OFAC (the Office of Foreign Assets Control) is a part of the U.S. Department of the Treasury that administers and enforces U.S. economic and trade sanctions. It acts under authorities that Congress has given the president and Treasury, mainly the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act. When the president issues an executive order declaring a national emergency (like those cited in this press release), OFAC is delegated the power to identify targets, block their property under U.S. jurisdiction, and prohibit U.S. persons from dealing with them.
Both E.O. 13581 and E.O. 13851 are sanctions orders issued under IEEPA, but they target different problems:
• E.O. 13581 (2011, Obama) – “Blocking Property of Transnational Criminal Organizations” – declares that significant transnational criminal organizations (TCOs) are a national emergency and authorizes Treasury (OFAC) to block the U.S. property of: (1) foreign persons that constitute significant TCOs; (2) those who materially assist or support them; and (3) those owned or controlled by them. This is a general, global authority focused on large criminal networks (drug cartels, human smuggling rings, etc.).
• E.O. 13851 (2018, Trump) – “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua” – declares a national emergency specific to the political and human‑rights crisis in Nicaragua. It authorizes blocking the property of Nicaraguan officials and others responsible for serious human‑rights abuses, corruption, or actions undermining democracy and stability in Nicaragua, and can bar their entry into the United States.
In this press release, CSRL is treated as a “significant transnational criminal organization” under the E.O. 13851 authority as amended, while El Marro is designated under E.O. 13581 for acting for or on behalf of CSRL.
The SDN List (Specially Designated Nationals and Blocked Persons List) is a public list that OFAC maintains of individuals, companies, vessels, and other entities whose property is blocked under U.S. sanctions programs.
Being added to the SDN List means: • Any of the person’s property or interests in property that are in the United States or held by “U.S. persons” (including U.S. banks and companies abroad) are frozen and must be reported to OFAC. • U.S. persons are generally prohibited from doing business with the listed person, unless OFAC grants a specific license. • Entities that are 50% or more owned (directly or indirectly) by one or more SDNs are also treated as blocked, even if they are not separately named.
Sanctions in this CSRL action work by putting the named cartel and individuals onto, or under the same restrictions as, entries on the SDN List.
Huachicol (fuel theft) generally works as follows:
• Theft methods in Mexico – Criminal groups and corrupt insiders target Petróleos Mexicanos (Pemex), the state oil company, by: – Bribing Pemex employees. – Illegally drilling taps (“clandestine” taps) into pipelines. – Stealing from refineries and storage facilities. – Hijacking tanker trucks or threatening Pemex staff.
• Domestic resale – The stolen gasoline, diesel, or LPG is sold at roadside stands, informal stations, or through complicit gas stations around Mexico, often at a discount (all commonly called huachicol).
• Cross‑border smuggling into the U.S. – For crude oil theft in particular: – Cartels move stolen Pemex crude by truck or other transport to the U.S. southwest border. – Complicit Mexican brokers and U.S. importers re‑label the crude as “waste oil” or other industrial/hazardous material on customs and shipping paperwork to avoid scrutiny, taxes, and safety rules. – Small, often privately held U.S. oil and natural‑gas firms near the border receive the shipments, blend or resell the product at a discount into U.S. and global markets, then send the proceeds back to the cartels in Mexico.
Treasury and FinCEN describe these schemes as generating billions of dollars for cartels and as a major non‑drug revenue source.
For U.S. companies and banks, these sanctions create legal obligations and risk if they have direct or indirect dealings that touch CSRL, El Marro, or entities they own or control:
• Blocked property – Any property or interests in property of the designated parties that are in the United States or in the possession or control of a U.S. person (including U.S. banks, brokers, traders, or logistics firms) must be frozen and reported to OFAC.
• Prohibited transactions – U.S. persons are generally barred from providing or receiving funds, goods, or services to/from these designated parties. This includes processing payments, financing cargoes, insuring shipments, chartering vessels or trucks, or buying/selling fuel or crude tied to them, even indirectly through intermediaries, unless OFAC licenses the activity.
• 50‑percent rule – Any company that is 50% or more owned (directly or indirectly, individually or in aggregate) by one or more blocked persons is also treated as blocked, which means U.S. firms must screen counterparties carefully.
• Compliance expectations – Banks and companies with exposure to fuel and energy trade near the U.S.–Mexico border are expected to strengthen sanctions and anti‑money‑laundering controls, monitor for red flags described in the FinCEN oil‑smuggling Alert, and file Suspicious Activity Reports where appropriate.
Failure to comply can lead to civil or criminal penalties on a strict‑liability basis (violations can be penalized even if the U.S. party did not know the counterparty was sanctioned).
Enforcement and cooperation against fuel theft and cartel operations involve both U.S. and Mexican authorities:
• In Mexico – The federal government, Pemex, and security forces (army and National Guard) run operations to locate and shut illegal pipeline taps, raid storage sites, and arrest huachicoleros. Pemex has reported multibillion‑dollar revenue losses from fuel theft and routinely publicizes seizures of stolen fuel and dismantling of clandestine taps.
• U.S. financial and sanctions tools – U.S. agencies (Treasury/OFAC and FinCEN) target oil‑smuggling networks with sanctions and financial‑intelligence alerts. The May 2025 FinCEN Alert on oil smuggling schemes was issued jointly with DEA, FBI, and Homeland Security Investigations and is explicitly aimed at cartels stealing Pemex crude and smuggling it into the United States. Treasury has also sanctioned multiple individuals and entities linked to CJNG and other cartels’ fuel‑theft networks.
• Bilateral security cooperation – The U.S.–Mexico High‑Level Security Dialogue, under the Bicentennial Framework for Security, Public Health, and Safe Communities, sets joint priorities against transnational crime, including cartels and illicit finance. Within this framework, agencies share intelligence, coordinate investigations, and support rule‑of‑law and financial‑crime capacity in Mexico. Financial‑intelligence units (FinCEN and Mexico’s FIU) and law‑enforcement agencies coordinate on cases involving money laundering and cross‑border smuggling, including fuel theft.
Overall, enforcement combines Mexican on‑the‑ground operations against taps and storage, and U.S. actions to disrupt financing, U.S. buyers, and cross‑border smuggling routes.