Yellen, in Mexico, to announce new actions to at stemming fentanyl flows

By David Lawder

MEXICO CITY (Reuters) – U.S. Treasury Secretary Janet Yellen said she will announce new actions on Wednesday to crack down on Mexico’s drug cartels as she seeks to improve cooperation with Mexico in stemming the flow of the deadly opioid fentanyl to the U.S.

Yellen, on her first trip to Mexico since taking office in 2021, told reporters that the Treasury aims to sharpen both countries’ ability to find and cut off the flow of financing to drug cartels and their front companies.

“We have authorities now that I think make it easier for us to go after middlemen who are not actually trading fentanyl itself but goods like pill presses and pharmaceuticals that aren’t export controlled,” Yellen told reporters.

“But when used as part of a cartel to facilitate the drug trade, we can now come down and put sanctions on those entities,” she added.

Yellen will tour a government crime lab, meet with private sector finance executives and Mexico’s finance minister and central bank chief to improve information sharing. On Thursday, she is scheduled to meet with Mexican President Andres Manuel Lopez Obrador.

The trip follows Treasury’s announcement on Monday of a counter-fentanyl “strike force” that will bring together the department’s resources, including the Office of Terrorism and Financial Intelligence and the Internal Revenue Service’s Criminal Investigation unit, to disrupt illicit drug trafficking, including through cryptocurrencies.

U.S. President Joe Biden and Chinese President Xi Jinping last month agreed to deepen cooperation to stem the flow of fentanyl precursor chemicals from China, which are often mixed by Mexican drug gangs before distribution in the U.S.

Yellen said the drive for Mexico’s cooperation in enforcing sanctions is an important part of making good on the Biden-Xi anti-fentanyl pledge.

“We’re meeting with a number of the entities in Mexico that are providing us with information. And we’ll have a meeting with many of the banks tomorrow to discuss information sharing. They’ve been increasingly helpful in providing information that’s useful in tracing these [financial] flows.”

(Reporting by David Lawder; Editing by Chizu Nomiyama)