The U.S. Department of the Treasury, through the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), has coordinated with the Government of Mexico to target the Hysa Organized Crime Group and Mexico-based gambling establishments linked to cartel-related money laundering. OFAC designated 27 individuals and entities connected to the network, while FinCEN issued a notice of proposed rulemaking to impose a Section 311 “special measure” intended to cut 10 Mexico-based gambling establishments off from access to the U.S. financial system. OFAC designated the Hysa Organized Crime Group under Executive Order 13581 (as amended) as a significant transnational criminal organization and also designated members of the Hysa family and related individuals and businesses, including gambling and hospitality companies in Mexico and associated entities in Canada and Poland. The designations trigger U.S. asset-blocking and reporting obligations, apply the 50 percent ownership rule to entities owned by blocked persons, and generally prohibit U.S. persons from dealing in the property or interests in property of blocked persons absent authorization; Treasury also highlighted potential civil and criminal penalties, strict-liability civil enforcement, and potential exposure to secondary sanctions for foreign financial institutions facilitating significant transactions for designated persons. FinCEN’s proposal identifies transactions involving 10 specified Mexico-based gambling establishments as a class of transactions of primary money laundering concern and would (1) prohibit covered financial institutions from opening or maintaining correspondent accounts for foreign banks if used to process transactions involving those establishments and (2) require special due diligence on correspondent accounts designed to prevent such processing. Comments on the proposed rule may be submitted via Regulations.gov.

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