US Treasury to monitor transactions over $200 in certain areas next month

• The U.S. Treasury’s Financial Crimes Enforcement Network proposed a Geographic Targeting Order to combat cartel-related money laundering. It requires money services businesses in ZIP codes near the California and Texas borders to report cash transactions over $200.

• In January, President Trump signed an executive order designating Mexican cartels as foreign terrorist organizations, enabling broader enforcement actions; eight organizations, including six major cartels, have since been listed.
• Critics argue the reduced reporting threshold, from $10,000 to $200, infringes on privacy, with concerns that the order affects counties housing over 1 million Americans.

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The U.S. Treasury is proposing an expansion of financial surveillance in select areas of the country it says targets Mexican cartel operations. 

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed a Geographic Targeting Order (GTO). The department said it would “combat the illicit activities and money laundering of Mexico-based cartels and other criminal actors along the southwest border of the United States.” 

The order will take effect April 14. It will require all money services businesses (MSBs), such as check cashing businesses or wire services in 30 ZIP codes across California and Texas near the southern border, to report any cash transaction over $200 to the federal government. The proposal doesn’t affect any border counties in Arizona or New Mexico.

Trump administration on decision

“Today’s issuance of this GTO underscores our deep concern with the significant risk to the U.S. financial system of the cartels, drug traffickers, and other criminal actors along the Southwest border,” Treasury Secretary Scott Bessent said in a statement. “As part of a whole-of-government approach to combatting the threat, Treasury remains focused on leveraging all our available tools and authorities to better identify and counter these criminal activities.”

President Donald Trump in January signed an executive order to classify Mexican cartels as foreign terrorist organizations (FTOs), which allows broader enforcement actions. The State Department announced in February that it would list eight organizations, including six major Mexico-based drug cartels, as FTOs and Specially Designated Global Terrorists. 

Lower threshold

Currently, MSBs must report transactions higher than $10,000 to the federal government. Some worry that the change, which applies to counties housing more than 1 million Americans, amounts to an invasion of privacy. 

“Whether it’s the mob or the cartel, organized crime is not an easy thing to deal with,” writes Nicholas Anthony, a policy analyst at the CATO Institute. “However, this challenge does not mean Americans should have their rights stripped away in the pursuit of justice.”