ARTICLE
3 January 2025

Constitutional Reform On Organizational Simplification

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Dentons Lopez Velarde

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On December 20, 2024, amendments to various articles of the Political Constitution of the United Mexican States regarding organizational simplification (the "Reform") were published in the Federal Register.
Mexico Government, Public Sector

On December 20, 2024, amendments to various articles of the Political Constitution of the United Mexican States regarding organizational simplification (the "Reform") were published in the Federal Register.

Under the Reform, the following autonomous and regulatory agencies will be abolished:

  • The National System for the Continuous Improvement of Education (MEJOREDU), whose functions will be assumed by the Ministry of Public Education.
  • The National Council for the Evaluation of Social Development Policy (CONEVAL), whose functions will be assumed by the National Institute of Statistics and Geography (INEGI).
  • The National Institute of Transparency, Access to Information, and Protection of Personal Data (INAI), whose functions will be assumed by the Ministry of Public Administration (SFP), the Control and Discipline Body of the Judiciary, the Comptroller Bodies of Autonomous Entities, the auditors of the Federal Congress, the National Electoral Institute and the Federal Conciliation and Arbitration Tribunal, within their respective jurisdictions. However, regarding personal data protection in possession of private parties, the Reform only establishes that the Organizational Law of the Federal Public Administration will define the body responsible for managing protection procedures, verifications, and the imposition of penalties (the specific entity has not yet been determined).
  • The National Hydrocarbons Commission (CNH), whose functions will be assumed by the Ministry of Energy.
  • The Energy Regulatory Commission (CRE), whose functions will be assumed by the Ministry of Energy.
  • The Federal Economic Competition Commission (COFECE), whose functions will be assumed by a new competition agency with legal personality and assets of its own, as well as technical and operational independence in its decisions, organization and functioning, ensuring the separation between the authority that investigates and the one that resolves the proceedings.
    The Federal Telecommunications Institute (IFT), whose functions will be assumed by the Ministry of Infrastructure, Communications, and Transportation, except for those related to economic competition, which will be assumed by the new competition agency.

Additionally, the Reform contemplates that the Telecommunications Investment Promotion Body will be integrated to the Ministry of Infrastructure, Communica-tions and Transportation.

A constitutional mandate is also established for public entities to adjust their organizational and occupational structures, eliminating duplication of functions.

The Reform became effective on December 21, 2024, except for the changes regarding economic competition and telecommunications, which will take effect 180 days after the entry into force of the secondary legislation to be issued in this regard. To implement the foregoing, the saving provisions of the Reform establish the following:

  • A 90-day deadline from its entry into force for Congress to make the necessary adjustments to the corresponding laws, except for adjustments regarding economic competition and telecommunications, for which no deadline is established for the issuance of secondary laws.
  • A 90-day deadline from the issuance of the legislative reforms approved by Congress for local congresses to harmonize their laws on access to public information and personal data protection.
  • Until the entry into force of the legislative reforms approved by Congress, the INAI, the local guarantor bodies, the CNH and the CRE will continue to operate under their current legislative framework. Subsequently, they will cease to exist and the legal instruments, agreements, inter-institutional agreements, contracts or equivalent acts issued or entered into by these agencies will remain in force and bind the institutions assuming their functions, without prejudice to the possibility of the parties to ratify, modify, or terminate them later on.
  • The commissioners of the CRE, CNH, INAI, and the state guarantor bodies, as well as the appointees of MEJOREDU, will conclude their terms once the secondary legislation becomes effective, except for those whose appointments conclude earlier. In cases where new appointments are required to meet a quorum, their duration may not exceed the entry into force of the secondary laws.
  • COFECE and IFT will cease to exist and their commissioners will conclude their terms, upon the entry into force of the legislative adjustments regarding economic competition and telecommunications contained in the Reform, i.e., 180 days after the secondary legislation in these matters becomes effective (the issuance of which is not subject to any deadline).
  • The licenses granted by the IFT will remain in effect, notwithstanding the obligations and considerations that the Federal Executive may establish under its authority.
  • The legislative adjustments to ne made shall consider the elimination of entities, administrative units, or structures representing duplication of functions, as well as the integration of decentralized bodies and units into centralized public administration departments capable of assuming their jurisdiction; the Federal Executive shall issue the corresponding abolishment decrees.
  • The labor rights of public officers will be honored pursuant to the applicable laws; the staff of abolished public entities will be integrated into the institutions assuming their functions, as applicable.

The Reform provides for a new competition authority with technical and operational independence but dependent on the Federal Executive, being the only case where the corresponding powers were not directly transferred to an Executive Federal entity. It seems clear that this exception was aimed at complying with Chapter 21 of the United States-Mexico-Canada Agreement (USMCA), which requires each country to maintain a national competition agency.

Likewise, although the Reform does not foresee substantive changes in secondary legislation, it is foreseeable that the mandate to adjust secondary laws to this Reform will be an opportunity to make other changes that should be monitored to evaluate their scope and effects. The same may occur with the new mandate to avoid duplication of functions in the organizational structure of public entities, which could entail the elimination of additional structures.

These changes will likely result in delays in all procedures currently under the jurisdiction of the abolished agencies and, eventually, changes in the resolution criteria to align those more consistently with each administration's policies.

If you require additional information about the above or any related matter, please do not hesitate to contact our team at Dentons López Velarde.

The full text of the Reform may be consulted here: DOF - Diario Oficial de la Federación

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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