The U.S. Treasury announced on June 30 that it has placed sanctions on two Mexican individuals and nine companies tied to a transnational scheme that moves fuel from the United States into Mexico while evading import taxes. The Treasury said the operation is connected to the Jalisco New Generation Cartel (CJNG) and is part of an illegal enterprise that produces hundreds of millions of dollars in revenue for the cartel each year.
In its statement, the Treasury highlighted that smuggled fuel and stolen crude oil have evolved into the second-largest revenue stream for Mexican cartels after drugs, according to the U.S. government. Commenting on the move, Secretary of the Treasury Scott Bessent said, "Today's action highlights the extent to which Mexico's cartels are expanding beyond traditional drug trafficking to generate revenue for their criminal organizations, which continue to traffic deadly drugs that kill Americans."
The agency pointed to Mexico's tax framework as a key factor in the scheme. Mexico applies a levy known as IEPS on many products, including imported diesel and gasoline. The Treasury said cartel networks and associates evade that levy through practices such as misclassifying customs paperwork and by bribing government officials.
According to the Treasury, certain U.S. companies that cooperated in the scheme used their access to major refineries and domestic fuel distributors to purchase fuel legally and then divert it. That diversion was executed through a web of U.S. and Mexican front and shell companies, the statement said.
Although Mexico is a substantial crude oil producer, the Treasury noted that the country imports fuels because its ageing refineries cannot meet domestic demand. Once smuggled across the border, the fuel allegedly is sold at large margins through petrol stations controlled by the cartel and at unregulated roadside fuel stops.
The Treasury also described how the proceeds were concealed. Complicit U.S. fuel distributors reportedly laundered money by buying luxury goods, investing in real estate, and acquiring other investment assets, the agency said.
Alongside the designations, the Treasury issued new guidance intended to help banks and other financial institutions identify red flags in cross-border fuel transactions. The guidance aims to make it easier for financial institutions to detect patterns consistent with diversion, tax evasion, and subsequent money laundering linked to the fuel trade.
The sanctions named two individuals and multiple companies. Oscar Juraidini and seven companies he owns or controls were designated for acting on behalf of the CJNG. Those entities are Centro Cambiario La Peseta, OJ Living Trust, RK Real King, Soma Transporte y Servicios, Ogui Fletes, OF Transportes, and UK-based Cucumber Sweet Waves. The Treasury said these entities were acting on behalf of the cartel.
Also designated were J. Refugio Ruiz and two logistics firms he operates - Jomadi Logistics & Cargo and Ahavat Logistics Solution - with the Treasury citing material support to the cartel. The Treasury said Jomadi Logistics & Cargo, Soma Transporte y Servicios, OF Transportes and Centro Cambiario La Peseta did not respond to requests for comment.
The statement added that efforts to contact Juraidini, Ruiz and the other companies were unsuccessful because no online presence or contact information could be found for them.
Analysis
The Treasury's action targets an established revenue channel for organized criminal groups that intersects with commodities markets, logistics networks, and financial services. By naming individuals and corporate entities in both the U.S. and abroad, the sanctions aim to disrupt an end-to-end chain that begins at fuel procurement and ends with on-the-ground retail sales inside Mexico. The added guidance to banks indicates a focus on cutting off the financial pathways that obscure illicit proceeds.
The measures underscore several structural frictions in the fuel market cited by the Treasury: a tax on imported fuels, limitations in Mexico's refining capacity that drive imports, and the presence of intermediaries able to convert legitimately purchased fuel into contraband through document manipulation and corrupt practices.
What remains unclear from the Treasury statement
- The scope of enforcement going forward and how quickly financial institutions will operationalize the new guidance.
- The extent to which the designated companies and individuals can be reached for legal process or asset seizure, given the reported lack of contact information.
Implications
Energy and commodities traders, fuel distribution networks, and financial institutions involved in cross-border payments may be affected by the new sanctions and guidance. The Treasury's action intends to make it harder for networks to profit from diverted fuel and for the proceeds to be laundered through conventional markets such as real estate and luxury goods.