Corporate Enforcement Actions for Kingpin Act Violations
Since February 20, 2025, when eight cartels and transnational criminal organizations (TCOs) were designated as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs), there has been significant attention on enforcement actions by the US Department of Justice (DOJ) against corporations for supporting these groups.
However, enforcement efforts related to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), which targets international narcotics traffickers and their networks with economic sanctions, have attracted less focus.
Scope of Kingpin Act Enforcement
The Kingpin Act complements the International Emergency Economic Powers Act by explicitly addressing narcotics-related economic sanctions. Recent enforcement under this legislation signals that the DOJ and the US Department of the Treasury's Office of Foreign Assets Control (OFAC) are actively investigating and prosecuting a broad range of corporate conduct across various industries.
"Material support by corporations to foreign terrorist organizations, including recently designated Cartels and TCOs," and related sanctions violations remain priority areas for white-collar enforcement," the DOJ's Criminal Division emphasized.
Implications for Businesses
- Companies operating in diverse sectors face increasing enforcement risks related to dealings with cartels and TCOs.
- Prosecutions under the Kingpin Act underline the US government’s determination to scrutinize and penalize corporate involvement with designated criminal organizations.
This trend highlights the importance of rigorous compliance programs to manage sanctions risks and avoid association with designated entities.
Author's Summary
Enforcement actions under the Kingpin Act emphasize growing regulatory scrutiny on corporations supporting criminal organizations, underscoring the need for robust compliance across industries.