Financial Crimes and Terrorism Financing Plague Mexico

Mexico, already plagued by high levels of violence, faces a significant threat from financial crimes and terrorism financing, according to a new report by a Washington-based think tank.

Corruption: The Most Prevalent Financial Crime

The study analyzed expert interviews from 250 individuals across government, civil society, the private sector, and international organizations. It found that corruption is not only the most prevalent financial crime affecting Mexico but also the largest source of illicit proceeds in the region.

• Corruption was identified as the primary driver of illegal activities, including drug trafficking, migrant smuggling, human trafficking, and mineral trafficking.
• The report highlights the need for effective anti-corruption measures to combat these illicit activities.

Primary Channels Used to Move Illicit Proceeds

The study identified financial institutions, real estate, bulk-cash smuggling, and trade-based money laundering as the primary channels used to move illicit proceeds within Mexico. While some countries have made improvements to their anti-money laundering (AML) and combating the financing of terrorism (CFT) laws in recent years, implementation is often incomplete and political will varies.

Insufficient Efforts to Combat Financial Crimes

The report’s findings suggest that many experts believe current efforts to combat financial crimes are insufficient. The study recommends a range of measures to address this issue, including:

• Establishing specialized courts for financial crime cases
• Implementing staff exchange programs between countries
• Enhancing international cooperation and information sharing

International Donor Assistance Needed

The report highlights the need for international donor assistance, particularly from the United States, to better align technical assistance efforts with areas of greatest need. The study also recommends that FATF mutual evaluations take into consideration whether countries “weaponize” AML/CFT and anti-corruption laws against political opponents or non-profit organizations.

Methodology

The study’s methodology included:

• A review of national risk assessments, mutual evaluation reports, and international treaties on financial crimes and illicit economies
• Interviews with subject matter experts
• Quantitative analysis to estimate the scope of financial crimes

Implications for Policymakers

The report is part of a larger project by the think tank that aims to analyze financial crimes in Latin America and the Caribbean. The findings are likely to have significant implications for policymakers and law enforcement agencies seeking to combat these threats.