Pemex Industrial Transformation to Challenge Cofece Fine

(Pemex, 26.Aug.2018) — As of today, the Commission of Economic Competition (acronym in Spanish, Cofece) published the fine imposed on Pemex TRI for over 418 million pesos, for allegedly having failed to comply with one of the obligations acquired in October 2016, to restore competition in marketing and distributing 7 oil products.

Pemex Transformación Industrial wishes to state the following in this regard:

– 1) Pemex TRI has complied with all the obligations it acquired with the Cofece to prevent any inappropriate practices in the first-hand competition and sales of  oil products currently under investigation.

– 2) Pemex TRI has worked with the Cofece from the start to correct such practices. Since Pemex TRI assumed the obligations assumed with the Cofece, the company has corrected all the practices that were observed.

– 3) Among the obligations that were acquired, Pemex TRI assumed the obligation to submit an annual report for five years, issued by an external auditor who will accredit that marketers of the oil products under investigation are receiving equal treatment. This report must be submitted during the first quarter of each year.

– 4) Pemex TRI ratified the obligations it assumed on October 11, 2016, and therefore, the obligation to prepare the annual report issued by the external auditors expired on October 11, 2017. From this period onwards, the report was to be issued during the first quarter of 2018. The external auditor’s report was submitted on March 23, 2018.

– 5)However, the Cofece stated that the annual auditing report for the first year was submitted out of time. It claims the report should have been filed during the first quarter of 2017, that is, four months after signing the commitment, which contradicts the nature of the annual report established by the Commission and article 114 of the Federal Law of Economic Competition.

– 6) Pemex TRI will file proceedings before the Judicial Branch to contest this measure, as the fine is in itself illegal and disproportionate.

– 7) Notwithstanding the above, Pemex TRI will continue to promote competition through actions that will further transparency and clarity in its relationships with its clients.

***

Pemex Unit Fined $22 Mln by Competition Authority

(Reuters, 21.Aug.2018) — Mexico’s competition authority said on Tuesday that it has fined a unit of state-owned oil company Pemex for presenting an annual compliance report on antimonopoly measures in the recently opened fuel market a year after it was due.

The Federal Commission for Economic Competition, or COFECE, fined Pemex’s Industrial Transformation unit, responsible for a range of refining and logistical activities, 418.31 million pesos ($22.1 million) for the late report.

COFECE said the report, one of the measures the Pemex unit committed to in 2016 to end an investigation into monopolistic practices in the sale and distribution of diesel and other fuels was presented a year late.

“By delaying the presentation of the aforementioned audit, Pemex’s TRI (Industrial Transformation unit) disregarded a necessary and fundamental element for COFECE to verify compliance with the obligations acquired,” the authority said in a statement.

Pemex will challenge the decision, contending that it has complied with all reporting requirements, and describing the fine as “illegal and disproportional,” the company said in a statement later on Tuesday.

Last year, COFECE fined Pemex’s Industrial Transformation unit nearly 369 million pesos for the “possible commission of a monopolistic practice… in the diesel market.”

At the time, Pemex said it would challenge the fine.

Reporting by Adriana Barrera and David Alire Garcia; Writing by Anthony Esposito; Editing by Sandra Maler

***