The U.S. government is laser-focused on illicit fentanyl and synthetic opioid trafficking and has shifted its approach from targeting narcotics operators themselves to focusing on their financial and commercial infrastructure: banks, brokerage houses, trade intermediaries, corporations and logistics firms. There is a clear political and enforcement intent to “make examples” of institutions—regardless of size or degree of complicity—to establish deterrence, show resolve, and build domestic political capital.
On June 25, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) targeted three mid-sized Mexican financial institutions—CIBanco, Intercam Banco, and Vector Casa de Bolsa—on the ground that they were primary money laundering concerns under Section 311 of the USA PATRIOT Act. Notably, these were the U.S. Government’s first use of Treasury’s new authorities under the Fentanyl Sanctions Act and the FEND Off Fentanyl Act, which expand sanctions tools into the realm of counter-narcotics, counterterrorism, and financial intelligence enforcement.
The Section 311 actions make it illegal for U.S. persons to provide banking services to the targeted institutions. The practical effect is that all U.S. banks will immediately sever ties. Historically, this results in the targeted institution being driven into liquidation within days of the announcement. Targeted institutions are hard-pressed to dispute the accusations because Section 311 allows FinCEN to use “classified information” in the designation, i.e., information that the targeted institution will never see and never have the chance to challenge.
Entities seeking to insulate themselves from the risks posed by Section 311 and similar severe actions (e.g., OFAC designation), must assess their risks and design proactive prevention strategies. Importers and exporters of chemicals, banks and other financial institutions are well-advised to assess their risks, examine their prevention strategies, and to take every possible step to manage their reputational risks.
While the scope of these orders is specific, their strategic implications are far-reaching. They reflect a core pillar of the Trump administration’s broader security and enforcement agenda: using financial sanctions as a tool of narcotics interdiction, targeting not only drug traffickers but the financial systems and institutions—both witting and unwitting—that support them.
Three key themes define this new posture:
- Cartel designations as Foreign Terrorist Organizations (FTOs) create new legal risks for financial entities. Associations with cartel-linked transactions, even if indirect or historical, now potentially fall under national security statutes.
- The U.S. government has shifted its approach from targeting narcotics operators to focusing on their financial and commercial facilitators: banks, brokerage houses, trade intermediaries, and logistics firms even at relatively low levels of involvement.
- There is a clear political and enforcement intent to “make examples” of institutions—regardless of size or degree of complicity—to establish deterrence, show resolve, and build domestic political capital. The Trump administrations has shown that it likes to move in bold strokes to maximize political gains, and DOJ and the U.S. treasury are on board with this politicized approach.
For Mexican and Central and South American financial institutions and corporate conglomerates, this means that even limited exposure or passive oversight failures may result in reputational damage, regulatory review, or loss of access to U.S. correspondent banking and capital markets. Given the Trump administration’s focus on cartels and the infrastructure of narco-money laundering we anticipate more actions will follow in Mexico and elsewhere in Central and South America.
LBKM has litigated on behalf of financial institutions targeted for 311 enforcement and has advised numerous other financial institutions and corporations on how to ensure they are not targeted. In the latter capacity, we partner with former U.S. law enforcement and regulatory authorities, under attorney-client privilege and full confidentiality, to identify red flags and take proactive steps to prevent or defuse 311 and OFAC targeting. As with many situations, this problematic new focus by the U.S. government also brings opportunity: institutions with strong compliance governance can reposition as regional safe havens for clean finance, attracting risk-averse global partners and occupying space vacated by de-risked competitors.
The broad implications of the recent actions cannot be understated. The U.S. government will use every tool at its disposal to combat narcotics trafficking and its infrastructure—taking quick and decisive actions against entities without regard for the local consequences and using legal mechanisms that make it hard if not impossible for the target to fight back. Those who act quickly and decisively will not only insulate themselves from enforcement risk but also lead the next generation of secure, transparent financial services in the Americas.
We are available to provide confidential exposure reviews, internal assessments, and engagement strategies for regulators, partners, and investors.
The foregoing is for informational purposes only. It is not intended as legal advice and no attorney-client relationship is formed by the provision of this information.
About LBKM
Lewis Baach Kaufmann Middlemiss PLLC is a boutique law firm focusing on international financial disputes, financial compliance, white collar defense and investigations, insurance and reinsurance, and cross-border commercial litigation and arbitration. The firm has offices in Washington, New York, and London.