US Treasury sanctions three Mexican financial institutions over money laundering ties

The US Treasury Department has imposed financial sanctions on three Mexican financial institutions—CIBanco, Intercam Banco, and Vector Casa de Bolsa—accusing them of involvement in an illicit network used to funnel payments to China for trafficking the synthetic opioid fentanyl.

The Treasury labeled the firms as “primary money laundering concerns,” a designation that enables it to impose strict restrictions on their access to the US financial system.

The sanctions mark the first time the Treasury’s financial crimes unit has exercised new powers granted under recently enacted anti-fentanyl legislation.

The move comes amid a broader crackdown on opioid trafficking, as former President Donald Trump intensifies his campaign focus on combating the flow of illegal drugs into the United States.

Alvaro Vértiz asserts that the US will stop at nothing to stop fentanyl trafficking

The three companies, according to the Treasury, had played a long-standing and central role in laundering millions of dollars for Mexican cartels and facilitating payments to secure precursor chemicals for the production of fentanyl.

Concerning this, Deputy Treasury Secretary Michael Faulkender highlighted that they have taken steps to stop the financial institutions based in Mexico from working with US financial institutions. 

The sanctions were the Treasury Department’s Financial Crimes Enforcement Network’s first actions to be carried out under the FEND Off Fentanyl Act. The bill was signed into law last year and provides the agency with new authorities to go after opioid smuggling.

Fentanyl, a cheap synthetic painkiller, has driven the opioid epidemic in the United States over the last decade and is the most common cause of overdose deaths.

The news comes as Trump has been ramping up a US assault on drug trafficking from Mexico in a challenge to left-wing President Claudia Sheinbaum.

The founder of Vector Casa de Bolsa is Alfonso Romo, who for two years managed the office of Sheinbaum’s mentor and predecessor, President Andrés Manuel López Obrador. Meanwhile, there are no allegations of wrongdoing on Romo’s part or that of the former president.

Alvaro Vértiz, who leads Latin America at the Washington-based advisory firm DGA Group, commented on the topic of discussion. According to Vértiz, this seriously damages the trust in the Mexican financial system.

He also mentioned that the US is ready to do anything necessary to fight fentanyl trafficking, and there will be no exceptions.

Mexico’s financial firms vow to adhere to oversight regulations strictly 

All three institutions — two banks and a brokerage — are small but prominent players in Mexico’s financial sector, which manage $7 billion, $4 billion, and $11 billion, respectively.

Following the Treasury’s claims, CIBanco and Intercam conducted business with or offered services to the now-dominant Jalisco New Generation cartel. For Vector, it assisted a Sinaloa cartel mule to launder US dollars 2 million from the US to Mexico.

Several senior industry executives have reacted to the news. According to them, this will force Mexico’s financial institutions to strictly adhere to “know your customer” and anti-money laundering oversight.

It is worth noting that Sheinbaum has won some praise from US officials for prioritizing greater co-operation on security, with her security minister increasing arrests, seizures, and extraditions.

Despite this, in response to this news, Mexico’s finance ministry said it had not been provided proof of the accusations.

The ministry stated that if they received clear evidence showing illegal actions by these three financial institutions, they would take strong legal action. However, at that moment, they did not have any such information.

The wider US-Mexico relationship has been rocky as Trump imposed a 25% tariff on a broader range of goods, and the administration has raised the possibility of unilateral military action against drug cartels. 

Trump issued an executive order designating six cartels as terrorist organisations in his first weeks in office, and he sent a former Army Green Beret to be his ambassador in Mexico City.

CIBanco and Intercam did not respond to requests for comment. In the statement, Vector said it categorically denies any claim against its integrity, and that the transactions were with legitimate companies.

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