Can Money Laundering Controls Reduce US Synthetic Opiod Supply?

• In Event: The Varieties of Money Laundering

Abstract

a) Objective. Fentanyl is now the principal source of the soaring number of drug related deaths in the United States, so it is reasonable to ask whether more intensive AML efforts might help reduce the flow of fentanyl, principally imported now from Mexico using precursors manufactured in China. This paper examines the financial flows specific to synthetic opioids and existing AML in China, Mexico and the United States to assess the vulnerability of the fentanyl trade to money laundering controls.
(b) Data/Methods. Review of published analyses of AML enforcement in China, Mexico and the United States. It uses new estimates of the financial flows among the three countries related to the fentanyl trade to assess potential effect of more intensive AML on retail opioid prices.
(c) Results a trade which is characterized by small international financial flows. The growing use of money laundering methods that match the needs of drug traffickers seeking to repatriate US dollars to Mexico with the demand for US dollars by Chinese residents is an additional distinctive barrier.
(d) Conclusions/Implications. Though the evidence base is weak, the paper tentatively concludes that these controls are particularly ill-suited to controlling the fentanyl trade

Author

• Peter Reuter, University of Maryland