Wifredo A Ferrer and Michael E Hantman are Partners in our Miami office.
A new report shows that Mexico did the right thing by passing a new national anti-corruption legal regime (the National Anti-Corruption System) in 2016. The new report, from the Financial Action Task Force (FATF, aka GAFI), an intergovernmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing, finds that $58.5 billion (approximately 1.13 trillion pesos) was generated from narcotrafficking, tax fraud and other crimes in Mexico in 2014. This staggering amount is 6.6 percent of the country's gross domestic product, and does not account for monies connected to government corruption.
The 321-page report, which has not yet been publicly released but has been viewed by Reuters, reportedly shows that the Mexican government is "gravely deficient" in combatting corruption,according to GAFI. The report stated that there is a "high threat" that "illicit resources will be laundered in Mexico."
Although Mexico's President Enrique Peña Nieto signed the National Anti-Corruption System into law, he has also said that corruption in Mexico is "cultural," for which he received criticism. Mexico is ranked 128th out of 137 nations for ethics and corruption for 2017-2018 by the World Economic Forum.
Takeaways and Considerations
Mexican companies and U.S. companies doing business in Mexico can expect the negative anti-corruption report to embolden public officials in Mexico to fight back and reform behaviors. Mexico's new National Anti-Corruption System has been a positive step that should be followed by re-emphasizing enforcement priorities. Because the National Anti-Corruption System just took effect in July 2017, one can expect robust anti-corruption efforts in Mexico in the coming months and years. Holland & Knight has extensive experience in helping clients design, implement and enforce comprehensive enterprise-wide compliance and ethics programs to reduce their potential legal exposure.
To read more: Mexico Report Flags Shortcomings in Fight Against Corruption.
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