US Sanctions Chinese Entities for Allegedly Providing Precursor Chemicals for Illicit Fentanyl Production

The Treasury Department building in Washington, on Jan. 19, 2023. (Saul Loeb/AFP via Getty Images)

The Treasury Department announced on April 14 it is sanctioning two entities tied to China for allegedly “supplying precursor chemicals to drug cartels in Mexico for the production of illicit fentanyl intended for U.S. markets.”

Wuhan Shuokang Biological Technology Co., Ltd. (WSBT) and Suzhou Xiaoli Pharmatech Co., Ltd. (SXPC) were sanctioned “for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production,” said the department.

China is a major supplier of fentanyl.

“Illicit fentanyl is responsible for the deaths of tens of thousands of Americans each year,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson in a statement. “Treasury, as part of the whole-of-government effort to respond to this crisis, will continue to vigorously apply our tools to prevent the transfer of precursor chemicals and machinery necessary to produce this drug.”

Additionally, the Treasury Department sanctioned five individuals: Yao Huatao, 32; Wu Yonghao, 31; Wu Yaqin, 30; Wang Hongfei, 32; and Ana Gabriela Rubio Zea, 32.

Yao is WSBT’s sole owner. Wu Yagin and Wu Yonghao are sales representatives of WSBT, while Wang “is the owner of a cryptocurrency wallet that has been used to receive bitcoin payments for illicit drug transactions on behalf of WSBT,” according to the department. Rubio Zea, who lives in Guatemala, is a buyer of fentanyl who bought over 55 Ibs. of the drug from SXPC for the Mexico-based Sinaloa Cartel.

Almost 15,000 lbs. of fentanyl was seized by the United States in the 2022 fiscal year, while over 11,000 lbs. of fentanyl was seized in the 2023 fiscal year, according to Customs and Border Protection. In the United States, the fiscal year begins on Oct. 1 and ends the following Sept. 30.

The State Department’s Narcotics Rewards Program has offered a combined $25 million for information leading to the arrest or conviction of 27 individuals allegedly involved in illicit fentanyl trafficking.

The Department of Justice announced on April 14 charges against 33 members of the Sinaloa Cartel, including “the Chapitos,” the four sons of former Sinaloa Cartel leader Joaquin “El Chapo” Guzman, for allegedly trafficking fentanyl. The Chapitos are Joaquin Guzman Lopez, 36; Alfredo Guzman Salazar, 37; Ovidio Guzman Lopez, 33; and Ivan Guzman Salazar, 40.

“The PRC [People’s Republic of China] government must stop the unchecked flow of fentanyl precursor chemicals that are coming out of China,” said Attorney General Merrick Garland during a press conference announcing the charges.

“The cases we are announcing today exemplify the comprehensive approach the Justice Department is taking to disrupt and hold accountable those who bear significant responsibility for this fentanyl epidemic,” he added.