Legal provisions.

Navigation and Maritime Commerce Law (hereinafter LAW).

Regulation of the Navigation and Maritime Commerce Law (hereinafter REGULATION).

Legal reasoning.

In accordance with Article 7, Section I of the LAW, the Ministry of the Navy (hereinafter SEMAR) is the authority in matters of merchant marine and holds the status of the National Maritime Authority.

SEMAR, in its capacity as the national maritime authority, has the authority to ensure that general waterways and navigation comply with safety conditions.

To fulfill this objective, SEMAR has the authority to inspect and certify Mexican naval artifacts and vessels in compliance with international and national regulations concerning navigation safety, the protection of human life at sea, and the prevention of marine pollution.

In the case of exploration and extraction platforms, the law classifies them as naval artifacts. This is because the law, in Article 2, Section V, defines naval artifacts as: "Any other fixed or floating structure that, although not designed and built for navigation, is capable of being moved on the water either by itself or by a vessel, or is built on the water for the fulfillment of its operational purposes."

Furthermore, the regulation grants various powers to SEMAR and imposes obligations on the builders and/or owners of naval artifacts in order to ensure that they comply with the applicable regulations.

In this regard, the law grants the status of public interest to inspections and empowers SEMAR to carry them out. This is in accordance with Articles 8, Section XX, and 65 of the Law, which state:

"Article 8.- The powers of the Secretariat, without prejudice to those corresponding to other agencies of the Federal Public Administration, are as follows:"

1. "To inspect and certify Mexican vessels and naval artifacts, as well as service facilities and waste reception facilities, for compliance with international treaties, national legislation, regulations, and Mexican official standards concerning navigation safety, human life at sea, and the prevention of marine pollution by vessels;"

"Article 65. The inspection service is of public interest. The Secretariat will inspect and certify that Mexican vessels and naval artifacts, as well as service facilities, comply with the applicable regulations. and waste reception facilities, comply with national legislation and international treaties regarding navigation safety, the protection of human life at sea, and the prevention of marine pollution by vessels."

Service facilities

The REGULATION, in its Article 424, defines service facilities as: "facilities that provide services to vessels, naval artifacts, and offshore units operating in national territory."

These facilities are obligated to have the corresponding registration with SEMAR in accordance with Articles 315 and 426.

"Article 315.- Service facilities will be issued: I. A permanent registration number and maritime approval certificate, valid for twelve months, to: shipyards, docks, floating docks, slipways, and naval repair workshops, whether mechanical, electrical, electromechanical, or radioelectrical,"

"Article 426.- All service facilities and waste reception facilities referred to in Article 315 of this Regulation must be registered with the General Directorate."

To obtain it, SEMAR must carry out an inspection of the facilities. This is in accordance with the provisions established in Article 429 of the REGULATIONS.

 “Article 429.- Any service facility that complies with the provisions established in the Official Mexican Standards or applicable international agreements shall be issued, after an inspection, a maritime approval certificate, which will be valid for one year.

Likewise, Article 74 of the LAW establishes the obligation to construct naval artifacts (platforms) under safety conditions in accordance with the International Treaties and the REGULATIONS. To this end, the construction must comply with the following requirements:

"Article 74.- The construction, as well as the significant repair or modification of vessels, must be carried out under technical safety conditions, in accordance with the International Treaties and the respective regulations, for which:"

1. "The shipyards, docks, slipways, workshops, and facilities serving the Merchant Marine must adhere to the respective Mexican official standards;"
2. "The project must be previously approved by the Secretariat and developed by professionally recognized individuals or legally constituted companies, with demonstrated technical capacity;"
3. "III. During the work, the vessel under construction or repair shall be subject to the corresponding tests, inspections, and verifications;"
4. "At the end of the work, the vessel will require maritime safety and tonnage certificates issued by the Secretariat directly or by an inspector authorized by it."

"To fulfill the mandate established in section I of the aforementioned article, it can only be achieved through registration as a service facility. The current regulations do not provide the SEMAR with any other mechanism to ensure that the construction yard observes and complies with the corresponding official standards."

Legal implications for non-compliance with the applicable regulations.

SEMAR will be subject to a fine equivalent to fifty thousand current minimum wages in Mexico City, amounting to $7,085,000.00 in accordance with article 293 of the LAW and article 692 of the REGULATIONS.

"Article 293.- In order to supervise the process of construction, repair, modification, or maintenance in dry dock of a Vessel or Naval Artifact, the shipowner must request an inspection from the General Directorate at least fifteen calendar days in advance of its commencement when it is in national territory, and thirty calendar days when it is abroad."

"Article 692.- The Port Captains, in accordance with the provisions of articles 9, section XIII and 326, section IV of the Law, within the scope of their respective jurisdictions and competencies, will sanction violations of the provisions of the Law and those regulated in this Regulation as follows:"

"III. A fine of fifty to one thousand days of salary to the owner of a Mexican Vessel or Naval Artifact who:"

"Fail to allow Inspection and verification visits as established in this Regulation;"

[…]

"Inability to flag and register the naval artifacts, prior to verification by the national maritime authority in accordance with the provisions of Article 10 of the Regulation."

"Article 10.- Mexican vessels and naval artifacts are those flagged and registered in a port captaincy, at the request of their owner or shipowner, after verifying their safety conditions." 

Flagging is the act by which the Mexican Flag is imposed on a Vessel or Naval Artifact. To be considered Mexican and to fly the National Flag, vessels and naval artifacts must be registered.

The lack of registration and flagging has the following consequences:

• The inability to register the naval artifact in the Public Naval Registry.

• The lack of registration prevents the recording of any act related to the naval artifact, such as:

•  Contracts for acquisition, transfer, or assignment, as well as those constituting real rights, transferring or extinguishing ownership, including their modalities, mortgages, and liens on Mexican vessels; all of which must be documented in a public instrument granted before a notary or public broker.

•  Contracts for the construction of vessels or naval artifacts carried out within national territory, as well as those built abroad that are intended to be flagged as Mexican.

• Judicial and administrative rulings that are duly authenticated;

• Any other contract or document related to vessels, maritime commerce, and port activities, when required by law.

Inability to issue provisional safety certificates in accordance with Article 305 of the REGULATION.

"Article 305.- The OSSM, prior to the authorization of flagging, registration, and, where applicable, the assignment of the distinctive call sign, shall issue to Vessels and Naval Artifacts the applicable provisional certificates with limited validity in the following cases:

1. Newly constructed Mexican vessels, whether in national territory or abroad. The validity of the provisional certificates will be one hundred and twenty calendar days, non-extendable.

 OSSM. Maritime Safety Supervision Officer assigned to the Ministry, responsible for conducting surveys, inspections, verifications, and certifications of Mexican or foreign-flagged Vessels and Naval Artifacts, as well as service facilities, in compliance with the provisions established in this Regulation and applicable International Treaties. It is important to mention that, as a result of the reform, the Maritime Safety Supervision Officer is the Deputy General Directorate of Maritime Protection and Certification within the Port Captaincy and Maritime Affairs Unit of the Ministry of the Navy.