At the end of September 2018, the United States, Mexico, and Canada reached an agreement on the modernization of their existing trade framework. While the United States-Mexico-Canada Agreement (“USMCA”) has a wide ranging impact on the North American economy, it also has important implications for the anti-bribery/anti-corruption arena.
U.S.-Mexico-Canada Trade Agreement
Specifically, Chapter 27 of the Agreement deals with the anti-corruption efforts of the three countries. Under Chapter 27, the three countries “affirm their resolve to prevent and combat bribery and corruption in international trade and investment.” The Agreement recommits the party-countries to several multilateral anti-bribery United Nations’ conventions as well as G20, APEC, and OECD principles. The party-countries pledge to maintain their laws and other measures that criminalize bribery and corruption, as well as to promote the integrity of public officials and to encourage the participation of the private sector and civil society against bribery and corruption.
Among the three countries, Mexico is seen as an outlier in terms of the level of corrupt activity occurring in that country, ranking 135 out of 180 countries on a widely-watched indicator of corruption.1 The inclusion of a chapter on anti-corruption into the USMCA indicates the United States is intent on using its trade, diplomatic, and other advantages to impose upon other countries a commitment to combatting corruption. The USMCA also is intended to enhance cooperation between the three countries’ law enforcement functions to combat bribery and corruption.
The bottom line for companies doing business in North America is, first, the United States is committing itself to enforcing its anti-corruption laws for conduct that occurs in foreign jurisdictions, including Mexico, and is attempting to build up countries like Mexico’s resources to combat corruption.
Second, the anti-corruption chapter of the Agreement reiterates the importance of “internal compliance programs in enterprises to combat corruption.” Under the USMCA, the U.S., Mexico and Canada are required to encourage businesses to establish compliance programs for the purpose of preventing and detecting corruption, and those compliance programs are to take into account the size of the enterprise, the legal structure of the enterprise, and the sectors in which the enterprises operate. Thus, the USMCA again highlights the importance of having a compliance program that is intended to detect and prevent bribery. The USMCA also reiterates that such a program is to be designed with the size, structure and businesses in which the firm operates in mind.
1 See Transparency International’s Corruption Perceptions Index, 2017, available here.
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