Frida Damián Torres
SMPS Legal, Mexico City
fdamian@smps.com.mx

The Financial Action Task Force (FATF) is an inter-governmental standard setter created in 1989 to protect the international financial system from abuse. It develops global anti–money laundering (AML), counter-terrorist financing (CTF) and counter-proliferation financing (CPF) standards (jointly, the ‘FATF Standards’), evaluates how well countries are implementing them and promotes cooperation among governments, supervisory bodies and the private sector. Its core framework is the so-called ‘40 Recommendations’, a coherent, risk-based set of requirements that jurisdictions are free to adapt to their own legal and institutional contexts, while aiming for equivalent outcomes. The FATF Standards cover:

• criminalisation and confiscation;
• preventive controls for financial institutions and designated non-financial businesses and professions;
• customer due diligence and beneficial ownership-related transparency;
• suspicious transaction reporting and electronic transfer traceability;
• cross-border cash controls;
• supervision and national coordination;
• international cooperation; and
• targeted financial sanctions aligned with the UN Security Council.

The FATF’s mutual evaluations and follow-up reviews test not only a jurisdiction’s technical compliance, but also the real-world effectiveness of the measures implemented through the ‘Immediate Outcomes’ capability, ensuring that rules on paper translate into measurable results. This shared benchmark provides a lens for comparing how Mexico, the US and Canada have adopted, and are performing against, the FATF Standards.

The US

The US’ last full FATF review was carried out in October 2016, after which the country entered the enhanced follow-up process, which involves regular check-ins to track the changes being introduced to address any shortfalls. In March 2024, FATF adopted the seventh report in regard to these follow-ups, which looks at technical compliance only, not how well the system works in practice. Since that update, the most visible advancement in the US is on company ownership transparency: the Corporate Transparency Act and the Financial Crimes Enforcement Network’s (FinCEN) new reporting rule require most companies to file beneficial ownership information (BOI) via a secure, non-public federal database, bringing the US much closer to the FATF Standards and earning an upgrade to the country’s rating on that topic. In addition, the BOI Access Rule (finalised in December of 2023 and in force since 20 February 2024) provides law enforcement and national security agencies with a clearer, faster way to query information contained within that database.

Despite this progress, the US still has five recommendations rated ‘partially compliant’ and three as ‘non-compliant’, which marks out the next set of priorities for reform. The most significant structural gap concerns the coverage of designated non-financial businesses and professions (DNFBPs), including lawyers, accountants, real estate agents and trust and company service providers, many of whom are not fully subject to customer due diligence rules, suspicious activity reporting obligations or dedicated AML/CTF supervision. As a result, the US remains ‘non-compliant’ in regard to FATF Recommendations 22, 23 and 28. Apart from the above, several technical points still require attention in the US, most notably requirements on the screening of politically exposed persons, the information that must accompany electronic transfers, the timeliness and scope of suspicious activity reports and clarity on how trustees maintain and share information about trusts.

In conclusion, the trajectory is clearly positive as the US has addressed one of its most visible weaknesses and largely meets, or is close to meeting, many of the FATF Standards. The path to full alignment now entails extending the AML/CTF obligations and supervision to key professional intermediaries. As of the writing of this article, the exact timing for the US’s next evaluation has not been determined.

Mexico

Mexico’s last full FATF review was carried out in November of 2017 and the report was published in early 2018. Since then, the country has been subject to the enhanced follow-up process, which involves the FATF verifying how the country is addressing the gaps and areas of non-compliance identified in the full report. In the most recent update to that fourth cycle (May 2022), the FATF recorded concrete improvements in regard to international cooperation. For example, Mexico has put in place better systems to manage and prioritise mutual legal assistance and asset recovery requests, earning upgrades to ‘compliant’ on Recommendations 37 (AML) and 38 (freezing and confiscation in regard to AML). By contrast, Mexico’s cross-border cash controls (Recommendation 32) still face shortcomings, so that area remained only ‘partially compliant’.

In general, Mexico is ‘compliant’ or ‘largely compliant’ with many of the FATF’s Recommendations, but work is still needed on some long-standing issues, such as in relation to beneficial ownership transparency for companies (Recommendation 24), suspicious transaction reporting (Recommendation 20) and selected supervisory/oversight points, which are precisely the kind of practical fixes the FATF follow-up process is meant to address.

Looking ahead, Mexico has now moved into the fifth round of assessments under the updated 2022 FATF Methodology, a cycle with stronger, results-oriented procedures and a shorter timeline. The FATF has confirmed that the fifth round began under the 2022 rules and the Mexican government planning documents indicate that the Mutual Evaluation Report for Mexico is slated for discussion during the FATF Plenary to be held in October 2026. In public briefings and press coverage, the FATF has also signalled that while the review covers all 40 Recommendations, it will place particular emphasis on 13 priority areas.

In July 2025, Mexico passed a legal amendment to its AML laws, enhancing beneficial ownership identification, the monitoring of politically exposed persons and oversight of high-risk sectors (for example, gambling) in order to address some of the outstanding technical deficiencies ahead of the 2026 review.

Moreover, Mexico has strengthened its cross-border cooperation toolkit and is in broad alignment with many of the FATF Standards, yet the upcoming fifth round review will hinge on visible progress made in a few key areas, such as making company ownership information more usable in practice, bringing key professional intermediaries fully into the AML/CTF perimeter along with effective supervision, tightening cash courier controls and improving the quality and timeliness of suspicious activity reporting.

Canada

Canada’s last full FATF review was carried out in 2016, according to which the FATF identified a broadly solid framework, especially across major banks, but also identified several structural gaps. The most prominent one is the carve-out of key legal professions (lawyers, law firms and Québec notaries) from the AML/CTF obligations, which the FATF called a serious impediment given their role in real estate deals and in forming companies and trusts. At the same time, the FATF supervisors judged large federally regulated banks in the country to have a good grasp of the risks they face and that they apply group-wide controls, while urging more intense oversight in regard to higher risk sectors involving DNFBPs, particularly real estate and dealers in precious metals and stones (DPMSs), and better coordination between the Office of Superintendent of Financial Institutions (OSFI) and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to avoid duplication of efforts in this area.

A low level of reporting by DNFBPs (aside from casinos) and an uneven understanding of the obligations in this area, again notable within the real estate sector, were flagged, reinforcing the need for stronger outreach and supervision beyond the financial sector.

On the intelligence and enforcement side, the FINTRAC’s analysis is constrained because it cannot compel the provision of additional information by reporting entities, and Canada’s asset recovery results were judged to be too low, hence the FATF’s call for the country to improve timely access to intelligence and to make confiscation a clear nationwide priority.

Moreover, transparency of ownership remains a central theme. The FATF assessed Canadian companies and trusts as at high risk of misuse, with beneficial ownership information hard to obtain or verify in practice and trust data even harder to access, creating delays for law enforcement.

Looking ahead, Canada is undergoing its fifth round of mutual evaluations (possible FATF Plenary discussion in June 2026). Against that timeline, the priorities are clear: (1) bring the legal professions fully into the AML/CTF perimeter and subject to supervision; (2) improve DNFBPs performance in regard to the FATF Standards (especially real estate and DPMSs) through more intensive oversight and the provision of clearer expectations; (3) strengthen the usefulness and timeliness of financial intelligence; and (4) make beneficial ownership information for companies and trusts accurate, accessible and verifiable in practice.

Conclusion

Taken together, Mexico, the US and Canada are advanced FATF members that meet, or largely meet, most of the global AML/CTF obligations, and none of them appear on FATF’s list of High-Risk Jurisdictions subject to a Call for Action or Jurisdictions under Increased Monitoring as of 13 February 2026. This means all three countries operate outside the FATF’s grey- and black-list processes, despite the fact that they all still have work to do.

The US is moving in the right direction after its 2024 upgrade to beneficial ownership transparency under the Corporate Transparency Act and related rules; the remaining priorities cluster around fuller oversight of DNFBPs and a few technical rulebook fixes. Mexico has logged concrete progress since its 2018 review, particularly on cross-border cooperation, and now needs to consolidate its gains on BOI usability, cash courier controls and the quality and timeliness of suspicious activity reporting. Canada, for its part, has strong banking supervision with persistent gaps around the inclusion and oversight of certain legal professions and the practical accessibility of ownership information for companies and trusts.

In short, none of the ‘three amigos’ are facing a risk designation process before the FATF and each country has a clear, manageable reform agenda to address the remaining issues identified.