ANTI-MONEY LAUNDERING. Self-Regularization Program and Amnesty January 7, 2019
The Federal Revenues Law for the 2019 fiscal year (“FRL”), in its Fourteenth Transitory article establishes that 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 the period of July 1st, 2013 to December 31, 2018, may implement self-regularization program, prior authorization of the Tax Administration Service (“TAS”), as long as they are up-to-date in fulfilling their obligations for the year 2019.
Likewise, an amnesty is provided for the anti-money laundering matters, since it is specified that there will be no penalty imposed on the period of non-compliance covered by the corresponding auto-regularization program, in addition that the TAS will be able to cancel the fines imposed during the period of non-compliance covered by such program.
Finally, it is noted that the TAS must issue and publish in the Official Gazette of the Federation the general rules that regulate the application of self-regularization programs, within a maximum of 60 days-term following the entry into force of the aforementioned FRL.
The TAS in addition to its multiple powers as a tax authority, also has verification powers in matters of anti-money laundering, which it has exercised on a recurrent basis since approximately 2016, due to the fact that the Financial Action Task Force identified several entities and non-governmental organizations as a vulnerable sector that has access to considerable sources of funds and resources to carry out national and international transactions.
On the occasion of these powers, fines have been imposed on many occasions that were challenged and were finally declared illegal by the Federal Court of Administrative Justice, because several provisions contained in the Anti-money Laundering Law are not clear, also in its regulations and other general rules in which they were intended to support such fines; on the contrary, they generate uncertainty in a number of situations, causing additional administrative and financial burdens, such as guarantee and challenge the fines imposed.
It is essential to review and analyze the operations carried out by the entities during the aforementioned period, in order to verify and confirm if vulnerable activities were carried out or not in terms of the Anti-money Laundering Law and, if applicable, observe the general rules that will regulate the self-regularization programs that the TAS will publish in due time and qualify to the benefit of the aforementioned amnesty.
If you have any questions regarding the foregoing, please do not hesitate to contact us.
Mexico City, January 7, 2019