Reported by FinCEN

The Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) to combat illicit financial activities involving Mexican currency exchange houses (centros cambiarios) and money transmitters operating in certain U.S. border areas. This order mandates specific record-keeping and reporting requirements for money services businesses (MSBs) in select counties in California, Arizona, New Mexico, and Texas. FinCEN’s goal is to prevent money laundering and other financial crimes linked to drug trafficking and organized crime.

Under the order, MSBs must report all currency exchanges and money transfers of $500 or more conducted for Mexican MSBs. This requirement applies to transactions involving cash, checks, or other monetary instruments. The report must include detailed customer identification (such as name, address, date of birth, and ID type) and transaction details. MSBs must file reports within 30 days of the transaction date. This stricter reporting standard enhances the ability of law enforcement agencies to track suspicious financial movements.

FinCEN issued this GTO due to the high risk of money laundering associated with cross-border transactions. Criminal organizations, particularly Mexican drug cartels, exploit MSBs to move illicit proceeds between Mexico and the U.S. By imposing this order, FinCEN aims to increase transparency in financial transactions and disrupt illicit cash flows that fund criminal enterprises. The order supplements existing anti-money laundering (AML) regulations and strengthens oversight of financial activities in vulnerable regions.

The order also includes compliance obligations for MSBs, requiring them to implement internal controls to ensure accurate reporting. MSBs must train employees, maintain detailed transaction records, and cooperate with regulatory authorities. FinCEN has the authority to take enforcement actions against non-compliant businesses, including penalties and legal consequences. The GTO underscores the importance of financial institutions in preventing money laundering and protecting the financial system from abuse.

In conclusion, this FinCEN order is a targeted measure to curb money laundering risks along the U.S.-Mexico border by requiring increased financial transparency from MSBs. By tracking transactions linked to Mexican currency exchange houses, law enforcement agencies can better identify suspicious activities and disrupt illicit financial networks. The GTO highlights the ongoing efforts of U.S. authorities to combat financial crime and protect the integrity of the financial system.

Read order from: https://www.fincen.gov/sites/default/files/shared/SWB-MSB-GTO-Order-FINAL508.pdf