Understanding FinCEN’s New Geographic Targeting Order and Its Legal Implications

On March 11, 2025, the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, issued a new Geographic Targeting Order (GTO) to combat illicit financial activities along the United States’ southwest border. 

This directive primarily targets money laundering activities linked to Mexico-based cartels and other criminal organizations operating in key regions of California and Texas. The order imposes stringent Currency Transaction Report (CTR) filing requirements on money services businesses (MSBs) operating within specified ZIP codes.

Key Provisions of the GTO

Under this latest order, all MSBs within 30 ZIP codes across California and Texas must file CTRs with FinCEN for any cash transaction at or exceeding $200. This represents a significant tightening of anti-money laundering (AML) measures, as the usual CTR threshold under the Bank Secrecy Act (BSA) (31 U.S.C. § 5313) is $10,000.

Treasury Secretary Scott Bessent emphasized the necessity of this order, stating:

“Today’s issuance of this GTO underscores our deep concern with the significant risk to the U.S. financial system posed by cartels, drug traffickers, and other criminal actors along the Southwest border.”

Legal Context and Enforcement Implications

This measure is part of a broader governmental initiative aimed at curbing the influence of transnational criminal organizations. Notably, in January 2025, President Donald J. Trump issued an Executive Order allowing the designation of certain cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). The legal foundation for these designations stems from:

• The Immigration and Nationality Act (INA) (8 U.S.C. § 1189), which outlines the criteria for FTO designations, and
• The International Emergency Economic Powers Act (IEEPA) (50 U.S.C. §§ 1701–1708), which grants the government authority to block assets and restrict financial transactions of designated entities.

Following this Executive Order, the Departments of Treasury and State designated eight organizations in February 2025, including six major Mexico-based drug cartels, as FTOs and SDGTs. These designations allow the U.S. government to impose financial sanctions and block cartel-related transactions within the U.S. financial system.

Additionally, the legal framework supporting FinCEN’s authority to issue GTOs is derived from:

• The Currency and Foreign Transactions Reporting Act (Title 31, U.S.C. §§ 5311-5332), which requires financial institutions to report suspicious transactions,
• 31 C.F.R. § 1010.370, which allows FinCEN to issue GTOs imposing additional reporting obligations,
• 18 U.S.C. § 1956, which criminalizes money laundering and financial transactions derived from specified unlawful activities,
• The USA PATRIOT Act (Public Law 107-56, Title III) enhances AML measures to prevent terrorist financing.

Implications for Money Services Businesses and Financial Institutions

MSBs and financial institutions operating in the designated regions must comply with the new GTO by implementing enhanced due diligence and reporting measures. Failure to adhere to these requirements may result in severe civil and criminal penalties under:

• The Bank Secrecy Act (31 U.S.C. § 5318(h)), which mandates robust AML compliance programs,
• The USA PATRIOT Act (Public Law 107-56, Title III, Sec. 352), which strengthens AML enforcement, and
• The Money Laundering Control Act (18 U.S.C. §§ 1956, 1957) criminalizes financial transactions involving proceeds of unlawful activities.

Covered Jurisdictions

The GTO applies to MSBs in the following ZIP codes across seven counties:

California

• Imperial County: 92231, 92249, 92281, 92283
• San Diego County: 91910, 92101, 92113, 92117, 92126, 92154, 92173

Texas

• Cameron County: 78520, 78521
• El Paso County: 79901, 79902, 79903, 79905, 79907, 79935
• Hidalgo County: 78503, 78557, 78572, 78577, 78596
• Maverick County: 78852
• Webb County: 78040, 78041, 78043, 78045, 78046

What This Means for Businesses and Legal Compliance

Businesses operating in these regions must take immediate steps to ensure compliance, including:

• Reviewing and updating AML policies to reflect the lower $200 CTR threshold,
• Enhancing employee training on FinCEN reporting requirements,
• Conducting periodic audits to identify and report suspicious transactions, and
• Engaging legal counsel to navigate potential regulatory challenges and mitigate liability risks.

The terms of the GTO take effect 30 days after its publication in the Federal Register and will remain in force for 179 days thereafter.

Conclusion

This new FinCEN directive underscores the U.S. government’s aggressive stance against money laundering and cartel-related financial crimes. For financial institutions, MSBs, and legal professionals, understanding these regulatory changes is essential to ensuring compliance and avoiding severe penalties. If you operate a financial business in the affected areas, it is crucial to consult with legal counsel specializing in AML regulations to ensure full compliance with the new GTO requirements.

For more information on how these new regulations may affect your business, contact our law firm today for a consultation.