MEXICO FALLS SHORT IN IMPLEMENTING FATF GUIDELINES, SAYS FOLLOW-UP REPORT

The Financial Action Task Force (FATF), a global standard-setting body, has released a follow-up report assessing Mexico’s efforts to combat money laundering and terrorist financing. The report reveals that while Mexico has made some progress in implementing the technical requirements of the FATF Recommendations, it still lags behind in several key areas.

Assessment of Compliance

The report evaluates Mexico’s compliance with 40 recommendations aimed at preventing and combating money laundering, terrorist financing, and proliferation financing. Mexico scored well on some aspects, including:

• Assessing risk and applying a risk-based approach (R.1)
• National cooperation and coordination (R.2)
• Regulation and supervision of financial institutions (R.26)

However, Mexico fell short in other areas, such as:

• Customer due diligence (R.10)
• Record keeping (R.11)
• Internal controls and foreign branches and subsidiaries (R.18)
• Preventing the misuse of new technologies (R.15)
• Regulating and supervising designated non-financial businesses and professions (DNFBPs) (R.29)

Shortcomings Identified

The report highlights several shortcomings in Mexico’s implementation of measures to prevent money laundering, terrorist financing, and proliferation financing. These include:

• Non-compliance with recommendations related to:
  • Reporting of suspicious transactions (R.20)
  • Tipping-off and confidentiality (R.21)
  • Powers of law enforcement and investigative authorities (R.31)
• Partial compliance in areas such as:
  • Targetted financial sanctions related to terrorism and terrorist financing (R.6)

Government Response

Mexico’s government has vowed to address the shortcomings identified in the report and implement the necessary reforms to bring its laws and practices in line with international standards.

Context

The FATF report comes at a time when Mexico is facing mounting pressure to improve its anti-money laundering and counter-terrorism financing regime. The country has been grappling with issues related to corruption, drug trafficking, and organized crime, which have contributed to the need for stronger regulations and enforcement.

Conclusion

Mexico’s failure to fully implement the FATF Guidelines highlights the importance of strengthening its anti-money laundering and counter-terrorism financing regime. The government’s commitment to addressing these shortcomings is a crucial step towards improving the country’s financial stability and combating organized crime.