Mexico Regulator Steps In to Run Banks Tarred by US Accusations
Mexico's bank regulator said it was temporarily stepping in to run CIBanco SA and Intercam Banco SA in a bid to protect customers following accusations by US authorities that the firms were potentially facilitating money laundering by drug cartels.
The National Banking and Securities Commission, or CNBV, said in a statement Thursday that it was replacing management at the two banks 'in order to safeguard the rights of these institutions' savers and clients, given the potential implications for these banks of the measures announced by the United States Department of the Treasury.'
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Los Angeles Times
an hour ago
- Los Angeles Times
Mexico disputes U.S. money laundering charges against banks allegedly linked to fentanyl trafficking
MEXICO CITY — President Trump's vow to 'wage war' on drug cartels has resulted in bombshell accusations of money-laundering against three Mexican financial institutions — allegations that produced a defiant pushback from Mexican President Claudia Sheinbaum. 'There's no proof, just words,' a clearly agitated Sheinbaum told reporters on Thursday. 'There has to be proof to know if there was money laundering or not. Therefore, we don't deny it or accept it.' A day earlier, the U.S. Department of the Treasury issued what it called 'historic' sanctions against CiBanco, Intercam Banco and Vector Casa de Bolsa. The department accused the three of laundering millions of dollars in narco-cash to facilitate the trafficking of fentanyl and other synthetic opioids into the United States. The orders 'affirm Treasury's commitment to using all tools at our disposal to counter the threat posed by criminal and terrorist organizations,' Treasury Secretary Scott Bessent said in a news release. The Treasury Department move would largely prohibit U.S. financial institutions from dealing with the three sanctioned entities, effectively shutting them out from access to the world's largest market. The Treasury accused the three firms of laundering funds for various Mexican drug cartels and 'facilitating payments for the procurement of precursor chemicals needed to produce fentanyl.' U.S. authorities say Mexican cartels use chemicals imported from China to produce fentanyl in clandestine laboratories and then smuggle the potent opioid into the United States. Black-market fentanyl has led to tens of thousands of overdose deaths in the United States, officials say. Sheinbaum has been widely lauded for her non-confrontational, 'cool-headed' approach with the Trump administration, despite many disagreements — including on Trump's imposition of 25% tariffs on some Mexican imports, a levy meant to prompt Mexico to crack down further on fentanyl smuggling. But Sheinbaum signaled her clear displeasure with Treasury's punitive actions. 'Mexico is not subordinate to anyone,' Sheinbaum said. 'We coordinate, collaborate — we have said this many times — but we will not subordinate ourselves.' In Mexico, some analysts have called the Treasury moves a broadside against Mexico's economic well-being. U.S. authorities have frequently sanctioned Mexican companies and individuals for alleged links to drug smuggling, but experts say targeting of banks is much less frequent. 'The accusation is the gravest news for the Mexican financial system in decades and represents a point of no return for these three firms,' wrote columnist Carlos Mota of the El Heraldo de México newspaper. 'The entire Mexican financial system entered into shock.' But the Treasury said that 'any burden and disruption should be relatively minimal,' since none of the three firms is a dominant player in Mexico. All institutions — two banks and a brokerage house, all medium-sized firms — denied any wrongdoing. Vector Casa de Bolsa said it 'categorically rejected any imputation that compromises its institutional integrity.' Vector manages about $11 billion in total assets, according to U.S. officials. The case against Vector has drawn special scrutiny in Mexico because of the firm's ties to Alfonso Romo, a businessman who served for two years as chief of staff for former President Andrés Manuel López Obrador, Sheinbaum's predecessor, mentor and the founder of Mexico's dominant Morena political bloc. After leaving the chief of staff position, Romo remained a top economic advisor to López Obrador. Mexican media accounts have described Romo as the honorary president and co-founder of Vector. Romo has not commented publicly. According to Mexican media reports, Mexico's current finance minister, Edgar Amador, is a former analyst with Vector. Among other allegations against Vector, the Treasury said that from 2013 to 2016 'a suspected Sinaloa cartel money mule' transferred more than $1.5 million to the brokerage firm. Vector was also allegedly linked to millions of dollars in Sinaloa cartel payouts to Genaro García Luna, Mexico's former top federal security official. García Luna was convicted in 2023 U.S. district court of colluding with the Sinaloa mob and receiving millions of dollars in graft. He is serving a 38-year prison sentence. The U.S. order against the three Mexican financial institutions is to take effect in 21 days. It is a civil action and does not involve criminal charges. Special correspondent Cecilia Sánchez Vidal contributed to this report.
2 hours ago
Mexico's president slams sanctions on Mexican banks by Trump administration
MEXICO CITY -- Mexican President Claudia Sheinbaum responded sharply Thursday to U.S. government sanctions blocking transfers from three Mexican financial institutions, saying Washington hasn't shown evidence of its allegations of money laundering. The U.S. Treasury Department announced the sanctions Wednesday on the banks CIBanco and Intercam Banco and the brokerage Vector Casa de Bolsa, alleging that they had facilitated millions of dollars in money transfers for Mexican drug cartels. Sheinbaum said during her morning news briefing Thursday that the administration of U.S. President Donald Trump had showed no evidence proving that the institutions carried out any money laundering, despite repeated requests for such evidence. 'The Treasury Department hasn't provided a single piece of evidence to show that any money laundering was taking place," she said. 'We aren't going to cover for anyone, there isn't impunity here. They have to be able to demonstrate that there was actually money laundering, not with words, but with strong evidence." The accused banks also fired back on the orders, rejecting the allegations and similarly citing a lack of evidence. Brokerage firm Vector said Wednesday night in a statement that it 'categorically rejects any allegation that compromises its institutional integrity" while Intercam said in a statement it denies being involved in any 'illegal practice.' Vector is owned by entrepreneur Alfonso Romo, who served as chief of staff to ex-President Andrés Manuel López Obrador early in his presidency. Manuel Somoza, president of strategies of CIBanco, told local press that they only heard about the order the same time it was made public, and noted that it wasn't a formal legal accusation, but rather an investigation. 'Our books are open," he said. 'Rumors are clearly damaging, whether they're true or not. So, what we want is for (American authorities) to come and investigate." Sheinbaum said they were notified by American officials of the accusations ahead of the Wednesday announcement, and that Mexican financial regulators carried out their own investigations into the institutions. They found "administrative infractions," she said, but nothing close to the accusations being levied by Treasury officials. In the orders blocking transactions between the three institutions and American banks, the Trump administration alleged that the three companies facilitated millions of dollars in transfers with Chinese companies, which it said were used to buy chemicals to produce fentanyl. The Treasury Department said the institutions had facilitated transfers to U.S. banks, but officials would not name which U.S. institutions were implicated nor provide more details. Sheinbaum countered that their own investigation simply showed that institutions had strong relationships with Chinese clients and banks, which she said was more of an indicator that the two countries share a robust trade relationship. China has been the main source of chemical precursors to produce fentanyl in Mexico, according to U.S. authorities. At the same time, the U.S. has increasingly sought to block growing Chinese influence and investment in Latin America. The leader also expressed frustration on Thursday morning, reminding Trump officials that Mexico is a sovereign nation and must be treated as an equal by the U.S. government.
Wall Street Journal
3 hours ago
- Wall Street Journal
Mexico Takes Over Two Small Local Banks Sanctioned by Washington
MEXICO CITY—Mexican financial authorities said Thursday that they are taking over two small local banks that were identified by the U.S. Treasury Department as being involved in money laundering and facilitating payments for precursors used to make fentanyl. Mexico's Banking and Securities Commission decreed temporary management intervention in CIBanco and Intercam Banco to prevent a run on deposits. The commission said that the measures aim to protect the interests of savers and creditors given the implications that the measures announced by the U.S. Treasury could have for these banks.
