By Janetsky, Megan
CITY OF MEXICO (AP) Following accusations that they assisted in the launder of millions of dollars for drug cartels, three Mexican banking firms that were sanctioned by the Trump administration last week have experienced a series of negative economic repercussions.
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The U.S. Treasury Department declared that it was preventing transactions between U.S. banks and the brokering company Vector Casa de Bolsa, as well as Mexican operations of CIBanco and Intercam Banco. The claims have been vehemently denied by all three.
Although the sanctions statement contained specific accusations about the way money was routed through the firms, Mexico’s president, Claudia Sheinbaum, accused U.S. officials of not offering any evidence to support their claims. It described how mules transferred funds through American bank accounts and interactions with Chinese businesses that U.S. officials claimed supplied fentanyl production supplies.
In order to safeguard creditors, Mexico’s banking regulator has declared that it will temporarily assume administration of CIBanco and Intercam Banco.
Sheinbaum stated on Tuesday that the Mexican government is making every effort to guarantee that creditors are not impacted and that they have every right to withdraw their funds from the banks.
The sanctions will take effect 21 days after the notification, according to the U.S. Treasury Department.
Citing anti-money laundering concerns, Fitch Ratings downgraded the three institutions and other affiliates, stating that the downgrade reflects the potential negative impact of the sanctions.
“Given the possible impact on their ability to meet their financial obligations, the new ratings reflect the significantly more vulnerable credit profile of these entities in response to the aforementioned warnings,” the credit rating agency said in a statement.
Visa Inc. unilaterally decided to disconnect its platform for all international transactions through CIBanco, CIBanco announced Monday, with minimal prior notice. Visa was accused by the bank of failing to adhere to the 21-day grace period specified in the sanctions.
The bank said, “We would like to reaffirm that your funds are secure and can be reimbursed through our branch network.” We remind our clients that CIBanco had no control over this decision.
Additionally, S&P Ratings removed CIBanco from its ratings index, citing the termination of its contracts with the bank subsequent to the U.S. Treasury declaration.
