During a House Financial Services Subcommittee hearing, Brookings Institute senior fellow Vanda Felbab-Brown said in her testimony that China won't take accountability for its role in fentanyl trafficking unless the U.S. and its allies take a multilateral approach.
The hearing, held Thursday, March 23 by the House Financial Services Subcommittee on National Security, Illicit Finance and International Financial Institutions, was titled "Follow the Money: The CCP’s Business Model Fueling the Fentanyl Crisis." In her testimony, Felbab-Brown, the director of Brookings' Initiative on Nonstate Armed Actors, said China won't change its role in allowing the precursors for fentanyl to be shipped to the U.S. or stop the Chinese brokers who engage in money laundering for the Mexican cartels that traffic fentanyl across the southern border unless multiple nations step up.
"The structural characteristics of synthetic drugs, such as fentanyl, including the ease of developing similar, but not scheduled, synthetic drugs and their new precursors ... pose immense structural obstacles to controlling their supply," she said in the hearing. "U.S. domestic prevention, treatment, harm reduction and law-enforcement measures are fundamental and indispensable to countering the devastating fentanyl crisis," she said, adding that with the spread of the deadly drug, "even supply control measures with partial and limited effectiveness can save lives and thus need to be designed as smartly and robustly as possible."
The U.S. government has tried convince China to tighten its regulations on fentanyl-class drugs and their precursor chemicals, Felbab-Brown told the committee. However, China sees its counternarcotics enforcement and international law-enforcement cooperation as strategic tools that it can use to achieve other objectives, she said. Since 2020, China’s willingness to cooperate with the United States has declined, and in August 2022, China officially announced that it suspended all counternarcotics and law-enforcement cooperation with the U.S., she said.
"There is little prospect that in the absence of significant warming of the overall U.S.-China bilateral relationship, China will meaningfully intensify its anti-drug cooperation with the United States. U.S. punitive measures, such as sanctions and indictments, are unlikely to change that," she said.
Chinese individuals are increasingly involved in laundering money for Mexican cartels, such as the Sinaloa Cartel and Cartel Jalisco Nueva Generación (CJNG). Chinese brokers usually avoid using formal banking systems in the U.S. and Mexico, and money is often moved using Mexican and Chinese criminal networks including trade-based laundering, value transfer using wildlife products such as marine products and timber, real estate, cryptocurrencies, casinos and bulk cash, Felbab-Brown said.
Mexico’s cooperation with U.S. drug enforcement efforts has declined since 2019, particularly since 2020, when U.S. law-enforcement activities in Mexico were hindered by Mexican government actions after the U.S. arrest of former Mexican Secretary of Defense Gen. Salvador Cienfuegos, Felbab-Brown said. The March 2023 crisis in U.S.-Mexico law-enforcement cooperation is merely a visible tip of how Mexico has reduced counternarcotics and law-enforcement cooperation with the United States, she said.
"Because of the diversification of the economic portfolio of Mexican cartels and Chinese criminal networks, to focus primarily on drug seizures close to their source is no longer an adequate approach for effectively countering drug smuggling networks that send pernicious drugs to the United States or their financial systems," Felbab-Brown said.
She suggested that the U.S. take the following actions in order to "induce better cooperation from China":
- Reminding Beijing that it wants China to be seen as a global counternarcotics policy leader
- Continuing to call on China to take down websites that perpetuate the illegal sale of synthetic opioids
- Coordinating with allies to put pressure on China to step up its monitoring and enforcement of anti-money-laundering efforts
- Encouraging "best practices" in China's pharmaceutical and chemical industries
- Sanctioning Chinese companies that violate those best practices and banning them from accessing U.S. markets
- Leveraging Chinese pharmaceutical and chemical industry officials
- Developing legal indictment portfolios against Chinese traffickers and their companies
- Working to incentivize allies and partners to prioritize this issue
Additionally, she said that the U.S. needs to implement a "whole-of-government" approach to tackle the fentanyl crisis and should authorize "a wide range" of agencies, including the State Department and Department of Defense, "to support U.S. law enforcement against Mexican and Chinese criminal actors and fentanyl trafficking and crimes against nature."
