Interviews

Arydai Prado (Prado & Cantú), México: “Many businessmen still believe that Compliance is just related to money laundering. That’s not true. Compliance is about protecting your Company”

With experience in Administrative and Legal Areas focused on Administration, Human Resources and Business Management, as well as Internal Control, Arydai Prado is based in Ciudad de México where she runs her own Law Firm, Prado & Cantú. She has provided WOLEP an insight into the latest legal developments in México, particularly in regard to telework and outsourcing, and their impact on its economy and society.

Q: You are very experienced. How did your first start out as a Lawyer? What is required to become a Lawyer in México?

A: Actually, I have two careers, I also studied Business and Human Resources Management. I was studying and working at the same time, I was very young, but since my first job I was in charge of administrative controls. After that, all my jobs were related to administration and different kind of internal controls, so then, I realized the importance of regulations and normativity. That’s why, a few years ago, I decided to also study Law.

I think that the first requirement to be a Lawyer is to feel the call. You can choose any University, but the call is the first thing that you have to be sure about. I felt the call to help people, to have justice and equity. Looking back, I can say that I fulfilled my dream.

 

Q: Your practice areas include Real Estate & Construction, Corporate and Commercial, Banking and Finance, Regulation and Compliance. What is the most important one?

A: I am in charge of Compliance and I really like it because of my beginnings. I was always in charge of internal controls, that’s why I chose Compliance, but all areas are important for business development.

 

Q: Can you explain briefly why Compliance is so important for a Company or an organization?

A: Many people and businessmen still believe that Compliance is just related to money laundering. And many times they say: “Oh no, I don’t need that. That’s just for financial companies or banks”, but that’s not true! Compliance is in our everyday lives. It is in your house... What are you going to do in a contingency or a natural disaster? How are you going to contact your family? So Compliance is the base of everything. You should protect your company of any kind of contingency, not only money laundering. You must have controls in your Company. You cannot avoid risks - but certainly you can reduce its impact, and that’s what Compliance is. Of course, this is only a summary - the topic is very extensive!

Bottom line is that Compliance allows you to protect your business and your interests. So, if you don’t have a Compliance Program, your business might have corporate governance issues, employees wrongdoings, lack of integrity culture and many other issues that might produce a negative impact on business development.

Compliance is the base of everything. You should  protect your company of any kind of contingency, not only money laundering. You must have controls in your Company. You cannot avoid risks - but certainly you can reduce its impact, and that’s what Compliance is.

Q: Obviously the last two years have created both challenges and opportunities for each one of your specializations. What are some of the biggest changes that have impacted these domains during this interval, whether we’re talking new legislation, regulation or workplace dynamics?

A: The pandemic, undoubtedly, has changed everything in our lives. But it has also let us know the importance of having legal backup in our lives and, of course, in our business.

With this pandemic, we’ve learned about breach of contracts, about financial crises, or, even worse, about bankruptcies. These were caused by bad administrations, and by a lack of legal administrative controls. In the case of México, I think we must work very hard to accelerate and implement procedures and legal hearings online or virtual sessions, because we could not move from our house to another place, so we need new technologies, like meetings via Zoom.

 

Q: Are you happy with the legislation currently in effect regarding Compliance in México? Have things changed at this level in this pandemic?

A: A few years ago, we received a new legislation called El Código Nacional de Procedimientos Penales and it doesn’t  specifically mention Compliance per se, but it mentioned the importance of due diligence for Companies. So, I am looking forward to the day - hopefully one not that far away - when Compliance will be addressed specifically in the legislation as something not only necessary but mandatory for all the companies. It’s still a new domain, we could say it is in its infancy.

We have many specialists recognized around the world that manage this area, but I can see that it is still not very known to businessmen, they still believe it’s just for financial companies, it’s complicated. We are trying to do our best, and I’m sure that El Código Nacional de Procedimientos Penales is trying to move things in the right direction for Compliance.

 

Q: You recently wrote an article regarding the telework legislation that was adopted by México at the start of the year. Please walk us through this development. How did Companies and employees respond to it?

A: First of all, Labor Law is a social law and it always has to be focused to protect workers, while also not harming the rights of employers. Though I think there is more controversy with another reform - which is about regulating outsourcing in México.

Outsourcing has many implications, and it is right now in the eye of most people, because we are talking about modifications in Labor Law, but also in Social Security Law and Taxes Law, and maybe these changes are the most important right now, because the impact for the employers will be very, very high. So, these two reforms are the most prominent right now in México.

Many people here in México worked as outsourced employees, meaning they were not directly contracted by a principal office, and maybe this is where it’s going to be a major problem for big companies.

The pandemic, undoubtedly, has changed everything in our lives. But it has also let us know the importance of having legal backup in our lives and, of course, in our business.

Q: In practice, did the new legal provisions create an imbalance between the rights of the employees and those of the employers? What are some legal issues that arose in this particular situation?

A: Not yet. What happened at the beginning of the pandemic was that many people lost their jobs. and this was very difficult, because nobody imagined that it would last for so long. We all imagined it would pass in two weeks’ time or one month at the most, but as time passed, we saw that it was not going to stop, and small companies had to take a decision, a very hard one, to end their contracts with their employees. So, I think both reforms - regarding teletrabajo (telework) and outsourcing - are going to be very important because many companies went bankrupt while others need to contract people, again. Companies are working to handle this the best way they can, protecting their own interests without harming employees’ rights.

 

Q: Real Estate and Construction is one of the industries that was much affected by the ongoing pandemic. How did Mexican economy cope and how important was your counsel as a Lawyer for the continuity of your Clients’ businesses?

A: Unfortunately, in México, Real Estate is still being affected by the pandemic as we speak. Many offices and shopping centers practically disappeared during the pandemic, because of the revenues reduction. On the other hand, the construction industry is also affected, because of administrative resolutions by the Government that prevent it from operating. And that’s a huge problem. Sales are also affected because many workers use mortgage loans to buy a property. So, this sector was one of the most affected in México in 2020 and still is.

 

Q: What has been your biggest challenge / professional success in the past 12 months?

A: I think that every day and every assignment is a challenge, because from them you are going to learn new things. Each one of the cases is different. Of course, you build on your experience, but no new case is quite the same as the previous one. I try to learn something new from every case: a new word, a new place, a new law or a new article. To me, there are no small or big cases, every Client is important.

 

Q: Indeed, you’ve been prolific in the past months, with many publications on different topics of interest to your Clients. How do you manage to balance writing with your day-to-day activity as a Lawyer?

A: I try to be organized, organize my time, my activities. I love reading and I love to be informed not only about law - about everything. I “record” that information in my head and, as soon as I can, just go and write it. I can only say that if I read about sports, I can find something that lights up something and I go: “That is Compliance!”. The pandemic has revealed many situations where contracts were not honored as signed, we learn about many things. We hear about lawsuits against big companies, to the tune of: “My contract said that this was going to happen, and you are not complying with this!”. We can find many, many such situations in big industries nowadays, like the movie industry or football industry.

I try to learn something new from every case: a new word, a new place, a new law or a new article.

Q: Your Law Firm, Prado & Cantú, has both a Facebook Page and an Instagram account. Do you pay close attention to being active on social media?

A: Many times, we think that social media is the future. But no, I think social media is the present! So we must learn to use social media to our benefit, because it is also risky; if we publish something accidentally using a «wrong» word, things can blow up quickly. We must learn to use social media, carefully, that is for sure.

 

Q: The WOLEP network aims to change the legal landscape and provide Lawyers with the tools of tomorrow. You're obviously a very modern, very business-oriented Lawyer. What is  your first impression of WOLEP?

A: I loved it, ever since I knew about it! I think it is exactly what we need. A community of experts, a place to do networking, to share Clients, to share experience. Of course, I’m new to it, but from what I’ve seen until now, I love it. I think it’s going to be a hit!

This is the moment for WOLEP, for this kind of tools that help us to keep in touch no matter where we are, you can be in Asia, Africa or America, and still we can work together and share Clients and meet other peers with a high standard of legal practice.

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