Mexican Senate Passes Sweeping Anti-Money Laundering Reform Amid Heated Debate

In a landmark move during the fourth day of its extraordinary session, the Mexican Senate approved a major reform to the Federal Law for the Prevention and Identification of Operations with Illicit Proceeds and the Federal Penal Code. The reform package, now headed to the Chamber of Deputies, is aimed at strengthening the country’s financial safeguards against illicit money flows, aligning national regulations with international standards set by the Financial Action Task Force (FATF).

The approved legislation introduces tighter oversight on so-called “vulnerable activities”—including transactions in real estate, virtual assets, and trusts—and sets new compliance obligations for identifying ultimate beneficial owners. These changes are designed to enhance the detection and investigation of money laundering schemes and prevent the use of Mexico’s financial system for criminal operations.

One of the most contentious changes in the bill was the removal of language referencing terrorist financing. Senator Jesús Lucía Trasviña Waldenrath (Morena) successfully proposed this amendment, arguing that such references were redundant and legally inconsistent, as terrorist financing is already addressed in existing laws.

A Divided Chamber: Ethics vs. Overreach

Senator Javier Corral Jurado (Morena), who introduced the reform, stressed that the changes are meant to fortify the Mexican economy by closing pathways for illicit financial flows. “This is about safeguarding our financial system and responding to international obligations,” he said, noting that the reform responds to FATF criticisms of Mexico’s previous regulatory gaps.

Supporting the bill, Senator Óscar Cantón Zetina (Morena) called the initiative an “ethical and political fight” against organized crime. “This is a signal to the criminal underworld that the Mexican state will not turn a blind eye to financial corruption,” he declared.

However, opposition lawmakers voiced sharp criticism. Senator María Guadalupe Murguía Gutiérrez (PAN) expressed concern that the reform might infringe on constitutional rights, including privacy and property protections. She also questioned the expansion of regulatory powers to agencies outside their traditional jurisdictions, such as the Ministry of Finance and Public Credit (SHCP).

Senator Claudia Edith Anaya Mota (PRI) went further, accusing the legislation of militarizing public administration by granting the National Guard broader roles in financial intelligence tasks. “This opens the door to persecution—especially against sectors like religious organizations or informal businesses,” she warned.

In response, Senator Luis Alfonso Silva Romo (PVEM) defended the reform’s administrative nature and clarified that it does not grant judicial powers to authorities. “The intent is preventative, not punitive,” he stated, adding that data protection and banking secrecy remain intact, with oversight extended only to high-risk sectors.

Balancing Transparency and Rights

While supporters hailed the reform as a vital tool for dismantling sophisticated financial crime networks, critics warned of potential overreach. Senator Geovanna Bañuelos de la Torre (PT) praised the bill for targeting shell companies and simulated transactions that help criminals launder money. “This is about piercing the corporate veil that criminals hide behind,” she said.

But Senator Alejandra Barrales Magdaleno (Citizen Movement) cautioned that the reform could violate citizens’ privacy rights by enabling authorities to access financial data without a court order. “In a country where insecurity is rampant, giving this level of access without checks is a dangerous precedent,” she said.

As the bill moves to the lower house, the debate around privacy, security, and the limits of state power is far from over. The proposed reforms mark a significant shift in Mexico’s anti-money laundering architecture—but they also spotlight the delicate balance between safeguarding national security and protecting civil liberties.