Sanctions Capture Cartels As Terrorist Groups

Although terrorist designations are not new, before the latest cartel designations, companies often had significantly less exposure because the jurisdictions implicated by terrorist activity were either conflict zones, or comprehensively sanctioned jurisdictions where sanctions risks had already made it prohibitively difficult to operate, e.g., Yemen, Iran, Iraq, and Syria. Now, significant terrorist risk exists in Mexico and several other Latin American countries in which Canadian companies have significant operations. Under NAFTA and CUSMA, supply chains have benefited through manufacturing and sourcing in Mexico. However, cartel activity in the country is now leading to increased enforcement risk.