Changes to the money laundering prevention regulation will affect credit institutions
- 29 septiembre, 2024
- Regulatory Alert
- Por Tenet Consultores
Alejandra Onofre – Money Laundering Prevention Consulting Leader
Tenet Consultores informs about the changes to the General Provisions referred to in Article 115 of the Law of Credit Institutions (Ley de Instituciones de Crédito)
The Mexican Secretaría de Hacienda y Crédito Público (SHCP), with the prior opinion of the Comisión Nacional Bancaria y de Valores (CNBV), announced changes to the Ley de Instituciones de Crédito, which modify the regulation on money laundering prevention.
The resolution that amends, adds, and repeals several of the general provisions referred to in Article 115 of the Ley de Instituciones de Crédito was published in the Diario Oficial de la Federación on August 28th, 2024.
Among the main changes that will affect credit institutions in Mexico are modifications in the identification of clients and the opening of accounts, as well as changes in the requirements for transaction reports, and the annual submission of information from the operating questionnaire, all with a focus on improving the prevention of transactions with resources of illicit origin and the financing of terrorism.
The new provisions update the definitions of Client, Device, and Risk, among others, and introduce the definition of the Interim Compliance Officer.
On the other hand, more IDs have been accepted to identify clients, such as the voting credentials issued by consular offices. And the identification requirements for federal, state, and municipal public agencies and entities classified with a Risk Level other than low, as well as for suppliers, have been also modified.
On the other hand, the requirement to prove the legal existence of federal, state, and municipal public agencies and entities, as well as other legal entities, has been eliminated.
However, there will be more requirements to identify public agencies and entities classified with a Risk Level other than low, as well as to identify foreign nationals outside the country.
There are also increased requirements to identify co-owners and authorized third parties in accounts opened by clients, as well as beneficiaries. In the case of trusts, it establishes how to identify the members of the technical committee or equivalent governing body, when the credit institutions do not act as trustees.
The requirements for non-face-to-face identification have been modified, eliminating the possibility of doing so for foreign customers and other specific groups such as authorized third-party course providers and beneficiaries.
There is also an obligation to conduct a face-to-face interview or apply any of the authorized technological identification mechanisms when the transactional level of low-risk accounts is exceeded, and this level must be defined at the beginning of the relationship and through the automated system.
Credit Institutions will face increased requirements when opening accounts or entering into agreements with Clients that, due to their characteristics, could generate a high Risk Level.
And now, international fund transfers must be reported to the SHCP in the event that a credit institution is the holder of a Omnibus Account opened in another credit institution or in any Obligated Entity.
The requirements for the transactions ID with Sociedades Financieras de Objeto Múltiple no reguladas (Sofomes), Exchange Centers and Money Transmitters have also been modified.
Institutions would also be required to establish a Compliance Manual with specific criteria, measures, and procedures against terrorist financing as a crime.
In summary, these changes will mainly affect customer identification and verification, risk management, compliance, and transaction reporting procedures.
The objective is to strengthen prevention and control practices in financial institutions, ensuring a robust framework for the identification and management of risks associated with money laundering and terrorist financing.
These changes will require technological and operational adjustments by the institutions to comply with the new standards, as well as more sophisticated monitoring of operations, reporting and auditing requirements.
Institutions will need to adapt their policies, procedures, and systems to meet the new requirements and ensure compliance with the updated regulations.
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In order to comply with these requirements and to get help updating your standards and systems, it is useful to count on a consulting firm specializing in financial, regulatory and IT issues.
To obtain specialized advice for your institution on anti-money laundering matters Contact Tenet Consultores at 55 2978 9198 or at contacto@tenet.com.mx.