Could Mexico join countries such as Haiti, Venezuela and South Sudan on the Financial Action Task Force’s “grey list” due to deficiencies in its measures to counter money laundering?
In light of the United States government’s money laundering accusations against three Mexican financial institutions, an expert who spoke to the newspaper El Universal believes that it is a distinct possibility.
The Financial Action Task Force (FATF) is an intergovernmental organization that describes itself as “the global money laundering and terrorist financing watchdog.”
The organization maintains a “black list,” which “identifies countries or jurisdictions with serious strategic deficiencies to counter money laundering, terrorist financing, and financing of [weapon] proliferation.”
Three countries — North Korea, Iran and Myanmar — are currently on that list.
The FATF also has a “grey list,” which “identifies countries that are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and [weapon] proliferation financing.”
“When the FATF places a jurisdiction under increased monitoring” — i.e. on the “grey list” — “it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring,” according to the intergovernmental organization.
There are currently 24 countries and jurisdictions on the “grey list,” including the three mentioned above as well as Algeria, Bulgaria, Kenya, Monaco, Syria and the British Virgin Islands, among others.
US accusations ‘will be reflected in next FATF assessment,’ says anti-money laundering expert
El Universal reported on Monday that there is a risk that Mexico will be added to the FATF’s “grey list” due to the alleged cases of “narcolavado” (drug trafficking-related money laundering) involving the Mexican banks CIBanco and Intercam and the Mexican brokerage firm Vector.
US sanctions 3 Mexican financial institutions accused of money laundering
The newspaper’s assessment was based on an interview with Genaro Gómez Muñoz, an anti-money laundering expert who is a member of the Money Laundering Prevention and Anti-Corruption Commission of the Mexican Institute of Public Accountants.
Gómez Muñoz told El Universal that the United States’ allegations against CIBanco, Intercam and Vector — all of which denied the allegations that they laundered millions of dollars for drug cartels — “will be reflected in the next FATF assessment” of Mexico, whose results will be announced later this year.
He noted that Mexico’s capacity to counter money laundering hasn’t been assessed by the FATF since 2017. This year’s assessment comes at a time when the Mexican government is seeking to strengthen anti-money laundering legislation. A proposed reform to that end was approved by the Senate last week.
Nevertheless, “the cases of the banks that are allegedly involved with [money laundering related to] drug trafficking will impact us in the result” of the FATF assessment, Gómez Muñoz said.
He said that the FATF’s rating of “due diligence” in Mexico with regard to efforts to prevent money laundering would suffer as a result of the United States’ accusations against CIBanco, Intercam and Vector.
Gómez Muñoz: US saw ‘a risk to the integrity and security of their financial system’
The United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) outlined the accusations against CIBanco, Intercam and Vector in orders that also prohibit transactions between U.S. banks and the three Mexican financial institutions.
FinCEN said last week that its orders would “become effective 21 days after … [they] are published in the Federal Register,” which occurred last week.
“By that date [mid-July] covered financial institutions should … cease any and all transmittals of funds, from or to CIBanco, Intercam, or Vector, as defined in the orders,” FinCEN said.
The orders were the “first actions by FinCEN pursuant to the Fentanyl Sanctions Act and the FEND Off Fentanyl Act,” the Treasury Department said in a statement.
United States Secretary of the Treasury Scott Bessent said last Wednesday that, “Through the first use of this powerful authority, today’s actions affirm Treasury’s commitment to using all tools at our disposal to counter the threat posed by criminal and terrorist organizations trafficking fentanyl and other narcotics.”
Gómez Muñoz, an accountant who has also worked as an academic, told El Universal that the main reason FinCEN turned its focus to Mexico was to protect the United States’ financial system.
“They saw there is a risk to the integrity and security of their financial system, [with it] being used by criminal organizations related to the trafficking of fentanyl, which at this time is the enemy of United States society,” he said.
CIBanco and Intercam customers report restrictions on USD transactions
The El Economista newspaper reported on Friday that CIBanco and Intercam customers had reported restrictions on “the management of operations in their dollar accounts.”
“In the case of CIBanco, the manager of a company who preferred not to be identified, explained that he can’t withdraw, transfer or exchange foreign currency from his dollar account,” El Economista said.
The newspaper said that two other CIBanco customers it spoke to reported that there hadn’t been any problems with transfers in Mexican pesos.
El Economista didn’t provide additional details on the problems it said Intercam customers have also experienced when managing their dollar accounts.
Both CIBanco and Intercam were disconnected from Mexico’s SPEI money transfer system for five hours last Thursday, the newspaper said.
The National Banking and Securities Commission (CNBV) decreed “temporary managerial interventions” at CIBanco, Intercam and Vector after the United States government accused the three financial institutions of money laundering.
Finance Minister Edgar Amador Zamora said on Friday that the aim of the administrative takeovers was to “ensure there were no interruptions in the banking system and to look after … the savings of the clients of these institutions.”
Asked whether the money of account holders at the three financial institutions is safe, Amador responded, “Absolutely.”
With reports from El Universal
