On January 20, 2025, President Donald J. Trump signed Executive Order 14157, "Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists" (EO 14157). EO 14157 declares that cartels "function as quasi-governmental entities" that "threaten the safety of the American people, the security of the United States, and the stability of the international order in the Western Hemisphere."1 The order further states that "[o]ther transnational organizations, such as Tren de Aragua ... [and] Mara Salvatrucha (MS-13)," wage "campaigns of violence and terror in the United States" that "similarly threaten the stability of the international order in the Western Hemisphere."2
Consistent with EO 14157, Secretary of State Marco Rubio has designated eight international cartel entities'primarily operating out of Mexico'as both Foreign Terrorist Organizations (FTOs)3 and Specially Designated Global Terrorists (SDGTs):4 (1) Cartel del Golfo (a.k.a. CDG, Gulf Cartel, Osiel Cardenas-Guillen Organization); (2) Cartel de Jalisco Nueva Generacion (a.k.a. New Generation Cartel of Jalisco, CJNG, Jalisco New Generation Cartel); (3) Cartel del Noreste (a.k.a. CDN, Northeast Cartel, Los Zetas); (4) Cartel de Sinaloa (a.k.a. Sinaloa Cartel, Mexican Federation, Guadalajara Cartel); (5) Carteles Unidos (a.k.a. United Cartels, Tepalcatepec Cartel, Cartel de Tepalcatepec, the Grandfather Cartel, Cartel del Abuelo, Cartel de Los Reyes); (6) Mara Salvatrucha (a.k.a. MS-13); (7) la Nueva Familia Michoacana (a.k.a. LNFM); and (8) Tren de Aragua (a.k.a. Aragua Train).5
These designations increase the legal risks facing individuals, companies, and organizations that may have business dealings or operations in regions of Latin America and the United States where these newly designated FTOs and SDGTs, or their agents or affiliates, are most active. Although these cartels are predominantly based in Mexico, their operations and distribution networks extend well beyond the border of Mexico and other key Latin American countries, such that these designations also increase risks for business entities, organizations, and individuals operating throughout the Western Hemisphere.
Companies in a wide variety of sectors'including banking, financial services, transportation, tourism, logistics, telecommunications, oil and gas, mining, real estate, agriculture, and agribusiness'may face increased risks of civil litigation and/or criminal investigation and prosecution if they directly or indirectly do business with, or otherwise engage in prohibited activities with, cartels designated as FTOs or SDGTs or with their agents or affiliates.6 Indeed, the US government's designations of these cartels present litigation risks even to those individuals and entities that may not know of or suspect a connection to drug trafficking but that nonetheless may be sued under the Anti-Terrorism Act (ATA) on a theory that they had constructive knowledge or "should have known" of an alleged connection to a designated cartel or its agents or affiliates. Individuals or entities may also face heightened scrutiny from the US government as it seeks to investigate and prosecute those most closely connected to the newly designated FTOs; additional regulatory obligations, particularly with respect to US financial institutions' obligations to freeze and report on FTO funds; and increased risks of being subject to secondary sanctions.
This alert provides an overview of the legal landscape and explains how WilmerHale is well positioned to help clients assess and navigate the increased risks, including by helping clients identify and mitigate these risks, respond to US government investigations, and navigate criminal prosecutions and civil suits.7
I. Civil Litigation Risk Under the ATA
The new FTO designations open US courts to private civil suits against individuals, companies, or other organizations under the ATA. The ATA establishes US jurisdiction and provides terrorism-related causes of action for individuals or entities injured by the terrorist acts of a designated FTO or its affiliates or agents. Plaintiffs can sue not only the FTOs themselves for their acts of terrorism but also any company, entity, or individual that aids and abets such acts or conspires with an FTO or its affiliates or agents in support of such acts. In Twitter v. Taamneh, the US Supreme Court found it insufficient to plead secondary liability under the ATA based on nothing more than a defendant's passive nonfeasance or failure to act. But the Taamneh decision may not fully protect an individual or a company from secondary claims under the ATA where plaintiffs allege affirmative conduct, such as providing goods or services to clients with alleged connections to designated FTOs, particularly when they do so in some unusual way.
The ATA, as amended by the Justice Against Sponsors of Terrorism Act (JASTA)8 enables US nationals to bring claims of primary liability for acts of international terrorism or secondary liability for aiding and abetting a designated FTO or engaging in a conspiracy with a person or persons who committed an alleged act of international terrorism.9 Successful plaintiffs may be awarded treble damages, litigation costs, and attorneys' fees.10
The construction of the term "international terrorism" in the context of cartel-linked activities may raise novel questions. The ATA defines "international terrorism" as "violent acts" or "acts dangerous to human life" that (1) violate federal or state criminal law; (2) appear to be intended to "intimidate or coerce" civilians, "influence ... government [policy] by intimidation or coercion," or affect a government's conduct "by mass destruction, assassination, or kidnapping"; and (3) "occur primarily outside the territorial jurisdiction of the United States" or "transcend national boundaries."11
Disputes over whether cartel-linked violence satisfies this definition will likely center on the second and third elements. Most of the newly designated cartels generally attempt to acquire or maintain control through intimidation and coercion tactics targeting civilians and governments.12 But litigation will be heavily fact-dependent and may turn on inquiries into whether the specific attack objectively appeared to involve terroristic intent.13 If the alleged act occurs in a US jurisdiction, the key inquiry will be whether the act "transcend[s] national boundaries." The mere fact that a US-based perpetrator was influenced or radicalized by foreign content online has been held insufficient to satisfy the transnational component.14 But, as one court has suggested, an attack may transcend national boundaries if a perpetrator was, for instance, radicalized overseas and planned the attack abroad.15 Whether cartel violence in areas under US jurisdiction satisfies the third element will turn on considerations of the "means by which" the acts at issue "are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate[.]"16
A defendant may face aiding-and-abetting liability under the ATA not just for direct acts of international terrorism but also for knowingly and substantially assisting an act of international terrorism that results in injury to the plaintiff.17 In Taamneh, the Supreme Court clarified that secondary liability under the ATA requires "conscious, voluntary, and culpable participation in another's wrongdoing"'mere passive nonfeasance is generally not sufficient. In Taamneh, the plaintiffs asserted secondary liability claims under the ATA, alleging that Facebook's, Google's, and Twitter's failure to remove the content of a designated FTO (i.e., ISIS) from their platforms amounted to providing substantial assistance to an ISIS terrorist attack in Istanbul. The Court held that such allegations were insufficient to allege secondary liability claims because the ATA requires more than defendants' failure to act. Instead, defendants must affirmatively act, such that they "culpably associated themselves with the ... attack, participated in it as something that they wished to bring about, or sought by their action[s] to make it succeed."18 However, the Court left open the possibility of ATA liability based on mere inaction in "situations where the provider of routine services does so in an unusual way or provides such dangerous wares that selling those goods to a terrorist group could constitute aiding and abetting a foreseeable terror attack."19
Lower courts have since considered what conduct meets Taamneh's "culpable participation" standard. Courts have recently considered'and in many cases allowed cases to proceed past the motion-to-dismiss stage'aiding-and-abetting claims where plaintiffs plausibly alleged that transactions occurred in "unusual ways" or that aid to a terrorist enterprise was "pervasive and systemic," including where plaintiffs asserted that:
- a bank allegedly provided non-routine banking services for customers with well-known, public, and direct ties to terrorists for a lengthy period by "affirmatively cho[osing] to ignore red flags regarding these individuals ... and cho[osing] to insulate their transactions from scrutiny designed to expose violations of international sanctions and to prevent the flow of money to terrorists," such that the bank's management allegedly appeared to intend to assist the customer in harming Americans.20
- a cryptocurrency exchange provided otherwise routine services'cryptocurrency transaction services'in an "unusual way" (i.e., in a way that was allegedly designed to circumvent anti-money laundering regulations) to, among other things, allegedly protect a user associated with Hamas, thereby aiding and abetting Hamas' October 7, 2023 attacks in Israel.21
- a South African telecom company allegedly aided and abetted the Iranian Islamic Revolutionary Guard Corps and its proxies by allegedly, among other...
