud of the law)3. Notwithstanding the foregoing, Independent Producers may continue to sell their energy exclusively to CFE, but only with respect to the capacity originally indicated in the permits, not with regards to generation surpluses.
(e) The Energy Transition policies will be applied exclusively by the State, through CFE, at all its levels and attributions.
(f) The figure of Clean Energy Certificates (“CELs”) is canceled.4
(g) In relation to the exclusive exploitation of lithium and strategic minerals for the energy transition, the Federal Executive proposes that:

a. No concessions will be granted for the exploitation of lithium and strategic minerals for the energy transition.
b. The mining concessions granted, for gold, silver, copper and other minerals that are already being explored and/or exploited, will be preserved in all their terms; however, they will not cover the exploitation and production of lithium.
c. Mining concessions granted previously, in which there is already a history of lithium exploration duly endorsed by the Ministry of Economy, may continue with said exploration activity.

The Bill is the sum of all the attempts made by the current administration to reverse the effects of the Constitutional Reform on Energy Matters of 2013 and its secondary legislation, which seeks to re-establish the state monopoly on electricity sector and providing benefits to the CFE in total detriment to the private sector.

As it is a proposal for Constitutional amendment, it is necessary that it be approved by two-thirds of the Congress (Chamber of Deputies at least 333 Deputies; and Senate, at least 85 Senators) and most of the Local Congresses, so we anticipate that there will be significant opposition from the various political factions.

It is important to point out that to this date it is not possible to take actions to challenge the Bill. However, if it is approved under the proposed terms, we consider that there are sufficient elements to consider the existence of violations of other constitutional provisions and international treaties, opening the door for challenging the Bill through acciones de inconstitucionalidad (unconstitutionality actions), and by the private sector, through amparo lawsuits and/or administrative procedures aimed at protecting the interests of the participants in the sector; as well as the possibility of initiating dispute resolution procedures before international organisms. Once the final version of the Initiative is approved and published, we will be able to analyze and propose possible actions and mechanisms to challenge it.

The attorneys of Mañón Quintana will be glad to discuss or address any questions related to the scope of this Bill.

1 The Initiative considers the elimination of the division of activities in the sector established in the Electricity Industry Law, so that all activities are carried out by the State. Article 2 of the Electricity Industry Law establishes that “... the electricity industry comprises the activities of generation, transmission, distribution and commercialization of electric energy, the planning and control of the National Electric System, as well as the operation of the Wholesale Electricity Market. ... ”. The proposed constitutional amendment will eliminate the division of said activities so that they are concentrated in a single body such as the CFE.
2 The Bill does not establish whether that 46% will be determined with respect to production or installed capacity; It is also not clear as to whether the cancellation covers all the permits granted to private parties, including the import / export permits for electricity.
3 In the Decree which amended the Electricity Industry Law, published in the Official Gazette of the Federation of February 1, 2021, it was established in the Fourth Transitory Article, the faculty of CRE to revoke the self-supply permits granted under the Public Electric Energy Service Law, which have been obtained by carrying out "acts constituting fraud to the law", and should be understood as those schemes in which the Partners related to a Self-Supply Permit, do not have a substantial participation in the Permittee's capital, making a "corporate simulation". To this date, there are several judgments declaring the unconstitutionality of the Decree to reform the LIE, procedures that are in the Review stage before the Specialized Collegiate Courts.
4 In the Reform Decree published in the Official Gazette of the Federation of February 1, 2021, the regulation related to the CEL was modified, so that the granting of such certificate was not subject to the ownership of the centrals, nor to the date of start of operation of power plants.

Mexico City, August 02, 2021

Mañón Quintana Abogados and Nativo launch Pro Bono initiative “Rola el Permiso”

Dear clients and friends,

At Mañón Quintana Abogados and Nativo we firmly believe in the realization of human rights for as many people as possible.

We celebrate the General Declaration of Unconstitutionality 1/2018 issued by the Supreme Court of Justice of the Nation which invalidated with general effects, the absolute prohibition of activities related to the recreational or recreational self-consumption of cannabis; however, we recognize that the road is still long for there to be a comprehensive regulation that covers all activities related to cannabis and that offers a real justice alternative for people in prison for the crime of simple possession.

Therefore, as a joint pro bono initiative of MQA and Nativo, consistent with these convictions, with the aim that people who consume cannabis do so legally and that the human rights of a greater number of people are respected, we present the #RolaElPermiso initiative.

Through this initiative we make available to the general public, free of charge, the following tools:

  • A permit application format for self-consumption of cannabis to be filed before COFEPRIS.
  • Illustrated manual to make an appointment before COFEPRIS.

Both documents will allow any person to appear before COFEPRIS and request a personal permit for recreational cannabis consumption.

The initiative can be consulted (in Spanish) at: https://rolaelpermiso.com/

Mexico City, August 02, 2021

CRE publishes the Agreement by which the methodology for determining maximum prices of Liquefied Petroleum Gas is established.

Dear clients and friends,

On June 29, 2021, the Energy Regulatory Commission (“CRE”) published in the evening edition of the Federal Official Gazette, the Agreement A/024/2021 by which the regulation of maximum prices of Liquefied Petroleum Gas commercialization to end users is established6. This is done in compliance with the Emergency Directive for the welfare of the consumer of liquefied petroleum gas, issued by the Ministry of Energy, in order to protect the interests of end users (the "Agreement"), which began its validity on the same date of its publication. The aforementioned Agreement results from the Emergency Guideline for the welfare of liquefied petroleum gas consumer (the "Guideline") issued by the Ministry of Energy ("SENER") and published in the Federal Official Gazette on June 28.

The Guideline’s main objective is to require CRE to issue a methodology for determining maximum prices of Liquefied Petroleum Gas (“LP Gas”) for the benefit of final consumers, derived from the constant variations in fuel prices as a presumed consequence of the liberation of prices arising from the Energy Reform in 2013. In said document, SENER determined that such methodology should be issued within a period of no more than three days from its entry into force, additionally indicating that said emergency measure would be valid for six months from its publication.

Article Twentieth of the Agreement establishes that the regulation of maximum LP Gas prices has as objectives: (i) the protection of end users, (ii) promote an efficient supply at affordable prices of LP Gas, (iii) promote the acquisition of LP Gas at affordable prices, (iv) avoid undue discrimination, v) reflect in prices the conditions of the LP Gas market, and fuel demand and, (vi) obtain a margin that allows cost recovery of the Marketers, Distributors and Distributors of LP Gas for the development of the Industry.

Likewise, the Agreement indicates that the permit holders7 that will be subject to the regulation of maximum prices of LP Gas sold to the end user are those that carry out the following activities: (i) commercialization of LP Gas in terms of the provisions of Article 19 of the Regulations of the Activities referred to in Title Three of the Hydrocarbons Law8 (the "Regulations"), (ii) distribution of LP Gas by means other than pipelines9, in its modalities: (a) distribution through distribution plant; (b) distribution by auto-tank; and, (c) distribution through delivery vehicles; and (iii) sale to the public of LP Gas10 in its modalities of: (a) dispensing warehouses, (b) service stations with a specific purpose, and (c) multimodal service stations, with the exception of the service station modality for self-consumption.

In the Agreement, the CRE establishes that for the fixation of maximum prices it will use the 145 price regions that were established by the Ministry of Economy11, and used until December 31st, 2016, indicating that the methodology will take the cost structure as a reference of the LP Gas distribution segment by plant. However, each region will have a maximum price applicable to the sales of LP Gas to the final user, which will be determined based on the sales costs associated with each region, and it is important to note that the maximum prices will ensure that the end user can acquire LP Gas at affordable prices.

CRE will determine the maximum prices applicable to the sale of LP Gas to the user in each region, in accordance with the following premises:

  1. The methodology incorporates for each type of plant: i) efficiency parameters and costs associated with the plant; ii) the profitability associated with the LP Gas distribution activity by plant, estimated based on the analysis carried out by the Commission; iii) tax contributions; iv) technological efficiency, and v) particular characteristics of each region.
  2. The economic life of an investment project of a typical plant will take into account the cash flows, during a period of twenty years, discounted at an Internal Rate of Return (IRR), associated with the distribution of LP Gas by plant, of in accordance with the analysis carried out by the Commission.

The type of plant and its size will be determined with the result of averaging the annual sales of the year preceding its application for a representative sample of LP Gas distribution permits by plant; as well as the minimum and maximum sales values reported for different plants nationwide.

Finally, the calculation of the maximum prices of LP Gas by region will be carried out using a cost model, which takes into account the following criteria:

  1. Determination of the type of plant.
  2. The initial investment and the costs of operation, maintenance of the type of plant.
  3. The estimated costs and efficiency parameters, and the sales volumes associated with each region.
  4. The estimated freight cost for each of the regions, based on the analysis carried out by the Commission from the information reported by the permit holders.
  5. The marketing margin, which considers an IRR that allows the permit holders to recover the total costs for the investment and operation of the LP Gas distribution permit through the plant, within a maximum period of twenty years and a profit margin for the performance of the activity.

The Commission will publish the maximum prices to the end user by electronic means, every Saturday, and the beginning of the term will be from Sunday until the following Saturday, for each of the regions and for each of the municipalities that make up the regions.

Derived from the publication of the Guideline and the Agreement, the participants in the sector, including Associations such as the Mexican Association of Liquefied Gas Distributors and Related Companies "AMEXGAS", have expressed their disagreement with the possible implementation of measures aimed at artificially intervening in determination of fuel prices when there are less ruinous alternatives for the sector.

The above statements are in addition to the position published by the Federal Economic Competition Commission (“COFECE”), in which it states that any action by the CRE, aimed at determining and publishing a methodology for the determination of maximum prices, would imply a violation of the provisions of the Hydrocarbons Law, specifically Article 82 of the Law, which establishes that "[t]he regulation for consideration, prices, and rates set forth by the Energy Regulatory Commission, with the exception of the activities of Retailing to the Public of Liquefied Petroleum Ga, gasoline, and diesel, whose prices shall be determined based on market conditions", in addition to the provisions of Article 77 of the Regulation of the Activities referred to in Title Three of the Hydrocarbons Law, which establishes that the prices of the products related to the activities of commercialization and Retail Sale of LPG shall be determined based on market conditions. And in the case of the distribution of LP Gas not linked to pipelines, such activity will not be subject to price regulation, unless otherwise determined by COFECE.

We consider that there are several arguments to challenge both the Agreement and the Guideline, for the possible contravention of the legal provisions related to the activities of the LP Gas sector, as well as the rights of free competition and concurrence of the permit holders and other market participants, violations that may be asserted through the filing of legal actions before the competent bodies, whether administrative or judicial.

Mañón Quintana's lawyers are at your service with regards to any questions related to the scope and effects of the Agreement and the Guideline.




6 ACUERDO Núm. A/024/2021 por el cual se establece la regulación de precios máximos de gas licuado de petróleo objeto de venta al usuario final, en cumplimiento a la Directriz de emergencia para el bienestar del consumidor de gas licuado de petróleo, emitida por la Secretaría de Energía, con la finalidad de proteger los intereses de los usuarios finales
7 All permit holders are obliged to comply, in a timely manner, with the requests for information and reports notified by the CRE, in terms of articles 81 and 84 of the Hydrocarbons Law, as well as the provisions of Agreement A/022/2018 regarding the operation of the LP Gas Siretrac.
8 Article 19.- For the purposes of this Regulation, commercialization is understood as the activity of offering to Users or End Users, jointly or separately, the following: I. The sale of Hydrocarbons, Petroleum Products or Petrochemicals;
II. The management or contracting of Transportation, Storage or Distribution services of said products, and
III. The provision or intermediation of value-added services for the benefit of Users or End Users in the activities referred to in this Regulation.
Marketing permits do not entail ownership of the infrastructure, nor the provision of the services it uses and that are subject to permits under this Regulation.
9 Article 4, section XI of the Hydrocarbons Law; 35 of the Regulation and Agreement A / 056/2018
10 Articles 4, section XIII of the Hydrocarbons Law; 41 and 42 of the Regulation.
11 http://dof.gob.mx/nota_detalle.php?codigo=4941934&fecha=01/01/2007

Mexico City, June 17, 2020

The CRE extends the validity of the transitory regime of SISTRANGAS’ Operating Balance Rules

Dear clients and friends,

On June 15, 2021, the Energy Regulatory Commission (“CRE” or “Commission”) published on its website, the Resolution RES/235/2021 (the “Resolution”), which authorizes the National Centre of Natural Gas Control (“CENAGAS”) the extension of the validity of the transitory regime of the so-called Operating Balance Rules (“RBO”), as well as the non-application of the penalties established in the RBO to the users, with the exception of the penalty for recidivism in the generation of imbalances, as well as the inapplicability of penalties derived from the critical alert caused by weather conditions in the United States in the period from February 15 to 20, 2021.

On July 19, 2019, the CRE issued Resolution RES/840/2019, which authorized CENAGAS to apply a transitory regime to replace Rule 8. Operating Balance Rules contained in the Terms and Conditions for the Provision of the Transportation Service (“TCPS”) applicable to the National Integrated Transportation and Storage System (“SISTRANGAS”)1, in this resolution it was established that the transitional regime would be in force until February 19, 2020, date on the which, CENAGAS was obliged to install and operate the “real-time measurement equipment” within the system. Derived from CENAGAS’ failure to comply with such measurement obligation, it requested the CRE to extend the validity of the transitory regime until May 31, 2020, such request was approved by the Commission through Resolution RES/546/2020 published in the Commission website on May 11, 2020.

The purpose of the transitory RBO regime was (i) to establish a methodology to determine imbalances (deviations between injections or extractions within the system, discrepancies between the programmed and assigned NG amounts), (ii) to grant CENAGAS with faculties to carry out various actions to maintain the balance of SISTRANGAS in the event of operational emergencies, and (iii) establish the obligation of users to pay the imbalances generated, either by payment in cash or in kind, as well as the imposition of conventional (exorbitant) penalties for non-compliance with their obligations as SISTRANGAS’ users.

As a consequence of the pandemic caused by Covid-19, CENAGAS informed the CRE about the impossibility of implementing (and complying with) its obligations regarding the installation of real-time measurement systems established in its Independent Manager permit, as well as in Resolutions RES/119/2019, RES/840/2019 and RES/546/2020. Therefore, it requested the extension of the application of the transitory regime of the RBO, reiterating its request to not apply the penalties established in the resolutions, including the non-application of such penalties for the critical alert period caused by the climate emergency in the States that affected the users of the System.

As a result of CENAGAS 'request, the Commission determined (1) to extend the validity of the RBO until the CRE approves new TCPS applicable to SISTRANGAS 2; (2) to not apply the penalties established in the RBO for the period from February 16 to 20, 2021 to SISTRANGAS’ users; (3) to not apply the penalties for non-compliance to the programmed amount and the recurrence in the generation of imbalances contained in RES/840/2019, being only appropriate the application of a measure to encourage the operational discipline of users, a penalty for intervention equivalent to 50% of the price of natural gas injected by CENAGAS, when the percentage of the imbalance exceeds 100% with respect to the Maximum Daily Quantity in case of Firm-Based Service, or exceeds 100% of the expected quantity to be transport under Interruptible-Base Service 3; (4) to reiterate the obligation of CENAGAS to publish intervention actions and their costs on a monthly basis, as well as to inform CRE, bimonthly, about the progress and actions implemented to obtain real-time measurements in the System; and (5) to oblige the owners of the transportation systems that are part of SISTRANGAS, to allow access to their facilities for the implementation of the real-time measurement systems.

Derived from the foregoing, and despite the suspension of the application of the aforementioned conventional penalties until the competent health authority determines the conclusion of the emergency caused by Covid-19 virus, it is important that the users and participants of SISTRANGAS continue with the implementation of strategies aimed to avoid incurring imbalances or recurrence in them or, where appropriate, contesting the determination of penalties derived from the lack of tools and elements to be certain of the real-time measurement in the system.

The attorneys of Mañón Quintana will be glad to discuss or address any questions related to the scope of the Resolution.

1 Such TCPS were approved by the Commission through Resolution RES/119/2019 and its Annex.
2 CENAGAS must file a new TCPS proposal within a 30 business-days period after the Resolution was notified.
3 Such resolution was included on the order UH-250/104332/2020 of December 18, 2020, issued by CRE’s Hydrocarbons Unit.

Mexico City, June 03, 2021

Various provisions of the Mexican Regulations for Health Supplies have been amended, added and repealed.

Dear clients and friends,

On May 31, the Decree amending, adding and repealing several provisions of the Regulations for Health Supplies (the "Decree") was published in the Federal Official Gazette. Please find the most relevant aspects of these amendments detailed below:

  1. Labeling of medicines intended exclusively for public health institutions

    The Decree expands the requirements originally established in the Regulations for Health Supplies (the "Regulation") with respect to health supplies intended exclusively for public health institutions, establishing that:
    1. The primary or secondary label of health supplies exclusive for public institutions must be differentiated from that intended for the private sector.
    2. The labeling must comply with the requirements established by the Regulations themselves as well as applicable Mexican Official Standards.
    3. The label must include the text "not for sale" or "property of the Health Sector".
    4. The labeling must contain the code of the National Compendium of Health Supplies on its secondary packaging (or primary packaging in the absence of secondary packaging).

  2. English as a second language to integrate dossiers

    1. The Decree allows the submission in English of information to be included in the registration dossier for health supplies. This avoids the need for translations by an expert translator, making the time required to submit documents to COFEPRIS more efficient.

  3. Biotechnological biocompatible medicines

    1. The information required for the processing of health registrations of biocompatible biotechnological drugs is developed in greater detail, to include preclinical and clinical studies of biocompatibility, immunogenicity, and adverse event reports, subject to the opinion of the New Molecules Committee.
    2. The indications approved for the reference biotechnological drug will be authorized provided that the biocompatible is presented in the same pharmaceutical formulation and dosage, and that the mechanism of action or pharmacodynamic effect is the same as the reference drug.
    3. The registration of a biocompatible product with respect to a biotechnological product protected by a patent may be requested within eight years prior to the expiration of such patent, to carry out the corresponding studies, tests, and experimental production. The registration will be granted only at the end of the patent term.
    4. The Ministry of Health, based on the opinion of the New Molecules Committee, may exempt the interested party from submitting in vitro studies.
    5. The characteristics with which reports of preclinical studies in animals must comply are developed in greater detail.
    6. The Ministry of Health, with the opinion of the New Molecules Committee, may request a report on comparative pharmacokinetic studies to demonstrate pharmacokinetic biocompatibility.
    7. The specific requirements for the approval of each biocompatible biotechnological drug will be determined by the Ministry of Health considering the opinion of the New Molecules Committee.
    8. In the event that the Pharmacopoeia and its supplements do not have relevant information, guides or national monographs, the Secretariat may resort to international guides for the evaluation of biocompatibility tests.
    9. When an applicant for registration of a biocompatible biotechnological drug has based its application on clinical studies of origin, it must submit clinical studies conducted in Mexico at the time of requesting an extension.
    10. The use of a biotechnological drug in other clinical indications may be approved, as long as there is scientific justification supported by clinical studies.

  4. Deadlines for modifications to marketing authorizations

    1. The Decree establishes that COFEPRIS will have a term of 45 working days for technical modifications and 20 working days for administrative modifications of marketing authorizations.
    2. If this Agency does not resolve the matter within the established term, it will be considered as a constructive assent.
    3. The official notice authorizing the modification shall establish the term that the holder of the registry shall have to exhaust inventories, which may not exceed 240 working days.

  5. Assignment of registrations

    1. The new holder must notify COFEPRIS of the transfer of rights of a marketing authorization within a term no longer than 30 working days from the date of transfer, accompanying the documents that demonstrate the transfer and the project of labels identifying the new holder.

  6. First extension of marketing authorizations for national medicines

    1. The requirements for the first extension of the marketing authorization of medicines have been simplified.
    2. In case of major modifications that have an impact on the pharmacokinetics of the drugs, a technical report issued by the Interchangeability Units must be submitted to justify it.
    3. For the granting of extensions in the marketing authorization of drugs, compliance with good manufacturing practices will be verified.
    4. Extension requests will not be an additional procedure to verify the authorized conditions, only to verify that the changes made do not impact the quality, efficacy, and safety of the drug.

  7. First extension of marketing authorizations for foreign drugs

    1. It is necessary to have a legal representative domiciled in Mexico.
    2. For foreign medical devices, a certificate of good manufacturing practices issued by a national regulatory agency recognized by the Ministry of Health will be required.
    3. Extension requests will not be an additional procedure to verify the authorized conditions, only to verify that the changes made do not impact the quality, efficacy, and safety of the drug.

  8. First extension of marketing authorizations for medical devices

    1. The requirements for the first extension of the sanitary registration have been simplified.
    2. For foreign medical devices, a certificate of good manufacturing practices issued by a national regulatory agency recognized by the Ministry of Health will be required.
    3. Extension requests will not be an additional procedure to verify the authorized conditions, only to verify that the changes made do not impact the quality, efficacy, and safety of the drug.

  9. Deadlines for the first extension for drugs and medical devices

    1. Requests for the first extension for drugs and medical devices must be submitted 150 calendar days prior to the date on which the registration expires.
    2. COFEPRIS will have 120 calendar days to resolve the request. In case the respective resolution is not issued within the established term, it will be understood that the application was granted.

  10. Second and subsequent extensions of drugs and medical devices

    1. Requests for second and subsequent extensions for drugs and medical devices must be submitted 150 calendar days prior to the date on which the registration expires.
    2. The certificate issued by COFEPRIS as acknowledgement of receipt of the application submitted, must keep the same alphanumeric code, and will have the effect of extending the marketing authorization.
    3. If the applications are not submitted within the period established for such purpose, the marketing authorization will lose its validity and a new registration must be requested.
    4. Second and subsequent extensions may be requested once the specific format for this procedure is published.

  11. Relevant deadlines

    1. COFEPRIS has 180 working days from June 1 to make the necessary regulatory adjustments to comply with the Decree, including the format for second and subsequent extensions.
    2. The public sector will have 180 calendar days to start requiring the new labeling for products destined for public health institutions.
    3. Drug manufacturers or establishments will have 120 calendar days to use up packaging materials and finished products that do not comply with the new labeling provisions applicable to products for sale to the public sector.

  12. Applications in process

  13. The extension requests in process will be attended until their conclusion in terms of the provisions in force at the time of their filing.

In the hope that this communication proves useful, the lawyers of Mañón Quintana are at your service to with regards to any questions related to the scope of this document.

Mexico City, May 24, 2021

SENER amends the Thirteenth Transitory Article of the Hydrocarbons Law and CRE eliminates the asymmetric regulation applicable to PEMEX

Dear customers and friends,

On May 19, 2021, the Ministry of Energy (“SENER”) published in the Federal Official Gazette the “Decree by means of which the Thirteenth Transitory Article of the Hydrocarbons Law, published in the Federal Official Gazette on August 11, 2014, is amended” [“Decreto por el que se reforma el Artículo Décimo Tercero Transitorio de la Ley de Hidrocarburos, publicada en el Diario Oficial de la Federación el 11 de Agosto de 2014”] (the “Decree”). The Decree entered into force on May 20th, 2021.

The Decree‘s main purpose is to eliminate the authority granted to the Energy Regulatory Commission (“CRE” or “Commission”) to subject the firsthand sale of Hydrocarbons, Petroleum Products or Petrochemicals, as well as the commercialization made by companies controlled by Petroleos Mexicanos (“PEMEX”) to asymmetrical regulation principles.

Asymmetrical regulation had the purpose of limiting PEMEX’s power in the Hydrocarbons, Petroleum Products and Petrochemical market, through certain restrictions to the sale of its products, in order to prevent tied sales, price manipulation, and other practices that could adversely affect other participants in this market and, consequently, the consumers.

Furthermore, the Decree recognizes that the commercialization activities carried out by PEMEX, shall be considered as “commercialization activities” in terms of the Hydrocarbons Law and its Regulations1, subject to the principles of generality and no undue discrimination.

Under the transitory regime of the Decree, CRE shall void any decrees, resolutions, guidelines and other administrative provisions related with the asymmetrical regulation principles applicable to PEMEX, within the following 30 (thirty) calendar days after the Decree’s entry into force.

We believe that there are several arguments to challenge both the Decree and the Agreement issued by the CRE, for the possible contravention of the rights of free competition and concurrence of the permit holders and other participants in the hydrocarbons market, violations that may be asserted through the filing of legal actions before the competent administrative or judicial bodies.

The attorneys of Mañón Quintana will be glad to discuss or address any questions related to the scope of the Decree.

1 Regulations to the activities referred to in Title Three of the Hydrocarbons Law.

Mexico City, April 20, 2021

Decree creates the National Registry of Mobile Telephony Users.

Dear Clients and Friends,

On April 16, 2021, the Decree amending and adding several provisions of the Federal Telecommunications and Broadcasting Law (the "Decree") that creates the National Registry of Mobile Telephony Users (the "PANAUT") was published in the Official Gazette of the Federation.

Pursuant to the Decree, the PANAUT is a database with information of the individuals or legal entities that own each mobile telephone line and whose purpose is to collaborate with the competent authorities in matters related to security and justice in matters related to the commission of crimes.

Pursuant to the Decree, the PANAUT will contain the following information:

  1. Mobile telephone line number;
  2. Date and time of activation of the mobile telephone line acquired in the SIM card;
  3. Full name or, as the case may be, name or company name of the user;
  4. Nationality;
  5. Official identification number with photograph or Unique Population Registry Code of the holder of the line;
  6. Biometric data of the user and, if applicable, of the legal representative of the legal entity, in accordance with the general administrative provisions issued by the Institute for such purpose;
  7. Address of the user;
  8. Data of the telecommunications concessionaire or, as the case may be, of the authorized parties;
  9. The contracting scheme of the mobile telephone line, whether postpaid or prepaid, and
  10. The notices updating the information referred to in this article.

Registration in the PANAUT will be mandatory for all holders of a mobile telephone line. Telecommunications concessionaires will have a term of two years from the publication of the Decree to register all their clients. Mobile telephone lines that are not registered within the term provided will be cancelled immediately.

The Decree establishes a term of 180 calendar days for the Federal Telecommunications Institute to issue the general administrative provisions detailing which biometric data must be collected and how.

In Mañón Quintana Abogados we consider that the collection of biometric data of all cell phone line users violates several human rights enshrined in the Constitution, such as the right to identity, the right to the presumption of innocence, the right to the protection of personal data and privacy; in addition to violating several principles such as proportionality and minimization of personal data.

To combat this Decree, it is possible to file a constitutional action (amparo), tending to the non-application of the rule to the claimant.

The lawyers of Mañón Quintana are at your service to attend and resolve any questions related to the scope of this document.

Mexico City, March 16, 2021

Constitutional amendments to Mexico's Federal Judicial Branch.

On March 11, 2021, the Federal Government published in the Federal Official Gazette the Decree that amended several provisions of the Federal Constitution (“Constitution”) related to the Federal Judicial Branch ("FJB").

The purpose of this Decree is to reorganize the internal structure of the FJB, the functions of the bodies that comprise it, as well as the scope of the constitutional-jurisdictional control proceedings provided for in the Constitution. Below, we summarize the most relevant aspects of the amendments:

  1. Changes in the internal structure of the FJB.

    Reorganization of the judicial bodies
    • The Unitary Circuit Courts will be eliminated and replaced by Collegiate Courts of Appeal, which will be composed by three Magistrates.
    • Circuit Plenaries will be eliminated and replaced by Regional Plenaries, which will have jurisdiction over those circuits determined through the issuance of the corresponding General Regulations.

    Reorganization of the judicial career
    • The principles of excellence, objectivity, impartiality, professionalism, independence, and gender equality are incorporated as guiding principles of the judicial career.
    • A new structure of the judicial career is envisaged for FJB officials.

  2. Changes in the functions of the bodies that comprise the FJB.

    Functions of the Supreme Court of Justice
    • The Supreme Court of Justice (“SCJN”) is given greater independence in the definition of its jurisdictional policy related to the issuance of General Regulations, to achieve an adequate distribution of cases between its Chambers, as well as to refer certain matters to the Collegiate Circuit Courts which will no longer be subject to matters in which there is case law.
    • The SCJN will only resolve the contradiction of criteria between the Regional Plenaries or the Collegiate Circuit Courts belonging to different regions those that arise between Collegiate Circuit Courts of the same region will correspond to the competent Regional Plenary.
    • A system of integration of case law by precedents is created for the SCJN, in which the reasons of the decisions adopted by a qualified majority (8 of the 11 Justices) will be mandatory for all judicial bodies.

    Functions of other bodies of the FJB.
    • Jurisdiction over the incidents of substitute performance of amparo judgments will be conferred to the judicial bodies that issued them freeing the SCJN from this function.
    • The Federal Judiciary Council may concentrate in one or more jurisdictional bodies those cases regarding serious human rights violations. The decision on the suitability of the concentration must be made based on the social interest and public order, which will constitute an exception to the rules of competence and jurisdiction.

  3. Changes in the scope of the constitutional-jurisdictional control proceedings.

    Constitutional disputes (controversias constitucionales).
    • The autonomous bodies of the federal entities are expressly authorized to file constitutional disputes.
    • Constitutional disputes may only concern violations to the Constitution or to human rights recognized in international treaties.

    Constitutional remedy proceedings (juicio de amparo).
    • The so-called sovereignty remedy proceeding (amparo soberanía) will be eliminated with respect to disputes between the States and the Federation (sections II and III of article 103 of the Constitution).
    • Regarding direct remedy proceedings (juicio de amparo directo), the admission of the motion for review on constitutional issues must be of exceptional interest in constitutional or human rights matters thus, leaving aside the standard of importance and significance required before the amendments. In addition, no remedy will be allowed against the decision that dismisses the motion for review during an amparo directo en revision proceedings.
    • If in any motion of review filed within an amparo directo en revision proceeding, the SCJN finds unconstitutional a general rule, it will report it to the corresponding issuing authority. In case that a Collegiate Circuit Court establishes case law (jurisprudencia) by reiteration or the SCJN by precedents, in which the unconstitutionality of a general rule is determined, the issuing authority will be notified of such decision. If a period of 90 days elapses without the unconstitutionality problem being resolved by such authority, the SCJN will issue the corresponding general declaration of unconstitutionality, provided that said decision is adopted by a qualified majority.

As a result of the publication of the Decree and in view of the significance of the amendments, we can expect that the SCJN will soon inaugurate the Eleventh Period of the Federal Judicial Weekly Publication which spreads the case law issued by the judicial bodies.

As of the entry into force of the Decree (March 12, 2021), Mexico's Congress has a period of 180 days to approve the secondary legislation derived from it, among which possibly there will be: (i) a new Organic Law of the FJB and the Law of Judicial Career of the FJB; (ii) amendments to the Federal Labor Law for Government Workers; (iii) amendments to the Federal Public Defender's Office Law; (iv) amendments to the Amparo Law; and, (v) amendments to the Federal Code of Civil Proceedings.

The attorneys of Mañón Quintana will be glad to discuss or address any questions related to the scope of the Decree.

Mexico City, February 04, 2021

The Executive Branch filed an initiative to amend some provisions of the Electricity Industry Law

Dear customers and friends,

On February 1st, 2021, the President of Mexico filed before the Congress, a preferential bill that seeks to amend some provisions contained in the Electricity Industry Law (the “Bill”).

The main purpose of the Bill is to give priority of dispatch, within the National Electric System, to the electricity generated by the power plants owned by the Federal Electricity Commission (“CFE”) - Hydroelectric plants in the first place -, compared to the generation plants that works from renewable sources and combined cycles, which are mostly operated by the private sector.

Additionally, the Bill contemplates the following modifications:

  1. Eliminates the provision that establishes that electricity generation and commercialization services must be provided in an open competition regime.
  2. It intends that any CFE new generation project be considered within the Legacy Contracts.
  3. Grants CFE, as a provider of basic services, with the faculty to enter into Electricity Coverage Contracts, through any other scheme besides auctions.
  4. Establishes that the granting of generation permits will be subject to the planning of the National Electric System by the Ministry of Energy.
  5. Adds a provision which establishes that Clean Energy Certificates will not be subject to ownership or to power plant operation date.
  6. The Energy Regulatory Commission is granted with the faculty to revoke any self-supply permits granted under the Electric Power Public Service Law, which have been obtained by carrying out "acts constituting fraud to the law."

From our point of view, the amendments and modifications contained in the Bill constitute an additional attempt by the current administration to reverse the effects of the Constitutional Energy Reform of 2013 and its secondary legislation, seeking to provide benefits for the State-owned companies.

In connection with the foregoing, it is important to point out that on previous occasions, the Courts analyzed different actions where the Executive Branch has sought to reverse the effects of said Constitutional Reform, and them have resolved in favor of the private sector, fighting for the protection of investments and projects in the electricity sector.

Even though it is a preferential bill filed by the President, it must complete with the legislative process before the Congress, which includes the analysis and discussions by the correspondent Commissions, and where appropriate, approved within a maximum term of 60 calendar days from its filing, by a majority.

Once the final version of the Bill is fled, approved and published, we will be able to analyze and propose the possible actions and mechanisms to challenge it.

The attorneys of Mañón Quintana will be glad to discuss or address any questions related to the scope of this Bill.

Mexico City, February 04, 2021

Guidelines for the registry and recognition of organizations or professional associations that are authorized to issue quality seals or recommendations for food and non – alcoholic beverages

Dear customers and friends,

In compliance with the fifth transitory article of the amendment to the “Mexican Official Standard NOM-051-SCFI/SSA1-2010, General Specifications for the labelling of prepackaged food and non – alcoholic beverages commercial and sanitary information” (“NOM-051”), on January 27, 2021, the Federal Consumer Protection Agency (“PROFECO”) issued the Guidelines for the registry and recognition of organizations or professional associations that are authorized to issue quality seals or recommendations for food and non – alcoholic beverages (“Guidelines”), whose purpose is summarized as follows:

  1. General Provisions

    The Registry granted to the organizations or professional associations by PROFECO’s General Directorate of Surveillance will only be granted for each filing of prepackaged products and will be in effect for one year after the date of issue of the registration statement, which can be renewed thirty days before its expiration, without in any way exempting the Guarantors with the compliance of Article 32 of the Federal Consumer Protection Law (“LFPC”), as well as per articles 25, 26 y 27 from its Regulations.

  2. Requirements

    In order to obtain the corresponding registry, Guarantors shall file before PROFECO the following documents, both physically and digitally:

    • Registry applications, which will be available at PROFECO's website;
    • Original proof of payment of rights;
    • Notarized copy of the entity’s articles of incorporation no more than five years old;
    • Notarized copy of the power of attorney, of the attorney in fact that starts the procedure before PROFECO;
    • Simple copy of the Fiscal Identification and the attorney in fact’s CURP;
    • Studies, certifications, awards and authorizations that proof the professional reputation and academic quality of the Guarantor;
    • Provide and address, phone number and email in order to receive official documents and notices.

  3. Procedure

    Guarantors may file the application in writing at: (i) Federal Consumer Protection Agency offices, (ii) the Citizen Contact office of PROFECO; or, (iii) the National Lab of the Federal Consumer Protection Agency. Such application must be ruled and personally served by PROFECO to the applicant in no longer period of twenty business days. In case that PROFECO doesn’t rule within such deadline, the Guarantor must assume that the application was denied. In case that PROFECO rules that the application lacks the compliance of formal requirements and/or the filing of certain documents, said authority may require the Guarantor in order to comply with the missing documentation and/or formal requirements within a deadline of five business days, in case that the Guarantor fails to comply with the aforementioned, the application will be dismissed.

    PROFECO may cancel the Registry at the Guarantors request or if any of the following events occur: (i) Guarantor fails to file its application for renovation in the applicable deadline (thirty days before its expiration); or, (ii) the Guarantor issues quality seals or recommendations violating provisions of the LFPC or its Regulations, in which case a ten day deadline will be granted to the Guarantor in order to express arguments and offer evidence, in order for PROFECO to rule regarding the cancelation of the registry. In such case, the Guarantor would be disable to file for a new application during the next three years.

    PROFECO’s rulings related with the Guidelines may be optionally challenged before PROFECO via an ordinary remedy or through a Federal Contentious-Administrative Trial before the Federal Administrative Justice Court.

Mañón Quintana's team is available to further advise you in any matter arising from the Guidelines.

Mexico City, January 18, 2021

Regulations of the General Health Law for the Sanitary Control of Production, Investigation and Medicinal Use of Cannabis and its Pharmacological Derivatives.

Mexico City, january 18, 2021.

Dear customers and friends,

On January 12, the Regulations of the General Health Law for the Sanitary Control of Production, Investigation and Medicinal Use of Cannabis and its Pharmacological Derivatives (the "Regulations") were published in the Federal Official Gazette. Their purpose is the regulation, control, promotion and sanitary surveillance of raw materials, pharmacological derivatives and medicines of Cannabis, for production, research, manufacturing and medical purposes.

  1. In general terms, the Regulations cover:
    1. Primary production, including supply, manufacture for medical use, raw material for research, and production of seeds;
    2. Research for health;
    3. Pharmacological research;
    4. Manufacturing of pharmacological derivatives and medicines and;
    5. Diagnostic, preventive, therapeutic, rehabilitation and palliative care.

  2. The Regulations establish as competent authorities: the Federal Commission for Protection Against Sanitary Risks (“COFEPRIS”); the National Service for Agriculture Health, Safety and Quality (“SENASICA”); the National Service for Seed Inspection and Certification (“SNICS”); the Ministry of Economy (“SE”) and the Ministry of Finance and Public Credit (“SHCP”), through the Tax Administration Service (“SAT”), which will exercise the powers conferred upon them by their own laws, regulations and other applicable provisions.

    1. SENASICA is in charge of regulating and promoting the quality of Cannabis, as well as the application, verification and certification of systems to reduce the risk of physical, chemical and microbiological contamination in primary production, in accordance with the Federal Law of Plant Health and other applicable legal provisions;

    2. SNICS will regulate the production of certified seeds, the qualification of seeds and the marketing and circulation of all cannabis seeds, in accordance with the Federal Law on the Production, Certification and Trade of Seeds and other applicable legal provisions;

    3. COFEPRIS is responsible for the regulation, control and health promotion related to the research, manufacture and medical purposes of cannabis, its pharmacological derivatives and medicines, as well as the control and monitoring in the testing and traceability, in accordance with the provisions of the General Health Law and other applicable legal provisions;

    4. SAT will verify compliance with the legal provisions applicable to imports and exports, and

    5. SE will intervene, according to its attributions, in the determination of the tariffs that should correspond to import and export.

  3. With respect to the purposes contemplated in the Regulations, these are divided into research, production, medical purposes, manufacturing, and destruction:

    1. Research: COFEPRIS must authorize the research protocol, and maintain and update annually the national inventory of research conducted in the country on cannabis.

    2. Production: permission must be obtained from SENASICA for planting of cannabis for research and manufacture. The application must be accompanied by the corresponding research protocol. Permits to plant authorized species or varieties will be granted for planting, cultivation, harvest, research and manufacture of pharmacological derivatives and medicines.

    3. Medical purposes: medical prescription will require compliance with the provisions of Article 240 of the General Health Law. The drugstores, pharmacies or drugstores authorized to prescribe cannabis medicines, must have a register of patients, according to applicable legal provisions on protection of personal data. Possession of medicines derived from cannabis shall be accredited with the copy of the special prescription that contains the bar code and the autograph signature of the authorized professional that extends it or, in its case, the corresponding invoice.

    4. Manufacturing: The guard and custody of the raw material, pharmacological derivatives, or medicines of cannabis, will be responsibility of the holder who must have the documents demonstrating their legal possession. The public and private establishments that are destined to the manufacturing process or that import, export or use raw material, pharmacological derivatives, or cannabis medicines, will have control books authorized by COFEPRIS, and a security system for their safekeeping. During the months of January to May, the producers that regularly need raw materials, pharmacological derivatives or cannabis medicines must communicate by means of a notice to COFEPRIS, a forecast of the quantities that they will demand during the following year. Cannabis medicines cannot be presented in the form of a medical sample or original gift. The owners of raw materials, pharmacological derivatives, or cannabis medicines, as well as those responsible for specific actions and other actions that they carry out in compliance with other applicable legal provisions, must give written notice to COFEPRIS and other corresponding authorities about the disappearance of the same, in order to avoid their deviation.

    5. Destruction: must be communicated to COFEPRIS and carried out in the presence of a certified third party.

  4. With respect to export and import, the Regulations allow for the import of raw materials, pharmacological derivatives, and cannabis medicines. For export only pharmacological derivatives, and cannabis medicines are allowed.

    A sanitary permit prior to import, granted by SADER or COFEPRIS, must be obtained. Likewise, none of these actions are to be carried out by mail or by using the services of courier or parcel service companies, or in any other case indicated by the regulations on customs clearance.

    In the case of raw materials, pharmacological derivatives, and cannabis medicines from abroad, only authorized customs clearance will be allowed. The import of raw material, pharmacological derivatives, and cannabis medicines will not be allowed in cases where they are prohibited in the country of origin or not allowed for import in accordance with applicable regulations.

  5. Persons holding a marketing authorization must have an independent Quality Control Laboratory under the authority of a person certified according to quality management procedures. COFEPRIS may verify the control laboratories to check their operating conditions, infrastructure, procedures and analytical tests.

  6. Finally, advertising and marketing is only allowed for cannabis medicines that are directed to health professionals, so it is prohibited to make promotion and advertising aimed at the general population. At any time, COFEPRIS may carry out verification proceedings and visits for this purpose.

The Regulations will enter into force the day after its publication in the DOF, that is, on January 13, 2021. Likewise, all administrative provisions that are contrary to the Regulations will be repealed.

The attorneys of Mañón Quintana are at your service in relation to any questions or comments regarding this client alert.

Mexico City, January 06, 2021

The Ministry of Economy publishes the Agreement establishing the products whose import and export are subject to regulation by the Ministry of Energy.

Mexico City, january 6, 2021.

Dear clients and friends,

On December 26, 2020, the Ministry of Economy published the “greement establishing the products whose import and export are subject to regulation by the Ministry of Energy” (the "Agreement") in the Federal Official Gazette.

The Agreement refers to the requirement for a prior authorization issued by the National Commission of Nuclear Safety and Safeguards for the import and export of nuclear, radioactive and ionizing radiation materials. It also applies to the import and export of petroleum and hydrocarbons, including the requirement to obtain a prior authorization by the Ministry of Energy.

With respect to import and export activities of Petroleum Products and Hydrocarbons, the Agreement addresses the following items:

  1. The need to obtain a permit from the Ministry of Energy prior to import or export any product.
  2. The procedure for application, analysis and granting of import and export permits.
  3. Possible scenarios in order to obtain an extension of the permits.
  4. The causes for termination and revocation of the permits (such as expiration of the term, resignation of the permit holder or failure to comply with any condition to which the permit has been subject), including a more detailed and expedited revocation procedure which allows the authority to suspend the permit during the investigation.
  5. The 20-years permits are eliminated, only 1-year and 5-years permit will be granted, subject to demonstrating that the existing contractual obligations are in full force and effect during the same period and, that the company has or is developing storage or transportation infrastructure for the corresponding merchandise.

The Agreement entered into force on December 28, 2020, and it will not affect permits granted prior to this date. Permits granted before December 28, 2020 will continue to be governed in accordance with the rules applicable at the time they were granted, as long as the description of the products matches the description filed before customs authorities.

Furthermore, renewal of prior permits must be submitted in accordance with the rules established in the Agreement, unless the application for renewal happened before the entry into force of said Agreement.

The attorneys of Mañón Quintana will be glad to discuss or address any questions related to the scope of this Agreement.

Mexico City, December 03, 2020

General Guidelines of the Mexican System of Classification Equivalences for Video Game Contents.

Mexico City, december 3, 2020.

Dear clients and friends

On November 27, the General Guidelines of the Mexican System of Classification Equivalences for Video Game Contents. Content (the "Guidelines") were published in the Federal Official Gazette. As its name refers, the purpose of the Guidelines is to establish the Mexican System of Classification Equivalences for Video Game Content (the "System"), as well as the graphic specifications for the warnings, content descriptors and interactive elements that must be implemented by "Mandated Subjects" with respect to video games distributed, commercialized or leased in México. This, in order to create specific parameters that help to make an appropriate categorization of their content, as well as their target audiences.

In general, the Guidelines establish the following:

  1. The distributors, marketers or lessors of video games are considered Mandated Subjects.
  2. The function of the Guidelines is to watch over and comply with the best interest of the child, which is configured as a prevailing need of the State to grant special protection to children and adolescents. Considering their degree of social vulnerability and the use of technology by these groups their rights should be tutelaged through public policies in order to avoid their exposure to contents not suitable for their age.
  3. The System will help guarantee that the criteria applied in the Guidelines are in accordance with those issued by the Entertainment Software Rating Board (ESRB) in charge of the classification of video games in the United States of America.
  4. Parental Controls are regulated as a tool available on any device that plays video games, designed to allow the person responsible for the minor to prevent or restrict access to video games that are not suitable for their age, as well as a measure to access actions to block content and interactive elements, as well as the setting of time limits.
  5. The obligations in terms of the Guidelines include: (i) complying with the System and the graphic specifications for warnings, interactive elements and content descriptors in video games in any format, (ii) include the classification of each video game sold or leased, as appropriate, and (iii) restricting the sell or lease of videogames for adults to minors, by requesting proof of age to potential clients.
  6. The Mandated Subjects must include the classification of content corresponding to each video game for sale or lease, as well as include warnings specifications of each Classification in accordance with the following:
    1. Warning: Measures that allow full identification of the content.
    2. Classification Category: brief explanation of the content according to the Warning and the corresponding Classification.
    3. Content Specifications: A guide to the content that may appear in the video games assigned to each category. However, a particular video game may contain one, several or none of the references and/or content described in the content specifications.
  7. The System is categorized as follows:
    1. CLASSIFICATION (A): For all audiences
    2. CLASSIFICATION (B): For adolescents 12 years and older.
    3. CLASSIFICATION (B15): For those over 15 years old.
    4. CLASSIFICATION (C): Not suitable for persons under 18 years.
    5. CLASSIFICATION (D): Extreme content and adult.
  8. The content specifications serve as an example of the content that may appear in the video games assigned to each category, which must be shown with a stamp on the front cover and another on the back cover, both with specific measures for each type of box for this purpose.

Finally, the entry into force of the Guidelines is subject to a period of 180 days from their publication, that is to say, on May 26, 2021. Ttherefore the Guidelines will be binding only for those video games that are distributed after this date. Likewise, within the same term, the Ministry of the Interior is subject to issue a Parental Guide on the subject of video games.

The lawyers of Mañón Quintana are at your service for any doubt or comment related to this informative note.

Mexico City, November 20, 2020

The Energy Regulatory Commission establishes a new process for updating permits that are in the circumstances contained in Resolutions A/043/2016 and A/043/2018.

Mexico City, november 20 , 2020.

Dear clients and friends,

On November 10, 2020, the Energy Regulatory Commission (“CRE”) published on the Federal Official Gazette (“DOF”) the Resolution A/038/2020, which modifies the Resolution A/043/2016 that establishes the cases where an updating of a permit applies (the “Resolution”).

The Resolution does not modify the cases where an update of a permit proceeds in terms of the Resolutions A/043/2016 and A/043/2018; but establishes a process for the resolution of the applications. The procedure will be process as follows:

  1. Once the application has been submitted, the corresponding Administrative Unit of the CRE (Petroleum products, Petrochemicals, Natural Gas, or Electricity) will be the authority in charge of the analysis and evaluation of its origins.
  2. Before render its resolution, the Unit must send to the Board of Commissioners (through the Executive Secretariat) the application’s background information including every update application filed by the permit holder, in order to inform the Board and obtain its approval or rejection, the last one must be justified.
  3. The Executive Secretariat must inform the Unit of the decision adopted by the Board of Commissioners, and subsequently inform the applicant.
  4. The Unit will report the answered application to the Executive Office, in order to register the corresponding update in the CRE’ Public Registry.

The procedure applies to the following permit update request:

  1. In all activities:
    • Change or modification to the corporate or ownership structure of the permit holder, as long as such modification does not come from a share or stock transfer transaction, provided that it does not imply a change of control.

  2. In matters of hydrocarbons, oil, petrochemicals, and bioenergy, except for natural gas transportation through pipelines in the modalities of Self Use and Self-Supply, regarding:
    • Change or modification to the routes and destination of transportation and distribution systems by means other than pipelines.
    • Any change in the investment amounts of the specific project.
    • Change of the system’ operator when the permit allows such modification.
    • Any modification or change of petroleum or petrochemicals products to be stored, transported, distributed, or commercialized.
    • Modification of the products to be commercialized that belongs to the same family (oil, hydrocarbons, or petrochemicals).
    • Modification of the vehicle fleet registry, in the case of permits for transportation and distribution by means other than oil and LPG pipelines; regarding natural gas in case the capacity established in the permit is not altered. Registration or deregistration of vehicle fleet guard stations, in the case of permits for transportation and distribution by semi-trailers and auto-tanks.
    • Modification of the trademarks or brands of hydrocarbons and oil products, as well as those used in transportation and distribution by means other than LPG pipelines and retail.
    • Changes in the type of oil (except LPG), in tanks covered by storage and distribution permits.

  3. In the matter of natural gas transportation permits through pipeline in the modalities of Self Use and Self-Supply, in the following cases:
    • Change in the corporate name of the permit holder, as well as of the name of the partners and shareholders, except in the cases in which such change in partners or shareholders derives from a spin-off or merger involving new interconnections.
    • Modification of the authorized route at the request of a competent administrative or judicial authority.
    • In the modality of self-use: (i) the connection to incorporate a new natural gas supply point, which does not imply any change to the capacity, length, trajectory, or operation of the system, and (ii) changes in the corporate or ownership structure, provided that does not imply a change of control.
    • In the modality of a self-supply company: (i) changes in the corporate or ownership structure of the permit holder or of the partners, (ii) derived from the spin-off of a partner, the modification of the corporate structure and, if applicable, the name of the partner who remains interconnected, and (iii) in the event of merger of partners that does not imply a change of control.

  4. Regarding power generation and supply:
    • Reduction of the installed capacity as long as there is no change in technology, or in the authorized demand for electricity imports.
    • Any change in the direct current capacity of the applicable generation equipment, as long as it does not imply a change in the capacity in alternate current.
    • Any change in Suppliers’ start of Operation Date.
    • Any change of location of a power plant, that due to its characteristics can be moved without disassembling the equipment.
  5. The lawyers of the firm are at your service for any additional information.

Mexico City, October 27, 2020

The Federal Antitrust Commission announces an investigation regarding alleged monopolistic practices (cartel activity) in the Non-Residential Real Estate Leasing Market.

Mexico City, October 27th, 2020.

Dear clients and friends,

On October 22, 2020, the Investigation Authority of the Federal Antitrust Commission (“COFECE”) announced via the Federal Official Gazette the opening of an ex-officio investigation regarding alleged absolute monopolistic practices (Cartel Activity) in the Non-Residential real estate leasing Market (countrywide), in terms of article 53 of the Federal Economic Competition Law and possibly in terms of article 9 of the former Competition Law, due to the fact that such Authority has knowledge of certain conducts that assumedly constitute possible monopolistic practices in the investigated market. Therefore, said ex-officio investigation to the Countrywide Non-Residential Real Estate Leasing Market could cause the following consequences:

  • The Authority may require any individual or company to exhibit any information or documents deemed necessary related to the investigation, either as a defendant or as a collaborating third party, as well as suppliers or any other economic agent of the investigated market.
  • The Authority may order the performance of on-site inspections of any other economic agent related to the investigated market.

Upon conclusion of the investigation, if the Authority finds elements that indicate a probable responsibility of the investigated economic agents, it will initiate the correspondent administrative procedure, in which the Commission may impose, among other, the following penalties:

  • A maximum fine equivalent to 10% of the Economic Agent’s annual income, regardless of the corresponding civil or criminal liability.
  • Up to 10 years of imprisonment for the person found guilty of the Economic Agent’s monopolistic practice.

Finally, once the COFECE’s resolution is considered as res judicata, third parties that may have suffered damages deriving from the monopolistic practices have the right to file judicial actions before the Administrative District Courts specialized in Antitrust, Broadcasting and Telecommunications.

The lawyers of Mañón Quintana are at your service for any question or comment related to the scope of this newsletter.

Mexico City, October 12, 2020

The Energy Regulatory Commission approved modifications to the General Administrative Provisions that established the terms to request an authorization to modify or transfer electric generation or power supply permits, included in Resolution RES/390/2017.

Mexico City, October 12, 2020.

Dear clients and friends,

On October 7, 2020, the Energy Regulatory Commission (“CRE”) published the Resolution RES/1094/2020 on the Federal Official Gazette (“DOF”), which modifies the General Administrative Provisions that established the terms to request an authorization to modify or transfer electric generation or power supply permits, included in Resolution RES/390/2017 (the “Resolution”).

This publication is the result of an amendment proposal filed by the CRE before the National Commission of Regulatory Improvement ("CONAMER") on October 5, 2020 (the "Draft"). The original draft was filed on February 13, 2020, together with a request for exemption from filing the Regulatory Impact Analysis (“RIA”), which CONAMER rejected at that moment, ordering various adjustments and clarifications to the original draft.

Along with the Draft, a new request for exemption of a RIA was filed, which was resolved by CONAMER in a favorable sense on October 5, 2020, therefore, the CRE was entitled to publish the Resolution in the DOF. The Resolution will enter into force on October 8, 2020 and in terms of the recitals contained in the Resolution, the purpose of the modification is to prevent “...the continuing distortion of the nature and purpose of the permits granted under the Public Electricity Energy Service Law (“LSPEE”)...”, as included in the “petition sheet” filed by the Federal Electricity Commission before the CRE in October 2019.

In this regard, the Resolution includes the following:

  • Adds a section IV to Provision Sixth, by which the modification of generation permits is prohibited when it comes to the registration of load centers that have entered into a Basic Supply Contract (Contrato de Suministro Básico) under the Electricity Industry Law (“LIE”).

  • Derogates section I, subsection e), number i) of Provision Ninth, that implies a prohibition/ban to the modification of the permits granted under the LSPEE, to include new partners, other than those previously authorized in the permit, through the filing of a request for inclusion of said partners in the corresponding expansion plans.

  • Modifies numerals ii) to iv) and adds number v), on the subsection e) section I of Provision Ninth, which ban generation permits granted under the LSPEE from being modified to include: (1) load centers that have entered into an electricity supply contract under the LIE; y, (2) load centers that have been required to register as Qualified Users in the Qualified User Registry even when such registration have expired or have decided to unsubscribe from it.

  • In case of partners already approved or included on expansion plans, who have carried out a merger or spin-off, they are required to prove their status as partner or beneficiary of the electricity, as long as no new load centers are included.

  • We considered that the Resolution substantially affects the rights acquired under the LSPEE and LIE by the permit holders and the partners or establishments associated to such permits, who will be entitled to file an amparo (constitutional action), and since October 8th, an action for judicial review before the Federal Administrative Justice Court, in order to fight back such resolution.

    The lawyers of Mañón Quintana are at your service for any question or comment related to the scope of the Resolution.

    Mexico City, October 12, 2020

    The General Plenary of the High Chamber of the Federal Administrative-Law Court agreed to modify its Internal Regulations, to expand the jurisdiction of the Specialized Chamber in Environmental and Regulatory Matters in order for it to process and decide the claims raised against final decisions, administrative acts and procedures issued by the Energy Regulatory Commission.

    Mexico City, October 12, 2020.

    Dear clients and friends,

    On October 7, 2020, the General Plenary of the High Chamber of the Federal Administrative-Law Court (“TFJA”) published in the Federal Official Gazette a modification to its Internal Regulations, by which a number 11 to subsection a., of section III of article 50 was added, and article 132 was amended (the "Amendment").

    The TFJA determined to modify its Internal Regulations in order to expand the jurisdiction of the Specialized Chamber in Environmental and Regulatory Matters (the “Specialized Chamber”) in order to process and decide the claims raised against final decisions, administrative acts and procedures issued by the Energy Regulatory Commission.

    The Amendment is the result of the jurisprudence thesis issued by the Second Chamber of the Supreme Court of Justice on August 14, 2020, which establishes that prior to filing an amparo proceeding against any resolution, general rules, legal acts or omissions by the Coordinated Regulatory Agencies in Energy Matters all ordinary remedies must be previously exhausted either by filing a motion for review before the same administrative authority that issued the contested act or by filing an action for judicial review before the Specialized Chamber of the TFJA. The Amendment became effective on October 8, 2020.

    In our opinion, the Amendment is relevant since those interested in challenging the administrative decisions and acts issued by the CRE or its administrative units will be compelled to exhaust the aforementioned remedies before filing an amparo proceeding before a District Court.

    The attorneys at Mañón Quintana are at your service for any questions or comments related to the scope of the Amendment.

    Mexico City, October 12, 2020

    New Counsel: Mañón Quintana Abogados, SC

    Mexico City, October 12, 2020.

    Dear Clients and Friends,

    In order to continue providing legal services of excellence and expand our service capacity to other areas of law, we are pleased to inform you of the incorporation of Antonio Barrera Ríos, as Counsel in the practices of Arbitration and Energy Law in our Mexico City office.

    Antonio is an attorney with more than ten years of experience in Commercial Arbitration, participating in several domestic and international arbitrations as a party lawyer and assistant to arbitral tribunals, as well as in Energy Law and Constitutional Law, focusing his professional practice on advising and representing national and international companies in the energy, mining, infrastructure and financial sectors.

    He graduated from Universidad La Salle, Mexico City, obtain a Master's degree in Energy Law and Arbitration from University of Texas, Austin, Texas, United States of America and has a diploma in Energy Law from the Escuela Libre de Derecho in Mexico City. In the professional field, he served as a Senior Associate in the Energy and Litigation areas of prominent Mexican law firms.

    We are convinced that Antonio's incorporation strengthens the Firm derived from his knowledge, experience, but above all from his humane treatment, which reaffirms our commitment to continue consolidating our position as one of the leading law firms in Mexico for the attention of the most important, critical and demanding matters of our clients.

    Mexico City, July 10, 2020

    Quality Infrastructure Law

    Mexico City, July 10, 2020

    Dear clients and friends,

    On July 1st, the new Quality Infrastructure Law ("LIC") was published in the Federal Official Gazette, which will abrogate the Federal Law on Metrology and Standardization ("LFMN"); this Law aims to establish and develop the basis of industrial policy within the National Quality Infrastructure System, through the activities of standardization, accreditation, conformity assessment and metrology, promoting economic development and quality in the production of goods and services, in order to expand productive capacity and continuous improvement in value chains, foster international trade and protect legitimate public interest objectives.

    In addition, the LIC has the following purposes:

    1. Promote the concurrence of the public, social and private sectors in the elaboration and observance of the Mexican Official Standards and the Standards (which replace the Mexican Standards -NMX-);
    2. Establish coordination and collaboration mechanisms on standardization, conformity assessment and metrology between the Standardizing Authorities, the National Metrology Center, the Designated Metrology Institutes, accreditation bodies and conformity assessment bodies, local and municipal entities, as well as the social and private sectors;
    3. Promote technological innovation in goods, products, processes and services to improve the quality of life of people throughout the country;
    4. Promote the creation of greater physical and digital infrastructure for the adequate development of Conformity Assessment activities;
    5. Establish and maintain the General System of Units of Measurement, to create the Designated Institutes of Metrology and to establish what refers to scientific metrology, legal metrology, as well as applied or industrial metrology; and,
    6. Promote and disseminate the activities of standardization, accreditation, conformity assessment and metrology.
    7. The new Quality Infrastructure Law introduces the concept of "legitimate public interest objectives" and establishes that it is up to the Mexican Official Standards to address the causes of problems identified by the Standardization Authorities, which affect or jeopardize these objectives. In terms of the Law, the following are legitimate public interest objectives:

      1. The protection and promotion of health;
      2. Protection of the physical integrity, health and life of workers in the workplace;
      3. The protection of organic production, of genetically modified organisms, health and food safety, aquaculture, fisheries, animal and plant;
      4. Food security to education and culture;
      5. Tourist services;
      6. National security;
      7. Environmental protection and climate change;
      8. The use and exploitation of natural resources;
      9. Healthy rural and urban development;
      10. Public works and services;
      11. Road safety;
      12. The protection of the right to information;
      13. The protection of designations of origin; and,
      14. Any other public need, in terms of the applicable legal provisions.

      Among some of the novel elements to highlight of the SCI, it is worth mentioning the following:

      1. Standardization authorities should promote harmonization with international models, principles and best practices.
      2. The National Commission on Standardization will now be the National Commission on Quality Infrastructure.
      3. Much more detailed procedures than the LFMN are established for the development, issuance, modification and cancellation of Mexican Official Standards.
      4. The requirements for the operation of Accreditation Bodies are increased.
      5. The National Register of Evaluators is created.
      6. The Quality and Innovation System is created.

      The SCI will also regulate: (i) the National Quality Infrastructure System; (ii) the Quality and Innovation System; (iii) the Metrology System and Scientific Metrology; (iv) Legal Metrology and Industrial or Applied Metrology; and, (v) the Quality Infrastructure Technology Platform, as well as incentives and market surveillance.

      According to its first transitory article, the Quality Infrastructure Law will come into force sixty (60) days after its publication in the Federal Official Gazette - that is, on August 31, 2020 - and with its entry into force it will repeal the Federal Law on Metrology and Standardization. The Federal Executive shall issue its regulations within a term of twelve months and, in the meantime, the Regulations of the Federal Law on Metrology and Standardization shall continue to be applied as long as it is not opposed.

      The lawyers of Mañón Quintana are at your service for any doubt or comment related to the scope of the new Quality Infrastructure Law.

    Mexico City, June 19, 2020

    Possible modifications to the Regulations for the Sanitary Control of Products and Services and to the Regulations of the General Health Law on Advertising, as well as clarifications to the Modifications to NOM-051-SCFI/SSA1-2010, General Specifications of Labeling for Prepackaged Foods and Non-Alcoholic Beverages - Commercial and Sanitary Information published on March 27, 2020.

    Mexico City. June 19, 2020.

    Dear clients and friends,

    On June 5, the Ministry of Health filed a Regulatory Impact Analysis before the National Commission for Regulatory Improvement ("CONAMER"), which anticipates the imminent reform of the Regulations for the Sanitary Control of Products and Services, as well as the Regulations of the General Health Law on Advertising, in order to harmonize the provisions related to the front warning labeling of prepackaged foods and non-alcoholic beverages at the regulatory level.

    In this sense, according to the draft project presented to CONAMER, below please find a brief summary of the most relevant points proposed:

    1. Regulation of Sanitary Control of Products and Services
      • The Regulation defines terms Frontal Warning Labeling, Portion and Critical Nutrients.
      • Where products or their components may present an intermediate or immediate health risk to consumers a warning shall be included on the label in accordance with the relevant Official Standards.
      • The Ministry of Health may require and corroborate the biological, chemical, physical and nutritional specifications of the products, as well as the general techniques of their process, and must guarantee the confidentiality of the information.
      • Labelling information shall be truthful and shall be described and presented in such a way not to mislead consumers regarding the nature of the product.
      • The labelling of food and non-alcoholic beverages shall include front labelling in accordance with the applicable Official Standards.
      • The label of products aimed at children should not contain elements that incite, promote or encourage their purchase or consumption, nor make reference to other similar elements with the same purpose.
      • The reference portions will be established by the Ministry of Health in coordination with the higher education institutions and will be published in the corresponding official website.
      • The Ministry of Health shall determine the ingredients, additives or substances that may create a risk to health. Products containing them shall include a precautionary statement regarding to their consumption, particularly with respect to products intended for children.
      • The inclusion of graphic or textual endorsements on food and beverage labels is permitted, if the provisions of the Federal Consumer Protection Act ("LFPC") met.
      • No nutrients may be added to fresh food, except those that must be added on a mandatory basis.
    2. General Health Law on Advertising.
      • Advertising must not suggest or indicate that the use of a product is a determining factor in modifying the behavior of persons; indicate or induce to believe that the product has ingredients or properties that it lacks, or include stamps or endorsements without scientific, objective and reliable evidence in terms of LFPC.
      • Advertising for products whose labels include excess energy, critical nutrients and ingredients that represent a health risk in excessive consumption must include the stamps and legends established by the corresponding Mexican Official Standard and must not include recommendations or endorsement stamps or legends.
      • Advertising of pre-packaged products which include on their label one or more warning labels or the legend of sweeteners, shall not include children's characters, animations, cartoons, celebrities, sportsmen or pets, interactive elements, such as visual-special games or digital downloads, aimed at children that encourage, promote or promote the consumption, purchase or choice of such products

    Additionally, on June 19, the Ministry of Economy and the Ministry of Health published an explanatory note in the Official Gazette in order to clarify some elements of the Amendments to NOM-051, published in the DOF, to correct some open or erroneous references among the numerals of the Standard itself. These clarifications do not substantially change the provisions of the Amendments to NOM-051 published on March 27.

    The attorneys of Mañón Quintana Abogados are at your service to elaborate on the contents of this document in light of the new obligations for the labeling of alcoholic beverages and prepared foods.