Chihuahua, Chih., April 16th, 2020.

Dear Clients and Friends,

We hereby inform you the following information for further implementation.

On April 13, 2020 the Technical Council of the Mexican Institute of Social Security (MSSI) issued a decree No. 191/2020, in which it disseminates the following legal and administrative mechanisms in order to facilitate the payment of employee-employer’s fees:

a). By means of an agreement for the payment of fees in installments, employers who do not pay their fees within the established terms, pursuant to Articles 40-A and 40-C of the Social Security Law (SSL), will be liable, as from the date on which the credits become enforceable, for the payment of tax credits adjustments, surcharges and the applicable penalties. Nevertheless, if requested by the employer, the Institute may grant a payment extension for up to 48 months, by means of an installment agreement, making an initial payment for 20% of the fees generated during the corresponding months and paying surcharges pursuant to Article 8 of the Federal Revenue Law. In other words, the initial amount to be covered will be 20% of the employer’s fees and 100% of the employee’s fees, the rest may be deferred for a maximum of 48 months. The agreed amount for payment in installments will not undergo any modification. Since the payment is made outside the legal term, it will generate credit adjustments and surcharges. The benefit of signing this agreement lies in the fact that the monthly interest rate ranges between 1.26% and 1.82%, depending on the chosen term in its execution (12 months, 24 or more than 24 months). In addition, pursuant to Article 40-D of the SSL, the deferred payment of retiree insurance fees may be authorized for complete periods due, with no waiver of accessories, in order to facilitate the employer’s efforts to calculate the partial amount of the Agreement. In the Ordinary Monthly Issuance, an estimate shall be sent based on different payment scenarios.

b). No guarantees of any kind will be required for the execution of said agreement, the foregoing in compliance with the authorization granted by Technical Board in the decree number ACDO. AS2. HCT.300419/150.P.DIR, issued on April 30, 2019. Nevertheless, the aforesaid does not affect the economic-coactive capacity of the Institute. In the event that the employer or liable subject does not comply with the payment of two authorized installments, the authorization for the payment extension in installments will be revoked and payment will be required through an administrative enforcement procedure.

c). If the agreed commitments are covered in a timely manner, the fines can be reduced to 90% of the original amount, as foreseen in the decree of the Technical Council No. 187/2003, published in the Federal Official Gazette on July 15, 2003.

d). In cases where the employment relationship persists but the employee is absent from his/her work, article 31 of the Social Security Law (SSL) foresees an absence discount of up to 7 days. During these days the fee of Health and Maternity Insurance must be paid. This provision ensures the continuity of the employment relationship, promotes the conservation of the companies’ personnel and the salary level of the employees. In the ordinary monthly issue, a payment estimate will be sent considering the application of 7 days of absenteeism, which shall be conditioned to the employer’s compliance of several criteria.

e). In pursuance with the General Declaration of Sanitary Contingency, issued by the health authority, the period ranging from March 31, 2020 to the date on in which the Technical Board determines that the causes that gave origin to said declaration have ceased, will be considered as non-working days for the execution of proceedings, hearings, notices or summonses, the aforementioned in compliance with the decree ACDO.AS2.HCT.300320 /P.DIR, issued by the Technical Board in session of March 30, 2020 and published in the Federal Official Gazette on March 31st, 2020.

f). The granting, processing and payment of labor permits is facilitated through non presential mechanisms for insured persons affected by the COVID-19 virus, in order to prevent and reduce the displacement of the insured and retired population to medical units, institutional administrative units and financial entities. The above-mentioned measures are taken in order to protect the health of the population and to comply with the decree ACDO.SA2.HCT.250320/97.P.DPES, issued by the Technical Council in its ordinary session held on March 25, 2020, which grants the disability treatment to the COVID-19 permit.

We hope that the previous information is useful for your company, we remain at your service for any inquiry on this matter.

Inintegrum Corporacion Legal, SC.