Ethics spotlight: The impact of the FCPA in Mexico

Those who do business in other countries have almost always had to balance the professional ethical environments of the two markets. Organizations often do not play by the same rules in foreign countries as they do in the United States — neither in theory nor in practice. 

Mexico is one example. Business south of the border has many attractive upsides, but even the most fastidious accounting and strict policies could lead to spurious accusations of ethical violation. 

United States law 

The Department of Justice outlines one of the most important laws on this matter: The Foreign Corrupt Practices Act of 1977. Most would interpret the FCPA to broadly prohibit bribery of foreign officials. Unfortunately, bribery could be a common practice in Mexican business if various independent and professional sources are correct in their analyses. 

However, the act has various limitations and a considerable volume of case law that applies to it. Accusations, even those with a basis in extensive investigations, could have a viable defense. The arguments would typically be against the scope of the accusations, their basis in material fact or the evidence-gathering methods. 

Mexican business environment 

Bringing this piece of federal legislation to bear on the contemporary issues of doing business in Mexico, there are often some contradictions. As reported by Bloomberg, there is still a significant amount of corruption despite anti-corruption initiatives by the new Mexican administration. This could result in an environment where legitimate businesspeople may find themselves guilty by association — or be the target of diversionary tactics by their less-honest associates. 

The Bloomberg article puts forth evidence that the new president could be maintaining or even increasing bribery, fraud, cronyism and so on. As a proactive measure, Americans doing business in Mexico may want to increase efforts towards compliance with the FCPA and other domestic and international regulations.