In this episode, we present a conversation between Juan Carlos Machorro, a partner at our firm, and Delia Paredes, a Master in Economics and partner at TransEconomics, about the challenges and opportunities that the Mexican economy will face at the start of President Trump's second term in the United States and how, in an optimistic but clearly possible scenario, the long-term prospects can be positive for Mexico.
In this episode we present a conversation between Juan Carlos Machorro, partner of our firm, and María Elena Abraham, advisor of the firm expert in immigration law.
With President Trump's inauguration, one of the central issues is undoubtedly immigration. We discussed the implications of the announced actions on the country's political, economic, and social landscape, the response of Dr. Sheinbaum's administration, the initial actions taken on both sides of the border, and the legal, political, and economic feasibility of implementing a plan of this magnitude.
Background
Publication of secondary provisions
On January 21, 2025, the General Provisions applicable to simplified issuers and securities subject to simplified registration (“Single Circular of Simplified Issuers” and/or “CUES”) were published in the Official Gazette of the Federation. This publication comes a few days after the expiration of the term granted to the CNBV by the decree that reformed the LMV and the LFI of December 28, 2023.
The CUES was developed as a result of working groups of various stock market authorities, such as the Ministry of Finance and Public Credit, the Bank of Mexico, the National Commission of the Retirement Savings System, as well as private sector trade associations, such as the Mexican Association of Stock Market Institutions, AC The draft of the Single Simplified Issuer Circular was approved at the beginning of September 2024 by the Governing Board of the CNBV, which was then submitted to stock market participants. As we announced upon publication of the reform to the LMV and the LFI, there is today a desire for openness on the part of the financial authorities, to allow access to the securities markets in a simpler and faster way, with a lower, but no less important, regulatory burden.
The key points of the secondary regulation contained in the CUES are described below:
Updating of Manuals and Internal Regulations by Brokerage Firms and Stock Exchanges
Among the most important actions to be taken in the secondary regulation of simplified issues, the stock exchanges, the Mexican Stock Exchange and the Institutional Stock Exchange, will be responsible for adjusting their internal regulations in accordance with the CUES. Likewise, the brokerage firms must review their internal manuals in the same terms. This is due to the fact that the Single Circular for Simplified Issuers provides for a host of new powers, functions and responsibilities for said regulated entities, which will now serve as the main channel for simplified issuers.
Eligible Values for Simplified Registration
Securities that may be registered under this regime include the following:
Offer Limited to Qualified Investors
Securities registered in the National Securities Registry under the simplified issuance regime may only be offered by securities market intermediaries to institutional and qualified investors under the terms of the applicable regulations.
Simplified Broadcasting Levels
Two levels of simplified issuers have been defined according to the maximum amounts per issue and accumulated per fiscal year:
Requirements and Limits for Simplified Issuers
Simplified broadcasters must comply with:
Credit Quality Opinions
Tier II issuers and those issuing asset-backed securities must submit a credit rating opinion on the issue, issued by a securities rating agency.
Disclosure and Reporting Obligations
Stock Market Review and Opinion
Role of the National Banking and Securities Commission (CNBV)
The CNBV will not verify the documentation submitted by the issuers or the information disclosed to the investing public. It must carry out the simplified registration of the securities in the National Securities Registry within a maximum period of two business days.
Cancellation of Registration
Obligations of the Placement Broker
Intermediaries must, among other things:
General Requirements for Registration
To obtain simplified registration, broadcasters must:
Executive Summary:
• This tax incentive replaces the incentives for key export industry sectors, previously published on October 11, 2023, and its subsequent modification on December 24, 2024. The highlights of the new incentive are the following:
[1] Percentages range from 91 to 41%, depending on the type of investment involved.
In the context of artificial intelligence models (“IA”) and its relationship with the protection of personal data, a new criterion has been issued in Europe on its legal implications. In September of this year, the Irish Data Protection Commission requested the European Data Protection Committee (“EDPS”) to issue an opinion on issues of general application pursuant to Article 64(2) of the General Data Protection Regulation (“GDPR”). These opinions issued by the EDPB shall be binding on one, several or all of the public and independent authorities established by the Member States of the European Union (“Control Authorities”), as indicated in the corresponding opinion.
The request was about the processing of personal data in the context of the development and implementation phases of AI models, specifically the following questions were raised:
In light of the above, on December 17, 2024, the EDPB issued Opinion 28/2024 on certain aspects of protection related to the processing of personal data in the context of AI models, which is mandatory for all Supervisory Authorities (the “Opinion”).Opinion”), to which the EDPB provided the following responses:
For such purposes, in order for an AI model to be considered anonymous, both the probability of direct extraction (including probabilistic) of personal data relating to the subjects whose personal data were used to develop the model, and the probability of obtaining, intentionally or not, such personal data from queries, must be negligible.
In order to carry out their assessment, the Control Authorities will review the documentation provided by the controller to demonstrate the anonymization of the AI model. To prove the above, some elements that the controllers may use are: (i) the sources that were used to collect the information to train the AI models; (ii) the preparation and minimization given to the personal data that was used to train the AI models; (iii) the audits carried out to estimate and predict the probability of identification of the personal data; and (iv) the tests that were carried out on the AI model against external attacks, among others.
The Opinion outlined three processes that must be undertaken when assessing the application of legitimate interest as a legal basis for processing personal data, namely: (1) identifying the legitimate interest pursued by the controller; (2) assessing the necessity of the processing for the purposes of the legitimate interest(s) pursued (necessity test); and (3) assessing that the legitimate interest(s) do not override the interests or fundamental rights and freedoms of the data subjects (balancing test). It will also be important to consider the reasonable expectations of data subjects in the balancing test, as due to the complexity of the technologies used in AI models, it may be difficult for data subjects to understand the variety of different processing activities involved.
The Opinion also stresses that where the interests, rights and freedoms of data subjects appear to prevail over the legitimate interest(s) pursued by the controller, the controller may consider introducing mitigating measures to limit the impact of processing on such data subjects; for example, technical measures, pseudonymisation measures, measures to facilitate the exercise of rights, transparency measures, anti-web scraping measures (web scraping), among other.
Finally, although this Opinion is only effective and applicable in the Member States of the European Union, it may come to have collateral influence as a non-binding criterion in other jurisdictions, including Mexico, as has happened with the content established in the GDPR. Therefore, it will be important to know the practical impact that the Opinion will have in the European Union.
In this episode, we are joined once again by Juan Carlos Machorro and Alejandro Luna, partners at our firm, to discuss customs infrastructure in Mexico. Given the challenges that may arise due to the tense trade environment among the three North American countries, the need for the smoothest possible customs process is paramount. Our experts discuss changes in customs regulations over the past few years, areas of opportunity within the entire system, and some of the plans on the Mexican administration's agenda.
On December 27, 2024, the decree was published amending, adding and repealing various articles of the Tax Code of Mexico City for the fiscal year 2025, the main changes being the following:
On December 30, 2024, the Miscellaneous Resolution for 2025 was published in the Official Gazette of the Federation, which came into force on January 1, 2025. Its main modifications and additions are mentioned below:
In this first episode of 2025, we are joined by Juan Carlos Machorro and Alejandro Luna, partners at our firm, to discuss the 2026 review of the United States-Mexico-Canada Agreement (USMCA) and what to expect from it in the coming year. With the upcoming inauguration of President Donald Trump in the United States, the Mexican, U.S., and Canadian governments are expected to prepare their positions regarding the USMCA review, in a context of increased protectionism and President-elect Trump's threats to impose tariffs on all foreign goods.
Executive Summary:
The Reform proposes the administrative reorganization of the Mexican State to align it with the principles of the current administration, essentially with a view to reiterated Republican austerity. In order to achieve this, the powers granted by the CPEUM to these OCAs will be transferred, within the scope of their respective subjects, to other public entities, most of which belong to the institutional structure of the Federal Executive Branch.
The subjects of the Reform, their guarantor bodies to date, as well as the public entities that will assume their functions, will be those indicated in the table included below. We note that the functions in matters of protection of personal data held by individuals have not yet been assigned to any private body:
¿What will happen with the financial resources that were destined for these OCAs and that will be saved with their disappearance??
The Reform indicates that the economies and savings generated by the extinction of these OCAs will be allocated to the Pension Fund for Welfare that is created in terms of the applicable legislation.
¿How long will it take to make adjustments to the corresponding laws to comply with the provisions of the Reform??
The Congress of the Union (Chamber of Senators and Deputies) has a period of ninety (90) calendar dayscounted from the entry into force of the Reform (that is, counted from December 21, 2024), to make the necessary adjustments to the secondary laws ("Secondary Laws") that correspond to comply with said Reform.
This involves making changes to the texts contained in existing laws, or the issuance of new laws that would govern matters of transparency, access to public information, protection of personal data (for both the private and public sectors), economic competition, telecommunications and broadcasting.
It will be important to monitor the adjustments that are made to the Secondary Laws of each of the subjects, in order to know with certainty the public entity that will ultimately assume the functions of protecting personal data held by individuals and its terms.
¿When do OCAs expire and until when do their legal acts cease to have effect??
The OCAs will expire once the Secondary Laws come into force. However, as for the IFT, they will expire 180 days after the Secondary Laws come into force.
Likewise, legal acts issued by the OCA's prior to the Secondary Laws coming into force will continue to have all their legal effects until they are concluded by the passage of time or in the manner established in said legal acts. These legal acts will be understood as being in force and will bind, in their terms, the substitute public entities that will assume the functions of the OCA's, as appropriate, without prejudice to the right of the parties to ratify, modify or rescind them later.
In particular, the enabling titles granted by the IFT will remain in force under their terms, without prejudice to the fact that the concessionaires and/or authorized parties must comply with the obligations and compensations that may be imposed on them by the Federal Executive, in the exercise of its powers.
¿How long will the current OCA Commissioners remain in office??
Commissioners who continue in their positions when the Reform comes into force (i.e., December 21, 2024) will conclude their functions upon the entry into force of the Secondary Laws, except for those whose term of their appointment ends previously. As for the IFT Commissioners, their functions will conclude up to 180 days after the entry into force of the Secondary Laws.
In cases where it is necessary to make a new appointment to integrate the quorum of one of the OCAs, the duration of this designation may not exceed the entry into force of the Secondary Laws.
https://dof.gob.mx/nota_detalle.php?codigo=5745905&fecha=20/12/2024#gsc.tab=0
Executive Summary:
For many years, the jurisprudence 1a./J. 63/98[1] of the Supreme Court of Justice of the Nation (“SCJN”) established a clear rule: disputes arising from real estate leasing should be processed exclusively through civil proceedings. According to this criterion of the SCJN, real estate leasing should not be considered an act of commerce since it is not listed among the acts that article 75 of the Commercial Code considers as commercial.
This interpretation was revised and abandoned by the First Chamber of the SCJN on April 30, 2023, through jurisprudence 1a./J. 170/2023 (11a.)[2]. Thus, the SCJN ruled that, under certain conditions, the commercial route may be the most suitable for resolving conflicts related to the leasing of real estate. This change responds to the need to recognize that some leases are for commercial speculation purposes and are essentially acts of commerce.
The starting point for determining the admissibility of the commercial route lies in defining whether the specific real estate lease constitutes an act of commerce. In this regard, the SCJN highlighted that the list of acts of commerce contained in article 75 of the Commercial Code is not exhaustive, but merely illustrative and, therefore, there may be commercial acts that are not explicitly mentioned in said section –such as real estate leasing-. Likewise, our Supreme Court specifies that section XXV of the article in question provides that commercial acts include both those expressly included as well as those analogous ones carried out for commercial speculation purposes.
It was therefore determined that, although real estate leasing is not explicitly classified as an act of commerce, it could be considered as such by analogy. Indeed, if the leasing has a commercial speculative purpose, it must be considered as an act of commerce, which leads to any related dispute being resolved by commercial means.
This change of approach has several implications. On the one hand, it provides greater certainty to the parties involved in a commercial real estate leasing dispute, since there is a clearer criterion on the procedure to be followed in these cases. However, it may generate uncertainty about the nature of the act, which, in turn, would generate doubts regarding the substantive and procedural rules that must be applied in the event of a dispute.
In this sense, although this new position of the SCJN offers an approach more in line with reality, it also poses the challenge of operating in an environment where the admissibility of the route will depend on the judicial interpretation of the type of act –civil or commercial-.
In conclusion, the new SCJN criterion opens the doors to processing real estate lease disputes in the commercial court and marks a significant change in the Mexican legal field. By abandoning the jurisprudence that restricted these disputes to the civil court, and by allowing, under certain conditions, the commercial court, the possibility of certain leases is recognized –those for commercial speculation purposes– may be considered acts of commerce.
Executive Summary:
At the outset, it is essential to note that, in cases of unconstitutionality actions, the SCJN requires a qualified majority of 8 votes to invalidate a norm. If such a majority is not achieved, as was the case with the unconstitutionality actions filed against the constitutional reform of the Federal Judiciary, these actions are deemed "dismissed." This means that the provisions remain valid for general application but do not necessarily receive a definitive pronouncement on their constitutionality.
The reform proposed by the Federal Executive, which was published on September 15, 2024, in the Federal Official Gazette, amends several provisions of the Political Constitution of the United Mexican States,[1] including, among others: (i) the composition of the Supreme Court of Justice of the Nation, (ii) the process for appointing Justices of the Supreme Court, Circuit Court Judges, and District Judges by establishing a popular election process for these positions, and (iii) setting a maximum period of six months for the resolution of matters, counted from the date they are brought to the judicial body’s attention.
In this regard, it is important to mention that the dismissal of these unconstitutionality actions does not preclude future challenges, as the provisions may be questioned again through other constitutional control mechanisms, such as amparo lawsuits or constitutional controversies. Thus, despite recent restrictions, the amparo lawsuit could be used to challenge the reform in specific cases, especially when violations of fundamental rights or legislative procedures are alleged.
This aligns with the SCJN’s established precedents, which recognize that constitutional reforms can be analyzed under parameters of constitutional regularity, such as the pro persona principle and human rights. per person and human rights.
Additionally, while constitutional controversies have traditionally been limited to disputes between branches of government, the SCJN has developed criteria that could allow challenges against provisions that violate essential principles, such as the functional division of powers or the federal pact.
Furthermore, the recent constitutional supremacy reform, effective as of November 1, 2024, introduces a significant element to this analysis. This reform prohibits challenging constitutional amendments through unconstitutionality actions, constitutional controversies, and amparo lawsuits. While the provision aims to strengthen the supremacy of constitutional reforms, its impact on the legal framework could be problematic, as it significantly restricts the available constitutional control mechanisms to question potential violations of legislative procedures or the content of these reforms. This could lead to a more rigid interpretation of the Constitution, potentially affecting the principle of progressivity and effective access to constitutional justice.
Given the above, we believe that the SCJN's ruling does not represent a definitive conclusion to the discussions surrounding the judicial reform. Other constitutional control mechanisms and new actions by affected parties could lead to a more detailed analysis in the future regarding irregularities in the reform's approval process and the constitutionality of its content.
[1] https://www.gob.mx/cms/uploads/attachment/file/892010/REFORMA_AL_PODER_JUDICIAL__2_CS.pdf
