Financial Crime World

Mexico’s New Anti-Money Laundering Law Takes Effect in June 2013

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Mexico has recently enacted a new anti-money laundering law aimed at preventing and detecting transactions or activities involving illegal proceeds or terrorism financing. The law will take effect on June 17, 2013, and sets forth rules and procedures to identify and notify certain transactions or activities that may be used by organized crime groups for money laundering or terrorism financing.

Restrictions on Cash Transactions

The new law imposes restrictions on the use of cash in certain transactions, including:

  • Purchase and sale of real estate properties valued at over $500,200 pesos ($38,775 USD)
  • Other specific activities

These restrictions aim to prevent the laundering of illegal proceeds through the use of cash.

Vulnerable Activities

The law identifies vulnerable activities that must be notified to the Mexican Ministry of Finance, including:

  • Gambling
  • Raffles and lottery activities
  • Issuance and retail of services cards, credit cards, pre-paid cards or traveler checks
  • Other activities

Entities or individuals performing these vulnerable activities are required to:

  • Identify clients and users
  • Retain and safeguard relevant documentation for a five-year period
  • File notices with the Ministry of Finance
  • Appoint an individual responsible for complying with the law

Failure to comply may result in fines up to $4,051,450 pesos ($314,066 USD) or 10% of the value of the transaction, whichever is higher, as well as imprisonment of up to 10 years.

Obligations for Financial Institutions

Financial institutions, including banks, brokerage firms and other financial entities, will also continue to perform obligations imposed by specific laws related to money laundering prevention. These obligations include:

  • Implementing know-your-customer policies
  • Retaining and safeguarding relevant documentation for a 10-year period
  • Delivering notices required by the law to the Ministry of Finance

Financial Analysis Special Unit

The law also establishes a Financial Analysis Special Unit within the Mexican Attorney General’s Office to investigate transactions involving illegal proceeds. The unit will work in conjunction with other authorities, including:

  • National Banking and Securities Commission
  • National Insurance and Bonds Commission
  • Tax Administration Services Agency

to enforce the law.

Effective Date and Regulations

The regulations of the law are expected to be issued by June 17, 2013, and will include simplified forms for submitting notices required under the law. The effective date of the law is nine months from its publication, which means it will take effect on June 17, 2013.

In summary, Mexico’s new anti-money laundering law aims to prevent and detect transactions or activities involving illegal proceeds or terrorism financing by imposing restrictions on cash transactions, identifying vulnerable activities, and requiring financial institutions to implement specific obligations. The law will come into effect on June 17, 2013, and is expected to play a key role in combating organized crime and protecting the financial system.