US Treasury Delays Sanctions on Mexican Banks
Financial institutions in Mexico—Cibanco, Intercam, and Vector—will have an additional 45 days to meet specific standards before facing sanctions, as announced by the US Treasury Department’s Financial Crime Enforcement Network (FINCEN) on Wednesday.
An order from FINCEN issued on June 25 prohibited fund transfers among the three banks, with sanctions originally set to take effect this month. However, the deadline has now been pushed to September 4.
The extension appears to stem from Mexico’s efforts to cooperate with the Treasury Department regarding the sanctions order.
According to a statement released on Wednesday, “this [45-day] extension reflects the Mexican government’s ongoing steps to address the concerns raised in FINCEN’s order.”
On June 26, Mexico’s National Bank Securities Commission (CNBV) indicated the possible temporary management of Cibanco and Intercam to ensure they meet regulatory requirements.
FINCEN has expressed concerns about significant money laundering associated with illegal opioid trafficking, specifically related to the Fentanyl Sanctions Act.
The sanctions won’t completely block assets or all dollar transactions globally, but they will prohibit US transactions in Mexican locations. Yet, some customers have already reported facing difficulties and are worried about severe complications once the sanctions are implemented.
President Claudia Sheinbaum has challenged the unified claim of money laundering against the three banks, seeking concrete evidence.
While it’s not uncommon for individuals and businesses with ties to organized crime in Mexico to face US sanctions, actions against financial institutions are relatively rare. Notably, this is the first measure taken under the fentanyl law.
FINCEN stated that it intends to “continue to closely coordinate these issues with the Mexican government, carefully considering all facts and circumstances as we look at further expansion until the order is executed.”
Cibanco and Intercam have reported assets exceeding $7 billion and $4 billion, respectively, while brokerage firm Vector manages around $11 billion.
