Background on the Reform
The Mexican Senate has moved forward with an anti-money laundering reform, which was approved in committees by Morena and its allies. The opposition from PAN, PRI, and MC voted in abstention.
Committee Approval and Key Concerns
The Justice and Legislative Studies Committees of the Senate approved the reform by 33 votes from Morena, PT, and PVEM, with zero against and six abstentions from PAN, PRI, and MC. The reform targets the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (Anti-Money Laundering Federal Law) and the Código Penal Federal.
PRI representative Carolina Viggiano expressed her opposition, stating that the reform allows the use of the Guardia Nacional for money laundering investigations without proper Ministerial Public control or judicial supervision. She warned that military personnel could monitor suspicious accounts without an ongoing investigation.
Viggiano also pointed out that the changes consider organizations of civil society, such as those maintaining asylums, orphanages, and food banks, as vulnerable entities subject to excessive administrative burdens.
PAN’s Guadalupe Murguía agreed with the reform’s objective but raised concerns about potential violations of personal rights, privacy, property, bank secrecy, and the presumption of innocence.
Key Aspects of the Reform
Javier Corral, president of the Justice Commission, explained that the amendment broadens the current law’s scope to explicitly include preventing terrorism financing and reinforcing the obligation to identify the controlling beneficiary, ensuring transparency about who truly controls or benefits from operations.
The reform updates crucial definitions, such as “business relationship,” and expands the list of vulnerable activities to include real estate development, virtual assets, and trusts. It also clarifies notaries’ and public officers’ obligations in anti-money laundering efforts.
The reform adopts a risk-based approach, differentiating regulatory burdens based on real risk levels. It introduces simplified measures for low-risk sectors like certain non-profit organizations and public entities, as well as specific rules and automated monitoring systems for politically exposed persons.
Moreover, the reform enhances compliance systems by requiring staff training, high-risk entity audits, automated monitoring systems implementation, and electronic reporting of suspicious operations management, including unfinished ones.
The reform also strengthens inter-institutional cooperation and the sanction regime, recognizing the Unidad de Inteligencia Financiera (UIF) through the Secretaría de Hacienda y Crédito Público (SHCP) as a victim in financial crimes. It introduces penal responsibility for legal entities, adjusts the use of the Unidad de Medida y Actualización (UMA) for thresholds and sanctions, and eliminates specific intent in certain conducts to prevent impunity without affecting those acting in good faith.
Next Steps
The approved decreto has been forwarded to the Permanent Commission’s Mesa Directiva in the Congress of the Union for scheduling its discussion and voting during the upcoming extraordinary session of the Congress of the Union, expected to take place next week.
