In brief
On 13 November 2024, the Chamber of Deputies approved the reform to the second paragraph of Article 19 of the Mexican Constitution, regarding mandatory pre-trial detention rules.
The reform expands the list of crimes that merit mandatory pre-trial detention to include extortion; crimes under applicable laws committed for the illegal introduction and diversion, production, preparation, sale, acquisition, import, export, transportation, storage and distribution of chemical precursors and essential chemical substances, synthetic drugs, fentanyl and derivatives; smuggling/contraband and any activity related with false invoices, under the terms established by criminal and tax law.
The crimes of tax fraud and drug dealing were excluded from the approved reform.
Key points of the reform on criminal tax implications
In accordance with Article 19 of the Mexican Constitution, the Public Prosecutor's Office may only request preventive detention from the judge when other precautionary measures are not sufficient to guarantee the appearance of the accused at the trial, the development of the investigation, as well as when the accused has been previously sentenced for the commission of an intentional crime.
However, the same provision establishes a list of crimes in which informal preventive detention may be ordered, without exceptions, disregarding the analysis of the rest of the precautionary measures that judges may order in other cases. This list includes crimes such as sexual abuse or violence against minors, organized crime and human trafficking.
The constitutional reform implies that a criminal judge must order mandatory pre-trial detention also in cases of smuggling/contraband and any activity related with false invoices, under the terms established by law.
Corporate criminal liability implications
Tax crimes of smuggling and any activity related with false invoices may be attributable to both natural and legal persons involved in their commission. In accordance with the corporate criminal liability regime in force, legal entities and/or their representatives and/or their relevant officers may be held criminally liable if it is proven that such crime was committed on behalf of, for the benefit or through the means provided by a company, even if the crime is committed by a related third party.
Sanctions attributable to corporations may include economic penalties based on the company's net income, suspension of its activities, closure of facilities, judicial intervention, seizure of assets or dissolution of the company.
Next steps for companies in Mexico
- Conduct a criminal tax risk assessment to identify activities that expose the Organization to criminal tax risks subject to the corporate criminal liability regime and mandatory pre-trial detention.
- Design and implement policies, programs and/or internal controls for the prevention of corporate crimes, aimed at preventing and mitigating any scenario of corporate criminal liability.
We invite you to schedule a meeting with Baker McKenzie experts to discuss compliance strategies.
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