The U.S. Department of the Treasury's Office of Foreign Assets Control has imposed what it describes as its largest sanctions action to date against the Cartel de Jalisco Nueva Generación — commonly known as CJNG — network. The action designates more than 50 Mexican individuals and entities under both narcotics trafficking authorities and counterterrorism authorities, specifically Executive Order 13224, which targets individuals and organizations that commit, threaten to commit, or support acts of terrorism.

The designated network spans a wide range of commercial sectors, including:

• Construction
• Agriculture
• Tequila and agave production
• Fuel retail and petroleum services
• Logistics and transportation
• Clothing and furniture manufacturing
• Private security

Property Blocking

All property and interests in property of designated individuals and entities that are within the United States or within the possession or control of U.S. persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

The 50-Percent Ownership Rule

OFAC's 50-percent rule applies: entities owned 50 percent or more — directly or indirectly — by one or more designated persons are themselves blocked, even if not separately listed on the SDN List. This rule significantly expands the practical scope of the designation beyond the named parties.

Prohibited Transactions

U.S. persons are generally prohibited from engaging in transactions with designated parties. This includes payments, deliveries, contract performance, insurance coverage, and the release of any blocked property.

Secondary Sanctions Exposure

Because many targets were also designated under Executive Order 13224 — the counterterrorism authority — participating foreign financial institutions may face secondary sanctions exposure. This means non-U.S. banks and financial institutions that knowingly facilitate significant transactions for designated parties risk being cut off from the U.S. financial system, even if they have no direct U.S. nexus to the underlying transaction.

Financial institutions must immediately rescreen all Mexican counterparties, beneficial owners, payment intermediaries, and correspondent relationships. Potential matches must be escalated before any payment is processed or released. Existing account relationships with Mexican businesses in the designated sectors — construction, agriculture, tequila, fuel, logistics — require enhanced due diligence and beneficial ownership verification.

Companies importing goods from Mexico — particularly agricultural products, tequila and agave derivatives, fuel, clothing, and furniture — must verify that their Mexican suppliers, distributors, and freight forwarders are not designated or 50-percent-owned by designated parties. Supply chain due diligence should extend to sub-suppliers and logistics intermediaries.

Petroleum services companies, fuel retailers, and energy infrastructure operators with Mexican operations or counterparties face heightened exposure given the explicit designation of petroleum-sector entities. Contracts with Mexican fuel suppliers, service providers, and joint venture partners should be reviewed for sanctions representations, beneficial-ownership disclosure requirements, and suspension or termination rights triggered by designation.

U.S. and international construction firms with Mexican projects, subcontractors, or material suppliers must rescreen their entire Mexican supply chain. Construction is explicitly named in the designated network, and the 50-percent rule means that a designated individual's ownership interest in a subcontractor — even a minority stake — can trigger blocking obligations.

The designation of tequila, agave, and agricultural entities creates specific risks for U.S. importers of Mexican spirits, food products, and agricultural commodities. Importers should verify the ownership structure of their Mexican suppliers and request updated beneficial ownership certifications.

Transportation and logistics companies moving goods across the U.S.–Mexico border must rescreen carriers, freight forwarders, customs brokers, and warehousing operators. The designation of logistics entities within the CJNG network means that routine cross-border shipments may inadvertently involve blocked parties.

Insurance companies providing coverage to U.S. businesses with Mexican operations or counterparties must review their underwriting and claims procedures to ensure that coverage is not extended to blocked parties or transactions.

Existing contracts with Mexican counterparties should be reviewed for:

1. Sanctions representations and warranties — Does the counterparty represent that it is not a designated party and that no designated party holds a 50-percent or greater ownership interest?
2. Beneficial ownership disclosure — Does the contract require ongoing disclosure of ownership changes?
3. Suspension and termination rights — Does the contract permit suspension of performance or termination without penalty if a counterparty becomes designated?
4. Blocked-property procedures — Does the contract address what happens to payments, goods, or services if a party becomes blocked mid-performance?
5. Indemnification — Who bears the cost of compliance failures, delayed shipments, or contract termination resulting from a sanctions designation?

Immediate (within 24–48 hours):

• Run all Mexican counterparties, beneficial owners, and payment intermediaries through OFAC's SDN List and the Consolidated Sanctions List
• Apply the 50-percent rule to any entity with Mexican ownership
• Escalate potential matches to compliance counsel before processing any pending transactions

Short-term (within 30 days):

• Update onboarding and KYC procedures to require enhanced beneficial ownership disclosure for Mexican counterparties in the designated sectors
• Review and update sanctions representations in existing contracts
• Brief operations, procurement, and accounts-payable teams on the new designations and the sectors affected

Ongoing:

• Implement automated rescreening triggers for any ownership change notification from Mexican counterparties
• Monitor OFAC for follow-on designations — large network actions typically generate additional designations as investigations continue
• Review insurance coverage for sanctions exclusions and ensure that claims procedures address blocked-property scenarios

Turkish companies with U.S. operations that source goods from Mexico, use Mexican logistics providers, or have Mexican joint venture partners face the same compliance obligations as U.S.-headquartered companies. The key exposure points are:

• Procurement: Mexican raw materials, components, or finished goods passing through U.S. customs
• Logistics: Mexican freight forwarders or carriers used for U.S.-bound shipments
• Financial transactions: Payments routed through U.S. correspondent banks for Mexican counterparties
• Insurance: U.S.-placed insurance policies covering Mexican operations or shipments

Because the secondary sanctions authority under Executive Order 13224 can reach non-U.S. financial institutions, Turkish banks facilitating significant transactions for CJNG-linked entities also face potential exposure, even without a direct U.S. nexus.

This article is based on publicly available OFAC designations and Federal Register materials. It does not constitute legal advice. Businesses with specific compliance questions should consult qualified sanctions counsel.