Three Mexican development banks have considerable operational challenges in the wake of sanctions placed on them by the Trump administration. As a result of this news, the U.S. Treasury Department acted swiftly to announce sanctions against CIBanco, Intercam Banco and Vector Casa de Bolsa. They claim that these banks helped Mexican drug cartels launder their drug money.
The sanctions only prohibit transactions between U.S. banks and the Mexican branches of CIBanco and Intercam Banco. They further block all transactions involving Vector Casa de Bolsa. The U.S. government is accusing these banks of participating in hundreds of millions of dollars being moved for illicit purposes. They employed “mules” to move dollars via bank accounts located in the United States. Additional accusations point to these universities’ complicity in conducting business with Chinese firms that provided precursors and other components for fentanyl production.
Mexico’s banking authority quickly intervened in CIBanco and Intercam Banco. This step was designed to minimize the risk to creditors from the sanctions. This intervention could not have come at a more pressing time. Both banks are currently engaged in deep and ongoing efforts to stabilize their operations and restore confidence with their clients.
CIBanco reported that Visa Inc. “unilaterally decided to disconnect its platform for all international transactions,” a move that occurred with little warning. CIBanco is still dealing with the fallout from its loss of access to international transaction capabilities. These capabilities are essential in supporting its day to day operations.
Mexican President Claudia Sheinbaum went to the core of all the complaints about the sanctions. She asserted that her administration is doing everything possible to shield creditors from being harmed. She recognized that lenders are able to pull their money out of the haulted banks. This would at least signal that she trusts the judgment of their decision makers to navigate this tough environment.
CIBanco, Intercam Banco and Vector Casa de Bolsa have each unequivocally denied the allegations of the U.S. Treasury Department. They hold their ground against these allegations. They continue to assert that they have always acted on the right side of the law and challenge the justifications for the sanctions levied against them.
President Sheinbaum even admonished American officials for providing no tangible proof to support their allegations. She stated her disappointment with the “lack of transparency surrounding the decision making process that led to the sanctions”.
