In an article [1] published this week in Latin Lawyer (“Anti-bribery act brings Mexico up to OECD standards, say lawyers”), Mexican lawyers suggest that a new bribery law [2] in Mexico is broad enough to satisfy OECD commitments. One lawyer even states, “It’s been called the Mexican Foreign Corrupt Practices Act.”
The law is certainly a positive development. But is it a Mexican FCPA? Not quite.
The new Mexican bribery law extends to both Mexicans and foreigners. It creates liability for individuals and corporate entities. These are significant changes, indeed. They bring Mexico’s anticorruption regime closer in line with international standards.
But the scope of the law is limited to corruption in public procurements, both Mexican and foreign. The FCPA, on the other hand, covers bribery in a broad range of activities. It covers improper regulatory payments (see the Tyson Foods [3] case involving health inspectors in Mexico). It covers payments to low-level mayors, city council members, and urban planners (see reports [4] on the Wal-Mart investigation in Mexico). Cases are commonly built on payments to customs and immigration officials, tax authorities, and public hospital doctors – all types of public officials engaged in all types of public activities.
Yes, public procurements are the source of a large number of FCPA actions. This activity is where so much high-dollar corruption can occur (FCPAméricas has written about [5] public procurement risks based on years investigating corruption for The World Bank). But payments to win expensive public contracts are just one of many forms of bribery.
The new Mexican law appears to fall short of Mexico’s commitments under the OECD Anti-Bribery Convention [6] as well (the Convention is largely based on the FCPA). As a Member of the convention, Mexico is subject to periodic peer review monitoring by Working Groups. These reviews help ensure that Member Countries like Mexico live up to their obligations under the agreement. In January 2012, FCPAméricas described how [7] the last Working Group review gave Mexico a poor bill of health in fulfilling its commitments. That Working Group, in its phase 3 report [8], also commented on the anti-bribery legislation that Mexico just passed:
The Anti-Corruption Bill is a commendable attempt to strengthen Mexico’s foreign bribery framework but there may be questions over its limitations. The Bill does not cover the full range of foreign bribery as required by the Convention.
The Working Group called into question whether the legislation’s penalties are adequate, stating: “individuals cannot be punished by incarceration because the Bill is not criminal in nature.” It also asked whether the Ministry of Public Administration, the enforcement authority for this law, has adequate “investigative capacity.”
Despite these apparent limitations, the new Mexican law signals real progress for a country known for significant corruption. In the 2012 Latin America Corruption Survey [9], Mexico ranked as one of the four most corrupt countries in the region.
Mexican lawyer Monica Schiaffino from law firm Littler, De La Vega y Conde correctly states in the Latin Lawyer article, “It’s just the first step, we’re hoping for more developments.” Many Mexican lawyers predict that incoming Mexican President Peña Nieto will likely continue efforts to address bribery given increased international pressure. If nothing else, the fact that the Mexican Congress is acting, Mexican lawyers are discussing these issues, and publications like Latin Lawyer are reporting on them, are significant developments in themselves.
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