Volume 5, Number 22, Page 4

Mexican Congressional Highlights

Compiled by Alfonso Trujillo from the Cámara de Diputados press releases

Banking

In response to the recent Mexican Supreme Court decision allowing banks to recover interest charged on top of unpaid interests in overdue loans, the Congress pronounced their opposition and discussed possible reforms that would make such practices illegal. Repealment of Commerce Code 1363 and Federal Civil Code 2397 will be considered, in addition to a reevaluation of Fobaproa’s role in future bailouts of the banking system. The court decision was generally hailed as an unconstitutional comingling of legislative and judicial powers, destructive to the Mexcian economy and especially damaging to small business debtors. Boletines 984 & 983, 10/13/98.

With the express goal of deterring “white-collar” crime, an initiative was presented in Congress which would increase sanctions and penalties for banking and securities criminal violations. The initiative would introduce sweeping reforms to various laws, including Credit Institution Law, General Credit Auxiliary Organization and Activites Law, Federal Finance Institution Law, Mutual Fund Societies and Institution Law, Retirement Savings Plan Law, and Securities Market Law, as well as Article 194 of the Federal Penal Procedures Code. Boletin 974, 10/8/98.

Commerce

Among measures passed onto the Mexican Senate on October 15, with 362 votes in favor, include a reform initiative to Federal Consumer Protection Law (as published in the Diario Oficial 9/23/98). Previously, the Consumer Goods & Services Distribution & Management and Internal Affairs & Political Coordination commissions inaugurated the information system “What is What in Prices”, in conjunction with the Federal Consumer Attorney’s Office (Profeco). This system provides information on the comparative costs and brands of basic products, in hopes of encouraging better budgetary planning and savings by consumers. Boletines 992, 10/15/98 & 965, 10/3/98.

Energy

Continuing their review of the 1997 Federal Expense Budget, the Budget Commission met with Maria F. Casanueva, chief of the Department of Energy, to discuss the Department’s role in managing Mexico’s energy sector. Casanueva stated the department led efforts to open avenues of private investment for the energy sector, as well as pursuing development of alternative energy sources and increasing environmental protection levels. Budgetary resources were increased 3.7 % relative to 1996, 56% of which was designated for Pemex, leaving the other 44% to be distrubuted among other interests.

Among questions directed at Fernanda Casanueva was one regarding subsidy levels for state run industries such as Pemex, the Federal Electricity Commission (CFE) and the Central Light and Power Company (CLyFC), to which the Chief responded only the CLyFC received federal subsidies outsdie the budget. Other concerns included the two percent (2%) failure in meeting 1997 projections for Pemex production, and the maintenance costs of state-run retail franchises related to the state energy industry. Boletin 986, 10/14/98.

Labor

An initiative to regulate maternity leave for working mothers is under analysis by the Social Security and Labor & Social Prevision commissions. If approved, the reforms to Article 170, Section II of Federal Labor Law and Article 28 of Federal State Workers Law would allow working mothers to freely distribute a 12 week leave period around childbirth as desired and dictated by the mother’s physical condition. Boletin 995, 10/17/98.

Natural Resources & Environment

Members of the Hydraulic Affairs Commission met with the director general of the National Water Commission, Guillermo Guerrero Villalobos, to discuss and analyze the current effectiveness of Improvement Contributions for Federal Hydraulic Infrastructure Public Works Law. Guerrero Villalobos favors a repeal of the law, which he stated “is almost impossible to apply, has many grave contradictions, and is working against the hydraulic sector” in improving the current infrastructure. Among other issues dicussed during a question & answer session with the CNA director include criteria for the assignation of water resources, reforms to National Water Law, and Mexico’s water conservation movement. Boletin 988, 10/14/98.

Social Security

The Mexican Social Security Institute (IMSS) Special Investigative Commission updated the Congress on their ongoing inquiry into World Bank credit financing provided to the IMSS and their current level of services available to the Mexican citizenry. Domingo Yorio Saqui (PRI) replaced Marco Antonio Adame Castilo (PAN) as head of the commission, and promised to provide theior final report in short time. Boletin 978, 10/10/98.

Taxation

Two initiatives were presented before the Congress regarding cuts in Value-Added Tax (IVA) and Income Tax (ISR) application. The first initiative would provide a zero IVA rate on the transport or importation of goods, offering of such services, or the temporary use of goods realized in and between Mexican states, cities and their decentralized organizations, aimed at reducing the financial burden on conducting commerce for local governments. Further reforms to the IVA and ISR laws were proposed in another initiative designed to make it easier for alimentary donations by corporations and individuals. Boletin 982, 10/13/98.