Considering how to address the new Executive Order on Cartels & Terrorism? Do you have heightened risks?
The designation of cartels as terrorist entities could fundamentally shift how businesses operate across the US-Mexico border.
Join our latest podcast where Christopher Mason & Dr. Ian O. discuss the impacts of Avocado Toast & Geopolitical Risk.
➡️ Cartels in Mexico dominate the market on avocados.
➡️ Are you now doing business with cartels and therefore financing terrorism?
On January 20th, the President signed an Executive Order focused on designating cartels as foreign terrorist organizations.
This decision could reverberate throughout industries, requiring companies to adapt their approach to due diligence conducted on customers, clients, and suppliers.
Third-party risk management teams must consider a heightened regulatory and criminal enforcement environment.
Chris emphasizes how "the stakes will be raised… both from a reputational standpoint and a criminal standpoint."
Tighter constraints, impacting banks, suppliers, and a wide range of industries, could have a chilling effect as businesses work to adapt their compliance programs to account for exposure to a new regulatory framework.
In-house counsel must also ensure that policies and procedures align with any emerging regulatory or legislative changes.
Dr. Ian O. illustrates the pervasive reach of cartels into legitimate sectors, using the avocado supply chain as a prime example.
Businesses dealing with seemingly innocuous products must now consider the potential risk of indirect association with terrorist networks.
Key Points:
📌 Heightened Regulatory Scrutiny: Classifying cartels as terrorist organizations will dramatically increase regulatory pressures on businesses with ties to Mexico, necessitating robust compliance strategies.
📌 Increased Vigilance: Companies operating in financial services, agriculture, and logistics must implement enhanced vetting policies and procedures to account for changes.
📌 Due Diligence Imperative: Enhanced due diligence procedures are critical across all regional business sectors to avoid reputational damage and possibly criminal prosecution.
📌 Broader Implications for International Trade: This classification could further strain U.S.-Mexico relations and complicate trade logistics, requiring businesses to adapt swiftly and strategically.
Infortal’s Continuing Legal Education (CLE) courses are designed to equip executives, attorneys and risk managers with strategic insights to navigate the complex landscape of geopolitical risk. We cover topics such as international sanctions, regulatory risks, corporate espionage, AML, global warfare, anti-terrorist financing and corruption.
We can help you make informed decisions and mitigate potential risks for your business.
