Although the United States has historically designated organizations like Al Qaeda, ISIS, and Boko Haram as foreign terrorist organizations (FTOs), in February 2025, the State Department broadened the definition of an FTO when it designated eight international criminal organizations. Among these were six drug cartels with substantial ties to Mexico, such as the Sinaloa Cartel, the Cartel del Noreste (formerly Los Zetas) and the Cartel de Jalisco Nueva Generación. For details of this designation, see our blog post here.
Last week, the government went further, focusing on Venezuela. On November 16, the US Department of State indicated its intent to designate the Cartel de los Soles, or the Cartel of the Suns, (the Cartel) a Venezuelan criminal organization, as an FTO.[1] This statement of intent comes as no surprise to those following dramatically heightening tensions between the United States and Venezuela.[2] While undoubtedly the future designation of the Cartel will have far reaching consequences for US foreign policy, it also exposes companies operating in the region, particularly in Venezuela or with Venezuelan companies, to unprecedented risks in the United States.
Cartel de los Soles
The Cartel has been publicized as an informal group of high-ranking members of the Armed Forces of Venezuela with links to international drug trafficking.[3] Reportedly, the Cartel, or more accurately its alleged members, are deeply intertwined with the Venezuelan government and military.[4]
The Cartel would not be the first criminal organization with ties to Venezuela to be designated as an FTO. In February 2025, Tren de Aragua (TDA), a Venezuelan criminal organization, which allegedly had expanded into the United States, was designated as such. The February designation, however, was silent on TDA’s ties with the Maduro regime. In recent statements, the State Department expressly connected the Venezuelan government with the Cartel, stating that itis “headed by Nicolás Maduro and other high-ranking individuals of the illegitimate Maduro regime.”[5] The November 18 statement thus finalizes the Maduro-terrorism link.
By functionally designating the Venezuelan government and the upper ranks of the Venezuelan military, including President Maduro himself, as members of an FTO, the State Department has drastically increased the level of caution entities must exercise when operating in Venezuela or when doing business with Venezuelan state-owned companies.
Engaging with FTOs, even indirectly, potentially exposes companies to substantial criminal, civil, and regulatory risk in the United States.
Criminal Liability
Companies that engage with FTOs, including by providing material support or resources, may be investigated and face criminal liability in the United States.[6] For example, companies may face criminal investigation and prosecution for allegedly providing “material support or resources” to a designated FTO. The primary FTO-related material support criminal charge, 18 U.S.C. § 2339B, is somewhat simpler to charge and prove than other criminal statutes in the counterterrorism space: it requires proof of material support to the FTO, but not necessarily proof that such support helped to carry out a specific act or acts of terrorism.
“Material support” is construed broadly to include tangible and intangible property, financial services, lodging, training, expert advice or assistance, safehouses, communications equipment, facilities, personnel, and transportation. See 18 U.S.C. § 2339A(b)(1). This means that, for instance, a chemical company that knowingly sells a necessary fentanyl precursor to a member of an FTO-designated cartel would have potentially provided material support to an FTO.[7]
Importantly, extortion payments or any other payments in exchange for permission from an FTO to operate in a territory, a practice common among cartels, may be seen by prosecutors as qualifying as material support. This risk is real: in 2022, French cement maker Lafarge S.A. pled guilty to providing financial support to ISIS in exchange for permission to operate a cement plant in Syria, paying criminal fines and forfeiture totalling $777.78 million.[8] Similarly, Chiquita, a global food company primarily known for being one of the world's foremost marketers and distributors of bananas, pleaded guilty to making payments to the Colombian AUC, a guerilla group that waged war against the Colombian government, and agreed to pay criminal fines.[9]
Civil Liability
Engaging with FTOs may also subject companies to significant civil litigation risk in the US. The Anti-Terrorism Act (ATA) allows US nationals injured by an act of international terrorism to sue both the principal wrongdoers and those who aid and abet or conspire with an FTO to commit terrorist acts. For more details on the ATA, see our previous blog post here.
Even before the February 2025 FTO designations, plaintiffs tried to allege civil terrorism-related claims against financial institutions in connection with their transactions with drug cartels. With the recent FTO designations, a material increase in civil ATA claims is expected. The Camarena v. Caro-Quintero lawsuit filed against the Sinaloa Cartel just weeks post-designation is a preview of claims companies may face.[10] While this is a lawsuit directly against the cartel, plaintiffs may use the legal theories advanced in Camarena to sue and to seek to impose liability on legitimate businesses.
Increased Sanctions and Regulatory Risk for Third Parties
The designation of Venezuelan cartels and entities associated with the Venezuelan government may also expose companies engaged in dealings with them to sanctions risks. Under US primary sanctions, these risks could include potential administrative inquiries, subpoenas, and enforcement actions for potential sanctions violations. Additionally, companies could face US secondary sanctions risks for knowingly providing material support to such sanctioned persons.
Even companies engaged in lawful activities in Venezuela may face scrutiny around such dealings. For example, the company may be subjected to enhanced due diligence, a need to explain responses to compliance certifications, or be required to justify the reasonableness of such activities in transactions like financings and investments.
A company’s exposure to these risks can be long-lasting: US sanctions have a ten-year statute of limitations.
Key Takeaways
The FTO designations earlier this year presented a complex and still-emerging business risk. The latest designation heightens and refocuses this risk, particularly regarding Venezuela. Given the evolving legal landscape, proactive measures are critical for companies doing business in the country and broadly in Latin America. Enhanced due diligence and risk assessments, strong internal compliance controls, and vigilant financial and operational monitoring are essential steps to mitigate potentially substantial criminal and civil liabilities.
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This blog post is part of an ongoing series exploring the legal, commercial, and strategic complexities of operating in conflict zones and high-risk jurisdictions. Contributors to this series include Freshfields attorneys Timothy Harkness, Nabeel Yousef, Kate Cooper, Joshua Kelly, Sylvia Noury, Alexandra van der Meulen, Carsten Wendler, Matthew Haggans, Piusha Bose, Maria Slobodchikova, Paige von Meheren, Andrew Bulovsky, Jackson Myers, Heather Cameron, Elischke de Villiers, Keian Razipour, Omeed Askary, and Jordan McGuffee. Stay tuned for upcoming posts, and please reach out with topics, questions, or experiences you’d like us to cover as part of this ongoing conversation.
For a collection of related previous posts and webinars, please click this link.
[1] Office of the Spokesperson | Terrorist Designations of Cartel de los Soles | United States Department of State.
[2] See, e.g., The Americas Correspondent | War looms in Venezuela as Trump tests an “Americas First” doctrine | The Economist.
[3] The name “Cartel de los Soles” is a journalistic label for the phenomenon of the Venezuelan military profiteering from the drug trade as opposed to a name of common use. The group is described with the moniker “Suns” because of the sun insignia denoting the rank of generals in the Venezuelan military. There are no reports of the group describing itself as a cartel, let alone the “Cartel de los Soles.”
[4] See, e.g., Helen Cooper | Trump Directs Military to Target Foreign Drug Cartels | New York Times and Katie Bo Lillis | Is the US targeting a Venezuelan cartel that may not technically exist? | CNN.
[5] Office of the Spokesperson | Terrorist Designations of Cartel de los Soles | United States Department of State. Although the designation itself was silent on TDA’s ties to the Maduro regime, in July 2025 when the US Department of the Treasury’s Office of Foreign Assets Control sanctioned the Cartel, it suggested that the Maduro regime provided “material support” to TDA and the Sinaloa Cartel. Office of Foreign Assets Control | Treasury Sanctions Venezuelan Cartel Headed by Maduro | United States Department of the Treasury. Maduro and several Venezuelan officials were notably indicted in the Southern District of New York in March 2020 under the first Trump Administration on four counts related to narco-terrorism. Office of Public Affairs| Nicolás Maduro Moros and 14 Current and Former Venezuelan Officials Charged with Narco-Terrorism, Corruption, Drug Trafficking and Other Criminal Charges | United States Department of Justice.
[6] See 18 U.S.C. § 2339B.
[7] See, e.g., Eastern District of New York | Two Indian Chemical Companies and a Senior Executive Indicted for Distributing Fentanyl Precursor Chemicals | United States Department of Justice.
[8] Office of Public Affairs | Lafarge Pleads Guilty to Conspiring to Provide Material Support to Foreign Terrorist Organizations | United States Department of Justice.
[9] #07-161: 03-19-07 Chiquita Brands International Pleads Guilty to Making Payments to a Designated Terrorist Organization And Agrees to Pay $25 Million Fine.
[10] See Camarena v. Caro-Quintero, No. 3:25-cv-00651, Complaint (S.D. Cal. Mar. 20, 2025).
