The designation of Mexican cartels as FTOs: A challenge for the financial system of Mexico

The Trump administration's decision to classify Mexican cartels as Foreign Terrorist Organizations (FTO) redefines not only the bilateral relationship between Mexico and the United States, but also the challenges for the Mexican financial system. In this context, the State Department announced the designation of Tren de Aragua (TdA), Mara Salvatrucha (MS-13), Sinaloa Cartel, Jalisco New Generation Cartel (CJNG), Northeast Cartel (CDN), La Nueva Familia Michoacana (LNFM), Gulf Cartel (CDG), and Cárteles Unidos (CU) as Foreign Terrorist Organizations (FTO) and Specially Designated Global Terrorists (SDGT). This measure, which includes the most influential criminal groups in the region, strengthens the strategic approach against organized crime and expands the legal and financial implications for these organizations, as well as for their support networks. Although the Mexican government maintains that its regulatory framework against the Money laundering and terrorist financing (AML/CFT) is strongly supported by its membership in the Financial Action Task Force (FATF) and oversight by the CNBV; this designation exposes critical vulnerabilities. Financial institutions, fintechs, and companies now face a scenario where seemingly legitimate transactions could involve extraterritorial sanctions, multifaceted legal risks, and deep economic disruptions.

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