Typically, methods of money laundering in Mexico include the use of shell or front companies to conceal beneficial ownership; the purchase and sale of real estate and high-value goods and cash smuggling along the border, according to the Financial Action Task Force.

An international corruption watchdog and standard-setting body has said that despite Mexico’s efforts to pursue some high-profile cases, it fails to take a systematic approach to addressing money laundering. 

Mexico has a “mature” anti-money laundering and counter-terrorism financing regime and it has upped its efforts since 2008. However, the country “faces a significant risk” of money laundering, stemming from organized crime such as drug trafficking, extortion, corruption and tax evasion, according to a new report by the Financial Action Task Force (FATF). 

Though Mexico’s financial services sector “demonstrates a good understanding” of the primary money laundering threats from crime groups, non-financial businesses have a “limited” perception of risks entailed, the report stated. 

“[Money laundering] is not investigated and prosecuted in a proactive and systematic fashion, but rather on a reactive, case-by-case basis, notwithstanding the fact that some high-profile investigations have recently been conducted,” said the Paris-based organization in its report. 

The FATF sets global standards for tackling money laundering and terrorism financing and ranks countries on their efforts to stymie flows of dirty cash. Nations that fail to implement meet its requirements risk being labeled as high-risk or uncooperative jurisdictions. 

Mexico’s Finance Ministry and Attorney General’s Office said in a joint statement the FATF evaluation acknowledged Mexico has a mature scheme in place for money laundering prevention and fighting the financing of terrorism, but that it needs to work on some aspects.

“The report indicates that the country faces risks mainly related to money laundering and should therefore strengthen actions such as giving priority to investigations, the seizure of illicit goods, the supervision of vulnerable non-financial activities and the identification of the end beneficiaries of assets and companies,” the statement said.