Enhance, Don’t Limit, Human Rights and Constitutional Guarantees

In liberal democracies, legal certainty, protection of human rights, and constraints on government powers are a fundamental part of the rule of law and the cornerstone of the confidence required to promote investment and economic growth. The rule of law protects fundamental rights, in opposition to tyranny and lawlessness. Rule of law means that no individual stands above the law. Aristotle wrote: “It is more proper that law should govern than any one of the citizens."

Article 1 of the Mexican Constitution states that legal provisions related to human rights must be interpreted according to the most favorable and broad protection of individuals. In addition, it provides that all authorities have the obligation to promote, respect, protect, and guarantee human rights according to the principles of universality, interdependence, indivisibility, and progressivity.

The Mexican Supreme Court (SCJN) has defined that the principle of progressivity that governs human rights implies both gradualism and progress. The first factor refers to the fact that, in general, the realization of human rights is not achieved immediately but involves a whole process that entails defining short-, medium-, and long-term goals. Progress implies that the enjoyment of these rights must keep improving. In this sense, the principle of progressiveness of human rights is related not only to the prohibition of regression in the enjoyment of fundamental rights but also to the positive obligation to promote them in a progressive and gradual manner, since, as stated by the Permanent Constituent, the Mexican state has the constitutional mandate to carry out all the necessary changes and transformations in the economic, social, political and cultural structure of the country, so as to guarantee that all persons may enjoy their human rights. Therefore, the progressivity principle requires all authorities of the Mexican state to increase the promotion, respect, protection, and guarantee of human rights. In addition, said principle prevents all authorities, by virtue of its expression of non-regression, from adopting measures that diminish the level of protection of human rights.

There has been a broad and public discussion in Mexico in recent weeks about the scope and supremacy of human rights to privacy and legal security of personal information and property. In particular, the focus has been on whether there should be limits or exceptions to banking secrecy[1], which binds all financial institutions to maintain absolute confidentiality of all the deposits, operations and services their clients perform or receive. A common exception to the general rule of secrecy derives from judicial requirements or orders whenever the banking information of the defendant is necessary for trials, court proceedings or criminal investigations.

Despite the above, a couple of weeks ago, the First Chamber of the SCJN ruled[2] that Article 142, section IV, of the Law of Credit Institutions does not violate the human right to privacy by allowing the tax authorities to require information related to bank secrecy without judicial authorization, since such power is an exception to the interruption of privacy in accordance with Article 16 of the Constitution.

In the opinion of the First Chamber, there is a constitutionally valid purpose for this exception, which consists, mainly, in the verification of the compliance with the tax obligations of the citizens within the framework of the authority of verification, surveillance and control of the Ministry of Finance and Public Credit as guarantor of the tax system, and who assumes the power to act in defense of the Nation's patrimony. Furthermore, it is a power that is not arbitrary, since it is subject to the rules of the norm itself, because the information is requested with the necessary justification and motivation in terms of article 16 of the Federal Constitution, as well as being framed within the powers given to the tax authority.

In addition, the First Chamber considered the measure suitable to achieve the intended purpose because it allows the tax authority to obtain information that allows it to verify and ensure compliance with tax obligations, since from the analysis of the banking or financial information of citizens the tax authority can determine whether or not these obligations comply with the obligations established by the tax provisions.

What is more questionable, in my opinion, regarding the SCJN’s decision is the fact that it considered that this exemption to banking secrecy is necessary to achieve the intended purpose, arguing that there is no alternative that is less restrictive of human rights to achieve this end, since, among the possible measures suitable to allow the federal tax authority to quickly and expeditiously collect the user's banking information solely for tax purposes, this requirement of financial information constitutes the least harmful and sufficient way, in the court’s view, to allow the verification of the obligation to contribute to public spending based on the analysis of the taxpayers' income.

The previous argument fails to take into consideration, at least, two important aspects related to the proportionality of the measure and the supremacy of a human right. First, as a result of several legal amendments and additions to the tax provisions passed in recent years, the Mexican tax authorities have a very detailed, specific, and immediate access to all of the taxpayer’s activities, as a result of electronic invoicing, electronic accounting records, cross referencing with third parties, informative tax returns, reporting obligations from financial institutions, etc. There is probably no operation or activity by a taxpayer that is not reported (almost) in real time to the tax authorities or in periodical electronic records. Therefore, the need to violate banking secrecy should apply only under extreme circumstances, fully supported and justified in each particular case, not by a general rule. Second, and immediately related to the above, there should be no problem demanding a judicial scrutiny to this type of request from the tax authorities that violate banking secrecy in order to preserve the supremacy of a human right and, foremost, to avoid any arbitrary actions.

In conclusion, the tax authorities already have ample, broad, and immediate access to taxpayer information, which justifies the need to involve a judge in reviewing and ruling whether there are reasonable and justified basis to allow the tax authorities to require information related to bank secrecy. Quoting Aristotle again, “laws, when good, should be supreme; and that the magistrate or magistrates should regulate those matters only on which the laws are unable to speak with precision owing to the difficulty of any general principle embracing all particulars.”

[1] Article 142 of the Law of Credit Institutions.

[2] Amparo en Revisión 470/2021