Mexico's lower house passes foreign investment reform
Deputies voted 314 to 117 to give the Defense, Navy and Security ministries a seat on the panel that screens foreign takeovers. Floor amendments remain.
Mexico's Chamber of Deputies passed a reform of the Foreign Investment Law on Tuesday, 314 votes to 117 with no abstentions. The vote covers the bill as a whole and the articles no lawmaker asked to amend.
The bill takes up the measure the Senate approved Sept. 30, which grew out of an initiative by President Claudia Sheinbaum. Articles with floor amendments still need a vote. If the text stays as it is, it goes to the president.
The dispute is over who decides. When the Senate passed it, Emmanuel Reyes Carmona of the governing Morena party, who chairs the Economy Committee, said the reform balances economic openness with national security. Miguel Márquez Márquez of the National Action Party (PAN) said putting the Army in the commission's routine work does not help attract capital. Francisco Daniel Barreda Pavón of Citizens' Movement rejected "militarizing foreign investment policy" as a way to protect the country.
The National Commission on Foreign Investment (CNIE), which approves certain investments, will add the secretaries of Defense, the Navy and Security and Citizen Protection as voting members. The attorney general's office, the intelligence agency (CNI), the tax agency (SAT) and the financial intelligence unit (UIF) will sit in without a vote on national security matters.
For investors, the change is the threshold. The CNIE will have to approve any foreign bid for more than 49% of a Mexican company that is above a set asset size and works in critical technology, in basic inputs such as energy or food security, or with sensitive information, especially personal data.
Transferring shares without that approval, or after the CNIE denies it, carries a fine of 5,000 to 200,000 times the daily UMA, the inflation-indexed unit Mexico uses for fines and fees. Ignoring risk-mitigation measures the commission orders draws the same penalty. Current law sets those fines in minimum wages.
The reform does not say what asset size triggers a review. The CNIE will set it in a general resolution.
