Mazatlán Zona Franca is a semi-autonomous region, previously part of Gran México until 120 BFC. It was formed to allow the Sinaloa cartel to undercut CJNG with economies of scale and drive them east in order to curtail the Mexican drug wars which were becoming increasingly damaging to the Mexican economy. The region is a free economic zone, with nominal custom duties and no customs regulations for imports that are not transshipments into Mexico. The administration is controlled by the Sinaloa cartel which runs the zone largely as a minarchic government. Taxes are collected from local businesses and used to fund a military capable of maintaining order and territorial control, to provide welfare to its members, and for some external affairs such as maintaining international and off world embassies (which are often accused of being little more than coordination centers for its illicit exports and people smuggling operations).
Economy
The zones economy is largely based on traditionally illicit activities where a laissez-faire economy backed by a narco-state has a comparative advantage, such as simple synthetic drug manufacture, international tax avoidance and money laundering, vice tourism, human smuggling, and as an extradition haven. The zone has attempted to expand to other illicit activities but is generally out-competed in medical tourism, generic drug production, biotech, offshore banking, and citizenship as a service by the Argentinian Mancomunidad due to that territories perceived safety; in data protection and cybercrime by the RDP due to its low cost of operations, and in grey market tech exports, complex synthetic drugs, and sexbots by the higher tech Kuromaku. It typically avoids hiring out mercenaries or piracy except where it benefits Gran México, which in turn has never bowed to external pressure to annex the zone.
Over time the zone has had to adapt its economy to changing technology. Already in 120 BFC ultra low orbit ABEP spy satellites were becoming more widespread, and with slowly increasing spread of motes starting in the 70s privacy in most terrestrial environments has almost completely disappeared in an attempt to control dangerous Fabricator. This has forced the zone to operate illicit activities either internally, or in remote environments, or digitally, or in other areas on and off Earth where they are either tolerated or corruption is high.
Judicial System
The Mazatlán Zona Franca maintains order via competing private defense agencies and some limited use of automated technojuez for dispute arbitration. Unlike their use in the more anarcho-capitalist Argentinian Mancomunidad, the zone's systems have less access to surveillance data, transaction records, and behavioral patterns due to the privacy concerns arising from the majority of the economic activity in the zone and are mostly used for small commercial disputes. As well as territorial defense related issues, cartel administered security forces deal with larger internal disruptions and significant commercial disputes both of which have the possibility of exile or execution as punishments. The system is largely effective in encouraging a mostly self-policing population capable of generating trade flow and regional stability through a combination of economic incentives and the cartel welfare system's creation of dependency on the limited central government.