Coming into force: The new Federal Law for the Prevention and Identification of Transactions with Funds from Illegal Sources (the "Law") was published by the Ministry of Finance on October 17, 2012, and comes into effect today, July 17, 2013.
Objectives: The Law is intended to enhance coordination between the various responsible government authorities and to provide clear guidelines for those parties in the financial and other relevant sectors engaged in “vulnerable activities”, i.e., those most likely to be acting as facilitators for money laundering activities.
Actions to consider
Report vulnerable activities: The Law lays down a number of measures and procedures to prevent and detect acts or transactions involving funds from illegal sources, chief among which, the identification and prevention of certain activities, known as “vulnerable activities”. To this end, certain persons are now required to identify and report acts or transactions linked with activities that may be vulnerable to use by organized crime for its money laundering processes.
As such, the Law imposes the obligation to report certain kinds of transactions, such as payments in cash in amounts equal to or greater to certain thresholds.
Restrict cash transactions: The Law also restricts the use of cash in certain transactions associated with high-value assets, to prevent organized crime from placing a high volume of cash from its criminal activity into the formal economy, as well as limiting, to the extent possible, the performance of money laundering activities protected by the anonymity that cash transactions provide.
Additional authority of the MFPC: The Law empowers the Ministry of Finance and Public Credit ("Hacienda") to oversee and enforce this regime and to follow up on the information received from other agencies in Mexico and abroad. For these purposes, the Law establishes better mechanisms for coordination between Hacienda and the competent authorities. The Law seeks to regulate the coordination between Hacienda and the police and enforcement agencies responsible for coordinating the prevention, investigation and prosecution of crimes, utilizing certain mechanisms to ensure the proper handling of information without compromising criminal investigations. The information collected by Hacienda through application of the Law may be of great use to different kinds of authorities, such as (a) the Public Prosecutor (Ministerio Público), and (b) the agencies responsible for fighting corruption.
Regulations to the Law: The Federal Executive Power will issue the Regulations to this Law within the next thirty days of its coming into force. We will maintain you informed of the publication thereof.