First Majestic Corp. against the Government of MexicoPublished by MAC on 2021-03-15
Source: Reuters, GLOBE NEWSWIRE (2021-03-20)
Not the first, certainly nor the last.
Obrador seemed to have been highly welcomed by the people when elected for his threatened/promised action to reign in exploitative, aruguably corrupt, companies - not least mining ones. Now that his government has started baring its teeth, some of these will use their own in the cheapest and most demonstrative ways they know.
Canadian miner First Majestic Silver Corp. announced that it has submitted a Request for Arbitration to the International Centre for Settlement of Investment Disputes (ICSID), on its own behalf and on behalf of Primero Empresa Minera S.A., its subsidiary in Mexico. By its part, officials are doubling down on an effort to criminally prosecute Primero for tax fraud.
Back in October 2011, some two hundred Wixáritari marched to Mexico City calling on the government to cancel 80 mining concessions granted to First Majestic, which where threatening one of their most sacred ceremonial sites.
The Wikárika People from the states of Jalisco, Nayarit and Durango stated then: "We manifest our profound rejection of the mining project of the transnational company First Majestic Silver in the Real de Catorce desert, given that our sacred sites are an invaluable patrimony and of incalculable value to us, our children, grandchildren and all of the descendents of the Wixárika."
March 02, 2021
VANCOUVER, British Columbia (GLOBE NEWSWIRE) -- FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the "Company" or “First Majestic”) announced today that it has submitted a Request for Arbitration to the International Centre for Settlement of Investment Disputes (“ICSID”), on its own behalf and on behalf of Primero Empresa Minera S.A. de C.V. (“PEM”), its subsidiary in Mexico, based on Chapter 11 of the North American Free Trade Agreement (“NAFTA”).
Despite repeated attempts by the Company to encourage the Government of Mexico to engage in good faith negotiations to resolve the dispute, the Government has refused to engage. The Company believes that the Government’s actions are contrary to the terms of the Advance Pricing Agreement, which established the methodology for determining PEM’s revenues and taxes for the 2010 to 2014 fiscal years, and which, according to the Company’s Mexican counsel remains valid in accordance with the Mexican Federal Tax Code unless and until it is nullified by a final instance Court. In addition, the Government of Mexico has refused to participate in the Mutual Agreement Procedures under three international double-taxation treaties signed by Mexico.
First Majestic has instructed its Washington D.C. international arbitration counsel, Arent Fox LLP, to initiate the process under the ICSID rules for constituting a neutral and independent arbitration tribunal to adjudicate the dispute under Chapter 11 of NAFTA with the Government of Mexico.
ABOUT THE COMPANY
First Majestic is a publicly traded mining company focused on silver production in Mexico and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine. Production from these mines are projected to be between 12.5 to 13.9 million silver ounces or 20.6 to 22.9 million silver equivalent ounces in 2021.
FOR FURTHER INFORMATION contact email@example.com, visit our website at www.firstmajestic.com or call our toll-free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
Mexican tax authorities to seek over $500 million from Canada's First Majestic
February 1, 2021
Daina Beth Solomon
MEXICO CITY (Reuters) - Mexico’s government plans to seek more than $500 million from Canadian miner First Majestic Silver Corp in what it says are owed taxes for artificially keeping its silver prices low over the past decade, two sources told Reuters.
Audits dating back to 2010 show that the company owes about 11 billion pesos ($534.36 million), the sources said.
So far, Mexico’s Tax Administration Service, or SAT, has sought 5.5 billion pesos ($267.18 million) in tax debt, with the remaining half of the total yet to enter into formal disputes, according to the sources.
Officials are also doubling down on an effort to criminally prosecute First Majestic’s local unit, Primero Empresa Minera, for tax fraud related to the scheme, even after a judge held off on filing charges on Thursday, the sources and another person with direct knowledge of the case said.
Under President Andres Manuel Lopez Obrador, authorities have taken a hardball approach to squeezing taxes out of companies, warning that tax dodgers could face criminal charges and jail time.
The Mexican leader has threatened to personally expose companies with major tax debts, and has called out Canadian mining firms in particular, without naming them.
First Majestic, a Vancouver-based company that owns three working mines in Mexico with another eight in various stages of development, did not respond to a request for comment.
The company has previously said it has made several proposals to resolve taxation disputes with Mexico, and its latest filings show that Mexico’s tax authority has called for $219 million in reassessments.
According to the government’s analysis, Primero Empresa Minera, which First Majestic bought in 2018, set its silver prices below market value in a system similar to transfer pricing used by multinationals to shift profits to low tax havens.
Mexico’s government won one battle against First Majestic in September with a court ruling that nullified Primero Empresa Minera’s pricing arrangement. First Majestic has said it would appeal the decision.
Officials last year also drew up criminal charges, in line with a recent reform that classifies tax fraud over 7.8 million pesos as a serious crime. According to an official document dated April 2020, reviewed by Reuters, prosecutors sought to recover from Primero Empresa Minera 426.3 million pesos ($20.71 million) in taxes owed in 2015 alone.
A judge in the northeastern state of Durango however declined to file charges last week, saying the tax authorities’ audit of the company was incomplete. Prosecutors have appealed the ruling, arguing the full audit was not necessary, said one of the people familiar with the case.
SAT said it would not comment on ongoing investigations.
The finance ministry’s tax prosecutor Carlos Romero declined to comment on First Majestic or Primero Empresa Minera. However, in circumstances when a full audit is requested, he said the prosecutor’s office could file a fresh complaint once the audit is complete.
“We fight to the very end,” he said.
Still, a decision on the appeal could be months away.
First Majestic’s shares surged more than 30% after Bloomberg reported on the court’s decision, the same day as a surge in silver stocks.
Mexican tax authorities reaped payments from nearly 900 large companies last year in their bid to boost state coffers in the country with the lowest tax take in the Organisation for Economic Co-operation and Development. In two of the biggest deals that were made public, Walmart Inc’s Mexico unit and Coca-Cola bottler Femsa forked over nearly 17 billion pesos.