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Saturday, 9 November 2013

Mexico's $50 billion money laundering problem

Cash seized by Mexican authorities
According to Teodoro Briseño Maldonado, Director of Money Laundering Prevention and Terrorism Financing for the Mexican financial services firm TM Sourcing, data from Mexico’s  Unidad de Inteligencia Financiera (UIF), or “Financial Intelligence Unit” indicate that the country launders anywhere from $10 billion to $50 billion annually.

Given that the oft-quoted number is $10 billion, to have Mr. Briseño Maldonado, who also works for Mexico’s National Banking Services Commission (Comisión Nacional Bancaria y de Valores, or “CNBV”), come out with an estimate that tops out at $50 billion is alarming.

Briseño Maldonado said that there was no specific methodology to the corruption, and that the most vulnerable sectors of the economy are real estate and automotive, with donations to charities often used as a way to cycle money back to family interests.

Speaking at the 16th Convention of the National Association of Exchange Centres and Money Transfer (Convención de la Asociación Nacional de Centros Cambiarios y Transmisiones de Dinero), Briseño Maldonado said that while the Mexican government frequently quotes the $10 billion number, he personally believes that FIU data supports an amount approaching the $50 billion mark.

Mexico has a new money laundering law that went into effect in July. The law would increase reporting requirements and make cash transactions of over $40,000 illegal. The idea is to target high-cash transfer areas of the economy like real estate, automobile sales, jewelry, gaming, and art. However, it has been criticized by some in the business sector as overly bureaucratic, while also punitive to other sectors that often have high-value cash transactions, such as agriculture.

For its part, the U.S. State Department estimates that between $19 billion and $29 billion is sent by drug traffickers from the US to Mexico each year.

(TE Wilson is the author of Mezcalero, a Detective Sánchez novel.)

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