Mexico-based financial institutions CIBanco, Intercam and Vector will have 45 more days to meet certain standards before receiving sanctions, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced on Wednesday.
On June 25, FinCEN issued an order prohibiting the execution of fund transfers to and from the three aforementioned Mexican banks. Implementation of sanctions was to take effect this month, but has now been put off until September 4.
The delay was in large part the result of Mexico’s response to the sanction order, indicating cooperation with the Treasury Department.
“This [45-day] extension reflects that the Government of Mexico has taken further steps to address the concerns raised in FinCEN’s orders,” a Treasury Department statement released Wednesday said.
On June 26, Mexico’s National Banking and Securities Commission (CNBV) assumed temporary management of CIBanco and Intercam to ensure compliance with regulatory standards.
FinCEN said the institutions were “found to be of primary money laundering concern in connection with illicit opioid trafficking pursuant to the Fentanyl Sanctions Act and the FEND Off Fentanyl Act.”
The sanctions do not block property or cut off all global dollar-based activities, but do prohibit U.S. transactions with their locations in Mexico. A survey of more than 200 Mexico News Daily readers revealed that some customers have already experienced inconveniences from the pending sanctions and more fear serious difficulties once they are implemented.
President Claudia Sheinbaum has adamantly demanded evidence to back up the United accusations of money laundering by the three financial institutions.
While U.S. sanctions are fairly common against individuals and companies for links to Mexican organized crime, measures against financial institutions are less common. In addition, this is the first such action taken by the U.S. under the Fentanyl Acts.
FinCEN said it planned to “continue to coordinate closely with the Government of Mexico on these matters and will carefully consider all facts and circumstances in considering any further extensions to the implementation date of the orders.”
Commercial banks CIBanco and Intercam have assets of over US $7 billion and $4 billion, respectively, while brokerage firm Vector manages almost $11 billion in assets.
With reports from Reuters
