On April 16th, 2019, the General Guidelines applicable to the regularization program related to the compliance of the obligations set forth under article 18 of the Federal Law for the Prevention and Identification of Transactions with Funds from Illicit Sources (“AML Law“) were published.
These guidelines establish the terms that Regulated Parties (individuals and entities that carry out vulnerable activities established on article 17 of the AML Law) that have not complied with their obligations triggered from July 1st, 2013 to December 31st, 2018 should comply with in order to request an authorization before the SAT for the application of a regularization program, as well as the procedures that must be observed during the regularization program’s period.
The regularization programs may only be applied by Regulated Parties that have duly complied with the AML obligations triggered during 2019. Furthermore, the following steps should be observed in order to obtain the authorization to apply for these programs:
- File a request through the Anti Money Laundering Webpage (AMLWP) within the next 30 business days after the Dispositions entered into force (June 19, 2019).
The Regulated Parties must file a statement under oath establishing their intention to amend and rectify any omissions or anomalies incurred.
- The regularization program proposed by the Regulated Party should be enclosed to the request and must include the following information:
- description of the omissions or irregularities and their relation to the applicable legal provisions established in the Anti Money Laundering Law, as well as the grounds that lead to the omission or irregularity
- description of the actions that will be performed in order to amend the non-compliance of obligations
- statement under oath that the Regulated Party does not fall under the following scenarios:
- is not registered as a Regulated Party as requested by the Anti Money Laundering Law
- the data shown within the aforementioned registry has not been duly updated as it is established under article 7 of the General Rules issued by the Ministry of Finance
- the corresponding obligations for 2019 have not been complied with The corresponding obligations for 2019 have not been complied with;
- the Regulated Party has committed a crime established under the Anti Money Laundering Law
The Authorization for the implementation of the regularization programs may be issued through the AMLWP and may be left without any legal effects at the time the SAT determines that the Regulated Party is responsible of the infringements previously mentioned.
If the authorized program is duly completed and the omissions and irregularities are amended, Regulated Parties will not be sanctioned.
The regularization programs must be duly finalized in a term no longer than 6 months beginning August 1st, 2019.
If the SAT were to determine that that the Regulated Parties are not carrying out their program diligently or that it was not implemented and completed during the established timeframe, SAT will be able to sanction them.
In cases were the SAT has already started a process to verify the compliance of the AML Law, the request for a self regularization program must be filed before the administrative unit carrying out the verification process before said unit has finalized the audit. If the aforementioned verifications ended before June 19th, 2019, the Regulated Party may file a request for the application of the regularization program before the unit that carried out the corresponding verification.
If the Regulated Party files a regularization program that covers a period for which SAT imposed a fine, this fine may be pardoned provided that the program has been completed successfully and the following requirements are met:
- file a “Pardon Request” before the Taxpayer Administrative Commission applicable to the Regulated Party tax domicile in a term no longer than 20 business days after the 6 month period for the completion of the program has finalized
- to have completely amended any omissions or irregularities that the regularization program described
- establish the period of regularization, the omissions and irregularities sanctioned by SAT as well as the number and fine sum, resolution number and authority that imposed said fine
Tax pardons carried out by SAT will not be subject to any reimbursement, compensation, credit or tax balance in favor of the Regulated Parties.
Based on the foregoing, we recommend reviewing activities that have been carried out during the applicable time frame in order to identify if they constitute a vulnerable activity and if they should have been reported through the corresponding notices.
Baker McKenzie has the tools, personnel and experience required for the implementation of the AML regularization program. We are at your service if you wish to discuss in detail any particular case.
This article also appeared on www.bakermckenzie.com and can be accessed here.
1 Published in the Federal Official Gazette on August 23, 2013.