April 14-20, 2022 | Issue 4 - Illicit Finance and Economic Threats (IFET) Team
Jennifer Kelly, IFET Team
Jennifer Loy, Chief of Staff
Prescription drugs and banknotes
Date: April 18, 2022
Location: West Virginia, USA
Parties involved: USA; West Virginia; Johnson & Johnson (J&J); Janssen Pharmaceuticals Inc. (Janssen); State Attorney General Patrick Morrisey; Mexican cartels; US-based opioid drug users
The event: West Virginia State has settled with J&J's subsidiary Janssen for $99 million USD for the company’s role in furthering the opioid crisis. West Virginia accused Janssen of failing to outline the risks of addiction associated with opioid use while promoting the prescription drugs’ benefits. State Attorney General Patrick Morrisey said the money would go towards helping communities impacted by the opioid crisis. J&J and Janssen stated the settlement is not an admission of liability, and both companies have stopped selling prescription opioids to the US. Mexican cartels traffic the majority of synthetic opioids into the US, resulting in more than 64,000 deaths from synthetic opioids overdoses between April 2020 and April 2021.
Analysis & Implications:
The ease of access to pain treatment medication is almost certainly an aggravating factor for synthetic opioid addicts, with the lack of accessible public and mental health services likely worsening their addictions. The synthetic opioid crisis almost certainly financially strains the US healthcare system due to the cost of caring for overdose patients, while individuals requiring treatment for non-drug-related illnesses likely experience a reduction in hospital resources.
The synthetic opioid crisis also likely increases pressure on the social care system, as addicts who give birth to babies likely have their children placed in foster homes. Many children of addicts raised in the foster care system will very likely experience behavioral and mental health issues, with some children likely to enter the criminal system.
The Mexican cartels’ success in trafficking synthetic opioids into the US is very likely due to a lack of efficient border controls and high levels of corruption, including bribing law enforcement agents. Mexican cartels very likely use the profits generated from illicit trafficking of synthetic opioids to finance production of drugs and establish supply routes to the US. Without addressing the source of the drugs from Mexico, it is almost certain the settlement from Janssen will fail to combat the opioid crisis in West Virginia, very likely resulting in further deaths.
Date: April 19, 2022
Parties involved: Financial Action Task Force (FATF); United Arab Emirates (UAE); Malta; Cayman Islands; Financial institutions; Organized criminal groups
The event: The FATF released a new report stating that just over half of the 120 countries assessed had competent anti-money laundering and countering-terrorist financing (AML/CTF) laws and regulatory structures. Only 9% of all countries were “substantially effective” in this area. Of the 120 countries, FATF recently gray-listed several countries with “strategic deficiencies” in AML/CTF controls, including the UAE, Malta, and the Cayman Islands. FATF stated countries must demonstrate improvements to verification and reporting processes to mitigate money laundering and terrorist financing risks.
Analysis & Implications:
Organized criminal groups likely evade detection of money-laundering activities in gray-listed countries, such as the UAE, by using shell companies as, due to high quantities operating, it is unlikely financial institutions will investigate. With enforcement of more stringent controls on the real estate industry very likely due to FATF audits, UAE-based money-laundering groups will likely move their operations to the cryptocurrency market to exploit the lack of verification required from financial institutions. It is very unlikely law enforcement will apprehend all criminals operating through cryptocurrency due to the lack of regulations on the market.
Including the UAE and the Cayman Islands on FATF’s gray list will almost certainly deter legitimate international companies from operating in these regions due to the damage to the countries’ reputations, which will likely negatively impact economies. Organized criminal groups will likely take advantage of the weak AML/CFT controls and increase operations in the region until financial institutions introduce more stringent measures, which very likely further undermines the legitimacy of the countries’ financial markets.
________________________________________________________________________ The Counterterrorism Group (CTG)
 “Assorted Banknotes and Coins on Table” by Szymon Shields licensed under Pexels
 J&J's Janssen Settles With WVa for $99M in Opioid Lawsuit, US News, April 2022, https://www.usnews.com/news/politics/articles/2022-04-18/j-js-janssen-settles-with-wva-for-99m-in-opioid-lawsuit
 Government commission: Synthetic drug trafficking a ‘national security’ emergency, Politico, February 2022, https://www.politico.com/news/2022/02/08/synthetic-drug-trafficking-opioids-00006517
 Half of assessed jurisdictions don't have 'adequate laws and regulatory structures' — FATF, Cointelegraph, April 2022, https://cointelegraph.com/news/half-of-assessed-jurisdictions-don-t-have-adequate-laws-and-regulatory-structures-fatf