On August 21, United States Department of Treasury imposed financial sanctions on three Chinese nationals and two companies accused of producing and shipping fentanyl, a deadly synthetic opioid, to the U.S.
The sanctioned nationals include Guanhua Zheng, 63, and Fuijing Zheng, 36, a father and son indicted in Ohio last year on charges of producing and smuggling fentanyl and fentanyl-related substances. The third man, Xiaobing Yan, 42, was linked to similar charges in Mississippi in 2017. The two companies were identified as Qinsheng Pharmaceutical Technology and the Zheng Drug Trafficking Organization, both of which are based in Shanghai.
The Under Secretary of the Treasury Department, Sigal Mandelker, claims their trafficking operations are “directly contributing” to the crisis of opioid addiction, overdoses, and deaths in the U.S. Mandelker also explained to reporters that the Zhengs and Yan shipped hundreds of packages of Fentanyl to the U.S., targeting their customers through online advertising and using commercial mail services to smuggle the deadly substance.
Since the indictments of the three nationals, the U.S. has pressured China to arrest them but they all, along with five other Chinese citizens indicted in the U.S. for fentanyl trafficking, remain free. This catalyzed the U.S. Treasury Department’s decision to identify the nationals as significant foreign narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (the “Kingpin Act”), creating legitimate grounds for imposing sanctions.
This act enables anyone who is identified as a significant foreign narcotics trafficker to be placed under a law that freezes any property they control within the U.S. and bars American citizens from doing business with those properties. Additionally, the men face penalties ranging from civil fines up to $1.1 million per violation.
Along with these sanctions, the Foreign Crimes Enforcement Network (FinCEN) issued an advisory to financial institutions about financial schemes related to the trafficking of these synthetic opioids. The goal is to equip these institutions with sufficient information to assist them in detecting and reporting criminal activity.
White House counselor Kellyanne Conway expressed the administration would “continue to name and shame and prosecute and punish people who are peddling their poison into our kids and into our communities. Meanwhile, U.S. officials point to China as the main source of fentanyl and fentanyl-related substances and claim the substances are primarily entering the country from China via international mail.
China’s foreign ministry spokesman, Geng Shuang, responded to the sanctions on August 22, telling reporters in Beijing that the country’s government and the U.S. were cooperating on the anti-narcotics “front,” and had communicated on specific cases, although he declined to elaborate on specifics.
The two countries appear to have been working together on the issue since November 2018, when Xi made a pledge to Trump to take action as part of trade negotiations. A few months later, on May 1, Beijing announced the expansion of state controls to include the 1,400 known fentanyl-related substances, and new ones developed in the future. This move designated all of these substances as illegal.
Coincidentally, the sanctions come three weeks after President Trump took to Twitter to accuse Chinese President Xi Jinping of revoking its promise to stem the flood of fentanyl into the U.S. China responded to the accusation, labeling it as “blatant slander” and claiming authorities have made “unprecedented efforts” to address the country’s illicit fentanyl production and trafficking.
The Trump administration’s urgency to address the Chinese fentanyl trade is part of the government’s attempt to thwart the rampant opioid crisis plaguing the U.S. While there are a range of opioids contributing to the crisis, the presence of synthetic opioids, such as fentanyl, is rapidly increasing due to its ease of synthetization and affordability. Fentanyl, responsible for more than 30 percent of opioid overdoses, is so potent that it is 50 times stronger than heroin and just two milligrams, equivalent to a few grains of sand, can lead to death. The substance can be traced to the deaths of thousands of Americans, including the likes of Prince, Tom Petty, and Mac Miller.
U.S. authorities are continually trying to crack down on drug rings that are trafficking the substance. Most recently, on August 31, law enforcement officials busted a lab in Virginia linked to a multi-state drug ring and seized enough fentanyl from the Shanghai-based vendor to kill 14 million people. The vendor had mailed the fentanyl through the U.S. Postal Service.
Amidst this crisis and the clear tension between the U.S. and China over how it is being handled, is the ongoing trade war between the two countries. It is unknown whether or not the recent sanctions from the Treasury Department will have an impact on Beijing. Some experts believe any crackdown by Beijing on the production and trafficking of opioids will depend on meaningful progress toward resolving trade war. However, implications will soon become clearer. On September 5, the countries announced they will resume trade talks in early October with “good negotiating conditions.”
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