Red Color Coding System Decreed in Mexico City and The State Of Mexico

Considering the hospital occupation of Mexico City and the State of Mexico, Claudia Sheinbaum (head of the CDMX government), Hugo López-Gatell (undersecretary of health) and Alfredo del Mazo (governor of the State of Mexico) announced that in both entities non-essential activities will be suspended for three weeks due to the COVID-19 pandemic, that is, from December 19 to January 10, 2021.

With respect to Mexico City, as published in the Official Gazette of CDMX, the activities that may continue to operate in said entity are:

1. Labor activities of the medical, paramedical, administrative and support branch in the entire Health System of Mexico City;
2. Pharmaceutical sector;
3. Cleaning and sanitization of medical units at different levels of care;
4. Supply, services and supply chains of all essential activities;
5. Elaboration and sale of bread;
6. Tortilla shops;
7. Groceries, miscellaneous and collections;
8. Small neighborhood businesses with a maximum of 3 (three) workers; with the exception of those located in the A and B perimeters of Mexico City’s Historical Center;
9. Veterinary clinics and sale of animal feed;
10. Laundries;
11. Dry cleaners;
12. Harnesses;
13. Moving services;
14. Maintenance services;
15. Manufacturing of medical supplies, equipment, and health care technologies;
16. Disposal of biohazardous and infectious waste;
17. Financial services;
18. Notarial services;
19. Energy sector;
20. Generation and distribution of drinking water;
21. Food and beverage industry;
22. Markets;
23. Supermarkets;
24. Self-service stores;
25. Passenger and cargo transportation services, their services and supply chains;
26. Agricultural, fishing and livestock production;
27. Agro-industry;
28. Chemical industry;
29. Courier services and electronic commerce;
30. Postal service;
31. Private security;
32. Nursing homes and senior citizens’ residences;
33. Shelters and care centers for women victims of violence, their children;
34. Telecommunications and media;
35. Emergency Services;
36. Verification centers;
37. Funeral and burial services;
38. Storage and cold chain services for essential supplies;
39. Mechanical workshops;
40. Repair shops;
41. Solid waste management;
42. Construction industry;
43. Mining;
44. Manufacturing industry;
45. Sale of prepared food only in the form of take away or home delivery services;
46. Hotels with a maximum capacity of 30% and only with lodging service. This capacity does not apply to the accommodation of health personnel, refugees or migrants who are under agreement with international organizations; and
47. Programs, procedures and public services necessary for the operation of Mexico City.

Regarding the State of Mexico, as published in the Official Newspaper of the State of Mexico, the activities that may continue to operate in the relevant entity are:

1. Labor activities of the medical branch in all its specialties, paramedical, administrative and support in the entire health sector;
2. The pharmaceutical and chemical sector in its production, distribution and sale (pharmacies);
3. The manufacture, maintenance and repair of medical supplies, equipment and technologies for health care, as well as those involved in the proper disposal of bio-infectious hazardous waste;
4. The cleaning and sanitization of medical units at different levels of care and other facilities directly linked to the provision of health services;
5. The activities involved in public safety, civil protection, procurement and delivery of justice, attention to victims and search of persons, as well as state legislative activity;
6. Financial services, notaries, pawnshops, tax collection, treasury services and those that allow their provision;
7. Distribution and sale of energy, gas stations and gas;
8. Generation and distribution of drinking water;
9. Food and beverage industry;
10. Supply centers, markets or their analogous, supermarkets, self-service stores, convenience stores, grocery stores, miscellaneous stores, butcher stores, poultry stores, creameries, bakeries, tortilla stores and similar;
11. Sale of prepared food and non-alcoholic beverages, via delivery to the place, to take away, and/or at home exclusively, by restaurants, inns, lunch stores, economic kitchens and other establishments whose activity is the preparation, sale or retail of food. No food or drinks may be consumed in the establishments;
12. Sale of food for animals and veterinary services;
13. Laundry and dry cleaning services;
14. Cargo transport services;
15. Public transportation services and the High Capacity Transport “BRT” of the Mexibus I, II and III Systems, as well as in the cabins of the Cable Car System. The concessionaires, permit holders, authorized persons and users must, during the term of the Agreement, observe the maximum limits of the permitted quota, as well as the modalities for the rendering of the service, as determined by the competent authorities;
16. Maintenance and mechanical repairs;
17. Agricultural, cattle, livestock, agro-industry, chemical and cleaning product activities and production;
18. Hardware stores, hardware stores, smithies, carpentry and material houses;
19. Sale of products to support work and home schooling, as well as improvements and maintenance to the operation of the home, limiting their sale at home;
20. Courier, parcel and e-commerce services;
21. Private security and safety systems;
22. Social assistance centers for children and adolescents, homes for the elderly; shelters and centers for women victims of violence, their children;
23. Telecommunications, media, information technology, electronics and high technology;
24. Private emergency services, funeral and burial services;
25. Storage services, distribution centers and cold chain for essential supplies;
26. Cleaning and sanitation services of public and private spaces, which provide services to the public and are permitted;
27. Logistics (communications of local jurisdiction, airports and railroads);
28. Construction, mining and manufacturing industries;
29. Manufacture of transportation equipment;
30. Supply chain and provisioning of essential activities;
31. Activities directly related to the operation of government social programs;
32. The construction, conservation and maintenance of critical infrastructure that ensures the production and distribution of indispensable services such as: (i) Drinking water; (ii) Electric power, gas, oil, gasoline, turbosine; (iii) Basic sanitation; (iv) Cleaning services; (v) Local jurisdiction communications including primary road infrastructure and mass transportation and telephone systems, as well as public transportation; and (vi) Hospital and medical infrastructure.
33. The production, distribution, supply, construction, conservation, repair, maintenance and provision of services of public utility or general interest, through concessionaires or contractors, as well as private ones, that are strictly necessary for the adequate execution of essential activities and that are directly related to them;
34. Shopping centers and malls must limit access to their facilities exclusively to those establishments that carry out the essential activities provided for in the Agreement, and may not have a capacity greater than 15%; and
35. The economic units that provide lodging services must limit their capacity to 30%.

By virtue of the evolving nature of the scenario before us, it will be important to follow up on the provisions, agreements and decrees that, from time to time, will be issued by the competent authority in order to stay informed of the legal provisions applicable to the labor, contractual and fiscal obligations of our clients.

As for the labor aspects, considering that the competent authorities have not issued a declaration of health contingency, the only relevant legal provisions are those related to the Joint Commission on Safety and Hygiene of the companies, the mandatory medical examinations for employees and the provisions applicable in case an employee is infected by COVID-19.

We remind you that without the issuance of the above-mentioned declaration, it will not be possible to suspend any of the effects of the labor relationship between the employer and its employees without the acknowledgment of the competent labor court.

In contractual matters, the general rule is that the parties shall comply with what has been agreed between them in the manner and terms that appear to have been agreed upon. Therefore, in order to determine whether a pandemic such as COVID-19 is justified, legal and sufficient cause to exempt from liability for the breach of contractual obligations assumed by the parties, it will be necessary to analyze the contract or legal act from which the relevant obligation derives. From this act, a definition could be derived of what constitutes an act of God or force majeure, the duration that this event must have in order to be considered as such and, if applicable, the procedure that the parties must follow in order to notify the other party of its update.

In case the parties have not included provisions to that effect in the executed contract, they will apply supplementary the provisions of the Civil Code of the respective entity or, in case of a commercial act, the provisions of the Federal Civil Code. In accordance with the provisions of the Federal Civil Code, as well as the Civil Code for Mexico City and the Civil Code for the State of Mexico, no one is obligated to the acts of God derived from acts or omissions due to the COVID-19 pandemic and, if applicable, the declaration of a health emergency, unless they have expressly accepted this responsibility or when the law imposes it.

If you or any of your customers are unable to comply with the obligations arising from their contractual relationship, it will be important to analyze in a detailed and timely manner the specific case and the provisions of the contract or legal document from which the obligation derives, to determine the possibility of invoking an act of God or force majeure and suspend its performance without liability.

We wish that all our clients, business partners and collaborators and their families are and remain without health complications. We reiterate our commitment to our clients to overcome these moments of economic and business uncertainty with creativity in the application of the best legal practices.

Yours sincerely,

Cannizzo