Mexico City, April 8th, 2020.
On April 2, the “Decree ordering the extinction or termination of public trusts, public mandates and similar mandates” (Decreto por el que se ordena la extinción o terminación de los fideicomisos públicos, mandatos públicos y análogos) (the “Decree”) was published in the Federal Official Gazette (Diario Oficial de la Federación) (“DOF”).
In this regard, the President of the Republic instructs the agencies and entities of the Federal Public Administration, the Office of the President of the Republic, as well as the Agrarian Court, that in terms of the Federal Budget and Fiscal Responsibility Law (Ley Federal de Presupuesto y Responsabilidad Hacendaria) (“LFPRH”) and its respective Regulations, to carry out the processes to extinguish or terminate all public trusts without organizational structure, mandates or similar mandates of a federal nature in which they act as responsible mandating units.
In this sense, the rights and obligations arising from such instruments shall be incurred by the relevant executors of expenses from their authorized budget, in accordance with the applicable provisions.
On the other hand, those executor of expenses are also instructed, through their responsible units, to adequately coordinate the necessary actions to concentrate in the Treasury of the Federation (Tesorería de la Federación) all federal public resources that are part of the trusts, mandates or similar already mentioned, no later than April 15 of the current fiscal year.
It is clarified that the Head of the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) (“SHCP“), Mr. Arturo Herrera Gutiérrez, is authorized to resolve the exceptions to the provisions of the preceding paragraph in consultation with the Ministry of Public Affairs (Secretaría de la Función Pública) (“SFP“). These exceptions shall be resolved upon a duly justified request submitted by the Head of the executing agency to the Head of the SHCP, Mr. Arturo Herrera Gutiérrez. In the event that such authorization is not issued within a period not exceeding 10 (ten) business days, it will be understood as unauthorized.
Likewise, the executors of expenses must refrain from exercising or committing federal public resources charged to public trusts without an organizational structure, mandates and similar mandates of a federal nature. Only in the merely necessary cases may the respective exemption request be excused by the Head of the SHCP, Mr. Arturo Herrera Gutiérrez.
It should be noted that public trusts, mandates or similar mandates that are incorporated by mandate of Law or Legislative Decree and whose extinction or termination requires constitutional or legal reforms, as well as legal instruments that are used as public debt mechanisms, or whose purpose is to attend to health emergencies or to execute labor or pension obligations, are excluded from the Decree.
Finally, it is established that failure to comply with the Decree will give rise to the corresponding administrative responsibilities in terms of the General Law on Administrative Responsibilities (Ley General de Responsabilidades Administrativas).
Lawyers of the banking and financial practice of our Firm will be delighted to provide you with further information regarding the content of this informative note.
Miguel Angel Peralta
Pedro Said Nader