February 15, 2019

Mexico Supreme Court Declares Unconstitutionality of a Legal Provision with General Effects

The Unprecedented Ruling Affects the Country's Telecommunications Sector
Holland & Knight Alert
Octavio Lecona

Leer en Español: México SCJN declara inconstitucionalidad de un precepto normativo con efectos generales

Mexico's National Supreme Court of Justice rendered a judgment declaring the unconstitutionality of specific language of Article 298, Section B, Subsection IV of the Telecommunications and Broadcasting Law. The legal precept serves as an "umbrella" provision that empowers the telecommunications regulator to fine concessionaires and licensees with amounts ranging from 1 percent to 3 percent of their taxable income for violations of the regulatory framework which are not specifically provided for in the sanctions chapter of said law.

At the end of 2017, the Supreme Court considered in reiterated resolutions that the minimum fine equivalent to 1 percent of taxable income was excessive and irrational in view of the sanctions' system of said law and, therefore, unconstitutional for breaching Article 22 of the Mexican Constitution.

As a result of the declaration, the portion of the legal precept referring to the minimum sanction equivalent to 1 percent can no longer be applied to any person. The declaration will take effect from the date of its notification to Mexican Congress.

It is the first time the Supreme Court has exercised this power since its inclusion in the Mexican Constitution in 2011. The third paragraph of Section II of Article 107 of the Constitution empowers the Supreme Court to issue a declaratory judgment of unconstitutionality provided that a) the unconstitutional provision has not been resolved within a 90-day period from the notification of the jurisprudential criteria to the issuing body; b) it is with respect to legal precepts other than those that are tax related, and c) it is approved by at least eight justices.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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