The Armed Forces are responsible for customs in Mexico: A trap for transparency and a gateway to corruption

11/09/2022

Translated from Spanish

Deploying the argument that public security institutions are “guarantors of transparency,” President Andrés Manuel López Obrador gave the Armed Forces administrative control of Mexico’s customs, both at interstate points as well as main ports of access into the country. However, the opacity in the administration of the sector and the insistence about subjecting customs resources to military command could cause, according to specialists, just the opposite: more opacity and, with it, more corruption.

By Luisa García and Claudia Ocaranza

“Ports, especially customs, have long been cradles of corruption,”¹ said President Andrés Manuel López Obrador in July 2020. The statement was made from the seaport of Manzanillo, Colima, one of the main access points for goods into Mexico. A year later, he continued in the same vein, stating that “we have to clean up all of the country’s customs,”² while announcing the expansion of the protective and administrative tasks conferred to the Army and Navy.

The General Customs Administration (AGA) ceased to exist at the end of 2021 and was replaced by the National Customs Agency of Mexico (ANAM) in January 2022. With this measure promoted by the Federal Government, the customs authority no longer falls under the command of the Tax Administration Service (SAT), but rather becomes a decentralized administrative entity whose 50 customs offices belong under the control of the Armed Forces.

According to data and sources with experience in customs and transparency matters interviewed by Empower, the phenomenon of opacity is already present in Mexican customs. These sources believe that the situation could get worse and, consequently, jeopardize the operations of points of entry and increase other phenomena that already occur in customs, such as corruption.

The consulting firm Integralia identifies as a risk the increase in opacity and corruption resulting from militarization since, by using national security as a justification for their actions, “military institutions are less subject to counterweight, oversight, and accountability mechanisms than civilian agencies. Likewise, military institutions can be used as a vehicle for opacity when the Federal Government seeks to keep a certain project or program away from public scrutiny.”³

At the beginning of 2022, the Secretariat of National Defense (SEDENA) began to take charge of border customs, while the Secretariat of the Navy (SEMAR) took over maritime customs and the new ANAM began to administer internal access points and customs. However, in May 2022, ANAM lost control of customs, as dictated by a reform of its internal regulations. The Army crafted the text of this reform and, in its annotations, detailed that the restriction on ANAM’s control was President López Obrador’s idea, as reported by the newspaper Reforma based on the massive Guacamaya Leaks.⁴

Confidentiality and Customs

Customs is not the first door that López Obrador has opened for the military. Following a boost in expanded security tasks, there are now more than 20 functions beyond the typical scope of military forces that have been conferred to them over the past three and a half years of this current administration, according to the recent study “Militarization in Mexico” by the consulting firm Integralia.⁵

For the infrastructure projects that have been the flagship of the current administration —such as the Felipe Ángeles International Airport, the Dos Bocas refinery, and the Mayan Train — the same narrative has been used to justify SEDENA’s interference and, likewise, its opacity. The discourse revolves around the argument that national security is the reason why information about its activities cannot be made transparent, whether proactively or in response to freedom of information requests, which prevents citizens from learning even the smallest detail about the tasks carried out by the Armed Forces.

“The current government does not understand that customs is not a national security issue. It sees customs as national security and not as it has been seen since the opening of trade, which is as [an issue of] facilitating foreign trade. This small difference is what led the president to decide to militarize customs,” said Manuel Díaz, a specialist in international trade, in an interview with Empower.

“Security issues tend to be quite opaque,” commented Eunice Rendón, former deputy executive secretary of the National Public Security System (SESNSP). “There is also no transparency about resources and, in SEDENA, even less so. It is one of the most opaque institutions in terms of resources,” she told Empower.

According to Integralia’s study, the Armed Forces are characterized by their opacity. Beyond the number of freedom of information requests that are answered negatively for reasons of confidentiality or national security, “they do not report on fundamental issues in order to be able to learn about their operation and evaluate their performance, such as their policies and programs, their territorial deployment, or events related to alleged human rights violations.”

Trust funds for the military

For the administration of customs resources, SEDENA and SEMAR have access to unstructured trust funds, a financial vehicle that, for the rest of the current public administration, was limited after López Obrador extinguished that specific kind of trust funds in 2020.⁶ That year, over a hundred Federal Government unstructured trust funds disappeared.⁷

With the publication of ANAM’s internal regulations in December 2021, both Secretariats were given a wide margin to create trust funds in order to manage the revenues collected by customs under their coordination.⁸ This type of trust is a fund that obtains and manages public resources to fulfill a specific objective, based on the decisions of a technical committee.⁹

Months after the issuance of the regulation, it was specified that both SEDENA and SEMAR could “participate as Responsible Units” of these funds, without mentioning the power to create them in the first place, in an amendment published in May 2022¹⁰. To date, SEDENA maintains, via its response to a freedom of information request submitted by Empower,¹¹ that it has not created trust funds, while SEMAR has created a trust called “Fideicomiso de Administración y pago SEMAR” (SEMAR Administration and Payment Trust), created for the purpose of providing the Secretariat with funds to pay for purchases and contracts.

“What happened with the trust funds caught my attention because, at the beginning of this administration, the President ordered the disappearance of the vast majority of public trusts, because he argued that they lent themselves to corruption, almost all of them,” recalled Paulina Creuheras, a transparency specialist and coordinator of Integralia’s study “Mlitarización en México,” in an interview with Empower.

“On one hand, the Government is getting rid of them and, on the other, it is empowering the Armed Forces to administer new ones, and this is worrying because they’re not the most transparent institutions, to the contrary,” he added.

Classified information, according to ANAM

The information that the new customs authority has classified as confidential, until now, indicates the agency’s tolerance for openness.

“The Federal Government is sweeping away the customs trust fund [FACLA], the largest of the federal public administration,”¹² Reforma recently reported. It specified that the Government plans to spend 113 billion pesos through that fund, according to documentation obtained through Guacamaya Leaks. For example, 53.615 billion pesos have already been spent from FACLA on “priority public projects.” According to an article based on the Leaks, “28.289 billion [is destined] for the Isthmus of Tehuantepec corridor, which SEMAR controls, 21.299 billion for SEDENA projects along the northern border, and 3.927 billion for the so-called Guaymas Project, which consists of a highway and a port,” among other infrastructure projects assigned to the Armed Forces.

In fact, information about FACLA (Trust to Manage the Funds under Article 16 of the Customs Law) was declared confidential by ANAM in its response to a freedom of information request reviewed by Empower.¹³ The argument for confidentiality is that these funds are of private, not public, origin.

“The FACLA funds are private resources from the payments of importers and exporters, which are not contributions and do not qualify as public income,” reads the response. They also claim that Mexico’s Supreme Court of Justice recognizes this quality of “private funds” in its resolution of constitutional controversy 84-2004.

For Maria Marván, former commissioner of the Federal Institute of Access to Information and Data Protection, now INAI, the information about FACLA should be public because it is held by the Secretariat of Finance as the fiduciary, which is ultimately responsible for the trust fund.

“If the information is private, because the trust is private, and the funds are private, then how can we make sure that this money is financing what it is financing [public works] and is part of the federal budget. There is a silent expropriation process. They are stealing private money to use it for public matters,” commented the former commissioner in an interview for this article.

A presentation by the SAT, dated 2007, mentioned the following about FACLA: “This trust, which is public, is subject to review by the auditing entities and, at the same time, there is an obligation to make its operations transparent and disclosed.”Amidst the inconsistencies, transparency is lost

There are other examples of ANAM’s transparency criteria. The names of those in charge of an academic activity, for example, may qualify as information that ANAM considers classified. This is how it responded to a request for the “names of those who taught the Diploma in Maritime Customs and National Security.”¹⁴ ANAM has also classified as confidential the names of the people currently in charge of different central administrative units, such as the General Directorate of Customs Operations, the Directorate of Border Customs Supervision, and the General Directorate of Customs Investigation.¹⁵

This informational opacity clashes with the initiative promoted by the Federal Government in its July 2021 decree when it created the ANAM. “It is convenient to carry out actions that strengthen national security, mainly at the access points to the country, preferably considering the hiring of personnel that have stood out for being guarantors of transparency (…), as is the case of those who belong or have belonged to the Armed Forces, to be incorporated as personnel [of ANAM],” said the document with which López Obrador announced the new relationship between customs and military forces on July 14, 2021.¹⁶ However, there is still no sign of a before and after regarding the new “guarantors of transparency.”

The confidential data of foreign trade

The militarization of customs presents a vulnerability for national and international trade, a sector on which the Mexican economy is highly dependent. Imports and exports account for almost 80% of the country’s gross domestic product, with the United States and Canada as its main trading partners.¹⁷

Two Mexican companies and their subsidiaries were included on the U.S. Customs and Border Protection (CBP) “watchlist” in October 2021. Agropecuarios Tom, S.A. de C.V. and Horticola Tom, S.A. de C.V. products began to be detained by U.S. authorities for using forced labor.¹⁸ CBP’s international watchlist records a total of 65 companies, mostly Asian, that are prohibited from shippig goods into the United States from their home country.

However, it is impossible to know if any of these companies circulate goods in Mexico because the information contained in the export records, called “pedimentos,” is considered confidential, according to ANAM’s response to a freedom of information request submitted by Empower. “The pedimentos and the information contained in them, through which foreign trade operations of specific taxpayers are carried out, are classified as confidential, by virtue of being protected by tax secrecy.”¹⁹

But this information restriction does not apply to all cases. Although information on exports and imports is available for download on ANAM’s website,²⁰ the data is scattered, does not include fiscal identifiers, and 99% of the transactions in 2021, for example, had no federal entity of origin or destination. Moreover, ANAM does not have a user-friendly consultation tool for citizens that gathers all the information and facilitates searches of shipments by company. These obstacles to data processing and analysis have been exploited by multinational companies that profit from Mexican foreign trade databases. Some examples of these companies include Panjiva, Import Key and Market Inside.

Empower gained access to a sample of the monthly databases that these companies obtain through leaks from customs insiders. From this information the companies extract partial data that they include in their private search engines. A total of 70 variables are displayed in these customs records, from the distinction between imports and exports, the customs agent code, the name of the importing or exporting company, the import/export declaration number, the RFC (Federal Taxpayer’s Registry), the country of origin or destination, the means of transport (air, road, rail, sea), the total price and the unit price, among others.

Manuel Díaz, an expert in international trade, added that the price paid for imports and the names of exporting and importing companies should be protected by trade secrecy, something that certainly differs from what happens in the U.S., Mexico’s main trading partner.

Data collection without transparency

From trust funds to a lack of transparency, the incursion of the military in Mexico’s customs operations continued under Horacio Duarte, a lawyer and politician close to AMLO, who was the head of ANAM when it was created in 2022, a position he vacated on October 12, 2022 to join the political campaign of Delfina Gómez in the State of Mexico. Previously, Duarte was the head of the former AGA, which was replaced by the ANAM. The lawyer has accompanied López Obrador since 2005, during the impeachment process AMLO faced as head of the Mexico City Government.²¹ More recently, Duarte has presided over the MORENA political party in the State of Mexico, from 2015-18, and subsequently left a post as undersecretary of Employment to lead, in May 2020, the general administration of customs.²²

“In the specific case of the customs office where I’m located, I can see that the personnel is already half civilian and half military,” explained Enrique Prida, president of the Customs Agents Association of Toluca, in an interview with Empower. As reported by the digital newspaper Animal Político, ANAM’s institutional plan is that, by the end of 2022, all customs personnel will be military personnel.²³

Duarte, the former head of ANAM, was also the main communicator of customs collection data. On August 20, 2022, he wrote on his Twitter account, “Coordination with the Armed Forces has made the country’s 50 customs offices more efficient and secure.” And the day before he tweeted, “From 18 customs offices coordinated with @SEMAR_mx, we have collected 362 billion pesos, from January to June of this year, an increase of 13% compared to the same period of 2021. #TransformingCustoms.”

The figures that are in short supply are those that would allow for an independent analysis of this data.

“The collection data will always exist, (…) but for example, of the number of registered companies, maybe they will provide general data: how many of them are 100% digitized, how many have their papers in order, how many are not under observation, not with that detail,” said Aarón Rojas, part of the company Galica Servicios Logísticos, with 12 years of experience in the foreign trade sector, in an interview with Empower. “I honestly don’t think that the customs authority, the National Customs Agency, is really concerned about making this kind of thing transparent, they are concerned about collection.”

Empower asked ANAM why it does not publish in the Transparency Obligations Portal System (SIPOT) which companies have been observed for non-compliance with customs regulations or non-compliance with legal procedures in foreign trade operations, or which companies have been banned from carrying out foreign trade operations due to a history or sanctions for smuggling, money laundering, or other illicit practices. However, as this article went to publication, no response had been received from the customs authority.

Customs agents in limbo

For Enrique Prida, from the Customs Agents Association of Toluca, the change of command brought with it anomalies. “We are in a kind of ‘who do I listen to or who do I address,’ because there are three: SAT, ANAM, and the military. [We request] that it be defined as soon as possible to whom can we address ourselves to resolve customs issues. I repeat, today, this is in limbo,” he assured Empower.

Prida refers specifically to the “notice of crossings,” a procedure by which the customs system recognizes the validity of a foreign trade operation and which could be considered the heart of customs operations. Import/export declarations, which are valid for a limited period of time, are the documents by which they request approval of such operations. However, although they comply with the steps established by ANAM (going through the red or green traffic light system, leaving customs with complete documentation and taxes paid), the SAT still withholds the authorization because it has no record of the operation. “Why? Because the two authorities in this case, ANAM and SAT, do not provide feedback, and we, the users, are the ones who are paying for the problem,” explained the customs agent.

The same situation was confirmed to Empower by a customs agent in Mexico City. “Treasury [SAT] registers the operation as ‘open,’ as if the customs agent has not closed it, because the ‘patent” is suspended, and then the agent is left without work for a week.”

In a foreign trade scenario, the damage to operational regularity is just the icing on the cake. There is concern that the increase in the lack of transparency with the Armed Forces will end up facilitating the spread of what it was precisely intended to prevent: corruption in Mexican customs.

Neither SEDENA nor SEMAR responded to responses for comment for this article.

1 “Semar y Sedena administrarán y vigilarán aduanas,“ Andrés Manuel Lopez Obrador’s YouTube Channel, accessed 1 September 2022, www.youtube.com/watch?v=iFLuoSLaCFQ&t=5981s.

2 “Creación de la Agencia Nacional de Aduanas es para reforzar seguridad: AMLO,” El Economista, accessed 15 August 2022, www.eleconomista.com.mx/politica/Creacion-de-la-Agencia-Nacional-de-Aduanas-es-para-reforzar-seguridad-AMLO-20210715-0057.html.

3 “La militarización en México. Hacia la consolidación de una política de estado 2006-2022. Reporte especial,” Integralia, accessed 29 September 2022, www.integralia.com.mx/web/reporte-especial-la-militarizacion-en-mexico-hacia-la-consolidacion-de-una-politica-de-estado-2006-2022.

4 “Denuncian empresarios corrupción de militares en aduanas,” Reforma, 8 October 2022, www.reforma.com/denuncian-empresarios-corrupcion-de-militares-en-aduanas/ar2483076?referer=–7d616165662f3a3a6262623b727a7a7279703b767a783a–.

5 “La militarización en México. Hacia la consolidación de una política de estado 2006-2022. Reporte especial,” Integralia, 14 September 2022, www.integralia.com.mx/web/reporte-especial-la-militarizacion-en-mexico-hacia-la-consolidacion-de-una-politica-de-estado-2006-2022.

6 “DECRETO por el que se ordena la extinción o terminación de los fideicomisos públicos, mandatos públicos y análogos,” Diario Oficial de la Federación, 2 April 2020, www.dof.gob.mx/nota_detalle.php?codigo=5591085&fecha=02/04/2020#gsc.tab=0.

7 Luis Pablo Beauregard, “Morena se impone en el Senado y desaparece 109 fideicomisos,” El País, 21 October 2020, elpais.com/mexico/2020-10-21/morena-se-impone-en-el-senado-para-sacar-adelante-la-polemica-extincion-de-los-fideicomisos.html.

8 “DECRETO por el que se reforman y adicionan diversas disposiciones del Reglamento Interior de la Secretaría de Hacienda y Crédito Público y del Reglamento Interior del Servicio de Administración Tributaria, y por el que se expide el Reglamento Interior de la Agencia Nacional de Aduanas de México,” Diario Oficial de la Federación, 21 December 2021, dof.gob.mx/nota_detalle.php?codigo=5639045&fecha=21/12/2021#gsc.tab=0.

9 Samedi Aguirre, “¿Qué son los fideicomisos y que pasará con sus recursos si desaparecen?,” Animal Político, 1 October 2020, www.animalpolitico.com/elsabueso/que-son-fideicomisos-por-que-no-deberian-extinguirse.

10 “DECRETO por el que se reforman, adicionan y derogan diversas disposiciones del “Decreto por el que se reforman y adicionan diversas disposiciones del Reglamento Interior de la Secretaría de Hacienda y Crédito Público y del Reglamento Interior del Servicio de Administración Tributaria, y por el que se expide el Reglamento Interior de la Agencia Nacional de Aduanas de México,” Diario Oficial de la Federación, 24 May 2022. dof.gob.mx/nota_detalle.php?codigo=5652965&fecha=24/05/2022#gsc.tab=0.

11 Response to a freedom of information request directed to SEMAR, folio 330026622001543, Plataforma Nacional de Transparencia, 20 October 2022.

12 “Exprime la 4T el fondo aduanero”, Reforma, reprinted by El Heraldo, 24 October 2022, www.heraldo.mx/exprime-la-4t-fondo-aduanero.

13 Response to a freedom of information request directed to SEMAR, folio 332746522001067, Plataforma Nacional de Transparencia, 20 October 2022.

14 Response to a freedom of information request directed to ANAM, folio 332746522001021, Plataforma Nacional de Transparencia, 24 August 2022.

15 Response to a freedom of information request directed to ANAM, folio 332746522000586, Plataforma Nacional de Transparencia, 20 June 2022.

16 “La militarización en México. Hacia la consolidación de una política de estado 2006-2022. Reporte especial,” Integralia, September 2022.

17 “Cifras del comercio exterior en México,” Santander, Trade Markets, accessed 15 August 2022, santandertrade.com/es/portal/analizar-mercados/mexico/cifras-comercio-exterior.

18 “Withhold Release Orders and Findings List,” U.S. Customs and Border Protection, accessed 16 August 2022, www.cbp.gov/trade/forced-labor/withhold-release-orders-and-findings.

19 Response to a freedom of information request directed to ANAM, folio 332746522000021, Plataforma Nacional de Transparencia, 24 August 2022.

20 “Información pública de operaciones de comercio exterior,” ANAM, accessed 5 November 2022, anam.gob.mx/informacion-publica-de-operaciones-de-comercio-exterior.

21 “Abogado de AMLO recordó el desafuero a 17 años: ‘El pueblo acabó dándole la razón’,” Infobae, 8 April 2022, www.infobae.com/america/mexico/2022/04/08/abogado-de-amlo-recordo-el-desafuero-a-17-anos-el-pueblo-acabo-dandole-la-razon.

22 “Horacio Duarte Olivares es nuevo Administrador General de Aduanas del SAT,” Government of Mexico, accessed 1 May 2020, www.gob.mx/sat/prensa/horacio-duarte-olivares-es-nuevo-administrador-general-de-aduanas-del-sat-13-2020.

23 Zedryk Raziel, “Sedena ordena que todo el personal civil en Aduanas sea reemplazado por militares a más tardar el 5 de diciembre,” Animal Político, 29 July 2022, www.animalpolitico.com/2022/07/aduanas-sedena-ordena-cambiar-personal-civil-por-militares.