In U.S. Migrant Crackdown, a Renewed Focus on Cross-Border Remittances

The United States is tightening its oversight of the tens of billions of dollars resident and undocumented migrants send home each year through Western Union, MoneyGram, and other financial institutions, according to a recent U.S. Treasury Department warning.

In an alert published last week, the Financial Crimes Enforcement Network (FinCEN) urged money services businesses and other firms to be “vigilant in detecting, identifying, and reporting suspicious activity” involving cross-border transactions linked to undocumented migrants within the United States.

“While the vast majority of remittances from the United States are legitimate and can provide critical financial support to family members abroad, FinCEN previously cautioned that malign actors have used low-dollar cross-border funds transfers to facilitate or commit terrorist financing, narcotics trafficking, and other illicit activity,” the bureau said in the notice.

FinCEN positioned the warning as part of a broader effort in recent years to shine a light on transactions benefiting Mexican drug cartels, including through Geographic Targeting Orders and other alerts highlighting cartel activity.

The new alert comes as the Trump administration couples its hard line on migration with its ongoing campaign against Latin American drug cartels, including sanctions, asset freezes and a new 1% federal tax on remittances sent by foreign nationals that is scheduled to take effect in 2027, according to reporting by El País.

Asked about the Treasury move, Mexican President Claudia Sheinbaum flatly rejected the notion that remittances are a major laundering channel for organized crime, El País said.

“This idea that remittances are used for money laundering, there is no evidence of it, and if there were, it would have to be punished, but that doesn’t mean we’re going to criminalize everyone who sends remittances,” Sheinbaum said at the National Palace, according to El País.

Rogelio Madrueño, a researcher at the Center for Advanced Studies in Security, Strategy and Integration at the University of Bonn, told the news outlet that criminal organizations recruit both Mexican and U.S. citizens to commingle dirty money with legitimate remittances and then send the sums across the border in small increments to avoid scrutiny.

In 2023, approximately 7% of remittances could be traced to illicit activity, Madrueño told El País.

“FinCEN is pointing out the obvious: for dirty money to arrive here from the United States, there must have been a conduit, and that conduit could be the money transmitters,” said José Antonio Quesada, adviser to the national president of the Mexican Institute of Finance Executives (IMEF), in comments to El País.

While the alert does not create a direct new legal obligation for Mexican banks, Quesada said they will have to tighten their own risk controls and monitoring, given that FinCEN has now flagged the issue as a priority.

According to figures cited by El País from the Bank of Mexico, remittances to Mexico hit a record $64.7 billion in 2024 but are now declining. From January to October 2025, inflows totaled $51.3 billion, a 5% drop compared with the same period a year earlier and the steepest decline for that span since 2009.

By contrast, a BBVA research report referenced by El País found double-digit growth in remittances to Honduras (24%), Guatemala (19.5%) and El Salvador (16.3%) in 2025, and a 5.4% rise for Colombia.