Appendix to “Ways that Changes to Another Country’s Tax Laws May Change your ‘Tax Relationship’ with the US” — The amendment of a Mexican tax law and how it triggered the US-Mexico extradition treaty
by John Richardson
1978 US Mexico Extradition Treaty
Article 2. EXTRADITABLE OFFENSES
1. Extradition shall take place, subject to this Treaty, for wilful acts which fall within any of the clauses of the Appendix and are punishable in accordance with the laws of both Contracting Parties by deprivation of liberty, the maximum of which shall not be less than one year.
2. If extradition is requested for the execution of a sentence, there shall be the additional requirement that the part of the sentence remaining to be served shall not be less than six months.
3. Extradition shall also be granted for wilful acts which, although not being included in the Appendix, are punishable, in accordance with the federal laws of both Contracting Parties, by a deprivation of liberty, the maximum of which shall not be less than one year.
4. Subject to the conditions established in paragraphs 1, 2 and 3, extradition shall also be granted:
(a) For the attempt to commit an offense; conspiracy to commit an offense; or the participation in the execution of an offense; or
(b) When, for the purpose of granting jurisdiction to the United States government, transportation of persons or property, the use of the mail or other means of carrying out interstate or foreign commerce is also an element of the offense.
JR Note: It appears that Mexico increased the prison time for certain tax crimes to the one year minimum required by the treaty.
Citizenship/Nationality can operate as a defence to an extradition request
Article 9. EXTRADITION OF NATIONALS
1. Neither Contracting Party shall be bound to deliver up its own nationals, but the executive authority of the requested Party shall, if not prevented by the laws of that Party, have the power to deliver them up if, in its discretion, it be deemed proper to do so.
2. If extradition is not granted pursuant to paragraph 1 of this article, the re quested Party shall submit the case to its competent authorities for the purpose of prosecution, provided that Party has jurisdiction over the offense.
JR Note: Many countries have a presumption of extraditing their own citizens. Assuming the presumption against extraditing their own nationals is a standard feature of Mexico’s extradition treaties, individuals moving to Mexico (who are not Mexican citizens) would we well advised to obtain Mexican citizenship as soon as possible.
The full text of the US Mexico extradition treaty is here …
Protocol – November 13, 1997
JR Note: The protocol to the treaty does NOT appear to change the range of offenses for which extradition is possible.
Commentary: Changes in Mexican tax law which triggered the application of the extradition treaty
Starting on Jan. 1, 2020, anyone accused of serious tax irregularities, such as the use of a fake invoice by the company or its counterparts – including suppliers and service providers – regardless of accepting the invoice in good faith, could now face prison without bail under this new provision. This new law effectively enables the government to enforce mandatory pre-trial detention for those accused of malfeasance with faking electronic invoices. During the investigation process, this could lead to asset seizures and the freezing of bank accounts. There is a risk of business owners losing control of their companies, even before being found guilty or being exonerated.
With these changes coming into effect in 2020, the Mexican government will have broad statutory authority to criminalize a company that makes a good faith invoicing error, including incarcerating executives in maximum security jails. Even if found not guilty at the end of the process, it is unlikely that the Mexican authorities compensate accused parties for lost assets.
