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Corporate Compliance Insights

New Corruption Risk Data for Mexico

by Matteson Ellis
January 8, 2016
in Uncategorized
New Corruption Risk Data for Mexico

This article was republished with permission from FCPAméricas Blog, for which Matteson Ellis is founder, editor and regular contributor.

Lots of eyes are on Mexico right now, given the country’s efforts to develop a new National Anti-Corruption System, the opening up of its energy sector to foreign investment and the reality of corruption risk that persists for business there, making attention to anti-corruption compliance of continued importance. It is fitting that two reputable actors in Mexico – PwC and FTI Consulting – have recently published new and helpful data related to the prevalence of corruption risk in the country.

The following data can help companies when developing business and compliance strategies on the ground. It can be used by compliance personnel when training employees in the country. It can help educate global executives who are making their first forays into Mexican business about the nature of bribery risk there.  The findings:

From PwC

2000-2015 Latin America Anti-Corruption Enforcement Results

PwC’s Forensic Services team analyzed FCPA settlements over the last 15 years involving Mexico and other Latin-American countries, which included 46 country-specific cases. It published the results in September 2015, finding the following:

  • Mexico was the Latin-American country involved in the highest number of FCPA settlements. Mexico was involved in 12 cases, followed by Argentina (eight cases), Venezuela (seven), Brazil (seven), Honduras (two), Panama (two), Ecuador (two), Costa Rica (two), Colombia (one), Bolivia (one), Haiti (one) and the Bahamas (one).
  • 67 percent of the Mexico FCPA cases involved illicit payments made through business partners, such as joint venture partners, sales representatives and distributors who interacted with government agencies on behalf of the prosecuted companies. Half of these business partners were sales agents.
  • 25 percent of the Mexico FCPA cases involved the giving of gifts, entertainment or travel to government officials as part of the bribery scheme.
  • 25 percent of the Mexico FCPA cases involved the use of fictitious vendors or invoices. By creating or accepting false invoices, businesses sought to justify improper payments to government officials. This included false invoices submitted directly to companies by government officials to support illicit payments or the creation of shell companies to funnel the payments.
  • 25 percent of the Mexico FCPA cases involved manipulation of a company’s payroll process to make improper payments. For example, companies included ghost employees on the payroll to create a way of transferring funds to officials, or they hired a relative of an official as a way of influencing the official.
  • 17 percent of Mexico FCPA cases involved control deficiencies in a company’s treasury processes, such as checks issued to an employee who cashed the checks and used the funds to bribe an official.
  • 17 percent of Mexico FCPA cases involved overpricing for goods and services and using the extra funds to pay kickbacks as the method of bribery.

From FTI Consulting

2015 Corruption Survey

In December, FTI Consulting Mexico published survey results related to perceptions and experiences with government corruption in Mexico. The survey was based on interviews with managers and executives from 565 companies operating in Mexico. It was the second year in which the survey was conducted. The following results were notable.

  • There was an increase in negative perceptions of corruption at all levels of government in Mexico: in 2014, 43 percent of business leaders said that all levels of government were “equally corrupt.” This year, the figure was 76 percent.
  • Approximately one in five business leaders reported at least one incident in the last year in which public officials requested money to facilitate or issue paperwork, perform an official function or participate in or win a public contract.
  • In 2014, 45 percent of respondents considered it “necessary or very necessary” to participate in corruption schemes to do business with the government at local or national levels; in 2015, 21 percent expressed the same sentiment. Small companies tended to face greater risk, with 37 percent saying that they had experienced corruption incidents.
  • Only 39 percent of respondents consider reputation (integrity and/or honesty) to be the most important factor when selecting a partner or supplier.

The opinions expressed in this post are those of the author in his or her individual capacity and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.


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Matteson Ellis

Matteson Ellis serves as Special Counsel to the FCPA and International Anti-Corruption practice group of Miller & Chevalier in Washington, DC.  He is also founder and principal of Matteson Ellis Law PLLC, a law firm focusing on FCPA compliance and enforcement. He has extensive experience in a broad range of international anti-corruption areas. Previously, he worked with the anti-corruption and anti-fraud investigations and sanctions proceedings unit at The World Bank. Mr. Ellis has helped build compliance programs associated with some of the largest FCPA settlements to date; performed internal investigations in more than 20 countries throughout the Americas, Asia, Europe and Africa considered “high corruption risk” by international monitoring organizations; investigated fraud and corruption and supported administrative sanctions and debarment proceedings for The World Bank and The Inter-American Development Bank; and is fluent in Spanish and Portuguese. Mr. Ellis focuses particularly on the Americas, having spent several years in the region working for a Fortune 50 multinational corporation and a government ethics watchdog group. He regularly speaks on corruption matters throughout the region and is editor of the FCPAméricas Blog. He has worked with every facet of FCPA enforcement and compliance, including legal analysis, internal investigations, third party due diligence, transactional due diligence, anti-corruption policy drafting, compliance training, compliance audits, corruption risk assessments, voluntary disclosures to the U.S. government and resolutions with the U.S. government. He has conducted anti-corruption enforcement and compliance work in the following sectors: agriculture, construction, defense, energy/oil and gas, engineering, financial services, medical devices, mining, pharmaceuticals, gaming, roads/infrastructure and technology. Mr. Ellis received his law degree, cum laude, from Georgetown University Law Center, his masters in foreign affairs from Georgetown’s School of Foreign Service, and his B.A. from Dartmouth College. He co-founded and serves as chairman of the board of The School for Ethics and Global Leadership in Washington, D.C. He is a member of the District of Columbia, Texas, New York, and New Jersey bar associations. Mr. Ellis is also author of The FCPA in Latin America: Common Corruption Risks and Effective Compliance Strategies for the Region.

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