Mexico

Sanctions

No

FATF AML Deficient List

No

Higher Risk

US Dept of State Money Laundering Assessment 
Corruption Index (Transparency International & W.G.I.)
International Narcotics Control Majors List
Not on EU White list equivalent jurisdictions

Medium Risk

World Governance Indicators (Average Score)

Failed States Index (Political Issues)(Average Score)

Non - Compliance with FATF 40 Recommendations

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ANTI-MONEY LAUNDERING

 

FATF Status

Mexico is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Mexico was undertaken by the Financial Action Task Force (FATF) in 2017. According to that Evaluation, Mexico was deemed Compliant for 5 and Largely Compliant for 19 of the FATF 40 Recommendations.

 

 

 

US Department of State Money Laundering assessment (INCSR)

Mexico is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

 

OVERVIEW

 

Illicit actors launder billions of dollars of drug trafficking proceeds through the Mexican financial system annually.  Corruption, bulk cash smuggling, kidnapping, extortion, fuel theft, intellectual property rights violations, fraud, human smuggling, and trafficking in persons and firearms serve as sources of additional funds laundered through Mexico.  Mexican authorities have had some success investigating and blocking accounts of suspected money launderers and other illicit actors but have shown extremely limited progress in successfully prosecuting money laundering and other financial crimes.  Two Supreme Court rulings in 2017 will temporarily slow and complicate investigations into illicit financial activities.  

 

Money laundering offenses continue as the government struggles to prosecute financial crimes and seize known illicit property and assets.  To increase the number of illicit finance convictions, the government needs to combat corruption, improve its judicial capacity, and reform cumbersome asset forfeiture laws. 

 

 

 

SANCTIONS

There are no international sanctions currently in force against this country.

 

BRIBERY & CORRUPTION

 

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           28

World Governance Indicator – Control of Corruption             16

Corruption is a significant risk for companies operating in Mexico. Bribery is widespread in the country's judiciary and police, and business registration processes, including getting construction permits and licenses, are negatively influenced by corruption. Organized crime continues to be a very problematic factor for business, imposing large costs on companies. Collusion between the police, judges and criminal groups is extensive, leading to widespread crime, theft, impunity and weak law enforcement. The petroleum industry is dominated by the state-owned oil company Pemex, which has been the subject of several high-profile corruption cases. Gifts and hospitality are not forbidden by law and may be permissible, depending on intent. Attempted bribery, extortion, abuse of office, bribery of foreign public officials and facilitation are criminalized under Mexico's Federal Penal Code (Código Penal Federal, in Spanish). However, Mexico's anti-corruption laws are almost never enforced, and public officials are rarely held liable for illegal acts. For further information - GAN Integrity Business Anti-Corruption Portal

 

ECONOMY

Mexico's $2.2 trillion economy has become increasingly oriented toward manufacturing in the 22 years since the North American Free Trade Agreement (NAFTA) entered into force. Per capita income is roughly one-third that of the US; income distribution remains highly unequal.

 

Mexico has become the US' second-largest export market and third-largest source of imports. In 2014, two-way trade in goods and services exceeded $590 billion. Mexico has free trade agreements with 46 countries, putting more than 90% of trade under free trade agreements. In 2012, Mexico formally joined the Trans-Pacific Partnership negotiations and formed the Pacific Alliance with Peru, Colombia, and Chile.

 

Mexico's current government, led by President Enrique PENA NIETO, emphasized economic reforms during its first two years in office, passing and implementing sweeping education, energy, financial, fiscal, and telecommunications reform legislation, among others, with the long-term aim to improve competitiveness and economic growth across the Mexican economy. Mexico began holding public auctions of exploration and development rights to select oil and gas resources in 2015 as a part of reforms that allow for private investment in the oil, gas, and electricity sectors. The second and third auctions demonstrated the capacity for the Mexican Government to adapt and improve the terms of the contracts to garner sufficient interest from investors amid low oil prices.

 

Although the economy experienced stronger growth in 2014-15 as a result of increased investment and stronger demand for Mexican exports, growth is predicted to remain below potential given falling oil production, weak oil prices, structural issues such as low productivity, high inequality, a large informal sector employing over half of the workforce, weak rule of law, and corruption. Over the medium-term, the economy is vulnerable to global economic pressures, such as lower external demand, rising interest rates, and low oil prices - approximately 20% of government revenue comes from the state-owned oil company, PEMEX. The increasing integration of supply chains, development of energy sectors, and government-to-government focus on trade facilitation will continue to make the North American region increasingly competitive and contribute to Mexican economic development and strength.

 

Agriculture - products:

corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products

 

Industries:

food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism

 

Exports - commodities:

manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton

 

Exports - partners:

US 81.1% (2015)

 

Imports - commodities:

metalworking machines, steel mill products, agricultural machinery, electrical equipment, automobile parts for assembly and repair, aircraft, aircraft parts

 

Imports - partners:

US 47.3%, China 17.7%, Japan 4.4% (2015)

Investment Climate  -  US State Department

Mexico is one of the United States' top strategic partners for trade and investment in the world.

 

Over the past three years, as part of a broad multiparty political pact, the government of Mexico (GoM) has undertaken significant reforms regarding financial regulations, taxation, anti-trust, energy, and telecommunications. In 2014 and 2015, the GoM implemented a number of constitutional amendments intended to encourage foreign investment, enhance competition, as well as increase the country’s tax base. Despite the government’s projections for economic growth exceeding 3 percent, according to the GoM’s statistics, Mexico achieved GDP growth rates of 2.1 and 2.5 percent in 2014 and 2015 respectively.

 

The most significant recent changes in Mexico’s investment outlook have taken place in the energy and telecommunications sectors. Prior to constitutional reform, the state-controlled oil company, Pemex, had a monopoly on all hydrocarbon activity in the country. New legislation has opened this sector by allowing Pemex to partner with domestic and international private sector firms, and some of the country’s oil fields are now being opened to outside exploration and development. In telecommunications, reforms are intended to improve competition and diminish concentration in the sector through the creation of a new, constitutionally autonomous regulator. This regulator is empowered to order divestitures, enforce regulations, and apply targeted sanctions to companies it sees as dominant in the market.

 

 

Country Links

Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros

Comisión Nacional Bancaria y de Valores

Bank of Mexico

Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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