Maxine Waters Questions FinCEN Director on Cartel Ties to Chinese Money Laundering

Cartel Links to Chinese Money Laundering

• 💡 FinCEN has identified Chinese money laundering networks as a prevalent and increasing method leveraged by cartels.
• 🎯 These networks utilize US and foreign corporate structures to hide, launder money, park assets, and repatriate illicit funds from criminal activities like human trafficking and smuggling.
• ⚠️ Under Secretary of Treasury John K. Hurley confirmed that these networks enable cartels to distribute fentanyl, conduct human trafficking, and harm communities.
• 💰 The cartels exploit laws in Mexico and China regarding US dollar flows, using an informal, decentralized network to launder money from narcotics exports.

De-risking Strategy and Caribbean Impact

• 📌 In 2023, the Treasury Department released a US governmentwide de-risking strategy as required by the AML Act of 2020.
• 🗺️ This strategy aims to address the negative effects of de-risking on Caribbean nations and territories, which are often cut off from international banking.
• 🤝 FinCEN has noted that its policies should not lead to the de-risking of populations, emphasizing that banks complying with Bank Secrecy Act obligations and managing illicit finance risks are not prohibited from serving specific customer classes.
• 🏦 FinCEN is working with federal banking agencies to clarify that compliance with BSA obligations does not preclude providing services to any customer type, especially in the context of correspondent banking services in the Caribbean.
• 📈 The agency is committed to providing follow-up information on the factual basis for examining de-risking issues and planned actions for the next year.