How trust can boost the US-Mexico fight against narco finance

The Hill

09-07-2025

The U.S. Treasury Department's announcement that it is targeting three Mexican financial institutions for their alleged roles in laundering proceeds tied to synthetic opioid trafficking marks a turning point, not only in the U.S. financial offensive against fentanyl, but also in the future of U.S.-Mexico security cooperation.
These sanctions, issued under the expanded authority of the FEND Off Fentanyl Act, are the first of their kind and they may herald a more focused approach to choking off the money that makes organized crime so profitable and powerful.
But behind the headlines is a deeper truth: If we are serious about dismantling the financial networks of the cartels, we need more trust and more coordination between government agencies in both countries.
Money laundering is not just a financial crime — it is the lifeblood of drug trafficking organizations. From fentanyl precursors purchased from China to illicit cash sent back through trade-based laundering schemes, the ability of criminal organizations to move, hide, and invest their profits is what allows them to survive.
That is why the bilateral anti-money laundering relationship between the U.S. and Mexico has been, and must continue to be, a cornerstone of the fight against organized crime.
Over the last 20 years, the two governments have built institutional linkages through the High-Level Security Dialogue and the North American Drug Dialogue, shared intelligence through joint task forces and cooperated on regulatory and supervisory alignment.
Yet, revelations like this remind us that those channels have thus far been woefully insufficient to counter the power and ingenuity of the drug trafficking organizations.
The trust deficit that often clouds U.S.-Mexico cooperation — rooted in concerns over corruption, impunity and sovereignty — must be addressed head-on.
Since the tragic 1985 abduction and murder of Drug Enforcement Agency agent Enrique 'Kiki' Camarena, trust between U.S. and Mexican security agencies has been marred by suspicion and periodic breakdowns in cooperation.
The aftermath of the Camarena affair exposed the deep entanglement of Mexican law enforcement with drug trafficking organizations, prompting a significant retrenchment in bilateral collaboration.
In the decades since, while cooperation has resumed in fits and starts — such as during the Mérida Initiative period — longstanding fears over corruption, leaks and sovereignty have frequently undermined joint efforts.
Put succinctly, U.S. agencies often question the integrity and competence of their counterparts in the Mexican government, while Mexican officials remain deeply wary of the motives behind U.S. security operations.
Recent years have seen further deterioration, particularly following the 2020 arrest of former Mexican defense minister Salvador Cienfuegos in the U.S., which triggered a diplomatic backlash and led Mexico to pass legislation restricting foreign law enforcement operations on its soil.
This cycle of mistrust has hindered intelligence-sharing, constrained operational coordination and ultimately allowed drug trafficking organizations to exploit jurisdictional and institutional divides. If both countries are to mount a successful and sustained fight against organized crime, rebuilding that trust must become a shared strategic priority.
It is true that Mexico has made significant strides in recent years, particularly with the 2020 reforms to its financial intelligence framework and enhanced powers for the Unidad de Inteligencia Financiera, but those reforms have not been fully implemented and there are still significant problems with compliance.
Meanwhile, the U.S. has deployed an increasingly sophisticated array of financial tools, including the Global Magnitsky Act and Section 311 of the Patriot Act, to disrupt criminal finance globally.
What's missing is a seamless partnership; one where intelligence is shared in real time, regulatory frameworks are interoperable and suspicious activity is pursued across borders with joint accountability.
Examples from around the world show what's possible when financial cooperation is prioritized.
The U.S.-United Arab Emirates Joint Task Force on Illicit Finance has led to seizures of millions of dollars linked to terrorist networks. Europol's collaboration with the Financial Intelligence Units of European Union member states has generated successful operations against transnational crime, from cyberfraud to human trafficking.
Even in Latin America, the Tri-Border Area cooperation initiative among Argentina, Brazil and Paraguay has shown that coordinated anti-money-laundering efforts, when paired with law enforcement cooperation, can disrupt illicit flows in even the most complex regions.
Mexico and the U.S. are connected not only by their economic integration, but by shared security challenges and a common interest in dismantling the financial networks that sustain organized crime.
But disrupting cartel finance requires more than just sanctions — it demands trust. To build that trust, we must go beyond high-level declarations and invest in the institutional relationships that matter.
That means enhancing vetting procedures to ensure the integrity of counterparts on both sides, expanding secondments and joint training programs between agencies and creating regular, structured interactions among investigators, prosecutors and regulators.
Emerging technologies like artificial intelligence can also support this effort, offering new tools to detect suspicious financial patterns, track illicit flows across borders and flag anomalies in real time.
Crucially though, we must also engage civil society — especially bar associations, law schools and the offices of state and federal attorneys general in both countries — to build a broader base of professional trust and legal cooperation.
Only by deepening these networks and normalizing collaboration at every level can we create the resilient, binational ecosystem needed to fight financial crime and drug trafficking and protect lives on both sides of the U.S.-Mexico border.
Duncan Wood is CEO of Hurst International Consulting and former director of the Wilson Center's Mexico Institute.