6 days ago
US targets three Mexican financial institutions under fentanyl sanctions
The FinCEN sanctions do not block property or cut off all global dollar-based activities of the Mexican firms as other Treasury sanctions would, but they do prohibit US transactions with their locations in Mexico, a US Treasury official told reporters. The action will have a similar effect of cutting the institutions out of the US financial system, the official added.
The Treasury said that commercial banks CIBanco and Intercam have assets of more than $7bn (R123.59bn) and $4bn (R70.62bn) respectively, making them relatively small by global banking standards.
But the action against Vector, a brokerage firm that manages nearly $11bn [R194.21bn] in assets and is one of the top 10 securities brokers in Mexico, 'underscores the significance of our actions', deputy US Treasury secretary Michael Faulkender told reporters.
'This is a bold move. Being cut off from the US financial system is a death blow. It's enormously impactful,' said Vanda Felbab-Brown, senior fellow at the Brookings Institution and a specialist on organised crime.
'These are hardly the biggest banks in Mexico, but they are not small entities. These are medium-level banks,' she said, adding that while significant it was unlikely to 'make any kind of dent in the financial flows of Mexican criminal groups'.
LAUNDERING MILLIONS
The Treasury said all three institutions 'have collectively played a long-standing 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'.
'Vector categorically rejects any accusation that compromises its institutional integrity,' Vector said in a statement. It reiterated its full willingness to collaborate with Mexican and US authorities to clarify the situation.
Intercam said: 'We categorically deny any connection between this institution and any illicit practice.'
'CIBanco has no involvement in illegal activities,' the bank said in a statement, adding it complies with all regulations set by the relevant authorities.
Luis Manuel Perez de Acha, a tax lawyer and money laundering expert in Mexico City, said the accusations were a 'bombshell'.
'The entire financial system passes through the US, so they are practically left without operations,' he said.
