septembre 22 2025

Ongoing Developments Related to FinCEN’s CIBanco Order

Authors:

Executive Summary

On June 25, 2025, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued its first orders (“Orders”) pursuant to the 2024 FEND Off Fentanyl Act (21 U.S.C. § 2313a) (the “FEND Act”), designating three Mexico-based financial institutions, CIBanco S.A., Institution de Banca Multiple (“CIBanco”), Intercam Banco S.A., Institución de Banca Multiple (“Intercam”), and Vector Casa de Bolsa, S.A. de C.V. (“Vector”), as being of “primary money laundering concern” in connection with illicit opioid trafficking. The Orders were originally published in the Federal Register on June 30, 2025, with an initial effective date of July 21, 2025.¹

On July 9, 2025, FinCEN extended the initial effective date by 45 days to September 4.² Most recently, on August 19, FinCEN further extended the effective date for the Orders to October 20, 2025.² The multiple extensions from the initial effective date reflect significant steps taken by the Mexican government to address FinCEN’s concerns,² including placing administrative and legal representatives in key managerial roles of the affected institutions to promote regulatory compliance and the prevention of illicit finance. The new effective date of October 20, 2025, allows for continued bank operations without endangering client resources and protects the savings and assets of depositors and investors. According to FinCEN, these steps, along with parallel review of the anti-money laundering/countering the financing of terrorism (“AML/CFT”) certification of the compliance officers in all three institutions, reflect a commitment to addressing financial integrity risks. FinCEN continues to monitor and work closely with Mexican authorities to ensure sustained progress.³

In response to FinCEN’s order, CIBanco filed a complaint in US District Court for the District of Columbia on August 17, 2025, seeking to enjoin the initial order.⁴ ⁵ CiBanco voluntarily dismissed its lawsuit based on FinCEN’s latest extension.

These developments occurred against the backdrop of FinCEN’s FAQs, which clarify that the Orders are not sanctions designations or OFAC actions, contain no requirement to block or freeze funds or property, do not impose new SAR reporting obligations, and do not prohibit transmittals to trusts with accounts held at institutions other than the designated entities.³

This Legal Update provides an overview of regulatory and institutional developments related to the Orders issued by FinCEN, including the extension of the effective dates of the Orders, clarification from FinCEN through its FAQs, CIBanco’s lawsuit filed in response to FinCEN’s CiBanco order, the acquisition of CIBanco and Intercam’s businesses by Mexican financial institutions unaffected by the Orders, and the potential impact of the Orders on US banks and credit facilities.

Background and Legal Developments

The 2024 FEND Act empowers the Secretary of the Treasury to impose certain obligations or restrictions on US financial institutions where it reasonably determines that a foreign financial institution, transaction, or account presents a “primary money laundering concern in connection with illicit opioid trafficking.”¹ Under this authority, FinCEN issued the Orders against CiBanco, Intercam, and Vector in June 2025.

The Mexican government has been working to avoid the ramifications of this designation. The Mexican government’s interventions include the National Banking and Securities Commission (“CNBV”) assuming temporary management of CIBanco and Intercam.⁶ Additionally, Mexico’s Finance Ministry announced plans to temporarily transfer the trust businesses of CIBanco and Intercam to Mexican development banks while seeking permanent private institutions to manage these operations.

On August 17, 2025, CIBanco filed a civil lawsuit in the US District Court for the District of Columbia,⁸ seeking to temporarily and then permanently suspend the enforcement of FinCEN’s order. In the initial complaint, CiBanco argued that the order was imposed without prior notice, without an opportunity to defend itself, and based on vague accusations.⁸ The lawsuit has since been voluntarily dismissed by CiBanco based on FinCEN’s latest extension. Because the parties have been operating under a regime of cooperation thus far, they have avoided the negative consequences that will arise if the Orders are effectuated.

For additional background and a discussion of considerations for financial institutions (foreign and domestic), see our recent Legal Update: FinCEN Designates Three Mexican Financial Institutions Under New Section 311 Authority.

Interpretive Guidance: FinCEN’s Clarifications (FAQs)

FinCEN’s FAQs remain the key interpretive guidance for US financial institutions to analyze the Orders.

The Orders are not sanctions nor do they result in OFAC designations: The Orders “are not considered sanctions designations or OFAC actions” and contain “no requirement to block funds or property.”³ Unlike OFAC sanctions, the Orders do not require covered financial institutions to block transactions or freeze funds.³ In addition, CIBanco, Intercam, and Vector will not be added to the OFAC SDN or Non-SDN Lists as a result of the Orders issued by FinCEN.³
No new reporting obligations: The Orders “do not impose a new SAR reporting obligation or otherwise alter existing SAR reporting obligations.”³ There is also no requirement to report to OFAC such transactions, unless such transactions are otherwise reportable to OFAC under OFAC’s authorities.³
Trust structures are outside the scope of the Orders: The Orders “do not prohibit a covered financial institution from engaging in a transmittal of funds to or from a trust of which CIBanco, Intercam, or Vector is a trustee if the account of the trust is held at a financial institution other than CIBanco, Intercam, or Vector.”³
May not apply to Mexico-based subsidiaries: The Orders may not apply to Mexico-based subsidiaries of US financial institutions. The determination will depend on the subsidiary’s legal status under US AML law and the capacity in which it operates. Mexican subsidiaries should contact their parent companies to develop a compliance approach in accordance with these Orders.³
Do not apply to historical transactions: The Orders do not apply to historical transactions, and covered financial institutions do not need to reject funds received before the Orders’ effective dates. Covered financial institutions are only responsible for applying the Orders to transactions that occur after the Orders are effective.³

Current Institutional Developments

On August 19, 2025, Grupo Financiero Multiva announced it reached an agreement to acquire the entirety of CIBanco’s fiduciary business.⁷ ⁹ The transaction is subject to regulatory approval; however, it represents a strategic move to ensure the operational continuity of the trusts managed by CIBanco.⁷ CIBanco accounted for nearly 28% of Mexico’s fiduciary market, with over 3 trillion pesos in fiduciary assets. Through its acquisition, Multiva hopes to strengthen its position in the fiduciary services market, which according to data from the CNBV, exceeds 11 trillion pesos (around $193 billion USD).⁷

Separately, Kapital Bank will acquire a “significant” part of Intercam Grupo Financiero’s operations,⁹ as announced by the Mexican finance ministry.

Impact on US Banks and Credit Facilities

The extension of the effective dates of the Orders to October 20, 2025, and the FAQs, provide reassurance to the fund finance market that cooperation and settlement are possible. For funds with investors using CIBanco in a trustee capacity but holding trust accounts elsewhere, the commitments remain unaffected by the order issued against CIBanco.³ The new effective date of October 20 gives regulators and the Mexican government more time to manage transitions, while FinCEN’s guidance confirms the Orders’ application is narrower than initially feared.

Conclusion

The decision to extend the CIBanco order to October 20 reflects FinCEN’s ongoing coordination with the Mexican government.² The published FAQs continue to provide clarity: the Orders are not sanctions measures, do not expand reporting duties, and do not reach trustee structures with accounts outside the designated institutions.³ These developments should be monitored closely as the October 20, 2025 deadline approaches, particularly given the ongoing institutional transitions following Multiva’s acquisition of CIBanco’s trust business and the continued temporary management by Mexican authorities.²