DOJ using broad civil forfeiture authority after designating cartels as Foreign Terrorist Organizations

On September 3, 2025, the US Department of Justice (DOJ) announced that it had seized 300,000 kilograms of precursor chemicals used to produce methamphetamine that had been shipped from China and were intended for clandestine labs controlled by the Sinaloa Cartel in Mexico.¹ The DOJ used an expansive civil forfeiture authority—the terrorism forfeiture statute, which is the broadest forfeiture authority available to prosecutors—unlocked by the February 20, 2025 designation of eight cartels and transnational criminal organizations (TCOs) as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs).

The seizure—which the DOJ touted as the largest seizure of such chemicals ever by US law enforcement—illustrates the US government's powerful jurisdictional reach to seize and seek forfeiture of cartel-related assets. The seizure also demonstrates the extent to which the DOJ has prioritized law enforcement actions targeting cartels and TCOs:² a team of national security prosecutors in the United States Attorney's Office for the District of Columbia who long focused on seizing Iranian oil intended to be sold to fund Iran's Islamic Revolutionary Guard Corps (IRGC) and assets used to enable the evasion of North Korean sanctions are expanding their focus to include Mexican drug cartels.

The Seizure of Meth Precursor Chemicals Using the Terrorism Forfeiture Statute

According to DOJ's press release and comments by officials at a press conference announcing the seizure (the seizure warrant itself remains under seal), law enforcement interdicted two vessels on the high seas that had departed from a port in Shanghai, China and were en route to Mexico. The ships were carrying 1,300 barrels of chemicals that could have been used to produce nearly 190,000 kilograms of methamphetamine, which the DOJ stated was worth approximately $569 million. The seizure appears to be part of an initiative launched by US Immigration and Customs Enforcement in 2019 to identify suspicious shipments of precursor chemicals from China and other source countries that are destined for drug cartels in Mexico. Including this most recent seizure, that initiative has led to the interdiction of at least 2,000,000 kilograms of methamphetamine and chemical precursors to date.³

Although the DOJ did not identify the exact location where the ships were interdicted, the DOJ announced that U.S. law enforcement had worked closely with foreign law enforcement partners to consolidate the two shipments in Panama and transport them to the Port of Houston in the United States. The DOJ highlighted in its announcement that the seizure warrant was based on the material support and terrorism forfeiture statutes, 18 U.S.C. §§ 981(a)(1)(G) and 2339B, and the designation earlier this year of the Sinaloa Cartel as an FTO.

The terrorism forfeiture statute is the broadest federal forfeiture authority. A violation of the material support statute can constitute a "federal crime of terrorism,"⁴ which, among other consequences, triggers this asset forfeiture provision. The provision authorizes forfeiture of, among other things, "[a]ll assets, foreign or domestic[,]" of a terrorist organization.⁵ As one court has explained, "the statute empowers the government to seek the forfeiture of property outside the United States, which may have never touched the United States. The broad expanse of this language is for forfeiture actions to reach all property of terrorist organizations."⁶ The statute and the forfeiture theory the DOJ used to seize these precursor chemicals are the very ones the DOJ has used to seize, for example, petroleum from oil tankers outside the United States that was intended to be sold for the benefit of the IRGC.⁷

Other Broad Forfeiture Authorities Available to the DOJ

In addition to the terrorism forfeiture statute, the DOJ has other broad forfeiture authorities it can use to restrain, seize, and forfeit cartel-related assets. Perhaps most notably, the DOJ can seize funds belonging to a foreign financial institution that are held in a US correspondent account if the DOJ can demonstrate that an equivalent amount of funds connected to illegal activity is held at the foreign financial institution outside the United States. Specifically, the DOJ can pursue a civil forfeiture action to restrain, seize, and forfeit funds deposited into an account at a foreign financial institution by seizing an equivalent amount of funds from a correspondent account held in the United States by the foreign financial institution.⁸

Because use of this authority raises important policy considerations, approval of senior DOJ officials, in consultation with officials at the Departments of State and Treasury, is required.⁹ Nonetheless, the DOJ has previously used this authority, including to seize and forfeit approximately $102 million in assets held in a US correspondent account belonging to Lebanese Canadian Bank (LCB), in connection with allegations that LCB used the US financial system to launder narcotics trafficking and other criminal proceeds from the United States to West Africa to Hizballah-controlled money laundering channels.¹⁰

Seizure Suggests Aggressive Approach

The DOJ's seizure of precursor chemicals from ships outside US territorial waters that were en route from China to Mexico reveals that prosecutors will aggressively use broad terrorism forfeiture authorities triggered by the designation of Mexican drug cartels as FTOs to seize and forfeit cartel-related assets. Indeed, the DOJ has added material support and sanctions violations, as well as other offenses related to cartels and TCOs, to its Corporate Whistleblower Awards Pilot Program.¹¹ Whistleblowers can now receive up to a $50 million award for reporting such corporate misconduct where the report leads to the forfeiture of assets. More broadly, the DOJ's Criminal Division has highlighted "[m]aterial support by corporations to foreign terrorist organizations, including recently designated Cartels and TCOs," as a priority area of white-collar enforcement.¹²

With the DOJ's prioritization of material support and sanctions offenses involving cartels and TCOs, the DOJ's expansive forfeiture authorities for FTO-related assets, and the significant financial incentives that are now available to whistleblowers under the DOJ's expanded Corporate Whistleblower Awards Pilot Program, financial institutions and other companies operating in cartel- or TCO-controlled areas or dealing with cartel- or TCO-controlled businesses will face not only heightened criminal enforcement, sanctions, and civil litigation risks as we highlighted in previous alerts (available here and here). They may also face aggressive civil asset forfeiture actions targeting goods with an FTO connection—for example, the Office of Foreign Assets Control recently highlighted the cartels' involvement in Mexico's agricultural sector¹³—or even funds held at US correspondent banks on behalf of banks in Mexico.

Financial institutions and other companies should ensure that they have robust and demonstrable compliance programs with clear guidelines and protocols to avoid violating US law and to avoid involvement in cartel-related asset seizures. These steps should include:

• Conducting risk assessments to identify areas of business operation that are high risk;
• Implementing strict know-your-customer and third-party screening, background checks, and management procedures;
• Strengthening anti-money laundering and counter-terrorism financing and sanctions controls;
• Providing training to employees in high-risk areas, geographic or otherwise, at all levels of the operation, on identifying red flags and providing guidance on how to manage and when to escalate cartel- and TCO-related risks;
• Ensuring internal reporting structures are strong and effective;
• Working with counterparties, lenders, and correspondent banks to preempt de-risking considerations;
• Establishing protocols to handle cartel demands, US government requests, and third-party queries;
• Working with local and US regulators to mitigate and manage cartel- and TCO-related risks, and to address any conflicts of laws; and
• Consulting with counsel as appropriate.

_{1 Dep't of Justice, U.S. Seizes 300,000 Kilos of Meth Precursor Chemicals Sent from China Destined for Mexico's Sinaloa Drug Cartel (Sept. 3, 2025) available here.
2 Dep't of Justice, Total Elimination of Cartels and Transnational Criminal Organizations (Feb. 5, 2025) available here.
3 U.S. Immigration and Customs Enforcement, ICE, CBP seize 50,000 kilograms of meth precursor chemicals destined for Sinaloa Cartel (June 2, 2025) available here.
4 18 U.S.C. § 2332b(g)(5).
5 Id. § 981(a)(1)(G)(i).
6 United States v. One Gold Ring with Carved Gemstone, Civil Action No. 16-CV-02442 (TFH), 2019 WL 5853493, at *1 (D.D.C. Nov. 7, 2019).
7 See, e.g., United States v. All Petroleum-Product Cargo Aboard the M/T Arina et al., Civil Action No. 21-CV-3234 (RDM), United States' Verified Amended and Consolidated Complaint for Forfeiture In Rem, Docket Entry 25 (D.D.C. May 15, 2023).
8 18 U.S.C. § 981(k).
9 Dep't of Justice, Justice Manual § 9-111.700, available here.
10 United States v. All Assets of Lebanese Canadian Bank SAL or Assets Traceable Thereto et al., Civil Action No. 11-CV-9186 (PAE), Stipulation and Order of Settlement Regarding Lebanese Canadian Bank and Société Générale de Banque au Liban S.A.L. (S.D.N.Y. June 25, 2013). 
11 Dep't of Justice, Corporate Whistleblower Awards Pilot Program (May 12, 2025) available here.
12 Criminal Division Memorandum, Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime (May 12, 2025), available here.
13 U.S. Department of the Treasury, Treasury Takes Decisive Action Against Violent Mexican Cartels (Aug. 14, 2025), available here.}

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