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Mexico Business Intelligence Report (June 2004)
U.S. Sarbanes-Oxley Act in Mexico?:
The Sarbanes- Oxley Act (SOXY) applies to the international operations of multinational companies and Mexican companies that trade their shares in U.S. stock markets. SOXY is an attempt to correct abuses from the recent corporate governance scandals of Enron, WorldCom, etc.
Although primarily addressing accounting practices, SOXY also requires companies to enhance its internal controls, specifically:
- Implement a code of ethics policy and establish procedures to facilitate employee reporting of suspected internal/external fraud and theft, for example a hot line for anonymous tips.
- Obligates a serious expeditious response and investigation to evaluate the validity of suspected fraudulent activities – no more "sweeping it under the rug!".
Comments:
- Progress on corporate governance yes, but implementation and compliance is the key.
- Many companies are addressing these issues through the establishment of local business integrity and compliance committees and through external consultants.
Crime Trends in Mexico City:
The Good News:
Judicial Reform?:
- President Fox sent to Congress this spring a comprehensive proposal for judicial reform.
- It includes establishing innocence until proven guilty, oral public trials, prohibiting confessions extracted by torture, and a major reorganization of prosecutorial and police functions.
- Comment: It is an ambitious commendable beginning, but questionable how expeditiously Congress will act upon this initiative, particularly considering the formidable backlog of other pending reforms.
Some Progress in Developing Crime Databases:
- A computerized criminal database is now operational in 8 of the 70 police districts of Mexico City. It is based on the "Compstat" program of former New York City mayor, Rudy Giuliani. The computerized mapping of criminal "hot spots" will eventually be implemented citywide. (Reforma, 21 April 2004)
- Recognizing the lack of coordination between the Mexico City and State of Mexico police authorities, the State of Mexico Attorney General announced the initiation of a similar criminal database program known as CAT Metropolitano, focusing on the State of Mexico municipalities bordering the Federal District. (Reforma, 21 April 2004).
Declining Crime Trends in Mexico City:
Mexico City Attorney General announced that criminal incidents in the Centro Historico had declined 38% in the first four months of 2004. Although some other city districts are experiencing increasing crime rates, he anticipates that by the end of the year there will be an average reduction of crime citywide of 15%. (Reforma, 26 April and 7 May 2004)
The Bad News:
Kidnaps for Ransom:
- A five year old student of the Liceo Albert Einstein was kidnapped in the early morning hours from the school property in a southern neighborhood of Mexico City. Comment: Two similar incidents took place three years ago. (Reforma, 18 March 2004).
- By way of contrast, the number of kidnappings in Colombia fell 46% in the first quarter of 2004 versus last year. A total of 317 were kidnapped this quarter, the lowest number since 1996. (OSAC/Intelligence Research, 4 May 2004).
Federal Crime Statistics Still High:
According to the Federal Attorney General´s Office, in the past three years federal crimes increased 9.6%. Specifics:
- Crimes utilizing weapons represented 18% of all federal crimes in 2003.
- White collar crime increased 30% in the past three years.
- Illicit drug possession represented 75% of all federal crimes in 2003.
Cybercrime Extortion:
You receive an email threatening to erase your PC hard drive and access your bank accounts if you don´t pay up! If you don´t respond, a second email follows with your password information, your bank account information, details of your recent internet activity, and a new monetary demand.
Comments:
- A PC firewall program and prudent computer security practices are imperative.
- Should you still receive such an email, extortionists are vulnerable during effecting the delivery of the extortionists’ monetary demand, whether personally or to a bank account. That is the time to seek assistance from the cybernetic crime unit of the Federal Secretariat of Public Safety, tel# 01-800-440-3690.
Thanks for your attention, and please continue to send us your comments, critiques and experiences to improve and enrich subsequent issues to:
Media Contact
Jillian Bernaiche
(602) 889 - 1626