Issue 143 – March / April 2019

April 29, 2019
Outlook on Mexico’s New Administration


By Mario Melgar-Adalid

Following the tradition started by U.S. President Franklin D. Roosevelt to pause and assess the first 100 days of an administration, Mexican President Andrés Manuel López Obrador reported on his work after 100 days in office.  His report highlights achievements as to some of the 100 commitments made during his inauguration, as well as the fact that Mexico is currently in a transitional stage. Changes in Mexico include political, economic and social aspects, of which two strategies are noticeably present: fighting corruption and making progress to achieve an egalitarian society.  Naturally, these proposed changes have generated discussion and debate regarding strategies to accomplish the administration’s outlined goals. In the arena of foreign affairs, the new administration has decided to strictly … read more

April 29, 2019

Political Thermometer

The personal demeanor of President López Obrador will cause his administration to be politically active.  President López Obrador is a politician who does not shy away from criticism and has a unique approach to facing everyday matters.  In addition to this, he holds daily press conferences to inform the public on government projects and to answer questions. Politics will remain ever present during this administration.  Further, MORENA has been extremely active in proposing new legislation at the federal and state levels. As a result, opposing political parties have formed alliances to debate and challenge the proposals.  In fact, some of the legislative initiatives have been amended to include changes that have improved or postponed the initial proposals. In Mexico, major … read more

Economic Indicators

On April 29, 2019, updated financial indicators reflected:

Peso/Dollar Exchange Rate: $19.01 pesos per Dollar.

Mexican Stock Exchange: The Mexican Stock Exchange (BMV) closed at 44,956.73 points.

Interest Rates: The Average Interbank Rate (TIIE) for a 28-day period was at 8.5956%

Piercing the Corporate Veil in Mexico
By Adrián Salgado

In November 2018 the Third Collegiate Court on Civil Matters of the First Circuit published judicial decision number I.3o.C.340 C (10a.) entitled: “Corporate Veil. Justification for piercing the corporate veil.” In this decision, the Court ruled that piercing the corporate veil is justified when parties use the corporate form in an otherwise legal and valid manner for improper ends or to avoid legal obligations or liability.

Mexico Enacts Important Tax Law Changes Eliminating Universal Tax Credit Offsets
By Miriam Name and Edgar González

Mexico’s federal Congress recently enacted the 2019 Federal Revenue Law (the “Revenue Law”). An important change in Article 25, paragraph VI of the Revenue Law sets forth numerous limitations on tax credits, including an elimination of taxpayers’ ability to credit or offset all types of federal taxes against each other on a universal basis. The purpose of such new limitations is supposedly to combat tax evasion in Mexico. The Revenue Law now provides that taxpayers may “net out” positive balances against amounts owed only if both balances or amounts are for the same type of tax (e.g. Mexican income tax). The Revenue Law further provides that taxpayers with positive Value Added Tax balances may only credit or offset such tax … read more

The Legal Separation of Mexico’s Federal Electricity Commission
By Jose María Lujambio

The constitutional energy reforms enacted in Mexico in late 2013, mandated Congress to grant the Department of Energy (known by its Spanish acronym as “SENER”) the authority to establish rules strictly separating certain activities of the electricity sector in order to promote open access and efficient operation, and to monitor its compliance. Since then, the bases for the disaggregation of the sector’s value chain activities have been established, aimed to serve as a fundamental component of ensuring effective competition.   The Electric Industry Law (known by its Spanish acronym as “LIE”) of 2014 provided that the activities of generation, transmission, distribution, commercialization and supply of primary products should be performed independently, under a strict regime of legal separation. Further, when … read more