Trade Compliance

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Mexico Enacts New National Anti-Corruption System

Posted September 07, 2016

Corruption has long been a significant risk for companies operating in Mexico.  As noted by the definitive GAN Business Anti-Corruption Portal, bribery is “widespread in the country’s judiciary and police” and the influence of organized crime in Mexico “continues to be a very problematic factor for business, imposing large costs on companies.” Moreover, GAN states that: “Collusion between the police, judges and criminal groups is extensive, leading to widespread crime, theft, impunity and weak law enforcement.”

Seeking to rectify this serious compliance problem, on July 18, 2016, Mexican President Enrique Peña Nieto signed into law the implementing legislation for the country’s new National Anti-Corruption System (Sistema Nacional Anticorrupción de México or SNA). The constitutional amendment creating the SNA as a forum for coordination between all levels of government to fight corruption was published on May 27, 2015, and the Mexican legislature subsequently approved a number of supplementary legislative packages. 

One of the new legislative reforms, the General Law on Administrative Responsibilities, requires public officials to declare their assets, conflicts of interest, and taxes and provides that companies may be able to mitigate the penalties assessed against them for corruption-related violations by implementing effective compliance programs and by self-reporting and cooperating with authorities.

According to Viridiana Rios, a fellow at the Mexico Institute program of The Woodrow Wilson International Center for Scholars, with passage of the SNA, “Mexico has now a system composed of (1) independent and effective authorities coordinated around a common mission to prevent and combat corruption; (2) a new comprehensive and integrated system of administrative responsibilities; (3) a new criminal regime to fight corruption; and (4) a new control and oversight system to coordinate state and local authorities.”

The OECD’s Secretary General, Angel Gurria, who was himself Mexico’s Foreign Minister in the mid-to-late 1990’s, welcomed the enactment of the SNA laws, noting that “promulgation of these laws substantially transforms the anti-corruption architecture of Mexico by putting in place measures that the OECD considers effective.” 

According to Secretary General Gurria “perhaps the most important game changer of the reforms is that they reach beyond the Federal level and include all levels of government. Indeed, the new legislation requires the Mexican States to follow suit with their own local anti-corruption systems, thereby tackling some of the strongest footholds of corruption in Mexico.” 

In this regard, it should be noted that earlier this week, the Mexican Supreme Court overturned two state anti-corruption laws that would have allowed departing governors to select the prosecutors in charge of investigating corruption allegations against them. Widely seen as an attempt to shield politicians from prosecution and effectively circumvent the new SNA regime, the laws passed in Chihuahua and Veracruz, were ruled unconstitutional.