Money laundering is a global phenomenon linked to various crimes, such as tax evasion, human trafficking, drug trafficking, terrorism, and corruption. This crime undermines countries’ financial systems by disguising illicit funds as legitimate transactions, eroding public trust in institutions, and contributing to political and social instability.
The Impact of Money Laundering in Mexico
The World Bank estimates that money laundering accounts for approximately 2.7% of the world’s gross domestic product, equivalent to more than twice the size of Mexico’s economy. Between 18 billion and 44 billion pesos enter the Mexican financial system through money laundering from criminal activities.
The Federal Law for the Prevention and Identification of Operations with Illicit Proceeds (LFPIORPI, as it is abbreviated in Mexico) aims to combat the use of vulnerable financial institutions and companies by criminal groups in Mexico. The receipt of donations is considered a vulnerable activity, which affects Authorized Donees in Higher Education (Donatarias Autorizadas de Educación Superior).
The objective of the study
The study titled “The Impact of the LFPIORPI on Authorized Donees in Higher Education in Mexico” (The impact of the LFPIORPI on Authorized Donees in Higher Education in Mexico) focuses on explaining the financial and administrative repercussions that the implementation of the obligations under the LFPIORPI has had on Authorized Donees in Higher Education in Mexico, institutions that play a crucial role in the social and educational transformation of the country.
It uses a qualitative and explanatory approach, employing ethnographic methods. In-depth interviews were conducted with LFPIORPI compliance officers, and questionnaires were distributed to experts in money laundering prevention.
Risks and challenges
Authorized Higher Education Charities view the receipt of donations as a supplementary yet essential source of income for tax purposes under Title III of the Income Tax Law. However, ensuring compliance entails significant financial costs, although these are lower than the potential penalties for noncompliance.
Consequently, confusion was found regarding the treatment and origin of the obligations established in the LFPIORPI, which requires adjustments to systems, controls, and processes. The need to implement a risk-based methodology was also highlighted.
Commitment and Updates
The importance of senior management’s commitment to ensuring organizational integrity and governance is emphasized, and technological adjustments to the SAT (the Mexican tax agency) platform are suggested to improve compliance.
The preparation of this thesis has been a process of professional and personal growth, which has helped me develop the skills and attitudes that will be essential for continuing my research in this field.
Researcher Data
Dr. María Guadalupe Torres Pulido
Business School
Universidad Panamericana, Guadalajara Campus
