November 08 2011
The World Economic Forum has estimated that the cost of corruption in Mexico is between 7% and 9% of its gross domestic product. As part of the fight against corruption, and within the scope of the 2007 to 2012 National Development Plan, in March 2011 President Felipe Calderon filed a decree proposal on the Federal Anti-corruption in Government Contracting Law, and also a decree proposal which will amend and expand various provisions of the Federal Law of Administrative Accountability of Public Officials. Both proposals are being analysed and debated in Congress.
These initiatives are a consequence of a real demand for a transparent legal framework for the large infrastructure projects being developed in the telecommunications and energy industries, including oil and gas. They are also a consequence of international conventions executed by Mexico, including:
The new initiatives draw on the principles established in these international conventions and are also influenced by foreign legislation such as the US Foreign Corrupt Practices Act and, more recently, the UK Bribery Act.
The Federal Anti-corruption in Government Contracting Law establishes the liability and penalties applicable to individuals and legal entities, whether national or foreign, and in whatever capacity they may act - as shareholders, partners, legal representatives, clients or agents, advisers, subcontractors, employees or others. Such liability arises from participation in irregular conduct during direct or indirect participation in federal government contracting - including preliminary acts, bidding processes and any other act or proceeding deriving therefrom - or in international commercial transactions.
In terms of government contracting, the legislative proposal highlights the following points:
The provisions of the Federal Law of Administrative Accountability of Public Officials are amended and expanded to establish:
This legislation could become a powerful tool for strengthening the anti-corruption framework. It creates effective financial deterrents and places significant responsibility on the public as a key instrument in identifying corrupt procurement practices at federal level.
For further information on this topic please contact Humberto Morales Barrón at Sanchez-DeVanny Eseverri SC by telephone (+52 81 8153 3910), fax (+81 8153 3901) or email (firstname.lastname@example.org).
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