By Antonio Ocasio and Skyler Gluck[1]

 

Anti-Terrorism Act (ATA) liability is now a pressing concern for U.S. companies with exposure to Mexico. Those who act quickly—by tightening compliance, documenting intent, and aligning with legal counsel—can reduce risk and preserve partnerships.

In a move that may redefine corporate liability in cross-border commerce, the U.S. government has officially labeled eight Mexican criminal groups—including the Sinaloa Cartel and CJNG—as Foreign Terrorist Organizations (FTOs).

Labeling cartels as terrorist organizations does more than make a political statement—it activates the full counterterrorism toolkit. What once fell under narcotics enforcement is now subject to the broader and more forceful legal regime used against terrorist networks, extending liability into business dealings that touch cartel-controlled sectors.

In practical terms, this means that a U.S. company whose supplier pays extortion money to a cartel—knowingly or even recklessly—may now be sued for aiding terrorism. Liability doesn’t require proof of direct support. Under the ATA, civil plaintiffs can pursue triple damages, and the DOJ can seek criminal penalties of up to 20 years in prison.

What was once a criminal law issue at the fringes of trade policy is now a frontline compliance concern. And with Mexico accounting for over 70% of regional trade, it’s not just borderland businesses at risk—it’s national.

What Changed?

In February 2025, the U.S. State Department designated eight criminal organizations as both FTOs and Specially Designated Global Terrorists (SDGTs): Tren de Aragua (TdA), Mara Salvatrucha (MS-13), Cártel de Sinaloa, Cártel de Jalisco Nueva Generación (CJNG), Cártel del Noreste (CDN), La Nueva Familia Michoacana (LNFM), Cártel del Golfo (CDG), and Cárteles Unidos (CU). These groups generate billions through drug trafficking, human smuggling, illegal mining, and related crimes.

Understand ATA Liability

The Anti-Terrorism Act (18 U.S.C. § 2333) enables U.S. nationals to sue for injuries caused by international terrorism—including against those who aid and abet designated FTOs. Under § 2333(d)(2), liability applies to anyone who knowingly provides substantial assistance or conspires with the perpetrator of such acts.

Criminal penalties include up to 20 years imprisonment. Civil plaintiffs can recover triple damages, attorneys’ fees, and costs. Even minor forms of support—logistical services, routine payments, or business transactions—can trigger liability.

What Counts as Knowledge or Assistance?

The DOJ evaluates both the type of assistance and the provider’s state of mind. Material support may include goods, services, financial flows, or even indirect logistical aid. Knowledge includes actual awareness, willful blindness, or circumstances that a reasonable person would recognize as suspicious. Even extortion payments—common in cartel regions—are not legal defenses.

Proactive Risk Management

Legal and reputational risks can be mitigated through disciplined internal controls. Every U.S. company with Mexican exposure should:

  • ·  Seek counsel early – Regulatory coordination is essential.
    • Partnering with counsel may be especially important in transnational industries or when operating across borders or sectors where risks may not be known by management. Counsel can act as a buffer, reducing the risk of directly engaging with potentially compromised actors, tailoring strategies to local circumstances, and ensuring compliance with both U.S. and Mexican legal frameworks.
  • ·  End relationships with sanctioned financial institutions by September 4th.
  • ·  Map the risk – Identify regions, vendors, and sectors with known exposure.
  • ·  Audit contracts – Build exit clauses and transparency into every agreement.
    • Document everything – Keep a contemporaneous record of due diligence and decisions.
  • ·  Establish internal protocols – Train personnel on how to respond to red flags.

 

[1] Antonio Ocasio is the Managing Partner at Aragon Partners LLP, where he focuses on US-Latin America cross-border transactions and regulatory compliance. Earlier in his career, he served as Counsel and Vice President for Latin America at EXCEL, a private security and investigations firm, based in New York.

 

Skyler Gluck is a Research Fellow at Aragon as well as a full-time student at Columbia University’s Dual Baccalaureate Program with Sciences Po. The Research Fellowship Program is a joint initiative between Aragon and the Dual Baccalaureate Program’s Alumni Association. It is designed to provide rigorous and challenging professional training to select candidates of the program.