MEXICO CITY – Mexico has announced plans to fight money laundering by using “kingpin” lists like those issued by the United States, but at least one expert warned Monday it still isn’t clear how the process will work.
The administration of President Enrique Pena Nieto has gone further than its predecessors in publicly naming tax evaders by publishing their names in press releases.
But Mexico has long been criticized because businesses designated by the U.S. Treasury Department as laundering conduits for drug cartels often continue to operate in Mexico.
Mexican officials had previously complained the U.S. lists didn’t include enough evidence to convince courts to shut down the companies, and many of the people named in the U.S. actions have denied any role in money laundering.
But Finance Secretary Luis Videgaray said recent reforms to Mexico’s financial laws will allow officials to prohibit bank and brokerage transactions, without the need for a prior court ruling to convict an individual or seize a company.
Videgaray said over the weekend at a conference in Washington that Mexico’s government will prohibit financial transactions by individuals or firms allegedly involved in money laundering or financing terrorism.
“For the first time we have the ability to issue a list, and have that list prohibit any financial institution from carrying out transactions with these persons,” Videgaray said Saturday.
Videgaray said those transaction bans will be based on U.S. and United Nations’ lists and Mexico’s own designations. But the law that allows those lists is relatively vague, and it is unclear whether the designations can be challenged in courts.
“I think we, or the Mexican government, should be very careful in how these lists are put together and who is included, because if we are not, then there will be 20,000 human rights complaints,” said Gerardo Palomar Mendez, a law professor at the Monterrey Technological university.
As to how the designations would be made, Palomar Mendez said Monday “It seems to me it isn’t clear.”
Last week, the U.S. Treasury Department’s Office of Foreign Assets Control added to its “kingpin” list a Mexican real estate developer who allegedly operated on behalf of fugitive drug lord Rafael Caro Quintero.
The designation prohibits Americans and U.S. companies from conducting financial or commercial transactions with those on the list, and freezes any assets they may have under U.S. jurisdiction.