In May 2015, the Instituto de Administración y Avaluos de Bienes Nacionales (INDAABIN), Mexico’s federal government organization that administers nearly 100,000 federal assets in the Republic of Mexico, similar to the United States Government Services Administration (GSA), requested our organization to assist in preparing the Valuation Standards and Code of Ethics to conform to International Valuation Standards (IVS). The President of Mexico recognized the country’s poor reputation with respect to its appraisals, which are commonly rejected by many global financial institutions.
The federal government of Mexico recognized that the Valuation and Review Standards and Code of Ethics must change in order to attract global investors. INDAABIN wanted to promote and maintain a higher level of public confidence in the valuation profession by standardizing such requirements for both external hired appraisers and internal reviewers within the Institute. By adopting a set of standards and code of ethics which conform to IVS and place personal responsibility on the valuation professionals in the sector, the federal government is making strides in pursuing the global public interest and increasing foreign investment. The success of the new standards and code of ethics will require valuation professionals and reviewers in Mexico to develop conclusions which clearly communicate their analysis and opinions that are not misleading, and are performed with objectivity, integrity, independence and professionalism.
According to the World Bank’s recent report on “Corruption”, non-ethical behavior in Latin American countries:
- Causes higher interest, risk and discount rates;
- Generates lower global foreign investment, resulting in a reduced economic growth;
- Global financial organizations take a “harder look” at transactions in those respective countries;
- Corruption distorts public expenditure— increases economic waste, losses of government revenues & instils excessive spending;
- Eliminates or reduces free competition;
- Increases inequality between the wealthy and the poor;
- Undermines “institutions” of democracy; • Reduces patronage between the wealthy and the political elites;
- Reduces monopoly of power; and
Weakens the respective judicial systems. The World Bank report further states that, to reduce corruption, government must:
- Adopt preventive measures;
- Ensure transparency;
- Increase access to accurate public information;
- Require internal control mechanisms;
- Punish / sanction the wrongdoers; and
- Ensure the “rule of law”, promoting ethical standards.
As part of the directive to address established by President Enrique Peña Nieto and INDAABIN have taken the first steps towards adopting IVS and has become a model for other governments in Latin America. First steps for “internal” administrative reform by INDAABIN were to:
- Perform a detailed analysis of the existing administrative and working papers of INDAABIN, which included processes, regulatory procedures, and the language of its documents to conform to IVS;
- Classify and score the University programs within Mexico that provide valuation curriculums;
- Classify and score the professionals who work within INDAABIN as valuation reviewers, and develop review guidelines for their internal professionals which conform to IVS; and
- Classify and score the professional appraisers, who are registered with the Federal Government to perform valuations for INDAABIN, and develop guidelines to perform external appraisals which conform to IVS.
Duff & Phelps proposed a draft of the new Standards and Code of Ethics to be adopted by INDAABIN. And further utilized the leading global Valuation Professional Organizations (VPOs) to review the framework to strengthen the new standards to conform to the highest level of IVS. The VPOs included the International Valuation Standards Council (IVSC), Royal Institute of Chartered Surveyors (RICS), the Appraisal Foundation, Appraisal Institute (AI), American Society of Appraisers (ASA), the International Right of Way Association (IRWA); and FECOVAL (Mexico based Valuation Professional Organization). The disciplines covered within the framework of the new Valuation Standards and Code of Ethics included appraisal review, real property, machinery and equipment, personal property, business and intangible asset valuations.
A meeting of the leaders of the seven VPOs occurred in Mexico City, and after many hours of discussion, agreement was reached to present the first round of standards to the federal government. The first round of standards, which included the Valuation Standards and Code of Ethics for all valuation disciplines, were adopted into Mexico Federal Law on December 3rd, 2015 in Mexico City by the Secretary of Public Administration (SFP), Minister Virgilio Andrade of Mexico.
The head of Mexico’s government recognized that the responsibility of the valuation professional is to protect public confidence. Some of the key tenets of the Valuation Standards and Code of Ethics adopted into law by the Secretary of Public Administration (SFP) are:
Ethics: A valuation professional must promote and preserve the public trust inherent in the appraisal practice by observing the highest standards of professional ethics;
Record Keeping: A valuation professional must prepare a work file for each appraisal or appraisal review assignment. A work file must be in existence prior to the issuance of any report; and
Competence: A valuation professional must be competent to perform the assignment. If the valuation professional is not competent, he/ she must decline or withdraw from the assignment before accepting the assignment, and further have the adequate education and tools to perform the assignment.
Contributor: Bruce Greenberg, Duff & Phelps, Mexico City.
For more information, please send an email to: firstname.lastname@example.org.
CDMX regresa a semáforo naranja: Sheinbaum
La jefa de Gobierno de la Ciudad de México, Claudia Sheinbaum, anunció este viernes que la capital del país regresará a semáforo naranja a partir del próximo lunes.
En videoconferencia de prensa, la mandataria apuntó que aún con el cambio de color, se deben mantener las medidas sanitarias. Entre las razones del cambio se encuentra la baja (en comparación con los últimos dos meses) en la ocupación hospitalaria que al día de hoy se ubica en 68%, así como en los ingresos hospitalarios.
Por lo que se permitirá la reapertura de gimnasios en espacios cerrados, así como la de albercas en un horario de 06:00 a 23:00 horas con servicio de citas, de martes a domingo.
Mientras que los teatros podrán dar funciones al aire libre con uso obligatorio de cubrebocas y las iglesias en un horario de 07:00 a 19:00 horas sin ceremonias o misas.
Otras de las actividades permitidas hasta el momento son:
- Comercios al 20% de capacidad.
- Agencias automotrices.
- Centros comerciales y tiendas departamentales.
- Transportes de uso turístico.
En cuanto a los restaurantes, se amplía el horario hasta las 22:00 horas, el servicio será únicamente en exteriores y se permitirán mesas de comensales de 5 personas.
Asimismo, el gobierno de la ciudad señaló que como Protocolo para Miércoles de Ceniza, solo se permitirá la entrada de una persona por familia, atrios y áreas abiertas y conservando las medidas sanitarias básicas.
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