The Mexican government boasts the record of remittances from the United States as a sign of success, but the figures raise suspicions for being too optimistic and for their alleged relationship with drug money laundering.
The Bank of Mexico (Banxico) reported this month that the country added in the first half of 2021 more than 23,618 million dollars in remittances, an increase of more than 22% in the same period of 2020, when the country received more than of $ 40.606 million, an all-time high.
“The figures are very disconcerting and do not add up. If one sees the mass of remittances reported in the National Household Income and Expenditure Survey (ENIGH) last year, they add up to less than 3,000 million dollars,” Jorge Andrés warns Efe Castañeda, director of applied research at Mexicanos Contra la Corrupción y la Impunidad.
THE DRUG TRAFFICKING FACTOR?
In the midst of this record, the US Drug Enforcement Administration, the DEA, notes in its 2020 National Drug Threat Assessment (NDTA) that these cash shipments are part of money laundering methods.
Mexican criminal organizations “use wire transfers, legitimate business accounts, funnel accounts, and structured deposits with remittance companies to move money while hiding the path of illicit income,” the report says.
The United States Department of Justice reported a year ago the arrest of 28 members of the Jalisco Nueva Generación Cartel (CJNG) for laundering 10 million dollars in Texas that they sent in “thousands of transactions” in remittances to Mexico.
Another example was the conviction of eight people last April in Ohio for laundering $ 44 million with the same system and for the same cartel.
“In the case of remittances, there is indeed a factor that can determine that there may be a percentage of organized crime that is using them to launder money,” explains Guillermo Huerta, coordinator of the Organized Crime Asset Recovery Diploma of the Anahuac University.
As the cases illustrate, the cartels “may be pressuring or extorting” Mexicans in the United States to carry out the “ant transfers”, that is, in small amounts that do not attract attention, deepens Professor Huerta.
The expert recalls that 2020 was “an atypical year” due to the pandemic, which caused the closure of the border between Mexico and the United States for non-essential crossings.
“We are seeing the resilience on the part of the drug markets, obviously at the moment that they close the border and certain commercial activities are suspended, they have to find how to continue operating,” says Huerta.
The Anáhuac University academic reports that it is a global issue that has already lit the red light of the International Financial Action Group (GAFI), to which the Financial Intelligence Unit (FIU) of Mexico belongs.
“In the case of the FIU, I believe that a good job is being done in identifying the resources, however, it is very important that a comprehensive strategy can be had,” he highlights.
FIGURES THAT DO NOT SQUARE
On the Mexican side, Jorge Andrés Castañeda points to the “data that does not add up” by citing that, according to the Bank of Mexico (Banxico), the state of Michoacán has received 25,000 million dollars in the last five years, which would be equivalent to 10 % of its GDP.
“That is a stratospheric figure. If all that money were actually reaching households, if it were reaching savings and consumption, it would be seen in the local economy and it is not the case,” he says.
The researcher suggests that Banco de México’s definition of remittances and the way in which they are accounted for encompasses “much more than worker transfers in the United States.”
Although he believes that the evidence on the alleged drug trafficking activity is “anecdotal”, he also asks to see which are the main receiving areas in Mexico.
“You can see certain municipalities that are relatively small, especially in Jalisco and Michoacán, where they have quite large numbers of remittances and are known as being part of territories currently occupied by cartels,” he says.
Despite the questions, President Andrés Manuel López Obrador usually presumes remittances as a factor of economic development, which, according to him, reach 10 million poor families in the country.
“I find it quite regrettable that the strategy of a country is to depend on the strategy of our workers abroad, even if all that money were indeed remittances, it is not an achievement of this government,” says Castañeda.