Mexican President Felipe Calderón’s Government Puts Limits On Cash Exchanges; Hopes To Hinder Drug Cartels

June 16, 2010 7:00 am 0 comments

dollarToday in Latin America

Top Story — In an apparent attempt to stop drug cartels from laundering money, the Mexican government announced Tuesday strict limits on the exchange and deposit of U.S. dollars in the country’s banks.

The limits were announced as President Felipe Calderón faces criticism for his administrations failure to intercept the elicit money that cartels bring into Mexico.

“For the last few years we’ve seen the Mexican banking system receiving a very large amount of U.S. dollars in cash, far beyond what could be explained by the activities and dynamics of the economy in Mexico,” said Finance Minister Ernesto Cordero, according to the Los Angeles Times.

A U.S. and Mexican joint report stated that cartels send between $19 billion and $29 billion a year from the U.S. to Mexico, with just under half that amount making its way into banks.

The limits state that tourists and Mexican citizens without bank accounts will be able to exchange up to $1,500 a month, while Mexicans with bank accounts can change a maximum of $4,000.

Mexico has seen a surge in drug-related violence in June and officials believe that the limits will help reduce this violence, which some attribute to turf battles between rival cartels. Much of the money brought into Mexico from the United States is used to purchase high-powered assault weapons.

“This measure is consistent with a strategy of fighting not just drug trafficking but also organised crime,” Cordero said, according to the BBC. “We have to close the way to dollars from sources that may be illegal.”

Just Published at the Latin America News Dispatch

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  • Check out this weekend’s World Cup schedule and the Latin America News Dispatch staff picks to win it all.
  • Read Alison Bowen’s new piece, “Documented Immigrants Should Not Be Deported For Minor Drug Infractions, Supreme Court Says.”
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