Mexican regulator, the National Banking and Securities Commission (CNBV), fined CIBanco, Intercam and brokerage firm Vector on Tuesday after the U.S. announced sanctions on the three financial institutions for alleged money laundering in June.
CNBV fined the three firms a total of 185 million pesos (US $9.8 million), due to “non-compliance in administrative processes,” Mexico’s Finance Ministry said in a press statement on Tuesday.
Intercam was fined 92.15 million pesos ($4.9 million), CIBanco 66.61 million pesos ($3.55 million) and Vector 26.46 million pesos ($1.4 million).
The Finance Ministry reiterated that despite the announced U.S. sanctions on CIBanco, Intercam and Vector, no evidence of wrongdoing has been forthcoming.
“If we have conclusive information that proves illicit activities of these three financial institutions, we will act with the full force of the law,” the ministry’s press statement read. “However, to date, we have no such information.”
Most of the fines on Intercam and CIBanco were related to money-laundering prevention, while Vector faced fines for failure to publish mandatory information.
The fines reportedly corresponded to June, when the CNBV took control of the three financial institutions.
CIBanco, Intercam and Vector win temporary reprieve from US money laundering sanctions
On June 25, the U.S. prohibited the execution of fund transfers to and from Mexico’s CIBanco, Intercam and Vector after they were found to have laundered money in connection with illicit opioid trafficking by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). All three have denied FinCEN’s allegations of money laundering.
An estimated 30% to 40% of clients with significant funds in the affected financial institutions had alternative bank accounts and withdrew their funds in the first two days after the FinCEN accusation, according to CNBV’s vice-president José Antonio Quesada.
On July 9, FinCEN announced that CIBanco, Intercam and Vector would have an additional 45 days, until September 4, to meet certain standards before receiving sanctions.
“It is very difficult to see what future these institutions may have if the sanction issue is not resolved quickly, and from experience, I can say that these things are not resolved quickly,” Victor Manuel Herrera, the president of the National Committee for Economic Studies of the Mexican Institute of Finance Executives (IMEF), said in a press conference.
With reports from Reuters and El Financiero
Let the good times roll. It doesn’t look good for Mexican banks. If the government doesn’t kneel to the demands of the u.s. regarding drugs, trade and illegal immigration they could be in for a very tough time. This could be just the beginning of the destruction of the Mexican banking system, although because of the large number of u.s. corporations that are intertwined with Mexican business and the banks, it doesn’t seem likely that it will be completely destroyed. But things are getting crazy so we’ll see.
I’m grateful Mexico’s regulators stepped in to operate the banks on a temporary basis. Banking is based on trust. Mexico acted quickly and appropriately. Now it’s up to the institutions to fix themselves quickly to the standards defined by the regulated environment in Mexico.
But there has not been any evidence presented publicly that they laundered money. That is a not a charge brought by Mexican Authorities. Mexico found these deficiencies only after stepping in on a temporary basis following allegations by the US that remain only allegations. It’s telling that Mexican authorities have found / reported no such evidence
Agree with TRUTH comments above. Big changes are heeding your way so buckle up your belt because you BANKs are going to need it. Once the investigation begins it gets deeper every day. BIG CHANGES INTHE HORIZON.
It is maddening that the finance ministry has not been presented with information from the USA agencies implementing these punitive actions against Mexican financial companies. Knowing how fast things move in the Mexican banking industry it is very doubtful there will be a quick resolution here and hence it seems inevitable that intercam and the other operations will go out of business proving to be a great disservice to many of us American immigrants living here in Mexico. I’m sure the cartels have long transition to cryptocurrency and other non-traceable means of interchanging assets. In other words this is a useless exercise that will hurt a lot of innocent people who might lose their jobs, inconvenience a lot of customers and result in no change in cartel operations.
So if one of those banks goes out of business, does that mean all the account holders lose all their money? I have a small Intercam account and was glad I was able to withdraw a few pesos a week ago. In Ajijic, this banking crisis coincided with the closure of BBVA or Bancomer which had popular ATMS used by foreigners to get pesos. CIBanco has an ATM with a sign saying it does not process foreign bank cards.
I pay my rent in pesos, and this situation is looking pretty tricky especially because no evidence had been produced to show the offenses the banks are accused of. My main bank is in the USA. Any great suggestions?