Washington— The Chinese chemical company’s sales team offered drug cartel operators more than just the key ingredients needed to manufacture the deadly fentanyl for the United States.
In exchange for cryptocurrency payments, Wuhan Shuokang Biological Technology provided technical assistance and advice to Mexico’s notorious Sinaloa Cartel, including which chemicals could be most effectively combined to make the synthetic opioid and how to economize on “starting material,” according to a US indictment unsealed on April 14.
US prosecutors say the Chinese company used its professional-looking website to maintain a semblance of legitimacy.
In reality, its middlemen supplied illicit chemicals and substances to the cartel, helping it flood the United States with the cheap fentanyl that is killing record numbers of Americans.
Investigators describe the indictment as one of the most significant attempts to link Chinese chemical companies to Sinaloa mobsters who dominate the fentanyl trade. But if previous US criminal cases against the suppliers are any indication, there’s little chance the Chinese suspects will be prosecuted.
Little support from China
Amid worsening geopolitical tensions with Washington, China is increasingly unwilling to crack down on illicit chemical shipments, experts say. “It’s important to realize that this is just a mosquito on the windshield on the Chinese side of things,” said Jonathan P. Caulkins, a professor at Carnegie Mellon University who investigates criminal drug trafficking, noting that the sale of fentanyl precursors it constitutes only a “tiny, tiny, tiny” amount of the overall business of the chemical industry.
The 23 suspects named in the indictment include four Chinese nationals as well as Mexican cartel bosses, offering a rare window into the global supply network fueling the fentanyl crisis that is devastating communities and families across the United States. More than 70,000 Americans die each year from the synthetic opioid, which is up to 50 times more potent than heroin.
The two key nations in the chain, China and Mexico, have long downplayed their roles and blamed American users for the demand for illegal drugs. Mexico’s president insists his country is a transit point for fentanyl, not a producer, while a Chinese official recently declared: “There is no such thing as fentanyl trafficking between China and Mexico.”
Charges unsealed in the Southern District of New York dispute those claims and describe a chemical pipeline from the Chinese province of Wuhan passing through ports in Germany and the United States before reaching cartel “cooks” working out of mountain hideouts. from Northern Mexico.
The indictment is important in exposing the involvement of Chinese companies in supplying precursor chemicals, refuting the country’s claims that it has no proof that the materials are going to Mexican cartels, said Vanda FelbabBrown, who studies the international trade in opioids. for the Brookings Institution, a DC-based think tank
But without the Chinese willingness to clamp down on the country’s chemical industry, the impact of the prosecution is limited, he said. In the best of cases, Chinese companies identified in the documents can change their names or websites, and defendants can avoid traveling to countries that have extradition treaties with the United States.
“I don’t think there are any broader deterrent effects on the Chinese industry,” Felbab-brown said in an interview.
The Biden administration has responded to the rising number of fentanyl deaths with greater urgency in recent months, boosting interdiction efforts along the southern border while pressing the Mexican government to crack down on its cartels.
Not too long ago, the collaboration between China and the United States in the illegal drug trade, while never extensive, seemed to be paying off. In 2019, Chinese authorities, alerted by the Drug Enforcement Administration (DEA), convicted a network of fentanyl suppliers from the northern city of Xingtai. US and Chinese officials even held a joint press conference after nine men were sentenced.
But even that was calculated, said Felbab-brown. “(China) only participated in the fight against narcotics when they thought it would lead to changes in their geostrategic relationship,” he said.
That year, under pressure from the Trump administration, China also agreed to sweeping domestic restrictions on “all fentanyl-related substances,” while blaming the United States for its culture of drug use. But the precursor chemicals still flowed to the Mexican cartels, allowing them to dominate the illicit fentanyl market.
zero cooperation
In August 2020, China announced that it was suspending cooperation with the United States in the fight against illegal narcotics due to the visit of then-US Speaker of the House Nancy Pelosi to Taiwan. But by then, China had largely withdrawn from such efforts as a result of escalating trade disputes, disagreements over human rights, as well as tensions over Taiwan’s status.
“They don’t work with us at all anymore,” said House Rep. David Trone, D-Md., who co-chaired the United States Commission to Combat Trafficking in Synthetic Opioids. “They know who (the precursor traffickers) are. We know who they are. Yet they do nothing about it.”
A Chinese Foreign Ministry spokesman recently said the country had been “trying to help the United States to the best of its ability,” but the recent allegations “seriously undermine” such efforts, Reuters reported.
Still, researchers have doubted how easy it would be to cut off shipments of precursors from China, which account for only a small fraction of the country’s massive and poorly regulated chemical and pharmaceutical industries. Experts say small and medium-sized players in China are the key players exporting precursor chemicals, which thanks to advances in synthetic chemistry can easily be turned into fentanyl by cartels.
easy to traffic
A study last year estimated that the amount of fentanyl consumed in 2021 was just in the single digits in metric tons, underscoring the potency of the drug and the ease of smuggling it into the United States.
“There is no universal agreement that the Chinese could stop this even if they wanted to,” Caulkins said.
And even if China were to act, other countries with large chemical industries, such as India, are well positioned to supply illegal precursors and synthetic drugs to criminal organizations, experts say.
The senior White House official who oversees drug control policy said Tuesday that China needs to strengthen regulations that let it know who is really buying the chemicals. “China has to make a decision. You can be part of the global community to demonstrate your leadership on the world stage on this issue, or you can do nothing,” said Rahul Gupta, director of the Office of National Drug Control Policy.
Previous US allegations against Chinese suppliers have had minimal effect on the fentanyl trade and resulted in few prosecutions.
In August 2018, the Justice Department obtained an indictment against a Shanghai father and son who allegedly exported deadly fentanyl analogues and other drugs to 25 countries and 37 states. Federal prosecutors alleged that the drugs caused the overdose deaths of two people in Ohio. But the men, Fujin Zheng and his father, Guanghua Zheng, labeled “significant” drug traffickers under the Foreign Narcotics Kingpin Designation Act, remain beyond the reach of US law, presumably in China.
Most recently, in December 2021, the Treasury Department issued sanctions against four Chinese chemical companies for trafficking synthetic drugs, including those believed to have shipped fentanyl precursors to Mexican cartels.
One suspect, Chuen Fat Yip, remains at large despite a $5 million reward for information leading to his arrest.
Members of the ‘Chapitos’
China remains the “source of the vast majority” of the precursor chemicals used by the Sinaloa Cartel to manufacture fentanyl, according to the New York indictment. It names several leaders of the “Chapitos” network, a faction of the Sinaloa drug cartel, including alleged kingpin Ovidio Guzmán López, who was arrested by Mexican security forces in January, and three brothers, who remain at large. They are the sons of former head of the Sinaloa Cartel Joaquín “El Chapo” Guzmán, who is serving a life sentence in the United States.
Big Chinese chemical companies that make fentanyl precursors avoid scrutiny by selling to middlemen inside China, according to the indictment. Two of the defendants are Kun Jiang, owner of Suzhou Xiaoli Pharmatech Co., and Huatao Yao, owner of Wuhan Shuokang Biological Technology, or SK Biotech. Both were charged, along with Yao’s associates Yaqin Wu and Yonghao Wu.
The Treasury Department also imposed sanctions against the companies and the defendants, barring anyone in the United States from doing business with them, measures that may have limited practical value. Chinese chemical companies “are nimble” and often change their names to avoid scrutiny from law enforcement, the indictment says.
They claim to be the biggest
Both companies sold fentanyl precursors through a Guatemala-based broker, Ana Gabriela Rubio Zea, who bragged that the cartel’s operation was “the largest in Mexico, so we can buy a lot,” according to the indictment. Rubio Zea was also charged, and US authorities offered up to $1 million for information leading to her arrest or conviction.
Rubio Zea arranged for the chemicals to be disguised, sometimes in food containers or packaged along with legal chemicals, to avoid detection by law enforcement, according to the indictment. He also relied on “border corruption” to get the chemicals into Mexico, prosecutors said.
