Does Mexico Have Same Money Laundering Laws As Us

Clasificación JEL: F42, G28, H26, K42.

Introduction

The paper reviews the current status of the struggle against coin laundering and the financing of terrorism in Latin America and the Caribbean. For this purpose, information technology first examines the diverse agreements and resolutions concerning this consequence at global and regional levels. It and then provides a clarification of the coin laundering process and the importance of its prevention for economic and fiscal stability, including a word of some effects in the existent sector.

Next, a discussion of the trends and mechanisms used for laundering money in the region is presented based on the typologies put forward by the Financial Action Task Force (FATF), the Financial Activeness Task Strength on Money Laundering in South America (GAFISUD) and the Caribbean Financial Activeness Chore Forcefulness (CFATF, besides known as GAFIC in Spanish), also as those emphasized in the us Coin Laundering Threat Assessment (Usa Departament of the Treasury, Money Laundering Threat Cess Working Group, 2005) conducted by the United states of america Department of Treasury in December 2005, and the United States Authorities's National Money Laundering Strategy (United States Departament of the Treasury, 2007). Information technology so identifies the master international actors and their role in this struggle.

The following section provides an analysis of the key results of recent Common Evaluations conducted by specialized agencies to appraise Latin American and Caribbean countries' compliance with the corresponding international standards. It also highlights some new money laundering typologies that emerge as a effect of the creation of innovative fiscal products such every bit remittance payments past cell phones, internet transactions, the use of prepaid cards, and operations realized through the system of non-banking correspondents A instance study of Mexico'due south recent performance is also presented. The paper's final department shares our conclusions on the electric current challenges of financial regulation in Latin America and the Caribbean.

The identification and documentation of current threats to the fiscal sector is a specially salient topic in the low-cal of the recent publication of the so called, Panama Papers, which has farther highlighted the calibration and telescopic of offshore accounts and vanquish corporations, among other financial sector risks. Nosotros include some reflections on emerging threats related to the financing of terrorism, and emphasize the need for innovative and coordinated international action to combat these disquisitional problems and to ensure fiscal sector integrity and macroeconomic stability in the region.

I. Background

The phrase "coin laundering" was officially coined by the United states of america Government in the Money Laundering Control Act of 1986, which established it as a Federal crime. In 1988 the United states of america passed the Anti-Drug Corruption Human activity, introducing new restrictions and legislative support to prevent money laundering, including the obligation to maintain full information almost and the identification of persons who acquire bearer documents or transfer amounts greater than three thousand dollars (3 000 USD). ¹ International efforts to combat money laundering were strengthened with the Vienna Convention in December 988 and the Convention of the European Quango in990. The quondam introduced the obligation to criminalize the laundering of money derived from drug trafficking, and instituted the first measures to promote international cooperation, while the latter mandated support for the investigation and confiscation of illicit money originating from whatever blazon of criminal activity.

The negative effects of coin laundering on the integrity of the financial system and the operational and reputational risks it posed for banks increasingly worried regulators. At the end of 988, the Basel Committee issued its offset statement against money laundering. In response to these growing concerns, the Group of Seven (G7), meeting at the Paris Tiptop in July 989, established the Financial Activeness Job Force (FATF). ^two

Throughout the 990s, Federal legislation in the United states was passed to fortify efforts in the fight confronting money laundering. The Uniting and Strengthening America by Providing Appropriate Tools to Restrict, Intercept and Obstruct Terrorism Act, more commonly known as the USDA Patriot Deed -passed in 200 afterward the attacks of September xi^th- further enhanced legislation confronting money laundering in the U.s., and introduced the financing of terrorism as a Federal offense. It prohibited certain activities with "off-shore" banks without concrete offices or affiliates in the USD, and significantly increased client identification requirements. The Act also legislated for the possible expropriation of assets of illicit origin (United States Departament of the Treasury, Fiscal Crimes Enforcement Network, 206).

Today, most related laws beyond countries incorporate a significantly wider concept of money laundering to include all types of financial documents (insurance, mortgages, government securities, bonds, etc.), goods, existent estate, as well every bit gold and precious stones. This broader definition has fortified non-financial professionals' role in the fight against coin laundering. Thus, recommendations for run a risk assessment in real manor and the buying and selling of precious metals, every bit well as guidelines for professionals such equally lawyers and auditors accept been produced by the FATF and other international expert groups to address these themes.

Afterwards September eleven^th, 200 near jurisdictions have also incorporated the criminal offence of terrorist financing into their legislation. This is a more complex phenomenon to identify because the funds used in the financing of terrorism tin can come from avails of unlawful origin, but they may also be derived from assets of legal origin that have been channeled through various operations in the legal financial arrangement. The latter carries a significantly higher risk for the financial system, given that the funds may come up from perfectly legal operations or concern, but be intended for terrorist activities. ³

II. The integrity of capital letter markets and fiscal stability, and effects in the real sector

The process of money laundering comprises three phases: 1) the incorporation of products of illicit transactions, such as drug, homo, and artillery trafficking, kidnapping, tax evasion, corruption, etc. into the financial system; 2) as a 2d phase, a series of depository financial institution transactions and transfers are made to different accounts and jurisdictions in order to conceal the origin and location where the original infraction was committed, sending the transaction to another jurisdiction also makes it more hard to monitor and afterward exist retrieved by the relevant authorities, and three) the 3rd phase consists of the return of these resources which have been invested in business concern, real estate or avails of any nature, thus giving them the appearance of originating from legal operations. Coin laundering and the financing of terrorism may adversely impact the overall wellness of the economic system and its financial stability ⁴ by introducing distortions in the allocation of resources in such a way that investment decisions depend less on factor prices and profit render calculations, and more on criminal or illicit pressures. Moreover, through financial institutions, it has a triple negative effect (^{Bartlett, 2002}):

1. It erodes the financial institutions involved considering the entity tin be defrauded by employees linked to laundering operations or because organized crime takes control over the financial entity (^{Financial Action Job Forcefulness, 2006}).

2. It weakens public conviction in banking and non-banking financial institutions, thus limiting their impact on growth. Such institutions play a crucial part in the formation and allocation of capital, especially in developing economies. The successful reform of the financial system in these jurisdictions depends on sustained increases in depositor and investor conviction. Money laundering negatively impacts the reputation of banking entities, slows their ability to concenter capital and affects their market value.

3. It reduces the chance of good corporate governance in financial institutions and increases operational take chances in the absence of effective policies to combat money laundering. Conversely, policies against money laundering promote skillful corporate governance and reduce operational risk, thus contributing to the efficient performance of banks and not-banking financial companies. This was recognized by the Basel Committee, which includes among its principles for constructive banking supervision, key elements of a "know your client" policy. This is defined equally a central element of internal command policies and risk direction. ⁵ The Basel Commission also addresses the issue of noesis of the ultimate casher of the property, ⁶ an attribute that if not properly applied could ultimately allow a financial institution to exist controlled by organized criminal offence.

In that location is yet a limited corporeality of literature on the direct effects of money laundering in the existent sector of the economy. Still, at that place is evidence that in addition to the indirect furnishings through the financial sector, coin laundering may adversely affect productivity by generating perverse incentives that induce transactions not based on the normal market mechanisms for resource allocation via relative prices and profits (^{Bartlett, 2002}). The most common instance is real estate investment, where the increase in need past money launderers induces higher market prices, thus leading all buyers to overpay for property assets and potentially generating "crowding-out" effects. ⁷

At that place is too testify of a strong correlation betwixt low levels of compliance with international anti-money laundering standards and depression tax collection, as well every bit with high levels of corruption. In relatively small countries, or in countries highly dependent on financial flows including those positioned every bit "off-shore" centers, money laundering can lead to meaning market distortions.

In some cases the search for more flexible regulations has led to a suboptimal situation, where the possibility of money laundering is facilitated, with consequent negative effects on the land and the international community. Previous feel shows that jurisdictions with relaxed regulatory systems attract illicit money and tend to, at some point, face reputational problems that consequence in low business organisation turnover and stiff fluctuations in their levels of economic activeness and employment. ⁸

The relevance of anti-money laundering targets and deportment to combat the financing of terrorism for national and international security has increased in the light of the current state of global affairs, marked by the emergence of new terrorist threats such as the Islamic State of Iraq and Syrian arab republic (ISIS), and the resurgence and strengthening of new factions of established terrorist groups including those connected to Al Qaida and Al Shabaab, among others. Preempting the flow of coin (of licit or illicit origin) to terrorist groups, drug and human traffickers, and other criminal entities that pose a threat to national and international security is an always increasing priority. Cooperation at the national and international levels is of the utmost urgency from both government and private sectors.

IV. Methods and trends of money laundering and the financing of terrorism

I of the essential tasks performed by FATF working groups, regional bodies similar to this 1, the Egmont Group and Financial Intelligence Units (FIUS) of member countries is the identification of methods used by money launderers or those interested in financing terrorist operations. The main objective of identifying these methodologies is to create appropriate mechanisms to prevent them and alert fiscal institutions and regulators to the new and emerging trends of money launderers.

In 2005 the Us Government conducted the USD Money Laundering Threat Assessment (^{United States Departament of the Treasury, Money Laundering Threat Assessement Working Group, 2005}). This document later served as the basis for the USD 2007 National Money Laundering Strategy (^{United States of the Treasury, 2007}). The key points identified in the assessment are:

1. Banks remain the main aqueduct through which money laundering operations are performed. The incorporation of internet technology and remote cyberbanking presents new challenges for banks in terms of client identification requirements and the identification of funding sources.

2. Money Services Businesses (MSBS), which include remittance agencies, exchange houses, vendors of traveler's checks, check cashing operations, etc., have a legal obligation in the United States to register with the Department of Treasury. Even so, less than 20% of MSBS comply with this regulation. As a result of the absence of "know your customer" policies, MSBS accept become one of the gateways to the financial organization for coin launderers and peradventure for those interested in the financing of terrorism.

3. The smuggling of cash continues to be a primary channel for coin launderers. A substitute for smuggling money has recently been the utilise of prepaid cards, in detail those that utilise an open system (^{United States of the Treasury, 2007}). In this instance, the card provider is not necessarily related to the provider of goods or services and in some cases obtaining greenbacks directly from the prepaid cards is immune.

4. Online Payment Systems: Given that is possible to make online payments between countries, this system presents prosecution difficulties for national government. Precious metals may likewise be used for payment, which opens an boosted door to money launderers, especially when service providers accept payment in cash.

5. Informal Value Transfer Systems (IVTS): While these mechanisms have worked well over time as an efficient method for transferring funds between communities that have no access to formal financial services, they have recently been used for money laundering and terrorist financing, every bit the systems exercise not have identification requirements.

6. Money laundering based on trade is probably the best-known method and is mostly used for laundering funds from drug trafficking. In this typology, one of the mechanisms used is the Black Market Peso Exchange (BMPE), where the proceeds of criminal activities such equally drug sales in the United States, are used to pay the obligations of an import company from another state ^ix in the United States. Meanwhile, the visitor pays the suppliers of the drugs in the land with local currency. Some other fashion to wash money based on trade is through free trade zones. ¹⁰ Co-ordinate to the FATF Typologies Report of November 2008, money laundering through the use of gratuitous zones in Latin America and the Caribbean has been detected.

7. Insurance Companies: Term life insurance and annuities accept generated an opportunity for money launderers, primarily because insurers typically provide their products through brokers who usually do not have adequate controls, especially when operating in poorly or unregulated markets. Cases have been found where money launderers utilized the buy of term life insurance to transfer illicit funds and only paid an insurance penalisation for disinvesting before the expiration of the term.

8. Crush corporations ¹¹ and trusts represent another way to hide money derived from illicit activities. The use of vanquish corporations unremarkably occurs in and so-chosen "tax havens", since there are practically no registration requirements for companies in many of these jurisdictions. The near of import omission maybe of shell corporations is the identification of the rightful owners, especially through the employ of bearding companies with bearer shares. In Latin America, nearly countries now do not let for the use of these instruments and FATF-like regional bodies are making articulation efforts with regulatory agencies to ensure compliance with the FATF Recommendations in this regard. ¹² Trusts can serve an important lawful office; notwithstanding, they also nowadays money launderers with the advantage of not requiring registration with any fiscal potency in most jurisdictions. At that place have been transactions of this nature linked to abuse in some Latin American countries. One documented instance detailed the cosmos of a series of trounce companies and trusts that were used to purchase insurance companies in other jurisdictions with lax regulation. Coin launderers and so used these companies to drain the assets of the acquired insurance agencies into "off-shore" accounts, thus shortchanging the original policyholders (^{Fiscal Action Task Force, 2006}).

9. Casinos represent an additional opportunity for coin launderers because, currently, virtually of them provide other financial services such as deposit-taking, credit, funds transfers, check cashing and strange exchanges. Online gaming and casinos allow players an extra level of anonymity and make it fifty-fifty more hard for judicial authorities to track illicit transactions, given the power to separate the place where the financial criminal offence is committed from the place where it is reported or fifty-fifty where funds are ultimately delivered.

In Latin America and the Caribbean, the nigh important efforts in the identification of methodologies used by money launderers have been made by GAFISUD and the CFATF (^{Financial Action Job Force of South America, 2006}; ²⁰⁰⁸; ^{Caribbean Financial Activity Task Strength, 2008}). These collective efforts represent an important input into the definition of guidelines for the competent authorities in order to protect their respective jurisdictions from the possibility that their systems could be used for money laundering or the financing of terrorism.

V. The international community of the fight against coin laundering and the financing of terrorism

In recent years, the mandates of several international organizations, equally well equally national and multilateral financial institutions have been extended to comprise efforts to combat money laundering and the financing of terrorism. As Chart 1 illustrates, the international customs, including the United Nations and other international organizations such as the World Bank (WB), the Imf (Imf), and regional development banks, together with the FATF and subsidiary regional-way bodies, plays a primal function in combating money laundering and in developing strategies and guidelines for monitoring national compliance. Coupled with individual sector expert groups such every bit the Wolfsberg and Egmont Groups and national institutions including financial regulators, and legislative and judicial bodies, international efforts to foreclose money laundering and the financing of terrorism crave a complex and coordinated commitment from multiple actors.

Source: Writer'southward own elaboration.

Nautical chart i A Global Commitment in the Fight against Money Laundering and the Financing of Terrorism.

i. Financial Activity Task Force (FATF)

The Financial Action Job Forcefulness (FATF) was created by the G7 in July 989 with the specific mandate to design and promote compliance with international standards for the prevention of money laundering. The FATF is composed of 34 jurisdictions and two regional organizations that together represent the majority of the world fiscal centers. ¹³ Currently, in formal FATF meetings eight regional groups are involved equally associate members, while 23 international organizations hold observer status. ¹⁴ The Basel Commission formally joined as an observer in October 2008. The task force's primal piece of work has focused on developing good practices confronting coin laundering which accept been incorporated into forty Recommendations, and recently updated with nine Regulations against the financing of terrorism (Chart 2). Of the (40 + nine) Recommendations, six accept been designated Core Recommendations, with an additional x highlighted as Key Recommendations.

Source: Author's elaboration based on ^{Fiscal Action Chore Force (2004)}.

Nautical chart two FATF Recommendations and Good Practices (twoscore + 9) Recommendations (2003 Recommendations and 2004 Amendments).

In detail, the 40 Recommendations to prevent money laundering depict:

1. The scope that coin laundering must have within a land's legal organisation and the need to incorporate preventive and confiscation measures into existing regulatory codes.

2. The measures to be taken past financial institutions and non-financial businesses and professions to prevent money laundering (including customer due diligence policies, the definition and reporting of unusual or suspicious transactions, and preventative supervisory deportment), and those to exist taken past the international customs in a compliance alienation.

3. The necessary institutional framework to be applied including the definition of competent authorities, and their respective powers and resources.

4. The role of international cooperation including a clear commitment to participate in common legal help, support the possibility of extradition and provide other forms of cooperation.

Moreover, the special recommendations with regard to the prevention of the financing of terrorism contain a delivery to: 1) ratify and implement the relevant Un instruments; 2) criminalize offenses related to the financing of terrorism, terrorist acts and organizations; iii) enact legislation to facilitate the freezing of avails that could be intended for terrorist activities; 4) plant procedures for reporting suspicious transactions; five) ensure the possibility of international cooperation and extradition; 6) concord all alternative systems for transferring funds to FATF standards and recommendations, peculiarly the requirement of "know your client" policies; seven) establish clear policies for customer due diligence in bank transfers; 8) review the legal obligation of registration requirements for non-governmental organizations in order to forestall them from being used to divert resources to terrorist activities; and 9) establish command procedures for monitoring companies dedicated to the transport and movement of cash.

The United nations Security Quango recently issued a series of enhanced recommendations amongst increased concerns for the financing of terrorist groups and the proliferation of weapons of mass destruction (^{United nations Security Quango, 2004}; ^2006a; ^2006b; ^2006c; ^2006d; ²⁰⁰⁷; ^2008a; ^2008b; ²⁰¹⁴). Resolution 1671 of the United Nations Security Council urges the international community to implement the (forty + 9) Recommendations to combat money laundering and the financing of terrorism without delay. The FATF reacted by preparing guidelines for implementing relevant resolutions in each of its member jurisdictions. During their session on September 24th, 2014, the Security Quango unanimously adopted Resolution 2178 in an endeavor to further crevice down on the financing of international terrorist threats. In addition, the Resolution criminalized the deed of traveling abroad to fight for extremist organizations, besides every bit recruiting for or providing funding to such terrorist groups.

The (xl + ix) FATF Recommendations have been accustomed past 180 jurisdictions and by the Boards of multilateral fiscal institutions such as the Imf, WB, the Asian Evolution Bank, and the African Development Depository financial institution. The Paris Declaration of 2002 played an important role in conferring sanctions on those countries identified as non-cooperative in the fight against money laundering by the FATF. Thereafter, a list of identified countries was established, and those countries were required to accept appropriate measures and enact legislation in order to be removed from the list. The FATF remains willing to place those countries that do not cooperate, and continuously reviews the progress of jurisdictions. In fact, in their meeting in October 2008 the FATF highlighted concerns most some countries, especially in terms of their delivery to support the fight against the financing of terrorism. The four primary objectives of the FATF under its current mandate ^fifteen are to: 1) review and clarify international standards (40 + 9 Recommendations); two) promote the implementation of the Recommendations; 3) identify and generate adequate responses to new threats of money laundering and the financing of terrorism; and four) institute working relationships with other members of the international customs (^{Financial Action Task Force, 2008}).

During the meeting of Ministers of the FATF in April 2012, the mandate was unanimously extended to 2020, ¹⁶ focusing on the FATF'south function as the international standard setting institution for efforts to combat money laundering, the financing of terrorism and the proliferation of weapons of mass devastation. The extended mandate reaffirms the close operational cooperation with the international community, and strengthens joint work with the FATF-style regional bodies. The near important chore of the FATF is to assess compliance with international standards through a consequent procedure for each fellow member jurisdiction. It continually develops methodological guidelines for evaluations to ensure each of the assessments follow a harmonized methodology. The evaluation procedure includes the preparation of questionnaires that are sent to the regime of each country in advance so that evaluators are familiar with the established procedures prior to their Mutual Evaluation. During the country visit, consultations are conducted with national authorities, and too with relevant financial and non-financial private sector agencies and associated professionals. ¹⁷ One time the visit has been ended, the assessor grouping, with the support of the Technical Secretariat of the FATF, prepares a Mutual Evaluation report. ¹⁸ The terminal certificate is submitted for word and blessing in the FATF Assembly.

The FATF completed the third round of compliance assessments for each of its 34 member jurisdictions in 2011, though some members remain under a follow-up procedure. ¹⁹ Identifying jurisdictions with deficiencies in their controls to preventing money laundering or the financing of terrorism, allows for support to be given to these countries to assistance mitigate these risks and protect the stability and security of the international customs. In do, the definition of a list of non-cooperating countries allowed more than than xx jurisdictions to receive FATF back up and significantly improve their financial law-breaking prevention schemes.

I of its important contributions has been the revision and adoption of a new set of Recommendations, which were canonical in February 2012 following a joint process of consultation with the FATF-Style Regional Bodies and other international observers. The International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (^{Financial Activeness Chore Force, 2012}) synthesize the previous (40 + nine) Recommendations, seeking to tighten legislation and strengthen compliance. These new Recommendations identify a special emphasis on creating transparency, preventing abuse and managing the risks of new and emerging threats to financial sector stability.

Of item relevance given the current global state of affairs is the challenge of combating terrorist financing. Nigh anti-money laundering and counter-terrorist financing strategies have been mainstreamed throughout the new Recommendations, replacing the need for a set of Special Recommendations; nevertheless, Department c applies a specific focus to gainsay the financing of terrorism and the proliferation of weapons of mass destruction. The 2012 Recommendations (Nautical chart iii) are gear up to exist practical uniformly in the upcoming fourth circular of Mutual Evaluations, that volition be conducted in ii jointly re-enforcing components: a Technical Compliance Assessment to measure the level of conformity with the revised standards, and an Effectiveness Assessment, which will rely on the judgment of the assessors, taking into account national context and the effective level of hazard (^{Financial Activity Task Forcefulness, 2013a}). The assessment of a country will outcome in two sets of ratings: "Technical Compliance" which ranges from Compliant to Non-Compliant, and "Effectiveness" from High to Low. ²⁰ Such fourth round began in late 2013 with the assessments of Australia, Belgium, Kingdom of norway and Espana to exist finished past 2015.

^a this Recommendations have interpretative notes, which should exist read in conjunction with the Recommendation.

Source: Writer'due south elaboration based on ^{Financial Action Task Strength (2012)}.

Nautical chart iii 2012 Revised FATF Recommendations.

2. Regional groups similar to the FATF

Globally, compliance with the FATF (40 + 9) Recommendations relies on support from the and so-called FATF Style Regional Bodies (FSRBS). ²¹ These regional groups act similarly to the FATF, disseminating information and grooming assessors in the implementation of evaluation methodologies in each of their respective fellow member jurisdictions. Their geographical distribution allows them to perform the important job of identifying risks and emerging typologies, ²² sometimes identifying ones that are regionally specific (^{Caribbean Fiscal Activeness Chore Force, 2008}; ^{Financial Activeness Job Force of South America, 2006}; ²⁰⁰⁸). Another important contribution of the FSRBS has been supporting countries in the drafting of laws and regulations that comply with international standards.

As in the case of the FATF, their most of import job is to carry Mutual Evaluations for member jurisdictions in gild to identify potential weaknesses in their national protection schemes, and to support countries in finding appropriate mechanisms to address them. Countries of Latin America and the Caribbean are members of either the Caribbean Financial Action Chore Force (CFATF, or GAFIC in Spanish) or the Fiscal Action Task Force on Money Laundering in South America (GAFISUD). Some jurisdictions also participate direct as members of the FATF. ²³ In some cases, assessments take been conducted with the support of the IMF, through their Financial Sector Assessment Program (FSAP) and in others with the support of the WB. The tertiary round of Mutual Evaluations for all Latin American and Caribbean countries performed by CFATF and GAFISUD was concluded in 2013.

3. Egmont Group

In 1995 a grouping of Financial Intelligence Units (FIUS) ²⁴ gathered in Brussels, Belgium established an informal cooperation network chosen the Egmont Group, named after the location of their initial meeting at the Egmont Aremberg Palace. Since and so, the Egmont Group has met formally on an annual basis, and today operates with the support of a Technical Secretariat based in Canada. This has immune the Group to establish formal procedures for operational information exchange, the promotion of best practices and preparation. Currently, there are 108 countries with FIUS recognized by the Egmont Group, who been divided into five working groups. One of the most important results has been the negotiation of bilateral agreements to exchange data among members, which allows for the tracking of international money laundering or the financing of terrorism.

4. Wolfsberg Group

The Wolfsberg Group emerged as an initiative of eleven global banks ²⁵ for the purpose of elaborating policy standards aimed at preventing money laundering and the financing of terrorism in the financial services industry, taking into consideration the characteristics of the business and looking to mitigate the impact of these threats on productivity. The Group derives its name, from the identify of its commencement coming together, at the Wolfsberg Castle in Switzerland, where they met to draft procedural guidelines for the prevention of money laundering through private banking operations. In 2007 the Wolfsberg Grouping issued its statement against corruption and a subsequent document in 2011, which identifies some of the measures that financial institutions tin take to prevent bribery and fraud. In improver, the Group is currently working with the Lodge for Worldwide Interbank Fiscal Telecommunication (SWIFT) ²⁶ membership and regulatory bodies to incorporate preventative measures in swift letters to protect the global arrangement of payments (^{Wolfsberg Group, 2016}).

five. Un (UN)

In 1988 the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention) was adopted, which incorporated a telephone call for the criminalization of money laundering. In 1998 the Un Political Announcement and Activity Plan confronting Coin Laundering was adopted, and in December 2000 the UN Convention against Transnational Organized Crime was agreed in Palermo, Italy. This convention also called for the criminalization of money laundering, and focused on issues of mutual legal assistance, international cooperation, joint research among countries and extradition. As office of these efforts, and to comply with the provisions of the Vienna Convention, the Global Program confronting Money Laundering, Proceeds of Crime and the Financing of Terrorism (GPML) ²⁷ was created every bit a office of the Police force Enforcement, Organized Crime and Anti-Money Laundering Unit of the UN Office on Drugs and Criminal offense.

In late September 2001 the United Nations Security Council adopted Resolution 1373 which provided a primary legal ground for the prevention of the financing of terrorism at the international level. This resolution entered into force in April 2002. At the same time, the Security Council also created the Counter-Terrorism Committee responsible for monitoring the implementation of this resolution past United nations members States. In September 2006 the United nations Global Counter-Terrorism Strategy was adopted, including a call for Member States to fully implement the comprehensive international standards embodied in the forty Recommendations of the FATF on money laundering and the nine Special Recommendations on the financing of terrorism. ²⁸ The UN Strategy recognizes the support required by some States in the implementation of the (40 + 9) FATF Recommendations. Consistent with that recognition, the FATF follows upwardly on the issued resolutions and produces corresponding implementation guides. ²⁹ In add-on, the FATF provides technical back up for their application in various countries, particularly in developing countries.

six. Arrangement of American States

The Inter-American Drug Abuse Control Commission (CICAD), a specialized agency of the Organization of American States (OAS), was created in 1986 with the aim of reducing the production, trafficking and abuse of drugs. As part of its strategy, in 1999, CICAD created the Anti-Money Laundering Department (AML) that focuses its efforts on providing back up and technical assist to supervisors and administrators of justice in the Americas. OAS-CICAD has contributed significantly to the creation and implementation of FIUS, and with the support of the Inter-American Development Bank (IDB) has organized various grooming programs for FIU staff, judges and prosecutors in the region. The Inter-American Committee against Terrorism (CICTE), a specialized commission of the OAS, was created in 1999 with an aim to promote cooperation among Member States to foreclose, combat and eliminate terrorism. CICTE participates as an observer in meetings of the FATF. The CICTE Secretariat has initiated a serial of technical assist and capacity edifice initiatives to support the region in the prevention and elimination of terrorism, including targeted programs on border and financial controls, the protection of critical infrastructure, crisis management programs and the drafting of national polices in coordination with international, regional and sub-regional institutions and relevant private sector actors. In 2002 under the guidance of CICTE, Fellow member States adopted the Inter-American Convention against Terrorism, which entered into force in July 2003.

vii. International Budgetary Fund and the WB

One of the most important monitoring activities that the International Monetary Fund (IMF) developed in the recent past is derived from the country'southward Financial Sector Assessment Program (FSAP). Since 200, recognizing the risk imposed by money laundering and the financing of terrorism on the integrity and stability of the financial system, the International monetary fund has incorporated an assessment of countries' regulations and compliance with FATF recommendations in their FSAP reports. ³⁰ This enables the Fund to provide back up to their members to overcome regulatory weaknesses, and assist countries that have adopted legislation to combat money laundering and the financing of terrorism, but face bug in implementation.

The WB, recognizing the inverse relationship betwixt money laundering and financial stability, gives technical assistance to developing countries in the implementation of the (40 + 9) Recommendations. At the aforementioned time, information technology incorporates the Imf'S compliance assessments into their broader fiscal system assessments. The WB too provides support for the blueprint of appropriate legal norms and regulations to ensure that they are adapted to international standards (^{International monetary fund and World Bank, 2001}). Under the Action Plan to Prevent Money Laundering and the Financing of Terrorism, the WB has initiated a staff preparation program to ready officers to adequately address these issues with countries.

8. Asian Development Banking company

The Asian Development Depository financial institution (ADB) based its strategy for the prevention of money laundering and the financing of terrorism on their programs to back up the financial sectors of countries in the region, linking sector loan disbursements to the requirement that some decisions or policies supporting the evolution of laws to regulate these problems are adopted. The Anti-Money Laundering and Financing of Terrorism Policy approved past the Board of the ^{Asian Development Bank (2003)} incorporates the post-obit elements: i) back up fellow member countries in their efforts to constitute effective legal and institutional frameworks for the prevention of money laundering and the financing of terrorism; 2) increase coordination and collaboration with other agencies and international organizations; 3) strengthen internal controls to safeguard the resource of the Asian Evolution Banking concern; and 4) strengthen staff capacities in these areas, according to the policy review in Apr 2008 (^{Asian Evolution Banking company, 2008}).

9. African Evolution Bank

Since October 2007, the African Development Banking concern (AFDB) has strengthened its policy against money laundering and the financing of terrorism with the adoption of its Bank Group Strategy for the Prevention of Money Laundering and Terrorist Financing in Africa (^{African Development Bank, 2009}). The Strategy emphasizes the demand to comply with the (40 + ix) FATF Recommendations, equally well as to assist member countries in the creation and implementation of appropriate legislation. The resolution as well emphasizes the need for risk mitigation to ensure that the Bank's resources are used for their intended purposes by Member States.

10. Inter-American Development Banking company

The Inter-American Development Banking concern (IDB) developed several joint projects with GAFISUD, CFATF and the OAS-CICAD equally part of the efforts to back up the region and to ensure that some of the countries that had been listed by the FATF as noncompliant were able to improve their conformity with international standards and develop their ain schemes to fight coin laundering and the financing of terrorism. The IDB supported the design of new regulations in Panama and Guatemala, and the establishment of relevant FIUS. Additionally, the IDB has participated in technical assistance projects for the preparation of judicial officers in joint projects with FSRBS and the OAS-CICAD.

Vi. Current situation and new challenges for regulation and supervision in Latin America and the Caribbean area

The about important task assigned to the FATF is the assessment of countries' compliance with the (40 + 9) Recommendations, through the utilise of a homogeneous methodology. In the instance of Latin America and the Caribbean area, evaluations are conducted by GAFISUD, the CFATF or the Imf. In the latter case, evaluations are then submitted for approving to the FATF or a FSRB to ensure their consistency. Assessments for Brazil, Argentina and Mexico are conducted directly by the FATF. In all cases three rounds of Common Evaluations have been completed with satisfactory progress, equally most countries have made significant efforts to prevent the risk of coin laundering and the financing of terrorism. Today no country in Latin America and the Caribbean remains on the FATF list of countries with a high risk of money laundering or terrorist financing. Globally, Iran and the North korea (North Korea) remain on this list, with particular business organization for their failure to combat the financing of terrorism and money laundering, noting the serious threats these pose to international fiscal organisation security.

In its statement in June 2014, the FATF identified jurisdictions with strategic deficiencies in their compliance with anti-money laundering and counter-terrorist financing efforts and who have not made sufficient progress and/or have not committed to an action program with the FATF (^{Financial Action Task Forcefulness, 2014a}). ³¹ The FATF and GAFISUD note that Ecuador has taken steps towards improving its anti-money laundering and counter-terrorist financing authorities, including past enacting a new criminal code, which includes provisions to adequately criminalize money laundering and terrorist financing. However, despite Ecuador'southward loftier-level political commitment to the FATF and GAFISUD, the country has not made sufficient progress in implementing its action plan, and sure strategic deficiencies remain, especially with respect to procedures for identifying and freezing terrorist assets. This does non hateful, nonetheless, that deficiencies do not even so exist in some countries in their constructive implementation of the Recommendations. Side by side, a summary of compliance with the (40 + 9) Recommendations in Latin America and the Caribbean area is presented. This analysis is based on publicly available information from the websites of the FATF, the CFATF and GAFISUD, and is derived from countries' corresponding third Round Mutual Evaluation Reports.

Chart 4 shows that the bulk of countries in the region however face shortcomings in their compliance with the (xl + 9) Recommendations. In fact, 33 of the 42 countries surveyed in the region, were rated Non-Compliant or Partially Compliant with more than 50% of FATF Recommendations. Of these, 10 countries (Argentine republic, Republic of bolivia, Dominica, Dominican Democracy, Guyana, Haiti, St. Lucia, Suriname, Trinidad and Tobago, and Turks and Caicos) were rated Non-Compliant or Partially-Compliant with more than 80% of the Recommendations. Based on the results of their third Circular Mutual Evaluations, these countries would require support in their efforts to combat money laundering and the financing of terrorism Guayana and Panama were too listed every bit jurisdictions with strategic deficiencies.

*c = Compliant, LC = Largely Cpmliant, PC = Partially Compliant, and NC = Not Compliant.

^a Core Recommendations include: R.1, R.5, R.10, R. xiii, R.2 and R.4.

^b Central Recommendations include: R.3, R.iv, R.23, R.26, R.35, R.36, R.40, R.I, R.III, and R.V.

Note: Ratings reverberate compliance in each state's respective 3rd Circular Mutual Evaluation Report (MER).

Source: Data compiled from ^{Financial Action Chore Force (north.d.)}, ^{Caribbean Action Financial Action Task Force (due north.d.)} and ^{Financial Action Task Force of Southward America (n.d.)}.

Nautical chart 4 Latin America and the Caribbean: Compliance with FATF (40 + 9) Recommendations*.

In guild to fortify countries' efforts, particular attention should exist applied to their compliance rates with Core and Key Recommendations. In Latin America and the Caribbean, ix countries were rated Not-Compliant wit all six Core Recommendations, amongst them: Antigua and Barbuda, Argentina, Belize, Dominican Republic, Guyana, St. Lucia, Suriname and Trinidad and Tobago and Turks and Caicos. In contrast simply Panama and Peru were rated Complaint and/ or Largely Compliant with all six Core Recommendations. The real examination for many countries will be in their upcoming fourth Round Mutual Evaluations, which will stress not only the being of national laws and regulations, merely also their application and effectiveness. That is to say, the majority of countries in the region face shortcomings in compliance with Cadre FATF regulations.

With regard to compliance with the 10 Cardinal Recommendations, overall, the region failed to perform better. With the exception of Anguilla, the British Virgin Islands, the Cayman Islands, Republic of colombia, Jamaica and Panama, who had compliance rates of more than 80%, the majority of the region struggled to comply. Performance was again especially troubling in Argentina, Guyana and St. Lucia (who failed to comply with any of the ten Primal Recommendations) and Aruba, Belize, Bolivia, Dominica, Dominican Commonwealth, Haiti, Honduras, Saint Maarten, St. Kitts and Nevis, Suriname, and Trinidad and Tobago (who rated Non-Compliant or Partially Compliant with more than 80% of the Key Recommendations).

The cases in which less than 40% of the Cadre and Primal Recommendations are met require special attending. Based on the results of the tertiary Circular Mutual Evaluations, fifty% of countries in the region had compliance levels below this threshold. This is peculiarly true when there are deficiencies in the implementation of Recommendations v and 23. With respect to Recommendation five on customer due diligence, only Panama and Republic of peru were rated as Largely Compliant with the FATF Regulation, while more than one-third of all countries in the region were rated Non-Compliant with this critical recommendation.

In the case of Panama, this is the consequence of an agreed working plan to leave the grayness list of non-compliant countries. When viewed together, compliance with Recommendations 5 and 23, serve equally central pillars of a country's fiscal organization and strategy to gainsay money laundering and the financing of terrorism. Hither the Caribbean nations faced serious issues in fulfilling the FATF regulations, with Aruba, Bermuda, Commonwealth of dominica, Haiti, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, as well as Honduras rating Non-Compliant on both Recommendations 5 and 23.

Given the typologies of coin laundering found in the region, information technology tin can be concluded that while countries have made significant progress in the implementation of the (40 + ix) FATF Recommendations, at that place is still a gap in Latin America and the Caribbean with respect to international norms. Additionally, the emergence of new forms of coin laundering and the financing of terrorism requires that policies and countries' regulatory frameworks exist periodically reviewed in order to reflect recent developments. One of the biggest regional challenges is the emergence of new forms of money laundering that rely on avant-garde technological platforms or innovations, including remittance payments by cell phones, and the proliferation of web-based international fiscal services, the use of pre-paid credit cards, and the proliferation of not-banking correspondents. Moreover, in countries that lack adequate regulation, there is a hazard that non-governmental organizations and trusts are used for money laundering. It is also noteworthy that there are still some Latin American and Caribbean countries that practise not meet about of the Key and Special Recommendations to counter the financing of terrorism and weapons of mass destruction. Emerging threats in this regard often stem from the operations of transnational organized criminal offence groups, including drug trafficking networks. Advances in online engineering also pose new risks for the financing of terrorist organizations, rogue criminal regimes and breakaway nations.

As highlighted previously, notwithstanding certain advances, such as the success of Panama in beingness removed from the gray list in February 2016, there remains significant room for improvement with regard to legal compliance and implementation. The Panama Papers prove that the adjacent challenge for the region in terms of anti-coin laundering and counter-terrorist financing efforts will exist during the upcoming 4th Circular Common Evaluations, which volition measure countries' continued application of international norms, besides as their performance with respect to the revised FATF Regulations adopted in 2012 that underline effectiveness of the approved legislation. With the emergence of new international issues and threats to financial system stability, Latin America and the Caribbean countries together equally a region will have to strengthen multi-lateral cooperation and improve their capacities to jointly address these risks.

VII. United mexican states's compliance with the FAFT (40 + 9) Recommendations

Mexico, the 2nd largest economic system in Latin America and the Caribbean, is a fellow member of both the FATF and the CFATF. Given the country'southward importance in the region, besides equally its integration into the global economic organisation through merchandise relationships and economical cooperation, Mexico provides a particularly relevant case written report of a country'south efforts to combat money laundering and the financing of terrorism. In 2008, Mexico underwent its third Mutual Evaluation, and was rated Partially Compliant or Non-Compliant with 25 Recommendations, or put in another way, five% of the Recommendations (Nautical chart 5). Of detail concern was United mexican states'due south performance with respect to the Core and Central Recommendations, where the country was rated Partially Compliant or Non-Compliant with nine of the sixteen Recommendations. For Mexico, five Cadre Recommendations were rated Partially Compliant, amid them: R.i, R.5, R.iii, SR.II and SR.4, while no Core Recommendations were rated Not-Compliant. Notably, Mexico was identified as having strategic deficiencies in national approaches to the criminalization of money laundering and in practices and regulations, with respect to "know-your-customer" customer due diligence principles. Every bit for the Key Recommendations, iii were rated Partially Compliant: R.23, SR.I and SR.5, while one was rated Non-Compliant (SR.III, which refers to targeted fiscal sanctions related to the financing of terrorism). Given these important deficits in Mexico's strategy against money laundering and the financing of terrorism, the FATF Plenary decided in October 2008, that the country should be placed nether the regular follow-upward procedure, with periodic monitoring reports to exist produced by national authorities outlining recent reforms and efforts to address the identified shortcoming in compliance.

Source: Author'southward elaboration based on financial Action Task Force, ^{Financial Activeness Task Forcefulness of South America and International Monetary Fund (2008)}.

Chart 5 Compliance Results of United mexican states'southward 2008 Common Evaluation.

Since the results of the 2008 Mutual Evaluation, United mexican states has focused on building a comprehensive legal and institutional anti-money laundering and counter-terrorist financing framework. The country has issued or amended several laws and regulations aimed at criminalizing coin laundering and the financing of terrorism. Efforts have also been fabricated to meliorate the prevention of money laundering in the country, through enhanced coordination amidst national authorities, including law enforcement and judicial officials, as well as with international expert groups and international organizations. The regulatory framework for financial institutions was reformed in line with the (forty + 9) Recommendations and integrated all the necessary financial supervisory and customer due diligence requirements. In addition, all designated not-fiscal businesses and professions (DNFBPS) and other risky businesses and professions were incorporated by law into the anti-coin laundering and counter-terrorism financing regime. Efforts to combat terrorist financing were as well strengthened through the institution of an asset freezing regime for known or suspected terrorists. Coupled with programs to heighten the judicial process and expedite investigations, prosecutions and convictions, Mexico has adopted an integrated arroyo in lodge to protect the long-term stability of the financial system.

As Chart vi illustrates, Mexico enacted a multi-dimensional national plan to overcome shortcomings in its anti-money laundering and counter-terrorist financing strategy. The national strategy rests on four pillars: 1) data and organization; 2) enhancing the regulatory framework; 3) risk-based supervision and constructive banking procedures; and 4) transparency and accountability, which combined serve to enhance national efforts to comply with the FATF Recommendations. Concrete lines of action for various institutional partners, as well equally the cyberbanking sector take as well been identified to public-private cooperation efforts.

Source: ^{Financial Activity Task Force (2012b)}.

Chart 6 Summary of the National Strategy to Combat Money Laundering and the Financing of Terrorism.

Mexico's starting time follow-upward report to the FATF was issued in October 2010, with the second and third issued in October 2012, and 2013, respectively. The Fourth Follow-up Report, issued in February 2013, illustrated concrete progress in some areas of compliance, just the country was accounted to have shown bereft progress with regard to some Key Recommendations. At this phase, Mexico entered into a procedure of Targeted Enhanced Follow-upwards. Subsequent Follow-up Reports were issued in June 2013 (Fifth Follow-up Report) and October 2013 (Sixth Follow-upwardly Report). In February 2014, Mexico submitted its 7^thursday Follow-upwardly Report to the FATF, as well equally its awarding for removal from the Follow-Up procedure, having identified sufficient progress in addressing the gaps in national compliance, particularly with respect to the Core and Key Recommendations that had been rated Partially Compliant in the tertiary Circular Mutual Evaluation (Chart vii).

Source: ^{Financial Action Job Force (2014b)}.

Chart 7 Mexico: 7^th Follow-Upward Compliance Report with FATF Regulations and Progress Achieved since the Third Round Mutual Evaluation.

As this nautical chart illustrates, United mexican states has managed to brand strides in addressing the shortcomings of national anti-coin laundering and counter-terrorist financing programs. All Core and Fundamental Recommendations are now rated Largely Compliant, and the land has shown progress in meeting FATF standards with respect to other Recommendations. I of Mexico's major successes in compliance is its improved performance with respect to Recommendation 1, focusing on the criminalization of money laundering. The Federal Criminal Code was amended to accost technical shortcomings in the definition and operation of money laundering. In addition, long-term measures were enacted to raise the effectiveness and efficiency of the national criminal organisation. The country has recently focused on pursuing the prosecution of loftier-profile coin laundering cases, thus raising the effectiveness of the new legislation.

As Nautical chart viii illustrates, the amount of coin seized in recent years in money laundering cases in Mexico has increased rapidly, both in terms of national currency seizures and those in strange dollar transactions. From 2009 to 2013, budgetary seizures in Mexican pesos increased 231%, while seizures in us dollars increased past more than 600% equally a result of heightened efforts to monitor, find and capture flows of illicit coin.

Chart 8 Amounts Seized in Coin Laundering Cases, 2009-203.

	2009	2010	2011	2012	2013
Corporeality of Mexican pesos seized (in MXN)	247 337 523	97 824 599	179 986 165	354 210 379	820 412 363
In USD a	eighteen 918 998	5 187 945	13 765 874	27 093 768	62 753 842
Amount in US dollars seized (in USD)	1 192 548	522 044	368 343	39 448	eight 450 770

a The conversion to USD for all amounts was made with the official exchange rate of 13 January 2014.

Source: ^{Financial Activeness Task Force (2014b)}.

While the trend in budgetary seizures has increased on boilerplate over the final v years, the largest gains have been realized since 2012. Equally Graph 1 indicates, in terms of both usa dollars and Mexican pesos seized, the levels dropped significantly post-obit the 2009 financial crisis. However, in 2013, detection of illicit flows of both currencies increased dramatically. It is expected that due to heightened national efforts to monitor transactions, and increased cooperation among both national and international entities, the amounts of illicit funds seized by Mexican authorities could continue to increase in coming years. The country has adopted an enhanced run a risk-based approach, which is aligned with the National Strategy to Combat Money Laundering and the Financing of Terrorism, and will be utilized to supervise the fiscal organisation and accost emerging threats.

Source:^{Fiscal Action Task Forcefulness (2014b)}.

Graph 1 Significant Increases in Monetary Seizures through Money Laundering Cases, 2009-2013.

At the Federal level, the number of prosecutions for money laundering cases accept also increased, indicating the state'south delivery to investigation, and the improved coordination of activities throughout the banking and judicial organisation. This besides reflects increased cooperation with constabulary enforcement agencies and FIUS. Despite the sustained increase in the prosecution rate in Mexico over the last eight years, the conviction rate overall has tapered (Chart 9). From 2006 to 2013, in just over seven years, the number of prosecutions increased by 133%, though the confidence rate dropped from nearly 60% to less than twenty% over this same time period.

Chart 9 Mexico: Number of Prosecutions, Convictions and Acquittals Related to Money Laundering Cases, 2006-2013.

	2006	2007	2008	2009	2010	2011	2012	2013
Prosecutions	36	45	61	45	seventy	108	128	84a
Convictions	21	18	29	21	27	33	8	15
Acquittals	6	eight	eight	4	v	5	four	five
Confidence Rate	58.iii%	40.0%	47.5%	46.7%	38.6%	thirty.half-dozen%	half dozen.3%	17.9%

^a Mexican Regime report that in 2013 the FIU made 84 requests for money laundering prosecutions directed to the Federal Prosecutor. In addition, they explained that the Federal Prosecutor could have initiated other money laundering prosecutions. However, they highlight that at the fourth dimension, with regard to 2013 data, they do not have the data for those potential additional cases.

Source: ^{Fiscal Action Chore Strength (2014b)}.

In summary, since the 2008 Mutual Evaluation, United mexican states has made some notable progress in national efforts to combat coin laundering and the financing of terrorism. Following the successful review of its 7^th Follow-up Report in February 2014, Mexico was removed from the formal Follow-up process by the FATF, reflecting the country's improved performance with respect to Key and Core Recommendations. Notwithstanding, despite this progress, Mexico nevertheless has ongoing work in preventing money laundering and the financing of terrorism. A key factor is the land'southward ability to demonstrate connected compliance and cooperation with the existing Recommendations in hereafter evaluations. In addition, some non-Core and Primal Recommendations all the same need to be addressed for the land to come into full compliance with the full battery of FATF Recommendations. Emerging national and international security threats, too as the sheer magnitude and complication of the financial structure in Mexico may weigh on the land's future compliance. Worrisomely, with the erosion of the rule of law in some Mexican states, corruption remains a serious threat to the operations of FIUS, and undermines the effectiveness of the judicial organization. An overarching limitation in compliance, as well as in the prosecution and confidence of money laundering and terrorist financing violations, is the weak financial capacity of the Land. This fiscal precariousness is exacerbated by the extremely low level of tax collection in Mexico, in role due to rampant tax evasion and elusion, as well as deficiencies in the judicial organisation that have led to few convictions and incarcerations for taxation fraud.

Conclusions

The newspaper has reviewed the current status of the struggle against money laundering and the financing of terrorism in Latin America and the Caribbean, with special reference to the case of United mexican states. It showed that in that location accept been significant advances in the majority of countries in the region in establishing appropriate policies and legislation in the fight against these financial sector security risks. Nevertheless, it identified major challenges or obstacles that question the continued and effective awarding of FATF Recommendations, as well every bit countries' ability to cope with emerging international threats.

Another result of this work is to stress the demand for special attention to provide technical support to countries in Latin America and the Caribbean that, according to the Mutual Evaluations conducted, accept not yet accomplished compliance with more than 50% of the (forty + 9) FATF Recommendations. Important business organization rises for countries that have low levels of compliance with Key Recommendations, particularly those who do not comply with Recommendations 5 and 23, relating to due diligence requirements for customer identification, and the absence of laws and regulations that seek to forbid people linked to money laundering or the financing of terrorism from existence able to exercise command over or go owners of financial institutions. Coordinated activeness is required past the international community in order to strengthen these countries' capacity to place and prosecute criminal activities, including tax evasion and corruption, as well as to comply with international norms aimed at promoting international financial stability and security.

This commodity too identified new and emerging threats to the financial sector and, more broadly, to macroeconomic security that require the design and implementation of international regulatory standards, specially with regard to technological advances. Proper systems for monitoring and evaluation will aid individual jurisdictions to identify and manage emerging risks. Close transparent cooperation with other jurisdictions and supportive international organizations, including specialist groups and public-private partnerships, tin help take a global approach to combating emerging financial crimes, as well as the financing of terrorism and weapons of mass destruction. The same technological innovations that enable the emergence of new risks also provide the international customs with tools to combat coin laundering and terrorist financing. Technology -based intelligence monitoring, advanced data analytics, and ever-modernizing capacities to share information and analysis in real time with international counterparts, including with law enforcement and judicial agencies, can assistance to stem the menses of these threats, and strengthen the security of the international financial organization, specially because "know your client" policies must include a concrete form of information verification, and follow upward monitoring to exist effective.

For the case of United mexican states, and looking ahead, its next Mutual Evaluation will exist conducted in 2018, a year of Presidential elections. The country will be required to demonstrate continued compliance with the previous Recommendations, equally well as compliance with the amended fix of 2012 FATF Recommendations. The country will also face a stricter set of penalties in the case of non-compliance, with the possibility of inclusion in the FATF's lists of high-risk and non-cooperative jurisdictions. This, by the fashion, volition too apply to Panama, that despite the country ́s efforts to be removed from the gray list of non-compliant countries, will have to strengthen its continued endeavour to guarantee the effectiveness of the recently approved legislation. This took a dramatic plow recently in the light of the world leak of the so called Panama Papers revealing again the country ́s function as a tax haven.

Source: http://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S0188-33802016000100009

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