Firms Face Mexico's New Anti-Corruption Initiative Ben DiPietro - The Wall Street Journal
go to original November 5, 2016

Mexico’s new anti-corruption law takes effect next July and companies that do business there need to be looking at the rules and devising strategies to comply with the new requirements. The law, passed in July, aims to crack down on bribery and corruption by forcing government officials to be more transparent about their finances and business transactions. It calls for the appointment of a special prosecutor to investigate corruption cases, boosts penalties for companies that break the law and pushes firms to create their own anti-corruption compliance programs. “This regulation affects all companies operating in Mexico, both local and international, so every business needs to take into account the new compliance procedures,” said Dalia Sierra Ramirez, a partner in EY’s Fraud Investigation and Dispute Services practice.

Companies should do a risk assessment to make sure they are complying with all of the compliance program elements laid out in the new regulation, should conduct due diligence and make sure their human resources departments are monitoring for high-risk personnel and checking to see that third parties are adhering to their compliance standards, said Ms. Ramirez. “If the company does not have a compliance program already in place, it should conduct a risk assessment in order to understand what are the company’s high-risk areas and then identify the specific activities it will have to implement to protect itself from these risks and be in compliance with the regulation,” she said.

Companies that can show they have an effective compliance program could receive a reduced penalty if involved in a corruption allegation, said Ms. Ramirez. “If an employee or third party commits a corrupt act that in turn benefits the company, that organization will be held liable unless it can demonstrate that it has implemented a compliance program that meets all of the requirements of the new regulation,” she said.

Read more of the Morning Risk Report at The Wall Street Journal

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