• Riskology by Infortal™: Episode 41 - Avocado Toast & Geopolitical Risk

  • Feb 10 2025
  • Length: 11 mins
  • Podcast

Riskology by Infortal™: Episode 41 - Avocado Toast & Geopolitical Risk

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  • Summary

  • On January 20th, the President signed an Executive Order focused on designating cartels as foreign terrorist organizations. This decision could reverberate throughout industries, requiring companies to adapt their approach to due diligence conducted on customers, clients, and suppliers. Third-party risk management teams must consider a heightened regulatory and criminal enforcement environment. Tune in to Riskology by Infortal™ Episode 41, where hosts Dr. Ian Oxnevad and Chris Mason break down the potential impact of designating cartels as terrorist organizations. Executive Order and Its Ripple Effect Chris Mason emphasizes how "the stakes will be raised… both from a reputational standpoint and a criminal standpoint." The designation of cartels as terrorist entities could fundamentally shift how businesses operate across the US-Mexico border. Tighter constraints, impacting banks, suppliers, and a wide range of industries, could have a chilling effect as businesses work to adapt their compliance programs to account for exposure to a new regulatory framework. In-house counsel must also ensure that policies and procedures align with any emerging regulatory or legislative changes. Cartel Influence on Legitimate Industries Dr. Ian Oxnevad further illustrates the pervasive reach of cartels into legitimate sectors, using the avocado supply chain as a prime example. Businesses dealing with seemingly innocuous products must now consider the potential risk of indirect association with terrorist networks. Key Takeaways Heightened Regulatory Scrutiny: Classifying cartels as terrorist organizations will dramatically increase regulatory pressures on businesses with ties to Mexico, necessitating robust compliance strategies. Increased Vigilance: Companies operating in financial services, agriculture, and logistics must implement enhanced vetting policies and procedures to account for changes. Due Diligence Imperative: Updated enhanced due diligence procedures are critical across all regional business sectors to avoid reputational damage and possibly criminal prosecution. Broader Implications for International Trade: This classification could further strain U.S.-Mexico relations and complicate trade logistics, requiring businesses to adapt swiftly and strategically. For more insights, tune into Episode 41 of Riskology by Infortal.™ Resources: Infortal Worldwide Email Dr. Ian Oxnevad on LinkedIn Chris Mason on LinkedIn
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