On May 3rd, 2003, the Mexican President published the Decree that amends, adds and derogates several provisions of the Federal Law for the Control of Chemical Precursors, Essential Chemical Products and Machines for the Manufacturing of Capsules, Tablets and/or Pills ("Amendment").

The Amendment comes in a context of diplomatic tension between the governments of Mexico, China and the United States, due to the fentanyl and other chemical substances consumption crisis in the United States.

Regarding the content of the Amendment, the following aspects stand out:

The Decree elevates the Law in question to the rank of "public order, general interest and observance throughout the national territory", due to the important public health implications it presents.

The Amendment modified the definitions of essential precursor chemicals and essential chemicals for including a broader concept that encompasses more substances, such as synthetic drugs.

Under the Amendment, the Integral System of Substances (the "SISUS") is now formally recognized, being its main objective to simplify administrative procedures for persons carrying out regulated activities. Through its registry, the SISUS will allow knowing the location, quantity and type of chemical precursor, essential chemical product or machines related to its production. The information contained in the SISUS is confidential and may only be provided by order of a Federal Control Judge, within the proceedings of crimes against health due to organized crime.

As a result of the Amendment, regulated entities must do the following:

• Report annually to the Ministry of Health ("SSA"), through the Federal Commission for the Protection against Sanitary Risks ("COFEPRIS"), information regarding the subjects with which they carry out activities; and

• Register the regulated activities they carry out, within a period not exceeding 24 hours, counted from the time they carry out the corresponding activity, within the SISUS.

The Amendment also enhances as competent authorities in this matter the Ministry of National Defense, the Ministry of the Navy, and different bodies of the Ministry of Finance and Public Credit, such as the Financial Intelligence Unit, the Tax Administration Service and the National Customs Agency of Mexico.

Likewise, the Ministries of Security and Citizen Protection and the Environment and Natural Resources, as well as COFEPRIS and the National Guard, are empowered to cooperate with the authorities mentioned in the preceding paragraph in the prevention and detection of deviation to produce drugs, chemical precursors, essential chemical products and machines to produce capsules, tablets or pills.

The obligation to the importation or exportation of chemical precursors and essential chemical products to be carried out only through the customs offices determined by the SSA prevails, but now granting express verification authority to COFEPRIS.

Finally, the Amendment incorporates new sanctions. Among the most relevant are: (i) a sanction form 10 to 15 years of imprisonment and a fine equivalent to the 10% of the income obtained for anyone who deviates or makes use of chemical precursors or essential chemicals to produce synthetic drugs; and (ii) a sanction from 7 to 10 years of imprisonment and a fine of one thousand to five thousand Units of Measurement and Actualization for anyone who has in his possession chemical precursors, essential chemicals or machines to produce capsules.

Next steps

After the Amendment was published, the President of the Republic must make the necessary amendments to the Regulations of the Law. Such obligation must be completed within 180 calendar days following the publication of the Amendment, which period expires on October 30, 2023.

Likewise, the Ministry of the Navy and the Ministry of Infrastructure, Communications and Transportation must publish the formats through which the notices for the transportation of chemical precursors or essential chemicals must be submitted.