US targets three Mexican financial institutions under fentanyl sanctions
A view shows a bronze seal beside a door at the U.S. Treasury building in Washington, U.S., January 20, 2023. REUTERS/Kevin Lamarque/File Photo
The U.S. Treasury on Wednesday prohibited certain transactions with Mexico-based financial institutions CIBanco, Intercam Banco and Vector Casa de Bolsa as part of its new fentanyl sanctions.
The actions by the Treasury-run Financial Crimes Enforcement Network (FinCEN) to declare the three institutions "as primary money laundering concerns" mark the first actions under the Fentanyl Sanctions Act and the FEND Off Fentanyl Act, the Treasury said in a statement.
Experts said the move, although targeting relatively small institutions, could have significant impact on Mexico's financial system given the interconnectedness between banks and the close business relationship with the United States.
Although sanctions against individuals and companies for links to Mexican organized crime groups are fairly frequent, measures against financial institutions are far less common.
The sanctions also add another potential obstacle to easing U.S.-Mexico trade tensions over U.S. President Donald Trump's 25% punitive tariffs on many imports from Mexico, which are aimed at spurring action to halt the flow of fentanyl into the U.S.
Mexico's Finance Ministry said in a statement that it was notified of the FinCEN investigation and asked the Treasury for evidence of illicit activity links to CIBanco, Intercam and Vector, but received no "conclusive information."
The FinCEN sanctions do not block property or cut off all global dollar-based activities of the Mexican firms as other Treasury sanctions would, but they do prohibit U.S. transactions with their locations in Mexico, a U.S. Treasury official told reporters. The action will have a similar effect of cutting the institutions out of the U.S. financial system, the official added.
The Treasury said that Commercial banks CIBanco and Intercam have assets of over $7 billion and $4 billion, respectively, making them relatively small by global banking standards.
But the action against Vector, a brokerage firm that manages nearly $11 billion in assets and is one of the top 10 securities brokers in Mexico, "underscores the significance of our actions," Deputy U.S. Treasury Secretary Michael Faulkender told reporters.
"This is a bold move. Being cut off from the US financial system is a death blow. It's enormously impactful," said Vanda Felbab-Brown, senior fellow at the Brookings Institution and a specialist on organized crime.
"These are hardly the biggest banks in Mexico, but they are not small entities. These are medium-level banks," she said, adding that while significant it was unlikely to "make any kind of dent in the financial flows of Mexican criminal groups."
LAUNDERING MILLIONS
The Treasury said all three institutions "have collectively played a longstanding and vital role in laundering millions of dollars on behalf of Mexico-based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl."
"Vector categorically rejects any accusation that compromises its institutional integrity," Vector said in a statement. It added that it reiterated its full willingness to collaborate with Mexican and U.S. authorities to clarify the situation.
Intercam said: "We categorically deny any connection between this institution and any illicit practice."
"CIBanco has no involvement in illegal activities," the bank said in a statement, adding that it complies with all regulations set by the relevant authorities.
Luis Manuel Perez de Acha, a tax lawyer and money laundering expert in Mexico City, said the accusations were a 'bombshell.'
'The entire financial system passes through the United States, so they are practically left without operations," he said. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
Trump says US and Iran will talk next week, Middle East war over for now
[WASHINGTON] President Donald Trump said the US would hold a meeting with Iran next week but cast doubt on the need for a diplomatic agreement on the country's nuclear programme, citing the damage that American bombing had done to key sites. 'We're going to talk to them next week,' Trump said Wednesday at a press conference during the Nato summit at The Hague, without giving more details. 'We may sign an agreement. I don't know, to me, I don't think it's that necessary.' He reiterated that the US strikes on the Natanz, Isfahan and Fordow facilities had 'obliterated' them, again disputing an American intelligence assessment that said Teheran's nuclear programme had only been set back by a matter of months. The comments came on day two of a ceasefire between Israel and Iran, ending 12 days of conflict that threatened to escalate into a wider regional war and upend energy markets. As the missiles fell silent and oil prices plunged – wiping out most of their increase during the hostilities – focus has switched to a possible next stage of nuclear diplomacy. Trump said the conflict was effectively 'over' after the US bombing mission – though he also warned: 'Can it start again? I guess someday it can. It could maybe start soon.' Iran has been sending signals that it's ready to resume talks, which were underway with the US before Israel attacked. 'The logic of war has failed – return to the logic of diplomacy,' Iran's mission to the United Nations said on Wednesday. The mission didn't immediately respond to requests for comment on Trump's hint at new talks. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Before Israel's June 13 attack on Iran, Trump envoy Steve Witkoff had taken the lead in five rounds of talks with the Islamic Republic, seeking a deal to replace the 2015 nuclear agreement that Trump abandoned during his first term. 'We're hopeful for a comprehensive peace agreement,' Witkoff said on Wednesday on CNBC when asked what the next steps are for diplomacy with Iran. 'We were hopeful when we first started negotiations. It didn't quite work out that way, but today, we are hopeful. The signs are there.' Witkoff said the US has been 'having conversations with the Iranians' and that 'multiple interlocutors are reaching out to us,' adding that his 'strong sense' is that 'they're ready.' 'For Iran, a diplomatic track makes as much sense today as it did before the attack,' said Ray Takeyh, a senior fellow at the New York-based Council on Foreign Relations. 'It seems that the Iranian programme was not fully disabled. This may tempt Israel or the US to conduct additional strikes. A diplomatic process will obviate that possibility.' It's not clear what that would entail. The UN's nuclear watchdog has for decades been central to monitoring of Iranian nuclear activities. But Teheran is in no hurry to resume working with the agency, which it blames for failing to condemn the US and Israeli attacks. Iran's parliament has approved legislation that would suspend cooperation with the International Atomic Energy Agency until nuclear sites are secured, though any ultimate decision will be taken at higher levels of the state. The IAEA said Tuesday that inspections in Iran should resume 'as soon as possible' to determine what's happened to stocks of uranium enriched to 60 per cent levels, not far short of the 90 per cent required to build a bomb. The IAEA says it last verified those inventories a few days before Israel's June 13 attack and their whereabouts is now unknown, suggesting they may have been moved preemptively from sites targeted by US bombs. Trump said the US bunker-buster strikes had eliminated some key risks by burying the country's atomic materials under 'granite, concrete and steel.' 'We think everything nuclear is down there,' he said. 'They didn't take it out.' Pressed about the sources for such findings, he cited new intelligence assessments and also said 'we've also spoken to people who've seen the site,' without identifying them. The White House declined to specify to whom Trump was referring. Iran's nuclear installations were 'badly damaged' by US airstrikes, Foreign Ministry spokesperson Esmail Baghaei told Al Jazeera TV on Wednesday, in the first such comments from Teheran. The official didn't give further details and said authorities were still reviewing the situation on the ground. Trump cited that assessment during his Nato press conference, as well as a statement by Israel's nuclear agency that said the Fordow site had been rendered inoperable and Teheran's ability to make a nuclear weapon set back by 'many years.' Earlier this month, Trump had said Iran was 'weeks away' from having an atomic weapon, though some experts and US intelligence estimates said it could take months or years for the nation to develop a weapon. Iran maintains that its nuclear programme has purely civilian purposes, and that it's entitled to pursue that goal under international law. Witkoff said that 'enrichment is the red line' for the US with Iran, 'and beyond enrichment, weaponisation is the red line.' Israel's attacks on Iranian military and nuclear sites killed several top generals and atomic scientists. Iran countered by firing drones and ballistic missiles into Israel. Both have declared victory. Oil has slid back to around the levels it was trading at before the fighting began, posting a two-day decline of some 14 per cent. It rebounded slightly on Wednesday as Trump played down the prospect of near-term sanctions relief for Iran. Asked if his Tuesday comments approving Chinese purchases of Iranian oil undermined his strategy of maximum pressure on Iran, Trump said he is 'not giving up' on it. But he also indicated US financial penalties are doing little to stop Beijing from buying Teheran's supplies. 'If they're going to sell oil, they're going to sell oil,' Trump said. 'China is going to want to buy oil. They can buy it from us. They can buy it from other people.' Bank of Israel chief Amir Yaron told Bloomberg that the military campaign cost the government about 1 per cent of gross national product and would require revisions to this year's budget. He said gains on the country's financial markets suggest that they see the conflict resulting in 'a positive outcome for Israel.' Iran's civil aviation authority said 13 airports in the country's eastern regions have reopened for flights, though Teheran's airports remain closed until further notice, according to state media. Trump said both nations are 'tired, exhausted. They fought very, very hard and very viciously, very violently, and they were both satisfied to go home and get out.' BLOOMBERG
International Business Times
an hour ago
- International Business Times
Nvidia Becomes World's Most Valuable Company Again as AI Boom Lifts Stock
Nvidia stock soared to new heights on Wednesday, allowing the company to once again become the most valuable publicly traded firm in the world. The California-based chipmaker saw its shares climb more than 4%, hitting a record price of $154.10. That surge brought Nvidia's total market capitalization to $3.76 trillion, pushing it ahead of Microsoft, which was valued at $3.65 trillion after a smaller 0.2% gain in its share price. The recent rally in Nvidia's stock was largely driven by a positive report from Loop Capital. The financial firm raised its price target for Nvidia to $250, up from $175, while maintaining a strong "buy" recommendation. Loop Capital analyst Ananda Baruah wrote that the market is entering what he described as a "Golden Wave" of generative artificial intelligence (Gen AI) adoption. He added that Nvidia is in a leading position to benefit from the next major phase of AI-driven demand for advanced computing hardware. This enthusiasm for Nvidia reflects renewed investor interest in artificial intelligence, a trend that has sparked enormous gains in technology and semiconductor stocks over the last few years. Nvidia's chips are considered among the best for running complex AI models, and demand continues to climb as industries adopt AI tools more widely. Interestingly, despite its steep rise, Nvidia's valuation still appears reasonable to some investors. The company is currently trading at around 30 times projected earnings for the next year, based on data from LSEG. That is below its five-year average price-to-earnings ratio of 40, indicating that Nvidia's strong earnings growth is keeping pace with its rising stock price. Nvidia, Microsoft, and Apple have been competing for the title of the world's most valuable company over the past year. Microsoft recently held the top spot after overtaking Nvidia earlier in June. Meanwhile, Apple's stock also edged up by 0.4% on Wednesday, placing its total valuation at $3.0 trillion. Nvidia's rebound has been especially notable considering it had dropped significantly in April. The fall came after comments from former President Donald Trump about global tariffs, which triggered market jitters. However, Nvidia has since gained over 60% from its April low, fueled by investor optimism that the U.S. government will resolve trade disputes and avoid damaging tariffs on tech imports.
AsiaOne
2 hours ago
- AsiaOne
Amnesty says Cambodia is enabling brutal scam industry, Asia News
BANGKOK — Human rights group Amnesty International accused Cambodia's government on Thursday (June 26) of "deliberately ignoring" abuses by cybercrime gangs who have trafficked people from across the world, including children, into slavery at brutal scam compounds. The London-based group said in a report that it had identified 53 scam centres and dozens more suspected sites across the country, including the Southeast Asian nation's capital, Phnom Penh. The prison-like compounds were ringed by high fences with razor wire, guarded by armed men and staffed by trafficking victims forced to defraud people across the globe, it said, with those inside subjected to punishments including shocks from electric batons, confinement in dark rooms, and beatings. Amnesty said its findings revealed a "pattern of state failures" that allowed the billion-dollar industry to flourish, including failures to investigate human rights abuses, identify and assist victims, and regulate security companies and tools of torture. "Deceived, trafficked and enslaved, the survivors of these scamming compounds describe being trapped in a living nightmare — enlisted in criminal enterprises that are operating with the apparent consent of the Cambodian government," said Amnesty International's Secretary General Agnes Callamard. Amnesty said the Cambodian government did not respond to its list of scamming compounds or suspicious locations, and that the National Committee to Combat Human Trafficking shared "vague data on interventions at compounds, none of which clarified whether the state has identified, investigated or prosecuted individuals for human rights abuses other than deprivation of liberty." The Cambodian government did not immediately respond to a Reuters' request for comment about the report. Phnom Penh has said previously that it is tackling scam gangs and in January set up a taskforce headed by Prime Minister Hun Manet. While Cambodia has overseen raids that have freed some trafficked workers, Amnesty said it found more than two-thirds of scam compounds were either not investigated by police or had continued to operate even after police interventions. Two compounds did appear to have been shut down, the group said. During rescue efforts, police did not enter compounds but met representatives who handed over only the victim who had called for help, the group said, while some survivors were beaten by their bosses after trying to contact the police. Children trafficked Cambodia emerged during the pandemic as a hub for the global scam industry as mostly Chinese-led criminal groups repurposed unused casinos and hotels as scam centres housing as many as 100,000 people, according to the United Nations. Similar enclaves have flourished in Myanmar and Laos. The industry in Cambodia now generates more than US$12.5 billion (S$15.9 billion) annually — half of the country's GDP, according to the United States Institute for Peace. Thailand and Cambodia have traded barbs over the scam issue in recent days as border tensions have heated up, with the Thai prime minister calling for a crackdown in Cambodia and another government official calling the country a hub for cybercrime. The criminal gangs entice trafficking victims with fake job offers posted on social media and then force them to financially exploit people online including through fake romances or "pig-butchering" schemes in which the scammer builds trust with a victim before stealing their money, Amnesty said. Nine out of 58 survivors interviewed by Amnesty were children, the group said, including a 16-year-old boy from China who was kicked and barred from leaving. Amnesty said it had confirmed the death of a Chinese child in one compound. An 18-year-old Thai survivor told Reuters he was trafficked to a compound in Phnom Penh in 2023 and then, when he tried to leave, sold to another compound close to the Vietnamese border. The man, who asked not to be named, was forced to use deepfake video software to pose as an older attractive man to lure Thai women into handing over their money. After almost a year, he threw himself out of a window, injuring himself, and escaped after hiding in a hospital. [[nid:719444]]
