Latest news with #FENDOffFentanylAct
Mint
5 days ago
- Business
- Mint
Mexico Fined Financial Firms Targeted by US Over Drug Claims
Mexican regulators imposed 185 million pesos in fines last month on three firms that were targeted by the US Treasury for potentially aiding drug traffickers, according to government data. Intercam Banco SA and its brokerage were fined 92 million Mexican pesos for violations of anti-money laundering rules such as failing to have an automated registry of unusual activity or follow its own guidelines on high risk clients, according to newly released data in regulator CNBV's database of fines. CIBanco SA and its brokerage were fined nearly 67 million pesos, also under anti-money laundering rules, for failing to maintain records and processing inordinate amounts of US dollars in cash. Brokerage Vector Casa de Bolsa SA was not called out for breaking anti-money laundering rules, but was fined almost 27 million pesos for faults including failing to notify clients of changes in its fund information. Last month, the US Treasury department's Financial Crimes Enforcement Network slapped orders on the same firms that will prohibit transfers with them, using new powers for the first time from last year's FEND Off Fentanyl Act. The bulk of Intercam's fines were imposed on the same day as the US action while most of CIBanco's and Vector's were levied on June 26, one day later, suggesting coordination between the countries' authorities. After the US orders were published, President Claudia Sheinbaum said the US had not provided proof of money laundering to justify such a drastic move. Last week, the US extended the deadline to cut off the firms to Sept. 4, citing Mexico's cooperation and quick move to take over management of the banks. With assistance from Jose Orozco. This article was generated from an automated news agency feed without modifications to text.
The Hill
11-07-2025
- Business
- The Hill
Trump's new front in the war on drugs: The banks
While most headlines fixate on border walls and migrant surges, the Trump administration has quietly redrawn the front lines of America's war on fentanyl. This time, there are no boots, no barbed wire, and no rallies in El Paso. The fight has moved into spreadsheets and settlement systems. It now begins with bank wires. On June 25, the Financial Crimes Enforcement Network (FinCEN) executed what amounts to a financial airstrike. Three Mexican financial institutions were designated as 'primary money laundering concerns' under expanded fentanyl-related authorities. CIBanco, Intercam Banco and Vector Casa de Bolsa were each linked to laundering proceeds tied to the Sinaloa, Gulf and Jalisco New Generation cartels. For the first time, the U.S. invoked enhanced powers under the Fentanyl Sanctions Act and its 2024 counterpart, the FEND Off Fentanyl Act, to prohibit U.S. financial institutions from executing fund transfers with the designated entities. This isn't symbolic policy. These orders carry direct operational impact. Any U.S. bank conducting business with these institutions, directly or through intermediaries, must now sever ties. Access to dollar clearing? Gone. Trade finance exposure? Risky. Every transaction now triggers compliance protocol and reputational scrutiny. This is not traditional sanctions strategy. These are not sweeping Office of Foreign Asset Control designations that allow for humanitarian carveouts or negotiated wind-downs. This is a tactical, targeted strike embedded in the guts of the global financial system. It is precise, asymmetric and unrelenting, the financial equivalent of a drone strike without the debris. And it marks a doctrinal shift. Trump, often caricatured as obsessed with walls and tariffs, has added a powerful new weapon to his arsenal: financial denial infrastructure. It is not just about stopping the flow of drugs. It is about shutting off the liquidity that sustains the pipeline. For all the theater of his immigration speeches, this is the quiet policy move that may prove more durable. Consider the backdrop: More than $60 billion in remittances flows annually from the U.S. to Mexico. A meaningful share of those funds passes through regional banks and brokerages that until now operated with little cross-border scrutiny. By targeting institutions complicit in laundering cartel money and facilitating payments for precursor chemicals, FinCEN is signaling that the fentanyl trade will no longer be approached as a law enforcement issue alone. It is now a financial systems threat as well. And the Treasury Department isn't bluffing. The evidence cited in the designations includes direct ties to narcotics traffickers, shell entity layering and even meetings between bank executives and cartel operatives. One institution allegedly laundered more than $2 million to Chinese chemical suppliers. Another handled structured wire transfers linked to bulk cash smuggling. These aren't abstract compliance failures. They are systemic facilitation mechanisms. Mexico's government has already begun to push back, claiming the designations were unilateral and lack evidentiary transparency. That objection might resonate diplomatically, but the private sector won't wait for resolution. The effect is immediate: Global banks will reassess counterparty exposure. De-risking will accelerate, and any institution in Mexico even tangentially connected to suspicious flows is now within the blast radius. This is how deterrence takes shape: not through threats, but through demonstration. The implications go beyond Mexico. China's role in the precursor chemical supply chain remains the largest upstream vulnerability. If Treasury is willing to designate banks in North America, it is only a matter of time before East Asian entities face the same treatment. What began as a domestic opioid crisis has now metastasized into a transnational compliance dragnet. Yet almost no one is talking about it. In today's media environment, fragmented, fast-moving, and dominated by sensationalism, this pivotal FinCEN action received little attention. But make no mistake: this is Trump's most sophisticated offensive yet. It is built on the post-9/11 financial architecture but directed inward, toward cartels, their financial enablers and the global institutions that have failed to scrutinize cross-border flows with appropriate rigor. Some will claim this amounts to financial imperialism. Others will say it bypasses diplomatic norms. Both critiques miss the point. This isn't about diplomacy. It's about leverage. And when cartels can move hundreds of millions through opaque correspondent channels, the argument for restraint disappears. What matters now is precedent. The U.S. has shown that it will name and isolate not just kingpins, but banks as well — not just shell companies, but regulated institutions. It has turned the anti-money laundering infrastructure, long treated as a compliance checklist, into an instrument of statecraft. This is no longer a question of border control. It is now a matter of financial sovereignty. For compliance officers, the message is unmistakable: The risk calculus has changed. For regulators abroad, it sends the warning that proximity to the U.S. financial system no longer guarantees immunity. And for traffickers, it signals a new reality: Your money has nowhere safe to go. This is how you fight fentanyl in 2025 — not just with interdiction, but with isolation. Not just with rhetoric, but with remittances. Trump, whether intentionally or not, has handed Treasury a new doctrine: one that doesn't require a camera crew, a legislative majority or a border photo-op. Just a Fedwire terminal, a designation memo, and the full weight of the U.S. financial system. And that may prove more powerful than any wall ever could. Brett Erickson is managing principal at Obsidian Risk Advisors and an advisory board member at the Loyola University Chicago Law's Center for Compliance Studies and DePaul University College of Business.
The Hill
09-07-2025
- Politics
- The Hill
How trust can boost the US-Mexico fight against narco finance
The U.S. Treasury Department's announcement that it is targeting three Mexican financial institutions for their alleged roles in laundering proceeds tied to synthetic opioid trafficking marks a turning point, not only in the U.S. financial offensive against fentanyl, but also in the future of U.S.-Mexico security cooperation. These sanctions, issued under the expanded authority of the FEND Off Fentanyl Act, are the first of their kind and they may herald a more focused approach to choking off the money that makes organized crime so profitable and powerful. But behind the headlines is a deeper truth: If we are serious about dismantling the financial networks of the cartels, we need more trust and more coordination between government agencies in both countries. Money laundering is not just a financial crime — it is the lifeblood of drug trafficking organizations. From fentanyl precursors purchased from China to illicit cash sent back through trade-based laundering schemes, the ability of criminal organizations to move, hide, and invest their profits is what allows them to survive. That is why the bilateral anti-money laundering relationship between the U.S. and Mexico has been, and must continue to be, a cornerstone of the fight against organized crime. Over the last 20 years, the two governments have built institutional linkages through the High-Level Security Dialogue and the North American Drug Dialogue, shared intelligence through joint task forces and cooperated on regulatory and supervisory alignment. Yet, revelations like this remind us that those channels have thus far been woefully insufficient to counter the power and ingenuity of the drug trafficking organizations. The trust deficit that often clouds U.S.-Mexico cooperation — rooted in concerns over corruption, impunity and sovereignty — must be addressed head-on. Since the tragic 1985 abduction and murder of Drug Enforcement Agency agent Enrique 'Kiki' Camarena, trust between U.S. and Mexican security agencies has been marred by suspicion and periodic breakdowns in cooperation. The aftermath of the Camarena affair exposed the deep entanglement of Mexican law enforcement with drug trafficking organizations, prompting a significant retrenchment in bilateral collaboration. In the decades since, while cooperation has resumed in fits and starts — such as during the Mérida Initiative period — longstanding fears over corruption, leaks and sovereignty have frequently undermined joint efforts. Put succinctly, U.S. agencies often question the integrity and competence of their counterparts in the Mexican government, while Mexican officials remain deeply wary of the motives behind U.S. security operations. Recent years have seen further deterioration, particularly following the 2020 arrest of former Mexican defense minister Salvador Cienfuegos in the U.S., which triggered a diplomatic backlash and led Mexico to pass legislation restricting foreign law enforcement operations on its soil. This cycle of mistrust has hindered intelligence-sharing, constrained operational coordination and ultimately allowed drug trafficking organizations to exploit jurisdictional and institutional divides. If both countries are to mount a successful and sustained fight against organized crime, rebuilding that trust must become a shared strategic priority. It is true that Mexico has made significant strides in recent years, particularly with the 2020 reforms to its financial intelligence framework and enhanced powers for the Unidad de Inteligencia Financiera, but those reforms have not been fully implemented and there are still significant problems with compliance. Meanwhile, the U.S. has deployed an increasingly sophisticated array of financial tools, including the Global Magnitsky Act and Section 311 of the Patriot Act, to disrupt criminal finance globally. What's missing is a seamless partnership; one where intelligence is shared in real time, regulatory frameworks are interoperable and suspicious activity is pursued across borders with joint accountability. Examples from around the world show what's possible when financial cooperation is prioritized. The U.S.-United Arab Emirates Joint Task Force on Illicit Finance has led to seizures of millions of dollars linked to terrorist networks. Europol's collaboration with the Financial Intelligence Units of European Union member states has generated successful operations against transnational crime, from cyberfraud to human trafficking. Even in Latin America, the Tri-Border Area cooperation initiative among Argentina, Brazil and Paraguay has shown that coordinated anti-money-laundering efforts, when paired with law enforcement cooperation, can disrupt illicit flows in even the most complex regions. Mexico and the U.S. are connected not only by their economic integration, but by shared security challenges and a common interest in dismantling the financial networks that sustain organized crime. But disrupting cartel finance requires more than just sanctions — it demands trust. To build that trust, we must go beyond high-level declarations and invest in the institutional relationships that matter. That means enhancing vetting procedures to ensure the integrity of counterparts on both sides, expanding secondments and joint training programs between agencies and creating regular, structured interactions among investigators, prosecutors and regulators. Emerging technologies like artificial intelligence can also support this effort, offering new tools to detect suspicious financial patterns, track illicit flows across borders and flag anomalies in real time. Crucially though, we must also engage civil society — especially bar associations, law schools and the offices of state and federal attorneys general in both countries — to build a broader base of professional trust and legal cooperation. Only by deepening these networks and normalizing collaboration at every level can we create the resilient, binational ecosystem needed to fight financial crime and drug trafficking and protect lives on both sides of the U.S.-Mexico border. Duncan Wood is CEO of Hurst International Consulting and former director of the Wilson Center's Mexico Institute.
Mint
09-07-2025
- Business
- Mint
Mexican Firms Targeted by US for Laundering Get Reprieve
The US Treasury is granting a 45-day reprieve to three Mexican financial firms it moved to cut off from the US financial system, citing progress by the country's government in addressing money laundering by drug trafficking cartels. The Treasury department's ban on fund transfers with the designated firms will now take effect on Sept. 4, it said in a statement. The department's Financial Crimes Enforcement Network slapped orders last month on CIBanco SA, Intercam Banco SA and brokerage Vector Casa de Bolsa SA prohibiting all transfers with them from late July. 'Treasury will continue to take every action necessary to protect the US financial system from abuse by illicit actors and target the financing of transnational criminal organizations and narcotics traffickers,' Andrea Gacki, FinCEN director, said in the statement. Gacki said the US and Mexico had coordinated 'for months' to take the unprecedented steps. The move last month to identify the three firms as potentially involved in money laundering for drug cartels sparked chaos in Mexico, even though the Treasury said the impacts on the economy would minimal. The measures immediately prompted firms in both the US and Mexico to cut off business with the three affected institutions and cast a cloud over private equity and real estate trusts administered by the firms. The Mexican government had pushed for ways to soften the blow, including a carve-out for such trusts, according to people familiar with the matter. The country's Finance Ministry also sought more clarity on which companies and transactions were caught by the ban, including if it extended to local payments firms and payments within Mexico, the people said, asking not to be identified discussing private information. The disruptions had pushed Mexico's bank regulator to intervene the day after the US announcement. And earlier this month, Mexico's Finance Ministry said it was temporarily transferring the trust businesses of CIBanco and Intercam to local development banking units, with plans to eventually spin them off. All three firms have rejected the Treasury department's claims, and Mexican President Claudia Sheinbaum said the US had not provided proof of money laundering. The steps were the first time FinCEN has used the FEND Off Fentanyl Act, an anti-money laundering and sanctions law enacted last year. In winning the latest reprieve, Mexico had showed a commitment to addressing financial risks, particularly by assuming temporary control of the designated firms, the Treasury said in the statement. Any further extension would depend on the actions and cooperation of the Mexican government — which should be clear on the seriousness of President Donald Trump's plan to stamp out cartels — according to another person familiar with the matter. Fitch Ratings said Tuesday that the designated institutions' relatively small market share as well as the swift regulatory response have limited the threat of broader market disruption. But it warned that money laundering risks will hang over Mexico's financial system. 'Contagion risk can erode confidence in the broader financial system if not contained, which could pressure cross-border capital flows, increase compliance costs, and drive client outflows,' Fitch analysts including Alejandro Tapia wrote. Sheinbaum said during her daily media conference on Wednesday that the Finance Ministry has acted 'very responsibly, precisely to prevent the contagion Fitch is talking about.' She added that the ministry's handling of the trusts is a long and laborious process, but that it's going well. 'With the bank trusts, it's a problem,' she said. 'It's an operational risk, but it's not a credit risk or a counterparty risk.' The banks' roles as trustee for much of the country's financial issuance caused a particular headache. Billions of dollars of real estate and private equity securities have been sold by investment firms in the past decade, mostly to Mexico's pension funds, and CIBanco was a dominant player as trustee. The orders raised concerns over whether US-based funds would be able to receive money or make distributions. A series of Mexican REITs have already moved to replace CIBanco as trustee. 'The measures had a wider reach than expected,' said Mauricio Basila, a lawyer and former official and Mexico's bank regulator. With assistance from Maya Averbuch. This article was generated from an automated news agency feed without modifications to text.
Yahoo
26-06-2025
- Business
- Yahoo
US sanctions Mexican banks, alleging connections to cartel money laundering
The United States has imposed sanctions on three Mexican banks, alleging they had been used to launder money for drug cartels. On Wednesday, the US Department of the Treasury tied the banks – CIBanco, Intercam Banco and Vector Casa de Bolsa – to the cross-border trafficking of the deadly synthetic drug fentanyl. It accused them of playing 'a longstanding and vital role in laundering millions of dollars on behalf of Mexico-based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl'. The sanctions are part of a wider pressure campaign by the administration of US President Donald Trump against Latin American gangs, criminal networks and drug traffickers. That campaign has included designating several groups as 'foreign terrorist organisations' and using tariffs to pressure Mexico's government to increase enforcement of irregular traffic across the border. In a statement, the Treasury Department said the banks were the first to be targeted under new pieces of legislation – the Fentanyl Sanctions Act and the FEND Off Fentanyl Act – passed to expand its ability to target money laundering related to opioid trafficking. The sanctions would block transfers between the targeted Mexican banks and US banks, although it was not immediately clear how far-reaching the limits would a statement, Secretary of the Treasury Scott Bessent accused the banks of 'enabling the poisoning of countless Americans by moving money on behalf of cartels, making them vital cogs in the fentanyl supply chain'. But Mexico's Secretariat of Finance and Public Credit responded to the sanctions by saying it had yet to receive conclusive evidence justifying them. 'We want to be clear: If we have conclusive information proving illicit activities by these three financial institutions, we will act to the fullest extent of the law,' the Finance Ministry said. 'However, to date, we have no information in this regard.'CIBanco did not immediately respond to the allegations. The US Treasury Department accused it of being connected to money laundering by the Beltran-Leyva Cartel, the Jalisco New Generation Cartel (CJNG) and the Gulf Cartel. Intercam, which is also accused of having connections to the CJNG cartel, also did not respond. Meanwhile, the brokerage firm Vector, which was linked to money laundering by the Sinaloa Cartel and Gulf Cartel, said the US claims tying its operations to drug traffickers were false. 'Vector categorically rejects any accusation that compromises its institutional integrity,' the company said in a statement, adding that it would cooperate to clarify the situation.
