Mexico's new federal Anti-Corruption in Public Contracts Law
(the "Anti-Corruption Law") became effective on June 12,
2012. The Law establishes liabilities and penalties on foreign and
Mexican individuals and corporations who directly or indirectly
engage in actions or omissions aimed at achieving an unlawful
advantage when procuring public contracts with the Mexican federal
government. The Anti-Corruption Law also regulates the procedure
for imposing sanctions and charges the Ministry of Public
Administration (the "Ministry") with the responsibility
for conducting investigations and with imposing sanctions under the
law. An investigation of alleged violations of the Anti-Corruption
Law may be commenced at the Ministry's sole discretion or based
on a sworn statement filed by a government entity, public servant
or person with relevant knowledge.
Key Provisions of the Anti-Corruption Law
The following is a partial list of actions or omissions which
constitute a violation of the Anti-Corruption Law:
Promising, offering or handing money or other gifts to a public
servant or a third party so that the recipient may perform or
refrain from performing an act in relation to his/her official
duties, in order to obtain or retain a benefit or advantage with
regard to the procurement of public contracts, regardless of
whether the money or gift is accepted or the desired result is
obtained.
Performing acts or omissions with the purpose of bidding for a
public contract if the individual or corporation is legally barred
from the bidding process under the law or through an administrative
order.
Performing acts or omissions with the purpose of evading the
requirements or rules established by the public contracting
entities.
Participating in the procurement of a public contract for the
ultimate purpose of benefiting parties that are barred from the
bidding process.
Promoting or using any economic or political influence, real or
fictitious, on a public servant, in order to obtain a benefit or
advantage, regardless of whether the public servant accepts or the
result is obtained.
Notably, liability will attach even if the unlawful conduct
occurs through a third party or the money or gift is not
accepted.
Individuals that violate the Anti-Corruption Law may be fined
one-thousand to fifty-thousand times the daily minimum wage for
Mexico City, and disqualified from entering into federal public
contracts for a minimum of 3 months, and up to 8 years. As the
current daily minimum wage is $62.33 MXN (approximately $4.45 in
U.S. Dollars), the fines may range from (at current rates)
MXN$62,330.00 to $3,116,500.00 (approximately USD$4,452.14 to
$222,607.14).
In the case of legal entities (such as corporations), penalties
will be contingent on the severity of the violation. The fines may
reach up to two million times the daily minimum wage for Mexico
City (approximately $8,904,285.71 in U.S. Dollars), and the
disqualification may range between 3 months and 10 years. The
Ministry has complete discretion in determining the penalties which
will be imposed on a case by case basis.
Notably the Anti-Corruption Law provides for a possible
reduction of sanctions for parties who willingly confess to their
participation in the unlawful conduct before the administrative
sanctions procedure is commenced or even while it is under way.
Practical Considerations for Corporations
Given the reach of the Anti-Corruption Law, organizations should
consider taking action as follows:
Review the organization's code of conduct and internal
policies to ensure that it reflects the company's commitment to
a culture of integrity in which unlawful practices, such as bribery
and corruption, are prohibited and penalized.
Engage in due diligence to identify risks and screen third
parties representing the organization in business dealings.
Train all key personnel to ensure that they fully understand
the Anti-Corruption Law as well as the organization's
anti-corruption policies and procedures.
Appoint a compliance team to monitor and review the
organization's public contracts, in order to ensure compliance
with the law and the organization's anti-corruption policies
and procedures.
We are available to assist you with regard to your
organization's efforts to comply with the Anti-Corruption
Law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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