Strengthening Regulations Based on GAFI Recommendations
Héctor Santana Suárez, head of the Securities, Pensions, and Social Security Unit at Mexico’s Ministry of Finance, announced that new regulations to combat money laundering in Administrators of Retirement Funds (Afores) will be completed by August. These regulations aim to strengthen existing measures and incorporate recommendations from the Group of Action Financial (GAFI), an international organization setting standards to fight money laundering.
A Fortification of Existing Regulations
Julio César Cervantes, president of the National Commission for the Retirement Savings System (Consar), explained that these new regulations are merely an enhancement of the current framework to improve money laundering control.
Guillermo Zamarripa, president of the Mexican Association of Afores (Amafore), echoed this sentiment, stating that the updates are necessary due to outdated rules.
Zamarripa clarified that these new regulations are unrelated to recent cases involving CI Banco, Intercam, and Vector Casa de Bolsa, which were flagged by the US Department of Treasury for money laundering related to opioid trafficking.
Low Exposure of Afores to Money Laundering
Cervantes asserted that the Retirement Savings System (SAR) is significantly less exposed to money laundering compared to the broader financial system. This is primarily because most contributions are collected through the Social Security system, ensuring comprehensive documentation and traceability.
“The SAR maintains an electronic record with fingerprints, photos of workers, and complete employment histories. This makes it the safest sector regarding money laundering,” Cervantes emphasized.
Potential Risks Within Afores
Despite the low exposure, Zamarripa acknowledged potential risks within Afores, particularly in voluntary savings of substantial amounts. He highlighted that such cases are limited since only 8% of Afore participants claim to engage in voluntary savings.
Key Questions and Answers
- What are these new regulations about? The new regulations aim to strengthen existing measures against money laundering in Afores, aligning with GAFI recommendations.
- Who is responsible for these regulations? The Mexican Ministry of Finance, through Héctor Santana Suárez and with support from Consar and Amafore, is leading this initiative.
- Why are these regulations necessary? The current rules are outdated, and these updates aim to improve money laundering control within Afores.
- Are these regulations related to recent money laundering cases? No, these new regulations are unrelated to the CI Banco, Intercam, and Vector Casa de Bolsa cases.
- Why is SAR less exposed to money laundering? SAR’s reliance on Social Security contributions ensures comprehensive documentation and traceability, making it less vulnerable to money laundering.
- What are the potential risks within Afores? Zamarripa identified voluntary savings of substantial amounts as a potential risk, though he noted that such cases are limited.
