February 14, 2020
1. Former Pemex director detained to face three more charges
Former Petróleos Mexicanos (Pemex) director, Emilio Lozoya, was arrested in a luxury housing complex in Málaga Spain, after having evaded Mexico’s justice system since May of last year. Emilio Lozoya was director of the state-owned company from 2012 to 2016, and faces charges including crimes of criminal association and operations with resources of illicit origin, in addition to bribery.
The announcement of his arrest was made by the Attorney General’s Office (FGR), stating that they had requested Lozoya’s extradition as a result of connections with Brazilian construction giant Odebrecht. The Financial Intelligence Unit of the Ministry of Finance has at least three other pending charges against the former Pemex director.
2. President of the Supreme Court proposes judicial reform
Supreme Court President Arturo Zaldívar proposed a reform of the powers of the judiciary to President Andrés Manuel López Obrador. He based his proposal on the fact that the judiciary does not have the power to send initiatives directly to the legislature. The executive branch will be tasked with submitting these reforms.
The reform includes the modification of seven constitutional articles and the issuance of two new laws; among them the creation of a program to promote careers in the justice system, the transformation of the Institute of the Federal Judiciary into a Federal School for Judicial Training, mandatory reviews of judges, as well as the implementation of measures against corruption, nepotism and sexual harassment.
3. Senate discusses outsourcing, with the intention of minimizing impact on business owners
The Senate began an open parliamentary process with civil society organizations, governmental authorities, international agencies and the private sector to discuss changes to the law that intend to regulate outsourcing and put a stop to illegal subcontracting.
Santiago Nieto, head of the Financial Intelligence Unit, stated that tax fraud through illegal outsourcing practices costs the government MXN $324 billion (USD $17.5 billion) annually. Private sector representatives recognized bad practices and abuses regarding outsourcing, but asked that any regulations do not end up as persecutions of accomplished entrepreneurs, stating it would discourage investment and destabilize the job market.
4. 17 local legislatures approve constitutional reform that prohibits tax write-offs
The Mexican Senate approved amendments to article 28 of the Constitution prohibiting tax forgiveness measures, following its approval by 17 state legislatures. This change must be submitted to the president for publication and entry into force.
According to figures from Senator Alejandro Armenta Mier, more than MXN $500 billion (USD $27 billion) in taxes have been written off for high-income individuals. The constitutional reform will prohibit these exemptions as well as monopolistic practices.
5. Business leaders reaffirm their social pledge
The Business Coordinating Council, led by Carlos Salazar Lomelín, presented a document that aims to improve trust between society and the private sector, through actions on the part of the private sector.
Moreover, during the presentation of the document, prominent business leader Carlos Slim highlighted the achievements of the López Obrador administration, including improvements in the minimum wage, purchasing power and low inflation, although he reiterated the need for greater private investment in the country.