Mexican police display items seized after an operation against drug cartels in Tlaquepaque, Jalisco State, Mexico on February 13, 2025. AFP
Mexican police display items seized after an operation against drug cartels in Tlaquepaque, Jalisco State, Mexico on February 13, 2025. AFP

US designates Latin American cartels as foreign terrorist organisations



The US has designated eight Latin American organised crime groups that also operate in the US to be foreign terrorist organisations.

The designation is normally reserved for groups like ISIS or Al Qaeda that use violence for political ends – not for money-focused crime rings such as the Latin American cartels. The groups, which include Mexico's notorious Sinaloa Cartel and Venezuela's Tren de Aragua, are involved in drug trafficking and migrant smuggling.

The designation was published in Thursday’s edition of the Federal Register. Secretary of State Marco Rubio said the groups pose a risk to US national security, foreign policy and economic interests.

"The intent of designating these cartels and transnational organisations as terrorists is to protect our nation, the American people, and our hemisphere," Mr Rubio said in a statement.

"That means stopping the campaigns of violence and terror by these vicious groups both in the United States and internationally. These designations provide law enforcement additional tools to stop these groups."

Stephen Miller, the White House deputy chief of staff, called the designation a "sea change in US policy".

We "are now operating in a legal reality where these cartels are recognised as terrorists, and there will be a whole-of-government effort to remove these terrorists from our soil and to degrade their ability to credit or undermine any American security or sovereignty," Mr Miller told White House reporters.

Mr Trump, a Republican, issued an executive order after taking office on January 20 that called on officials to evaluate whether any criminal cartels or transnational gangs should be designated as terrorism groups.

This month he delayed a move to impose steep tariffs on Mexico and Canada over what he said was insufficient co-operation to thwart illegal immigration and trafficking of illicit fentanyl. CNN and The New York Times reported this week that the CIA was using drones to carry out surveillance in Mexico.

Mexican President Claudia Sheinbaum said on Wednesday that US drone flights over Mexican territory were part of a collaboration with the US, adding that there was nothing illegal about it.

During Mr Trump's 2017-2021 presidency, he considered terrorism designations for cartels but ultimately shelved the plans.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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