VOLUME 2000
January 19, 2000
Number 2
Foreign Tax Law
Bi-Weekly Bulletin
ENVIRONMENTAL PROTECTION LAW AMENDED
ENVIRONMENTAL
PROTECTION LAW AMENDED
A Decree amending the General Law of Ecological Balance and Environmental Protection
was published on January 7, 2000 in the Diario Oficial of Mexico.
This Decree amends articles 3, 15 and 39 of the Law. The following is a full text translation of those articles as amended by the Decree. The full text of the Law can be found in FOREIGN TAX & COMMERCIAL LAWS ON CD-ROM - Mexico, published by Foreign Tax Law, Inc.
Article 3. (Environmental
Law)
For purposes of this law, the following definitions will be applicable:
I. environment - the conjunction of natural or man-induced elements that interact in a determined space and time;
II. protected natural areas - zones in national territory and those places where the nation exercises its sovereignty and jurisdiction, in which the original environment has not been significantly altered by man and which have been placed under protection;
III. rational use - the use of natural elements in a manner which is efficient, socially useful, and produces preservation of the elements and of the environment;
IV. pollution - the presence in the environment of one or more pollutants or of any combination thereof that causes ecological imbalance;
V. pollutant - any material or energy in any of its physical states and forms, which upon being incorporated or acting on air, water, soil, flora, fauna, or any natural element, alters or modifies its natural composition and condition;
VI. environmental risk - a risk situation deriving from human activities or natural phenomena which could place the integrity of one or more ecosystems in danger;
VII. control - inspection, supervision, and application of the measures necessary for implementation of the provisions established herein;
VIII. ecological criteria - the guidelines intended to preserve and restore ecological equilibrium and protect the environment;
IX. ecological imbalance - alteration of the interdependent relationships between natural elements which form the environment, that negatively affects the existence, transformation and development of man and other living beings;
X. ecosystem - the basic functional unit for interaction of living organisms among themselves and these with the environment, in a determined space and time;
XI. ecological equilibrium - the interdependent relationship between elements forming the environment that make possible existence, transformation, and development of man and other living beings;
XII. natural element - physical, chemical, and/or biological elements that present themselves in a determined time and space without the human influence;
XIII. ecological emergency - a situation deriving from human activities or natural phenomena that upon severely affecting natural elements places one or several ecosystems in danger;
XIV. land fauna - the land animal species who exist subject to natural selection processes, whose populations seasonally or permanently live in Mexican territory and develop freely, including lesser populations found under the control of man, as well as domestic animals that due to abandonment become wild and therefor are susceptible to capture and appropriation;
XV. land flora - the land vegetable species as well as mushrooms, that exist subject to natural selection processes and develop freely in Mexican territory, including populations or specimens of these species found under human control;
XVI. aquatic flora and fauna - biological species and biogenic elements which have as their seasonal, partial or permanent habitat water, in Mexican territory and in the zones where the nation exercises sovereignty rights and jurisdiction.
XVII. environmental impact - modification of the environment caused by human or natural action;
XVIII. environmental impact statement - the document through which significant or potential environmental impact is provided, on the basis of studies, concerning a work or activity, as well as the manner of avoiding or minimizing the environmental impact if same is negative;
XIX. improvement - the increase in environmental quality;
XX. ecological regulation - the process of planning directed toward evaluating and scheduling land use and management of natural resources in Mexico and the zones over with the nation exercises sovereignty and jurisdiction, to preserve and restore ecological equilibrium and to protect the environment;
XXI. preservation - the conjunction of policies and measures to maintain conditions which encourage evolution and continuity of natural processes;
XXII. prevention - the conjunction of preventive provisions and measures taken to avoid environmental deterioration;
XXIII. protection - the conjunction of policies and measures to improve the environment and to control and prevent its deterioration;
XXIV. natural resource - natural elements susceptible to being used to human benefit;
XXV. ecological region - the unit of Mexican territory which shares common ecological characteristics;
XXVI. waste - any material generated in extraction, mining, transformation, production, consumption, use, control or treatment processes whose quality does not permit using it again in the process that generated it;
XXVII. hazardous wastes - all residues, in any physical state, that due to corrosive, toxic, poisonous, reactionary, explosive, flammable, infectious or irritating biological properties, represent a danger to ecological equilibrium or to the environment;
XXVIII. restoration - conjunction of activities tending toward recovery and re-establishment of conditions propitious for evolution and continuity in natural processes;
XXIX. Secretariat - the Secretariat of Urban Development and Ecology (SEDUE); and
XXX. natural vocation; conditions existing in an ecosystem to sustain one or more activities without resulting in ecological imbalances.
XXXIV. (Added by Decree of January 3, 2000, effective January 8, 2000) Minister: The Minister of Environment, Natural Resources and Fishing;
XXXV. (Added by Decree of January 3, 2000, effective January 8, 2000) Natural Vocation: Conditions that an eco-system presents to sustain one or more activities without imbalance of ecology being produced, and
XXXVI. (Added by Decree of January 3, 2000, effective January 8, 2000) Environmental Education: Process of training directed to all the society, both in the school environment and in the extracurricular environment, in order to facilitate an integrated perception of the environment for the purpose of attaining more rational conduct on behalf of the social and environmental development. Environmental education includes the assimilation of knowledge, the formation of values, the development of competences and conduct for the purpose of guaranteeing the preservation of life.
Article 15. (Environmental
Law)
For formulation and implementation of ecological policy and issuance of technical
standards and other instruments provided for herein, relating to preservation
and restoration of ecological equilibrium and environmental protection, the
Federal Executive Branch shall observe the following principles:
I. ecosystems are the common patrimony of the society and the nation's life and productive possibilities depend on their equilibrium;
II. ecosystems and their elements must be used in a manner which assures optimum sustained productivity compatible with their equilibrium and integrity;
III. authorities and individuals must assume responsibility for protecting ecological equilibrium;
IV. responsibility regarding ecological equilibrium includes both present conditions and those that will determine the quality of life for future generations;
V. prevention of causes that generate them is the most efficient means of avoiding ecological imbalances;
VI. use of renewable natural resources must be done in a manner which assures maintenance of their diversity and renovation;
VII. non-renewable natural resources must be used in a manner that avoids the danger or exhausting them and of generating adverse ecological effects;
VIII. coordination among the different levels of government and coordination with society are indispensable for the efficacy of ecological action;
IX. the principal subjects of ecological cooperation are not only individuals but include social groups and organizations. The purpose of concerted ecological action is to reorient the relationship between society and nature;
X. in exercising the powers conferred by law on the State to regulate, promote, restrict, prohibit, orient, and, generally, induce individual action in economic and social fields, the criteria for preservation and restoration of ecological equilibrium shall be considered;
XI. all persons are entitled to enjoy a healthy environment. The authorities, pursuant to this and other laws, shall take the measures to preserve this right;
XII. control and prevention of environmental pollution, proper use of natural elements, and improvement of the natural environment in human settlements, are fundamental elements to elevate the population's quality of life;
XII. it is in the interest of the nation that activities which are carried out within national territory and in those zones where it exercises its sovereignty and jurisdiction do not affect the ecological equilibrium of other nations or zones under international jurisdiction; and
XVIII. (Added by Decree of January 3, 2000, effective January 8, 2000) The competent authorities in equality of circumstances before other nations, shall promote the preservation and restoration of the global and regional ecosystems;
XIX. (Added by Decree of January 3, 2000, effective January 8, 2000) Through the quantification of the cost of the contamination of the environment and of the depletion of the natural resources provoked by economic activities in a determined year, the Domestic Net Ecological Product shall be calculated. The National Institute of Statistics, Geography and Informatics shall integrate the Domestic Net Ecological Product into the System of National Accounts, and
XX. (Added by Decree of January 3, 2000, effective January 8, 2000) Education is a means to value life through the prevention of environmental deterioration, preservation, restoration and the sustainable development of the ecosystems and to thereby avoid ecological imbalance and environmental damages.
Article 39. (Environmental
Law)
(Amended by Decree of January 3, 2000, effective January 8, 2000) The competent
authorities shall promote the incorporation of ecological content, knowledge,
values and skills, in the various educational cycles, especially at the basic
level, as well as in the cultural training of the children and young people.
Likewise, they shall sponsor their promised share of massive communication media in the strengthening of the ecological conscience and the socialization of sustainable development plans.
The Minister shall promote the generation of strategic knowledge by means of various actions concerning nature, the interaction between the elements of the ecosystems, including the human element, the evolution and transformation thereof, for the purpose of gathering information for drawing up programs that encourage the prevention (of harm), restoration, conservation and protection of the environment.
AMENDMENTS
TO THE LAW OF PROTECTION AND DEFENSE OF USERS OF FINANCIAL SERVICES, LAW OF
CREDIT INSTITUTIONS AND THE GENERAL LAW OF INSURANCE INSTITUTIONS AND MUTUAL
COMPANIES
A Decree amending the Law of Protection and Defense of Users of Financial Services,
the Law of Credit Institutions and the General Law of Insurance Institutions
and Mutual Companies was published on January 5, 2000 in the Diario Oficial
of Mexico. This Decree repeals article 135 of the Law of Insurance Institutions
and Mutual Companies, which appears COMMERCIAL LAWS OF THE WORLD - MEXICO and
the Mexican Commercial Law section of FOREIGN TAX & COMMERCIAL LAWS ON CD-ROM,
published by Foreign Tax Law, Inc.
Otherwise, the Decree repeals article 118-B of the Law of Credit Institutions, article 93 Bis of the Federal Law of Bond Institutions and article 31 of the Law on Retirement Savings Systems.
Amendments to article 7 of the Law of Protection and Defense of Users of Financial Services apply the Fiscal Code of the Federation (see TAX LAWS OF THE WORLD - MEXICO and the Mexican Tax Law section of FOREIGN TAX & COMMERCIAL LAWS ON CD-ROM) to notification that are not provided in the Law, though such application is not applicable to notifications and resolutions handed down within the procedures of arbitration and conciliation followed in accordance with that Law.
A new article 50 bis was added to the Law of Protection and Defense of Users of Financial Services by the Decree:
Article 50 bis.
(Financial Services User Protection Law)
(Added by Decree of December 11, 1999, effective January 6, 2000) Each Financial
Institution must employ a Specialized Unit, the object of which shall be to
attend to questions and claims of Users. Said Unit shall be subject to the following:
I. The Head of the Unit must have the faculties to represent and obligate the Financial Institution for the fulfillment of the agreements derived from the attention given to the claim;
II. The Unit shall have staff in each state in which the Financial Institution has branches or offices;
III. The expenses derived from its functioning, operation and organization shall be charged to the Financial Institutions;
IV. It must respond in writing to the User within a period not exceeding 30 working days as from the date of reception of the questions or claims, and
V. The head of the Specialized Unit must present a quarterly report to the National Commission, differentiated by product or service, identifying the operations or areas that register the largest number of questions or claims, with the scope that the National Commission shall deem proper. That report must be made in the format that is authorized for the purpose, or, if applicable, has been proposed by the National Commission therefor.
The presentation of claims before the Specialized Unit shall suspend the limitations of actions which might have been pending.
Financial Institutions must inform of the Specialized Unit's location, hours and its liable party or parties, by means of notices placed in visible places in all their branches. Users may, at their choice, present their question or claim before the Specialized Unit of the Financial Institution in question or before the National Commission.
Articles 54, 56, 61, 65, 69, 70, 71, and 72 have been amended, as follows:
Article 54. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The National
Commission shall inform the Public on the claims indexes that are presented
before it by each one of the Financial Institutions. The information shall be
generalized without identifying the Users involved.
Article 56. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) As a measure
of protection to the User, the National Commission shall review and, if applicable,
propose to the Financial Institutions modifications to the models of standard
contracts utilized in their various operations, in terms of the provisions in
item XVIII of article 11 of this Law.
By standard contract, for the purposes of this Law, shall be understood the contract drawn up unilaterally by a Financial Institution, whose stipulations on the terms and conditions applicable to the contracting of operations or services are uniform to all Users.
Article 61. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The National
Commission shall not take cognizance of the claims for variations of the rates
of interest contracted between the User and the Financial Institution, when
those variations are a direct consequence of general conditions observed in
the markets.
Article 65. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) Claims must
be filed within the term of one year as from the occurrence of the act from
which they arose. A claim may be presented, at the election of the User, to
the domicile of the National Commission or to the Delegation thereof that is
closest to the domicile of the User, or to the Specialized Unit to which article
50 Bis of this Law refers, of the corresponding Financial Institution.
Article 69. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) In the case
in which the User does not appear at the hearing of conciliation and does not
present justification of his absence within the 10 working days following the
date established for its procedure, the claim shall be considered set aside
and another may not be presented before the National Commission for the same
facts, a formal statement being duly drawn up in which the absence of the User
is shown on the record.
Failure of the creditor or its representative to appear shall not impede the conciliation hearing from being carried on.
Article 70. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) If the Financial
Institution does not comply with any of the obligations derived from the conciliation
agreement, the National Commission shall order the corresponding Financial Institution
to enter the contingent liability that derives from the claim, or, if applicable,
the reserve, in the terms of that which is established in article 68, item X.
Editor's Note: The following is a translation of the new redaction of Article 68, item X: "Once the conciliation hearings are concluded and the parties do not reach an agreement, the National Commission will order the corresponding financial institution to enter the contingent liability that derives from the claim, giving notice of this, if applicable, to the National Commission to which its supervision corresponds. That accounting record may be cancelled by the financial institution, under its strict liability, if after 180 calendar days have elapsed after its entry, the claimant has not asserted his rights before the competent judicial authority or the arbitral proceeding pursuant to this Law has not been begun.
In the case of Insurance Institutions and Mutual Companies, the order mentioned in the first paragraph of this item, will be referred to the constitution and investment of a technical reserve specified for outstanding performance obligations, pursuant to the General Law of Insurance Institutions and Mutual Companies, the amount of which must not exceed of the sum insured. Said reserve will be entered in a determined account."
Article 71. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The Regional,
State or Local Delegations of the National Commission to which a claim has been
presented, shall be empowered to conduct the conciliatory procedure and, if
applicable, the arbitration that the parties claim the benefit of, up to the
drawing up of the plan of the award.
Article 72. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The Financial
Institutions may cancel the liability or reserve when the lapse of the suit
has been decreed, estoppel has proceeded, a supervening exception of the prescription
period occurs or a ruling that has caused a final judgment in which the Institution
was absolved has been handed down. It also may be cancelled when a payment has
been effected to the satisfaction of the User.
A new article 72 Bis has been added, as follows:
Article 72 Bis.
(Financial Services User Protection Law)
(Added by Decree of December 11, 1999, effective January 6, 2000) In arbitral
judgments in amicable composition or of strict law, the parties of common accord
may be held totally or partially to the rules of procedure established by the
National Commission, which shall be published in the Diario Oficial of the Federation.
In those cases in which a matter represents a conflict of interest in any manner between the arbitrator proposed by the National Commission and any of the parties, the arbitrator must be excused from taking cognizance of the matter, in which case the National Commission must propose a new arbitrator to the parties within the two following working days, who may, at the election of the parties, continue the arbitration procedure at the stage at which it was in at the time of being appointed or else totally or partially replace the procedure.
Arbitrators who pursuant to the preceding paragraph must be excused and are not, may be challenged by the affected party, without prejudice to the liability they incur for damages caused.
The causes of removal to which this article refers shall be determined pursuant to the provisions in article 39 of the Federal Code of Civil Procedure.
A new article 72 Ter has been added, as follows:
Article 72 Ter.
(Financial Services User Protection Law)
(Added by Decree of December 11, 1999, effective January 6, 2000) The following
requirements must be met in order to be proposed as an arbitrator by the National
Commission:
I. To be a Mexican citizen in full possession of his rights;
II. To have a title and professional license as an Attorney at Law or its equivalent;
III. To have had at least three years of legal practice in financial matters;
IV. To have resided in the country during the year immediately preceding his appointment;
V. To possess recognized competence and honor, and
VI. Not to be a shareholder, director, auditor or to exercise any type of employment in any Financial Institution.
It is an indispensable requirement that the legal practice to which item III refers is in the area to which the matter which is the object of the claim presented, in order that the National Commission may propose the arbitrator to take cognizance of the controversy.
Articles 73, 74, 77, 80, 81, 83, 84, 94 (first paragraph), 96, and 97 have been amended as follows:
Article 73. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) In the agreement
upon which the arbitral judgment in amicable composition is based, the parties,
at their election, shall enable the National Commission or any of the arbitrators
proposed thereby, to resolve the controversy raised, in informed truth and good
faith, and they shall establish the questions that must be the object of the
arbitration by common agreement and in the manner specified, establishing the
steps, formalities, terms and period to which the arbitration must be subject.
The Commercial Code (see the translation of the full text in COMMERCIAL LAWS OF MEXICO or in the Mexican Commercial section of FOREIGN TAX & COMMERCIAL LAWS ON CD-ROM) shall be applied to all that is not provided in the arbitration procedure.
Article 74. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) In the agreement
upon which the arbitral judgment of strict law is based, the parties shall empower,
upon their election, the National Commission or any of the arbitrators proposed
thereby, to determine the steps, formalities, terms and periods to which the
arbitration shall be subject, according to the provisions in article 75 of this
Law.
Article 77. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) Whoever
functions as an arbitrator, after analyzing and evaluating the proofs and pleas
contributed by the parties, shall issue a finding that shall resolve the controversy
raised by the User.
The findings handed down by the arbitrators proposed by the National Commission which have not been complied with in the period to which the first paragraph of article 81 of this Law refers, must be sent to the National Commission by the arbitrator, for the purpose of proceeding pursuant to that which is provided in articles 80 and 81.
Article 80. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The National
Commission shall adopt any measures necessary for fulfillment of the awards
handed by the Commission itself, as well as those issued by the arbitrators
proposed thereby, by which it is mandated, if applicable, that the award shall
be paid to the person in whose favor it has been issued, or the financial service
demanded should be restored thereto.
Agreements concluded before the National Commission shall have the nature of a final judgment.
Article 81. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) If the award
issued by the National Commission or by the arbitrator proposed thereby demands
that the Financial Institution indemnify the User, the Financial Institution
shall have a period of 15 working days as from the notification to do so.
If the Financial Institution does not comply within the time stipulated, the National Commission shall send the file to the competent court for its execution.
The administrative authorities and the tribunals shall be obligated to assist the National Commission in the sphere of their respective competence. When the National Commission requests the assistance of the public police force, the competent authorities shall be obligated, under their strictest liability, to render the necessary assistance to the extent and for all the time that it shall require.
Article 83. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) In the case
of Insurance Institutions and Mutual Companies, as well as of Bond Institutions,
in case of non-execution of the award, the auction of invested securities shall
be ordered pursuant to the respective Laws.
Article 84. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) In order
to verify the fulfillment of the awards, the National Commission shall require
the director general or the official who carries out its activities to check
within the following 72 hours, that the payment to which the Financial Institution
has been condemned has been made or the demanded financial service has been
restored, in the terms of article 81; if such verification is omitted, the National
Commission shall impose a fine on the same Financial Institution that may be
up to the amount of that which has been ordered to be paid or else that which
is established in article 94, item VII and shall newly require said official
to verify the punctual fulfillment within the following 15 working days. If
it is not done, the terms of article 81 shall proceed and, if applicable, the
provisions relative to contempt of a judicial order shall be applicable.
Without prejudice to the preceding, the affected party may petition the National Commission for the delivery of the file to the competent court for its execution, which shall be carried out pursuant to that which is provided in the proper law.
Article 94. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The National
Commission shall be empowered to impose the following penalties:
I. Fine of 200 to 1,000 days' wages, to the Financial Institution that does not furnish the information that the National Commission requests, pursuant to article 47 of this Law;
II. Fine of 200 to 1,000 days' wages, to the Financial Institution that does not furnish the information that the National Commission requests, for the fulfillment of its object, in accordance with articles 12, 53 and 58 of this Law;
III. Fine of 500 to 2,000 days' wages, to the Financial Institution that does not present the report or the additional information to which items II and VI, respectively, of article 68 of this Law refers;
IV. Fine of 500 to 2,000 days' wages, to the Financial Institution that does not attend the conciliation hearing to which article 68 of this Law refers;
V. Fine of 500 to 2,000 days' wages, to the Financial Institution that does not comply with that which is provided by item IX of article 68 of this Law;
VI. Fine of 500 to 3,000 days' wages, to the Financial Institution that does not register the contingent liability or does not set aside the specific reserve for obligations pending to fulfill to which articles 68, item X and 70 of this Law refer;
VII. Fine of 100 to 1,000 days' wages, to the Financial Institution that does not comply with the arbitral award in the period established in article 81 of this Law;
VIII. Fine of 500 to 2,000 days' wages, to the Financial Institution that does not comply with that which is provided in article 50 Bis of this Law; and
IX. The fine to which article 84 of this Law refers.
Article 96. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) In order
to impose the fine that corresponds, the National Commission must give a hearing
to the Financial Institution presumably in violation, within the period that
the National Commission itself shall fix and which may not be less than five
working days and must take into account the economic conditions thereof, the
gravity of the offense committed, as well as the necessity of avoiding recurrences
and practices tending to contravene the provisions contained in this Law.
Article 97. (Financial
Services User Protection Law)
(Amended by Decree of December 11, 1999, effective January 6, 2000) The fines
must be paid by the Financial Institution penalized, within the 15 working days
following the date of their notification. When as a result of the interposal
of any measure of defense, the fine is totally or partially confirmed, its amount
shall be updated in terms of the Fiscal Code of the Federation and must be paid
within the five working days following that on which the competent authority
notified the offender of the final resolution. If the fines are not paid in
time by the offenders, they shall be made effective through the Minister.