Cross-border trade is growing across North America . U . S . trade with Canada and Mexico reached a record $ 1.78 trillion last year . 1 Mexico emerged as the top trade partner for the U . S . this year , with trade totaling $ 263 billion between the two countries during the first quarter of 2023 alone . 2 Mexico is well positioned to continue benefiting from investments driven by “ nearshoring ,” where production of goods is moved to North America , primarily at the expense of Asia . 3
While trade across the continent expands , we must also recognize the potential for various risks to grow accordingly , including financial crimes such as money laundering , as well as the need to act decisively and collaboratively to address these risks . The U . S . and Mexico have shared well-established and long-standing national security concerns ; many of these relate to violent transnational organized crime groups operating across the region that generate billions of dollars in annual profits . These massive profits need to be laundered to a great extent through the financial sector , and growth in overall trade flows will provide additional opportunities to hide and move these criminal proceeds .
Mexico continues to cope with powerful drug cartels based within its borders that are responsible for the transportation of illicit narcotics , including fentanyl , into the U . S ., its primary consumer market . These groups are , meanwhile , often bolstered by arms illegally trafficked southward from the U . S . 4 These highly profitable criminal groups typically do not just traffic drugs and guns . They also participate in a range of other criminal activities , including human trafficking ( HT ) and fraud , making them resilient to enforcement efforts . 5 Collaborative and innovative approaches are essential to combat these threats more effectively .
As a response to increasingly complex and globally interconnected financial crime threats across the world , we have seen numerous financial information sharing partnerships ( FISPs ) emerge over the past decade , according to the Future of Financial Intelligence Sharing ( FFIS ) research program . 6
What are FISPs ?
According to FFIS , FISPs are “ A type of public-private partnership ( PPP ), specifically voluntary initiatives between financial regulators , law enforcement [ LE ] agencies , governments and the private sector that provide a forum for strategic or tactical intelligence sharing . They encourage all parties to share information on individuals , entities , and organizations engaged in or reasonably suspected , based on credible evidence , of engaging in financial crime activity , or information on red flags and typology indicators in order to inform typology co-creation .” 7
These partnerships bring key stakeholders together from across the public and private sectors to share information and collaborate on top and emerging financial crime threats . As recent FFIS research has demonstrated , these partnerships have already shown positive results in many countries like the U . S . and Canada through enhanced information sharing and dialogue , improved suspicious activity reporting and risk mitigation by financial institutions ( FIs ). In addition , these partnerships have resulted in impactful government enforcement actions such as arrests , sanctions and asset seizures . FISPs can generate productive leads for suspicious activity related to financial crime , helping FIs to find more financial crimes and faster . They can also help eliminate unnecessary customer friction and frontline distraction by allowing FIs to pinpoint risk and target financial crime activity more precisely . Mexico is in the initial stages of developing its own FISP and the time to help foster this important progress is now .
Global FISP formation efforts
There are now more than 20 FISPs in the world , according to FFIS , a research initiative run through the Royal United Services Institute , a leading U . K . -based think tank . 8 FISPs are increasingly viewed as best practices for national-level efforts to combat financial crime and as critical components of more effective anti-money laundering / counter-terrorist financing ( AML / CTF ) frameworks .
• According to the Wolfsberg Group , “ PPPs often provide the most direct and impactful opportunity for FIs to collaborate with public sector stakeholders to identify and address financial crime risks .” 9 Furthermore , providing highly useful information to relevant government agencies in defined priority areas is one of the three key elements of an effective AML / CTF program and FISPs have been credited with improvements on this in several countries .
ACAMS Today September – November 2023 65