Author: Alejandro Sobarzo Hadad; Kuri Breña, Sánchez Ugarte y Aznar
The Principles of Federal Prosecution of Business Organizations in the Justice Manual of the US Department of Justice provide that the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of a charging decision, constitutes one of the factors that prosecutors would consider in conducting an investigation, determining whether to bring charges, and negotiating plea or other agreements. In accordance with the laws comprising the so-called National Anticorruption System in Mexico, whether a corporation has in place an integrity policy is one of the mitigating factors to be taken into consideration by the authorities in the imposition of sanctions and determining corporate liability.
In light of recent legal reforms in Mexico; the public policies being implemented by the new administration with the intention to fight corruption, money-laundering; organized crime and other illicit activities (including the National Law on Extinction of Ownership Rights - Ley Nacional de Extinción de Dominio and other initiatives underway intended to strengthen the powers of the National Unit of Financial Intelligence of the Ministry of Finance, among others); and considering the global reach of various foreign laws and international treaties designed to fight corruption in international business transactions (FCPA, the UK Bribery Act, the OECD Anti-bribery Convention, the USMCA, among others), it is imperative for Mexican companies to implement adequate and effective compliance programs.
This is particularly important in the case of companies that engage in high-risk activities such as regular interaction with governmental authorities (i.e. companies engaged in providing goods and services to the government; companies that are involved in imports and exports; companies participating in regulated industries such as energy and oil, mining, banking, telecom, transportation, etc.); as well as companies engaged in activities identified as “vulnerable” under the Mexican federal anti-money laundering law, such as gaming; commercialization of credit and debit cards; Fintech; non-banking lending & leasing, real estate developers; dealers of precious metals, jewelry, and art; commercialization of air, land and water vehicles (new and used); bullet-proofing of vehicles; cash courier and security transport services; non-profit organizations; customs brokerage; notarial services, personnel outsorcing; and certain corporate legal services.
In the implementation of a compliance program, each organization should consider, among other things, its regulatory landscape; its line of business; vulnerabilities of the territories where it operates; level of interaction with government; strategy for securing business; its corporate objectives, principles and values; and the severity of the consequences that may arise as a result of any misconduct by members of the organization.
10 items to consider in a well-designed compliance program:
- A code of conduct setting forth the company’s commitment to full compliance with the law, accessible to all employees, and with the clear message that misconducts will not be tolerated;
- Policy for donations, gifts and hospitality & entertainment;
- Policy for contracting suppliers, agents, lobbyists, and sales reps (KYC & due diligence requirements);
- Guidelines to interact with governmental officials and rules in public procurement procedures;
- Recommended anticorruption and compliance clauses to be included in relevant contracts;
- Guidelines on data privacy;
- Guidelines on anti-money-laundering;
- Systems to process complaints and anonymous whistleblowing mechanisms;
- Supervision and control procedures by senior management; and
- Regular compliance and anticorruption training courses to all personnel.
