August 24, 2021

U.S.-China Economic and Security Review Commission 1

Illicit Fentanyl from China: An Evolving Global Operation

Lauren Greenwood, Congressional Fellow

Kevin Fashola, Former Congressional Fellow

Key Findings

• China remains the primary country of origin for illicit fentanyl and fentanyl-related substances 

trafficked into the United States: In 2019, China fulfilled a pledge to the United States and placed all 

forms of fentanyl and its analogues on a regulatory schedule. Nevertheless, illicit fentanyl from China 

remains widely available in the United States. Chinese traffickers are using various strategies to circumvent

new regulations, including focusing on chemical precursors, relocating some manufacturing to India,

rerouting precursor shipments through third countries, and leveraging marketing schemes to avoid

detection. China’s weak supervision and regulation of its chemical and pharmaceutical industry also enable 

evasion and circumvention.

• Since China’s government scheduled fentanyl, the amount of finished fentanyl shipped directly from 

China to the United States has declined, while the amount shipped from Mexico has increased: The 

U.S. Drug Enforcement Administration (DEA) assesses Chinese traffickers have shifted from primarily 

manufacturing finished fentanyl to primarily exporting precursors to Mexican cartels, who manufacture 

illicit fentanyl and deliver the final product. U.S. law enforcement has seen a growing trend of Chinese 

nationals, in both Mexico and the United States, working with Mexican cartels. As Chinese suppliers 

coordinate more with international partners, the DEA is concerned that fentanyl production is becoming 

increasingly global and more difficult to track and control.

• Chinese brokers are laundering Mexican drug money through China’s financial system: Chinese 

money launderers are using financial technology, mobile banking apps, and social media to evade 

authorities.

• Cooperation between the United States and China remains limited: U.S. law enforcement agencies 

have established working groups, conducted high-level meetings, and shared information with their Chinese 

counterparts, which has led to the dismantling of a few illicit fentanyl networks. At the same time, U.S. 

authorities are reporting that cooperation remains limited on the ground. The Chinese government has 

cooperated less with U.S. authorities on criminal and money laundering investigations, conducting joint 

operations, and U.S. requests for inspections and law enforcement assistance.

Overview of Chinese Fentanyl Flows to the United States

According to the U.S. Centers for Disease Control and Prevention (CDC), synthetic opioids—primarily illicit 

fentanyl—remain the largest cause of overdose deaths in the United States.

1 The CDC estimates that in the United 

States, there were more than 93,000 drug overdose deaths in 2020, of which an estimated 69,710 were opioid 
U.S.-China Economic and Security Review Commission 2

overdoses. This is a more than 30 percent increase from the 50,963 opioid overdoses in 2019.

*2 Stay-home orders, 

disruption of normal routines, economic hardships, and other stressors related to the novel coronavirus (COVID19) pandemic contributed to the rise in abuse of illicit opioids in the United States in 2020,3 despite the increased

price of street fentanyl. 

In its 2020 National Drug Threat Assessment report, the DEA assessed that China was “the primary source of 

fentanyl and fentanyl-related substances trafficked through international mail and express consignment operations, 

as well as the main source for all fentanyl-related substances trafficked into the United States.”4 Fentanyl is 

trafficked into the United States by two primary methods: (1) sent from Chinese suppliers via international mail or 

express consignment services, such as UPS, FedEx, or DHL; and (2) smuggled across the U.S.-Mexican border. 

• International mail: According to U.S. seizure data, finished fentanyl and related analogues were often 

mailed from China in parcel packages. Fentanyl shipped this way tends to be above 90 percent purity and 

is shipped in packages weighing less than 1 kilogram, or 2.2 pounds.

†5 According to U.S. Customs and 

Border Protection (CBP), only 11.58 pounds of fentanyl was seized in direct shipment from China in the 

first eight months of 2019 compared to 278 pounds in 2018.

6

• U.S.-Mexico border: According to Thomas Overacker, executive director of the CBP Office of Field 

Operations, “Most of the illicit fentanyl entering our country by weight does so at ports of entry (POEs) 

along our southwest border by private vehicles, pedestrian, and commercial vehicles.”

7

In 2019, CBP seized 

more than 2,660 pounds of illicit fentanyl from Mexico compared to 1,500 pounds in 2018.

8 The Mexican 

government reported that seizures of illicit fentanyl at clandestine labs and ports increased six-fold in 2020, 

suggesting Mexico is accounting for a greater share of the fentanyl trafficked directly into the United States

even though the precursor chemicals originate in China.

9 Reflecting on the impact of the Chinese

government’s decision to schedule fentanyl, in 2021 the DEA noted that Mexican cartels, “will remain the 

primary source of supply for heroin and [finished] fentanyl smuggled into the United States, using 

precursors primarily sourced from China.”10 

Major Developments since 2018

In November 2018, the Commission published a staff report, Fentanyl Flows from China: An Update since 2017.

‡

Since the report’s publication, there have been several significant developments:

• China scheduled fentanyl: At the December 2018 G20 Summit in Argentina, General Secretary of the 

Chinese Communist Party Xi Jinping made a commitment to then President Donald Trump that China 

would schedule or control fentanyl.11 As a result of U.S.-China counternarcotic negotiations, in April 2019 

China’s Ministry of Public Security, National Health Commission, and State Drug Administration jointly 

announced that all fentanyl and analogues would be placed on the Supplementary List of Non-medicinal 

Narcotic Drugs and Psychotropics Drugs, effectively controlling all types of fentanyl unless given a special 

permit.

12 The DEA confirmed the controls went into effect in May 2019.13 According to David Prince,

deputy assistant director of transnational organized crime at U.S. Immigration and Customs Enforcement 

(ICE), China’s scheduling has led to a decline in the number of Chinese manufacturers “willing to 

sell/export [finished] fentanyl products.”14

 

* The CDC also continues to update its numbers as new data are made available. According to the CDC, overdose deaths were already 

increasing in 2019 but further accelerated during the COVID-19 pandemic as a result of the “disruption to daily life due to the COVID-19 

pandemic [which] has hit those with substance use disorder hard.” Although widely abused, fentanyl is also prescribed legally by medical 

professionals for pain relief. As a result of the COVID-19 pandemic, opioid and licit fentanyl used to treat patients increased as well. U.S. 

Centers for Disease Control, Overdose Deaths Accelerated during COVID-19, December 17, 2020. 

https://www.cdc.gov/media/releases/2020/p1218-overdose-deaths-covid-19.html.

† The DEA assesses that fentanyl of such purity is produced by chemical companies in China, in contrast to fentanyl from Mexico, which has 

a purity below 10 percent and is often mixed with other illicit drugs (e.g., heroin, cocaine, and methamphetamines). U.S. Drug Enforcement 

Administration, 2018 National Drug Threat Assessment, March 2019. https://www.dea.gov/sites/default/files/2018-11/DIR-032-

18%202018%20NDTA%20final%20low%20resolution.pdf; U.S. Drug Enforcement Administration, 2020 National Drug Threat Assessment, 

March 2021. https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf. 

‡ See Sean O’Connor, “Fentanyl Flows from China: An Update since 2017,” U.S.-China Economic Security and Review Commission, 

November 26, 2018. https://www.uscc.gov/sites/default/files/Research/Fentanyl%20Flows%20from%20China.pdf.
U.S.-China Economic and Security Review Commission 3

• U.S. increased efforts to stem illicit flows: U.S. enforcement agencies have stepped up enforcement against 

Chinese drug traffickers. For example, since 2017 the U.S. Department of the Treasury’s Office of Foreign 

Asset Control (OFAC) has designated at least 14 Chinese nationals and six Chinese entities on the Foreign 

Narcotics Kingpin Designation list under the Kingpin Act, a significant increase from the 2000–2016 

period, when only five Chinese nationals and two entities were designated. 15 Additionally, the U.S. 

Department of Justice (DOJ) has indicted at least 11 Chinese nationals on money laundering and drug 

trafficking charges and convicted at least three Chinese nationals of drug-related crimes.16

• Illegal drug traffickers in China began to adjust their operations: Although the Chinese government has 

scheduled some precursor chemicals, drug producers can still access critical precursor ingredients from 

China and manufacture new fentanyl analogues to avoid Chinese law enforcement.

17

Key Terms

Synthetic opioids: Substances produced in a laboratory using the same chemical structure (synthetic) as natural 

opioids, which are a class of drugs extracted from the opium poppy plant. 

Fentanyl (licit): A potent synthetic opioid approved by the FDA for pain relief, often for cancer patients, and as an 

anesthetic. It is approximately 100 times more potent than morphine and 50 times more potent than heroin. Fentanyl 

pharmaceutical products are available in lozenges, tablets, nasal sprays, skin patches, and injectable formulations. 

Fentanyl (illicit): Fentanyl produced and sold illegally and typically found in powder or pill form, sometimes 

mimicking pharmaceutical drugs such as oxycodone. 

Drug schedules: Drugs, substances, and certain chemicals used to make drugs are classified into five distinct 

categories or schedules depending upon the drug’s acceptable medical use and the drug’s abuse or dependency 

potential. Schedule I drugs represent the greatest potential for abuse. Fentanyl is a Schedule II narcotic under the 

U.S. Controlled Substances Act of 1970.

Controlled substance: A drug or other substance that is tightly controlled by the government because it may be 

easily abused or cause addiction. The government “control” manages how the substance must be made, handled, 

used, stored, and distributed. 

Analogues: A drug that has been designed to mimic the pharmacological effects of the original drug and in some 

cases is produced to avoid government controls. Some Fentanyl analogues include acetylfentanyl, furanylfentanyl, 

carfentanil, which are all similar in chemical structure to fentanyl. 

Precursor chemicals: Also known as “precursors,” these are substances used in manufacturing of other products. 

Fentanyl precursors, like ANPP, NPP, or 4-AP, are used to produce fentanyl and more easily evade authorities.

Many precursors can be used to make both licit and illicit drugs. 

Source: Various.18

Chinese Illicit Fentanyl Producers Evade Authorities

China’s May 2019 fentanyl scheduling announcement has changed the way illicit vendors operate as Chinese

authorities have ramped up investigations of known manufacturing sites, cracked down on websites selling illicit

fentanyl, begun to enforce shipping rules, and created special investigation teams.*19 In response, Chinese illegal 

 

* As noted in the Commission’s 2017 fentanyl report, “the chemicals used to produce fentanyl and fentanyl-like products are illegally diverted 

from legitimate pharmaceutical uses, with criminals taking advantage of inadequate enforcement protocols to produce unregulated 

chemicals.” This makes it particularly challenging to identify which manufacturing sites are solely used for legal production and which 
U.S.-China Economic and Security Review Commission 4

fentanyl producers began seeking new ways to evade authorities, including developing new fentanyl precursors, 

working with traffickers in other countries, and using technology to avoid detection. According to a 2020 DEA 

report, Fentanyl Flow to the United States, fentanyl production is becoming a global operation (see Figure 1), which

has exacerbated illicit trafficking to the United States by introducing additional countries into the supply chain.

20

While the 2019 scheduling announcement brought heightened scrutiny to illicit fentanyl production, China’s 

regulation and enforcement of its vast chemical and pharmaceutical industries remain weak. In his testimony before 

the Commission in 2019, Ben Westhoff highlighted how “China’s clumsy, understaffed bureaucracy has a difficult 

time controlling the country’s chemical industry. Different layers of government are sometimes at odds with one 

another, local officials are corruptible, and industry regulations are confusing and poorly enforced.”21 Without

effective regulation of China’s chemical and pharmaceutical industries, illicit fentanyl manufacturers have an easier 

time operating.

Figure 1: Fentanyl Flows to the United States, 2019

Source: U.S. Drug Enforcement Administration, Fentanyl Flow to the United States, January 2020.

New Fentanyl Precursors: In January 2018, China added two fentanyl precursors, NPP and 4-ANPP, to the 

controlled substance list. U.S. and Mexican authorities reported a decline in seizures immediately following China’s 

2019 scheduling of fentanyl, but traffickers quickly adjusted, by developing alternative precursors that are not 

scheduled. As reported by the U.S. Department of State, Chinese traffickers have shifted to alternative precursors 

chemicals like 4-AP (see Appendix, Table 1).22 According to the Center for Advanced Defense Studies (C4ADS), 

since the 2019 scheduling of all fentanyl, Chinese producers have developed at least four more precursor substitutes, 

 

sites are dual-use. U.S.-China Economic and Security Review Commission, Fentanyl: China’s Deadly Export to the United States, 

February 1, 2017, https://www.uscc.gov/research/fentanyl-chinas-deadly-export-united-states. 
U.S.-China Economic and Security Review Commission 5

which contribute to evading detection.23 Marketing on the internet for these four substitutes has become increasingly 

common.24 The Chinese government has yet to ban these four precursors.25

The State Department dubbed China’s precursor substitutes “indirect precursors” or “pre-precursors.”*26 Bryce 

Pardo, an associate policy researcher at RAND Corporation, said this shift may set a worrisome precedent as 

traffickers are exporting the pre-precursors to Mexico, where they are subsequently made into finished fentanyl.27

The DEA’s 2020 Drug Threat Assessment Report also expresses concern that Chinese chemists are increasingly 

focused on precursors to precursors, many of which have legitimate uses and are therefore hard to regulate.28

Potential Production Shifts to India and Other Third Countries: In 2020, the DEA noted that India has begun 

to emerge as a more prominent source country for Mexican drug trafficking organizations and that this trend could 

accelerate “if China-based traffickers work with Indian nationals to circumvent China’s new controls on fentanyl.”

29

U.S. law enforcement is also concerned that Southeast Asia’s “Golden Triangle” could become the next fentanyl 

hotspot after India.

†30 The region is also known to have limited drug enforcement and regulation and is already a 

major source for methamphetamines and other drugs.

31

Technological and Digital Evasion Methods: Traffickers continue to use the internet and technology to conceal 

their illicit activities, and their methods have become increasingly more sophisticated. To avoid scrutiny and 

detection, some Chinese sellers have used the numerical code, scientific names, and technical nomenclature of 

fentanyl and related precursors in their advertisements on websites, social media, and e-commerce platforms.

32 The 

complexity and abstract nature of chemical nomenclature and classification systems, rather than the more

recognizable terminology, makes it harder for law enforcement to track illicit fentanyl advertising online.

33 This 

method also allows the sellers to create many different naming combinations for marketing, further outpacing U.S. 

and Chinese authorities. C4ADS reported that various drug groups operating online are using password-encrypted 

websites and private groups on social media and messaging apps to operate platforms or virtual marketplaces that 

connect illicit fentanyl consumers and sellers while avoiding detection by U.S. and Chinese law enforcement.

34 To 

reduce potential public exposure, many of these websites and groups have deployed web moderators who serve as 

gatekeepers to ensure only trusted individuals have access.

35

Chinese Traffickers Increase Cooperation with Mexican Cartels 

Mexican cartels have historically been involved in the production of poppies in Mexico that are used to make

heroin.

36 With Mexican anti-drug authorities ramping up the destruction of poppy fields across the country, however, 

the cartels have shifted from heroin to synthetic opioids like fentanyl, which are cheaper to make and more 

profitable.

37 As Chinese traffickers sought to evade the Chinese government’s increased regulation in 2019, 

Mexican cartels looked to maximize their role in the illicit fentanyl trade.

The China-Mexico connection grew when Chinese traffickers increased fentanyl precursor sales to Mexican 

cartels.

38 Speaking in March 2021, Matthew Donahue, the deputy chief of foreign operations for the DEA, described

“an unlimited and endless supply of precursors chemicals ... coming from China to Mexico,” noting that Chinese 

traffickers have virtually ceased making analogues to focus solely on precursors.39 Mexican officials have worked 

with the DEA to dismantle established networks of manufacturing plants, or “pill mills,” in Mexico City, Mexicali,

and other places controlled by the Sinaloa cartel and the Jalisco Nueva Generacion (Jalisco New Generation) cartel.‡

 

*According to the DEA’s 2020 National Drug Threat Assessment Report, “Although 4-AP is not a direct replacement for 4-anilino-Nphenethylpiperidine (4-ANPP) in the synthesis of fentanyl, 4-AP can be converted into 4-ANPP in a one-step chemical reaction.” Only 

direct replacements are considered precursors, but experts colloquially refer to 4-AP as a precursor due to its ability to synthesize 4-ANPP. 

U.S. Drug Enforcement Administration, 2020 National Drug Threat Assessment Report, March 2021, 

https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf.

† The name “Golden Triangle” refers to the region where the borders of Burma, Laos, and Thailand meet. Historically, it is known for its 

opium cultivation. https://www.reuters.com/article/us-asia-drugs/asian-drug-lords-likely-producing-precursor-chemicals-in-goldentriangle-idUSKBN2AC0KF. 

‡ The DEA noted in an interview with the Commission that in addition to supplying vast amounts of precursor chemicals, Chinese traffickers 

are also shipping large-scale “industrial sized pill presses” to Mexico. Mexican cartels then press loose fentanyl power into pills. U.S. Drug 

Enforcement Administration, interview with Commission staff, March 15, 2021.
U.S.-China Economic and Security Review Commission 6

40 These pill mills in Mexico made finished fentanyl from Chinese-sourced precursors to traffic across the U.S.-

Mexico border into the United States.

41

The Sinaloa and Jalisco cartels are the main entities responsible for manufacturing precursor chemicals into finished 

fentanyl and smuggling it into the United States.

42 The Sinaloa cartel has developed relationships with suppliers in 

China and India to purchase precursor chemicals or, in some cases, finished fentanyl powder.

43 Fentanyl and 

precursors are shipped from China to many ports of entry across Mexico’s Pacific coastline, such as Lazaro 

Cardenas in Michoacán, Manzanillo in Colima, and Ensenada in Baja California.

44 Chinese nationals implicated in 

trafficking have also been known to travel to Mexico.

45

A November 2020 investigation by Fox News highlighted an emerging trend of Chinese nationals involved in illicit 

fentanyl operations in Mexico.

46 The investigation focused on the Zheng DTO (Drug Trafficking Organization),

colloquially known as “Los Zheng Cartel,” which operates through multiple shell companies that seemingly offer 

legitimate services such as chemical labs, veterinary care, computers, and retail. Intelligence professionals in 

Mexico have described the Zheng cartel as having “the largest presence in Mexico for trafficking fentanyl and 

methamphetamines.”

47 The Zheng cartel has developed extensive relationships with suppliers in China, can easily

import goods from China into Mexico, and has cultivated relationships on both sides of the U.S.-Mexico border.

48

According to media reporting, the Zheng cartel is suspected of having ties to both the Sinaloa and Jalisco cartels.

49

Effectively, the Zheng cartel serves as an intermediary between suppliers in China and cartels in Mexico.

In 2018, the U.S. Attorney’s Office in Cleveland indicted two Zheng cartel leaders on 43 counts of manufacturing 

and shipping fentanyl analogues and 250 other drugs to 37 states and 25 countries.50 According to the indictment, 

since 2008 the Zheng cartel has “engaged in this conspiracy from its base of operations in Shanghai.”51 In August

2019, the Treasury Department designated Fujing Zheng, a Chinese national who leads the Zheng cartel, his father 

Guanghua Zheng, and the Zheng cartel under the Kingpin Act.

52 Additionally, in July 2020 the Treasury Department 

added four Chinese nationals to the Kingpin list for their links to the Zheng cartel and fentanyl trafficking; it also

designated one company, Global United Biotechnology Inc., saying it was “a virtual storefront of Zheng DTO” 

through its use of digital currency to launder illegal drug money.

53 Despite the designations and indictments, as of 

January 2021 the Zhengs and their associates remain at large and continue operating in both China and Mexico.

54

Chinese fentanyl traffickers have survived challenges like China’s 2019 scheduling of fentanyl and COVID-19 

because of their vast networks inside of Mexico and the United States. Cartels like Los Zheng rely on coconspirators

in the United States, Mexico, and elsewhere to retrieve, package, and distribute their shipments.

Separate from the Zheng cartel, individuals and groups of Chinese “chemical brokers” are also operating in 

Mexico.

55 According to the DEA, these chemical brokers are active in the state of Sinaloa, especially the capital of 

Culiacan, where an estimated 2,000 Chinese nationals are working to facilitate and coordinate the importation of

precursors chemicals.

56

Chinese Money Laundering in Mexico: A Transnational Web

In February 2020, the U.S. Department of the Treasury described Chinese money launderers as “key threats” and 

vulnerabilities in the U.S. financial system. 57 A December 2020 Reuters investigation found Chinese money 

launderers “have come to dominate the international money laundering market.”58 The DEA reports having also 

seen Chinese money launderers working with drug trafficking organizations in the Dominican Republic and 

Colombia.

59

In a high-profile case that shed light on the intersection of financial technology and drug trafficking, Xianbing Gan,

a Chinese national based in Chicago, was arrested by U.S. authorities in November 2018 on suspicion of money 

laundering for a cartel. In March 2020, Gan was convicted on money laundering charges.

60 In addition to the Gan 

case, in October 2019 U.S. attorneys in Oregon charged Shefeng Su, Xinhua Li Yan, and Xiancong Su with money 

laundering.

61 In September 2020, Xueyong Wu was convicted in the U.S. District Court Eastern District of Virginia 

in Richmond and sentenced to five years in prison for laundering money for a Mexican drug cartel.

62 It is difficult 

to know exactly how much money Chinese nationals have laundered for cartels, but in the Gan case alone, the 

Department of Homeland Security (DHS) estimated his operation laundered between $25 million and $65 million.63
U.S.-China Economic and Security Review Commission 7

Chinese criminals use complex techniques to launder money for Mexican drug cartels. One common technique is 

to use “mirror transactions” that involve cross-border currency swaps. In these transactions, an intermediary usually 

receives one currency (e.g., accepts U.S. dollars earned by drug dealers) and deposits an equivalent amount of

another currency in a foreign bank (e.g., deposits renminbi [RMB] in a Chinese bank) (see Appendix, Table 2 for 

an example of how mirror transactions work).

64 These types of laundering schemes offer a mechanism for cartels 

to access profits while limiting exposure and risk. Chinese money launderers leverage encrypted mobile 

communications apps like WeChat to move vast sums of money from the United States to China then back to 

Mexico with great speed, discretion, and efficiency.

65

Since they are difficult to track, convertible virtual currencies or cryptocurrencies such as Bitcoin, Ethereum, or 

Monero have become a popular medium.

66 DEA spokesperson Michael Miller told Reuters that Mexican cartels

“are increasing their use of virtual currency because of the anonymity and speed of transactions” and that their use 

“will only increase in the future.”

67 The Reuters investigation revealed that once Chinese money launderers move 

illicit drug proceeds into China’s financial system, some of that money is used to purchase consumer goods or more 

precursor chemicals, recycling the money back into the economy.

68 The money, consumer goods, or precursors are 

transferred back out of China to the drug cartel in Mexico.

69

U.S.-China Cooperation and Enforcement Efforts

Although U.S.-China enforcement cooperation on combating illicit fentanyl has improved, serious gaps remain.

While China has increased cooperation by scheduling all forms of fentanyl, participating in counternarcotic working 

groups, and complying with U.S. shipping requirements, cooperation lags in money laundering investigations, 

criminal prosecution, and legal assistance in ongoing cases. Chinese regulatory authorities continue to delay 

requests for access to inspect and investigate potential sites of illegal chemical production where precursors are 

made. Requests are often delayed for days, allowing any illegal operation to vacate or clean up the premises. 

The United States and China first cooperated in a high-profile case that began in 2017, resulting in nine people 

convicted on drug-related charges in Hebei Province.70 U.S. authorities carried out three major arrests in New York 

and Oregon.

71 The DEA gave its Chinese counterparts intelligence that led to the discovery of a sprawling illicit 

fentanyl network in China. 72 Yu Haibin, vice director of the Office of China National Narcotics Control 

Commission, said in an interview that China has taken steps to crack down on “distributing, producing and 

smuggling,” expressing hope that this could play a positive role with the United States.

73

China has also complied with U.S. requests to better regulate its shipping and postal networks. In 2018, Congress 

passed the Synthetics Trafficking and Overdose Prevention (STOP) Act, which required the U.S. Postal Service 

(USPS) to receive Advanced Electronic Data (AED) on 100 percent of inbound package shipments from China by 

December 31, 2018, and 100 percent from all other international shipments by December 31, 2020.

74 AEDs provide

basic information about the shipper, the recipient, and package content—information used by postal authorities to 

monitor potentially harmful or illicit content.75 According to Gary Barksdale, the chief postal inspector of USPS, 

China’s compliance with the STOP Act and USPS’s AED requirements has improved from 32 percent in October 

2017 to 85 percent in May 2019—short of the 100 percent threshold but well above the average international AED 

compliance score, which was 54 percent as of October 2020.

76 Though China’s AED compliance is high, the country

is also the largest source of packages coming to the United States.77 The United States must continue to maintain a 

strong screening process for all mail coming from China.

Since China moved to control all fentanyl in 2019, statements made during congressional testimony from 

representatives of various U.S. law enforcement agencies have highlighted China’s continued cooperation:

• Department of Justice: In testimony during a January 2021 hearing before the House Judiciary 

Subcommittee on Crime, Terrorism and Homeland Security, Amanda Liskamm, director of Opioid 

Enforcement and Prevention Efforts at DOJ, said that through “bilateral communications and bridgebuilding efforts,” DOJ has engaged Chinese counterparts “on the control of fentanyl and other psychotic 

substances.”78 According to Ms. Liskamm, “When China controls a drug or precursor chemical, we see a 

significant drop in the use of the substance for illicit purposes in the United States.”

79
U.S.-China Economic and Security Review Commission 8

• Customs and Border Protection: During testimony to the Homeland Security Subcommittee on 

Investigations on “Combating the Opioid Crisis” in December 2020, CBP Director Overacker said “CBP 

now regularly shares targeting information with the China Ministry of Public Security (MPS) and the 

General Administration of China Customs.”80 He also said CBP has initiated a series of “regular meetings 

between the CBP attaché in Beijing and the China Ministry of Public Security.”81

• Drug Enforcement Administration: During a July 2019 hearing on “Oversight of Federal Efforts to Combat 

Illicit Fentanyl” before the House Energy and Commerce Committee, Matthew Donahue, then the regional 

director of the North and Central Americas Operation Division at the DEA, said, “The DEA is committed 

to working with China in well-established bilateral efforts: liaison presence, the Counter Narcotics Working 

Group, regular meetings with scientists; and enhancing collaboration with DEA interagency partners.”

82 In 

Congressional testimony, Mr. Donahue said he was encouraged by China’s 2019 fentanyl scheduling and 

its potential to “prevent chemical workarounds to be exploited by clandestine synthetic opioid producers in 

China by allowing the United States and China to cooperate on a broader range of cases.”

83 The DEA 

currently has an office in Beijing, and in 2020 China’s government approved the DEA’s request to establish 

satellite offices in Shanghai and Guangzhou.*84

• Immigration and Customs Enforcement: At the same July 2019 hearing, ICE Deputy Assistant Director 

Prince noted collaborative efforts by ICE and DHS with China regarding information sharing on “certified 

lab reports” and “shipping labels” and how these efforts led China to control all fentanyl variants and 

analogues in May 2019.

85

Despite these positive trends, there remain significant gaps in U.S.-China antidrug cooperation, especially in 

enforcement and criminal prosecution. For example, the DEA reported it informally asked its Chinese counterparts 

for assistance with the Gan investigation but did not receive Chinese support despite multiple requests.

86 When 

asked by Reuters about the lack of cooperation in the Gan case, China’s Foreign Ministry first deflected the question 

and accused the United States of not requesting support, and later claimed the bank account holders U.S.

investigators inquired about were “legitimate enterprises and business holders” in China.

87 Retired DEA agent 

Jeffrey Higgins noted in 2018 that he felt “China is merely seeking to create the appearance of cooperating with 

U.S. officials, while not enacting any reforms.” 88 Other retired U.S. law enforcement personnel echoed this 

sentiment. In an interview with online investigative reporting project SpyTalk, former DEA agents anonymously

expressed frustration about the lack cooperation from China despite the DEA publicly touting Chinese cooperation 

efforts.

89

The State Department reported in the 2020 International Narcotic Control Strategy Report (INCSR) on Money 

Laundering that “China has not cooperated sufficiently on financial investigations and does not provide adequate 

responses to requests for financial investigation information.”

90 ICE Deputy Assistant Director Prince also 

described China as “recalcitrant” in ICE’s conspiracy and cryptocurrency investigations, echoing the findings in 

the State Department’s report.

91 In a rare admission, in September 2019 the People’s Republic of China’s Office of 

China National Narcotic Control Commission said U.S.-China cooperation on investigating and prosecuting 

fentanyl remains “extremely limited.”

92

The United States, along with 40 other countries, is a signatory to a mutual legal assistance treaty that “allow[s] for 

the general exchange of evidence and information in criminal and related matters.”93 The United States and China 

also signed a mutual legal assistance treaty in June 2000.94 As a signatory, China is required to comply with U.S. 

requests for legal assistance. According to the State Department, however, “Many outstanding requests by both the 

United States and China remain unfulfilled,” further hindering U.S.-China cooperation efforts.95

U.S law enforcement has noted that China’s relatively limited cooperation with the United States on curbing

fentanylstands in notable contrast to China’s cooperation with Australia on methamphetamines.96 In 2017, Australia

was the only Western country to have a joint task force with China’s National Narcotics Control Bureau.

97 This 

 

* The DEA noted that the field office in Shanghai is expected to improve anti-money laundering investigations, while the field office in 

Guangzhou is expected to work with China to stem the flow of precursors. Guangzhou is the capital of Guangdong Province, a major 

chemical hub in China. Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 15, 2021.
U.S.-China Economic and Security Review Commission 9

cooperation led to multiple convictions and drug seizures in Australia, including the 2017 seizure of almost 2,000 

pounds of crystal meth, the largest seizure of drugs in Australia’s history.

98

Conclusions and Considerations for Congress

The fentanyl challenge has grown in complexity since Chinese suppliers began to evolve their tactics in 2019. Drug 

producers and smugglers in China are becoming more sophisticated in evading Chinese and U.S. authorities, and 

the growing involvement of Mexican cartels and advanced money laundering schemes have exacerbated the 

problem. Law enforcement agencies are struggling to keep pace with a rapidly changing illicit drug environment.

As Chinese fentanyl networks diffuse and seek alternatives to China as a source for precursor chemicals, U.S. 

authorities will have to develop solutions that reflect the more globalized nature of the supply chains. Enforcement 

can no longer be approached unilaterally or even bilaterally because fentanyl traffickers are operating 

transnationally. This presents a potential opportunity for the United States to work with other countries on 

counternarcotic enforcement. 

Multilateral Cooperation: Abuse of illegally sourced fentanyl is not a problem for the United States alone. Fentanyl

is also being shipped to Canada, Europe, and other destinations via online direct-to-consumer websites and postal

delivery. As in the United States, China remains a primary source of illicit fentanyl in Canada, where opioid usage 

has increased since the start of the COVID-19 pandemic.

99 According to the DEA, fentanyl powder is shipped from 

China to Canada and sold there or smuggled into the United States.

100 Europe is also a growing market for illicit

Chinese-sourced fentanyl, although not nearly on the same level as North America.101

Both China and Mexico are signatories to the 1988 UN Drug Convention. At the urging of the United States, in 

October 2017 the UN required all parties who are signatories to the convention to schedule 4-ANPP and NPP, two 

popular fentanyl precursors.

102 In January 2018, China scheduled the two precursors. Another key precursor, 4-AP, 

has no legitimate uses but has not been listed in the UN’s schedules; currently, only the United States has scheduled 

4-AP and has been urging China to do so as well. Historically, a multilateral approach through international bodies 

has proven to be effective in pressuring China to introduce additional restrictions on fentanyl.

Joint Operations: In contrast to limited U.S.-China cooperation, the United States and India have achieved a degree 

of joint operational successes in combating trafficking. For example, in 2017 U.S. and Indian authorities cooperated

in an operation leading to the seizure of over one billion tablets of illegally trafficked tramadol, a type of synthetic 

opioid.

103 In Operation Broadsword in January 2020, the U.S. Food and Drug Administration, CBP, and the Office 

of Criminal Investigations in India jointly targeted and inspected 800 shipments entering the United States through 

the international mail facility. These shipments “had been transshipped through third party countries to conceal their 

place of origin,” and many contained counterfeit and illegal opioid drugs.104 The operations ultimately stopped

millions of counterfeit and illegal opioids.

105 The United States and China have yet to conduct similar coordination.

Congressional Role: Digital tools and advanced money laundering techniques are increasingly being used by 

traffickers. Enforcement on these digital platforms remains highly challenging for U.S. authorities. According to 

the 2020 Reuters investigative report, when asked about these new advanced forms of money laundering, a source 

familiar with these operations said, “It is the most sophisticated form of money laundering that’s ever existed.”

106

Even though traffickers’ growing arsenal of tactics presents a unique and complex challenge, Congress could play 

a significant role in countering these new avenues of illicit transactions. The 2021 National Defense Authorization 

Act directed the Treasury Department to conduct a comprehensive report to Congress on the illicit financing and 

money laundering risk posed by Chinese bad actors and to assess the role of Chinese regulations in permitting such 

risk.

107 The findings from the report are likely to shed more light on this complex means of money laundering and 

may provide insights into opportunities for future Congressional action. 
U.S.-China Economic and Security Review Commission 10

Appendix

Table 1: Popular Known Fentanyl Precursors China Has Not Banned

Masked substitutes: Chemically altered precursor 

substitutes meant to escape detection, but can easily 

be transformed into a controlled fentanyl precursor

• 4-AP

• 4,4-PIPERIDINEDIOL 

Unmasked substitutes: Are not chemically altered 

precursors

• 1-BOC-4ANPP

• 1-BOC-4-PIPERIDONE

Source: C4ADS, “Lethal Exchanges: Synthetic Drug Networks in the Digital Era,” November 17, 2020. https://www.c4reports.org/lethalexchange. 

Table 2: How Chinese Brokers Launder Money for Mexican Cartels

Step One A Mexican cartel wants to bring proceeds from U.S. drug sales back to Mexico. It 

contacts Chinese money brokers operating in Mexico to see who offers the cheapest 

rates.

Step Two The parties agree on a commission and the amount to be laundered, say $150,000.

Step Three Using encrypted phone messages, the Chinese broker sends the cartel member: 

1) A code word;

2) A number from a U.S. burner phone; and

3) A unique serial number from a $1 bill

Step Four The Mexican cartel shares those details with a cartel-linked drug dealer in the United 

States, who calls the burner phone and identifies himself using the code word. He 

arranges to meet a U.S.-based money courier working for the Chinese broker.

Step Five The drug dealer and the money courier meet in public somewhere in the United 

States. The courier hands over a $1 bill with the unique serial number. When that 

checks out, the dealer hands over the cash, keeping the bill as a “receipt.”

Step Six The courier takes the $150,000 to a U.S.-based Chinese merchant, who has a bank 

account in China. The merchant then performs a currency swap known as a “mirror 

transaction.” He takes possession of the U.S. cash and then transfers $150,000 worth 

of Chinese RMB from his Chinese bank account to the money broker’s Chinese 

account using an account number provided to him by the courier.

Step Seven The cartel’s drug cash is now sitting in a Chinese bank, outside the view of U.S. law 

enforcement. The broker has two options to send it on to the drug cartel in Mexico.

Step Eight (option 1) Do another “mirror transaction.” The $150,000 worth of RMB is now 

transferred from the money broker’s Chinese account to the Chinese bank account of 

a Mexico-based businessperson. That Mexico-based businessperson then provides 

$150,000 worth of pesos to the money broker in Mexico, who delivers that cash to the 

cartel.

(option 2) The Chinese money broker buys $150,000 worth of consumer products in 

China, such as clothing, and exports them to Mexico. The goods are then sold and the 

proceeds are delivered to the cartel.

Source: Drazen Jorgic, “Factbox: Step by Step - How Chinese ‘Money Brokers’ Launder Cash for Mexican Drug Cartels,” Reuters, 

December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-factbox/factbox-step-by-step-how-chinese-money-brokerslaunder-cash-for-mexican-drug-cartels-idUSKBN28D1LW.
U.S.-China Economic and Security Review Commission 11

Endnotes

1 U.S. Centers for Disease Control, Overdose Deaths Accelerated during COVID-19, December 17, 2020. 

https://www.cdc.gov/media/releases/2020/p1218-overdose-deaths-covid-19.html.

2 U.S. Centers for Disease Control, Provisional Drug Overdose Death Counts, https://www.cdc.gov/nchs/nvss/vsrr/drug-overdosedata.htm. U.S. Centers for Disease Control, Drug Overdose Deaths in the U.S. Up 30% in 2020, July 14, 2021. 

https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2021/20210714.htm.

3 Margaret Williams, “Why Overdose Deaths Are Surging amid COVID-19,” Ohio State University Wexner Medical Center, July 16, 2020. 

https://wexnermedical.osu.edu/blog/why-are-overdose-deaths-surging-amid-covid-19.

4 U.S. Drug Enforcement Administration, 2020 National Drug Threat Assessment, March 2021. 

https://www.dea.gov/sites/default/files/2021-02/DIR-008-21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

5 U.S. Drug Enforcement Administration, 2020 National Drug Threat Assessment, March 2021. 

https://www.dea.gov/sites/default/files/2021-02/DIR-008-21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

6 U.S. House Energy and Commerce Subcommittee on Oversight and Investigations, Oversight of Federal Efforts to Combat the Spread of 

Illicit Fentanyl Hearing, QFR Response of Thomas Overacker, April 10, 2020.

https://docs.house.gov/meetings/IF/IF02/20190716/109817/HHRG-116-IF02-Wstate-OverackerT-20190716-SD002.pdf. 

7 U.S. House Energy and Commerce Subcommittee on Oversight and Investigations, Oversight of Federal Efforts to Combat the Spread of 

Illicit Fentanyl Hearing, Q&A, July 16, 2019. https://energycommerce.house.gov/committee-activity/hearings/hearing-on-oversight-offederal-efforts-to-combat-the-spread-of-illicit.

8 U.S. House Energy and Commerce Subcommittee on Oversight and Investigations, Oversight of Federal Efforts to Combat the Spread of 

Illicit Fentanyl Hearing, QFR Response of Thomas Overacker, April 10, 2020; U.S. Drug Enforcement Administration, 2020 National 

Drug Threat Assessment, March 2021. https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf. U.S. Drug Enforcement Agency, 2020 National Drug Threat 

Assessment, March 2021. https://www.dea.gov/sites/default/files/2021-02/DIR-008-

21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

9 Reuters, “Mexico Government Says Fentanyl Seizures Up Almost Six-Fold in 2020.” https://www.reuters.com/article/us-mexicodrugs/mexico-says-fentanyl-seizures-up-almost-six-fold-in-2020-idUSKBN2951KV.

10 Drug Enforcement Administration, National Drug Threat Assessment, March 2021, https://www.dea.gov/sites/default/files/2021-

02/DIR-008-21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

11 Mark Landler, “U.S and China Call Truce in Trade War,” December 1, 2018. https://www.nytimes.com/2018/12/01/world/trump-xi-g20-

merkel.html.

12 Zhang Yang, “From May 1st, the Entire Class Fentanyl Substances Will Be Regulated,” State Council of Information Office of the 

People’s Republic of China. http://www.scio.gov.cn/34473/34474/Document/1651166/1651166.htm.

13 U.S. Drug Enforcement Administration, DEA Intelligence Report: Fentanyl Flow to the United States, January 2020. 

https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf

14 U.S. House Energy and Commerce Subcommittee on Oversight and Investigations. Oversight of Federal Efforts to Combat the Spread of 

Illicit Fentanyl Hearing, Q&A, July 16, 2019. https://energycommerce.house.gov/committee-activity/hearings/hearing-on-oversight-offederal-efforts-to-combat-the-spread-of-illicit.

15 U.S. Department of the Treasury, Counter Narcotics Trafficking Sanction, January 2021. https://home.treasury.gov/policyissues/financial-sanctions/sanctions-programs-and-country-information/counter-narcotics-trafficking-sanctions

16 U.S. Department of Justice, Justice News: Press Releases and Speeches, January 2021. https://www.justice.gov/news.

17 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

18 U.S. Drug Enforcement Administration, Drug Fact Sheet, April 2020. https://www.dea.gov/sites/default/files/2020-

06/Synthetic%20Opioids-2020.pdf; National Institute of Health, Fentanyl DrugFacts, June 2021. 

https://www.drugabuse.gov/publications/drugfacts/fentanyl; U.S. Drug Enforcement Administration, Drug Fact Sheet, April 2020. 

https://www.dea.gov/sites/default/files/2020-06/Fentanyl-2020_0.pdf; U.S. Drug Enforcement Administration, Drug Scheduling, 

https://www.dea.gov/drug-information/drug-scheduling; National Institute of Health, National Cancer Institute Dictionaries, Definition 

of controlled substance - NCI Dictionary of Cancer Terms - National Cancer Institute; U.S. Drug Enforcement Administration, 2020 

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21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

19 U.S. Drug Enforcement Administration, DEA Intelligence Report: Fentanyl Flow to the United States, January 2020. 

https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf. 

20 U.S. Drug Enforcement Administration, DEA Intelligence Report: Fentanyl Flow to the United States, January 2020. 

https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf.

 
U.S.-China Economic and Security Review Commission 12

 

21 U.S.-China Economic and Security Review Commission, Hearing on Exploring the Growing U.S. Reliance on China’s Biotech and 

Pharmaceutical Products, written testimony of Ben Westhoff, July 31, 2019. 

https://www.uscc.gov/sites/default/files/Ben%20Westhoff%20Written%20Testimony.pdf .

22 U.S. Department of State, International Narcotic Control and Substance Report Volume I: Drug and Chemical Control, March 3, 2020. 

https://www.state.gov/wp-content/uploads/2020/06/Tab-1-INCSR-Vol.-I-Final-for-Printing-1-29-20-508-4.pdf.

23 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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24 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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25 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

26 U.S. Department of State, International Narcotic Control and Substance Report Volume I: Drug and Chemical Control, March 3, 2020. 

https://www.state.gov/wp-content/uploads/2020/06/Tab-1-INCSR-Vol.-I-Final-for-Printing-1-29-20-508-4.pdf.

27 Bryce Pardo, RAND Corporation, interview with Commission staff, February 17, 2021.

28 U.S. Drug Enforcement Administration, 2020 National Drug Threat Assessment, March 2021. 

https://www.dea.gov/sites/default/files/2021-02/DIR-008-21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

29 U.S. Drug Enforcement Administration, DEA Intelligence Report: Fentanyl Flow to the United States, January 2020. 

https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf.

30 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

31 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

32 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

33 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

34 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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pread.pdf.

35 Michael Lohmuller, Nicole Cook, and Logan Pauley, “Lethal Exchange: Synthetic Drug Networks in the Digital Era,” C4ADS, January 

2020. 

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36 White House Office of National Drug Control Policy, White House Office of National Drug Control Policy Announces Record Reduction 

in Poppy Cultivation and Potential Heroin Production in Mexico, July 31, 2020. https://trumpwhitehouse.archives.gov/briefingsstatements/ondcp-announces-record-reduction-poppy-cultivation-potential-heroin-production-mexico/.

37 Chris Adams, “The Fentanyl Surge,” National Press Foundation, April 21, 2021. https://nationalpress.org/topic/the-fentanyl-surge/. 

38 U.S. House Energy and Commerce Subcommittee on Oversight and Investigations, Oversight of Federal Efforts to Combat the Spread of 

Illicit Fentanyl Hearing, QFR Response of Thomas Overacker, April 10, 2020; U.S. Drug Enforcement Administration, 2020 National 

Drug Threat Assessment, March 2021. https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-008-

20%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf.

39 Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 15, 2021.

40 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.
U.S.-China Economic and Security Review Commission 13

 

41 U.S. Drug Enforcement Administration, DEA Intelligence Report: Fentanyl Flow to the United States, January 2020. 

https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR00820%20Fentanyl%20Flow%20in%20the%20United%20States_0.pdf.

42 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

43 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

44 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

45 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

46 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

47 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

48 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

49

 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

50 Eric Heisig, “Chinese Fentanyl, the Dark Web and Over-Prescribing Doctors: AG Sessions Talks Combating Opioid Epidemic in 

Cleveland,” January 30, 2019. https://www.cleveland.com/court-justice/2018/08/chinese_fentanyl_the_dark_web.html.

51 U.S. Immigration and Customs Enforcement, 2 Chinese Nationals Charged with Operating Global Opioid Conspiracy Resulting in 

Death, August 22, 2018. https://www.ice.gov/news/releases/2-chinese-nationals-charged-operating-global-opioid-conspiracy-resultingdeaths.

52 U.S. Department of State, Designation of PRC Foreign Nationals and Entities under the Foreign Narcotics Kingpin Designation Act. 

https://www.state.gov/designation-of-prc-foreign-nationals-and-entities-under-the-foreign-narcotics-kingpin-designation-act/.

53 U.S. News and World Report, “U.S. Sanctions Four China-Based Individuals, Firm over Fentanyl, July 17, 2020. 

https://www.usnews.com/news/world/articles/2020-07-17/us-sanctions-four-china-based-individuals-firm-over-fentanyl.

54 Hollie McKay, “Chinese Cartels Quietly Operating in Mexico, Aiding US Drug Crisis,” Fox News, November 12, 2020. 

https://www.foxnews.com/world/chinese-cartels-mexico-us-drug-crisis.

55 Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 15, 2021.

56 Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 15, 2021.

57 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

58 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

59 U.S. Drug Enforcement Administration, 2020 National Drug Threat Assessment, March 2021. 

https://www.dea.gov/sites/default/files/2021-02/DIR-008-21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.

60 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

61 U.S. Department of Justice, Three Indicted for International Money Laundering Schemes Pairing Mexican Drug Traffickers and Chinese 

Nationals, October 18, 2019. https://www.justice.gov/usao-or/pr/three-indicted-international-money-laundering-scheme-pairingmexican-drug-traffickers-and.

62 U.S. Department of Justice, Chinese Nationals Sentenced for Laundering Millions for Mexican Drug Cartels, September 29, 2020.

https://www.justice.gov/opa/pr/chinese-national-sentenced-laundering-millions-mexican-drug-cartels.

63 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

64 Alexander Weber, Boris Groendahl, and Nicholas Comfort, “Money to Launder? Here’s How (Hint: Find a Bank),” Bloomberg, April 

19, 2019. https://www.bloombergquint.com/quicktakes/money-to-launder-here-s-how-hint-find-a-bank-quicktake.

65 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

66 The White House, Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and 

Other Synthetic Opioids, August 21, 2019.https://www.fincen.gov/sites/default/files/advisory/2019-08-

21/Fentanyl%20Advisory%20FINAL%20508.pdf.
U.S.-China Economic and Security Review Commission 14

 

67 Diego Ore, “INSIGHT - Latin American Crime Cartels Turn to Crypto to Clean Their Cash,” Reuters, December 8, 2020. 

https://www.reuters.com/article/mexico-bitcoin/insight-latin-american-crime-cartels-turn-to-crypto-to-clean-up-their-cashidUSL1N2IJ01D.

68 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

69 Drazen Jorgic, “Special Report: Burner Phones and Mobile Banking Apps: Meet the Chinese Brokers Laundering Mexican Drug 

Money,” Reuters, December 3, 2020. https://www.reuters.com/article/us-mexico-china-cartels-specialreport/special-report-burnerphones-and-banking-apps-meet-the-chinese-brokers-laundering-mexican-drug-money-idUSKBN28D1M4.

70 Bill Chappell, “China Jails 9 in Fentanyl Trafficking Case that Began with a Tip from the U.S.” NPR, November 7, 2019. 

https://www.npr.org/2019/11/07/777173066/china-jails-9-in-fentanyl-trafficking-case-that-began-with-a-u-s-tip.

71 Bill Chappell, “China Jails 9 in Fentanyl Trafficking Case that Began with a Tip from the U.S.” NPR, November 7, 2019. 

https://www.npr.org/2019/11/07/777173066/china-jails-9-in-fentanyl-trafficking-case-that-began-with-a-u-s-tip.

72 Steven Lee Meyers, “China Sentences Man to Death for Trafficking Fentanyl to the U.S.,” New York Times, November 7, 2019. 

https://www.nytimes.com/2019/11/07/world/asia/china-fentanyl-death-penalty.html.

73 South China Morning Post, “Fentanyl Trafficker in China Sentenced to Death,” Interview with Yu Haibing, November 7, 2019. 

https://www.youtube.com/watch?v=DrABhGDoJJ8.

74 SUPPORT for Patients and Communities Act, Public Law No: 115-271, October 24, 2018. https://www.congress.gov/bill/115thcongress/house-bill/6.

75 U.S. Postal Service Office of the Inspector General, Implementing Advanced Electronic Data: Challenges and Opportunities, September 

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76 Gary Barksdale, written testimony to the Committee on Energy and Commerce Subcommittee on Oversight and Investigations, July 16, 

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