Global Trade and Compliance, LLC

Latin America

Leader: Carl W. Pike

Introduction
The United States, the European Union, Japan and Canada, as well as Latin America’s other Export and Import partners, have fundamental interests at stake in the region, such as its commitment to democratic governance and expanding trade relations, as well as the unique responsibility and capacity to prevent continued deterioration in criminal violence. But the U.S. government cannot solve the problem alone (…).

Threats emanating from the region are mainly tied to narcotics and other illicit trafficking:

2024 / Colima in Mexico ranked as the world’s most dangerous city with a homicide rate of 140 per 100,000 inhabitants, according to Statista. Ten (10) of the 13 cities with the highest murder rates worldwide are all found in Mexico. 

2023 / The world’s most dangerous city has been revealed: Celaya, a farming and industrial hub northwest of Mexico City, topped the list of the world’s most dangerous cities, citing a homicide rate of 109.4 per every 100,000 inhabitants, according to recent Statista data. In fact, the six cities with the highest murder rates worldwide were all found in Mexico, including in Tijuana (photo above), Ciudad Juárez, Ciudad Obregon, Irapuato and Ensenada. Outside of Mexico, St Louis in the United States, Feira de Santana, Brazil, and Cape Town, South Africa, were also seen amongst the top ten.

2022  / According to this ranking of the world’s 50 most violent cities, compiled by Mexico’s Citizens’ Council for Public Safety and Criminal Justice (CCSPJP), the vast majority of  the 50 most violent cities in the world are in the Western Hemisphere. Except for Cape Town, Durban, and Johannesburg in South Africa, they are all in the Americas. The 2022 list is headed by Mexico, with 9 of the 10 most violent cities. Brazil contributes 10 cities to the list, and Colombia has 6 cities on the list. Jamaica with Kingston, Haiti with Port-au-Prince, Ecuador with Guayaquil, Puerto Rico with San Juan, and Honduras with San Pedro Sula and the Central District close the list.
Tijuana has the most homicides of any city in Mexico, with about double the number of the place that comes second, the border city of Ciudad Juarez. Tijuana, situated in the border state of Baja California and with a population of over 2.1 million, has for several years seen around 2,000 murders annually. The current round of violence in Tijuana date back to 2017; turf battles between the Jalisco New Generation and Sinaloa cartels, and other groups, are to blame.

However, there are also increased activities and investments made in the region by our adversaries in the context of great-power competition. While Russia and, to a lesser extent, Iran are highly dependent on anti-U.S. governments assuming power in various Latin American countries, as well as on unlawful networks, China, Latin America’s second-largest trading partner after the United States (Collectively, the EU is Latin America’s third-largest trading partner), is implementing large-scale global plans that include Latin America as an increasingly important component. In 2017, China extended their Belt and Road Initiative to Latin America, describing it as a “natural extension of the 21st Century Maritime Silk Road”, and since then their steady diplomacy in Latin America has created new avenues for influence in the region. Beijing now has a larger footprint, stronger diplomatic ties, and greater economic leverage in Latin America than at any time in the past, and what China’s global security initiative tells us about its strategic engagement with Latin America, can be found in an analysis of the “Global Security Initiative Concept Paper”, published in The Diplomat. Jamestown’s Eurasia Daily Monitor describes how the Kremlin pushes its agenda throughout Latin America
“Triads, Snakeheads, and Flying Money: The Underworld of Chinese Criminal Networks in Latin America and the Caribbean” is a Florida International University (FIU) paper, published in August 2023, providing a comprehensive analysis of the Chinese individuals, gangs, and companies engaging in illicit activities in Latin America and the Caribbean. Their methodology was to research academic literature, news articles, press releases, official statements, and podcasts in Spanish, Portuguese, Mandarin and English, as well as conduct off-the-record interviews with U.S. and LAC intelligence and law enforcement officials to ascertain growing trends in Chinese criminal behavior in the region.

China’s Role in Democratic Backsliding in Latin America and the Caribbean
China’s mounting influence in Latin America and the Caribbean (LAC) has been the subject of study and consternation in U.S. policy circles for well over a decade. An especially concerning area of research in this regard has been the possibility that Chinese economic, diplomatic, security, and political activities within the region could be contributing to the democratic backsliding witnessed in recent decades. However, the precise mechanisms through which the People’s Republic of China may or may not exacerbate LAC’s ongoing democratic regression have been insufficiently studied. This CSIS report seeks to more fully enumerate the nature of China’s impact on democracy in LAC.
When the Dragon Joins the Club—Chinese Engagement in Regional Organizations and Forums in the Americas is another interesting Florida International University (FIU) paper, published in March 2024. As Chinese influence in the Americas expands, U.S. policymakers are increasingly concerned about its presence within regional organizations. Despite the focus on specific organizations, Latin America and the Caribbean (LAC) boast a complex network of governance forums, offering numerous avenues for Chinese engagement. With over 30 regional organizations ranging from established forums like the Organization of American States to ad hoc groups, the LAC region presents a diverse landscape, with Chinese engagement strategy varying from pursuing economic advantages to shaping regional norms. While U.S. attention often centers on select organizations, a broader approach is necessary to prevent alienating LAC leaders and to enhance regional governance effectively.

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Regarding Russia, we are sharing the below links to State Department Reporting that may be of interest, as well as two 2024 CSIS publications. The Russian government is currently financing an on-going, well-funded disinformation campaign across Latin America. The Kremlin’s campaign plans to leverage developed media contacts in Argentina, Bolivia, Chile, Colombia, Cuba, Mexico, Venezuela, Brazil, Ecuador, Panama, Paraguay, Peru, and Uruguay, among other countries in Latin America, in order to carry out an information manipulation campaign designed to surreptitiously exploit the openness of Latin America’s media and information environment. The Kremlin’s ultimate goal appears to be to launder its propaganda and disinformation through local media in a way that feels organic to Latin American audiences to undermine support for Ukraine and propagate anti-U.S. and anti-NATO sentiment.
Exporting Pro-Kremlin Disinformation: The Case of Nova Resistência in Brazil (United States, Department of State, October 19, 2023), and
The Kremlin’s Efforts to Covertly Spread Disinformation in Latin America (United States, Department of State, November 7, 2023).
The Kremlin’s Caribbean Gambit: A Great Power Competition Spillover? (Center for Strategic and International Studies, June 24, 2024)
Two Years Later: LAC and Russia’s War in Ukraine / While Latin American and Caribbean (LAC) governments may be geographically removed from what many regional leaders consider an internal European conflict, the region has not been spared from the war’s economic and geopolitical repercussions. In the two years since Russia’s full-scale invasion of Ukraine, many countries continue their pursuit of nonalignment, neither condemning Russia for the invasion nor fully supporting Ukraine. Read “Critical Questions” of February 22, 2024, produced by the Center for Strategic and International Studies.

Services
When requiring immediate assistance for acts or threats of violence or political instability, or when the need for intelligence gathering arises, we will immediately assist with the necessary resources. We cover Latin America’s largest cities and many other destinations in South America, Central America, Mexico, or the islands of the Caribbean (see below*).
Our carefully selected professionals provide various levels of high or low-profile protection and we also carry out audits/assessments, covert surveillance operations, investigations (e.g. illicit trade, corruption-related services**, asset tracing, etc. but also background checks and (enhanced) due diligence regarding M&A and foreign direct investments – FDI), as well as various other services. Our U.S. based operations personnel come from law enforcement (DEA, mostly), and have special operations backgrounds, all with in-depth, local experience and expertise, and are well equipped to handle even the most difficult assignments.

For more details, please use this form to contact our Senior Consultant Intelligence & Operations, or our CEO.

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*List of Countries in Latin America (in alphabetical order):
1) Antigua and Barbuda (Saint John’s/Caribbean)  2) Argentina (Buenos Aires/South America) 3) Bahamas (Nassau/Caribbean) 4) Barbados (Bridgetown/Caribbean) 5) Bolivia (La Paz, Sucre/South America) 6) Brazil (Brasilia/South America) 7) Chile (Santiago/South America) 8) Colombia (Bogotá/South America) 9) Costa Rica (San José/Central America) 10) Inoperative: Cuba (Havana/Caribbean) 11) Dominica (Roseau/Caribbean) 12) Dominican Republic (Santo Domingo/Caribbean) 13) El Salvador (San Salvador/Central America) 14) Ecuador (Quito/South America) 15) Grenada (Saint George’s/Caribbean) 16) Guatemala (Guatemala City/Central America) 17) Inoperative: Haiti (Port-au-Prince/Caribbean) 18) Honduras (Tegucigalpa/Central America) 19) Jamaica (Kingston/Caribbean) 20) Mexico (Mexico City/North America) 21) Nicaragua (Managua/Central America) 22) Panama (Panama City/Central America) 23) Paraguay (Asunción/South America) 24) Peru (Lima/South America) 25) St. Kitts and Nevis (Basseterre/Caribbean) 26) St. Lucia (Castries/Caribbean) 27) St. Vincent and The Grenadines (Kingstown/Caribbean) 28) Trinidad and Tobago (Port of Spain/Caribbean) 29) Uruguay (Montevideo/South America) 30) Inoperative: Venezuela (Caracas/South America)

** Corruption: dishonest behavior by those in positions of power
The effects of corruption are far-reaching: it can undermine political, social and economic stability, and ultimately threaten the safety and security of society as a whole; it creates a fertile ground for organized criminal activities as criminals are aided in their illegal activities by the complicity of corrupt public officials. But there’s also the FCPA….
The risk to Latin American companies is that the Foreign Corrupt Practices Act (FCPA) is applicable to 1) U.S. citizens and companies, to 2) foreign persons residing in the U.S., to 3) foreign companies listed on U.S. exchanges, and to 4) foreign firms and persons who have substantial contacts in the U.S.
In the U.S., enforcement of the FCPA falls primarily to the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
In recent years, the DOJ has increased its criminal enforcement actions on entities operating in Latin American jurisdictions. According to Law.com, nearly 60% of Justice’s FCPA enforcement actions and more than two-thirds of FCPA-related prosecutions of individuals during 2022 had connections to Latin America.
The increase in enforcement of the FCPA makes companies with ties to Latin America more vulnerable, which means that companies with ties to Latin America need to put measures into place to ensure compliance.

For more information about our FCPA-related services, please click here.

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Additional Information:

2024
Assessing the Adequacy of Anti-corruption Institutions in Select Latin American Countries (Georgetown Americas Institute) / Counter Transnational Criminal Organizations (US Southern Command) / Mobile security vulnerabilities threaten millions in Latin America (ICFP and Citizen Lab) /The peaceful dialogue of Latin America (The Christian Science Monitor) / Latin America & the Caribbean (Brookings) / Forty-Seven Defendants Charged in Imperial Valley Takedown of Drug Trafficking Network Linked to Sinaloa Cartel (DOJ, Office of Public Affairs) / The President Needs to Lead the Cold War on China (Foreign Policy and American Enterprise Institute) / Mexico’s Historic Elections – and Political Violence (Wilson Center) / Exporting Autocracy – China’s Role in Democratic Backsliding in Latin America and the Caribbean (Center for Strategic and International Studies) / Juan Orlando Hernández, Former President of Honduras, Sentenced to 45 Years in Prison for Conspiring to Distribute More Than 400 Tons of Cocaine and Related Firearms Offenses (DOJ, Office of Public Affairs) / Treasury Sanctions Mexico- and China-Based Money Launderers Linked to the Sinaloa Cartel (DOJ, Office of Public Affairs) / The Kremlin’s Caribbean Gambit: A Great Power Competition Spillover? (CSIS) / China’s presence in Latin America has expanded dramatically (The Economist)

2022-2023
China and Russia’s Lies Are Winning Over the Global South (AEI) / Mexico’s Long War: Drugs, Crime, and the Cartels (CFR) / Recession Has Businesses Looking At Latin America (Forbes) / How Mexico’s Cartel Jalisco Nueva Generación rules (Brookings) / US needs to rebuild Latin American alliances as Russia grows global pro-war power base (The Conversation) / China’s Latin America Move (Forbes) / A Hesitant Hemisphere: How Latin America Has Been Shaped by the War in Ukraine (CSIS) / The US Must Defeat Mexico’s Drug Cartels (Hudson) / Latin America and the Caribbean: Top Three Risks for 2023 (CSIS) / Journalism in Latin America is Under Attack by Spyware (Wilson Center) / The House Judiciary Subcommittee on Crime and Federal Government Surveillance: The Fentanyl Crisis in America: Inaction is No Longer an Option (video) / Briefing on the Senate Foreign Relations Committee Countering Illicit Fentanyl Trafficking Hearing (Wilson Center / video) / The American Dream, Reimagined: Why LatAm Is Primed To Be The Next Silicon Valley (Forbes) / Years of global supply chain chaos could mean a nearshoring jackpot for the Americas in 2023 (Fortune, subscription needed / What China’s Global Security Initiative Tells Us About Its Strategic Engagement with Latin America (The Diploma) / Triads, Snakeheads, and Flying Money: The Underworld of Chinese Criminal Networks in Latin America and the Caribbean (FlU) / Crucial trends to watch in Latin America next year (2024) (EIU’s latest Global Outlook video) / Notice on the Continuation of the National Emergency with Respect to the Global Illicit Drug Trade (White House)/ Dollarization – Argentina’s Last Chance for Economic Stability (AEI) // Russian Influence Campaigns in Latin America (USIP) / Latin America Anti-Corruption Assessment 2021-2022 (Cyrus R. Vance Center for International Justice) / Gang violence is spreading across Latin America (The Economist)

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Sanctions (2024)

July 1, 2024: Treasury Sanctions Mexico- and China-Based Money Launderers Linked to the Sinaloa Cartel

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a Mexico-based money launderer and China-based members of a money laundering organization with criminal links to the Sinaloa Cartel as part of ongoing efforts to disrupt the flow of illicit narcotics into the United States. This action is the result of the U.S. government’s ongoing efforts, in cooperation with the Mexican government, to disrupt the trafficking of fentanyl and save lives — a priority under the President’s Unity Agenda. Today’s action furthers efforts by Treasury’s Counter-Fentanyl Strike Force, which leverages Treasury’s unique expertise and capabilities to disrupt the illicit financial networks relied upon by the cartels.
“Combatting the threat posed by Money Laundering Organizations in China is a key priority of the Treasury Department, and today we are taking action to cut off the financial flows of major money launderers who are powering the trafficking of fentanyl and other illicit drugs to the United States,” said Deputy Secretary of the Treasury Wally Adeyemo. “Through our Counter-Fentanyl Strike Force, we will continue leveraging Treasury’s unique capabilities to disrupt the illicit fentanyl and drug trafficking trade that claims the lives of thousands of Americans each year.”

March 25, 2024: Deputy Secretary Adeyemo Announces New Treasury Sanctions Against Sinaloa Cartel Fentanyl Network

Deputy Secretary of the Treasury Wally Adeyemo announced, alongside local leaders and law enforcement in Arizona, that the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned operatives in a Black Market Peso Exchange (BMPE) scheme to launder millions in illicit fentanyl proceeds for the Sinaloa Cartel. OFAC designated 15 Sinaloa Cartel members, several of whom are fugitives, and six Mexico-based businesses pursuant to Executive Order (E.O.) 14059. The Sinaloa Cartel, which is one of the most notorious and pervasive drug trafficking organizations in the world, is responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States.

Sanctions (Q4, 2023)

October 3, 2023: Treasury Targets Large Chinese Network of Illicit Drug Producers (working together with Mexico-based criminal organizations such as the Sinaloa Cartel and the Jalisco New Generation Cartel (CJNG)

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 28 individuals and entities involved with the international proliferation of illicit drugs, including a China-based network responsible for the manufacturing and distribution of ton quantities of fentanyl, methamphetamine, and MDMA precursors. Those designated by OFAC today are also involved in the global trafficking of xylazine and “nitazenes,” which are highly potent and often mixed with illicit fentanyl or other drugs.

November 7, 2023: Treasury Sanctions Sinaloa Cartel Network Flush with Illicit Fentanyl on Southwest Border

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 Sinaloa Cartel members—several of whom are fugitives—and four Sonora, Mexico-based entities. Responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States, the Sinaloa Cartel is one of the most powerful and pervasive drug trafficking organizations in the world. This action was coordinated closely with the Government of Mexico, including La Unidad de Inteligencia Financiera (UIF), Mexico’s Financial Intelligence Unit.