July 20, 2012 –
FinCEN issues advisory on U.S. currency restrictions in Mexico

On Wednesday, July 18, 2012, the Financial Crimes Enforcement Network (“FinCEN”) issued an Advisory (the “Advisory”) reminding financial institutions of previously enacted Mexican regulations imposing restrictions on Mexican financial institutions for transactions in U.S. currency (the “MX Currency Restrictions”).

In 2010, FinCEN issued a similar advisory  alerting financial institutions of the then recently-enacted MX Currency Restrictions.

The Advisory affirms that the MX Currency Restrictions are likely having a direct impact on illicit funds being moved through U.S. financial institutions.

The Advisory provides examples of activity commonly seen prior to the MX Currency Restrictions to establish a baseline for future monitoring purposes, as well as recently observed activity.

The Advisory further states that funnel account activity, or interstate cash, has become an increasingly relied-upon method for the movement of potentially illicit funds between disparate geographic areas and provides additional methodologies and potential red flags financial institutions may also wish to consider when identifying suspicious activity.

Given the recent changes resulting from the MX Currency Restrictions, financial institutions should be mindful of changes in transaction patterns based on their customers, products and services, and geographic locations.

Accordingly, financial institutions may need to modify their existing BSA/AML policies and procedures to identify suspicious activity and comply with SAR reporting requirements as a result of the MX Currency Restrictions.

Read the July 18 advisory by FinCEN: Update on U.S. currency restrictions in Mexico.

For more information, please contact Gunster’s Banking and Financial Services practice attorneys.