07 / 21 / 25
Implications of the Reform to the Federal Law for the Prevention and Identification of Transactions Involving Resources of Illicit Origin
MEXICO CITY, MEXICO, July 21st, 2025 – On July 17, 2025, the reform to the Federal Law for the Prevention and Identification of Transactions Involving Resources of Illicit Origin was published in the Official Gazette of the Federation.
The Federal Law for the Prevention and Identification of Transactions Involving Resources of Illicit Origin (the “AML Law”) aims to prevent and combat crimes associated with money laundering and terrorism financing in Mexico. Enacted in 2012, the AML Law seeks to protect the financial system and the national economy through restrictions on high-value cash transactions, identification of clients and “suspicious” transactions, mandatory reports to authorities, and coordination of inter-agency efforts.
Since 2017, Mexico has received various observations and recommendations to strengthen its legal framework for the prevention of money laundering and terrorism financing, particularly in preparation for an upcoming evaluation later in 2025. Therefore, the Mexican Congress recently approved a reform to the AML Law, which was published in the Federal Official Gazette (Diario Oficial de la Federación) on July 17, 2025, in line with international standards, particularly with the recommendations issued by the Financial Action Task Force (FATF). This reform expands the scope of regulated and obligated sectors, and introduces new, more specific and rigorous guidelines and obligations, to provide greater security to transactions conducted within the country. In general terms, the main aspects introduced by the reform are as follows:
- New activities classified as “vulnerable”:
- The reception of funds for real estate projects intended for sale or lease.
- Exchanges of virtual assets with Mexican nationals in foreign jurisdictions.
- The dispatch of goods without the assistance of customs agencies.
- Additional obligations for those performing vulnerable activities:
- Carry out assessments to identify and mitigate risks, in accordance with the new guidelines.
- Undergo mandatory annual training programs for board members, executives, and employees who interact with clients.
- Implement automated mechanisms for the continuous monitoring of transactions with clients, enabling enhanced due diligence for clients or users identified as Politically Exposed Persons or high-risk individuals.
- Conduct annual audits: internal audits in cases of low or medium risk, and external audits when high risk is identified.
- Maintain supporting information and documents relating to the vulnerable activity and client identification for 10 years, instead of 5.
- If a “suspicious” transaction is detected, even if not completed, it must be reported to the authorities within the next 24 hours.
- Controlling Beneficiary. The reform refines the definition of “beneficial owner”, lowering the ownership threshold for being considered as such, now by holding 25% or more of the share capital, as opposed to the previous 50%. Also, it includes a dedicated chapter on the subject, particularly targeting business corporations and trusts. The authority has the authority to conduct inspections or request information from companies to verify compliance with the AML Law in this regard.
As a result of the reform, a greater number of transactions and sectors are now classified as high-risk and, therefore, are subject to a stricter regulation. This affects all entities or individuals required to comply with the AML Law, such as real estate developers and investors, tax-exempt organizations (donatarias autorizadas), lenders, institutions issuing credit, financial services, or prepaid cards, real estate brokers, notaries public, commercial brokers, and, in general, any individual or legal entity engaged in vulnerable activities as defined by the AML Law. In cases of non-compliance with the obligations established by the AML Law, severe sanctions could be imposed, such as significant fines, temporary suspension of operations, and even criminal liability; therefore, it is essential for those engaged in vulnerable activities to review their internal processes, train their staff, and update their compliance policies to meet the new legal requirements.
At SMPS Legal, S.C., we are committed to providing preventive, not just reactive, legal advice: reviewing contracts, properly structuring businesses, designing internal policy manuals to protect clients, and provide a solid defense against increasingly stringent inspections. Rather than viewing this reform as an obstacle, we see this reform as a valuable opportunity for our clients to strengthen their operations with higher standards of transparency and resilience, aligning with international practices that are now essential for accessing and competing in new markets. We view this change as a natural step toward a more robust compliance culture which, when properly managed, not only reduces legal risks but also builds trust and competitiveness for every client that complies with the new regulations. new legislation. The SMPS Legal team is at your disposal for any questions or comments regarding this notice.