Cartels as terrorist organisations: the legal risk that changed for companies in Mexico

What was designated and what it triggers

On 19 February 2025, the US State Department designated eight groups as foreign terrorist organisations (FTO) and specially designated global terrorists (SDGT): the Sinaloa, Jalisco New Generation, Northeast and Gulf cartels, the New Michoacán Family and Cárteles Unidos, plus Tren de Aragua and Mara Salvatrucha. Canada did the same that month. For the groups, in practice, little changes: they were already pursued with every counter-narcotics tool. The real change falls on everything around them.

The designation activates three US legal mechanisms with extraterritorial reach. The offence of material support to terrorist organisations, which punishes anyone who provides goods, services, funding, transport or infrastructure to a designated group, regardless of intent. The Anti-Terrorism Act, which lets victims of international terrorism sue not only the organisation but third parties that gave it support, for treble damages. And OFAC's sanctions regime, which can add individuals and companies to the SDN list, with frozen assets and exclusion from the US financial system.

Why it reaches companies that have nothing to do with it

The risk threshold widened to whole sectors. It is not only about who sells chemical precursors: the haulier that unknowingly moves contaminated cargo; the packaging or fuel supplier whose customer turns out to be a front; the landlord of a warehouse; the regional bank that processes the payments. In an economy where cartels are involved in avocados, limes, fuel theft, mining and construction, the distance between a legitimate company and a designated group can be a single intermediary.

Extortion is the most delicate case. In an environment where protection rackets affect businesses of every size, any payment linked, knowingly or not, to a designated cartel could be interpreted as support for a terrorist organisation. That includes payments made under threat or duress. Duress is a defence argument, not an automatic exemption, and it will have to be proven with records.

What a compliance programme must add

• Knowing counterparties: screening customers, suppliers, hauliers and tenants against OFAC lists, with enhanced due diligence in sectors and regions with high criminal penetration.
• A written extortion protocol: no one pays on their own; every threat is logged and channelled to a committee with legal advice; every decision is documented with date, participants and reasons.
• Contract clauses requiring suppliers and partners to comply with sanctions regulations and to report any contact with designated groups.
• A review of insurance and coverage: many kidnap and extortion policies carry terrorism exclusions that may now be triggered.
• A protected reporting channel so staff can report extortion attempts or pressure without fear, because an employee's silence becomes the company's exposure.

What comes next

Designation is an instrument of pressure that the United States extended during 2025 and 2026 to groups in other countries of the region, and that is used in combination with financial sanctions, tariffs and police cooperation. Companies with ties to that country — accounts, partners, customers, stock listings — must assume their operations in Mexico are now read through an additional lens. AmCham Mexico published a company protocol to guide that adaptation; it is a good starting point, not a substitute for specific advice.

The cartels did not change in February 2025. What changed was the price of being close to them, even unintentionally.