By: Antoine Del Sordo
The amendment to the Federal Law for the Prevention and Identification of Transactions with Illicit Proceeds (the “Anti-Money Laundering Law”), and to Article 400 Bis of the Federal Criminal Code published on July 16, 2025, constitutes a profound change in the Mexican regulatory framework regarding prevention of and reinforcement to corporate transparency. Given the scope of the amendment, this first analysis focuses on the redefinition and incorporation of several key concepts, such as beneficial owner, politically exposed person, and real estate development, among others.
Beneficial Owner
The 2025 amendment significantly expands and redefines the concept of beneficial owner. The main changes introduced to this concept are:
1. The reduction of the control threshold to determine effective control from more than 50% to more than 25% of the rights that allow, directly or indirectly, the exercise of voting rights over the capital stock.
2. The elimination of ambiguity regarding the possibility of a legal entity being deemed a beneficial owner, clarifying that it must always be a natural person.
3. The alignment of the term “beneficial owner” with “ultimate beneficiary” or “real owner,” for the purpose of ensuring legal consistency with other concepts recognized within the Mexico legal framework.
This redefinition also entails much stricter oversight and a piercing of the corporate veil, requiring obligated entities to identify the true ultimate holders of assets or resources, thereby hindering the use of opaque structures.
Furthermore, among the main identification and registration obligations, the Anti-Money Laundering Law provides that all commercial companies —and not only the persons engaged in “Vulnerable Activities”, as such term is defined in the Anti-Money Laundering Law— must register their beneficial owner in the electronic registry operated by the Ministry of Economy, as well as record the transfer of ownership or the creation of rights of any nature over equity interests or shares. Likewise, they must retain the information supporting the identification practiced and keep it permanently updated.
The foregoing requires the development of internal protocols to comply, in the first instance, with the registration and, subsequently, with the continuous updating of information related to the beneficial owner, pursuant to the current Anti-Money Laundering Law.
In addition, the amendment increases significantly the administrative burden, as it requires a thorough review of shareholding structures, chains of control and indirect beneficiaries, particularly in the case of complex structures. This will demand exhaustive documentary research and detailed internal procedures to avoid the risk of sanctions in the event of non-compliance with the identification and registration obligations mentioned.
Politically Exposed Person
The reform introduces the figure of the politically exposed person (“PEP”), following the international guidelines of the Financial Action Task Force [1] , and defines it in the Anti-Money Laundering Law as any natural person who holds (or has held) prominent public functions in Mexico or abroad, as well as their family members, close associates and collaborators, under the conditions and characteristics to be specified by the Ministry of Finance and Public Credit (“SHCP”) through a further still pending regulatory provision.
As can be noted, the definition of PEPs is broad, as it includes not only officials with relevant public positions but also their immediate and extended family members by consanguinity or affinity, as well as people with whom they have maintained significant professional, social, or business relationships.
In this regard, although the SHCP must specify the conditions and characteristics that family members, close associates, and collaborators must meet to be considered PEPs, the scope of the definition set forth in the Anti-Money Laundering Law imposes a significant administrative burden on obligated entities, as they are required to carry out rigorous identification and differentiated monitoring of PEPs and their transactions, as well as to design specific internal policies and implement automated systems to identify, monitor, and intensively follow up on their operations.
Other Incorporations of Relevant Concepts
Real Estate Development
The reform also introduces the concept of “real estate development” into the Anti-Money Laundering Law, defined as “the project for the construction of real estate or the subdivision of lots intended for sale or lease.” This definition seeks to delimit and provide certainty regarding the scope, subjects, and transactions regulated in one of the sectors that are historically more frequently misused for money laundering. In this sense, the Anti-Money Laundering Law seeks to differentiate the customary or professional provision of construction, development, or brokerage services —already considered a vulnerable activity— from the reception of funds intended for real estate development, which is now incorporated as a vulnerable activity. This addition seeks to cover the pre-construction stage of transactions and extends obligations in this subject, as obligated entities, to trustees, brokers, funds, and institutional investors as parties receiving funds to subsequently allocate them to construction.
Risk and Incorporation of the “Risk-Based Approach”
The amendment also defines “risk” as the probability that vulnerable activities may be used for the commission of money laundering offenses or for the financing of criminal organizations. Based on this concept, the Risk-Based Approach (“RBA”) is introduced, requiring obligated entities to identify, analyze, understand, and mitigate risks inherent to themselves and to their clients or users.
This implies that obligated entities must conduct periodic risk assessments pursuant to the general rules issued for such purpose by the SHCP that consider products, clients, channels, and geographic areas involved, in order to segment transactions and implement controls based on the apparent risk, as well as to document and justify the measures adopted. Therefore, the RBA raises the level of sophistication and technicality of prevention, which may pose significant challenges for micro, small, and medium-sized enterprises engaged in vulnerable activities, due to limited resources and specialized personnel.
Conclusion
The 2025 amendment to the Anti-Money Laundering Law represents a watershed moment in Mexican regulation on the prevention of transactions with illicit proceeds. The redefinition of the concept of beneficial owner, the incorporation of the notion of politically exposed person, the inclusion of real estate development as a vulnerable activity, and the adoption of the RBA reflect an effort to align the national legal framework with the most demanding international standards. Nevertheless, these modifications also impose a considerable administrative and operational burden on obligated entities, requiring the implementation of more robust internal protocols, more sophisticated control systems, and a stricter compliance culture. In this context, early preparation and institutional adaptation will be essential to mitigate risks and ensure effective compliance with the new provisions.
1 The Financial Action Task Force is an intergovernmental body established in 1989 by the G‑7, whose purpose is to set international standards and to promote the effective implementation of legal, regulatory, and operational measures to combat, among other matters, money laundering.
