Volume 5, Number 10, Page 5

MEXICO

Congressional Highlights

compiled by Alfonso Trujillo from the Camara de Diputados press releases

Tourism & Gambling — In a presentation before the Tourism Commission, Department of Tourism Secretary Oscar Espinosa Villarreal (Sectur) stated that Mexico must promote private investment in all sectors of the tourist industry in order to realize Mexico’s enormous tourist potential.

A question and answer session was held which centered on the feasibility of gambling casinos in Mexico as a means to increase tourism. Espinosa Villarreal stated that Mexico ranks 8th worldwide in attracting foreign tourists and 15th in attracting foreign capital related to tourism activities. He urged legislators to consider the economic advantages of creating gambling attractions in Mexico. He also strongly advised the commission to examine the presence of casinos in countries such as Spain, which has a tourist-based income four times that of Mexico which he stated was due in large part to casinos. Boletines 674 & 675, 4/22/98.

Social Security — The Internal Regime & Political Coordination Commission announced to Congress that it has formed a 16-member committee to investigate the Mexican Social Security Institute (IMSS). The committee plans to examine the possible privatization of some IMSS services. Boletín 673, 4/21/98.

Environment — Opposition to the creation of the San Juan Teacalco toxic waste site near Temazcalapa, Hidalgo, where approximately 150 tons of metallic waste contaminated by Cobalt 60 are buried, was announced in Congress. This issue was turned over to the Ecology & Environment and the Energy Commissions for analysis. Concerns have been raised over the establishment of this and other similar waste sites without the safety measures necessary to protect the population and environment. The opposition deems the current infrastructure for the management and disposal of toxic wastes to be insufficient. Boletín 657, 4/15/98.

Agriculture — A proposal regarding the continuation of wheat subsidies for grain producers in Sonora, Sinaloa and other wheat producing regions was forwarded to the Budgetary Commission for analysis and review. Measures in the proposal include price supports for wheat, as well as the creation of federal grain reserves and additional need-based subsidies, and would require funding from the Departments of the Treasury and Agriculture. Boletín 680, 4/23/98.

Transportation — The Commerce Commission received a draft proposal from the Mexican Senate which would establish a National Vehicle Registration Law. If approved, the law would require all vehicles manufactured, assembled, imported or distributed in Mexico to be registered with the Department of Commerce and Industrial Development (SECOFI). The proposed law would also create a National Vehicle Registration Advisory Committee, comprised of representatives from the Departments of the Interior, Foreign Relations, the Treasury, and Communications & Transportation, as well as the office of the Attorney General of Mexico. Boletin 678, 4/23/98.

Labor — The Labor & Social Services Commission received an initiative which proposes reforms to Articles 133, 135, 164 and 170 of the Federal Labor Law. The reforms would allow sanctions to be imposed on businesses with discriminatory hiring practices on the basis of age, gender, marital status or pregnancy, while also seeking to eradicate harassment in the workplace. The proposal would also establish equal employment rights for women and six-week maternity leave for female employees in cases of pregnancy or adoption. Boletin 678, 4/23/98.

Health — An initiative to create a National Medical Arbitration Commission was turned over to the Interior & Constitutional Issues Commission. The proposed commission would operate as a decentralized public organization of the federal government, with the authority to establish mechanisms of conciliation between parties involved in cases of alleged negligence in the medical care of patients. A council would also be established to inform patients and medical service providers of their rights and obligations, as well as to receive, investigate and attend to complaints presented by patients regarding possible negligent medical attention. Boletín 678, 4/23/98.

Agriculture — A reform initiative regarding the Livestock Organization Law was turned over to the Livestock Commission for review. The initiative seeks to establish more suitable criteria for the unionization of livestock owners at the local, regional and national levels, and create a National Livestock Organization System. If approved, the reforms would require that livestock organizations remain independent of political affiliation, and that livestock owners could not belong to more than one organization. Boletín 498, 4/28/98.

Taxes — Congress approved by 419 votes reports presented by the Treasury Commission relating to the approval of modifications to Articles 119M, 119N, and 119Ñ of the Income Tax Law (ISR), as well as the repeal of Article 2-D and item XIV of the Special Tax on Products & Services Law (IEPS). The approved measures will reduce the income tax contribution to zero percent (0%) for those who earn up to two times the minimum wage and will exempt companies that recycle bottles from the IEPS tax. Boletín 696, 4/28/98.

FROM THE EDITOR

Registry Modernization, Going the Wrong Way?

Under Mexico’s current commercial registry framework, documents are stored in endless rows of files and are not always legible or readily accessible. Some files have been misplaced, stolen, damaged with pages torn out of original books, or deteriorated with time, smog and humidity. Certain registries are plagued due to so many of these problems that, more likely than not, a search will fail to turn up a document registered only a few years before, let alone one hundred.

Herminio Blanco, Secretary of Commerce, is determined to solve these problems by computerizing the registry system and has decided to go forward with a legislative initiative to implement a new “Federal Electronic Commercial Registry Law.” Although Mexican enterprises and business persons should welcome this development, given the great potential for improving the filing and notice functions under an electronic system, they should also be concerned about certain important aspects of the initiative.

On the one hand, electronic files will make registration and searches more reliable and easily accessible; on the other hand, reliability will only go as far as the accuracy of the data transfer. Moreover, the folio real and folio mercantil —the current filing and searching index systems deeply rooted in Civil Law registries— are not easily adapted to modern commercial transactions. Such systems were developed for filing and searching via an exclusive registration or folio number and worked well in the 19th Century when the volume of registrations was low and the vast majority of these centered around a folio number assigned to the legal description of a parcel of land. This folio system allowed the registrar to assign a book, binder or dangling hooks with paper for each parcel of land and then be assured that all transactions involving that property would be filed therein. Index systems for modern-day registries add reliability beyond that of the folio without the limitation of an assigned number. A computerized system should instead focus on name indices, either business entity or debtor, where searching third parties can be assured that all registrations on a given name can be located without the difficulties of obtaining access to the folio number.

Furthermore, the initiative may create tensions between the federal and state governments. Under Mexican law, commercial law and registries are federal and not state in nature. However, commercial registries have operated under de facto state control for many decades and represent a substantial source of revenue. Therefore, the creation of a federal registry will likely be opposed by each of the 31 states fearing loss of both revenue and influence in the commercial process.

Committing to the new registry system is arguably the most important step in the reform process, but it is not sufficient. In order for a computerized registry to succeed, Mexico must ensure that legitimate claims of the states are satisfied and that registry reforms contemplate a new and improved filing process—not merely an electronic version of the present-day paper chaos.

—José Felipe García