On November 13, the Treasury through its Office of Foreign Assets Control and FinCEN announced coordinated actions with the Mexican government to disrupt purported money laundering activities linked to a transnational criminal organization operating through Mexico-based gambling establishments. The Office of Foreign Assets Control imposed sanctions on 27 individuals and entities alleged to be involved in laundering narcotics proceeds and supporting cartel operations. FinCEN concurrently issued an NPRM under the USA PATRIOT Act, identifying transactions involving 10 gambling establishments located in Mexico as a class of transactions of “primary money laundering concern” due to their purported role in facilitating illicit financing for a cartel.

The proposed rule would prohibit covered U.S. financial institutions from opening or maintaining correspondent accounts for foreign banks if those accounts are used to process transactions involving any of the identified gambling establishments. Covered institutions would also be required to apply special due diligence to their correspondent accounts, including notifying relevant foreign correspondent account holders about the prohibition on processing transactions for the identified gambling establishments, implementing risk-based procedures such as transaction screening to detect such activity, and taking appropriate steps — such as terminating the account — if prohibited transactions are detected.

FinCEN’s proposal would not create new suspicious activity reporting (SAR) requirements but would permit financial institutions to consider this designation, “as warranted and appropriate,” when assessing related transactions. For SARs involving these gambling establishments, the agency directed institutions to use a designated code when filing. Comments on the proposed rule will be due on or before December 17.