Mexico Makes Progress in Combating Money Laundering, But More Work Needed
Mexico has taken significant strides in understanding and combating the risks of money laundering (ML) and terrorist financing (TF), according to a recent assessment. However, more needs to be done to effectively tackle these issues.
Understanding the Risks
The country’s authorities have demonstrated a good understanding of the risks posed by ML and TF, thanks in part to a comprehensive risk assessment conducted in 2016. The assessment identified key vulnerabilities, including:
- Use of front companies
- Lack of beneficial ownership information
National Strategy and Actions
Mexico is developing a national strategy based on the findings of the risk assessment, and has taken several high-level actions to mitigate risks, such as:
- Issuing new regulations
- Improving coordination between agencies
However, implementation of these measures remains a concern due to capacity issues and high turnover rates among senior officials.
Coordination between Authorities
Coordination between authorities is generally good, with the Financial Intelligence Unit (FIU), prosecutors, and supervisors working together effectively. However, there are concerns about:
- Coordination on terrorist financing issues
- Lack of inter-agency cooperation on money laundering cases at the federal and state levels
Involvement of the Financial Sector
The financial sector was closely involved in the development of the risk assessment and has been informed of its results. Designated non-financial businesses and professions (DNFBPs) were also encouraged to engage, although their involvement was more limited.
Use of Financial Intelligence
Financial intelligence is regularly received by competent authorities, but is not always used effectively to support money laundering investigations and asset tracing. The FIU produces high-quality strategic analyses that serve prosecutors in launching ML investigations, but financial intelligence does not often lead to the launch of such investigations due to various factors, including:
- Delays in dissemination
- Lack of beneficial ownership information
Conclusion
While Mexico has made progress in understanding and combating money laundering and terrorist financing risks, more work is needed to address these issues effectively.