The US government has expressed concern about law enforcement in Mexico in matters related to fraud, insurance companies, the protection of industrial property rights, and labor rights in agriculture, maquiladoras, and construction.

In its report Statement on the Investment Climate in Mexico 2025, the State Department noted that US companies have reported in recent years the filing of criminal charges against company officials and related parties arising from contractual or commercial disputes, with two such cases in the first quarter of 2025 alone. 

Law enforcement in Mexico

In its view, the 2024 judicial reforms in Mexico could further impact the legal landscape for foreign investors by affecting the predictability and impartiality of judicial decisions, as well as reciprocity in dispute resolution. 

“U.S. companies investing or doing business in Mexico should familiarize themselves with Mexican laws and procedures that allow parallel criminal cases, often based on allegations of fraud, to be prosecuted simultaneously with commercial disputes,” he said.

On the other hand, the State Department’s 2025 Trade Barriers Report published on March 31, 2025, indicated that several U.S. companies report that Mexico’s SAT has changed its interpretation of its laws and, as a result, insurance companies have been required to retroactively pay value-added tax on damage claims dating back to 2015. 

ILO

“U.S. companies have expressed concern that the SAT is not applying the law consistently, which could lead to the insolvency of some insurers in Mexico,” the investment report noted.

Thirdly, according to the International Labor Organization (ILO), the Mexican government was reasonably effective in enforcing labor laws in large and medium-sized companies, especially in factories operated by U.S. companies and in other industries under federal jurisdiction. 

But the State Department added that enforcement was poor “in many small businesses” and in the agricultural and construction sectors, and virtually nonexistent in the informal sector. 

Workers’ organizations have filed numerous complaints about poor working conditions in maquiladoras and in the agricultural production industry. The most common complaints were: low wages, poor working conditions, long working hours, unjustified dismissals, lack of social security and occupational safety benefits, and lack of freedom of association.