Latest Financial Crime Trends in Mexico: A Complex Multipolar Market

Mexico has been grappling with a highly intense and diversified criminal market for over two decades, characterized by an unprecedented level of violence and criminality. The Mexican government’s inability to rebalance power between itself, criminal groups, and society has led to a complex multipolar market that is difficult to control.

Rise in Drug-Related Violence

The past two years have seen a surge in drug-related violence, with the murder rate breaking previous records in 2017 and 2018. This violence has been fueled by the fragmentation of criminal groups, which has led to intense internal conflicts and a proliferation of criminal actors.

• The Sinaloa Cartel has developed its own fentanyl supply chain, which enters the United States through legal ports of entry.
• Efforts by the government to eradicate poppy cultivation and combat militia groups have been ineffective, leading to widespread impunity and temptation for individuals to participate in criminal activity.

Anti-Crime Militias: A Complex Issue

Anti-crime militias that have emerged in Mexico have rarely reduced violence in a sustained way and often engage in various forms of criminality. Government responses to these militias have been ineffective, and the strength and emergence of militia groups reflect a long-standing absence of government presence and underdevelopment.

Root Causes of Violence

The over-prescription of opioids in the United States has created a major addiction epidemic, which has led to an increase in poppy cultivation in Mexico. However, efforts to eradicate poppy cultivation have often failed to sustainably reduce illicit crop cultivation, and policies to pacify these areas have thrust poppy farmers deeper into the hands of criminal groups.

Path Forward

In order for Mexico’s violence to decline, one of two scenarios must occur:

• A criminal group must temporarily win enough turf and establish enough deterrence capacity to create a narcopeace.
• The state must systematically build up enough deterrence capacity against criminals and realign local populations with the state.

Ultimately, it is essential that Mexico strives to achieve this objective and address the root causes of its complex multipolar market.