By Sean K. Parker
Let us be honest with each other. We often find ourselves trying to pretend we don’t see the problem as we walk by the homeless on the street, but it’s there, the drug crisis. We ignore it because it means we have to be engaged, to participate in helping to find a solution. For some skeptics, they believe that these people made this choice, but the reality is, however they got here, they need help. As criminals develop new illicit drugs which are cheaper to make and are more addictive than their predecessors, the mounting pressure and costs on our legal, healthcare and social welfare systems grows. The question is, what do we really stand to lose if we continue to look the other way?
New Illicit Opioids
There are two new drugs on the street, both opioids, and both more powerful and addictive than fentanyl; carfentanil and niztazene.
In May 2025, the U.S. Drug Enforcement Agency released a notice on carfentanil, which is a synthetic opioid “for veterinary use, more specifically to tranquilize large animals such as elephants…It is 100 times stronger than fentanyl”. Where it would only take a couple of milligrams to overdose on fentanyl, it now only takes .02 mg to overdoes on carfentanil. This drug has now been detected in 37 U.S. states. As deaths from fentanyl are on a slow decline in the U.S., the numbers related to carfentanil are increasing, from “29 deaths from January to June 2023, to 238 deaths from January to June 2024.” Drug traffickers are putting on to the market more powerful and addictive drugs to drive profits that are cheaper to produce. Drugs that require a significant effort in production and cost, a growing season, and a vast amount of labour are becoming less attractive to drug traffickers. Carfentanil is so powerful that naloxone, the medication used to reverse the effects of opioids, “may not be effective against carfentanil in normal doses.” In Toronto alone this dangerous opioid has shown up. In a report by the Toronto Drug Checking Service (“TDCS”), “Carfentanil appeared in 14 percent of the 193 samples that the TDCS tested in August (2025)”. This provides a greater challenge for emergency service workers, when dealing with an overdose, because naloxone, a drug to counteract regular fentanyl may not work, because the service worker would be unaware that carfentanil was consumed, and the dosage would not be strong enough to counter the effects of the drug.
In addition to carfentanil, niztazenes is an opioid that is 10 times stronger than fentanyl. It is not a new drug, “initially developed in the 1950’s and 1960’s, when the company Ciba-Geigy developed it as a synthetic opioid analgesic.” Where carfentanil and fentanyl have primarily hit North America, niztazenes impact has been felt across the pond in the UK, where the government has recorded “400 nitazene related deaths between June 2023 and January 2025.” With the UK government now addressing an emerging opioid crisis, the global stakes are rising. Fentanyl addiction has been the focus for Canada, the United States and Mexico, but Nitazenes are showing up in every jurisdiction. Since 2019, the United Nations Office on Drug and Crime has shown a steady rise in Nitazenes, with many European countries being hit including “Latvia, Estonia, Frankfurt, the United Kingdom, Sweden and Germany”. It is showing up in large cities like Berlin, Birmingham, Frankfurt, and Dublin.
Fentanyl and the cost to the United States
In the United States alone the U.S. government has spent trillions of dollars fighting fentanyl. “In 2023 alone, illicit opioids, primarily fentanyl, cost American an estimated $2.7 trillion (in December 2024 dollars), equivalent to 9.7 percent of the GDP.” The areas of society impacted include the legal, social and healthcare systems, as well as costs related to lost productivity related to those individuals addicted to fentanyl. These are costs placed on the shoulder of the U.S. taxpayer. The United States is trying to address this issue from a variety of approaches. Two approaches that have caught on follow along the lines of a punitive and a rehabilitative approach:
In 2023, in the first case in what is believed to be of its kind, a drug dealer in Placer County California was convicted in the 2nd degree murder of a teen girl who died from a fentanyl overdose. A subsequent case followed in 2024, in the same county, of another drug dealer who was also convicted of 2nd degree murder. There is a now accountability and liability for drug dealers related to overdoses, but the reality is, the impact on the illicit production of fentanyl is minimal. As per FINCEN 2024 report “Fentanyl Illicit Related Finance: 2024 Threat Pattern & Trend Analysis”, several Mexican drug cartels, currently control the production of fentanyl, with vast amounts of fentanyl crossing the border into the United States. Severe criminal penalties against drug dealers, especially where death is involved of the user, are the step in the right direction, but the impact of this approach-on the local distribution channels via drug dealers remains to be seen. The real impact needs to be felt closer to the source of distribution, and less so at the local distribution level.
The second perspective, which is rehabilitative in nature, is the use of drug courts, acknowledging that there is a victim element to consider for those individuals addicted to drugs. The key objective of these courts is to get people into treatment programs. By ensuring people are not criminalized for their substance abuse, and requiring them to complete treatment within certain parameters, it lessens the burden on the U.S. judicial/penal systems. “The National Institute of Justice concluded from a decade-long study of a drug court that reduced recidivism and other long-term program outcomes resulted in public savings of $6,744 on average per participant.” By participating in the drug court programs, for the individuals involved it can be life changing. “Participants who successfully complete the drug court program can have their underlying criminal offenses dismissed or expunged.”
Several global financial regulators and country governments have released articles, and raised awareness related to the damaging effects of illicit opioids but often figuring out how to operationalize the information remains a challenge for many entities and financial institutions. Financial institutions often take a risk-based approach when it comes to their financial crime risk management, to help prioritize activities, unfortunately the issue is whether the right approach was taken. Criminals are nimble and where one approach no longer works, a new approach is taken to exploit financial institutions. Financial institutions need to be agile. With millions of customers, a multitude of banking partners, and billions of transactions daily, financial institutions often find there are challenges in finding the proverbial (opioid) needle in a haystack. Couple that with budgetary constraints, resourcing issues and shareholders demands for profitability, this becomes a perfect storm which is exploited by drug traffickers. Taking a step back, if financial institutions are facing these challenges related to fentanyl and drug trafficking, smaller entities, with a lack of financial resources, or expertise have an even larger task in front of them. The risks for these entities become so much greater due to the perceived weaknesses of these entities by drug cartels and other criminal enterprises.
Where do we go from here?
Trump’s visit to South Korea to address trade tensions and the flow of fentanyl, was a step in the right direction, with the Chinese government committing to take “unspecified measures to tighten control on the production and export of fentanyl precursor chemicals (which) is part of a broader package of actions to reduce bilateral economic tensions.” These unspecified measures make it difficult to assess their effectiveness, however China has in the past, effectively applied measures. “China’s May 2019 embargo boosted the U.S. street price of fentanyl” and there was “1,000 fewer fentanyl overdose deaths than would have occurred otherwise, according to a recent PIIE Working Paper, Stopping the flow: The effects of U.S.-China cooperation on fentanyl markets and overdose deaths. “ As the pressure on obtaining the precursor chemicals for illicit fentanyl production increases “criminal gangs have shifted procurement toward India, another major producer of pharmaceutical chemicals”. The challenge for the Trump administration becomes, in a geopolitical supply chain, how do you pivot effectively to address emerging threats when your opponent is nimbler than you?
The answer to that challenge is to follow the money flows. Financial institutions are effectively the gatekeepers of the world economy. As criminals become more agile, public/private partnerships are important. Knowledge sharing is key between financial institutions/reporting entities and the regulators/law enforcement. That is why countries, including Canada and the U.S., have legislation and regulations which require particular entities to have in place robust compliance/risk management programs. It is also why stringent oversight by the regulator is necessary to ensure enforcement of those programs.
A scalable solution to this issue also needs to be considered because entities may not have the expertise or the financial resources to identify opioid-related activity. The current list of typologies and red flags some global regulators have issued to their respective constituents, may be difficult to operationalize for smaller entities because of the level of skill or technology needed to flag these activities. This is an opportunity for regulators to further distill information to risk prioritize what is important, which is key to helping entities in successfully fighting fentanyl flows.
Illicit opioids are emerging as a global threat and no longer can we look away from their impact. The cost of turning the other cheek is too high. It’s moving into other parts of the world into new markets. Many years ago, miners used canaries to identify carbon monoxide. The fentanyl crisis in North America is very much a canary in a coal mine situation. The rest of the world should take lessons learned here and start identifying red flags in their region. Too many people have died and it has been an economic burden in the United States, Canada and Mexico. If we aren’t careful the opioid crisis could become a global crisis.
Sean Parker is the CEO and Managing Director of AML Consultancy Inc. He is a financial crime risk management expert, having extensive experience in anti-money laundering, sanctions and fraud. Sean has worked with global and local banks specializing in transaction monitoring, payment flows/channels and regulatory reporting.
