On September 24, 2025, the U.S. Department of State formally designated the 18th Street gang as both as Foreign Terrorist Organization (FTO) and a Specially Designated Global Terrorist (SDGT). This gang, commonly known as Barrio 18, was described in the press statement as “one of the largest gangs in our hemisphere” and noted to have conducted attacks against security personnel, public officials and civilians in El Salvador, Guatemala and Honduras.
The Federal Register notice that followed explained that the Secretary of State, in consultation with the Attorney General and the Secretary of the Treasury, concluded that circumstances described in section 219 of the Immigration and Nationality Act “exist with respect to: Barrio 18 (also known as Calle 18, The Revolutionaries, Sureños)”.
This designation places Barrio 18 in the same category as major Latin American cartels that were labelled as FTOs earlier in 2025. It reflects the U.S. government’s evolving strategy to treat violent gangs as national security threats and to marshal terrorism and all US enforcement and intelligence authorities to disrupt their financing. For financial institutions and corporates, the move introduces significant legal and regulatory risks: FTO designations trigger material‑support statutes, increase exposure to sanctions and special‑measure orders and require enhanced risk management across customer due‑diligence, sanctions screening and supply‑chain oversight.
Barrio 18 originated in Los Angeles but has grown into a transnational gang operating primarily in El Salvador, Honduras and Guatemala. It is known for its territorial control, extreme violence and reliance on micro‑extortion. A United Kingdom Home Office briefing on gangs in Honduras notes that Barrio 18 imposes “war taxes” (impuestos de guerra) on residents of communities under its control and that former members report the gang will extort anyone, from “the person selling candies on the corner of the street to formal businesses,” regardless of economic situation. The same briefing cites research estimating that extortion payments in Honduras amount to U.S. $52 million to U.S. $72 million per year and warns that in some neighborhoods all residents and businesses must pay. Other sources show that Central American gangs increasingly engage in extortion of residents, bus drivers, and business owners and that failure to pay often results in harassment or violent reprisals.
Extortion is only part of that gang’s portfolio. Barrio 18 also runs local drug-dealing points within its territories, relies on forced recruitment and uses violence and intimidation to enforce its rules. These activities provide a steady stream of illicit revenue that often intersects with legitimate commerce. Funds are laundered through small businesses, remittances, trade transactions and money‑service providers, creating multiple exposure points for financial institutions. The gang’s decentralized structure makes it difficult to detect: “clicas” (cells) operate semi‑autonomously, meaning that a relationship with a seemingly low‑risk individual or business could conceal ties to the gang.
The FTO designation of Barrio 18 occurred against the backdrop of an unprecedented enforcement campaign targeting financial facilitators of Latin American cartels. On June 25, 2025 the Financial Crime Enforcement Network (FinCEN) issued three orders identifying CIBanco S.A., Intercam Banco S.A. and Vector Casa de Bolsa as primary money‑laundering concerns and prohibiting certain transmittals of funds involving those institutions.
These orders were published on June 30, 2025 with an effective date of 21 days from publication, making them effective on July 21, 2025. FinCEN subsequently extended the effective date to September 4, 2025 and then, through an order published on August 22, 2025, extended it again to October 20, 2025. The extension notice explained that the banks were deemed primary money‑laundering concerns “in connection with illicit opioid trafficking” and confirmed that the orders remain in force until the new effective date. This context matters because the designated banks have documented connections to cartels that were also designated as FTOs earlier in 2025; it demonstrates the U.S. government’s willingness to use special‑measure orders to sever financial channels once a threat is treated as terrorism‑related. Such designations essentially shut off these institutions from the globally financial systems and impact their viability. For example the Mexican Government took over CIBanco’s trust business to protect customers and major customers began moving their accounts.
These bank orders are not the focus of this piece; they are cited only to illustrate the gravity of FTO‑related enforcement. Institutions that continued to transmit funds for the designated banks after the effective dates would risk violating 31 U.S.C. § 5318A (section 2313a orders) and 18 U.S.C. § 2339B (material‑support statutes). The same enforcement posture now applies to Barrio 18: any financial facilitation of its activities, even indirectly, could prompt similar orders or prosecution. The extension of the bank orders underscores that remediation efforts in Mexico did not immediately remove the U.S. restrictions and that FinCEN is prepared to adjust timelines based on compliance progress. This should serve as a cautionary example for compliance teams reviewing their exposure to Barrio 18.
Under 18 U.S.C. § 2339B, knowingly providing material support or resources to an FTO is a felony with penalties up to 20 years for individuals, significant fines and forfeiture for firms, and extraterritorial reach. Payments, remittances, or trade tied to Barrio 18 through direct accounts, correspondent relationships, or supply chain finance can qualify as material support. Small transactions that look routine can become prosecutable when viewed in aggregate across the network. The FTO designation also enables U.S. authorities to apply the International Emergency Economic Powers Act (IEEPA) against anyone who “willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids or abets in the commission of” a sanctions violation related to FTOs or SDGTs. Criminal penalties under IEEPA can reach up to $1 million and 20 years of imprisonment. In addition, institutions may face class action or civil liability lawsuits under the Anti-Terrorism Act.
Authorities can use special measures under 31 U.S.C. § 5318A to cut off high risk conduits quickly, as shown by 2025 actions restricting certain Mexican institutions for cartel finance, which were extended into October 2025. Barrio 18’s FTO status increases the likelihood of blocking actions against facilitators and fronts that move its funds.
The designation moves Barrio 18 into the terrorism framework. The enforcement bar is higher, timelines are shorter, and tolerance for residual exposure is low. If your program does not surface Barrio 18 linkages, you are accepting criminal, sanctions, and de-risking risk.
List screening alone will miss intermediaries. Barrio 18 finances blend micro payments, family remittances, cash businesses, and trade. The control that matters now is network resolution.
The designation took effect upon publication. That means faster restrictions, broader liability, and fewer second chances. If you are not mapping networks that connect small payments, remittances, and trade to Barrio 18 nodes, you may process prohibited transactions without realizing it. U.S. authorities have signaled they will use their full toolkit to cut those channels.
For teams operationalizing network risk mapping, Sigma360’s proprietary FTO risk intelligence data can help identify indirect exposure. The dataset captures gang and cartel aliases, facilitators, and associated entities, and links them through shared identifiers such as ownership, addresses, phones, emails, and corporate roles. It is designed to enrich screening and investigations by revealing network linkages that traditional list matching can miss, with coverage that aligns to terrorism and sanctions designations and updates that reflect emerging facilitators. Used alongside remittance, trade, and KYC data, it supports the aggregation and attribution needed to detect Barrio 18 financing patterns at scale.