New restrictions for the importation of products regulated by the Ministry of Energy are introduced.

A presidential decree was published yesterday in the afternoon edition of the Federal Register, establishing a series of measures to fight the illicit trading of fuels, in connection with the importation of products regulated by the Ministry of Energy (the “Decree”).

According to the Decree, the restrictions contemplated thereunder are part of the actions by the Mexican federal government to prevent crimes related to: (a) the importation of products declared under tariff codes that do not correspond to the products that is actually being imported (including products used to alter or adulterate fossil fuels), and (b) the importation of products without having the required import permits, thereby omitting the payment of the applicable tax contributions, increasing the environmental, safety and health risks associated with the handling of such products and causing damages to motor vehicles.

Following please find a summary of the most important provisions of the Decree:

Restricted Products

The Decree is applicable to the products referred in the tariff codes of the Law of General Import and Export Taxes listed in the Sole Annex of the Decree (the “Restricted Products”; see English translation attached).

Prior Resolution by the Ministry of Energy

From the date when the Decree becomes effective (October 24, 2023, the “Effective Date”) and until the regulations and regulatory adjustments referred below are issued:

• Those interested in importing any Restricted Products shall evidence before the Undersecretary of Hydrocarbons of the Ministry of Energy, that the volume and destination of the relevant products is necessary for their productive process, the products will be used for the development or performance of lawful activities and their importation does not contravene the Decree. In addition, if the importation of the relevant products requires an import permit issued by the Ministry of Energy, the importer shall comply with the requirements applicable for the granting of such permit.
• Importers who already have an import permit granted by the Ministry of Energy for the importation of the relevant Restricted Products, may continue with their operations, provided they inform to the Undersecretary of Hydrocarbons of the Ministry of Energy, within a maximum period of 30 business days from the Effective Date, that they intention to continue with the operations authorized under their permits and that the volume and destination of the Restricted Products is necessary for their productive process, is intended for the development or performance of a licit activity and that the import of such Restricted Products does not contravene the Decree.
• The Ministry of Energy shall analyze the information provided by the applicants or permit holders and issue a resolution within a maximum term of 15 business days.

Additional Regulatory Actions

Within the 10 business days following the Effective Date:

• The Ministry of Economy and the Ministry of Energy shall regulate the non-tariff control measures for the importations and the traceability of Restricted Products.

Within the 30 business days following the Effective Date:

• All federal authorities (including, the Ministry of Economy, the Ministry of Energy, the Ministry of Environment and Natural Resources, and the Ministry of Infrastructure, Communications and Transportation, the Tax Administration Service, the National Customs Agency of Mexico, the Energy Regulatory Commission, the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector and the Federal Attorney General's Office for Environmental Protection), shall make adjustments to the registries, roosters, systems and platforms, physical or electronic, regarding the importation and traceability of the Restricted Products, and make the necessary adjustments to the applicable regulations or any other action required for the effective compliance of the Decree.
• The National Customs Agency of Mexico, in coordination with the Tax Administration Service, shall determine the specific customs offices through which the customs clearance for the importation of the Restricted Products shall be carried out.

Inspection and Verification

The Ministry of Infrastructure, Communications and Transportation, the Energy Regulatory Commission, the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector, the Federal Attorney General's Office for Environmental Protection and the Federal Attorney General's Office for Consumer Protection, as well as the National Guard, shall increase and intensify the inspection and verification of the transfer facilities, intermodal terminals, storage or any other facility or means of transportation in which the Restricted Products are deposited, and the compliance with the applicable regulations, including those issued by the Ministries of Energy and Economy pursuant to the Decree.

Moreover, all federal authorities in charge of public security, as well as the Ministry of National Defense and the Ministry of the Navy are instructed to coordinate and assist in the enforcement of the Decree.

Guaranteed Supply

The supply in the Mexican territory of the Restricted Products shall be guaranteed by the Federal Executive branch, through the centralized and decentralized authorities and instrumentalities, including the State Productive Enterprises, who shall coordinate in the fight against the illicit fuels market (which is identified as a matter of national and public interest), and carry out the appropriate actions to achieve such purpose, including monitoring the market and the traceability of the fuels offered to the general public, in order for the Mexican State to have the necessary information to maintain, reorient or eliminate measures to eliminate the problematic situation described in the Decree.

Interpretation

The Ministry of Energy is responsible for interpretation of the Decree.

The Decree may be consulted in Spanish here.