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The New Partnership Collaboration Agreement Between The Financial Intelligence unit and The Audit Ministry (Secretaría de la función pública)

Within the framework of the actions being carried out by the executive branch to tackle the problem of corruption in our country, on January 3rd, of this year, the Audit Ministry (Secretaría de la Función Pública – as per its Spanish abbreviation) and the Financial Intelligence Unit (UIF, by its initials in Spanish) of the Ministry of Finance and Public Credit signed a framework collaboration agreement to establish the bases and mechanisms for collaboration and joint coordination in the fight against corruption.

This agreement seeks to establish a scheme for the exchange of information to help investigate possible violations of the General Law of Administrative Responsibility related to improper acts of public servers, regulated in that law.

However, this is directly preceded by the result obtained by Mexico in the Mutual Evaluation Report of January 2018 of the Financial Action Task Force against Money Laundering (“FATF”), of which Mexico is a member, and in which one of its findings is that “the number of criminal actions and convictions for money laundering cases is very scarce”. According to the report, “Significant deficiencies were detected in the way money laundering cases are investigated. Specifically, very rarely are parallel financial investigations conducted, and Money Laundering is rarely prosecuted as a stand-alone offence. The level of corruption affecting law enforcement authorities, particularly at the states level, undermines their ability to investigate and prosecute serious crimes.”

In addition, another part of the report also states that, “based on the information provided in Mexico’s June 2016 National Risk Assessment, conducted within the framework of the FATF and other documents from public sources, the amount of proceeds generated by predicate offenses committed in and outside of Mexico is high. The main national fund-generating crimes can be divided into three levels of magnitude: (i) national organized crime, which includes drug and human trafficking; (ii) corruption; and (iii) tax evasion.

As it can be inferred from the results of the FATF Mutual Evaluation Report, corruption continues to be a pending issue in our country, and therefore, in addition to directly prosecuting crimes related to improper acts of public servers (such as bribery, influence peddling or the diversion of public resources), it is also of the utmost importance that financial intelligence be used and that the investigation and prosecution of financial crimes, and in particular the crime of money laundering, be strengthened in order to contribute to the percussion of such crimes committed by public servers. In turn, the fight against corruption will also help to strengthen the capacity of the authorities to prosecute money laundering, since, as it can be observed, money laundering and corruption are two problems that are closely linked, and whose fight requires a comprehensive strategy.

For this reason, the new government has also announced that new changes will be proposed to the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, in order to broaden its scope and include political parties and labor unions as entities subject to the obligations established in said law, and therefore, subject to supervision by the competent authorities.

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