Seven transnational criminal organizations added to list of terrorist entities: Be mindful of Canada’s far-reaching anti-terrorism laws

The Government of Canada recently added seven entities to the designated list of terrorist groups under the Criminal Code. All seven entities are transnational criminal organizations operating out of Mexico and Latin America, with networks in the US and Canada. The announcement follows the US designation of many of the same entities as Foreign Terrorist Organizations and Specially Designated Global Terrorists.

These steps are directly related to the government’s $1.3 billion commitment to strengthen Canada-US border security. This commitment relates to President Trump’s threats to impose tariffs on Canadian imports due to alleged concerns about the flow of fentanyl and illegal immigration from Canada into the US. 

Canadian companies operating in areas of Latin America where the newly designated terrorist entities operate must take extra precautions, as the cartels may operate in some areas as quasi-governmental entities, controlling nearly all aspects of local society. 

Canadian businesses operating in these regions should review their due diligence and compliance policies and practices, their supply chains and partners, and adjust as required. 

A terrorist designation under the Criminal Code carries significant implications, not only for those directly affiliated with the designated entities, but also for any individuals or entities whose efforts even indirectly could be viewed as supporting a designated group. 

Seven transnational criminal organizations are now “terrorist entities” 

The seven newly designated entities are all major drug cartels operating primarily out of Latin America:

• Cártel del Golfo (Gulf Cartel) 
• Cártel de Sinaloa (Sinaloa Cartel) 
• La Familia Michoacana (the Family) 
• Cárteles Unidos (consisting of various affiliated cartels) 
• La Mara Salvatrucha (MS-13) 
• Tren de Aragua
• Cártel de Jalisco Nueva Generación (Jalisco New Generation Cartel) 

The government has stated that the designation is due to the terrorist activity the organizations participate in, in addition to their roles in drug trafficking.¹

The impact of a terrorist designation is far-reaching

The Criminal Code prohibits wilfully collecting or providing, directly or indirectly, property, financial or other related services to listed terrorist entities intending or knowing they will be used in a way that benefits the terrorist entity or supports terrorist activity. 

There is very little case law on these Criminal Code provisions and some risk that its application could be unpredictable. For example, some judges may interpret the provision to include situations where the mere risk that funds could find their way into unclean hands is enough to make them illegal. 

Exceptions for humanitarian assistance and ministerial authorizations

There are very limited exceptions for individuals or organizations whose acts are carried out “for the sole purpose” of providing humanitarian assistance, as long as reasonable efforts are maintained to minimize any benefit to terrorist groups.¹ 

Entities can also apply for a ministerial permit to carry out certain activities; however receiving such an authorization is not automatic and is subject to significant due diligence by the government.

Recommendations 

The Government of Canada has continued to expand and strengthen Canada’s anti-money laundering, anti-terrorist financing, and sanctions laws, including to facilitate easier prosecution of some of these offences. 

Legal and reputational risks mean Canadian companies must be diligent when operating in regions with a cartel presence. 

Canadian businesses operating in these regions should review their due diligence and compliance policies and practices, their supply chains and partners, and adjust as required. 

The authors would like to thank Ian Chesney, articling student, for his contribution to preparing this legal update.