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National Law On Asset Forfeiture 2021

Last June 2021, the Supreme Court of Justice (the “SCJN”) carried out the study of the Action of Unconstitutionality 100/2019 filed by the National Human Rights Commission (the “CNDH”), on September 9, 2019, against various provisions of the National Law on Asset Forfeiture (the “Law”), in force since August 10, 2019.

What the CNDH sought by promoting the Action of Unconstitutionality against several provisions of the Law, was to adjust the same to the applicable constitutional and conventional system, and thus guarantee the observance of human and fundamental rights related thereto, contributing to consolidate and preserve the Rule of Law.

The SCJN, in its revision, although invalidated some of the challenged provisions of the Law, the rest still subsist and will remain in force.

In this sense, it is important to take into consideration that the findings of unconstitutionality determined by the SCJN will not have retroactive effects to previous ongoing court proceedings and will take effect upon notification of the corresponding sentence resolutions to the Federal Congress, which has not occurred as of this date and it is expected that will take a couple of months to be notified.

UNCONSTITUTIONALITY OF CONCEPTS OF THE NATIONAL LAW ON ASSET FORFEITURE BY THE SUPREME COURT OF JUSTICE

On the other hand, it should be noted that in accordance with the Twelfth Transitory Article of the Law, in August 2020, the Attorney General had to undertake a public call for the review of the constitutional and legal system in the matter of asset forfeiture, that will aim the identification, discussion and formulation of constitutional and Law reforms, for its optimal operation, which is still pending to be carried out.

Generally speaking, the resolutions adopted by the SCJN with respect to the Action of Unconstitutionality of the Law clarify that (i) asset forfeiture only applies in connection with assets whose legitimate origin cannot be proven, element that refers punctually to the origin of the assets and not to their use or destination, as established in the Law; (ii) the action of asset forfeiture proceeds with respect to criminal conducts set forth in federal, general and local laws; (iii) the action of asset forfeiture under no circumstances has unlimited statute of limitations; (iv) the District Attorney may not access databases of other authorities, nor order the securing of assets as a provisional measure, without a court order; and (v) the cause for the early sale of assets by the authority under the argument that the disposal was necessary due to the “nature of the asset” is removed, since such circumstance was ambiguous and generated uncertainty as to the assets that fell into such category.

Additionally, another important provision invalidated by the SCJN is one of the elements for the proceeding of the asset forfeiture action, consisting of the owner´s knowledge (at present or that should have had) of the destination of the asset to the illegal act. The above is invalidated because it was considered that such element distorted and exceeded the constitutional legal system.

Finally, regarding the requirements to assume that an acquisition was made in good faith, it was necessary to prove, among other things, (a) the incapability of the purchaser to know that the asset subject to forfeiture action was used as instrument, object or product of an illegal act or to hide or mix assets resulting from the illegal act; and (b) in the event of having learned of the unlawful use of the asset, to have prevented or given a timely notice to the competent authority, elements that are invalidated and will no longer be required to prove good faith.

Regarding the controversial provisions of the Law that did not undergo any modifications and are still in force, note following: (i) the judge may order as a provisional measure, even prior to the filing of a court proceeding, the securing of the property subject to asset forfeiture, with the intention of guaranteeing the conservation of such assets, and the impossibility of the defendant or affected individual to offer any bond in order to lift the measure; (ii)the non-opposability of the banking, exchange, stock exchange, or tax secrecy, within the asset forfeiture proceedings in any of its stages; (iii) the possibility that in the event of a judgment declaring the asset forfeiture, the judge may also declare the extinction of other rights, whether principal or accessory, if it is proven that the owner knew of the cause that gave rise to the action; and (iv) the capability of an early sale of the asset, under certain circumstances (other than its nature), during the process of asset forfeiture, prior to the issuance of the final judgement.

The following is an analysis of the resolutions of the SCJN in connection with the Action of Unconstitutionality of the Law:

The Law defines asset forfeiture as the loss of rights that a person has, in relation to patrimonial assets where legitimate origin cannot be proven, particularly those that are instrument, subject or product of illicit acts, declared by judgement of judicial authority, without any payment or compensation to its owner or to the relevant individual that, for any circumstance, possesses or holds such assets. Likewise, under the Law, legitimate origin was defined as “the origin or lawful obtaining of the assets, or the lawful use or destination of the assets linked to the illicit act”, in this sense, the SCJN invalidates the second part of such term, considering that the Constitution, when stating that the asset forfeiture action shall be applicable with respect to assets where legitimate origin cannot be proven, refers only to the origin of such assets and not to their use or destination (Article 2, section XIV).

It determinó puntualmente que, los delitos por hechos de corrupción, el encubrimiento, los delitos cometidos por servidores públicos, el robo de vehículos, y recursos de procedencia ilícita (conocido también como lavado de dinero), por los que, entre otros hechos ilícitos, puede proceder la extinción de dominio, se refieren tanto al fuero federal como al local, toda vez que la Ley, originalmente, únicamente remitía a la legislación penal federal (Artículo 1, fracción V, incisos f, g, h, i y j).

The second paragraph of Article 5 is invalidated, in the provision that establishes “The information obtained by the District Attorney for the preparation of the asset forfeiture action, will be strictly reserved until it is presented before the judicial authority”. The foregoing, because it totally prohibited access to the information obtained by the District Attorney for the preparation of the asset forfeiture action before it was filed with the judicial authority, and it was considered an overinclusive measure that violated the human right of access to information and the principle of maximum publicity.

With respect to Article 7, which established that the asset forfeiture action would proceed, among others, (i) on those “assets of lawful origin used to conceal other assets of unlawful origin, or materially or legally mixed with assets of unlawful origin”, the characteristic "of lawful origin" (section II) is invalidated; and (ii) on "assets of lawful origin, which value is equivalent to any of the assets subject to asset forfeiture, when it is not possible to locate, identify, seize, secure or material seizure, and in which case the value is equivalent to any of the assets described in the preceding sections", the entire section (section IV) is invalidated. The foregoing because such provisions were clearly in violation of Article 22 of the Constitution, which expressly provides that asset forfeiture action proceeds only against patrimonial assets where the legitimate origin cannot be proven.

Likewise, Article 7, section V, states that the action is applicable with respect to assets used for the commission of illegal acts by a third party, "if the owner had knowledge thereof and did not notify the authority by any means or did not performed any action to prevent it". In this sense, such portion of the Law is invalidated, since it is deemed that the Constitution does not require evidencing such subjective element, in order to consider that the action may proceed with respect to such asset.

n terms of the Law, in order for the asset forfeiture action to proceed, the following elements must be present: (i) the existence of an illicit act; (ii) the existence of an asset of illicit origin or destination; (iii) the link between the two previous elements; and (iv) the owner's knowledge of the destination of the asset to the illicit act, or of the fact that it is the product of an illicit act. In this regard, the SCJN invalidates the subjective element of the knowledge that the owner has or should have had of the destination of the asset for the commission of the illicit act, provided in Article 9, paragraph IV, of the Law, since the Constitution does not require evidencing of such element, and the rule then exceeded the constitutional system. Likewise, and under the assumption that the same defect was found in other provisions of the Law, Articles 126, fourth paragraph, and 214, first paragraph, in the sections referring to the subjective element of the knowledge of the owner for the proceeding of the asset forfeiture action are invalidated by extension.

The Law established the imprescriptibility of the action in the case of assets of unlawful origin, provision that the SCJN invalidated since it noted that from the analysis of the legislative process it was not the will of the constituent to allow that such action did not had a statute of limitations, and such aspect could not be left to the will of the legislator. Furthermore, it considered that such provision did not pass the proportionality test (Article 11, first paragraph).

ticle 15 of the Law provided a presumption of good faith in the acquisition and destination of the assets, with respect to which, the SCJN recognized the validity only of the presumption of good faith in the acquisition of the assets as an element to determine their lawful origin, but invalidated the presumption of good faith with respect to the destination of the assets, since it considered that it was intended to take as a basis for the validity of the action, the destination of the assets and not their unlawful origin, as required by Article 22 of the Constitution. Additionally, sections V and VI of said article were invalidated, which established that in order to presume good faith, it was necessary to prove, among other things, (a) the incapability of knowledge by the defendant or affected party that the property subject to asset forfeiture action was used as an instrument, object or product of the illicit act or to cover-up or mix assets resulting from the illicit act; and (b) in the event of having learned of the unlawful use of the property owned, to have prevented or given timely notice to the competent authority.

Regarding the procedure, the following provisions of the Law are modified:

(i) The Law allowed the District Attorney, in case of urgency or other duly grounded need, to adopt as a provisional measure the securing of assets subject to asset forfeiture, a power that the SCJN considered to be violating of the right to judicial protection, in addition to the fact that it did not pass a proportionality test, since the legislator could have opted for less harmful measures to guarantee the effectiveness of the action without the need to dispense the prior judicial control, therefore such power is invalidated (Article 173, second paragraph).
The District Attorney was empowered to access, in cases of urgency, information contained in databases without prior judicial authorization, provision that is invalidated as a violation of the right to the protection of personal data set forth in Articles 6 and 16 of the Constitution, since the measure was not necessary to achieve the purposes intended by the legislator (Article 190).
(iii) The Law provided for the possibility of carrying out the early sale of the assets subject to forfeiture process, among other cases, when the disposal was necessary due to the "nature of the asset". This assumption is invalidated as it is deemed a violation of the principle of legal certainty, for not establishing with precision the specific characteristic of the nature of an asset that would make an anticipated sale necessary (Article 228, paragraph a).

Bill To Reform The Urban Development Law And Civil Code For Mexico City On Construction And Residential Pre-Sales

On November 10, 2020 a bill was introduced to the Mexico City Congress seeking to amend and add a paragraph to article 93 of the Urban Development Law, as well as a new article 2279 Bis to the Civil Code, both for Mexico City (the “Bill”).

The preliminary statements of the Bill discuss the issue related to certain irregular practices from some real estate developers when commercializing residential units, such as the marketing and pre-sale of apartments that are not included in the construction license granted over the underlying plot of land, and which may result in a demolition order of unauthorized units from the competent authority. This becomes a complex issue when the authority decides to proceed with the demolition of such units, and the units are no longer owned by the developer, but by bona fide third parties, unaware of the terms and conditions of the construction license.

The foregoing, represents an important problem in a city where the pre-sale of vertical condominiums has such a high demand, being the largest vertical developed in Mexico along with the State of Mexico.

In this regard, the Bill proposes the prohibition of executing purchase and sale agreements with respect to projects during early construction stage on real estate assets, until the occupancy permit is granted by the competent authority, under penalty of definitive construction suspension in case of breach thereof.

The use and occupancy permit is obtained when the construction completion notice is filed, being the final authorization to be obtained to complete the construction authorization processes types B or C (residential up to 10,000 sqm and above 10,000 sqm, respectively).

It is important to note that despite the Bill preliminary statements mention pre-sales, the proposed text reform does not allow the execution of purchase and sale agreements only, being silent and, therefore not prohibiting the signing of promissory purchase agreements and sale offers.

The Bill was turned to the relevant Commission, through the Directive Panel for its analysis and subsequent ruling, which will be responsible for the drafting of the preliminary reform project. If the Bill is approved by the Commission, it will be included in the agenda for its presentation at the Congress, in order to be discussed, voted and, as the case may be, approved or rejected.

COVID19 Reform to the Civil Code of Chihuahua for Leases

The Decree establishes amendments to the provisions of the CCC regarding leases in the event of a major epidemic or sanitary contingency (the "Contingency"), consisting in classifying such Contingency as a valid case for the applicability of the legal feature known as "Hardship", granting the parties the right to "agree on the terms of the termination or the modifications of the contract under the principles of equity and good faith, taking into account the extraordinary circumstances during the period they remain in force, or to appear before the competent courts, which shall evaluate the principles and circumstances mentioned above".

Likewise, it is provided that in the event of a Contingency, during the time that the measures deriving thereof remain in force, recognized by the competent sanitary authority, which prevent or modify full or partial conditions of use of the leased property for the tenant, it shall be considered that no default in the payment of rent is incurred, therefore, the landlord could not terminate the lease on such basis.

It is important to remark that the Third Transitory Article of the Decree, establishes that the parties with lease agreements in force in 2020, must agree on the corresponding modifications, with retroactive effects as of March 23, 2020, in order to reestablish conditions of fairness under the current socioeconomic circumstances, while and until normal conditions are reestablished or the end of the Contingency is decreed by competent authority.

Considering the principle of non-retroactivity of the law, in the interest of legal certainty, provided under Article 14 of the Constitution, which states that “no law shall be given retroactive effect in detriment of any person”, the Decree might be challenged by anyone who is affected.

Finally, from our review to the original reform proposal, we noted that the intention was to cover the restaurant industry thereby, however, while being processed by the State of Chihuahua Congress, it was extended to all type of leases and asset classes.

Following a complete transcript of the reform under the Decree:

Artículo 1691-e: Only those unforeseeable events of general nature, which produce unfair alterations in what was agreed by the parties, such as circumstances that affect national, state or regional economic situation or other related matters, in such a way that if the contracting parties had known them, they would not have agreed in the way and terms they did or would not have contracted, will be considered as extraordinary events.
In case of major epidemics, as recognized by the competent federal or state sanitary authority, the provisions of paragraph 2330 and other applicable provisions of this Code shall be applied.

Artículo 2330: If by act of God or force majeure the tenant is completely prevented from using the leased property, no rent shall be accrued while the impediment lasts, and if the impediment lasts more than two months, tenant may request the termination of the contract.
If the impediment to use the leased property is due to a major epidemic recognized by competent federal or state sanitary authorities, the provisions of articles 1691-a to 1691-g of this Code shall be applicable. In this case, the parties may agree on the terms of termination or the modifications of the contract under the principles of equity and good faith, taking into account the extraordinary circumstances during the period that they remain in effect, or they may go before the competent judicial authority, which shall evaluate the aforementioned principles and circumstances.
Regarding leases, in the event of causes derived from epidemics of major character recognized by competent sanitary authority, which prevent or modify the conditions of total or partial use of the leased property, in accordance with the provisions of this article, and other relative of this Code, it shall be considered that there is no default in the payment of rents, during the time that the measures derived from the sanitary contingency remain in effect.

Third Transitory Article: Individuals and/or legal entities with lease agreements in force during the present year 2020, must agree on the modifications of the forms and modalities of the execution of the same, with retroactive effects as of March 23 of said year, in order to reestablish the conditions of equity under the current socioeconomic circumstances, while and until restoration of normal conditions occur or until a decree is issued by legally competent means, establishing the end of the sanitary emergency set forth in the Agreement published that same day in the Official Federal Gazette, by which the SARS-CoV2 virus (COVID-19) epidemic in Mexico is recognized as a disease of serious priority attention, as well as establishing the activities of preparation and response to such epidemic. The recognition of reestablishment to the referred normality, will be equally valid if it is issued by competent state authority.

COVID19 Reforms To The Civil Code of Nuevo Leon For Retail Leases

On October 2, 2020, Decrees 357 and 358 were published in the Official Gazette for the State of Nuevo León, which amended articles 2005 and 2326 of the Civil Code for the State of Nuevo León (“CCNL”), entering into force on October 3, 2020, pursuant to the following:

Article 2005: No one is obliged to acts of God or force majeure, except when given caused or contributed thereto, when expressly accepted such responsibility, or when mandated by law.
Article 2326: If the use of the property is impeded only in part, the tenant may request a partial reduction in rent, based on the opinion of experts, unless the parties elect to terminate the contract, provided the impediment lasts for the period of time set forth in the preceding article.
Tenants of real properties conducting commercial activities that are disturbed in their enjoyment as a result of a declaration of civil protection or sanitary emergency issued by competent authority, which orders the suspension of their commercial activities, may be entitled to a reduction in rent for the duration of the emergency declaration and prohibition for opening their business on the jurisdiction where the property is located, according to the terms agreed to by and between landlord and tenant, or in the absence of an agreement, as defined by competent authority.

Likewise, it is important to remark that article 2327 of the CCNL establishes that articles 2326 and 2325 are non-waivable, the latter in turn providing that: “If by act of God or force majeure the tenant is completely prevented from using the leased property, no rent shall be accrued while the impediment lasts, and if it lasts more than two months, tenant may request the termination of the contract.”

On the other hand, it is important to consider that unlike article 2325 of the CCNL where the existence of an act of God or force majeure is conditioned to an absolute impediment as a result of a wide variety of concepts, the reformed article 2326 of the CCNL specifically conditions the temporary reduction of the rent to the following circumstances:

Leases over a real estate property where commercial or retail activities are carried out (not applicable then to residential or industrial leases).
Declaration of civil protection or sanitary emergency issued by competent authority, ordering the suspension of commercial activities.
Such declaration resulting in the disturbance to enjoy the leased property by the tenant.

Since new article 2326 establishes that the tenant shall have the right to a reduction in the rent amount, which will be subject in first instance to the agreement between the parties and, in the event of not reaching an agreement, the competent authority will be in charge to determine the applicable temporary reduction, it is advisable to prevent this type of eventualities in new lease contracts for commercial real estate facilities located in Nuevo León, by including a specific and balanced provisions regarding the agreement of the parties on a temporary reduction in rent that may become applicable in terms of such article 2326 of the CCNL.

Ministry Of Finance Presents New COVID19 Credit Restructuring Program

The regulatory ease intends to promote loan restructuring so that financial institutions can adjust payment schedules to the new economic reality of the borrowers and their families, for which payments shall invariably be reduced by at least 25%, which will imply extending the remaining term by up to 50% from the original maturity, as well as lowering interest rates and waiving principal payments.

Therefore, financial authorities, through the National Banking and Securities Commission, decided to implement four new measures to encourage and enable banks and other financial intermediaries to restructure client loans upon request.

The measures included in this package are:

Computing a lower amount of specific reserves when restructuring is agreed with the client.
Recognition of the specific reserves released by the loan restructuring as additional reserves.
They may recognize a higher regulatory capital when considering the additional reserves as part of the suppletory capital.
Prudently reduce capital requirements for credit risk.

In addition, to encourage financial inclusion and new lending, the following three measures will be taken in connection with banks:

The use of the capital buffer is extended until December 31, 2021.
Liquidity requirements are extended until March 2021, allowing banks to temporarily reduce their liquidity buffers below 100% of their needs.
The regulation that allows the opening of accounts and contracting of credits without the need of the client to be present at the bank is extended to legal entities.

Furthermore, the limits established for credit contracting and account opening are eliminated, facilitating the opening of simplified identification accounts considered low risk for SOFIPOs (Popular Financial Corporations) and SOCAPs(Savings and Loan Cooperative Corporations).

Legal Reform On Urban Development In Mexico City

On July 22, 2020, the Decree amending the Regulations for the Urban Development Law of Mexico City was enacted in the Official Gazette of Mexico City, reforming articles 37, 70 and 158.

The reform focuses on reducing repetitive steps regarding certain administrative procedures on urban development through the attribution of permanent validity (subject to the annual payment of the corresponding fees under the Mexico City Tax Code) to the following evaluations, registries, certificates and opinions:

Evaluation on the Application of Regulations for the applicability of general and specific norms that are not directly applied;
Technical Evaluation for Interventions indicated for construction works, modifications, extensions, installations, repairs, registration of work performed and/or demolition or its revalidation in properties or buildings subject to urban cultural heritage and/or located in a Heritage Conservation Area;
Interventions registry for the assessment of Type A construction and the works that do not require a construction assessment, nor a special construction license in properties or buildings located in the Heritage Conservation Area;
Technical Evaluation for interventions on the assessment of Type A construction and works that do not require a construction assessment, nor a special construction license or its revalidation in properties subject to urban cultural heritage;
Certificate of restoration or rehabilitation of properties subject to urban cultural heritage for the tax reductions provided in article 273 of the Mexico City Tax Code;
Technical Opinion on the exemption of original construction license of buildings properties subject to urban cultural heritage;
Technical Opinion for the merger /subdivision/re-distribution of properties, patrimonial condition and feasibility of demolition and/or project, in properties subject to urban cultural heritage and/or in Heritage Conservation Areas;
Technical Evaluation or Technical Opinion for the installation, modification, placement or removal of advertisements and/or outdoor advertising in properties subject to urban cultural heritage and/or in Heritage Conservation Areas;
Unique Certificate of Land Use Zoning printed on security paper stating the specific provisions established by the urban development planning instruments for a specific building or property; and
Unique Digital Certificate of Land Use Zoning stating the specific provisions established by the urban development planning instruments for a specific building or property.

Notwithstanding the foregoing, it is important to remark that the validity of the certificates indicated in paragraphs 9) and 10) above, will not be permanent in the case of unique zoning certificates that contemplate the application of General Regulation 26 "Standard to promote and facilitate construction of low-income and popular housing on urban land”.

Furthermore, such certificates will lose their validity if the use and surface requested for the property are modified, or if there are modifications to the applicable Partial or Municipal Urban Development Programs.

Constitutional Law on Human Rights for Mexico City

Impact on real estate evictions as a result of the reform to the Constitutional Law on Human Rights for Mexico City

On June 7, 2019, the reform to the article 60 of the Constitutional Law on Human Rights for Mexico City in connection with real estate evictions, was published in the Mexico City´s Gazette.

Since February 8, 2019, when the relevant law came into effect, its article 60 established a set of rules and dispositions that prevented the effective execution of any procedure for the eviction of a property in the event of non complance with a lease agreement or an invasion.

As part of the requirements, this article provided that (i) only in exceptional cases could a person be evicted (without establishing what these cases would be); (ii) the obligation of the judge to grant prior audience to the targeted individual, who shall not be discriminated; (iii) all possibilities should be explored to avoid or minimize the need for the use of force; (iv) compensation should be paid in case of being deprived of property or suffering immaterial losses; and (v) the authorities must had to ensure adequate relocation within a radius not greater than 15 kilometers.

However, due to the political, social and business impact generated by such article, the local Congress modified it, publishing the amendment last June 7 and completely removing the polemical paragraph.

Seeking to promote the right to adequate housing, the right to private property was completely vulnerated by the original article 60, nevertheless, under the current wording of the article as modified, it sets forth that no person may be evicted without a judicial order issued in accordance with the constitutional and legal provisions applicable to the specific case, the right to a hearing must be guaranteed, due process shall be respected and mediation and conciliation should be sought at all times, in addition to compliance with the essential procedural formalities. Furthermore, everyone affected by an act of eviction may request to the authorities for its incorporation into governmental housing programs, whose petitions shall be resolved gradually and in the extent of the authority's possibilities.

National Law on Asset Forfeiture

On August 9, 2019, the National Law on Asset Forfeiture (the "Law"), was published in the Official Gazette of the Federation.

Upon the entry into force of the Law, on August 10th 2019, the Federal Law on Asset Forfeiture (the "Federal Law"), as well as the laws on asset forfeiture of the Mexican States, and all legal, regulatory and adminis are abrogated, with the intention of unifying criteria, and thus have a single procedure at national level.

The Federal Judiciary Council and the judicial powers of the States and Mexico City, now have a period of 6 months to create civil courts specialized in matter of asset forfeiture; in the meantime, ordinary civil courts will have jurisdiction.

Asset forfeiture in favor of the State, through the Federal Government and the federative entities, as appropriate, is the loss of rights that a person has, in connection with patrimonial assets whose legitimate origin cannot be proven, particularly those that are instrument, object or product of illicit acts, declared by sentence of a judicial authority, without any payment or compensation for the owner.

The exercise of the action for asset forfeiture (the "Action"), corresponds to the District Attorney (the "DA"), as it was established in the Federal Law, and will be through a special procedure of the jurisdictional process of civil nature and patrimonial character, autonomous of the criminal procedure, (i.e. it will proceed even when the criminal responsibility of the corresponding felonies has not yet been determined); Mexico City (the "Local Law"), abrogated through the entry into force of the Law, and that established that the lawsuit for asset forfeiture could only be filed when the formal prison warrant has been issued. The Action provided in the Law does not have a statute of limitations in the case of property of illicit origin; it shall prescribe in 20 years in the case of property of illicit destination; and it will not be extinguished by the death of anyone who is subject to investigation or criminal proceedings, with the consequences and effects subsisting against heirs, legatees and successors in title.

The Law expands the catalogue of illicit acts for which asset forfeiture may proceed to the following: organized crime; kidnapping; hydrocarbon, oil and petrochemical crimes; health crimes; human trafficking; corruption crimes; cover-up; crimes committed by public servants; vehicle theft; resources of illicit origin (also known as money laundering); and extortion.

In terms of the Law, for the Action to proceed it shall be based on the following elements: (i) the existence of an illicit act; (ii) the existence of an asset of illicit origin or destination; (iii) the causal nexus of the two previous elements; and (iv) the owner's knowledge of the destination of the asset to the illicit act, or of the fact that it is the product of an illicit act, however, the latter shall not be considered fulfilled when it is proven that the owner was incapable of knowing it, determining as a presumption of good faith the real impediment of the affected party to know of the illicit act related to the asset, and in case of having learned of the illicit use, having prevented or given timely notice to the authority; the burden of proof being on the owner or possessor of the asset subject of the asset forfeiture procedure.

In the Local Law, it was foreseen that the Action proceeded regarding the assets subject to hereditary succession, as long as it was exercised before the stage of inventory and liquidation of assets in the corresponding procedure, being impossible to proceed if the latter was already in a subsequent stage; with the new Law this circumstance of legitimation of the asset is suppressed, establishing that no legal act carried out on the assets subject to asset forfeiture legitimates them, without prejudice to the rights of third parties in good faith.

Regarding the special procedure, and as crucial and/or controversial points, the following are noted:

The DA has the right to use the evidence collected in the investigation file, and it shall be considered pre-constituted evidence in the proceeding in question.
The judge may order as a provisional measure, even prior to the filing of the lawsuit, the securing of the property subject to asset forfeiture, and may also order a sand still since the issuance of the measure, with the intention of guaranteeing the conservation of the property, without granting the affected person the right to offer a bond in order to have such measure lifted.
The DA may request from the judicial authority the client’s information from credit institutions and other financial, trust and tax system entities, and due to the nature and purpose of the Action, the banking, exchange, stock exchange or tax secrecy shall not be opposable, nor shall the access to the information contained in databases be prevented regarding asset forfeiture.
In the event that the judgment declares the asset forfeiture, the judge may also declare the extinction of other rights, principal or accessory over them, if it is proven that the owner knew the cause that gave rise to the Action. In case of guarantees, the holder must prove the pre-existence of the secured credit, and if necessary, that the measures established by law for the granting and use of credits were taken; otherwise, the judge will declare the collateral extinct. On the other hand, if the Action is declared inadmissible, the return of the assets will be ordered immediately, or when it is not possible (meaning the case in which the anticipated sale has been made), the delivery of their updated value will be carried out, to their legitimate owner or possessor, together with the interests, yields and accessories, minus the administration expenses, in liquid amount that effectively have been spent (if any). In addition, a resolution will be made concerning the lifting of the precautionary. and provisional measures that may have been imposed.
The acquittal of the person involved in the criminal proceeding, or the non-application of the penalty of confiscation of property, does not prejudge the legitimacy of any property.
The judgment that declares the asset forfeiture, shall also resolve the issue of preferential rights in the terms provided by the Law (as described hereafter).
The possibility of use by the government, or even the anticipated sale of the asset, during the process of asset forfeiture and prior to the issuance of the final judgment, is provided; with the exception of those assets which the authorities consider to be object of proof. In addition, in the event of asset forfeiture for being declared, the Administrative Authority will not be able to dispose of the assets if, in any pending criminal case, their preservation is ordered for probative purposes.
The anticipated sale of the asset, subject to the process, shall proceed only if: (i) such disposal is necessary based on the nature of the property; (ii) they represent an environmental or health hazard; (iii) over time they may suffer loss, deterioration or impairment or, in any case their operation may be seriously affected; (iv) its administration or custody becomes unaffordable or causes damage to the treasury; (v) it is fungible, consumable, perishable, self-sustaining or other animal movable property; or (vi) it is an asset that, without suffering material deterioration, depreciates substantially over time.
The assets may be given in use, deposit or commodatum, when: (i) they allow the public administration to obtain a greater benefit than that resulting from their anticipated sale, or such disposal is not considered appropriate prior to the final judgment, and (ii) if they are suitable for a public service. Upon request of the affected person, and once the ownership and lawfulness of the possession of the assets have been proven, they may remain in possession of their owner, possessor or any of their occupants, as depositary; those who remain in possession of the assets may not sale or encumber them.
The Federal Law provided, regarding the application of the proceeds of the sale of asseasset forfeiture, a first priority right for the reparation of any damage to the victim, and then for the payment of credits secured by the asset; in this case, the Law suppresses this scenario and establishes, as second priority, the payment of disbursements derived from the execution of social programs for crime prevention, programs for public security institutions strengthening and the procuration of justice, in accordance with the objectives established in the National Development Plan.
When the assets are abroad or subject to a foreign state jurisdiction, both the precautionary measure and the execution of the asset forfeiture judgment, will be substantiated through international legal assistance.

Conclusions

The Law has a national character and, unlike the Federal Law, this one will be applicable at the federal and local level.

Although, on one hand, the Law establishes the independence of the special process of asset forfeiture from the criminal procedure, it also determines the illicit act as one of the elements that conditions asset forfeiture. Under this logic, it should be noted that, factually, it is not possible to identify the autonomy or rupture of the criminal procedure referred to both in the Law and in the Constitution, since it does not correspond to a civil judge the determination of the existence or not of an illicit act or a criminal offence, but to a criminal court.

Furthermore, even when the anticipated sale of the specific assets referred to in the Law is contemplated, this applies, in general terms, to those properties, that have the character of perishable or not manageable for the State; and finally, the Law contemplates that, the requirements for the Action to proceed will not be configured, when it is proven that the owner did not know the illicit act related to the asset, and in case of having learned of it, did give timely notice to the authority. In this understanding, as long as the transactions related to properties are conducted with due.

Operation Rules for the Public Registry of Water Rights

On July 23, 2020, the preliminary draft of the Operation Rules for the Public Registry of Water Rights, prepared by the National Water Commission, part of Mexico Ministry of Environment and Natural Resources, was published on the website of the National Commission for Regulatory Improvement.

These Rules have not yet been published in the Federal Official Gazette, for their entry into force, as they are undergoing the regulatory improvement process, after which they will be published with the corresponding adjustments and will then be effective.

The following is a summary of the content of this preliminary draft to date:

The purpose of issuing these Rules is the updating of the legal framework that regulates the operation of the Registry and incorporate as well the use of information technologies for various procedures, the establishment of the operation bases for the services provided by the aforementioned Registry, the requirements for the registration of all acts which, in accordance with the Law on National Waters, may be registered, as well as for the recording of preventive annotations and the means by which the entries in the Registry are to be publicized.

It is foreseen that, for the operation of the Registry, the principles of maximum disclosure, first in time first in law, registration, specialty, legality, officiousness and good faith will be observed.

It is established that the recording of the acts and documents in the Registry will have declaratory effects against third parties, and that the titles of concession or assignment, as well as the permits susceptible of registration, which are not registered in the same, will not produce any legal effect against third parties.

Furthermore, the publicity of the registered acts will be made on the website of the National Water Commission or upon request to the Registry with the corresponding payment of fees and the registration will be made within a period of no more than 15 business days after the Registry receives the request.

Regarding the registration in the Registry of the matriculation, extension, modification, transfer, extinction and revocation of concession or assignment titles or permits, it is established that this can be done through the following means:

Personal registry qualification. It is carried out by an official assigned to the Management of the Public Registry of Water Rights who will carry out the analysis of the title and/or permit, the administrative resolution and other supporting documents of the act that is requested for registration, in order to ensure that it complies with the applicable legal framework in force, and that there is congruence with the supporting documents or the registry records and preventive notes existing in the Registry itself; thus, when the proceeding of registration of the act is determined, the registrar will carry out the corresponding registration.

Automatically. With respect to those procedures in which the personal registry qualification is non essential, the register will instruct in the system of electronic procedures that these can be registered automatically, in which case the recording in the Registry will be generated electronically.

And for registration, the following requirements must be met:

Application for registration in the Registry submitted by the administrative unit that issued the act for which registration is requested. In the case of files handled through the electronic procedure system, the application for registration will be understood to have been made when the file is turned over to the Registry for its registry qualification through said system.

Administrative resolution electronically signed in those procedures attended electronically by the Electronic Procedures System; in the case of files attended physically, a copy of the corresponding resolution duly signed must be sent to the Registry.

Except in cases of extinction and revocations, the title or permit signed electronically in those procedures handled by the Electronic Procedures System; in cases of files physically handled, the original title or permit must be sent to the Registry.

Information on the title or permit for which registration is requested, stored in the corresponding database, for those procedures that are not sent through the Electronic Procedures System.

The supporting documents of the act for which registration is requested in accordance with the applicable legal provisions contained in the file.

In addition, the Rules contemplate those acts for which a preventive annotation must be recorded, and the requirements for this annotation.

The Registry shall automatically register regulated areas, closed areas, reserve declarations and hydraulic planning for national waters, as well as the availability of national waters, and shall also make available to users in general, through the Commission's website, public information registered in the Registry for free consultation.

In order to request the Registry to issue certificates and certified copies of the titles of concession, assignment, permits or registration of works in the free zone, the following requirements must be met:

Request for issuance of certificate or certified copies presented at the Integral Service Center;
Proof of payment for the certificate referred to in the Federal Rights Law, and;
Copy of the applicant's official ID

Finally, the Registry must keep the database of titles of concession or allocation of national waters and their inherent public goods, as well as wastewater discharge permits registered in the Public Registry of Water Rights, updated, along with the free database available for public consultation via internet, for which purpose it may take the necessary actions to keep it updated. If proof of the existence or non-existence of the records contained therein is required, users will be able to submit the corresponding formality, upon payment of fees.

The referred Rules shall enter into force the day following their publication in the Federal Official Gazette, and with this, the Rules of Organization and Operation of the Public Registry of Water Rights, published in the Federal Official Gazette on December 6, 2002, shall be abrogated, and all notices, circulars and other documents regarding registration requirements issued prior to the entry into force of the same shall be void.