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Mexico Business Intelligence Report (Sept 2002)
Renaming of the Crime Letter:
Fear not that the Crime Letter has passed away! It is merely a name change to reflect the broader corporate concerns of operating in Mexico, not only personal and corporate security, but also issues such as reputational due diligence and competitive and preventative intelligence. We will remain faithful to the continuing interest of our readership to security issues.
Reputational Due Diligence:
As recent Mexican business scandals attest, the cases of Carlos Cabal Peniche, Jorge Lankenau, Raul Salinas, among others, establishing a new business relationship in Mexico can have its hazards. Whether it is for a joint venture, or the selection of a major client or supplier for your ongoing business operations it is wise to know whether your potential new business partner is:
A dolphin? Subscribes to your high standards of business ethics and practices.
A shark? Will only exploit a relationship out of need.
A barracuda? Will surely take advantage of you as often as possible, merely for the sheer pleasure he gains in doing so.
The key point is "know your client".
Corporate Problems of Internal Theft, Fraud, Corruption?
- Does your company have a code of ethics to reinforce company values?
- Are all employees required to annually review and sign their acknowledgement that they have read and agree with your code?
- Do you have a "hot-line" to report anonymous tips of internal wrongdoing, preferably managed by an independent external party?
- Companies must not only promulgate their corporate values, but also facilitate employee involvement to insure compliance.
- The Mexican Comptroller, SECODAM, has a web site with information on establishing a corporate code of conduct: www.secodam.gob.mx
Crime Trends in Mexico City:
The Good News:
- Citizen Participation:
The new Mexico City Secretary of Public Safety, Marcelo Ebrard, has created a new Subsecretary for Citizen Participation and Crime Prevention:- Citizen participation has been sorely lacking, with the prevailing attitude that itīs the governmentīs problem to solve!
- All Mexico City residents have a vital role to play, and the city authorities are developing the mechanisms to facilitate this involvement, in part through the establishment of a center to receive complaints from city residents.
- For example, the City Attorney General is testing a simplified police report form and process to facilitate and encourage the reporting of crimes in Mexico City.
The Bad News:
Is Mexico City Safer than New York?
Based on the murder rate, Mexico City was safer, but it no longer is. According to the Reforma daily newspaper, 10 June 02:
Murders per year:
| Year | Mexico City | New York City |
|---|---|---|
| 1993 | 920 | 1,927 |
| 1994 | 1,098 | 1,582 |
| 1995 | 1,204 | 1,181 |
| 1997 | 978 | 767 |
| 1998 | 945 | 629 |
| 1999 | 879 | 667 |
At the same time Mexico is in the mid-range when murder rates are compared with other Latin American countries:
Murders per 100,000 people - year 2000:
| Guatemala | 150 |
| El Salvador | 150 |
| Colombia | 89.5 |
| Jamaica | 35 |
| Brazil | 19.7 |
| Mexico nationwide | 17.8 |
| Venezuela | 13.2 |
| Peru | 11.2 |
| Mexico City | 8.2 |
| Argentina | 4.8 |
| Chile | 3.6 |
Comment: The problem in Mexico City, however, is not genuinely violent crime, but instead the impunity that criminals enjoy, turning muggings, car thefts, and kidnappings into lucrative business ventures.
Credit Card Fraud Is Rising:
According to the Mexican Bankers Association (ABM), Mexican banks lost US$54 million over the past twelve months from credit card fraud. Obviously we all loose with the resulting higher bank service fees. The cloning of credit cards occurs primarily in supermarkets, department stores, restaurants and hotels. 52% of the victims were foreigners, primarily tourists.
Recommendation:
Keep an eye on your credit card at all times to discourage the sales clerk from making an additional swipe of your card. There are "swipe" machines connected to Palm Pilots that can steal the magnetic strip data on your credit card in order to start charging new purchases on your card at other stores.
Theft of Luxury Cars in Mexico City:
- According to the Mexican insurance association (AMIS), the probability of theft of an insured vehicle in Mexico City is 1.19%.
- Some luxury cars, however, experience a higher theft rate: Mercedes Benz (3.21%), Audi (1.95%), BMW (1.55%).
- Other luxury models experience a theft probability below the 1.19% average.
- 100% of all luxury cars, however, are stolen through carjackings at gun point, versus 54% for all models.
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