The U.S. Treasury Secretary Janet Yellen announced sanctions against a Mexican drug trafficking group on Thursday, June 20, for their involvement in the transportation of fentanyl and its precursor chemicals to the United States. This is part of a broader effort by the U.S. to curb the flow of deadly synthetic opioid drugs.
The U.S. Treasury imposed sanctions on eight leaders of the La Nueva Familia Michoacana drug trafficking group, cutting off their connections to the U.S. dollar financial system and freezing any assets they may have in the U.S. or U.S. institutions.
Yellen, who was in Georgia for interviews, also announced new supplemental guidance issued by the Financial Crimes Enforcement Network (FinCEN) to banks to help them identify and report suspicious transactions related to Mexican criminal organizations purchasing fentanyl precursor chemicals and manufacturing equipment from China.
Yellen stated that reporting such transactions will help FinCEN and its partner agencies track traffickers, which is a crucial step in combating fentanyl and other opioid drugs.
The new guidance announced by Yellen reminds banks to be vigilant regarding transactions related to China. She said, “This allows us to trace the flow of funds behind illegal fentanyl supply chains and apprehend criminals profiting from the proliferation of opioid drugs.”
The guidance includes providing banks and other counterparties with “Red Flags” marking services to alert them to potential suspicious transactions, including transactions related to chemical and pharmaceutical companies in China or Hong Kong; using Chemical Abstracts Service numbers to identify suppliers on e-commerce or the “dark web.”
According to the guidance, Mexican companies with minimal or no online business, or those engaged primarily in business with Chinese chemical or pharmaceutical companies, should also exercise caution.
Yellen also called for enhanced cooperation with Mexico in combating the trafficking of fentanyl and its precursor chemicals, stating that the Biden administration will emphasize this in discussions with Mexico’s newly elected first female president, Claudia Sheinbaum.
Fentanyl has become the leading cause of drug overdose deaths in the U.S., leading to tens of thousands of overdose deaths each year.
Yellen visited Mexico in December last year in an effort to strengthen collaboration to combat illegal fentanyl trafficking and related financial activities, including the establishment of a fentanyl task force. The task force integrates resources from several departments, including counterterrorism, the Financial Crimes Enforcement Network, and the criminal investigation units of the Internal Revenue Service to stop illegal drug trafficking.
In November last year, Biden and Chinese leader Xi Jinping agreed to cooperate in curbing the illegal trade of fentanyl at a meeting near San Francisco. However, in April this year, a special committee of the U.S. House of Representatives on China issues found that the Chinese authorities subsidize the production and export of fentanyl precursor materials and other synthetic drugs through direct subsidies and tax rebates.