Wednesday, February 17, 2010

Attacking Money Launderers

Western Union's agreement to pay $94 million to the American government as a penalty for contributing to money-laundering made news on both sides of the border last week. Over the course of a decade, gangs used Western Union to send drug money from the US back to Mexico. The negative publicity will probably encourage not only the offending company but also other financial institutions to tighten up their internal anti-laundering practices, which is of course a positive development, but it's worth noting that even using an very conservative $10 billion annual estimate of drug income, the fine represents less than one tenth of a percent of the total revenue from drug trafficking in Mexico during that time period.

That's still, however, more than Mexico accomplished in attacking dirty money. I don't know the ins and outs of the recently passed asset-seizure law, and it could be that for technical reasons it's very difficult to apply liberally (although the recent criticism from Carlos Navarrete would seem to indicate that it's more a matter of will), but it's an open secret which bars and restaurants are fronts for drug traffickers here in Torreón. As ever, more could be done on this issue.

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