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Mexico reward private informants on money laundering activities.

Last Monday, Mexico announced a plan to reward people who report suspected money laundering activities.

In this program, mexican authorities will pay them with up to one-quarter of any illicit funds or property seized.

This innovative policy of mexican authorities is based in Mexico ´s  struggle to find effective measures to fight drug trafficking and money laundering activities of about $10 billion a year.

Under the new policy, informants can file reports in person, by email or by telephone.

The exact percentage of individual rewards will be determined case by case by a special committee.

Only private people will get rewards, not public servants, nor law enforcement officers or  banking system employees. The latter  will not be eligible because it is already their duty to report suspicious transactions.

Due to a lack in the regulations there is difficult to catch money launderers in Mexico. That is because the banking system is not very developed and the mexican society has a cash-based economy, due to the remittances of mexicans living in U.S. or Canada.

Also there is a lot of cash on the streets due to the increasing sophistication of drug cartels that move proceeds from U.S. into Mexico.

It is also difficult for the mexican government to get congressional support on anti money laws.

A bill send by President Calderon to the mexican Congress is still being considered in Congress, with low possibilities of being approved. The bill proposed tough new anti-money laundering rules in order to prohibit cash purchases of any real estate in pesos and cash purchases of cars, planes and other goods for amounts exceeding 100,000 pesos ($7,700).

Also in June last year, President Calderón signed a decree imposing strict limits on transactions in U.S. dollars, limiting tourists and residents who don’t have accounts at Mexican banks to dollar transactions of $1,500 a month or less.