Recent Senatorial Reforms to Strengthen Anti-Money Laundering Measures
The Mexican Senate has recently discussed and approved a series of amendments to the Federal Law for the Prevention and Identification of Operations with Illicitly-Obtained Funds and the Federal Penal Code, aiming to reinforce the legal framework for combating money laundering in the country. While we support the spirit of these reforms, it is crucial to analyze their implications and risks, especially in the context of existing sanctions against Mexican financial institutions by the United States and the need for legal certainty.
The Role of Elisa de Anda Madrazo
These reforms aim to expand the authorities’ powers and align the regulatory framework with international standards set by the Group of Action Financial International (GAFI). Notably, GAFI is currently presided by a distinguished Mexican, Elisa de Anda Madrazo, whose exceptional career has been instrumental in these efforts.
Necessary Measures with Potential Risks
As a legislator for six consecutive years, I firmly believe that these measures are necessary. However, good intentions do not always guarantee effective legislation, as there are still risks that need to be addressed.
The Absence of “Financing Terrorism” Mention
The primary concern is the Senators’ decision to remove any mention of “financing terrorism,” deeming it unnecessary and redundant. Money laundering refers to the introduction of illicit funds into the financial system, while “financing terrorism” involves the exit of these resources for use by criminal organizations.
The expertise required to address the exit of resources from the financial system for illicit activities differs significantly from traditional anti-money laundering measures. The Senators’ decision seems contradictory, as the United States is implementing stricter measures to target criminal organizations related to drug trafficking, now labeled as “terrorists.”
This omission from the law may lead financial institutions to overlook these risks in their compliance manuals, leaving them more vulnerable to orders from the Department of the Treasury, similar to recent instances.
Professionalization and Audits
On a positive note, the reforms include changes related to professionalization and audits. These involve implementing processes for personnel selection, mandatory annual training programs for directors, board members, compliance officers, and employees directly involved with clients or users. Additionally, new electronic systems for registration and vulnerable activities, guidelines, regulations, and manuals are to be implemented within a year of approval.
Additional Measures for Enhanced Protection
While these reforms bring Mexico closer to international standards, further measures are required to detect and prevent financing schemes related to fentanyl trafficking and chemical precursor acquisition, avoiding sanctions from our northern neighbor.
Given the U.S. designation of Mexico as a “hostile country,” UNIFIMEX will intensify efforts to professionalize its members and maintain open dialogue with regulatory authorities and legislators. This collaboration aims to propose clearer criteria, consistent rules, and effective mechanisms for a robust, committed, and modern Mexican financial system.
Key Questions and Answers
- What are the recent reforms to the anti-money laundering law in Mexico? The Mexican Senate approved amendments to the Federal Law for the Prevention and Identification of Operations with Illicitly-Obtained Funds and the Federal Penal Code, aligning the country’s regulatory framework with international standards set by GAFI.
- Who is Elisa de Anda Madrazo, and why is she relevant? Elisa de Anda Madrazo is a distinguished Mexican who currently presides over GAFI. Her leadership has been instrumental in shaping international anti-money laundering efforts.
- What concerns have been raised about the reforms? Critics argue that removing the “financing terrorism” mention from the law may leave financial institutions vulnerable to risks, as they might not adequately address these concerns in their compliance manuals.
- What positive changes have been implemented? The reforms include measures for professionalization and audits, such as mandatory annual training programs and new electronic systems for registration and vulnerable activities.
- What additional measures are needed to protect Mexican financial institutions? Given the U.S. sanctions and designation of Mexico as a “hostile country,” further measures are required to detect and prevent financing schemes related to fentanyl trafficking and chemical precursor acquisition.
