FATF to chastise Mexico on AML effectiveness, lack of big cases, convictions, progress against corruption

Mexican prosecutors are failing to systematically punish money launderers and tax authorities are too lax with potential drug money fronts such as real estate and luxury goods firms, according to a draft report on Mexico’s efforts to fight illicit finance, another dour report on the country’s counter-financial crime efforts, where some fear it’s on the verge of a failed state.  The report by the Financial Action Task Force (FATF), an international organization that sets global standards for fighting illicit finance, highlights the tiny dents made by Mexican prosecutors in the financial networks of drug gangs and corrupt officials. Mexico has been slipping in convictions, data in the report shows.The country already lagged regional peers such as Colombia and Brazil, both of which have made strides in setting up independent prosecutors.
 
“Money laundering is not investigated and prosecuted in a proactive and systematic fashion,” said the draft of the report, sections of which were seen by Reuters. Its publication is set for early January. The report, if the rest of the findings are as negative as the sliver seen by the news organization, could usher in a fresh round of de-risking from U.S. and international financial institutions, many of which have already banned doing business with Mexican money services businesses, also a major issue cited in federal enforcement actions. Countries and banks rely on FATF reports to more accurately risk assess regions, and entities therein, cognizant that the global AML watchdog has ratcheted up exams in recent years, focusing on effectiveness rather than just laws on the books, (via Reuters).