For the first time, the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) invoked the Fentanyl Sanctions Act and the Fend OFF Fentanyl Act on June 25, 2025, to issue three separate orders that each designate a Mexico-based financial institution as a “primary money laundering concern in connection with illicit opioid trafficking.” The three banks are CIBanco S.A., Institution de Banca Multiple (“CIBanco”); Intercam Banco S.A., Institución de Banca Multiple (“Intercam”); and Vector Casa de Bolsa, S.A. de C.V. (“Vector”). Effective July 21, the three orders prohibit covered financial institutions from engaging in “transmittals of funds” involving the designated institutions.
The specific conduct giving rise to these designations varies by institution, but FinCEN found that each engaged in a “long-standing pattern of associations, transactions, and provision of financial services that facilitate illicit opioid trafficking by Mexico-based cartels,” including the procurement of precursor chemicals from China for unlawful purposes.
These orders prohibit any “covered financial institution,” as defined in 31 C.F.R. § 1010.100(t), from engaging in “transmittals of funds.” A “covered financial institution” refers to an agent, agency, branch, or office within the United States of any (i) bank (except bank credit card systems), (ii) broker or dealer in securities, (iii) money services business (i.e., a person that accepts checks or money in an amount greater than $1,000 on a given day in return for currency or a combination of currency and other monetary instruments), (iv) telegraph company, (v) authorized casino, (vi) card club or similar gaming establishment, (vii) person subject to supervision by any state or Federal bank supervisory authority, (viii) futures commission merchant, (ix) introducing broker in commodities, or (x) mutual fund. Engaging in “transmittals of funds” means “sending and receiving of funds, including convertible virtual currency.”
As noted in the orders, the sanctions are effective 21 days from their date of publication in the Federal Register to ensure compliance (i.e., until July 21, 2025). Violations may result in civil penalties of up to twice the value of transaction or $1,776,364 per violation, and criminal penalties of up to $1 million per transaction for willful violations.
Although the sanctions only directly impact covered financial institutions, other parties should consider that it may be difficult to process payments to or from accounts at these banks, as payments may not be processed by covered financial institutions. Furthermore, additional due diligence may be advisable for any transactions involving these banks, as they may raise red flags related to money laundering.