Issue 120–March 2014

March 12, 2014

Notes on the Energy Reform in Mexico

By José María Lujambio

Approximately three months ago, the most important constitutional reform on energy in Mexico up to now was published in the Official Journal of the Federation. This reform intends to implement radical changes by promoting competition in a sector that has been historically characterized by the concentration of productive activities at the hand of the Mexican government since the 1930s, which began to open up to private investment just two decades ago. The same holds true for the hydrocarbon industry, given that oil production has always dominated public debate in Mexico. Nevertheless, it is also the case that the electricity sector is quietly undergoing its greatest transformation since its nationalization in 1960. Since then, and until the 2013 reform, the generation, … read more

March 14, 2014

The Payment of Rent in Foreign Currency

By Jorge Ojeda

Clients often ask their attorneys whether it is possible to agree that the rent to be paid for real property located in Mexico may be paid in foreign currency (most often U.S. Dollars). At first the answer seems easy, that yes it is possible; however, there are various aspects to consider. Foreign currency does not constitute legal tender in Mexico and, for such reason, Mexico’s Monetary Law and Provisions of the Mexican Central Bank that authorize the debtor to pay in foreign currency, when payment is to be made within Mexico,  consider that payment is properly made when the agreed amount is delivered in foreign currency or its equivalent in pesos, in accordance with the official exchange rate published by … read more

The Hiring of Minors
By Pablo Sáenz

One  current topic is that of minors who have to work in order to help support their families and, as a consequence, have to miss school and academic preparation. Mexico’s labor authorities have taken action regarding this issue and have decided to protect the rights of minors, so that they may have the possibility to have access to basic education and to attempt to eradicate child labor. Pursuant to the foregoing, companies that have a need to hire minors should be aware of the legal requirements and limitations with respect to hiring minors.   Article 123, Subsection A of the Political Constitution of the United Mexican States establishes the following: (i) utilization of the labor of minors under the age … read more

US-Mexico Trade Relations Not as Sweet Due To Potential Trade War on Sugar and High Fructose Corn Syrup
By guest Les Glick

A recent case under the antidumping and countervailing duty law against imported Mexican sugar is only the latest chapter in the complicated saga of the relationship between the United States and Mexico when it comes to sugar. Sugar has been an impediment to the economic integration of the two countries that was originally foreseen at the signing of the North American Free Trade Agreement (NAFTA). Indeed, due to a dispute between the countries involving the importation of U.S. high fructose corn syrup (HFCS) into Mexico, Mexico did not gain full access to the U.S. market for sugar exports through NAFTA until 2008. In their petition for the imposition of antidumping and countervailing duties on imports of sugar from Mexico, the complainants, … read more

Mexican Business Law Reforms
By Marimar Pérez-Cacheaux and Raymundo Vazquez Hernández

On June 13, 2014, numerous reforms to various business laws  were published in the Official Journal of the Federation, which included, among others, the Commercial Code, the General Law of Business Associations, the Law of Investment Funds and the General Law of  Instruments and Credit Transactions. The following highlights some of the most important changes included in such reforms:   Creation of an Electronic Registry: An electronic Public Registry of Commerce has been created and shall operate with an information protocol by means of which the capture, storage, custody, security, consultation, reproduction, verification, administration and transmission of registry information will be maintained. The Department of Economy has one year from the publication of the reform to create the electronic system, … read more

Recent Jurisprudence – Purchase and Sale Agreement. Obligation to Pay a Given Monetary Price
By Adrián Salgado and Marimar Pérez-Cacheaux

The Federal Civil Code states that “a purchase and sale shall occur when one of the contracting parties agrees to transfer ownership of an item or a right, and the other agrees to pay for such, a given monetary price.” With respect to such matter, the Mexico’s Supreme Court of Justice has published legal opinion number XXI/2014 (10ª), entitled ¨Purchase and sale agreements. Obligation to pay a given monetary price¨, issued by the First Chamber, that the term “given” is not limited to the fact that it be definite, but it also means that the price should also be fair, serious and real; in other words, it should not be simulated, fictitious or ridiculous, with such being ridiculous if there … read more