Decree that sets forth the products which import and export are subject to regulation by the Ministry of Energy of Mexico

On December 28, 2020, the Decree that sets forth the products which import and export are subject to Regulation by the Ministry of Energy of Mexico (the "Decree"), became effective.

This Decree supersedes the Decree that establishes the classification and codification of hydrocarbons and oil products which import and export are subject to a prior permit from the Ministry of Energy, published in the Federal Official Gazette on December 29, 2014, and its subsequent amendments.

Among the main changes proposed under the Decree, permits for the import and export of hydrocarbons and oil products will no longer be granted for 20 years – only for one or five years. Interested parties must submit their request through a writ that includes the general data of such interested party, of the products in question and the requirements for permits of one or five years, as applicable.

To obtain a one-year permit, the interested parties must (1) prove that they have a corporate purpose related to the activity of the requested permit and hold a commercialization and/or transportation permit granted by the Energy Regulatory Commission; (2) indicate the means by which the products will be transported to the corresponding delivery or exit point; (3) file information on suppliers and customers, and the documents that evidence a business relationship with them; among other requirements.

It is worth noting that for obtaining permits related to natural gas in a gaseous state, there are additional requirements.

Furthermore, for import permits, if the interested party is the holder of a commercialization or distribution permit to sell gasoline, diesel or jet fuel to service stations or final users, such party must prove compliance with the obligations under the Public Policy on Minimum Storage of Oil Products (Política Pública de Almacenamiento Mínimo de Petrolíferos).

For five-year permits, in addition to the requirements provided for the one-year permit in question, the interested party must, among other things, demonstrate contractual commitments with suppliers and customers with a duration of at least five years.

For the granting of permits, the Ministry of Energy must take into consideration the analysis of the corresponding energy balance, the conditions of energy safety and the guarantee of the supply of the oil product or hydrocarbon in question within the national territory. Among other more important considerations, the Ministry of Energy may discretionally deny the requested permits, in case that derived from the analysis of the energy balance, it calculates impact on the energy safety or guarantee of supply in national territory.

Likewise, additional oil products that require an import permit, were added to the Decree, namely Ethyl Alcohol, Benzol, Toluol, Xylol, lubricating oils or lubricant preparations based on mineral oils derived from petroleum, Ammonia and Ethylene, among others.

The Decree also establishes obligations consisting of submitting monthly reports to the Ministry of Energy.

Finally, a specific section was included for the import of nuclear materials and fuels, including radioactive materials, equipment that generates ionizing radiation, equipment and dual-use goods and related technology, susceptible to serve for the proliferation and manufacture of nuclear weapons of massive destruction.

These products are included so that the National Commission for Nuclear Safety (Comisión Nacional de Seguridad Nuclear y Salvaguardias) may evaluate and determine if the import authorization is appropriate.

For more information regarding the content of the Decree and the obligations set forth thereunder, please contact César Fernández.

Special thanks to Alejandro López-Velarde (Mexico City), who works under the supervision of César Fernández, for his assistance in the preparation of this content.