TBML behind declining cash seizures on US-Mexican border

Trade-based money laundering (TBML) and other increasingly sophisticated methods of smuggling money are behind declining seizures of illicit cash along the US border with Mexico.

Seizures by US Customs and Border Protection (CPB) officers along the border rose from US$8 million in 2005 to a peak of US$37 million in 2009 but since then they have been in decline, falling to just US$7 million in 2016.

Declining seizures

Arizona’s ports saw a similar rise from US$500,000 to US$1.82 million between 2005 and 2008 and by 2011 they had reached US$12.1. But in 2016, customs officers at the state’s ports seized just US$960,000.

Despite declining seizures, experts are agreed that smuggling money across the border remains a billion US dollar plus problem.

Cash deposit restriction

After the Mexican government restricted the deposit of US dollars in Mexican banks and currency exchange houses in 2010, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) warned that money launderers would turn to TBML operations to move money across the border.

Some operations have been detected. In 2014, in a crackdown called Operation Fashion Police, 1,000 law enforcement agents operating in the Los Angeles fashion district arrested nine people who allegedly took part in a TBML scheme orchestrated by Mexican drug cartels.

Choice location

US authorities believe the area became a major repository for cartel cash because Los Angeles has a large Mexican expatriate population and trade flows freely between the US and Mexico.

FinCEN has announced that it has issued geographic targeting orders (GTOs) in some sectors and locations where TBML across the US-Mexican border is likely to be rife.

These include the fashion district of Los Angeles and electronics exporters in South Florida, and there may be other GTOs that FinCEN has not publicised.



Categories: Trade Based Financial crimes News