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FEDERAL LAW FOR PREVENTION AND IDENTIFICATION OF TRANSACTIONS WITH RESOURCES OF ILLEGAL ORIGIN

 On October 17, 2012 this law was published in the Federal Official Gazette (DOF); and broadcasted in the media as “Anti-Money Laundering Law”. Such regulation was inforced on July 17 and its rules of procedure will be issued in August of this year.

By means of this law several procedures were set forth in order to detect illegal transactions involving funds, which mean greater surveillance by the authority in all financial and commercial transactions which take place in Mexico.

The purpose of this law is to protect the National Financial system and economy, establishing measures and procedures to prevent and detect acts or transaction which involve resources of illegal origin.

Competent Authority

The authority responsible for applying this law and its rules of procedure will be the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público or "SHCP").


Vulnerable activities

All acts, transactions and services carried out by financial institutions; as well as the purchase and sale of goods and services carry out by new economic players, such as:

* Activities related to gambling, raffles and lottery activities.

* The issuance and trade, concurrent orprofessional, rendering of services through service cards, pre-paid cards and all those that constitute instruments for storing monetary value, not issued or sold by Financial Institutions.

* Customary and professional trading of Precious Metals, Precious Stones, jewelry or watches.

* Trading or distribution of cars, aircrafts or vessels, whether new or usedpre-owned.

* Rendering of independent professional services, when rendered or provided to a client or on behalf of them.

* The rendering of services related to the legal authority to attest documents, such as Notary Publics.

* Creation of personal rights related to the use or enjoyment of real estate properties.

The vulnerable activities shall be subject to identification and therefore, of submission before the SHCP of the corresponding notice, provided that they are carried out under the terms and amounts determined for each particular case.


Obligations

The following obligations are imposed for those conducting Vulnerable Activities:

* Identify customers and users and verify their identity through specific documents.

* Preserve, keep, safeguard and prevent the destruction or concealment of information and documentation supporting a Vulnerable Activity.

* Provide the necessary assistance for carrying out verification visits as set forth in the Anti-Money Laundering Law.

* File Notices when required by the SHCP.


Notices

The Anti-Money Laundering Law provides that legal entities or individuals carrying out Vulnerable Activities must file the corresponding Notices before the SHCP, no later than the 17th day of month following the day on which they had carried out the transaction subject to be notified.


Review Visits

The SHCP has the authority to verify at any time the compliance with the obligations established by the Anti-Money Laundering Law, through the practice of visits to those carrying out Vulnerable Activities.


Confidential Information

The information and documentation supporting the Notices and the identification of those who have submitted them, as well as the designated legal representatives, is considered confidentialand reserved information under the terms of the Federal Law of Transparency and Access to Public Governmental Information.


Infringement and Crimes

The Anti-Money Laundering Law provides several types of penalties for those who violate its provisions.

As a general rule, the SHCP will penalize administratively those who commit administrative infringements as set forth in the Anti-Money Laundering Law, except for infringement committed by Financial Institutions, which will be sanctioned by the regulatory agency that is competent to supervise them.


The following are considered as administrative infringements:

I. Failure to comply with the requirements established by the SHCP.

II. Failure to comply with the obligations set forth for those who carry out Vulnerable Activities.

III. Failure to file Notices within a thirty-day term following to the date in which the Notice is required to be filed.

IV. Filing of Notices which do not comply with applicable requirements.

V. Participation in prohibited acts (regarding the use of cash and metals).


The sanctions with respect to the foregoing infringements range from 200 to 65,000 minimum wages as in forced in the Federal District, as well, another penalties consisting of the revocation of gaming business permits and the definitive cancellation of the licenses granted to public notaries, public brokers, customs brokers or, as applicable.

In addition to the foregoing, the falsification, alteration, modification or the disclosure of information that allegedly links a person or legal entity with any transaction reported to the SHCP, are considered criminal offenses and are punishable with imprisonment.

At ACM Legal, we are ready to provide you with the support you require in this and in any other corporate application you may require, please bear in mind we are just a phone call away in order for us to keep your company updated and in that manner, avoid possible legal, financial or business contingencies.