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Mexico: New obligations for commercialization and distribution activities before the Energy Regulatory Commission

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In brief

On 26 July 2022, the Energy Regulatory Commission (CRE) submitted before the National Regulatory Improvement Commission (CONAMER) a preliminary document draft of the General Administrative Provisions1 that establishes (i) new obligations and compliance procedures for commercialization and distribution permit holders of oil-refined products or petrochemicals, as well as (ii) new requirements and procedures for applications to secure permits before CRE (“New DAGCs“).

Applicability:

It is important to consider that the New DAGCs mainly results applicable for the following activities: (i) commercialization of oil-refined products or petrochemicals and (ii) distribution of oil-refined products through means other than pipelines, excepting LP gas.

Is the New Project in force now?

No, pursuant to the document draft of the New DAGCs there is no specific date for its publication and release, therefore such provisions are not in force yet.

However given its relevant impact, from a regulatory perspective, it is relevant to monitor the evolution on the New DAGCs. Our Firm will be reporting any progress and changes on the same.

Key Takeaways

The New Project mainly includes:

  • New obligations:

CRE is imposing new significant obligations that permit holders must comply to maintain their permits. For instance, permit holders will be obliged to submit two new reports in connection with their discounts and business revenue.

Additionally, there are new requirements in the procedures to secure new permits from a regulatory perspective.

  • New sanctions:

CRE is including new revocation causes that may impact current commercialization and distribution permits.

  • Key term:

Permit holders will have 90 days to comply with new obligations. After this period ends, CRE may sanction permit holders pursuant to the applicable regulatory framework.

  • Publication date:

It does not anticipate the publication date in the Federal Official Gazette yet, therefore, there is no certainty of when it will become effective.Our Firm will be happy to further discuss with you how the New DAGCs may impact your operations, as well as to analyze tailor made legal strategies for your business to mitigate your risk.

1 General Administrative Provisions that establish the requirements for applications, modifications, updates and obligations for the commercialization of oil-refined products or petrochemical and distribution of by means other than pipelines, except for liquefied petroleum gas for both activities.

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Author

Benjamín Torres is the leader for Baker McKenzie's Energy, Mining & Infrastructure (EMI) and Projects Practice Group in Latin America and Mexico.
He is recognized as "Highly Regarded Lawyer" by IFLR, and is also listed as a recommended lawyer by Who's Who Legal for oil, gas, and project finance in Mexico. He is recognized as one of the country's leading lawyers in the energy and natural resources area (Band 1) by Chambers and LEGAL 500. Benjamin has been named "Lawyer of the Year" for Energy and Natural Resources by The Legal 500 at the 2023 Mexico Awards. This award recognizes the leading legal players from private practice and in-house who have contributed to the Mexican and global market. For several years, he has been acknowledged by the magazine Petróleo & Energía as one of the top 100 leaders in Mexico's energy industry and he currently serves in its Editorial Board. Additionally, in 2021, Benjamin was awarded the recognition of "Stand Lawyer" during the Stellar Performance Stand Out Talent Survey of Acritas and Chambers Latin America.
Benjamin is Board member of Association of International Energy Negotiators (formerly AIPN) and served as President of the Energy Committee in AmCham Mexico during 2018 through 2021. In addition, he has lectured for the Energy and Sustainability Law Master's Degree at Universidad Autónoma de Nuevo León and taught Energy Law classes at Universidad Autónoma de Ciudad Juarez and Business Law at ITESM Campus Ciudad Juarez. He has served at the Energy Editorial Boards of Reforma and Norte newspapers.

Author

Pamela joined Baker McKenzie's Energy, Mining & Infrastructure Practice Group (Projects) in 2016. She has a solid industry expertise, with over four years of experience advising companies in cross-border transactions involving energy and infrastructure projects, mergers and acquisition, project development including regulatory and finance matters, as well as in government contracting. Prior to joining the Firm, Pamela worked in the Banking & Finance Practice, where she acquired experience on project finance and the negotiation of domestic credits, as well as in banking and financial regulatory issues.

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