Companies in Mexico should enhance their compliance programs in light of the criminal reform.

February, 2018

On February 10th, 2014, section A of article 102 of the Mexican Constitution was amended in order to transform the Procuraduría General de la República (Attorney General's Office) into an independent public entity called Fiscalía General de la República ("FGR"). Unfortunately, after almost 4 years, it hasn't yet come into force.

On January 31st, 2018, more than 300 civil society organizations, through a group called #Reforma102, presented in Congress a citizens' amendment initiative to modify the same section A of article 102 of the Mexican Constitution. Such amendment aims to promote the creation of an FGR that effectively addresses Mexican challenges in terms of impunity, autonomy, competence, and impartiality of the criminal justice system stakeholders.

Specifically, the proposals of the citizen initiative that we consider of special interest to our clients are the following:

i) That the Attorney General in charge of the FGR has real independence and autonomy, so that he or she can (a) responsibly exercise the FGR's legal power, (b) resist political pressure, and (c) be guided by truth and legality;

ii) That the current Attorney General of the Procuraduría General de la República does not automatically become the Attorney General of the FGR, but that such position be filled as established in the Mexican Constitution. This is in order to ensure that the new FGR is not just a change of name that does not change Mexico's legal system;

iii) That the Attorney General has an operational efficiency that ensures an effective investigation and prosecution of crimes that can meet the challenges of Mexico's criminal reality; and

iv) That the Attorney General of the FGR can be removed for criminal liability or serious administrative misconduct, in accordance with the National Anticorruption System ("NAS").

In light of this proposal, it is relevant that companies have in mind that they could be subject to corporate criminal liability.

The National Code of Criminal Procedures provides that companies will be liable for crimes committed on their behalf or for their benefit by their legal representatives or agents (de facto or de jure); or when people under the authority of the companies engage in criminal conducts when the company did not exercise proper control over them.
Proper control is the principal defense of companies against criminal liability. It is understood that companies do not have proper control when they: i) do not have mechanisms to prevent and detect crimes; ii) in spite of having such mechanisms, they are not adequate; and iii) do not adopt effective and appropriate control mechanisms that aim to prevent the commission of crimes.
Therefore, the Federal Criminal Code provides that a company can now be liable for, among other things, drug trafficking, influence peddling, bribery, fraud, concealment, money laundering, environmental crimes, copyright crimes, kidnapping, human trafficking, and tax fraud.

In order for companies to mitigate these risks, we highly recommend that our clients update and strengthen their compliance programs to ensure proper control inside their companies, and to avoid the occurrence of any conduct sanctioned by the criminal law. This prevention is also closely related to risk mitigation regarding corruption matters.

To obtain additional information contact our experts:

Diego Sierra, Partner:
+ 52 (55) 5258-1039, dsierra@vwys.com.mx 

Pablo Fautsch, Associate:
+ 52 (55) 5258-1027, pfautsch@vwys.com.mx 

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