Non-trial resolutions as an overlooked ally in the Mexican fight against corruption


In summary

This article provides an overview of the mechanism and benefits of non-trial resolutions (NTRs) and their outlook in Mexico, in accordance with the OECD Recommendations on Non-Trial Resolutions published in December 2021. It also includes the authors’ opinions on the benefits of implementing NTRs in Mexico by using the equivalent of NTRs in Mexican criminal law as a gateway to ramp up the country’s much-needed fight against corruption.


Discussion points

  • Overview of NTRs as the predominant means of enforcing foreign bribery and other related offences since the entry into force of the Anti-Bribery Convention of the OECD (OECD Anti-Bribery Convention)
  • Overview of criminal law and the equivalent of NTRs in Mexican criminal law
  • The current obstacles of implementing NTRs as mechanisms in Mexican criminal law based on the current standing of opportunity criteria

Referenced in this article

  • Recommendations of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions of the OECD,
    article XVIII
  • Legal framework of Mexican criminal law, including anti-bribery and corruption framework, and criminal proceedings
  • OECD Anti-Bribery Convention

Non-trial resolutions as mechanisms for enforcing foreign bribery and other related offences

Non-trial resolutions (NTRs) refer to a wide range of mechanisms used to resolve criminal matters without a full court proceeding, based on an agreement between an individual or a company and a prosecuting or another authority. [1] In other words, NTRs are agreements between an entity or individual and an enforcement authority to resolve criminal matters without a full trial on the merits.[2]

We have focused our analysis of NTRs on the Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Recommendation), specifically article XVIII, which contains the specific recommendations for NTRs and their potential application to Mexico. [3] The OECD Recommendation was issued to establish the new standards for the member countries of the OECD.

Parties may enter into NTRs at any stage of an investigation or prosecution of a bribery offence. NTRs may impose financial penalties, disgorgement of profits, compliance, and reporting conditions, among other sanctions, including prison terms for individuals. [4] In some cases, NTRs can be used in administrative or civil proceedings to enforce the foreign bribery laws on the parties to the OECD Anti-Bribery Convention, specifically with legal persons. [5] NTRs can manifest in several ways, such as convictions (eg, plea agreements) or non-conviction agreements (eg, deferred prosecution agreements). [6] NTRs can vary largely in type of resolution and leniency for the accused; ranging from the decision not to charge a defendant to the imposition of criminal sanctions.

Among other obligations, article XVIII of the OECD Recommendation provides that member countries of the OECD, such as Mexico, should:

  1. adopt a clear and transparent framework regarding NTRs, including the authorities entitled to enter into NTRs, whether these resolutions require the admission of guilt;
  2. develop a clear and transparent criterion regarding the use of NTRs including self-disclosure of misconduct, cooperation with law enforcement authorities, and remediation measures;
  3. provide clear and publicly accessible information on the advantages that an alleged offender may obtain by entering into a NTR;
  4. where appropriate; and consistent with data protection rules and privacy rights, as applicable, make public elements of NTRs resolutions;
  5. ensure that foreign bribery resolved by NTRs is punishable by transparent, as well as effective, proportionate, and dissuasive sanctions as required by Article 3 of the OECD Anti-Bribery Convention;
  6. ensure that the non-trial resolution of foreign bribery cases does not constitute an obstacle to the effective investigation and prosecution of natural or legal persons in other countries, and generally allows for effective international cooperation, as provided under Articles 9 and 10 of the OECD Anti-Bribery Convention;
  7. ensure that the conclusion of a non-trial resolution with a natural or legal person is without prejudice to an enforcement action against other relevant natural or legal persons, where appropriate; and
  8. ensure that non-trial resolutions are subject to appropriate oversight, such as by a judicial, independent public, or other relevant competent authority, including law enforcement authorities. [7]

    According to the OECD, NTRs are the predominant means for enforcing foreign bribery and other related offences. For all 44 parties to the OECD Anti-Bribery Convention, 23 have successfully concluded a foreign bribery action. [8] Based on a study made in 2018 by the OECD, between the entry into force of the OECD Anti-Bribery Convention and the cut-off date for the study, a remarkable 78 per cent of foreign bribery resolutions concluded using NTRs.[9]

    There are many potential benefits of implementing NTRs as a law enforcement tool. Law enforcement agencies experience predictability by establishing clear guides on the opportunities for leniency in relation to corporations’ liability. This has promoted companies’ cooperation to work with law enforcement and reach mutually beneficial agreements.

    Another example of NTRs’ advantages lies in their flexibility and their capacity to adapt depending on the gravity of the offences, while simultaneously considering mitigating factors such as voluntary disclosure and timely cooperation. [10] The latter is a powerful example of how countries, by redefining the structure of incentives, can further promote corporate commitment to compliance by reaffirming how this commitment can allow for NTRs to be an option for a company facing criminal proceedings.

    Finally, the OECD Recommendation was designed to be an achievable standard to the member countries of the OECD. Although Mexico does not currently have NTRs as they are presented by the OECD Recommendation, there are some provisions that could provide a starting point for Mexico to begin moving towards the standards provided for by the Recommendation.

    Overview of Mexican criminal law NTR equivalents – criterios de oportunidad

    As established by the OECD, advocates for NTRs argue in favour of these mechanisms by establishing that they are compromising in nature, rather than adversarial, consequently constituting an incentive for wrongdoers to self-report and therefore increasing the probabilities of reducing impunity for the corresponding crimes.

    In this section, we explore the concept of opportunity criteria (criterios de oportunidad), a legal avenue provided under Mexican criminal law akin to NTRs. As we further explicate in the following sections, Mexican legislators intended for opportunity criteria to offer a gateway for increasing the effectiveness of the Mexican criminal law adversarial justice system in the prosecution of crimes that most affect the perception of unsafe conditions and impunity of citizens.[11]

    Anti-bribery framework

    To fully understand the possible effects of implementing NTR mechanisms in Mexico, we must first broadly describe Mexico’s anti-bribery regulatory architecture. This structure is supported by Mexico’s National Code of Criminal Procedure (which governs both federal and state criminal proceedings), the Federal Criminal Code (which typifies federal corruption offences), the General Law on Administrative Responsibilities (which typifies both public servants and private parties’ corruption offences), and parallel state statutes for criminal and administrative responsibilities (where we can find criminal and administrative corruption-related offences).[12]

    In Mexico, bribery is a federal offence when (1) the public official is a federal public official, (2) the public official is carrying out acts of a federal nature, (3) if a crime is initiated, prepared, or committed abroad but produces – or is intended to produce – its effects in Mexico and finally, (4) if a crime is initiated or prepared abroad but is committed in Mexico, allowing for extraterritorial effects.[13]

    Finally, over the past few decades, Mexico has acquired several relevant international commitments by signing and ratifying the Organization of American States Inter-American Convention Against Corruption, the OECD Anti-Bribery Convention (as defined above), the United Nations (UN) Convention Against Corruption and the UN Convention Against Transnational Organized Crime.

    Mexico’s National Code of Criminal Procedures

    On 18 June 2008, Mexico revamped its criminal justice system through a constitutional reform that signalled the transition from a traditionally inquisitorial-written criminal justice system to an accusatory-oral system. The system entered into force at the federal level on 24 November 2014 and would enter into force in all states on 18 June 2016.[14]

    In this context, on 8 October 2013, an amendment to article 73, section XXI of the Mexican Constitution empowered Congress to enact national legislation on matters of criminal procedure, alternative dispute resolution mechanisms and enforcement of criminal judgments, which were applicable and mandatory for both the federal and local authorities. Thus, since 2014 the National Code of Criminal Procedures (NCCP) has governed the rules and procedures concerning any criminal procedure in Mexico. The NCCP applies at both a state and federal level.[15]

    The investigation stage in criminal proceedings

    Under Mexico’s Constitution, the Attorney General’s Office must investigate and prosecute crimes. [16] Consequently, federal or local prosecutors and their investigation agents in Mexico are responsible for investigating and prosecuting crimes. Under the NCCP, criminal investigations are comprised of two phases:

    • Initial investigation stage, which begins from the moment a criminal report is filed until the investigated party is summoned to appear before a supervisory judge in an initial hearing in which the prosecutor will inform the party under investigation that it is subject to an ongoing criminal investigation.
    • Complementary investigation stage, which begins once a supervisory judge has ruled on the merits of the prosecutor’s initial investigation and decided that there is enough evidence to subject the investigated party to a criminal process. The standard to indict a person is that of probability of commission of the crime. The standard for the prosecutor to obtain a condemnatory award is that of beyond a reasonable doubt.

    During both stages of the investigation, the prosecutor will obtain information on the possible commission of a crime by conducting investigation techniques and actions.

    Investigation techniques are defined as the procedures, expertise and skills used by the prosecutor and its investigation agents to confirm the possible commission of a criminal act and the responsible parties. While some of these techniques require prior judicial authorisation from a supervisory judge, others do not.[17]

    Since Mexican prosecutors have broad prosecutorial powers and are authorised to conduct, collect and request a large array of investigation techniques and acts to support their case theory, the main restrictions found in the NCPP for Mexican prosecutors conducting a criminal investigation are the victim’s and the defendant’s human rights.

    Constitutionally protected human rights demand that certain prosecutorial activities are subjected to previous judicial control. This mechanism seeks to ensure that fundamental rights are not violated during the collection of evidence or information in a criminal procedure.

    If a prosecutor obtains any evidence by side-stepping prior judicial authorisation or exceeding the scope of the authorisation given by the judge, any party can request at any moment that the evidence obtained be excluded from the investigation. Exclusion of evidence also applies to any information that deviates directly or indirectly from the illegal act, following a similar logic as the derivative evidence doctrine.

    Cooperating parties to criminal proceedings

    The use of cooperating companies or individuals (cooperating parties) in criminal investigations within the Mexican legal system is restricted to the application of an NTR decision known as an opportunity criterion (criterio de oportunidad). Currently, NTRs as outlined and described under the OECD Recommendation do not exist in Mexico. An opportunity criterion may apply where a defendant delivers essential and useful information to the prosecution regarding another more severe crime and agrees to testify. This scenario offers the closest resemblance to an NTR under Mexican law. Here, the application of an opportunity criterion extinguishes the criminal action.

    In Mexico, in the context of criminal proceedings, cooperating parties tend to be defendants who have entered into an agreement with the prosecutor, in which they provide information to prosecute a graver crime in exchange for leniency.

    The opportunity criterion as a procedural means first appeared in the framework of the criminal justice system after the criminal justice reform of 2008, in the seventh paragraph of article 21 of the Mexican Constitution, which provides that ‘the Public Prosecutor’s Office may apply an opportunity criterion in the cases and conditions provided by law’.[18]

    Traditionally, prosecutors were legally mandated to prosecute every crime they investigated. However, the 2008 constitutional reform allowed prosecutors to apply an opportunity criterion and refrain from accusing an investigated party if the defendant redressed or guaranteed the damage to the victim and the investigation fell under specific cases provided by the NCPP.[19]

    Additionally, the Federal Law for the Protection of Persons Involved in Criminal Proceedings creates the procedural category of ‘cooperating witnesses’. A cooperating witness ‘is a person who has been a member of organized crime or a criminal association, who voluntarily agrees to provide effective assistance to the investigating authority, by giving testimony or providing other means of evidence to investigate, prosecute or sentence other individuals’.[20]

    However, ‘collaborating witnesses’ are restricted to crimes provided in the Federal Law against Organised Crime and collaborating witnesses can also apply for an opportunity criterion.

    The requirements to enter into a ‘cooperation agreement’ (technically called an opportunity criterion) are:

    • the cooperating party must be under a criminal investigation;
    • the cooperating party must provide relevant and useful information to prosecute a graver crime;
    • the cooperating party must appear in court and deliver it’s testimony in front of a judge;
    • the cooperating party must redress any damage caused to the victim; and
    • the cooperating party must not be under investigation for crimes against minors, domestic violence, tax fraud, or any other criminal activity that might be regarded of high public interest.

    The Attorney General’s Office has issued guidelines for prosecutors to follow before granting an opportunity criterion to cooperating parties. Under these guidelines: (1) a cooperating party must provide information on a crime with a higher arithmetic median than the crime attributed to the cooperating party; (2) the cooperating party’s actions in the crime for which they are providing information must be less egregious in nature than those executed by the individual against whom they are providing information; (3) the cooperating party must have acted as an accessory or have a reduced intervention on the crime for which they are providing information; (4) the cooperating party’s testimony must have a mitigating factor; and (5) the conduct of the individuals against which the cooperating party is providing information must have an aggravating factor.

    As noted above, under the NCCP prosecutors are allowed to grant an opportunity criterion (among others) when a defendant provides essential and effective information in trial to prosecute a more severe crime. However, an opportunity criterion may not be available when the defendant is investigated for crimes against self-determination (crimes of a sexual nature against minors), domestic violence, tax crimes or those that severely affect the public interest. The restriction on granting an opportunity criterion in relation to the crimes that severely affect the public interest tends to cause prosecutors to hesitate to apply opportunity criteria and implement NTRs to corruption-related offences in Mexico.

    Mexican law does not define crimes that ‘seriously affect the public interest’. It is not unreasonable to believe that corruption-related offences may fall under this category. But what is ‘public interest’? No precedents offer any type of response to this question. No corruption-related opportunity criteria have been challenged so that the courts may decide whether a prosecutor may validly apply them in facts concerning corruption. This apparent impediment notwithstanding, a prosecutor will still preserve prosecutorial discretion and may seek to adopt a more progressive interpretation towards application of an opportunity criterion under the spirit of the international treaties to which Mexico is a party, as well as the OECD Recommendation and, ultimately, Mexico’s anti-corruption provisions. In our opinion, it would not be frivolous for a prosecutor to consider applying an opportunity criterion – assuming all other requisites are met – assuming it would be in the country’s best public interest in order to help dismantle a complex corruption scheme.

    Current obstacles to implementing NTRs under Mexican criminal law

    Even though we can safely conclude that Mexico is not entirely foreign to NTRs, it is far from establishing the necessary mechanisms and proceedings to achieve the standards set out by the OECD Recommendation.

    Opportunity criteria appear to share the same nature as NTRs and the OECD Recommendation. They offer an incentive for wrongdoers to self-report and therefore increase the probabilities of reducing impunity for the corresponding crimes. Mexican legislators echoed this principle by explicitly recognising increasing the effectiveness of the justice system in the prosecution of crimes that most affect the perception of unsafe conditions and impunity of citizens as one of the main objectives of opportunity criteria.

    According to the latest statistics published in the Corruption Perceptions Index by Transparency International, Mexico ranks 124 out of 180 countries. Additionally, the Global Corruption Barometer found that there has been a 44 per cent increase in people who think that corruption has increased in the past 12 months. Even more worrying, 34 per cent of public service users in Mexico have paid a bribe in the previous 12 months. [21] This index serves as a perfect example of a crime that is seen as an important issue to address in terms of perceived unsafe conditions and impunity.

    Regardless of the similarities in nature, purpose and intentions of NTRs and opportunity criteria, the restriction on applying the latter in relation to crimes of public interest represents an important obstacle for these concepts. This restriction hinders the effectiveness of opportunity criteria – and likewise NTRs – as mechanisms for the dismantling of crimes such as bribery and corruption.

    For Mexico to achieve the standards set out by the OECD Recommendation, it would be ideal for Mexico to amend the NCCP’s apparent restriction of ‘public interest’ to allow a clear and unambiguous application of opportunity criteria to resolve corruption-related offences. However, in the absence of such regulatory amendment, prosecutors may plausibly adopt opportunity criteria in corruption-related cases. Prosecutors could apply an opportunity criterion by holding that entering into such types of NTRs serves a ‘public interest’ purpose as provided under Mexico’s constitutional provisions to fight corruption, the anti-corruption international treaties to which Mexico is a party and, last but not least, the OECD Recommendation.

    This might be too much to expect from prosecutors, who are subject to constant rigorous public scrutiny and sometimes might feel pressed to stay within the four clear corners of the law. Nevertheless, Mexico’s corruption problems demand serious actions and international experience proves that NTRs are an available and efficient mechanism to dismantle complex structures of corruption. An example of legal innovation and transformation might spark some hope. In civil law, not more than 10 years ago, Mexico was completely oblivious to the possibility of recognising punitive damages. Such damages are nowhere to be found, either in statute or doctrine. They were not taught in law school. Despite this, parties sought punitive damages in cases of tragic deaths arising from negligence. Arising out of these claims, the courts granted such relief. Consequently, new legal theories have reshaped civil damages doctrine. Perhaps a similar development may arise in criminal law through creative lawyering and open-minded prosecutors who recognise the need to innovate in order to effectively fight corruption.

    *The authors especially thank Julieta Béjar and José Mario de la Garza Martins for their contributions to the preparation of this article.


    Notes

    [1] OECD (2019), ‘Resolving Foreign Bribery Cases with Non-Trial Resolutions: Settlements and Non-Trial Agreements by Parties to the Anti-Bribery Convention’, www.oecd.org/corruption/Resolving-Foreign-Bribery-Cases-with-Non-Trial-Resolutions.htm.

    [2] Commentary on non-trial resolutions, recent OECD Guidance and Project Roll Out, Ibanet.org (2021), https://www.ibanet.org/document?id=IBA-NTR-Commentary-2-11-2022#:~:text=Non%2Dtrial%20resolutions%20are%20agreements,full%20trial%20on%20the%20merits (last visited 2 July 2022).

    [3] Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions, Legalinstruments.oecd.org (2021), https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0378 (last visited 1 July 2022).

    [4] Commentary on non-trial resolutions, recent OECD Guidance and Project Roll Out, Ibanet.org (2021), https://www.ibanet.org/document?id=IBA-NTR-Commentary-2-11-2022#:~:text=Non%2Dtrial%20resolutions%20are%20agreements,full%20trial%20on%20the%20merits (last visited 2 July 2022).

    [5] OECD (2019), ‘Resolving Foreign Bribery Cases with Non-Trial Resolutions: Settlements and Non-Trial Agreements by Parties to the Anti-Bribery Convention’, www.oecd.org/corruption/Resolving-Foreign-Bribery-Cases-with-Non-Trial-Resolutions.htm.

    [6] Commentary on non-trial resolutions, recent OECD Guidance and Project Roll Out, Ibanet.org (2021), https://www.ibanet.org/document?id=IBA-NTR-Commentary-2-11-2022#:~:text=Non%2Dtrial%20resolutions%20are%20agreements,full%20trial%20on%20the%20merits (last visited 2 July 2022).

    [7] OECD (2019), ‘Resolving Foreign Bribery Cases with Non-Trial Resolutions: Settlements and Non-Trial Agreements by Parties to the Anti-Bribery Convention’, www.oecd.org/corruption/Resolving-Foreign-Bribery-Cases-with-Non-Trial-Resolutions.htm.

    [8] id.

    [9] id.

    [10] Explanatory Notes Addressed to The Working Group on Bribery, Ibanet.org (2018), https://www.ibanet.org/MediaHandler?id=74647D8C-5D27-433A-93AA-1C97E8818A66 (last visited 1 July 2022).

    [11] Anteproyecto de Dictamen de las Comisiones Unidas de Justicia y de Estudios Legislativos, Segunda por el que se expide el Código Nacional de Procedimientos Penales, Senado.gob.mx, https://www.senado.gob.mx/comisiones/justicia/docs/Iniciativa/Anteproyecto_Dictamen_CNPP_211113.pdf (last visited 1 July 2022).

    [12] Abiola Makinwa and Tina Søreide (eds.), ‘Structured Settlements for Corruption Offences Towards Global Standards?’, IBA Anti-Corruption Committee: Structured Criminal Settlements, Subcommittee, OECD.org (2018), https://www.oecd.org/corruption/anti-bribery/IBA-Structured-Settlements-Report-2018.pdf (last visited 1 July 2022).

    [13] See article 222 and 222-bis of the Federal Criminal Code. See article 52 of the General Law on Administrative Responsibilities.

    [15] ‘Article 2. Purpose of the Code. The purpose of this Code is to provide the rules to be observed in the investigation, prosecution and punishment of crimes, in order to clarify the facts, protect the innocent, ensure that the perpetrator does not go unpunished and that the damage is repaired, and thus contribute to ensure access to justice in the application of the law and resolve the conflict arising from the commission of the crime, within a framework of respect for the human rights recognized in the Constitution and in the International Treaties to which the Mexican State is a party.’

    [16] ‘Mexican Constitution, Article 102. The Federal Public Prosecutor’s Office is responsible for the prosecution before the courts of all federal crimes and, therefore, will request precautionary measures against the accused; it will seek and present evidence that proves their participation in acts that the laws establish as crimes; it will ensure that federal criminal trials are carried out with all regularity so that justice is promptly and expeditiously administered; it will request the application of penalties, and will intervene in all matters that the law determines.’

    [17] Sergio Ramírez García and Olga I de G Mariscal (2016), El Código Nacional de Procedimientos Penales: Estudios’, Universidad Nacional Autónoma de México, Instituto de Investigaciones Jurídicas.

    [18] ‘Mexican Constitution Article 21.The investigation of crimes shall be entrusted to the Public Prosecutor’s Office and to the police, which shall act under the direction and command of the former in the exercise of this function. The Public Prosecutor’s Office may consider opportunity criterion for the exercise of the criminal action, in the cases and conditions established by law.’

    [19] ‘Article 256. Cases in which the opportunity criterion operate: Once the investigation has been initiated and after an objective analysis of the data contained therein, in accordance with the normative provisions of each Prosecutor’s Office, the latter may refrain from exercising the criminal prosecution based on the application of opportunity criterion, provided that, as the case may be, the damages caused have been repaired or guaranteed.’

    [20] ‘Article 2.- For the purposes of this Law, the following definitions shall apply: “X. Collaborating Witness: A person who voluntarily agrees to provide effective assistance to the investigating authority, by giving his testimony or providing other means of evidence to investigate, prosecute or sentence evidence to investigate, prosecute or sentence other individuals”.

    [21] https://www.transparency.org/en/countries/mexico. Please note that the last statistics provided by the Global Corruption Barometer were published in 2019.

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