The United States has blacklisted nearly 20 gas stations in Mexico for their financial ties to organized crime over the last 10 years, yet a significant number are still operating and have franchise agreements with state oil company Pemex.
Between 2004 and 2014, the US Treasury’s Office of Foreign Assets Control (OFAC) blacklisted 19 fuel service stations in Mexico for laundering the profits of organized crime groups, reported El Universal. Nine of those companies blacklisted by OFAC are still operating, and have contracts with Pemex, according to El Universal.
An official from Mexico’s Finance Ministry told El Universal that the Financial Intelligence Unit — the Mexican government body responsible for investigating money laundering — opens a probe into any company designated by the US Treasury. However, if the standard of evidence of wrongdoing needed to file a report to Mexico’s Attorney General’s Office, authorities cannot bring legal action against the suspected businesses.
Among the blacklisted companies, 90 percent are located in either Sinaloa or Jalisco state, according to El Universal. All of the fuel companies still in business are linked to either the Sinaloa Cartel or to drug lord Rafael Caro Quintero, a co-founder of the Guadalajara Cartel in the 1980s, who was released from a Mexican prison in August 2013 (see El Universal’s graphic below).
Companies blacklisted by the OFAC have their US assets blocked, and are prohibited from doing business with US companies or citizens.
InSight Crime Analysis
While a designation by the OFAC freezes a company’s assets in the US, this does not prevent it from continuing to run its business in Mexico. Nevertheless, there is still responsibility on Pemex to do a thorough background check on the service stations that operate under their franchise. The fact that nearly half of the gas stations blacklisted by the OFAC since 2004 still have contracts with Pemex suggests the state oil company isn’t doing nearly enough when it comes to scrutinizing or controlling its franchises.
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It is hard to see how excluding those service stations blacklisted by the US would not be in Pemex’s own best interest, as these front companies are dedicated to laundering profits for the criminal organizations that steal Pemex’s product, among other illicit activities. Pemex has taken other dramatic measures to address the problem of oil theft, including announcing that it will stop sending fully refined fuel through the more than 14,000 kilometers of pipeline that cross Mexico. But cleaning up its franchise operations would seem like another obvious move that would help Pemex combat its billion-dollar losses thanks to organized crime.