Money laundering is considered to be the crime of operations with resources from illegal origins under article 400-bis of the Federal Criminal Code. The money laundering offense is also complemented by the Federal Law Against Organized Crime, which provides higher criminal sanctions for money laundering offenders considered to be members of a criminal organization, and the Federal Criminal Procedures Code, which considers the money laundering offense to be a serious offense and thus limits the ability of any defendant to obtain release prior to conviction.
Ministry of Finance is Regulatory Authority
With regard to anti-money laundering laws and regulations, the Ministry of Finance is the overall regulatory authority. The Ministry of Finance is authorized by the relevant laws to regulate and supervise the financial system, and to issue anti-money laundering regulations that establish measures and procedures for the subject entities to prevent and detect money laundering activities.
Anti-Money Laundering Measures
Pursuant to the Law for the Prevention and Identification of Transactions with Criminal Proceeds (subject to certain qualifications that may include monetary thresholds and habituality), entities and persons engaged in the following designated non-financial businesses and professions will also be bound to carry out certain AML measures:
- construction services, real estate development services, real estate brokerage or intermediation services;
- the lease and granting of personal rights of use over real estate assets. vehicle and real estate pick- up of funds services;
- activities related to the practice of gambling, contests or raffles carried out through the sale of tickets, tokens or any other type of proof of payment;
- activities related to the issuance and marketing of prepaid cards, payment service cards and any type of card comprising instruments for the crediting of money value;
- activities related to the issuance and marketing of traveler’s cheques;
- the granting of credit or guarantees;
- marketing of precious metals, precious stones, jewels or watches;
- marketing and auctioning of artworks;
- marketing and distribution of new or used vehicles;
- money and value transportation services;
- certain representation activities carried out by lawyers and other independent service suppliers;
- certain notarial, attestation and appraisal activities carried out by notaries public, brokers and public officers;
- the receiving of donations by non-profit organizations;
- certain customs brokerage activities; and
- Mexico’s AML regulations require covered institutions to elaborate and send to the corresponding regulatory authority a document in which the institutions develop their customer identification and KYC policies, as well as all criteria, measures and internal proceedings that the institutions must adopt in order to comply with the AML regulations, including the selection proceedings of their employees and AML training requirements.
- Mexico is not listed as a non-cooperative country by the FATF, nor as an uncooperative tax haven by the OECD. It is on the EU’s white list of equivalent jurisdictions and is not included in the original IMF list.
Virtual Assets & Cryptocurrencies Amendment
(May 22, 2018) Mexico’s Federal Law for the Prevention and Identification of Transactions with Resources of Illicit Origin (commonly referred to as the Anti-Money Laundering Law) was amended in March 2018 in order to regulate transactions with “virtual assets”—that is, cryptocurrencies. (cit Origin] art. 17(XVI), Nota de vigencia, DIARIO OFICIAL DE LA FEDERACIÓN [D.O.F], Oct. 17, 2012, amended of March 2018, Mexico’s House of Representatives website.)
This law defines virtual assets as representations of value electronically registered and utilized by the public as a means of payment for all types of legal transactions, which may be transferred only electronically. It also provides that Mexico’s legal currency may not, under any circumstances, be considered a virtual asset. (Id.)
Providing services involving virtual assets is an activity classified by this Law as vulnerable to money laundering. Thus, providers of such services must report to the Mexican government relevant transactions that reach or exceed a particular amount (equivalent to approximately US$2,638 as of May 2018) starting in September 2019. (Id.)
Furthermore, providers of such services will have a number of additional duties, including identifying their clients and verifying their identity through official identification documents, a copy of which must be kept by the provider; asking the client for information on his or her occupation if a business relationship is established; and keeping records pertaining to transactions and clients. (Id. arts. 17,
Regulations further detailing pertinent requirements for financial companies are to be published by August 2018. (Ley para Regular las Institutions de Technology Financier [Law to Regulate Financial Technology Companies] art. 58, DISPOSICION TRANSITORIA SEGUNDA, D.O.F, Mar. 9, 2018, available as originally enacted on Mexico’s House of Representatives website.
Corruption is the abuse of entrusted power for private gain. It can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.
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This article is based upon Flex MLS reporting, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. If you have any other questions, contact me through my website.Harriet Murray