On June 25, 2025, FinCEN issued its first orders under the 2024 FEND Off Fentanyl Act (FOFA), imposing special measures against three Mexican financial firms—CIBanco S.A., Institución de Banca Múltiple (CIBanco), Intercam Banco S.A., Institución de Banca Múltiple (Intercam), and Vector Casa de Bolsa, S.A. de C.V. (Vector)—that it identified under its new authority as being “of primary money laundering concern” in connection with fentanyl trafficking by Mexican drug cartels. FinCEN’s orders prohibit covered institutions from sending or receiving funds, including convertible virtual currency, to and from CIBanco, Intercam, and Vector, or their branches, subsidiaries, and offices located in Mexico.
The orders cover a number of financial institutions, including, among others, banks, broker-dealers, money services businesses, and mutual funds. Also covered are persons subject to supervision by any state or federal bank supervisory authority, such as officers and directors.
These orders have implications for U.S. financial institutions, as well as other parties that may engage in financial transactions with these Mexican financial institutions.
Background
Congress enacted FOFA, a sanctions and anti-money laundering (AML) law, to expand the Treasury Department’s authorities to combat the U.S. fentanyl crisis by creating new tools to target opioid traffickers and the financial networks that enable them. The legislation grants the secretary of the treasury the authority to utilize special measures to target money laundering associated with the trafficking of fentanyl and other synthetic opioids, including by cartels.
This authority has been delegated to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and allows the agency to impose measures such as prohibiting or placing conditions on the transmittal of funds when there are reasonable grounds to conclude that there is a money laundering concern in connection with illicit opioid trafficking. Though similar to provisions in the USA PATRIOT Act that authorize the targeting of financial institutions, classes of transactions, or types of accounts found to be concerns for money laundering, FOFA is more limited in scope in that it specifically focuses on money laundering in connection with synthetic opioid trafficking.
Implications
In its recent actions under FOFA, FinCEN alleges that all three institutions “played a longstanding and vital role” in laundering millions for Mexican-based cartels, including three cartels which are themselves designated by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) as specially designated nationals (SDNs), two of the three of which being also designated as foreign terrorist organizations (FTOs).
- FinCEN determined that CIBanco processed more than $2 million in payments on behalf of Mexico-based companies to China-based companies for the purchase of precursor chemicals (those necessary to manufacture fentanyl). FinCEN also determined that, in 2023, a CIBanco employee knowingly facilitated the creation of an account to launder $10 million on behalf of a Gulf Cartel member.[1] Executives at Intercam are accused of meeting directly with suspected Jalisco New Generation Cartel (CJNG) members to discuss money laundering schemes and, similarly to CIBanco, to have processed $1.5 million in payments to a China-based supplier of precursor chemicals.[2]
- FinCEN determined in its order against Vector that, between 2013 and 2021, the company facilitated over $1 million in payments from Mexico-based companies to China-based companies known to have shipped precursor chemicals to Mexico. It also alleged that a Sinaloa cartel “money mule” used various methods to launder $2 million from the United States to Mexico through Vector.[3]
The FinCEN orders reflect one of the Trump administration’s highest priorities: to combat drug cartels and stop the flow of synthetic opioids and related illicit proceeds into the United States. The ramifications for the three Mexican entities are far-reaching. Not only will they be completely excluded from the U.S. financial system as U.S. financial institutions comply with the requirements of the FinCEN orders (U.S. financial institutions will be prohibited from sending or receiving transmittals of funds (including crypto transactions) to these Mexican institutions), but non-U.S. financial institutions may also seek to avoid transactions with them, in particular if such institutions have significant exposure to the U.S. market (including having a physical presence in the United States or relationships with U.S. correspondent banks). In addition, given that these actions are based on determinations by FinCEN that the banks are actively engaged in laundering millions for OFAC-sanctioned cartels, non-financial institutions may also consider de-risking from interactions involving the three Mexican financial firms out of sanctions compliance and reputational concerns.
In a statement made the same day FinCEN announced these orders, Mexico’s Finance Ministry acknowledged it was notified of FinCEN’s intent to issue these orders but said that it received “no conclusive information” in response to a request for evidence of illicit activity links to the three financial institutions. Almost immediately following the issuance of FinCEN’s orders against CIBanco, Intercam, and Vector, Mexico’s banking regulator announced it would temporarily step in to manage CIBanco and Intercam, in a move aimed at protecting the banks’ creditors and depositors. CIBanco has issued a statement saying it intends to collaborate with U.S. and Mexican regulators.
In light of these new orders, U.S. financial institutions (as set out above) should take steps to identify if they have any transactions or exposure to CIBanco, Intercam, or Vector. Any such transactions will need to be discontinued. U.S. financial institutions should also consider whether their compliance processes are sufficiently robust to identify and prevent any future transactions that may run afoul of the FinCEN orders. This includes reviewing due diligence measures and making any updates as needed. Lastly, the recent actions by FinCEN are the latest reminder of the need to update risk-based compliance programs to take account of the Trump administration’s increased enforcement priority on combatting cartels and narcotics trafficking. (Read MoFo’s earlier analysis of the implications of designating the cartels a foreign terrorist organization, which was followed days afterward by a first-ever indictment in the Western District of Texas of support to CJNG.) The new enforcement landscape can have particular implications for financial institutions in Latin America and on the multinational companies that transact with them.
[1] Imposition of Special Measure Prohibiting Certain Transmittals of Funds Involving CIBanco S.A., Institución de Banca Múltiple, 90 Fed. Reg. 27,770, 27,771–72 (June 30, 2025).
[2] Imposition of Special Measure Prohibiting Certain Transmittals of Funds Involving Intercam Banco S.A., Institución de Banca Múltiple, 90 Fed. Reg. 27,777, 27,778–80 (June 30, 2025).
[3] Imposition of Special Measure Prohibiting Certain Transmittals of Funds Involving Vector Casa de Bolsa S.A. de C.V., 90 Fed. Reg. 27,764, 27,765–68 (June 30, 2025).
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