Chambers & Partners has detected the use of an ad blocker.
We make use of tailor-made ads to enhance your experience of our website.
Please 'whitelist'

Mexico in Latin America

Use the dropdowns below to find recommended firms and editorial commentary.

Practice areas

Mexico Overview

In the last twelve months, there have been a number of administrative, judicial and legislative actions that have had and will have a major impact on the economic, legal and political environment in Mexico.

Business Environment 

2016 and 2017 have been marked by great volatility of the Mexican peso primarily due to soft oil prices, uncertainty about the future of the North American Free Trade Agreement (NAFTA), and elections for governors in multiple states.

Economic growth remains sluggish with GDP rates of 2.5% or less, and is fuelled more by consumption than investment. The results of the presidential elections in the United States created a very difficult environment at the beginning of 2017, especially because of the uncertainty of whether NAFTA would be terminated. A lot has been said about the existing economic integration of North America and the pros and cons of NAFTA, but little or nothing has been said on the legal front.

Among others, NAFTA serves as an investment protection treaty; that is, that an investor of one NAFTA country who invests in another NAFTA country enjoys a level of protection that cannot be ignored, including free convertibility and transferability of currency, and the right to seek relief from international arbitration panels against certain decisions of the host country which otherwise would have to be adjudicated by the courts of the host country. Preserving the stability and legal safety of billions in investments made in the last 25 years would seem at least as important as determining the future of the North American market and this should be considered.


COFECE, the Mexican Antitrust Commission created in 2014, has launched a number of unprecedented investigations that have concluded with record fines, and there are other investigations in progress. The aggressiveness of COFECE is creating more awareness as to how (i) major M&A transactions are structured (including the sharing of information among competitors), and (ii) certain businesses operate; major fines include:

1. Pension Funds Four AFOREs (pension funds managers) were found liable of entering into agreements to cap transfers of accounts among them. COFECE determined that such agreements, designed to protect the portfolio of clients of such AFOREs and to save on marketing expenses, deterred competition in a regulated industry. The fine of 1.1 billion pesos is the largest fine ever imposed in Mexico's financial sector. Apparently the fine has been paid at least by three AFOREs; one AFORE obtained a reduction by agreeing to cooperate with COFECE.

2. Real Estate In 2016 COFECE authorised the acquisition of real estate assets to a specific purchaser. The transaction closed a few months later with a different purchaser affiliated to the entity originally authorised by COFECE. All the parties involved were fined, including the notary public who formalised the transaction, who was fined more than 8.5 million pesos. The transaction did not seem to present any antitrust concern but closing through an affiliate instead of the purchaser authorised by COFECE prompted the fine.

3. Treasury Bills In 2017 COFECE launched an investigation against banks and other financial intermediaries for potential collusion and manipulation of the primary and secondary markets. The potential ramifications of the investigation are enormous. The investigation has prompted the Mexican Banking and Securities Commission (CNBV) to commence a similar investigation.

Energy Reform 

It is common to hear that Mexico's energy reform of 2013 is moving very slowly. After 75 years of the PEMEX and CFE monopolies, it is not possible to assume that just because there were major changes to the Constitution and the Law, conditions would change overnight. It is a long haul; new regulators and agencies had to be created, staffed, organised and funded; the mindset of the employees of both PEMEX and CFE had to adapt to the rules, and vested interests have to be confronted, all at a time where oil prices have been dipping for almost four years.

The bidding rounds conducted by the Mexican government to seek investment in exploration and production of hydrocarbons have been increasingly successful. Both domestic and international oil producers and others have committed to invest billions of dollars in exploration and production primarily in shallow waters.

The energy reform has also caused courts and regulators to act to protect the market and open access to it, as well as to protect the interest of the State in the industry. Below are two examples:

1. Tied Sales While PEMEX had a legal monopoly, PEMEX would sell gasoline to gas stations forcing them to contract the transportation of gasoline with PEMEX (who would subcontract the service with the PEMEX Union). COFECE fined PEMEX 653 million pesos and the matter went up to the Supreme Court, who ruled that gas stations purchasing gasoline from PEMEX or even importing it are free to contract the transportation with whomever they prefer.

2. Bidding Caps The Ministry of Finance (SHCP) has been authorised to set price limits in biddings for hydrocarbon projects conducted by the government to avoid operational risks in the future which could jeopardise the viability of the projects.

National Anti-Corruption System 

In 2015, The Mexican Constitution was amended to provide the foundations of the National Anti-Corruption System. The implementing legislation came in 2016 and it has become effective.

The National Anti-Corruption System is the instance of co-ordination between governmental authorities at all levels with the purpose of preventing, detecting and sanctioning serious administrative offences and corruption acts, as well as to audit and control public resources.

The System has a Co-ordinating Committee formed by the heads of the Superior Auditing Office of the Federation (the ASF), the Specialised Public Prosecutor's Office to Combat Corruption (the Anti-Corruption Special Prosecutor) and the Secretary of the Public Function; the president of the Federal Court of Administrative Justice; the president of the National Institute of Transparency, Access to Information and Protection of Personal Data; a representative of the Federal Judiciary Council; and a representative of the Civic Participation Committee.

The Co-ordinating Committee shall, inter alia: (i) establish mechanisms of co-ordination with local systems; (ii) design and promote policies of auditing and control of public resources, prevention, control and deterrence of administrative offences and corruption acts, and their causes; and (iii) submit non-binding recommendations to authorities with the purpose of an institutional strengthening to prevent administrative offences and corruption and improve internal control.

A Civic Participation Committee has been formed by five Mexican citizens, renowned for their contribution to transparency, accountability or for fighting corruption. Its purpose is to aid the Co-ordinating Committee in fulfilling its functions.

States shall establish local anti-corruption systems for the purposes set forth above. State legislatures shall have state autonomous auditing entities to verify actions of states and municipalities in respect of funds, local resources and public debt.

The main aspects of the reform include the following:

• The authority of Congress was expanded to (i) establish the framework for the National Anti-Corruption System, (ii) reinforce the authority of the Federal Court of Administrative Justice, which now has a special section to sanction and impose liability on public officials, private companies and individuals involved in serious administrative offences, to compensate for damages affecting entities of the Federal Government and their assets, and (iii) provide for specific sanctions to private companies and individuals involved in corruption acts or serious administrative offences.

• The House of Representatives has the authority to designate, by a qualified vote, those in charge of the internal auditing bodies of the constitutionally autonomous organisations making use of the federal budget, and the Senate has been granted authority to ratify the minister of internal control.

• The ASF has been strengthened to (i) audit the use of federal appropriations by states and municipalities, (ii) require entities making use of the federal budget to provide information from past fiscal years at any time, and (iii) promote actions before the Federal Court of Administrative Justice or the new Anti-Corruption Special Prosecutor against public officials or private companies and individuals making use of the federal budget.

• Public officials now have the obligation to file a declaration of their assets and interests, in addition to their tax return (declaración 3 de 3).

• Internal auditing bodies of the federal, state and municipal entities have the authority to take action to prevent, correct and investigate acts that could result in administrative liability and to sanction those actions outside the scope of authority of the administrative courts, and also to report acts or omissions that may constitute felonies before the Anti-Corruption Special Prosecutor.

• Administrative courts can impose (i) economic sanctions, (ii) prohibition to participate in public procurement processes, and (iii) compensation for damages and losses caused to the public finances or federal, state or municipal public entities. In addition, the suspension of a company’s activities, its dissolution or intervention can be ordered, to the extent the company had an economic benefit and the participation of its directors, auditing body or partners is proved in the offence, or in those cases in which the company is used in a systematic manner to be involved in serious administrative offences.

• Liability may be avoided or attenuated if a private entity has in place an 'integrity policy' which is adequate. The law provides guidelines for implementing an integrity policy.