In a historic first, the US Department of the Treasury’s Financial Crimes Enforcement Network recently published orders prohibiting transactions with covered Mexico-based financial institutions.
On June 30, 2025, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published in the Federal Register orders identifying three Mexico-based financial institutions (the Orders)—as being of primary money laundering concern in connection with illicit opioid trafficking. As a result, “covered financial institutions” are prohibited from engaging in transmittals of funds from or to the financial institutions, or from or to any account or convertible virtual currency address administered by or on behalf of them. FinCEN issued the Orders on June 25 to take effect July 21, 2025, 21 days after their publication in the Federal Register. On July 9, 2025, FinCEN extended the effective date to September 4, 2025.
These Orders reflect the US government’s focus on combating drug cartels, particularly those operating in Mexico. The Orders also exhibit the US government’s expanded use of new and existing legal authorities and multiple agencies to implement this policy, including these actions by FinCEN pursuant to the Fentanyl Sanctions Act and the FEND Off Fentanyl Act; sanctions regulations administered by the US Office of Foreign Assets Control (OFAC); and US Department of Justice (DOJ) prosecutions using counterterrorism and anti-corruption authorities.
This increase in enforcement, and the US government’s policy priority to target Mexican drug cartels, continues to elevate risks for financial transactions involving business related to Mexico.
FinCEN issued the Orders pursuant to statutory provisions in the 2024 FEND Off Fentanyl Act (Fentanyl Act). The Fentanyl Act added 21 USC § 2313a, codifying Section 7213A of the Fentanyl Sanctions Act. It authorizes FinCEN (through delegation by the Secretary of the Treasury) to impose special measures where it finds that “reasonable grounds exist” to conclude that financial institutions outside the US, transactions outside the United States, or accounts “within or involving” non-US jurisdictions that FinCEN determines are of primary money laundering concern in connection with illicit opioid trafficking. 2313a authorizes the imposition of any of the “special measures” described in Section 311 of the PATRIOT Act. The special measures authorized under Section 311 consist of one or more of the following:
Section 2313a also adds a sixth special measure authorizing FinCEN to prohibit or impose conditions on transmittal of funds by US financial institutions and agencies from or to these entities.
FinCEN is not required to consider any particular facts in making the determination pursuant to 2313a but does provide a definition of “opioid trafficking” for purposes of its implementation. Opioid trafficking exists where FinCEN concludes any of the following (which are taken from the Drug Enforcement Administration definition of that activity):
In the orders, FinCEN adopted the factors described for implementing special measures in 31 USC § 5318A(c)(2)(B), taking into account how money laundering occurs in the opioid trafficking trade:
In each of the cases, after considering these factors and finding that less restrictive measures would be insufficient, FinCEN imposed the most restrictive special measure available—prohibiting US financial institutions and agencies from engaging in certain transmittals of funds from or to any of the three Mexican institutions. FinCEN expressly excluded any branches, subsidiaries, or offices operating outside Mexico, including in the United States, from the scope of the prohibitions.
In reaching these determinations, FinCEN made the following determinations and considered the following factors:
FinCEN then weighed these facts against the statutorily required considerations of the below:
FinCEN further assessed whether the specific special measures will have any of the following adverse impacts:
A final determination requires that FinCEN decide whether to implement its decision through order or regulation. In these cases, FinCEN decided an order was the appropriate route.
In the Orders, FinCEN acknowledged that the institutions maintained anti-money laundering compliance programs; however, FinCEN determined that the existence of these programs did not overcome FinCEN’s determination that these companies were financial institutions of primary money laundering concern.
In the case of one institution, Intercam Banco S.A., Institución de Banca Multiple (Intercam), FinCEN noted that FinCEN and financial institutions had previously flagged Intercam as a potential facilitator of money laundering and that Intercam previously had paid fines for inadequate anti-money laundering controls, including related to failure to report suspicious transactions. FinCEN did not make similar critiques regarding the sufficiency of compliance programs maintained by the other two institutions. Nonetheless, FinCEN concluded that despite their compliance programs, the totality of the circumstances merited imposing the prohibitions.
The Orders are FinCEN’s first use of Section 2312a authority to prohibit the transmittal of funds to or from an entity of primary money laundering concern. Coming reasonably quickly after passage of the FEND Off Fentanyl Act, they reflect a determined effort by the US government to use a whole-of-government approach to combating the fentanyl crisis.
DOJ has emphasized criminal and civil enforcement efforts on matters related to cartels and transnational criminal organizations (TCOs). For example, Attorney General Pam Bondi’s memorandum addressed DOJ’s focus on the elimination of cartels and TCOs. The overall impact of these actions is clear: combined with the designation of several criminal organizations operating in Mexico as “terrorist organizations,” these efforts continue to alter the risk calculus for people and companies doing business in Mexico.
Although FinCEN’s actions do not present the same risks that would apply if the institutions had been added to OFAC’s list of Specially Designated Nationals and Blocked Persons, these prohibitions have potential repercussions beyond just the three companies targeted by the Orders. (OFAC emphasized its focus on cartel-related investigations earlier this year.) For example, these designations may cause third parties to seek alternative relationships due to the potential for reputational harm arising from the designations. And, while the designations do not operate to prohibit non-financial institutions from using these entities’ services, given the “money laundering” moniker that comes with the designation, many will likely shy away from dealing with them.
While, as FinCEN noted, alternative financial institutions are available in Mexico for legitimate transactions, the imposition of special measures will likely cause disruptions to transactions, including remittances and other business activities, since covered US financial institutions can no longer conduct covered transactions with the named entities. Recognizing the significance of the Orders, Mexico’s Comision Nacional Bancaria y de Valores temporarily took over the institutions, replacing their management, leadership, and legal counsel in an effort described as designed to protect customers and creditors. FinCEN noted that the extension of the effective date of the Orders reflected the Mexican government’s actions to address FinCEN’s concerns and indicated the Mexican authorities’ ongoing coordination with the US government.
FinCEN can expand its use of this authority to target additional Mexican financial institutions, making business in Mexico increasingly difficult by effectively sanctioning broader parts of the Mexican financial sector. Given FINCEN’s historically close relationship with OFAC and DOJ, we expect to see close coordination across agencies in combating perceived misconduct involving cartels and TCOs.
This authority is not limited geographically and could be used to target institutions in other countries as well. For instance, given the Orders’ focus on transactions involving China-based suppliers of fentanyl precursor chemicals, FinCEN could expand its use of this prohibition to financial institutions used by such suppliers.
US financial institutions will likely need to consider proactive measures designed to identify other at-risk entities.
In further guidance provided to US entities, FinCEN stated that it expects covered financial institutions to (1) implement procedures to ensure compliance with the terms of the orders; and (2) exercise reasonable due diligence to prevent engaging in transmittals of funds involving the three financial institutions.
Compliance programs designed generally to address risk in Mexico may be insufficient in this environment and could require review and updating to address the US government’s increased enforcement activity. US financial institutions will need to ensure that their compliance programs are appropriately tailored, and periodically reassessed, to address these risks.
Consistent with longstanding regulatory guidance, reviews of compliance programs remain advisable to ensure that policies and procedures remain current and address increased enforcement risks and priorities. Based on DOJ pronouncements and congressional interest, the increased enforcement activity is likely to be magnified due to whistleblower activity.
In May 2025, DOJ’s Criminal Division leader Matthew Galeotti announced a significant expansion of DOJ’s whistleblower pilot program, which now encompasses a range of conduct that directly and indirectly concerns cartels and financial institutions. DOJ thus anticipates not only aggressive enforcement, but more whistleblower actions.
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