On September 1, 2013 the regulations for the Money Laundering Law were published and now effective. Under this Law, anyone, Mexican national or foreigner, who buy property, goods (vehicles, art, jewelry, etc) exceeding the values determined in the Law is obliged to pay by wire transfer or check. Cash transactions for such cases will be forbidden and will be subject to big monetary penalties, besides the possibility of being investigated by the -federal money laundering bureau-.
How will it work?
Let’s have the example of a real estate transaction in the Mexican Riviera Maya. Whenever a property is sold and the purchase price exceeds the limit amount set in the law (approximately $521,6250 pesos or $43,500 USD), parties will declare in the contract the purchase price and how it was paid; so far nothing different than in the past but now parties will have to provide the public notary with the payment information (bank account details and deposits confirmations). Also new is the obligation for Notary, real state broker and lawyers involved in the transaction to file at the Mexican Taxation system (SAT) a report informing who are the parties involved in each transaction, for how much and how the money was paid.
Law will forbid cash transactions for buying a new or used vehicle (automobiles, boats, planes, etc) when the purchase price exceeds the amount of $208,650 PESOS or $17,400 USD).
Note: amounts in pesos will increase according to the minimal wage in Mexico City and the amounts in dollars will vary according the current exchange rate.
The purpose is to create a system for identifying transactions, parties and tracing money. Those who render professional services will have to report and keep a file from the client and the transaction for not less than five years and shall provide it upon request of SAT or the bureau. Default to provide reports and information will be penalized.
It will be considered a federal offense to give false information or to modify or alter data that will be part of the report.
Further more there is the obligation for notaries and professionals to give notice to SAT whenever the following services are surrendered to a client:
- purchase or sell property;
- administration of resources or assets;
- administration of bank accounts, bonds, etc;
- incorporation, operation, administration of business entities.
For notaries, it also include setting up property trusts.
Consult me for your next property transaction or purchase of valuable goods.