Initiatives to Reform the Federal Cinematography Law in Mexico

February 16, 2021

On February 5, 2021, two different initiatives for the Federal Film Law (“LFC”) were published in various printed media, as well as in social networks. The first one, which will be presented by Senator Susana Harp (president of the Senate’s Culture Commission) and the second one by Senator Ricardo Monreal (coordinator of MORENA’s parliamentary group).

Susana Harp’s initiative will be submitted to give continuity to Mexico’s public policy on cinematography under an institutional model that, while dispensing with the operation of trusts and mandates, does not lose the dynamism, independence, and sense of creative freedom under which cinematographic production has developed in recent decades.

The purpose of this initiative is to add four (4) articles and a transitory article to the LFC consisting of:

• The Ministry of Culture, through the Mexican Institute of Cinematography (“IMCINE”), will promote national cinematography in its different activities, through subsidies or under systems of financial support, venture capital, guarantee and investment, for the benefit of cinematographic works that are produced or made.
• Eligibility of the projects will be determined based upon the following principles and criteria:

1) Respect for freedom of expression.

2) Promotion of cultural plurality.

3) Respect for cultural diversity.

4) Technical and economic feasibility.

5) Originality; and

6) Promotion of thematic diversity and cinematographic genres.

• IMCINE will form commissions for the selection of projects eligible for financing, made up of persons of recognized experience in the film industry from different specialties in the field.
• The commissions, in accordance with IMCINE’s budget availability, will identify those projects that will be developed under the modality of multi-year projects, in accordance with the Budget and Fiscal Responsibility Law, which will be managed by the authorities of the Ministry of Culture and IMCINE before the Ministry of Finance and Public Credit, to ensure budget sufficiency.

For the performance of its functions, IMCINE will have:

• The resources indicated annually in the Federal Expenditure Budget;
• The contributions made by the public, private and social sectors;
• Donations from individuals or legal entities, which will be tax deductible under the terms of the Law;
• The proceeds of the fees generated by services in cinematography, in accordance with article 19-C, section I, paragraphs a) and b) of the Federal Law of Fees;
• The administrative pecuniary sanctions that may be applied pursuant to this Law; and
• The resources indicated for such purpose in other laws.

Senator Ricardo Monreal proposes new legislation to encourage the granting of tax incentives and incentives to individuals or corporations that promote the production or distribution of audiovisual works. The initiative essentially seeks the following:

1. It guarantees audiences access to culture, as well as the exercise of their cultural rights.
2. Adjusts the scope of the Law, extending it to include other audiovisual works such as series.
3. Creates a glossary that makes the Law more understandable and operative.
4. Recognizes and protects the rights of audiences by establishing that the State will be responsible for implementing public policies to form hearings.
5. Establishes rules for the transmission of cinematographic works, such as the right to be shown in their original language.
6. It establishes minimum bases for Mexico to protect and preserve its national cinematographic cultural heritage.
7. Establishes clear rules for the exhibition of national works.
8. It encourages the granting of tax incentives and incentives to individuals or companies that promote the production or distribution of audiovisual works.

Senator Monreal emphasized the importance of Articles 8 and 19 of the initiative, yet to be presented. Article 8 establishes the obligation of transmission in the original language, while Article 19 is the adaptation that has existed since the golden age of national cinema, to establish screen time for the exhibition of Mexican cinema.

Senator Monreal also added that comprehensive reform on the matter is considered necessary to update the legislation in accordance with national and international requirements. In the text of the initiative, Senator Monreal states that cinema is one of the most important arts worldwide.

Finally, it is important to mention that both initiatives have been withdrawn from the Senate for revisions, and we do not know when and if they will be approved or not.

OLIVARES will continue to actively monitor the present, and our Partner Luis C. Schmidt and his team are available for any questions or advice you may require.

Luis C. Schmidt luis.schmidt@olivares.mx; Guillermo Treviño guillermo.trevino@olivares.mx; Jaime Rodriguez jaime.rodriguez@olivares.mx; José Manuel Santin jose.santin@olivares.mx

who can be found at the following number: +52 55 5322 3000.