03 / 20 / 22
Amendment to the Law of Credit Institutions
MEXICO CITY, MEXICO, March 23rd, 2022 – On March 11, 2022, an amendment to the Law of Credit Institutions (Ley de Instituciones de Crédito) was enacted, which grants the Financial Intelligence Unit (Unidad de Inteligencia Financiera) the authority to include an individual or entity to the list of blocked individuals when there is sufficient evidence that the individual or entity, or the transaction in question, is related to financing terrorism crimes or transactions with illegal resources.
Prior to the amendment to the Law of Credit Institutions published on March 11 of this year, the Financial Intelligence Unit (FIU) already had authority to supervise banking transactions that were relevant, unusual or concerning. This obligation derives from the obligation contained in the Thirty-Fourth, Thirty-Sixth and Thirty-Eighth General Provisions of Article 115 of the Law of Credit Institutions (the “General Provisions”), which contains the financial institutions’ obligation to report such transactions to the National Banking and Securities Commission (Comisión Nacional Bancaria de Valores) and the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público).
In addition to the above, as a result of the Amendment, the FIU has been granted authority to act not only as a result of reports submitted by the financial institutions, but also to take preventive action against individual or entities when FIU considers that there is sufficient evidence that such individual or entity carried out transactions possibly related to or associated with financing of terrorism crimes or transactions with illegal resources.
As a consequence of the foregoing, and based on amendment to the Law, FIU has been authorized to include such individuals or entities in the list of blocked individuals issued by the Ministry of Finance and Public Credit (the “Block List”). When an individual or entity is included in the Block List, all financial institutions are bound to immediately suspend any act, operation or service to any such individual or entity.
Regretfully the Law and the General Provisions fail to establish the parameters that FIU needs to consider for a transaction or operation to have “sufficient indication”, since, according to the interpretation of the Amendment, this authority to take preventive action is not subject to the prior report to which the financing institutions are bound, nor does it establish in which cases or circumstances are the individuals or entities involved in certain operations or transactions considered to be included in the Block List.
As part of the Amendment, Article 116 Bis 2 is incorporated to the Law, individuals or entities who fall under this assumption are granted the right to a constitutional hearing. The amendment includes the corresponding procedure for the hearing.