Drug Enforcement Agency Focused on Fentanyl Precursor Imports
Drug Enforcement Agency Focused on Fentanyl Precursor Imports
By John H. Kester
Importers working to ensure compliance with swiftly changing tariffs enforced by Customs and Border Protection would be prudent also to keep another arm of government in mind: the Drug Enforcement Agency (“DEA”). Just as the Trump Administration has pointed to fentanyl as justification for tariffs on China, Canada, and Mexico, the DEA has focused on identifying those importing fentanyl precursor products in the U.S.
In March, IMC Pro International Inc. (“IMC”), a North Carolina logistics firm, agreed to pay $400,000 to resolve allegations that it violated the Controlled Substances Act by transshipping fentanyl precursor chemicals. According to Reuters, the matter represented the first time in U.S. history that any U.S. shipping company has paid to settle allegations of violating that Act based on transshipment through the United States of fentanyl precursor chemicals – the DEA alleged the precursors were destined for lab(s) in Mexico. After seizing five packages identifying IMC as shipper, the DEA discovered an alleged business arrangement under which IMC allowed Chinese companies access to its accounts with common carriers in order to generate domestic shipping labels to be used for the goods those companies manufactured. The packages seized by DEA included:
- 1-BOC-4 Piperidone, now a List I Regulated Chemical;
- List I chemicals are those designated by DEA that have legitimate uses and are used in manufacturing a controlled substance in violation of the CSA and are important to the manufacture of a controlled substance. Under 21 U.S.C. § 822(a), “Every person who manufactures or distributes any controlled substance or list I chemical,” or who proposes to do so, must register with DEA. The CSA additionally imposes requirements regarding recordkeeping, volumes, reporting suspicious transactions, etc. Knowing violations of the CSA may be prosecuted as criminal
- 2-Bromethyl Benzene, a chemical on the DEA’s Special Surveillance List (“SSL);
- The SSL includes chemicals, products, materials and equipment most frequently used in the clandestine production of controlled substances or listed chemicals. Its stated purposes are:
- to inform individuals and firms of the potential use of the items on the list in the manufacture of controlled substances and listed chemicals; and,
- to remind individuals and firms that civil penalties may be imposed on them if they distribute a laboratory supply to a person who uses, or attempts to use, that laboratory supply to manufacture a controlled substance or listed chemical, in violation of the CSA, with reckless disregard for the illegal uses to which such a laboratory will be put.
- The SSL includes chemicals, products, materials and equipment most frequently used in the clandestine production of controlled substances or listed chemicals. Its stated purposes are:
In light of the foregoing, shipping companies would be prudent to:
- Ensure they have not created business arrangements allowing others to identify the shipping company as a shipper without oversight;
- Evaluate whether they are shipping any items regulated by, g., the DEA’s Regulated Chemicals lists or its Special Surveillance List;
- If they are importing such chemicals, ensure they are doing so in compliance with DEA regulations and all applicable laws; and,
- Conduct due diligence to ensure that they do not facilitate suspicious shipments, g., as in the example above, precursor chemicals from China transshipped to Mexico.
“I encourage shipping and logistics companies that may have engaged in similar business arrangements to uphold their own responsibilities and assist in the efforts to stop the flow of fentanyl,” Acting U.S. Attorney Margaret Leachman for the Western District of Texas was quoted as saying in a DEA release. Special Agent in Charge Daniel Comeaux for the DEA Houston Division stated, “DEA will continue to hold companies accountable who make it easy for drug trafficking organizations to get their hands on precursor chemicals to produce deadly synthetic drugs like fentanyl.”
We hope this is helpful, and please let us know if you have any questions.
John H. Kester jkester@gkglaw.com
