In connection with the above, we have received various concerns, the most common of which is whether or not all commercial companies must identify Controlling Beneficiaries for the purposes of the Federal Law for the Prevention and Identification of Operations with Illicit Resources (Anti-Money Laundering Law), its Regulations, and the General Rules.

Comments

As a result of this reform, “Chapter IV Bis on Controlling Beneficiaries” was added to the Anti-Money Laundering Law, which essentially specifies in Articles 33 Bis and 33 Ter that: (i) commercial companies must comply with the requirements made by the authorities to determine who their Controlling Beneficiary is and keep the supporting information; (ii) in the event of the transfer of ownership or the creation of rights over shares or stock, commercial companies must submit the corresponding notice in the electronic system operated by the Ministry of Economy; and, (iii) they must register in the aforementioned electronic system the information to identify the person or group of persons who meet the requirements to be considered Controlling Beneficiaries of said companies.

However, a penultimate paragraph was added to section III of article 3 of the Anti-Money Laundering Law, specifying that for the purposes of Chapter IV Bis, a Controlling Beneficiary shall be understood to be the individual who ultimately has effective control over a legal entity in terms of subsection b) of that section, “even if said legal entity is not a Customer or User of someone who carries out vulnerable activities or acts or operations are carried out with them in their name.”

Given the lack of clarity and, therefore, the poor wording of the previous provision, it is necessary to note the intention of the legislator in the Explanatory Memorandum of the “Initiative with Draft Decree amending, adding, and repealing various provisions of the Federal Law for the Prevention and Identification of Operations with Illicit Resources, and amending Articles 11 bis and 400 bis of the Federal Criminal Code”, in which it stated that, in view of the proposed changes to Recommendation 24 of the Financial Action Task Force and its Interpretative Note, all countries are required to establish a register of beneficial owners or use an alternative system that allows the authorities efficient access to information on such owners.

Consequently, the proposal to add Chapter IV Bis to the Anti-Money Laundering Law is intended to ensure that all commercial companies, regardless of whether or not they carry out a vulnerable activity, are required to identify and register the individual or group of individuals who control them.

Therefore, although we believe that this obligation is redundant and contrary to the nature and purpose of the Anti-Money Laundering Law, it is clear that all commercial companies must identify the Controlling Beneficiaries for the purposes of said Law, its Regulations, and the General Rules.

It should be noted that, in accordance with the Second Transitory Article of the aforementioned Decree, the Ministry of Finance and Public Credit, after consulting with the Tax Administration Service, will amend the corresponding General Rules within 12 months of its entry into force (i.e. no later than July 17^th, 2026).

However, we believe that this obligation should not imply an additional administrative burden for companies for the following reasons:

• Since December 15^th, 2018, any modification or incorporation of partners or shareholders in the shareholding structure of a corporation or limited liability company must be reported through a notice submitted to the Ministry of Economy’s “Electronic System for Commercial Company Publications”, in accordance with the provisions of Articles 73, second paragraph, 129, second paragraph of the General Law on Commercial Companies and 50 Bis of the Commercial Code. Consequently, this obligation suggests keeping the entries in the books of Meetings, Share Register, and Capital Variations up to date, noting the Federal Taxpayer Registrations of the partners or shareholders.

• Likewise, starting in fiscal year 2020, legal entities must file a notice with the Federal Taxpayers Registry within 30 business days of any change or addition to their shareholding structure, reporting the name and code of their partners or shareholders in said Registry, in accordance with Article 27, sections A, subsection II, and B, subsection VI, of the Federal Tax Code and rule 2.4.15. of the Miscellaneous Tax Resolution for 2025.

• Finally, on January 1^st, 2022, Articles 32-B Ter, 32-B Quáter, and 32-B Quinquies of the Federal Tax Code came into force, incorporating the obligation for legal entities, trustees, trustors or trustees, as well as contracting parties or members of legal entities, to obtain and keep, as part of their accounting records, reliable, complete, and up-to-date information on their Controlling Beneficiaries and to provide it to the Tax Administration Service when required.

We believe that companies will have the necessary information to identify their Controlling Beneficiaries for the purposes of the Anti-Money Laundering Law, its Regulations, and the General Rules, provided that they have up-to-date information for the aforementioned corporate and tax purposes related to changes in their shareholding structures and their Controlling Beneficiaries for tax purposes.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, August 1^st, 2025

Comments

This amendment repeals the last paragraph of article 129 of the Amparo Law, which established the following: ““The amparo jurisdictional body may exceptionally grant the stay of execution, even when dealing with the cases provided for in this article, if in its judgment the refusal of the stay of execution could cause greater harm to the social interest.”

Likewise, a last paragraph is added to article 148 of the Amparo Law, which specifies the following: “In the case of amparo proceedings that resolve the unconstitutionality of general rules, in no case the stay of executions that are issued will establish general effects”.

With this amendment, it is categorically prohibited for Judges to grant stay of executions with general effects in those amparo trials that resolve the unconstitutionality of general rules, that is, the stay of executions granted can never have a benefit for the community.

We consider that the aforementioned amendment violates the principle of progressivity stated in Article 1^st of the Mexican Constitution, since any authority has the obligation to promote, respect, protect and guarantee human rights, precisely in accordance with the aforementioned principle, that is, that human rights cannot decrease, on the contrary, they can only increase, which implies that they progress gradually.

Therefore, both the Federal Executive and the Legislative Branch cannot issue general rules or amendments to our legislation that limit, restrict, eliminate or disregard the scope and protection recognized by several.

Evidently, this amendment serves political interests exclusively and with the sole purpose of not preventing the advancement of legislative acts that imply the creation or development of Federal Government projects extremely questionable, with lack of transparency and with non-accountability, such as, the opening of the Felipe Ángeles International Airport, the “Mayan Train”, the “Dos Bocas Refinery”, the militarization of the National Guard, the breaking of the independence of the electoral authority, etc.

Nevertheless, as the Mexican Supreme Court of Justice has recognized, in accordance with the “control of constitutionality” or “control of conventionality ex officio” that every Judge is obliged to observe and apply, we consider that Judges can continue granting stay of executions to the complainers that participate in a certain market or industry, as well as the rest of the participants who have not filed an amparo lawsuit challenging the rule in question, in order to avoid alterations that benefit certain participants to the detriment of others.

Such is the case, for example, of the unconstitutionality of the amendment to the Electrical Industry Law published in the Official Gazette of the Federation on March 9^th, 2021, which favored the generation of electricity generated by the Federal Electricity Commission, since the stay of executions were granted to the complainers of the amparo lawsuits against said amendment and, additionally, to any participant in the electricity market, in order to avoid providing privileges to some to the detriment of other participants.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, June 18^th, 2024

The Criterion basically states that in accordance to article 17, section IV of the Federal Law on Prevention and Identification of Operations from Illicit Sources (AML Law) the granting of credits or loans between Companies of the same Business Group will be considered as Vulnerable Activities (VA) subject to comply with the obligations established in the AML Law, with the exception of filing Notices, as long as the total amount of the operation has been provided through Financial System Institutions and the Companies comprise a Business Group in terms of article 3, section X, of the General Rules.

Nevertheless, the aforementioned Criterion has raised doubts and concerns regarding when such operations are effectively considered VA; that is, as of the date when it was updated or since before.

Comments

The article 17, section IV of the AML Law establishes that the habitual or professional granting of guarantee operations or the granting of loans or credits, that may include or not a warranty, by means of entities different from the Financial Entities are considered VA, and when the act or operation is equal or superior to a certain amount a Notice must be submitted.

However, on July 25^th, 2014, the addition of the article 27 Bis of the General Rules entered into force, which states in its section I, subsection a), that regarding to the provisions set forth in the article 17, section IV of the AML Law, the corresponding Notices are not subject to filing when Companies that are part of a Business Group executed operations granting loans or credits exclusively with other Companies of the same Business Group. The above, as long as the total amount of the operation would have been provided through Financial System Institutions.

Therefore, it is important to clarify that the centralized treasury operations and/or loans granted between Companies of the same Business Group are considered VA with the exemption of submitting Notices, as of the date in which the referred article 27 Bis, section I, subsection a) of the General Rules entered into force, this is, since July 25^th, 2014, and not from January 18^th, 2021, date in which the aforementioned Criterion was updated. 

Recommendations

Companies of the same Business Group that effectively executed the aforementioned operations must verify the fulfillment of the obligations set forth in the AML Law, including, among others: (i) registry upon the Tax Administration Service; (ii) submission of the monthly reports or “zero” notices; (iii) obtain information and documentation of the clients, users and/or beneficial owners and identify and classify the risk level; (iv) integrate the identification records; (v) to have guidelines, internal policies and procedures; etc.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, March 11, 2021

Such General Provisions will enter into force 45 days after its publication on the OGF (i.e. June 21, 2019), which fundamentally establish the following:

– The TAS will not impose any penalty with respect to the period of non-fulfilment covered by the SRP, as long as it is fully covered, and the irregularities or breaches are corrected at the time the vulnerable activity was carried out.

– The obliged individual or entity must submit their application for SRP authorization before the Anti-money Laundering Website, within 30 business-day-term following the date that entered into force the General Provisions and must fulfill certain requirements for such purpose. The SRP must be concluded within a maximum period of 6 months from the following day in which the aforementioned 30 business-day-term ended.

– If verification audits are being carried out, or they were concluded prior to the entry into force of the General Provisions, the obliged individual or entity may adhere to the SRP, as long as they submit the authorization application of his program before the verification audit department.

– An application for SRP authorization will be inadmissible when the obliged individual or entity: (i) is not recorded in the register; (ii) its data in the register are not updated; (iii) is not up-to-date with its obligations during the year 2019; and, (iv) the irregularity or breach committed constitutes an offense established by the Anti-money Laundering Law.

– Until the SRP period concludes, the obliged individual or entity within 20 business-day-term from the day in which the aforementioned period ends, may request to the TAS the waiving of fines imposed during the time in which the irregularity or breach was committed that covered by the SRP and must fulfill with certain requirements for that purpose.

– The TAS will verify the provenance of waiving of fines within a maximum period of 6 months from the date the application was submitted and will have to inform its provenance or not provenance to the obliged individual or entity within 30 business-day-term after the verification was concluded. The TAS may dismiss the application in some cases.

Comments

The Anti-money Laundering Law, its regulations and other general rules have not been characterized by stating precise and clear provisions; on the contrary, they are characterized by substantial administrative and financial established burdens for its fulfillment.

The SRP are an important alternative for those individuals or entities who performed vulnerable activities and are not up-to-date with their obligations from July 1^st, 2013 to December 31, 2018 and thus, normalize its due fulfillment.

Recommendations

It is essential to review and analyze the operations carried out between July 1^st, 2013 to December 31, 2018, in order to verify if vulnerable activities were performed or not in terms of the Anti-money Laundering Law and, if applicable, submit the SRP application according with the General Provisions.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, April 16, 2019

Likewise, an amnesty is provided for the anti-money laundering matters, since it is specified that there will be no penalty imposed on the period of non-compliance covered by the corresponding auto-regularization program, in addition that the TAS will be able to cancel the fines imposed during the period of non-compliance covered by such program.

Finally, it is noted that the TAS must issue and publish in the Official Gazette of the Federation the general rules that regulate the application of self-regularization programs, within a maximum of 60 days-term following the entry into force of the aforementioned FRL.

Comments

The TAS in addition to its multiple powers as a tax authority, also has verification powers in matters of anti-money laundering, which it has exercised on a recurrent basis since approximately 2016, due to the fact that the Financial Action Task Force identified several entities and non-governmental organizations as a vulnerable sector that has access to considerable sources of funds and resources to carry out national and international transactions.

On the occasion of these powers, fines have been imposed on many occasions that were challenged and were finally declared illegal by the Federal Court of Administrative Justice, because several provisions contained in the Anti-money Laundering Law are not clear, also in its regulations and other general rules in which they were intended to support such fines; on the contrary, they generate uncertainty in a number of situations, causing additional administrative and financial burdens, such as guarantee and challenge the fines imposed.

Recommendations

It is essential to review and analyze the operations carried out by the entities during the aforementioned period, in order to verify and confirm if vulnerable activities were carried out or not in terms of the Anti-money Laundering Law and, if applicable, observe the general rules that will regulate the self-regularization programs that the TAS will publish in due time and qualify to the benefit of the aforementioned amnesty.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, January 7, 2019