The concept of Controlling Beneficiary emerges as one of the important elements among the measures implemented in the fight against money laundering and the financing of terrorism (AML/CFT); and as part of the proposal of the Financial Action Task Force (FATF).
The FATF defined the figure as “Ultimate Beneficiary” as “the person or natural persons who ultimately own or control a client and/or the natural person in whose name an operation is carried out. It also encompasses the people who exercise final effective control over a legal person or legal arrangement” (Grupo Egmont, 2018).
In Mexico, the notion of Controlling Beneficiary is officially recognized with the publication of the Federal Law for the Identification of Operations with Resources of Illicit Origin (LFPIORPI), which was published in 2012 in the Official Gazette of the Federation, in response to the recommendations made by the FATF in 2008. This law establishes that the controlling Beneficiary is the person or group of people who:
a. Through another or any act, he obtains the benefit derived from them and is the one who, ultimately, exercises the rights of use, enjoyment, enjoyment or disposal of a good or service, or
b. It exercises control over that legal entity that, in its capacity as client or user, carries out acts or operations with those who carry out vulnerable activities, as well as the people on behalf of whom any of them are carried out.
It is understood that a person or group of people controls a legal entity when, through the ownership of securities, by contract or any other act, they can:
I. Impose, directly or indirectly, decisions in general meetings of shareholders, partners or equivalent bodies, or appoint or dismiss the majority of directors, administrators or their equivalents;
II. Maintain ownership of the rights that allow, directly or indirectly, the exercise of voting with respect to more than fifty percent of the share capital, or
III. Direct, directly or indirectly, its administration, strategy or main policies.
This law defined the Controlling Beneficiary, and although the obligation to identify, verify or validate the information regarding this person for those who carry out vulnerable activities was not established 1, another series of requirements were established that had to be met, such as the presentation of notices by electronic means and in the format established by the Ministry of Finance and Public Credit, as well as the integration and conservation of files.
With the 2022 reforms to the Federal Tax Code, greater relevance is given to the figure of the Controlling Beneficiary. It was introduced into the code with the purpose that all legal entities have the obligation to identify it and report it to the Tax Administration Service (SAT), since if they do not do so they may be subject to different sanctions, and it also seeks to reduce evasion tax and that Mexico complies with international commitments regarding Transparency and Exchange of Information for Tax Purposes.
As of January 1, 2022, all legal entities, trusts and other legal entities must comply with properly identifying, verifying and validating the controlling beneficiary, as established in article 32-B Ter of the Tax Code, in case of not doing so, the penalties stipulated in said ordinance range from $500,000.00 to $2,000,000.00 (MXN), for failing to keep, maintain and keep up to date the information and records relating to the Controlling Beneficiary.
Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita, 2021.
IMCP, El Beneficiario Final o Beneficiario Controlador desde la perspectiva de la LFPIORPI en Boletín de la Comisión de Prevención de Lavado de Dinero y Anticorrupción, Número 4, febrero 2022.
IMCP, El Beneficiario Controlador desde la Perspectiva del Código Fiscal de la Federación, en Boletín de la Comisión de Prevención de Lavado de Dinero y Anticorrupción, Número 5, febrero 2022.
1 Vulnerable Activities are the activities carried out by Financial Entities such as those linked to gambling; the issuance or marketing of service cards, credit cards, prepaid cards and all those that constitute instruments for storing monetary value; travelers checks; mutual or guarantee operations or the granting of loans or credits; construction or development services of real estate or intermediation in the transfer of ownership or establishment of rights over said assets; marketing of Precious Metals, Precious Stones, jewelry or watches; the auction or commercialization of works of art; marketing of vehicles, new or used, whether air, sea or land; vehicle armor; custody and/or transfer of securities, as well as the provision of professional services such as notaries public, public brokers; receipt of donations, activities related to foreign trade, among others. (Article 17, LFPIORPI)
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