FCPAméricas Blog
Ten Key Aspects of Mexico’s New National Anti-Corruption System (the SNA)
5.14.2015
This guest post was provided by Diego Sierra, partner of Von Wobeser & Sierra law firm in Mexico City, who focuses on Mexican anti-corruption compliance matters.
On April 22nd, 2015, the Mexican Chamber of Senators approved constitutional reform in the area of fighting corruption. The reform was then approved by 22 state legislatures, according to newspaper reports, and by 21, according to the Senate website [Ed Note: FCPAméricas has discussed reform developments here]. Approval of the majority of the legislatures of the States is required to pass a constitutional reform in Mexico.
It is very likely that during this week the Permanent Commission of Mexico’s Federal Congress will declare the constitutional validity of the reform and will forward it to the Federal Executive Branch for its official publication in the Official Journal of the Mexican Federation. Within one year after entry into force of the reform, Mexican’s Federal Congress must approve the National Anti-Corruption System General Law and the Administrative Liabilities General Law.
The anti-corruption reform makes the following relevant changes to the Mexican legal system:
- Creates the National Anti-Corruption System (SNA) as a coordinated function between the authorities of all levels of government competent in prevention, detection and sanctioning of administrative liability for corruption, as well as the supervision and control of public resources.
The SNA has a Coordinating Committee composed of members of the Superior Auditor of the Federation, the Special Anti-Corruption Prosecutor, the Secretariat of the Federal Executive responsible for internal control, the President of the Federal Tribunal of Administrative Justice, the President of the guarantor body referred to in article 6 of the Federal Constitution, and a representative of the Council of the Federal judiciary and of the Committee of Citizen Participation.
The SNA Coordinating Committee develops an annual report containing the progress and results of the exercise of its functions and the implementation of policies and programs in the field.
- Enables the Superior Auditor of the Federation (ASF) to:
- Conduct audits directly during the fiscal year in progress, derived from complaints, to investigate and punish in a timely manner possible irregular acts;
- Monitor State resources when derived from debt guaranteed by the Federation;
- Promote the imposition of penalties corresponding to federal and local public servants as well as to individuals when the ASF detects irregularities; and,
- Oversee federal funds that are intended and are exercised by public and private trusts, funds and mandates.
- Establishes the Federal Tribunal of Administrative Justice.
The SNA transforms the Federal Tribunal of Fiscal Justice and Administration into the new Federal Tribunal of Administrative Justice that shall have the authority to impose sanctions on public servants of the three branches of government and constitutional organs of the Federation. The Tribunal’s jurisdiction will extend over autonomous federal entities and municipalities that have serious administrative responsibilities and individuals who participate in events related to these responsibilities. The Tribunal has jurisdiction to determine those responsible for payment of compensation and fines.
- Obligates States to create Tribunals of Administrative Justice.
State constitutions and laws are required to create Tribunals of Administrative Justice. The reform also empowers the Legislative Assembly of the Federal District to issue the organic law of the Tribunal of Administrative Justice.
- Establishes new rules related to specific responsibilities for public servants.
- Distinguishes serious administrative responsibilities from non-serious administrative responsibilities;
- Establishes that serious administrative responsibilities shall be investigated and substantiated by the Superior Auditor of the Federation and the internal control bodies.
- Establishes that non-serious administrative responsibilities shall be investigated, substantiated and resolved by internal control bodies.
- Establishes specific sanctions.
Tribunals in administrative matters determine the responsibility of individuals for participation in acts linked to serious administrative misconduct and where appropriate, impose sanctions. Examples of sanctions include: (i) economic sanctions; (ii) disqualification from participating in acquisitions, leases, services or public works; and (iii) compensation for damages caused to the Treasury or Federal, State, or municipal public bodies.
- Requires declaration of assets and interests by public servants.
Regarding the declaration of asset and interests, public servants are obligated to submit, under oath, a declaration of their assets and interests before the competent authorities. Asset recovery is proposed as a remedy for illicit enrichment.
- Extends the statute of limitations for serious administrative misconduct from three years to seven years.
A statute of limitations that exceeds six years means that public servants who commit serious administrative misconduct can be investigated and sanctioned by a different administration than the one for which they exercised their functions when they committed the offense.
- Grants new powers to federal legislative bodies.
- The Chamber of Deputies appoints, by a vote of two-thirds of its members who are present, individuals to hold positions in the internal control bodies of autonomous agencies that are granted resources from the Federation’s expenditure budget;
- The Senate of the Republic confirms the Secretary responsible for the internal control of the Federal Executive Branch; and,
- The Mexico Federal Congress issues the general law that establishes the bases for the coordination of the SNA and the law of the Federal Tribunal of Administrative Justice. The Mexico Federal Congress has one year from the publication of the reform on anti-corruption to fulfill this obligation.
- Sanctions Corporations with Potential Dissolution and Management Intervention
The new article 109, IV, of the Constitution, sets forth that legal entities will be sanctioned with suspension of activities, corporate dissolution or intervention in the case of serious administrative responsibilities causing damages and losses to the Public Treasury or to federal, state or municipal public entities, provided that the legal entity in question obtained an economic benefit and the participation of its Board of Directors, its Audit Committee or its partners can be proven and established. Dissolution of legal entities will apply in cases where legal entities systematically engage in serious administrative misconduct.
The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.
© 2015 FCPAméricas, LLC
Post authored by Guest
Comments
May 21st, 2015 at 7:48 pm
Mr. Sierra,
I’m wondering whether there will be any guidance issued requiring income and asset disclosure statements to be publicly assessable and what class of public servants will be required to file and when. If the constitutional amendment passes will all of this have to be decided and written into the law implementing this new provision? What can be done now, if anything, to help shape this law? As you know, there are model laws and lessons learned out there.
PS Thanks for the summary annoucement.
January 29th, 2016 at 3:01 pm
[…] constitutional reforms involved several major institutional changes. (See here, here, and here). First, they created an overarching National Anti-Corruption System (NAS), […]