Mexico

Researcher4714: The Federal Law on the Administration and Property Disposal Public Sector (LFAEBSP) regulates the disposal of assets of all ministries and federal institutions. Both the Ministry of Defence and the Navy (SEDENA and SEMAR) report on the planned disposal of public property and related waste to the Management Service and Property Disposal (SAE). SEDENA has published on its website its 2015 Annual Programme for Final Disposal of Public Property - many of the assets are assigned to be sold by SAE. SEMAR has not publish such a report on its website.

In turn, SAE reviews the reports of SEDENA and SEMAR and periodically informs the Ministry of the Economy (SE) and the Ministry of the Civil Service (SFP) on the disposal/sale of assets. The LFAEBSP mandates that the SAE’s disposal procedures be carried out in an effective, impartial and transparent way. Recently, however, three former heads of SAE were accused of abuse of authority and improper exercise of public service, by allegedly selling 122 goods at a lower price. The damage to the Treasury was estimated at more than 10 million pesos. Notwithstanding, the Office of the Attorney General (PGR) ordered that no prosecution be carried out against these public servants.

The disposal of confiscated weapons, munitions and explosives is administered by SEDENA (Art 9). In this regard, SEDENA published in its First Governmental Report (2013) the number of confiscated and destroyed arms (p. 34). However, the information is neither detailed nor disaggregated.

Researcher4714: The Federal Superior Auditor (ASF) oversees the financial management of income generated by asset disposals. It verifies that the processes of reception, valuation, sale, accounting, and the management of public resources are conducted in accordance with the law. In the last audit (on the exercise of the federal budget 2013), the ASF analysed 95 percent of expenditures by Management Service and Property Disposal (SAE). In its report, ASF noted anomalies such as: 1) There are goods that SAE received between 2000 and 2005-2012 which were intended for sale and that, as of December 2013, had not been sold; 2) there are goods that had not been registered in the management system, and others that, although registered, were not found in the warehouse; 3) the accounting report for 2013 contained expenses from previous years.

Regarding the level of independence, the AFS is part of the Chamber of Deputies and political parties are predominantly responsible for appointing its chief auditor and monitoring its performance. ASF cannot directly dictate sanctions but only make recommendations, whose acceptance and application depends on the Ministry of the Civil Service (SFP). Internally, both the Ministry of National Defence (SEDENA) and the Ministry of the Navy (SEMAR) have within their organic structure an administrative unit responsible for inspecting, supervising and auditing all human, material and financial resources - the Inspector and General Comptroller Units. They cannot impose sanctions, but have the power to recommend the intervention of disciplinary bodies or the courts of military justice. No reports of their activities are publicly available.

Researcher4714: Article 74, Section IV of the Mexican Constitution establishes that there may not be spending on secret items except for those “items deemed necessary”, which are purchased by ministries with the written agreement of the president. Every fiscal year since 2009, the decree through which the Expenditure Budget of the Federation (PEF) is issued has contained a clause stating that the budget contains no contingent resources corresponding to secret items.

However, the media has reported on the use of a little-known item in the budget to cover secret spending on security. According to this report, during the last presidential term (2006-2012) this budgetary classification - item 33701 - was used to finance &quoute;confidential expenses&quoute; in the fight against organised crime. According to investigative journalists, as much as 12 billion pesos ($700 million) was spent on classified areas such as undercover operations or renting safehouses.

Response to peer reviewers: Score changed from 0 to 3, on the grounds that, using the figures provided by peer reviewer 1, total &quoute;secret&quoute; expenditure under items 33701 and 55102 came to 1.3 percent of the budgets of SEDENA and SEMAR in 2013. This does not include the entire intelligence and security budget, but can serve as an approximation for the amount of secret spending as a proportion of security and intelligence spending. Sources added.

Researcher4714: Article 74, Section IV, of the Mexican Constitution establishes that there may not be spending on secret items except for those “items deemed necessary”, which are purchased by ministries with the written agreement of the president. Every fiscal year since 2009, the decree through which the Expenditure Budget of the Federation (PEF) is issued contains a clause stating that the budget contains no contingent resources corresponding to secret items. However, the media has reported on the use of a little-known item in the budget to cover secret spending on security. According to this report, during the last presidential term (2006-2012) this budgetary classification - item 33701 - was used to finance &quoute;confidential expenses&quoute; in the fight against organised crime

Interviewed by the media, a member of Congress declared that, if spending was defined as confidential or classified, it would not be possible to know the final destination of the money or to evaluate the proper use of the resources. Interviewee 2 confirmed that information classified or reserved according to the Federal Law of Transparency cannot be monitored by the Congress.

Response to peer reviewers: Score maintained at 0 due to lack of evidence of closed-door sessions in which Congress is given information on secret spending.

Researcher4714: Article 74, Section IV of the Mexican Constitution establishes that there may not be spending on secret items except for those “items deemed necessary”, which are purchased by ministries with the written agreement of the president. Every fiscal year since 2009, the decree through which the Expenditure Budget of the Federation (PEF) is issued has contained a clause stating that the budget contains no contingent resources corresponding to secret items. However, the media has reported on the use of a little-known item in the budget to cover secret spending on security - item 33701.

Congress cannot access documents that contain information classified or reserved according to the Federal Law of Transparency, and national security is one of the grounds upon which information may be classified. This also applies to the Bicameral Committee on National Security, which is entitled to assess and monitor all policy and actions related to national security.

A member of Congress told the media that, if spending was defined as confidential or classified, it would not be possible to know the final destination of the money or to evaluate the proper use of the resources. Interviewee 2 confirmed that information classified or reserved according to the Federal Law of Transparency cannot be monitored by the Congress.

The Federal Superior Auditor (ASF) audits the use of resources and the achievement of goals and objectives in public security.

Response to peer reviewers: Score changed from 0 to 1 and source added. Score not raised to 3 as suggested due to lack of evidence.

Researcher4714: Chapter XV of the Law on the Federal Budget and Fiscal Responsibility regulates public expenditure on national security. It establishes that “special disbursements” can be made to carry out activities and operations that involve risk, urgency or confidentiality. These can be considered as expenditures not formally authorised within the official defence budget.

The Public Trust Administration and Payment of Military Equipment (FPAPEM) created in 2007, and coordinated by the Defence Ministry (SEDENA) has resources to cover &quoute;contingent&quoute; and &quoute;urgent&quoute; operations of internal order and national security, including the acquisition of military equipment and spare parts and the public works contracts and maintenance services necessary for such goods. According to SEDENA, &quoute;urgent operations&quoute; are those carried out by the army and air force that arise unexpectedly and that require immediate and urgent attention. “Contingent operations” are those required as a result of unforeseen situations. The management of the Trust is audited by the ASF, but only after the federal budget has been fully implemented.

Response to peer reviewers: Score changed from 1 to 2, on the grounds that off-budget military expenditures may be made to carry out contingent or urgent activities, but that these are registered and scrutinised.

Researcher4714: The Public Trust Administration and Payment of Military Equipment (FPAPEM) created in 2007, and coordinated by the Defence Ministry (SEDENA) has resources to cover &quoute;contingent&quoute; and &quoute;urgent&quoute; operations of internal order and national security, including the acquisition of military equipment and spare parts and the public works contracts and maintenance services necessary for such goods. The management the Trust is audited only after the fiscal year is over. Much military equipment is acquired with the resources of this Trust, causing the final level of spending to be greater than approved in the original budget. The use of this Trust is not suspected to involve illicit economic activity.

However, the Superior Audit Office (ASF) has made remarks regarding opacity in the Trust’s management of public funds. For instance, in its review of the implementation of the Federal Budget 2009, the ASF declared that the quantity, quality and price was not guaranteed for the purchases and services that SEDENA purchased through the Trust. Likewise, in its the review of the Federal Budget 2012, ASF noted that, for some contracts, the final destination of resources did not match the criteria of being a “contingent or urgent” national security matter.

Response to peer reviewers: Score maintained.

Researcher4714: The Federal Act of Transparency and Access to Public Information establishes the grounds on which information may be classified or reserved (2002, Art. 13,14) for a maximum period of 12 years, although it is possible to extend this period (Art. 15). Article 16 states that the heads of the administrative units in every federal institution are responsible for the classification or reservation of information. Article 17 states that the Federal Institute for Access to Public Information (IFAI, now INAI) can, at all times, have access to classified or confidential information to determine proper classification, declassification or the appropriateness of granting access.

In May 2015, a new General Act of Transparency and Access to Public Information was passed. It states that information relating to corruption, serious human rights violations or crimes against humanity cannot be classified as confidential (Art. 115).

The “General Guidelines for Classification and Declassification of Information” (2003) further detail the grounds for classification (Guidelines 18-24), as well as the procedures to be followed. In order to reserve a document on national security grounds it must be demonstrated that the release of a document would cause &quoute;a present, probable and specific damage&quoute; to national security (Guideline 8). The information can be classified as confidential on grounds of national defence provided that its dissemination could endanger missions by the army, air force or navy related to the protection of the sovereignty of the Mexican state; or when disclosure of the information could jeopardise the integrity and permanence of external defence or internal security of the Mexican state.

If an individual is dissatisfied with the classification of information they have requested, they can complain to INAI. In turn, INAI reviews the information and the legal justification that government entities used to classify it. It can order the confirmation, refusal or modification of the answer given to the petitioner. In the case of a modification, part of the information can be made available to the petitioner while another part remains classified. There are critiques that the criterion of classifications has been abused on many occasions, and experts consider this to be a “tendency” on the part of certain sectors such as defence and security. INAI itself has recognised this issue, and has established that information can only be reserved on national security grounds &quoute;in exceptional cases&quoute;. INAI has ordered the declassification of information in cases of grave human rights abuses such as the San Fernando migrant massacre (2010), the killing of civilians by the army in Tlatlaya (2014), and the disappearance of students in Iguala (2014).

Researcher4714: The National Board of Agricultural Farms and Stores of SEDENA, created by a 1973 presidential decree, established shops selling basic goods, clothing, and school supplies at wholesale prices for the benefit of members of the armed forces. Another presidential decree (1975) ordered the creation of agricultural farms to increase food production and improve the nutrition of the military and their families. The Ministries of Defence and the Navy (SEDENA and SEMAR) are responsible for regulating the organisation, distribution and operations of these stores.

The income generated should be reinvested in the stores, used in the creation of subsidiaries or, by presidential mandate, reinvested into welfare projects benefiting members of the armed forces. An investigative article states that SEDENA manages up to 47 stores that generate income and that are not audited. In response to a Request for Information, SEDENA reported that these military farms and stores generated profits of 209 million pesos for the period 2007-2014. This would be well under 0.5 percent of the defence budget.

Although SEDENA maintains that the income generated in these farms and stores is re-invested in the maintenance of the facilities and other works to benefit members of the army and their families, details of their operations and finances are not available to the public.

Response to peer reviewers: Score changed from 1 to 4, on the basis that the businesses account for less than 1 per cent of the defence budget.

Researcher4714: The Ministries of Defence and the Navy (SEDENA and SEMAR) manage commercial establishments that generate income (farms and convenience stores). According to the presidential decrees that created them, the income generated in these farms and stores is to be re-invested in the maintenance of the facilities and other works to benefit members of the army and their families, but no evidence was found that these commercial establishments are subject to scrutiny or auditing processes. An investigative article states that SEDENA manages up to 47 stores that generate income and that are neither transparent nor audited.

Response to peer reviewers: Score raised from 0 to 2, but not to 3 as suggested, on the grounds that no evidence was found that SEDENA-run farms and stores are audited.

Researcher4714: There is no evidence of unauthorised private enterprise by members of the military or other Ministry of Defence (SEDENA) employees. The government does not explicitly outlaw unauthorised private enterprise by these officials, but public servants are banned from intervening in matters in which they have personal, family or business interest, and must report any possible conflict of interest (Law on Administrative Responsibilities, Art. 8 section XI, XII, XIV; Art. 9; Code of Ethics of Public Servants of the Federal Public Administration; and the Code of Conduct of both SEDENA (Section 8, Conduct in Office, Employment or Commission) and SEMAR (Section, Values, Impartiality). Chapter II of the Law on Administrative Responsibilities sets out the administrative sanctions for infractions, which include: 1) private or public reprimand; 2) Suspension of employment, position or commission for not less than three days and no more than one year; 3) Removal from office; 4) Economic sanction and 5) Temporary ineligibility to hold posts, positions or commissions in public service (Art. 13). When ineligibility is imposed as a result of an act or omission involving profit or gain, the sanction can be ineligibility for a 10- to 20-year period.

Although these sanctions are strong enough to discourage civil servants from illicitly benefiting from their position, academics and civil society have posed criticisms regarding the consequences of breaking these regulations, given the small number of public servants who have been jailed for such infractions.

Response to peer reviewer: Score maintained, due to lack of evidence that the government outlaws unauthorised private enterprise by military officials.

Researcher4714: The Ministry of Defence (SEDENA) does not set out a clear strategy against corruption in the First and Second Governmental Report for the current presidential term. On the other hand, Defence Minister General Salvador Cienfuegos and other officials have stated in interviews or speeches that there is a zero tolerance policy towards military personnel engaging in corrupt behaviour. On their websites, however, neither SEDENA nor the Ministry of the Navy (SEMAR) give documents or official statements from the minister or chiefs regarding anti-corruption or integrity measures. The approval of a Code of Conduct for Public Officials of the Ministry of Defence (March 19, 2013) has been the most significant action against corruption. Experts consider the Codes of Conduct to be ineffective, however, since they are not binding documents and establish no sanctions, involving only moral commitments.

Response to peer reviewer: Score changed from 2 to 3 in line with existing evidence.

Researcher4714: According to the General Rules of Military Duties, which applies to the Ministries of Defence and the Navy (SEDENA and SEMAR), those failing to comply with internal regulations on ethical behaviour and the proper management of resources will be subject to disciplinary sanction according to their hierarchy and the magnitude of the offence. If they commit a crime, their case is determined by the Code of Military Justice, which punishes corruption-related acts such as fraud, embezzlement or asset retention with a minimum of three years of imprisonment and a maximum of 12, depending on the amount misappropriated (Art 239).

SEDENA publishes information on the number of crimes of the Military Order committed by its members (final judgments). SEMAR publishes no such information. In 2013, 763 SEDENA personnel were jailed, mostly soldiers (i.e. low rank). In contrast, no top-ranking personnel had been prosecuted for a decade before 2012, when three generals were imprisoned for allegations for drug trafficking and alleged links to organised crime, although they were later released. Through a citizen request asking on the number of military elements that by the end of 2005 where imprisoned, a report was issued stating that 13 out of 105 elements were imprisoned for corruption-related crimes (a maximum of 8 years when the felony was the only one committed)&quoute;, since this was the one information in this regard available through the system that provides access to the answers of SEDENA to Request for Information.

Civil society groups argue that members of the military accused of grave human rights violations often enjoy impunity, either escaping prosecution or being tried on lesser charges. In a recent case, charges were dropped against four of the seven soldiers accused of taking part in extrajudicial killings in Tlatlaya in 2014.

Researcher4714: In Mexico, the term “whistleblower” is not legally defined. The Federal Law of Administrative Responsibilities of Public Servants requires public servants to report to the internal comptroller if they know of others committing corrupt acts. Experts have criticised this requirement since it the report must be written down and cannot be sent by other means, and because it establishes that the decision to investigate the report is up to the internal comptroller or the authorities in the Ministry of the Civil Service (SFP). In addition, though the law was recently modified, the reforms did not add protection for whistleblowers. In the defence sector, the General Regulations of Military Duties state that personnel must inform their immediate superiors if they know of actions against the homeland. However, it does not specify the procedure for how to do this.

In 2012, there was a scandal concerning possible corrupt acts regarding large contracts in the intelligence sector, after information on the contracts appeared in a national newspaper. It was speculated that the information was released by whistleblowers, and the reaction inside SEDENA was of condemnation. The then-defence minister ordered an investigation against those found responsible for leaking the information, on the grounds that disclosure of information classified on national security grounds is considered as felony and treason.

Recently, high-profile radio presenter Carmen Aristegui was allegedly fired for participating in a whistle-blowing platform initiative (Mexicoleaks) that aimed to gather anonymous information to expose state corruption.

Researcher4714: According to the Organic Law of the Mexican Army and Air Force (Art), the president appoints the defence minister; undersecretary; chief clerk; the inspector and comptroller general of the army and air force; the national defence general staff; the attorney general of military justice and the president and judges on the Supreme Military Tribunal; and commanders of the special forces. The president also appoints the directors and heads of department within the Ministry of Defence (SEDENA). These appointments must be ratified by the Mexican Senate (Senate Regulations, Art. 239).

Likewise, the Accord Issuing the Provisions in the areas of Human Resources (Acuerdo, 2010) establishes that, in addition to the assessments determined by the institution, the candidate must prove with documents: a) general identification, data and address; b) experience and level of education c) competence; d) i. the absence of conflict of interest; ii. that they are not party to any trial. iii) that they hold no other employment or public office, and e) a statement that they are not disqualified for the employment (Chapter I).

The Ministry of the Public Service (SFP) is responsible for establishing the guidelines under which job profiles of the corresponding public servants involved in the public procurement process are to be determined and to train them to achieve satisfactory performance (Art. 7). In turn, the Rules of Procedure of the Ministry of Civil Service (SFP) state that, within the SFP, the Public Procurement Regulations Unit is responsible for promoting and coordinating actions for training of public servants working in the field of public procurement and assets disposal.

There is no information available on the job selection process for personnel involved in defence procurement. However, the Manual of Administration of the Ministry of Defence states that in general, personnel chiefs and officers are not to stay more than three years in the same position.

Response to peer reviewers: Score changed from 1 to 2, but was not raised to 3 as suggested, as there was not sufficient evidence of special attention paid to personnel in sensitive positions.

Researcher4714: Under the Federal Law on Transparency and Public Information (LFTAIPG - Art. 7), each government agency and entity is obliged to publish certain information on its staff on the Transparency Obligation Portal (POT). In section IX (“Budget”) of the POT, both the Ministry of Defence of the Navy (SEDENA and SEMAR) publish information on the number of civilian and military posts. This is given for each region of the country and includes: 1) job title, 2) rank, 3) number of personnel with this title/rank, 4) wage level, 5) social security benefits associated with each title/rank. No information on gender is given, as it is not mandated by the law.

However, the number of members of the armed forces is not published on the websites of SEDENA or SEMAR, and no such figures were found in the First or Second Governmental Report of the current presidential term. While the ministries comply with the Transparency Law by publishing this information through the POT, it would be more transparent to proactively publish it on their websites for any citizen to consult. Citizen requests for this type of information have been answered by both ministries and are publicly available, via the internet platform administered by the Federal Institute of Access to Information and Personal Data (IFAI, now INAI). However, if one is not familiar with these platforms, the information is not easy to find. Some disaggregated information regarding the gender statistics within the defence institutions was found in the Observatory for Gender Equity in the Arm Forces. However, it does not include civilian personnel.

Researcher4714: Pay rates and allowances, for both civilian and military personnel, are published in the Transparency Obligation Portal, in line with requirements for all federal ministries and institutions under the Law of Transparency and Public Information. Both the Ministry of Defence (SEDENA) and the Ministry of the Navy (SEMAR) publish the pay rates and allowances associated with every position within section IV &quoute;Salaries&quoute; and IX &quoute;Budget&quoute; of the portal. SEDENA also publishes information on pay rates and allowances (for military personnel only) on its website.

Researcher4714: According to an inspection report of the Superior Federal Auditor (ASF), the Ministry of Defence (SEDENA) has a computer system to calculate and apply the payroll of members of the army and air force. The system is called Comprehensive Payroll Management System (SIAN) and it allows the ministry to pay staff salaries efficiently and in the place their activity is located. SIAN also generates reports on payroll summaries.

The ASF reported that some information was missing from the reports generated by SIAN, which meant that it was not possible to generate a report of the payroll classified by budget programme nor detailed reports of earnings and deductions for each employee. Consequently, the ASF’s supervisory activities were limited. It further made a recommendation to add information to the reports and better evaluate tax, accounting, and SEDENA’s compliance with its financial obligations. According to the First and Second Government Report of SEDENA, SIAN has been modified in order to include more information.

No evidence was found to suggest that the basic pay for members of the military has been subject to discretionary adjustments. It is not clear whether the information missing from the reports submitted to ASF could give information on this. Likewise, no evidence was found regarding late payments.

Researcher4714: According to the Organic Law of the Mexican Army and Air Force, the president appoints the defence minister; undersecretary; chief clerk; the inspector and comptroller general of the army and air force; the national defence general staff; the attorney general of military justice and the president and judges on the Supreme Military Tribunal; and commanders of the special forces. The president also appoints the directors and heads of department within the Ministry of Defence (SEDENA). These appointments must be ratified by the Mexican Senate (Senate Regulations, Art. 239).

Likewise, the Accord Issuing the Provisions in the areas of Human Resources (Acuerdo, 2010) establishes that, in addition to the assessments determined by the institution, the candidate must prove with documents: a) general identification, data and address; b) experience and level of education c) competence; d) i. the absence of conflict of interest; ii. that they are not party to any trial. iii) that they hold no other employment or public office, and e) a statement that they are not disqualified for the employment (Chapter I).

There are media stories suggesting the politicisation of some high-rank designations in the Ministry of Defence (SEDENA). In addition, there were allegations regarding suspected nepotism in the Ministry of the Navy (SEMAR) during the last presidential term, when the navy minister was accused of placing his retired brothers in a high command position within the navy, while his son was promoted within the ruling National Action Party (PAN).

Response to peer reviewer: Score changed from 2 to 3, on the basis of evidence of generally high transparency and activity to address corruption risks in payroll, promotions, appointments and rewards, but with shortcomings.

Researcher4714: The Law on Promotions and Rewards of the Armed Forces establishes that promotions are to be conferred by strict hierarchy (2003, Art. 5) and that only the president can promote generals, chiefs and officials in the army and air force (Art. 3). Under Article 76 of the Constitution, the Senate has the authority to ratify the promotions of officers above the rank of lieutenant colonel in the army and frigate captain in the navy.

The process for promoting middle and top management level is called “Superior Promotion” and is held annually. Under this process, the Ministry of Defence (SEDENA) selects candidates and presents them to the president. Article 32 of the Law on Promotions establishes that the president will consider merit, ability and professional competence. To be considered, candidates must comply with conditions such as: seniority in grade, good military and civil behaviour; good health; approval of training, upgrading or higher courses, professional competence, physical capacity (Article 8). In turn, to participate in the Superior Promotion a candidate must have 1) four years of seniority in grade, and 2) an established number of years of service (23 for Lieutenant Colonels; 27 for Colonels, 31 for General Brigadier; 35 for General of Brigade). The Ministry of the Navy (SEMAR) follows a similar procedure established on the Law on Promotions of the Armed Services of Mexico (2004, Article 18 and Chapter V). Oversight of this process is not mandated to independent personnel in SEDENA or in SEMAR.

Annually, every unit provides the files of those who qualify to for a promotion to the Chief of Military Staff (Estado Mayor) to be reviewed and assessed. In a later phase different tests (medical, theoretical and practical, and physical) must be approved to promote a candidate. An Evaluation Commission analyses candidates for high rank promotions. The Law on Promotions does not establish independent witnesses or institutions to audit the process or its results. Article 10 of the Rule states that the General Staff should publish in January of each year all information related to promotions of troops (including the number of promotions to be awarded in each hierarchy and specialisation, according to the existing vacancies; participants; general testing period; location of examination centres).

High-rank promotions are annually published through an official press communication. No evidence was found to suggest there is potential for inappropriate conduct in the promotions process.

Researcher4714: Mexico practises compulsory conscription. The Law of Military Service establishes that selection is to be made by a lottery system, which is public and verified by military inspectors and three representatives of the participants. The results of this lottery are definitive and there is no legal or other resource to change them (Art. 46, 47). Clear punishments are set out for those who intervene or try to intervene to exclude, defer or falsely excuse participants from the lottery, who are to be punished through Military Justice (Art. 63). There is no evidence that punishments are applied and, according to the last National Index of Corruption and Good Governance (2010), there is a low percentage of respondents saying that they had bribed in order to excuse conscription (this service obtained a score of 1.54 in a scale of 0 to 100, where the lower the value, the less corruption there is).

Researcher4714: Article 63 of the Law of Military Service establishes in its second paragraph that if staff are found to have intervened to exclude somebody from enrolment, to get an unwarranted exception or to substitute a conscript with a different person, he or she will be punished as guilty of the crime of breach of military duties under Article 382 of the Code of Military Justice, which is punished with a year of imprisonment. There is no specific policy on refusing bribes to gain preferred postings in the recruitment process, but no evidence of bribery was found in this regard.

Response to peer reviewer: Score changed from 1 to 2, on grounds that this is better supported by the existing evidence.

Researcher4714: No evidence of &quoute;ghost soldiers&quoute; was found in media articles or expert opinions. The Federal Superior Auditor (ASF) annually inspects SEDENA. In its latest report ASF reviewed the electronic system used by SEDENA to administer the payroll of military personal and did not make any observation regarding the existence of ghost soldiers, or the risk of it. In addition, The Code of Military Justice punishes with three years in prison anyone who declares a larger number of men, animals, assets, or wages than there actually are, or declares as serving someone who does not exist or who does not serve (Art 239, Section I).

Researcher4714: The Ministry of Defence (SEDENA) publishes a Manual for the Organisation and Operation of the Office of Personnel. This mentions the Comprehensive Payroll Management System (SIAN) - a system that organises and carries out the payment of staff salaries. It is likely that the chains of command are separate from chains of payment since this electronic payment system is in place.

The Ministry of the Navy (SEMAR) has stated that it is developing software called the Comprehensive Budget Management System (SIAP 6.1) designed to facilitate, integrate, manage, monitor and control the execution of its budget, and that will interact with internal computer systems for human resources, payroll, procurement and warehouses, and with external systems of the Ministry of Finance (SHCP). SEMAR states that the system has already been implemented in the generation of the digital payroll, which issues digital tax receipts through the internet (CFDI) for all staff of the institution. There are no official or media reports suggesting that military personal receive less than their due amount.

Researcher4714: Both the Ministry of Defence and of the Navy (SEDENA and SEMAR) have issued a Code of Conduct, covering public servants in the air force, army and navy. These do not distinguish between civil and military personnel, since both are public servants. The codes are not binding documents, establishing no punishments and involving only moral commitments and guidance on bribery, gifts and conflicts of interest. Both ministries publish a short report on the implementation of their Codes of Conduct. In SEDENA, the Ethics Committee supervises the implementation of the Code. Regarding the diffusion of the Code, SEDENA states on its website that, in coordination with the Ministry of Public Administration (SFP), it has held conferences on the topics of &quoute;Culture of Lawfulness&quoute; and &quoute;Code of Ethics of Federal Public Administration.&quoute; A total of 1,500 staff attended these conferences.

Defence sector personnel are also obliged to comply with the anti-corruption regulations that apply to all government employees, namely the Federal Law of Administrative Responsibilities of Public Servants and the Code of Ethics for Public Officials of the Federal Public Administration. This guides public servants with regard to gifts and hospitality, bribery and conflicts of interest. However, experts believe this system is ineffective given the small number of public servants who have been imprisoned for corruption offences, while the number of cases that have been criminally prosecuted is even lower.

Response to peer reviewer: Score changed from 2 to 3, on the grounds that this is better supported by the existing evidence.

Researcher4714: The Code of Conduct of the Ministry of Defence (SEDENA) was issued on October 2014, and therefore it is too early to assess its effectiveness. However, there are concerns regarding the fact that the Code is not a binding document since it establishes no punishments and involves only moral commitments. In turn, the Ministry of the Navy (SEMAR) implemented its Code of Conduct in June 2012. It has published a short report on the implementation of its Code of Conduct specifying the number of of disciplinary proceedings (nine) and the number of administrative proceedings against public servants (none).

Researcher4714: The First Government Report of the Ministry of Defence (SEDENA, 2013) does not report information on anti-corruption training of its personnel. The Ministry of the Navy (SEMAR) presents detailed information on the number of trainings in different fields; however, there is no report of anti-corruption training. The Ministry of the Civil Service (SFP) annually trains civil servants, but focuses on training members of the internal comptrollers existing in every federal ministry, institution or agency.

In its website SEDENA reports only that, in coordination with the SFP, a series of conferences were held on the topics of &quoute;Culture of Lawfulness&quoute; and on the &quoute;Code of Ethics of Federal Public Administration&quoute;, attended by 1,500 of its staff. It states that the conferences were organised with the purpose of educating public servants working in SEDENA so that they observe the ethical values contained in the Code of Ethics whenever they perform their duties.

Researcher4714: The legal framework of the Ministry of Defence and the Navy (SEDENA and SEMAR) does not specify a policy to publish information on the prosecution of personnel for corrupt activities. In the Second Government Report of President Peña Nieto, the Federal Police provided data on the number of complaints filed to the Ministry of Civil Service (SFP), as a measure to deter corrupt acts by members of the force. It also gave the number of Federal Police officers (75) that are facing civil public prosecution for being directly or indirectly involved in acts os corruption or crime.

The institutions in charge of national defence, in contrast, did not present a similar report. SFP publishes on its website the list of civil servants that have been punished for not complying with the Federal Law of Administrative Responsibilities of Public Servants (including personnel of the national defence sector). However, the report establishes only the name, institution and punishment, and there is no detail on the offence, and they are not necessarily corruption-related. Experts believe this system is ineffective, given the low number of public servants in general who have been jailed for corruption offences, while the number that have been criminally prosecuted is even lower. Three generals and a lieutenant colonel were arrested in May 2012 for alleged ties to organised crime, in the first such high-level detentions in more than a decade. A year later, however, all had been released.

Finally, there is lack of transparency of prosecutions carried out by the Attorney General of Military Justice (PGJM), including the prosecution of military personnel accused of human rights violations. Human Rights Watch reported that &quoute;given the opaqueness of the military justice system, it is impossible to obtain complete information on the number, status, and outcomes of cases of human rights violations committed by the military against civilians that were investigated and tried by military courts&quoute; (2009).

Response to Peer Reviewer: There are examples of outcomes being made public, but no policy that they must be. Score maintained.

Researcher4714: Facilitation payments as such are not typified as a felony in Mexico, although acts such as attempted corruption, bribery, extortion, abuse of office, and bribery of foreign public officials are criminalised under the Federal Penal Code (Title 10 &quoute;Crimes Committed by Public Servants&quoute;, Chapters IV-XIII). Anti-corruption regulations are intended to target bribery in general (i.e. Law on Administrative Responsibilities; Code of Ethics of Public Servants of the Federal Public Administration; and the Code of Conduct the Ministry of Defence and of the Ministry of the Navy). In addition, the Federal Anti-Corruption in Public Procurement Act establishes penalties with the goal of setting a real penalty cost for companies that bribe.

However, analysts consider that the sanctions that Mexican law provides for legal entities that bribe are very weak, as the small size of fines for those who offer bribes to public officials, viewed in light of the enormous profits that corruption can generate, make sanctions rather irrelevant. The Business Anti-Corruption Portal, a government-sponsored, anti-corruption compliance resource aimed at the business community, states that Mexican anti-corruption legislation is almost never enforced, and that public officials are rarely held liable for illegal acts.

Researcher4714: The White Book of the Ministry of Defence (SEDENA) defines Mexico's Military Doctrine broadly as a “systematised set of norms and rules that underlie the existence of the armed forces in order to enable its internal organisation and fulfil its general missions”. It states that this doctrine “is contained in the Constitutions, body of Laws and Rules”. Experts have criticised the vagueness of this definition.

However, the White Book’s section on &quoute;Military Policy&quoute; states that this policy is intended to create a more professional and morally solid armed forces, whose thoughts and actions are guided by honour, honesty, spirit of sacrifice, discipline, loyalty, and love for the homeland. Although the Codes of Conduct within the army and navy aim to deter dishonest and corrupt behaviour, there is no document explicitly addressing the issue of corruption or dishonest behaviour in case of domestic operations, nor a specific military doctrine addressing corruption issues as a strategic issue in overseas operations.

Response to peer reviewer 1: Agree. Response to peer reviewer 2: Score maintained at 0, as the Code of Conduct does not address corruption as an issue of strategy, i.e. &quoute;the overall approach to achieving the country's defence and security goals&quoute;.

Researcher4714: The Defence Sector Programme 2013-2018 establishes the sector's objectives, strategies and courses of action for this period. The document plans several training programmes in the areas of gender equality, human rights and international humanitarian law, military justice, and information and communication technology. There is, however, no mention of training in corruption issues for commanders or military personal in general. Human rights groups criticise high levels of impunity for abuses committed by military personnel, suggesting that corruption issues may be mishandled.

Response to peer reviewer: Score maintained, due to lack of evidence of corruption training.

Researcher4714: It is unclear whether or not corruption monitors are deployed. The Defence Sector Programme 2013-2018 establishes the sector's objectives, strategies and courses of action for this period. The document plans several training programmes in the areas of gender equality, human rights and international humanitarian law, military justice, and information and communication technology. There is, however, no mention of training in corruption issues for commanders or military personal in general.

Mexico's armed forces have been widely deployed across the country in domestic security operations since 2006. In addition, President Enrique Peña Nieto announced in September 2014 that members of the armed forces would join UN peacekeeping forces. According to news reports, the first group of soldiers and marines would be ready to be trained by April 2015. However, the website of the Ministry of Defence (SEDENA) has no mention of training strategies for the military participating in peacekeeping missions.

Response to peer reviewer: Score changed from 0 to 1, but not to 2, as no evidence was found of officials being deployed to detect corruption.

Researcher4714: Currently, the Technical Committee of the National Security Council is responsible for conducting the procurement of goods, leasing and services that falls into the exceptions established by Article 41 section IV of the Law on Acquisitions, Leases and Services of the Public Sector (where there is urgent need, military ends, national or public security is endangered, or there is a lack of providers). Accordingly, contracting whilst on deployed operations or peacekeeping missions may be carried out through this Committee.

Among the Committee’s faculties are: 1) producing a catalogue with the description of the goods to be bought; and 2) generating a list of suppliers and contractors on national security. This list should present evidence that allows an assessment of their technical and financial solvency, and capacity to fulfil contracts on time (Operating Rules of the Technical Committee, 2011). Although it is established that procurement procedures will be carried out under the Regulations of the Law on Acquisitions, Leases and Services of the Public Sector, there are no relevant guidelines or training intending to address corruption risk in contracting whilst on operations.

Response to peer reviewer: Score maintained, due to lack of evidence on guidelines.

Researcher4714: Media reports and academic research suggests that since the fight against organised crime began in 2006, the number of PMCs in Mexico has increased, especially coming from the United States. The Merida Initiative (2008) includes activities to be carried out by the United States that are outsourced to PMC and other private contractors. In 2011, Mexico was the country in Latin America with the second highest number of contracts with US PMCs assisting in the fight against drug trafficking, after Colombia (De los Reyes, 2011). The Mexican government cannot effectively scrutinise the activities of these contractors since they benefit from the same treatment as other US government employees (Perret 2013, in Garza 2014). PMCs contracted directly by the Mexican government have a much more limited scope of activities and their activities are limited to training (ibid). No specific evidence of corruption in PMCs’ activities was found.

Response to peer reviewer 1: Sources added, and comments taken into account in determining score.

Response to peer reviewer 2: Score adjusted from 0 to 2, on the grounds that there is evidence that PMCs are employed, but not of corruption, although their activities lack scrutiny by the Mexican government.

Researcher4714: The Law of Acquisitions, Leases and Services of the Public Sector (LAASSP) regulates public procurement, including that of the defence institutions. No items are exempt from the procedures established in the law. Although there are no clauses specific to corruption risks, the LAASSP establish that bidding companies must sign a statement of integrity, declaring that they will not, either themselves or through an intermediary, encourage public servants from the contracting agency or entity to induce or alter evaluations of the proposals, or change the results or other aspects of the procedure to give them more favourable conditions than other participants (LAASSP, Art. 29, Section IX). In addition, participants must provide documentation to support their legal constitution, and show that the provider is not under judicial investigation or other legal processes (demands, suits for breach), and that it does not have individual or legal entities previously sanctioned by the Ministry of Civil Service (SFP) (LAASSP, Art. 50). The Federal Superior Auditor (ASF) audits defence and security procurement and results are made available although with a lag of about a year and a half.

The legislation is well established in relation to the defence institutions and there is no evidence of it not being enforced in practice.

Researcher4714: The full procurement cycle is highly formalised through the Law of Acquisitions, Leases and Services of the Public Sector (LAASSP) and the Rules of Operation of the Technical Committee of the National Security Council.

Article 21 of the LAASSP establishes that government agencies and entities must make available to the public, no later than January 31 each year, their Annual Acquisitions Programme (PAAAS) corresponding to the fiscal year, with the exception of information that is withheld in accordance to the applicable provisions, or that is confidential under the terms established in the Federal Law of Transparency and Access to Public Government Information (national security being one of the grounds on which information can be reserved or classified).

The same law states that the federal government must register information on all contracts over a certain amount (300 times the daily minimum wage), on an electronic system, open for public consultation (Compranet), that aims to promote transparency and monitor public procurement. Here, one can find more detailed information on providers and contract details. However, details on acquisitions made on national security grounds, and much defence procurement is classified, and may be only partially available or be classified for several years.

Response to Peer Reviewer: Agree, sources added.

Researcher4714: Procurement oversight mechanisms are in place. The Ministry of the Civil Service (SFP) and Federal Superior Auditor (ASF) periodically run detailed audits on all public procurement, including the defence institutions (Art. 37, Section XXV of the Organic Law of the Federal Public Administration; Art. 74, Sections II and VI, and Art. 79 of the Constitution of the United States of Mexico; and Art. 3 the Law on Control and Accountability of the Federation).

Regarding the independence of external auditors, all oversight bodies are subordinated politically. The president appoints the head of the Ministry of the Civil Service (SFP). Likewise, the Superior Federal Auditor (AFS) is part of Congress. Finally, the ASF cannot directly dictate punitive administrative responsibilities but only makes recommendation, whose acceptance and application depends of the SFP. Internally, there is a Review Committee on Acquisitions, and the Ministries of Defence and of the Navy (SEDENA and SEMAR) each have a department in charge of inspecting, supervising and auditing all human, material and financial resources (Inspector and General Comptroller Unts). These units do not have the power to impose disciplinary sanctions, but can recommend the intervention of disciplinary bodies or the courts of military justice if necessary. Regarding levels of transparency, procurement oversight mechanisms include the review and evaluation of the information that, by mandate of the Law on Transparency and Access to Information, must be made available to the public.

Response to Peer reviewer: Agree, sources added.

Researcher4714: There is a policy of disclosing defence purchases. The Ministries of Defence and of the Navy (SEDENA and SEMAR) are obliged to make general information on purchases available to the public (under the Federal Law of Transparency and Access to Public Government Information (LFTAIPG), Art. 7, Section XIII). This information includes: the contracting procedure, the object/service contracted, the period of validity and total amount. In addition, the Law of Acquisitions, Leases and Services of the Public Sector (LAASSP) establishes that all contract information on actual and potential purchases over a certain value must be registered in an electronic system open for public consultation (Compranet). Regarding potential purchases, Article 21 of the LAASSP establishes that, no later than January 31 of each year, agencies and entities must make available to the general public their Annual Programme of Procurement, Leases and Services (PAAAS). This programme must contain the description and amount of assets to be purchased or leased and the number and description of the services to be contracted (LAASSP, Art. 20).

However, the same article states the programme will not contain information classed as confidential under the terms established in the LFTAIPG; this includes information classified on national security grounds. SEDENA and SEMAR publish their Annual Programmes on their Websites, providing information on subject of the contract, estimated value, quantity, unitary measure, and estimated procedure (i.e. open or restricted tenders, direct award). The Federal Superior Auditor (ASF) yearly inspects procurement procedures. In its latest report, the ASF stated that both SEDENA and SEMAR met, in general, the applicable legal and regulatory provisions. However, it has detected some anomalies. For instance, in a tender for the SEDENA, which acquired six helicopters in 2013 to serve the president and cabinet members, ASF observed that resources of different spending items were reallocated to cover the acquisition of the helicopters.

Response to peer reviewer: Score changed from 2 to 3, source added.

Researcher4714: The Ministries of Defence and of the Navy (SEDENA and SEMAR) do not require specific procedures or compliance programmes from companies participating in bidding processes; however, the Law on Acquisitions, Leases and Services of the Public Sector (LAASSP) establishes provisions regarding compliance, and states that contracts are to be awarded to the bidder whose tender is solvent, i.e. it meets the legal, economic and technical requirements established in the call for tender, conditions that ensure its compliance (Art. Article 36 Bis). In addition, companies must sign a statement of integrity, in which they declare that they will not, themselves or through an intermediary, encourage public servants from the contracting agency or entity to induce or alter the evaluation of the proposals, or induce the results or other aspects of the procedure to acquire more favourable conditions in relation to other participants (LAASSP 2000, Art. 29, Section IX).

In addition, participants must provide documentation to support their legal constitution, and show that the provider is not under judicial investigation or other legal processes (demands, suits for breach) and that the company does not have individual or legal entities previously sanctioned by the Ministry of the Civil Service (SFP) (LAASSP 2000, Art. 50). If the integrity statement is breached, penalties are established by Article 59 and are to be imposed by the SFP. In addition to the fines, SFP can temporarily forbid providers from participating in procurement procedures directly or through an intermediary (Art. 60). SPP publishes a list of providers sanctioned (fines and disqualification/debarment).

Response to Peer reviewer: Agree, sources added.

Researcher4714: Legislation on procurement and service contracting establishes that all federal governmental entities must formulate an Annual Programme of Procurement, Leases and Services (PAAAS), based on the properly identified needs of their departments or agencies, in order to promptly meet the responsibilities, objectives and goals of their programmes. Such needs must also be consistent with the National Development Plan, as well as sectorial, institutional, regional and special programmes, and the approved budget.

The Defence Sector Programme 2013-2018 establishes the objectives, strategies and courses of action of the sector. In turn, the Federal Superior Auditor (ASF) yearly audits budget implementation including procurement procedures. In its latest report, the ASF stated that both the Ministries of Defence and of the Navy (SEDENA and SEMAR) met, in general, the legal and regulatory provisions, though it detected some budgetary movements not justified by the goals and objectives outlined by SEDENA.

While procurement requirements are generally derived from defence objectives, there is not evidence of an open, well-defined and audited national defence and security strategy.

Researcher4714: The formal procedure to define purchase requirements includes: 1) identifying needs, 2) checking stock, 3) reserving stock and adjusting quantities, 4) estimating prices, 5) prioritising needs, and 6) generating and sending a requirement document to the responsible area within the ministry (Manual Administrativo, 2006). In turn, the Law on Acquisitions, Leases and Services of the Public Sector (LAASSP) establishes that, no later than January 31 of each year, government agencies and entities must publish their Annual Programme of Procurement, Leases and Services (PAAAS) (Art. 21). This programme must contain the description and amount of assets to be purchased or leased, and the number and description of the services to be contracted (LAASSP, Art. 20). However, the same article states the programme will not contain information classed as confidential under the terms established in the Federal Law of Transparency and Access to Public Government Information (LFTAIPG); this includes information classified on national security grounds.

Both the Ministry of Defence (SEDENA) and the Ministry of the Navy (SEMAR) publish their Annual Programme on their website, providing information on subject of the contract, estimated value, quantity, unitary measure, expected procedure (i.e. open or restricted tenders, direct award). The Federal Superior Auditor (ASF) yearly inspects procurement procedures. In its latest report (2015), the ASF stated that both SEDENA and SEMAR met, in general, the legal and regulatory provisions applicable in the matter. However, it has detected some anomalies. For instance, in a tender for the SEDENA, which acquired six helicopters in 2013 to serve the president and cabinet members, ASF observed that resources of different spending items were reallocated to cover the acquisition of the helicopters, and that there was a lack of enforcement of contractual penalties amounting to 2.7 million pesos for the late delivery of goods. ASF also stated that SEDENA did not provided sufficient technical and economic evidence for the selection of six aircraft purchased in 2013.

Likewise, the media has questioned the need for acquiring military equipment from the United States through multi-million dollar contracts, citing a lack of evidence to show that work was undertaken to define and quantify the need for these purchases.

Researcher4714: The Law of Acquisitions, Leases and Services of the Public Sector (LAASSP) establishes that only in exceptional circumstances is a public tender process neither appropriate nor feasible (Art. 41). These circumstances are 1) in case of an urgent need; 2) in case confidentiality is required because the item is related to national security; or 3) lack of providers. In such cases, there are two methods of alternative procurement: a) restricted tender (or invitation) to a specific number of suppliers and b) direct award. In order to assess the percentage of defence procurement conducted as public tender, a sample was analysed of contracts awarded between February 2014 and March 30, 2015. The information can be consulted through the Portal of Transparency Obligations (POT) of the National Institute for Access to Public Information and Data Protection (INAI, formerly IFAI).

For this period, the Ministry of Defence (SEDENA) reports a total of 3,105 contracts awarded, out of which 1,678 were directly awarded, 1,079 were awarded through restricted tender, 108 were awarded through national public tender, and 240 through international public tender. In total, only 11.2 percent of the sample contracts were awarded through public tenders, while 88.7 percent were awarded through restricted tenders or direct awards. In terms of value, contracts awarded through public tenders amounted to 23.2 percent of the total value, direct awards to 48.5 percent and restricted tenders to 28.3 percent. In total, direct awards and restricted tenders correspond to 76.8 percent of the contract value. For the same period, the Ministry of the Navy (SEMAR) reported a total of 141 contracts, all of which were made through direct awards.

Researcher4714: Tender boards are not subject to specific regulations and codes of conduct. On the other hand, as long as they are public servants, members of tender boards are subject of the Federal Law on Administrative Responsibilities of Civil Servants (LFRASP). Article 7 states that public servants are responsible for safeguarding the principles of legality, honesty, loyalty, impartiality and efficiency in the performance of their jobs, positions or commissions.

Regulations also establish that public servants must document evidence supporting their decisions, and that they will be held accountable for the exercise of the functions. In addition, the Ministries of Defence and of the Navy (SEDENA and SEMAR) have Codes of Conduct, although they are not designed specifically for members of tender boards. Tender boards' decisions can be audited by the Ministry of the Civil Service (SFP), the Federal Superior Auditor (ASF) or by an internal comptroller (Inspector and General Comptroller Units).

There are concerns regarding the independence of auditors since the SFP is part of the federal executive branch and the president appoints the minister unilaterally. In addition, the Federal Superior Auditor (AFS) is part of the Chamber of Deputies and political parties have the leading role in appointing its holder and monitoring their performance. Finally, the ASF cannot directly dictate sanctions but can only make recommendations, whose acceptance and application depends on the SFP.

Response to peer reviewer: Score changed from 3 to 2, source added.

Researcher4714: There is no legislation or procedures in place to discourage and punish collusion between bidders that is specific to defence and security. However, the Federal Law of Economic Competition (LFCE) prohibits and punishes bid rigging and collusion (this also applies to defence and security contracts). Criminal sanctions include imprisonment of three to ten years and a fine (Federal Penal Code, Article 254a, Section IV; Art. 253). Additionally, a judge may also order the suspension for up to a year or dissolution of the company of which the offender is a member or representative (ibid).

Academics point out that under current regulations, fines and penalties on companies are lower than the fines imposed on public servants in cases of collusion, and that, considering that the contracts at stake are usually worth hundreds of millions of pesos, economic incentives to prevent bribery are weak (Hill & Rivero, 2012). It is also argued that the law can be too specific, and sometimes it is hard to prove a hypothesis of bidder collusion.

The Federal Competition Commission (COFECE) monitors, promotes and ensures fair competition and competition in the markets. It has analysed and documented evidence of collusion in Mexican public procurement, such as the agreement between competitors to coordinate positions in public tenders by the Mexican Social Security Institute (IMSS), imposing fines on the companies and individuals involved.

Another tool to discourage collusion is the Anti-Corruption Law in Public Procurement Law (2012), which imposes penalties on individuals and providers who engage in acts of corruption during public contracting processes. However, there are also critiques regarding its effectiveness, given that investigations cannot be started on the initiative of oversight institutions, but only after formal complaints have been received.

Response to peer reviewer 1: Agree, sources added. Response to peer reviewer 2: Score maintained, due to lack of additional evidence that collusion is actively discouraged by the government and there is evidence of offending companies facing punishment.

Researcher4714: Both the Ministries of Defence and of the Navy (SEDENA and SEMAR) have departments specialised in procurement. There is no evidence of staff shortages or rotations limiting their ability to perform effective oversight of defence contractors. The external audit carried out by the Federal Superior Auditor (ASF, 2013) on the implementation of the national budget 2009, states that SEDENA took corrective actions to recover overpayments made to a contractor, and that it considered the possibility of terminating the contract given backlog in the work programme. This actions, however, were made in response to a recommendation made by the ASF during 2010.

In addition, the Ministry of the Civil Service (SFP) periodically trains and updates procurement staff as well as suppliers and contractors on the use of the electronic system for government procurement (Compranet). At the local level, SFP also trains state comptrollers, and there are seminars and workshops addressed the contents of the Law of Public Sector Acquisitions and Leasing Services (LPSALS). However, academics recommend that relevant officials should also receive legal advice on the processes to follow in case of disagreement or impugnment.

Researcher4714: The Law of Acquisitions, Leases and Services in the Public Sector (LAASSP) establishes formal mechanisms for companies to complain about malpractice in procurement through a dissent appeal (instancia de inconformidad). The law specifies when a company can complain depending on the stage that the procurement has reached; i.e. before or after bidding, and before or after signing a contract. Complainants must specify the act or acts causing grievance, and provide evidence for them.

There are no established mechanisms to protect complainants from discrimination, but nor was evidence found that discrimination takes place. According to a study by the OECD, however, there are concerns about the requirement for companies to attend a “clarification meeting” (junta de aclaraciones) before registering a complaint (OECD: 87). According to the study, the Supreme Court (CSJ) has ruled that this requirement hinders due process.

Researcher4714: Suppliers to defence institutions are subject to the Federal Law on Anti-Corruption in Public Procurement (LFACCP), which aims to hold accountable individuals and legal entities participating in national procurement and international business transactions, and punish them when they act unlawfully (Art. 1 & 2).

It imposes administrative penalties on individuals and providers (national and foreign) who engage in acts of corruption in public contracting processes (LFACCP 2012, Chapter 5). For individuals, sanctions include fines ranging from 1,000 to 50,000 times the daily minimum wage. In cases involving federal public contracts, the fine can be increased to between 30 and 35 percent of the value of the contract. The individual will also be considered ineligible to participate in public procurement at the federal level for a period of between three months and eight years. Legal entities can be fined between 10,000 and 2 million times the minimum wage, which can be increased to between 30 and 35 percent of the value of the contract. The Ministry of the Civil Service (SFP), publishes a list of providers sanctioned (with fines or disqualification/debarment).

However, there are critiques regarding the independence of the auditors and the fact that they cannot open investigations on their own initiative, but only when a formal complaint is received.

Researcher4714: Legislation does not specifically regulate offset contracting. However, according a study, Mexico began offset contracting with other less developed countries during the late 1980s with negotiations involving arms for oil. More recently, there are reports that, between 2007 and 2012, the Mexican government made several agreements of this kind. An example is an agreement on police cooperation and intelligence training signed with the French government in 2009, which included an offset in which the Mexican government agreed to buy Eurocopter helicopters. A similar agreement is reported to be in progress with Germany. Although the specific details are not available, and the case has been highly controversial, it is known that the agreement could include German human and material resources. There is scarce publicly available information on offset contracts or their auditing in Mexico.

Response to peer reviewer: Score was changed from 1 to 2 on the basis of evidence of moderate transparency and activity to address corruption risk, with significant shortcomings.

Researcher4714: The government does not publish information on projected offset agreements, nor does it make public the basic details of offset programmes. However, media sources have published information suggesting that, between 2007 and 2012, the Mexican government made several agreements of this kind. For example, it reportedly made an agreement with Eurocopter, a Franco-German helicopter company, to install an assembly facility in Mexico worth €500 million, under which the Mexican government agreed to buy 5 Cougar EC-725 helicopters made by Eurocopter as compensation. The Ministry of Defence (SEDENA) placed a 12-year classification and reserved the information regarding the budget item used for their acquisition on grounds of national security.

Response to peer reviewer: Score maintained, as there is evidence that the country may have been engaged in offset contracts, but no official statement of this was found.

Researcher4714: The government does not publish information on projected offset agreements, nor does it make public the basic details of offset programmes. However, media sources have published information suggesting that, between 2007 and 2012, the Mexican government made several agreements of this kind. For example, it reportedly made an agreement with Eurocopter, a Franco-German helicopter company, to install an assembly facility in Mexico worth €500 million, under which the Mexican government agreed to buy 5 Cougar EC-725 helicopters made by Eurocopter as compensation. The Ministry of Defence (SEDENA) placed a 12-year classification and reserved the information regarding the budget item used for their acquisition on grounds of national security.

SEDENA has declared that the acquisition of the helicopters was presented as an investment project to the Ministry of Finance (SHCP) and that, although the request for resources for the purchase named the company which was intended to provide them, there was not enough evidence to assess the generalised level of competition. Therefore, the absence of evidence suggests that offset contracts either lack competition or could not be reasonably considered to be subject to any level of competition regulation.

Response to peer reviewer: Score maintained.

Researcher4714: The Mexican government does not specifically control companies’ use of agents and intermediaries in the defence procurement cycle. Public procurement in general, including defence, is regulated through the Federal Law on Acquisitions, Leases and Services of the Public Sector (LAASSP) and the Federal Law on Anti-Corruption in Public Procurement. The latter defines an intermediary as a natural or legal person, of Mexican or foreign nationality, who acts in the name or interest of the company that is participating in a procurement process as a shareholder, member, partner, agent, principal, broker, manager, advisor, consultant, subcontractor, employee or any other character involved in public procurement matters (Art. 3, Section IX; Art 2., Section II). Likewise, it establishes that if corrupt acts are committed through an intermediary for any benefit or advantage of a participant in the procurement process, both the company and the intermediary shall be punished. However, does not establish measures to regulate the use of intermediaries.

Researcher4714: Major arms deals can be made through invitation procedures or direct adjudication, under Article 41 of the Law of Acquisitions, Leases and Services of the Public Sector (LAASSP). The law allows purchases and leases to take place without being subject to public procurement procedure when acquisitions are made for exclusively military or naval purposes, or when their publicity could jeopardise national security or public safety.

According to Interviewee 4, &quoute;additional&quoute; information can be published prior to the signing of the contract, depending on the procedure. For an open tender, all information should be public. It is not the same for direct awards or restricted invitation (the case for major arms deals), in such cases the information is provided only to those involved in the procurement procedure; and institutions are under no obligation to disclose any information concerning such procedures.

The 2015 Annual Procurement Program of the Ministry of the Navy (SEMAR) does not provide information on arm deals. There is no additional information on the site regarding financing packages.

Response to peer reviewer: The Annual Procurement Program of SEMAR (2015) do not provide information on arm deals. There is no additional information on the site regarding financing packages.The score was not modified since the publication of the Annual Procurement Program is evaluated in a different question. Score maintained.

Researcher4714: The Federal Law on Anti-Corruption in Public Procurement regulates all public procurement, including that of the defence sector. Although it does not regulate the usage of sub-contractors, its regulations and sanctions in case of corrupt behaviour apply to individuals or companies (Mexican or foreign) involved in public procurement, including subcontractors. There is no evidence that the government encourages the main contractor to ensure that its subsidiaries and sub-contractors adopt anti-corruption programmes in practice, or of how the law has been enforced in relation to subcontractors.

Response to peer reviewer: Agree. Score changed from 0 to 1.

Researcher4714: According to SIPRI, Mexico has imported arms from Brazil, Canada, China, Czech Republic, Denmark, France, Israel, Italy, Netherlands, Qatar, Russia, Spain, Sweden, Switzerland and United States between 2004 - 2014. The largest suppliers, in descending order, are the United, States, Spain, Israel and France.

Mexico's acquisition of military equipment from the US has raised questions about whether these purchases meet real operational needs. According to investigative journalists, the current government has acquired $1.346 billion in equipment, technology, spare parts and military training from the US. These acquisitions were made through at least three transactions between April 2014 and March 2015. In addition,15 helicopters were purchased from the Texan company Textron. It is likely that political considerations have played an important role, given that the United States has been shown to have a political influence on Mexican national security policy, for example, through influencing the candidates for the position of defence minister.