Corporate Enforcement Actions for Kingpin Act Violations Highlight Cartel-Related Enforcement Risks
Since the designations on February 20, 2025, of eight cartels and transnational criminal organizations (TCOs) as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs), much attention has been given to prior enforcement actions by the US Department of Justice (DOJ) against corporations accused of providing material support to FTOs.
However, enforcement actions under the Foreign Narcotics Kingpin Designation Act (Kingpin Act)—which supplements the International Emergency Economic Powers Act by targeting international narcotics traffickers and their networks with economic sanctions—have received relatively less public focus.
Scope of Kingpin Act Enforcement
These Kingpin Act enforcement actions illustrate that both the DOJ and the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) are actively pursuing investigations, designations, and enforcement across a wide range of corporate conduct in various industries.
The DOJ's Criminal Division has emphasized “[m]aterial support by corporations to foreign terrorist organizations, including recently designated Cartels and TCOs” and sanctions violations involving cartels and TCOs as key priorities in white-collar enforcement.
Implications for Companies
- Companies operating in diverse sectors must assess compliance risks related to dealings with entities designated as cartels or TCOs.
- Enforcement actions show that providing indirect or direct support to these designated groups carries significant legal and financial risks.
- Ongoing monitoring and due diligence remain critical given the expanded scope of DOJ and OFAC enforcement activities.
Summary
Enforcement under the Kingpin Act underscores growing regulatory scrutiny of corporate conduct related to cartels and TCOs, highlighting the importance of proactive compliance strategies.
Author's summary: Recent Kingpin Act enforcement emphasizes rising risks for companies linked to cartels and transnational criminal organizations, urging stronger compliance and vigilance across industries.
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