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 end the Mexican drug war which was becoming hugely 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 and is generally considered a minarchy. 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 east asian criminal groups. 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.