ANTI-MONEY LAUNDERING. General Provisions – Self-Regularization Program April 16, 2019
In connection with the Newsletter of January 7, 2019, on April 16 of this year was published on the Official Gazette of the Federation (“OGF”), the General Provisions referred to in the Fourteenth Transitory article of the Federal Revenues Law for the 2019 fiscal year that regulates the Self-Regularization Programs (“SRP”) for those individuals or entities who are not up-to-date in complying with the obligations set forth in articles 17 and 18 of the Federal Law on Prevention and Identification of Operations from Illicit Sources (“Anti-money Laundering Law”), from July 1st, 2013 to December 31, 2018, prior authorization of the Tax Administration Service (“TAS”), as long as they are up-to-date in fulfilling their obligations for the year 2019.
Such General Provisions will enter into force 45 days after its publication on the OGF (i.e. June 21, 2019), which fundamentally establish the following:
– The TAS will not impose any penalty with respect to the period of non-fulfilment covered by the SRP, as long as it is fully covered, and the irregularities or breaches are corrected at the time the vulnerable activity was carried out.
– The obliged individual or entity must submit their application for SRP authorization before the Anti-money Laundering Website, within 30 business-day-term following the date that entered into force the General Provisions and must fulfill certain requirements for such purpose. The SRP must be concluded within a maximum period of 6 months from the following day in which the aforementioned 30 business-day-term ended.
– If verification audits are being carried out, or they were concluded prior to the entry into force of the General Provisions, the obliged individual or entity may adhere to the SRP, as long as they submit the authorization application of his program before the verification audit department.
– An application for SRP authorization will be inadmissible when the obliged individual or entity: (i) is not recorded in the register; (ii) its data in the register are not updated; (iii) is not up-to-date with its obligations during the year 2019; and, (iv) the irregularity or breach committed constitutes an offense established by the Anti-money Laundering Law.
– Until the SRP period concludes, the obliged individual or entity within 20 business-day-term from the day in which the aforementioned period ends, may request to the TAS the waiving of fines imposed during the time in which the irregularity or breach was committed that covered by the SRP and must fulfill with certain requirements for that purpose.
– The TAS will verify the provenance of waiving of fines within a maximum period of 6 months from the date the application was submitted and will have to inform its provenance or not provenance to the obliged individual or entity within 30 business-day-term after the verification was concluded. The TAS may dismiss the application in some cases.
The Anti-money Laundering Law, its regulations and other general rules have not been characterized by stating precise and clear provisions; on the contrary, they are characterized by substantial administrative and financial established burdens for its fulfillment.
The SRP are an important alternative for those individuals or entities who performed vulnerable activities and are not up-to-date with their obligations from July 1st, 2013 to December 31, 2018 and thus, normalize its due fulfillment.
It is essential to review and analyze the operations carried out between July 1st, 2013 to December 31, 2018, in order to verify if vulnerable activities were performed or not in terms of the Anti-money Laundering Law and, if applicable, submit the SRP application according with the General Provisions.
If you have any questions regarding the foregoing, please do not hesitate to contact us.
Mexico City, April 16, 2019