Two recent pronouncements indicate that enforcement risks around dealing with criminal narcotics trafficking organizations in Latin America continue to increase. We expect the Trump Administration to continue to focus on designating such organizations as Foreign Terrorist Organizations (“FTOs”), sanctioning their supporters, and enforcing the measures already in place. We also expect countries across Latin America to align more with the United States and impose their own sanctions against these organizations.
First, on September 15, President Trump submitted to Congress a Presidential Determination on Major Drug Transit or Major Illicit Drug Producing Countries for Fiscal Year 2027(“Presidential Determination”). The Presidential Administration named a number of countries as major drug transit or illicit drug producing countries, including several countries in Latin America (Colombia, Mexico, and others). It also stated that the Government of Brazil has failed to confront Primeiro Comando da Capital (“PCC”) and Comando Vermelho, which were designated by the US State Department as Foreign Terrorist Organizations earlier this year.
Just a few days later, on September 22, the 15 countries participating in the new Shield of the Americas initiative—Argentina, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guyana, Honduras, Panama, Paraguay, Peru, Trinidad and Tobago and United States—issued a joint statement (“Joint Statement”) in which they announced their intention to pursue individual and collective measures against 24 designated criminal organizations that operate across the Americas.
Notably, Brazil is not among the participants. The Brazilian Government has not formally responded to the Joint Statement, but its Ministry of Justice and Public Security rejected the Presidential Determination’s characterization of Brazil’s enforcement efforts and reaffirmed the country’s commitment to combating transnational organized crime and to international cooperation in that arena.
Taken together, these pronouncements provide a strong sense of future sanctions and enforcement priorities. We can expect the US Government to continue to target parties who deal with these organizations, as it did in July through sanctions on parties determined to have links to PCC (see our blog post on the July sanctions here).
Now we can also expect at least 15 countries across Latin America to focus their own enforcement efforts on these organizations. In fact, in the Joint Statement, the participating governments indicated that they intend to employ measures such as asset freezes, immigration and visa restrictions, and criminal liability for persons who knowingly provide material or logistical support to targeted organizations.
Companies with footprints in Latin America should be aware of the risks of dealing with these organizations and parties sanctioned for links to them. Our trade team in the United States and across Latin America has been advising our clients on how to identify and mitigate these risks. We would be happy to speak with you about what we are seeing and how companies in the region are addressing these risks.
