Latin America Compliance Enforcement
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The main prosecution bodies in Argentina are the judiciary branch and the prosecution offices at the federal and local levels, not only for individuals but also for corporations. Corporate liability for corruption-related offences is of a criminal nature; therefore, only judges – and not administrative authorities – can hold a company liable under the Corporate Criminal Liability Act (Law 27,401).
There is a federal judiciary system in which the federal branch (both judiciary and prosecution) prosecutes federal crimes, and the local (provincial) judiciary prosecute local crimes. A crime is, as a rule, considered local unless a specific law establishes that it has a federal nature.
Certain compliance-related criminal offences, such as money laundering, drugs and arms trafficking and modern slavery are governed by federal law. Bribery and corruption-related offences, on the other hand, may be federal (when a national or international public official is involved) or local (when a provincial or local public official is involved).
The federal judiciary system is undergoing a gradual process to replace the old National Criminal Procedural Code (NCPC), which regulated the procedure for prosecuting federal criminal offences, with the Federal Criminal Procedural Code (FCPC). Under the NCPC, federal judges are responsible for prosecuting most criminal offences (including compliance-related), although they are also entitled to delegate an investigation to a federal prosecutor. In contrast the new FCPC establishes that federal prosecutors must carry out all prosecutions. As at the time of writing, the FCPC has been implemented at the federal courts in just a few jurisdictions (the provinces of Salta, Jujuy and Mendoza and the City of Rosario, Santa Fe). Federal courts and prosecutors based in the city of Buenos Aires and other provinces still mostly operate under the rules of the NCPC.
At the federal level, a set of special prosecution units aid judges and prosecutors when dealing with highly complex cases. Three of these units are focused on compliance-related criminal offences: the Office of the Prosecutor for Economic Crime and Money Laundering (PROCELAC); the Prosecutor’s Office of Administrative Investigations (PIA), which specialises in corruption and bribery-related offences; and the Anti-Trafficking Prosecutor’s Office (PROTEX), which deals with cases relating to modern slavery.
Finally, Argentina’s criminal system also allows for claimants to intervene and be part of the accusation. The Financial Information Unit (UIF), the agency created to lead the administration’s anti-money laundering (AML) efforts, is entitled to intervene as a claimant in money laundering-related cases. The Anti-Corruption Office (OA) is also entitled to intervene as a claimant in corruption-related cases.
Argentina lacks a uniform enforcement policy. In most jurisdictions, the principle of legality still rules. This means that prosecutors have a theoretical mandate to prosecute all the criminal offences equally since they lack the formal discretionary powers to decide which offences they should prioritise. This issue generates uncertainty as it is almost impossible to assess with any degree of precision which policy is guiding a prosecution body’s efforts.
Law 27,401, which established corporate criminal liability for corruption-related offences, provides that prompt and spontaneous self-reporting to the authorities because of an internal investigation is one of the requirements to avoid or mitigate penalties and other types of liability.
Law 27,401 requires self-reporting to be ‘spontaneous’; therefore, to benefit from it, the report must be prompt, voluntary and prior to any request by the enforcement authorities. An entity should consider self-reporting as soon as it has a reasonable certainty of the wrongdoing. The legal steps to do so may vary depending on the jurisdictional authority to which the report is presented; therefore, entities should always seek specialist counsel prior to self-reporting.
In criminal procedures, the FCPC enables a reduction of penalties for individual defendants who supply precise, verifiable and reliable details to prevent or to stop certain crimes (including acts of corruption), to clarify facts, to advance investigations and to identify individuals or the recipients of undue benefits, among other things.
Law 27,401 also provides for effective cooperation agreements, which are plea bargains in corruption-related investigations. Companies can agree to cooperate with the Prosecutor’s Office through the disclosure of information or precise, useful and verifiable data for the clarification of facts, identification of authors or participants, and the recovery of the proceeds of the crime. Through this procedure, companies can negotiate and agree on reduced terms of the penalty with the Prosecutor’s Office (that must, at least, include the payment of a fine, restoration of the proceeds of the crime and surrender to the state the goods that would presumably be seized in case of a conviction). The terms of the effective cooperation agreement must be submitted to the judge, who evaluates the legality or reasonability of the agreed terms and decides whether to sustain or overrule the agreement.
Although self-reporting, as a general principle, is not mandatory, there are some exceptions. For example, public officers are expected to report the commission of criminal offences that come to their knowledge; ‘obligated’ entities, as defined under Law 25,246 on AML and counter-terrorist financing, must report suspicious transactions to the UIF; and corporations publicly listed with the National Securities Commission must inform, under Law 26,831, any fact that could substantially affect the placement or trade of securities or development of its activities.
The format in which the entity should report the findings varies according to the jurisdiction and enforcement authority. If a report is submitted before prosecutors or judges, it should be presented in writing. Section 176 of the National Criminal Code Procedure establishes that the report should detail, as far as possible: the facts; the place, time and way in which the crimes were perpetrated; the participants; the victims; the witnesses; and any other relevant element.
Reports made directly to the police or other authorities have no formal requirements and may be made even orally; however, this course of action is generally not recommended. When an entity is already aware that it is the subject of a government investigation, exceptional care should be taken when cooperating with law enforcement authorities. The entity must be sure that the authority will not perceive its cooperation as a way of hampering the investigations or as an attempt to obstruct justice (a crime that is punishable in Argentina). It is not frequent practice either for authorities and private entities to cooperate in a joint investigation or for authorities to delegate part of an investigation to a company under investigation.
Regulatory enforcement for compliance breaches
Compliance with AML obligations is largely dealt with from a regulatory standpoint. Law 25,246, which regulates AML, created the UIF and tasked this entity with coordinating the administration’s AML efforts and policies. Even though the UIF is the main administrative authority responsible for imposing AML regulations, the Central Bank (BCRA) and the National Securities Commission (CNV) also have limited authority to impose AML requirements within their scope of competence.
The UIF has adopted the 2012 FATF Recommendations. Consequently, it has been using a risk-based approach to enforce requirements over regulated entities. These requirements include risk self-assessments, AML training for personnel, customer due diligence and record-keeping, internal controls, periodic activity reports, reporting of suspicious activity, transparency on legal ownership and the identification of final beneficiaries, among other things.
The penalties for non-complying regulated entities are administrative in nature. The UIF is the competent government authority responsible for examining compliance and enforcement of AML requirements. It has the power to conduct audits and investigations of regulated entities and can impose fines to those found not to be compliant.
Other than what is stated in its regulation, the criteria for examination can be casuistically inferred from the considerations made as motivation for each of the sanctions imposed. These sanctions are publicly available on the agency’s website. Nevertheless, it is important to note that the UIF does not have a publicly available enforcement policy and it greatly depends on the discretionary decisions of the public official in charge of its management.
Key outcomes in recent enforcement activity
From the perspective of anti-bribery and corruption, although Law 27,401 was enacted in 2017, creating criminal liability for legal entities for corruption-related matters, there have been no final judgments as yet. The National Prosecutor Office is working with a corporation in what could be the first collaboration agreement in a criminal procedure under Law 27,401. As the agreement is not yet settled, there is no public information about its details.
In contrast, there are many ongoing cases and investigations involving individuals – both former and current public officers and businesspeople. Most notably, Vice President Cristina Fernández de Kirchner was convicted in a high-profile case in December 2022. The conviction stemmed from corruption charges related to her tenure as the country’s president from 2007 to 2015. A Court of Criminal Justice found her guilty of ‘fraudulent administration’ over the awarding of public works tenders to Lazaro Báez, with whom the Kirchner family is closely related. In an independent case, Báez had already been convicted for money laundering. Fernández de Kirchner was convicted to six years’ imprisonment and a life ban from any public office. This ruling has been appealed, and it is expected to go through a lengthy process during which the penalties will remain suspended.
This is the first time a vice president has been convicted of a crime while in office in Argentina. As expected, it has generated political controversy. There has been praise from some sectors, which considered the verdict as a landmark that sends a strong message on the commitment to combating corruption and holding high-ranking officials accountable in the country; other sectors, particularly (but not exclusively) those politically identified with the vice president, see the ruling as confirmation of an alleged political persecution to which Fernández de Kirchner and her allies have been subject – an embodiment of the ‘lawfare’ campaign of which the ultimate goal is to proscribe ‘Kirchnerism’ from the political arena.
Meanwhile, some of the cuadernos-related prosecutorial efforts have progressed, even if slowly and with mixed success. The Notebooks case has become immense, with several related investigations running in parallel but with no significant progress in recent years. A combination of political interference, lack of resources in the judiciary, inefficient procedural rules, lack of expertise in investigating complex cases with so many ramifications, and insufficient experience in international judicial cooperation might all be factors that account for the poor results to date. In addition, other than some isolated actions concerning specific persons, no foreign jurisdiction has shown any significant determination to step in to investigate the ‘notebook’ allegations and take enforcement actions, alongside Argentina (or in spite of it).
Challenges for commercial organisations
The main challenge for commercial organisations in Argentina derives from economic uncertainty, high inflation and instability. These economic and financial exigencies that companies must deal with on a daily basis, combined with poor enforcement, results in many companies not being able to focus on compliance initiatives as an actual priority.
From a compliance point of view, some highly interventionist policies that have been implemented, particularly to administrate the current shortage of hard currency, coexisting multiple exchange rates and the daily economic stress are all risk factors that can result in a fertile soil for corruption, bribery and tax evasion. This is reflected in the position Argentina occupies in the Corruption Perception Index maintained by Transparency International.
Nevertheless, the continuing trend is of commitment by companies to adopt thorough compliance programmes and to investigate wrongdoing.
Argentina’s prosecution bodies have not shown any clear indications regarding where they will focus their future enforcement efforts. Elections are due to be held in the final quarter of 2023, and it seems likely that the current slow pace of investigations in the private sector will continue.
From a regulatory standpoint, there is currently a relevant bill that is due to be considered by Congress that increases the number of activities susceptible to being regulated by the UIF and the number of entities that have special AML obligations. Most notably, the bill intends to include fintech, payment service providers and lawyers and accountants whose practices focus on company incorporation and administration. The fate of the bill is uncertain as the current government does not have the necessary numbers in Congress to have it passed.
Finally, the OA has approved a Registry of Integrity and Transparency for Companies and Entities (RITE), where organisations may register and present their compliance policies and procedures, be evaluated and obtain official recognition of their level of integrity and transparency. As at the time of writing, RITE is not yet fully active but is expected to begin operating soon. Registration with RITE will not be mandatory, but some government agencies are expected to request suppliers and vendors to be registered as a condition for participating in public procurement processes.
The prevention and prosecution of corrupt acts, and the recovery of ill-gotten gains, are regulated by the Brazilian anti-corruption legal framework, which comprises the following civil, administrative and criminal legislation: (1) the Brazilian Anti-Corruption Law, known as the Brazilian Clean Company Act (BCCA), which is the primary anti-corruption legislation; (2) the Administrative Improbity Law (Federal Law No. 8,429/1992), amended by Federal Law No. 14,230/2021; and (3) the New Public Procurement Law (Federal Law No. 14,133/2021), enacted in 2021 to replace the Public Procurement Law (Federal Law No. 8,666/1993). Notably, criminal liability is applicable only to individuals, as legal entities cannot be held criminally liable, with the exception of environmental crimes; therefore, criminal liability for corrupt practices is applicable only to individuals, pursuant to the Brazilian Criminal Code.
The BCCA entered into force in January 2014 and may be enforced against companies involved in corruption of public officials as well as fraudulent practices in public bids and government contracts. In addition to the BCCA, corrupt practices and fraudulent acts in public procurement may also be punished by other federal laws such as the Administrative Improbity Law and the Public Procurement Law. Both laws were enacted in the 1990s and, respectively, amended and replaced in 2021. The amendments to both laws sought to clarify how the legislation applies to the same acts.
The Administrative Improbity Law (as amended by Federal Law No. 14,230/2021) punishes illicit enrichment, losses to the public treasury and harmful acts against the principles of the public administration. Companies involved in acts of administrative improbity are subject to penalties, such as fines, and may face prohibition from contracting with the government.
Although both the Administrative Improbity Law and the BCCA apply to similar conduct, amendments to the former provide that penalties under the Administrative Improbity Law will not be applicable to legal entities if the act of administrative improbity is subject to the BCCA. In addition, a new provision establishes that penalties applied to legal entities based on the Administrative Improbity Law and the BCCA shall respect the principle of non bis in idem, which prohibits prosecution or sanction twice for the same act.
The New Public Procurement Law punishes fraudulent practices in public procurement with penalties such as fines, suspension and debarment. The administrative infractions set forth in the New Public Procurement Law that are also considered illicit acts under the BCCA will be jointly investigated and prosecuted in accordance with the proceedings and competent authority established by the BCCA.
These recent amendments are important legislative responses to avoid multiple prosecutions based on the same facts and bring more legal certainty to the Brazilian anti-corruption legal framework.
The relevant authorities involved in enforcement actions and that have the power to enter into leniency agreements are the following:
- Federal Public Prosecutor’s Office (MPF): independent from the Executive Branch, the MPF has powers to pursue criminal lawsuits against individuals and civil claims against companies and individuals. It is currently the leading enforcement entity with the greatest number of signed leniency and plea bargain agreements;
- Federal Attorney General’s Office (AGU): the AGU is the agency responsible for representing the government in civil claims and with powers to file civil lawsuits;
- Office of the Comptroller General (CGU): the CGU is the anti-corruption body of the federal government; and
- Federal Audit Court (TCU): the TCU is responsible for auditing and overseeing the financial aspects of government contracts and has the power to impose administrative penalties such as debarments from participating in public bids in connection to the federal government.
Additionally, depending on the subject matter and specifics of the prosecution or settlement attempt, there are other Brazilian authorities that may have authority over companies seeking a corporate resolution, such as the following:
- Administrative Council for Economic Defence (CADE), which is Brazil’s antitrust authority;
- Brazil’s Securities and Exchange Commission (CVM); and
- Central Bank of Brazil (BACEN).
Of all the authorities listed above, only the CGU, as the highest-ranking enforcement authority of the federal government, can bind other authorities to its agreement.
These authorities are the predominant federal enforcement agencies. It is important to note, however, that state and municipal agencies may also have enforcement jurisdiction over corruption and other financial crimes; therefore, if a corrupt act that is subject to a settlement agreement is also subject to the jurisdiction of a state or municipal agency, it is crucial to also consider engaging in negotiations with local authorities.
In this regard, a corrupt act that involves federal funds or government officials as well as public procurement fraud or bid rigging in connection with state agencies will require negotiations with at least two agencies (the CGU and the local authority), but most likely will involve three or four. In this regard, companies must consider engaging appropriate counsel to interact with each and all competent authorities. To have appropriate expectations and understanding regarding the negotiation process, it is also crucial to understand that each negotiation process is distinct, requires independent evidence gathering, follows different time frames and will result in fines and penalties that can eventually be compensated.
Corruption and other financial crimes are governed by a patchwork of anti-corruption laws that contain guidelines for prosecuting not only bribery per se but fraud in public procurement, misappropriation, conflict of interest and other inappropriate conduct intrinsically related to acts of corruption. These laws also provide a robust legal foundation that recognises and rewards cooperation.
Despite a strong legal foundation, companies operating in Brazil that face enforcement or voluntarily seek to disclose wrongdoings remain uneasy about cooperation and their ability to settle. This unease is rooted in the overlap of the responsibilities and authority of several Brazilian government agencies that negotiate and enter into leniency agreements, which continues to this day.
A recent attempt to untangle this situation and to structure a clear and defined cooperation framework concluded with one key government agency withholding its signature. The dispute for authority between agencies has discredited them and raised doubts in respect of the legitimate interests they are seeking – whether it be honest disclosures and cessation of corrupt practices or the mere collection of financial compensation for damage.
To better understand the current enforcement and cooperation framework, reference must be made to the BCCA provision that determines that ‘the highest authority of each public body or entity’ has jurisdiction to enforce its provisions, although the Federal Constitution and other anti-corruption legislation create similar and overlapping competences for multiple agencies.
Moreover, the BCCA does not provide for any articulation, joint cooperation, communication or review by another authority before an agreement is reach.
In August 2020, the TCU sought the assistance and intervention of the Brazilian Supreme Court (STF) for a coordinated agreement encompassing all the authorities involved with leniency agreements.
The inter-agency agreement was signed on 6 August 2021 by the CGU, the AGU, the TCU, the STF and the Ministry of Justice. The MPF did not sign the agreement on the grounds that it did not respect the legal attribution of each institution and unconstitutionally restricts the power of the MPF in its anti-corruption activities.
As a result of this lack of consensus, based on the agreed cooperation framework, the CGU and the AGU will be responsible for conducting leniency agreement negotiations, and the TCU will be informed of the details for the purposes of calculations of damages and fines. Once a leniency agreement is signed, all parties who signed the cooperation framework will receive information, documents and evidence to ensure no further sanctioning occurs in respect of the same facts (non bis in idem).
In view of the fact that the MPF did not sign the inter-agency agreement, since it understood that the cooperation would undermine the efforts it has promoted as a pioneer in leniency agreements and plea bargaining in the past few years, companies will have to engage with the MPF and local state authorities over the same facts to avoid facing administrative improbity acts.
Despite there being common understanding of the importance of a ‘one-stop shop’ to galvanise a transversal fight against corruption, companies that seek a clean slate will have to engage in negotiations with multiple authorities.
Regarding recent judicial decisions on this matter, it is important to highlight a ruling by the STF in March 2021 that suspended the debarment sanction enforced by the TCU against legal entities that have signed leniency agreements with Brazilian authorities. According to the STF, although the execution of a leniency agreement does not prevent the TCU from acting in its capacity, coordination of activities is needed between public entities regarding enforcement within the anti-corruption legal microsystem, to avoid institutional conflicts or any reduction in the competence of one entity in favour of another.
Agreements in numbers and examples of cooperation
Although not common or free from conflict, there have been some synchronised and multiple authority agreements that consist of simultaneous interactions between authorities that are in agreement about the terms and penalties. One of these led to a resolution entered into by Technip in June 2018 with the CGU, the AGU, the MPF and the US Department of Justice (DOJ). Not only did this agreement encompass all relevant local authorities but also a foreign agency. Companies should consider this combined and facilitated interagency alignment as their ultimate goal although, realistically, this is not yet the most common scenario. An intermediate alternative that should be considered is engaging with the different authorities at the same moment, to make use of the same investigative efforts and evidence collection even though the final work-product required by each authority may be different. Also, not privileging one authority with more information or taking a significant amount of time to engage local authorities may increase the likelihood of fine compensation and any eventual cooperation or communication between the competent authorities.
In an ideal model of a combined effort in June 2021, Foster Wheeler Energy Limited entered into an agreement between the CGU, the AGU, the MPF, the US DOJ, the US Securities and Exchange Commission (SEC) and the UK Serious Fraud Office. In another joint resolution, Samsung Heavy Industries entered into an agreement with the CGU, the AGU, the MPF and the US DOJ in February 2021. Another noteworthy case concerns Stericycle, which signed an agreement with the CGU, the AGU, the US DOJ and SEC in April 2022.
Although still few in number, there have also been joint resolutions between just Brazilian authorities, as was the case between the CGU, the MPF and the AGU and two advertising agencies in April 2018.
What to expect
Strong political support is necessary for anti-corruption efforts and, despite significant movement since the Operation Car Wash investigations, efforts have not been as consistent in the past two years.
Despite the efforts during Operation Car Wash (now closed), several government-driven activities and sectors remained uninvestigated, such as educational and financial institutions. Additionally, the covid-19 pandemic may have initially affected the launching of new government investigations but also created a significant motive for current investigative efforts as there have been discussions concerning legitimacy regarding the offering of health products during the outbreak of the pandemic. Notwithstanding, the health sector has also been minimally monitored and investigated.
It, therefore, seems as if there are plenty of potential cases but no corresponding interest from the government to initiate the necessary investigations. This definitely does not mean that Brazil is free of corruption within its government structure or that companies in Brazil have ceased illicit practices.
Pledges to root out corruption were made by the current administration although what has actually been witnessed is a significant decrease in the number of corruption investigations and enforcement efforts. Amid this disappointing situation, Brazilians can only hope that anti-corruption efforts are once again strengthened and prioritised.
Anti-bribery, anti-corruption and anti-money laundering
Corruption was one of the main points that drove the political campaign of the current president, Andrés Manuel López Obrador, in 2018. The campaign was successful in the context of multiple corruption scandals, particularly those involving public officers during the term of the former president, Enrique Peña Nieto. After four years in office, corruption is still on the national political agenda, but mainly as a discourse to dismantle some of the institutions that were built to counteract corruption in the first place.
Corruption is one of the main words used by the president in his daily conferences and in the context of accusing opposers to his regime. While a great shift in anti-corruption enforcement was expected, only very specific high-profile cases seem to be being prosecuted. The former CEO of Pemex, Emilio Lozoya Austin, was charged for corruption in 2020, and Rosario Robles, former secretary of the Ministry of Social Development, was detained in 2019 for crimes related to a scheme to divert government money to political campaigns. She was absolved in 2023. Other corruption cases involving political groups related to the president or the current party in power have been denied or dismissed.
In 2015, a major reform of the Constitution created the National Anti-Corruption System (NAS) as an entity to coordinate all competent authorities (local, state and federal) to prevent, detect and sanction administrative faults and acts of corruption, as well as to audit and control public resources. The NAS took more than six years to be implemented in the 32 Mexican states, but the coordination committee made great efforts launching the National Anti-Corruption Policy and incorporating civil society and specialists in the fight against corruption.
However, on 18 April 2023, the president sent a bill to the Chamber of Deputies proposing to eliminate and merge certain institutions, such as the Executive Secretary of the NAS, to become part of one of the state secretaries. This bill, if approved, will affect the independence and impartiality of the NAS. The elimination of the Executive Secretary of the NAS would hinder the accountability mechanism of public institutions from the three levels of government because it is currently a key provider of information; therefore, it seems that without information and transparency, enforcement efforts against corruption will be left aside.
The Anti-Corruption Law, passed in 2016 as part of the above-mentioned constitutional reform, addresses corruption from the perspectives of both public officers and private parties. Common administrative liabilities are acts of public officers that contravene the principles of public service but that do not necessarily amount to corruption, such as failing to make periodic filings, failing to report violations to corruption laws or failing to ensure that subordinates observe the anti-corruption laws. Aggravated offences, on the other hand, are actions that result both in the violation of the public service principles and in corruption, bribery or diversion of public resources, among other things. Private parties (both individuals and corporations) may also be held liable under the Anti-Corruption Law.
The available administrative sanctions for public officials include reprimand, suspension, destitution and disqualification, as well as economic sanctions. With respect to the liability of citizens, the Anti-Corruption Law establishes that the competent courts shall determine their responsibility based on their participation in acts involving serious administrative faults, and those courts may determine the applicable sanctions, such as economic sanctions, disqualification from participating in public contracting and payment for the damage caused to the public finances.
Additionally, organisations can be sanctioned if there is evidence to show that (1) there has been a serious administrative liability (i.e., an aggravated offence, as described above), (2) the organisation obtained an economic benefit, or (3) the administrative body (i.e., management or the board of directors), surveillance bodies or committees, or the owners were involved, or the organisation has been involved in prior misconduct. The sanctions for the foregoing can be suspension of activities, dissolution or intervention of the entity. Corruption is also prosecuted as a criminal offence.
With regard to anti-money laundering, the Criminal Code prohibits operations involving resources from an illegal source and the financing of terrorism. The Federal Law on the Prevention and Identification of Operations with Illicit Resources (the AML Law), which came into force in 2013, includes a list of vulnerable activities that must be identified and reported by organisations to the Ministry of Finance and Public Credit through the Financial Intelligence Unit (FIU). The AML Law is independent of the specific regulations applicable to financial institutions. The FIU reviews organisations’ reports to identify suspicious activities. During the past few years, it has gained relevance as a source of information for prosecution and has been used instead of the NAS to prosecute some high-profile cases.
Pursuant to the National Code of Criminal Procedure (NCCP), organisations can face criminal prosecution for certain federal crimes (including corruption and money laundering activities) if and to the extent that the prosecution can establish that the relevant offence was committed on behalf of the organisation, for its benefit or through its means and provided that the organisation had failed to implement adequate controls. Even though ‘adequate controls’ are not defined in the NCCP, it is clear that the existence of compliance programmes is taken into consideration when imposing a sanction. As part of the 2016 constitutional reform, the Criminal Code was amended to include a specific section on corruption-related criminal offences and the sanctions for public servants and citizens involved in corruption.
The key prosecution body for money laundering activities is the Office of the Mexican Attorney General with the support of the Ministry of Finance and Public Credit. With regard to corruption, the key prosecution bodies are the Superior Audit Office of the Federation, the Ministry of Civil Service and the Specialised Prosecutor’s Office in the Fight against Corruption. The Ministry of Civil Service and the related internal control offices are bodies of the federal executive branch; the Superior Audit Office of the Federation falls under the legislative power and the Specialised Prosecutor’s Office in the Fight against Corruption is overseen by the Office of the Mexican Attorney General.
The Ministry of Civil Service is in charge of reviewing how common administrative liabilities notified through the internal control offices are managed. The Audit of the Federation is the body that conducts audits of federal public resources. Irregularities that relate to administrative liabilities are investigated and sanctioned by the Ministry of Civil Service. Both the Ministry of Civil Service and the Superior Audit Office Audit of the Federation are responsible for detecting and investigating cases of aggravated administrative liabilities and civilian liabilities, which are sanctioned by the Federal Court of Administrative Justice (a constitutional autonomous entity endowed with powers to sanction aggravated administrative liabilities of public officers and civilians). When a criminal offence is suspected, the Specialised Prosecutor’s Office in the Fight against Corruption will conduct the investigation. If the Office concludes that a criminal offence has been committed, it initiates a criminal action before the criminal federal courts.
The Anti-Corruption Law provides for a leniency programme by virtue of which an offender who confesses its offences is entitled to a reduction of the applicable fine of between 50 per cent and 70 per cent, and immunity from being banned from participating in public tenders, provided that:
- a formal investigation has not been notified to any of the alleged offenders;
- the applicant is the first to provide evidence that is sufficient to verify the existence of the infringement;
- the applicant cooperates fully and continuously with the competent authority investigating and prosecuting the matter; and
- the applicant ceases its infringement on being instructed to do so by the competent authority.
Later applicants for leniency may obtain a reduction in any applicable fine of up to 50 per cent if they produce further evidence to the investigative or prosecuting authority. If the formal investigation has already been initiated, an applicant is entitled to a reduction of up to 30 per cent of the applicable fine. This leniency programme does not grant immunity from criminal prosecution against directors, officers and employees. At the time of writing, there are no specific guidelines for the leniency programme, which can be viewed as a deterrent to using this mechanism.
In addition to leniency programmes, the Anti-Corruption Law also considers integrity policies and the active participation and cooperation of the management or shareholders of an organisation in an investigation as mitigating factors that must be weighed when imposing sanctions on an organisation. By contrast, it is an aggravating factor if the management of a corporation fails to report corrupt acts within the corporation of which they are aware.
Outcomes from enforcement activity
The key outcomes from enforcement activity in recent years have been centred on financial and tax-related crimes. The president has campaigned against tax evaders in his daily conferences, and several organisations have been punished for tax evasion. Further, the FIU has had a central role as prosecutor for several companies and civilians. According to an FIU report, 38,820 bank accounts have been blocked following a direct ordered from the FIU. Between January and April 2023, 51 complaints involving 473 persons were filed before the federal criminal courts. Fraud was the most common felony, and only one of the complaints (involving 11 people) was related to corruption.
The activities of the Superior Audit Office of the Federation (ASF) have also been key in uncovering major corruption cases (e.g., Odebrecht) in which public officers and civilians have been involved. From 2018 to 2020, the ASF decreased its audit function; however, its last report showed that for the fiscal year 2021, the ASF performed 2050 audits (a 44 per cent increase compared with the previous year).
The ASF has been subject to criticism in past years threatening its independent position. In 2021, it disclosed that the cancellation of the project to build an international airport in Mexico City would amount to 331 billion pesos. After two months of discussion with the executive power, and owing to political pressure, the ASF corrected the estimate to 113 billion pesos.
In the past few years, enforcement has been centred on tax and finance-related crimes rather than strictly corruption matters. Although corruption is still on the public agenda, there have been no major shifts in anti-corruption efforts that have been included in public policies or new legislation. In contrast, corruption is the main argument used for the launch of several bills to amend and affect independent institutions that have traditionally served as counterweights of power fostering transparency and public data availability.
Finally, as prevention mechanisms themselves, organisations should be aware of the need to establish very robust compliance programmes, which should incorporate strict compliance in respect of tax and anti-money laundering matters, as well as anti-bribery and anti-corruption features.
 Maximiliano D’Auro is a partner and Rodrigo Allende is a senior associate at Beccar Varela; Eloy Rizzo is a partner, Andre Luis Leme is a senior associate and Victoria Teles Manhães Barreto Arcos is an associate at Demarest Advogados; and Carlos Chávez is a partner and Marianela Romero is an associate at Galicia Abogados, SC.
 For the purposes of this section, the term ‘compliance breach’ has been interpreted as non-criminal violations to compliance-related regulations.
 Financial Action Task Force, ‘International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (updated February 2023).
 Nicolás Misculin, ‘Argentina court hands VP Cristina Kirchner 6-year jail term in graft case’, Reuters, 7 December 2022, www.reuters.com/world/americas/argentinas-vp-cristina-kirchner-faces-corruption-trial-verdict-2022-12-06 (accessed 14 August 2023).
 ‘Cuadernos’ refers to a series of investigations that were triggered by a whistleblower, Óscar Centeno, a former Planning Ministry chauffeur, with regard to the bags of money that former government official Roberto Baratta is accused of moving. The term ‘cuaderno’ makes reference to the notebooks (cuadernos in Spanish) that Centeno kept of all the activities he carried out for Baratta and that served to launch the investigations.
 Federal Public Ministry (MPF), Press Release, ‘MPF, em coordenação com CGU e AGU, firma acordo de leniência com empresas do grupo Amec Foster Wheeler’, 25 June 2021 (in Portuguese), www.mpf.mp.br/pr/sala-de-imprensa/noticias-pr/mpf-em-coordenacao-com-cgu-e-agu-firma-acordo-de-leniencia-com-empresas-do-grupo-amec-foster-wheeler (accessed 15 August 2023).
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