Mexican banks face cascading consequences following US sanctions
All three have fiercely rejected the claims. Mexico's President Claudia Sheinbaum accused US officials of providing no evidence to back their allegations, though the sanctions announcement made specific accusations on how money was transferred through the companies. It detailed how "mules' moved money through accounts in the US, as well as transactions carried out with Chinese companies that US officials said provided materials to produce fentanyl.
Mexico's banking authority has announced that it is temporarily taking over management of CIBanco and Intercam Banco to protect creditors. Sheinbaum said Tuesday that the Mexican government is doing everything within its power to ensure that creditors aren't affected, and said they were well "within their right' to pull their money from the banks.
The US Treasury Department said that the sanctions would go into effect 21 days after the announcement. Fitch Ratings has downgraded the three institutions and other affiliates, citing "anti-money laundering concerns' and saying the drop "reflects the imminent negative impact' that the sanctions could have.
"The new ratings reflect the significantly more vulnerable credit profile of these entities in response to the aforementioned warnings, given the potential impact on their ability to meet their financial obligations,' the credit rating agency wrote in a statement. On Monday, CIBanco announced that Visa Inc. had announced to them with little warning that it had "unilaterally decided to disconnect its platform for all international transactions' through CIBanco.
The bank accused Visa of not complying with the 21-day grace period laid out by the sanctions. "We would like to reiterate that your funds are safe and can be reimbursed through our branch network," the bank wrote. "We reiterate to our customers that this was a decision beyond CIBanco's control.'
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Kuwait Times
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Kuwait Times
a day ago
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Kuwait Times
a day ago
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What happens with Trump's July tariff deadline?
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