Mexico

1. Does Mexico have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes, both criminal offences are defined, respectively, in articles 400 Bis and 139 Quáter of the Federal Criminal Code ( “FCC”).

2. To whom does the legislation apply?

The criminal offence of money laundering can be committed by both individuals and legal entities, whereas terrorist financing can only be committed by individuals.

3. What does the legislation prohibit?

Regarding terrorist financing, it is prohibited to provide or collect funds or any kind of resources to finance or support individuals or terrorist groups’ activities; or to be used in the commission of specified crimes, in the Mexican territory or abroad.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

In the case of money laundering, it is prohibited to (i) acquire, sell, manage, guard, possess, deposit, withdraw or receive regardless of the purpose; (ii) transfer, invest or transport, within Mexican territory or to a foreign country, resources, assets or goods of any kind, and being aware that these proceeds arise from an illicit activity, as well as the hiding or concealment of the origin, destination, location or ownership of them and being aware that these proceeds arise from an illicit activity.

Underlying criminal activity does not need to be proven. The FCC provides a rebuttable legal presumption that the resources, goods or assets arise as a result of an illicit activity when there are reasonable grounds to conclude this or there are profits of a crime and their rightful origin cannot be proven.

5. What level of intent or knowledge is required to establish a violation?

The defendant will need to be aware of the illicit origin.

6. What are the potential penalties for infringing the legislation?

For terrorist financing, the penalty of imprisonment can be imposed from 15 to 40 years and 400 to 1,200 days fine (a day fine is the convicted individual or legal entity’s net income when the crime was committed, considering all the income). For money laundering, the penalty of imprisonment is from five to 15 years and a fine of 1,000 to 5,000 days.

The penalties that can be imposed to legal entities are: the suspension of activities, closure of establishments and premises, restriction to carry out the commercial activity in which the crime was committed, judicial intervention, temporary disqualification in public tenders and the fines previously mentioned.

7. Does the legislation have extra-territorial reach?

The provisions contained in the FCC apply when the crime is started, prepared, or executed abroad and has effects within Mexico. When the crime is started, prepared or executed abroad and, a relevant treaty applies, the defendant shall be extradited to or judged in Mexico. For this to apply, the following circumstances must be met: the defendant is in Mexico, the conduct is considered as a crime in Mexico and in the country in which the crime was executed, and the defendant has not been tried in that country.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes. Pursuant to the Federal Law to Prevent and Identify Money Laundering (hereinafter “Anti-Money Laundering Law”), when the activities provided in article 17 are carried out (namely “Vulnerable Activities”), a report shall be submitted on the 17th day of the following month since the activity was carried out. Article 32 establishes the cases in which it is prohibited to pay with cash or precious metals.

9. What are the potential penalties for failing to comply with these obligations?

Fines range from 200 to 65,000 times the minimum daily wage. In case of a failure to comply with the provisions of articles 17 and 32 of the Anti-Money Laundering Law, the fine can be the 10% of the transaction or 65,000 times the minimum daily wage, whichever is higher.

10. Who are the relevant enforcement authorities in Mexico and what are their contact details?