U.S. Treasury Targets Chinese Chemical Firm & Individuals in Illicit Drug Supply Chain
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Guangzhou Tengyue Chemical Co., Ltd., a China-based chemical company, and three individuals connected too its operations, due to their involvement in the proliferation of illicit drugs. the actions are taken under Executive Order 14059, which targets those contributing to the international drug trade.
The targeted individuals are Huang Zhanpeng, the executive director and 50 percent shareholder, and legal representative of Guangzhou Tengyue; Huang xiaojun, who controlled a bitcoin account used in attempted sales to a U.S. buyer in 2023; and a third individual not explicitly named in the proclamation.
OFAC’s investigation revealed Guangzhou Tengyue attempted to sell idenine, an analgesic chemical similar to xylazine, to customers within the United States. Huang Xiaojun facilitated these transactions through a bitcoin account. Huang Zhanpeng is sanctioned for providing support to Guangzhou Tengyue chemical Co., Ltd.These sanctions immediately block all property and interests in property of the designated individuals and entity located in the U.S., or within the possession or control of U.S. persons. any entity owned 50% or more by these sanctioned parties is also blocked.
U.S. persons are generally prohibited from engaging in transactions involving these blocked parties unless authorized by OFAC through a license or exemption. Violations can result in both civil and criminal penalties, with OFAC enforcing sanctions on a strict liability basis. Non-U.S. persons are also prohibited from actions that cause or conspire to cause U.S. persons to violate these sanctions, or from engaging in evasion tactics.
OFAC emphasizes that the goal of sanctions is behavioral change, and provides a process for seeking removal from the Specially Designated Nationals and Blocked persons (SDN) List, consistent with applicable laws. Further details on the designated parties and the sanctions are available on the OFAC website.
