Mexico must increase foreign bribery enforcement: full implementation of anti-corruption reforms could help

UN Photo/Cia Pak Enrique Peña Nieto, President of Mexico, addresses the general debate of the General Assembly’s seventieth session.

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Mexico needs to give more priority to foreign bribery enforcement, having yet to prosecute a case involving the bribery of foreign public officials 19 years after ratifying the OECD Anti-Bribery Convention. This is a cause for significant concern, especially given the export driven nature of the Mexican economy, and because its exports include high-risk sectors for corruption, such as extractives, manufacturing and agricultural products.

The OECD Working Group on Bribery has just completed its Phase 4 evaluation on Mexico’s implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments.

The report highlights several reforms following the constitutional amendment that resulted in the establishment of the National Anticorruption System. These could enhance implementation of the Convention, once fully operational.

The report therefore makes recommendations to urgently implement these reforms as follows:

• Nominate a Special Anti-Corruption Prosecutor, appoint judges to the Federal Court of Administrative Justice, appoint the Attorney General pursuant to the new constitutional mechanism, and implement the new Anti-Bribery Protocol.

The report further makes recommendations to:

• Immediately ensure adequate resources for investigating and prosecuting foreign bribery cases, particularly the four that are ongoing, and for foreign bribery enforcement by the Special Prosecutor’s Office for Corruption-Related Offences, once it is operational.
• Significantly strengthen measures for detecting foreign bribery, including through: the identification of bribe payments concealed as allowable expenses for tax purposes; the identification of bribe proceeds through Mexico’s Anti-Money Laundering system; improvements to the exchange of information between agencies that may detect foreign bribery and the law enforcement authorities; and clarification of the reporting obligations of accountants and auditors that discover foreign bribery.
• Enact whistleblower protections for public and private sector employees that report in good faith and on reasonable grounds suspected acts of foreign bribery to the competent authorities.
• Strengthen the newly reformed corporate liability regime, including by clarifying the circumstances that trigger liability for foreign bribery, and making it apply to State-Owned Enterprises.

The report also recognises that Mexico successfully implemented recommendations from its Phase 3 evaluation in 2011, including to amend the foreign bribery offence so that it applies to cases involving third party beneficiaries, ensure that companies can be held liable for foreign bribery without prosecuting or convicting the individual perpetrators, increase the maximum sanctions for accounting offences, and clarify that bribes are non tax deductible. It also recognises as positive achievements the Federal Judiciary Council’s new judicial statistical collection, which provides comprehensive information about foreign bribery enforcement, and the introduction of successor liability into Mexico’s criminal corporate liability framework, which is also notable for its coverage of a large range of forms of corporate restructuring.

The OECD Working Group on Bribery, which is composed of 44 countries, adopted the report on 10 October 2018, including recommendations made to Mexico on pages 56-61. In accordance with standard procedures, Mexico will be invited to submit a written report in two years (October 2020) to the Working Group on the steps taken to implement these recommendations. At that time, the Working Group will decide if it is appropriate to schedule a further evaluation to assess progress on the reforms that are not yet operational.

This report, available at http://www.oecd.org/corruption/anti-bribery/OECD-Mexico-Phase-4-Report-ENG.pdf, is part of the OECD Working Group on Bribery’s fourth phase of monitoring, which was launched in 2016.  Phase 4 examines the evaluated country’s particular challenges and positive achievements. It also explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as unresolved issues from prior Working Group evaluations.

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