Reporting from Mexico City — As part of his administration's fight against organized crime, Mexican President Felipe Calderon proposed new steps Thursday to curb money laundering.
Calderon said he will give Congress a package of legislation that would limit big-ticket cash purchases through which drug traffickers launder billions of dollars smuggled south across the U.S.- Mexico border.
It would also stiffen reporting requirements for businesses and strengthen the government's hand in detecting transactions aimed at helping drug lords launder proceeds.
"Today, more than ever, it is essential to act and have the tools needed to hit criminals where it hurts most, in their finances," Calderon said.
Calderon's nearly 4-year-old offensive against drug cartels has often been criticized for relying on force and failing to target the fortunes amassed by drug bosses and their associates.
Although U.S. and Mexican officials have announced steps to curb the cross-border smuggling of cash — estimated at between $19 billion and $29 billion annually — both governments acknowledge that too little has been done.
Mountains of cash finance sprawling criminal empires in Mexico, paying for arsenals of military-style weapons and allowing gangs to pay off entire police departments.
Billions of dollars in laundered drug profits pad Mexico's economy in the form of luxury resorts, restaurants, car dealerships, aircraft purchases and start-up businesses. That penetration of illicit funds in the formal economy makes it harder to crack down on the criminal enterprises, Calderon said.
In Mexico, about three-fourths of all transactions are in cash.
Calderon proposes a ban on cash purchases of real estate and of certain luxury goods that cost more than 100,000 pesos, about $7,650. His package would also require more businesses to report large transactions, such as real estate, jewelry and purchases of armor plating.
In June, the government announced strict limits on the amount in U.S. dollars that can be deposited or exchanged in banks.