Federal Anti-Money Laundering Law

At present in Mexico, according to the Secretaría de Hacienda y Crédito Público (SHCP) (Ministry of Finance and Public Credit), it is estimated that money laundering amounts to at least 10 billion dollars a year, which represents 3.6 percent of the country’s Producto Interno Bruto (PIB) (Gross Domestic Product).

“To combat this, in July 2013, the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin) came into force. Colloquially known as the Ley Antilavado de Dinero (Anti-Money Laundering Law), its main objective is to prevent and detect acts or operations that involve resources of illicit origin,” explains Débora Espinosa, an independent bilingual lawyer, who in this second part of her interview with Vallarta Real Estate Guide analyzes this legal mechanism that represents a breakthrough in Mexican legislation.

Main Objectives of the Anti-Money Laundering Law

• To protect the national financial system and the economy.
• To establish measures and procedures to prevent and detect acts or operations with resources of illicit origin.
• To establish mechanisms for inter-institutional coordination.
• To collect elements to investigate and prosecute the crimes of operations with resources of illicit origin.
• To investigate the financial structures of criminal organizations.
• To avoid the use of resources for the financing of criminal organizations.

This law imposes on individuals the obligation to inform the Unidad de Inteligencia Financiera (UIF) (Financial Intelligence Unit), which is part of the SHCP, of all activities considered to be Vulnerable. In addition, they must verify and collect information from the people with whom they carry out such operations, in order to identify those responsible for illegal acts.

“One of the first activities that business entities must perform is the appointment of a compliance officer. If this is not done, those responsible before the authorities for non-compliance with the provisions of the law would be, among others, the company’s directors and administrators,” emphasizes Espinosa.

Vulnerable Activities

“This type of activity is a concept provided for by the Anti-Money Laundering Law and serves to determine whether or not a person is obliged to comply with said prerogative,” explains our expert. The normative assumptions considered are the following:

• Games and raffles
• Issuance or marketing of services cards, credit cards and prepaid cards
• Travelers checks
• Loans or credits
• Real estate development and constitution of rights over property
• Metals and jewelry
• Artwork
• Vehicles
• Armor services
• Transfer or custody of securities
• Professional services
• Public faith (notaries, commercial notaries public and public services)
• Donations
• Provision of foreign trade services
• Leasing
• Exchange of virtual assets

Authorities Involved in the Anti-Money Laundering Law

• Ministry of Finance and Public Credit
• Supervisory authorities of financial institutions
• Office of the Attorney General of the Republic

Obligations for Those Who Perform Vulnerable Activities

• To identify the clients and users with whom they carry out their own supervised activities and verify their identity based on official documents, as well as obtain copies of the documentation.
• For cases in which a business relationship is established, to ask the client or user for information about their activity or occupation, based on the registration and updating of notices of activities presented for purposes of the Registro Federal de Contribuyentes (Federal Taxpayers Registry), among others.
• To ask the client or user who participates in Vulnerable Activities whether they are aware of the existence of the beneficiary owner and, if so, to display the official documentation to identify them.
• To keep, protect, safeguard and prevent the destruction or concealment of information and documentation that supports the Vulnerable Activity, as well as that which identifies its customers or users, keeping this documentation physically or electronically for a period of five years from the date on which said operation is performed or detected.
• To provide the necessary facilities for verification visits to be carried out under the terms of this law.
• To present notices to the SHCP at the times and in the manner provided by law.

“In fact, legal entities that carry out Vulnerable Activities must designate before the SHCP a representative in charge of complying with the obligations derived from the Anti-Money Laundering Law. As long as there is no representative or the designation is not up to date, compliance with the obligations shall be the responsibility of the members of the administrative body or the sole administrator of the business entity.”

Notices

“Those who carry out Vulnerable Activities must submit to the SHCP the corresponding notices, no later than the 17th day of the immediately following month, as corresponds to the month in which the operation was carried out. The presentation of the notices will be made through electronic means and in the official format established by the Ministry of Finance.”

The notices must contain the following:

• General data of who performs the Vulnerable Activity.
• General data of the client, user or the controlling beneficiary, as well as information about their activity or occupation.
• General description of the Vulnerable Activity for which the notice is given.

“Because real estate agents are only required to send the notice to the SHCP when the operations exceed 678,032 pesos, the real intention with this law is that the real estate professional serves as a sensor so that the federal authority can detect any money laundering operation that is being carried out through the marketing of properties,” concludes our expert.

Administrative Sanctions

In any legislation, there is always a penalty for non-compliance. If, for any reason, all of the above is not observed and/or complied with, the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin carries a fine ranging from 2,000 to 10,000 minimum wages in force in Mexico City. The first time, a notification is received as a warning of non-compliance, and in the event of a repeat offense, the corresponding punishment is applied.