To better align Mexico’s anti-corruption legislation with globally-accepted norms, the Mexican government enacted new anti-corruption measures on July 18, 2016. The General Law on Administrative Accountability will replace two existing Mexican laws—the Federal Anti-Corruption Law on Public Procurement and the Federal Law of Administrative Accountability of Public Officials. The legislation is scheduled to go into effect in July of 2017.
The heightened measures come in the context of a climate of change towards greater anti-bribery prevention and transparency in business practices. Mexico has long been perceived as a nation plagued by corruption. Transparency International (TI) ranked Mexico in 95/168 in its 2015 Corruptions Perceptions Index. It has largely been felt by nationals of the country that Mexico’s existing anti-corruption framework was seldom enforced, and as such, failed to effectively deter corruption by government officials, private companies and individuals. In 2012, Mexico implemented advancements in the procurement context via the issuance the Federal Law Against Corruption in Public Procurement, legislation that established sanctions for individuals and companies, either local or foreign, in connection with illicit conduct related to national public procurement.
In July of 2016, President Peña Nieto issued a public apology relative to his own involvement in a corruption scandal that had entangled his administration since 2014. It was alleged that Peña Nieto and Mexican Finance Secretary Jose Luis Videgaray awarded contracts to companies that sold homes to themselves and to first lady Angelica Rivera. Following investigations, it was determined that no conflicts of interests were present. Nonetheless, the scandal was regarded as one of many catalysts to Peña Nieto’s campaign for change, as the events were perceived to have diminished the Mexican people’s faith in the administration. Peña Nieto declared his commitment to work harder to fight corruption. His apology was issued during a press conference dedicated to the overview of other major anti-corruption reform: enactment of a National Anti-Corruption System. The National Anti-Corruption System is a reform movement that mandates updates to 14 existing constitutional articles, the drafting two new general laws, as well as reform of five additional laws.
Mexico’s efforts have been positively received by the global community. The Organisation for Economic Co-operation and Development (OECD) has specifically lauded Mexico for the progress. According to the OECD, passage of these laws “substantially transforms the anti-corruption architecture of Mexico by putting in place measures that the OECD considers effective.”
Effective July 2017, the General Law on Administrative Accountability will make it unlawful to:
- Bribe public officials;
- Participate in administrative proceedings at the federal, state, or municipal level after having been prohibited from doing so, due to previous improper acts;
- Use or attempt to use their influence or economic or political power on a public official in order to obtain a benefit or to cause damage to a person or a public official;
- Use false information during an administrative proceeding in order to obtain an authorization, benefit, or advantage, or to damage any person;
- Take any joint action with other private parties in order to obtain a benefit or advantage in a federal, state, or municipal public procurement process;
- Misappropriate public funds; or
- Hire, for competitive advantage, public officials or former public officials who were in office within the past year and who possess privileged information derived from their office.
The liability structure under the General Law on Administrative Accountability has been likened to the United States’ Foreign Corrupt Practices Act (FCPA). Namely, an organization may be subject to liability and sanctioned for misconduct carried out by employees and third parties who acted on the organization’s behalf, in order to obtain benefits for the organization. However, liability may be absolved if enforcement authorities determine that the organization had a sufficient “integrity policy” in place (i.e., an adequate anticorruption and compliance policy). The General Law on Administrative Accountability offers guidelines as to what makes for a robust policy. Guidelines specify that companies should:
- Adopt a clear and complete procedures manual, that details the functions and responsibilities of each of the company’s areas, in addition to clearly specifying the chain of command and leadership structure throughout the company; and
- Establish adequate internal whistleblower and reporting systems that allow for appropriate reporting to enforcement authorities, as well as disciplinary procedures for those employees who act contrary to the company’s policies or Mexican law.
All in all, Mexico’s legislative developments are expected to provide a more sound foundation for the fight against bribery and corruption, and stand to better align the nation with global anti-corruption laws.
For more information on anti-bribery and anti-corruption compliance, please see CREATe.org’s various resources.