According to the Census Bureau (May 2015), Mexico is the third largest trading partner with the United States (behind Canada and China), amounting to approximately 14% of U.S. total trade. While trade will certainly increase as Mexico begins to open up its economy to competition, corruption continues to represent a significant challenge. Mexico ranks 103 out of 175 countries based on the 2014 Corruption Perception Index, published by Transparency International. (The U.S. is 17 and the UK is 14.)
After a series of political and financial scandals, including one involving his wife, President Enrique Peña Nieto recently signed new anti-corruption measures aimed at rebuilding the public’s trust in the government and the financial systems. The centerpiece of Peña Nieto’s efforts is the creation of the National Anti-Corruption System (“Sistema Nacional Antricorrupcion” (SNA)), which was passed on April 21, 2015. While the SNA does not create any new crimes relating to public corruption, it does send a signal that Mexico intends to take a strong position on enforcing the anti-corruption efforts that started in 2012.
In 2012, Mexico passed the Federal Law Against Corruption in Public Procurement. This law is similar to the ones adopted in the U.S. (Foreign Corrupt Practices Act (FCPA)), the UK (UK Bribery Act) and Brazil (Clean Companies Act) [see The Brazilian Clean Companies Act and the Global Trend of Anti-Corruption Statutes (July 7, 2015)], in that it prohibits individuals and firms from offering money or gifts to obtain or maintain a business advantage in public procurement contracts with the Mexican government. The Mexican law is similar to the UK Bribery Act and it goes further than the FCPA in that it applies to payments or gifts to both foreign and domestic officials. It also prohibits the use of facilitation payments. Unfortunately, it is widely perceived that Mexico’s anti-corruption legislation is almost never enforced, and public officials are rarely held liable for illegal acts.
The SNA is a Constitutional Amendment that will have to be ratified by the various Mexican states, but it establishes a clear enforcement scheme to correct the current institutional flaws in the Mexican system. The SNA will enforce anti-corruption efforts in all levels of government – municipal, state and federal. The system comprises four primary organizations: the Secretariat of Public Function (agency to enforce and investigate administrative wrongdoing), the Superior Auditing Committee of the Federation (agency to audit public monies), the Fiscal Department Specialized in Fighting Corruption (new agency to investigate and follow up on corruption complaints) and the Federal Court of Administrative Justice (court has authority over public officials and private persons involved in the public corruption).
The SNA also created a Coordinating Committee, which includes all four heads of the organizations mentioned above plus one representative of the Federal Institute of Access to Information, one of the Judicial Council and one representative of the Citizenship Participation Committee. The Coordinating Committee is to create policies to audit and control the use of public resources, as well as prevent, control and discourage corruption.
The adoption of the SNA represents an opportunity to remind companies with Mexican operations or agents of the importance of their compliance obligations, including developing a robust and effective compliance program to prevent corrupt activities. Companies will also need to maintain vigilant in monitoring the progress of the SNA and any guidance to be published by the Coordinating Committee.
For more information on anti-corruption initiatives in Mexico, please contact the attorneys listed above.