On July 18, 2016, Mexican President Enrique Peña Nieto approved the laws of Mexico's new National Anti-Corruption System, declaring that he is "more than committed to combating corruption, hence the importance of the system." The objective of the National Anti-Corruption System is to coordinate the efforts of all Mexican governmental bodies―at the federal, state, and municipal levels―that are involved in anticorruption enforcement. These laws apply to both public officials and private parties, including companies and their directors, officers, and employees.
The new measures, which consist of newly enacted laws as well as amendments to existing laws, establish the most far-reaching anticorruption enforcement system to date in Mexico. These measures stem from a May 27, 2015 amendment to the Mexican Constitution and were published this month in Mexico's Federal Official Gazette. The newly enacted laws include the following:
- The General Law of the National Anti-Corruption System;
- The General Law on Administrative Accountability;
- The Organic Law of the Administrative Justice Federal Court; and
- The Federal Accounting and Accountability Law.
Existing laws that were amended under the National Anti-Corruption System include the Federal Criminal Code, the Organic Law of the Federal Public Administration, the Tax Coordination Law, the General Government Accounting Law, and the Organic Law of the Attorney-General's Office.
Notable provisions enacted under the new measures include the following:
Amended Federal Criminal Code
The amendments to the Federal Criminal Code establish new corruption offenses and penalties for public servants and private parties. For example, private parties are subject to prosecution under a new form of influence peddling (i.e., improperly influencing a public official in connection with public business). Under the amendments, private parties may be prosecuted for participating in public business without authorization, claiming to have influence over public officials who are authorized to make decisions related to public affairs, and promoting the illicit resolution of public affairs matters, in exchange for a benefit for themselves or for a third party. Potential penalties for violating these provisions include imprisonment for up to six years and a monetary fine equivalent to the income the defendant would earn in 100 days. In addition, private parties who hold a public contract, permit, or concession and who, in connection with that contract, permit, or concession, use false or forged information in order to obtain a benefit for themselves or for third parties, can be imprisoned up to nine years and fined in an amount equivalent to 100 days of income.
New General Law on Administrative Accountability
In 2017, the General Law on Administrative Accountability will replace two existing laws—the Federal Anti-Corruption Law on Public Procurement and the Federal Law of Administrative Accountability of Public Officials. Under the General Law on Administrative Accountability, companies can be held administratively liable when they:
- Bribe public officials (under a broad definition of "bribery");
- Participate in administrative proceedings at the federal, state, or municipal level after having been prohibited from doing so because of prior improper conduct;
- 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 (material, human, or financial resources); or
- Hire public officials or former public officials who were in office within the last year and who possess privileged information derived from their office, directly resulting in a market benefit or competitive advantage.
A company can be sanctioned for acts carried out by persons who acted on behalf of the company in order to obtain benefits for the company.
Penalties for violations of the General Law on Administrative Accountability include a fine of up to two times the benefits obtained, debarment, suspension of activities, liquidation of the company, and a requirement that the company indemnify government agencies.
Under the General Law on Administrative Accountability, a company can avoid liability if the relevant authority determines that the company had in place an adequate "integrity policy" (i.e., an adequate anticorruption and compliance policy). The law provides guidelines for companies implementing such a policy, including that companies:
- Adopt an organization and procedures manual that is clear and complete, includes the functions and responsibilities of each of the company's areas, and clearly specifies the chain of command and leadership throughout the company; and
- Establish adequate whistleblower and reporting systems that allow for appropriate reporting to the competent authorities, as well as disciplinary procedures for those employees who act contrary to the company's policies or Mexican law.
New Organic Law of the Administrative Justice Federal Court
The new Organic Law of the Administrative Justice Federal Court abolishes the Organic Law of the Tax and Administrative Justice Federal Court. The law mandates that the Administrative Justice Federal Court has authority to sanction both public servants and private parties for serious administrative violations under the new National Anti-Corruption System. The court's authority to sanction private parties, however, does not impair other government agencies' ability to impose sanctions on companies or individuals.
Amended Federal Accounting and Accountability Law
Under the Federal Accounting and Accountability Law, a company can be held liable for failing to cooperate with the Federal Superior Auditor in the course of an anticorruption investigation. Penalties include a financial penalty in the nature of a tax assessment in an amount of up to 10,000 times the Measure and Update Unit (currently approximately US$40,577), which can be increased in the event of recurring offenses. These sanctions are independent of other criminal or civil liability.
The newly published laws and amendments became effective on July 19, 2016, except for the General Law on Administrative Accountability, which will become effective in July 2017, and the Federal Criminal Code and the Organic Law of the Attorney-General's Office, which will become effective upon the appointment of a new head of the Prosecutor's Office, who will be focused on anticorruption enforcement.