Mexican virtual asset service providers (VASPs) have been reminded by the Government that the deadline for ensuring compliance with the reporting requirement is nearing soon therefore they all must make sure that they submit their reports by 17th September 2021 otherwise actions under the newly passed federal law namely “Prevention & Identification of Operations with Illicit Resources”.
The government functionaries in Mexico are busy these days sending reminders to domestically operating virtual asset service providers (VASPs). Reminders are sent for re-appraising VASPs that law namely “Prevention & Identification of Operations with Illicit Resources” requires them to fulfill certain requirements.
The said law was passed by the Mexican Government recently for the purposes of monitoring activities of money laundering. This law was made applicable to VASPs and all businesses involving financial. However, the only party which half-heartedly accepted the law was VASPs. VASPs argue that crypto business takes place in a decentralized atmosphere therefore the law cannot apply to them. However, the Mexican Government denied their argument on the basis that crypto is actively used for illicit activities.
The Mexican Government, through the law, imposed a condition upon VASPs to surrender information relating to the transactional history of their customers. However, the application of the law was restricted to a certain limit of crypto transactions. For example, the law provides that if the crypto transactions of any VASP customer exceed US$ 87,000 only then VASP will be obligated to submit the information. No data will be required for their customers if their transactional history fell short of US$ 87,000. The law was proposed to be implemented by 17th September 2021, which date is nearing soon. This is why the reminders are sent to make sure that VASPs arrange their record and comply with the reporting requirement.
The relevant clause dealing with VASPs in the relevant law is Article 17’s sub-section XVI. Sub-Section XVI states that the activities carried out by VASPs are vulnerable in nature and therefore necessitate reporting. This very obligation has been extended to even foreign exchanges which are serving customers in Mexico as well. Even if foreign VASPs have no branch/office establishment in Mexico, the law would still be applicable to them without any exception.
The reminder notes that whoever is involved in the business as defined in sub-Section XVI is required to comply with the reporting requirement. There is no exception or exemption for anyone, explained the reminder.
Mexico is a country that is seriously looking at its commitments towards the international community and the law. The country’s efforts in complying with the standards as described by Financial Action Task Force (FATF) are appreciated by the authority. Mexico adopted these standards way back in 2018. However, initially, the standards were applied to businesses other than VASPs but now the standards have been applied to VASPs as well.