In conjunction with the recent OFAC designation…

Of a Chinese network supplying opioids to the US, FinCEN issued an advisory yesterday entitled “Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and Other Synthetic Opioids.” Here’s the first section (it’s a lengthy one – 18 pages):

Transnational criminal organizations (TCOs), foreign fentanyl suppliers, and Internet purchasers located in the United States engage in the trafficking of fentanyl, fentanyl analogues, and other synthetic opioids and the subsequent laundering of the proceeds from such illegal sales.

Introduction

The Financial Crimes Enforcement Network (FinCEN) is issuing this advisory1 to alert financial institutions to illicit financial schemes and mechanisms related to the trafficking of fentanyl, fentanyl analogues, and other synthetic opioids,2 and to assist them in detecting and reporting related activity.

The United States is in the midst of an unparalleled epidemic of addiction and death, fueled by the illicit trafficking, sale, distribution, and misuse of fentanyl and other synthetic opioids. The statistics are sobering; between 2013 and 2017, deaths in the United States from synthetic opioids, other than methadone, increased over 800 percent.3 Every day in the United States, more than

130 people die from an opioid-related overdose.4 These numbers alone cannot fully capture the devastation wrought by this epidemic, the consequences of which are far reaching and everlasting, from grieving parents and orphaned children, to the enormous economic and public policy costs,5 and the destruction of current and future generations.

The epidemic is tearing away at the social and economic fabric of our communities, while TCOs, international drug traffickers, money launderers, and other criminal actors profit off the misery

of victims. Criminal networks and others generate billions of dollars in illicit drug proceeds, and

use the U.S. financial system and economy to advance their criminal enterprises and continue this epidemic to generate more criminal profits, resulting in more deaths and addictions. FinCEN

and other U.S. government agencies are collaboratively working with foreign partners, including Mexico, to end the fentanyl epidemic. This advisory will assist financial institutions in detecting

and reporting suspicious activity, making it harder and more costly for criminals to (i) commit these crimes; (ii) hide and use their illicit money; and (iii) continue fueling this epidemic. By using the information in this advisory and safeguarding our financial system, financial institutions will help save lives, protect innocent families, and ensure the safety and future of our communities. Indeed, this is the real value and utility behind information generated, maintained, and reported under the Bank Secrecy Act by financial institutions. This advisory highlights the primary typologies and red flags derived from sensitive financial reporting which are associated with (i) the sale of these drugs by Chinese, Mexican, or other foreign suppliers; (ii) methods used by Mexican and other TCOs to launder the proceeds of fentanyl trafficking; and (iii) financial methodologies associated with the sale and procurement of fentanyl over the Internet by purchasers located in the United States.6 Fentanyl is sold in the United States in many forms, all of which can be deadly. Fentanyl can be purchased alone; mixed with heroin, cocaine, or methamphetamine; or pressed into pill form and falsely sold as prescription opioids, many times being ingested by unsuspecting victims.

Link:

FinCEN Advisory

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