Last Thursday, May 5, 2011, the Mexican Senate approved President Felipe Calderon’s Federal Anti-Corruption in Government Contracting initiative.
Our colleagues at Sánchez DeVanny Eseverri, S.C. (“Sánchez DeVanny”), Mexico have analyzed the new legislation and provide its highlights below:
- It establishes the responsibility and sanctions applicable to individuals and legal entities, whether national or foreign, acting under any capacity (either as shareholders, partners, legal representatives, clients or agents, advisors, subcontractors, employees, or others) for irregular conducts in which they may incur during their direct or indirect participation in federal government contracting (including preliminary acts, bidding processes, and any other act or proceeding derived from such), or in international commercial transactions.
- The following are among the irregular conducts subject to sanctions: offering or paying money to a government officer in order for him to carry out or omit an act related with his functions, carry out acts to obtain an improper benefit or advantage in federal government contracting processes, or participate in public bids despite being prevented to do so by law or by an administrative resolution, or in any other way evade the rules or requirements of the federal government contracting.
- For individuals, the sanctions basically consist in fines that range from a thousand to fifty thousand times the general minimum wage in effect in Mexico City (this is, between US$5,000 and US$250,000 approximately) or 30% to 35% of the amount of the government contract and, for legal entities, in fines that range from ten thousand to two million times the general minimum wage in effect in Mexico City (this is, between US$50,000 and US$10,000,000) or 30% to 35% of the amount of the government contract. Additionally, both individuals and legal entities may be sanctioned with disqualification to participate in federal government contracting processes for a period from 3 months to 5 years.
- The competent authority to apply, develop and interpret this law and its provisions, and to apply sanctions, will be the Mexican Ministry of Public Administration.
The foregoing analysis of the Federal Anti-Corruption in Government Contracting initiative was provided by attorneys Humberto Morales-Barrón and Daniel Maldonado Alcántara of Sánchez DeVanny, Mexico.