Decree establishing measures to combat the illicit fuel market, related to the import of goods regulated by the Ministry of Energy

Executive Summary:

• On October 23, 2023, the “Decree establishing measures to combat the illicit fuel market, related to the importation of goods regulated by the Ministry of Energy” was published.
• By this Decree, the importation of goods corresponding to sixty-eight (68) tariff fractions of the General Import and Export Tax Law is temporarily restricted with the objective of combating the illicit fuel market and smuggling.
• Holders of import permits for any of the 68 goods must notify the SENER Hydrocarbons Undersecretariat of the continuity of their operations.

On October 23, 2023, the “Decree establishing measures to combat the illicit fuel market, related to the importation of goods regulated by the Ministry of Energy (“SENER”)” was published in the Official Gazette of the Federation (“DOF”).

Through this Decree, the Executive seeks to eradicate and/or control certain practices that were occurring in the hydrocarbon processing industry in the sense of importing certain components that are used to mix with other hydrocarbons or petroleum products to produce low-quality gasoline and/or diesel that will be marketed illegally (another form of huachicol), which affects the quality of the product received by the final consumer and represents serious risks to the environment and the health and safety of the same consumer.   

Contents of the Decree:

• The importation of goods corresponding to sixty-eight (68) tariff fractions of the General Import and Export Tax Law in force (the "TIGIE"), detailed in the Sole Annex of this Decree, is temporarily restricted, with the objective of combating the illicit fuel market and smuggling, to avoid imminent damage to health and the environment, the violation of the health and safety of the population surrounding fuel handling centers, and the negative impact on private vehicles and public transportation.
• Those interested in importing any merchandise included in the Single Annex must request and prove, before the Hydrocarbons Undersecretariat of SENER, the volume and destination of the merchandise in question, as well as the production process and the purpose of the development or execution, to corroborate that said import is a legal activity, and that it does not contravene the Decree.

The Single Annex is available for consultation at: https://sidof.segob.gob.mx/notas/5706285 

Implications of the Decree:

It is of utmost importance to note that the holders of import permits for any of the 68 goods mentioned in the Single Annex must notify, within a maximum period of 30 business days from the entry into force of the Decree, the Undersecretariat of Hydrocarbons of SENER, by means of a simple free writing or communication, the continuity of their operations and, in particular, corroborate that the products destined for said import conform to a volume and destination that are imperative for their production process.

It should be noted that, in the absence of proper accreditation of these elements, permit holders will not be able to continue the activities covered by their import permit.

Once the notification has been received, SENER will analyze the information provided by the applicant or permit holder and will decide, within a maximum period of 15 business days, whether said permit holder may or may not import the goods subject to the Decree, which represents a significant change in the way in which hydrocarbons will be imported and marketed. 

It is also important to consider the risk involved in implementing this measure, since SENER has not been efficient in resolving the procedures that fall within its jurisdiction during this Administration.

Worse still, in the case of permit holders whose import permit title is valid, we would be facing a flagrant violation of the constitutional guarantees of the governed, who could be affected by a retroactive provision that violates, among others, the principle of legality.

Another risk we observe regarding the implementation of the Decree is to consider that, within a period of 15 or 30 days, the Ministry of Economy, the Ministry of the Environment and Natural Resources, the Ministry of Infrastructure, Communications and Transportation, the Tax Administration Service, the National Customs Agency of Mexico, the Energy Regulatory Commission, the Agency for Security, Energy and Environment, and/or the Federal Attorney General's Office for Environmental Protection, according to the scope of their respective powers, referred to in Articles Three and Five of the Decree, will coordinate to make adjustments to the records, registers, systems and platforms, physical or electronic, relating to the import and traceability of goods in accordance with the Decree.

In addition to said Decree, on October 25, 2023, the “Guide to comply with the first article of the Decree (the “Guide”)” was published on the SENER portal so that permit holders can obtain the corresponding authorizations from the SENER Hydrocarbons Undersecretariat. 

Guide available for consultation at: https://www.gob.mx/sener/articulos/decreto-por-el-que-se-establecen-medidas-para-el-combate-al-mercado-ilicito-de-combustibles 

It is important to consider that both the Decree and the Guide could represent a risk in terms of the investments made by those permit holders who import the goods provided for in the Sole Annex of the Decree, since not in all cases will they prove that the total volume and final destination of the same constitutes a fundamental element for their production process.

Publication links:

• https://sidof.segob.gob.mx/notas/5706285
• https://www.gob.mx/sener/articulos/decreto-por-el-que-se-establecen-medidas-para-el-combate-al-mercado-ilicito-de-combustibles