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“When Cartels Become Terrorists: The Policy Gamble Behind Trump’s Executive Order”

  • Alec Weissgerber
  • Nov 2
  • 7 min read
Alec Weissgerber
Alec Weissgerber

President Trump signed an Executive Order designating cartels as Foreign Terrorist Organizations early on in his presidency. With this designation, the United States is able to freeze any financial assets that the cartels have or are subject to, which will severely limit their operations. This inhibits their ability to conduct operations in Mexico, the United States, and internationally. In addition to that, any organizations that potentially support the cartels financially can now be investigated and prosecuted. The cartels rival a small army as far as capabilities, weaponry, and tactics are concerned. Because of this the FTO was indeed necessary and another attribute of this designation allows for direct military action (Special Forces raids) into Mexico by the United States if the administration ultimately deemed this was the appropriate course of action.

           

Direct military action into Mexico by the United States would of course significantly destabilize any relations that are already in place. The violence has been increasing along the border, the illegal immigration has been increasing, and the funding and aid provided by the United States in years past has proven to have little to no impact given the freedom the cartels have to continue operations. Corruption in the Mexican government is also a significant concern. There have been multiple incidents of documented corruption and cooperation between the Mexican government and the cartels. This of course makes it significantly difficult for U.S. policy makers and intelligence officials to cooperate with their Mexican counterparts to effect change. Ultimately though, cooperation must take place between the United States and the Mexican government in order to combat this problem. If both nations cannot adopt transparency and cooperation, the cartels will continue to proliferate, and significantly hurt the economies and livelihoods of both countries.


Under the new Trump Administration Mexican cartels were recently designated as Foreign Terrorist Organizations (FTOs). Once an organization is designated an FTO, there are significant legal capabilities that U.S. law enforcement officials have. The newly implemented designation of cartels, especially those in Mexico, will significantly impact the national security interests of the United States.


Defining Mexican cartels as Foreign Terrorist Organizations allows the U.S. to unilaterally and directly intervene in the sovereign nation of Mexico. If the Department of Defense were to take such measures, this would negatively impact diplomatic relations between the United States and Mexico. However, it is possible that this type of direct action is necessary. The continuous bilateral attempts to combat cartel operations have proven to be unsuccessful. Additionally, there is significant evidence of corruption within the Mexican government, further demonstrating that these bilateral actions will continue to be a failure. Direct military action may indeed be the answer. However, even if the Department of Defense utilized direct military action, it is possible that the United States would not only be drawn into a classic near-peer conflict but a prolonged and costly conflict mirroring that of operations in Iraq and Afghanistan as seen in recent years.


Addressing the challenges posed by cartels and the crisis at the southern border is a complex and multifaceted issue. There needs to be continued enforcement efforts and cooperation across the U.S. intelligence, diplomatic, and defense communities. There also needs to be bilateral efforts with the U.S. and Mexican governments absent that of further corruption. Outside of this, the cartels will continue to operate unimpeded for years to come.


What is an FTO?

Defining what constitutes an FTO under U.S. law is essential to understanding the potential impacts of an FTO designation on these organizations.  According to the United States State Department, FTOs are foreign terrorist organizations that are designated by the Secretary of State in accordance with Section 219 of the Immigration and Nationality Act (INA). FTO designations are used in the fight against terrorism and are an effective means of curtailing support for terrorist activities and pressuring groups to get out of the terrorism business.[1] Furthermore, from a U.S. legal perspective, once an organization is designated an FTO, it is unlawful for a person in the United States to knowingly provide material support or resources to an FTO. Representatives and members of the FTO are inadmissible to, and in certain circumstances, subject to removal from the United States. Additionally, any financial institution that becomes aware that it possesses funds in which a designated FTO or its agent has an interest must withhold the funds and report them to the Office of Foreign Assets Control (OFAC) and the Treasury Department.[2] This means that any financial institution with even a possibility of handling cartel funds must conduct an internal audit to determine whether they are inadvertently supporting the cartels. If they are, they can be held criminally liable. Eliminating the cartels' access to funds will significantly inhibit their ability to continue to conduct operations both in the United States as well as in Mexico.


Potential Impact

Now that the cartels have been designated as FTOs, the administration can take more extensive action to combat them both domestically and internationally. As with financial institutions, if an individual or an organization in the U.S. is found to be supporting an FTO, they can effectively be charged with a crime. The FTO designation also grants U.S. authorities the means to deport cartel members within the borders of the United States. This will allow law enforcement officials a broader reach and authority both domestically and into Mexico. From a financial perspective, any bank, credit union, or other financial institution that has control over cartel funds must report the funds to OFAC. This means that the cartels are now unable to launder money in U.S. banks, or even with banks that might be affiliated with the United States. This will further inhibit their operations internationally. One issue that might arise however is that by placing these sanctions on banks and other financial institutions, the United States runs the risk of hindering economic trade as it could be difficult to decipher between legitimate transactions and those affiliated with cartel money laundering.


Additionally, under the U.S. Anti-Terrorism Act, any Mexican financial institution that provides material support to businesses owned or controlled by the cartels could face lawsuits. There is precedent for this, as previous lawsuits have been brought against banks that are suspected of doing business with Hezbollah and ISIS.[3] These actions will further inhibit the cartel’s financial operations and drive them underground, making it harder for them to conduct business internationally. Since there are a significant number of Mexican banks within the United States or have affiliate institutions within U.S. borders, these institutions will be required to complete an audit and possibly an internal investigation to determine whether or not any of their funds are affiliated with the cartels or any other FTOs. This will also have to continue on a regular basis because even though these new laws will make it more difficult for cartels to launder money, they will continue efforts in doing so.


The U.S. Anti-Terrorism Act also created 18 U.S.C. 2339B making it unlawful for any person who is subject to the jurisdiction of the United States anywhere to knowingly provide material support to a foreign terrorist organization that has been designated by the Secretary of State.[4]  Now that the cartels are designated an FTO they will lose the financial support from banks that they do business with in Mexico, the United States, and in any other nation across the globe. Since the banks can also be held responsible for what will now be considered funding terrorism, the financial support will be drastically inhibited. To add further detail to the aforementioned Antiterrorism Act, under an FTO designation, U.S. federal officials can pursue charges and prosecutors can gain extraterritorial jurisdiction, allowing them to pursue cases against foreign nationals acting entirely outside U.S. borders, even with minimal connection to the U.S. This is critical for targeting cartel members operating abroad, as it enables prosecution of key players whose actions significantly impact U.S. national security.[5]


Now that cartels are designated as an FTO, U.S. law has a much broader reach, allowing for a significantly stronger impact on prosecuting cartel members, securing the border, and shutting down cartel operations. The material support charges that fall under the FTO designation allow prosecutors to charge anyone affiliated with cartel operations. This means everyone from mules, lookouts, money launderers, (affiliated banks as mentioned above) public officials, law enforcement officers, and even drug clients can be brought to justice. The punishments can be severe, ranging from asset forfeitures to life imprisonment.[6] The FTO designation is serious and is necessary given the depth and breadth of cartel operations from a global perspective.


International Reach and Significance

It is important to understand the economic reach and financial impact that the cartels have on an international economy. Today, Mexican drug cartels receive an estimated $30 billion each year in illicit revenue, they are the fifth largest employer in Mexico, and have about 185,000 members.[7] The cartels rival a small nation’s army in size, funding, and capabilities. They are now equipped with military-grade weaponry to include anti-aircraft weapons, and armored vehicles, and employ advanced technologies such as drones and signal jamming systems.[8] This is further evidence of the impending threat and the need for the cartels to be designated an FTO.


So, what is America to do? What is the appropriate response now that the cartels are indeed designated an FTO? The classification as a Foreign Terrorist Organization allows for direct and unilateral military action within the sovereign nation of Mexico. Ideally, such a response would never be considered with a neighboring country. However, it has become necessary due to the Mexican government’s inadequate security policies and limited capacity to combat cartels and the drug trade. The Mexican government, for years, has continuously allowed the cartels to operate unmolested throughout Mexican territory.[9] The policies enacted throughout previous years have not worked, as we have seen the violence and illegal border crossings continue to increase. Immediately after the signing of the Executive Order, the United States assigned active-duty troops to the southern border to enforce these failed policies.


 

 

 

 

 

 

[7] Rafael Prieto-Curiel, Gian Maria Campedelli, and Alejandro Hope, “Fentanyl and Other Drugs Found in Mexico,” Science, Vol. 381, No. 6664 (September 2023), pp. 1312–1316, https://www.science.org/doi/10.1126/science.adh2888 (accessed December 4, 2024).

 

 

 

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