Mexico improves in 6 recommendations after combating money laundering


As a result of Mexico's progress in strengthening its measures to combat money laundering and terrorist financing since its evaluation of the country's framework, the Financial Action Task Force (FATF) upgraded six out of seven recommendations that the country's financial authorities requested to be reclassified.

The intergovernmental body -which seeks to develop policies to combat money laundering and terrorist financing- resolved that Mexico improved in the recommendations on non-profit organizations, customer due diligence, politically exposed persons, new technologies, wire transfers, and reliance on third parties.

The only item with no progress was FATF recommendation 18, which deals with internal controls and affiliates and subsidiaries. In total, the organization promotes 40 recommendations to countries to prevent money laundering and terrorist financing; in the 2018 evaluation, Mexico fully complied with only five.

Last December, the country -through the Financial Intelligence Unit (UIF)- asked FATF to reclassify seven recommendations that the body that develops policies to help combat money laundering and terrorist financing had left as "partially compliant".

The day before, with the approval of Mexico's Third Enhanced Follow-Up Report with a request for reclassification of those seven recommendations, FATF determined that it was possible to reclassify six of them, half to "compliant" and the rest to "largely compliant".

The agency determined that the country is fully compliant with recommendations 12 on politically exposed persons, given that -among other measures- it expanded the list of occupations considered in that classification, to adjust it to FATF criteria, and introduced requirements for insurance and bonding companies in relation to life insurance policies for those subjects.

It also considered full compliance in the area of wire transfers -which is recommendation 16- given that the lack of requirements in relation to beneficiary information, the absence of information on procedures to determine when to exercise, reject or suspend a wire transfer without the required information, or to identify occasional clients that transfer Mexican pesos.

At the same time, recommendation 17 regarding reliance on third parties was reclassified as "compliant", given that it addressed the lack of requirements for all financial institutions to report on the countries in which a third party may rely and the lack of comprehensive requirements to ensure that the third party is regulated and supervised for compliance.

Regarding the rest that was reclassified as "mostly complied with", the delay in the Mexican Congress to approve the anti-money laundering law. This was the case with recommendation 8 on non-profit organizations, as well as with recommendations 10 and 15, respectively, on customer due diligence and new technologies.

It was also confirmed that Mexico complies with the new requirements of the recommendations that were recently modified, so the ratings remain unchanged 2 in cooperation and national coordination as "mostly compliant", 7 in targeted financial sanctions as "compliant" and 21 in disclosure and confidentiality as "mostly compliant".