MIP Abogados

ANTI-MONEY LAUNDERING. Must all commercial companies identify Controlling Beneficiaries for the purposes of Anti-Money Laundering? August 1, 2025

Ricardo Martín — Fri, 01 Aug 2025 15:46:00 +0000

On July 16^th, 2025, the “Decree amending and adding various provisions to the Federal Law for the Prevention and Identification of Operations with Illicit Resources, and amending Article 400 Bis of the Federal Criminal Code” was published in the Official Gazette of the Federation. Said Decree entered into force on the 17^th of the same month and year, with certain exceptions, such as evaluations under a Risk-Based Approach, or training and internal or external audits.

In connection with the above, we have received various concerns, the most common of which is whether or not all commercial companies must identify Controlling Beneficiaries for the purposes of the Federal Law for the Prevention and Identification of Operations with Illicit Resources (Anti-Money Laundering Law), its Regulations, and the General Rules.

Comments

As a result of this reform, “Chapter IV Bis on Controlling Beneficiaries” was added to the Anti-Money Laundering Law, which essentially specifies in Articles 33 Bis and 33 Ter that: (i) commercial companies must comply with the requirements made by the authorities to determine who their Controlling Beneficiary is and keep the supporting information; (ii) in the event of the transfer of ownership or the creation of rights over shares or stock, commercial companies must submit the corresponding notice in the electronic system operated by the Ministry of Economy; and, (iii) they must register in the aforementioned electronic system the information to identify the person or group of persons who meet the requirements to be considered Controlling Beneficiaries of said companies.

However, a penultimate paragraph was added to section III of article 3 of the Anti-Money Laundering Law, specifying that for the purposes of Chapter IV Bis, a Controlling Beneficiary shall be understood to be the individual who ultimately has effective control over a legal entity in terms of subsection b) of that section, “even if said legal entity is not a Customer or User of someone who carries out vulnerable activities or acts or operations are carried out with them in their name.”

Given the lack of clarity and, therefore, the poor wording of the previous provision, it is necessary to note the intention of the legislator in the Explanatory Memorandum of the “Initiative with Draft Decree amending, adding, and repealing various provisions of the Federal Law for the Prevention and Identification of Operations with Illicit Resources, and amending Articles 11 bis and 400 bis of the Federal Criminal Code”, in which it stated that, in view of the proposed changes to Recommendation 24 of the Financial Action Task Force and its Interpretative Note, all countries are required to establish a register of beneficial owners or use an alternative system that allows the authorities efficient access to information on such owners.

Consequently, the proposal to add Chapter IV Bis to the Anti-Money Laundering Law is intended to ensure that all commercial companies, regardless of whether or not they carry out a vulnerable activity, are required to identify and register the individual or group of individuals who control them.

Therefore, although we believe that this obligation is redundant and contrary to the nature and purpose of the Anti-Money Laundering Law, it is clear that all commercial companies must identify the Controlling Beneficiaries for the purposes of said Law, its Regulations, and the General Rules.

It should be noted that, in accordance with the Second Transitory Article of the aforementioned Decree, the Ministry of Finance and Public Credit, after consulting with the Tax Administration Service, will amend the corresponding General Rules within 12 months of its entry into force (i.e. no later than July 17^th, 2026).

However, we believe that this obligation should not imply an additional administrative burden for companies for the following reasons:

Since December 15^th, 2018, any modification or incorporation of partners or shareholders in the shareholding structure of a corporation or limited liability company must be reported through a notice submitted to the Ministry of Economy’s “Electronic System for Commercial Company Publications”, in accordance with the provisions of Articles 73, second paragraph, 129, second paragraph of the General Law on Commercial Companies and 50 Bis of the Commercial Code. Consequently, this obligation suggests keeping the entries in the books of Meetings, Share Register, and Capital Variations up to date, noting the Federal Taxpayer Registrations of the partners or shareholders.

Likewise, starting in fiscal year 2020, legal entities must file a notice with the Federal Taxpayers Registry within 30 business days of any change or addition to their shareholding structure, reporting the name and code of their partners or shareholders in said Registry, in accordance with Article 27, sections A, subsection II, and B, subsection VI, of the Federal Tax Code and rule 2.4.15. of the Miscellaneous Tax Resolution for 2025.

Finally, on January 1^st, 2022, Articles 32-B Ter, 32-B Quáter, and 32-B Quinquies of the Federal Tax Code came into force, incorporating the obligation for legal entities, trustees, trustors or trustees, as well as contracting parties or members of legal entities, to obtain and keep, as part of their accounting records, reliable, complete, and up-to-date information on their Controlling Beneficiaries and to provide it to the Tax Administration Service when required.

We believe that companies will have the necessary information to identify their Controlling Beneficiaries for the purposes of the Anti-Money Laundering Law, its Regulations, and the General Rules, provided that they have up-to-date information for the aforementioned corporate and tax purposes related to changes in their shareholding structures and their Controlling Beneficiaries for tax purposes.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, August 1^st, 2025

TAX. Differences between the amounts contained in the Digital Tax Receipts by Internet and the amounts stated in the Tax Returns? June 23, 2025

Ricardo Martín — Mon, 23 Jun 2025 15:57:24 +0000

By virtue of multiple acts that the tax authority is persistently carrying out with taxpayers, such as, (i) communications for alleged inconsistencies in their tax obligations; (ii) invitation letters to regularize their tax situation; (iii) temporary suspensions of their Digital Seal Certificates; (iv) rejections in relation to the cancellation notices in the Federal Taxpayers Registry for merger of companies.

Comments

The common denominator argued by the tax authority is that according to the information contained in its institutional databases, there are differences, inconsistencies or lack of concordance between the amounts stated in the Digital Tax Receipts by Internet (e-invoices) issued in a certain period and the amounts stated in various returns, whether annual, monthly final, withholding or provisional payments filed in the same period.

However, it is necessary to point out that the amounts stated in the referred returns of a certain period with the amounts contained in the e-invoices issued in the same period, a situation that the tax authority has not purged, nor analyzed or valued with the purpose of understanding, due to the moment in which the taxes are caused, or due to other concepts that will not be reflected in the e-invoices, such as the annual adjustment for inflation or the exchange gain.

The amounts indicated in the e-invoices only reflect, among others, the amounts corresponding to (i) the price of the agreed consideration for income tax (IT) purposes; (ii) the value of the acts or activities for value added tax (VAT) purposes; (iii) the VAT transferred; or (iv) if applicable, the respective amounts for withholdings, whether IT or VAT. However, such amounts do NOT imply amounts actually paid or collected.

E-invoices are electronic documents that describe, in essence, the goods acquired, or services rendered, the price or consideration agreed upon, as well as the taxes; that is, they are merely descriptive digital documents that do not cover payments that have actually been made and, therefore, that the taxes in question have already been incurred.

On the contrary, the amounts stated in the various tax returns reflect, among others, the respective amounts (i) of income obtained for IT purposes; (ii) of acts or activities taxed by VAT; (iii) of withholdings made, whether IT or VAT. That is, such amounts DO imply amounts actually paid and/or collected.

Tax returns in their different aspects, i.e., provisional or final payments, withholdings or the fiscal year, are official forms with which taxpayers state their tax obligations (e.g., income), as well as their payment obligations for taxes incurred.

Consequently, the income is never obtained, unless it occurs first, with the simple issuance of the e-invoices, or that the consideration is effectively paid or collected by the simple issuance of the e-invoices, in such a way that the amounts declared will not coincide with the amounts stated in the e-invoices issued in the same periods.

In fact, it is a real and eminently reiterated situation that the amounts stated in the e-invoices are effectively paid or collected in periods other than the periods in which the e-invoices were issued, that is, the payments occurred in a month other than the month in which the e-invoices were issued.

It is materially impossible and legally incorrect to cause and pay either IT or VAT on amounts recorded in e-invoices that have not been received; consequently, it is neither possible nor correct to pay and declare a payment that has not actually been made.

Therefore, the amounts stated in the various tax returns will not be the same amounts contained in the e-invoices issued in the same periods, for that reason, the amounts stated will not coincide with the amounts stated in those e-invoices.

Recommendations

Any taxpayer (i.e. individual or legal entity) that is subject to an act by the tax authority in which it states that there are discrepancies between the amounts stated in the e-invoices issued in a certain period and the amounts stated in different returns filed in the same period, must explain in detail the origin and reason for such discrepancies, as well as provide the information that proves it by cross-checking it with the respective work papers, in order to disprove the origin and reasons for such act.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, June 23^rd, 2025

AMPARO. Prohibition of granting Stay of Executions with General Effects June 18, 2024

Ricardo Martín — Tue, 18 Jun 2024 18:58:53 +0000

On June 14^th, 2024, the “Decree amending articles 129 and 148 of the Amparo Law, Regulatory of Articles 103 and 107 of the Political Constitution of the United Mexican States, in matters of stay of execution of the challenged act and unconstitutionality of general rules” was published in the Official Gazette of the Federation. Said Decree entered into force on the 17^th of the same month and year.

Comments

This amendment repeals the last paragraph of article 129 of the Amparo Law, which established the following: ““The amparo jurisdictional body may exceptionally grant the stay of execution, even when dealing with the cases provided for in this article, if in its judgment the refusal of the stay of execution could cause greater harm to the social interest.”

Likewise, a last paragraph is added to article 148 of the Amparo Law, which specifies the following: “In the case of amparo proceedings that resolve the unconstitutionality of general rules, in no case the stay of executions that are issued will establish general effects”.

With this amendment, it is categorically prohibited for Judges to grant stay of executions with general effects in those amparo trials that resolve the unconstitutionality of general rules, that is, the stay of executions granted can never have a benefit for the community.

We consider that the aforementioned amendment violates the principle of progressivity stated in Article 1^st of the Mexican Constitution, since any authority has the obligation to promote, respect, protect and guarantee human rights, precisely in accordance with the aforementioned principle, that is, that human rights cannot decrease, on the contrary, they can only increase, which implies that they progress gradually.

Therefore, both the Federal Executive and the Legislative Branch cannot issue general rules or amendments to our legislation that limit, restrict, eliminate or disregard the scope and protection recognized by several.

Evidently, this amendment serves political interests exclusively and with the sole purpose of not preventing the advancement of legislative acts that imply the creation or development of Federal Government projects extremely questionable, with lack of transparency and with non-accountability, such as, the opening of the Felipe Ángeles International Airport, the “Mayan Train”, the “Dos Bocas Refinery”, the militarization of the National Guard, the breaking of the independence of the electoral authority, etc.

Nevertheless, as the Mexican Supreme Court of Justice has recognized, in accordance with the “control of constitutionality” or “control of conventionality ex officio” that every Judge is obliged to observe and apply, we consider that Judges can continue granting stay of executions to the complainers that participate in a certain market or industry, as well as the rest of the participants who have not filed an amparo lawsuit challenging the rule in question, in order to avoid alterations that benefit certain participants to the detriment of others.

Such is the case, for example, of the unconstitutionality of the amendment to the Electrical Industry Law published in the Official Gazette of the Federation on March 9^th, 2021, which favored the generation of electricity generated by the Federal Electricity Commission, since the stay of executions were granted to the complainers of the amparo lawsuits against said amendment and, additionally, to any participant in the electricity market, in order to avoid providing privileges to some to the detriment of other participants.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, June 18^th, 2024

CONSTITUTIONAL. Sensitive and controversial constitutional amendment to the Federal Judiciary Branch June 14, 2024

Ricardo Martín — Fri, 14 Jun 2024 18:55:34 +0000

Currently, the Federal Executive publicly insists on the need to approve the Annex 15 of its constitutional amendment proposal submitted on February 5^th, 2024, before the Chamber of Deputies, with which the Federal Judiciary Branch (FJB) would be substantially modified.Comments

The most relevant aspects of the aforementioned amendment are:

The Justices of the Mexican Supreme Court of Justice (MSCJ), the Magistrates of the Collegiate Circuit Courts (CCC) and the District Judges would be appointed by the election through direct and secret vote of the citizens (more than 1,500 officials).
The MSCJ would be integrated with 9 Justices instead of 11 and would only function in Plenary session, thus disappearing its Chambers.
The mandate of the MSCJ Justices would be 8, 11 and 14 years, depending on who obtains the most votes during the election process.
The mandate of the CCC Magistrates and the District Judges would be 9 years and they could be re-elected.
Both the Executive Branch, as well as the Legislative and Judicial Branches, would propose the candidates to occupy positions in the FJB.
The electoral authority would be in charge of organizing the election process of the MSCJ Justices, CCC Magistrates and the District Judges.
The Justices of the MSCJ, the Magistrates of the CCC and the District Judges who are currently in office, would conclude their duties in advance and on the date on which the elected officials take up their duties.
The Federal Judiciary Council would be replaced by the Judicial Administration Body, which would be made up of officials from the 3 Branches.
A Judicial Disciplinary Court would be created whose members would be appointed by the election through direct and secret vote of the citizens.
The granting for stay of executions with general effects against laws or regulations would be prohibited.
The amendment provides that secondary legislation to implement the constitutional reform must be issued within 180 calendar days (approximately 6 months) following the entry into force of the reform.

We consider that this amendment would not improve the delivery of objective, impartial, rational, prompt and expeditious justice; on the contrary, it would deteriorate it by subjecting the members of the FJB to the interests of the Executive and Legislative Branches. We estimate that it would cause, among others:

The breaking of the division of Powers as one of the basic pillars of democracy.
Multiple conflicts of interest (e. type of corruption) between the elected candidates and those who proposed them and provided them with resources, even with the voters themselves.
Exponential corruption in its several modalities without mechanisms to prevent and mitigate it.
The absence of career Justices, Magistrates and District Judges within the FJB.
Having candidates chosen without the broad, in-depth knowledge and legal technique required by such delicate assignments.
Direct interference by other Powers in the FJB would totally undermine its impartiality.
The FJB would be subject to purely political interests and not to the interests of true social justice, which would erode its independence.

If the reform is approved in practically all its terms, all the means and defense mechanisms that we have as citizens to protect ourselves from illegal and arbitrary acts by the authorities would be restricted and coerced, since those would be resolved by officials with questionable capacity and lack of impartiality, among other deficiencies.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, June 14^th, 2024

SEVERAL MATTERS. General Law of Alternative Dispute Resolution Mechanisms January 29, 2024

Ricardo Martín — Mon, 29 Jan 2024 18:51:26 +0000

On January 26^th, 2024, the General Law of Alternative Dispute Resolution Mechanisms (Law) was published in the Official Gazette of the Federation, which purpose is to establish the bases, general principles, and distribution of powers in alternative dispute resolution mechanisms (ADRM) that will consist, but not limited to: (i) Negotiation; (ii) Collaborative Negotiation; (iii) Mediation; (iv) Conciliation; and (v) Arbitration.

Comments

We estimate that the most relevant aspects are the following:

The ADRM stated in the Law will be applicable to several matters, such as family law, civil law, commercial law, corporate law, criminal law, administrative law, tax law, social security law, industrial property law, etc.
The ADRM will be governed by multiple principles, such as: Good Faith, Confidentiality, Honesty, Impartiality, Neutrality, etc.
The ADRM National Council will be the governing body in matters of public policies regarding the ADRM.
There will also be an ADRM National Council exclusively on administrative law matters.
The aforementioned National Councils will be responsible for issuing the certificates to the Facilitating Individuals, whether public or private, whose main faculty will be to promote the communication and agreement for the resolution of disputes between the Parties through the ADRM.
The Federal Judiciary or the federal entities judicial power, as well as the Federal Court of Administrative Justice (FCAJ) and the Courts of Administrative Justice of the federal entities (CAJ), will have their own ADRM Public Centers to carry out the procedure and provision of ADRM services.
The Facilitating Individuals will have public faith for the conclusion of the Agreements signed by the Parties, as well as for issuing certified copies of said Agreements and their annexes.
Any person may request to access to the ADRM procedure verbally, in writing or online before the Public or Private ADRM Centers.
The processing of the ADRM may or may not derive from a jurisdictional procedure, so if it is the latter case, they may not exceed the period of 3 months, unless the Parties agree to extend the period.
In any jurisdictional procedure, the authority must inform the Parties of the possibility and right they have at any time, until before the resolution that concludes the procedure is issued, to access to the ADRM Public Center to resolve their dispute through the conclusion of an Agreement.
On the occasion of the ADRM procedure, the necessary sessions will be held with the presence of the Parties, with the purpose of reaching the conclusion of an Agreement, whether total or partial, or, if it is not reached, they will be left to except their rights to enforce them in the way and manner they deem appropriate.
From the registration of the Agreements signed by the Parties and subscribed by the Facilitating Individual in the corresponding Agreement System, these will have res judicata
In the case of Agreements concluded in administrative law matters, these will have res judicata effects once approved by the corresponding Magistrate of the FCAJ or CAJ concerned.

Both the Federal Congress and the Legislatures of the federal entities, no later than January 27^th, 2025, must issue the corresponding regulatory updates for fulfill the Law.

Although the ADRM currently exists in Mexico City and the federal entities, such as the Mediation Agreement in family law, civil law, commercial law and criminal law, the Law will seek to unify the figure of the ADRM at the national level and expand it to other matters, such as administrative law. We consider that the ADRM in tax law will be independent of the figure of the Conclusive Agreement that is processed before the Taxpayer Ombudsman.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, January 29^th, 2024

TAX. Fiscal Stimulus for Key Sectors of the Export Industry October 24, 2023

Ricardo Martín — Tue, 24 Oct 2023 18:59:03 +0000

With the entry into force of the “Decree that grants fiscal stimulus to key sectors of the export industry consisting of the immediate deduction of investment in new fixed assets and the additional deduction of training expenses” (Decree), it intends that those companies that seek to optimize their operations through the nearshoring strategy and those companies that are currently located in Mexico, belonging to certain key sectors in the export industry, access to certain benefits and thus encourage competition and investment in strategic sectors.

Comments

Among the most notable aspects are the following:

The Decree grants a fiscal stimulus to (i) legal entities that pay taxes under the general regime of law; (ii) legal entities that pay taxes under the simplified trust regime; and (iii) individuals with business and professional activities, who are primarily dedicated to the production, processing, or industrial manufacturing, as well as the export of certain goods in the following sectors:

Human and animal food.
Fertilizers and agrochemicals.
Pharmaceutical industry.
Electronic components for computers and telephones.
Medical use.
Accessories for electrical installations.
Engines for cars, vans, trucks, and aircraft.
Electrical and electronic equipment for cars, vans, trucks, trains, ships, and aircraft.
Cinematography or audiovisuals.

Taxpayers may choose to apply the fiscal stimulus when they estimate that, during the tax years 2023 and 2024, the amount of their income from exports will represent at least 50% of their total invoicing in each fiscal year.

The fiscal stimulus consists of choosing to make the immediate deduction of the investment in new fixed assets acquired from October 12^th, 2023 until December 31^st, 2024, deducting in the year in which the respective investment is made, the amount resulting from applying to the original amount of the investment, only the percentages established in the second article of the Decree, instead of those stated in articles 34, 35 and 209, sections B and C of the Income Tax Law.

Taxpayers must maintain the use of the investments for a minimum period of 2 years immediately following the tax year in which the immediate deduction is made and a specific record of said investments is kept.

Taxpayers may make the aforementioned immediate deduction, only in the case of investment in new fixed assets, whose acquisition is intended to be used exclusively for the development of the activities of the key sectors listed above.

Additionally, these taxpayers may apply in the annual tax return for the fiscal years of 2023, 2024 and 2025, a fiscal stimulus consisting of an additional deduction equivalent to 25% of the increase in the expense incurred for training received by each of their workers in the corresponding fiscal year. Training being understood as those that provide technical or scientific knowledge linked to the activity of the taxpayer, provided to active workers who are duly registered with the Mexican Social Security Institute.

Taxpayers who choose to apply the fiscal stimulus described above, in addition to the requirements established in tax legislation regarding investment deductions, must comply with the following:

Be registered in the Federal Taxpayer Registry and have the tax email-box enabled and register valid means of contact.
Have an opinion on compliance with tax obligations in a positive sense.
Submit the corresponding notice in a timely manner.

Recommendations

The Decree, although it offers relevant benefits for certain taxpayers, it is essential to carry out a detailed review and analysis of the specific case, due to the lack of clarity of certain particularities, exceptions and/or requirements that it provides. Those taxpayers who choose to apply the aforementioned fiscal stimulus must prepare and keep all the necessary supporting information and documentation by which they demonstrate that the respective investments and training provided, as the case may be, are closely related to their activities.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Mexico City, October 24^th, 2023

CORPORATE. Use of Electronic Media for the holding of Shareholders Meetings October 23, 2023

Ricardo Martín — Mon, 23 Oct 2023 18:40:13 +0000

On October 20^th, 2023, the Decree amending several provisions of the General Law of Commercial Companies (GLCC) was published in the Official Gazette of the Federation, with the purpose of regulating and expressly enabling commercial legal entities to use various electronic, optical or any other technology tools and means in the daily development of its corporate activities (e.g. holding shareholders meetings).

Comments

Among the most notable aspects are the following:

The shareholders meetings, administrative bodies and/or sessions of the board of directors, as the case may be, may be held through the use of electronic, optical or any other technology (e. remotely) as long as they are established in the By-laws of the corresponding commercial legal entity and there are mechanisms or measures that allow access, accreditation of the identity of the attendees, the meaning of their vote and the corresponding evidence is generated.
The meetings, as well as the sessions, may be carried out totally or partially through in-person or virtual attendance through the aforementioned means.
It will not be understood that a meeting is held outside the respective corporate domicile when it is carried out through the use of electronic, optical or any other technology.
In the case of Limited Liability Companies (LLC), the calls will be made by publishing a notice in the electronic system established by the Ministry of Economy and must include the agenda and the signature of the person issuing them.
In accordance with the provisions set forth in the Commercial Code regarding the use of technologies, the minutes of the respective meetings may be signed with an electronic signature.

It should be noted that those commercial legal entities established prior to this amendment may incorporate into their By-laws the provisions that allow them to have the possibility of holding virtual meetings and sessions, as well as recognizing the use of electronic, optical, and other technologies in order to document the minutes and other related documents of the commercial legal entity.

The Decree will enter into force on October 23^rd, 2023, with the exception of the modifications to the second paragraph of article 81 of the GLCC regarding the LLC´s calls, which will enter into force on April 22^nd, 2024.

Due to the above, commercial legal entities will be authorized to validly hold the corresponding meetings and sessions remotely, as long as the participation is simultaneous, and interaction is allowed in the deliberations in the same way that would be carried out in a face-to-face meeting.

Recommendations

It is essential to take advantage of technology for legal purposes, in such a way that commercial legal entities must promptly carry out the pertinent modifications to their By-laws in order to include the corresponding rules for the use of electronic, optical or any other technology means. These modifications will provide greater agility and efficiency to commercial legal entities in the development of their corporate activities.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Mexico City, October 23^rd, 2023

TAX and LABOR. Unconstitutionality of the concepts of Services or Specialized Works defined by the Ministry of Labor and Social Welfare August 16, 2023

Ricardo Martín — Wed, 16 Aug 2023 18:33:48 +0000

In connection to our Newsletter of June 29^th, 2023, the Mexican Supreme Court of Justice (MSCJ) recently published the final resolution that resolved the “Amparo” Review 687/2022, with which it confirmed the constitutionality of several legal provisions that prohibit labor subcontracting in general, with the exception of cases of specialized services or execution of specialized works.

However, in said final resolution it was determined that the Ministry of Labor and Social Welfare (MLSW) is not entitled to define the concepts of specialized services or works.

Comments

From the analysis of the aforementioned final resolution, we highlight the following premises and conclusions of the MSCJ:

From article 13 of the Federal Labor Law (FLL), the elements that allow to define what is the type of subcontracting allowed are derived, by expressing in said provision that the services or works should not be part of the corporate purpose or the predominant economic activity of the beneficiary.

In such a way, the “specialization” is linked to the analysis of the corporate purpose and the predominant economic activity of who would benefit from the services or works, and these must not coincide with the contracted services or works.

However, the “Ruling by which the general dispositions for the registry of individuals and companies that render specialized services or execute specialized works set forth in article 15 of the Federal Labor Law are specified” (Ruling) exceeds the provisions set forth in the article 13 of the FLL.

Although article 15 of the FLL empowers the MLSW to issue general rules, this only entails the issuance of the administrative regulation of the registration procedure before the Register of Contractors of Specialized Services or Specialized Works (REPSE). In other words, said authorization in no way implies that the MLSW is empowered to define what should be understood by specialized services or works.
The fact that the MLSW intends to establish or develop the material content of the specialized services or works is not reduced to a technical aspect of the registration procedure before the REPSE but allows the cases in which subcontracting is possible to be expanded or restricted.

In addition, the FLL does not indicate as distinctive factors those set forth in the second article, section VII of the Ruling; that is, the training, certifications, permits or licenses that regulate the activity, equipment, technology, assets, machinery, risk level, average wage range and experience.

Due to the above, the MSCJ resolved that the second article, section VII of the Ruling through which the MLSW defines what should be understood by specialized services or works, is unconstitutional.

In addition with the foregoing, we consider that the “Guide for complying with the obligations regarding the registry upon the Register of Contractors of Specialized Services or Specialized Works for individuals or legal entities that provide specialized services or carry out specialized works within the framework of the amendments in labor subcontracting matters” issued on August 26^th, 2021 by the MLSW is illegal, considering that specialized services or works are configured according to the space or place in which the contractor’s workers provide such services or execute those works.

Recommendations

It is important to continue expediting pertinent preventive actions, as well as the review and analyze the contracting schemes for the provision of services implemented or to be implemented, considering the previous comments, due to the escalation of coordinated inspections carried out by the Tax Administration Service, the Mexican Social Security Institute, the National Institute Housing Fund for Workers and the MLSW according to the Bulletin 39/23 issued by the latter.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Mexico City, August 16^th, 2023

TAX and LABOR. Mexican Supreme Court of Justice reaffirms the prohibition of Labor Subcontracting June 29, 2023

Ricardo Martín — Thu, 29 Jun 2023 17:52:44 +0000

On June 14^th, 2023, the press communication 212/2023 was published in the Mexican Supreme Court of Justice (MSCJ) website, through which it was informed that, during the session that took place on that same date, the Second Chamber of the MSCJ reaffirmed that labor subcontracting is generally prohibited, for violating workers’ rights and evading tax obligations. Hence, labor subcontracting regarding specialized services or the execution of specialized works is exceptionally permitted.

Comments

The referred communication sets forth that the Second Chamber of the MSCJ validated diverse requirements imposed to the companies dedicated to specialized subcontracting; nevertheless, it notes that it was determined that the Ministry of Labor and Social Welfare (MLSW) is not entitled to define the concept of specialized services or works.

The communication points out as background the “Amparo” Review 687/2022[1] through which the complaining party exposed, among other matters, that article 13 of the Federal Labor Law (FLL) violates the legal security principle by conditioning the exercise of subcontracting to specialized services without promptly and precisely defining such concept; that is to say, the elements in order to esteem a specialized service or work are not delimited, leaving it to the discretion of the tax and labor authorities.

Also, the complaining party mentioned that it is not enough that the denoted legal disposition refers to the corporate purpose and economic activity of the beneficiary, since those elements are related to the prohibition itself but do not form part of the concept of specialized services or works, as such.

Finally, the complaining party stated that the “Ruling by which the general dispositions for the registry of individuals and companies that render specialized services or execute specialized works set forth in article 15 of the Federal Labor Law are specified” (Ruling), published in the Official Gazette of the Federation on May 24^th, 2021, precises the definition of “specialized services or works”, which violates the hierarchical subordination principle for going beyond the FLL provisions themselves, since in these articles, the MLSW was limited to regulate the inscription process upon the Register of Contractors of Specialized Services or Specialized Works (i.e. REPSE).

Until the resolution through which the “Amparo” Review 687/2022 was resolved is published, we will know with detail the meaning and scope of the referred resolution.

Nevertheless, we esteem that the precision pointed out in the communication is relevant, because if it is confirmed that the MLSW does not have powers to define what must be understood regarding specialized services or works, intrinsically would demonstrate the illegality of the “Guide for complying with the obligations regarding the registry upon the Register of Contractors of Specialized Services or Specialized Works for individuals or legal entities that provide specialized services or carry out specialized works within the framework of the amendments in labor subcontracting matters” issued on August 26^th, 2021 by the MLSW, with which it has supported the exercise of verification powers, regardless of the impact that the aforementioned Ruling may suffer.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Mexico City, June 29^th, 2023

[1] The origin of the present matter is the “Amparo” Review 121/2022 resolved by the Second Collegiate Court in Labor Matters of the First Circuit, who determined the applicability of the original jurisdiction of the MSCJ (i.e jurisdiction reservation) for the resolution of the constitutionality of the challenged provisions, and the Indirect “Amparo” 1934/2021 resolved by the Eight District Court in Labor Matters of Mexico City.

CIVIL and LEGALTECH. Civil and Familiar Procedure National Code June 8, 2023

Ricardo Martín — Fri, 09 Jun 2023 00:51:21 +0000

On June 7^th, 2023, the Civil and Familiar Procedure National Code (CFPNC) was published in the Official Gazette of the Federation (OGF), which purpose is to establish a single civil and familiar procedural regulation based on the human rights set forth in the Mexican Constitution and International Treaties.

Comments

We consider that the importance of the CFPNC is based on the fact that the legal controversies related to the most common issues lie in civil and familiar matters. According to the recent National Census of the Administration of State Justice of the National Institute of Statistics and Geography, more than 65% of the cases processed in the first instance in all the Judicial Courts of the States were in said matters.

The CFPNC establishes specific provisions for all trials and procedures that will be predominantly oral, such as: (i) Civil Ordinary; (ii) Civil Summary; (iii) Civil Executive; (iv) Special Mortgage; (v) Special Real Estate Lease; (vi) Arbitration Trial, among others, which we estimate that should expedite and improve the processing and resolution of such trials.

Special provisions are established for the exercise of the preparatory means in the civil executive trial for alleged debts and the content of a document or the signature embodied in it is recognized.

Its states the bases for the preparation of the arbitration trial when an arbitration clause has been established in an agreement, but the arbitrator has not been appointed.

All procedures regulated by the CFPNC may be processed online (i.e. Internet), which situation we consider highly relevant, since the digitization of justice is encouraged throughout Mexico, through the use of the advanced electronic signature, the holding of virtual hearings and virtual proceedings, as well as the importance of documents generated by electronic, digital or optical means.

The application of the CFPNC will enter into force at the federal and local levels when the Federal Congress and the Local Congresses issue certain Declarations no later than April 1^st, 2027, respectively.

The Declarations must indicate the date on which the CFPNC will enter into force and must be published in the OGF and in the Official Gazettes of the States, as appropriate.

Between the Declarations and the entry into force of the CFPNC there must be a maximum period of 120 calendar days (i.e. vacatio legis). In all cases in which the Declarations have not been issued, the entry into force of the CFPNC will be no later than April 1^st, 2027.

Consequently, once the CFPNC enters into force, the Federal Code of Civil Procedures will be abrogated, as well as the civil and familiar procedural legislation of the States.

Recommendations

There will be a reasonable period for the different Judicial Courts to implement the necessary measures for the due observance and application of this new system of common oral justice, which will cause a challenge for individuals and legal entities with the purpose of promoting digital justice for the resolution of their controversies, as happens in administrative matters.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Mexico City, June 8, 2023