The social debate
on Mexican casinos
Mexican Cardinal Norberto Rivera has come out against
the possible opening of casinos, saying that while he is not opposed to entertainment as long as casinos can be used for money-laundering
authorities must not allow their presence in Mexico.
laundering is a crime in Mexico according to Article 400 Bis of the Federal Penal Code.
Furthermore, it imposes a sentence of from five to 15 years in prison on anyone convicted of acts or operations with
money known to come from an illegal activity when the origin, location or destination of the proceeds are covered-up.
According to the Mexico affiliate of Ernst &
Young, Mancera Ernst & Young, money laundering operations in Mexico have risen to a whopping US$24 billion, almost five
percent of the total for the entire world. Patricia Torres, the manager of Mancera
Ernst & Young, also notes that those measures that have been adopted to fight the problem, “a never-ending road,”
Mexico is one of 29 member countries of the Financial
Action Task Force on Money Laundering (FATF), that was established at the G-7 Summit in Paris in 1989 in response to mounting
concerns over money laundering. The FATF has issued 40 recommendations that represent
the international standard for fighting this crime.
Basically the recommendations call for countries to criminalize money laundering; for financial institutions
to identify their clients; for all concerned to ensure there are adequate supervisory and control systems over financial institutions;
and for the signing, ratification and implementation of applicable treaties and international conventions.
Dirty money, according to financial specialists, always looks for countries with weak political
and financial institutions, and with serious efficiency problems in their legal systems.
And while the recommendations will not be do away with money laundering entirely, international cooperation is essential
in order to detect the crime.
To date Mexico has been unable to satisfactorily apply all of the FATF international recommendations,
even though its financial system can be considered strong as shown by the presence of important international banks like Citibank,
HSBC and BBVA.
As well, some measures for the detection of money laundering operations are in place, such as the
Secretariat of Finance requiring banks and brokerage firms to report monetary transactions over US$10,000.00, questionable
dealings and transfers to fiscal paradise or secret bank account countries.
However the efficiency of the legal system is weak.
With respect to Latin America money laundering, Mexico is on a par with other countries suffering
from problems that in turn promote this type of criminal activity. Countries
like Colombia due to narcotics trafficking and Argentina because of corruption.
Hence Benjamín Vidagras, vice president of the National Banking and Securities Commission, acknowledges
that the Mexican legal system must be modified in order to establish mechanisms that will bring about the prevention of money
laundering and not just its punitive pursuit, as do the devices currently in place.
But the opening of casinos in Mexico does not have
to be stopped in order to prevent money laundering. What needs to be done is
to fully comply with the 40 recommendations of the FATF, especially the points that require in this case independent professionals
to verify the identity of casino owners and operators, and those setting better parameters for risk detection as well as the
monitoring of operations.
The proposed legislation for a new Gaming and
Raffles Law also includes certain safeguards for the prevention of money laundering, such as requiring proof of legality of
corporate and partner funds that are invested in the casinos. Furthermore, every
three months the gaming commission must receive financial reports from casino permit holders and operators, reports that will
show income, expenditures, wager receipts and payoffs. Those reports will then
be given to the finance ministry, including anything that seems unusual precisely in order to detect possible money laundering.
Article 162 in the bill states that the gaming commission,
to be created according to the new law, will then establish in its regulation suitable procedures and controls so as to detect
and prevent gaming activities and wagering with resources that are illegal in origin.
The crime of money laundering will continue
with or without casinos. What is needed is coordination in new intelligence efforts,
so that this crime can be prevented without slowing growth in Mexico’s tourism industry or in the creation of jobs due
to a fear of something that not only already exists but also goes virtually unchecked.
Andrade González (a www.mexidata.info columnist) is an attorney and Mexican business consultant with offices in Mexico City. Lic. Andrade, who received his LL.M. in Constitutional and Protection (“Amparo”) Law
from the Universidad Iberoamericana, is also a law professor at the Universidad Intercontinental. His e-mail address is email@example.com.