In Mexico’s 2017 Mutual Evaluation Report (MER), the country was found to have significant gaps in compliance with Recommendation 16 of the Financial Action Task Force (FATF) standards. This recommendation addresses the need for transparency in wire transfers, requiring financial institutions to include and retain accurate originator and beneficiary information throughout the payment chain to prevent its misuse for money laundering or terrorist financing. At the time, Mexico was rated Partially Compliant, with key deficiencies related to record keeping, traceability, and oversight of intermediaries.

Key Improvements

Following the MER, Mexico undertook a series of regulatory and legislative reforms that culminated in its re-rating to Compliant in a subsequent FATF review. The country introduced explicit obligations for financial institutions to retain originator and beneficiary information in all stages of a wire transfer, and to ensure this data is readily available to competent authorities upon request.

Mexico’s reforms also strengthened controls over intermediary financial institutions by requiring risk-based procedures to detect and respond to incomplete wire transfer data. The legal framework now mandates that suspicious wire transfers be reported, and information on transactions must be retained for a specified period, enhancing both oversight and enforcement capabilities.

Additionally, supervisory authorities were empowered to enforce compliance, supported by clarified regulatory expectations aligned with FATF standards. These reforms brought Mexico’s domestic rules in line with the travel rule which requires that information on both the sender and recipient travel with the wire transfer throughout its course.

Conclusion

Mexico has significantly enhanced its regulatory framework to meet the full requirements of FATF Recommendation 16. By ensuring traceability and transparency in wire transfers and granting authorities timely access to essential data, the country has strengthened its defenses against illicit financial flows. Its upgrade to Compliant reflects a robust and coordinated approach to financial integrity and international standards.