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Monday, October 15, 2012

Mexico approves Anti-Money Laundering Law - Can it affect you?

Mexico's Congress approved Thursday a long-awaited anti-money laundering law. While this law aims to attack the finances of Mexico's powerful drug cartels, both Mexicans and foreigners doing business or investing in Mexico should familiarize themselves with it, as new restrictions on certain cash purchases of real estate, jewelry, armored cars and other assets occurring within Mexico are imposed. 

In particular, this law (a) forbids buyers and sellers from giving or accepting cash payments of over a $50,000 for Mexican real-estate purchases; (b) forbids cash purchases of more than $15,000 for automobiles or items like jewelry and lottery tickets; and (c) requires Mexican notaries (who, as opposed to US notaries, are specialized lawyers acting as public officers with jurisdiction over voluntary, non-contentious private law such as real estate transactions, incorporation of legal entities, wills, trusts and successions, among other acts) to report payments in Mexican transactions exceeding the established limits.  Violators can face up to 20 years in prison!
The type and amount of the restricted transactions are not that uncommon.  Thus, it is imperative for Mexicans and non-Mexicans alike to understand the new restrictions, limitations and reporting obligations established by this new law in order for them to avoid criminal liability for what would otherwise be a legal transaction.  
The bill now goes to President Calderon's office for ratification and is set to take effect in about nine months to give authorities time to prepare its enforcement. Accordingly, if all goes well, the law may come into effect in July of 2013.

Mauricio Leon de la Barra is an international law attorney licensed to practice law in Mexico and California, and has more than 15 years of experience representing clients in cross-border business and real estate transactions and litigation involving international, U.S. and Mexican laws.