07 | DIC | 2019
FinTech Law to prevent money laundering
Mexican pesos are seen – Photo: Edgard Garrido/REUTERS

FinTech Law to prevent money laundering

Leonor Flores
Mexico City
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Financial Technology Institutions must comply with the Federal Law of Prevention and Identification of Operations with Resources from Illegal Origin (LFPIORPI)

Financial Technology Institutions (FITs) will be subject to the same rules and regulations that traditional banking to prevent both money laundering and transactions involving funds from illegal sources.

Once the FITs have been authorized to operate, they will have to suspend acts, operations or services deriving from those people in the blacklist of Mexico's Ministry of Finance and Public Credit (SHCP), along with the submission of an anti-laundering report involving any suspicious transactions to the Financial Intelligence Unit (FIU) of the SHCP.

FITs must designate an anti-laundering compliance officer and safeguard their clients background information and overall documentation.

Otherwise, FITs will be transgressing banking regulations and thus, they will be sanctioned by the financial authorities with large fines and corporate punishment.

These aforementioned measures are the result of a series of reforms implemented to the Federal Law of Prevention and Identification of Operations with Resources from Illegal Origin (LFPIORPI) which warns that virtual assets would never be considered legal tender in national territory.

In order to prevent money laundering involving virtual assets and cryptocurrencies authorized by the National Banking and Securities Commission (CNBV), FinTech Law had to be aligned with the LFPIORPI and various legal systems involving the Credit Institutions Law, the Securities Market Law, the Transparency and Regulation of Financial Services Law, CNBV Laws, and Condusef (National Commission for the Protection and Defense of the Users of Financial Services) Laws among others had to be reformed as well.

Moreover, FinTech companies may exchange information between other entities of the financial system in order to strengthen measures and procedures to prevent and detect operations that may favor illegal transactions.

Financial technology (FinTech) is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services through the use of smartphones for mobile banking and investing services which seek to make financial services more accessible to the general public.


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