The department's Office of Foreign Assets Control designated Mercurio Internacional, based in Bogota, as helping in the trafficking activities of the narco-terrorist group Revolutionary Armed Forces of Colombia, known as FARC, the department said in a news release.

Mercurio Internacional accepted foreign currency from FARC from a number of sources, the department said. It would convert the currency -- derived through drug sales -- into pesos for the FARC to fund its activities in Columbia.

FARC has been identified as a significant foreign narcotics trafficker under the Foreign Narcotics Kingpin Designation Act and designated as a foreign terrorist organization by the U.S. State Department.

Besides freezing assets Mercurio Internacional may have under U.S. jurisdiction, the action bars U.S. people or entities from conducting business with the money exchange house.

"Today's (Wednesday's) action targets the FARC's drug trafficking and terror activities by undermining its financial network," OFAC Director Adam Szubin said. "This deals another blow to the FARC's ability to fund its operations by laundering criminal proceeds through the international financial system."