Imposition of Special Measure Prohibiting Certain Transmittals of Funds Involving CIBanco S.A., Institución De Banca Multiple

<RULE> DEPARTMENT OF THE TREASURY <SUBAGY>Financial Crimes Enforcement Network</SUBAGY> <CFR>31 CFR Chapter X, Part 1010</CFR> <SUBJECT>Imposition of Special Measure Prohibiting Certain Transmittals of Funds Involving CIBanco S.A., Institución De Banca Multiple</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Financial Crimes Enforcement Network (FinCEN), Treasury. <HD SOURCE="HED">ACTION:</HD> Order. <SUM> <HD SOURCE="HED">SUMMARY:</HD> FinCEN is issuing notice of an order prohibiting certain transmittals of funds involving CIBanco S.A., Institución De Banca Multiple, a financial institution operating outside of the United States determined to be of primary money laundering concern in connection with illicit opioid trafficking. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This action is effective [21 days after publication in the <E T="04">Federal Register</E> ]. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> The FinCEN Resource Center at <E T="03">www.fincen.gov/contact.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Summary of Order</HD> This order sets forth FinCEN's finding that CIBanco S.A., Institución De Banca Multiple (CIBanco), a Mexico-based commercial bank, is a financial institution operating outside of the United States that is of primary money laundering concern in connection with illicit opioid trafficking—specifically, through its provision of financial services that facilitate illicit opioid trafficking by Mexico-based drug trafficking organizations (DTOs), including (1) the Gulf Cartel, (2) the Beltran-Leyva Organization (BLO) Cartel, and (3) Jalisco New Generation Cartel (CJNG)—and imposes a prohibition on certain transmittals of funds involving CIBanco by any covered financial institution. <SU>1</SU> <FTREF/> <FTNT> <SU>1</SU>  The application of FinCEN's authorities in this order is specific to authorities provided by the Fentanyl Sanctions Act and codified at 21 U.S.C. 2313a. It is not intended to otherwise reflect the applicability of, or obligations under, any provision of the Bank Secrecy Act (BSA) or its implementing regulations. </FTNT> <HD SOURCE="HD1">II. Background</HD> <HD SOURCE="HD2">A. Statutory Provisions</HD> In 2024, Congress enacted the FEND Off Fentanyl Act, <SU>2</SU> <FTREF/> which among other things, added 21 U.S.C. 2313a  <SU>3</SU> <FTREF/> (section 2313a). Section 2313a grants the Secretary of the Treasury (Secretary) the authority to make a finding that “reasonable grounds exist for concluding” that any of the following is of primary money laundering concern in connection with illicit opioid trafficking: <FTNT> <SU>2</SU>  The FEND Off Fentanyl Act is Division E of Public Law 118-50 (Apr. 24, 2024). </FTNT> <FTNT> <SU>3</SU>  Section 2313a codifies section 7213A of the Fentanyl Sanctions Act, as amended by section 3201(a) of the FEND Off Fentanyl Act. The Fentanyl Sanctions Act is Title LXXII of Public Law 116-92 (Dec. 20, 2019). </FTNT> (1) One or more financial institutions operating outside of the United States; (2) One or more classes of transactions within, or involving, a jurisdiction outside of the United States; or (3) One or more types of accounts within, or involving, a jurisdiction outside of the United States. <SU>4</SU> <FTREF/> <FTNT> <SU>4</SU>  21 U.S.C. 2313a(a). </FTNT> Upon making such a finding, the Secretary is authorized to require domestic financial institutions and domestic financial agencies to take certain “special measures,” which are safeguards that may be employed to defend the United States financial system from money laundering risks connected to illicit opioid trafficking. <SU>5</SU> <FTREF/> The authority of the Secretary to administer section 2313a has been delegated to FinCEN. <SU>6</SU> <FTREF/> <FTNT> <SU>5</SU>   <E T="03">See</E> 21 U.S.C. 2313a(a). </FTNT> <FTNT> <SU>6</SU>  In accordance with Treasury Order 101-05 and 31 U.S.C. 321(b)(2), the authority vested in the Secretary under section 2313a has been delegated to the Director of FinCEN. </FTNT> Pursuant to section 2313a, the Secretary may impose one or more of six special measures. <SU>7</SU> <FTREF/> First, the Secretary may impose any of the five special measures provided for in 31 U.S.C. 5318A(b), commonly known as section 311 of the USA PATRIOT Act. <SU>8</SU> <FTREF/> Special measures one through four, codified at 31 U.S.C. 5318A(b)(1)-(4), describe additional recordkeeping, information collection, and reporting requirements. Through these special measures, the Secretary may impose such information collection and reporting requirements on covered domestic financial institutions and domestic financial agencies—collectively, “covered financial institutions.”  <SU>9</SU> <FTREF/> Special measure five, codified at 31 U.S.C. 5318A(b)(5), authorizes the Secretary, in consultation with the Secretary of State, the Attorney General, and the Chairman of the Board of Governors of the Federal Reserve System, to prohibit, or impose conditions upon, the opening or maintaining in the United States of correspondent or payable-through accounts by any domestic financial institution or domestic financial agency for, or on behalf of, a foreign banking institution, if such correspondent account or payable-through account involves one or more financial institutions operating outside of the United States that the Secretary has found to be of primary money laundering concern. <SU>10</SU> <FTREF/> Special measure six, codified at 21 U.S.C. 2313a(a)(2), allows the Secretary to “prohibit, or impose conditions upon, certain transmittals of funds (to be defined by the Secretary) by any domestic financial institution or domestic financial agency, if such transmittal of funds involves any such institution, class of transaction, or type of accounts.”  <SU>11</SU> <FTREF/> <FTNT> <SU>7</SU>  21 U.S.C. 2313a(a). </FTNT> <FTNT> <SU>8</SU>   <E T="03">See</E> 21 U.S.C. 2313a(a)(1). 21 U.S.C. 2313a(a)(1) explicitly references “the special measures provided for in section 9714(a)(1) of the National Defense Authorization Act for Fiscal Year 2021 (Pub. L. 116-283; 31 U.S.C. 5318A note)” (section 9714). Section 9714, in turn, references the five special measures set out in 31 U.S.C. 5318A(b)(1)-(5). </FTNT> <FTNT> <SU>9</SU>  31 U.S.C. 5318A(b)(1)-(4). </FTNT> <FTNT> <SU>10</SU>  31 U.S.C. 5318A(b)(5). </FTNT> <FTNT> <SU>11</SU>  21 U.S.C. 2313a(a)(2). </FTNT> Importantly, in connection with finding that a financial institution is of primary money laundering concern and imposing any special measure, section 2313a requires a finding that the relevant financial institution is “of primary money laundering concern in connection with illicit <E T="03">opioid trafficking</E> ” (emphasis added). 21 U.S.C. 2302 provides the operative definition of “opioid trafficking” for purposes of section 2313a, as any illicit activity: (1) to produce, manufacture, distribute, sell, or knowingly finance or transport—(a) synthetic opioids, including controlled substances that are synthetic opioids and listed chemicals that are synthetic opioids; or (b) active pharmaceutical ingredients or chemicals that are used in the production of controlled substances that are synthetic opioids; (2) to attempt to carry out an activity described above; or (3) to assist, abet, conspire, or collude with other persons to carry out such an activity. <SU>12</SU> <FTREF/> For purposes of this order, FinCEN interprets the term “synthetic opioid” to include fentanyl and fentanyl analogs, as well as precursors to fentanyl and precursors to fentanyl analogs. <SU>13</SU> <FTREF/> <FTNT> <SU>12</SU>  21 U.S.C. 2302(8). </FTNT> <FTNT> <SU>13</SU>   <E T="03">See, e.g.,</E> Drug Enforcement Administration, <E T="03">Synthetic Opioids Fact Sheet</E> (Dec. 2024), <E T="03">https://www.dea.gov/sites/default/files/2025-01/Synthetic-Opioids-Drug-Fact-Sheet.pdf;</E> World Health Organization, <E T="03">Opioid Overdose</E> (Aug. 29, 2023), <E T="03">https://www.who.int/news-room/fact-sheets/detail/opioid-overdose; see also</E> Drug Enforcement Administration, Docket No. DEA-1086, <E T="03">Special Surveillance List of Chemicals, Products, Materials and Equipment Used in the Manufacture of Controlled Substances and Listed Chemicals</E> (Oct. 24, 2023), <E T="03">https://www.govinfo.gov/content/pkg/FR-2023-10-24/pdf/2023-23478.pdf.</E> </FTNT> <HD SOURCE="HD2">B. Illicit Opioid Trafficking</HD> The sustained influx of fentanyl and other synthetic opioids into the United States has profound consequences, resulting in drug overdose becoming the leading cause of death for people aged 18 to 44 in the United States. <SU>14</SU> <FTREF/> To address the synthetic opioid crisis, it is necessary to target the money laundering efforts of the Mexico-based DTOs that are the primary source of fentanyl and other synthetic opioids trafficked into the United States. These DTOs manufacture synthetic opioids in clandestine laboratories in Mexico using precursor chemicals sourced largely from the People's Republic of China (China), traffic these synthetic opioids into and throughout the United States, and launder the illicit profits back to Mexico. <SU>15</SU> <FTREF/> <FTNT> <SU>14</SU>   <E T="03">See</E> Centers for Disease Control, <E T="03">CDC Reports Nearly 24% Decline in U.S. Drug Overdose Deaths</E> (Feb. 25, 2025), <E T="03">https://www.cdc.gov/media/releases/2025/2025-cdc-reports-decline-in-us-drug-overdose-deaths.html;</E> E.O. 14159, <E T="03">Imposing Duties To Address the Synthetic Opioid Supply Chain in the People's Republic of China,</E> 90 FR 9121 (Feb. 7, 2025), <E T="03">https://www.federalregister.gov/documen ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 60k characters. 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