This Week in AML

New Sanctions on Internet Suppliers of Fentanyl

The US Treasury and its Office of Foreign Assets Control (OFAC) have announced new sanctions against a number of individuals and entities involved in supplying illicit fentanyl and other illegal substances. The action was coordinated with the Netherlands and the UK. John and Elliot discuss the new sanctions and the importance of the multi-lateral cooperation which led to them.



New Sanctions on Internet Suppliers of Fentanyl TRANSCRIPT


Elliot Berman: Hi, John, how are you this week?

John Byrne: Hey, Elliot. How are you doing?

Elliot Berman: I'm good. How are you?

John Byrne: I'm good. Very happy that young people decided to vote yesterday in the United States in large numbers, cuz, we know that you and I vote all the time, but it's really nice to see the younger generation vote. So that part was very encouraging, and some things will continue to play out in the US, the Senate, and the House. But in general, people took their obligation seriously, which is always a good thing. 

Elliot Berman: Agreed. My daughter took our seven-year-old granddaughter with her to vote. Took her into the booth. Actually probably violated some rule by allowing her to fill in one of the circles, but when I saw our granddaughter late yesterday, she was wearing a future voter sticker, and I'm very proud of it. 

John Byrne: That's great. My youngest daughter, Jen, who, as you know, lives in Milwaukee, did some ballot counting last night, so she worked for about 12 hours, so she did her job.

Elliot Berman: Yeah. That's terrific. So this week, the treasurer department announced sanctions on internet-based suppliers of illicit Fentanyl and other synthetic drugs. I assume you saw that press release. 

John Byrne: Yeah, I did. You know, cuz we've talked about this at the partnership forum. We've referenced this with our law enforcement partners on webinars and podcasts, obviously the horrific amounts of Fentanyl in the US and just globally.

You know, continuing to challenge everybody and to see this particular activity being done in a coordinated fashion made it especially interesting. So it was us with other countries and the Treasury Department with OFAC, Homeland Security, and DEA. So definitely a major collaborative effort. 

Elliot Berman: Yes. And that's something that you and I chatted about before we started the recording.

Just like Ukraine or the Russian sanctions related to the invasion of Ukraine, the coordinated effort is the most effective. So it's interesting to see that OFAC and the Treasury continue to use this economy collaboratively, trying to get maximum effectiveness.

John Byrne: Right. And then, the treasury said they identified over 50 virtual wallet addresses associated with one of the network's drug trafficking activities. As we said, obviously, they worked closely with Several countries, including the Netherlands and the United Kingdom. This is just another example that I don't think we talked that much about, about the value of sanctions outside of normal, money laundering, and terrorist financing.

This isn't. This is an equally horrific crime, the spreading of illicit drugs. But you don't always think about this sort of drug trafficking and the proceeds of this drug trafficking as something that sanctions can address. And obviously, this is a perfect example of how they've done it very well.

They basically identified some online marketplace things on the dark web. This is very compelling. 

Elliot Berman: Yes. And in many respects, while not money laundering itself, its interdiction is at the pre-money laundering stage. Because once these ill-gotten funds flow through the illegal channels, ultimately, some of them will be laundered to make them really useful.

John Byrne: Right. And you know, as with all these actions. OFAC reminds people where to get additional information on how the sanctions process works. There are FAQs there. And they also do things like say, hey, if you want information on how to submit a request for removal from an OFAC list, how to do that. So there's a lot of really excellent information.

Elliot Berman: Yes. The other thing that was interesting is it's clear that to get to the individuals who are named; there was a lot of excellent investigative work to look through. A lot of entities, a number of which are listed in the press release that are actual, you know, or the face entities of the activity. And it reminds us again of the importance of beneficial ownership registries. And the transparency of ownership, which clearly an organization like this would not like. But there was a lot of terrific work between the investigative groups in the three countries involved.

There were a number of UK-based and Netherlands-based companies, which I'm sure is why we part of the reason they were involved in the cooperation. But it takes a village. 

John Byrne: Right. And two of the individuals were Dutch nationals. They were arrested, and even though they were arrested, they continued to engage in the trafficking generating millions of dollars in virtual currency from the proceeds through the website to identify was called the realrc.com, which was maintained by one of the two individuals. And they say something that I think we're well aware of. Visitors reached that site through advertisements on popular social media platforms, and that's how they purchased Fentanyl and other illegal substances.

But this tells you again, using social media platforms, virtual currency, and drug sale websites. You know, obviously this, this stuff didn't happen 20 years ago. So there are, unfortunately, all these new mechanisms to move illegal products. And this is, again, a really good example of how that works. And like you say, working together with the agencies in these other countries and the various agencies in our country, it does take all sorts of cooperation to be 


Elliot Berman: Right. In that same vein, I was reading the IRSCI annual report, which came out within the last week or two. And one of the points of emphasis in that report was their international cooperative efforts, their foreign offices, and all of the kinds of work they do with their foreign counterparts in foreign countries to be able to have an activity or successful investigations like these occur. Now IRSCI wasn't specifically called out in this, and I don't know if they were involved. Still, it just reminded me that the FBI and a number of the other law enforcement agencies in the US have extensive and effective international offices and activities and recognition.

To the extent that crime ever stops at our borders, it certainly doesn't anymore. And you really have to build those partnerships across boundaries because the bad guys are absolutely not viewing the borders as something to stop. 

John Byrne: Oh, that's right. That's right. So just a couple of things are coming. You want to mention the webinar on November 17th, and I'll talk about what's coming up in December. 

Elliot Berman: Sure. So thanks for the lead-in. So at 1:00 PM Eastern Time and 6:00 PM GMT will be our November webinar, and it's on countering terrorism financing.

A great panel will be led by Dennis Lormel, whom many of you have seen on our other webinars and heard on our AML Conversations podcast. We're, we're very excited about that. It's one hour, and you can register by going to our website, which is amlrightsource.com, and there's a landing page there, or if you scroll down a little bit, a little blue popup will come on the screen, and you can click on that.

It'll take you right to the place to register. And John, tell us about December. 

John Byrne: So, in December, the theme is corruption, and we have two investigative journalists from the Organized Crime and Corruption Reporting Project who will discuss various elements of global corruption.

Also something that the acronym for the organization is OCCRP. They also have something called a Russia Asset Tracker, which is an interesting database that investigators use. We talk a little bit about that, but also about the problem of corruption globally and some of the cases they are investigating as we speak.

So they promised us that in early December, a couple of things would be finalized, and we'll break those stories. They'll break those stories on our webinar in December. So looking forward to that. 

Elliot Berman: And that webinar is on December 15th. And that's also at 1:00 PM Eastern Time in the US and Canada. And at 6:00 PM GMT in the UK.

So, John, have a great weekend, and I'll talk to you next week. 

John Byrne: Take care, Elliot. Stay safe.

Elliot Berman: Okay, bye-bye.