Cartels and Transnational Criminal Organizations (TCOs) flood communities with illicit synthetic drugs and threaten U.S. security. In 2024, CBP and HSI seized more than 27,000 pounds of fentanyl, while HSI initiated more than 5,800 narcotics-related investigations. In the first six months of 2024, CBP seized nearly 3,000 weapons and more than 654,000 rounds of ammunition. Since April 2024, CBP has led an expanded, multi-agency effort to target the transnational criminals, including cartels funneling fentanyl and other drugs from Mexico into the U.S.
On January 20, 2025, President Donald Trump issued Executive Order (EO) 14157, "Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists." This order establishes a process to classify certain international cartels and other transnational organizations as Foreign Terrorist Organizations (FTOs) under Section 219 of the Immigration and Nationality Act (8 U.S.C. 1189) or as Specially Designated Global Terrorists (SDGTs) under the International Emergency Economic Powers Act (50 U.S.C. 1702) and Executive Order 13224.
Most recently, in February 2025, the State Department announced the designation of Tren de Aragua (TdA), Mara Salvatrucha (MS-13), Cártel de Sinaloa, Cártel de Jalisco Nueva Generación, Cártel del Noreste (formerly Los Zetas), La Nueva Familia Michoacana, Cártel de Golfo (Gulf Cartel), and Cárteles Unidos as FTOs and SDGTs.
[1] Fact Sheet: DHS Shows Results in the Fight to Dismantle Cartels and Stop Fentanyl from Entering the U.S. URL
[2] U.S. Customs and Border Protection - Operation Plaza Spike Fact Sheet URL
EO 14157
Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists – creates a process by which international cartels and other organizations can be designated as Foreign Terrorist Organizations (FTO) and Specially Designated Global Terrorists (SDGT).
Foreign Terrorist Organization (FTO): Non-U.S. organizations that are designated by the U.S. Secretary of State as engaged in (or retain the capability and intent to engage in) terrorist activity that threatens U.S. nationals or U.S. national security. The U.S. Secretary of State makes these designations in accordance with the Immigration and Nationality Act (INA), section 219, as amended.
Specially Designated Global Terrorists (SDGT): Individuals or entities that the Office of Foreign Assets Control (OFAC) determines have committed (or pose a significant risk of committing) acts of terrorism. In addition, OFAC can designate individuals or entities as SDGT if entities knowingly provide support, services, or assistance to, or otherwise associate with, organizations designated under OFAC Counter Terrorism Sanctions programs. Furthermore, OFAC can impose civil or criminal penalties on U.S. persons who engage in prohibited transactions with SDGTs.
EO 13224
This order, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, issued by then-President George W. Bush shortly after the 9/11 attacks, aims to disrupt terrorist financing by freezing the assets of individuals and entities associated with terrorism. It authorizes the U.S. government to:
- Designate individuals, groups, and organizations as "Specially Designated Global Terrorists" (SDGTs).
- Freeze the U.S.-based assets of those designated individuals or groups.
- Prohibit U.S. persons and entities from conducting financial transactions with them.
- Allow the Secretary of the Treasury, in consultation with the State and Justice Departments, to add more groups/individuals to the list.
This executive order is a key legal tool used by the U.S. government to combat terrorist networks by targeting their financial support structures.
The designation of cartels and gangs as terrorist organizations enhances the abilities of financial investigators in several areas. This shift expands the legal and operational tools available, primarily by integrating counterterrorism frameworks into their efforts against these newly designated groups.
The designation unlocks broader authority to disrupt financial networks utilizing laws like the International Emergency Economic Powers Act (IEEPA) and EOs. Financial investigators—working through agencies like the U.S. Treasury’s Office of Foreign Assets Control (OFAC)—can freeze assets and block transactions linked to designated groups without needing to prove a specified unlawful activity (SUA), i.e., drug trafficking. This would apply to any property or interests in the U.S. financial system, as well as those controlled by U.S. persons globally. The threshold would shift from establishing criminal intent to simply demonstrating association with a designated entity, which can expedite action against complex, transnational money flows.
Next, it imposes stricter obligations on financial institutions. Banks and other entities must report and block transactions involving designated groups, amplifying scrutiny on suspicious activities. The “material support” clause, broadly defined under U.S. law to include financial services, goods, or even indirect assistance, casts a wider net, enabling investigators to target not just the cartels/TCOs but also their facilitators, such as complicit businesses or individuals. Penalties for noncompliance, including hefty fines or criminal charges, incentivize proactive cooperation from the private sector, effectively outsourcing some investigative burden.
Lastly, it enhances interagency collaboration by aligning the efforts of financial investigators with those of counterterrorism units across all federal agencies. This unified approach allows for shared intelligence and resources, such as terrorist financing databases, which are often more robust than those used solely for organized crime. For instance, tracking fentanyl profits might now leverage tools originally developed to trace FTO funds, offering deeper insight into layered money laundering schemes.
From a compliance and AML perspective, companies should already be conducting due diligence to prevent doing business with cartels and their respective facilitators as several of the cartels were already on OFAC’s SDN list as designated TCOs. EO 14157 specifically cited TdA and MS-13 as threatening the stability of international order in the Western Hemisphere. OFAC designated MS-13 and TdA as TCOs in 2012 and 2024, respectively.
In short, the designation does give financial investigators more tools—faster asset seizures, heightened private-sector vigilance, and better coordination; however, its effectiveness depends on the execution and balancing of these powers against unintended economic or diplomatic fallout.
Given the TCO designation of both TdA, MS-13, and other cartels, being further designated as an SGDT follows the recent push for a whole-of-government, cross-agency approach to countering the threat of cartels and TCOs.
The additional penalties for material support of an FTO-designated cartel or transnational criminal organization broaden the risks for companies as cartels are highly integrated with regional economies and their influence extends across several industries. In addition to enhanced due diligence, AML compliance necessitates a closer examination of financial transactions and supply chains as cartels are notorious for their complex economic structures and sophisticated financial infrastructure. Financial institutions will need to ensure they maintain robust KYC practices and have appropriate controls in place to comply with requirements to freeze funds per future OFAC designations.
Traditionally, the U.S. Government has been able to designate cartels and other transnational organizations as TCOs; however, EO 14157 expands the options to pursue cartels to include FTO and SDGT designations and enables more options to extricate cartels from the U.S. financial system.
In embracing this expanded whole-of-government approach, HSI’s mission is the investigation, prosecution, disruption, and dismantlement of TCOs and other criminal actors engaged in illicit cross-border financial activity. In support of EOs, HSI seeks to strengthen the anti-money laundering infrastructure of the United States; enhance information sharing between the United States Government and the private sector regarding techniques and trends used in crimes involving illicit cross-border financial activity; and increase cooperation between domestic and foreign law enforcement agencies.
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Financial institutions are tasked with identifying red flag indicators that might signal transactions or activities tied to cartels or designated terrorist organizations, such as those labeled as FTOs or SDGTs. These indicators overlap due to the groups’ shared reliance on illicit financing, but they’re tailored to their operational traits—cartels often focus on drug profits, while terrorist groups prioritize ideological funding. Measures can be taken to help prevent these crimes, including stringent adherence to anti-money laundering protocols.
The following are red flag indicators of high-risk activity associated with FTOs and SDGTs, other transnational organizations, and their facilitators:
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Unusual Cash Transactions: Large, frequent, or unstructured cash deposits or withdrawals raise alarms. Cartels often deal in cash-heavy drug proceeds, while terrorist groups may use cash to avoid traceable electronic trails. For example, deposits just below reporting thresholds (e.g., $10,000 in the U.S.)—a tactic called "structuring"—or cash moved through funnel accounts across borders are common red flags.
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Rapid Movement of Funds: Wire transfers or payments that move quickly through multiple accounts, especially across high-risk jurisdictions like Mexico, Colombia, or sanctioned countries (e.g., Iran, Syria), suggest money laundering. Look for funds entering from a cartel stronghold, then exiting to a third country within hours, or transfers lacking clear economic purpose.
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Mismatch in Transaction Purpose: Payments tied to vague or inconsistent explanations— “consulting fees” or “import/export” with no supporting documentation—can mask illicit flows. Cartels might disguise drug money as legitimate trade, while terrorist financing might appear as charitable donations to front organizations. A business claiming to sell agricultural goods but moving millions without invoices is a classic sign.
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Use of Shell Companies or Fronts: Accounts tied to entities with no physical presence, minimal assets, or ownership obscured through nominees point to layering tactics. Both cartels and terrorists exploit these to distance funds from their source—think a newly formed company in Panama wiring funds to a cartel-linked region with no apparent business history.
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High-Risk Geographic Links: Activity involving countries known for drug trafficking (e.g., Mexico, Afghanistan) or terrorist financing (e.g., Somalia, Yemen) triggers scrutiny. This includes correspondent banking relationships or customers with addresses in these zones, especially if paired with other suspicious behavior.
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Third-Party Involvement: Payments routed through intermediaries—such as money service businesses (MSBs), hawaladars, or unregulated crypto exchanges—complicate tracking. Cartels use MSBs to launder cash, while terrorists lean on informal value transfer systems like hawala to fund operations discreetly.
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Anomalous Customer Behavior: Clients with sudden spikes in activity, no clear income source, or profiles inconsistent with their transactions (e.g., a low-income individual wiring $50,000) stand out. Politically exposed persons (PEPs) or those linked to sanctioned entities also raise flags, as they might facilitate cartel or terrorist networks.
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Trade-Based Anomalies: Over- or under-invoicing in trade transactions—say, importing goods at inflated prices to move value—points to trade-based money laundering (TBML). Cartels use this to shift drug profits, while terrorists might exploit it for dual-use goods (e.g., chemicals with military applications).
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Charity or Nonprofit Ties: For terrorist groups, donations to obscure charities, especially in conflict zones, can signal fundraising fronts. Cartels rarely use this, but they might co-opt legitimate businesses, so institutions check for unusual outflows to nonprofit entities with weak oversight.
HSI’s mission is to protect the United States by investigating global crimes that impact our local communities. We have over 10,000 employees stationed in over 235 U.S. cities and more than 50 countries worldwide. This gives us an unparalleled ability to prevent crime before it reaches our communities. HSI encourages the public to report suspected suspicious activity through its Tip Line. You may remain anonymous.
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