Background on the COFECET and its Replacement
The Mexican Senate has approved a reform that effectively dissolves the Federal Competition Economic Commission (COFECET) and transfers its responsibilities to a new entity, the National Antimonopoly Commission (NAC). This reform is part of a broader package aimed at simplifying organizational structures and strengthening competition policy under a new institutional model aligned with international standards and the provisions of the United States-Mexico-Canada Agreement (T-MEC).
Key Changes and Implications
- The NAC will have legal personality and its own assets, ensuring greater independence and autonomy.
- The reform addresses issues such as non-compliance with concentration conditions, failure to notify mergers and acquisitions, illicit concessions, and providing false information.
- Companies sanctioned for absolute monopolistic practices may be barred from participating in federal or local public tenders for a period of 6 months to 5 years.
Potential Criminal Actions
- The head of the Investigative Authority can now file complaints with the Federal Attorney General’s Office (FGR) following the issuance of a Probable Cause Opinion.
Rationale Behind the Reform
Emmanuel Reyes Carmona, president of the Economy Commission, emphasized that Mexico requires a robust, independent authority with full democratic legitimacy. The NAC prioritizes institutional effectiveness, transparent decision-making processes, and accountability.
The new antimonopoly body mirrors the structure of its U.S. counterpart, satisfying one of the T-MEC requirements and ensuring a separation between investigative and sanctioning authorities, which guarantees impartiality in decision-making.
This reform demonstrates compliance with Article 21 of the T-MEC regarding competition policy, as stated by Reyes Carmona.
Next Steps
The approved reform has been sent to the Chamber of Deputies for further legislative proceedings. The creation of the NAC is expected to strengthen Mexico’s competition policy framework and align it with international standards, ultimately benefiting consumers and businesses alike.
Key Questions and Answers
- What is the purpose of this reform? The reform aims to dissolve COFECET and establish a new, more robust National Antimonopoly Commission (NAC) that aligns with international standards and the T-MEC provisions.
- What changes will the NAC bring? The NAC will have legal personality, its own assets, and a clear separation between investigative and sanctioning authorities to ensure impartiality. It will address issues such as non-compliance with concentration conditions and illicit concessions.
- How will this reform impact companies sanctioned for monopolistic practices? Companies found guilty of absolute monopolistic practices may be barred from participating in federal or local public tenders for a period of 6 months to 5 years.
- What are the next steps following Senate approval? The approved reform has been sent to the Chamber of Deputies for further legislative proceedings.
