Criminal liability

Historically, only individuals could commit crimes in Mexico. Companies could be held only jointly liable for damages caused by their employees, officials or representatives through a criminal activity. However, following recent amendments to the Criminal Code and the enactment of the new National Code of Criminal Procedures, companies may now be held criminally liable. Thus, if a company is accused of bribing a public officer, both the individuals involved and the company can be subject to criminal liability.

Administrative liability

Under the General Law on Administrative Accountability, the following acts constitute administrative offences:

  • bribery;
  • the illegal participation in administrative procedures;
  • influence peddling;
  • the use of false information;
  • collusion;
  • the misuse of public resources; and
  • the improper hiring of former public servants.

Each act is defined under the law. For example, 'bribery' is defined as the promise, offer or delivery of an unlawful benefit by an individual or company to one or more public servants, directly or through a third party, in exchange for said public servants taking or refraining from taking an action relating to their duties or that of another public servant, or to abuse their influence, with the purpose of obtaining or maintaining, for themselves or a third party, a benefit or advantage, regardless of the acceptance or receipt of the benefit or the result obtained therefrom.

Individuals who commit any of the above acts may incur:

  • a fine of up to twice the value of the benefits obtained or, where no benefit was obtained, a fine ranging from Ps8,000 to Ps12,000,000 (as of December 2018);
  • temporary disqualification from participation in public procurement for three months to eight years; and
  • indemnification for the damages and losses caused to the public finances.

Companies that commit any of the above acts may incur:

  • a fine of up to twice the value of the benefits obtained or, where no benefit was obtained, a fine ranging from Ps80,000 to Ps120,000,000 (as of December 2018);
  • temporary disqualification from participation in public procurement for three months to 10 years;
  • suspension of the entity's business activities for three months to three years;
  • dissolution; and
  • indemnification for the damages and losses caused to the public finances.

A fine reduction programme allows for a 50% to 70% fine reduction if the offender voluntarily discloses its illegal conduct before the authority initiates a penalty procedure. Subsequent offenders that come forward can receive a reduction of up to:

  • 50%, provided that they bring the new information to the authority's attention; and
  • 30% once an investigation has been initiated.

Notably, administrative and criminal liability are not mutually exclusive. As such, an individual or company can be liable for both types of liability.

Integrity policies

Notwithstanding the above, the General Law on Administrative Accountability provides that the Mexican authorities will consider a company's implementation of an integrity policy when determining its liability. Under Article 15 of the law, an 'integrity policy' must include:

  • a clear and complete organisation and procedures manual that includes the functions and responsibilities of each of the company's areas and clearly specifies the chain of command and leadership;
  • a code of conduct that has been duly published to employees;
  • adequate and efficient control, monitoring and audit systems;
  • adequate reporting systems (both within and outside the company), as well as disciplinary procedures and actions that will apply in case of a breach of any law or company rule or policy;
  • adequate training and qualification systems;
  • HR policies designed to prevent the incorporation of individuals that may pose a risk to the integrity of the corporation; and
  • mechanisms that ensure the transparency and publicity of individual interests at all times.

Under the General Law on Administrative Accountability, the implementation of an integrity policy is crucial for companies. Where a company does not have such a policy and an employee commits a company-related crime, the company may be subject to both criminal and administrative liability, which may result in the suspension of it business or even its dissolution.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.