FATF AML Deficiency List
US Dept of State Money Laundering assessment
International Narcotics Control Majors List
Corruption Index (Transparency International & W.G.I.)
Non - Compliance with FATF MER Recommendations
World Governance Indicators (Average Score)
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 Follow-up 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 2021. According to that Evaluation, Mexico was deemed Compliant for 8 and Largely Compliant for 22 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 4 of the Effectiveness & Technical Compliance ratings.
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.
Billions of dollars of drug trafficking proceeds are laundered 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 are additional sources of laundered funds. Authorities have had some success investigating and freezing accounts of suspected launderers, but have shown extremely limited progress in successfully prosecuting financial crimes. Two Supreme Court rulings in 2017 curbed the authority of the Financial Intelligence Unit (UIF) and the Federal Prosecutor General’s office (FGR), complicating Mexico’s ability to counter illicit financial activities. As a result, Mexican authorities now must rely on international requests for assistance or judicial seizure orders obtained by FGR to freeze accounts.
Money laundering activity continues as the government struggles to prosecute financial crimes and seize illicit assets. To increase the number of money laundering convictions, the government needs to combat corruption and improve investigative and prosecutorial capacity. To this end, the FGR completed a protocol on conducting parallel financial investigations in 2018. New legislation passed in 2019 promises to strengthen the Mexican authorities’ ability to use asset forfeiture as a tool to combat money laundering and transnational organized crime.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 31
World Governance Indicator – Control of Corruption 23
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
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
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.
Other Useful Links