ILO NEWSLETTER- REFORMA ENERGETICA Y MARINA MERCANTE

Shipping & Transport - Mexico

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Effects of energy reform on maritime industry

Contributed by M & L Estudio Legal

September 09 2015

After a decades-long monopoly over the production and commercialisation of oil and electricity by state entities PEMEX and the Federal Electricity Commission, the private sector can now participate in these activities as a result of the comprehensive energy reform implemented in 2014.

One of the main concerns in respect of oil and gas reserves in the Gulf of Mexico relates to the maritime equipment used to extract and develop these resources, especially those situated in deep waters. Mexico does not have the specialised vessels and platforms available in other countries – such as Brazil, which in 2008 began to overhaul its state oil company, Petrobras. In order to increase Petrobras's maritime capabilities, a $240 million special guaranty fund was established as collateral for loans provided for the acquisition of marine equipment in Brazilian yards. A memorandum of understanding was also signed between Petrobras and Noble Corporation for the acquisition of semi-submersible platforms amounting to $4 billion.

Neither the Mexican government nor Pemex has announced effective measures to support investment in the marine equipment that will be needed to implement the energy reform effectively. It appears that the government expects this issue to be addressed through associations between national and foreign shipowners.

The Mexican Shipowners Association has noted that in order to meet the maritime requirements under the energy reform, an initial investment of at least $3 billion during the first three years will be needed to acquire high-specification vessels, tankers and offshore supply ships.

According to the Maritime Law, cabotage services are restricted to Mexican-flagged vessels. In the absence of Mexican vessels (or where they are very limited), foreign-flagged vessels may participate in such activities under certain strict conditions and for limited periods (for further details please see "New maritime regulations published").

Many observers are of the view that the energy reform will be the ultimate driver for the promotion, growth and consolidation of the Mexican merchant marine. However, this will likely be facilitated mainly through associations or joint ventures between Mexican shipping companies and foreign partners interested in participating in the Mexican oil industry (on the basis set out in the energy reform), following the necessary evaluation of the conditions affecting global oil prices.

For further information on this topic please contact Juan Carlos Merodio at M & L Estudio Legal by telephone (+52 55 5207 1187) or email (j.merodio@ml-estudiolegal.com.mx). The M & L Estudio Legal website can be accessed at www.ml-estudiolegal.com.mx.

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Juan Carlos Merodio Lopez

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APERTURA OFICINAS ENSENADA

Cargo preference for foreign-flagged vessels?

Shipping & Transport - Mexico

Cargo preference for foreign-flagged vessels?

Contributed by M & L Estudio Legal June 24 2015

The Chamber of Deputies (the lower house of Congress) recently passed the Law for the Development of the Merchant Marine and Naval Industry.

The new law aims to provide special instruments to promote and incentivise the Mexican merchant marine industry, especially for vessels engaged in international trade and shipyards operating within the Mexican territory.

Author

Juan Carlos Merodio Lopez

􏰂

The most important measures proposed in the legislative initiative are as follows:

• 􏰀  Creation of the Committee for the Support of the Merchant Marine and Naval Industry 􏰁 the main objective of this committee will be to participate in drafting public policy instruments. It will be composed of one representative each from the treasury, naval, economy, transport and communications, fisheries and energy ministries. The marine associations may act as advisers to the committee. 
• 􏰀  Creation of the Folio Especial for vessels engaged in international trade 􏰁 Mexican shipowners will be authorised to register foreign-flagged vessels with the maritime authority in a special category of the Maritime Public Registry, referred to as the 'Folio Especial'. Once registered, foreign-flagged vessels will be subject to the same treatment as Mexican-flagged vessels in order to obtain the benefits introduced by the new law, especially with regard to cargo preference (discussed below). To register a foreign-flagged vessel in the Folio Especial, the shipowner must comply with certain requirements, the most important of which is a commitment that the vessel will have at least 50% Mexican crew within three years. 
• 􏰀  Cargo preference for Mexican vessels and foreign-flagged vessels under the Folio Especial 􏰁 of special importance in this bill is the stipulation that Mexican vessels and foreign-flagged vessels registered in the Folio Especial will have preference in respect of all import and export cargo of the Mexican government, whether the central administration or governmental organs. Of course, if this legislation is finally passed and becomes effective, it will provide tremendous advantages and incentives. Other benefits granted to Mexican vessels in international trade will equally be granted to foreign-flagged vessels registered in the Folio Especial. 
• 􏰀  Mexican naval industry 􏰁 shipyards and other installations within the Mexican territory may benefit from special treatment or preference in building, repair and maintenance work required by Mexican private shipowners and entities of the Mexican government. For such purposes, Mexican shipyards will first need to undergo a special registration process ('Constancia de Preferencia') before the maritime authority.
  As mentioned, the new law was approved by the Chamber of Deputies. It has now been turned over to the Senate for review, debate and approval. If finally approved by the Senate, it will become binding law.
  For further information on this topic please contact Juan Carlos Merodio at M & L Estudio Legal by telephone (+52 55 5207 1187) or email (j.merodio@ml-estudiolegal.com.mx). The M & L Estudio Legal website can be accessed at www.ml-estudiolegal.com.mx.
  The materials contained on this website are for general information purposes only and are subject to the disclaimer.
  ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com. 

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􏰃􏰂Copyright 1997-2015 Globe Business Publishing Ltd 

Conferencia Ensenada . Dia de la Marina. Junio /2015

New Maritime regulations published

Shipping & Transport - Mexico
New maritime regulations published
Contributed by M & L Estudio Legal May 06 2015
On March 4 2015 new regulations under the Maritime Law 2006 were published.
The regulations are comprehensive, covering numerous aspects of maritime activity in respect of national and international matters, including:

• 􏰀  marine insurance (including protection and indemnity clubs);
  
• 􏰀  merchant marine;
  
• 􏰀  flagging requirements;
  
• 􏰀  the Maritime Public Registry;
  
• 􏰀  ship agents;
  
• 􏰀  merchant marine education;
  
• 􏰀  national and international navigation;
  
• 􏰀  marine inspections and surveys;
  
• 􏰀  classification societies;
  
• 􏰀  certifications;
  
• 􏰀  shipyards and naval construction;
  
• 􏰀  salvage;
  
• 􏰀  navigation safety;
  
• 􏰀  oil pollution;
  
• 􏰀  pilotage;
  
• 􏰀  towage; and
  
• 􏰀  nautical tourism.
  

Of special importance to the international maritime community is the possibility of foreign vessels undertaking cabotage trade in Mexico. In principle, cabotage activity is reserved for Mexican-flagged vessels; however, the Maritime Law 􏰁 and now the regulations 􏰁 have established certain conditions under which foreign-flagged vessels are allowed to carry out cabotage in Mexican waters, which is particularly relevant in connection with offshore and other services related to the oil industry in the Gulf of Mexico.
Only Mexican shipping companies with 51% Mexican investment capital are allowed to register Mexican-flagged vessels to undertake cabotage trade. The vessels must be owned by the shipping company or operated under a finance lease agreement.
In the absence of Mexican-flagged vessels, under Article 40 of the Maritime Law foreign shipowners are allowed to obtain a special temporary permit of cabotage for foreign-flagged vessels. This temporary permit will not be required for tourism services, maintenance and port construction and dragage. A permit will also not be required for vessels of extraordinary technical specifications (to be determined by a special committee).
A foreign shipowner wishing to apply for a special permit of cabotage navigation will need to file a petition before the Merchant Marine Direction, attaching the following documents:

• 􏰀  certification of its legal existence as shipowner at its place of business;
  
• 􏰀  safety certifications applicable to the vessel, insurance policies and third-party liability; and
  
• 􏰀  identification of crew members and operative personnel of the vessel.
  Temporary permits for cabotage navigation will be issued for three-month terms, with the possibility of an extension of up to two years, after which the vessel will need to be flagged under the Mexican flag.
  

Author
Juan Carlos Merodio Lopez
􏰂

For further information on this topic please contact Juan Carlos Merodio at M & L Estudio Legal by

telephone (+52 55 5207 1187) or email (j.merodio@ml-estudiolegal.com.mx). The M & L Estudio Legal website can be accessed at www.ml-estudiolegal.com.mx.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com.
Online Media Partners

􏰃􏰂Copyright 1997-2015 Globe Business Publishing Ltd