Mexico to ban payment in cash

Mexico says it is planning to tighten the noose around big-ticket cash purchases to curtail the flow of smuggled dollars and fight money laundering.

(PRESS TV)   President Felipe Calderon put forward the sweeping new measures Thursday to crack down on billions of dollars of the illicit money gained by the drug cartels and spent by them for more profit.

“This illicit money is vital for the criminal. That is what they seek, this money. It is also vital to finance their activities,” said Calderon, The Washington Post reported on Thursday.

If approved by the legislature, the legislation would not allow anyone to buy real estate in cash. Neither would it permit anyone to spend more than MXN 100,000 (USD 7,700) in cash on vehicles, boats, airplanes and luxury goods.

Violators of the new legislation would face up to 15 years in prison.

According to the National Drug Intelligence Center, around USD 18 billion to USD 39 billion in drug money is smuggled from the United States into Mexico where it is laundered.

“In the criminal world, cash is king, and in Mexico you have to go after the cash if you want to disrupt their operations,” said Jerry Robinette, a special agent in charge of the US Immigrations and Customs Enforcement agency in San Antonio, wrote the Post.

However, so far very little has been done “to either impede the movement of drug money into the formal economy or significantly reduce the flow of bulk cash across the US-Mexico border,” says Douglas Farah, a consultant for the Woodrow Wilson International Center for Scholars.

US and Mexican agents seize no more than 1 percent of this southbound cash, according to a Washington Post analysis, based on figures provided by both governments.

In Mexico, about three-fourths of all transactions are in cash.

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