Introduction
The implementation of stricter anti-money laundering (AML) measures is expected to affect the pace of remittances sent from the United States to Mexico, according to experts.
Expert Opinions
Alberto Ramos, Goldman Sachs Economist
Ramos, an economist at Goldman Sachs, anticipates that the tightening of US migration policies and measures to curb illicit drug trafficking and money laundering will impact the dynamics of formal remittance transfers.
Luis Gonzali, Franklin Templeton Vice President and Co-Director of Investments
Gonzali, Vice President and Co-Director of Investments at Franklin Templeton, has also expressed concerns that remittances might slow down if the origin of these funds cannot be justified.
Jesús González, CEMLA Remittances Forum Director
González, the director of CEMLA’s Remittances Forum, believes that formal registration of remittances undermines any arguments about the illicit origin of transfers.
He emphasizes that remittance companies conduct thorough and meticulous customer due diligence, making it difficult for illicit activities such as money laundering to occur through these channels.
González also points out that, by law, remittances cannot exceed $8,000.
Banco de México’s Stance
Victoria Rodríguez Ceja, Governor of Banco de México, stated during a press conference that all entities involved in these transfers, both within and outside Mexico, are obligated to comply with all anti-money laundering procedures.
Mexican entities must also report to the Financial Intelligence Unit (UIF) to significantly mitigate risks, she added.
US Increase in Vigilance
By late November, the Financial Crimes Enforcement Network (FinCEN) of the US Department of Treasury announced an increase in scrutiny of cross-border fund transfers, including remittances totaling over $72 billion since 2024.
FinCEN urged money transfer businesses to be vigilant in identifying and reporting suspicious transactions of at least $2,000 involving undocumented migrants, as they could be linked to money laundering and drug trafficking.
FinCEN acknowledged that most US remittances are legitimate and vital for providing financial support to relatives abroad. However, they have previously warned that malicious actors exploit these low-amount cross-border fund transfers for terrorism financing, drug trafficking, and other illicit activities.
Mexico’s President Claudia Sheinbaum dismissed the notion that remittances are used for money laundering during one of her morning press conferences, stating that there are no indications supporting such claims, and any evidence would need to be sanctioned.
Key Questions and Answers
- What are the new AML measures affecting remittances? The stricter anti-money laundering (AML) measures aim to reduce illicit drug trafficking and money laundering. These changes will subject remittance companies to increased scrutiny, making it more difficult to send remittances to Mexico.
- How will these measures impact remittances? Experts, including Alberto Ramos from Goldman Sachs and Luis Gonzali from Franklin Templeton, anticipate a decrease in remittances that could affect consumption in Mexico.
- What is the role of formal remittance registration? Formal registration of remittances, as explained by Jesús González from CEMLA, undermines arguments about illicit transfer origins due to thorough customer due diligence by remittance companies.
- What is the US Department of Treasury’s stance on remittances? FinCEN acknowledges that most US remittances are legitimate but warns that malicious actors exploit these low-amount cross-border fund transfers for illicit activities.
- What are the reporting obligations for Mexican entities? According to Banco de México Governor Victoria Rodríguez Ceja, Mexican entities involved in remittance transfers must comply with all AML procedures and report to the UIF to mitigate risks.
