The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory and financial trend analysis highlighting the threat posed by Chinese Money Laundering Networks (CMLNs) to the U.S. financial system.
These networks facilitate laundering for Mexico-based drug cartels, linked to fentanyl trafficking and other crimes, exploiting legal restrictions in China and Mexico.
On August 28, 2025, FinCEN released a detailed advisory urging U.S. financial institutions to be vigilant against CMLNs used by Mexico-based drug cartels.
These cartels are designated as Foreign Terrorist Organizations due to their involvement in fentanyl trafficking and human trafficking.
The advisory aims to help institutions detect suspicious activities linked to these networks.
The Global Picture
According to FinCEN Director Andrea Gacki, CMLNs are pervasive globally and play a significant role in laundering proceeds from various illicit activities.
The networks exploit currency control laws in China and Mexico, creating a mutualistic relationship with cartels that need to launder large sums of money.
Complex Methods of Laundering
CMLNs employ sophisticated methods such as trade-based laundering, money mules, and insider recruitment within financial institutions.
They also use counterfeit Chinese passports for account openings and engage in complex real estate transactions involving shell companies or third parties to integrate illicit funds into the U.S. market.
Indicators for Financial Institutions
- Unusual account activity from individuals reporting occupations like “student” or “housewife.”
- Large volumes of unexplained wealth in accounts with minimal transaction history.
- Use of shell companies or third parties in real estate transactions.
- Frequent cross-border transactions without clear business justification.
Implications for Bilateral Relations
The advisory highlights how foreign currency restrictions impact illicit flows between China and Mexico, affecting economic relations with the U.S.
This situation underscores broader challenges in law enforcement cooperation among these nations concerning border security and financial regulation.
Additional Reading
Food for Thought
The ongoing efforts by FinCEN highlight the critical need for vigilance against transnational criminal organizations exploiting global financial systems.
By identifying red flags associated with CMLNs, U.S. financial institutions can better protect themselves from being conduits for illicit activities that threaten national security and economic stability.
Sources: U.S. Department of the Treasury, Financial Crimes Enforcement Network (FTA), and Financial Crimes Enforcement Network (Advisory).
Prepared by Ivan Alexander Golden, Founder of THX News™, an independent news organization delivering timely insights from global official sources. Combines AI-analyzed research with human-edited accuracy and context.
