Essential points for the fulfillment of the Obligations for the Prevention of Operations with Resources of Illegal Origin

The operation and application of the Law represents an advance in Mexican legislation, but at the same time it could become a workload for companies or individuals with business activities that carry out acts that are stipulated as vulnerable activities mentioned on article 17 of the Law; as of entry and effect of such law such sectors shall comply with the imposed obligations.

The main objective of the Law is to establish measures and procedures to prevent acts and operation with illicit resources, and with this to access the information of the companies and their clients so that it can facilitate and prevent the commission of crimes.

For the administrative authority, there are non-financial activities that must be classified as vulnerable and must comply with the obligation to collect the client’s information, as well as to give notice of the operations in accordance with the amounts stipulated by law. Such activities are Gaming, Sweepstakes and Lotteries, the purchase of real estate, as well as vehicles (air, sea and land), jewelry, works of art and prepaid cards, Construction and sale of real estate, armoring services, in addition to certain operations performed by professional service providers.

The law stipulates two essential obligations that the obligated parties must comply with it and these are the identification of the clients with whom vulnerable activities are carried out and the obligation to notify the Tax Administration Service of the vulnerable activities when they surpass the amount mentioned in the Law.

In order to carry out a favorable application of the law, we recommend to follow the following points and to comply with the obligations stipulated by law in order to avoid administrative sanctions which amounts are high and could cause a prejudice in the operation of companies.

I. Identify whether your commercial activity or the principal commercial object is within the vulnerable activities stipulated in article 17 of the Law;

II. Create records of clients or subjects with whom you carry out vulnerable operations so that you keep the detailed information of the operation and avoid administrative penalties by not submitting complete information when requested by the authority;

III. Review all commercial transactions carried out in cash, since the Law establishes cash transaction limits for vulnerable activities;

IV. Maintain trained and certified the personnel involved with the law and the vulnerable activity operations, by always updating their information with the guidelines and obligations established by the law in order to avoid administrative sanctions; and

V. Perform external audits of the vulnerable operations in order to detect anomalies within the information and with this prevent administrative sanctions.

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