Reform to the Anti-Money Laundering Law: Strengthening the regime applicable to the Vulnerable Activities sector

I. Origin.

As a result of the recommendations received by Mexico in the most recent mutual evaluation report from the Financial Action Task Force (FATF), a reform initiative to the Federal Law for the Prevention and Identification of Operations with Illicit Proceeds ("Anti-Money Laundering Law") was presented in recent months.

This initiative was recently approved by the Congress of the Union, and the respective reform decree was published in the evening edition of the Official Gazette of the Federation on July 16, 2025 (the "Reform"), entering into force the day after said publication.

This document summarizes the main and most relevant changes to the Anti-Money Laundering Law.

II. New concepts introduced in the Anti-Money Laundering Law.

II.I. New Obligations and Expanded Obligations.

The main objective of the Reform is establish new obligations to people who carry out vulnerable activities, in order to assimilate them to those activities carried out by regulated financial institutions, which have a more robust regime, and which entail a greater administrative burden.

However, the Reform provides for the possibility that, subsequently, the Ministry of Finance and Public Credit (the “SHCP”) establishes general exceptions to compliance with these obligations, through officially published agreements.

Such new obligations, or expanded obligations of those carrying out vulnerable activities, are the following:

1. Risk-Based Approach.- They must evaluate their operations using a risk-based approach. This seeks to identify, analyze, understand, and mitigate the risk that such operations could be used in acts that could constitute crimes involving operations with illicit proceeds, financing of terrorist and criminal organizations, and similar offenses.
2. Automated Monitoring Mechanisms. These mechanisms aim to: (i) monitor acts and transactions to identify those that deviate from the transactional profile of clients and users; (ii) accumulate transactions semiannually for reporting purposes; and (iii) provide intensified monitoring of clients or users who are politically exposed persons.[1] or high risk.
3. Annual Audits.- The Reform introduces the requirement that an annual audit be conducted—through an internal or external auditor—of the effectiveness of compliance with anti-money laundering obligations. This will depend on the risk level of the person carrying out the vulnerable activity.
4. Staff Selection and Training.- Processes must be in place for staff selection, as well as for training certain staff in anti-money laundering.
5. Type of Documentation to be Retained and Period.- According to the Reform, (i) the retention period for information and supporting documentation for vulnerable activities is extended from 5 to 10 years; (ii) the scope of the information and documentation that must be retained is conceptually required to allow for the reconstruction of operations, and it expressly provides that commercial correspondence for carrying out the operation, as well as prior analyses, must be retained.
6. Identification of the Controlling Beneficiary.- Although the Anti-Money Laundering Law stipulated the obligation to inquire about the existence of a controlling beneficiary, the Reform expressly establishes the obligation to identify that controlling beneficiary and to request the corresponding information and documentation. In this regard, the definition of controlling beneficiary was modified to clarify that it always includes one or more natural persons, and the percentage of control was reduced from 50% to 25%.

In addition to the previous obligations, which are specific to those who carry out vulnerable activities, the Reform establishes a general obligation, applicable to all commercial companies, to (i) meet requirements under the Anti-Money Laundering Law, to determine your Controlling Beneficiary and retain the information that supports it (which was already a tax obligation under the applicable provisions); and (ii) to give notice, in the PSM in charge of the Ministry of Economy, not only of the transfer of ownership of securities representing shares or stocks, but also of the constitution of rights of any nature over them, also recording the information necessary to identify the respective controlling beneficiary(ies), which is an additional obligation to what is required under the applicable commercial provisions, and therefore, could be punishable under the Anti-Money Laundering Law.

The SHCP will also promote among the federal entities that the Companies and associations of a civil nature also identify their respective controlling beneficiaries.

II.II. Vulnerable Activities.

The Reform introduces, clarifies or expands the following vulnerable activities:

• Real Estate Development.- The receipt of funds for the construction of real estate or subdivision of lots, intended for sale or rent, is established as a new vulnerable activity.
• Cryptocurrency Exchanges Operating with Mexicans.- Although this vulnerable activity already existed, the Reform has extraterritorial effects, establishing that the habitual and professional offering of exchange of virtual assets is considered a vulnerable activity, including operations carried out with Mexican citizens from another jurisdiction.

In this regard, the notification threshold was reduced by approximately two-thirds, to 210 UMAs, and a new threshold was introduced, which is not related to the amount of the transactions, but to the consideration for the service provided, setting it at a low threshold of 4 UMAs.

Likewise, in the specific case of this vulnerable activity, there is an obligation to obtain and retain accurate information on transactions involving virtual assets: originator, recipient, and controlling beneficiary.

• Public notarization service providers. - In addition to the public notarization service providers previously covered under the Anti-Money Laundering Law (notaries, brokers, and public officials), the Reform adds the facilitators referred to in the General Law on Alternative Dispute Resolution Mechanisms.

• Customs agencies. Previously, the Anti-Money Laundering Law only considered certain operations carried out by customs agents and representatives as vulnerable activities. Under the Reform, operations carried out by customs agencies are considered vulnerable activities.

Furthermore, it is clarified that the conduct of vulnerable activities through trusts or any other legal entity is subject to compliance with the Anti-Money Laundering Law.

III. Clarifications and improvements to the Anti-Money Laundering Law

In addition to the new concepts mentioned in the previous section, the Reform contemplates the following:

• Only the establishment of trusts to guarantee credit in favor of institutions of the financial system or public housing agencies is excluded as a vulnerable activity for public notaries.
• Concepts such as the Compliance Manual and 24-Hour Notices, which were previously provided for in secondary provisions, such as regulations and general rules, are now included in the Anti-Money Laundering Law.
• The obligation of public notaries is established give notice under the Anti-Money Laundering Law, in all types of company formation, increase or decrease of share capital, merger or spin-off, and purchase and sale of shares or corporate shares.
• Clarifications of certain terms related to vulnerable gaming and sweepstakes activities.
• Training programs for non-profit organizations, as well as simplified compliance measures, will be implemented within six months of the reform's entry into force.
• As a new sanction, the SHCP may order the suspension of actions or operations with certain clients.
• A provision of the Anti-Money Laundering Law that was not entirely clear, but that allowed for spontaneous compliance with anti-money laundering obligations, has been amended. The new provision allows the Ministry of Finance to refrain from sanctioning all the violations committed, provided that there is spontaneous compliance and recognition of the violation committedThere will also be a second phase of spontaneous compliance, during which fines can be reduced by up to 50%. However, it is advisable to wait for amendments to the secondary regulations or to approach the authorities.

IV. Secondary Regulations

The reform establishes that, within a period of 12 months, the secondary provisions will be amended to give effect to the new provisions of the Anti-Money Laundering Law, so several of these provisions will not have full practical effect immediately.

[1] The SHCP must prepare and maintain an updated list of public officials who should be considered politically exposed persons. In turn, public entities at all three levels of government—federal, state, and municipal—must submit specific lists of such individuals to the SHCP.