After initial speculation (see prior commentary here and here), it is clear that the Trump administration's anti-cartel and fentanyl campaign has taken center stage as a top priority, with implications for companies and individuals doing business in Latin America, particularly Mexico. We summarize recent developments at the U.S. Department of the Treasury primarily over the past month and provide analysis of emerging enforcement risk and compliance expectations.

OFAC Developments

Treasury's Office of Foreign Assets Control (OFAC) continues to issue a steady stream of blocking sanctions against Mexican entities and individuals found to be involved in cartel and drug activity and other forms of organized crime. The sanctions in general are impacting the energy sector, tourism, agriculture, and even technology.

• Sanctions on CJNG Affiliates. On August 13, 2025, OFAC sanctioned four Mexican individuals and 13 Mexican companies for tourism-linked fraud led by the Cártel de Jalisco Nueva Generación (CJNG), an entity designated as a Foreign Terrorist Organization (FTO), and affiliated businesses operating in tourist areas of Puerto Vallarta, Jalisco, and Bahia de Banderas, Nayarit. OFAC asserted that the entities engaged in timeshare fraud schemes as a way to generate revenue for terrorist activity and fentanyl trafficking. OFAC's press release highlighted that this action is the fifth CJNG sanctions package related to timeshare fraud and put U.S. persons on notice that "[t]hose considering the purchase of a timeshare in Mexico should conduct appropriate due diligence." The action recalls OFAC's 2021 ransomware advisory in which OFAC put U.S. persons on notice that they may face significant penalties for "ransom" payments to sanctioned actors, even in the context where they had been victimized. As with the ransomware campaign, OFAC is likely seeking to drive down revenue to cartels while strongly encouraging U.S. persons to take sufficient measures to avoid victimization and cooperate with law enforcement.
• Sanctions on Carteles Unidos and Los Viagras. On August 14, 2025, OFAC sanctioned two Mexican cartels based in the state of Michoacan – Carteles Unidos and Los Viagras – and seven individuals found to be linked to terrorism, drug trafficking, and extortion in Mexico's agriculture sector. The Secretary of State had already designed Carteles Unidos as an FTO in February 2025. OFAC stated that the sanctions were coordinated not only with other U.S. agencies but also with Mexico's respected financial intelligence unit, the Unidad de Inteligencia Financiera (UIF). 
  
  OFAC stated that these cartels "routinely extort Mexican farmers, packers, and others involved in the process of harvesting and exporting agricultural products, such as avocados, by demanding compulsory payments via cartel affiliates. When victims are unable or unwilling to pay, they face the risk of significant violence to property or even loss of their lives… the Michoacan-based cartels engage in land seizures, deforestation, and illegal logging to grow their own agricultural products as part of a broader effort to increase diversify [sic] their revenue streams." 
  
  On the same day, the Department of State issued a notice offering rewards of up to $26 million for information leading to the arrests and/or convictions of certain Carteles Unidos members. 
  
  In addition to the involvement of Los Viagras in the agriculture sector, media reports state that the cartel has also been heavily involved in the telecommunication sector. The reporting explains that over the last two years, the cartel has systematically seized control of certain internet infrastructure across at least ten municipalities in Michoacán. When legitimate internet providers refused to make payments to Los Viagras, the group reportedly engaged in destruction of fiber optic cables and telecommunications equipment and established its own clandestine internet services, compelling residents to subscribe under threats of violence. 

As a result of these sanctions, all property or interests in property of these sanctioned persons and entities at U.S. banks are now blocked or frozen. Non-U.S. banks may also face secondary sanctions for any transactions involving these sanctioned persons.

FinCEN Developments

FinCEN Director Statement to Congress. Underscoring the administration's growing focus on cartels and fentanyl trafficking, on September 9, 2025, the Treasury's Financial Crimes Enforcement Network's (FinCEN) Director Andrea Gacki testified before the House of Representatives' Committee on Financial Services, Subcommittee on National Security, Illicit Finance, and International Financial Institutions, where she discussed the administration's cartel campaign. She highlighted FinCEN's sanctions against certain Mexican financial institutions (FinCEN's orders of June 25, 2025, discussed here), targeting bulk cash smuggling by transnational criminal organizations, and oil smuggling schemes associated with Mexico-based cartels (discussed here). She also highlighted FinCEN's engagement of the Government of Mexico and of the private sector in the campaign against cartels and fentanyl trafficking. She discussed the red flags that FinCEN has shared with the markets to help financial institutions monitor and report related activity to FinCEN, the financial trend analyses that it has published to drive awareness and promote disruption of key vectors of cartel illicit finance, and exchange events that FinCEN has convened to mobilize regional financial institutions along the border as "frontline partners" in address illicit drug financing.

Recent Financial Trend Analyses. In addition, FinCEN's two public financial trend analyses published in 2025 reflect the administration's focus on these issues. In April 2025, FinCEN published a detailed analysis of fentanyl-related illicit finance, which highlighted the central role of Mexico-based cartels. Notably, the analysis of more than 1,200 reports filed pursuant to the Bank Secrecy Act (BSA) found that, "Sinaloa and Jalisco, strongholds of the Sinaloa Cartel and [CJNG], were the top two Mexican states identified in subject address fields of BSA reports related to fentanyl. In addition, BSA reporting highlighted the role of Mexican chemical brokers and the use of front companies, money mules, and U.S. intermediaries to procure fentanyl precursor chemicals." More recently, in August 2025, FinCEN published a report on the role of Chinese money laundering networks (CMLNs), including in regard to facilitating money laundering using bulk cash received from U.S. drug trafficking networks and returning profits to cartels in Mexico. The analysis also describes how CMLNs serve as key participants in trade-based money laundering schemes involving cartels. 

Takeaways 

These recent events provide insights into evolving U.S. enforcement strategies related to Mexican cartels and fentanyl trafficking: 

• FinCEN and OFAC strategic alignment. We see close cooperation and alignment between FinCEN and OFAC in Treasury's campaign against cartels. OFAC press releases cite FinCEN's prior alerts and financial intelligence. And FinCEN appears to be borrowing heavily from the carrot-and-stick playbook perfected by OFAC in many of its major sanctions programs. 
  
  On the stick side, FinCEN is showing a willingness to use aggressive measures to advance policy goals, most notably the June 25, 2025, FinCEN order, pursuant to the Fentanyl Sanctions Act and the FEND Off Fentanyl Act. These unprecedented orders threaten to cut off three major Mexican banks – used by millions of innocent account holders – from the U.S. financial system unless substantial progress is made in removing cartel-linked accounts, putting the entire Mexican financial system on notice that FinCEN takes anti-money laundering (AML)/countering the financing of terrorism (CFT)-related deficiencies seriously. 
  
  At the same time, FinCEN is signaling through carrots that it will cooperate with legitimate actors in its fight against cartels. FinCEN, as noted above, has published trend analyses and other guidance for the private sector, giving covered financial institutions (and companies in other sectors) the tools to assess their risks and promoting risk-based compliance programs. FinCEN's press releases also highlight collaboration with the Mexican government, echoing OFAC's historical approach of pursuing collaboration with partner governments and resorted to harsh sanctions measures when those fall through.
  
  We suspect this alignment may be due to stronger ties between the two agencies under FinCEN Director Gacki, who led OFAC for several years until stepping in to lead FinCEN in 2023. Director Gacki is a long-time Treasury veteran who enjoyed success under both Republican and Democratic administrations. For example, as director of OFAC, she played a pivotal role in implementing the Trump administration's sanctions campaigns against Iran and Venezuela as well as the Biden administration's sanctions campaign against Russia in response to the 2022 invasion of Ukraine. 
• Treasury scrutiny of financial flows to Mexico. In its sanctions imposed against aspects of the tourism industry, OFAC referenced FinCEN's July 2024 alert on timeshare fraud associated with Mexican cartels and Treasury's disclosure, which resulted in U.S. banks reporting over "1,300 transactions totaling $23.1 million, sent primarily from U.S.-based individuals to counterparties in Mexico." We suspect this use of information from financial institutions is the tip of the iceberg in terms of information flowing to FinCEN, especially about cross-border payments to and from Mexico. For example, OFAC also has long-standing authority to instruct U.S. banks to monitor and report on certain property or transactions. Treasury is also the only financial ministry in the world with an in-house intelligence shop. Notably FinCEN's June 25, 2025, orders, also appear to have relied extensively on information provided by U.S. banks to FinCEN, as well as other sources of information. 
• Aggressive measures followed by modifications. In its campaign against cartels, FinCEN appears to be willing to take bold action in response to administration priorities and then mitigate any unintended consequences that arise. Again, this appears to borrow from OFAC's playbook in major sanctions campaigns, such as the "maximum pressure" campaign against Iran under the first Trump administration. For example, after FinCEN's June 25 orders were issued, FinCEN clarified a narrower scope through subsequent FAQs than what many in the market had interpreted. FinCEN also issued two extensions to give time to the market to adjust. Similarly, on September 28, 2025, FinCEN issued a modification of a Geographic Targeting Order (GTO) requiring money services businesses to file transaction reports for cash transactions – raising the reporting threshold from $200 to $1,000. The modification was likely in response to two lawsuits filed by affected parties arguing that the measures were overly burdensome administratively (given their low thresholds) in addition to challenging the measures on procedural and due process grounds. FinCEN later adjusted its measure by subsequently issuing the higher reporting threshold. This is not to say that FinCEN does not seek to minimize unintended consequences; instead, it is likely being asked by the administration to take quick action, but is willing to consider and act on input from industry participants regarding collateral consequences. Furthermore, we are unlikely to see FinCEN behave this way on other issues that are not a priority for the administration (such as ultimate beneficial ownership, referenced in Director Gacki's statement as an area where companies are being provided relief "to reduce regulatory burdens"). 

For more information, please contact:

Matteson Ellis, mellis@milchev.com, 202-626-1477

Leah Moushey, lmoushey@milchev.com, 202-626-5896

James G. Tillen, jtillen@milchev.com, 202-626-6068

Collmann Griffin, cgriffin@milchev.com, 202-626-5836

Franco Jofré, fjofre@milchev.com, 202-626-1585

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