Rethinking Business Risk in Mexico: Compliance Lessons from a Changing Enforcement Landscape

 According to Tara McGrath, Jamie Schafer, and Sydney Veatch of Perkins Coie, as reported in Bloomberg Law, business risk in Mexico has become a focal point of intensified US enforcement efforts that link cartel activity to national security concerns. The authors warn that multinational companies operating there now face risks similar to those in conflict zones, such as Syria or Afghanistan. Actions once viewed as routine business practices, like local “security” payments or transfers to Mexican suppliers, could now trigger investigations under terrorism financing or sanctions laws.

The shift stems from US agencies, including the Department of Justice (DOJ) and the Office of Foreign Assets Control, treating cartel-related operations as threats to national security. This heightened scrutiny means compliance teams must adapt quickly to a landscape where commercial and criminal liabilities increasingly overlap. McGrath, Schafer, and Veatch emphasize that proactive measures are critical. Companies should approach Mexico as a high-risk jurisdiction by conducting rigorous risk assessments, implementing continuous third-party screening, and enhancing audit protocols.

They further recommend training staff to recognize emerging red flags, verifying that vendors and distributors are not affiliated with designated entities, and ensuring that policies explicitly prohibit any form of payment to cartels. The authors also advise performing “lookbacks” on prior transactions to identify potential exposure and reassessing voluntary disclosure strategies in light of the DOJ’s updated guidance, which may favor self-reporting.

For in-house legal and compliance teams, assumptions about “standard” operations and business risk in Mexico no longer apply. Sustained vigilance, updated controls, and strategic disclosure can reduce exposure and strengthen overall business risk resilience.