The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently executed its first enforcement action under the 2024 FEND Off Fentanyl Act by sanctioning three Mexican financial institutions as money laundering concerns. This action follows the Trump administration’s designation of drug cartels as Foreign Terrorist Organizations, creating a legal framework for targeting not just traffickers, but also their financial enablers.
Secretary of the Treasury Scott Bessent commented on the significance of the enforcement action in June 2025. “Financial facilitators like CIBanco, Intercam and Vector are enabling the poisoning of countless Americans by moving money on behalf of cartels, making them vital cogs in the fentanyl supply chain. Through the first use of this powerful authority, these actions affirm Treasury’s commitment to using all tools at our disposal to counter the threat posed by criminal and terrorist organizations trafficking fentanyl and other narcotics.”
Implications for U.S. Financial Institutions
The sanctions against the three designated entities effectively cuts them off from the U.S. financial system and signals a more aggressive financial enforcement approach aimed at drug cartels.
The action has both immediate and far-reaching regulatory implications, as it sets a precedent for all institutions. Among the impacts:
Increased regulatory scrutiny
Financial institutions must anticipate and prepare for broader scrutiny and reporting of cross-border and high-risk corridor transactions.
Compliance program enhancements
Institutions should enhance their AML and Countering the Financing of Terrorism (CFT) programs to account for the act’s enforcement mechanisms and elevated expectations tied to narcotics-related financial activity.
Board and management awareness
These developments carry reputational and legal risks. Boards and compliance committees must be briefed on any institutional exposure and countermeasures.
In a recent development, the U.S. Treasury granted a 45-day temporary reprieve to the sanctioned Mexican institutions, pushing the effective date of the restrictions to September 4. This delay reflects coordinated efforts between the U.S. and Mexican governments and acknowledges progress made by Mexico in addressing cartel-linked money laundering. While the sanctions remain in force, the grace period offers a brief window for affected firms to transition operations and mitigate any immediate economic disruptions.
For Institutions with Exposure to the Sanctioned Banks
Banks that have had transactions with the sanctioned banks are expected to take additional measures to comply with the act, including:
Transaction lookback
A transaction review is expected—even in the absence of formal regulatory direction—spanning at least 12 to 24 months. The objective is to identify dealings with sanctioned institutions and determine if SARs are warranted.
Suspicious activity reporting
If transactions show red flags consistent with fentanyl trafficking or cartel-linked activity, institutions must file SARs detailing counterparties, amounts and reason for suspicion.
Risk reassessment
Entities or customers with ties to the named banks may need to be re-risked and subjected to enhanced due diligence (EDD), particularly if operating in high-risk jurisdictions.
Updated internal controls
Transaction monitoring systems should be revised to detect activity involving the three banks or similar typologies consistent with fentanyl trafficking.
What This Means for Compliance Strategy
The designation of these financial institutions and use of “special measures” against them marks a significant shift in U.S. anti-money laundering enforcement. It’s not just a targeted response—it’s a signal that financial institutions are expected to serve as the front line in detecting and disrupting the financial mechanisms that underpin the illicit fentanyl trade.
The message from regulators is clear: Enhanced vigilance is no longer optional. Financial institutions must strengthen their AML frameworks, re-evaluate client risk and prepare for increased scrutiny—particularly if they serve as correspondents or have counterparties in Mexico or other high-risk regions.
Our Financial Crimes team is closely monitoring these evolving requirements.
We’re here to help—from rapid transaction reviews and SAR support to strategic enhancements that align with FinCEN expectations. Reach out if you need guidance navigating these developments and ensuring your compliance programs are future-ready.
About the Author
Partner, Financial Crimes Advisory
Jon Glass has more than 25 years’ experience managing and operating anti-money laundering (AML) compliance, fraud detection and security programs across multiple industries. He was previously a managing director and co-founder of Dominion Advisory Group, a U.S.-based AML advisory and financial crime consulting firm.
