Strap on cash and duty of confidentiality BIS: lawyers, hand over your clients’s secrets.

1 09 2010

Lawyers would have the duty to inform the MX.Gov't on clients and their "suspicious operations"

As anticipated in my previous post, President Calderon introduced a bill in Congress aimed at reducing the financial power of organized crime in Mexico, but that also outlaws all cash purchases of real estate,and similar operations over a certain amount of money for a variety of items as cars, jewelry and a variety of what the government considers luxury items.

The initiative still has not been – to my knowledge – made available to the public, but the Secretaría de Hacienda y Crédito Público (Ministry of Finance) published a brief of the proposal, and a press release.

As said in my previous post, this is only a proposal by the President, subject to the vote of Congress. But some of its components are alarming. For example, the proposed sanction for a Notary Public that witnesses a cash purchase of a house is 5 to 15 years in prison. Really? 90 months in average for a professional that after going to law school won an opposition contest versus many of his peers? For titling a house sale which payment was made in cash? How about if the buyer pays with solid gold?

The Ministry of Finance brief details that now lawyers, public accountants, Notary Publics, jewelers, art galleries, among others, will be subject to a duty to report suspicious activities.

The press release goes beyond, explaining that the new duties for LAWYERS and rest of the group include surrendering names, relevant information and documentation of clients that make transactions regulated by the new law. Sanctions for non-compliance of this duty to report are of course included.

Yes, SURRENDERING CLIENT’S INFO AND DOCUMENTS. This has a number of Constitutional deficiencies.

Fortunately, both opposition parties’ leaders on the Senate announced today that they will not approve the bill via fast-track, but will analyze the impact of the proposals on human rights – this is likely political posture and not genuine interest in due process et al., but the effect will be positive nonetheless. Hopefully Congress will protect the attorney-client relationship.

Carlos Loperena, president of the Barra Mexicana Colegio de Abogados -Mexico’s main bar of attorneys- promised to define the Bar’s formal position soon on the effect of the proposal on the duty of confidentiality. He has already said he supports the proposal generally – everybody can agree in the benefits of cutting down on the financial power of organized crime- but also said that lawyers’ secreto profesional (professional secret or duty of confidentiality) has no limits, just as similar duties by medical doctors and religious ministers.

Random quiz: why is St. Ives (Ivo of Kermartin) patron of lawyers? For his rectitude and zealous in the discharge of his duties. His tomb supposedly reads in Latin: “Sanctus Ivo erat Brito, Advocatus et non latro, Res miranda populo.” In bold print: attorney and not a thief. Apparently we had a bad name as early as the 14th century!

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4 responses

1 09 2010
jennifer rose

This proposal is just plain shocking, but I’m predicting that it’ll never fly in a country where even law-abiding, honest, non-narco citizens still stash cash under the mattress. Has PAN lost its mind?

2 09 2010
Ignacio Pinto-Leon

Enforcement would be almost impossible. The automotive dealers association said that close to 60% of their sales are cash-based. http://www.cronica.com.mx/nota.php?id_nota=528266.

4 09 2010
John Calypso

An absolute absurdity – Calderon has lost his mind.

7 09 2010
Pedro Ceron

I understand the Calderon’s good intention to avoid the economic activity of the organized crime, but this initiative is not the best way to control it, because in order to control all the econmic activity of narcos, the government will affect the economic activity and economc transactions of people that made their money in a honest manner, and at the same time with this initiative will stop the economic activity, because in Mexico most of the transactions are made in cash.

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