On September 3, 2025, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") announced sweeping sanctions against Guangzhou Tengyue Chemical Co., Ltd. ("Guangzhou Tengyue"), a China-based manufacturer and distributor of synthetic opioids and cutting agents. The action, taken pursuant to Executive Order ("E.O.") 14059, also targets two of the company's representatives, Huang Xiaojun ("Xiaojun") and Huang Zhanpeng ("Zhanpeng"), for their direct involvement in trafficking illicit substances to the United States. The sanctions coincide with a federal criminal indictment unsealed by the FBI and DEA, charging the company and its affiliates with conspiracy to commit drug trafficking under 21 U.S.C. § 846.
Key Findings
Synthetic Opioids and Cutting Agents
Following the press report, Guangzhou Tengyue is accused of manufacturing and exporting potent synthetic chemicals often used to adulterate fentanyl and other opioids. These substances are linked to a surge in overdose deaths in the U.S. Notably, two of the chemicals, xylazine and medetomidine, do not respond to Narcan, the standard overdose reversal agent, making their presence in the drug supply especially lethal. OFAC designated Guangzhou Tengyue and its representatives, Xiaojun and Zhanpeng, pursuant to E.O. 14059 for materially contributing to the international proliferation of illicit drugs.
Criminal Indictment and Enforcement Coordination
OFAC carried out its investigation with the support of the Drug Enforcement Administration, including the Tampa District Office CHEMEX team, as well as the Federal Bureau of Investigation and its Cincinnati Field Office. The sanctions are part of a broader enforcement effort across numerous federal agencies to target drug trafficking networks responsible for trafficking multi-kilogram quantities of fentanyl, fentanyl adulterants, methamphetamine, and cocaine into and through the United States.
The FBI indictment, based on a joint investigation by the FBI and DEA that commenced in January 2024, alleges that Guangzhou Tengyue and its representatives coordinated multi-kilogram shipments of synthetic opioids and cutting agents to U.S. buyers, including through cryptocurrency transactions. Xiaojun was also identified as the account holder for a Bitcoin wallet used in these transactions. Charged defendants include three individuals in the U.S. and approximately 22 individuals and businesses based in China. For additional information on this action please refer to this Justice Department press release.
Broader Context and Policy Implications
This action underscores the Trump Administration's continued use of sanctions to combat the opioid epidemic, particularly the flow of fentanyl precursors from China. It also reflects a growing trend of integrating criminal prosecutions with economic sanctions to disrupt transnational drug networks. In remarks following the action, Undersecretary John K. Hurley stated, "[i]llicit opioids coming from China are destroying American lives, families, and communities. Under President Trump's leadership, we will use all of the tools at our disposal—including sanctions and prosecutions—to stop this epidemic."
OFAC Designation Implications
As with prior OFAC designations, all property and interests in property of the designated individuals and entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Entities owned 50 percent or more by one or more blocked persons are also blockedunderOFAC's 50% Rule.
All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
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