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Mexico City, June 27 EST: Terrafina, a major industrial real estate trust in Mexico, is removing CIBanco as trustee after the U.S. Treasury blacklisted the bank over alleged links to fentanyl-related money laundering — a move that speaks to how financial reputations can evaporate overnight in today’s compliance-driven markets.
The announcement came Friday, just two days after the Treasury’s Financial Crimes Enforcement Network (FinCEN) named CIBanco, along with Intercam Banco and Vector Casa de Bolsa, as institutions “of primary money laundering concern.” It was the first use of powers under the FEND Off Fentanyl Act, passed by Congress in 2023 to give Washington sharper tools to target drug cartel financing.
Fast-Moving Fallout
On June 25, FinCEN published allegations that the three firms had helped move drug proceeds and payments for precursor chemicals tied to fentanyl production. Within 24 hours, Mexico’s financial regulator placed CIBanco and Intercam under temporary control to contain the damage.
By June 27, Terrafina made its move — quietly, but decisively. The REIT said it would terminate CIBanco as trustee, a relationship that effectively made the bank responsible for holding and managing assets on behalf of Terrafina’s shareholders.
No replacement has been named, but the company made clear the decision was aimed at minimizing risk. “This was a proactive step to preserve operational and reputational stability,” a source close to Terrafina’s leadership told New Jersey Times. “You can’t afford to wait this out when the counterparty is under international sanction.”
Regulatory Questions, Diplomatic Heat
What makes this episode unusual is the speed. For a REIT — particularly one with cross-border investors — cutting ties with a trustee is rarely done without months of planning. But sanctions tend to rewrite the playbook.
In its filing, FinCEN accused the banks of enabling “high-risk transactions” with ties to narcotics financing, noting that CIBanco and Intercam managed over $11 billion in combined assets. The report alleged facilitation of bulk cash transfers and transfers linked to chemical procurement from Asia — mechanisms often used by criminal networks to avoid detection.
All three institutions have denied wrongdoing. CIBanco said it would cooperate with authorities and defended its internal controls. Intercam and Vector issued similar statements.
Mexico Pushes Back
The sanctions have also drawn a sharp response from President Claudia Sheinbaum, who said the U.S. had provided no formal evidence and called the move “unilateral.” Mexico’s financial authorities have so far found no criminal violations, according to public statements, though administrative issues were acknowledged.
“We respect international cooperation,” Sheinbaum said in a briefing, “but sovereignty and due process come first.”
That’s created a complicated picture: Mexico trying to avoid panic at home while the U.S. increases pressure abroad.
Real Risk for Counterparties
For Terrafina, the calculus was straightforward. A trustee flagged by U.S. authorities becomes a liability — both in perception and in practice. Asset managers and lenders quickly reassess exposure. Auditors flag compliance issues. And large institutional investors start asking questions no company wants to answer on an earnings call.
“This wasn’t about guilt or innocence,” said a veteran Latin American capital markets attorney. “It was about control, optics, and speed.”
Terrafina oversees more than 260 industrial properties across Mexico, with a portfolio geared toward logistics and export manufacturing — sectors deeply reliant on stable cross-border financial relationships. Any appearance of proximity to a tainted institution could rattle tenants, lenders, and foreign investors alike.
What Happens Next
CIBanco and Intercam remain under direct regulatory oversight. A longer review will likely determine if internal failures occurred — or if the U.S. moved prematurely.
Meanwhile, the REIT is expected to nominate a new trustee in the coming weeks. Depending on how the investigation unfolds, other corporates may follow suit, reassessing their financial counterparties amid fears that regulatory heat — whether fair or not — could spread fast.
One fund manager in Mexico City put it plainly: “Even if this blows over, nobody wants to be the last one holding the bag.”
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