Mexico readies FX, bond conduct rules in wake of price fixing probe

5/24/2017 Reuters

banco de mexicoMexico’s central bank is preparing to implement a new code of conduct governing foreign exchange and bond trading in the second half of the year, according to a copy of a presentation published Wednesday.

The announcement follows news last month of a probe by Mexico’s anti-trust agency into collusion by major banks to fix prices in central bank debt auctions.

Banco de Mexico Governor Agustin Carstens gave the presentation on Monday at a closed door meeting of the International Council of Securities Associations that was hosted by the Mexican Association of Securities Intermediaries (AMIB).

Carstens said Mexico’s central bank will only trade with banks that adhere to best practice forex rules, designed by the Bank for International Settlements’ Foreign Exchange Working Group that are due to be published on May 25, according to the presentation.

The central bank declined a request for further comment.

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US Bank Admits Criminal Failure to Stop Money Laundering to Mexico

5/23/2017 InSight Crime

banamexA subsidiary of one of the largest banking corporations in the United States has admitted to engaging in criminal behavior by failing to properly investigate tens of millions of dollars in suspicious money transfers to Mexico, highlighting the important role US financial institutions play in laundering money for Latin American criminal organizations.

Banamex USA, a subsidiary of the US banking conglomerate Citigroup, accepted responsibility for “criminal violations by willfully failing to maintain an effective anti-money laundering (AML) compliance program … and willfully failing to file Suspicious Activity Reports,” according to a May 22 press release from the US Department of Justice.

In exchange for cooperating with the government’s investigation, paying a $97 million fine and admitting wrongdoing, the bank will not be formally prosecuted for breaking the law.

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Crime Groups Control 65 Percent of State Prisons in Mexico: Report

5/23/2017 InSight Crime

prison cell blockOrganized crime groups control 65 percent of state prisons in Mexico, according to a government report about prison conditions in the country published this week. The figure reaffirms the poor conditions of Mexican prisons, which have long been plagued by corruption, escapes by top criminal suspects, and the participation of prison officials in various crimes.

A video made public in early May serves as the most recent example of the lack of control prison authorities have in Mexico.

The recording shows a party held in Puente Grande, one of the country’s maximum-security prisons. Various members of the Jalisco Cartel – New Generation (Cartel Jalisco Nueva Generación – CJNG) are shown celebrating José Luis Gutierrez Valencia, alias “Don Chelo,” who is suspected to control the penitentiary. Tellingly, there is no discernible presence of security officials in the video.

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Rights Commission: Journalist Kidnapped in Southern Mexico

5/20/2017 New York Times

michoacanenglishMEXICO CITY — Mexico’s National Human Rights Commission is urging authorities to locate a journalist and media executive abducted in the southern state of Michoacan amid a wave of media slayings in recent weeks.

Salvador Adame is reportedly the owner and director of the local channel 6TV.

The rights commission says he was grabbed by armed men and forced into a vehicle Thursday night in the city of Nueva Italia, part of a violence-plagued region known as the “Tierra Caliente” or “Hot Lands.”

In a statement Friday, it also called on Michoacan officials to protect Adame’s family and his co-workers at 6TV.

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VIDEO & ARTICLE | Rethinking U.S.-Mexico Security Strategy

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“And so we have an initiative underway where the senior members of the Mexican Government will be coming up here on May the 18th to participate in an interagency process with us to see if we can get at transnational organized crime and begin to break these organized crime units up.“  Secretary of State Rex W. Tillerson speech to Department of State employees, May 3, 2017. 

U.S. Secretary of State Rex W. Tillerson’s maiden speech before U.S. Department of State employees on May 3rd forms the backdrop for an important meeting he will host with his Mexican counterpart today.  It will be an opportunity to redefine U.S.-Mexico security cooperation for the foreseeable future.  The question is whether that opportunity will be used to define new and effective ways to address the vexing problem of organized crime, corruption, and extreme violence, or whether it will simply result in a doubling down on what has already been tried and mostly failed.  In other words, will the new plan look a lot like the old plan with both sides simply trying harder?

Secretary Tillerson’s words are reassuring in part because they signal a willingness to work together with Mexico to address serious problems of insecurity.   It goes without saying that nothing is more important to the immediate safety and security of the United States than its relationship with its neighbor Mexico.  But the President’s own statements about Mexico, Mexicans, and their security forces during the campaign and after his election raised concerns that he might undermine decades of work to reduce tensions between the two countries and to address common security threats through a framework of “shared responsibility.”

But cooperation is not an end in itself, but a means to an end and what must be examined is whether the strategy being pursued is appropriate.  The Secretary’s suggestion that the focus of security cooperation should be “transnational organized crime and (to) begin to break these organized crime units (OCU) up,” raises significant questions.

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VIDEO & OP-ED | America & Mexico to Tackle Increasing Drug Violence

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Secretary of State Tillerson and Homeland Security Secretary Kelly meet their Mexican counterparts on May 18 to discuss the fight against organized crime and drug smuggling. This is a positive sign in a relationship that has been shaken by U.S. criticisms this year. Both countries need good—and better—cooperation against drugs and cartels. The United States is suffering an epidemic of opioid overdoses fueled by the abuse of prescription drugs and heroin and synthetic opioids smuggled from Mexico. Mexico is suffering a surge in homicides fueled in part by the criminal gangs that feed U.S. drug demand and reap billions of dollars in profits.

Mexico and the United States have improved cooperation. However, that progress has not been sufficient to stem the smuggling of deadly drugs or the drug-related violence in Mexico. More progress will require higher levels of trust, commitment and investment by the two governments, and creative thinking to find better ways to address illegal drug use and flows.

Launching a reinvigorated effort against international criminal groups will also depend on the state of U.S.-Mexico relations and, specifically, if the governments find a way to work for mutually acceptable outcomes on two other important topics: trade (NAFTA) and migration. It is hard to imagine that the two governments can forge the confidence needed to reach a new level of collaboration against criminal networks without bilateral relations moving beyond the recent high-profile tensions. Mexican domestic politics, for one, won’t allow it.

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Mexico president heads to Guatemala to discuss migration, extradition

5/17/2017 Reuters

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Flickr/Presidencia de la República

Mexican President Enrique Pena Nieto will travel to Guatemala to meet its leader Jimmy Morales on June 5 and 6, the Mexican president’s office said in a statement on Wednesday.

The two presidents agreed on the date in a phone call on Wednesday, according to the statement.

The meeting comes as Mexico begins to take a larger role in the regional migration issue. The vast majority of Central American migrants heading for the United States enter Mexico by crossing the border from Guatemala, and the U.S. government has been leaning on Mexico to do more to make people stay.

A Mexican diplomatic source said the visit was in part to offer support to Morales, whose family has become embroiled in a corruption scandal, and to discuss the extradition of Javier Duarte, a former ruling party governor and Pena Nieto ally who was arrested in the Central American country after fleeing graft and organized crime charges.

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