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Mexico Enacts New Provisions to Combat Money Laundering in the Insurance Industry

Published 28 June 2021

Mexico has been an active member of the Financial Action Task Force ("FATF") since 2000, whose objective is to establish international standards on the prevention of money laundering and the financing of terrorism ("PLD/FT"). Since then, the Mexican State has deployed various actions aimed at protecting the financial system and the national economy.

In November 2020, the Mexican government issued new provisions entitled: "General provisions referred to in Article 492 of the Law on Insurance and Bonding Institutions" ("PLD/FT Provisions"), by virtue of which the previous provisions on money laundering ("Previous Provisions") were repealed.

In summary, both the current and previous provisions present a clear direction aimed at strengthening policies on customer recognition and identification (Know-Your-Costumer Policies). However, the PLD/FT Provisions seek to generate new approaches aimed at preventing all practices that may cooperate with money laundering or terrorist financing, through four additional measures: (i) risk-based approach, (ii) novel models, (iii) exchange of information between entities, and (iv) list of blocked persons.

The knowledge and adequacy of the measures indicated by insurance institutions is crucial for the correct development of internal compliance policies, focused on monitoring and restricting activities in the area of money laundering and financing of terrorism.

Authors

Miguel Angel de la Fuente

Mexico City

mdelafuente@dacbeachcroft.com

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