Today was published the Federal Law for Prevention and Identification of Transactions with Resources from Illicit Means, also known as the “Anti-Money Laundering Law” which shall be in effect in 3 months from now. This new law is a result of a series of expert’s recommendations and a popular demand to reduce power to Mexican Cartels by affecting their finances. Even when this law is new, some of its regulation was already in practice by Mexican Banks due to some administrative orders (circulares) provided by the Mexican Tax Authority. This new law is a lot more ample and goes beyond financial institutions; some relevant aspects of this law:
– It regulates the activates that could be financed with resources coming from criminal actions, usually known as “money laundering”
– It establishes penalties to people performing “Vulnerable Activities” without notifying that to the authority.
– The meaning of Vulnerable Activity is wide, and related to the usual or professional services connected to gambling, betting, financial services, prepaid services, construction, development, precious metals and precious stones trading, auctions, vehicles selling, armored vehicles selling, custody and transportation of money, rendering of professional services, cash management, investment and incorporation services. Only when these activities surpasses the minimum established. Depending on the activities, there are different amounts mentioned as the minimum required. As in example, for precious metals the minimum is 20,000 pesos, for auctions is 300,000 pesos,
– When a person falls into the Vulnerable Activity hypothesis, this person will have to send a written notice of this activity to the Federal Tax Authority.
– The information provided to the authority is related to the type of transaction, the parties involved, personal information of the parties and information related to the transaction.
– It is important to mention that this law clarifies that when it comes to Vulnerable Activities, no one can argue the “banking secrecy principle”
– High penalties to those not complying with it.
– Payments with cash, precious metals and precious stones are forbidden when the transaction’s amount surpasses certain amount.
– Public Notaries, Sellers, Intermediaries and in general, people involved in these transactions will have the obligation of notify these activities to the authorities.
– Management and use of this information, by the authorities, is reserved and limited to the investigation and prosecution of resources coming from illicit means.
As any other law, it will take some time until we see it in practice, its success will depend on the Authority’s follow up and revision faculties. If you want to read the complete law (in Spanish), you can download it here: http://www.dof.gob.mx/nota_detalle.php?codigo=5273403&fecha=17/10/2012
Gustavo Calderón, is a Lawyer and University Professor in Playa del Carmen, Mexico, with more than 10 years of experience in Corporate Law and Real Estate Law. Mr. Calderón focuses his practice towards serving the expatriate population of the Riviera Maya.