Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin — CNBV — MX

FEDERAL LAW FOR THE PREVENTION AND IDENTIFICATION OF OPERATIONS WITH RESOURCES OF ILICIT ORIGIN Published in the Official Gazette of the Federation on October 17, 2012.
Updated with the Decrees published in the same Gazette on March 9, 2018 and May 20, 2021.

FEDERAL LAW FOR THE PREVENTION AND IDENTIFICATION OF OPERATIONS WITH RESOURCES OF ILICIT ORIGIN

INDEX
Chapter I
Preliminary Provisions
Chapter II
On the Authorities
Chapter III
On Financial Entities and Vulnerable Activities First Section On Financial Entities Second Section On Vulnerable Activities Third Section Deadlines and methods for the submission of Notices Fourth Section Notices through Collegiate Bodies
Chapter IV
On the Use of Cash and Metals
Chapter V
On Verification Visits
Chapter VI
On the Reservation and Handling of Information
Chapter VII
On Administrative Sanctions
Chapter VIII
On Crimes
Transitory
Statement of Reasons
References

Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin

Chapter I
Preliminary Provisions

Article 1. This Law is of public order and public interest and is of general observance in the United Mexican States.

Article 2. The purpose of this Law is to protect the financial system and the national economy, establishing measures and procedures to prevent and detect acts or operations involving resources of illicit origin, through inter-institutional coordination, with the aim of gathering useful elements to investigate and prosecute the crimes of operations with resources of illicit origin, those related to them, the financial structures of criminal organizations, and to prevent the use of resources for their financing.

Article 3. For the purposes of this Law, the following shall be understood:
I. Vulnerable Activities, the activities carried out by Financial Entities in terms of Article 14 and those referred to in Article 17 of this Law;
II. Notices, those that must be submitted in terms of Article 17 of this Law, as well as the reports that financial entities must submit in terms of Article 15, fraction II, of this Law;
III. Beneficial Owner, the person or group of persons who:
a) Through another or through any act, obtains the benefit derived from them and is the one who, ultimately, exercises the rights of use, enjoyment, profit, or disposal of a good or service, or b) Exercises control over that legal entity that, in its capacity as a client or user, carries out acts or operations with whoever performs Vulnerable Activities, as well as persons on whose behalf any of them is celebrated. It is understood that a person or group of persons controls a legal entity when, through the ownership of securities, by contract, or through any other act, they can:
i) Impose, directly or indirectly, decisions in the general assemblies of shareholders, partners, or equivalent bodies, or appoint or remove the majority of directors, administrators, or their equivalents; ii) Maintain ownership of the rights that allow, directly or indirectly, to exercise voting rights with respect to more than fifty percent of the share capital, or iii) Direct, directly or indirectly, the administration, strategy, or main policies of the same.
IV. Crimes of Operations with Resources of Illicit Origin, those typified in Chapter II of Title Twenty-Third of the Federal Penal Code;
V. Collegiate Bodies, legal entities recognized by Mexican legislation that meet the requirements of Article 27 of this Law;
VI. Financial Entities, those regulated in Articles 115 of the Credit Institutions Law; 87-D, 95, and 95 Bis of the General Law of Organizations and Auxiliary Credit Activities; 129 of the Credit Unions Law; 124 of the Popular Savings and Credit Law; 71 and 72 of the Law to Regulate the Activities of Savings and Loan Cooperative Societies; 212 of the Securities Market Law; 91 of the Investment Funds Law; 108 Bis of the Retirement Savings Systems Law; 492 of the Insurance and Surety Institutions Law; and 58 of the Law to Regulate Financial Technology Institutions;
VII. Public Notaries, notaries or public brokers, as well as public officials to whom the Laws grant the faculty to give public faith in the exercise of their attributes established in the corresponding legal provisions, who intervene in the performance of Vulnerable Activities;
VIII. Law, the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin;
IX. Precious Metals, gold, silver, and platinum;
X. Precious Stones, the following gems: aquamarines, diamonds, emeralds, rubies, topazes, turquoises, and sapphires;
XI. Prosecutor's Office, the Attorney General's Office of the Republic;
XII. Business relationship, that established in a formal and everyday manner between whoever performs a Vulnerable Activity and their clients, excluding acts or operations that are celebrated occasionally, without prejudice to what other legal and regulatory provisions establish;
XIII. Secretariat, the Secretariat of Finance and Public Credit, and
XIV. Unit, the Specialized Unit for Financial Analysis of the Prosecutor's Office.

Article 4. In matters not provided for by this Law, the provisions contained in the following shall apply, according to their nature and subsidiarily:
I. The Commercial Code;
II. The Federal Civil Code;
III. The Federal Administrative Procedure Law;
IV. The Federal Law of Transparency and Access to Government Public Information, and
V. The Federal Law on the Protection of Personal Data Held by Private Parties.

Chapter II
On the Authorities

Article 5. The Secretariat shall be the competent authority to apply, in the administrative sphere, this Law and its Regulations.

Article 6. The Secretariat shall have the following powers:
I. Receive the Notices from those who perform the Vulnerable Activities referred to in the Second Section of Chapter III;
II. Request the information, documentation, data, and images necessary for the exercise of its powers and provide the Unit with the information it requests in terms of this Law;
III. Coordinate with other supervisory and public security authorities, national and foreign, as well as with those who perform Vulnerable Activities, to prevent and detect acts or operations related to the purpose of this Law, in terms of the applicable legal provisions;
IV. File the corresponding complaints before the Federal Public Prosecutor when, in the exercise of its attributes, it identifies facts that may constitute crimes;
V. Require the appearance of alleged offenders and other persons who may contribute to the verification of compliance with the obligations derived from this Law;
VI. Know and resolve on the review appeals filed against the applied sanctions;
VII. Issue General Rules of Character for the purposes of this Law, to better provide in the administrative sphere, and
VIII. Those provided for in other provisions of this Law and other applicable legal orders.

Article 7. The Prosecutor's Office shall have a Specialized Unit for Financial Analysis, as a specialized body for financial and accounting analysis related to operations with resources of illicit origin.
The Unit, whose head shall have the status of an agent of the Federal Public Prosecutor's Office, shall have ministerial officers and specialized personnel in matters related to the purpose of this Law, and shall be attached to the office of the Attorney General of the Republic.
The Unit may use the investigation techniques and measures provided for in the National Code of Criminal Procedures.

Article 8. The Unit shall have the following powers:
I. Request information from the Secretariat that proves useful for the exercise of its attributes;
II. Establish the criteria for the presentation of the reports prepared by the Secretariat, on financial operations that may be linked to schemes of operations with resources of illicit origin;
III. Design, integrate, and implement systems and mechanisms for the analysis of financial and accounting information so that it can be used by it and other competent units of the Prosecutor's Office, especially those related to the Notices subject of this Law;
IV. Cooperate with other competent areas of the Prosecutor's Office, in the development of intelligence tools with interdisciplinary methodologies for the analysis and investigation of the different criminal, socio-economic, and financial variables, to know the evolution of activities related to the crimes of operations with resources of illicit origin and measure their regional and sectorial risk;
V. Generate its own tools for the purpose of investigating conduct patterns that could be related to operations with resources of illicit origin;
VI. Participate in the design of training, updating, and specialization schemes in the matters of financial and accounting analysis;
VII. Issue technical guides and manuals for the formulation of opinions in the matter of financial and accounting analysis that are required by the agents of the Federal Public Prosecutor's Office in the fulfillment of their investigation and prosecution functions of the crimes of operations with resources of illicit origin;
VIII. Establish mechanisms for direct consultation of information that may be related to operations with resources of illicit origin, in the databases of the authorities of the three levels of government, for the planning of the fight against the crimes of operations with resources of illicit origin;
IX. Conduct the investigation for the obtaining of indications or evidence linked to operations with resources of illicit origin in accordance with the Federal Penal Code, and cooperate with the Specialized Unit in Organized Crime when it comes to investigations linked to this type of facts;
X. Request reports, documents, opinions, and evidence in general from the departments and entities of the public administration of the three levels of government, and from other authorities, autonomous public bodies, even constitutional ones, and those persons responsible for giving Notices in organizations with Activities subject to supervision provided for in this Law. In all cases, these requests must be made within the framework of a formally initiated investigation, as well as on individuals and facts recorded in an investigation file. In the case of Financial Entities, the requests for information, opinion, and evidence in general, shall be made through the Secretariat;
XI. Conclude agreements with the federative entities to access directly the information available in the Public Property Registries of the federative entities of the country, for the investigation and prosecution of the crimes of operations with resources of illicit origin;
XII. Issue opinions and expert reports in the matter of financial and accounting analysis that are required, and
XIII. Those others determined by legal and regulatory provisions.

Article 9. The public officials attached to the Unit, in addition to meeting the entry and selection requirements determined by the Law of the Attorney General's Office of the Republic, must:
I. Accredit specialization courses in crimes of operations with resources of illicit origin and organized crime that are established in the applicable provisions;
II. Pass the initial and periodic evaluation processes required for entry and permanence in said specialized unit, and
III. Not have been sanctioned with suspension for more than fifteen days, dismissal, or disqualification, by a final resolution in their work history.

Article 10. The personnel of the Secretariat who have access to the database that concentrates the Notices related to the Vulnerable Activities, must meet the requirements specified in the fractions of the previous article.

Article 11. The Secretariat, the Prosecutor's Office, and the Federal Police shall establish training, updating, and specialization programs directed at the personnel attached to their respective areas in charge of the prevention, detection, and combat of the crime of operations with resources of illicit origin and in the matters necessary for the achievement of the purpose of this Law, within the scope of their respective competencies.

Article 12. For the fulfillment of the purpose of this Law, the authorities shall have the following obligations:
I. Observe, in the exercise of this Law, the guiding principles of the public security institutions indicated in Article 21 of the Political Constitution of the United Mexican States;
II. Coordinate their actions, within the scope of their respective competencies, for the fulfillment of the purpose of this Law;
III. Refrain from providing information generated by virtue of this Law to any person who is not authorized to take notice of or be aware of it;
IV. Establish measures for the protection of the identity of those who provide the Notices referred to in this Law, and
V. When establishing administrative regulations, in their areas of competence, aimed at identifying and preventing acts or operations related to the purpose of this Law, they must:
a) Seek an adequate regulatory balance, which avoids unnecessary annoyances or procedures that affect the normal development of the activity; b) Take the necessary measures to facilitate compliance with this Law and mitigate its economic impact, and c) Prevent the financial system from being used for illicit operations.

Chapter III
On Financial Entities and Vulnerable Activities

First Section
On Financial Entities

Article 13. For the fulfillment of the purpose of this Law, Financial Entities shall be governed by the provisions of this Law, as well as by the Laws that specially regulate them according to their specific activities and operations.

Article 14. For the purposes of this Section, the acts, operations, and services performed by Financial Entities in accordance with the laws that regulate them in each case, are considered Vulnerable Activities, which shall be governed in terms of this Section.

Article 15. Financial Entities, with respect to the Vulnerable Activities in which they participate, have, in accordance with this Law and with the laws that specially regulate them, the following obligations:
I. Establish measures and procedures to prevent and detect acts, omissions, or operations that could be located in the scenarios provided for in Chapter II of Title Twenty-Third of the Federal Penal Code, as well as to identify their clients and users; in accordance with what is established in Articles 115 of the Credit Institutions Law; 87-D, 95, and 95 Bis of the General Law of Organizations and Auxiliary Credit Activities; 129 of the Credit Unions Law; 124 of the Popular Savings and Credit Law; 71 and 72 of the Law to Regulate the Activities of Savings and Loan Cooperative Societies; 212 of the Securities Market Law; 91 of the Investment Funds Law; 108 Bis of the Retirement Savings Systems Law; 492 of the Insurance and Surety Institutions Law; and 58 of the Law to Regulate Financial Technology Institutions;
II. Submit to the Secretariat reports on acts, operations, and services that they perform with their clients and that are carried out by members of the administrative council, attorneys-in-fact, executives, and employees of the entity itself that could be located in what is provided for in fraction I of this article or that, in their case, could contravene or undermine the adequate application of the provisions indicated;
III. Deliver to the Secretariat, through the competent decentralized body, information and documentation related to the acts, operations, and services referred to in this article, and
IV. Preserve, for at least ten years, the information and documentation related to the identification of their clients and users or who have been such, as well as that of those acts, operations, and services reported in accordance with this article, without prejudice to what is established in this or other applicable legal orders.

Article 16. The supervision, verification, and monitoring of compliance with the obligations referred to in this Section and the provisions of the laws that specially regulate Financial Entities shall be carried out, as appropriate, by the National Banking and Securities Commission, the National Insurance and Surety Commission, the National Retirement Savings System Commission, or the Tax Administration Service.
The decentralized bodies referred to in the previous paragraph, within the scope of their respective competencies, shall issue the criteria and general policies to supervise Financial Entities regarding the fulfillment of the obligations provided for in this Section. The Secretariat shall cooperate with said decentralized bodies to seek the homogenization of such criteria and policies.

Second Section
On Vulnerable Activities

Article 17. For the purposes of this Law, Vulnerable Activities shall be understood, and therefore subject to identification in terms of the following article, those listed below:
I. Those linked to the practice of games with betting, contests, or raffles that decentralized organisms carry out in accordance with the applicable legal provisions, or that are carried out under the valid permits granted by the Secretariat of the Interior under the regime of the Federal Law on Games and Raffles and its Regulations. In these cases, only when they are carried out under the following modalities and amounts:
The sale of tickets, chips, or any other type of similar receipt for the practice of said games, contests, or raffles, as well as the payment of the value represented by said tickets, chips, or receipts or, in general, the delivery or payment of prizes and the performance of any financial operation, whether carried out individually or in a series of transactions linked to each other in appearance, with the persons who participate in said games, contests, or raffles, provided that the value of any of those operations is for an amount equal to or greater than the equivalent to three hundred twenty-five times the minimum wage in effect in the Federal District. The aforementioned activities shall be subject to Notice to the Secretariat when the amount of the act or operation is equal to or greater than the equivalent to six hundred forty-five times the minimum wage in effect in the Federal District.
II. The habitual or professional issuance or commercialization of service cards, credit cards, prepaid cards, and all those that constitute instruments for the storage of monetary value, which are not issued or commercialized by Financial Entities. Provided that, based on such activities: the issuer or merchant of said instruments maintains a business relationship with the acquirer; said instruments allow the transfer of funds, or their commercialization is carried out occasionally. In the case of service or credit cards, when the accumulated monthly spending on the card account is equal to or greater than the equivalent to eight hundred five times the minimum wage in effect in the Federal District. In the case of prepaid cards, when their commercialization is carried out for an amount equal to or greater than the equivalent to six hundred forty-five times the minimum wage in effect in the Federal District, per operation.
The other instruments for the storage of monetary value shall be regulated in the Regulations of this Law.
They shall be subject to Notice to the Secretariat, in the case of service or credit cards, when the accumulated monthly spending on the card account is equal to or greater than the equivalent to one thousand two hundred eighty-five times the minimum wage in effect in the Federal District. In the case of prepaid cards, when they are commercialized for an amount equal to or greater than the equivalent to six hundred forty-five times the minimum wage in effect in the Federal District;
III. The habitual or professional issuance and commercialization of traveler's checks, different from that carried out by Financial Entities.
They shall be subject to Notice to the Secretariat when the issuance or commercialization of traveler's checks is equal to or greater than the equivalent to six hundred forty-five times the minimum wage in effect in the Federal District;
IV. The habitual or professional offering of loan or guarantee operations or the granting of loans or credits, with or without guarantee, by subjects other than Financial Entities.
They shall be subject to Notice to the Secretariat when the act or operation is for an amount equal to or greater than the equivalent to one thousand six hundred five times the minimum wage in effect in the Federal District;

V. The habitual or professional provision of construction services or real estate development, or intermediation in the transfer of ownership or constitution of rights over such properties, in which operations involving the purchase or sale of the properties themselves on behalf of or for the benefit of clients of those providing such services are involved.

Notices shall be filed with the Secretariat when the act or operation is for an amount equal to or greater than the equivalent of eight thousand two hundred and twenty-five times the minimum wage in effect in the Federal District;

VI. The habitual or professional commercialization or intermediation of Precious Metals, Precious Stones, jewelry, or watches, in which operations involving the purchase or sale of such goods are involved in acts or operations whose value is equal to or greater than the equivalent of eight hundred and five times the minimum wage in effect in the Federal District, with the exception of those in which the Bank of Mexico intervenes.

Notices shall be filed with the Secretariat when the person carrying out such activities conducts a cash operation with a client for an amount equal to or greater than the equivalent of one thousand six hundred and five times the minimum wage in effect in the Federal District;

VII. The habitual or professional auction or commercialization of works of art, in which operations involving the purchase or sale of such goods are carried out in acts or operations with a value equal to or greater than the equivalent of two thousand four hundred and ten times the minimum wage in effect in the Federal District.

The aforementioned activities shall be subject to Notice to the Secretariat when the amount of the act or operation is equal to or greater than the equivalent of four thousand eight hundred and fifteen times the minimum wage in effect in the Federal District;

VIII. The habitual professional commercialization or distribution of vehicles, new or used, whether air, sea, or land, with a value equal to or greater than the equivalent of three thousand two hundred and ten times the minimum wage in effect in the Federal District.

The aforementioned activities shall be subject to Notice to the Secretariat when the amount of the act or operation is equal to or greater than the equivalent of six thousand four hundred and twenty times the minimum wage in effect in the Federal District;

IX. The habitual or professional provision of vehicle armoring services for land vehicles, new or used, as well as for real estate, for an amount equal to or greater than the equivalent of two thousand four hundred and ten times the minimum wage in effect in the Federal District.

X. The habitual or professional provision of money or securities transport or custody services, with the exception of those in which the Bank of Mexico and institutions dedicated to the deposit of securities intervene.

Notices shall be filed with the Secretariat when the transport or custody is for an amount equal to or greater than the equivalent of three thousand two hundred and ten times the minimum wage in effect in the Federal District;

XI. The provision of professional services, independently, without a labor relationship with the respective client, in those cases in which, for a client or on behalf of and in representation of the client, any of the following operations are prepared or carried out:

a) The sale of real estate or the assignment of rights over them; b) The administration and management of resources, securities, or any other assets of their clients;

c) The management of bank, savings, or securities accounts; d) The organization of capital contributions or any other type of resources for the constitution, operation, and administration of commercial companies, or e) The constitution, spin-off, merger, operation, and administration of legal entities or corporate vehicles, including trusts and the purchase or sale of commercial entities.

Notices shall be filed with the Secretariat when the provider of such services carries out, on behalf and in representation of a client, any financial operation related to the operations indicated in the subsections of this section, respecting professional secrecy and the guarantee of defense in terms of this Law;

XII. The provision of public faith services, under the following terms:

A. Regarding public notaries:
a) The transmission or constitution of real rights over real estate, except for guarantees constituted in favor of institutions of the financial system or public housing agencies.
These operations shall be subject to Notice to the Secretariat when, in the acts or operations, the agreed price, the cadastral value, or, if applicable, the commercial value of the real estate, whichever is higher, or, if applicable, the amount guaranteed by principal debt, is equal to or greater than the equivalent in national currency to sixteen thousand times the general daily minimum wage in effect for the Federal District; b) The granting of powers of attorney for acts of administration or ownership granted on an irrevocable basis. The operations provided for in this subsection shall always be subject to Notice; c) The constitution of legal entities, their patrimonial modification derived from an increase or decrease in share capital, merger or spin-off, as well as the sale and purchase of shares and partnership interests of such entities. Notices shall be filed when the operations are carried out for an amount equal to or greater than the equivalent of eight thousand two hundred and twenty-five times the minimum wage in effect in the Federal District; d) The constitution or modification of trusts transferring ownership or guarantees over real estate, except those constituted to guarantee any credit in favor of institutions of the financial system or public housing agencies. Notices shall be filed when the operations are carried out for an amount equal to or greater than the equivalent of eight thousand two hundred and twenty-five times the minimum wage in effect in the Federal District; e) The granting of loan or credit contracts, with or without guarantee, in which the creditor is not part of the financial system or is not a public housing agency. The operations provided for in this subsection shall always be subject to Notice.

B. Regarding public brokers:
a) The appraisal of goods with a value equal to or greater than the equivalent of eight thousand two hundred and twenty-five times the minimum wage in effect in the Federal District; b) The constitution of commercial legal entities, their patrimonial modification derived from an increase or decrease in share capital, merger or spin-off, as well as the sale and purchase of shares and partnership interests of commercial legal entities; c) The constitution, modification, or assignment of trust rights, in which, according to applicable legislation, they may act; d) The granting of commercial loan or commercial credit contracts in which, according to applicable legislation, they may act and in which the creditor is not part of the financial system. Notices shall be filed with the Secretariat for the aforementioned acts or operations in terms of the subsections of this section.

C. Regarding public officials to whom the laws confer the faculty to give public faith in the exercise of their attributes provided for in Article 3, Section VII of this Law.

XIII. The receipt of donations, by associations and non-profit societies, for a value equal to or greater than the equivalent of one thousand six hundred and five times the minimum wage in effect in the Federal District.

Notices shall be filed with the Secretariat when the amounts of the donations are for an amount equal to or greater than the equivalent of three thousand two hundred and ten times the minimum wage in effect in the Federal District;

XIV. The provision of foreign trade services as an agent or customs broker, through authorization granted by the Ministry of Finance and Public Credit, to promote on behalf of others, the clearance of merchandise, under the different customs regimes provided for in the Customs Law, of the following merchandise:

a) Land, air, and sea vehicles, new and used, regardless of the value of the goods; b) Machines for gambling and lotteries, new and used, regardless of the value of the goods; c) Equipment and materials for the manufacture of payment cards, regardless of the value of the goods; d) Jewelry, watches, Precious Stones, and Precious Metals, whose individual value is equal to or greater than the equivalent of four hundred and eighty-five times the minimum wage in effect in the Federal District; e) Works of art, whose individual value is equal to or greater than the equivalent of four thousand eight hundred and fifteen times the minimum wage in effect in the Federal District; f) Ballistic resistance materials for the provision of vehicle armoring services, regardless of the value of the goods.

The aforementioned activities shall be subject to Notice in all cases indicated above, attending to what is established in Article 19 of this Law;

XV. The constitution of personal rights of use or enjoyment of real estate for a monthly value greater than the equivalent of one thousand six hundred and five times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled.

The aforementioned activities shall be subject to Notice to the Secretariat when the monthly amount of the act or operation is equal to or greater than the equivalent of three thousand two hundred and ten times the minimum wage in effect in the Federal District.

(2) XVI. The habitual and professional offer of exchange of virtual assets by subjects other than Financial Entities, which are carried out through electronic, digital, or similar platforms, which administer or operate, facilitating or carrying out operations of purchase or sale of said assets owned by their clients or providing means to custody, store, or transfer virtual assets other than those recognized by the Bank of Mexico in terms of the Law to Regulate Financial Technology Institutions. A virtual asset shall be understood as any electronically registered representation of value used among the public as a means of payment for all types of legal acts and whose transfer can only be carried out through electronic means. Under no circumstances shall legal tender currency in national territory, foreign exchange, or any other asset denominated in legal tender currency or foreign exchange be understood as a virtual asset.

(2) Notices shall be filed with the Secretariat when the amount of the purchase or sale operation carried out by each client of the person carrying out the vulnerable activity referred to in this section is for an amount equal to or greater than the equivalent of six hundred and forty-five Units of Measure and Update.

(2) In the event that the Bank of Mexico recognizes virtual assets in terms of the Law to Regulate Financial Technology Institutions, the persons who provide the means referred to in this section must obtain the corresponding authorizations within the timeframes indicated by said Bank of Mexico in the respective provisions.

Acts or operations carried out for amounts lower than those indicated in the previous sections shall not give rise to any obligation. However, if a person carries out acts or operations for a cumulative sum in a period of six months that exceeds the amounts established in each case for the formulation of Notices, it may be considered as an operation subject to the obligation to present them for the effects of this Law.

The Secretariat may determine, through general provisions, the cases and conditions in which Activities subject to supervision should not be subject to Notice, provided they have been carried out through the financial system.

Article 18. Those who carry out the Vulnerable Activities referred to in the previous article shall have the following obligations:

I. Identify the clients and users with whom they carry out their own Activities subject to supervision and verify their identity based on credentials or official documentation, as well as collect a copy of the documentation;

II. In cases where a business relationship is established, the client or user shall be requested to provide information about their activity or occupation, based on, among others, the registration and update notices of activities presented for the purposes of the Federal Taxpayer Registry;

III. Request that the client or user participating in Vulnerable Activities provide information on whether they have knowledge of the existence of the beneficial owner and, if so, exhibit official documentation that allows them to be identified, if it is in their possession; otherwise, they shall declare that they do not have it;

IV. Custody, protect, safeguard, and prevent the destruction or concealment of the information and documentation that serves as support for the Vulnerable Activity, as well as that which identifies their clients or users.

The information and documentation referred to in the previous paragraph shall be preserved physically or electronically for a period of five years counted from the date of the performance of the Vulnerable Activity, unless the laws of the matter of the federative entities establish a different period;

V. Provide the necessary facilities for verification visits to be carried out in terms of this Law, and

VI. Present the Notices to the Secretariat within the times and under the form provided for in this Law.

Article 19. The Regulations of the Law shall establish simplified measures for compliance with the obligations provided for in the previous article, based on the risk level of the Vulnerable Activities and those who carry them out.

Likewise, the Regulations shall consider as an alternative means of compliance with the obligations indicated in the previous articles, the timely and proper compliance by private parties of other obligations incumbent upon them, established in special laws, which imply providing the same information subject to the Notices established by this Law; for this purpose, the Secretariat shall take into consideration the information provided in formats, records, systems, and any other means to which it has access.

Article 20. Legal entities that carry out Vulnerable Activities must designate before the Secretariat a representative in charge of compliance with the obligations derived from this Law, and maintain said designation in force, whose identity must be safeguarded in terms of Article 38 of this Law.

Until there is a representative or the designation is not updated, compliance with the obligations that this Law indicates shall correspond to the members of the administrative body or to the sole administrator of the legal entity.

Natural persons must comply, in all cases, personally and directly with the obligations that this Law establishes, except in the case provided for in the Third Section of Chapter III of this Law.

Article 21. Clients or users of those who carry out Vulnerable Activities shall provide them with the necessary information and documentation for compliance with the obligations that this Law establishes.

Those who carry out the Vulnerable Activities must abstain, without any liability, from carrying out the act or operation in question, when their clients or users refuse to provide them with the aforementioned information or documentation referred to in the previous paragraph.

Article 22. The presentation before the Secretariat of the Notices, information, and documentation referred to in this Law, by those who carry out the Vulnerable Activities, shall not imply for them any transgression of the obligations of confidentiality or legal, professional, tax, banking, fiduciary, or any other secrecy provided for by the laws, nor shall it be subject to a confidentiality clause in any agreement, contract, or legal act.

Third Section
Deadlines and Forms for the Presentation of Notices

Article 23. Those who carry out Vulnerable Activities provided for in this Section shall present the corresponding Notices to the Secretariat, no later than the 17th day of the month immediately following, corresponding to that in which the operation that gave rise to it and that is subject to Notice had been carried out.

Article 24. The presentation of the Notices shall be carried out through electronic means and in the official format established by the Secretariat.

Such Notices shall contain, with respect to the act or operation related to the Vulnerable Activity to be reported, the following:

I. General data of the person carrying out the Vulnerable Activity;
II. General data of the client, users, or the Controlling Beneficiary, and information about their activity or occupation in accordance with Article 18, Section II of this Law, and
III. General description of the Vulnerable Activity on which Notice is given.

Notaries and public brokers shall be deemed to have fulfilled their obligations to present the corresponding Notices through the electronic system by which they inform or present the declarations and Notices referred to in the federal tax provisions.

Article 25. The Secretariat may request in writing or during verification visits, the supporting documentation and information of the Notices that is related to them.

Fourth Section
Notices Through Collegiate Entities

Article 26. Subjects who must present Notices in accordance with what is provided for by the Second Section of this Chapter may present them through a Collegiate Entity that must meet the requirements established by this Law.

Article 27. The Collegiate Entity must comply with the following:

I. Be composed of those who carry out similar tasks related to Vulnerable Activities, in accordance with the applicable legislation according to the object of the legal entities that make up the entity;
II. Maintain an updated roster of its members, who present Notices to the Secretariat through its channel;
III. Have within its object the presentation of the Notices of its members;
IV. Designate before the Secretariat the body or, if applicable, the representative in charge of the presentation of the Notices and maintain said designation in force.
The representative must have, at least, a general power of attorney for acts of administration of the entity and receive annual training for compliance with the obligations that this Law establishes;
V. Guarantee confidentiality in the handling and use of the information contained in the Notices of its members;
VI. Guarantee the custody, protection, and safeguarding of the information and documentation that its members provide for the compliance of their obligations;
VII. Have the express mandate of its members to present Notices to the Secretariat on their behalf;
VIII. Have computer systems that meet the necessary technical and security characteristics to present the Notices of its members, and
IX. Have a valid agreement with the Secretariat that expressly allows it to present the Notices referred to in the Second Section of this Chapter, on behalf of its members.

Collegiate Entities recognized by the Law may, prior to agreement with the Secretariat, establish a concentrator body to comply with the provisions of this Law.
The Regulations shall regulate what is necessary for the establishment and functioning of the bodies that are established.

Article 28. The Collegiate Entity must comply with the presentation of the Notices of its members within the deadlines and complying with the formalities that correspond to them in accordance with this Law.

Article 29. The Collegiate Entity must comply in a timely and proper manner with the information and documentation requirements related to the Notices that the Secretariat formulates to it in writing or during verification visits.

Article 30. Non-compliance with the obligations incumbent on the members due to causes attributable to the Collegiate Entity shall be the responsibility of the latter.

The Collegiate Entity shall not be liable when the failure to comply with obligations assigned to a member is due to causes attributable to that member.

Article 31. The Collegiate Entity must inform the Secretariat and its members at least thirty days in advance of its intention to extinguish, dissolve, or liquidate itself, or of its intention to cease acting as an intermediary between its members and the Secretariat.

From the time of extinction, dissolution, or liquidation, or when it ceases to act as an intermediary between its members and the Secretariat, the latter shall no longer receive Notices through the said Collegiate Entity; therefore, its members must comply individually and directly with the obligations arising from this Law.

Prior to the liquidation, dissolution, or extinction of the Collegiate Entity, or when it ceases to act as an intermediary between its members and the Secretariat, it must return to its members the information and documentation they provided for the fulfillment of their obligations.

In cases where the agreement entered into with the Secretariat ceases to be in effect, the Collegiate Entity must proceed in accordance with the aforementioned provisions.

Chapter IV
On the Use of Cash and Metals

Article 32. It is prohibited to fulfill obligations and, in general, to settle or pay, as well as to accept the settlement or payment, of acts or operations through the use of coins and banknotes, in national currency or foreign currency, and Precious Metals, in the following circumstances:

I. The creation or transfer of real rights over real estate with a value equal to or greater than the equivalent of eight thousand twenty-five times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled;

II. Transfers of ownership or creation of real rights over vehicles, new or used, whether air, sea, or land, with a value equal to or greater than the equivalent of three thousand two hundred ten times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled;

III. Transfers of ownership of watches, jewelry, Precious Metals, and Gemstones, whether by piece or by lot, and of works of art, with a value equal to or greater than the equivalent of three thousand two hundred ten times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled;

IV. Acquisition of tickets that allow participation in games with bets, contests, or raffles, as well as the delivery or payment of prizes for having participated in said games with bets, contests, or raffles, with a value equal to or greater than the equivalent of three thousand two hundred ten times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled;

V. Provision of armored vehicle services for any of the vehicles referred to in fraction II of this article or for real estate, with a value equal to or greater than the equivalent of three thousand two hundred ten times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled;

VI. Transfer of ownership or creation of rights of any nature over the titles representing social shares or shares of legal entities, with a value equal to or greater than the equivalent of three thousand two hundred ten times the minimum wage in effect in the Federal District, on the day the payment is made or the obligation is fulfilled, or

VII. Creation of personal rights of use or enjoyment of any of the assets referred to in fractions I, II, and V of this article, with a value equal to or greater than the equivalent of three thousand two hundred ten times the minimum wage in effect in the Federal District, monthly, on the day the payment is made or the obligation is fulfilled.

Article 33. Public Notaries, in the instruments in which they record any of the acts or operations referred to in the previous article, must identify the manner in which the obligations arising from them are paid when the operations have a value equal to or greater than the equivalent of eight thousand twenty-five times the minimum wage in effect in the Federal District.

If the value of the operation is lower than the amount mentioned above, or if the act or operation has been paid in whole or in part prior to the signing of the instrument, it shall suffice for the clients or users to make a declaration under oath of telling the truth.

In cases other than those mentioned in the previous paragraph, the other acts or operations referred to in fractions II to VII of the previous article must be formalized through the issuance of the corresponding certificates, invoices, or guarantees, or any other document in which the operation is recorded, and they will be verified prior to the identification of those carrying out the act or operation, as well as, where applicable, of the Controlling Beneficiary. In said documents, the method of payment must be specified and the respective receipt attached.

Chapter V
On Verification Visits

Article 34. The Secretariat may verify, ex officio and at any time, compliance with the obligations provided for in this Law, through the conduct of verification visits to those carrying out the Vulnerable Activities provided for in the Second Section of Chapter III of this Law, to the Entities referred to in Article 26 of this Law, or, where applicable, to the centralizing body provided for in the penultimate paragraph of Article 27 of the same.

The persons visited must provide exclusively the information and supporting documentation they have that is directly related to Vulnerable Activities.

Article 35. The conduct of verification visits, as well as the imposition of administrative sanctions provided for in this Law, shall be subject to what is provided by the Federal Law of Administrative Procedure.

Article 36. The verifications carried out by the Secretariat may only cover those acts or operations considered as Vulnerable Activities in terms of this Law, carried out within the five years immediately preceding the start date of the visit.

Article 37. The Secretariat, for the exercise of the powers conferred by this Law, where applicable, may request the assistance of the public force when circumstances so require. The commanders of the public force must provide the requested assistance.

Chapter VI
On the Reserve and Handling of Information

Article 38. The information and supporting documentation of the Notices, as well as the identity of those who have submitted them and, where applicable, of the representatives designated in terms of Article 20 of the Law and of the representative of the Collegiate Entities referred to in Article 27, fraction IV, of this order, is considered confidential and reserved in terms of the Federal Law of Transparency and Access to Government Public Information.

Article 39. The information derived from the Notices submitted to the competent authorities will be used exclusively for the prevention, identification, investigation, and sanction of operations with resources of illicit origin and other crimes related to them.

Article 40. The Secretariat must inform the Federal Public Prosecutor's Office of any act or operation derived from a Vulnerable Activity that could give rise to the existence of a federal crime identified as a result of the application of this Law.

Article 41. During the investigations and the federal criminal process, the absolute protection of the identity and of any personal data obtained as a result of the application of this Law, especially through the submission of Notices, will be maintained, in terms set forth in the Political Constitution of the United Mexican States, for which purpose, the information on the acts and operations contained in said Notices, which is necessary to be provided in the corresponding investigations, will be done through the reports submitted by the Secretariat for this purpose.

Public servants of the Secretariat will keep the due reserve of the identity and of any personal data referred to in the previous paragraph, as well as of the information and documentation they have provided in the respective Notices, except in cases where it is required by the Unit or the judicial authority.

The identity and personal data of the public servants who intervene in any act derived from the application of the Law must be kept in reserve and under protection, observing, where applicable, what is provided in Article 20 of the Political Constitution of the United Mexican States.

Article 42. The Notices submitted in terms of this Law shall in no case have, by themselves, full probative value.

In no case shall the Federal Public Prosecutor's Office base its investigation exclusively on the Notices referred to in this Law; therefore, the same shall be supported by the evidence that accredits the act or operation that is the object of the Notices.

Article 43. The Secretariat, as well as the competent authorities in matters related to the object of this Law, will establish mechanisms for coordination and exchange of information and documentation for its due compliance.

Article 44. The Unit may consult the databases of the Secretariat containing the Notices of acts or operations related to Vulnerable Activities, and the latter has the obligation to provide the required information.

(3) Article 45. The Secretariat and the Prosecutor's Office, within the scope of their respective competencies, exclusively for the purposes of identifying and analyzing operations related to the crimes of operations with resources of illicit origin, are legally empowered and legitimated, through the administrative units expressly empowered for this purpose in their respective regulations, to corroborate the information, data, and images related to the issuance of official identifications, held by federal authorities, as well as to enter into agreements with autonomous constitutional bodies, federal entities, and municipalities, to corroborate the referred information.

(3) The Secretariat or the Prosecutor's Office may enter into agreements with the authorities that administer the registers of the identification documents referred to in this article, for the establishment of remote consultation systems.

Article 46. The Unit may request the Secretariat to verify information and documentation, regarding the identity of persons, domiciles, telephone numbers, email addresses, operations, businesses, or legal acts of those carrying out Vulnerable Activities, as well as other specific references, contained in the Notices and other information received in accordance with this Law.

The Federal Public Prosecutor's Office may request the Secretariat to exercise the powers provided for in this Law, in terms of the collaboration agreements signed for this purpose.

(3) Article 47. Without prejudice to the information and documentation that the Secretariat is obliged to provide to the Prosecutor's Office in case the Secretariat, based on the information it receives and analyzes in terms of this Law, becomes aware of the commission of conduct susceptible to being analyzed or investigated by the instances in charge of combating corruption or law enforcement of the federal entities, it must communicate to said instances, according to their respective competence, the necessary information to identify acts or operations, as well as persons presumably involved with resources of illicit origin.

Article 48. The head of the Secretariat, by agreement, will authorize the public servants who can carry out the exchange of information, documentation, data, or images referred to in Articles 43, 44, and 46 of this Law and the operation of the coordination mechanisms.

Article 49. The Secretariat may provide information in accordance with international treaties, agreements, or conventions, or in their absence, according to the principles of cooperation and reciprocity, to foreign authorities in charge of the identification, detection, supervision, prevention, investigation, or prosecution of crimes equivalent to those of operations with resources of illicit origin.

In these cases, those who receive the information and data from the Secretariat must guarantee the confidentiality and reserve of what is provided to them.

(3) Article 50. Public servants of the Secretariat, the Prosecutor's Office, and persons who must submit Notices in terms of the present Law, who become aware of information, documentation, data, or news of acts or operations that are the object of this Law and that have been submitted to the Secretariat, shall refrain from disclosing or providing it, by any means, to anyone not expressly authorized in the same.

For information, documentation, data, and images to be provided to public servants of the federal entities, they must be subject to legal obligations regarding custody, reserve, and confidentiality with respect to what is provided to them in terms of this Law, and their non-observance must be criminally sanctioned.

The violation of the reserves imposed by this Law will be sanctioned in terms of the applicable legal provisions.

Article 51. The administrators of the systems provided for in the Payment Systems Law, including the Bank of Mexico; legal entities or trusts whose object is to carry out processes of compensation or transfer of information of payment means of the financial system, as well as to compensate and settle obligations derived from banking, stock market, or financial contracts, and persons who issue, administer, operate, or provide services for credit, debit, prepaid cash access, service, electronic payment cards, and those who provide services for such purposes, will provide the Secretariat with the information and documentation to which they have access and that the Secretariat requests from them in writing, which must be notified to them in terms of the Federal Law of Administrative Procedure, for the purposes of what is provided in this Law.

The persons referred to in the previous paragraph will provide the information and documentation requested from them, within thirty days following the date on which the notification of the requirement takes effect.

The exchange of information and documentation that takes place in accordance with the first paragraph of this article, between the Bank of Mexico and the Secretariat, will be done in accordance with the collaboration agreements entered into for this purpose.

Chapter VII
On Administrative Sanctions

Article 52. The Secretariat will administratively sanction those who infringe this Law, in terms of this Chapter.

As an exception to what is provided in the previous paragraph, violations by Financial Entities of the obligations referred to in Article 15 of this Law will be sanctioned by the respective decentralized bodies of the Secretariat empowered to supervise compliance with them, and for this purpose, the imposition of said sanctions will be done in accordance with the procedure provided for in the respective Special Laws that regulate each of the Financial Entities in question, with the sanctions expressly indicated in said Laws for each case referred to the corresponding Financial Entities.

The fines determined in terms of this Law will have the character of tax credits and will be fixed in a liquid amount, subject to the administrative execution procedure established by the applicable legislation.

Article 53. The corresponding fine will be applied to those who:

I. Refrain from complying with the requirements formulated by the Secretariat in terms of this Law;

II. Fail to comply with any of the obligations established in Article 18 of this Law;

III. Fail to comply with the obligation to submit the Notices referred to in Article 17 of this Law on time.

The sanction provided for in this fraction will be applicable when the submission of the Notice is made no later than within thirty days following the date on which it should have been submitted. In case that the lateness or omission exceeds this period, the sanction provided for in the case of omission in Article 55 of this Law will be applied, or

IV. Fail to comply with the obligation to submit the Notices without meeting the requirements referred to in Article 24 of this Law;

V. Fail to comply with the obligations imposed by Article 33 of this Law;

VI. Omit to submit the Notices referred to in Article 17 of this Law, and

VII. Participate in any of the acts or operations prohibited by Article 32 of this Law.

Article 54. The fines applicable for the circumstances of the previous article of this Law will be the following:

I. A fine equivalent to two hundred up to two thousand days of the general minimum wage in effect in the Federal District will be applied in the case of fractions I, II, III, and IV of Article 53 of this Law;

II. A fine equivalent to two thousand up to ten thousand days of the general minimum wage in effect in the Federal District will be applied in the case of fraction V of Article 53 of this Law, and

III. A fine equivalent to ten thousand up to sixty-five thousand days of the general minimum wage in effect in the Federal District, or from ten to one hundred percent of the value of the act or operation, when they are quantifiable in money, whichever is greater, will be applied in the case of fractions VI and VII of Article 53 of this Law.

Article 55. The Secretariat will refrain from sanctioning the offender, on a single occasion, in case it is the first infringement incurred, provided that it complies, spontaneously and prior to the start of the Secretariat's verification powers, with the respective obligation and expressly acknowledges the fault in which it incurred.

Article 56. Causes for the revocation of gaming and raffle permits, in addition to those indicated in the applicable legal provisions:

I. Recidivism in any of the conduct provided for in Article 53 fractions I, II, III, and IV of this Law, or

II. Any of the conduct provided for in Article 53 fractions VI and VII of this Law.

The Secretariat will inform the Secretariat of Governance of the facts constituting the cause for revocation, in order for it to exercise its attributes in the matter and, where applicable, apply the corresponding sanctions.

Article 57. Causes for the definitive cancellation of the authorization granted to the public broker, in addition to those indicated in the applicable legal provisions, is the recidivism in any of the conduct provided for in Article 53 fractions I, II, III, and IV of this Law.

Once the sanction imposed by the Secretariat has become final, it will inform its resolution to the Secretariat of Economy and request that it proceed to the definitive cancellation of the authorization of the public broker that has been sanctioned, and once informed, the Secretariat of Economy will have a period of ten business days to proceed to the requested definitive cancellation, in accordance with the applicable legal provisions.

Article 58. When the offender is a public notary, the Secretariat will inform the competent authority to supervise the notarial function of the infringement committed, in order for it to proceed to the cessation of the exercise of the function of the offender and the consequent revocation of its patent, prior to the procedure established for this purpose by the legal provisions governing its performance. The following circumstances will give rise to the sanction of revocation, being considered notorious deficiencies in the exercise of their functions:

I. Recidivism in the violation of what is provided in Article 53, in its fractions I, II, III, IV, and V, and

II. Violation of what is provided in fractions VI and VII of Article 53.

The imposition of the above sanctions will be carried out without prejudice to the other fines or sanctions that may be applicable.

Article 59. Causes for the cancellation of the authorization granted by the Secretariat to agents and customs attorneys:

I. Recidivism in the violation of what is provided in Article 53, in its fractions I, II, III, and IV, and

II. Violation of what is provided in fractions VI and VII of Article 53.

The Secretariat will inform the respective infringement to the customs authority, in order for it to proceed to the issuance of the corresponding resolution, following the procedure established for this purpose by the legal provisions governing its performance.

The imposition of the above sanctions will be carried out without prejudice to the other fines or sanctions that may be applicable.

Article 60. The Secretariat, in the imposition of administrative sanctions referred to in this Chapter, will take into account, where applicable, the following:

I. Recidivism, the causes that originated it, and, where applicable, the corrective actions applied by the alleged offender. A person will be considered a recidivist if they have incurred in an infringement that has been sanctioned and, in addition to that, commits the same infringement within the two years immediately following the date on which the corresponding resolution has become final;

II. The amount of the act or operation, seeking the proportionality of the amount of the sanction with them, and

III. The intention to carry out the conduct.

Article 61. The administrative sanctions imposed in accordance with this Law may be challenged before the Secretariat itself, through the review appeal provided for in the Federal Law of Administrative Procedure or directly before the Federal Court of Fiscal and Administrative Justice through the contentious administrative procedure.

Chapter VIII
Of the Crimes

Article 62. The penalty of imprisonment from two to eight years and a fine of five hundred to two thousand days, in accordance with the Federal Penal Code, shall be imposed on whoever:

I. Willfully provides those required to file Notices with false, or completely illegible, information, documentation, data, or images to be incorporated into those that must be submitted;

II. Willfully modifies or alters information, documentation, data, or images intended to be incorporated into the Notices, or incorporated in notices submitted.

Article 63. The penalty of imprisonment from four to ten years and a fine of five hundred to two thousand days, in accordance with the Federal Penal Code, shall be imposed on:

(3) I. A public servant of any of the dependencies or entities of the federal public administration, of the Judicial Branch of the Federation, or of the autonomous constitutional bodies who inappropriately uses the information, data, documentation, or images to which they have access or receive by virtue of this Law, or who violates the provisions of Chapter VI thereof, regarding the confidentiality and handling of information, and

II. Whoever, without authorization from the competent authority, reveals or discloses, by any means, information linking a natural or legal person or public servant to any Notice or information request made between authorities, in relation to any act or operation related to Vulnerable Activities, regardless of whether the Notice exists or not.

Article 64. The penalties provided for in Articles 62 and 63, fraction II, of this Law shall be doubled in the event that the person committing the offense is, at the time of committing it or has been within the two years prior to it, a public official in charge of preventing, detecting, investigating, or judging crimes.

Those who commit any of the crimes provided for in Articles 62 and 63 of this Law shall also be subject to a sanction of disqualification from holding public office for a time equal to the term of imprisonment imposed, which shall begin to run from the time the imprisonment sentence has been served.

Article 65. Prior complaint by the Secretariat is required to proceed criminally against employees, executives, officials, advisors, or any person who performs acts on behalf of financial institutions authorized by the Secretariat, who are involved in the commission of any of the crimes provided for in Articles 62 and 63 of this Law.

In the case provided for in fraction II of Article 63, proceedings shall be initiated either by prior complaint by the Secretariat or by complaint by the person whose identity has been revealed or disclosed.

TRANSITORY PROVISIONS

First. This Law shall enter into force nine months following the day of its publication in the Official Gazette of the Federation.

Second. The Federal Executive shall issue the Regulations of this Law within thirty days following the entry into force of this Law.

Third. The Notices that must be submitted by those who carry out Vulnerable Activities in terms of the First Section of Chapter III of this Law, shall continue to be submitted in accordance with the laws and general provisions that specifically apply to them.

Fourth. The Vulnerable Activities referred to in the Second Section of Chapter III of the Law, which have been carried out prior to its entry into force, shall be governed by the applicable legal provisions in force at the time they occurred.
The submission of Notices in terms of the Second and Third Sections of Chapter III of this Law shall take place, for the first time, upon the entry into force of the Regulations of this Law; such Notices shall contain information regarding acts or operations related to Vulnerable Activities carried out from the date of entry into force of said Regulations.

Fifth. The provisions regarding the obligation to submit Notices, as well as the restrictions on cash, shall enter into force sixty days following the entry into force of the Regulations of this Law.

Sixth. The agreements for the exchange of information and access to databases of the autonomous bodies, federative entities, and municipalities established by this Law, must be granted between the federal authorities and those, within a peremptory period of six months counted from the entry into force.

Seventh. All legal provisions that conflict with this Law are repealed.

Mexico, D.F., on October 11, 2012.- Deputy Jesus Murillo Karam, President.- Senator Ernesto Javier Cordero Arroyo, President.- Deputy Javier Orozco Gomez, Secretary.- Senator Iris Vianey Mendoza Mendoza, Secretary.- Signatures.

In compliance with the provisions of fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its proper publication and observance, I issue this Decree at the Residence of the Federal Executive Power, in Mexico City, Federal District, on October sixteen, two thousand twelve.- Felipe de Jesus Calderon Hinojosa.- Signature.- The Secretary of the Interior, Alejandro Alfonso Poiré Romero.- Signature.

TRANSITORY PROVISION
(From the Decree of March 9, 2018)
SINGLE. The addition of fraction XVI of article 17 of this Law, shall enter into force eighteen months following the entry into force of this Decree.

TRANSITORY PROVISION
(Decree by which the Law to Regulate Financial Technology Institutions is issued and various provisions of the Credit Institutions Law, the Securities Market Law, the General Law of Organizations and Auxiliary Credit Activities, the Law for the Transparency and Regulation of Financial Services, the Law to Regulate Credit Information Societies, the Law for the Protection and Defense of Users of Financial Services, the Law to Regulate Financial Groupings, the Law of the National Banking and Securities Commission, and the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, published in the Official Gazette of the Federation on March 9, 2018 are reformed and added) SINGLE. This Decree shall enter into force the day following its publication in the Official Gazette of the Federation, unless otherwise provided in the Transitory Provisions of this Decree.

Mexico City, on March 1, 2018.- Senator Ernesto Cordero Arroyo, President.- Deputy Edgar Romo Garcia, President.- Senator Rosa Adriana Diaz Lizama, Secretary.- Deputy Ana Guadalupe Perea Santos, Secretary.- Signatures.

In compliance with the provisions of fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its proper publication and observance, I issue this Decree in the

municipality of Acapulco de Juarez, state of Guerrero, on March eight, two thousand eighteen.- Enrique Pena Nieto.- Signature.- The Secretary of the Interior, Dr. Jesus Alfonso Navarrete Prida.- Signature.

EXPLANATORY STATEMENT
(Decree of October 17, 2012)

I. Diagnosis and evolution of the prevention and combat of operations with resources of illicit origin in Mexico.

Introduction

It must be remembered that organized crime is crime because it is business. In fact, it is the most profitable business in the world. There is no financial operation that can yield more profits than those resulting from activities carried out by drug traffickers. For every peso invested in the cultivation of cocaine or marijuana, at the end of the distribution chain, the profits are exponential. For example, a kilogram of coca paste in Colombia is worth 950 dollars and when converted to cocaine, the value of a kilogram rises to 2,340 dollars. Placed in a Mexican city on the northern border, the value of a kilogram of cocaine is 12,500 dollars. Once it crosses the border and steps onto United States territory, it rises to 26,500 dollars. Once it is divided into grams and distributed in envelopes or lines on the streets of major United States cities, a kilogram of cocaine can reach a yield of up to 180,000 dollars.

It is precisely these gains that stimulate an activity of extremely high risk for those who carry it out, and what provokes the ruthless struggle between the different organized crime groups, with tolls of thousands of deaths per year; figures similar, even to those of a declared war. These profits are the strength of criminal organizations. That is their heart, their source of power to co-opt police forces, subdue authorities, purchase armaments, chemical precursors, and put institutions on notice. That is why it is essential to weaken the engine represented by the profits of this activity, since the firepower exerted by the State has its limits, which are increasingly greater, for not directly combating what drives this activity.

That is the objective of this Initiative: to combat organized crime in a different way, not with weapons but with intelligence and probably without firing a single shot. This path may be more effective than the punitive actions carried out by the State, since by attacking the source of power of these criminal organizations, one is hitting the target where they could be most weakened. In addition, with the circumstance that in this combat no human lives are lost.

To seize an account in a bank or a brokerage house or to intervene a money laundering company, what is required is a system of accounting, financial intelligence, and controls on the flow of business in the country and not the deployment of law enforcement forces on the streets of cities. Here lies the importance of this new path, which undoubtedly will bring about many more achievements than those obtained to date.

Although there is still no precise methodology to estimate the amount of operations with resources of illicit origin and financing of terrorism carried out in Mexico, figures cited by the 2010 International Narcotics Control Strategy Report of the United States Department of State are known, which state that, between 15 and 30 billion dollars are the result of the annual profits obtained by organized crime in Mexico as a consequence of its activities; number 394 of the NEXOS Magazine, corresponding to October 2010, states that for this year it is estimated that the profits of organized crime will fluctuate between 15 or 16 billion dollars; and, according to the consulting firm Mancera, Ernesto and Young, in Mexico approximately 24 billion dollars are laundered per year.

On the other hand, the United States firm “No Money Laundring” estimates that money laundering in a country fluctuates between 2% and 5% of its Gross Domestic Product and that since Mexico is a country with a high level of corruption and drug trafficking, it can be expected that the amount of money laundering in our country will be close to the “high estimate”, that is, 5% of GDP - approximately 49,342 million dollars. On the other hand, a study by the Inter-American Development Bank estimates money laundering transactions in Latin America and the Caribbean between 2.5 and 6.3% of regional GDP.

Authorities of Mexico and the United States have identified that there is strong smuggling of US dollars in cash conducted by Mexican drug cartels from United States territory to Mexican territory. According to figures obtained from the Ministry of Finance and Public Credit (SHCP), currently the financial system in Mexico captures more than 10 billion dollars in “excess” funds, that is, their origin is not explained within the dynamics of the country's economic activity.

It is necessary to take into account the amounts of money that have been seized and abandoned in favor of the Federal Government. According to figures from the Attorney General's Office, from January 2007 to July 2010, this figure amounts to approximately 233 million dollars.

That is, the seized and confiscated amounts do not equate, even to 1% of the minimum estimated amounts of profit reported by the profits of organized crime.

Despite the effort that has been made in the fight against organized crime, it is relevant to compare the estimated amounts obtained by organized crime as a result of its activities with the amounts that have been seized by the Federal Government this year. Since this indicates the enormous challenge that the Mexican State has to achieve an effective fight. What makes it necessary to equip the Mexican State with greater and more effective instruments to combat the finances of organized crime.

Background

On the other hand, the crime of operations with resources of illicit origin was typified, for the first time, on December 28, 1989, in article 115 Bis of the Federal Tax Code, reformed on December 2 and 3, 1993, and December 28, 1994. The reason why this crime had an origin of a fiscal nature is due to the equating of the crime of money laundering with the diverse crime of tax fraud.

Subsequently, following the recommendations of international institutions, mainly those of the Financial Action Task Force (FATF) - an organization created by the so-called G-8 to channel the efforts of numerous countries in the prevention of money laundering -, the crime of operations with resources of illicit origin was transferred from fiscal legislation to financial legislation. This is because organized crime began to use the financial system as the ideal instrument to eliminate the trace of the so-called prior crime, that is, the crime from which the resources of illicit origin originate - kidnapping, vehicle theft, extortion, sale of illicit substances, among others -.

Since the typification of the crime in article 400 bis of the Federal Penal Code in 1996, the Mexican government has established a greater number of controls on the different institutions of the Mexican financial system, through general provisions issued by the Ministry of Finance and Public Credit (SHCP).

The general provisions contain obligations for institutions of the Mexican financial system, among others: i) the obligation to know and identify clients; ii) the implementation of monitoring systems; iii) various criteria for the safeguarding of information and the training of employees and the reporting of operations.

In this way, with the purpose of grouping in a single institution the powers of prevention and control of operations with resources of illicit origin, the Financial Intelligence Unit (UIF) was created on May 7, 2004, as an administrative unit of the SHCP, responsible for centralizing and processing all information regarding unusual, relevant, or concerning operations reported to it by institutions of the financial system.

In view of the measures adopted by the Mexican State to prevent the introduction of money of illicit origin into the financial system, organized crime sought other means to conceal the origin of its resources. In this way, organized crime has begun to use the non-financial sector of the economy - an area not regulated in this matter - to carry out operations with the purpose of laundering their capital. As a consequence, the criminal economy has become linked to the formal economy through complex business schemes, penetrating deeply into the markets and constituting a critical and volatile element in the global economy.

Currently, only Financial Institutions are subject to a specific regulatory regime aimed at the prevention and combat of operations with resources of illicit origin. However, the regulation is dispersed in 11 laws, corresponding to each of the sectors of the country's financial system, and unlike most countries in North America, Latin America, and Europe, its implementation is carried out through “general provisions” issued by the Ministry of Finance and Public Credit that do not have the authority of law.

The laws that disperse the norms relating to the prevention and detection of operations with resources of illicit origin are:

General Law of Organizations and Auxiliary Credit Activities, which regulates the following financial institutions: General Warehouses, Financial Leasing Companies, Exchange Houses, Financial Factoring Companies, Credit Unions, Money Transmitters, and Exchange Centers (articles 95 and 95 bis).
Credit Institutions Law, which regulates the following financial institutions: Credit Institutions and Limited Purpose Financial Societies (SOFOLES), Multiple Banking Institutions, Development Banking Institutions, and Operating Societies of Investment Societies (article 115).
Securities Market Law, which regulates Brokerage Houses, Stock Market Specialists, and Distributing Societies of Investment Societies (article 212).
Popular Savings and Credit Law, which establishes the provisions regarding popular savings and credit entities, cooperatives, and popular financial societies (article 124).
Law of Retirement Savings Systems, which regulates Retirement Fund Administrators (article 108 bis).
General Law of Insurance and Mutual Societies, which regulates insurance institutions (article 140).
Federal Law of Surety Institutions, which establishes the provisions regarding such institutions (article 112).
Credit Unions Law (article 129).
Law to Regulate the Activities of Savings and Loan Cooperative Societies (articles 71 and 72).
Investment Societies Law (article 91).

All the laws previously referred to, only enumerate the obligations of the obligated subjects of the financial system, to establish measures and procedures aimed at preventing and detecting operations with resources of illicit origin, submitting reports to the authority, and informing of employees, officials, proxies, or members of the Board of Directors.

However, the detail of the implementation of the regulation and the compliance with the respective obligations in this matter is carried out through “General Provisions”, issued by the Ministry of Finance and Public Credit that do not have the authority of law - subject to discretionary changes by the authority -, in which the requirements that the obligated subjects must meet on the following topics are stated:

Customer and user identification and knowledge policy;
Risk identification policy;
Reports to the authority: relevant operations, unusual operations, concerning internal operations, and fund transfer reports;
Internal structures;
Training and dissemination;
Automated systems; and
Reserve and confidentiality.
Even though the provisions issued by the Ministry of Finance and Public Credit (SHCP) have enormous flexibility to be modified, only those related to the banking system, exchange houses, and money transmitters have been updated recently in the years 2009 and 2010 - the others have fallen behind.
Consequently, in Mexico we have a dispersed regulatory framework in 11 legal instruments that do not precisely detail the rights and obligations of the obligated subjects of the financial system in the prevention of operations with resources of illicit origin and terrorist financing, multiple general provisions that do not have the authority of law and that have not been updated with the regularity needed, and finally, the various subjects other than the financial system, which can be used by organized crime to launder money, are not subject to any regulation that allows tracing the origin and destination of illicit resources. It is therefore fundamental to provide a legal framework that provides sufficient bases for authorities, the financial system, and other obligated subjects, to advance in the prevention and fight against money laundering.

II. Mexico's Participation in the Financial Action Task Force (FATF) and its Recommendations Regarding Non-Financial Obligated Subjects.
Mexico has been a member of the Financial Action Task Force (FATF) since the year 2000 and has presided over it since June 2010. However, despite the actions carried out, particularly by the Ministry of Finance and Public Credit, in the mutual evaluation report issued in October 2008, the FATF determined non-compliance by the Mexican government with its 40 recommendations on money laundering prevention and its 9 special recommendations to combat terrorist financing, indicating among other points the following:

"(...) the laws that penalize money laundering and terrorist financing do not fully respond to international standards, and there is no margin to significantly improve their application."

"There are no legal or regulatory measures for the prevention of money laundering and terrorist financing, nor for supervision, for any of the categories of non-financial businesses and professions designated by the FATF (designated nonfinancial businesses and professions DNFBPs in English), with the exception of trust services which by law can only be provided by authorized financial institutions."

"The lack of measures regarding the other categories of DNFBPs represents a significant gap in the regime for the prevention of Money Laundering and Terrorist Financing. Furthermore, no review has been carried out on non-profit organizations (NPO), nor to support the adoption of measures to prevent the illegal use of legal entities in relation to money laundering and terrorist financing."

As referred to by the FATF, there is no margin for significant improvement of the current legislation in this matter, and non-financial businesses and professions, which are a fundamental piece in the strategy of prevention and fight against money laundering and terrorist financing, lack regulation.

Among the non-financial subjects are included certain types of legitimate businesses and professions that, due to their own characteristics, can serve organized crime as a means of access for illicit resources to the formal economy, with the purpose of hiding their criminal origin.
As a consequence of the above, non-financial subjects must be effectively linked to social and legal responsibility to act as "gatekeepers" (as they are known in advanced legislations to combat this crime) or subjects of prevention of the carrying out of operations with resources of illicit origin and terrorist financing. Regarding this, the international community and experts in the matter insist on the great utility that entails for the strategies of prevention and fight against money laundering, the implementation of a legal regime applicable to non-financial prevention subjects.

In this sense, the FATF recommends that States adopt adequate policies to incorporate industries, businesses, and professions - that due to their own characteristics can serve organized crime as a means of access for illicit resources to the formal economy - into the prevention of operations with resources of illicit origin, collaborating with authorities by reporting suspicious operations of money laundering and providing useful information for such effect. In view of the aforementioned, it is necessary that the Mexican money laundering prevention policy be articulated globally and evolve similar to international models, both North American and Latin American and European, which have adopted international best practices, to the effect that all sectors susceptible to receiving or carrying out operations with funds of illicit origin are included.

III. International Best Practices.
The problem of money laundering constitutes a global phenomenon that has motivated nations to reform their legal frameworks and structures of prevention and fight against operations with resources of illicit origin and terrorist financing. Both in North America and in various countries in Latin America and Europe, exclusive legislations have been promoted to address this criminal phenomenon, unlike Mexico where, as mentioned above, there is legislative dispersion in eleven different instruments and non-financial subjects lack regulation.

The Spanish experience is especially relevant within international best practices. According to the latest FATF review of Spain, the Spanish legal framework to combat money laundering is evaluated positively. Spanish criminal types incorporate multiple active subjects and conduct susceptible to participating in the crime of money laundering. Spanish national and autonomous authorities have broad powers to obtain evidence and data of proof, in addition to having a wide range of special investigation techniques.

In Spain, the collaboration of financial institutions and public notaries, mainly, are fundamental axes in the strategies of prevention of capital laundering. However, both financial institutions and a great diversity of non-financial obligated subjects are contained in a single Law. Law 10/2010 applies to the following obligated subjects:
Credit Entities (Banks and Savings Banks, Financial Institutions); Authorized insurance entities operating in the life branch; Securities companies and agencies; Collective investment institutions; Management companies of collective investment institutions and pension funds; Portfolio management companies; Credit card issuing companies; Currency exchange activities; Gambling casinos; Real estate promotion; Auditors, external accountants, or tax advisors; Notaries, lawyers, and attorneys; Trade in jewelry, stones, or precious metals; Trade in art objects and antiques; Philatelic or numismatic investment; Professional transport of funds; Postal services for international remittances or transfers; and, Trade in lottery and other games of chance, insofar as the payment of prizes is concerned.

In Spain, a public body was created that concentrates governmental efforts in the matter. This is the Commission for the Prevention of Money Laundering, which incorporated the former Spanish Financial Intelligence Unit. Among the attributions of said Commission are the reception, analysis, dissemination, and supervision of information. In addition, it has broad inter-institutional coordination with police and law enforcement authorities.

The Spanish Civil Guard and National Police are both responsible for combating crime, including money laundering. The office of the prosecutor for drugs and money laundering acts before the National Court of crimes on drug trafficking and money laundering perpetrated by organized groups affecting more than one region.

On the other hand, the Colombian experience constitutes another of the international best practices in the matter. According to the FATF evaluation, the first controls established for the Colombian financial sector motivated the migration of those dedicated to laundering money to non-financial institutions and companies that lacked regulation. To counteract this new modality, the Colombian government has issued resolutions to impose and/or modify the reporting obligation of notaries, games of chance and skill, vehicle dealers, foreign exchange professionals, and foreign trade activities, among others.

It is worth highlighting that in Colombia, the policy against asset laundering is framed mainly in the fight against illegal armed groups, drug trafficking, and organized crime within the framework of a single law.
Due to the importance that the Colombian State attaches to the issue of money laundering, it created the Inter-institutional Coordination Commission against Money Laundering, a consultative body of the national government and coordinator entity of actions to combat this criminal phenomenon.

Another successful innovation in the Colombian legal framework is the system of administration of risk of money laundering and terrorist financing, known as SARLAFT. Through the implementation of segmentation policies of obligated subjects by identifying possible risks of operations with resources of illicit origin and terrorist financing, Colombians have simplified supervision and fostered the generation of quality reports on possible unusual conduct.

On the other hand, within the Brazilian experience in the matter, the creation of the General Register of Depositors and Clients of Financial Institutions in Law No. 9614/1998 stands out. In summary, this is a computerized system that indicates where clients of financial institutions maintain their accounts, checking deposits, savings deposits, time deposits, and other assets, rights, and values, directly or through their legal and tax representatives.

The main objective of the Register is to facilitate financial investigations carried out by competent Brazilian authorities, in the presence of data that allow supposing the presence of an operation with resources of illicit origin and terrorist financing; at the same time that it has simplified the task of client identification by financial institutions.

IV. Initiative of the Federal Law for the Prevention of Operations with Resources of Illicit Origin and Terrorist Financing.
The present Law Initiative adds to the efforts made by the Federal Government in the matter, namely:
The National Strategy for the Prevention and Fight against Money Laundering and Terrorist Financing made public on August 26, 2010; The Public Security Dialogues held by the President of the Republic with members of Civil Society in the month of August 2010; and Draft Decree of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, presented to this Senate of the Republic on August 26, 2010 (Initiative of the Federal Executive).

Likewise, the present initiative recognizes the proposal made by Senators Minerva Hernández Ramos and René Arce Círigo on July 15, 2009, regarding the Law for the Prevention of Money Laundering and Terrorist Financing (Hernández and Arce Initiative).
Throughout the present exposition of motives and for the better understanding of what is proposed here, the differences between the Federal Executive Initiative, the Hernández and Arce Initiative, and the present proposal will be mentioned, in a generic manner.

This initiative provides an inclusive proposal that incorporates the best of national and international experience in a single legal framework and that can be summarized in the following points:
Systematization of the legal framework for prevention and fight against operations with resources of illicit origin and terrorist financing. The reason why this initiative contemplated including the prevention of activities that could finance terrorism, in addition to being a recommendation of the FATF, attends to the operational link that exists between operations with resources of illicit origin and those of terrorist financing. Incorporation of new non-financial obligated subjects, as well as inclusion of current obligated subjects of the financial system in a single legal instrument. Norms are established that must govern the obligated subjects of the financial system, regarding the type of operations they will have to report and the different programs and policies they must elaborate to comply with their obligations of money laundering and terrorist financing prevention, as well as the internal structure they will be obliged to adopt for such effects. Non-financial obligated subjects will equally have prevention obligations; however, it will be the regulation and the Inter-institutional Technical Committee that will determine through general character provisions, both the programs and policies for their compliance, as well as the detail and characteristics of the operations they must report. A special regime is established for public officials - Notaries and Public Brokers - for which, unlike other non-financial obligated subjects, the type of activities regarding which they must carry out an Operations Report is established. The use of cash is restricted for any constitution or transmission of rights that is carried out on real estate. It is established that the operations carried out by non-financial obligated subjects for the amount equivalent to two thousand five hundred times the General Minimum Wage in effect in the Federal District must be carried out by means of some banking or financial instrument provided by the Law. Finally, it is disposed that any person who carries out an operation superior to two thousand five hundred times the General Minimum Wage in effect in the Federal District in cash, must report it to the Inter-institutional Technical Committee. In its case, said report will be considered carried out with the declaration made in terms of the Income Tax Law or that said amount is deposited into the financial system. With the purpose of protecting the use and handling of confidential information and personal data that are provided by individuals or obligated subjects, by virtue of the obligations established in the present draft law, the creation of a regulation in accordance with the new Federal Law on Personal Data in Possession of Individuals, as well as with the Federal Law on Transparency and Access to Government Public Information, is proposed, at the same time that the right of individuals regarding the treatment of their information is protected. Various criteria of reserve and information flow between competent
authorities are disposed with the purpose of promoting adequate and effective coordination and inter-institutional cooperation between competent authorities.

To institutionally strengthen the authorities in charge of the prevention and detection of operations with resources of illicit origin and terrorist financing, it is provided to incorporate within the Ministry of Finance and Public Credit an Inter-institutional Technical Committee that will be authorized to carry out the functions of prevention and detection of the operations object of the law that is presented, who will also integrate and administer both the Unique Registry of Identification and Data and the National Information and Reports System. Said committee will be coordinated by the head of the Financial Intelligence body of the Ministry of Finance and Public Credit and will be in charge of interacting with the different authorities related to the matter, as well as being the one that instruments the different procedures before the obligated subjects, that is, it will be the public face of the Inter-institutional Technical Committee.

On its part, the creation of a Consultative Council is proposed, which will be integrated by the heads of the dependencies of the Federal Public Administration that by the nature of their legal attributions, have relation with the instrumenting of this new Law. Its object will be to provide operational and coordination solutions between authorities.

Likewise, it is provided to equip the Attorney General's Office of the Republic, through the Federal Public Ministry, with the faculty to create temporary task groups, which will be integrated by public servants of various government dependencies, with the purpose of cooperating in the preliminary investigation stage. These groups will conclude their task at the moment when the preliminary investigation concludes, whether it has been committed or archived.

To make effective the application of the new obligations, the creation of administrative sanctions both for obligated subjects and for individuals is disposed.

Finally, it was deemed pertinent to incorporate the generic criminal type of money laundering, which to date is found in article 400 bis of the Federal Penal Code, with substantial modifications that will make its prosecution more effective. Likewise, new criminal types and sanctions in case of conspiracy are incorporated, which have an intimate relation with money laundering.

The present initiative intends to incorporate in a single instrument all the elements that have been considered relevant for the prevention and fight of money laundering and terrorist financing, as detailed below:

Systematization of the legal framework for prevention and fight against operations with resources of illicit origin and terrorist financing.
As pointed out above, the various financial laws in the matter of prevention of money laundering and terrorist financing provide basic aspects that are dispersed in eleven provisions, only applicable to the actors of the financial system, in addition to having to add the current general character provisions issued by the Ministry of Finance and Public Credit where their operation is detailed and that, as such, do not have the authority of Law, without considering that their issuance is discretionary.

Unlike the Federal Executive Initiative and the Hernández and Arce Initiative - which propose only the incorporation of actors of the financial system, leaving the current normative framework the regulation of the obligated subjects of the financial system - in the project that is proposed, the normative content of said general provisions is elevated to the character of law and is systematized in a single instrument, following international best practices and complying with the recommendations of the FATF.

Likewise, by concentrating in a single legal instrument both the obligated subjects of the financial system and the new non-financial obligated subjects, an integral structure is provided to the authority in its functions of prevention and detection of the criminal activities object of this initiative.
Regarding this, the benefits and reasons of said systematization in a unique legal instrument, can be summarized as follows:

The proposed legal order provides legal certainty, as it will be possible to easily access a single legal framework containing the obligations of all obligated subjects, as is the case in best international practices, such as in the cases of Brazil, Colombia, or Spain. This would avoid dispersion and reference to various provisions and special laws, contributing to the culture of legality and ease of knowledge of the Law.

The duties of the obligated subjects are established by law and not by general provisions issued by the administrative authority. This circumstance will provide legal certainty, since it avoids to the greatest extent possible the discretion of the authority, coupled with the fact that the violation of these norms brings as a consequence administrative sanctions and even criminal sanctions that, in both cases, require a basis whose origin is not the discretionary power of an authority.

In this sense, the intention of this proposal is to establish a base of general obligations on the part of the obligated subjects, and that the Inter-institutional Technical Committee be the one that, through general provisions, details the elements that allow these norms to be implemented.

An effective control and supervision system is proposed, through the Inter-institutional Technical Committee and the Financial Intelligence Unit of the Ministry of Finance and Public Credit, which will have sufficient powers and competencies to make operational the tasks of prevention, detection, and reporting; integration and administration of the Unique Identification and Data Registry and the National Information and Reporting System; and the issuance of general provisions, among others.

In this sense, the Initiative of the Federal Executive and the Hernández and Arce Initiative provide that the Ministry of Finance and Public Credit, through the Financial Intelligence Unit, will continue to have the powers of money laundering prevention, that is, they maintain the current administrative scheme.

By having systematic obligations of the obligated subjects, the responsibilities in which those who violate the new provisions may incur are established with precision. In this sense, it will be the Financial Intelligence Unit of the Ministry of Finance and Public Credit, at the request of the Inter-institutional Technical Committee, that will apply administrative sanctions to obligated subjects and offending individuals, while the crime of operations with resources of illicit origin is typified, to make its prosecution more effective, and new criminal offenses related to the subject matter of the Law are included.

The proposed initiative contemplates as supplementary provisions the Commercial Legislation, the Federal Civil Code, the Federal Law on Personal Data in Possession of Individuals, the National Security Law, the Federal Law of Transparency and Access to Government Public Information, and the Federal Administrative Procedure Law, insofar as they are applicable.

However, unlike the Initiative of the Federal Executive, it is not provided that the Federal Penal Code has the character of a supplementary norm, the reason for this is based on the fact that the principles of typicity, taxativity, and exact application of the law in criminal matters, provided for in article 14 of the Political Constitution of the United Mexican States, provide that the criminal norm must be contained in a single legal instrument and that the criminal sanction is not the product of a judgment of majority of reason or simple analogy.

Obligated Subjects.
In the present initiative, the various members of the Mexican financial system are listed, and they are defined as obligated subjects of the financial system whose operations will also be the object of this law, unlike the Initiative of the Federal Executive and the Hernández and Arce Initiative, in which they propose only the incorporation of non-financial obligated subjects, leaving the current regulatory framework created in a discretionary manner, by the SHCP, the regulation of the obligated subjects of the financial system.

The following are listed as the obligated subjects of the financial system:

Multiple banking institutions;

Development banking institutions;
Investment advisors;
General warehouses;
Financial lessors;
Exchange houses;
Insurance mutualist institutions or societies authorized in life insurance operations and to the persons who intermediate said insurance; the Agricultural and Rural Insurance Funds that operate life insurance; and, associations of persons who without issuing policies or contracts, grant their members insurance in case of death and survival under the terms of article 13 of the General Law of Institutions and Mutualist Insurance Societies; Financial factoring companies; Credit unions; Money transmitters; Credit card or service administrators; Currency centers; Credit institutions and limited object financial societies; Multiple object financial societies; Operating societies of investment societies, which directly distribute shares of the societies they administer or manage among the investing public; Brokerage houses; Stock specialists; Popular savings and credit entities; Cooperatives and popular financial societies; Retirement fund administrators, regarding voluntary or complementary contributions; Surety institutions; and, Those societies and institutions that in terms of current legislation are granted the character of member of the financial system.

On the other hand, it is proposed to incorporate new obligated subjects, who by the nature of the activities they carry out, present greater vulnerability to being used in operations with resources of illicit origin and terrorist financing, or who by their daily activity have access to information relative to said operations. In compliance with the provisions of the FATF and in follow-up to international best practices, the proposed new obligated subjects are:

Non-banking commercial entities that enter into loan or credit contracts, issue or market service, credit, or, in general, instruments used in the payment system, for the acquisition of goods, services, or disposal of cash or traveler's checks and sale of prepaid cards; Persons other than financial entities that habitually enter into loan contracts with or without pledge guarantee, directly or through commercial establishments, or who grant loans or credit contracts to the general public, regardless of the legal figure they adopt for the purpose of their operations; Persons who carry out games with bets, raffles, or contests in accordance with the Federal Law on Games and Raffles, the Federal Consumer Protection Law, and the Federal Radio and Television Law and their respective regulations, as well as decentralized public bodies that carry out said activities, under the terms of their applicable legislation; Persons who dedicate themselves to the activities of promotion, agency, development, construction, sale and purchase, loan, lease, investment, commission, administration, intermediation, or assignment of rights in the real estate sector; Independent professional service providers dedicated to legal, accounting, tax, or financial activities, when they participate in the realization of operations on behalf of clients, related to goods, resources, rights, or operations that by their nature or amount could be used for the realization of operations with resources of illicit origin or terrorist financing; Public Notaries; Persons who dedicate themselves to the transport and custody of money, securities, or precious metals; Public and private assistance institutions, religious associations and public worship, and in general any authorized donee in accordance with their respective laws; Legal entities that dedicate themselves to the manufacture, marketing, and sale and purchase of metals, precious stones, or jewelry and watches; Natural and legal persons who dedicate themselves to the marketing, sale and purchase, or lease of motor vehicles, aircraft, and vessels, new or used, and to persons who habitually provide the service of vehicle and real estate armoring; Persons who habitually dedicate themselves to air, maritime, or land transportation of goods or persons; Persons who habitually dedicate themselves to the trade of works of art and antiques; Persons who dedicate themselves to philatelic or numismatic investment; Persons who dedicate themselves to the provision of postal services for international money orders or transfers; Political parties and groups, with registration before the Federal Electoral Institute or before the Electoral Institutes of the Federal Entities and candidates for popular election positions, in terms of the Federal Code of Institutions and Electoral Procedures and the respective local legislations; Guild or union organizations, of a public or private nature, that are legally constituted and labor and peasant central
organizations; Natural or legal persons dedicated to the purchase, sale, import or export, supply, production, storage, and distribution of raw materials, chemical precursors, and laboratory equipment for the pharmaceutical industry; Natural or legal persons, in terms of Law, who have obtained from the competent authorities permission, authorization, or concession to provide public services or the exploitation, use, or enjoyment of federal domain assets; and, Tax warehouses, supervised warehouses, and customs agents, in terms of the Customs Law.

Tax warehouses are those places where customs authorities perform indistinctly the functions of handling, storage, custody, loading and unloading of foreign trade merchandise, supervision, as well as customs clearance of the same.

On its part, the Tax Administration Service grants concessions so that individuals provide services in supervised warehouses for handling, storage, and custody of merchandise.

The customs agent is the natural person authorized by the Ministry of Finance and Public Credit, through a patent, to promote on behalf of others the clearance of merchandise, in the different customs regimes provided for in the Customs Law.

It is important to highlight that both the Initiative of the Federal Executive and the Hernández and Arce Initiative do not contemplate the following non-financial obligated subjects: public and private assistance institutions and religious associations; persons dedicated to the marketing of raw materials, chemical precursors, and laboratory equipment for the pharmaceutical industry; tax warehouses, supervised warehouses, and customs agents; candidates for popular election positions, groups, and political parties; guild organizations, unions, or labor or peasant central organizations; persons who habitually dedicate themselves to the air, land, or maritime transportation of goods or persons; and, persons who have obtained permission, authorization, or concession to provide public services or the exploitation, use, or enjoyment of federal domain assets.

Obligations of the Obligated Subjects.
3.1. Obligated Subjects of the Financial System.
One of the most relevant proposals of the present initiative consists of establishing with precision the obligations of the financial obligated subjects. For this purpose, the various applicable financial laws, the general provisions issued by the Ministry of Finance and Public Credit, as well as the internal regulations and policies of each financial entity, were analyzed.

The obligations that the obligated subjects of the financial system will have are the following:

Create measures and procedures to prevent and detect acts, omissions, operations, or succession of these, that could favor, provide help, aid, or cooperation of any kind for the commission of the crimes of terrorist financing or those provided for in this Law;

Report to the Inter-institutional Technical Committee reports on unusual, internal unusual, and relevant operations.

Create compliance policies; prevention based on risk, under criteria of relevance, antecedents, amounts, and frequency of operations; identification and knowledge of their clients or users; and, access, handling, and disposal of information, which must be approved by the Inter-institutional Technical Committee;

Collect, safeguard, guarantee, and conserve the information and documentation that fully accredits the identity of their clients or users -with the correlative exclusive responsibility in the event of non-compliance due to fortuitous event or force majeure-;

Provide the necessary facilities to the visitors of the Financial Intelligence Unit of the Ministry of Finance and Public Credit, in order to give them access to the facilities, files, databases, and other goods and information necessary for the realization of verification visits;

Comply with the requirements made by the Financial Intelligence Unit of the Ministry of Finance and Public Credit, in concordance with the powers granted by this Law; and,

Provide training within the institutions on the subject matter of this Law, in accordance with the prevention policy.

It is important to clarify, that it will be the Inter-institutional Technical Committee, that will establish through general provisions the modalities and characteristics for the compliance of the established obligations.

As has been said, currently the Ministry of Finance and Public Credit issues in a discretionary manner and without the regularity required the general provisions, in which the obligations that the obligated subjects of the financial system must comply with are established. What is proposed here is that it is the new Inter-institutional Technical Committee that details the general provisions and the form and periodicity in which they must be complied with.

In addition, it has been considered necessary to provide that at least once every three months the obligated subjects of the financial system must report unusual, internal unusual, and relevant operations. This, with the purpose of guaranteeing a minimum of periodicity in the flow of information between the obligated subjects and the authority.

Likewise, with the purpose of strengthening prevention and detection measures, the obligated subjects of the financial system may exchange between their respective compliance officers, the information relative to their policies, measures, or procedures that they have adopted for such purposes.

On the other hand, for the compliance with the various obligations, the obligated subjects of the financial system must have an internal supervision and control body that will be in charge of coordinating the efforts to comply with the new obligations established and to issue the policies and prevention and identification programs, which must be approved by the Inter-institutional Technical Committee. Said body will be integrated by the compliance officer and by at least three executive-level officials of the financial institution itself.

They must also have a compliance officer, who will be designated by the supervision and control body, or by the board of directors or directive of each institution of the financial system, as applicable. It will be the legal representative of said body and responsible for ensuring the good management of the compliance program and will have in charge the operational and information functions of the respective body.

It will be the obligation of the board of directors and the general management of each financial entity, to attribute to the compliance officer sufficient authority, powers, and independence with respect to the other employees of the entity, which allows him to administer the program, as well as to execute effective corrective measures.

Finally, the obligated subjects of the financial system must have a compliance program adequate to the organization, structure, resources, risks, and complexity of the institution's operations.

3.2. Non-Financial Obligated Subjects.
Non-financial obligated subjects will have the obligations of client identification and knowledge; operation reporting; safeguarding and guaranteeing information -with the correlative exclusive responsibility in the event of non-compliance due to fortuitous event or force majeure-. In addition, they must collaborate with the Financial Intelligence Unit of the Ministry of Finance and Public Credit.

The duties imposed on non-financial obligated subjects are relatively easier to fulfill, compared to those of financial obligated subjects. This mainly attends to the fact that the members of the financial system already have a created structure that allows compliance with the norms that in this matter, the Ministry of Finance and Public Credit has issued.

In this sense, the Inter-institutional Technical Committee will dispose through general norms the form, the periodicity, and the activities that must be reported by non-financial obligated subjects. In the same way, it will be the same Committee, that will issue the identification, compliance, and prevention policies based on risk, under criteria of relevance, antecedents, amounts, and frequency of operations, and information handling for non-financial obligated subjects.

The provisions issued by the Inter-institutional Technical Committee must, as far as possible, take into account the opinions expressed by the various business chambers and sectors representing the industry, the Federal Electoral Institute, religious associations, public and private assistance institutions respectively, guilds, unions, and labor and peasant central organizations, etc.

The Inter-institutional Technical Committee will have the power to define through general provisions the operations that must be reported. Unlike the Initiative of the Federal Executive and the Hernández and Arce Initiative, which enumerate in a concrete manner the specific operations that must be reported, without giving margin to the Authority to expand these concepts according to what is prevailing in the markets and in criminal innovations.

The aforementioned delegation made to the administrative authority, to detail the activity that must be reported by non-financial obligated subjects, is in accordance with the principle of legality provided for in the Political Constitution of the United Mexican States, with respect to the principles of sanctioning administrative law and the so-called enabling clauses.

The following precedent issued by the Supreme Court of Justice of the Nation serves as support for the above:

Ninth Era
Registry No.: 182710
Instance: Plenary
Isolated Thesis
Source: Judicial Weekly of the Federation and its Gazette XVIII, December 2003 Subject(s): Constitutional Thesis: P. XXI/2003
Page: 9
ENABLING CLAUSES. CONSTITUTE FORMAL LEGISLATIVE ACTS. In recent years, the State has experienced great development in its administrative activities, which has caused transformations in its structure and functioning, and it has been necessary to endow officials outside the Legislative Power with attributions of a normative nature so that it faces dynamic and highly specialized situations effectively. This situation has generated the establishment of regulatory mechanisms called "enabling clauses", which constitute formally legislative acts through which the legislator enables a State organ, mainly of the public administration, to regulate a concrete and specific matter, specifying it general bases and parameters and which find their justification in the fact that the State is not a static phenomenon, since its activity does not depend exclusively on legislation to face the problems that arise, since the public entity, by being close to dynamic and fluctuating situations that must be regulated, acquires information and experience that it must take advantage of to face the dilemmas with agility and speed. In addition, the adoption of these clauses has as an essential effect a phenomenon of expansion of the attributions conferred on the administration and other State organs, which allow it to act expeditiously within a defined framework of action, susceptible to control through the principle of legality; with the understanding that the establishment of such normative enabling must be carried out in attention to an equilibrium in which the risk of establishing provisions that could promote arbitrariness is considered, as generating situations where it is impossible to exercise state control due to lack of adequate regulation, which could occur if it were required that certain dynamic aspects be regulated through a law.

Amparo in revision 199/2002. Moisés Saba Masri. September 9, 2003. Majority of six votes.
Absent: Guillermo I. Ortiz Mayagoitia and Humbromán Palacios. Dissenters: Juventino V. Castro and

Castro, José de Jesús Gudiño Pelayo and Juan N. Silva Meza. Rapporteur: José Vicente Aguinaco Alemán.
Secretary: Emmanuel G. Rosales Guerrero.

In this sense, the present bill project aims to enable the competent authority in this matter to issue, through general provisions, the details of the activities that non-financial obligated subjects must report.

On the other hand, non-financial obligated subjects must designate a compliance officer for their new obligations, from among those persons who hold a management level within the legal entity and have at least general power of attorney for acts of administration. Likewise, non-financial obligated subjects that are natural persons cannot appoint an attorney or representative for the purposes of responsibility and compliance with their respective obligations.

4.- Special regime for public notaries.

This initiative proposes incorporating notaries and public brokers as non-financial obligated subjects. This is based on the fact that they authenticate, formalize, and advise on a multitude of civil and commercial acts that, due to their characteristics, are susceptible to being used to carry out operations with resources of illicit origin or terrorism financing. That is, both notaries and public brokers perform a function of enormous social relevance by becoming one of the most important actors in the detection and prevention of this type of operation.

International experience demonstrates that public notaries have become one of the main custodians of the financial system and commerce in general. This is demonstrated by the diagnoses of the FATF and the best practices of countries such as Brazil, Colombia, or Spain.

Therefore, unlike other non-financial obligated subjects, a special regime of obligations is proposed for public notaries, while guaranteeing the confidentiality of the information they handle.

This special regime respects the federal pact as it establishes new norms subject to the scope of competencies marked by the Constitution, for both local and federal scopes.

In this sense, public notaries will have the following obligations:

To know and identify their applicants and persons requesting their public services;
To execute the Compliance Program and the policy of knowledge and identification of applicants and clients issued by the Intersecretarial Technical Committee;
To prepare an Operations Report and report it to the prevention and control body of the Notaries' College; and,
To warn applicants or persons requesting their services about the penalties incurred by those who carry out operations with resources of illicit origin or terrorism financing.

As stated, due to the relevance that public notaries have in the detection and prevention of operations with resources of illicit origin and terrorism financing, specific operations that must be reported to the Interinstitutional Technical Committee are established. These operations will be the following:

Translative acts of ownership of movable or immovable property;
The celebration of loan or credit contracts, in which the creditor is not part of the Mexican financial system nor is a public organism;
The constitution, merger, spin-off, dissolution, or liquidation of civil, commercial, or any other nature societies, or when new partners or shareholders are established;
The protocolization of minutes of shareholders' meetings or partners' assemblies, or documents containing resolutions adopted outside of said meetings or assemblies or of any nature, which agree on the increase or reduction of social capital or partnership shares;
In cases of reduction of social capital of fixed or variable part, when it results in the reimbursement to one or several shareholders or partners and the payment of dividends;
When, due to mergers or spin-offs, social capital, assets, or liabilities are transferred to the merging, spun-off, or spun-off entities;
In the issuance of powers of attorney granted with an irrevocable character;
In the formalization of assignments of rights;
When the fulfillment of an obligation is satisfied for an amount equivalent to two thousand five hundred times the General Minimum Wage in Force in the Federal District or its equivalent in foreign currency, regardless of its form of payment. In any case, the form in which said payment was made must be recorded;
The constitution, modification, or extinction of trusts and any act or operation derived from them;
Realization of appraisals; and,
Inheritances or legacies. In case their adjudication is carried out by a Judge, the latter will report directly to the Interinstitutional Technical Committee.

Unlike other non-financial obligated subjects, public notaries must prepare a monthly operations report and deliver it to the Notaries' College - as occurs in Spain -.

The fundamental reason driving the creation of the prevention and control body within the Notaries' College is, first, the enormous relevance that public notaries play in the prevention of money laundering and terrorism financing, as it is before them that a significant part of the operations carried out in the country takes place; secondly, the supervision and control body will systematize the information delivered by each notary through monthly operations reports, and this body will be the one to report said operations to the Interinstitutional Technical Committee, providing greater precision to the transmitted information, as it will be based on intelligence and risk systems; finally, to adequately safeguard the security of public notaries, it is specified that the information will be delivered directly to the Notaries' College and this in turn, will make the reports to the authority.

The prevention and control body of the Notaries' College will have the following obligations:

Report the acts or operations, through electronic means and in the official format established by the Interinstitutional Technical Committee;
Provide the Intelligence Organ of the Secretariat with the information and documentation requested;
Provide the necessary facilities to the visitors of the Intelligence Organ of the Secretariat;
Execute the compliance program and the risk-based prevention policy issued by the Interinstitutional Technical Committee; and,
Grant its employees continuous training on new provisions.

It is important to highlight that in Mexico, membership in the college is not mandatory, so public notaries who do not belong to the Notaries' College, as well as public brokers, must report directly to the Interinstitutional Technical Committee all operations when they exceed the amount equivalent to two thousand five hundred times the General Minimum Wage in Force in the Federal District.

5.- Restriction on the use of cash and monetary instruments.

National and international diagnoses demonstrate that one of the main mechanisms to carry out operations with resources of illicit origin and terrorism financing occurs through the use of cash - both in national currency and foreign exchange -. This is for the purpose of evading the trail that could be left in institutions that make up the financial system and, consequently, hindering its tracking. For this reason, this initiative proposes restricting the use of cash and monetary instruments.

With the aim of preventing crime from misusing cash, as well as to promote the formalization of the economy, the following measures are proposed:

5.1. Any legal act consisting of the constitution or transmission of rights over immovable property, regardless of its value or amount, must be carried out through any banking or financial payment method or instrument recognized by law, other than cash, in national currency or foreign exchange, precious metals, or traveler's checks. Such operation must be incorporated into the Unique Registry of Identification and Data.

5.2. On the other hand, it is foreseen that the operations listed below, for amounts equal to or greater than the amount equivalent to two thousand five hundred times the General Minimum Wage in Force in the Federal District, must be carried out through any instrument or banking or financial payment method recognized by the Law:

The marketing, purchase and sale, and leasing of motor vehicles, aircraft, and vessels, new or used; the vehicle and immovable property armoring service; and, the purchase and sale of metals, precious stones or jewelry, and watches;
Acquisition of tickets or any other instrument or means that allows participation in lotteries, contests, or games with betting, as well as the payment of prizes for said concepts;
Transmission of ownership or constitution of rights of any nature over the titles representing partnership shares or shares of legal entities;
Constitution of personal rights of use or enjoyment of any of the assets referred to in the previous subsections;
Acts of commerce, contracting, or provision of services carried out by hotels, travel agencies, hospitals, bars, restaurants, nightclubs, department stores, and supermarkets;
Donations or gifts in any modality; and,
All acts or operations carried out by Non-Financial Obligated Subjects, as well as any third party distinct from the Obligated Subjects, provided that they carry out any of the activities provided for by the Law as activities of non-financial obligated subjects. That is, those acts or operations that imply the primary or essential activity of non-financial obligated subjects, in terms of what is established by the Interinstitutional Technical Committee.

In this sense, it is no longer the subject themselves who are obligated to carry out operations through some banking or financial means, but the activity, that is, in the case, for example, of acquisition of chemical precursors, provision of services by customs agents or financial advisors, contracting of advertising by political parties or candidates, concessionaires or permit holders of public domain goods of the federation, union activities, among others, must be carried out through some financial or banking means provided for by the Law, regardless of whether it is an obligated subject.

On the other hand, it is important to clarify that the reference made in this bill project to total, partial, or fractional acts, refers to those acts related to the same operation. That is,

the fulfillment of obligations or payments in which, to avoid the use of the banking or financial means, they are extended over time, thereby avoiding the banking of the operation when the amount of two thousand five hundred times the General Minimum Wage in Force in the Federal District is exceeded. This without prejudice to the criminal or administrative sanction that may apply in each case.

5.3. Finally, it is proposed that operations in which third parties distinct from the obligated subjects intervene, directly or through an intermediary, for an amount greater than two thousand five hundred times the General Minimum Wage in Force in the Federal District, must be reported to the Interinstitutional Technical Committee.

However, the obligation to report is excluded for those persons who present the tax return referred to in the Income Tax Law or, in their case, enter the product of the operation into the financial system. In both cases, said operations would be subject to prevention, as in the case of the first, the Tax Administration Service must inform the Interinstitutional Technical Committee about the operation and, in the second case, the financial system must also report it to said authority.

All reported operations must be integrated into the National Information and Reports System and recorded in the Unique Registry of Identification and Data.

In the case of the Hernández y Arce Initiative, it only establishes the reporting regime for operations carried out in cash for an amount greater than one hundred thousand pesos. Regarding the Federal Executive Initiative, the restriction on the use of cash in national or foreign currency or precious metals, above one hundred thousand pesos, only refers to acts of transmission or constitution of real rights over the ownership of movable property, aerial, maritime, or terrestrial vehicles, and the provision of armoring services on them, jewelry, precious metals, and works of art, acquisition of tickets to participate in games with betting, contests, or lotteries, and the payment of their prizes, and the acquisition of partnership shares or shares.

In this sense, in said Initiatives, the other operations carried out by non-financial obligated subjects are free to use cash in national or foreign currency in their activities, however, they are subject to reporting.

This initiative additionally proposes the incorporation: of acts of commerce, contracting, or provision of services carried out by hospitals, bars, restaurants, nightclubs, department stores, and supermarkets; donations or gifts in any modality; and, all acts or operations carried out by Non-Financial Obligated Subjects, as well as any third party distinct from the Obligated Subjects, provided that they carry out any of the activities provided for by the Law as activities of non-financial obligated subjects.

On the other hand, regarding the obligation to report to the authority operations exceeding the amount equivalent to two thousand five hundred times the General Minimum Wage in Force in the Federal District, the three initiatives coincide in their essence and object, with the exception that both the Federal Executive Initiative and the Hernández y Arce Initiative propose the limit at one hundred thousand pesos.

This initiative proposes the use of the amount equivalent to the General Minimum Wage in Force in the Federal District, as this unit of value gives greater stability to the norm.

On the other hand, regarding the obligation to report cash operations referred to, the three initiatives share the purpose of exempting from the obligation to present said report when compliance with the corresponding tax obligations is given. However, this proposal considers that the entry into the financial system of the amount or product of the operation will also exempt the individual from carrying out the cash operation report, as with said entry there is already control by the financial system through the report of relevant operations.

6.- Reserve and confidentiality of information.

This initiative incorporates a specific chapter to guarantee the adequate treatment of the information of individuals and obligated subjects, in the stages of knowledge, identification, reporting, processing, analysis, and exchange of information and the eventual complaint that, in its case, the Intelligence Organ of the Secretariat of Finance and Public Credit presents.

First, it is proposed that the data that individuals deliver to obligated subjects be considered confidential, even after the financial, contractual, or service relationship that generated the delivery of the information has ended. This is consistent with the recent reform made to Article 16 of the Political Constitution of the United Mexican States and with the Federal Law on Personal Data in Possession of Individuals, in which the right of every person to the protection of their personal data in the possession of individuals is recognized and implemented.

Therefore, individuals who deliver information considered confidential or personal data to obligated subjects will have at all times the right of access, rectification, cancellation, and opposition with respect to them.

Obligated subjects are constrained to present in the form of reports, the operations referred to in this law. It is fundamental that the information contained in said reports, as well as the report itself - the name of the natural person or the institution that issued it -, be considered confidential.

Now, it is necessary to clarify that it is foreseen that, both the content of the report and the report itself, will not constitute a violation with respect to professional or legal secrecy or with respect to the duty to keep due banking, commercial, industrial, tax, or fiduciary secrecy, given that the information provided will be considered confidential at all times.

The Federal Law on Personal Data in Possession of Individuals establishes that individuals have the duty to inform their clients, users, or whoever they receive confidential information or personal data from, about the treatment that will be made of said information, through what the law calls the privacy notice. In said notice, obligated subjects must expressly mention that the information their clients or users provide them will be incorporated into the Unique Registry of Users of Financial Services; sent, if applicable, to the Interinstitutional Technical Committee, via the operations reports established by this bill project; and may also be shared with the different Compliance Officers of Financial Entities, in order to strengthen the measures of prevention and detection of acts, omissions, or operations with resources of illicit origin or terrorism financing.

On the other hand, in accordance with the Federal Law on Transparency and Access to Government Public Information, when information is transmitted or transferred between competent authorities in this matter, the consent of the individuals who are the holders of the transmitted information will not be required.

It should be noted that individuals have at all times the right of access, rectification, cancellation, and opposition with respect to their personal data in the possession of authorities, as established by the Federal Law on Transparency and Access to Government Public Information; however, for the proper implementation of the obligations established in this bill project and for the proper compliance with the powers granted to the Interinstitutional Technical Committee and the Intelligence Organ of the Secretariat of Finance and Public Credit, obligated subjects and the aforementioned authorities are prevented from disclosing to individuals the report that may be carried out, or the investigation that is activated. Therefore, in case an individual wishes to exercise the rights, they must go to the obligated subject to whom they delivered the information and, in any case, the obligated subject themselves must inform the Intelligence Organ of the Secretariat of Finance and Public Credit about the result of the respective procedure.

The above allows safeguarding the rights of individuals, while protecting the integrity of obligated subjects. That is, it is an exception to the access, rectification, cancellation, and opposition of personal data in the possession of the authority.

This initiative establishes that the complaint that is eventually presented to the Intelligence Organ of the Secretariat of Finance and Public Credit before the Attorney General's Office, must not contain the identification data of the obligated subject that, in its case, issued the operations report. This is solely for the purpose of protecting the obligated subject itself and the natural persons who have been involved in the issuance of said report. The exception to the above is the hypothesis in which an obligated subject is being investigated, in which case, it is evident that their identification data must be integrated into the complaint that is presented.

Finally, it is proposed that the complaints filed by the Financial Intelligence Unit of the Secretariat of Finance and Public Credit before the Attorney General of the Republic shall not consist solely of the report of operations that have been presented by any obligated subject, but that the Interinstitutional Technical Committee must provide elements and evidence data resulting from the analysis of the antecedents, operations, and activities of the investigated subject.

In the specific case of this section, neither the Federal Executive Initiative nor the Hernández and Arce Initiative makes reference to the Federal Law for the Protection of Personal Data in Possession of Individuals, nor to the Federal Law of Transparency and Access to Government Public Information. This initiative, on the other hand, has considered it fundamental to bring to light the rights regulated in the aforementioned normative provisions, as they are fundamental principles in the treatment of the information referred to in this draft Law.

7.- Authorities.

This initiative is based on and recognizes the effort made by the Secretariat of Finance and Public Credit in matters of prevention of operations with resources of illicit origin and financing of terrorism.

However, it is necessary to establish that the prevention and detection of the crime of money laundering has had operational difficulties, especially regarding the flow of information, cooperation, and coordination among the various competent authorities in the matter, as well as in the technical and interdisciplinary analysis that must be carried out in operations with resources of illicit origin and financing of terrorism.

In this sense, it is relevant to take into account that the budget of the current Financial Intelligence Unit of the Secretariat of Finance and Public Credit is $48,609,000.00 pesos annually.

Of the 15 Administrative Units of the SHCP, the Financial Intelligence Unit, whose function is to prevent operations with resources of illicit origin, is the one with the least budget assigned for the 2010 exercise. This is relevant if one considers the amounts between 15 and 35 billion dollars resulting from the activities of organized crime that must be combated.

Consequently, it is required to provide greater economic, human, material, and technical resources to the authority in charge of preventing and detecting operations with resources of illicit origin and financing of terrorism, so that its task is truly effective.

In virtue of this, this initiative has considered it indispensable to carry out a restructuring within the Secretariat of Finance and Public Credit to provide greater instruments and tools in the fight against the crime of money laundering and financing of terrorism. Therefore, the creation of the Interinstitutional Technical Committee is foreseen, it is proposed to maintain the current Financial Intelligence Unit of the Secretariat of Finance and Public Credit, and a Consultative Council is incorporated which will be integrated by the heads of the dependencies of the Federal Public Administration that, by the nature of their legal attributes, have a relationship with the implementation of this new Law.

The Federal Executive Initiative and the Hernández and Arce Initiative provide that the Secretariat of Finance and Public Credit, through the Financial Intelligence Unit, will continue to have the powers of prevention of money laundering, in the same terms and with the same powers that they have today.

Now, for the better understanding of the administrative scheme proposed, the powers and how each of the government instances interact are explained below:

7.1. Secretariat of Finance and Public Credit.

Specific powers are foreseen to be established for the Secretariat of Finance and Public Credit, without prejudice to the attributes contemplated in various legal provisions:

Ensure compliance with the obligations incumbent on the Financial Intelligence Unit, the Interinstitutional Technical Committee, and other public officials in charge of the application of this draft Law;
Conclude agreements and establish cooperation systems with countries or international organizations; and,
Know and resolve on the review resources that are filed against the resolutions issued by the Financial Intelligence Unit of the Secretariat;

In this sense, the Secretariat of Finance and Public Credit will be in charge of supervising the new provisions; be the representative of the federal government before international organizations; and be the second-instance authority for the purposes of the review resource that, if applicable, is filed against the administrative resolutions issued by the Financial Intelligence Unit.

7.2 Interinstitutional Technical Committee

The Interinstitutional Technical Committee will be the nerve center of the Secretariat of Finance and Public Credit, for the prevention and detection of operations with resources of illicit origin and financing of terrorism. As its primary function, it will be in charge of preventing and detecting, based on risk mechanisms and systems, the flow of capital or goods of any nature, that come from resources of illicit origin or financing of terrorism.

For this, it has been estimated necessary to equip this organ with an inter-secretarial and interdisciplinary structure for the best fulfillment of its functions. In this sense, it will be integrated by the head of the Financial Intelligence Unit of the Secretariat of Finance and Public Credit, who will coordinate it, and by public officials commissioned by the Secretariat of the Interior, by the Secretariat of Public Security, by the Attorney General of the Republic, and by the Bank of Mexico.

The commissioned public officials will retain the status of officials of the dependencies or entities that designated them, that is, they must proceed in accordance with the attributes and competencies established by the organic laws of the institutions of which they are part, with what is established by this draft Law and its eventual regulation.

Likewise, it is provided that the members of the Interinstitutional Technical Committee be designated by the heads of the previously mentioned secretariats or dependencies, at the request of the head of the Secretariat of Finance and Public Credit. In the case of the Commissioner proposed by the Bank of Mexico, its designation will be made based on the collaboration agreements celebrated for this effect. However, to preserve the level of specialization by the members of the Committee, it has been considered necessary to provide that they must have occupied, at least, the position of general director or equivalent, in the dependency or entity that makes their designation; have five years of professional experience in the matters regulated by this Law; and be subject to the entry and periodically to a trust exam in terms of the applicable legislation.

The members of the Interinstitutional Technical Committee in the exercise of their functions and independent of the other attributes detailed below, must serve as a constant link with the dependency or entity that made their designation and supervise that the information requested by the Financial Intelligence Unit of the Secretariat of Finance and Public Credit is fulfilled.

The Interinstitutional Technical Committee will be the organ that will implement the intelligence tasks. For this purpose, it will have the necessary human and material resources for the fulfillment of its obligations, as well as the following attributes:

Issue general provisions containing the guidelines that obligated subjects must comply with;
Establish the policies, formats, systems, and reports in accordance with which obligated subjects will fulfill their obligations;
Analyze and, if applicable, approve the measures and procedures, the compliance program, the identification and customer/user knowledge policies, risk-based prevention, access and handling of confidential information and personal data of obligated subjects;
Receive and analyze the reports issued by Obligated Subjects;
Integrate and administer the National Information and Reporting System and the Unique Identification and Data Registry;
Request the Financial Intelligence Unit of the Secretariat to: request information from authorities and Obligated Subjects; carry out verification visits; request the support of the public force; and, summon and request the appearance of alleged offenders.
Instruct the head of the Financial Intelligence Unit of the Secretariat of Finance and Public Credit to file a complaint before the Federal Public Ministry; and,
Cooperate, at the request of the Public Ministry, in the investigation of crimes subject to this draft law.

The powers that this draft law attributes to the Interinstitutional Technical Committee, added to its interinstitutional nature, will make the intelligence, prevention, and detection work make this organ an effective and optimal instance for the prevention and detection of operations with resources of illicit origin.

The Unique Information and Data Registry and the National Information and Reporting System will consist of the following:

The National Information and Reporting System will be integrated by all the operation reports made by obligated subjects, as well as those presented by persons who carry out cash operations exceeding the amount equivalent to two thousand five hundred times the General Minimum Wage in effect in the Federal District.

The System will allow analyzing, integrating, and systematizing the information and reports transmitted to it by obligated subjects, based on intelligence and risk mechanisms and systems, whose integration and administration will be in charge of the Interinstitutional Technical Committee.

The Unique Registry of Users of Financial Services will centralize, systematize, and individualize the information. The Registry must be integrated with the data transmitted by obligated subjects or third parties and various federal, state, and municipal authorities, whether of tax, registry, and population data, or of any other origin, as well as any other information considered relevant to fulfill the object of the law.

In addition, the universe of information will be integrated with data obtained from public sources, in which case its veracity must be proven. In the case of public officials, their data must be incorporated into the registry, including their respective asset declarations, and the circumstance that they are politically exposed persons.

The main objective of the Registry is to facilitate the analysis of the information in charge of the Interinstitutional Technical Committee. By having a unique registry, duplication of records will be avoided and it will allow for better tracking of asset modifications that occur in those who are the object of registration and analysis.

The persons subject to registration will have a unique identification number that will be directly provided by the obligated subject with whom they establish any contractual or business relationship.

Finally, it has been provided that the Attorney General of the Republic will have the power to form temporary task forces, in charge of the Federal Public Ministry for the investigation of crimes of operations with resources of illicit origin and financing of terrorism.

The function of the temporary task forces will be to assist the Federal Public Ministry during the preliminary investigation stage and until it concludes, which will provide an interinstitutional vision and experience that will strengthen the criminal cases subject to this initiative.

7.3. Financial Intelligence Unit of the Secretariat of Finance and Public Credit.

The Financial Intelligence Unit of the Secretariat of Finance and Public Credit will serve as the operational instance of the Interinstitutional Technical Committee and will be the authority that coordinates the relationship with the various authorities and with the obligated subjects.

It will have the following powers:

Communicate to obligated subjects the general provisions issued by the Interinstitutional Technical Committee;
Verify and supervise the compliance with the obligations imposed on obligated subjects;
Conclude collaboration agreements and establish mechanisms of interinstitutional cooperation with authorities of the different orders and powers of government and with the autonomous constitutional bodies;
Coordinate the various public dependencies that within their sphere of attributes regulate or supervise the Obligated Subjects of the Financial System;
Act as a consultative body for Obligated Subjects;
Instrument the administrative sanctioning procedure at the request of the Interinstitutional Technical Committee;
At the request of the Interinstitutional Technical Committee, request and deliver information to the authorities of the different orders and powers of government and to the autonomous constitutional bodies; carry out verification visits; request the delivery of information to obligated subjects; request the support of the public force; summon and request the appearance of alleged offenders;
Prior consultation with the Interinstitutional Technical Committee, fix the country's position in international meetings on the matter of the law; and,
Prior instruction of the Interinstitutional Technical Committee, file a complaint before the Federal Public Ministry on facts possibly constitutive of crimes provided for in this Law.

On the other hand, in the prevention and detection stage carried out by the Interinstitutional Technical Committee, it may instruct the Financial Intelligence Unit of the Secretariat of Finance and Public Credit to carry out visits to verify compliance with the obligations incumbent on obligated subjects, as well as on persons who have carried out operations subject to the regime of this Law.

At the request of the Interinstitutional Technical Committee, the Financial Intelligence Unit of the Secretariat of Finance and Public Credit will instrument the administrative sanctioning procedure. For this, in observance of the guarantees of legality, hearing, and due process, the different stages of the procedure have been foreseen - summons to the alleged offender, possibility of offering evidence and a hearing for its discharge, the right to present arguments and the possibility of appealing to the Secretariat of Finance and Public Credit -.

Likewise, by instruction of the Interinstitutional Technical Committee, the Financial Intelligence Unit of the Secretariat of Finance and Public Credit may file complaints for facts possibly constitutive of crimes of operations with resources of illicit origin and financing of terrorism, collaborating with the competent authorities in the investigation and criminal prosecution of the facts.

In addition to what has been explained so far, and due to the nature of the detection and prevention functions that will be carried out by the Interinstitutional Technical Committee and the Financial Intelligence Unit of the Secretariat of Finance and Public Credit, it has been estimated necessary to provide that the public officials who integrate it must be subject to periodic processes of control of trust evaluation and professional competencies, in the terms established by the regulation of this draft Law.

7.4. Consultative Council

The Secretariat of Finance and Public Credit will have a Consultative Council that will be integrated by the head of the Secretariat, who will preside over it, and by the Secretaries of the Interior, Public Security, and Economy, the Attorney General of the Republic, the Director of the National Center for Investigation and National Security, the Head of the Tax Administration Service, the President of the National Banking and Securities Commission, the President of the National Insurance and Surety Commission, and the President of the National Savings Systems for Retirement Commission, and, as a permanent guest, the Governor of the Bank of Mexico.

The head of the Financial Intelligence Unit of the Secretariat of Finance and Public Credit will serve as executive secretary.

The object of the Consultative Council will be to analyze and provide solutions to the operational problems of the various instances in charge of the prevention, detection, and investigation of operations with resources of illicit origin and financing of terrorism. For this effect, the Consultative Council will meet at least twice a year and will have the following attributes:

Know of the operational problems raised by the dependencies or government entities in charge of the operations subject to this draft law;
Know of the reports of the competent areas in the matter; and,
Propose and order the implementation of structural solutions to the various public instances to avoid the identified operational problems.

7.5. Obligations of the dependencies of the Federal Public Administration.

It has been considered necessary to provide that the various dependencies of the Federal Public Administration must collaborate within the scope of their respective attributes, in the prevention, detection, and combat of operations with resources of illicit origin and financing of terrorism. Therefore, it has been provided to establish the following obligations:

Observe, in the exercise of the law, the guiding principles of the public security institutions indicated in article 21 of the Political Constitution of the United Mexican States;
Coordinate their actions, within the scope of their respective competencies, for the fulfillment of the object of the law;
Provide in a timely manner all the information that is required by the Financial Intelligence Unit of the Secretariat of Finance and Public Credit, or that is held by the institution under its charge and may be relevant to fulfill the object of the Law;
Use the information generated as a result of the application of the Law, in the scopes of their respective competencies;
Refrain from providing information generated as a result of the application of the Law to any person who is not legally authorized to do so;
Establish measures for the protection of the identity of those who provide the reports referred to in the Law; and
When establishing administrative regulations, aimed at identifying and preventing the operations subject to the regime of this Law, they must seek an adequate regulatory balance; take the necessary measures to facilitate compliance with the Law and mitigate its economic impact; and, avoid that the financial system

used for the carrying out of operations with resources of illicit origin or of terrorism financing.

8.- Inter-institutional coordination.
It has been considered necessary to include a specific chapter referring to the coordination and cooperation among the various authorities involved in the prevention, detection, investigation, and prosecution of operations with resources of illicit origin and terrorism financing.

First, it is established that the Financial Intelligence Unit of the Ministry of Finance and Public Credit shall establish with the competent authorities in the matter, the mechanisms for coordination and exchange of information, data, and images necessary for the implementation of the law. Likewise, due to the nature of the Bank of Mexico as a constitutional autonomous body, it is foreseen that the coordination mechanisms agreed upon with it will be based on collaboration agreements entered into for that purpose.

It is also established that both the Financial Intelligence Unit of the Ministry of Finance and Public Credit, the Attorney General's Office, and the Public Security Secretariat are empowered, through legally authorized public officials, to corroborate information, data, and images related to the issuance of official identifications held by federal, state, and municipal authorities. In turn, it is established the correlative obligation of said authorities to deliver the required information to the Financial Intelligence Unit of the Ministry of Finance and Public Credit, the Attorney General's Office, and the Public Security Secretariat. In this sense, and with the purpose of facilitating the corroboration and transmission of information related to official identifications, it is foreseen the possibility that the competent authorities in the matter may enter into agreements for the establishment of remote consultation systems.

On the other hand, the Attorney General's Office and the Public Security Secretariat are authorized to request from the Financial Intelligence Unit of the Ministry, the verification of information, documentation, data, or images, regarding the identity of persons, domiciles, means of communication, operations, businesses, or legal acts of the obligated subjects.

Since the Inter-institutional Technical Committee will have access to information related to various operations that could be linked to corruption cases, and in the event that it knows of indications of the possible commission of any related crime, it must inform said circumstance to the Financial Intelligence Unit of the Ministry of Finance and Public Credit so that this, in turn, communicates to the local authorities in charge of combating corruption or prosecution of justice.

The Financial Intelligence Unit of the Ministry of Finance and Public Credit may only deliver information, documentation, data, and images to public officials of the Federative Entities, provided that they are subject to periodic trust examinations and have legal obligations regarding the custody, confidentiality, and secrecy of what is provided to them, and whose non-compliance is criminally sanctioned.

It is foreseen that the officials who receive information or data under the exception provided, must, in turn, guarantee the reserve, confidentiality, and proper use of the information.

It was deemed necessary to provide that public officials who, in the exercise of their functions, are granted access to information related to operations with resources of illicit origin or terrorism financing, must give a written promise of confidentiality that they will observe at all times, even after they have ceased in the position by reason of which access was granted. Likewise, said access must be conditioned to their hierarchical level, the need to know information based on their powers, attributes, or functions, and the certification in the matter of trust control.

Finally, it is proposed to add an article 111 bis to the General Law of the National Public Security System, with the purpose of incorporating the information and databases of the public property and commerce registries, as public security information when it is related to the object of the proposed law. In this sense, said instances will permanently make available to the Financial Intelligence Unit of the Ministry of Finance and Public Credit, the Attorney General's Office, and the Public Security Secretariat, through authorized public officials, their databases, records, notebooks, and information that they may require for the exercise of their respective prevention and investigation powers.

9.- Administrative sanctions on obligated subjects.
Chapter One "General Provisions" establishes that it will be the Financial Intelligence Unit of the Ministry of Finance and Public Credit who, at the request of the Inter-institutional Technical Committee, will carry out the corresponding actions to sanction the obligated subject who commits any infringement. In this order of ideas, it is determined with what criteria administrative sanctions will be individualized, what circumstances may be taken into account as mitigating factors and which will operate as aggravating factors, as well as the benefits that may be granted to the offender when it is their first non-compliance.

In the second chapter, the infractions of the obligated subjects of the financial system are detailed, which, in strict respect of the principle of proportionality and culpability, are grouped according to the gravity of the conduct and the risk that the infringement represents for the normative system of prevention.

On the other hand, chapter three does the same in relation to non-financial obligated subjects. The bill initiative, respectful of the diverse situations and realities held by said obligated subjects, consecrates in a separate chapter, the responsibility in which they may incur, determining a regime of sanctions and penalties different from those stipulated for obligated subjects of the financial sector.

10.- Crimes in matters of operations with resources of illicit origin.
Title Seventh of this initiative regulates the autonomous crime of operations with resources of illicit origin, as well as other criminal types that reproach specific typical conduct that implies a direct detriment to the system of prevention and combat against operations with resources of illicit origin and terrorism financing.

The crime of operations with resources of illicit origin - money laundering - is currently typified in article 400 Bis of the Federal Penal Code. In the case of the Federal Executive Initiative, it is foreseen to establish some crimes related to operations with resources of illicit origin and terrorism financing in the bill project that proposes and, on the other hand, reforms article 400 bis of the Federal Penal Code and adds other illicit conduct in that normative body.

This initiative proposes the repeal of said article, and the incorporation of the following autonomous criminal type:

"A penalty of five to fifteen years of imprisonment and a fine of up to three hundred thousand times the general minimum wage in force in the Federal District, or up to 100% of the operation, whichever is greater, shall be imposed on whoever, alone or through an intermediary, with knowledge that the resources, rights, or goods proceed or represent the product of an illicit activity, carries out any of the following conduct:

I. Acquires, alienates, administers, safeguards, possesses, changes, converts, transforms, deposits, withdraws, invests, transfers, transports, or transfers, from or receives for any reason resources, rights, or goods that proceed or represent the product of an illicit activity, within national territory, from it to abroad or vice versa;

II. Conceals, covers up, or prevents knowing the origin, the true nature, location, destination, or ownership of resources, rights, or goods that proceed or represent the product of an illicit activity.

For the purposes of this article, it is understood that they are the product of an illicit activity, the resources, rights, or goods of any nature, when there is evidence or data of proof that they come directly or indirectly, or represent the gains derived from the commission of some crime and their legitimate origin cannot be accredited."

The incorporation of the previously transcribed criminal type attends to three main reasons:

There is a systematic reason, which foresees that it is convenient and functional to have in a single normative body the main tools of combat and repression against operations with resources of illicit origin.

The Organic Law of the Federal Judiciary establishes in its article 50, subsection a), that they are federal crimes "those provided for in federal laws and in international treaties. In the case of the Federal Penal Code, they will have that character the crimes referred to in subsections b) to i) of this fraction". These subsections provide that they are federal crimes:

"(...) b) those indicated in articles 2 to 5 of the Penal Code; c) Those committed abroad by diplomatic agents, official staff of the legations of the Republic and Mexican consuls; d) Those committed in foreign embassies and legations; e) Those in which the Federation is the passive subject; f) Those committed by a public official or federal employee in the exercise of their functions or by reason of them; g) Those committed against a public official or federal employee, in the exercise of their functions or by reason of them; h) Those perpetrated by reason of the functioning of a federal public service, although said service is decentralized or concessioned; i) Those perpetrated against the functioning of a federal public service or to the detriment of the goods affected to the satisfaction of said service, although this is decentralized or concessioned. (…)"

For the above, the crimes provided for in the Federal Penal Code are subject to the concurrence of any of the hypotheses of personal, territorial, and temporal competence provided for in subsections b) to i) previously transcribed, which conditions the federal character of the criminal type of operations with resources of illicit origin contained in article 400 Bis of said Code.

It is for this reason that, with the incorporation of the criminal type in the present law proposal, the crime of money laundering will be federal matter without the need to concur with any of the previously referred competence hypotheses.

It is imperative to carry out reforms to the crime of operations with resources of illicit origin, in order to have a typical description that is not only operational and functional, but also respects the main rules of criminal imputation, as well as the international commitments that Mexico has undertaken. That is, the international instruments signed and ratified by the Mexican State - in particular article 3, subsections b and c of the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of Vienna, 1988 and article 6 of the United Nations Convention against Transnational Organized Crime of Palermo 2000 - obligate to incorporate a criminal type that sanctions not only the activities carried out with resources of illicit origin, but also those conduct that imply hiding, covering up, or simulating the true nature, origin, location, movement, or ownership of the resources, goods, or rights of illicit origin.

However, the current article 400 bis of the Federal Penal Code reproaches only the activities that are carried out with resources of illicit origin, but does not sanction the conduct that implies hiding, covering up, or simulating the origin, the true nature, location, destination, or ownership of the resources, rights, or goods that proceed or represent the product of an illicit activity.

With the consecration of the criminal type proposed in this bill initiative, not only are both conduct contemplated but full compliance is given to the international commitments acquired for decades, at the same time that international best practices are respected and the recommendations that the FATF has made to our country are fully complied with.

On the other hand, in the same first chapter of Title Seventh, other illicit conduct directly linked to this criminal phenomenon is reproached, by implying a serious detriment to the duties imposed on obligated subjects and on anyone who in compliance with their employment, position, or function executes said obligations, as well as a serious violation to the system of prevention and combat against operations with resources of illicit origin that stipulates this Law.

Therefore, in articles 85 to 95 of this initiative, it is sanctioned whoever uses information, data, documentation, or images reserved or protected for purposes other than those provided for in this Law; whoever carries out fractional operations; the straw man or nominee; the official or employee of the obligated subject who fraudulently alters the content of a report or provides altered or false data in it; as well as whoever informs the client, user, or third parties, about the content of the reports referred to in this Law.

The initiative also typifies the conduct of whoever fraudulently steals, destroys, or alters the reports or information contained in the National Information and Reporting System and the National Registry of Identification and Data; as well as the user or client who to carry out a commercial, financial, or service operation with an obligated subject, provides false or altered information or documentation; and, finally, whoever fraudulently steals, destroys, or alters the reports or information contained in the National Information and Reporting System.

For each crime, the respective penalties are proposed in compliance and respect of the principle of culpability, proportionality, and legality.

Special measures in case of collusion.
Title Seventh, chapter second, regulates special measures to be applied in case of collusion.

According to the definition of the Royal Spanish Academy Dictionary, to collude is a pronominal verb that means "Said of two or more people: to agree to undertake some plan, generally illicit".

Collusion consequently and according to the treatment given to it in this bill initiative, implies a conduct different from criminal association and organized crime, as well as any other criminal type established in current Mexican legislation. Specifically, the concept of collusion is incorporated as a situation of fact that allows the request for special measures by the public ministry before a control judge, when two or more people who in the specific case are some member of the board of directors, administrator, or similar body, the general manager, or the compliance officer agree or execute in a coordinated manner a plan that enables the carrying out by third parties or by themselves, operations with resources of illicit origin.

In article 97, the possibility is foreseen to request the control judge the removal of the compliance officer and the designation of an intervention by the Financial Intelligence Unit of the Ministry of Finance and Public Credit, when from the analysis of the reports of the obligated subjects, the possible existence of a collusion is detected. In article 98 of the present bill project, the possibility is foreseen to request the control judge, prior favorable opinion of the Inter-institutional Technical Committee, through the Financial Intelligence Unit of the Ministry of Finance and Public Credit, to order the temporary suspension of the operating license of the financial entity in question when there are evidence and data of proof that integrate the exercise of the penal action.

These are two precautionary measures that attend to avoid timely greater damages or harms both to financial institutions as well as to their clients and users.

In the case that the collusion has been accredited by a firm judicial resolution, article 99 establishes that the judge may order the definitive revocation of the operating license of the financial entity in question, independent of the other sanctions that may be applicable.

In the case of the temporary suspension of the operating license of the financial entity and of the definitive revocation thereof, what is proposed in articles 97 and 98 of the bill project is stipulated in concordance with numerals 12 and 16 of article 24 of the Federal Penal Code, which establishes in the catalog of penalties and security measures that judges may impose, the suspension or deprivation of rights or dissolution of societies.

Finally, article 194 of the Federal Code of Criminal Procedures is reformed, to endow with gravity the crimes that are proposed to incorporate in the present bill project, unlike the Executive Initiative, in which the gravity of the crimes related to the crime of operations with resources of illicit origin is not established.

In light of the above and based on what is provided by article 71, fraction II, of the Political Constitution of the United Mexican States, as well as by article 8.1 fraction I, 164 and 169 of the Regulations of the Senate of the Republic, I present to this Honorable Assembly the following initiative

Statement of Reasons
(Decree of March 9, 2018)

Based on article 71, fraction I of the Political Constitution of the United Mexican States, I allow myself to submit, through its dignified channel, before that Honorable Assembly, the present Initiative of decree by which the Law to Regulate Financial Technology Institutions is issued and various provisions of the Credit Institutions Law, the Securities Market Law, the General Law of Organizations and Auxiliary Credit Activities, the Law for Transparency and Ordering of Financial Services, the Law to Regulate Credit Information Societies, the Law for Protection and Defense of Users of Financial Services, the Law to Regulate Financial Aggregations, the Law of the National Banking and Securities Commission, and the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin are reformed, added, and repealed.

In recent decades, technology has radically transformed the way in which the trade of goods and services is carried out globally. This revolution of innovation, driven by the wide availability of technology, has impacted very importantly the financial services sector.

The impact of technology has transformed the provision of traditional banking and credit services, through innovations that have generated a significant reduction in the use of branches for the provision of financial services.

This type of technologies have been developed in recent years in harmony with the legislation applicable to regulated and supervised financial entities, but likewise in this period other technological innovations and business models have emerged that do not have regulation and supervision by the authorities on the operations they carry out with their clients, which makes it necessary to include them within the regulated and supervised sector of the financial system.

In addition to the above, it is foreseeable to think about new technologies that promote the decentralization of systems such as blockchain technology, as well as the proliferation of the collaborative economy and peer-to-peer financial services, which will modify even more the panorama regarding the way in which financial services are provided in the coming years.

The capacity for expansion of financial services through new technologies is enormous. According to the Fourth Quarterly Statistical Report 2016 prepared by the Federal Telecommunications Institute, as of December 2016 the number of mobile phone subscriptions in Mexico reached 111.7 million, while the number of mobile broadband subscriptions was 74.5 million.

In view of the foregoing, this Initiative aims to provide a regulatory space for innovation through technologies and financial services to develop and flourish. This is with the purpose of placing Mexico at the forefront in the development of financial services capable of increasing the level of financial inclusion throughout the country and improving competitive conditions in the Mexican financial system.

The initiative proposes creating a new Law to be called the "Law to Regulate Financial Technology Institutions," which aims to regulate Financial Technology Institutions (FTIs) and establish the conditions for entities regulated by this and other financial laws to develop technological innovations in safe regulatory spaces.

With the presentation of the Initiative, the need is recognized for such a dynamic sector as technological innovation to have a regulatory framework that allows authorities to mitigate risks and allow its expansion in a competitive environment. Therefore, the Law to Regulate Financial Technology Institutions is a law that establishes principles, so that from these, the different competent financial authorities issue secondary regulation in accordance with the dynamism inherent to said sector.

The Law to Regulate Financial Technology Institutions is based on the principles of financial inclusion and innovation, consumer protection, preservation of financial stability, promotion of fair competition, and prevention of money laundering and terrorist financing.

With the principle of financial inclusion, the aim is to bring financial services closer to people and sectors that have traditionally not been part of the financial system, promoting greater financial education and advice on these new alternatives. Likewise, complementing financial inclusion is the principle of innovation, which seeks to provide tools to increase the use of the aforementioned services.

The principle of consumer protection aims to protect the client by establishing defense mechanisms and verification of minimum standards, as well as granting regulatory and supervisory powers to financial authorities. Likewise, guidelines for the protection of personal data are established, as well as the obligation of complete disclosure to clients and investors of the operational model and risk factors that the FTI could represent.

Regarding the principle of preservation of financial stability, what is sought is to establish a general framework of authorized and supervised operation for FTIs, imposing prudential rules proportional to the risks they represent in various matters, such as financial, operational, market, technological (cybersecurity), corporate governance, and accounting rules. Likewise, it is sought that the financial technology market develops with limits and maximum transaction amounts in order to avoid regulatory inequality with other financial sectors, thus seeking a level playing field and fair and balanced competition.

Fair competition is one of the key factors intended to be promoted and protected, in view of the fact that the Financial Technology industry will allow greater diversity and new channels for the distribution of financial services, as well as cost reduction and improvement in the provision of said services.

A concern that has been the cause of the creation of standards, controls, and regulation for the provision of financial services, both nationally and internationally, has been the risk of money laundering and terrorist financing. Therefore, the last mentioned principle aims to prevent and mitigate said risk, seeking the correct financial functioning and its integrity, establishing the already accepted and proven regulatory framework, with minimum identification standards for clients that allow preventing this type of conduct.

In addition to the foregoing, it is relevant to mention that the Law to Regulate Financial Technology Institutions is technologically neutral, that is, the technology is indifferent with respect to the service provided.

It is of utmost importance to highlight that the over-regulation of this sector could bring about a result opposite to the end pursued by this new regulation, potentially damaging the financial market and causing a disincentive in financial inclusion, as well as creating barriers that could prove insurmountable for entrepreneurs, as well as for those who wish to opt to operate with any of the figures recognized in the Law to Regulate Financial Technology Institutions. As a consequence of the foregoing, the Law only provides for a general regulatory framework, that is, it only intends to establish the bases and minimum regulation that must govern FTIs, leaving the rest to be regulated in secondary provisions with the objective of having greater flexibility in its regulation, which would allow it to adapt according to the constant dynamism of this sector.

Although there must be flexibility in the regulation of FTIs, this should not be interpreted as the existence of regulatory arbitrage, since FTIs, in accordance with the Law to Regulate Financial Technology Institutions, must comply with the established requirements regarding amounts and limits just as other entities in the sector comply with their respective financial laws. However, it is also necessary to emphasize that FTIs must comply with these obligations proportionally to the risks they incur.

Now, once the principles that guide the conduct of entities regulated by the Law to Regulate Financial Technology Institutions and that must also be followed by authorities in the exercise of their powers have been set forth, the Law establishes the regulation for the different types of FTIs.

FTIs will be authorized, regulated, and supervised entities by financial authorities. To operate as an FTI, the Law to Regulate Financial Technology Institutions establishes that they will require authorization from the National Banking and Securities Commission, which will be granted prior to the review of the information and documentation mentioned in said Law and prior agreement of the Interinstitutional Committee. Said Committee would be composed of three key financial authorities, namely, the Ministry of Finance and Public Credit, the National Banking and Securities Commission, and the Bank of Mexico.

The Law to Regulate Financial Technology Institutions will recognize two types of FTIs: crowdfunding institutions and electronic payment fund institutions.

Crowdfunding institutions (crowdfunding in English) are platforms that put in direct contact people interested in participating in debt, equity, co-ownership, or royalty schemes. These institutions provide access to new sources of financing to segments of the population that are normally not served by traditional financial entities, regulating three forms.

Crowdfunding debt institutions are those where the institution puts investors in direct contact with applicants who require financing, who will subsequently return the resources, generally with the payment of interest. Crowdfunding equity institutions are those that facilitate that investors contribute resources, through the institution, to obtain participations in the share capital of corporate applicants that are promoted by this means to subsequently participate in the profits of said corporations. Finally, crowdfunding co-ownership or royalty institutions are those where investors contribute resources to a project obtaining a participation in a good or right. This figure has been regulated at the international level in countries such as the United States, Canada, China, Spain, Italy, France, the United Kingdom, and New Zealand.

The Law proposed to be issued contains the regulation of electronic payment fund institutions, as a consequence of the increased use of this payment modality in commerce, as it offers security and acceptance in affiliated businesses.

Regarding this, Peru, Paraguay, Brazil, Colombia, Uruguay, Kenya, and the European Union, among other jurisdictions, have regulated electronic payment funds, defining them in similar terms, as the monetary value represented by a credit enforceable against its issuer, stored in an electronic or digital medium, whose value is constant, denominated in the same currency and equivalent to the funds received by the issuer upon delivery.

In the regulation proposed in the Law to Regulate Financial Technology Institutions, electronic payment fund institutions will provide services of issuance, administration, reporting, and transmission of electronic payment funds (e-money in English). Electronic payment funds shall be understood as the monetary value issued at par against the receipt of legal tender currency, which will serve to make payments and transfers.

Likewise, it is proposed that FTIs have the capacity to operate with virtual assets. In this sense, virtual assets are representations of a verifiable digital value, which are not issued or backed by any central bank or financial entity, that is, they do not have legal tender status, and despite this, they generate utilities for their exchange due to their acceptance by the public. In recent years, the use of virtual assets, especially "Bitcoin," has increased, as well as its acceptance and value, so the regulation of institutions in which intermediation with these assets occurs has become increasingly pertinent. Additionally, it is proposed that persons who offer the purchase and sale of virtual assets within national territory be subject to the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin.

Considering that the speed at which technological advances occur does not allow adjusting the assumptions of legal norms with adequate opportunity and that many of the companies that develop innovative schemes or means are of recent creation, the Initiative contemplates, in addition to FTIs, the regulation of Novel Models. To operate said models, societies must have a temporary authorization granted by the competent Supervisory Commission on the matter of innovation, with the purpose of testing their innovative business models based on technology in financial activities currently regulated by some law of the current financial system. With this, it is sought that societies operating with Novel Models provide their services to a reduced number of clients and for a limited time, allowing them to experiment and develop their innovation in the real market in a controlled and supervised manner by authorities.

The authorization of Novel Models is being implemented in several countries, among which the United Kingdom and Singapore deserve special mention, pioneers in creating a figure known in English as Regulatory Sandbox. Additionally, the Initiative contemplates the possibility of granting temporary authorizations to Financial entities to carry out activities contemplated in their corporate purpose through Novel Models when exceptions to general provisions applicable to them are necessary.

In matters of user protection for services offered by FTIs, their supervision will be subject to the powers of the National Commission for the Protection and Defense of Users of Financial Services, so secondary regulation related to the formalization of legal relationships and the resolution of disputes will be issued. Regarding this, the Law for the Protection and Defense of Users of Financial Services is modified and FTIs are included as financial entities in terms of the Law for Transparency and Ordering of Financial Services.

In international experience, there is a set of rules and specifications that allow technological applications to communicate with each other. These rules and specifications are called APIs (from the English acronym Application Programming Interface). This Initiative proposes that financial entities and FTIs have open APIs, allowing the interconnection of digital financial services as long as there is prior consent of the users, specifically mentioning that this would not be a violation of financial secrecy. It is important to mention that to use the data shared through APIs, compliance with the general provisions issued by the competent authority is required.

The Federal Executive has sought to generate an environment of greater financial inclusion, in which the increase in well-being for the population is promoted, the movement of financial resources and the obtaining of credit and other financial services under convenient conditions for different sectors of society is incentivized, and competition is promoted, while at the same time ensuring the stability and security of the financial system, risks are mitigated, and the consumer is protected.

This Initiative continues this same trend and fosters innovation in the financial system so that it becomes another engine of growth for the country.

Among the National Goals established in the National Development Plan 2013-2018 is "Prosperous Mexico," whose purpose is to promote sustained growth of productivity, considering that adequate infrastructure and access to strategic inputs can foster competition and allow greater flows of capital and knowledge, in addition to providing favorable conditions for economic development, through a regulation that allows fair competition among companies and the design of a modern economic promotion policy focused on generating innovation and growth in strategic sectors.

To achieve the foregoing, strategies and lines of action were established, among which are: maintaining the macroeconomic stability of the country, democratizing access to financing for projects with growth potential, and guaranteeing clear rules that incentivize the development of a competitive internal market.

As has been established throughout this exposition, among the objectives of the Law are the increase in the level of financial inclusion throughout the country, the increase in access to financing, and the improvement of competitive conditions in the Mexican financial system, so the Law to Regulate Financial Technology Institutions will be an adequate instrument that will help in the fulfillment of the National Development Plan 2013-2018.

For the foregoing and in exercise of the power conferred upon me by Article 71, Section I of the Political Constitution of the United Mexican States, as well as Article 73, Section X of the same instrument, I submit to the consideration of the Honorable Congress of the Union, the following Initiative of:

STATEMENT OF REASONS
(Decree of May 20, 2021)

The issuance of a Law of the Attorney General's Office is necessary, which aims to establish the integration, functioning, and powers of the Attorney General's Office clearly and realistically, as well as the organization of the Federal Public Ministry, in accordance with the powers conferred by the Political Constitution of the United Mexican States, organizing it as an Attorney General's Office of the Republic as an autonomous public body, endowed with legal personality and its own patrimony.

In that sense, a series of principles that will govern the conduct of all public servants of the Attorney General's Office are considered necessary, such as: legality, objectivity, efficiency, professionalism, honesty, respect for human rights, loyalty, impartiality, specialty, and gender perspective.

Likewise, we cannot fail to observe the quality of the Public Ministry as a representative of society, through which it corresponds to act as a guarantor of access to justice for all those who have directly or indirectly seen their legally protected rights and interests violated.

In that context, it is provided that it will correspond to the Federal Public Ministry, representing the interests of society, the investigation and exercise of the penal action before the courts for crimes within its competence, the preparation and exercise of the action for the extinction of domain, as well as intervention in all matters corresponding to its constitutional functions.

Thus, in compliance with what is established in the General Constitution, in a question that attends to these circumstances, it is provided that the Public Ministry will exercise the representation of society in a punctual, efficient, and effective manner, in all matters that this or other legal provisions establish.

On the other hand, it should be noted that in accordance with the constitutional reform of March 26, 2019, through which the National Guard is recognized as a civil, disciplined, and professional public security institution, it is specified in the present project that the collaboration of the National Guard regarding the investigation of crimes will be carried out under the command and direction of the Public Ministry.

Said that, it is also necessary to point out that with respect to the duration of the term of the head of the Attorney General's Office, and in accordance with what is provided in Article 102, Section A, paragraph three of the Political Constitution of the United Mexican States, it is established that their appointment will be for a period of nine years, and their designation and removal must be carried out in accordance with what is provided in the constitutional text, guaranteeing the principle of gender parity referred to in Article 41 of the Constitution.

Now, with regard to the structure that is intended to be functional for the proper dispatch of matters within the competence of the Attorney General's Office of the Republic, its integration is proposed as follows:

I. The Attorney General;
II. The Competency Control Attorney's Office;
III. The Regional Control Attorney's Office;
IV. The Specialized Attorney's Office on Organized Crime;
V. The Specialized Attorney's Office on Electoral Crimes;
VI. The Specialized Attorney's Office on Combating Corruption;
VII. The Specialized Attorney's Office on Human Rights;
VIII. The Specialized Attorney's Office on Internal Affairs;
IX. Criminal Investigation Agency;
X. General Secretariat;
XI. The Internal Control Body, and
XII. The other units created by legal mandate or determined by the Attorney General in the Organic Statute.

The foregoing is so, with the purpose of having a solid, efficient structure and in accordance with the real needs in matters of justice procurement, which allows addressing the criminal phenomenon adequately.

In this order of ideas, a series of powers and obligations corresponding to the head of the Attorney General's Office that are necessary to successfully carry out the activities of the Attorney General's Office are listed. In that sense, in matters of obligations, we can highlight their appearance before any of the Chambers of the Congress of the Union in the cases and under the conditions established in Articles 93 and 102, Section A of the Political Constitution of the United Mexican States and the annual submission to the Congress of the Union and the Federal Executive of the activity report referred to in Article 102, Section A of our General Constitution.

With respect to absences, excuses, or temporary or definitive absences of the Attorney General, it is provided that the Organic Statute will be the instrument in which the terms to carry out the substitution must be developed, in addition to the foregoing, the duty to inform the Senate of the Republic in case of definitive absence is contemplated.

While for the case of the heads of the units that will integrate the Attorney General's Office, it is provided that the exercise of their functions during their absences will be carried out by the public servant of immediate lower hierarchy who has been designated for such effect, since practice has shown that currently this happens so, nevertheless, it is necessary to formalize the exercise of the acts in substitution, through the corresponding designation.

On the other hand, although it is true that in accordance with the constitutional text, the prosecution of federal crimes before the courts corresponds to the Federal Public Ministry, we cannot fail to observe that the head of the Attorney General's Office is not exempt from having the execution or participation in the execution of some crime imputed to them, and in that sense, it is provided that it will be the public servant who corresponds to act as their substitute, who must know of the complaint against them, taking charge of the respective investigation and resolving on the initiation of the procedure for the declaration of procedence before the Chamber of Deputies.

In addition to the foregoing, the creation of units in charge of the investigation of the crime that will provide support in the tasks performed by the Attorney General's Office is provided. These will have technical and management autonomy regarding their internal functioning, but will be subject at all times in their organizational structure to the institutional hierarchy and legal and normative powers of each administrative unit of the Attorney General's Office.

In that sense, said units must adjust to all and each of the obligations to which the public servants of the Attorney General's Office are subject without any exception.

Under this line of reasoning, and for the purpose of weighing a transparent and legally compliant action, it is considered necessary that the Organic Statute, the agreements by which the creation of units is arranged, as well as those by which powers of the Attorney General or any other act requiring that act of publicity are delegated, must be published in the Official Gazette of the Federation.

On the other hand, a list of powers corresponding to the Attorney General in its capacity as an autonomous body is established. In virtue of the foregoing, the Attorney General may determine its policies for criminal investigation and prosecution at the federal level, coordinate with other authorities to fulfill the ends of public security, promote the celebration of international treaties and subscribe the inter-institutional agreements necessary for the fulfillment of its functions, as well as remit to the Congress of the Union the institutional posture through a technical legal opinion on law initiatives, constitutional or legal reforms that are presented by the Federal Executive and in the Chambers of the Congress of the Union, among others.

Likewise, for the performance of its functions, the Attorney General will have investigation and litigation teams, which will have the function of organizing and managing the strategy of the Attorney General of the Republic efficiently, developing investigations in accordance with congruent investigation plans, which allow for the prompt determination of matters or their judicialization when the circumstances of the case so warrant.

Apart from the foregoing, when there is concurrence of crimes or criminal phenomena, mixed investigation and litigation teams may be formed, which will be integrated with personnel from various units of the Institution as well as with personnel from other Prosecutors' Offices or Procuratorates of the corresponding federal entities; for this purpose, the celebration of institutional collaboration agreements is foreseen.

We cannot fail to observe that institutional strengthening requires various challenges, especially a structural change, as society aspires to and expects adequate prosecution of justice.

Therefore, and with the aim of achieving these ends in an orderly and uniform manner, the Attorney General will have a Management Model for the fulfillment of its functions, applied in its various units.

Under this line of reasoning, a single-window mechanism is foreseen through which matters are channeled in a timely manner for their adequate processing and attention.

Likewise, the establishment of result evaluation mechanisms is foreseen. In this way, the Attorney General will have an evaluation system through which the processes of capturing and compiling data generated by the processing and follow-up derived from the exercise of the powers of the Public Ministry, its auxiliaries, and the support units of the Attorney General will be integrated.

The institutional result evaluation system, referred to in the previous paragraph, must generate products for the analysis of institutional activities, performance indicators, identify institutional needs, and statistical products, all oriented towards decision-making and the continuous improvement of the prosecution of justice.

Similarly, through the evaluation system, the planning, determination, and administration of technological systems and resources will be carried out, through a system useful for investigation, intelligence, development of tactical and operational strategies, and administrative decisions, guaranteeing quality and security in the information.

In matters of coordination and collaboration, the Attorney General will have a regional coordination system through units that will exercise their functions in the territorial circumscriptions established by the Statute.

These units will coordinate their actions with the central areas, in order to guarantee the unity of action and hierarchical dependence of the Public Ministry, prioritizing at all times the concentration of relevant matters in the units designated for such effect.

In this sense, it is established that the Attorney General will have managerial personnel, public prosecutors, federal ministerial police officers, experts, analysts, facilitators, as well as that specialized, professional technical, and administrative personnel necessary for the performance of its functions.

Apart from the foregoing, the possibility is contemplated that the Attorney General may designate as agents of the Federal Public Ministry the heads of those units that have under their charge criminal investigations and the command of public prosecutors. The foregoing with the object of limiting the possibility of designation in these terms and avoiding that the figure becomes corrupted, it being even necessary to note that this power of the Attorney General will be non-delegable.

In matters of powers and as far as operational personnel are concerned, all those powers of the agents of the Federal Public Ministry, agents of the Federal Ministerial Police, experts, analysts, and facilitators are established, which, in accordance with their respective scope of action, will guarantee the success of the investigation, avoiding delays and weighing at all times respect for the human rights of persons accused of conduct that the law defines as a crime, as well as the rights of victims or offended parties and witnesses.

Likewise, it should be noted that it is deemed necessary to implement a system of protection measures for these public servants, due to the danger inherent in the exercise of their functions.

Similarly, a regime of obligations is established for agents of the Public Ministry, agents of the Federal Ministerial Police, experts, analysts, and facilitators, as well as a special framework of obligations for agents of the Federal Ministerial Police, experts, and analysts, by reason of the very nature of their functions, the non-compliance with which will give rise to the corresponding procedures and sanctions.

In matters of collaboration and information exchange, it is foreseen that autonomous constitutional bodies, dependencies and entities of the Federal Public Administration and their counterparts in the federal entities, parastatal entities, decentralized public organizations, majority state-owned companies, public trusts that have the status of parastatal entity, and other dependencies of the Federal Public Administration, the organs, dependencies, entities, and institutions of the federal entities and government, as well as private parties that perform acts equivalent to those of authority in accordance with a norm of a general nature, in their respective scope of competence, will be obliged to provide the collaboration, support, and assistance requested by the Federal Public Ministry for the exercise of its functions.

These authorities will be jointly responsible for the actions and diligences that form part of the criminal investigation or process, so in their case they must appear before the competent authorities and submit the required reports in the terms established by the applicable legal provisions.

In this sense, it is established that non-compliance by public servants with such provisions will give rise to a request by the Public Ministry to their hierarchical superior, in order to initiate the responsibility or disciplinary procedures that correspond, without prejudice to the criminal responsibility that may result in their case.

Apart from the foregoing, this proposal foresees the creation of an Interinstitutional Coordination System, through which the Attorney General will design, build, and administer a national interoperable computer system, through the celebration of collaboration agreements for its operation and execution.

This system will be fed jointly with the Procuratorates and Prosecutors' Offices of the federal entities, with the purpose of sharing information regarding investigations, criminal phenomena, cases of recidivism, records and analysis of genetic profiles, relevant criminal characteristics, biological traces, ballistic fingerprint, voice analysis, biometric systems, and other elements related to criminal acts.

Now, as far as the growth and professional development of the public servants of the Attorney General is concerned, in the present proposal the bases have been established to articulate and implement the Professional Career Service as a solid system of professionalization and human development.

In this sense, the Statute of the Professional Career Service will be the instrument that develops the bases and procedures for its implementation.

The Professional Career Service will be an integral system of regulation of public employment of all personnel of the Attorney General of the Republic organized with the purpose of stimulating the professional and human growth of personnel, promoting job stability and reinforcing institutional identity. It will be composed of the following stages:

I. Entry;
II. Development;
III. Termination, and
IV. Sanction.

It is necessary to note that each of these stages involves a series of specific processes in order to implement the Professional Career Service in accordance with the needs of the Attorney General.

Under this line of reasoning, it is established that all public servants of the institution will be part of the Professional Career Service, divided into branches: the first one integrated by public prosecutors, agents of the Federal Ministerial Police, experts, analysts, and facilitators, while the second will be integrated by administrative personnel.

In this context, in order to verify that new entry personnel adhere to the institutional principles according to the job profile, and that active personnel act within the framework of conduct dictated by institutional regulations, evaluation and certification processes are established.

In this way, public servants of the Attorney General must submit to and approve the trust control evaluation processes, performance, and professional competencies, to enter and remain in the exercise of their functions.

The trust control evaluation process will consist of the following exams:

I. Socioeconomic;
II. Medical;
III. Psychometric and psychological;
IV. Polygraph;
V. Toxicological, and
VI. Those others established by the applicable norms.

On the other hand, the professional competencies evaluation process aims to determine that personnel have the knowledge, skills, attitudes, and aptitudes necessary for the performance of their position.

As a result of the foregoing, public servants who pass the periodic exams of trust control evaluation, performance, and professional competencies, will have the corresponding certification.

This certification aims to accredit that the evaluated person meets the job profile and the required competencies for compliance with constitutional and legal principles.

Apart from the foregoing, the need is reiterated that the Attorney General have a Professional Career Service suitable for each of the branches that integrate it, for which a series of specific entry and permanence requirements are proposed in accordance with the profile of the public servant's functions, according to the substantive or administrative nature of their functions.

Thus, the entry and permanence requirements established consist of a generic section, applicable to all personnel, and from there, those specific to agents of the Federal Public Ministry, agents of the Federal Ministerial Police, experts, analysts, facilitators, specialized public servants, professional technical, and administrative personnel are developed.

In addition to the foregoing, it is also worth noting that the present proposal contemplates the application of an opposition exam, which will be applied to new entry substantive personnel with the purpose of evaluating if the applicant has the necessary knowledge and skills to perform functions.

This exam will consist of two stages, one oral and one written, must be presented before the National Institute of Penal Sciences, and will be graded by a synod composed of a public servant with a minimum level of area director, who will serve as president, and two members of the substantive branch in question, who will serve as secretary and member, respectively.

The grading of the oral exam will be determined taking into consideration the average of points that each of the synod members assigns to the examinee. In both cases, the grading will be based on a scale of 0 to 10, with 7 being the minimum passing grade.

As for the termination of the relationships of the Attorney General with its personnel, a series of causes are listed through which the relationship may be terminated.

Likewise, it is established that in those cases where the form of service termination is declared by final sentence as unjustified, the Attorney General will be obliged to pay the corresponding indemnification, and other benefits according to the law, without in any case the reincorporation of the public servant proceeding.

Under the same line of reasoning and attending to the nature of the information handled inside the Attorney General, it is deemed necessary to establish from the text of the law, the duty of all its personnel to deliver all information, documentation, equipment, materials, identifications, values, or other resources that have been placed under their responsibility, custody, and safekeeping, upon concluding the legal relationship with the Attorney General.

In this way, public servants who are in charge of administering or managing funds, assets, or public values, the heads of units of the Attorney General, as well as those determined by their hierarchical superior or, in their case, the head of the Institution, by the nature and importance of the public service they provide, must carry out a handover-receipt act.

It is not omitted to specify that this obligation will also be applicable to public servants who, by commission, substitution, assignment, or under any other figure, have remained as provisional heads of an administrative unit whose head must comply with this obligation.

On the other hand, a section on sanctions is proposed, and a special regime for its application by reason of the administrative or substantive nature of the functions of the personnel of the Attorney General.

In this sense, personnel who are part of the Professional Career Service will incur administrative faults when they fail to comply with or transgress the content of their obligations; specifying that in cases of administrative faults attributable to personnel of the substantive branch, the Specialized Internal Affairs Prosecutor's Office will be in charge of imposing the corresponding sanction, in accordance with the procedure provided for in this same regulation, and other normative provisions.

Under this line of reasoning, the sanctions that may be imposed on said personnel will consist of public or private reprimand, suspension of employment, position, or commission for up to ninety days without pay, or dismissal, as appropriate.

While, for the case of administrative branch personnel, it is foreseen that the Internal Control Body will carry out the procedure and application of the sanctions that must be imposed for administrative faults, under the norms of the General Law of Administrative Responsibilities.

Apart from the foregoing, it was deemed appropriate to include a list of elements that must be taken into consideration for the purposes of the application of administrative sanctions, such as the gravity of the conduct, recidivism, hierarchical level, means of execution, the amount of benefit obtained, among others.

In addition to the foregoing, a special framework of disciplinary measures is included for agents of the Federal Ministerial Police. In this sense, agents of the Federal Ministerial Police who fail to follow the chain of command or do not execute the direct orders they receive, will be entitled to a disciplinary measure, consisting of public or private reprimand, arrest for up to twenty-four hours, or temporary suspension without pay for up to three days.

As can be observed, the possibility of imposing arrest as a disciplinary measure to agents of the Federal Ministerial Police is contemplated, for which reason the terms and scope of the application of this measure are specified, since every arrest order must be in writing and duly founded and motivated.

Likewise, the rules for the application of disciplinary measures are included, through which it is specified that hierarchical or positional superiors will be in charge of imposing measures on their subordinates, while the head of the Unit in charge of the Federal Ministerial Police will have the power to grade the disciplinary measure.

As far as the responsibility of the Head of the Attorney General of the Republic is concerned, in accordance with what is provided in the Political Constitution of the United Mexican States, the procedures for impeachment and declaration of procedibility will be applicable to him.

This, without overlooking that both the Attorney General and the other public servants of the Attorney General, regardless of the legal relationship they maintain with it, will be subject to the administrative responsibilities referred to in the General Law of Administrative Responsibilities.

Notwithstanding the foregoing, the Head of the Attorney General in terms of the supreme law can only be removed by the President of the Republic for incurring any of the serious causes contemplated in Chapter II, of Title Three of the General Law of Administrative Responsibilities, for the commission of one or more crimes considered as serious, as well as for ceasing to be a Mexican citizen, acquiring total or permanent incapacity that prevents the correct exercise of his functions for more than six months, or for committing serious violations to the Constitution.

In this sense, the Federal Executive must accredit before the Senate of the Republic the serious cause that motivated the removal and inform the Senate of the Republic, who will decide whether to object to it or not, in terms of article 102, Section A, fractions IV and V of the Constitution.

Regarding the integration of the assets of the Attorney General, in the present project the sources of income, economic resources, and assets regarding which it may avail itself for the exercise of its functions are established, specifying that the assets of the Attorney General are unseizable and imprescriptible, so they will not be susceptible to any judicial or administrative execution.

Likewise, it is foreseen that the Attorney General will prepare its draft annual budget of expenditures, which will be remitted to the Secretariat of Finance and Public Credit, for its incorporation into the draft Budget of Expenditures of the Federation that is remitted to the Chamber of Deputies.

In addition to all the above, the present proposal contemplates the publication of the Strategic Justice Prosecution Plan, through which the strategies and objectives to be developed for efficiency and effectiveness in the investigation and prosecution of crime will be determined, orienting in a prioritized and effective manner the exercise of criminal action, for which the functions of the institution will be developed under objective criteria and measurable goals in the short, medium, and long term in order for citizens to have prompt and expeditious justice.

As a result of the foregoing, the Head of the Attorney General must present the Plan to the Head of the Federal Executive Power at the beginning of his management, and present annually to the Congress the results and modifications that it may have had in its case.

Regarding the Internal Control Body, it is established that it will be a unit endowed with technical and management autonomy regarding its internal regime, but subject at all times in its

Organizational structure to the institutional hierarchy and legal and regulatory powers of each unit of the Attorney General's Office.

The Internal Control Body will be responsible for preventing, correcting, investigating, and qualifying acts or omissions that could constitute administrative liabilities of the public servants of the Attorney General's Office, for the purpose of sanctioning those distinct from those that are the competence of the Federal Administrative Justice Tribunal; as well as for reviewing the income, expenditure, management, custody, and application of federal public resources.

In view of the foregoing, the Internal Control Body will be obligated to file complaints regarding facts or omissions that could constitute crimes before the Specialized Prosecutor's Office for Internal Affairs.

The appointment of the head of the Internal Control Body, in accordance with the constitutional text and in accordance with the autonomy of the Attorney General's Office, will correspond to the Chamber of Deputies of the Congress of the Union, by the vote of two-thirds of its members present, and in accordance with the procedure established in the Organic Law of the General Congress of the United Mexican States.

It is proposed that the National Institute of Penal Sciences become a decentralized body of the Attorney General's Office, as a public research center, so that from the entry into force of this Draft Decree, it will be disincorporated from the Federal Public Administration.

Consequently, it is considered necessary to provide that the Internal Control Body of the Attorney General's Office of the Republic will be responsible for the auditing of the National Institute of Penal Sciences and that the organizational structure, as well as the material, financial, or budgetary resources of the Internal Control Body of said institute, will be transferred to the Internal Control Body of the Attorney General's Office.

This is because it corresponds to the Internal Control Body to promote, evaluate, and strengthen the proper functioning of public entities, as well as those other instances of the autonomous constitutional bodies, so it will be responsible for the procedures and the application of sanctions that, in its case, must be imposed for administrative offenses by public servants of the Attorney General's Office, based on the powers provided in the General Law of Administrative Responsibilities.

According to said legislation, decentralized public bodies have the status of entities, so the public servants who integrate them are subjects of administrative responsibilities, and, with the National Institute of Penal Sciences being constituted as a decentralized body of the Attorney General's Office of the Republic, it is considered an instance that must be audited by the Internal Control Body of this justice prosecution body that enjoys constitutional autonomy.

Finally, it is provided that the databases, systems, records, and files containing information, personal data, or data derived from acts of investigation, collected as a consequence of the exercise of the powers of the public servants of the Attorney General's Office, will be strictly reserved and may only be consulted for the purposes of investigation and prosecution of crimes. However, access to statistical information is guaranteed.

Once the above has been stated, it should be noted that this proposal is the result of a series of diagnostic works on the Institution with the aim of observing various areas of opportunity and making the Attorney General's Office a more professional, effective, and efficient Institution both in its structural organization and in the investigation processes, as well as the fact that, without leaving aside the recognition of the effort made to elaborate the Organic Law of the Attorney General's Office of the Republic, said Law has not proved functional or effective to the reality of an action that requires absolute effectiveness in its activities.

It is not superfluous to emphasize the fact that the Attorney General's Office of the Republic requires an administrative reorganization that allows for effective decentralization and greater efficiency regarding the powers of the Federal Public Ministry.

For all the above, and in exercise of the power provided in Article 71, fraction II of the Political Constitution of the United Mexican States, through its dignified conduct, I submit to the consideration of that Honorable Assembly the following:

REFERENCES
1) Reformed by Article Tenth of the Decree published in the Official Gazette of the Federation on March 9, 2018.
2) Added by Article Tenth of the Decree published in the Official Gazette of the Federation on March 9, 2018.
3) Reformed by Article Sixteenth of the Decree published in the Official Gazette of the Federation on May 20, 2021

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