Illicit Fentanyl Trafficking: Shipping Companies’ Hidden Time Bomb

Shipping companies can take pre-emptive measures.

The emergence of illicit fentanyl and related substances has the potential to be a major challenge for the maritime industry.  

Illicit fentanyl, one of the world’s deadliest and most profitable narcotics, and the transnational criminal organizations who traffic them, are a threat to public health, law enforcement and national security, as well as to the shipping companies who may unknowingly transport such illicit drugs but nevertheless are liable to suffer legal prosecution, financial and reputational damages.  

In recent years, fentanyl, which is up to 100 times stronger than morphine, is a leading cause of overdoses.  With greater global awareness and concern regarding the increasing fentanyl-related deaths, the maritime supply chains, which are one of the key routes for drug traffickers, are likely, sooner or later, to encounter governmental scrutiny over security protocols.  

Before the authority steps in and before an incident happens that can blow up to be a public relations crisis, the maritime industry should therefore be aware and take a serious view of this problem, educate all the relevant personnel and proactively implement the necessary measures to prevent being unwittingly used as an accomplice.

Fentanyl is a synthetic opioid approved for legitimate use as a painkiller and anesthetic.  However, the drug’s extremely strong opioid properties make it an attractive choice for drug abuse for both heroin and prescription opioid users.  In the U.S., fentanyl addiction has become a prolonged epidemic, and the Centers for Disease Control estimated that around 69,710 people died of an opioid overdose in 2020.  

For years, illicit fentanyl has swept through North America, and now, there are also signs that it has reached the shores of Southeast Asia.  There are indications of mass production in Myanmar’s Shan State for distribution to the wider region.  Also, illicit fentanyl was seized in Singapore for the first time on March 1.

Easy to make, easy to hide

Chinese chemical and pharmaceutical companies are producing the majority of illicit fentanyl and precursors, and even Mexican drug cartels are buying precursors from them.  Fentanyl, synthesized in labs entirely from chemicals, can be easily produced in small, clandestine spaces with only rudimentary equipment. 

Using precursors made in China, the Mexican cartels can begin manufacturing and distributing their own fentanyl products.  In this partnership, the role of the Chinese companies is to send precursor chemicals directly to the Mexican cartels for them to produce fentanyl in clandestine labs.  Intelligence also suggested that the cartels buy fentanyl from China, as it is much more pure and thus potent, adulterate it and then sell it.  Both the illicitly produced fentanyl, in powder or pill form, from China and Mexico is trafficked into North America.

Exploitation of global shipping infrastructure

Fentanyl and all related products are trafficked into the U.S. and other countries by two primary methods, i.e., send from Chinese suppliers via international mail or express consignment services.  The Chinese suppliers may also ship large volumes of illicit drugs and chemicals within legitimate bulk cargo or containers, effectively making use of the legal maritime trade infrastructure to hide their nefarious activities. 

The sheer volume of international maritime traffic, for example, approximately 750 million containers are shipped annually, coupled with the sophisticated and often ingenious concealment methods and complex routings adopted by the drug cartels, invariably makes successful law enforcement difficult.

To enable the import of precursors from China into Mexico, the control of the country’s Pacific Coast ports is of key importance to the drug cartels.  For example, U.S. intelligence indicates that the Sinaloa Cartel is active in many Northern Pacific ports, while the Jalisco New Generation Cartel is active in several Southern Pacific ports.  Also, this control is important for the cartels because Mexico continues to be a major transit country for illicit fentanyl, as well as a source country for illicit fentanyl and fentanyl-laced falsified tablets destined for the U.S.

In February 2021, the Mexican military seized about 100,000 fentanyl tablets, together with over 2.5 tons of methamphetamine, from a vessel near the coast of the north-western state of Sinaloa.  In August 2019, Mexico’s Ministry of Naval Affairs announced a major seizure of powdered fentanyl by the navy and customs enforcement personnel at the Lázaro Cárdenas seaport.  The illicit drug had originated in Shanghai, China, and was headed to Culiacán.  

Chinese criminals are one step ahead 

In April 2019, the Chinese government, under pressure from the U.S., announced that effective May 1, 2019, it would regulate all fentanyl analogs, and together with crackdowns on illicit fentanyl labs and sales websites, this resulted in a significant reduction in the country’s illicit fentanyl trade and thus shipment to the U.S.  Some suppliers relocated manufacturing to India and others rerouted precursor shipments through third countries 

Nonetheless, according to U.S. intelligence, shipments of fentanyl from India and Mexico appeared to have increased over the last two years, implying that while direct shipment of illicit fentanyl from China to the U.S. might have drop, Indian and Mexican cartels were importing more precursors from the Chinese to make illicit fentanyl which they then shipped off to the U.S.

However, while the regulation made all forms of fentanyl illegal, it did not ban all precursor chemicals that can be used to make fentanyl.  As such, there are loopholes that the Chinese suppliers, with their highly trained and paid chemists, can exploit to make it harder for the authority to detect and regulate illicit fentanyl and all related substances.  

The chemists are quick to synthesize new precursors which are so new that they are not even known to the authority yet.  They also chemically modify existing precursors that can be transformed back into a regulated fentanyl precursor through simple chemical reactions.  They change chemical formulas to develop analogs that are similar in the desired effect to fentanyl but are outside of the existing regulation.

Hiding in plain sight

The use of these new and modified precursors is facilitated by the fact that many illegal Chinese drug suppliers offer a wide range of legal products too, thereby providing them the camouflage to shift from illegal to legal chemical production quickly in order to circumvent regulations, and offer the cover to hide illicit activities. 

China has a vast bulk pharmaceutical and chemical manufacturing sector with generally weak supervision.  The drug suppliers recognize this fact and use it to their advantage by hiding their operations behind a complex network of corporate entities registered in far-flung cities in China’s interior industrial hinterlands where law enforcement scrutiny is often lax compared to bigger cities like Beijing or Shanghai.

This lax environment therefore makes it easy to locate clandestine labs in shopping malls, residential towers or office complexes and for the criminals to use sophisticated shipping methods to bypass security screening measures where thousands of doses of illicit drugs can be shipped together in small, hidden packages.  In this conducive situation, it is also easy for the criminals to hitch a ride along the legal supply chain serving the legal products sold globally intended for legitimate purposes in medicine and industrial processes. 

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