On June 11, 2021, the Seventh Resolution of Amendments to the General Foreign Trade Rules (“Seventh Amendment”) was published in the Federal Official Gazette. This Seventh Amendment included a restriction on the granting or extension of authorizations for the entry into or exit from the national territory of certain types of hydrocarbons through a place other than the authorized one, establishing that such authorizations may only be granted to State productive enterprises and their subsidiar
Indeed, as of June 12, 2021, only State productive enterprises and their subsidiaries may be authorized to import, through a place other than the authorized one, hydrocarbons, petroleum products, petrochemicals and their specialties, biofuels, as well as certain chemical precursors. This measure limited, in one fell swoop, the right of private parties to obtain the extension of authorizations previously obtained and still in force, as well as to obtain additional authorizations necessary for the development of their economic and business activities. This limitation of the rights of private parties forms part of a set of measures adopted systematically by the Executive and Legislative branches, the ultimate purpose of which we consider to be to counteract the effects of the so-called Energy Reform approved in 2013. At VWYS we have identified that there are arguments of unconstitutionality against this Seventh Amendment. Various companies are preparing amparo lawsuits and it will be up to the Federal Judiciary to resolve whether or not it is unconstitutional. Among others, some arguments in favor of private parties are (i) the violation of Article 1 of the Constitution insofar as it concerns the general protection of fundamental rights, (ii) the violation of the principle of reservation of law, since this is a restriction of rights established by a general administrative rule that lacks legal or constitutional grounds, (iii) the violation of Article 14 of the Constitution and of Articles 27 and 28 of the same ordinance, since it involves, respectively, a reform that could have retroactive effects to the detriment of the governed and a restriction that undermines free competition and effective competition, including (iv) the possible violation of the principle of legitimate expectation recognized by the Federal Courts. In addition, (v) it entails a violation of the principle of progressivity in the protection of the aforementioned fundamental rights, as it implies a setback in the freedoms guaranteed by the Constitution. The importance of this matter is not minor. Given the use that some private parties had been making of the authorizations that are now restricted, it is also essential to assess the risks of an immediate revocation of the authorizations still in force, as well as of the possible contractual breaches arising from a potential immediate revocation or from the impossibility of extending it. Indeed, regardless of the amparo lawsuit that companies decide to file against the Seventh Amendment or against its first act of application, it is also important to review the contracts that the affected companies have entered into with contractors, including the force majeure clauses – for acts of authority – and change-in-law clauses. These clauses could require certain actions on the part of the companies affected by the Seventh Amendment. If you would like to know more about this matter, please do not hesitate to contact our experts. Adrián Magallanes, Partner: +52 (55) 5258-1077 | amagallanes@vwys.com.mx Luis Miguel Jiménez, Partner: +52 (55) 5258-1058 | lmjimenez@vwys.com.mx Rodrigo Barradas, Associate: +52 (55) 5258-1077 | rbarradas@vwys.com.mx Miguel Concha, Associate: +52 (55) 5258 1058 | mconcha@vwys.com.mx
