Remittances and Money Laundering in Mexico

“Remittances sent from the United States to Mexico exceed informal finances that flow from developed to developing nations around the world by billions of dollars. Mexicans working both legally and illegally inside the United States sent an estimated US$28.1 billion to relatives in Mexico in 2005 alone. Money sent home to countries in Latin America and the Caribbean represents 70 percent of the world’s total amount of remittances. Most of this money originates in the US, where the formal financial sector remains reticent to remittance senders and companies because of worries over terrorist financing and money laundering.

The US Treasury Department includes all financial transfers within the realm of the formal financial structure. It applies controls against money laundering and terrorist financing to help detect and disrupt illicit fund transfers. These controls may lead to heavy fines or legal action that US banks would prefer to avoid rather than capture a part of remittance transfers.”

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