8:05 A.M. EST

MODERATOR: Good morning, everybody. Thanks for joining us on a Sunday morning.

Just to go over the ground rules quick, the call will be embargoed until the conclusion of the call. It’s attributable to senior administration officials.

For awareness, but not for reporting, joining us on today’s call are [senior administration official] and [senior administration official].

With that, I’m going to waste no time. I’m just going to hand it right over to [senior administration official].

SENIOR ADMINISTRATION OFFICIAL: Thanks, [moderator]. And thanks, everybody, for joining this morning. [Redacted] to be leading the counternarcotics working group meeting that is going to be taking place on the 30th of January.

I think as everybody knows on this call, President Biden has made beating the overdose epidemic a key priority in his Unity Agenda for the nation, including a focus on cracking down on global illicit drug trafficking and disrupting the flow of illicit fentanyl and its precursors.

And as part of that effort, we are focused on pursuing all avenues to effectively reduce the flow of precursor chemicals that fuel the manufacture and distribution of synthetic drugs, including fentanyl.

And I don’t think I have to tell anybody here that 100,000 people a year die in the United States from fentanyl overdoses. More people in the United States between the ages of 18 and 49 die from fentanyl than any other cause.

As all of you also know, for years bilateral cooperation between the United States and the People’s Republic of China on counternarcotics has been suspended, which has hindered our progress. But that changed during the November 15th meeting between President Biden and President Xi Jinping at Woodside, California.

At that meeting, the leaders announced the resumption of bilateral cooperation on counternarcotics with a focus on reducing the flow of precursor chemicals that fuel illicit fentanyl and synthetic drug production.

And so, we are announcing — this is an announcement to say that that first meeting is happening on January 30th. It will take place in Beijing. This is a key part of the implementation of the resumption of our bilateral cooperation on this effort.

The working group is a whole-of-government effort. It includes a delegation from DOJ, DHS, State, and Treasury. And it is a platform for ongoing coordination to support concrete enforcement actions with the goal of countering the evolving threat of synthetic drugs and to address the supply and distribution of precursor chemicals and pill presses to those who manufacture and distribute these deadly substances.

As I said, [redacted] going to be heading the delegation. We will also be joined by:

Rob Silvers, who’s the Under Secretary for Strategy, Policy, and Plans at the Department of Homeland Security;
Anne Milgram, the Administrator of the Drug Enforcement Administration;
Troy Miller, who is the Senior Official Performing the Duties of the Commissioner of Customs and Border Protection at the Department of Homeland Security;
Todd Robinson, the Assistant Secretary at the Bureau of International Narcotics and Law Enforcement;
Scott Rembrandt, the Deputy Assistant Secretary at the Office of Strategy Policy in the Office of Terrorist Financing and Financial Crimes at the Department of Treasury;
Bruce Swartz, the Deputy Assistant Attorney General and DOJ Counselor for International Affairs at the Department of Justice;
Katrina Berger. She is the head of Homeland Security Investigations;
And Vance Morgan from the White House’s Office of National Drug Control Policy.

And through this interagency working group, the United States will pursue a range of efforts across law enforcement actions, efforts to institute precursor chemical controls, monitor emerging front trends, counter illicit finance, and coordinate with other partners to help disrupt the global illicit drug supply chain.

We also think that this working group is so important because it provides the enduring architecture that will help us continue the coordination and the communication that will allow us to help verify what progress we are making and to continue to push for new progress as time goes on.

That said, this working group is, as I said, I think a really critical and pivotal moment for our direct diplomacy and the implementation on this issue. It’s by far not the only marker of progress. And our working-level officials from U.S. departments and agencies and PRC ministries meet regularly in Beijing and the United States and continue to do so on a quite regular basis to make progress on the commitments that President Biden and President Xi made and to share information to reduce the flow of precursor chemicals.

I will stop there and, [moderator], turn it back to you.

MODERATOR: Great. I think with that, we’ll go ahead and open it up to questions.

Our first question is going to go to Cate Cadell with the Washington Post.

Q    Thank you very much for doing this on a Sunday morning. I just want to start by asking: Are you going to come into these meetings with any specific outcome in mind?

And also, Chinese officials who sort of repeatedly indicate that they feel that it’s the U.S.’s own inability to crack down on the fentanyl supply in the U.S., I mean, what is your read on how willing they are to make any major changes at home?

SENIOR ADMINISTRATION OFFICIAL: Thanks for that. Maybe I’ll take the first question — part of the question, [senior administration official], on PRC actions — and then turn it over to you for the asks, if that makes sense.

Look, I think, as [senior administration official] had mentioned, counternarcotics cooperation has been stalled for quite a number of years. Immediately, though, after the two presidents met last November, China issued a notice to its domestic chemical industry, advising on the enforcement of laws and regulations related to trade and precursor chemicals. This essentially is a notice putting their companies — their chemical companies on notice that they will start to take law enforcement action if there’s trade in these precursor chemicals.

A similar notice to industry that China sent out in 2019 led to a drastic reduction in seizures of fentanyl shipments to the United States from China. And so, our expectation is that we’ll start to see the same happen in this precursor chemical industry as well.

In addition, we have information that the PRC started taking action against Chinese synthetic drug and chemical precursor suppliers right around the time of the summit and in the following months. So we saw companies shut down. We saw international payment accounts blocked. And this really is the first law enforcement action against synthetic drug-related chemical sellers by Chinese authorities since 2017.

In addition, in November of last year after the two presidents met, for the first time in nearly three years China submitted 145 incidents to the International Narcotics Control Board Global Database. This is the mechanism used to share real-time information internationally about things like shipments and suspected trafficking.

And this information — our hope is that it will help global law enforcement agencies identify trends and conduct intelligence-driven investigations that disrupt illicit synthetic drug supply chains.

And again, we’re starting to see reductions in seizures of precursors at some U.S. airports already. I think the nature of the drug trade means that we can’t just rest on the laurels of this set of actions that happened right after the summit. The hope is that — and our goal is that we use this working group to drive continued progress. As the drug trade evolves, as we see these chemicals come online, we’ll need to continue that coordination with Chinese authorities to ensure they’re acting on those new trends and new developments in the drug trade.

But let me stop there after addressing, again, the Chinese actions and turn it back over to [senior administration official] for our expectations coming out of the working group.

SENIOR ADMINISTRATION OFFICIAL: [Senior administration official], I think you said it perfectly. A big goal of this is continued pressure, continued dialogue, ensuring that we continue to push and encourage joint law enforcement actions, that we open up and improve our dialogue on illicit financing, that we continue to maintain communication about new chemicals as they come online, and that we set up robust information-sharing mechanisms for that communication to happen, and to continue to encourage the PRC to continue to submit information about chemicals to the U.N., as [senior administration official] just indicated.

And so, we are coming in with goals of furthering the work that has already started in very concrete and specific ways.

MODERATOR: Great. Our next question will go to Christina Anderson.

Q    Thank you for taking my question. So, I’m wondering: What’s to stop them from instead of shipping directly to the U.S., shipping via third countries so that they can sort of evade the whole mechanism?

SENIOR ADMINISTRATION OFFICIAL: Thanks for the question. I’ll take a stab at it.

I think what [senior administration official] described and what we’ve seen is actions with respect to the companies as a whole, which is not specific to them shipping to the United States but it is specific to the companies that supply and distribute regardless of where the chemicals go.

And so, certainly our expectation and our ask and part of our continued dialogue will be to try to ensure that exactly what you’re talking about does not happen. That would not be consistent with the goals of what we’re trying to achieve here.

MODERATOR: Next, we’ll go to Demetri with the FT.

Q    Morning. Thank you. Two questions. First, is China having a parallel discussion with Mexico? Or do you have any kind of trilateral discussions with the U.S., Mexico, and China?

And then separately, is there anything that China is not doing right now that you want them to do? Because it sounds like they’ve started the progress, but are there things that they’re reluctant to do that you want them to do?

SENIOR ADMINISTRATION OFFICIAL: Thanks, Demetri. I can take the first part and then turn it over to [senior administration official] to address parts of it.

Certainly, we know that China has started some conversations with the Mexicans on this. I think I’d refer to you to either the Mexican or Chinese government to content — or comment on the content of those.

But certainly, this is a problem that affects multiple different countries. I think the President and Secretary Blinken have both said there are two kinds of countries: those that have a fentanyl problem and know it and those that have a fentanyl problem and don’t know it, that it’s so quickly spreading.

So this is going to have to be an issue that goes beyond just the U.S., China, Mexico, Canada. It will have to be an issue that is addressed globally as well. And that’s our hope through some of the mechanisms that we have set up.

In terms of what China is doing, I think — you know, our initial ask coming out of this summit, as we discussed back then, was really the notice to companies to start focusing in on precursor chemicals, where they were going, know your customer, better labeling, disruption of financial transactions or specific company operations that we knew and we had passed information to the Chinese on, and we’ve seen that happen.

And I think the next step — again, to [senior administration official]’s point — is really, as we see that trade continue to evolve, there are going to be new companies of concern that pop up. The goal is to use these law enforcement-to-law enforcement mechanisms to pass that information and ensure that there’s action and follow-up. That’ll have to be — that’s not a one-time ask; that is a continual process, I think.

And then I think on the “know your customer” piece, that will be a big part of conversations as well. Proper labeling, ensuring that there’s not diversion of some of these dual-use chemicals to cartels and other customers that are known bad actors.

So, again, I think our hope is, in this working group, that we can really start to dig into the specifics. This is such a complicated problem. It’s not one that you can use one summit, you know, get action, and then consider it done.

The fentanyl listing back in 2017 was very different because, you know, it was one drug, and that one listing was able to really shut down the trade. The precursor chemicals is just such a much more difficult problem to solve.

[Senior administration official], back to you.

SENIOR ADMINISTRATION OFFICIAL: Yep, what [senior administration official] just said was very comprehensive. I would just add a couple of things.

One, in addition to seeking a situation where the PRC is responsive and acts upon information that we pass to them, I think, ultimately, we’d like to get to a place where the PRC is able to themselves identify and take action with respect to bad actors or actors that are clearly acting in ways that are concerning. So, for example, chemical companies that are advertising and selling very large numbers of chemicals that we know have very limited commercial value, or as [senior administration official] said, companies that are doing bulk shipping by using pre-printed labels and in ways that are kind of clear triggers of certain kinds of deceptive practices.

So a big ask of this trip is to encourage independent action as well.

And then, just on the Mexico point, I will — I just wanted to add that I think — I’m sure you also know the United States has a trilateral working group with Canada and Mexico on fentanyl-related issues. And we have been closely, you know, encouraging and monitoring the conversations that are happening between Mexico and the PRC as well. And I think it’s, as I said, really important that this is a multilateral issue, and it’s important that all affected nations are engaged in communicating with one another about the scope of the problem.

Q    Can I just get one clarification? At the moment, is China only acting when it receives information from the U.S., or is it independently finding that information domestically and acting on that, and then telling the U.S.? Or is it both?

SENIOR ADMINISTRATION OFFICIAL: There is a combination of those things. As [senior administration official] said, we would like to see more of all of it.

Q    Thank you.

MODERATOR: All right. And it looks like that is our last question. So, with that, we’ll conclude the call. Thank you all.

8:23 A.M. EST