US targets Mexican cartel fuel smuggling

The US has moved to disrupt a cartel-linked fuel smuggling network that uses logistics companies, falsified customs documents and maritime transport to move illicit hydrocarbons between the US and Mexico.

The Treasury's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) announced sanctions and a new alert targeting schemes linked to Cartel de Jalisco Nueva Generacion (CJNG), which Washington has designated under counternarcotics and counterterrorism authorities.

OFAC sanctioned two Mexican nationals and nine entities accused of supporting a fuel theft and smuggling enterprise that allegedly generates tens of millions of dollars annually for the cartel. The network is said to involve cross-border smuggling, shell companies, false invoices and misclassified customs documentation designed to evade Mexican fuel import taxes. FinCEN warned that fuel is being moved from the US into Mexico through tanker trucks, railcars and shadow fleets of maritime vessels, with front and shell companies operating across freight, logistics and fuel distribution.

That places maritime service providers, vessel operators, brokers, traders, terminal interests and banks on notice. Any company handling fuel movements into Mexico now faces a higher due diligence burden around cargo origin, consignee identity, customs descriptions, payments and links to newly designated entities. Treasury said huachicol-related activity has become the most important non-drug revenue source for Mexican cartels, covering fuel theft in Mexico, crude smuggling into the US and fuel smuggling back into Mexico. Huachicol is a Spanish slang term used to refer to adulterated alcoholic beverages, or to gasoline or diesel that has been adulterated or stolen.

Photo: Calistemon / Wikimedia Commons (CC BY-SA 4.0).