Mexican authorities are stepping up their fight against cartel money laundering following pressure from the U.S. and other international authorities. The country’s legislature recently expanded anti-money-laundering laws to impose stricter due diligence requirements and push companies to collect more information on their controlling ownership, among other measures. President Claudia Sheinbaum also installed a new head of Mexico’s financial intelligence unit, which gathers information on suspicious transactions and reports them to law enforcement.

But anti-money-laundering experts question whether the measures will improve the country’s enforcement and be enough to satisfy the Trump administration and the Financial Action Task Force, an international body that sets standards for combating money laundering. U.S. authorities and FATF, which can each effectively sever Mexico’s banks from their global counterparts, have criticized Mexico’s low money-laundering conviction numbers.

Last June, Treasury took action, blacklisting Mexican banks CIBanco, Intercam Banco and broker dealer Vector Casa de Bolsa for allegedly helping cartels launder the proceeds of their fentanyl sales. The move cut off the institutions from the U.S. financial system, temporarily stranding their assets and prompting Mexico’s securities regulator to take over their operations and auction off their assets. The companies have denied wrongdoing.

Mexico’s anti-money-laundering revamp was partly aimed at ensuring the country stays off FATF’s “gray list,” a designation that has posed harsh economic consequences for countries subject to it. Gray-listed countries have seen capital inflows decrease by an average of 7.6% of their gross domestic product, according to a 2021 paper from the International Monetary Fund.