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The Bank of Mexico fears that the reform to receive dollars in cash will open the door to organized crime

2020-12-11T13:40:33.674Z


The Senate approved on Wednesday a controversial initiative for the central bank to raise foreign currency through entities


The reform of the Bank of Mexico Law will allow the entity to receive dollars in cash SOPA Images / Getty

The handling of cash dollars in Mexico has opened a new front of discrepancies between the Bank of Mexico and the government of Andrés Manuel López Obrador.

The central bank has questioned the approval of a reform that allows Mexican banks to receive US dollars in cash and that in turn obliges Banco de México to acquire the remainder of these transactions to incorporate them into the country's international reserves.

The entity has explained, in a statement, that this measure puts the financial system at risk by opening the door to money of illicit origin, something that organized crime groups could take advantage of.

The Mexican Senate approved on Wednesday night the reform of the Bank of Mexico Law, in its articles 20 and 24, after Senator Ricardo Monreal, from the Morena party and close to the president, presented the initiative in November.

The reform, according to the senator, seeks to benefit the population that spends in foreign currency in Mexico: Mexican migrants who visit the country or send remittances, foreign tourists and workers in the tourism sector.

The Bank of Mexico points out that the advantages for this population are minimal, since only 1% of the remittances received in Mexico are in cash.

Since Monreal - leader of his party's bench in the Senate and a regular visitor to the National Palace to have breakfast with the president - presented the initiative, voices from the Bank of Mexico began to point out the weaknesses of the reform and the effects that it could bring to the Mexican financial system.

The Bank of Mexico even presented a counterproposal that was ignored by the legislators.

"The competent authorities for the prevention of money laundering coincide in the effects that the project would cause in the standards that the financial system must establish when operating with foreign notes and coins, which are considered high risk, as well as the contagion of said risk to the central bank ”, says the entity in a statement.

The central bank has also indicated that its independence could be disrupted, since changes in the law are "imposing on the Bank of Mexico the obligation to buy these notes."

Since 1994, the Bank of Mexico has maintained an autonomy dictated by the Constitution and that allows it to make monetary policy decisions far from the wishes of the current Government.

That independence established Mexico's economic future after the 1994 crisis, known as the

Tequila Effect

.

López Obrador has sought in the last two years to influence the decisions of the governing board of the institution with messages in his daily conference on the management of monetary policy.

The central bank has ignored the messages.

“It is regrettable that reforms to the Bank of Mexico Law have been approved in the Senate that put international reserves at risk and that undermine the autonomy of the Bank of Mexico.

I hope that this situation is corrected in the Chamber of Deputies, ”wrote the deputy governor of Banco de México, Gerardo Esquivel, on his Twitter account on Wednesday night.

Esquivel was appointed by López Obrador to his position at the central bank and has promoted the policies with a social focus of his government.

His latest message also shows the cracks that are beginning to show among the president's supporters in recent months.

The fears about criminal organizations gaining access to Mexico's financial system are not unfounded.

Cases such as HSBC, which in 2012 was singled out for carrying out money laundering operations with funds from drug cartels;

or the millionaire fraud of the Oceanografía company against Banamex in 2013, are some of the most recent information on how the banking system can still be used for illegal operations.

In the case that has been approved by the Senate, and that is pending ratification by the Chamber of Deputies, the illicit funds could reach the coffers of the Bank of Mexico.

The Association of Banks of Mexico (ABM), which groups together all the financial institutions in the country, has supported the Government's initiative because it "coincides with the social objectives" it proposes.

Mexican bankers have assured that the financial system will be able to take on dollars and minimize the risks of illicit money transactions.

"Banks that offer services for receiving foreign currency in cash comply with Mexican laws and regulations, international standards and control processes to mitigate the risks of handling resources of illicit origin," they said in a statement.

The ABM - led by Luis Niño de Rivera, president of Banco Azteca - at the same time pointed out that changes in the Bank of Mexico Law should not affect its autonomy.

The independent senator Emilio Álvarez Icaza pointed out in the legislative session that the initiative pushes the central bank to become "a money washer" and accused the Salinas Group - to which Banco Azteca belongs and is owned by the third richest man in Mexico, Ricardo Salinas Pliego– to lobby legislators to approve the reform. "Is this reform dedicated to one of the president's main allies?" He asked. Banco Azteca is the banking institution that manages public resources for their distribution among the population that receives government aid in cash. In July, López Obrador boasted in the White House to senior officials of the Trump Administration that Banco Azteca branches owned by Salinas Pliego receive 45% of the remittances sent by Mexicans in the United States to their country.

Source: elparis

All news articles on 2020-12-11

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