Mexico\u2019s anti-money laundering framework imposes mandatory obligations on a broad range of business activities. Foreign companies and their advisors operating in Mexico often discover they are subject to these obligations only after a regulatory inquiry begins. Understanding the framework before you operate\u2014and building compliance into your business structure\u2014is far less costly than responding to a UIF investigation.<\/p>\n\n\n\n
The Ley Federal para la Prevenci\u00f3n e Identificaci\u00f3n de Operaciones con Recursos de Procedencia Il\u00edcita (LFPIORPI), commonly called the anti-money laundering law, is the primary AML statute for non-financial businesses in Mexico. It was enacted in 2012, and its implementing regulations have been refined several times since. The law is administered by the Unidad de Inteligencia Financiera (UIF), which operates under the Secretar\u00eda de Hacienda y Cr\u00e9dito P\u00fablico (Ministry of Finance).<\/p>\n\n\n\n
Financial institutions (banks, exchange houses, and insurance companies) operate under separate AML frameworks supervised by the CNBV and the CNSF. LFPIORPI covers the non-financial sector\u2014what the FATF calls “Designated Non-Financial Businesses and Professions” (DNFBPs).<\/p>\n\n\n\n
The LFPIORPI establishes a defined list of \u201cvulnerable activities.\u201d Any person or entity that performs these activities professionally or habitually becomes an \u201cobligated person\u201d with compliance obligations under the law. The list includes:<\/p>\n\n\n\n
Every obligated person must implement four core obligations:<\/p>\n\n\n\n
Before establishing a business relationship or executing a transaction, the obligated person must identify and verify the client\u2019s identity. For individuals: government-issued ID, RFC, CURP, address, and information about the origin of funds. For legal entities: notarial deed, RFC, list of shareholders or partners (and their individual ID documents), and identification of the beneficial owner (the natural person who ultimately owns or controls the entity\u2014the \u201cUBO\u201d).<\/p>\n\n\n\n
The UBO identification requirement is particularly important for foreign-owned structures. A chain of holding companies does not obscure the obligation\u2014you must identify the natural person at the top of the ownership chain.<\/p>\n\n\n\n
When a transaction reaches or exceeds the applicable monetary threshold, the obligated person must file a notice with the UIF. Reporting thresholds vary by activity type:<\/p>\n\n\n\n
Notices are filed through the UIF\u2019s IUSE electronic portal. The filing deadline is the 17th business day of the month following the transaction. Cash transactions above the threshold in any covered activity must be reported regardless of the client\u2019s KYC status.<\/p>\n\n\n\n
Certain activities trigger reporting obligations even below the monetary threshold\u2014these are called \u201cvulnerable activities without a threshold\u201d and include any transaction where the professional suspects money laundering, regardless of amount.<\/p>\n\n\n\n
All client identification documents, transaction records, and UIF filings must be retained for five years<\/strong> from the date of the transaction. The records must be maintained in a format accessible to the UIF for inspection.<\/p>\n\n\n\n Entities with significant transaction volume must appoint a compliance officer responsible for overseeing the AML program, training employees, filing notices, and serving as the primary contact with the UIF. The compliance officer must be registered with the UIF.<\/p>\n\n\n\n The Unidad de Inteligencia Financiera receives and analyzes financial intelligence reports from financial institutions and LFPIORPI-obligated persons. When the UIF develops grounds to suspect that assets are proceeds of crime, it can issue a \u201cblocking order\u201d (lista negra) that freezes the assets of suspected persons\u2014a power it has used increasingly aggressively in recent years. The UIF works in coordination with the Fiscalia General de la Republica (FGR) on criminal prosecution.<\/p>\n\n\n\n Money laundering is criminalized under Article 400 Bis of the C\u00f3digo Penal Federal. The offense covers acquiring, possessing, using, converting, or transferring resources knowing or having reason to know they are proceeds of unlawful activity. The penalty is imprisonment of 5 to 15 years and a fine of up to 50,000 days of minimum wage.<\/p>\n\n\n\n Criminal liability extends to legal persons (companies) as well as individuals. Directors and officers who knew of or facilitated money laundering through the company can face personal criminal prosecution.<\/p>\n\n\n\n Real estate transactions and corporate work are two areas where LFPIORPI compliance and legal services intersect most directly. A real estate attorney advising a foreign buyer on a coastal property acquisition is performing a vulnerable activity. A corporate attorney helping a client incorporate a company or transfer shares is performing a vulnerable activity. These professionals must fulfill their own LFPIORPI obligations\u2014including KYC on their clients\u2014before providing the service.<\/p>\n\n\n\n For foreign buyers and investors, this means that your Mexican attorney will ask for documents that may seem like intrusive due diligence. This is not optional. The attorney is fulfilling a legal obligation, and providing false or incomplete information to satisfy a KYC request is itself a criminal risk.<\/p>\n\n\n\n An effective LFPIORPI compliance program for an obligated entity includes a written AML policy document, a client identification and verification procedure, a documented risk classification for clients and transactions (higher risk = enhanced due diligence), a notice-filing calendar, a record retention system, and annual training for all relevant personnel.<\/p>\n\n\n\n For multinationals whose Mexican entities perform vulnerable activities, the AML compliance program should align with the parent\u2019s global AML framework while meeting all Mexican-specific requirements.<\/p>\n\n\n\n4. Appointing a Compliance Officer<\/strong><\/h3>\n\n\n\n
The UIF and its enforcement role<\/strong><\/h2>\n\n\n\n
Criminal liability: C\u00f3digo Penal Federal Art. 400 Bis<\/strong><\/h2>\n\n\n\n
AML in real estate and corporate transactions<\/strong><\/h2>\n\n\n\n
Building a compliance program<\/strong><\/h2>\n\n\n\n
Frequently asked questions<\/strong><\/h2>\n\n\n\n