The bill imposes a series of regulations on businesses and transactions deemed vulnerable to money laundering, such as real estate and vehicle purchases as well as other high-end commerce. Once in effect, the bill will ban cash real estate transactions that exceed US$38,000 and oblige other businesses to register and account for any cash transactions over US$15,000. Additionally, the law demands that those businesses identify and register their clients or patrons with the government. The law doles out a minimum five year prison sentence for violations.
Legislators’ concerns that by limiting cash transactions, a cornerstone of the Mexican economy, the law might stifle the country’s growth hampered the bill’s progress. Ultimately, to make the bill more palatable, the Congress’ lower house diluted the original version Calderon proposed in 2010, which proposed banning all cash transactions over US$7,700.
More substantial regulations on cash transactions could provide a critical bulwark against the growth of organized crime in a country where criminal groups launder between US$10 and US$25 billion each year to fuel the elaborate underground economy that undergirds drug and human trafficking and other illicit activities.
However, negligent enforcement threatens to neuter the law. Mexico currently has several narrower anti-money laundering laws in place, including regulations for credit card companies and casinos. But in 2010 the Finance Ministry revealed that authorities prosecuted and punished only two percent of identified money laundering cases.
Ensuring effective enforcement will prove especially important as President-elect Enrique Peña Nieto takes office in December, as accusations of money laundering besmirched his recent campaign. While the suspicions were never substantiated, his Institutional Revolutionary Party (PRI) bears a reputation for corruption and shady financing which Peña Nieto has struggled to expunge. Upholding and actively enforcing the new money-laundering law offers a key opportunity to demonstrate a real commitment to instilling a culture of clean and fair governance.