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Legislation Approved by Senate Would Penalise Fentanyl Shipments from Mainland China

The U.S. Senate overwhelmingly approved on 27 June the National Defense Authorization Act for fiscal year 2020 with an amendment incorporating the Fentanyl Sanctions Act. If this legislation is enacted into law in its current form, the fentanyl sanctions amendment would require the Trump administration to impose heavy sanctions on mainland Chinese firms if they fail to stop the flood of fentanyl entering the United States.

The most recent estimates from the Centers for Disease Control and Prevention show that from August 2017 through August 2018 more than 48,000 people in the United States died from an opioid overdose, with synthetic opioids (excluding methadone) contributing to a record 31,900 overdose deaths. “We must hold China, currently the world’s largest producer of illicit fentanyl, accountable for its role in the trade of this deadly drug,” said Sen. Chuck Schumer, minority leader of the Senate Democrats. Sen. Tom Cotton (Republican-Arkansas) welcomed that this year’s NDAA “includes our bipartisan amendment to give law enforcement critical tools to stop this scourge and hold China accountable.”

Key elements of the fentanyl legislation include the following.

  • Require imposition of sanctions on (i) drug manufacturers that knowingly provide synthetic opioids to traffickers, (ii) transnational criminal organisations that mix fentanyl with other drugs and traffic them into the United States, and (iii) financial institutions that assist such entities. Waivers would be provided for countries that take sufficient action to implement and enforce regulations on synthetic opioid production.
  • Authorise new funding to law enforcement and intelligence agencies, including the U.S. Departments of Treasury, Defense and State, to combat the foreign trafficking of synthetic opioids.
  • Urge the president to commence diplomatic efforts with U.S. partners to establish multi-lateral sanctions against foreign synthetic opioid traffickers.
  • Establish a commission on synthetic opioid trafficking to monitor U.S. efforts and report on how to more effectively combat the importation of synthetic opioids.

Following a commitment to the United States in December 2018 at the G-20, mainland Chinese regulators announced that a wider range of fentanyl derivatives would be declared controlled substances in mainland China as of 1 May. Mainland China has struggled to enforce its drug laws and continues to deny that fentanyl producers in its territory are a major source of the illicit drugs contributing to the U.S. opioid crisis. U.S. lawmakers argue that this sanctions legislation would pressure Beijing to enforce its new laws and provide the U.S. executive branch with flexible new enforcement tools to prevent synthetic fentanyl imports.

The NDAA is still several steps from becoming law. The Senate version must be reconciled with a version expected to come up for a vote next month in the Democratic-controlled House of Representatives. That compromise version, expected later this year, must pass both the Senate and House and be signed into law by President Trump.

In addition to the fentanyl amendment, the Senate NDAA requires detailed reporting from the U.S. Department of Defense to prevent transfers of sensitive technology to mainland China and Russia. The legislation also includes an amendment barring federal funds from going to mainland Chinese state-owned companies such as CRRC, the world’s largest maker of passenger trains. CRRC said in a statement that U.S. lawmakers should “pause and review the facts regarding cybersecurity and competitive pricing in the passenger railcar market before making any decisions that will invariably and significantly impact U.S. transit agencies’ ability to modernize their fleets.”

Content provided by Picture: HKTDC Research
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