Trump Administration Announces Designation of International Cartels

U.S. President Donald Trump issued Executive Order 14157 (the EO) on Jan. 20, 2025, calling for the designation of drug cartels and other foreign organizations as foreign terrorist organizations (FTOs) or specially designated global terrorists (SDGTs) in an effort to combat drug trafficking and dismantle foreign criminal networks, including those operating across the U.S.-Mexico border. The EO requires the U.S. Secretary of State, in consultation with the Attorney General and the Secretary of Homeland Security, to make recommendations regarding the designation of transnational criminal groups as FTOs and/or SDGTs.

On Feb. 20, 2025, the U.S. Department of State published a press release announcing the designations of Tren de Aragua (TdA), Mara Salvatrucha (MS-13), Cártel de Sinaloa, Cártel de Jalisco Nueva Generación (CJNG), Cártel del Noreste (CDN), La Nueva Familia Michoacana (LNFM), Cártel de Golfo (CDG) and Cárteles Unidos (CU) pursuant to Section 219 of the Immigration and Nationality Act, as amended, and Executive Order 13224, as amended. The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has formally designated the organizations on its list of Specially Designated Nationals and therefore the applicable sanctions are currently in effect.

• TdA: Transnational organization from Venezuela, with cells in Colombia, Peru and Chile and a presence in Ecuador, Bolivia and Brazil
• MS-13: Originated in Los Angeles and shifted to Central America, but is active in El Salvador, Honduras, Guatemala, Mexico and the U.S.
• Cártel de Sinaloa: Based in Mexico
• CJNG: Presence in Mexico
• CDN: Formerly "Los Zetas," based in northeast Mexico
• LNFM: Successor of "La Familia Michoacana," based in Michoacan
• CDG: Based in northeast Mexico
• CU: Formed from an alliance of cartels in Michoacán

The FTO and SDGT designations set off sanctions compliance measures designed to restrict FTOs and SDGTs from accessing the U.S. financial system, among other effects. This includes prohibiting such organizations from engaging in financial transactions with U.S. individuals and entities, as well as blocking their property and interests in property within the U.S., that hereafter come within the U.S. or that hereafter come within the possession or control of U.S. persons, such that they may not be transferred, paid, exported, withdrawn or otherwise dealt in.

These sanctions also generally prohibit transactions that evade or avoid, or have the purpose of evading or avoiding, such sanctions restriction or prohibition. Participating in a conspiracy designed to circumvent sanctions is also prohibited. These statutory economic sanctions provide the U.S. government with broad exterritorial reach to curb narco-terrorism activities.

Takeaways and Next Steps

The extensiveness of these designations presents complex sanctions and anti-money laundering (AML) compliance challenges for U.S. and non-U.S. financial institutions and international organizations with operations, customers, suppliers, counterparties and/or supplier/distribution networks in Mexico and potentially elsewhere. Notably, given OFAC's strict liability standards and the potential for criminal liability, organizations are encouraged to review their AML and sanctions compliance programs and ensure that they are risk-based, specifically tailored and reasonably designed to prevent the direct or indirect facilitation, support or assistance of any prohibited organization.

Holland & Knight's Financial Services Team and International Trade Group, in collaboration with Holland & Knight's Mexico Practice, are strategically positioned to provide cross-jurisdictional guidance and advice to U.S. and non-U.S. financial institutions and other international organizations that potentially face AML and sanctions compliance risk considering these and any future FTO and/or SDGT designations.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.