The southwestern border of the U . S ., spanning 1,954 miles , is more than a geopolitical boundary between the U . S . and Mexico . Its vast expanse has become synonymous with both opportunity and challenges over the years . While many think of trade , commerce and cultural exchange when considering this region , ignoring the undertow of illicit activities is impossible ― the border remains a hot spot for drug trafficking , illegal arms trade , human trafficking ( HT ) and smuggling operations , necessitating vigilant scrutiny and transaction monitoring within the U . S . financial system .
Financial institutions ( FIs ) are tasked with understanding the concerns along the U . S . -Mexico border and incorporating these considerations into their Bank Secrecy Act ( BSA ) policy and procedures . It is critical to monitor for suspicious activity to ensure proceeds from these illicit activities do not infiltrate the U . S . financial system , and regulators will expect it .
Significant threats on the border
Drug trafficking : The border is a primary entry point for illicit drugs coming into the U . S . from Mexican drug cartels . The Sinaloa Cartel and the Jalisco New Generation Cartel ( CJNG ) have extensive networks that smuggle narcotics into the U . S ., including marijuana , methamphetamine , cocaine , heroin and fentanyl . Such drug operations require significant sums of money to maintain . Money transfers , cash activity and other financial indicators can lead to funding sources and financial beneficiaries , making it essential for institutions to be on high alert . In 2019 , the Financial Crimes
Enforcement Network ( FinCEN ) issued an “ Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and Other Synthetic Opioids ” 1 to alert FIs of illicit schemes related to the trafficking of these deadly drugs . The advisory describes several typologies and red flags to assist in suspicious activity monitoring .
Fentanyl crossing the border is a crisis that must be considered when developing an anti-money laundering ( AML ) program . According to the National Institute on Drug Abuse ( NIDA ), deaths involving synthetic opioids , primarily fentanyl , continued to rise , with 70,601 overdose deaths reported in 2021 . 2 In 2022 , NIDA reported that 109,680 people died as the fentanyl crisis deepened . 3 According to a 2019 FinCEN advisory , the U . S . is in “ an unparalleled epidemic of addiction and death fueled by the illicit trafficking , sale , distribution , and misuse of fentanyl and other synthetic opioids .” 4 Transnational criminal organizations ( TCOs ), “ international drug traffickers , money launderers and other criminal actors profit off the misery of victims . Criminal networks and others generate billions of dollars in illicit drug proceeds and use the U . S . financial system and economy to advance their criminal enterprises and continue this epidemic to generate more criminal profits , resulting in more deaths and addictions .” 5 FIs should monitor transactions to and from China , in particular , as the sale or purchase of fentanyl often involves money transfers to individuals in China and other foreign countries . The transactions are usually structured to evade BSA reporting .
HT and smuggling : Apart from regular migration , there are instances of people being trafficked or smuggled across the border for forced labor , sexual exploitation or criminal activities . Human smuggling is defined by the United Nations 6 as “ the facilitation , for financial or other material gains , of irregular entry into a country where the migrant is not a national or resident . The criminals behind this highly profitable business seize the opportunity created by the need or desire of people to escape not just poverty and lack of employment opportunities but also natural disaster , conflict or persecution .” 7 While smugglers , or “ coyotes ,” prey on these vulnerabilities , many migrants die of thirst in deserts , perish at sea or suffocate in containers in a desperate search for a better life .
As mentioned by the Rural Health Information Hub , “ The Department of Homeland Security defines human trafficking as using force , fraud , or coercion in exchange for labor , services , or a commercial sex act .” 8 The illegal trafficking of humans is a multi-million-dollar industry . Tracking payments , especially large or recurring ones , to familiar sources in border regions could signify involvement in such activities .
While a separate crime , HT gets a lot of exposure in the media and attention from law enforcement ( LE ). However , its sister crime ― human smuggling ― can be just as deadly . Human smuggling is not a victimless crime , as evidenced by the San Antonio , Texas , discovery in June 2022 of 53 migrants , including children , who died in a tractor-trailer as they attempted to enter the U . S . illegally . 9 The smuggler abandoned the locked trailer in sweltering South Texas temperatures with no water , and the people perished . This example is only one of the many yearly tragedies along our southwest border .
HT and smuggling have been named as part of FinCEN ’ s National Priorities , and FIs should include these concerns in their risk assessment and AML program . In January 2023 , FinCEN issued an alert on human smuggling along the U . S .
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