Posts Tagged ‘Mexico’

“Know Your Customer” in the news

In a memo sent to the Washington Post and published on his website, presidential candidate Donald Trump has outlined his ideas for compelling Mexico to “pay for the wall” as promised by his campaign. The first item on his list is unilateral executive tightening of banking regulations:

The provision of the Patriot Act, Section 326 – the “know your customer” provision, compelling financial institutions to demand identity documents before opening accounts or conducting financial transactions is a fundamental element of the outline below. That section authorized the executive branch to issue detailed regulations on the subject, found at 31 CFR 130.120-121. It’s an easy decision for Mexico: make a one-time payment of $5-10 billion to ensure that $24 billion continues to flow into their country year after year.

The paper goes on to describe in more detail the regulations that would be proposed, then dropped in a deal with the Mexican government in exchange for a payment.

I’ve been writing for quite a while now about how “Know Your Customer” and anti-money-laundering rules, typically adopted on a rationale of combating terrorism and major organized crime, are susceptible to being turned by government to many other objectives not discussed when regulatory authority was originally being sought.

Banking and finance roundup

  • Trying to buy gift cards in bulk as an employee bonus, Coyote discovers anew that the government hates cash;
  • Initial public offerings are drooping again, regulation one reason [Thaya Knight, Cato]
  • A dissent from the lamentations, here and elsewhere, on the decline of small community banks [Ira Stoll] “Fed’s Tarullo says looking into smaller banks’ concerns” [Business Insider]
  • Berned out? Financial transactions tax “one of the more overrated ideas in American Progressive political discourse” [Tyler Cowen, Wikipedia on Sweden’s experience via @aClassicLiberal on Twitter] And Sen. Sanders continues to express incredulity on Twitter about college loans’ carrying higher interest than home mortgages do, despite attempts to enlighten him on the whole topic of secured lending and collateral [@tedfrank]
  • Video of Federalist Society convention panel on constitutionality of administrative law judges at SEC and elsewhere with John S. Baker, Jr., Stephen Crimmins, Todd Pettys, Tuan Samahon, moderated by F. Scott Kieff;
  • Consumer Financial Protection Bureau ban on contractual arbitration will help class action lawyers, few others [Todd Zywicki, Mercatus]
  • “How US policies to stop terrorist financing end up hurting innocent families abroad” [Dylan Matthews, Vox] Money laundering regs, “de-risking” result in many bank closures in U.S.-Mexico border areas, hassles result for local residents and businesses [Kevin Funnell]

Wal-Mart’s Mexico practices: the sequel

Remember that big New York Times exposé that accused Wal-Mart of massive Foreign Corrupt Practices Act (FCPA)/bribery offenses during its expansion in Mexico? Oops:

A high-profile federal probe into allegations of widespread corruption at Wal-Mart Stores Inc.’s operations in Mexico has found little in the way of major offenses, and is likely to result in a much smaller case than investigators first expected, according to people familiar with the probe.

[Aruna Viswanatha and Devlin Barrett, WSJ (paywall), earlier] More: Mike Koehler, FCPA Professor.

Labor and employment roundup

  • Mach Mining v. EEOC: unanimous SCOTUS, Kagan writing, agrees courts can hold EEOC to legal duty of pretrial conciliation, but prescribes narrower review than employer asked, with no commission duty of good-faith negotiation [Maatman et al; earlier on case here, here, and here; earlier from me on EEOC record of frequent losses in court]
  • New “ambush election” rules: “Your Privacy Has Just Been Compromised, Thanks To Obama’s NLRB” [Labor Union Report]
  • U.K. controversy parallels ours: “Banning unpaid internships will harm, not help, the disadvantaged” [Andrew Lilico, IEA]
  • “U.S. signed agreement with Mexico to teach immigrants to unionize” [Sean Higgins, Washington Examiner]
  • Another view on bias-law “Utah compromise” [Dana Beyer, Huffington Post; my critical view]
  • Advice to employers: “OSHA is not your friend. It is not there to give you an atta-boy on workplace safety. It is there to find violations and levy fines to make money for OSHA.” [Jon Hyman]
  • “CA: Failing to Pay Prevailing Wages May Be Intentional Interference with Prospective Economic Advantage” affording competitors a cause of action [Garret Murai via TortsProf]

Update: N.M. court rejects suit against neighbor’s use of electronic devices

Updating a post from five years ago (related), a New Mexico appeals court has upheld the dismissal on summary judgment of Arthur Firstenburg’s lawsuit against next-door neighbor Raphaela Monribot for refusing to turn off her cellphone, computer, dimmer switches, and other electronic paraphernalia, which Firstenburg alleged cause him injury because he experiences electromagnetic sensitivity, or EMS, an acute sensitivity to electronic radiation, a condition on which (per the court) he has been drawing Social Security disability payments since 1992. The trial court excluded the proffered testimony of Firstenburg’s expert witnesses on causation; without it, it found that his claims of causation necessarily failed for lack of admissible evidence. More: George Johnson, New York Times.

More re: FCPA, Wal-Mart and Mexico

  • Notwithstanding the tone of much coverage, companies are not legally required to disclose past FCPA violations to the government when they emerge: “It’s my understanding from in-house counsel that those who [voluntarily] disclose are in the distinct minority,” says one observer. Also, Prof. Koehler notes that even if Wal-Mart successfully defends the Mexican outlays as lawful “facilitating payments,” the company could still be accused of violating FCPA’s “books and records” and internal control provisions as well as Sarbanes-Oxley. [Sue Reisinger, Corporate Counsel]
  • Coyote recalls the eyes-averted maneuvers with which his former employer put itself in a posture of formal FCPA compliance when operating in corrupt countries;
  • Must-read Scott Greenfield post: “The Foreign Corrupt Practices Act is the corporate version of blue laws, a reflection of American idealism born of our Puritanical origins, our Pollyanna-ish denial of how the sausage of business is made, our jingoistic belief that we are so integral to the economic functioning of the world that we can dictate a cultural and moral code for everyone, and they can either comply with our great American will or suck eggs. It’s a fantasy of self-righteousness, and even Wal-Mart got caught in the reality that the business of business is business, and not puffy-chested Americans can bully Mexicans into succumbing to our moralistic ways.” Also suggests what Wal-Mart might say in response (at least if Wal-Mart were a character in an Ayn Rand novel) and notes “efforts to take this mutt of a law and attempt to reform it, at least to the extent that it not make American multinational corporations chose between being criminals or uncompetitive.”
  • Speaking of which, some reforms sought by business: “Bringing Transparency to the Foreign Corrupt Practices Act” [Michael Mukasey and James Dunlop, Federalist Society “Engage”]
  • Jeffrey Miron: prosecute Wal-Mart but repeal FCPA [CNN/Cato]
  • While agreeing that the FCPA we have at present is pretty bad, Prof. Bainbridge thinks a case can be made for such a law in principle;
  • Something to get Capitol Hill Democrats on board for reform? FCPA might menace Hollywood on China dealings [WSJ “Corruption Currents”]

Earlier here, here, here, and (at Cato) here.

September 19 roundup

  • Educator: please don’t bring lawyers to parent-teacher meetings [Ron Clark, CNN] Steve Brill: what I found when I investigated NYC teacher “rubber rooms” [Reuters] “The Six Dumbest Things Schools Are Doing in the Name of Safety” [Cracked] School waterfall liability [Lincoln, Neb. Journal-Star]
  • As predicted: “Dodd-Frank Paperwork a Bonanza for Consultants and Lawyers” [NYT]
  • “Running out of common drugs” [Josh Bloom, NY Post] Pharmaceutical shortages: the role of Medicare price controls [Richard Epstein, Hoover; earlier here, here, etc.]
  • DoT insists on exposing private flight plans online. Yoo-hoo, privacy advocates? [Steve Chapman]
  • New class action law in Mexico includes loser-pays provision [WSJ]
  • Newt Gingrich candidacy revives memories of his 1995 call for death penalty (with “mass executions”) for drug smuggling [NYT archive via Josh Barro; see also @timothy_watson “Sounds kinda like Shariah Law to me.”)
  • “Cy pres slush fund in Georgia under ethics investigation” [PoL]

January 5 roundup

Swine farms and fishing expeditions

Texas lawyers are seeking discovery against hog-raising giant Smithfield Foods to determine whether a swine operation it partly owns in Mexico might have contributed to the death of a Harlingen woman in the H1N1 flu outbreak. “Mexican health officials have found no connection between the swine flu virus and the pig farm. Nevertheless, residents there have long blamed the farming operation for a variety of illnesses, UPI reported.” The lawsuit might seek $1 billion. [Brownsville Herald, May 12]