RegAlert1999-06-01 | FinCEN Advisory - Issue 12Added · Updated
Black Market Peso Exchange Update (FinCEN Advisory - Issue 12)
The advisory updates depository institutions and money transmission firms on the Black Market Peso Exchange system, highlighting the misuse of non-bank money transmitters to place narcotics proceeds into the U.S. financial system. It identifies specific unusual transaction indicators, such as money transmitters sending large funds to U.S. exporters or to nations outside their routine destinations, as potential components of this laundering scheme. The Treasury Department states that any report relating to a transaction described in the advisory constitutes a reportable suspicious transaction under 31 U.S.C. 5318(g)(2) and (g)(3).
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United States Department of the Treasury Financial Crimes Enforcement Network Subject:
Black Market
Peso Exchange
Update
Date:
June
1999
Advisory:
Issue 12
FinCEN Advisory
This advisory provides banks and other depository institutions with additional information concerning the Black Market Peso Exchange system. Overview - FinCEN Advisory Issue 9 FinCEN Advisory Issue 9 (November 1997) discussed in detail a largescale, complex money laundering system that is used extensively by Colombian drug cartels to launder the proceeds of United States narcotics sales. The system is called the Black Market Peso Exchange (BMPE) because its purpose is to facilitate “swaps” of dollars owned by the cartels in the United States for pesos already in Colombia, by selling the dollars to Colombian businessmen who are seeking to buy United States goods for export. As explained in greater detail in Advisory Issue 9, the Black Market Peso Exchange system operates through brokers who purchase narcotics proceeds in the United States from the cartels and transfer pesos to the cartels from within Colombia. ❏ The dollars are placed — that is, “laundered” — into the United States financial system by the peso broker without attracting attention; ❏ The dollars are then “sold” by the brokers to businessmen in Colombia who need dollars to buy United States goods for export; and ❏ Goods ready for export are often actually paid for by the peso broker, using the purchased narcotics dollars, on behalf of the Colombian importer. This underground financial and trade financing system is a major—perhaps the single largest avenue for the laundering of the wholesale proceeds of narcotics trafficking in the United States. It also reflects the desire of Colombian importers (who may otherwise be legitimate businessmen) to avoid paying extensive Colombian import and exchange tariffs by smuggling goods into Colombia. Finally, this system exploits United States exports in the recycling of narcotics dollars. The U.S. Customs Service believes that the
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Source: Financial Crimes Enforcement Network — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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