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Cablegate: Terrorist Finance: Mexican Official Discusses

VZCZCXRO7055
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #1119 0651420
ZNR UUUUU ZZH
P 061420Z MAR 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 5663
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/CDR USNORTHCOM
RHEHNSC/NSC WASHDC

UNCLAS MEXICO 001119

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/MEX, EEB/ESC KATHERINE LEAHY AND LEANNE
CANNON, EEB/ESC/TFS JEAN CLARK, S/CT PATTY HILL, S/CT
FINANCE GALER AND NOVIS
TREASURY FOR IA (ALICE FAIBISHENKO)
TREASURY FOR FINCEN
DOJ/AFMLS FOR ROBERT STAPLETON

E.O. 12958: N/A
TAGS: EFIN ETTC KTFN PREL PTER MX
SUBJECT: TERRORIST FINANCE: MEXICAN OFFICIAL DISCUSSES
ILLICIT CASH COURIER ACTIVITY

REF: A. SECSTATE 16120
B. MEXICO 961

1. (SBU) The head of Mexico's Financial Intelligence Unit
(FIU), Luis Urrutia, called Econoff on March 5, 2007 about
the non-paper she sent him on illicit cash couriers (Refs A
and B). Urrutia told Econoff that Mexico understands the
threats associated with illicit cash courier activity and
that the government is working to improve its handling of
this issue. He said that the Bank of Mexico (BOM) sent a
questionnaire to all banks asking about their clients, the
types of transactions conducted, and the amounts of
transactions for 2005. This study is not available to the
public, but Urrutia said the government plans to write a
paper on the results. He said the government will conduct a
similar study for 2006.

2. (SBU) The 2005 study showed that $11 billion flowed from
Mexico to the U.S. through the financial system. While most
of the flows are from the formal economy, some are from the
informal economy and include ill-defined activities. Urrutia
noted that some of the flows are through unlicensed foreign
exchange offices called centros cambiarios, which he referred
to as "the weakest link." He said that centros cambiarios
are a growing concern for Mexico because the Tax
Administration Service (SAT) is unable to supervise them
efficiently. SAT is mostly staffed with tax auditors who are
not used to dealing with these unlicensed enterprises. The
FIU is working with SAT, the BOM, and supervisors of the
banking system to figure out how to improve supervision of
centros cambiarios. Urrutia noted that Mexico is working
closely with FinCEN on this issue. (Comment: These efforts
relate directly to Mexico's requests for information from the
USG on Currency and Monetary Information Report (CMIR)
activity. The CMIR information would allow the GOM to
eliminate known and reported transfers and focus on the
suspicious ingress of funds from the U.S. End Comment.)


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity
GARZA

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