UIF and SAT Combat Money Laundering, Terrorist Funding

The Financial Intelligence Unit (UIF) of the Ministry of Finance, together with personnel from the Tax Administration Service (SAT) and its General Customs Administration (AGA), will work together under the recommendations of the Egmont Group toward greater collaboration to have more and better results in the fight against money laundering and terrorist funding, according to a note from El Economista.

Although there is no official figure of what money laundering represents in Mexico, according to various estimates and official reports, it can be concluded that each year about US$50 billion is laundered in Mexico, said Jorge Lara Rivera, an academic at the National Institute of Criminal Sciences (INACIPE) in an interview with El Economista. Money laundering, according to experts, is commonly related to organized crime, corruption and tax evasion.

Money laundering is especially troublesome at borders, where merchandise, people and large flows of money derived from Mexico’s commercial activity are always in motion. For this reason, UIF and AGA-SAT seek to work in a coordinated manner to face the current challenges at Mexican customs and support financial intelligence authorities in their ongoing fight against money laundering and terrorist funding.

A detailed assessment report on Anti-Money Laundering and Combating the Financing of Terrorism in Mexico was prepared by the International Monetary Fund (IMF) and revealed that the country has made considerable progress in combating money laundering since 2008. The report also noted that the “financial sector demonstrates a good understanding of the primary money laundering threats from organized crime groups and associated criminal activities as well as tax crimes, but the recognition of corruption as a main threat is uneven.”

Another problem in the fight against money laundering is that until relatively recently, the authorities in charge did not rank the identification and investigation of money laundering as one of their key priorities, according to the IMF. “Money laundering is not investigated and prosecuted in a proactive and systematic fashion, but rather on a reactive, case-by-case basis, notwithstanding the fact that some high-profile investigations have recently been conducted,” explains the IMF’s report. 

One of the strategies of the current administration, that according to some experts will be able to change the panorama of money laundering in Mexico, is to increase bank penetration. Raúl Martínez-Ostos, Chairman of The Board and CEO at Barclays Mexico Financial Group, said in an interview with MBN that “from the banking side, there is no denying that Mexico has low banking penetration, which opens the door to informality and expensive financing mechanisms. Programa de Impulso al Sector Financiero covers topics like technology and digitalization to address this issue. At the same time, the initiative tackles the problem of organized crime that affects the financial sector as much as any other. By reducing the use of cash, we can diminish problems related to money laundering and its impact on the country’s economy.”