Corporate Enforcement Actions for Kingpin Act Violations Highlight Cartel-Related Risks
Since the designations on February 20, 2025, of eight cartels and transnational criminal organizations (TCOs) as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs), there has been significant discussion about prior enforcement actions by the US Department of Justice (DOJ) against corporations accused of providing material support to these FTOs.
However, enforcement actions related to violations of the Foreign Narcotics Kingpin Designation Act (Kingpin Act) have attracted less public attention. This legislation supplements the International Emergency Economic Powers Act by specifically targeting international narcotics traffickers and their organizations through economic sanctions.
Enforcement under the Kingpin Act reveals that the DOJ and the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) actively investigate and enforce a broad range of conduct involving companies across many industries. As noted previously by the DOJ's Criminal Division:
"[M]aterial support by corporations to foreign terrorist organizations, including recently designated Cartels and TCOs, and sanctions violations involving cartels and TCOs" are priority areas for white-collar enforcement.
Implications for Corporations
- Companies operating in diverse sectors face increased scrutiny under the Kingpin Act.
- Investigations may involve various forms of support to designated cartels and TCOs.
- The DOJ and OFAC are jointly intensifying enforcement efforts in this area.
Key Takeaway
Corporate compliance programs must anticipate expanded enforcement risks linked to cartel-related activities under the Kingpin Act, highlighting the importance of rigorous sanctions screening and risk management.
Author's summary: Enforcement under the Kingpin Act signals rising corporate exposure to cartel-related sanctions risks, emphasizing DOJ and OFAC's focus on broad and diverse violations involving transnational criminal organizations.