After an aggressive grassroots campaign and under significant public pressure, Mexican President Enrique Peña Nieto announced the enactment of sweeping changes to Mexico’s anti-corruption laws on July 18, 2016.
Among other things, the new regulations allow representatives from federal, state and municipal authorities to gather and coordinate the prevention, detection, investigation, and sanctioning of those who engage in corrupt acts. The regulations also increase fines and jail time for public officials convicted of bribery, embezzlement and illegal enrichment, and include a variation on the originally-proposed “three of three” legislation—the enacted regulations require public officials and close relatives of public officials to disclose: (1) an accounting of their personal assets, (2) certain tax information, and (3) an accounting of their economic and beneficial interests. The law also introduces whistleblower protections for individuals. Perhaps most importantly, the law creates an independent anti-corruption prosecutor and encourages that prosecutor and other relevant government authorities to cooperate and share information with their counterparts in the U.S., U.K., and elsewhere.
The regulations, which will come into effect on July 19, 2017, also provide for significant criminal and administrative sanctions for private parties and legal entities that are found to have engaged in bribery, collusion in public bid procedures, influence peddling, wrongful use of public resources, or wrongful recruitment of ex public servants, among other acts. Individuals can face sanctions of up to twice the amount of the acquired benefits (or if no tangible benefit, around $600,000 USD), temporary ineligibility to participate in procurement, leases, services or state-owned projects for a period ranging from 3 months to 8 years, and compensatory and/or punitive damages. Legal entities can face similar sanctions—up to twice the amount of the benefit (and up to $6 million USD if no monetary benefit)—and can be deemed ineligible to participate in procurement, leases, services or state-owned projects for up to 10 years. Entities can also be subject to suspension of activities for a period ranging from 3 months to 3 years, partnership dissolution, and compensatory and/or punitive damages.
Along with the new penalties, the new regulations provide for some partial defenses for entities charged with offenses under the law. For example, legal authorities will give credit for the existence of a current compliance or integrity program that includes effective reporting and whistleblower protection tools. Entities can receive credit for self-reporting misconduct and collaborating with government investigations. Individuals charged with a serious offense under the law can confess and fully and continuously cooperate with authorities in exchange for a reduction of 50-70% of the total amount of his or her sanction.