[Federal Register Volume 63, Number 50 (Monday, March 16, 1998)]
[Presidential Documents]
[Pages 12937-12964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6584]
[[Page 12935]]
_______________________________________________________________________
Part IV
The President
_______________________________________________________________________
Presidential Determination No. 98-15 of February 26, 1998--
Certification for Major Illicit Drug Producing and Drug Transit
Countries
Presidential Documents
Federal Register / Vol. 63, No. 50 / Monday, March 16, 1998 /
Presidential Documents
___________________________________________________________________
Title 3--
The President
[[Page 12937]]
Presidential Determination No. 98-15 of February 26,
1998
Certification for Major Illicit Drug Producing
and Drug Transit Countries
Memorandum for the Secretary of State
By virtue of the authority vested in me by section
490(b)(1)(A) of the Foreign Assistance Act of 1961, as
amended, (``the Act''), I hereby determine and certify
that the following major illicit drug producing and/or
major illicit drug transit countries/dependent
territories have cooperated fully with the United
States, or have taken adequate steps on their own, to
achieve full compliance with the goals and objectives
of the 1988 United Nations Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances:
LAruba, The Bahamas, Belize, Bolivia, Brazil,
China, Dominican Republic, Ecuador, Guatemala, Haiti,
Hong Kong, India, Jamaica, Laos, Malaysia, Mexico,
Panama, Peru, Taiwan, Thailand, Venezuela, and Vietnam.
By virtue of the authority vested in me by section
490(b)(1)(B) of the Act, I hereby determine that it is
in the vital national interests of the United States to
certify the following major illicit drug producing and/
or major illicit drug transit countries:
Cambodia, Colombia, Pakistan, and Paraguay.
Analysis of the relevant U.S. vital national interests,
as required under section 490(b)(3) of the Act, is
attached.
I have determined that the following major illicit drug
producing and/or major illicit drug transit countries
do not meet the standards set forth in section 490(b)
for certification:
Afghanistan, Burma, Iran, and Nigeria.
In making these determinations, I have considered the
factors set forth in section 490 of the Act, based on
the information contained in the International
Narcotics Control Strategy Report of 1998. Given that
the performance of each of these countries/dependent
territories has differed, I have attached an
explanatory statement for each of the countries/
dependent territories subject to this determination.
You are hereby authorized and directed to report this
determination to the Congress immediately and to
publish it in the Federal Register.
(Presidential Sig.)
THE WHITE HOUSE,
Washington, February 26, 1998.
[[Page 12938]]
STATEMENTS OF EXPLANATION
Aruba
Aruba is a major trafficking and staging point for
international narcotics trafficking organizations which
transship cocaine and heroin from Colombia, Venezuela
and Suriname to the United States and Europe. Its key
position near the Venezuelan coast with air and sea
links to South America, Europe, Puerto Rico and other
Caribbean locations makes it a prime transshipment
point. Drug shipments are made primarily via
containerized cargo, but commercial airlines and cruise
ships are also used.
Money laundering organizations use legitimate
companies as fronts to invest in land development and
other construction projects. The Government of Aruba's
(GOA) Free Trade Zone (FTZ), casinos and resort
complexes are reported to be attractive venues for
money laundering and smuggling. Legislation recommended
by four joint Aruba-Dutch commissions to enhance
monitoring of the FTZ, casinos, import and export of
money, and legal entities is pending.
Although Aruba is a part of the Kingdom of the
Netherlands (GON), it has autonomy over its internal
affairs and has independent decision-making ability in
many drug policy areas. In 1997, the GOA passed and
implemented a new criminal procedural code which allows
for expanded investigative powers for local law
enforcement as well as for extradition of nationals
subject to service of sentences in Aruba. The change in
criminal procedure removed one of the last remaining
barriers to the GOA's full compliance with the 1988 UN
Drug Convention standards. The GOA has yet to ask the
Kingdom of the Netherlands (GON), a party to the 1988
UN Drug Convention, to extend it to Aruba.
The GOA, as part of a joint Netherlands-Netherlands
Antilles-Aruba Coast Guard, received two small fast
patrol boats to patrol the coastal waters and interdict
drug shipments. The GOA established money transaction
monitoring entities to review unusual transactions in
the banking sector. Aruban law enforcement officials
participated in USG-sponsored training courses for drug
enforcement during 1997.
Indications of corruption still hinder the
effectiveness of GOA efforts against international
narcotics traffickers and money launderers. The
withdrawal of the OLA party from the Eman coalition
government and the government's subsequent fall in late
1997 was linked in the press to the efforts of elements
within Aruban society and political circles who are
seeking to halt or reverse recent government actions,
including progress in trans-national crime,
counternarcotics and money laundering issues. Elections
in December returned no one party with a parliamentary
majority and efforts to form a new coalition government
have moved slowly. Progress in implementing anti-drug
measures approved in 1997 may be delayed as a result of
the political impasse.
Despite these problems, Aruba generally cooperated
in 1997 with the USG to meet the goals and objectives
of the 1988 UN Drug Convention.
The Bahamas
The USG and the Government of the Commonwealth of
The Bahamas (GCOB) have enjoyed an excellent,
cooperative working relationship on counternarcotics
over the past decade. The GCOB places a high priority
on combating drug transshipments through its
archipelago, as demonstrated by the extensive resources
it devotes to this initiative. Nevertheless,
significant quantities of illicit drugs continue to
transit The Bahamas en route to the U.S., and The
Bahamas remains a major drug transit country. The GCOB
cooperates very closely with the USG on Operation
Bahamas and Turks and Caicos (OPBAT). U.S. and Bahamian
law enforcement agencies
[[Page 12939]]
worked diligently together throughout the year to
respond to increases in air and maritime transshipment
incidents.
The first country to ratify the 1988 UN Drug
Convention, The Bahamas continues to take steps to
implement it. Following passage of anti-money
laundering legislation (March 1996) and implementing
regulations (December 1996), in November 1997 The
Bahamas submitted its strong anti-money laundering
regime to mutual evaluation by the Caribbean Financial
Action Task Force (CFATF).
During the year, the GCOB continued to strengthen
its judicial system, with assistance from the USG.
However, procedural delays continue to plague the court
system, leading to delays in drug cases. The Bahamas
needs to improve the effectiveness of its court system
in disposing of drug cases more expeditiously.
The GCOB should also put greater emphasis on
forfeiture of the proceeds of crime and trafficker
assets, including early disposal of commodities used in
trafficking before they lose value. The Bahamas has not
yet designated the U.S. under the Bahamian law
concerning execution of foreign forfeiture orders in
The Bahamas, despite repeated U.S. requests since 1993.
In past years, The Bahamas has prosecuted and convicted
some middle- and low-level officials on charges of
narcotics corruption.
Belize
The Government of Belize (GOB) recognizes the
problem of drug transit through its territory and the
effect drug trafficking has on domestic crime. Anti-
narcotics activities are centralized in a committee
consisting of various components of the Belize Police
Force (BPF) and the Belize Defense Force (BDF), with a
dedicated group of investigative police and a rapid
response force called the Dragon Unit. They are active
in the fight against drugs and work closely with the
USG. The GOB is party to the 1988 UN Drug Convention.
With USG help, the GOB continued to work to upgrade
the professionalism and equipment of the BPF to combat
violent crime and narcotics trafficking. A new two-
officer money-laundering unit has recently completed
training with USG support. The GOB has continued its
support of cooperative efforts to reduce drug
trafficking through its borders and to combat the crime
associated with such trafficking. The GOB has also
maintained its support of regional and unilateral
counternarcotics efforts.
1997 was a record year for cocaine interdiction
with more than two metric tons seized. Indications are
that marijuana cultivation remained stable. The efforts
of the Belizean security forces to control narco-
traffic have been hampered by the lack of manpower,
training and equipment, corruption within the ranks,
and the relatively large expanse of uninhabited
territory of the country.
This improved performance, however, was tempered by
the mixed record of convictions and sentencing,
including the dismissal of an important case involving
Colombian, Mexican, and Belizean defendants. The
Belizean judicial system remains weak, understaffed,
and underfunded. Although the GOB and the USG reached
tentative agreement on a new extradition treaty and a
MLAT in late 1996, the GOB subsequently raised new
concerns about certain aspects of these treaties and
negotiations were stalled during 1997. While the new
extradition treaty has not been completed, Belize
continues to extradite alleged criminals to the United
States under the 1972 US-UK extradition treaty.
The GOB needs to continue to fully cooperate with
the USG and take action to meet the goals and
objectives of the 1988 UN Drug Convention and other UN
drug conventions. Of particular importance, the GOB
should improve its prosecution of major drug cases,
provide more support for the judicial branch, and
conclude negotiations on mutual legal assistance and
[[Page 12940]]
extradition treaties with the US. A renewed commitment
to confronting corruption is essential.
Bolivia
Bolivia is the world's second leading producer of
cocaine hydrochloride, and has an illegal coca-cocaine
industry, including sophisticated operations to smuggle
essential chemicals, that is increasingly under the
control of Bolivians. The participation of foreigners
is more and more relegated to the refining of base into
cocaine hydrochloride and to transporting cocaine out
of Bolivia, however, this will diminish as Bolivian
traffickers improve their refining capabilities.
The former GOB never implemented an eradication
program in the Yungas, and quickly discontinued its
policy of arresting and prosecuting persons who plant
new coca. The new Banzer government has promised prompt
action on both issues. Additionally, although
eradication slowed in April and did not effectively
resume until early October, Bolivia exceeded its gross
eradication goal for 1997 of 7,000 hectares and
produced a net reduction in coca cultivation of 2
percent. This is an improvement over the one percent
net reduction in 1996 and was largely conducted after
the inauguration of the new Banzer government.
Bolivia's new government is building a consensus,
via a series of national dialogues, for the country's
first national counternarcotics strategy. Their five-
year plan includes the goal of totally eliminating
illicit coca cultivation by the year 2002.
Total narcotics-related arrests increased
substantially in 1997, as did seizures of cocaine
products and essential chemicals. The Special
Investigative Units--vetted and trained in the U.S.--
have returned to Bolivia and are actively engaged in
their own operations and in supporting the on-going
investigations of other Bolivian counternarcotics
units. The Bolivian Navy's Blue Devil Task Force has
been granted law enforcement authority, a change which
will almost certainly result in greatly improved
interdiction results on the country's waterways.
The legislature is considering critical judicial
reforms, including revisions to Law 1008, Bolivia's
basic counternarcotics law, which will, when enacted,
greatly improve the country's court system and result
in a fairer and more transparent judicial system.
Alternative development initiatives have been
highly successful in providing farmers viable, licit
alternatives and have helped solidify public opinion
against coca cultivation.
In 1998, the Bolivian government must act to
prevent new coca plantings and conduct eradication
efforts in a sustained and intensified manner. A net
reduction of 20 percent (or 7,000 hectares) of coca
plantings must be achieved in 1998 if the Bolivians are
to garner success for their 5-year plan to eliminate
illicit coca. They must eliminate individually
compensated eradication for controlling the cultivation
of new coca fields and prosecute those who plant them.
The Blue Devil Task Force must implement their new law
enforcement authority to effect seizures of narcotics
and chemicals, and arrests of narco-traffickers on
Bolivia's waterways. Enforcement of recently enacted
legislation criminalizing money laundering was delayed,
in 1997, pending clarification of lines of authority
and identification of funding sources. Bolivia must
move forward to vigorously implement these laws.
[[Page 12941]]
Brazil
Brazil is a major transit country for cocaine
shipped by air, river, and maritime routes from
Bolivia, Peru, and Colombia to the U.S. and Europe.
Because of increased interdiction of trafficker
aircraft in Peru (along the Peru/Colombia air
corridor), traffickers have shifted illicit narcotics
flights into Brazilian air space. Brazil's vast and
sparsely populated Amazon region provides ample
opportunity for traffickers to transship drugs and
chemicals by air and riverine routes. A southern ``drug
route'' also exists along Brazil's borders with
Paraguay and Bolivia.
While not a significant cultivation country, Brazil
is a major producer of essential/precursor chemicals
and synthetic drugs. There is also a growing domestic
drug consumption and addiction problem, primarily among
young people. Several key pieces of counter-narcotics
legislation, including an anti-money laundering law,
are under review in the congress. Brazil's bank secrecy
laws and its highly developed financial networks make
it fertile ground for money laundering of drug profits.
Although police drug seizures in 1997 were only
slightly above those in 1996, anti-narcotics law
enforcement units stepped up interdiction activities in
the Amazon region and along the southern ``drug
route.'' The government implemented a new national
defense policy (since 1996) to allow the military to
assist police anti-drug operations in the Amazon.
During two major operations in that region, the police
put a majority of all clandestine airfields out of
operation. In cooperation with neighboring countries,
Brazilian police carried out investigations which
disrupted several major drug smuggling organizations.
Brazil also continues to cooperate in extradition cases
of non-Brazilian citizens.
To signal its continued resolve to deal with
narcotics trafficking problems, Brazil signed a new
Letter of Agreement (LOU) for bilateral cooperation in
narcotics control with the U.S. in 1997. Brazil has
bilateral narcotics control agreements with all its
South American neighbors as well as Germany and Italy.
During a visit by President Clinton in October, Brazil
signed a mutual legal assistance treaty (MLAT) with the
U.S. In another positive step, the government
incorporated anti-money laundering provisions in a
packet of emergency measures sent to Congress in
conjunction with a growing economic/fiscal crisis. This
packet has cleared the lower house of the legislature
and is still being considered by the Brazilian senate
with passage possible in early 1998. Senior government
officials made clear to U.S. interlocutors during 1997
that Brazil was fully committed to working with the
U.S. and other nations in reducing the traffic in
illicit drugs in South America.
China
China both remains a major transit route for
Southeast Asian heroin destined for the U.S. and other
Western markets and has had increasingly to deal with
the phenomenon of itself becoming such a market. China
continues to take a strong stand to battle this trend.
In 1997, it further intensified its nation-wide efforts
to combat drugs by focusing special attention on anti-
drug education. Narcotics seizures also increased, as
did the monitoring of precursor chemicals: there was a
four-fold increase over 1996 in the seizures of such
chemicals. China also moved to strengthen anti-drug
legislation and for the first time identified money
laundering as a crime. In 1997, China signed a Mutual
Legal Assistance Agreement with India which placed
special emphasis on narcotics trafficking. China is
also a party to all of the UN narcotics conventions.
USG-PRC cooperation on counternarcotics issues
improved in 1997. In October, as part of the Joint
Statement issued during the Summit between Presidents
Jiang and Clinton, China agreed to the opening of
reciprocal drug enforcement offices in Beijing and
Washington and to the establishment
[[Page 12942]]
of a Joint Liaison Group on Law Enforcement which
specifically included narcotics trafficking as one of
the issues to be addressed. China hosted two Drug
Enforcement Administration seminars on chemical
control, sent officials to the United States to take
part in airport interdiction training and continued
working-level exchanges of information on international
drug trafficking cases with USG law enforcement
officials. A direct e-mail link with DEA to facilitate
information exchange on drug cases has been
established. In April, China transferred to the U.S.
for prosecution on drug trafficking charges a Burmese
national in its custody.
China continues to struggle with the corruption and
greed which have accompanied economic success and
prosperity. The Government has passed specific laws to
deal with officials guilty of the use, manufacture, or
delivery of narcotics. Penalties for such
transgressions include execution. There is no evidence
of high-level official involvement in the drug trade.
The juxtaposition, however, of low-paid law enforcement
and other officials with the lucrative drug business
creates the potential for corruption.
Chinese officials have noted that 90 percent of the
heroin flowing into China comes from Burma. China's
close trade and political relationship with Burma has
facilitated misuse of their shared 2,000-kilometer
border by drug traffickers. China has pledged
cooperation in helping the Burmese fight narcotics
production and has supported international programs to
wean Burmese farmers away from drug production. China's
success--or its failure--with regard to addressing the
problem of Burmese drug production has serious
implications for China, for the rest of Asia and for
the West.
Dominican Republic
The Dominican Republic is an active transshipment
point for drugs destined for the United States and
Europe. Traffickers smuggle narcotics through Dominican
territory by air, sea, and along the country's porous
border with Haiti. A weak Dominican judicial system
continues to hamper efforts to combat the narcotics
trade, but a promising reform process began in 1997.
The Government of the Dominican Republic (GODR)
continued to cooperate with the United States
Government (USG) on counternarcotics objectives and
goals. The GODR is party to the 1988 United Nations
Drug Convention. It has enacted a money laundering and
asset forfeiture law that complies with the
Organization of American States (OAS)/Inter-American
Drug Abuse Control Commission (CICAD) model. The GODR
and the USG have a bilateral maritime agreement that
allows for consensual boarding of sea vessels by host
country authorities. Dominican authorities cooperate
closely on drug investigation matters with the USG. The
GODR had a mixed record of drug-related seizures and
arrests. There was a decrease in marijuana seizures and
arrests for drug-related offenses (1,481 arrests) in
1997, but an increase in heroin seizures (8.3 kgs).
Cocaine seizures rose slightly from 1996 to 1,354 kgs.
in 1997.
This cooperation has been marred by the
disappointing record of judicial and legislative
reforms. Dominican law prohibits the extradition of
Dominican nationals, creating a refuge in the Dominican
Republic for Dominican nationals who are believed to
have committed serious crimes in the U.S. Pursuant to
an extraordinary and rarely used Executive Order, the
GODR did extradite two Dominican nationals to the
United States in August 1997 to stand trial on charges
of narcotics trafficking and homicide. Dominican
judicial authorities have yet to act on more than two
dozen additional U.S. extradition requests. An absence
of effective government supervision of exchange houses
or remittance operations and the presence of large cash
flows, which could hide money laundering activity,
continue to make the Dominican Republic vulnerable to
further money laundering. Money laundering is not
likely to diminish until the GODR aggressively
implements the money laundering legislation.
[[Page 12943]]
Neither the GODR itself nor senior government
officials encourage, facilitate, or engage in drug
trafficking or money laundering as a matter of
government policy. No evidence exists that senior
government officials are involved in drug distribution
or money laundering. No senior government official has
been indicted for drug-related corruption in 1997.
Ecuador
Ecuador continues to be a major transit country for
the shipment of cocaine from Colombia to the United
States and Europe. Ecuador is also used by traffickers
for money laundering of drug profits and to transit
essential/precursor chemicals destined for Colombian
drug labs. Cocaine is shipped primarily by road from
the Colombian border to major Ecuadorian ports where it
is concealed in bulk cargo transported in large ocean-
going commercial vessels.
In 1997, Ecuador increased the number of
interdiction checkpoints along inland transit routes
leading to ports. With U.S. aid, Ecuador is
establishing a Joint Information Coordination Center
(JICC) in the major port city of Guayaquil. Ecuador
also hosted a U.S. Customs/U.S. Coast Guard team which
assessed port operations for top government officials.
The Ecuadorian Congress passed legislation authorizing
the forfeiture of drug assets and the use of forfeiture
funds in support of prevention, rehabilitation, and
police counter-narcotics activities. Police assigned
personnel for U.S.-sponsored training to form a
``controlled chemical'' investigative unit. The
government submitted new legislation to help police
carry out money laundering investigations.
There is a long tradition of cooperation between
Ecuadorian National Police and U.S. law enforcement in
the area of narcotics control. Still, the police lack
many of the resources needed to deal effectively with a
narcotics trade directed by powerful criminal
organizations in its neighbor to the north, Colombia,
and, to a lesser extent, in Peru to the south.
Cooperation between the Ecuadorian and Peruvian
governments is complicated by an on-going, serious, and
occasionally violent border dispute.
Ecuador cooperated with the U.S. to eradicate most
of its coca crop in the 1980's and thus avoided the
production problems that currently plague its neighbors
Colombia and Peru. In 1997, Ecuador continued to
demonstrate its willingness to work closely with the
U.S. in dealing with other narcotics issues including
major vulnerabilities such as cocaine transshipments,
chemical diversions, money laundering, and judicial
corruption/inefficiency. The police's canine unit, for
instance, was created with U.S. assistance and had a
number of outstanding successes in interdicting cocaine
shipments in 1997. Ecuador has also signalled a
willingness to discuss and work out ways in the near
future to cooperate with the U.S. in maritime
interdiction.
Guatemala
With peace a reality after thirty six-years of
internal conflict, President Arzu has made public
security a top priority and has shown special interest
in ensuring maximum cooperation with the United States
in combatting counternarcotics trafficking through
Guatemala and in the region.
Guatemala is located half way between the U.S. and
Colombia and continues to be a transshipment and
storage point for cocaine destined for the US via
Mexico. There has been a marked increase in the use of
truck and shipping containers. Guatemala has made major
improvements to a self-financed port security program
which expanded operations.
A major initiative resulted in the transition from
the old national and treasury police forces to the new
National Civilian Police (PNC) and the consolidation of
various paramilitary law enforcement agencies. The
Depart
[[Page 12944]]
ment of Anti-Narcotics Operations (DOAN), a specially
equipped civilian police command, was transferred to
the PNC after re-training and a major pay increase.
With USG assistance, the DOAN seized almost 6 metric
tons of cocaine in 1997. There was also steady progress
in the successful prosecution of narcotics-related
crimes with over 90 per cent of those accused being
convicted.
Guatemala works closely with USG organizations to
stem the flow of drugs through Guatemala, but has not
yet enacted necessary legislation to implement all the
provisions of the 1988 UN Convention on narco-
trafficking. The Government of Guatemala (GOG) does not
encourage or facilitate illicit production or
distribution of narcotic or psychotropic drugs or
controlled substances.
Guatemalan studies show that drug use is on the
rise in most age groups with cocaine use increasing
rapidly. However, Guatemala has recently completed a
comprehensive national drug plan which is scheduled to
be implemented starting in January 1998 and which
includes an ambitious demand reduction program.
Haiti
Already confronted by a wide array of issues that
compete for the attention of its limited professional
and managerial talent, the Government of Haiti (GOH)
and its criminal justice institutions are severely
strained by increased international narcotics
trafficking activities. Haiti's fledgling national
police force is hampered by a lack of manpower,
training, equipment, and experience. The poorest nation
in the Western Hemisphere, Haiti is particularly
vulnerable to the corrosive effects of narcotics-
related corruption. Haiti's weak and ineffective
judicial system has a poor track record of narcotics
prosecutions. Haiti is a party to the 1988 UN Drug
Convention.
Because of a significant increase in the detected
activities of Colombian drug trafficking organizations
in Haiti in 1994, Haiti was added to the list of major
drug producing and transit countries in 1995. Due in
measure to effective USG interdiction efforts around
Puerto Rico and the Virgin Islands in 1997, traffickers
have increasingly targeted Haiti's long, undefended
coastline for narcotics deliveries intended for
transshipment (often throughthe Dominican Republic) to
the US. In response to this growing threat, the GOH,
within its existing capacity, cooperated fully with the
United States Government (USG) in counternarcotics
efforts in 1997. The GOH must build upon the positive
steps it has already taken to more aggressively seize
narcotics shipments, pursue and prosecute narcotics
traffickers, and investigate all allegations of
governmental corruption with a view to effective
prosecution.
The GOH is slowly but incrementally putting into
place the legal mechanisms and governmental policies to
counter organized trafficking elements. This effort has
been hampered overall by the ongoing political impasse
over a parliamentary quorum. In 1997, the GOH and the
USG signed a Maritime Counterdrug Agreement. In 1997,
the Haitian Coast Guard (HCG) and the U.S. Coast Guard
(USCG) cooperated in four separate maritime
interdictions that yielded over 2 metric tons of
cocaine and five tons of marijuana. With USG support,
the Counternarcotics Unit of the Haitian National
Police (CNU) was staffed, trained and partially
deployed in 1997. A fully-deployed CNU is scheduled to
move to a permanent headquarters facility at the Port
au Prince airport in 1998.
In response to allegations of drug-related
corruption within the Haitian government, the Haitian
National Police arrested 21 police and judicial
officials for suspected complicity in narcotics
trafficking in 1997. A Ministry of Justice (MOJ)
Special Advisor on Narcotics Matters drafted a national
narcotics strategic plan, completed draft legislation
on money laundering, and updated archaic Haitian
narcotics laws. That said, corruption remains
[[Page 12945]]
an important USG concern, as does the need for
successful prosecutions of narcotics trafficking cases.
In 1997, the GOH continued to give USG officials
high-level assurances of its commitment to drug
control, and those assurances have been supported by
progress in establishing Haitian counter-drug
institutions. However, Haiti still has a number of
major goals to achieve before it will be able to take
significant, independent action in counternarcotics.
Once a new Prime Minister and a new government are
installed, the Maritime Counterdrug Agreement and the
MOJ's legislation can be submitted for Parliamentary
approval and a National Narcotics Plan approved at the
cabinet level. The USG will continue to work with the
GOH to achieve Parliamentary passage of pending and
planned legislation and its vigorous implementation,
continued training the CNU, and the institution of
anti-corruption steps within the ranks in further
compliance with the goals and objectives of the 1988 UN
Drug Convention and the terms of our bilateral
agreements and treaties.
The USG will remain engaged in increasing the
capacity of the HCG and CNU to meet the threat posed by
traffickers. The USG will also help improve the overall
security of the Port-au-Prince Airport to inhibit the
flow of drugs via air links to the U.S. Additional
counternarcotics objectives for Haiti include targeting
at least one major international narcotics organization
for significant interdiction efforts and enacting civil
and administrative asset forfeiture provisions to
facilitate targeting of trafficker assets and companion
legislation requiring use of the forfeited funds solely
for counternarcotics interdiction and enforcement
operations.
Hong Kong Special Administrative Region
The Hong Kong Special Administrative Region remains
a target point for money launderers and drug
traffickers. USG officials believe that Hong Kong
traffickers control large portions of Southeast Asian
narcotics destined for the West, including the United
States. In 1997, however, there were no seizures of
heroin destined for the U.S. which could be tied to
Hong Kong itself. Hong Kong has strengthened money
laundering guidelines applicable to its financial
institutions, securities firms and the insurance
sector. It also enacted the 1997 Drug Trafficking
Order, which allows for the enforcement of confiscation
orders issued by countries that are signatories to the
1988 UN Drug Convention, thus enhancing Hong Kong's
ability to recover the proceeds of drug trafficking.
With Hong Kong's reversion to Chinese sovereignty in
July 1997, the 1988 UN Drug Convention has for the
first time been made applicable to Hong Kong. The U.S.-
Hong Kong Extradition Agreement was ratified by the
U.S. in November 1997 and came into force in January of
this year. The new U.S.-Hong Kong Mutual Legal
Assistance Agreement awaits Senate action.
Close cooperation between Hong Kong law enforcement
agencies and the Public Security Bureau of Guangdong
Province resulted in increased seizures on the mainland
of heroin which would otherwise have entered Hong Kong.
In conformity with the 1988 UN Drug Convention, Hong
Kong amended Schedules 1 and 2 of its Control of
Chemicals Ordinance to place the salts of 17 chemicals
under licensing control. Hong Kong also issues pre-
export notifications to destination countries of
precursor chemical shipments so as to prevent
diversions. As noted by the International Narcotics
Control Board, Hong Kong stopped three suspicious
chemical shipments in 1997. Hong Kong will face the
second review of its system by the Financial Action
Task Force in 1998 and has carefully reviewed its
existing body of narcotics-related legislation and
practices in preparation for that review.
There is no reported narcotics-related corruption
among senior government or law enforcement officials in
Hong Kong. Cooperation between the U.S. and Hong Kong
on counternarcotics matters remains both wide-ranging
and excellent. Hong Kong and USG personnel conducted
several joint narcotics
[[Page 12946]]
investigations in 1997, resulting in a number of
arrests and drug seizures, as well as in financial
seizures. In August, U.S., Hong Kong and Mexican
officials also successfully coordinated a controlled
delivery to Mexico of 150 kilograms of pseudoephedrine
originating in China. Hong Kong Customs and Excise
authorities provided two instructors to assist DEA's
diversion training team in conducting two one-week
seminars in China. Locally posted DEA officers continue
to provide monthly briefings at the Hong Kong Police
Command School.
India
India, an important producer both of licit and
illicit narcotics, is a crossroads for international
narcotics trafficking. It is the world's largest
producer of licit opiates for pharmaceutical use and
the only producer of licit gum opium. Some opium is
diverted from the country's legal production, although
it is difficult to ascertain the exact amount. The
Government of India estimates diversion at about 10
percent, although it may be as high as 30 per cent.
Illicit poppy cultivation declined significantly in the
past year, form 47 metric tons (mts) to 30 mts,
according to USG estimates. India's location between
the two main sources of illicitly grown opium, Burma
and Afghanistan, as well as its well-developed
transportation infrastructure, makes it an ideal
transit point but heroin transshipment is not as
significant as in neighboring Pakistan, Thailand and
China and there is no evidence that opiates
transshipped through India reach the U.S. in
significant amounts.
As a licit producer of opium, India must meet an
additional certification requirement. In accordance
with Section 490(c) of the Foreign Assistance Act, it
must maintain licit production and stockpiles at levels
no higher than those consistent with licit market
demand and take adequate steps to prevent significant
diversion of its licit cultivation and production into
illicit markets and to prevent illicit cultivation and
production.
Indian opium gum, the principal source of thebaine,
and alkaloid essential to certain pharmaceuticals, is
purchased by U.S. pharmaceutical firms. Between 1994
and 1996, India had difficulty meeting its production
goals and satisfying the world demand for this narcotic
raw material. Reduction in acreage, a severe drought
which limited crops and inaccurate physical inventories
over the last 20 years led to a depleted stockpile and
large discrepancies in inventory which were discovered
in 1994.
Starting in 1995, India took a number of steps to
increase licit opium productivity and the licit opium
stockpile. To increase future inventory accuracy, the
traditional method of storing liquid opium in large,
open vats, resulting in undetermined losses due to
evaporation, was changed to a system of sealed cans. To
ensure a more secure stockpile, the GOI increased the
opium crop by increasing each year the minimum
qualifying yield per hectare with which each farmer
must comply. Opium output grew each year, from 833 mts
in 1995 to 849 mts in 1996 to 1,341 mts in 1997. The
GOI also sharply increased its seizures of diverted
licit opium. Greater GOI attention to increasing licit
opium yields both increased the amount of narcotic raw
material available to purchasers and ensured a more
stable stockpile. Following years of an inadequate
supply, this year's increased production finally gives
India a licit stockpile consistent with market demand.
In 1997, India took five important steps to
increase licit opium production to meet market demand
while curtailing the diversion of licit opium. These
steps include: A) raising the minimum qualifying yield
(MQY) for relicensing to cultivate opium poppy from 48
to 52 kilograms per hectare; B) increasing GOI
vigilance of poppy farmers with direct farm visitation
by enforcement personnel to ensure all harvested opium
is turned in to government warehouses; C) seizing 11
mts of raw opium harvested by licit cultivators, but
not declared to the government in 1997 as opposed to
the 2 mts of diverted licit opium seized in 1996; D)
quickly averting the harmful effects of a
[[Page 12947]]
cultivator strike by licensing new farmers to replace
the striking cultivators; and E) making offenses
relating to cultivation and embezzlement of opium by
licensing cultivators on par with other trafficking
offenses, resulting in long prison terms and heavy
fines upon conviction.
While these are adequate steps to curb diversion,
the USG believes even more could be done and will work
with the GOI to increase diversion controls. USG offers
to help the Government of India (GOI) with a survey of
the licit opium fields have not yet been acted upon. A
well-designed crop study would provide accurate data on
crop yields and would be an important step in
establishing practicable levels of minimum qualifying
yield. The data could also be used to extrapolate the
level of diversion. The USG hopes to work with the GOI
on a future joint opium crop yield survey. Scientists
from the U.S. Department of Agriculture and the GOI
have collaborated on the design of a poppy survey.
India also has illicit cultivation, primarily in
Jammu and Kashmir, where GOI control is challenged by
insurgent groups and in the remote hills of Uttar
Pradesh. USG surveys between 1994 and 1997 indicated
illicit cultivation of opium poppy decreased steadily,
with the estimated yield declining from 82 mts of opium
to 30 mts. The GOI locates and destroys illicit
cultivation with vigor, but in some areas, such as
Jammu and Kashmir, GOI control is challenged by
insurgencies. The USG supplies satellite data along
with coordinates of suspected areas of illicit poppy
cultivation and the GOI has carried out extensive field
surveys and some random aerial surveys, some with DEA
assistance.
The GOI has made significant progress in
controlling the production and export of precursor
chemicals. Trafficking in illegally produced
methaqualone (mandrax), a popular drug in Africa, is
still a major problem. The GOI has a cooperative
relationship with the DEA, which is appreciative of
Indian efforts to control trafficking in precursor
chemicals. However, authorities have had limited
success in prosecuting major narcotics offenders
because of the lack of enforcement funding and
weaknesses in the intelligence infrastructure.
India met formally several times in 1997 with
Pakistan to discuss narcotics matters and is committed
to continuing consultations in 1998. Although these
meetings have produced limited results, they are an
important step toward much-needed regional narcotics
cooperation. India has also met with Burmese officials
along the border.
India is party to the 1988 UN Drug Convention, but
has not yet enacted supporting legislation on asset
seizures or money laundering. The substantive steps
India has taken in controlling illicit narcotics growth
and in increasing the harvest of licit opium while at
the same time tightening controls on the licit crop to
prevent diversion qualify India for certification.
Jamaica
Jamaica is a producer of marijuana and an
increasingly significant cocaine transshipment country.
The Government of Jamaica (GOJ) made some progress
during 1997 toward meeting the goals and objectives of
the 1988 UN Drug Convention, to which it became a party
in December 1995, and of our bilateral cooperation
agreements and treaties. Counterdrug cooperation
between DEA and the Jamaica Constabulary Force (JCF)
remained at high levels, and cannabis eradication
increased from 473 hectares in 1996 to 683 hectares in
1997, despite severe resource constraints. In October,
parliament passed a master national drug abuse
prevention and control plan which complies with the
OAS/CICAD model. Many important actions, however, still
remain to be taken by the GOJ to fully meet the
counterdrug goals and objectives.
During 1997, the GOJ extradited to the U.S. three
Jamaican national fugitives from U.S. justice, compared
to 1996, when the GOJ returned one
[[Page 12948]]
Jamaican national under a waiver of extradition, one
U.S.-Jamaican dual national who returned voluntarily
and six U.S. national fugitives who returned
voluntarily or were deported to the U.S. One U.S.
national died in Jamaica in 1996 while extradition
proceedings were pending. The U.S. seeks early
resolution of the 26 active extradition cases currently
pending with Jamaica. Although both countries have
begun to utilize the bilateral Mutual Legal Assistance
Treaty (MLAT), Jamaica needs to speed up its execution
of U.S. mutual legal assistance requests.
By year's end, the GOJ had not yet tabled in
parliament any precursor and essential chemical control
legislation. In September 1997, however, the GOJ signed
with the USG a letter of agreement (LOA) which details
USG counternarcotics assistance to be provided and GOJ
actions to be taken. This agreement includes a GOJ
commitment to introduce into parliament a precursor
chemical control law by April 1998.
In November 1997, the GOJ amended its 1996 anti-
money laundering law to mandate reporting of all cash
transactions of U.S. $10,000 equivalent or more.
Previously, the law incorporated a threshold reporting
requirement for all transaction types. Further
amendments are required to bring Jamaica into full
compliance with the recommendations of the Caribbean
Financial Action Task Force (CFATF). Although there are
four cases pending, to date there has been no
adjudication of money laundering cases. In February
1998, a Jamaican court granted the first forfeiture
order, under the 1994 law, of assets of a convicted
drug dealer; however, Jamaica has not provided for
earmarking of forfeited assets for counterdrug
purposes.
In the area of drug enforcement, GOJ drug arrests
and cocaine and hashish oil seizures increased in 1997
from 1996 levels, but marijuana seizures were down
substantially. A maritime law enforcement cooperation
agreement was signed by the GOJ and USG in May 1997; on
February 24, 1998, the GOJ notified the USG that it had
completed its constitutional requirements for the entry
into force of the agreement. A return notification from
the USG brings the agreement into force. The United
States hopes that, with the agreement in force,
maritime cooperation with Jamaica will improve. The GOJ
needs to reinvigorate the previously successful joint
Jamaica Constabulary Force (JCF)-DEA Operation Prop
Lock, which seized only one trafficker plane during
1997, and that had to be returned to its owner for lack
of probable cause.
Drugs in export shipments continued to threaten
Jamaica's legitimate commerce during 1997. At GOJ
invitation, U.S. agencies conducted an export security
assessment and recommended remedial actions to improve
security at air- and seaports. The GOJ needs to carry
out these recommendations. During 1997, there were
reports in the Jamaican media about drug-related
corruption of police and a resident magistrate, the
latter of whom was arrested on corruption charges. The
GOJ also needs to take strong steps to control drug-
related public corruption. A wide-ranging bill dealing
with corruption of public officials was tabled in
parliament, with passage expected in early 1998.
Parliamentary passage of introduced and planned
legislation and its vigorous implementation will be
necessary for Jamaica to meet fully the goals and
objectives of the 1988 UN Drug Convention and the terms
of our bilateral agreements and treaties.
Laos
Laos remains the world's third largest producer of
illicit opium. Despite concerted efforts by the
government, Laos' estimated potential production as a
result of the 1997 growing season was 210 metric tons,
up 5 percent from 1996. Cultivation increased by 12
percent, with most of the increase in the more isolated
northwest of the country. Opium production remained
low, however, within the USG-funded Houaphanh
alternative development project area. Laos' proximity
to important ports and trade routes also places
[[Page 12949]]
it on the trafficking routes for drugs destined for the
West, including the U.S. Recognizing the phenomenon of
``economic opportunism'' suggested by UNDCP experts as
contributing to increased opium production, Lao
authorities agreed in 1997 to a USG proposal to begin,
for the first time, an eradication program in areas
where alternative development projects are in place.
Lao law enforcement officials made their largest heroin
seizure ever (62.3 kilograms) in Luang Prabhang
Province in May, highlighting the increased
effectiveness of Laos' counternarcotics enforcement
efforts. Laos also ratified the 1971 UN Convention on
Psychotropic Substances and has indicated it may ratify
the 1988 UN Drug Convention in 1998, after passage of
required legislation.
In keeping with its plan to address all aspects of
the drug problem in Laos, the Government of Laos has
emerged as an increasingly active player in regional
and international counternarcotics efforts. In July, it
hosted a trilateral ministerial meeting with Burma and
Thailand to address problems of illicit drug production
and trafficking. Laos also signed bilateral
counternarcotics cooperation agreements with Burma and
the Philippines. It was selected to serve a four-year
term on the UN Commission on Narcotic Drugs, which
began this January.
USG-Lao counternarcotics cooperation remains a
center point of the overall relationship and continues
to be excellent. USG counternarcotics assistance to
Laos has increased as the Lao have moved toward a
counternarcotics policy which seeks to balance
alternative development, law enforcement, eradication
and demand reduction regimes. In order for Laos to
avoid the stigma attached to narco-societies, it must
control opium cultivation, production and trafficking
before modernization exacerbates those problems. It
will also have to deal with the problems posed by
corruption, including possible narcotics-related
corruption, among military and government officials.
The USG's commitment to Laos has been made both in
response to the determination thus far shown by the
Government of Laos and in recognition of Laos' need for
assistance in accomplishing its stated counternarcotics
goals.
Malaysia
For geographic and historical reasons Malaysia
remains, and likely will remain for some time, a
significant transit country for U.S. and European-bound
heroin. Top Malaysian leaders, including the Prime
Minister, are deeply concerned by Malaysia's drug
problem and have made combating illicit drugs one of
Malaysia's top national priorities. Police, armed with
stiff anti-trafficking laws that provide for detention
without trial and, in some cases, mandatory death
sentences, prosecute drug crimes vigorously. The Anti-
Narcotics Division of the police now enjoys department
status. Unlike some of its neighbors, Malaysia is
prepared to move against corruption. Several police
officers were arrested and prosecuted for drugs-related
corruption. Police also arrested several mid-level
police officers and other government officials
including a Malaysian diplomat, who was later acquitted
of drug smuggling charges. A newly amended anti-
corruption act gave the police additional powers to
prosecute corruption in 1997.
The government has also devoted new resources to
drug rehabilitation. In 1997 Malaysian authorities
launched new initiatives aimed at combatting drug use
among the young, improving drug rehabilitation
techniques, and combatting the spread of psychotropic
pills. Cooperation with the USG on combatting drug
trafficking has been excellent. The U.S.-Malaysian
Extradition Treaty came into force in 1997. Positive
discussions on a Mutual Legal Assistance Treaty
continued. Malaysia is working on legislation governing
asset forfeiture and management of seized assets to
complement the MLAT. Malaysia is a party to the 1961 UN
Single Convention and its 1972 Protocol, the 1971 UN
Convention on Psychotropic Substances and the 1988 UN
Drug Convention.
[[Page 12950]]
Mexico
The issue of illicit narcotics trafficking, and
related crimes, remains at the top of the bilateral
agenda between the U.S. and Mexico. These issues
figured prominently in meetings in which Presidents
Clinton and Zedillo approved documents which form the
basis of counternarcotics cooperation between the
United States and Mexico. In May, the two Presidents
issued the ``Declaration of the U.S.-Mexico Alliance
Against Drugs'' and released the Bi-National Drug
Threat Assessment. In November, the two Presidents
approved a summary of a binational drug strategy. Both
leaders have committed to strengthen their governments'
respective anti-drug efforts and to continue to work
toward closer and more effective bilateral anti-drug
cooperation.
The U.S./Mexico High-Level Contact Group on
Narcotics Control (HLCG) and the Senior Law Enforcement
Plenary continued to serve as the principal senior-
level fora for expanding and enhancing bilateral
counter-drug cooperation. The HLCG met three times in
1997, the Plenary twice, and their technical working
groups, which cover issues ranging from chemical
control to demand reduction, met throughout the year.
The HLCG supervised the preparation of the bilateral
threat analysis and the United States/Mexico Binational
Drug Strategy, which was released on February 6, 1998.
During 1997, the Government of Mexico (GOM) took
steps to begin implementing the important legislative
reforms of 1996 to advance its national efforts against
drug trafficking and organized crime. It developed a
number of specialized investigative units, such as the
Organized Crime and Financial Intelligence Units, to
implement those laws. The Bilateral Border Task Forces,
created in 1996, had to be reconstituted in 1997,
however; Mexican personnel are assigned and working in
these units, but are cooperating with U.S. law
enforcement counterparts on a limited basis. Agents
assigned to the new Special Prosecutor's Office and to
the elite investigative units underwent more rigorous
screening and background checks than their predecessors
and the process is being expanded to all parts of the
Office of the Attorney General (PGR). The GOM improved
training for the new agents, and plans to improve
salaries and benefits as well. The U.S. provided
training, technical and material support.
The GOM published regulations needed to implement
anti-money laundering legislation passed in 1996 and
began to work with financial institutions to improve
the effectiveness of its national reporting system for
suspicious and large currency transactions. The Mexican
Congress began its review of new asset forfeiture
legislation. In December, the Mexican Congress passed a
comprehensive chemical control bill enabling the GOM to
regulate all aspects of commerce in precursor and
essential chemicals to prevent their diversion to
illicit drug production. The Chemical Experts Working
Group promotes bilateral cooperation and information
sharing.
The GOM wrestled with very serious corruption
issues in 1997, including an internal investigation
which implicated General Jesus Gutierrez Rebollo, the
head of its federal drug law enforcement agency. He and
a number of co-conspirators are being prosecuted, and
the agency he headed was replaced by a new institution.
Mexico is seeking both to uncover ongoing cases of
corruption as well as to strengthen justice sector
institutions to withstand corrupting influences and
pressures. President Zedillo has made this a national
priority, but acknowledged that lasting reform will
take time.
Drug seizures in 1997 generally increased over 1996
levels. Mexican authorities seized 34.9 MT of cocaine,
115 kgs of heroin, 343 kgs of opium gum, 1,038 MT of
marijuana, 39 kgs of methamphetamine, and destroyed 8
clandestine laboratories. The GOM's massive drug crop
eradication effort reduced net production of opium gum
from an estimated 54 MT in 1996 to 46 MT in 1997, and
of marijuana from 3,400 MT in 1996 to 2,500 MT in 1997.
Authorities arrested 10,742 suspects on drug-related
charges. At least eight individuals considered by U.S.
law enforcement authorities
[[Page 12951]]
to be major traffickers were tried and sentenced to
prison terms of 9 to 40 years, including Joaquin Guzman
Loera (21 years), Hector Luis Palma Salazar (22 years),
Miguel Angel Felix Gallardo (12 years), Raul Valladares
del Angel (29 years). Unfortunately, Humberto Garcia
Abrego was released and Rafael Caro Quintero succeeded
in obtaining a reduction in his sentence.
In 1997, the U.S. and Mexico made further progress
in the return of fugitives. A new Protocol to the
Extradition Treaty, signed at the time of President
Zedillo's visit to Washington in November, will aid the
two governments in their efforts to combat
transnational crime by permitting ``temporary''
extradition of fugitives sentenced in one country to
face criminal charges in the other. The GOM approved
the extradition of 27 fugitives from U.S. justice (12
for drug charges) although nine (all Mexican nationals,
five facing drug charges) are appealing the GOM's
extradition order, or face charges in Mexico. Thirteen
fugitives (seven on drug charges) were formally
extradited; ten other fugitives (eight U.S. citizens
and two third-country nationals) were expelled by the
GOM to the U.S. in lieu of extradition.
Mexico made progress in its anti-drug effort in
1997 and cooperated well with the United States.
Nevertheless, the problems that Mexico faces in
countering powerful criminal organizations, and the
persistent corrupting influence that they exert within
the justice sector, cannot be minimized. There are also
areas of bilateral cooperation which must be improved
for the two governments to achieve greater success in
attacking and dismantling the trans-border drug
trafficking organizations. The U.S. is convinced,
however, of the Zedillo Administration's firm intention
to persist in its campaign against the drug cartels and
its broad-sweeping reform effort. Through daily
interaction between agencies of the two governments,
formal discussions in the HLCG and other bilateral
groups, as well as collaboration in multilateral fora,
the two governments are finding increasingly productive
ways to work together against the common threats our
nations face.
Panama
Panama is major transit point for Colombian cocaine
and heroin on its way to the United States. Cocaine
passes through Panamanian territorial waters concealed
in fishing boats or ``go-fast'' boats. Some of it is
off-loaded on the Panamanian coast and then transported
by truck up the Pan-American Highway into Costa Rica
where it is then bound for the US. It is also carried
by ``mules'' traveling by air to the US and Europe.
There is no evidence that any senior official of the
Government of Panama is involved in any drug scenarios
nor does government policy encourage or facilitate
drug-related criminal activity. However, the amount of
drugs seized by Costa Rican border officials from
tractor trailers entering from Panama is suggestive of
either inadequate inspections or corruption on the part
of Panamanian border officials. Corruption in the
Judiciary remains a concern, particularly because
judges are vulnerable to political influence and are
susceptible to threats.
Panama continued to cooperate with U.S. in
counternarcotics efforts in 1997. In 1997, they took
steps to implement its counternarcotics masterplan,
which was developed by the National Commission for the
Study and Prevention of Drug Related Crimes, a part of
their public ministry. The plan deals with prevention,
treatment, rehabilitation, and re-entry into the
workforce; control of supply; and illicit trafficking.
It encompasses state and non-governmental
organizations. Panama also hosted the ``First
Hemispheric Congress on the Prevention of Money
Laundering'' and became the first Latin American
country to be admitted to the Egmont Group, an alliance
of 30 nations with centralized financial analysis units
to combat money laundering. Panama is also an active
participant in the Commission Against Addiction and
Illicit Trafficking of Drugs (CICAD), the Caribbean
Financial Action Task Force (CFATF) and the Basel
Committee's Offshore Group of Bank Supervisors.
[[Page 12952]]
In 1997, Panamanian officials seized 21.62 metric
tons (MT) of illegal drugs, including 7 MT of cocaine.
Although Panama gives law enforcement a high priority,
this is not reflected by the scant resources and low
wages it provides some of its law enforcement agencies
which lack equipment, training and base facilities.
Panama needs to sign the maritime interdiction
treaty with the U.S. that was negotiated and approved
by the General Directorate of Consular and Maritime
Affairs earlier this year. They need to undertake a
fundamental and wide-ranging reform of the judicial
system to ensure it is protected from political
influence and corruption. Panama needs to sign the
agreement with the U.S. to establish a Multinational
Counternarcotics Center (MCC) at Howard Air Force Base.
Negotiations were essentially completed on this
agreement in late 1997, when the GOP raised new
concerns. The GOP also needs to enact bank reforms it
announced in 1997 and enact legislation to extend the
existing law against drug money laundering to include
the proceeds from all serious crimes.
Peru
Following the 1996 reduction in coca cultivation,
Peruvian coca cultivation declined dramatically in
1997, from 115,300 hectares (with the potential to
produce 460 metric tons of cocaine) in 1995 to less
than 69,000 hectares (with the potential to produce 325
metric tons of cocaine) in 1997. The 1997 percentage
decrease in the total area under coca cultivation was
27 percent, following the 18 percent decline in 1996. A
strong commitment by the Government of Peru (GOP) to
forcibly eradicate illicit mature coca in national
parks and other areas by manual labor means resulted in
over 3,462 hectares destroyed in 1997, a 175 percent
increase over 1996.
This success was the offspring of a combined
Peruvian Air Force (FAP) and Peruvian National Police
Drug Directorate (DINANDRO) ``airbridge denial''
interdiction program and increasingly effective
narcotics law enforcement. These two USG-supported
programs continued to deter traffickers from using
their preferred method of exporting large quantities of
cocaine base by air for further refining into cocaine
hydrochloride (HCl) in Colombia and elsewhere.
``Airbridge denial'' success maintained a cocaine base
glut in the coca cultivation zones and below-
production-cost farmgate coca prices. The collapse of
coca leaf prices spurred greater numbers of farmers to
accept the economic alternatives to coca offered by the
USG-Peru alternative development project, which
expanded in 1997.
The joint U.S.-GOP alternative development program
was successful in strengthening local governments,
providing access to basic health services and promoting
licit economic activities, thereby establishing the
social and economic basis for the permanent elimination
of coca. A total of 239 communities have signed coca
reduction agreements to reduce coca by approximately
16,300 hectares over the next five years.
Responding to traffickers developing new smuggling
methods on Peru's rivers, across land borders and via
maritime routes, Peruvian counternarcotics agencies, in
particular DINANDRO and the Peruvian Coast Guard,
established several riverine counternarcotics bases and
increased resources for riverine anti-drug operations.
Cooperating with USG law enforcement partners and
advisors, DINANDRO worked extensively with drug police
from Colombia and Brazil to share counternarcotics
intelligence and to participate in joint law
enforcement operations in the Amazonian tri-border
area.
In 1997, the Government of Peru (GOP) cooperated
fully with the USG in fulfilling the objectives of the
USG-Peruvian counternarcotics framework agreement and
of the 1988 UN Drug Convention, to which Peru is a
party. Counternarcotics activities remained a GOP
national priority, and Peru's 1997 ``National Plan for
Alternative Development, Drug Prevention and
Rehabilitation'' set goals of reducing illicit coca
production by approximately 50 percent within five
years.
[[Page 12953]]
Taiwan
Given trafficking patterns in the region and
Taiwan's role as a shipping center, the U.S. believes
Taiwan remains a transit point for drugs significantly
affecting the U.S. While Taiwan authorities dispute
this assessment, there is no disagreement with regard
to the fact that individuals from Taiwan continue to be
involved in international narcotics trafficking. Some
67 percent of all drugs smuggled into Taiwan are
believed to come from China. Whatever their belief
about Taiwan's transit role, Taiwan authorities
continue to mount an aggressive counternarcotics
campaign that involves both social rehabilitation
programs and harsh sentences for narco-trafficking.
Although Taiwan is not a UN member and cannot be a
signatory to the 1988 UN Drug Convention, it tries to
meet Convention goals regarding precursor chemicals via
an active program to control the products of its large
chemical industry. In addition, Taiwan authorities have
come to recognize that money laundering is a growing
problem. In 1997, a Money Laundering Prevention Center
was established under the auspices of the Ministry of
Justice Investigation Bureau.
Cooperation between USG law enforcement agencies
(under the auspices of the American Institute in
Taiwan) and Taiwan law enforcement institutions
continued to expand in 1997. Drug Enforcement
Administration (DEA) and Financial Crimes Enforcement
Network officials have led training seminars for Taiwan
counterparts and have broadened their range of contacts
within Taiwan's law enforcement community. Taiwan
authorities have generally responded positively and
constructively to U.S. requests on counternarcotics
issues. With the opening of the Money Laundering
Prevention Center, authorities have started sharing
with USG law enforcement officials Taiwan-originated
information related to money laundering cases where the
flow of money leads to the U.S. In addition, Taiwan
Ministry of Justice investigation officers assisted DEA
agents with a case involving a shipment of drugs to
Guam.
Taiwan's counternarcotics enforcement activities
led to a 19.1 percent increase in drug convictions in
the first ten months of 1997 over all of 1996. Drug
seizures also increased. The Money Laundering
Prevention Center pursued investigations in all 360
cases of reported suspicious transactions. Taiwan also
continues to prosecute cases of public corruption.
There are, however, no known cases of official
involvement in narcotics trafficking.
Thailand
Throughout 1997 Thailand continued its long
tradition of cooperation with the United States and the
international community in anti-drug programs. The
U.S.-Thai Mutual Legal Assistance Treaty has been in
effect since the middle of 1993, and USG requests for
assistance under the Treaty have been consistently
honored by the RTG. Cooperation between the USG and
Thailand in a number of areas, not specifically covered
by formal agreements, is long standing, close and
productive. DEA works closely with Thai drug
authorities in investigating major heroin trafficking
organizations, providing training and developing Thai
drug enforcement capabilities. The U.S. Customs Service
and Department of Defense have cooperated with various
agencies on anti-smuggling projects. DOD is also
supporting training initiatives with selected Border
Patrol and Narcotics Police units, and has assisted
development of the regional Drug Task Forces.
In another example of responsive drug enforcement
cooperation, after the illegal release on bail of a
major drug fugitive awaiting extradition to the United
States, Thai authorities moved quickly to secure his
return from Burma, expedited his extradition and
ultimately removed the judge responsible for granting
the bail. Thailand's continuing cooperation on
extraditions involved sending 17 individuals to the
U.S., all but one of whom
[[Page 12954]]
were defendants in drug cases, and some of whom were
Thai nationals or claimed Thai citizenship.
USG experts estimated that Thai opium production in
the 1996-97 growing season declined seventeen percent
from the previous year's production, to 25 metric tons.
Control programs have resulted in a reduction of the
amount of poppy grown from an estimate of up to 200
metric tons in the 1970's, to an estimated 25 metric
tons in 1997.
Although Thailand has yet to become a party to the
1988 UN Drug Convention due to its lack of anti-money
laundering laws, progress was achieved with money
laundering legislation, previously approved in Cabinet,
introduced in Parliament and passed through the first
of three readings. Thai officials have committed to the
passage of the laws during upcoming parliamentary
sessions. Thailand is generally in compliance with the
1988 UN Drug Convention except for enacting anti-money
laundering statutes. It enforces laws against the
cultivation, production, distribution, sale, transport,
and financing of illicit drugs. Last year penalties for
possession of methamphetamines were increased. As of
October 1997, 282 cases opened under the asset seizure
and consipracy statutes amounted to over 17 million
dollars seized or frozen. Thai authorities do, however,
need to strengthen the conspiracy law and create
additional legal tools to make prosecutions of higher
level offenders possible. Thailand's level of
international and bilateral cooperation on drug control
is expected to remain high, with the Kingdom setting an
example regionally for effective drug control programs,
despite current economic difficulties.
Venezuela
Venezuela continues to be a major transit country
for cocaine shipped from South America to the United
States and Europe. Law enforcement agencies estimate
that over 100 metric tons (mt) of cocaine transit
yearly. Venezuela is also a transit country for
chemicals used in the production of drugs in source
countries. Venezuela is not a significant producer of
illegal drugs, but small-scale opium poppy cultivation
occurs near the country's border with Colombia. In
recent years, Venezuela's relatively vulnerable
financial institutions have become targets for money
laundering of illegal drug profits.
In 1997, Venezuela took significant steps to
improve its counter-narcotics activity. A new drug czar
(appointed at the end of 1996) received ministerial
rank and a mandate to step up implementation of
Venezuela's comprehensive 1993 anti-drug law. Seizure
statistics increased more that 150 percent over those
in 1996. Venezuela's congress passed legislation to
control gambling casinos (a prime money laundering
target) and the government adopted new banking
regulations with strict reporting requirements. The
National Anti-Drug Commission (CNA, formerly CONACUID)
released a national anti-narcotics strategy containing
a comprehensive set of goals for the next four years.
These goals include judicial reform and a new organized
crime bill with conspiracy, asset forfeiture, and
additional anti-money laundering provisions.
Bilateral cooperation between Venezuela and the
U.S. received a boost during the October 1997 visit of
President Clinton to Caracas. The two countries signed
a joint declaration of ``Strategic Alliance Against
Drugs.'' The declaration addressed most of the areas of
the 1988 UN Convention (ratified by Venezuela in 1991)
and specific areas of bilateral concern raised in the
course of bilateral discussions during the year. During
this visit, the two countries also signed a mutual
legal assistance treaty (MLAT). 1997 also saw increased
cooperation between Venezuela and the U.S. in maritime
interdiction of illegal drug shipments.
Some problem areas remain. Narcotics-related
corruption in law enforcement, the judiciary, financial
institutions, and the prison system are continuing
concerns. The Government of Venezuela does not as a
matter of policy
[[Page 12955]]
or practice encourage or facilitate drug trafficking or
money laundering, nor do its senior officials engage
in, encourage, or facilitate such activities. Port
control needs to be improved. The new anti-money
laundering legislation needs to be implemented with an
effective control regime and organized-crime/asset
forfeiture legislation should be given a high priority.
Venezuela continues to lack an effective air
interdiction strategy.
Nevertheless, Venezuela demonstrated a high-level
political commitment to combat narcotics trafficking
and related crime during 1997. The U.S. will support
Venezuela's stepped-up counternarcotics effort and will
work closely with Venezuela in areas of common concern
as money laundering and diversion of precursor/
essential chemicals. The U.S. will also seek ways to
support judicial reform and to enhance cooperation in
maritime interdiction efforts.
Vietnam
Drug trafficking through Vietnam and domestic drug
abuse continue to increase, particularly among young
people with rising incomes. At the same time, intense
media coverage of narcotics arrests and trials,
especially stiff sentences, including several
executions, highlighted a ``get tough'' approach with
traffickers and corrupt mid-and-lower level government
officials. Law enforcement authorities also increased
drug seizures, investigations, and prosecutions,
generally. The number of drug arrests increased by 25
percent in the first six months of 1997, compared with
the same period last year. This followed an even larger
increase (66 per cent) in 1996. Some 70 percent of the
cases involved heroin. A spot raid in Ho Chi Minh City
netted 96 youngsters (mostly age 15-16) who were
dealing in heroin. In another incident, a judge in Ky
Son District (the area of heaviest drug production and
transit) was arrested in March for trafficking in
opium, but he later escaped. A Haiphong Court also
imposed stiff sentences on several drug pushers said to
have lured teenagers into heroin use. Traffickers seem
to have modified their transit routes somewhat in
response to these stepped-up enforcement efforts.
The Socialist Republic of Vietnam (SRV) took two
major initiatives during 1997: it established an Anti-
Narcotics Division (AND) of the People's Police and
reorganized and elevated responsibility for drug policy
coordination, which is now under a Deputy Prime
Minister. It also ratified the 1988 UN Drug Convention
in November. After considerable success reducing opium
poppy cultivation in the past few years, cultivation
may once again be increasing. Vietnam claims to have
reduced poppy cultivation from over 20,000 hectares in
the late 1980's and early 1990's to 2,885 hectares in
1995/96. USG experts, however, estimated an increase
from 3,150 hectares in 1996 to 6,150 hectares in 1997.
The United States and Vietnam are negotiating a
narcotics cooperation letter of agreement. During 1997,
the Vietnamese welcomed a visit by the Drug Enforcement
Administration's (DEA) Chief of International
Operations. There were also regular visits by DEA
officers based in Embassy Bangkok.
VITAL NATIONAL INTERESTS JUSTIFICATIONS
Cambodia
A transit point for Southeast Asian heroin as well
as a source country for marijuana, Cambodia experienced
violent internal conflict in early July 1997. This
conflict, and the high-level political infighting
leading up to it, disrupted USG counternarcotics
efforts aimed at helping to build a credible
counternarcotics and law enforcement infrastructure.
Indeed, all direct USG assistance to the government has
been suspended, although some humanitarian and
democracy-building programs continue.
In recent months, Cambodia appears to have begun to
try to refocus its counternarcotics efforts.
Counternarcotics agencies appear to be targeting
[[Page 12956]]
trafficking organizations more aggressively, but their
staffs remain poorly trained and equipped. Military and
police personnel have been arrested for their
involvement in narcotics-related activities, suggesting
an effort at rooting out at least some drug corruption.
DEA, U.S. Customs and other USG agencies continue to
have access to Cambodian counterparts and generally
characterize cooperation as good, in that interlocutors
are willing to share information and to respond, to the
extent possible, to requests for assistance.
However, the continuing instability has politicized
the counternarcotics effort. Various Cambodian factions
have charged political opponents with engaging in
illegal narcotics activities, often with the objective
of drawing US personnel into appearing to support one
or another party or individual. Politicization of the
counternarcotics effort has undermined some of the
value of USG assistance and harmed cooperation.
Moreover, little has been done by the Royal Government
of Cambodia (RGC) to assuage international concerns
about allegations of high-level government corruption,
leaving Cambodia's commitment to counternarcotics
efforts in doubt at this time.
The US, jointly with ASEAN and the UN, is now
engaged in a diplomatic effort to urge the RGC to
restore the Paris Peace Accords' framework by
permitting free and fair elections this year. Should
this effort to promote accountable democratic
governance in Cambodia succeed, it will be vital to
maintain our ability to provide all types of
counternarcotics, as well as other assistance, if
appropriate, to strengthen independent judicial systems
and foster accountable institutions of civil society in
Cambodia. Assistance to support democratic development
and long-term economic stability in Cambodia is a key
element of our overall long-term commitment to
stability and openness in the Asia-Pacific region.
Cambodia figures in our own strategic interest in
ASEAN's long-term political and economic stability,
especially since Cambodia continues to have an interest
in becoming a member of ASEAN. Accordingly, while it is
not appropriate at this time to certify Cambodia as
either fully cooperating with the United States or
taking adequate steps on its own to combat drug
production and trafficking, the risks posed by
inadequate counternarcotics performance are outweighed
by the risks posed to US vital national interest if
assistance is not available.
Colombia
As in previous years, Colombia remained the world's
leading producer and distributor of cocaine and an
important supplier of heroin and marijuana.
Notwithstanding significant eradication in the Guaviare
region, coca cultivation in southern Colombia grew
markedly, leading to an increase in coca cultivation
overall.
In November 1997, the Colombian Congress passed a
constitutional amendment reversing the 1991
Constitutional ban on the extradition of Colombian
citizens. This represents significant progress, and is
due in large part to effective lobbying of the
Government of Colombia (GOC) and the Colombian Congress
and Senate by the Colombian private sector.
Unfortunately, the final bill falls short because it
contains a ban on retroactive application. The
Government and members of the Colombian Congress have
filed challenges to this ban. However, if the ban is
upheld by Colombia's Constitutional Court, then the
Cali kingpins would be placed beyond the reach of U.S.
justice for crimes committed before December 1997.
Moreover, the constitutional bill may also require
implementing legislation, which the GOC has promised to
seek before President Samper leaves office in August
1998. This legislation could give opponents of
extradition another opportunity to weaken extradition.
In early 1997, Colombia passed excellent
legislation which stiffened sentences for narcotics
traffickers, strengthened regulations affecting money-
laundering and permitted forfeiture of the assets of
narcotics traffickers.
[[Page 12957]]
Implementation of these strong laws by the GOC has been
disappointingly slow and the GOC has yet to apply them
aggressively.
The GOC also took measures to improve prison
security in Colombia, giving the Colombian National
Police (CNP) responsibility for security in the maximum
security pavilions housing the major narcotics
traffickers, a great improvement. However, continued
attention has not been given to the problem. The U.S.
Embassy has heard fewer reports of traffickers carrying
out their illicit business activities with impunity
from their cells, but there are still indications that
the drug kingpins maintain some ability to operate
their criminal enterprises and exert influence from
prison.
The Colombian Government made only limited progress
in 1997 against narcotics-related corruption. Several
former congressmen and the mayor of Cali were sentenced
on corruption charges stemming from the ``Caso 8000''
investigation. The GOC has demonstrated little
inclination to root out official corruption and to
strengthen democratic institutions from the corrupting
influence of narcotraffickers.
The Colombian National Police and selected units of
the military involved in counternarcotics activities
produced impressive results in 1997. Figures for both
eradication and seizures were up, despite significant
challenges from heavily-armed narcotics traffickers and
several elements of the guerrilla movements which
support them. The maritime agreement signed in early
1997 has been successfully implemented and resulted in
interdiction of several cocaine shipments.
Although the GOC has made important progress in
some areas this year, the USG cannot certify Colombia
as fully cooperating with the United States on drug
control, or as having taken adequate steps on its own
to meet the goals and objectives of the 1988 UN Drug
Convention. Poor government performance in the
extradition debate, lack of a concentrated effort to
combat official narcotics-related corruption and still
lagging enforcement of strong counternarcotics laws all
argue against certification.
However, the vital national interests of the United
States requires that U.S. assistance to Colombia be
provided. The continuing dominance of Colombian cartels
in the cocaine industry, their growing role in the
heroin trade and the growing role of the guerrillas in
shielding and protecting illicit drug production make
the challenges in Colombia greater than ever before. To
meet these challenges, we need to work even more
closely with the GOC to expand joint eradication
efforts in new coca growing areas in southern Colombia
and in opium cultivation zones, to enhance
interdiction, and to strengthen law enforcement. The
GOC would not likely approve such an expanded program
if denied certification for a third straight time. We
have a unique opportunity with significant US-supplied
assets deployed and the commitment of the CNP and
elements of the armed forces to strong efforts in these
areas. However, they will need increased resources and
training to perform these tasks adequately. Strong
leadership must come from the Colombian government to
reform and defend essential democratic institutions,
such as the country's judiciary. The coming elections
may provide opportunities for further cooperation.
Moreover, key elements of US assistance which could
help in this effort, such as potential foreign military
financing (FMF) and international military education
and training (IMET), could not be provided to our
allies for counternarcotics operations if Colombia were
denied certification again. Indeed, this year the
President deemed necessary the provision of FY97 IMET
and previous year FMF by means of a waiver under
Section 614(b) of the FAA.
U.S. economic engagement is also a critical element
in counterbalancing the influence of drug money in the
Colombian economy. After two years of denial of
certification, U.S. companies, without access to OPIC
and EXIM Bank financing, have lost significant business
to competitors. With a vital
[[Page 12958]]
national interest certification, U.S. companies will be
able to compete on a level playing field for up to $10
billion in upcoming major contracts.
In making the decision to provide a vital national
interests certification to Colombia this year, we were
mindful of the deteriorating security and human rights
environment in Colombia, the threat to that country's
democracy, and the threat posed to Colombia's neighbors
and to regional stability. The cumulative effects of
Colombia's forty-year old insurgency, narco-corruption,
the rise of paramilitaries, the growing number of
internally displaced Colombians, growing incidents of
human rights abuses, and the potential threat that
Colombia's violence and instability pose to the region
all require a vital national interests certification.
Such a certification is necessary so that the USG can
provide assistance in order to broaden and deepen its
engagement with this and the next Colombian government
in an effort to effectively confront and eliminate
narcotrafficking. The threats to U.S. vital national
interests posed by a bar on assistance outweigh the
risks posed by Colombia's inadequate counternarcotics
performance.
Pakistan
Pakistan is a major producer and an important
transit country for opiates and cannabis destined for
international markets. In 1997, Pakistan produced
approximately 85 metric tons (mts) of opium, an
estimated increase of 13.3% from 1996. Heroin and opium
seizures increased, but the overall record of law
enforcement action continued to be poor. Seizures of
precursor chemicals improved substantially. The Nawaz
Sharif government, which took office in February 1997,
voiced greater concern about Pakistan's narcotics
problems, although this has not yet manifested itself
in essential counternarcotics actions.
The 1997 counternarcotics efforts of the Government
of Pakistan (GOP) were seriously deficient. The two
major accomplishments were passage of the comprehensive
drug control legislation and destruction of heroin
processing laboratories in Pakistan's Northwest
Frontier Province. One major arrest requested by the
USG took place, but there were no known trials of
previously arrested drug kingpins and no extraditions
of the 23 individuals requested by the USG for
narcotics-related offenses. Opium and heroin seizures
increased and acetic anhydride seizures sharply
increased, but the GOP did not interdict any large
opiate smuggling caravans on the well-traveled
Baluchistan route from Afghanistan into Iran.
The GOP made no progress in crop eradication. Poppy
cultivation increased 21% and opium production
increased 13%, despite USG programs and USG-assisted
UNDCP programs which had made steady progress in
decreasing production and poppy cultivation in the past
five years. The increase was primarily due to the GOP's
failure to enforce the poppy ban in Dir District, the
site of highest opium poppy growth, despite warnings
from both UNDCP and the USG that the GOP must continue
to press tribal groups living in that district to
eradicate illicit opium poppy. The GOP also made no
progress in demand reduction. There were no new
programs designed to control Pakistan's addict
population, estimated to be between 3 and 5 million.
The GOP estimates the addict population growth at 7% a
year.
USG/GOP law enforcement cooperation was severely
strained by the arrest, torture, courtmartial and
conviction of a DEA employee involved in an operation
which identified Pakistani Air Force Officers involved
in drug smuggling to the U.S. These steps were taken by
elements of the GOP with the full involvement of the
country's Anti Narcotics Force (ANF). Recently, the GOP
reduced the DEA employee's prison sentence on appeal.
The Administration remains engaged with the GOP in
seeking the release of this employee from prison.
Pakistan is a party to the 1988 UN Drug Convention,
which it ratified in October 1991, but implementing
legislation on money laundering has
[[Page 12959]]
not yet been drafted. While Pakistan's Control of
Narcotics Substances Act, passed in 1997, deals with
drug-related money laundering, Pakistan must still
criminalize money laundering from non-drug related
offenses.
The USG/GOP bilateral agreement provides funding
for law enforcement, roads and crop substitution in the
NWFP, and demand reduction activities. The GOP made
very little progress in meeting the goals of the
bilateral agreement and 1988 UN Drug Convention in
1997. The continued detention of the DEA employee,
despite repeated urgings at the highest levels for his
release, seriously complicates the counternarcotics
relationship. Because of this and because of the GOP's
poor counternarcotics law enforcement record and the
substantial upsurge in illicit poppy growth, Pakistan
cannot be judged to have cooperated fully with the USG
or taken adequate steps on its own to meet the
requirements of the 1988 U.N. Drug Convention.
However, vital U.S. national interests would be
damaged if Pakistan were to be denied certification.
Implementing sanctions would vitiate the broader U.S.
policy of high-level engagement, including strong
support for Prime Minister Sharif's commitment to hold
a dialogue with India as well as to strengthen
democracy and reform the economy.
Helping the GOP to strengthen its economy and to
move towards a more liberal, broader-based market
economy is one of the USG's major goals. Yet, a number
of new or potential initiatives would be halted or
thrown into question by denial of certification. This
could include such fundamental programs such as those
funded by OPIC and EX-IM, PL 480 projects involving
commodities other than food, and possibly the funding
of NGOs. Certification denial would also require the
U.S. to vote against Pakistan in multilateral
development banks (``MDBs'') at a time when Pakistan is
vulnerable to a financial crisis. The combination of
such negative votes and removal of possible assistance
could weaken Pakistan's investment climate, increase
its prospects for sliding into financial insolvency and
sharply inhibit our ability to help the GOP modernize
its economy.
In addition to this statutory basis for a vital
national interests certification, it should also be
recognized that denial of certification could
jeopardize broader interests between the U.S. and
Pakistan, including the ability to achieve meaningful
progress with the GOP on such important goals as
nonproliferation and Afghanistan.
Accordingly, while it is not appropriate at this
time to certify Pakistan as either fully cooperating
with the United States or taking adequate steps on its
own to combat drug production and trafficking, the
risks posed by inadequate counternarcotics performance
are outweighed by the risks posed to US vital national
interests if U.S. assistance was no longer available
and the U.S. was required to vote against loans to
Pakistan in MDBs, thus justifying a vital national
interests certification.
Paraguay
A determination to decertify Paraguay would be
justified in view of its substantial lack of
achievement in meeting its counternarcotics goals in
1997. However, the vital national interests of the
United States require certification, so that the
assistance, withheld pursuant to provisions of the
Foreign Assistance Act of 1961, can be provided.
Paraguay is a transit country for cocaine,
primarily Bolivian, en route to Argentina, Brazil, the
United States, Europe and Africa, as well as a source
country for high-quality marijuana. Paraguay was fully
certified for 1996, after the Government of Paraguay
(GOP) adopted a national drug control strategy,
promulgated an anti-money laundering law, and increased
its counternarcotics cooperation with the United States
and regional countries. Paraguay's counternarcotics
goals for 1997 included investigating major cocaine
traffickers, making significant seizures and arrests,
preventing the escape of arrested drug traffickers,
implementing the money laundering law
[[Page 12960]]
and provisions of the anti-drug law (Law 1340/88) aimed
at punishing and preventing official corruption,
enacting legislation authorizing controlled deliveries
and undercover operations, as well as criminalizing
drug-related conspiracy.
Unfortunately, Paraguay did not come close to
meeting any of these objectives. Responsibility for the
failure to do so is shared by all branches of the
Paraguayan government. There were no successful
investigations of significant traffickers. Although
cocaine seizures showed a minimal increase over 1996,
all involved minor traffickers. The largest seizure was
accompanied by the arrest of four suspects caught in
possession of over 21 kilos of cocaine. However, a
criminal court judge freed all four on what appear to
be spurious grounds; this judge received a minor
disciplinary sanction and continues to serve in office.
Judicial corruption was also suspected in connection
with Paraguay's refusal to extradite a suspected
narcotics trafficker to France. In that case, a lawyer
was recorded accepting an alleged bribe to pass on to
an appellate judge; the judge subsequently was removed
from office for his actions in yet another case.
Paraguay is a major money laundering center, but it
is unclear what portion is drug-related. The
promulgation of the 1996 money laundering law, and the
creation of an anti-money laundering secretariat
(SEPRELAV), in January 1997, now provides the GOP with
the legal tools necessary to move against this criminal
activity, but little has been done so far to apply the
law. SEPRELAV also has not been provided with a budget
to enable it to operate as an independent organization.
The Paraguayan Congress, controlled by the
opposition parties, made no progress on a major
revision of the anti-drug law, which was submitted by
the GOP in 1995. The GOP did not submit new legislation
to authorize controlled deliveries, undercover
operations or criminalize drug-related conspiracy. It
also failed to complete a precursor chemical monitoring
survey that was promised in 1996.
In part, these failures were due to the GOP's
allowing itself to become distracted by election-year
politics, particularly by its opposition to the
presidential candidacy of former Army Commander, and
unsuccessful 1996 coup plotter, Lino Oviedo. The GOP
and opposition parties also demonstrated reduced
political will to confront the politically influential
and economically powerful frontier commercial and
contraband interests during an election year.
The GOP, realizing its shortfalls on
counternarcotics cooperation and cognizant of the USG
decision on certification, recently has reaffirmed its
political will to prioritize counternarcotics efforts,
including taking law enforcement action against
significant narco-traffickers, agreeing to negotiate a
new bilateral extradition treaty with the USG, and
preparing a draft law to explicitly authorize
controlled deliveries. While positive steps, these
measures have yet to bear fruit; their possible
fulfillment will have a bearing on next year's
certification decision, not this year's.
Denial of certification would, however, cut off
assistance programs designed to meet the priority US
goal of strengthening Paraguay's democratic
institutions, at precisely the moment when those
institutions are being severely tested by the stress of
hotly-contested presidential, congressional and
gubernatorial election campaigns. Denial of
certification at this time could have an unintended
negative impact on the ongoing election campaign.
Denial of certification would also jeopardize ongoing
cooperation and assistance programs with the GOP
against other international crimes (smuggling,
intellectual property piracy, terrorism). Moreover,
vital national interests certification would help to
promote the political will and positive action against
narcotics trafficking that we will seek from the next
GOP.
The risks posed to all of these US interests
(promoting democracy, cooperation against other crimes
and continued counter-terrorism cooperation) by a
cutoff of bilateral assistance outweigh the risks posed
by Paraguay's failure
[[Page 12961]]
to cooperate fully with the USG, or to take adequate
steps to combat narcotics on its own.
STATEMENTS OF EXPLANATION
Afghanistan
Afghanistan continued as the world's second largest
producer of opium poppy, according to USG estimates.
Land under poppy cultivation and opium production rose
3 percent in 1997 according to US satellite surveys.
Continued warfare, destruction of the economic
infrastructure and the absence of a recognized central
government with control over the entire country remain
obstacles to effective drug control.
The inaction and lack of political will of the
Taliban faction, which controls 96 per cent of
Afghanistan's opium-growing areas, as well as
substantial drug trade involvement on the part of some
local Taliban authorities impede meaningful
counternarcotics progress as well. The Taliban, formed
by religious students, began its military campaign in
Afghanistan in 1994 and assumed effective control over
two thirds of the country in fall 1996. There is no
evidence that the Taliban or any other faction
controlling Afghan territory took substantive law
enforcement or crop eradication action in 1997.
Although the Taliban condemned illicit drug
cultivation, production, trafficking and use in 1997,
there is no evidence that Taliban authorities took
action to decrease poppy cultivation, arrest and
prosecute major narcotics traffickers, interdict large
shipments of illicit drugs or precursor chemicals or to
eliminate opiate processing laboratories anywhere in
Afghanistan in 1997. Narcotics remain Afghanistan's
largest source of income, and some Taliban authorities
reportedly benefit financially from the trade and
provide protection to heroin laboratories. There are
numerous reports of drug traffickers operating in
Taliban territory with the consent or involvement of
some Taliban officials. Taliban authorities called for
international alternative development assistance as a
precondition to eradicating opium poppy cultivation.
Afghanistan is a party to the 1988 UN Drug Convention.
In November 1997, the Taliban responded to a UNDCP
initiative by agreeing to eliminate poppy cultivation
in districts where alternative development was
provided, to control poppy cultivation in areas where
poppy was not previously grown and to eliminate
morphine and heroin laboratories when these sites were
brought to their attention. To date, these commitments
have not been tested.
The USG strongly supports the UN Secretary
General's Special Envoy for Afghanistan, Ambassador
Lakhdar Brahimi, and the UN Special Mission to
Afghanistan in their efforts to promote a cease-fire,
followed by negotiations leading to a broad-based
government that can address the problems of narcotics,
terrorism and humanitarian concerns. We assist the
peoples of Afghanistan, subject to resource
availability, primarily through UN programs aimed at
humanitarian relief, reconstruction and
counternarcotics. In 1997, USG transferred $1.6 million
in FY-95 and FY-96 funds earmarked for UNDCP to help
finance UNDCP's capacity building project and poppy
reduction projects in Afghanistan. The USG also
provided an initial $269,202 of a $772,905 poppy
reduction/alternative development project being
implemented by an American non-governmental
organization (NGO), Mercy Corps International (MCI) in
Helmand Province.
Since U.S. legislation makes special allowance for
continuation of such assistance generally,
notwithstanding any other provision of law, denying
certification of Afghanistan would have minimal effect
in terms of implementation of this policy.
Continuation of large-scale opium cultivation and
trafficking in Afghanistan, plus the failure of the
authorities to initiative law enforcement actions,
preclude a determination that Afghanistan has taken
adequate steps on its
[[Page 12962]]
own or that it has sufficiently cooperated with USG
counternarcotics efforts to meet the goals and
objectives of the UN 1988 Drug Convention, to which
Afghanistan is a party. Accordingly, denial of
certification is appropriate.
Burma
Burma continues to be the world's largest source of
illicit opium and heroin. In 1997, production declined
slightly from the previous year's levels; estimates
indicated there were 155,150 hectares under
cultivation, which could yield a maximum of 2,365
metric tons of opium.
On the law enforcement front, the Government of
Burma (GOB) seized more opium and heroin, and raided
more laboratories than in the past. These were welcome
developments, but, given the extent of the problem,
they were insufficient to make noticeable inroads
against drug trafficking and production. Seizures of
amphetamines and the precursor chemical acetic
anhydride declined. There were no arrests of major
traffickers. Drug lord Chang Qifu (Khun Sa), who
``surrendered'' to Burmese authorities in 1996, was not
brought to justice, and the GOB continued to refuse to
render him to the United States. The GOB did return a
U.S. fugitive to Thailand, which extradited him to the
United States.
Several ethnic groups declared that they would
establish opium free zones in their territories by the
year 2000, and the GOB undertook some eradication
efforts as well. Establishment of opium free zones
would require considerable time and investment of
resources. The Government of Burma approved a United
Nations Drug Control Program, a five-year alternative
development project in the ethnic Wa region; as the
year closed, UNDCP was making arrangements to initiate
work.
Money laundering and the return of narcotics
profits laundered elsewhere appear to be a significant
factor in the overall Burmese economy. An
underdeveloped banking system and lack of enforcement
against money laundering have created a business and
investment environment conducive to the use of drug-
related proceeds in legitimate commerce. The GOB has
encouraged leading narcotics traffickers systematically
to invest in infrastructure and other domestic
projects.
USG counternarcotics cooperation with the Burmese
regime is restricted to basic law enforcement
operations and involves no bilateral material or
training assistance. The USG remains concerned over
Burma's commitment to effective counternarcotics
measures, human rights, and political reform. The USG
is prepared to consider resuming appropriate assistance
contingent upon the GOB's unambiguous demonstration of
a strong commitment to counternarcotics, the rule of
law, punishment of traffickers and major trafficking
organizations (including asset forfeiture and seizure),
anti-corruption, eradication of opium cultivation,
destruction of drug processing laboratories, and
enforcement of money laundering legislation.
Iran
Iran has strengthened its counternarcotics
performance during the past year--particularly in the
area of interdiction--but direct information is limited
because the United States has no diplomatic presence in
the country.
Iran's interdiction efforts are apparently
vigorous, if partially effective. Costly physical
barriers and aggressive patrolling of its eastern
borders have led to Iranian claims of record narcotics
seizures of nearly 200 tons last year--and significant
Iranian casualties as well. But with an estimated 1,000
tons of opiates crossing the country each year, Iran
remains the major transit route for opiates from
Afghanistan and Pakistan to the West, although we do
not have recent data on the amount that may reach the
United States. Punishment of traffickers is harsh but
drug trafficking continues on a large scale.
[[Page 12963]]
Cultivation of opium poppies continues in Iran, but
the extent of cultivation is difficult to ascertain
conclusively. The 1993 United States Government survey
of opium cultivation in Iran estimated that 3,500
hectares were under cultivation. U.S. crop estimates
were a major factor in placing Iran on the majors' list
of drug producing and transit countries. Iran claims
complete eradication of the opium poppy crop. Recent
statements by the Dublin Group that opium cultivation
has markedly decreased give at least partial credence
to the Iranian claims, but a new crop survey would
help--and will be undertaken--to confirm such
eradication.
Iran has taken some steps to confront corruption
among customs, police and military personnel. Observers
have noted several convictions of corrupt officials but
the corruption of low-level officials continues; multi-
ton shipments of opiates could not traverse Iran
without assistance from complicit law enforcement or
military personnel. There have been no recent, credible
reports concerning high-level complicity in narcotics
trafficking and high-ranking officials of the GOI have
clearly stated Iran's official aversion to narcotics
trafficking.
Iran has ratified the 1988 UN Drug Convention, but
the United States Government and other observers remain
unaware of implementing legislation to bring Iran into
full compliance with the Convention. A 1997 proposal
approved by the Expediency Council appears to allow for
stronger drug laws and demand reduction programs, but
the extent to which the proposal helps Iran to comply
with the Convention cannot be predicted before the
proposal is enacted as unforceable laws or regulations.
No bilateral narcotics agreement exists between Iran
and the United States.
Iran has recently stated, at the highest level, a
desire to cooperate in international counternarcotics
programs. With the exception of the Iran/Pakistan/UNDCP
border interdiction program and a UNDCP demand
reduction survey, however, Iran does not yet
participate in important cooperative counternarcotics
efforts. Such programs of international cooperation
would add significantly to external understanding of
Iran's narcotics problems and counter-narcotics
efforts.
Nigeria
Nigeria is the hub of African narcotics trafficking
and the headquarters for global poly-crime
organizations. Nigerian narcotics traffickers operate
worldwide networks that transport heroin from Asia to
Africa, the NIS and the United States, and cocaine from
South America to Europe, Africa and East Asia. Nigerian
traffickers are responsible for a significant portion
of the heroin that is abused in the United States.
Marijuana is the only narcotic cultivated in Nigeria;
large quantities are exported to other African nations
and to Europe, but have little impact upon the United
States.
The need to repatriate their criminal gains has
motivated Nigerian traffickers to develop a
sophisticated and flexible money laundering system
capable of handling not only narcotics profits, but the
ill-gotten gains of Nigerian sponsored financial fraud
as well. The dislocations of Nigeria's economy have
helped to engender a vast informal commercial sector,
immune to most regulation and well suited to illegal
activities.
The record of Nigerian law enforcement against the
narcotics trade is, at best, mixed. The one force
capable of making headway against narcotics, the
Nigerian Drug Law Enforcement Agency (NDLEA), has been
handicapped by deficiencies in political and financial
support. The NDLEA arrests many couriers, but few
organization leaders. NDLEA efforts at Nigeria's
international airports have led to increased seizures
of narcotics, and may be a factor contributing to
traffickers's expansion into bulk shipments and across
borders into Nigeria's neighbors.
The Government of Nigeria has failed to react
responsibly to the ease with which criminals function
in Nigeria. Appropriate criminal narcotics
[[Page 12964]]
and money-laundering legislation has been enacted, but
remains unenforced, with no evidence that prosecutions,
convictions or asset seizures have been made against
any major criminal figures. Nigeria failed to provide
consistent policy advice to its law enforcement organs,
lacked the political will to attack pervasive
corruption, and again neglected to provide sufficient
material support for even the most basic operations of
its law enforcement agencies.
Nigeria again failed to meet its obligations to the
United States and other nations with regard to
extraditions and other forms of counter-narcotics
cooperation. Even direct promises of action have
remained unredeemed. A December, 1996, United States
mission to Nigeria received the Government of Nigeria's
assurance that extraditions of criminals to the United
States could resume immediately. No action has been
taken on extraditions over one year later.
[FR Doc. 98-6584
Filed 3-13-98; 8:45 am]
Billing code 4710-10-M