Treasury Strengthens Financial Regulations to Combat Money Laundering by Mexican Cartels

March 12, 2025 TruthUSA

Businesses located in border regions of California and Texas are now obligated to report cash transactions exceeding $200.

The administration under Trump is enhancing financial regulations along the U.S.-Mexico border as part of efforts to combat cartel money laundering. This involves implementing fresh cash transaction reporting obligations for businesses in pivotal border territories.

According to a Geographic Targeting Order (GTO) issued by the Treasury Department on March 11, businesses including currency exchanges, check-cashing services, and money transfer facilities within 30 ZIP codes in California and Texas are required to report all cash transactions above $200 to the Financial Crimes Enforcement Network (FinCEN).

The order, which will take effect 30 days following its publication in the Federal Register and remain effective for 179 days unless renewed, is part of a comprehensive initiative to crack down on cartel finances and drug trafficking operations.

“Today’s issuance of this GTO highlights our serious concerns regarding the significant risk posed to the U.S. financial system by cartels, drug traffickers, and other criminal entities along the Southwest border,” stated Treasury Secretary Scott Bessent.

“In our coordinated governmental effort to address this threat, Treasury is committed to utilizing all available tools and authorities to better identify and counter these illegal activities.”

The new regulation zeroes in on smaller cash transactions, which officials assert are often manipulated by cartels to structure and launder drug money by dividing deposits into lesser amounts to evade detection. Previously, the reporting threshold was only cash transactions exceeding $10,000.

The order specifically targets counties along the border in California (Imperial and San Diego) and Texas (Cameron, El Paso, Hidalgo, Maverick, and Webb), identified by the Treasury Department as high-risk areas for cash smuggling, money laundering, and cartel-related financial activities.

Non-compliance with the reporting mandates may lead to civil or criminal penalties under the Bank Secrecy Act (BSA).

This financial crackdown comes on the heels of President Donald Trump’s executive order on January 20, his first day back in office, which compelled officials to evaluate the potential designation of specific cartels and transnational gangs as terrorist organizations.

That directive resulted in a February decision to officially label several prominent Mexican cartels and criminal entities as terrorist organizations, thereby broadening U.S. legal authority to seize cartel assets, hinder financial transactions, and impose sanctions on supporters.

During his initial term, Trump contemplated such designations but ultimately did not proceed. This recent classification is part of a larger strategy to dismantle cartel operations using financial, legal, and enforcement actions.

Defense Secretary Pete Hegseth indicated that the Trump administration is considering military action against Mexican cartels following their designation as foreign terrorist organizations.

Although the new reporting regulations aim to mitigate cartel money laundering, critics argue that the measures may not effectively disrupt criminal finances and could impose additional burdens on legitimate businesses and low-income consumers in border regions.

Julia Yansura, program director for environmental crime and illicit finance at the FACT Coalition, criticized the new rule as “misguided,” asserting that it overlooks the larger issue.

“Illegal drug trafficking is a significant issue with devastating human consequences. More than 100,000 Americans succumb to drug overdoses annually, which is the leading cause of death for individuals aged 18 to 45,” Yansura stated in a statement. “However, it’s challenging to see how targeting $200 cash transactions will advance efforts against this $500 billion illicit market.”

Yansura also mentioned a recent Treasury Department decision to ease the enforcement of corporate transparency regulations, which were designed to target anonymous shell companies often utilized for extensive money laundering.

She expressed concerns that requiring businesses to report their transactions could deter individuals from utilizing legal financial services, thereby driving them to unregulated cash networks that are even more challenging to monitor.

The Epoch Times has reached out to the Treasury Department for a comment.

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