AMERICA'S DESIGNATION OF MEXICAN DRUG CARTELS AS TERRORIST ORGANIZATIONS INCREASES THE RISK THAT COMPLIANCE OFFICERS COULD BE INDICTED FOR PROVIDING MATERIAL SUPPORT TO A TERRORIST ORGANIZATION

This week's action by the Trump Administration, in designating narcotics cartels as terrorist organizations, could have some serious unintended consequences for compliance officers at international banks which engage in significant business with Mexico and Mexican banks. The toolbox available to charge compliance officers that approve funds transfers of what is later determined to be the proceeds of drug crime back to the Mexican drug cartels is greatly expanded when the recipient is a Specially Designated Global Terrorist organization (SDGT). Inept, lazy or sloppy compliance officers may soon find themselves indicted, as part of a massive drug case, as unwitting or negligent players in a money laundering operation.

That sounds like America's new government, now unfortunately led by non-lawyers who haven't considered all the implications of their acts, has run headlong into the Law of Unintended Consequences. There may be victims who were simply ineffective compliance officers, caught up as a small cog in a large narcotics wheel now named as a terrorist operation. Perhaps this is a sign that compliance officers whose skill levels are below Banking Best Practices had better become more effective, or face the possibility that some zealous Assistant U.S. Attorney will drop them into a huge drug case, now listed as a counter-terrorist operation. Watch yourselves now, gentlemen.