Mexican suspicious transaction reporting: legislation
| Date | 01 October 2003 |
| DOI | https://doi.org/10.1108/13685200310809644 |
| Published date | 01 October 2003 |
| Pages | 331-336 |
| Author | Antonio Herrera Vargas,James Backhouse |
| Subject Matter | Accounting & finance |
Mexican Suspicious Transaction
Reporting: Legislation
Antonio Herrera Vargas and James Backhouse
INTRODUCTION
The phenomenon of money laundering has its origins
in the early 1930s, in organised criminal activities and
the practice of tax evasion.
1
It has evolved since then
and has now reached a high level of complexity
although the three stages of the process
2
Ð place-
ment, layering, and integration
3
Ð provide a simpli-
®ed view. In Mexico, money laundering arises
mainly from two illegal activities, drug tracking
and tax evasion, and thrives because of the strategic
geographical location near to the USA. Even
though drug tracking and tax evasion are old pro-
blems, it was not until late in 1989 when the Mexican
legislation targeted money laundering per se as a pre-
dicate oence in its Fiscal Code of the Federation
(CFF Ð Codigo Fiscal de la Federacion).
This marked the starting point of the Mexican
anti-money laundering legislation and demonstrated
Mexico's will to respond to international concerns
4
and eorts to control such oences. Despite the intro-
duction of statutory oences in Mexico, there have
been few convictions
5
although there are numerous
cases under investigation.
6
This situation is not pecu-
liar to Mexico, as most governments avoid trumpet-
ing statistical data about their eectiveness. On a
global scale there is a clear understanding that regula-
tions implemented to counter money laundering
activities have not kept pace with the advances of
technology and global economic integration, which
has underscored the weaknesses in legal systems and
the failure of international cooperation to convict
launderers.
MEXICAN LEGISLATION
As in many other countries, the Mexican anti-money
laundering regime was borne out of international
pressures. It was introduced even before the Italian
anti-money laundering law of 1991.
7
Moreover,
Mexico is considered as one of the top 20 centres of
laundered money,
8
and this fact forced the govern-
ment to allocate resources in the global ®ght against
launderers. Thus, on 13th November, 1989, the
money laundering oence referred to in terms of
`illegal proceeds' was included in Art. 115 bis of the
Fiscal Code. This Article was published on 28th
December, 1989 in the Ocial Diary of the Federa-
tion (DOF Ð Diario O® cial de la Federacion),
9
and
came into force on 1st January, 1990. At that time
the oence of money laundering was considered by
the Mexican government to be mainly economic,
and hence deemed to be covered by the Fiscal
Code.
Mexico further strengthened its anti-money laun-
dering regime when the Secretariat of Finance and
Public Credit (SHCP Ð Secretaria de Hacienda y
Cre
Âdito Publico) took powers to supervise the ®nancial
system.
10
The SHCP leads the prevention and detec-
tion of money laundering activities by dictating
norms and regulations that ®nancial institutions
have to comply with. In so doing, the SHCP relies
on the opinion of the National Banking and Securi-
ties Commission (CNBV Ð Comision Nacional
Bancaria y de Valores),
11
and National Commission
of Fines and Insurance (CNSF Ð Comision Nacional
de Seguros y Fianzas).
12
In the same reform, sanctions
were established for employees of ®nancial institu-
tions who fail to apply such regulations.
Recognising the wider social and political agenda
beyond the economic issues of money laundering,
in March 1996, the President of the United Mexican
States introduced further reforms to the Penal Code,
incorporating the money laundering oence in a
penal framework rather than in the Fiscal Code.
Four main reforms are relevant to the prevention
and control of money laundering, which are the
basis of today's Mexican anti-money laundering
regime. These reforms were published by decree in
the DOF on 13th May, 1996.
13
One reform repealed Art. 115 bis from the CFF,
while a second added a new Article, 400 bis, to the
Mexican Penal Code.
14
Additionally, Art. 400 bis
increased the range of penalties.
15
This reform
demonstrates the determination of the Mexican
Government to satisfy international concerns in rela-
tion to its handling of the money laundering phe-
nomenon. A third reform gave the oence set out
in Art. 194 of the Penal and Penal Procedure Codes
Page 331
Journal of Money Laundering Control Ð Vol. 6 No. 4
Journalof Money Laundering Control
Vol.6, No. 4, 2003, pp. 331± 336
#HenryStewart Publications
ISSN1368-5201
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