Mexico Must Intensify Efforts to Combat Money Laundering and Terrorist Financing, IMF Says

Effective AML/CFT Regime, but Room for Improvement

MEXICO CITY - The International Monetary Fund (IMF) has deemed Mexico’s financial crime risk assessment and mitigation strategies effective, but authorities must step up efforts in pursuing launderers and confiscating their assets to mitigate significant risks. According to a recent Mutual Evaluation Report by the Financial Action Task Force (FATF), Mexico has a mature anti-money laundering and counter-terrorist financing (AML/CFT) regime with a well-developed legal and institutional framework.

Challenges Ahead

Despite having good preventive measures in place, Mexico faces a high risk of money laundering, largely due to activities associated with organized crime, such as:

• Drug trafficking
• Extortion
• Corruption
• Tax evasion

The report highlights that financial intelligence produced by the country’s Financial Intelligence Unit is not regularly used to investigate money laundering, underlying crimes, and terrorist financing.

Areas for Improvement

The IMF also noted that:

• Financial sector supervisors have a good understanding of the risks they face, but oversight of designated non-financial businesses and professions is under-resourced and lacking.
• Suspicious transaction reporting is low across all sectors.
• Mexican authorities fail to apply regulatory sanctions in an effective, proportionate, and dissuasive manner.

Additional Concerns

The report also raised concerns about:

• The lack of systematic pursuit of confiscation of proceeds and instrumentalities.
• Limited identification of beneficial owners, which hinders entities’ ability to assess and manage money laundering and terrorist financing risks.

Call to Action

Despite some high-profile investigations conducted by Mexican authorities in recent years, the IMF emphasized that a more proactive and systematic approach is needed to combat financial crime. The report concludes that Mexico must intensify its efforts to:

• Investigate and prosecute money laundering.
• Confiscate proceeds and instrumentalities.
• Mitigate significant risks and ensure the stability of its financial system.

In summary, while Mexico’s AML/CFT regime is effective, there is still much work to be done to combat money laundering and terrorist financing. Authorities must prioritize a more proactive approach to investigating and prosecuting these crimes in order to safeguard the country’s financial system.