Import, export and return of waste has been on the international environmental agenda since early 1980s. The Basel Convention on the Control of Transboundary Movements of Hazardous Waste and their Disposal was adopted in 1989 and entered into force as of May 5, 1992 with 53 signatories, including Mexico (“Basel Convention”). The Basel Convention is aimed to protect human health and the environment against the adverse effects of waste by reducing to a minimum the generation and transboundary movement of hazardous waste and ensuring their reasonably environmental handling.
The scope of application of the Basel Convention involves hazardous waste and non-hazardous waste, this last classified by virtue of its origin, composition and their characteristics, are identified for the purposes of the Basel Convention as “other non-
hazardous waste foreseen and controlled by Basel Convention”.
The Basel Convention requires the exporting Country to provide notice to the receiving Country prior import or export of waste.
In order to proceed with said transboundary movement, the receiving Country shall provide its written consent and assure the waste will be handled and disposed in terms of the applicable Environmental Legislation of the receiving Country.
INTERNATIONAL LEGAL FRAMEWORK
The legal framework at international level that governs transboundary movements of waste in Mexico such as Imports, Exports, or in the case of IMMEX Companies Return of waste are the (i) Basel Convention and its amendments; (ii) Decision C (2002) 107 (final) of the Organization for Economic Cooperation and Development (OECD) which organization was founded in 1961 to stimulate economic progress and world trade; (iii) OECD Decision C (92) 39 which was adopted in March 1992 and establishes a control system for transboundary movements of waste destined for recovery operations. This last Decision has been updated several times; (iv) Agreement between the United States and Mexico on Cooperation for the Protection and Improvement of the Environment in the Border Area, signed in La Paz, Mexico, on August 14, 1993, and in force as of February 16, 1984, whereby the United States and Mexico under the principle of good neighborliness discussed environmental problems derived by the growth of the industry in order to combine bilateral efforts for the environmental protection in the border area within which are included the cross-border shipments of hazardous waste, (identified commonly as “La Paz Treaty”); and (v) the renegotiated United States-Mexico-Canada Agreement (formerly the North American Free Trade Agreement (NAFTA) that establish a free-trade zone in North America among Canada, United States and Mexico (now “USMCA”). USMCA entered in force on July 1, 2020.
DEFINITION OF TRANSBOUNDARY MOVEMENT
Section three of article 2 of the Basel Convention provides the definition of “transboundary movement” understood as any movement of hazardous waste or “other non-hazardous waste foreseen in international treaty” coming from an area subject to the jurisdiction of a certain Country and destined for an area subject to the jurisdiction of another Country. The transboundary movement can be considered as any Import, Export and Return of waste whether hazardous or non-hazardous for environmental handling activities, including without limiting recycling, treatment or final disposal.
MEXICO’S ENVIRONMENTAL LEGAL FRAMEWORK
In Mexico the Ministry of Environment and Natural Resources (“SEMARNAT”) is the governmental environmental agency entitled to regulate transboundary movements of waste and the Federal Attorney´s Office for Environmental Protection (“PROFEPA”) is the Environmental Attorney’s Office in charge to verify compliance of the applicable regulations when importing, exporting or returning waste at the entry and exit points of Mexico pursuant to the terms of the General Law of Ecological Equilibrium and Environmental Protection, as well as the General Law for the Prevention and Integral Management of Waste and its Regulations.
The current Foreign Trade Law of Mexico, establishes in its article 20 that all raw materials (including waste or by-products) subject to regulations at the entry or exit points of the Country shall be identified by a tariff code, in other words, regulations may be imposed only in the case raw materials have been identified with a tariff code.
Pursuant to the aforementioned paragraph, in order to identify if certain raw material or waste are subject to a specific environmental regulation at the entry or exit points of Mexico, the first step is to identify the tariff code.
In said regard, on December 26, 2020 it was published in the Mexican Official Gazette of the Federation a Decree that establishes the raw materials and tariff codes whose import, export and return is subject to regulation by SEMARNAT, which contains that all those (i) hazardous waste; or (ii) “other non-hazardous waste foreseen on international treaties” (as said term was defined above) governed by the Basel Convention that derived by its tariff codes are subject to file and obtainment of an Authorization for Transboundary Movement before SEMARNAT.
For example in the specific case of IMMEX Companies, same have to file before SEMARNAT (i) Notice of Raw Materials Imported Under Temporary Regime that generate hazardous waste; (ii) Notice of Waste Recycled in Mexico; or (iii) Notice of Waste Returned Abroad (as the case may be, if waste stays in Mexico only for recycling purposes or is returned abroad) through procedure number SEMARNAT-07-021, format FF-SEMARNAT-046; (iv) Report of the Use of the returned waste. The aforementioned activities are subject to the verification of PROFEPA, which can be done at the entry of the raw material into the Country and/or at the exit/return of the waste from Mexico to Abroad (hereinafter identified as the “Transboundary Movement Regulation”). We will further discuss in detail IMMEX Companies.
DEFINITION OF WASTE IN MEXICO
In order to determine if the raw material to be imported or exported is subject to the Transboundary Movement Regulation described above, the Generator (Individual or company that produces waste, through the development or processes of consumption), shall be able to identify if said raw materials are waste. For said purpose it is important to take into consideration the definition established in article 5, section XXIX of the General Law for the Prevention and Integral Management of Waste which establishes that: a waste shall be understood as a material or product whose owner or possessor discards and that is in a solid or semi-solid state, or is a liquid or gas placed in containers or deposits, that may be capable of being valued or requires to be subject to treatment or final disposal in accordance with the provisions of the General Law for the Prevention and Integral Management of Waste and other applicable regulations.
HAZARDOUS OR NON-HAZARDOUS WASTE
Once it is identified that the raw material subject to Import, Export or Return is waste in Mexico, then, the Generator has the obligation to determine if it is: (i) hazardous; or (ii) non-hazardous waste.
To achieve this task, a test needs to be performed on the waste to determine if it has characteristics of corrosivity, reactivity, explosivity, flammability or the content infectious agents (CRETIB Test) besides, there are two main Mexican Official Standards among others, that will provide the elements to determine if it is or not hazardous waste.
The first is Mexican Official Standard NOM-052-SEMARNAT-2005, which establishes the Characteristics, the List of Hazardous Waste, as well as the procedure for identification, classification of hazardous waste (“NOM-052”). The Second Mexican Official Standard is NOM-161-SEMARNAT-2011, that establishes the criteria to classify and list Special Handling Waste, which is non-hazardous waste (“NOM-161”).
Due to the revision of the list of hazardous waste established in NOM-052 or the CRETIB Analysis results, in the event the raw material subject to the transboundary movement is classified as a hazardous waste, importer or exporter of said material will be subject to the Transboundary Movement Regulation and by general rule, shall file and obtain before SEMARNAT the Authorization for Transboundary Movement.
For the obtainment of said Authorization for Transboundary Movement, importer or exporter, will have to obtain written consent from the receiving Country to carry out the import or export, and shall provide an insurance or warranty before SEMARNAT sufficient enough to respond for environmental liability derived by said transboundary movement of hazardous waste, among other requirements.
The aforementioned has an exemption, which are the IMMEX Companies that are subject to specific regulations that will be further discussed.
In the event it is a non-hazardous waste, the Basel Convention and the Decision C (2002)107 of the OECD describe the raw material or waste controlled by said instruments and are to be considered for compliance purposes in Mexico as “other non-hazardous waste foreseen on international treaties”, and therefore subject to the Transboundary Movement Regulation. In the case of the La Paz Agreement, it is clear that only applies to transboundary movements of hazardous waste.
For example, in the Basel Convention the waste subject to control is the following:
- waste described in Exhibit I of the Basel Convention;
- waste not included in Exhibit I, but defined and considered as hazardous waste in the Country of export, import or in transit;
- waste described in any of the categories of Exhibit II of Basel Convention;
- waste described in any of the categories of Exhibit VIII of Basel Convention;
- waste described in any of the categories of Exhibit IX containing hazardous characteristics described in Exhibit III of the Basel Convention.
From the revision of the abovementioned Exhibits, including the last Amendment BC-14/12 to Exhibits II, VIII and IX of said Basel Convention in force in Mexico as of January 1, 2021, if the raw material or waste is identified by tariff code in the Transboundary Movement Regulation and controlled by the Basel Convention, even in the case it is a non-
hazardous waste, the importer or exporter of said raw material or waste will have to file and obtain before SEMARNAT the aforementioned Authorization for Transboundary Movement.
IMPACT ON IMPORT, EXPORT AND RETURN OF WASTE DERIVED BY AMENDMENT BC-14/12 OF THE BASEL CONVENTION
The recent Amendment BC-14/12 of the Basel Convention to Exhibits II, VIII and IX, creates an impact on Import, Export and Return of waste, since diverse types of plastics that formerly were not classified as waste subject to control of the Basel Convention where added, and as of the entry into force of the aforementioned amendment it is now required to file and obtain an Authorization for Transboundary Movement of plastics pursuant to article 50 paragraph X of the General Law for the Prevention and Integral Management of Waste and articles 108, 109, 115, 116 and 119 of the Regulations of the aforementioned Law. In other words, the Amendment classify most plastics as waste.
Said situation is producing an impact because the Authorization for Transboundary Movement prior to the Amendment was only granted for Transboundary Movements of Hazardous Waste, which is certainly not the case of plastics that are considered non-hazardous waste pursuant to NOM-161, and regardless of the aforementioned, the plastics are subject of the recent amendment of the Basel Convention and required to obtain the Authorization for Transboundary Movement.
In order to be exempt from obtaining the Authorization described in the preceding paragraph, plastics shall meet very narrow and strict conditions, for example plastics shall be pre-sorted, cleaned, and assigned for recycling in an “environmentally sound manner”. This definition of environmentally sound manner is creating confusion among importers and exporters, since it is not clearly defined in the Amendment BC-14/12 of the Basel Convention, thereby generating diverse interpretations for compliance purposes. To date, we do not have knowledge of clarifications from SEMARNAT of said definition.
IMMEX MAQUILADORAS
IMMEX are companies (that can be 100% foreign owned) located in Mexico which operated under an IMMEX Authorization granted by the Ministry of Economy that perform importation of raw materials, machinery and equipment on a temporary basis to carry out activities of manufacturing, assembly, repair or services and the final product is exported mainly to the United States.
IMMEX Authorization is granted under the scope of the Decree for the Development of the Manufacturing Industry, Maquiladoras (“Assembly Plant”) and of Services for Exportation (IMMEX Decree), which objective is to reinforce competitiveness within the Mexican exporting sector, promote the continuity of operations of industrial activities, creation of new jobs, and encourage foreign investment in Mexico.
Said IMMEX Companies are subject to specific regulations regarding customs and environmental matters (including handling of hazardous waste) in comparison with other manufacturing companies established nationwide that do not operate under the scope of the aforementioned IMMEX Decree.
IMMEX Companies have a particular procedure to comply with the Transboundary Movement Regulation, since pursuant to the Decree, in the case of raw materials imported on a temporary basis under the IMMEX Authorization, in order to comply with the Regulation, it shall provide before SEMARNAT the Notice of Materials Imported under Temporary Regime pursuant to the Regulations of the General Law for the Prevention and Integral Management of Waste procedure number SEMARNAT-07-021, format FF-SEMARNAT-046.
In general, when an IMMEX Company imports into Mexican territory raw materials under temporary regime, the hazardous waste generated by the manufacturing process of said raw materials shall be returned to its Country of origin within the term provided in its IMMEX Authorization or at least within 180 natural days from the generation of said hazardous waste pursuant to the Regulations of the General Law for the Prevention and Integral Management of Waste.
Notwithstanding the aforementioned, hazardous waste generated by raw materials imported under the temporary regime may remain in Mexico only for recycling purposes, if said hazardous waste is not recycled or sent to an authorized recycling company in Mexico, then that hazardous waste shall be returned to its Country of origin within the term provided for said purpose.
Consequently, IMMEX Companies in order to comply with the General Law for the Prevention and Integral Management of Waste and its Regulations shall provide before SEMARNAT the following notices, as the case may be; (i) Notices of Raw Materials Imported Under Temporary Regime that generate hazardous waste; (ii) Notice of Waste Recycled in Mexico; or (iii) Notice of Waste Returned Abroad.
GUIDELINES FOR COMPLIANCE OF TRANSBOUNDARY MOVEMENT REGULATION
As a result of the diverse interpretations for the compliance of Transboundary Movement Regulation, as of April 15, 2021, SEMARNAT has disclosed in its Official Web Site, Guidelines for the Import, Export and Return of waste for the identification of the type of Transboundary Movement Authorizations, among which are (i) Authorization to Import Hazardous Waste for the First Time and Subsequent Imports; (ii) Authorization to Import Non-hazardous Waste Subject to Control under International Treaties; (iii) Authorization to Import Samples of Hazardous Waste; (iv) Authorization to Export Hazardous Waste for the First Time and Subsequent Exports; and (v) Export of Sample of Hazardous Waste.
The Guidelines issued by SEMARNAT describe the scenarios whereby any of the aforementioned authorizations will be applicable and establish specific guidelines for the fulfillment of applications, requirements and follow up procedures for the obtainment of same. The aforementioned Guidelines are aimed to help the interested importers and exporters to identified the type of authorization corresponding to its Waste Transboundary Movement.
For IMMEX Companies, SEMARNAT has issued specific Guidelines for Imports under Temporary Regime and Return of Hazardous Waste and Recycling of Hazardous Waste (in the event said waste stays in Mexico for recyclable purposes), published also on April 15, 2021 in the Official Web Site of SEMARNAT whose purpose is also to advise IMMEX Companies regarding the submission of the Notice of Materials Imported Under Temporary Regime, Notice of Waste Recycled in Mexico, or Notice of Waste Returned Abroad, as the case may be and in which cases will be subject to the verification from PROFEPA at the entry and exit point of the Country.
In our opinion, the aforementioned Guidelines have been both helpful and confusing to importers and exporters, including IMMEX Companies for the compliance of the Transboundary Movement Regulation. Besides the above, the Mexican Federal Law of Administrative Procedure establishes that all types of administrative acts, regulations, decrees, agreements, Mexican Official Standards, rules, guidelines, dispositions entitled to regulate specific obligations issued by governmental agencies from the federal government (as it is the case of SEMARNAT and the Transboundary Movement Regulation), shall be published in the Official Gazette of the Federation in order to be valid and to produce legal effects, which is not the case of the Guidelines described in this section.
CONCLUSION
In summary, importers and exporters, including IMMEX Companies, are having a hard time complying with the Transboundary Movement Regulation derived by the different interpretations regarding the types of waste foreseen and governed by the Basel Convention, terms nor properly defined, as well as the lack of tariff codes in the Exhibits of the Basel Convention in order to classify correctly the waste subject to a transboundary movement in terms of the Foreign Trade Law of Mexico.
Other issues that have been difficult for importers and exporters, including IMMEX Companies is the fulfillment of diverse formats and procedures provided by SEMARNAT, since said formats and procedures are insufficient to include all possible scenarios for import and export and return of hazardous waste and non-hazardous waste governed by international treaties, creating with the aforementioned uncertainty regarding the correct path for the compliance of the Transboundary Movement Regulation, and resulting as well on a considerable impact in its Import, Export and Returns of waste transactions.
We understand the importance to keep legislating in order to reduce the generation and transboundary movement of hazardous waste and ensuring their reasonably environmental handling, notwithstanding it is the responsibility of the Parties of the Basel Convention to establish specific dispositions by tariff code for the compliance of new regulations, including update of the formats and procedures and if necessary carry out the necessary amendments to the applicable Domestic Legislation, and consider all possible transboundary movement scenarios of hazardous and non-hazardous waste in order to provide response and legal certainty to importers and exporters, including IMMEX Companies avoiding a negative impact on the economy derived by uncertainty during Import, Export and Return of waste.
