On December 1, 2020, the Ministry of Economy ("SE") and the Ministry of Energy ("SENER") published the preliminary draft (the "Preliminary Draft") of the Resolution that establishes the products whose import and export is subject to regulation by the Ministry of Energy (the "Resolution")1 by means of which:
- The tariff codes of the products that will be subject to regulation by SENER and the National Nuclear Safety and Safeguards Commission ("CNSNS") are established, whose compliance must be evidenced before the corresponding authorities;
- Control measures are established by means of prior authorization requirements to be granted by SENER through the CNSNS, to the import and export of nuclear materials and fuels, radioactive materials, equipment that generates ionizing radiation, equipment and dual-use goods in nuclear matters and related technology that are susceptible to diversion for the proliferation and manufacture of nuclear and mass destruction weapons; and
- (i) the products that will be subject to previous permit granted by SENER regarding the import or export of petroleum products, hydrocarbons and petrochemicals are established; (ii) the conditions and customs procedures by means of which foreign trade operations related to the import and export of petroleum products, hydrocarbons and petrochemicals are set forth; and (iii) the compliance conditions that must be evidenced before the competent authorities to obtain and maintain in force the previous import and export permits of petroleum products, hydrocarbons and petrochemicals are established.
In relation to the previous permits of import and/or export of petroleum products, hydrocarbons and petrochemicals (the "Permits"), the Preliminary Draft establishes, among others items, the following:
- Permits are intended to be a non-tariff restriction measure that regulates imports and exports of petroleum products, hydrocarbons and petrochemicals with the purpose of controlling that foreign trade operations do not affect the energy balance, to promote the compliance with tax, customs and foreign trade obligations, as well as to prevent and detect customs fraud and smuggling of products.
- SENER may request information from any institution or agency to determine that the granting or validity of a Permit contributes to the energy security and secures the fuel supply in Mexico.
- SENER and SE, within the scope of their own competence, will have the right to interpret for administrative purposes and/or apply in particular cases, the relevant legal provisions of the Resolution.
- It should be noted that the Preliminary Draft only contemplates Permits with one- and five-year terms; thus, Permits with longer terms are no longer contemplated2.
- New requirements were established for the granting of Permits with a term of one year. The following requirements should be noted: (i) regarding import permits: (a) a marketing and/or transport permit for the products to be imported must be submitted, either from the petitioner or a third party, in which case the commercial relationship with that third party must be evidenced; (b) the use and final destination of the products subject to the Permit must be indicated; (c) compliance with the administrative, tax and customs obligations of petitioner must be evidenced; (d) a monthly projection of the cost of admission and the volume of the products that are intended to be imported during the term of the corresponding Permit must be submitted; and (e) in the event that the importer is the permit holder of the marketing and/or distribution permits to sell fuels to service stations or end users in Mexico, compliance with the current Public Policy for Minimum Storage of Petroleum Products must be evidenced; and (ii) regarding export permits: (a) a transport and/or distribution permit for the products to be exported must be evidenced; (b) the use and final destination that will have the commodities subject to the Permit must be indicated; (c) information regarding the suppliers of the products to be exported must be submitted, including the relationship with those suppliers; (d) compliance with the administrative, tax and customs obligations of petitioner must be evidenced; (e) a monthly projection of the cost of admission and the volume of the commodities that is intended to be exported during the term of the corresponding Permit must be submitted and it shall be demonstrated that the intended export will not impact the supply in national territory; and, (f) in the event of natural gas exports, the logistics of the pipelines that will be used to transport the product must be described.
- According to the Preliminary Draft, for the granting of Permits with a five-year term, in addition to the requirements to obtain one-year term Permits, the following requirements must be met: (i) contractual commitments with a term of at least five years must be evidenced; (ii) contribution to the development or expansion of the storage and/or transportation infrastructure regarding the products to be exported must be evidenced; and (iii) in the case of exports, it must be evidenced that such activity will not have an adverse effect on the supply of the corresponding product in Mexico in the medium and long term.
- The Preliminary Draft establishes that Permits with a one-year term may be extended up to two times for the original term, and Permits with a five-year term may be extended once for the same term.
- The Preliminary Draft establishes that SENER will issue a resolution granting or rejecting a Permit within 12 business days from the date of receiving the request. In the event that SENER does not resolve within said period, the request shall be deemed rejected.
- The Preliminary Draft establishes that Permits with a term of one year will expire if the permitted activities are not carried out for more than 30 consecutive days, and Permits with a term of five years will expire if their holders do not exercise the rights foreseen in said permits or they do not fulfill their purpose during one year.3
- The Preliminary Draft expressly provides as events of revocation of the Permits, among others: (i) wrong performance of the activity granted in the permit; for example, the breach of administrative, tax or customs obligations by the permit holder; (ii) the modifications in the original conditions of the Permit if the permit holder does not inform such modifications to SENER, including, but not limited to, modifications to the bylaws and shareholder composition of the permit holder (i.e., corporate changes); and (iii) any breach without justified cause to the applicable energy laws, which threatens energy security and sovereignty.
- Finally, the Preliminary Draft establishes that permit holders must present a monthly report on the permitted activity in accordance with the formats that will be published on SENER's website.
The transitory articles of the Preliminary Draft establish that: (i) the current administrative provisions issued by SENER, which regulate the procedure and requirements for import and export permits will be abrogated; (ii) the export and/or import permits issued by SENER prior to the effective date of the Resolution will remain in force in the terms that were issued; and (iii) the procedures for applying for hydrocarbon or oil import and/or export permits which remain pending before the entry into force of the Preliminary Draft will continue to be substantiated with the provisions in force at the time of its application.
It should be noted that the Preliminary Draft is currently in the regulatory improvement and impact analysis process before the National Commission of Regulatory Improvement, which allows the public to submit comments or observations to the Preliminary Draft. Once this process is completed, the Resolution approved by SENER and SE, as it has been modified according to the regulatory improvement and impact analysis process, must be published in the Federal Official Gazette in order to come into effect.
1 In the website of the National Commission of Regulatory Improvement, available here.
2 Please note that currently, permits are granted for a period of up to 20 years.
3 Please note that Article 58 of the Resolution refers to previous permits valid for 20 years.
Gustavo Neyra Lopez (Legal Intern, White & Case, Mexico City) contributed to the development of this publication.
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