US files first-ever charges against Chinese fentanyl manufacturers

WASHINGTON/NEW YORK, June 23 (Reuters) - The U.S. Justice Department on Friday filed criminal charges against four Chinese chemical manufacturing companies and eight individuals over allegations they illegally trafficked the chemicals used to make fentanyl - a highly addictive painkiller that has fueled the opioid crisis in the United States.

The indictments mark the first time the U.S. has sought to prosecute any of the Chinese companies responsible for manufacturing precursor chemicals used to make the painkiller.

China's foreign ministry on Saturday urged the U.S. to stop using what it said were fentanyl-related pretexts to sanction and prosecute Chinese companies and citizens, and demanded the immediate release of those who were "illegally arrested".

"China urges the U.S. side to stop dumping blame and to stop smear attacks on China," the ministry said in a statement.

Earlier, the Chinese embassy spokesperson Liu Pengyu said such "long-arm jurisdiction" would create more obstacles for China-U.S. counter-narcotics cooperation.

The move came after Antony Blinken made the first visit to China by a U.S. Secretary of State in five years and said he had made clear that Washington needs much greater Chinese cooperation to stem the flow of fentanyl.

During his visit, the two sides agreed to stabilize their intense rivalry so that it did not veer into conflict, but failed to produce any breakthrough and the mood quickly soured again after U.S. President Joe Biden on Tuesday referred to Chinese leader Xi Jinping as a dictator.

The companies at the heart of the three separate indictments are accused of selling precursor chemicals to the Sinaloa Cartel in Mexico, which has flooded the U.S. with the drug.

Federal prosecutors in Manhattan announced the unsealing of an indictment against the China-based Hubei Amarvel Biotech, along with its executives Qingzhou Wang, 35, Yiyi Chen, 31, and Fnu Lnu, also known as Er Yang, with fentanyl trafficking, precursor chemical importation, and money laundering offenses.

In the Eastern District of New York, prosecutors announced the unsealing of two more indictments against three other Chinese companies and individuals accused of conspiring to manufacture and distribute fentanyl.

Prosecutors said the companies - including one called Hebei Sinaloa Trading Co - advertised precursor chemicals on social media in Mexico and the U.S., and used false customs forms and mislabeled packages to ship the chemicals by boat and air.

Two months earlier, the Justice Department charged leaders of the Sinaloa cartel with running a fentanyl trafficking operation fueled by Chinese chemical companies, including three sons of Joaquin "El Chapo" Guzman, the onetime cartel leader now imprisoned in the U.S.

Deputy Attorney General Lisa Monaco said the cases "break new ground by attacking the fentanyl supply chain at its origin."

"Fentanyl poses a singular threat, not only because the smallest doses can be lethal, but because fentanyl does not occur in nature. It is entirely man-made."

Also on Friday, Blinken announced he would convene a virtual ministerial meeting on July 7 of dozens of countries and international organizations, to launch a Global Coalition to Address Synthetic Drug Threats.

The aim would be to unite countries "in a concerted effort to prevent the illicit manufacture and trafficking of synthetic drugs, identify emerging drug trends, and respond effectively to their public health impacts," he said in a statement.

The Justice Department said undercover Drug Enforcement Administration (DEA) sources posing as fentanyl manufacturers met with Wang and Chen earlier this year and agreed to buy 210 kg of fentanyl precursors in exchange for payment in cryptocurrency. The DEA retrieved the chemicals from a Los Angeles warehouse in May.

Wang and Chen were arrested by DEA agents on June 8 and ordered detained in Honolulu, Hawaii until they can be transported to New York to appear before the judge handling the case. Yang remains at large.

Reporting by Sarah N. Lynch in Washington and Luc Cohen in New York; additional reporting by David Brunnstrom in Washington and Shanghai Newsroom; Editing by Chizu Nomiyama, Angus MacSwan and Alistair Bell

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