Duty of confidentiality and attorney–client privilege under attack in Mexico? We’ll see.

27 08 2010

Is the duty of confidentiality and attorney–client privilege under attack in Mexico by a new a new anti-money laundering bill soon to be introduced by Mexican President Felipe Calderon, as announced yesterday?

The initiative has been touted as a strong measure against organized crime, amidst the so-called Guerra al Narcotráfico (War on Drug Trafficking) started in 2006 by the federal government of Mexico. And the President probably is right in his core assumption that weakening the financial strength of the criminal organizations is fundamental. Per Constitutional mandate, the President, members of Congress and the state legislatures can introduce bills to reform federal laws with the Congreso of the Unión, Mexico’s bicameral federal legislative body.

The most visible component of the presidential initiative prohibits cash purchases of all real estate, and places a limit of $100,000 Mexican Pesos (approx. $7,700 US dollars) on such purchases of cars, planes and luxury items –traditionally associated with drug traffickers’ stereotype such as jewelry. Mexico already imposes a 2% tax on cash deposits into bank accounts after certain monthly limit.

Certain goods sellers and service providers would have a legal obligation to report suspicious activities – or “sensitive” activities (actividades sensibles), as called in the press conference – to the tax authority. Obvious addressees of the obligation to report are owners of car dealerships, financial agencies –which already had such duty, bulletproofing shops and jewelers. But apparently the obligation would also include CPAs and attorneys. Yes, lawyers. How about our duty of confidentiality and attorney-client privilege?

To be fair, the bill is still to be introduced to Congress – hopefully it would be made available to the public then – and still then, it would be only a proposal subject to Congress’ legislative powers. Once and if it is signed into law by Pres. Calderon after Congress approval, we will be able to see and analyze the reach of the measure towards the legal community.

And to put things in context, the so called War on Drugs presents unprecedented challenges to the Mexican government and State. Calderon himself is a good lawyer that

President Felipe Calderon announcing an anti-money laundering bill

graduated with honors from what is generally considered the best law school in Mexico. More to come as the topic progresses….

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1 09 2010
Strap on cash and duty of confidentiality BIS: lawyers, hand over your clients’s secrets. « The JurisMex Blog

[…] anticipated in my previous post, President Calderon introduced a bill to Congress aimed at reducing the financial power of […]

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