This guide was developed to support civil society organisations (CSOs) in understanding and meeting their obligations under Mexico’s Federal Law for Preventing and Identifying Operations with Resources of Illicit Origin (LFPIORPI). It seeks to explain the law in plain language and provide practical recommendations to help organisations avoid the risks associated with non-compliance. Drawing on survey data, legal analysis, and feedback from donors and public officials, the guide reflects the everyday challenges that CSOs in Mexico face.

Context & Background

LFPIORPI was enacted in 2012 as part of Mexico’s commitment to implementing the recommendations of the Financial Action Task Force (FATF). The law defines certain transactions, including the receipt of grants by CSOs, as "vulnerable activities". Since becoming a FATF member, Mexico has undergone periodic evaluations, with significant regulatory reform culminating in this legislation. While these changes mark an important step forward, they have also introduced considerable compliance demands for non-profit organisations.

Key Compliance Obligations

CSOs must identify donors when grant amounts reach the equivalent of 1,065 times the daily minimum wage in Mexico City, and formally report grants exceeding 3,210 times the minimum wage via the SAT’s online Money Laundering Prevention platform. These thresholds apply cumulatively over six-month periods and cover all donors—domestic and international alike. Organisations must collect extensive documentation from donors, including valid identification, proof of address, tax registration, and declarations of beneficial ownership. These records must be retained for five years and made available for inspection by the Financial Intelligence Unit (UIF).

Non-compliance carries severe financial penalties, with fines ranging from 200 to 65,000 times the minimum wage, or up to 100% of the undeclared transaction value. Importantly, an organisation may be sanctioned even if it fails to obtain information from only one donor. Such penalties could threaten the financial stability of many CSOs.

Even in months when no qualifying grants are received, CSOs are req

uired to submit a "zero notice" online by the 17th of the following month to remain compliant.

Challenges for CSOs

The guide identifies numerous operational difficulties. Many CSOs find the administrative burden considerable, particularly where donors are unwilling to provide the required documentation.

Smaller organisations often lack the capacity or funds to engage external advisers. There is also a widespread misunderstanding of the law, with some believing that only tax-exempt or officially registered organisations are subject to these obligations. This misconception increases the risk of inadvertent breaches.

Recommendations

Organisations are strongly advised to ensure they are compliant with all legal requirements, including retrospectively completing donor files where necessary. If relying on external accountants or advisers, they should confirm these parties are fulfilling their responsibilities accurately. Donors should be clearly informed, preferably in writing, about the requirements of the law and given assurances regarding the confidentiality of their information. Grants from government sources may also fall under the law’s scope if they meet the legal definition of a “grant”, so these should be reviewed closely. In such cases, written requests for required documentation should be made, and records of these communications retained in case of inspection.