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A new report suggests that as many as three-quarters of private security companies in Mexico may be operating off the books, limiting their ability to improve security and opening the door to such firms actually contributing to criminal activity.

The report, published April 6 by Mexico’s National Security Commission and the Robert Strauss Center for International Security and Law at the University of Texas at Austin, shows that although Mexico’s private security sector has grown steadily over the past eight years, many private security companies operate without regulatory oversight at the federal and state levels.

There are about 4,000 private security companies in Mexico employing at least 450,000 personnel — roughly the same as the number of police officers in the country. But an estimated 40 to 75 percent of all security firms in Mexico are not included in federal or state level registries.

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According to the report, the highest concentrations of private security firms were found in states with the most economic activity — namely, those along the US-Mexico border, in the center of the country and in the Yucatán peninsula.

Two states — the eastern coastal state of Veracruz and the state of Tamaulipas on the US border — stood out as having particularly high rates of unregistered security firms. An estimated 87 percent of security firms were operating informally in Veracruz. The same was true for 79 percent of security companies in Tamaulipas.

InSight Crime Analysis

Previous research has pointed to the problems associated with a lack of regulation of private security firms in Latin America. Employees of such firms have been found to engage in a variety of criminal activities, including drug and arms trafficking as well as extrajudicial killings.

These issues are particularly acute in Mexico, where criminal violence has reached historic levels, and private security firms have stepped in to fill a security gap where trust in the police is scarce.

Stephanie Leutert, co-author of the Strauss Center report, told InSight Crime that even among properly registered private security companies, there are already a “wide range of crimes being committed” by personnel as a result of lax regulatory enforcement.

“When you don’t have audits to make sure that people are following regulation, then you’re more likely to see more instances of assault and robbery,” Leutert said.

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Moreover, without a strong regulatory environment, private security firms can easily fall short on hiring standards, background checks and employee performance evaluations. And companies operating off the books are even more susceptible to corruption, abuses and criminal infiltration.

“Criminal groups are already outsourcing criminal activity to border gangs — assassinations, drug sales and control of territory,” Nicolás González Perrín, Federal Police Attache for the Mexican Ambassador to the United States told InSight Crime.

When it comes to organized crime co-opting private security firms, he added, “we shouldn’t rule out the possibility.”