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Federal Act for the Prevention and Identification of Operations with Illicit Resources (“LFPIORPI”)
It is a key instrument to protect the financial system and the national economy from acts or operations that involve resources of illicit origin. Since its publication on October 17, 2012, the law has empowered the Financial Intelligence Unit (FIU) to prevent and combat financial crimes, as well as to oversee financial structures related to criminal activities.
Proposal for Reform to the LFPIORPI
October 28, 2024, Senator Javier Corral Jurado presented a reform initiative to the Senate. This proposal seeks to:
1. Modify and add provisions of the LFPIORPI.
2. Reform key articles of the Federal Criminal Code (CPF).
The objective is to strengthen Mexico's financial system and align legislation with international recommendations issued by the International Financial Action Group (FATF). This involves addressing deficiencies identified in previous evaluations, increasing effectiveness in preventing money laundering and terrorist financing, and improving the country's economic stability.
Main Proposed Changes
The initiative includes, among others:
1. Expansion of Obligated Subjects: Incorporation of sectors not previously contemplated, such as certain professional services, business activities and financial services.
2. New Reporting and Documentation Obligations: Stricter requirements for the submission of reports to the FIU.
3. Enhanced Identity Verification: Implementation of advanced technologies and procedures to authenticate the identity of customers and users.
4. Broad Supervisory and Oversight Powers: Major capacity of authorities to inspect and control activities considered vulnerable.
5. Tougher Penalties: Increase in penalties for non-compliance with the obligations established by the LFPIORPI.
Impact on Companies and Recommendations
These reforms could have a significant impact on the business sector, especially for those companies that carry out activities considered vulnerable according to the LFPIORPI. The changes will force companies to:
Recommendations:
1. Perform a Comprehensive Diagnosis: Evaluate your organization's current compliance structure to identify gaps in the face of new provisions.
2. Strengthen Internal Control Systems: Implement advanced technological systems for the early detection of suspicious operations and to ensure continuous compliance with regulations.
3. Continuous Training: Develop specialized training programs for key employees, ensuring that they understand the implications of reforms and international best practices in this area.
4. Procedure Update: Review and adjust compliance manuals and internal reporting procedures to align with new provisions.
5. To view the full reform proposal, click on the following link:
http://sil.gobernacion.gob.mx/Archivos/Documentos/2024/10/asun_4795428_20241031_1730226276.pdf
Taking a proactive approach to these reforms not only avoids sanctions and legal risks, but also strengthens corporate reputation and builds customer and investor confidence. Implementing robust compliance systems can also improve operational efficiency and facilitate the transition to a more demanding regulatory environment.
This communication is for informational purposes only and does not constitute legal advice. However, our team of experts is available to provide specialized support and help your organization understand and adapt to these reforms.
Stay informed and prepared. The reforms to the ALFPIORPI and the CPF represent an opportunity to strengthen their compliance systems and align with international best practices. Do not hesitate to contact us for more information or personalized assistance.
We will be in touch to address your request.
