April 17, 2023

OFAC designates 5 individuals and 2 entities for providing fentanyl precursor chemicals to Mexican drug cartels

On April 14, 2023, the US Department of the Treasury’s Office of Foreign Assets Control designated two entities based in the People’s Republic of China (“PRC”), four PRC nationals, and a Guatemala national for supplying Mexican drug cartels with precursor chemicals used in the production of fentanyl intended for US markets.  The designations, imposed pursuant to Executive Order 14059, were the result of a collaborative effort between OFAC, the Drug Enforcement Administration, and the Department of Justice.  Executive Order 14059 targets persons who engage in or materially contribute to the international proliferation of illicit drugs or their means of production.

Among the designees is the Wuhan Shuokang Biological Technology Co., Ltd. (“WSBT”), a company responsible for the sale of fentanyl precursor chemicals.  All four newly-designated PRC nationals are also linked to the WSBT, including Yao Huatoa, its sole owner and executive director; two sales representatives who negotiated and facilitated the sale of the chemicals on behalf of WSBT; and a WSBT collaborator who used his cryptocurrency wallet to receive illicit drug-related payments in bitcoin on behalf of WSBT.  OFAC also sanctioned Guatemala-based Ana Gabriela Rubio Zea (“Rubio Zea”), an alleged broker of fentanyl precursor chemicals who purchased precursor chemicals on behalf of Mexico-based drug traffickers.  According to OFAC, Rubio Zea and three of the four newly-designated PRC nationals were indicted on April 4, 2023, by a federal grand jury in Southern District of New York on conspiracy charges related to money laundering and the importation of fentanyl.  Rubio Zea is reportedly linked to “Los Chapitos”, the four sons of notorious Mexican drug lord Joaquin “El Chapo” Gusman Loera who are high-ranking members of the Sinaloa Cartel.  Three of El Chapo’s sons were designated by the US in 2012 pursuant to the Foreign Narcotics Kingpin Designation Act; they were designated a second time in 2021 pursuant to Executive Order 14059.

As a result of these designations, all property and interests in property of these designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons unless authorized by OFAC.  US persons may also face civil or criminal penalties for violating Executive Order 14059.

Department of Treasury Press Release