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.
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.
Pursuant to the Law for the Prevention and Identification of Transactions with Criminal Proceeds (subject to certain qualifications that may include monetary thresholds), entities and persons engaged in the following designated non-financial businesses and professions will also be bound to carry out certain AML measures:
- Real estate development.
- 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 travelers’ checks
- The granting of credit or guarantees.
- Construction services, real estate development services, real estate brokerage or intermediation services.
- Marketing of precious metals, precious stones, jewels or watches.
- Marketing and auctioning of artwork.
- Marketing and distribution of new or used vehicles.
- Vehicle and real estate armoring services.
- Money and value transportation services.
- Certain representation activities carried out by lawyers and other independent service suppliers.
- Certain notarial, witnesses 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
- The lease and granting of personal rights of use over real estate assets.
Mexico’s AML regulations require specific institutions to develop 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 even though it was not included in the original IMF list.
Despite acknowledging that there is still room for improvement, the FATF recognizes that Mexico has made progress in developing its systems for combating money laundering.
AMPI agents will be attending classes to evaluate how we verify or vet the buyers and sellers of a transaction as to where the purchase funds have come from and has the seller followed the appropriate laws in declaring the funds he has received and paid the required taxes.
KNOW YOUR CUSTOMER IS NOW REQUIRED BY EVERY ENTITY ASSOCIATED WITH A REAL ESTATE TRANSACTION. This includes trust bank for foreigner, notary for all transactions, escrow companies or holders of buyer funds, real estate agents for the principals in the transaction.
In its latest Interim Follow-up Report of the Mutual Evaluation (2014), the FATF indicated that Mexico has focused on correcting deficiencies as well as enhancing the effectiveness of anti-money laundering and countering the financing of terrorism as a whole, Mexico has made significant progress in addressing the deficiencies identified in its evaluation report and could be removed from the regular follow-up process.
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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