|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
There are currently over 90 low-tax jurisdictions on Mexico's
blacklist. Mexican resident companies and individuals are taxable
on their worldwide income, including most undistributed income
from investments in those named jurisdictions.
____________________________________________________
US State Department Money Laundering Report - 2012:
Mexico is a major drug-producing and drug-transit country.
Proceeds from the illicit drug trade leaving the United States are
the principal source of funds laundered through the Mexican
financial system. Other significant sources of laundered proceeds
include corruption, kidnapping, and trafficking in firearms and
persons. Sophisticated and well-organized drug trafficking
organizations based in Mexico take advantage of the extensive U.
S.-Mexico border, the large flow of legitimate remittances, and the
high volume of legal commerce to conceal transfers to Mexico.
The smuggling of bulk shipments of U.S. currency into Mexico and
the repatriation of the funds into the United States via couriers,
armored vehicles, and wire transfers remain favored methods for
laundering drug proceeds. The combination of a sophisticated
financial sector and a large cash-based informal sector
complicates the problem. According to U.S. authorities, drug
trafficking organizations send between $19 and $39 billion
annually to Mexico from the United States, although the
Government of Mexico (GOM) disputes this figure. Mexico has
seized over $500 million in bulk currency shipments since 2002.
For additional information focusing on terrorism financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All crimes
Legal persons covered: criminally: NO civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks, mutual savings companies,
insurance companies, securities brokers, retirement and
investment funds, financial leasing and factoring funds, casas de
cambio, centros cambiarios (unlicensed foreign exchange
centers), savings and loans institutions, money remitters,
SOFOMES (multiple purpose corporate entity), SOFOLES (limited
purpose corporate entity), and general deposit warehouses
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 36,040 - January
through September 2011
Number of CTRs received and time frame: 4.1 million - January
through September 2011
STR covered entities: Banks, mutual savings companies,
insurance companies, securities brokers, retirement and
investment funds, financial leasing and factoring funds, casas de
cambio, centros cambiarios (unlicensed foreign exchange
centers), savings and loans institutions, money remitters,
SOFOMES (multiple purpose corporate entity), SOFOLES (limited
purpose corporate entity), and general deposit warehouses
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 54 from January to October 2011
Convictions: 13 from January to July 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Mexico is a member of the Financial Action Task Force (FATF)
and the Financial Action Task Force on Money Laundering in
South America (GAFISUD), a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.fatf-gafi.
org/document/20/0,3343,
en_32250379_32236963_41911956_1_1_1_1,00.html
Enforcement and implementation issues and comments:
The GOM has taken some important steps to reduce the use of
cash in the economy and prevent the laundering of illicit drugs
proceeds in U.S. dollars (USD); however, the package of bills
submitted in August 2010 to further enhance anti-money
laundering regulations remains in limbo in the Mexican Congress.
In June 2010, the Finance Ministry implemented regulations
imposing limits on USD transactions in Mexico. The caps, which
later were eased for border areas, are applicable to cash
transactions from dollars to pesos, including deposits, credit
payments, and service fees. In addition to limiting transaction
amounts for individuals, all USD transactions are prohibited by the
regulation for corporate entities and trusts (including account and
non-account holding entities), except for those which are
accountholders located in border or tourist areas, for which
transactions are limited. The impact of the restrictions has been
dramatic, with USD cash repatriation to the U.S. from the Mexican
formal financial sector dropping by 50%, or $7 billion. The new
destination for the USD cash no longer entering the Mexican
financial system remains an open question. Recent data does not
support the hypothesis that the flows would be redirected to
Central America and/or the Caribbean. U.S. and Mexican
authorities have agreed to continue studying the flow of U.S.
currency.
In 2010, the GOM announced the National Strategy for the
Prevention and Elimination of Money Laundering and Financing
for Terrorism. On April 14, 2011, the Federal Executive sent to
Congress a Bill of Decree by which the Federal Criminal Code and
the Federal Criminal Procedures Code are to be amended. The
bill includes a modification to the Federal Criminal Code in order to
expressly establish that a legal person is liable for any money
laundering/terrorist financing crimes, among others, committed by
any of its legal representatives acting on its behalf. The bill is
currently under review by the Senate. The government also
submitted a federal law for the Prevention and Identification of
Transactions with Criminal Proceeds, which was approved by the
Senate on April 28, 2011, and is currently under review by the
Congress. The bill includes, among other important aspects,
restrictions on the use of cash in certain transactions (i.e., real
estate, jewelry, precious stones and metals, games and lotteries,
accounting and legal services).
On August 3, 2011, amendments were issued to the General Law
of Auxiliary Credit Organizations and Activities to establish the
National Banking and Securities Commission (CNBV) as the
supervisory authority for AML/CFT with regard to centros
cambiarios, money remitters and non-regulated SOFOMES. This
authority will be transferred from the Tax Administration System
(SAT) to CNBV. The change was made in recognition that the
broad experience of CNBV on AML/CFT issues and its risk-based
approach to supervision will allow for better oversight of these
entities. The amendment provides for a transition period of 240
days. The existing centros cambiarios and money remitters that
registered prior to August 4, 2011, or that requested their
registration prior to November 1, 2011, may continue with their
operations if SAT approves their registration. If the registration is
denied, they must suspend their operations. Any new centros
cambiarios or money remitters which did not request registration
prior to November 1, 2011 are prohibited from initiating
operations until receipt of confirmation of registration by SAT.
After March 30, 2012, all requests for registration shall be
reviewed by CNBV. The general rule establishes that centros
cambiaros may only provide the services of buying, selling or
exchanging currency, within certain company formation
restrictions and with prior authorization from the Ministry of
Finance and Public Credit. An exception to the need for prior
authorization is established for centros cambiarios that provide
the aforementioned services and do not exceed the threshold of
$10,000 per client per day.
In 2011, the GOM also issued a number of AML/CFT regulations
covering financial entities; specifically: General Provisions
applicable to Auxiliary Credit Organizations (issued on 5/31/11);
General Provisions applicable to SOFOLES (issued on 3/17/11);
and General Provisions applicable to SOFOMES (issued on
3/17/11). These regulations strengthen reporting requirements
and expand the range of entities covered under AML/CFT
provisions. The regulations represent concrete steps forward,
though until the final passage by the Senate of the 2010 package
of anti-money laundering bills Mexico’s regulatory framework will
remain incomplete.
Mexico should amend its terrorist financing legislation to fully
comport with the UN Convention for the Suppression of the
Financing of Terrorism; and enact legislation and procedures to
freeze without delay terrorist assets of those designated by the
UN 1267 Sanctions Committee.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Mexico is both a major transit and source country for illicit drugs
reaching the United States. Approximately 95 percent of the
cocaine flow to the United States transits the Mexico-Central
America corridor from its origins in South America. Mexico
continues to aggressively combat drug trafficking, apprehending
key transnational criminal organization (TCO) leaders and
associates and seizing narcotics, weapons, and bulk cash. The
Government of Mexico’s effort to capture or kill TCO leadership
has resulted in multiple fractured organizations that fight over
lucrative trade routes and seek to intimidate or control
communities by killing or torturing security personnel, journalists,
and government officials.
As government successes continue to affect the TCO’s narcotics-
driven profits and drain their resources, they are increasingly
turning to traditional criminal activities such as kidnapping,
extortion, trafficking-in-persons, and domestic retail drug sales. As
of October 2011, Mexico was on track to surpass 13,000 drug-
related murders for the year, a 20 percent rise over the 11,583
committed in 2010. Notable declines in violence in the city of
Ciudad Juarez were countered by increases in the states of
Nuevo Leon, Tamaulipas, Veracruz, and Guerrero.
Mexico is also a major supplier of heroin, marijuana, and
methamphetamine to the United States. Mexico is also a source
and destination for money laundering activity and the U.S.
Attorney General estimates that 64,000 of the 94,000 weapons
recovered in Mexico over the last five years were traced from
origins in the United States. Complementing the Government of
Mexico’s effort, Merida Initiative implementation accelerated in
calendar year 2011 with major deliveries of equipment and
training of just over $500 million dollars to help transform Mexico’s
judicial and security institutions.
Mexico is party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Mexico is a large source, transit, and destination country for men,
women, and children subjected to sex trafficking and forced labor.
Groups considered most vulnerable to human trafficking in Mexico
include women, children, indigenous persons, and undocumented
migrants. Mexican women, girls, and boys from poor rural areas
are subjected to sexual servitude within the United States and
Mexico, lured by fraudulent employment opportunities or
deceptive offers of romantic relationships, including marriage.
Mexican trafficking victims also are subjected to conditions of
forced labor in agriculture, domestic service, construction, and
street begging, in both the United States and Mexico. During
2010, the majority of trafficking victims identified within Mexico
were from Chiapas, Veracruz, Puebla, Oaxaca, and Tlaxcala. The
municipality of Tenancingo in Tlaxcala state was identified as a
major source for Mexican sex trafficking victims exploited within
Mexico and in the United States. In some parts of the country,
public fear of criminal organizations impedes the ability of the
government and civil society to effectively combat trafficking.
According to official and civil society sources, the vast majority of
foreign victims in forced labor and sexual servitude in Mexico are
from Central America, particularly Guatemala, Honduras, and El
Salvador; many transit Mexico en route to the United States and,
to a lesser extent, Canada and Western Europe. However,
trafficking victims from South America, the Caribbean, Eastern
Europe, Asia, and Africa also are found in Mexico, and some
transit the country en route to the United States. Unaccompanied
Central American minors, traveling through Mexico to meet family
members in the United States, fall victim to human traffickers,
particularly near the Guatemalan border. Mexican men and boys
from southern Mexico are found in conditions of forced labor in
northern Mexico, and Central Americans, especially Guatemalans,
are subjected to forced labor in southern Mexico, particularly in
agriculture. Child sex tourism continues to grow in Mexico,
especially in tourist areas such as Acapulco and Cancun, and in
northern border cities like Tijuana and Ciudad Juarez. Most child
sex tourists are from the United States, Canada, and Western
Europe, although some are Mexican citizens. In addition to
Mexican drug cartels, organized crime networks from around the
world are reportedly involved in human trafficking in Mexico.
The Government of Mexico does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. During the reporting period,
Mexican authorities increased anti-trafficking law enforcement
efforts, achieved the first conviction and sentence for forced labor
in the country, and adopted new protocols for the treatment of
foreign victims. The Mexican Congress passed a national anti-
trafficking action plan and designated $4.2 million in funding to
implement the plan. Given the magnitude of Mexico’s trafficking
problem, however, the number of human trafficking investigations,
prosecutions, convictions, and sentences remained low, and
government funding for victim services remained inadequate.
While Mexican officials recognize human trafficking as a serious
problem, NGOs and government representatives report that some
local law enforcement officials tolerate and are sometimes
complicit in trafficking, impeding implementation of anti-trafficking
statutes.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Mexican government remained vigilant against
domestic and international terrorist threats and continued its
efforts to disrupt and dismantle the transnational criminal
organizations responsible for unprecedented drug-trafficking-
related violence. It worked with its neighbors to increase control of
its northern and southern borders. No known international
terrorist organization had an operational presence in Mexico and
no terrorist group targeted U.S. interests and personnel in or from
Mexican territory. There was no evidence of ties between Mexican
criminal organizations and terrorist groups, nor that the criminal
organizations had aims of political or territorial control, aside from
seeking to protect and expand the impunity with which they
conduct their criminal activity.
2010 Terrorist Incidents: The Animal Liberation Front claimed
responsibility for using propane and gasoline-based bombs to
cause property damage at banks and commercial sites in Mexico
City. Police arrested several alleged members. The People's
Revolutionary Army (EPR), which has resorted to violence in the
past, threatened to reemploy violent measures to force a
response to its demands for a government investigation into the
disappearance of two of its members.
Legislation and Law Enforcement: Mexican security forces
improved their operational effectiveness, information sharing, and
interagency coordination as part of a government-wide campaign
to combat organized crime, reduce violence, and prevent
terrorism. As part of this effort, the United States supported the
Mexican government’s efforts by providing training to Mexican
federal law enforcement and security agencies, and promoting
interagency law enforcement cooperation at the federal and state
levels. President Calderon proposed legislation to clarify national
security roles and responsibilities, streamline control of non-
federal police forces, and prevent money laundering and terrorist
financing. Although these efforts were primarily aimed at
organized crime groups, they also supported government
preparedness against domestic or international terrorism. The
Mexican government has nearly doubled spending on public and
national security over the past four years.
The United States and Mexico worked closely to address border
security challenges along Mexico's southern and northern
borders. U.S. Homeland Security Secretary Napolitano signed
arrangements with Mexican Interior and Public Security
departments to share information about transnational threats;
promote law enforcement information and intelligence sharing;
produce joint strategic plans; deploy enhanced airport screening
technologies; and strengthen passenger information sharing. On
the U.S.-Mexico border, officials increased coordination of patrols
and inspections and improved communications across the border.
U.S. and Mexican officials also improved cooperation on
investigations of aliens who may raise terrorism concerns. Mexico
implemented biometric controls and other measures to reduce
smuggling on its border with Guatemala and Belize.
Countering Terrorist Finance: There was no indication that
terrorist organizations used Mexico as a conduit for illicit activities.
Nevertheless, Mexico's limited capacity to counter money
laundering suggested a potential vulnerability. In order to counter
the illegal movement of funds, Mexican financial institutions are
required to follow international standards advocated by the
Financial Action Task Force, of which Mexico holds the 2010-2011
presidency. Furthermore, Mexican financial institutions are
required to follow the Law of Credit Institutions, as ordered by the
Mexican Treasury and supervised by the National Bank and
Securities Commission. This law requires banks to consult
international and country lists of individuals involved in terrorism
or other illicit activities and submit a suspicious activities report
within 24 hours to the Mexican Department of Treasury's Financial
Intelligence Unit on the activities of any individual on that list.
Regional and International Cooperation: As 2009-2010 chair of
the Inter-American Committee Against Terrorism, Mexico worked
to strengthen the capacities of OAS member countries to prevent
terrorism by promoting consultation and by strengthening border
controls. Mexico signed the Beijing Convention on the
Suppression of Unlawful Acts Relating to International Civil
Aviation and the Beijing Protocol to the Convention for the
Suppression of Unlawful Seizure of Aircraft at the conclusion of an
International Civil Aviation Organization diplomatic conference in
September.
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
There are currently over 90 low-tax jurisdictions on Mexico's
blacklist. Mexican resident companies and individuals are taxable
on their worldwide income, including most undistributed income
from investments in those named jurisdictions.
____________________________________________________
US State Department Money Laundering Report - 2012:
Mexico is a major drug-producing and drug-transit country.
Proceeds from the illicit drug trade leaving the United States are
the principal source of funds laundered through the Mexican
financial system. Other significant sources of laundered proceeds
include corruption, kidnapping, and trafficking in firearms and
persons. Sophisticated and well-organized drug trafficking
organizations based in Mexico take advantage of the extensive U.
S.-Mexico border, the large flow of legitimate remittances, and the
high volume of legal commerce to conceal transfers to Mexico.
The smuggling of bulk shipments of U.S. currency into Mexico and
the repatriation of the funds into the United States via couriers,
armored vehicles, and wire transfers remain favored methods for
laundering drug proceeds. The combination of a sophisticated
financial sector and a large cash-based informal sector
complicates the problem. According to U.S. authorities, drug
trafficking organizations send between $19 and $39 billion
annually to Mexico from the United States, although the
Government of Mexico (GOM) disputes this figure. Mexico has
seized over $500 million in bulk currency shipments since 2002.
For additional information focusing on terrorism financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All crimes
Legal persons covered: criminally: NO civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks, mutual savings companies,
insurance companies, securities brokers, retirement and
investment funds, financial leasing and factoring funds, casas de
cambio, centros cambiarios (unlicensed foreign exchange
centers), savings and loans institutions, money remitters,
SOFOMES (multiple purpose corporate entity), SOFOLES (limited
purpose corporate entity), and general deposit warehouses
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 36,040 - January
through September 2011
Number of CTRs received and time frame: 4.1 million - January
through September 2011
STR covered entities: Banks, mutual savings companies,
insurance companies, securities brokers, retirement and
investment funds, financial leasing and factoring funds, casas de
cambio, centros cambiarios (unlicensed foreign exchange
centers), savings and loans institutions, money remitters,
SOFOMES (multiple purpose corporate entity), SOFOLES (limited
purpose corporate entity), and general deposit warehouses
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 54 from January to October 2011
Convictions: 13 from January to July 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Mexico is a member of the Financial Action Task Force (FATF)
and the Financial Action Task Force on Money Laundering in
South America (GAFISUD), a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.fatf-gafi.
org/document/20/0,3343,
en_32250379_32236963_41911956_1_1_1_1,00.html
Enforcement and implementation issues and comments:
The GOM has taken some important steps to reduce the use of
cash in the economy and prevent the laundering of illicit drugs
proceeds in U.S. dollars (USD); however, the package of bills
submitted in August 2010 to further enhance anti-money
laundering regulations remains in limbo in the Mexican Congress.
In June 2010, the Finance Ministry implemented regulations
imposing limits on USD transactions in Mexico. The caps, which
later were eased for border areas, are applicable to cash
transactions from dollars to pesos, including deposits, credit
payments, and service fees. In addition to limiting transaction
amounts for individuals, all USD transactions are prohibited by the
regulation for corporate entities and trusts (including account and
non-account holding entities), except for those which are
accountholders located in border or tourist areas, for which
transactions are limited. The impact of the restrictions has been
dramatic, with USD cash repatriation to the U.S. from the Mexican
formal financial sector dropping by 50%, or $7 billion. The new
destination for the USD cash no longer entering the Mexican
financial system remains an open question. Recent data does not
support the hypothesis that the flows would be redirected to
Central America and/or the Caribbean. U.S. and Mexican
authorities have agreed to continue studying the flow of U.S.
currency.
In 2010, the GOM announced the National Strategy for the
Prevention and Elimination of Money Laundering and Financing
for Terrorism. On April 14, 2011, the Federal Executive sent to
Congress a Bill of Decree by which the Federal Criminal Code and
the Federal Criminal Procedures Code are to be amended. The
bill includes a modification to the Federal Criminal Code in order to
expressly establish that a legal person is liable for any money
laundering/terrorist financing crimes, among others, committed by
any of its legal representatives acting on its behalf. The bill is
currently under review by the Senate. The government also
submitted a federal law for the Prevention and Identification of
Transactions with Criminal Proceeds, which was approved by the
Senate on April 28, 2011, and is currently under review by the
Congress. The bill includes, among other important aspects,
restrictions on the use of cash in certain transactions (i.e., real
estate, jewelry, precious stones and metals, games and lotteries,
accounting and legal services).
On August 3, 2011, amendments were issued to the General Law
of Auxiliary Credit Organizations and Activities to establish the
National Banking and Securities Commission (CNBV) as the
supervisory authority for AML/CFT with regard to centros
cambiarios, money remitters and non-regulated SOFOMES. This
authority will be transferred from the Tax Administration System
(SAT) to CNBV. The change was made in recognition that the
broad experience of CNBV on AML/CFT issues and its risk-based
approach to supervision will allow for better oversight of these
entities. The amendment provides for a transition period of 240
days. The existing centros cambiarios and money remitters that
registered prior to August 4, 2011, or that requested their
registration prior to November 1, 2011, may continue with their
operations if SAT approves their registration. If the registration is
denied, they must suspend their operations. Any new centros
cambiarios or money remitters which did not request registration
prior to November 1, 2011 are prohibited from initiating
operations until receipt of confirmation of registration by SAT.
After March 30, 2012, all requests for registration shall be
reviewed by CNBV. The general rule establishes that centros
cambiaros may only provide the services of buying, selling or
exchanging currency, within certain company formation
restrictions and with prior authorization from the Ministry of
Finance and Public Credit. An exception to the need for prior
authorization is established for centros cambiarios that provide
the aforementioned services and do not exceed the threshold of
$10,000 per client per day.
In 2011, the GOM also issued a number of AML/CFT regulations
covering financial entities; specifically: General Provisions
applicable to Auxiliary Credit Organizations (issued on 5/31/11);
General Provisions applicable to SOFOLES (issued on 3/17/11);
and General Provisions applicable to SOFOMES (issued on
3/17/11). These regulations strengthen reporting requirements
and expand the range of entities covered under AML/CFT
provisions. The regulations represent concrete steps forward,
though until the final passage by the Senate of the 2010 package
of anti-money laundering bills Mexico’s regulatory framework will
remain incomplete.
Mexico should amend its terrorist financing legislation to fully
comport with the UN Convention for the Suppression of the
Financing of Terrorism; and enact legislation and procedures to
freeze without delay terrorist assets of those designated by the
UN 1267 Sanctions Committee.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Mexico is both a major transit and source country for illicit drugs
reaching the United States. Approximately 95 percent of the
cocaine flow to the United States transits the Mexico-Central
America corridor from its origins in South America. Mexico
continues to aggressively combat drug trafficking, apprehending
key transnational criminal organization (TCO) leaders and
associates and seizing narcotics, weapons, and bulk cash. The
Government of Mexico’s effort to capture or kill TCO leadership
has resulted in multiple fractured organizations that fight over
lucrative trade routes and seek to intimidate or control
communities by killing or torturing security personnel, journalists,
and government officials.
As government successes continue to affect the TCO’s narcotics-
driven profits and drain their resources, they are increasingly
turning to traditional criminal activities such as kidnapping,
extortion, trafficking-in-persons, and domestic retail drug sales. As
of October 2011, Mexico was on track to surpass 13,000 drug-
related murders for the year, a 20 percent rise over the 11,583
committed in 2010. Notable declines in violence in the city of
Ciudad Juarez were countered by increases in the states of
Nuevo Leon, Tamaulipas, Veracruz, and Guerrero.
Mexico is also a major supplier of heroin, marijuana, and
methamphetamine to the United States. Mexico is also a source
and destination for money laundering activity and the U.S.
Attorney General estimates that 64,000 of the 94,000 weapons
recovered in Mexico over the last five years were traced from
origins in the United States. Complementing the Government of
Mexico’s effort, Merida Initiative implementation accelerated in
calendar year 2011 with major deliveries of equipment and
training of just over $500 million dollars to help transform Mexico’s
judicial and security institutions.
Mexico is party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Mexico is a large source, transit, and destination country for men,
women, and children subjected to sex trafficking and forced labor.
Groups considered most vulnerable to human trafficking in Mexico
include women, children, indigenous persons, and undocumented
migrants. Mexican women, girls, and boys from poor rural areas
are subjected to sexual servitude within the United States and
Mexico, lured by fraudulent employment opportunities or
deceptive offers of romantic relationships, including marriage.
Mexican trafficking victims also are subjected to conditions of
forced labor in agriculture, domestic service, construction, and
street begging, in both the United States and Mexico. During
2010, the majority of trafficking victims identified within Mexico
were from Chiapas, Veracruz, Puebla, Oaxaca, and Tlaxcala. The
municipality of Tenancingo in Tlaxcala state was identified as a
major source for Mexican sex trafficking victims exploited within
Mexico and in the United States. In some parts of the country,
public fear of criminal organizations impedes the ability of the
government and civil society to effectively combat trafficking.
According to official and civil society sources, the vast majority of
foreign victims in forced labor and sexual servitude in Mexico are
from Central America, particularly Guatemala, Honduras, and El
Salvador; many transit Mexico en route to the United States and,
to a lesser extent, Canada and Western Europe. However,
trafficking victims from South America, the Caribbean, Eastern
Europe, Asia, and Africa also are found in Mexico, and some
transit the country en route to the United States. Unaccompanied
Central American minors, traveling through Mexico to meet family
members in the United States, fall victim to human traffickers,
particularly near the Guatemalan border. Mexican men and boys
from southern Mexico are found in conditions of forced labor in
northern Mexico, and Central Americans, especially Guatemalans,
are subjected to forced labor in southern Mexico, particularly in
agriculture. Child sex tourism continues to grow in Mexico,
especially in tourist areas such as Acapulco and Cancun, and in
northern border cities like Tijuana and Ciudad Juarez. Most child
sex tourists are from the United States, Canada, and Western
Europe, although some are Mexican citizens. In addition to
Mexican drug cartels, organized crime networks from around the
world are reportedly involved in human trafficking in Mexico.
The Government of Mexico does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. During the reporting period,
Mexican authorities increased anti-trafficking law enforcement
efforts, achieved the first conviction and sentence for forced labor
in the country, and adopted new protocols for the treatment of
foreign victims. The Mexican Congress passed a national anti-
trafficking action plan and designated $4.2 million in funding to
implement the plan. Given the magnitude of Mexico’s trafficking
problem, however, the number of human trafficking investigations,
prosecutions, convictions, and sentences remained low, and
government funding for victim services remained inadequate.
While Mexican officials recognize human trafficking as a serious
problem, NGOs and government representatives report that some
local law enforcement officials tolerate and are sometimes
complicit in trafficking, impeding implementation of anti-trafficking
statutes.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Mexican government remained vigilant against
domestic and international terrorist threats and continued its
efforts to disrupt and dismantle the transnational criminal
organizations responsible for unprecedented drug-trafficking-
related violence. It worked with its neighbors to increase control of
its northern and southern borders. No known international
terrorist organization had an operational presence in Mexico and
no terrorist group targeted U.S. interests and personnel in or from
Mexican territory. There was no evidence of ties between Mexican
criminal organizations and terrorist groups, nor that the criminal
organizations had aims of political or territorial control, aside from
seeking to protect and expand the impunity with which they
conduct their criminal activity.
2010 Terrorist Incidents: The Animal Liberation Front claimed
responsibility for using propane and gasoline-based bombs to
cause property damage at banks and commercial sites in Mexico
City. Police arrested several alleged members. The People's
Revolutionary Army (EPR), which has resorted to violence in the
past, threatened to reemploy violent measures to force a
response to its demands for a government investigation into the
disappearance of two of its members.
Legislation and Law Enforcement: Mexican security forces
improved their operational effectiveness, information sharing, and
interagency coordination as part of a government-wide campaign
to combat organized crime, reduce violence, and prevent
terrorism. As part of this effort, the United States supported the
Mexican government’s efforts by providing training to Mexican
federal law enforcement and security agencies, and promoting
interagency law enforcement cooperation at the federal and state
levels. President Calderon proposed legislation to clarify national
security roles and responsibilities, streamline control of non-
federal police forces, and prevent money laundering and terrorist
financing. Although these efforts were primarily aimed at
organized crime groups, they also supported government
preparedness against domestic or international terrorism. The
Mexican government has nearly doubled spending on public and
national security over the past four years.
The United States and Mexico worked closely to address border
security challenges along Mexico's southern and northern
borders. U.S. Homeland Security Secretary Napolitano signed
arrangements with Mexican Interior and Public Security
departments to share information about transnational threats;
promote law enforcement information and intelligence sharing;
produce joint strategic plans; deploy enhanced airport screening
technologies; and strengthen passenger information sharing. On
the U.S.-Mexico border, officials increased coordination of patrols
and inspections and improved communications across the border.
U.S. and Mexican officials also improved cooperation on
investigations of aliens who may raise terrorism concerns. Mexico
implemented biometric controls and other measures to reduce
smuggling on its border with Guatemala and Belize.
Countering Terrorist Finance: There was no indication that
terrorist organizations used Mexico as a conduit for illicit activities.
Nevertheless, Mexico's limited capacity to counter money
laundering suggested a potential vulnerability. In order to counter
the illegal movement of funds, Mexican financial institutions are
required to follow international standards advocated by the
Financial Action Task Force, of which Mexico holds the 2010-2011
presidency. Furthermore, Mexican financial institutions are
required to follow the Law of Credit Institutions, as ordered by the
Mexican Treasury and supervised by the National Bank and
Securities Commission. This law requires banks to consult
international and country lists of individuals involved in terrorism
or other illicit activities and submit a suspicious activities report
within 24 hours to the Mexican Department of Treasury's Financial
Intelligence Unit on the activities of any individual on that list.
Regional and International Cooperation: As 2009-2010 chair of
the Inter-American Committee Against Terrorism, Mexico worked
to strengthen the capacities of OAS member countries to prevent
terrorism by promoting consultation and by strengthening border
controls. Mexico signed the Beijing Convention on the
Suppression of Unlawful Acts Relating to International Civil
Aviation and the Beijing Protocol to the Convention for the
Suppression of Unlawful Seizure of Aircraft at the conclusion of an
International Civil Aviation Organization diplomatic conference in
September.
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
AML Information extracted from IMF Report - Mexico:Detailed Assessment of Observance of Basel Core Principles
March 2012
Main findings since the last 2006 BCP assessment Improvements have
been made in several areas as reported by the country to GAFISUD.
New secondary instructions have been issued in 2011 for exchange
centers (centros cambiarios), remittances and unregulated Sofomes
(Sociedades Financieras de Objeto Multiple). There are, however,
significant challenges ahead for AML efforts in Mexico. Banks’ internal
AML/CFT systems require further improvement, particularly in relation
to the detection and reporting of suspicious transactions, particularly
for small banks. Casas de cambios and many of Mexico’s “nonbank
banks’ known as Sofomes and Sofoles (Sociedades Financieras de
Objeto Limitado) are a matter of concern. Unregulated Sofomes, which
can launch operations without the authorization and supervision of
Mexican authorities, have faced increasing criticism and accusations of
questionable practices, including money laundering.
The applicable financial regulatory laws provide the CNBV with
comprehensive powers of supervision, including enforcement powers
for noncompliance with AML obligations. In 2007, CNBV developed a
new organization to increase the effectiveness of its supervisory
activities, by creating a dedicated department (Direccion General de
Prevencion de Operaciones Illicitas-DGPOI) responsible for AML/CFT
oversight, in addition to the existing on-site and off-site capacity of the
other prudential units. Integration of DGPOI within the overall
architecture of the CNBV was reinforced in 2009 by the upgrading of
the department into a Vice Presidency (Vice Presidencia de
Supervision de Procesos Preventivos-VSPP) comprising DGPORPI and
DGAAA.
As a result, AML/CFT has been given the same prominence as the
other VPs, but with limited resources. With only 13 dedicated on-site
inspectors, the assessors expressed serious concern about the
capacity of the VPSPP to properly oversee more than 430 entities,
including 41 banks. Most importantly, the upcoming transfer of hundreds
of new entities under VPSPP surveillance without any concomitant
transfer of resources may jeopardize CNBV capacity and create a
reputational risk.
In terms of processes, the supervision of banks is organized along
functional lines under various Vice Presidencies. To avoid duplication
of effort or gaps in surveillance, mechanisms of cooperation and
exchange of information have been established. VPSPP staff
participate in general integrated inspections but also they conduct
separate on-site visits, independently of the prudential areas. This
arrangement helps to increase expertise and cross-fertilization between
units.
With the technical assistance of the IMF, significant efforts have been
made to harmonize on-site work (through the creation of new manuals
and tools- bitacora-) and promote a more risk based approach. A Risk
Matrix for AML/CFT has also been conceived but is not yet fully
implemented. Only 15 banks out of 41 have been rated so far and the
risk mapping for the entire banking sector will not be completed before
March 2012. Off-site surveillance has also been strengthened, but
reporting mechanisms have not been completed yet.
The assessors reviewed several on-site examination reports, including
for international active banks in Mexico. The content appeared very
detailed and thorough. In addition, the assessors found evidence that
CNBV inspectors usually follow up on corrective measures undertaken
by the bank since the last visit. Also, on-site work is based on the
analysis of a sample of transactions. Furthermore, CNBV inspectors
verify the overall quality of STRs sent to the FIU. However,
mprovements are needed to better align on-site work with off-site
surveillance and promote a consolidated supervision for AML/CFT.
On the enforcement front, the credibility of AML policies and
procedures is generally measured by the number of convictions and
the amount of frozen or seized crimerelated assets. In the 2009
assessment report, GAFISUD judged Mexican AML efforts as low
relative to sanctions, convictions, and seizures. In 2011, BCP assessors
have not seen any notable improvement in this regard. Sanctions from
the CNBV have been used on a small scale and appear neither
proportionate nor dissuasive. Only fines have been applied to banks
and these have been relatively small, particularly for the
larger institutions. The assessors were told that CNBV is about to hand
over “exemplary” sanctions against one bank and a securities firm.
Due to the relative importance of ML risks in the Mexican system,
especially from drug trafficking and organized crime related offenses,
little attention has been given to terrorist financing. Prudential
surveillance in banks has mainly focused on compliance with AML
obligations. More attention to the surveillance of TF activities through
horizontal and thematic inspections would be desirable, although TF
has not been identified as posing a particular threat.
Click here to read full report
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
 | Click here to link to all FATF Reports |
AML Information extracted from IMF Report - Mexico:
March 2012
Main findings since the last 2006 BCP assessment Improvements have
been made in several areas as reported by the country to GAFISUD.
New secondary instructions have been issued in 2011 for exchange
centers (centros cambiarios), remittances and unregulated Sofomes
(Sociedades Financieras de Objeto Multiple). There are, however,
significant challenges ahead for AML efforts in Mexico. Banks’ internal
AML/CFT systems require further improvement, particularly in relation
to the detection and reporting of suspicious transactions, particularly
for small banks. Casas de cambios and many of Mexico’s “nonbank
banks’ known as Sofomes and Sofoles (Sociedades Financieras de
Objeto Limitado) are a matter of concern. Unregulated Sofomes, which
can launch operations without the authorization and supervision of
Mexican authorities, have faced increasing criticism and accusations of
questionable practices, including money laundering.
The applicable financial regulatory laws provide the CNBV with
comprehensive powers of supervision, including enforcement powers
for noncompliance with AML obligations. In 2007, CNBV developed a
new organization to increase the effectiveness of its supervisory
activities, by creating a dedicated department (Direccion General de
Prevencion de Operaciones Illicitas-DGPOI) responsible for AML/CFT
oversight, in addition to the existing on-site and off-site capacity of the
other prudential units. Integration of DGPOI within the overall
architecture of the CNBV was reinforced in 2009 by the upgrading of
the department into a Vice Presidency (Vice Presidencia de
Supervision de Procesos Preventivos-VSPP) comprising DGPORPI and
DGAAA.
As a result, AML/CFT has been given the same prominence as the
other VPs, but with limited resources. With only 13 dedicated on-site
inspectors, the assessors expressed serious concern about the
capacity of the VPSPP to properly oversee more than 430 entities,
including 41 banks. Most importantly, the upcoming transfer of hundreds
of new entities under VPSPP surveillance without any concomitant
transfer of resources may jeopardize CNBV capacity and create a
reputational risk.
In terms of processes, the supervision of banks is organized along
functional lines under various Vice Presidencies. To avoid duplication
of effort or gaps in surveillance, mechanisms of cooperation and
exchange of information have been established. VPSPP staff
participate in general integrated inspections but also they conduct
separate on-site visits, independently of the prudential areas. This
arrangement helps to increase expertise and cross-fertilization between
units.
With the technical assistance of the IMF, significant efforts have been
made to harmonize on-site work (through the creation of new manuals
and tools- bitacora-) and promote a more risk based approach. A Risk
Matrix for AML/CFT has also been conceived but is not yet fully
implemented. Only 15 banks out of 41 have been rated so far and the
risk mapping for the entire banking sector will not be completed before
March 2012. Off-site surveillance has also been strengthened, but
reporting mechanisms have not been completed yet.
The assessors reviewed several on-site examination reports, including
for international active banks in Mexico. The content appeared very
detailed and thorough. In addition, the assessors found evidence that
CNBV inspectors usually follow up on corrective measures undertaken
by the bank since the last visit. Also, on-site work is based on the
analysis of a sample of transactions. Furthermore, CNBV inspectors
verify the overall quality of STRs sent to the FIU. However,
mprovements are needed to better align on-site work with off-site
surveillance and promote a consolidated supervision for AML/CFT.
On the enforcement front, the credibility of AML policies and
procedures is generally measured by the number of convictions and
the amount of frozen or seized crimerelated assets. In the 2009
assessment report, GAFISUD judged Mexican AML efforts as low
relative to sanctions, convictions, and seizures. In 2011, BCP assessors
have not seen any notable improvement in this regard. Sanctions from
the CNBV have been used on a small scale and appear neither
proportionate nor dissuasive. Only fines have been applied to banks
and these have been relatively small, particularly for the
larger institutions. The assessors were told that CNBV is about to hand
over “exemplary” sanctions against one bank and a securities firm.
Due to the relative importance of ML risks in the Mexican system,
especially from drug trafficking and organized crime related offenses,
little attention has been given to terrorist financing. Prudential
surveillance in banks has mainly focused on compliance with AML
obligations. More attention to the surveillance of TF activities through
horizontal and thematic inspections would be desirable, although TF
has not been identified as posing a particular threat.
Click here to read full report
| MEXICO |
| KnowYourCountry |
|
________________________________________________________
AML News / Updates
June 21, 2010 - FinCEN issues Advisory on Newly Released Mexican
Regulations Imposing Restrictions on Mexican Banks for Transactions
in U.S. Currency
Read More.......
Links:
Worldwide AML Legislation (International Bar Association)
Unidad de Inteligencia Financiera (UIF)
Financial Intelligence Unit
AML News / Updates
June 21, 2010 - FinCEN issues Advisory on Newly Released Mexican
Regulations Imposing Restrictions on Mexican Banks for Transactions
in U.S. Currency
Read More.......
Links:
Worldwide AML Legislation (International Bar Association)
Unidad de Inteligencia Financiera (UIF)
Financial Intelligence Unit
|
| Last Updated: 16 April 2012 |