Anti-Money Laundering Law

Over a month ago, the Federal law to  Prevent and Identify Operations with  Resources of Illicit origin (commonly  called Anti-Money Laundering Act) took effect. We have noticed a minimal publicizing, however according to an analysis performed by our firm, we believe that this law may have significant impact on yourbusiness if not implemented on time the necessary measures to comply with each of the obligations.
According to the text of that law, its main purpose is the prevention and detection of operations involving illegal proceeds, there is a particular emphasis on the fact that if the original resources are illicit then a tax fraud has been committed. 

This Act applies throughout the country, holds to individuals and companies any people (including public notaries) involved in some activities that the law named vulnerable activities. 

Vulnerable activities 

Following are some of the operations that the law considers as vulnerable and due to its recurrence and type of operation The Act recognizes these resources could be involved in illegal proceeds: 

a.    Operations performed by financial institutions (banks, trusts, etc.) 

b.   Gambling or betting games, contests, and sweepstakes. 

c.    Transactions through credit cards and electronic purses provided by merchants. 

d.   Loans granted, with or without guarantee. 

e.   Precious metals trade.

f.    Construction investment services or Real estate development. 

g.    Merchandising and distribution of vehicles. 

h.   The provision of professional services on behalf of the client where they make Real estate transactions, bank account management, capital contributions, among others. 

i.   Reception of donations to associations or nonprofit organizations.                                                        

j.   Administration and handlingof resources, valuables or any other assets of its customers. 

k.   Public notaries, in relation to real estate transactions, awarding a power of attorney (irrevocable), constitution and modifications of companies and / or trusts. 

l.    Public corridors, conducting appraisals, incorporation of partnerships. 

m.  Customs broker services related to vehicles, machines for games, jewelry, and more. 

We place special emphasis on items e., to m., where under our opinion we believe that these items could be immersed in your business and therefore to perform these types of operations youwould be required to comply with this new arrangement. 

Obligations that must be met 

Within the main obligations that people will have who performs the above activities are: 

     a.   For transactions over certain amounts established on the Law, to identify their clients / users, getting and validating information on them and their activity as well as maintain such documentation for a period of 5 years. 

     b.   Submitting notices to the Treasury, for every transaction they perform, that is in addition to the identification to be performed as outlined under item a., (Limit of amounts apply). 

      c.   To allow visits by the authorities according to the guidelines of the law 

Implications for non-compliance 

Failure to comply fully with the above obligationswill result in fines up to imprisonment according to the following: 

-      Fines range from $ 12,000 to $ 120,000 pesos for those who do not perform the identification of their clients and / or submit any appropriate notice.

-       In the case of, notaries and brokers the fine can reach $ 600,000 pesos. 

-      It is considered to a crime, for any person who provides false information and will be subject to a penalty of 2-8 years in prison in addition to the corresponding fine. 

Concluding Remarks

It is of significant importance to point out that one of the main obstacles to overcome in order to comply with this new law, will be to convince our customers to provide information about them, as well as the controls that must be established for the custody and safekeeping of such information.

Finally, we mention that the first notices must be submitted no later than October 17 of this year.  Due to the short term to meet this deadline, and to mark the potential impact that this may have on your business, we invite you to check if your activity and / or operations are in one of the categories mentioned above. Therefore, we are at your service to provide further information about it and in such a case advise you on the implementation of the necessary measures, so you may avoid any unnecessary costs and impacts. 


"That article may be contrary to the interpretation of the tax authorities


CPA  Gabriela Rojas

Terán Rojas & Associates