[Federal Register Volume 65, Number 57 (Thursday, March 23, 2000)]
[Presidential Documents]
[Pages 15797-15819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6471]



[[Page 15795]]

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Part IV





The President





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Presidential Determination No. 2000-16 of February 29, 2000--
Presidential Determination on Major Illicit Drug Producing and Drug 
Transit Countries



Presidential Determination No. 2000-17 of March 2, 2000--Drawdown Under 
Section 506(a)(2) of the Foreign Assistance Act of 1961, as Amended, To 
Provide Emergency Disaster Assistance in Southern Africa
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                         Presidential Documents 
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  Federal Register / Vol. 65, No. 57 / Thursday, March 23, 2000 / 
Presidential Documents  

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 Title 3--
 The President

[[Page 15797]]

                Presidential Determination No. 2000-16 of February 29, 
                2000

                
Presidential Determination on 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 (and certain 
                jurisdictions) 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:

The Bahamas, Bolivia, Brazil, China, Colombia, Dominican Republic, Ecuador, 
Guatemala, Hong Kong, India, Jamaica, Laos, Mexico, Pakistan, 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, Haiti, Nigeria, and Paraguay.

                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.

                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 2000. Analysis of 
                the relevant U.S. vital national interests, as required 
                under section 490(b)(3) of the Act in the case of the 
                countries certified on this basis, is attached. Given 
                that the performance of all of these countries/
                jurisdictions has differed, I have also attached an 
                explanatory statement for each of the other countries/
                jurisdictions subject to this determination.

                You are hereby authorized and directed to publish this 
                determination in the Federal Register.

                    (Presidential Sig.)

                THE WHITE HOUSE,

                    Washington, February 29, 2000.

Billing code 4710-10-M

[[Page 15798]]

                Statements of Explanation

                    Afghanistan
                    In 1999 Afghanistan cultivated a larger opium poppy 
                crop and harvested more opium gum than any other 
                country by a wide margin. U.S. sources estimate a 23 
                percent increase in the opium harvest, while United 
                Nations Drug Control Program (UNDCP) data point to a 
                more dramatic 70 percent increase. There were also 
                increases in the refining of opium into heroin and in 
                drug trafficking from Afghanistan into neighboring 
                countries. The largest of Afghanistan's factions, the 
                Taliban, which controls 85-90 percent of Afghanistan 
                and 97 percent of the area where opium is cultivated, 
                derives significant income from every phase of drug 
                production and trafficking. In spite of its own 1997 
                ban on the cultivation of opium poppy, the Taliban 
                acknowledge they tax the crop at about 10 percent, and 
                allow it to be sold in open bazaars. Crop taxation 
                imparts legitimacy to opium cultivation and 
                distribution, and means that the Taliban benefits 
                directly from the entire opium business. The Taliban 
                also receives payments directly from traffickers.
                    The United States Government (USG) has spoken about 
                the drug problem directly with Taliban officials and 
                indirectly through the UNDCP. We have repeatedly urged 
                the Taliban to enforce its 1997 ban on opium poppy 
                cultivation. The Taliban response was at least a 23 
                percent increase in opium production over 1998. We also 
                urged the Taliban to honor its commitments to reduce 
                poppy cultivation in exchange for the delivery of 
                alternative development assistance. But in a Non-
                Governmental Organization (NGO) project area receiving 
                generous USG funding, poppy cultivation surged 68 
                percent, according to a UNDCP survey. Heroin labs are 
                proliferating throughout Afghanistan, particularly near 
                international borders.
                    The Taliban claims success for some counter-drug 
                measures. According to the UNDCP, the Taliban destroyed 
                34 drug laboratories. The Taliban also has made 
                unverified claims of seizures of 500 kg of opium, 70 kg 
                of heroin, and 1200 liters of acetic anhydride and 
                other heroin production chemicals. The Taliban Leader, 
                Mullah Omar, who promulgated the 1997 ban on opium 
                cultivation, ordered a one-third nation-wide reduction 
                in poppy cultivation for the 1999-2000 growing season 
                but, as noted, past commitments were not honored.
                    Overall, there was a sharp increase in poppy 
                cultivation, in refining of opium into heroin, and in 
                trafficking of illicit opiates in Afghanistan. There is 
                a growing body of evidence that the largest of 
                Afghanistan's factions, the Taliban, is fully complicit 
                in every phase of drug production and trafficking. 
                Sharp increases in large-scale opium cultivation and 
                trafficking in Afghanistan, plus the failure of the 
                authorities to initiate an appropriate law enforcement 
                response, preclude a determination that Afghanistan has 
                taken adequate steps on its own or that it has 
                sufficiently cooperated with USG counter-drug efforts 
                to meet the goals and objectives of the UN 1988 Drug 
                Convention, to which Afghanistan is a party. In the 
                absence of verifiable and unambiguous steps by the 
                Taliban to stop the promotion of poppy cultivation 
                (such as an end to the opium crop tax), the United 
                States and other concerned countries are compelled to 
                redirect their counter-drug efforts to interdiction and 
                border control strategies in surrounding countries.
                    The Bahamas
                    The Bahamas is a major transit country for drugs en 
                route to the United States from South America and the 
                Caribbean. The Government of the Commonwealth of The 
                Bahamas (GCOB) and the USG continue to enjoy a 
                productive counter-drug working relationship.
                    The Bahamas is a party to the 1988 UN Drug 
                Convention, and the GCOB works to meet its goals and 
                objectives as well as those of U.S.-Bahamas bilateral 
                drug control agreements. The GCOB places a high 
                priority on combating drug transshipments through its 
                archipelago and works closely with

[[Page 15799]]

                the USG on Operation Bahamas and Turks and Caicos 
                (OPBAT). The USG looks forward to assisting The Bahamas 
                to improve its maritime end-game capability, without 
                which sustained drug interdiction, arrest and 
                conviction of traffickers, and the forfeiting of their 
                assets is improbable. Given the volume of commercial 
                shipping through The Bahamas, the GCOB needs to 
                rigorously implement its chemical control laws to 
                prevent illegal diversion of precursor and essential 
                chemicals.
                    Bahamian authorities continue monitoring bank 
                compliance and investigating suspicious financial 
                transactions under the 1996 money laundering law. 
                Increased supervision of the offshore banking sector 
                and training of all financial sector employees, 
                however, will be necessary in order to increase the 
                number of suspicious activity reports, which is still 
                very small given the size of The Bahamas financial 
                services sector. Despite several public statements of 
                commitment, the GCOB has not established a financial 
                intelligence unit (FIU) or to seek membership in the 
                Egmont Group. In 1999, the GCOB passed legislation 
                which allows designation of the United States under 
                Bahamian asset forfeiture laws, based on reciprocity. 
                This will allow Bahamian courts to enforce U.S. 
                forfeiture orders in many cases.
                    The GCOB took further steps in 1999 to strengthen 
                its judicial system, with USG assistance. Despite these 
                efforts, no major Bahamian drug trafficker has been 
                convicted in The Bahamas and sent to prison, due 
                largely to continuing delays in the courts. In 
                addition, weak bail laws allow arrested drug 
                traffickers to obtain bail and continue transshipping 
                drugs while awaiting trail. Notwithstanding committed 
                and talented judicial leadership, The Bahamas needs to 
                improve the effectiveness of its court system and its 
                Attorney General's office in gaining convictions 
                against major drug traffickers. The Bahamas also needs 
                to improve its responsiveness to U.S. requests under 
                the mutual legal assistance treaty (MLAT) and to speed 
                the processing of extradition cases.
                    In October 1999, for the first time in recent 
                history, a Bahamian law enforcement official was 
                assassinated, allegedly by Bahamian drug dealers in 
                retaliation for his stand against a corrupt official or 
                to prevent his testimony. The GCOB should ratify the 
                Inter-American Convention against Corruption and assure 
                that corrupt public officials are effectively 
                prosecuted. Finally, the GCOB needs to move quickly to 
                complete and adopt a comprehensive national drug 
                strategy containing goals and objectives as well as 
                measures of effectiveness.
                    Bolivia
                    Exceeding the schedule of its own five year plan to 
                eliminate all illicit coca from Bolivia, in 1999 the 
                Banzer administration eradicated an unprecedented 
                16,999 hectares of coca, for a net reduction of 43 
                percent.
                    Although Bolivia remains the world's third largest 
                producer of cocaine, with the ability to produce a 
                potential 70 metric tons, Bolivian cocaine became less 
                marketable in 1999 due to a very successful law 
                enforcement effort to prevent precursor chemicals from 
                being smuggled in from neighboring countries. As a 
                result of significant law enforcement pressure, 
                Bolivian cocaine producers were forced to use less 
                efficient means of processing with substitute or 
                recycled chemicals, and cutting agents, such as 
                manitol. The purity of finished Bolivian cocaine 
                hydrochloride (HCl) dropped to as low as 47 percent, 
                causing Brazilian and other traffickers to buy only 
                Bolivian cocaine base and finish the processing in 
                Brazil.
                    The GOB began preparations for an eradication 
                program in the Yungas in 2000 to eliminate the coca 
                exceeding the legally allowable 12,000 hectares. There 
                is evidence that Yungas coca is being diverted to the 
                illicit market for conversion to cocaine products.
                    Despite a slight downturn in the Bolivian export 
                sector in 1999, export volumes of nearly all 
                alternative development crops improved. Banana exports 
                to Chile and Argentina increased 20 percent over 1998. 
                Demand for

[[Page 15800]]

                alternative development assistance by former coca 
                farmers, however, is exceeding supply.
                    In 1999, the Bolivian legislature enacted the final 
                portion of the judicial reform package, the new code of 
                criminal procedures. It establishes an accusatory, 
                adversarial, oral, public criminal trial system that 
                may also help to diminish corruption and improve the 
                credibility of the judicial system. The new code 
                permits the police to use undercover agents and to make 
                controlled deliveries of illicit drugs and other 
                contraband. The Judicial Council, created in 1998 to 
                depoliticize the selection of judges and to serve as a 
                mechanism for disciplining members of the judiciary, 
                had some of its powers to administratively remove 
                corrupt judges diminished by the Constitutional 
                Tribunal, which ruled that members of the judiciary can 
                only be removed subsequent to a final judgement by a 
                criminal court.
                    For the third year since the passage of the anti-
                money laundering law, no action was taken against money 
                laundering. The legal ambiguities regarding asset 
                seizure and forfeiture have not been resolved, and the 
                system remains inefficient.
                    Brazil
                    Brazil is a significant transit country for illicit 
                drugs en route to the United States, and a major 
                producer of precursor chemicals and synthetic drugs. 
                Since taking office in 1995, the administration of 
                President Fernando Enrique Cardoso has demonstrated a 
                firm commitment to countering the flow of illegal drugs 
                through Brazilian territory, and to establishing an 
                effective law enforcement infrastructure capable of 
                taking action against the domestic and international 
                criminal syndicates engaged in drug trafficking. In 
                1999, the Government of Brazil (GOB) worked closely 
                with regional neighbors and U.S. law enforcement 
                agencies in pursuit of mutual counter-drug objectives, 
                achieving particularly impressive results against 
                corruption and money laundering.
                    The most visible initiative in 1999 was the 
                formation in April of the Congressional Panel of 
                Inquiry (CPI) on drug trafficking. The Panel's high-
                profile investigations into the country's organized 
                drug networks have led to over 115 arrests, including 
                many tainted government officials. Through its actions, 
                the CPI has illustrated the drug trade's corrosive 
                effect on public institutions and energized previously 
                isolated voices against corruption and trafficker 
                impunity.
                    Criminal interests have long exploited Brazil's 
                highly developed financial sector, particularly as a 
                haven for illicit-drug profits. In 1999 the GOB 
                demonstrated a firm commitment to fighting the problem 
                of money laundering, and implemented regulations to 
                increase the effectiveness of Brazil's anti-money 
                laundering regime. The Brazilian Central Bank created a 
                special internal agency to trace money laundering, and 
                Brazil joined the Financial Action Task Force (FATF) 
                and the Egmont Group, two international bodies charged 
                with improving anti-money laundering efforts.
                    Brazilian authorities seized more cocaine in 1999 
                than in 1998, and cannabis seizures increased by six-
                fold. As in past years, Brazilian authorities 
                identified no opium or coca production in 1999. The GOB 
                acted vigorously against cannabis production in the 
                country's northeast, eradicating over three times as 
                many hectares as in 1998.
                    Burma
                    Burma is the world's second largest source of 
                illicit opium and heroin, exceeded only by Afghanistan, 
                and currently accounts for approximately 80 percent of 
                the total production of Southeast Asian opium. Largely 
                due to severe drought conditions in poppy growing 
                areas, production and cultivation continued to decline 
                significantly in 1999 for the third year in a row. In 
                1999 there were an estimated 89,500 hectares under 
                opium poppy cultivation, down 31 percent from 1998. 
                This hectarage yielded a maximum of 1,090 metric tons 
                of opium gum, 38 percent lower than in 1998 and less

[[Page 15801]]

                than half the average production during the last 
                decade. The Government of Burma (GOB) maintained most 
                of its opium crop-eradication efforts and expanded the 
                program to an additional 9,800 acres.
                    Seizures of methamphetamine in 1999 exceeded 1998's 
                record figures, although opium and heroin seizures were 
                well below 1998 levels. Burma made its first airport 
                seizures of illicit drugs in 1999. While there were 
                cases of drug interdiction and arrests of members of 
                some cease-fire groups for drug trafficking, the GOB 
                has been unwilling or unable to take on the most 
                powerful groups directly. Cease-fire agreements with 
                insurgent ethnic groups dependent on the drug trade 
                implicitly tolerate continued involvement in drug 
                trafficking for varying periods of time. The ethnic 
                armies, such as the United Wa State Army and the 
                Myanmar National Democratic Alliance Army, remain armed 
                and heavily involved in the heroin trade.
                    The GOB expressed support for eradication efforts, 
                crop substitution, and development assistance, but 
                allocated few resources to such projects. GOB policy is 
                to force the leaders in the ethnic areas to spend their 
                own revenues, including from the drug trade, on social 
                and physical infrastructure. The approach limits the 
                GOB's ability to continue or expand its counter-drug 
                efforts.
                    Burma's 1993 Narcotic Drugs and Psychotropic 
                Substances Law conforms to the 1988 UN Drug Convention 
                and contains useful legal tools for addressing money 
                laundering, seizing drug-related assets, and 
                prosecuting drug conspiracy cases. GOB officials, 
                claiming they lack sufficient expertise, have been slow 
                to implement the law, targeting few, if any, major 
                traffickers and their drug-related assets. Money 
                laundering in Burma and the return of drug profits 
                laundered elsewhere are thought to be significant 
                factors in the overall Burmese economy, although the 
                extent of this problem is impossible to measure 
                accurately. The cease-fire agreements condone money 
                laundering, as the government encouraged these groups 
                to invest in ``legitimate'' businesses as an 
                alternative to trafficking, thus extending to them the 
                opportunity to sanitize past illicit proceeds with 
                investments in hotels and construction companies, for 
                example.
                    The Burmese continued to refuse to render drug lord 
                Chang Qifu on grounds that he had not violated his 1996 
                surrender agreement. The 1988 UN Drug convention 
                obligates parties, including Burma, to prosecute such 
                traffickers.
                    The GOB's counter-drug efforts in 1999 showed 
                progress in a number of areas: methamphetamine and 
                ephedrine seizures increased; crop eradication 
                continued with modest expansion; anti-drug forces 
                conducted more vigorous law-enforcement efforts; and 
                members of some cease-fire groups were arrested for 
                drug trafficking. Such efforts must be stepped up, 
                however, if they are to have a significant impact on 
                the overall trafficking problem.
                    On balance, the USG remains concerned that Burma's 
                efforts are not commensurate with the extent of the 
                drug problem within its borders. Large-scale poppy 
                cultivation and opium production continue, decreasing 
                in the last few years largely because of severe drought 
                conditions rather than eradication programs. The GOB's 
                effective toleration of money laundering, its 
                unwillingness to implement its drug laws, and its 
                failure to render notorious traffickers under 
                indictment in the United States all continue to be 
                serious concerns.
                    Cambodia
                    In view of Cambodia's geographic location and 
                general state of lawlessness, it is likely that drugs 
                transited Cambodia en route the West, including the 
                United States. For that reason, Cambodia was designated 
                a major drug transit country in 1999. Political turmoil 
                in Cambodia has effectively precluded a fully credible 
                anti-drug effort for the last two years. Although 
                Cambodia has taken some positive steps to improve drug 
                enforcement in 1999, these steps were insufficient to 
                qualify for full certification.

[[Page 15802]]

                    Steps forward included increased emphasis on 
                eradication of illicit marijuana plantations. Prime 
                Minister Hun Sen and others have publicly threatened 
                provincial governors with dismissal if they tolerate 
                marijuana cultivation. At least one large (160 hectare, 
                or about 400 acre) plantation was eradicated as the 
                deadline for certification approached. There were also 
                several first-time drug seizures at Phnom Penh's 
                international airport. The President and the Chief 
                Prosecutor of the Phnom Penh Municipal Court were 
                removed for corruption; other judges are under 
                investigation. A police commander, suspected of dealing 
                in illicit drugs was removed, and Cambodia reorganized 
                a supervisory coordinating agency called the National 
                Drug Policy Board, replacing officials generally viewed 
                as ineffective with more respected officials. High 
                level government officials made statements emphasizing 
                their opposition to synthetic drug production in 
                Cambodia, and pressed efforts to confiscate 
                unauthorized weapons, both positive steps in countering 
                a drift towards lawlessness. Cooperation with the U.S. 
                Drug Enforcement Administration (DEA) was excellent.
                    Corruption remains an endemic problem in Cambodia, 
                however, and this problem adversely affects drug law 
                enforcement. Poorly paid and ill-trained police and 
                judicial officials have frequently looked the other way 
                in drug and other criminal cases. Cambodia remains a 
                refuge for criminal elements because enforcement is 
                ineffective and corrupt officials can be paid to 
                release those that may be apprehended. The combination 
                of incompetence and venality, even at high levels in 
                government and the police, pose an ongoing challenge to 
                improved drug law enforcement. In short, there has been 
                no fundamental institutional reform to meet the law 
                enforcement challenge Cambodia faces from drug 
                traffickers and other lawless elements. Thus, despite 
                some improvements, Cambodia still failed to meet the 
                legal standards for full certification.
                    A vital national interests certification is 
                necessary this year in order to protect U.S. vital 
                national interests in Cambodia, including promoting 
                democracy in Cambodia and stability in the region. 
                Democracy in Cambodia is not yet firmly established. 
                The democratically-elected coalition government, which 
                came to power in Cambodia last year continues to face 
                enormous challenges on all fronts, including the 
                formation of an international tribunal to try former 
                leaders of the Khmer Rouge. Cambodia also remains 
                vulnerable to drug trafficking and other crime 
                upsurges. Should counter-drug sanctions be imposed, it 
                would not be possible for the United States to provide 
                strategically-placed assistance to respond to potential 
                crises or to strengthen Cambodia's economic and 
                institutional bases for a democratic system. On 
                balance, the risks to U.S. interests in promoting 
                democracy and stability in the region if counter-drug 
                sanctions were imposed would outweigh the risks posed 
                by Cambodia's failure to fully implement effective drug 
                control.
                    Colombia
                    Colombia remains the world's largest cocaine 
                producer: over three-quarters of the world's cocaine 
                hydrochloride is processed in Colombia. Still, Colombia 
                met the certification criteria in 1999 due to important 
                strides made in combating illicit drugs and its full 
                cooperation with USG counter-drug efforts. The Pastrana 
                administration has demonstrated a clear commitment to 
                combating the illegal drug industry in Colombia. That 
                commitment led to a number of very concrete 
                achievements in 1999.
                    In September, the Government of Colombia (GOC) 
                unveiled its ``Plan Colombia,'' a comprehensive 
                strategy to address the many interrelated challenges 
                facing the country. The USG supports the work of the 
                GOC in formulating and beginning to implement this 
                comprehensive strategy. Importantly, both ``Plan 
                Colombia'' and the Pastrana administration's National 
                Drug Control Strategy couple alternative development 
                with aerial eradication of illicit crops.

[[Page 15803]]

                    Colombian authorities continued to cooperate with 
                the USG on a variety of specific projects. In October, 
                Operation Millennium, a coordinated operation among 
                Colombian, Mexican and U.S. law enforcement agencies, 
                resulted in the arrest of more than 30 suspects.
                    The Colombian National Police (CNP) continued its 
                outstanding counter-drug tradition. The CNP received 
                increased support from the Colombian armed services and 
                is poised to begin joint operations in southern 
                Colombia with the army's first special counter-drug 
                battalion. Such joint operations are vital for the 
                future of the program due to the threat to counter-drug 
                operations from heavily armed traffickers and other 
                illegal armed groups that are involved in many aspects 
                of drug trafficking.
                    The GOC made particularly strong advances in 
                combating maritime trafficking. A port security program 
                is now operating in all of the nation's major ports, 
                and in the past year resulted in the seizure of 16 
                metric tons of cocaine. In September, a standing 
                interdiction operations plan was signed to augment an 
                existing maritime agreement, leading to three U.S.-
                Colombian combined maritime interdiction patrols. Also 
                in September, U.S. and Colombian authorities reached an 
                accommodation concerning the volume of evidence 
                required by Colombian prosecutors and other evidentiary 
                concerns.
                    GOC efforts have also focused on drug trafficking 
                by air. The percentage of successful Colombian Air 
                Force (FAC) interdiction attempts has increased from 25 
                percent in 1997 to nearly 40 percent in 1999. At the 
                same time, the number of suspicious aircraft which 
                radar has detected flying to or from Colombia has 
                fallen from 231 in 1997 to fewer than 100 in 1999. The 
                CNP's civil aviation registration program inspected 343 
                aircraft in 1999, seizing 50 of these for violations.
                    The aerial eradication program succeeded in 
                treating more than 50,000 hectares of illicit crops in 
                1999, although totals were less than last year's record 
                level. The CNP also had a strong year in terms of 
                seizures, totaling 30 metric tons of cocaine 
                hydrochloride and base, 140 metric tons of coca leaf, 
                and 644 kilos of heroin, morphine and opium.
                    The level of cooperation between the Colombian 
                military and police continued to improve in 1999. 
                Information sharing advanced to a higher level with the 
                inclusion of both military and CNP personnel at the 
                Joint Intelligence Center (JIC), while interdiction and 
                eradication efforts both received a boost with the 
                creation of the new counter-drug battalion. Created to 
                work hand-in-glove with the CNP's anti-drug units, the 
                battalion will provide the police with needed support 
                as operations move into high-risk, coca-rich areas such 
                as Putumayo Department.
                    In November, the GOC extradited alleged heroin 
                trafficker Jaime Orlando Lara Nausa, the first 
                Colombian citizen extradited to the United States in 
                nine years. Behind the very public leadership of 
                President Pastrana, Colombian officials proceeded 
                despite drug traffickers' attempted legal roadblocks 
                and bombings possibly linked to the extraditions. This 
                commitment demonstrated the GOC's willingness to send 
                drug traffickers to justice in the United States 
                regardless of citizenship.
                    GOC officials also enacted important institutional 
                changes in 1999. The National Judicial Police Council 
                adopted a unified training curriculum and made it 
                mandatory for all Colombian investigators after January 
                2000. For the first time, all Colombian law enforcement 
                investigators will receive the same training.
                    Overall, Colombian counter-drug efforts continued 
                to improve in 1999, demonstrating the true commitment 
                of the Pastrana administration to cooperate fully with 
                the United States in combating the illegal traffic in 
                drugs.
                    Dominican Republic
                    The Dominican Republic is a significant transit 
                country for South American drugs, mostly cocaine, 
                moving to the United States. Drugs are transported

[[Page 15804]]

                into the Dominican Republic by air, sea, and across the 
                land border with Haiti. They are then moved onward by 
                air and sea to Puerto Rico and mainland United States.
                    During 1999, the Government of the Dominican 
                Republic (GODR) continued to cooperate fully with the 
                USG on counter-drug goals and objectives.
                    The GODR extradited nine Dominicans to the United 
                States in 1999, and kept several other fugitives in 
                custody awaiting decisions on extradition requests. The 
                National Drug Council (CND) drafted a National Drug 
                Strategy. A group of private attorneys energetically 
                promoted the passage of a newly drafted anti-money 
                laundering bill modeled on current Organization of 
                American States (OAS) standards. The GODR began the 
                process of developing an anti-corruption bill. The 
                draft strategy and both bills are scheduled for 
                submission to congress in 2000.
                    A ministerial-level bilateral meeting with Haiti 
                achieved historic border control accords, which were 
                subsequently approved at the highest levels of the 
                GODR. In 1999, the GODR activated a fourth border 
                control unit, deployed its drug detection dog unit to 
                the Haitian border, and took steps to double the size 
                of the dog unit in 2000.
                    Dominican forces participated in combined 
                operations under the bilateral Maritime Counter-drug 
                Interdiction Agreement. The GODR extended for one-year 
                temporary overflight authority for USG anti-drug 
                aircraft and vessels. In cooperation with the U.S. 
                military, the Dominican Navy and Army engaged in joint 
                counter-drug exercises.
                    The National Drug Control Directorate (DNCD) worked 
                closely with its counterpart, the DEA, on drug, 
                fugitive, and special investigations, drug operations, 
                and border interdiction during 1999. DNCD has begun to 
                require its special unit personnel to take polygraphs, 
                and has also initiated pre-employment and periodic 
                random drug testing for its employees.
                    For the first time, the GODR authorized wiretaps 
                for use in drug prosecutions. It also arrested and 
                jailed on passport fraud charges the top money manager 
                for the Coneo family, the dominant Colombian drug 
                trafficking organization operating on Hispaniola.
                    We will continue to encourage the Dominican 
                Republic to regularize its extradition process. GODR 
                should also: act on a pending amendment to enhance the 
                bilateral maritime agreement; increase cocaine 
                seizures, which amounted to less than half the amount 
                seized in 1998; and strengthen its weak judicial 
                system, which continues to hamper law enforcement 
                efforts.
                    Ecuador
                    Ecuador continues to serve as a major transit route 
                for cocaine destined for the United States, and for 
                precursor chemicals destined for drug processing labs 
                in Colombia and Peru. Despite suffering under the 
                effects of the country's worst economic crisis in 
                seventy years, the Government of Ecuador (GOE) pursued 
                an active counter-drug agenda in 1999 to considerable 
                effect, and cooperation between the GOE and the USG was 
                excellent.
                    The Ecuadorian National Police (ENP) seized a 
                record 10 metric tons of cocaine and coca base in 1999, 
                more than doubling 1998's total of 3.9 metric tons. 
                Heroin seizures also increased significantly, from 58 
                kilograms in 1998 to 81 kilograms in 1999. The ENP also 
                seized a record amount of methyl ethyl ketone (MEK) and 
                other precursor chemicals.
                    Along with these tactical successes, the GOE 
                implemented structural reforms to their judicial system 
                and law enforcement agencies that have the potential to 
                enhance the country's law enforcement infrastructure. A 
                unified anti-drug division was established within the 
                ENP, consolidating various specialized interdiction 
                units into a coherent organization for the first time. 
                The customs service was privatized to maximize 
                efficiency and bolster interdiction efforts. In 
                November 1999, the Ecuadorian Congress passed a new 
                criminal procedural code, intended to alter the 
                country's criminal justice

[[Page 15805]]

                system from a secretive, inquisitorial to an open, 
                accusatorial system similar to the U.S. model. In 
                addition, the GOE published a five-year counter-drug 
                strategy which clearly identifies the roles and 
                responsibilities of relevant GOE agencies in the fight 
                against international drug trafficking.
                    The GOE also increased its commitment to regional 
                interdiction efforts, most visibly in November 1999 
                when the GOE and the USG completed a 10-year agreement 
                permitting U.S. regional counter-drug detection and 
                monitoring missions to operate from an Ecuadorian air 
                force base in Manta. The GOE also completed a Joint 
                Information Coordination Center (JICC) in Guayaquil, 
                and plans to integrate this center with the national 
                anti-drug division headquarters.
                    Guatemala
                    In 1999, President Arzu continued to implement the 
                peace accords that ended 36 years of internal conflict. 
                Government of Guatemala (GOG) efforts are now focused 
                on combating violent crime, organized crime and other 
                domestic problems. The GOG fully cooperated with the 
                United States in combating counter-drug trafficking in 
                Guatemala and elsewhere in the region. Guatemala has 
                taken steps to implement, at the operational level, the 
                provisions of the 1988 UN Drug convention. However, 
                legislative support for ratification of a full maritime 
                counter-drug agreement and adoption of money laundering 
                legislation has not yet been obtained.
                    Guatemala's location, scarce law enforcement 
                resources, and a weak judiciary and penal system 
                permitted its continued use by traffickers as a 
                transshipment and storage point for cocaine destined 
                for the United States via Mexico. Along with increased 
                use of motor vehicle and container shipments, there has 
                been an increase in airdrops of illicit drugs over 
                Guatemalan territory for consolidation and 
                transshipment. With USG assistance, the Department of 
                Anti-Narcotics Police (DOAN) has stepped up training to 
                develop air interdiction and related capabilities. The 
                expanding self-funded port security program and the 
                trained DOAN agents have made impressive seizures in 
                the past year.
                    The consolidation of the National Civilian Police 
                (PNC) continues on track with full integration of the 
                DOAN. The USG-trained DOAN seized over 10 metric tons 
                of cocaine in 1999. This year the drug prosecutor 
                assistance program maintained its 90 percent conviction 
                rate, with some traffickers receiving sentences of up 
                to 20 years. Somewhat disturbing, however, were several 
                cases in which judges released suspected drug 
                traffickers on questionable grounds. The new drug 
                prosecutor's field office opened this year in 
                Quetzaltenango accounted for 110 successful 
                prosecutions in 1999.
                    Guatemala is a party to the 1988 UN Drug 
                Convention, and most GOG law enforcement activities are 
                fully consistent with its goals and objectives. 
                However, some of the convention's provisions have not 
                been codified into law and regulations, including 
                provisions on extradition and money laundering. The GOG 
                does not encourage or facilitate illicit production or 
                distribution of illicit drugs or controlled substances.
                    In 1999 the GOG began implementation of its 
                national drug policy, the anti-drug master plan and 
                national strategy which incorporates both demand and 
                supply reduction objectives to be accomplished by 
                specified ministries. The GOG provided additional 
                funding to the plan's implementers to attack the 
                alarming increase in drug abuse documented last year. 
                The GOG also took major steps in implementing assets 
                seizure and precursor chemicals regulations.
                    Haiti
                    Haiti is a significant transshipment point for 
                drugs, primarily cocaine, moving through the Caribbean 
                from South America to the United States. The USG cannot 
                certify Haiti as having fully cooperated with the 
                United States on drug control, or as having taken 
                adequate steps on its own, to

[[Page 15806]]

                meet the goals and objectives of the 1988 UN Drug 
                Convention, to which Haiti is a party. However, U.S. 
                vital national interests require that foreign 
                assistance continue to be provided to Haiti.
                    The USG recognizes that because Haiti had no 
                Parliament during 1999, no legislation could be enacted 
                or international agreements ratified. However, Haiti 
                failed to make sufficient progress on many anti-drug 
                objectives that did not require parliamentary action, 
                but only implementation by the Government of Haiti 
                (GOH). The GOH failed to: draft or update any pending 
                anti-money laundering or anti-corruption legislation; 
                revise and implement the draft national drug control 
                strategy; create mechanisms to enforce standards of 
                conduct and liabilities for GOH officials in accordance 
                with the Declaration of Principles signed by Haiti at 
                the 1997 Bridgetown Summit; vigorously investigate and 
                prosecute drug-related corruption involving GOH 
                officials; resolve and report on the ``450 kilo 
                affair'' in which policemen were allegedly involved in 
                the 1998 theft of a large cocaine shipment; set up a 
                special financial analysis unit to combat money 
                laundering; and join the Caribbean Financial Action 
                Task Force (CFATF).
                    Haiti also failed to make sufficient progress in 
                the area of law enforcement. Part of its overall lack 
                of success in this area is due to Haiti's inadequate 
                judicial system; the still limited capabilities of the 
                five-year-old Haitian National Police (HNP); and the 
                inexperience of the three-year-old police anti-drug 
                unit (BLTS). In addition, the HNP currently does not 
                have the ability to intercept drug airdrops. The GOH 
                failed to increase its drug seizure rate over 1998's 
                performance; the amount of cocaine seized in 1999 was 
                one-third that of 1998, although the estimated flow of 
                cocaine increased by nearly one-quarter. The GOH also 
                failed to double the size of the BLTS as planned, or to 
                enforce interagency cooperation between the HNP and the 
                customs and immigration services. This lack of 
                cooperation continues to impede counter-drug efforts 
                inside the customs control areas at the airport and 
                other ports of entry in Haiti.
                    GOH's international cooperation in 1999 was 
                significant, including ongoing implementation of the 
                1997 U.S.-Haiti maritime counter-drug interdiction 
                agreement even though parliamentary action to bring the 
                agreement into force has not yet been accomplished. GOH 
                cooperated with several international counter-drug 
                operations, one of which resulted in the arrest and 
                expulsion from Haiti of two key members of a major 
                international drug operation. Haitian authorities also 
                continued to work with their counter-drug counterparts 
                in the Dominican Republic to stem the flow of illicit 
                drugs over the land border.
                    U.S. vital national interests require that Haiti be 
                certified. A cutoff of bilateral assistance mandated by 
                denial of certification would threaten security and 
                democratic stability in Haiti, both of which bear 
                immediately and directly on U.S. ability to disrupt the 
                flow of both illicit drugs and undocumented Haitian 
                migrants into the United States. A cutoff would require 
                termination of important USG initiatives, including 
                programs targeting electoral support, police 
                development, economic growth, education, social 
                stability, hunger and environmental degradation. These 
                programs attack the roots of Haitian poverty and 
                hopelessness, chief catalysts for Haitian involvement 
                in the drug trade and illegal immigration into the 
                United States. The programs also address the underlying 
                problems in the Haitian law enforcement and judicial 
                system, especially endemic corruption and the lack of a 
                strong professional tradition, both of which contribute 
                to weak counter-drug performance. If critical U.S. aid 
                is withdrawn, and U.S. support for the electoral 
                process and public security is curtailed, assistance to 
                illicit traffickers of drugs and migrants will be an 
                unintended consequence.
                    The risks posed to U.S. vital national interests by 
                a cutoff of bilateral assistance outweigh the risks 
                posed by Haiti's failure to cooperate fully with the 
                USG, or to take adequate steps on its own, to combat 
                the illicit drugs. Accordingly, Haiti is granted a 
                vital national interests certification.

[[Page 15807]]

                    Hong Kong
                    Although the USG continued to view Hong Kong as a 
                major drug transit center in 1999 because of its 
                location and developed infrastructure, Hong Kong's role 
                as a major transit/staging area for the shipment of 
                heroin and methamphetamine to the United States appears 
                to have diminished over the last three years.
                    In 1999 Hong Kong continued its exemplary efforts 
                to stop illicit drugs from being trafficked across its 
                border with China and through its port. Through October 
                1999, Hong Kong officials seized 205 kilograms of 
                heroin (nearly the amount seized in all of 1998), 35.8 
                kilograms of cannabis, 16.7 kilograms of cocaine, and 
                9,811 kilograms of methamphetamine. In the same period, 
                7,620 individuals were arrested for drug-related 
                offenses. Drug-detection capabilities were enhanced in 
                several important areas: the number of drug-sniffing 
                dogs at the border and airport increased from 124 to 
                133; and high-tech equipment was procured to detect 
                illicit drugs in packages, facilitate the inspection of 
                baggage and cargo, and use in clearing air and sea 
                cargo.
                    With respect to precursor chemicals, Hong Kong 
                amended legislation to tighten control of the 
                transshipment, removal, and storage of potassium 
                permanganate and to require a license from the 
                Commissioner of Customs and Excise before potassium 
                permanganate can be imported, exported, or 
                manufactured. Control of several additional chemicals 
                was also tightened in 1999 in response to resolutions 
                passed by the UN Commission on Narcotic Drugs. The 
                legislature also began working to amend legislation to 
                enhance control of norephedrine.
                    Hong Kong also introduced new legislation to 
                strengthen the anti-money-laundering regime and laws 
                affecting drug profits and organized crime. New 
                reporting requirements for financial transactions went 
                into effect, and sentences for money laundering have 
                been lengthened.
                    Hong Kong and U.S. law enforcement agencies 
                continued to cooperate effectively on investigations 
                into the movement of illegal drugs and on money-
                laundering cases. The Mutual Legal Assistance Agreement 
                received legislative approval in Hong Kong and will 
                enter into force in early 2000. The Transfer of 
                Sentenced Persons Agreement with the United States and 
                with Sri Lanka came into force. Hong Kong also 
                concluded similar agreements with other countries and 
                the European Union.
                    In 1999 Hong Kong continued to implement new 
                initiatives to strengthen its already outstanding 
                counter-drug efforts, and Hong Kong authorities at all 
                levels continued their close cooperation with the 
                United States and other countries to defeat drug 
                trafficking.
                    India
                    India is the world's largest producer of licit 
                opium. Located between Afghanistan and Burma, the two 
                primary world sources of illicitly grown opium, India 
                also is a transit point for heroin, generally destined 
                for Europe. Heroin is produced in and trafficked 
                through India, but evidence to indicate that 
                significant quantities of heroin from India reach the 
                United States is scant. The Government of India (GOI) 
                has a cooperative working relationship with DEA, and 
                India is a party to the 1988 UN Drug Convention.
                    The GOI uncovered a trafficking network operating 
                in several Indian cities to ship locally-produced 
                heroin to Sri Lanka, and seized a related heroin lab 
                and over 100 kg of heroin. The GOI also broke up and 
                arrested an international trafficking operation routing 
                Afghan heroin to North America and seized 77 kilograms 
                of heroin. Overall, heroin seizures rose 7 percent. 
                More importantly, two well-organized trafficking 
                operations were disrupted.
                    The GOI tightened controls on the precursor 
                ephedrine hydrochloride by listing it as a controlled 
                substance under its Narcotic Drugs and Psychotropic 
                Substance Act. The GOI traced 9 tons of acetic 
                anhydride intended

[[Page 15808]]

                for Afghanistan and had it seized in Dubai. The GOI 
                enacted money-laundering legislation at the end of 
                1999.
                    The GOI annually takes forceful steps to prevent 
                illicit cultivation and production. The GOI appears to 
                have had genuine success in reducing illicit poppy 
                cultivation, which in 1999 was just a fraction of what 
                it was five years ago. India met formally with Pakistan 
                in 1999 to discuss drug matters and is committed to 
                continuing the process and to developing practical 
                results, which have been limited to date. In 1999 India 
                also met with Burmese officials to discuss cross-border 
                counter-drug issues.
                    Production and stockpile of licit opium in India 
                has clearly not exceeded licit demand. On the contrary, 
                India's stockpile has been barely adequate for some 
                time. The GOI did not make as much progress as hoped 
                for this year in rebuilding its depleted buffer stock 
                of licit opium. With excellent weather, the harvest 
                should have been 1300 metric tons, but at least in part 
                due to some diversion from licit production, the 
                harvest was only 971 tons, too small to rebuild stocks 
                to levels recommended by the International Narcotics 
                Control Board (INCB). The GOI did boost opium 
                production from 260 to 971 metric tons, sufficient to 
                satisfy international demand for licit opium, even if 
                carry-over stocks remain inadequate.
                    India is the only licit opium producing country 
                with a notable diversion problem. However, the exact 
                extent of this diversion is unclear. India has had an 
                elaborate and expensive-to-maintain system in place to 
                counter this threat of diversion for years, and India 
                took important additional steps to avert diversion this 
                year. For example, to discourage diversion of licit 
                opium, the GOI raised prices paid to farmers, and added 
                other incentives for higher yields. The GOI also 
                threatened stiff penalties for those convicted of 
                diversion. Licit opium diversion controls expanded in 
                1998-1999 and have been continued in 1999-2000. Still, 
                credible reports suggest that diversion may have 
                increased during the 1998-1999 growing season despite 
                GOI actions. Although India is taking adequate steps to 
                prevent significant diversion, there are additional 
                measures India could take to improve its control 
                regime. The GOI has not yet agreed to USG suggestions 
                to undertake a comprehensive joint licit opium yield 
                survey, which would provide a firmer scientific basis 
                for the GOI to set Minimum Qualifying Yields (MQY) for 
                farmers. Setting these yields correctly, by region, 
                helps limit diversion.
                    Jamaica
                    Jamaica is a major transit point for South American 
                cocaine en route to the United States as well as the 
                largest Caribbean producer and exporter of marijuana. 
                During 1999, the Government of Jamaica (GOJ) made 
                progress towards meeting the goals and objectives of 
                the 1988 UN Drug Convention. At regional meetings, GOJ 
                officials actively supported counter-drug initiatives. 
                Bilateral counter-drug cooperation is good and 
                improving. In the area of maritime law enforcement, 
                Jamaican forces continued to participate in combined 
                operations under the U.S.-Jamaica bilateral maritime 
                agreement.
                    In March 1999, Jamaica took an important step in 
                its effort to create an anti-money laundering regime 
                which meets international standards by amending the 
                1996 Money Laundering Act to require the reporting of 
                suspicious transactions. However, further amendment to 
                the law is required to address the critical issue of 
                money laundering in relation to the proceeds of other 
                serious crime. The GOJ has stated that, as a first 
                step, it has drafted amendments to the money-laundering 
                act that will add fraud and firearms offenses as 
                predicate offenses. The GOJ is in the process of 
                establishing a financial analysis unit to identify 
                money-laundering activities, but has not yet provided 
                staff for the unit. Jamaica's current asset forfeiture 
                regime does not permit the GOJ to take full advantage 
                of the forfeiture mechanism to augment the resources of 
                its anti-drug agencies and deprive criminals of the 
                proceeds of their crime. Current law requires the 
                conviction of a criminal drug defendant prior to 
                commencing a forfeiture action. In

[[Page 15809]]

                1999, Parliament passed legislation permitting the GOJ 
                to enter into agreements with other governments to 
                share assets confiscated from drug traffickers and 
                other criminals. The GOJ enacted a Precursor Chemicals 
                Act and has budgeted for implementation of chemical 
                controls. In late 1999, the GOJ introduced a bill in 
                Parliament establishing drug courts; the bill passed 
                both houses and now awaits the Governor General's 
                signature.
                    Transparency International and other organizations 
                have reported that corruption is viewed as a grave 
                problem in Jamaica--drug trafficking adds to the 
                problem. The GOJ's anti-corruption legislation, 
                introduced in Parliament in 1998, passed the House and 
                Senate in different versions; a compromise bill is 
                currently being crafted by a joint select committee of 
                Parliament. The GOJ's position is that passage of the 
                Anti-Corruption Act must occur before it can ratify the 
                Inter-American Convention Against Corruption, which 
                Jamaica signed in March 1996. The GOJ has a policy of 
                investigating credible reports of police corruption, 
                including those related to drugs, but more needs to be 
                done to root out corruption in the public sector.
                    The GOJ extradited four people to the United States 
                in 1999; there are sixteen active pending extradition 
                requests. In 1999, the GOJ developed, with USG 
                assistance, a special fugitive apprehension team to 
                target and apprehend fugitives from justice. The team 
                has thus far located three fugitives and provided 
                information for several U.S.-based investigations. The 
                GOJ arrested 6,718 drug offenders in 1999. 
                Nevertheless, no major drug traffickers were arrested 
                or convicted during 1999, and they continue to operate 
                with apparent impunity. The GOJ agreed in 1998 to 
                develop a vetted special investigative unit to target 
                drug kingpins, but the unit is not yet in existence. 
                While the GOJ has stated its intention to enact wiretap 
                legislation, the proposal for such legislation is still 
                under discussion in the Cabinet.
                    The GOJ exceeded the marijuana eradication goal of 
                800 hectares set out in the Fiscal Year 1998 Letter of 
                Agreement (LOA) with the USG. In addition, the GOJ 
                agreed in the LOA to pay a share of the marijuana 
                eradication teams' salaries, currently funded by the 
                USG, beginning in June 2000. While the GOJ made some 
                progress in implementing the recommendations contained 
                in a 1997 assessment, security at Jamaica's ports 
                remains a concern. The GOJ needs to take steps to 
                improve security at its ports, including implementation 
                of the remaining recommendations from the 1997 
                assessment. Additionally, the GOJ should consider 
                providing the means to admit evidence obtained by ion 
                scan technology in Jamaican courts. The GOJ has in 
                place a national drug control strategy that covers both 
                supply and demand reduction; the GOJ should add to its 
                strategy specific goals and objectives and measures of 
                effectiveness. Jamaica is a party to the 1988 UN Drug 
                Convention.
                    Laos
                    Laos is a major drug-producing country; it remains 
                the world's third largest producer of illicit opium, 
                behind Afghanistan and Burma. Although opium 
                cultivation fell 16 percent in 1999, the USG estimates 
                Laos' opium production for that year at 140 metric 
                tons, identical to the 1998 estimate. Somewhat improved 
                weather conditions increased estimated average yields, 
                allowing total production to remain unchanged. Crop 
                substitution project areas funded by the USG continued 
                to show no commercial opium cultivation, only low level 
                production sufficient for some local addict 
                consumption.
                    Laos cooperates with the USG and the UNDCP on crop 
                control/substitution projects designed to eliminate 
                opium cultivation. The administration of Phongsali 
                Province is providing enthusiastic support for the new 
                USG-funded project there. The province administration 
                assigned support personnel, held a meeting of district 
                directors from throughout the province, and is 
                expressing full support for the project to village 
                headmen. In May 1999, the Government of Laos (GOL) 
                agreed to a joint goal with the UNDCP to eliminate 
                opium cultivation in Laos within six years; efforts to 
                raise the estimated $80 million needed to reach this 
                goal are underway. The highland farmers who grow opium 
                now have no other viable option. Even if the farmers 
                understood

[[Page 15810]]

                how to grow other crops and had the wherewithal to do 
                so (neither of which is the case) they would lack 
                accessible markets for their products. An ambitious 
                project, requiring years of careful planning and 
                implementation, is essential to create an alternative 
                to opium. Such a plan would need alternative 
                development, law enforcement, and demand reduction 
                elements. Once developed, the plan would replace the 
                previous GOL counter-drug master plan, which dates from 
                1993 and was also developed with UNDCP assistance.
                    Law enforcement efforts continue. USG-funded 
                counter-drug offices law enforcement offices were 
                opened in two more provinces. These offices, now in six 
                provinces, along with other provincial police offices, 
                reported 143 drug-related criminal cases in 1999, 
                resulting in the arrests of 348 suspects (including 10 
                foreign nationals). Most arrests were of small-scale 
                traffickers. These cases involved the seizure of 14.7 
                kilograms of heroin, 225.8 kilograms of opium, 806,700 
                methamphetamine tablets, and 2.2 metric tons of 
                marijuana. Opium and heroin seizures fell significantly 
                from record 1998 levels, as there was no case to match 
                the 1998 destruction of a heroin laboratory. The number 
                of arrests and quantity of opium seized are roughly 
                equal to last year's totals, but the quantity of heroin 
                seized has fallen significantly from the past two 
                years. Methamphetamine seizures rose slightly. The 
                quantity of heroin has dropped, in part, because none 
                of the seizures was a very large shipment. Furthermore, 
                it is believed traffickers have changed their routes 
                and methods. For example, seizures in the United States 
                of opium-filled parcels from Laos have jumped.
                    The GOL works very closely with its foreign 
                assistance partners to combat drug trafficking and has 
                registered steady progress this past year. The GOL also 
                continues its important efforts to address the socio-
                economic problems underlying poppy cultivation. 
                Corruption and inefficiency remain significant 
                challenges to Lao counter-drug efforts. The GOL should 
                continue to work with its foreign assistance partners 
                to improve the administration of justice and to find 
                alternatives to growing poppy.
                    Mexico
                    In 1999, the Government of Mexico (GOM) made 
                substantial efforts to confront the major threats to 
                public health and democratic institutions posed by 
                transnational drug-trafficking organizations. Agreement 
                on unprecedented, bilaterally negotiated Performance 
                Measures of Effectiveness (PMEs) enhanced maritime 
                cooperation, and performance improvements in the 
                interdiction/eradication realm were encouraging. 
                Corruption and judicial obstacles to the swift 
                extradition of fugitives, however, remained impediments 
                to a more productive counter-drug relationship.
                    A new $500 million public security plan, including 
                establishment of the new Federal Preventative Police, 
                complemented close bilateral counter-drug cooperation 
                in 1999. That undertaking, which will take several 
                years to implement fully, restructures several existing 
                law enforcement agencies, and has already begun to 
                improve police coverage and crime investigation. Steps 
                are underway to acquire new technology, such as aerial 
                radar platforms and upgraded telecommunications, and 
                redistribute land, air, and maritime assets to improve 
                coverage of priority areas. An interagency interdiction 
                operation disrupted a major cartel's operations on the 
                Yucatan Peninsula as part of a broad-based effort to 
                reduce the flow of drugs into Mexico from Central and 
                South America.
                    Marijuana eradication was up 39 percent over 1998 
                and net production down 19 percent for the year. 
                Eradication of opium poppy, while down 10 percent from 
                1998, combined with reduced cultivation to yield a more 
                than 25 percent drop in net opium gum production. The 
                GOM made over 8,000 drug-related arrests, including: 
                major cartel co-founder Juan Quintero Payan and key 
                associates Oscar Benjamin Garcia Davila and Jaime 
                Aguilar Gastelum. The Mexican Congress passed a new law 
                codifying the use of seized/forfeited assets and 
                creating a new office in the treasury ministry to 
                manage these assets.

[[Page 15811]]

                    Mexico's achievements continued to be undermined by 
                chronic institutional weaknesses, particularly drug-
                related corruption. The GOM has taken steps to 
                strengthen internal controls, including expanding the 
                mandate of the Attorney General's Office's (PGR) 
                confidence control center and investigating numerous 
                individual cases of suspected corruption. One such 
                investigation implicated former Quintana Roo Governor 
                Mario Villanueva, currently a fugitive from justice. 
                President Zedillo has made combating corruption a 
                national priority, but he acknowledged success will 
                take time.
                    The USG and GOM cooperated closely on a wide range 
                of law enforcement and drug abuse prevention efforts in 
                1999, guided by a National Drug Strategy agreed to in 
                1998 and accompanying PMEs. The first formal evaluation 
                of the PMEs was completed in December 1999. Significant 
                maritime seizures in the final seven months of year 
                demonstrated enhanced U.S.-Mexican cooperation, as did 
                agreement by the two countries in November to establish 
                a new interdiction working group under the binational 
                High-Level Contact Group on Drug Control (HLCG). The 
                USG provided technical and material support and 
                training to Mexican agencies in furtherance of the 
                GOM's justice sector modernization initiative, demand 
                reduction programs and other efforts.
                    In 1999, the USG and GOM continued to work closely 
                on fugitive issues. The GOM extradited 14 fugitives to 
                the United States, including two Mexican national drug 
                traffickers, one of whom was also sought for the murder 
                of a U.S. Border Patrol agent. In keeping with its 
                historic 1996 decision to begin approving Mexican 
                nationals for extradition in appropriate cases, the GOM 
                appealed, with mixed results, several Mexican appellate 
                court decisions barring extradition. The GOM has 
                appealed to the Mexican Supreme Court a case which 
                could resolve conflicting decisions by lower appellate 
                courts and, thus, expedite delivery of fugitives in the 
                future. Regrettably, Mexico has yet to extradite a 
                major Mexican national drug trafficker.
                    The USG and GOM are committed at the highest levels 
                to continued cooperation in efforts to defeat and 
                dismantle heavily armed and well-financed trans-border 
                drug trafficking organizations. In recent years, the 
                two governments have constructed an unprecedented 
                framework for coordination, a mechanism for evaluation, 
                and fora for regular consultation on counter-drug 
                issues. Through daily working-level interaction between 
                counterpart agencies, policy-level discussions in the 
                HLCG and other bilateral entities, and collaboration in 
                multilateral groups, the two governments are finding 
                increasingly productive ways to work together against 
                the formidable threat drug trafficking poses to both 
                nations.
                     Nigeria 
                    Nigeria has failed to fully meet the criteria for 
                cooperation with the United States on counter-drug 
                matters and has not taken adequate steps on its own to 
                meet the goals of the 1988 UN Drug Convention. U.S. 
                vital national interests, however, require that Nigeria 
                be certified so that the assistance that would 
                otherwise be withheld remains available to support the 
                continuing transition to democratic civilian rule and 
                the increased efforts to improve cooperation on drug 
                and other crime issues evident under the democratic 
                government.
                    Nigeria remains the hub of African drug 
                trafficking. Nigerian poly-crime organizations operate 
                extensive global trafficking networks, dominate the 
                Sub-Saharan drug markets, and account for a large part 
                of the heroin imported into the United States. They 
                also transport South American cocaine to Europe, Asia 
                and elsewhere in Africa, especially South Africa, and 
                export marijuana to Europe and West Africa.
                    The counter-drug efforts of the Government of 
                Nigeria (GON) remain unfocused and lacking in material 
                support. The new democratic government of President 
                Obasanjo's strong public denunciation of drug 
                trafficking and financial crimes is a welcome change 
                from the high-level indifference that characterized 
                most of Nigerian military rule. However, there have 
                been no new actions or policies to bring about change.

[[Page 15812]]

                    The year 1999 saw the continuation of efforts 
                limited largely to interdiction of low-level couriers 
                and destruction of cannabis crops. Although the new 
                government signaled its willingness to work with the 
                USG on extradition issues, Nigeria did not extradite 
                anyone in response to outstanding U.S. extradition 
                requests. Well-drafted counter-drug legislation is 
                already on the books, but remains largely un-enforced.
                    Nigerian law enforcement agencies did not 
                significantly improve their counter-drug performance in 
                1999. There were no major trafficker prosecutions or 
                arrests by the National Drug Law Enforcement Agency 
                (NDLEA) in 1999. Total heroin seizures increased, due 
                primarily to a large seizure at Kano Airport. The NDLEA 
                has signaled a willingness to increase its professional 
                expertise, but institutional limitations make it 
                difficult for Nigerian law enforcement officials to 
                make progress against increasingly sophisticated 
                criminals. Asset seizures did not become a useful 
                counter-drug tool. Awareness of the local drug abuse 
                problem is growing, but demand reduction efforts have 
                been limited in scope and success.
                    Nigerian money launderers operate sophisticated 
                global networks to repatriate illicit proceeds from 
                drug trafficking, financial fraud, and other crimes. In 
                1995, the GON enacted a decree to combat illicit drug-
                derived money laundering, but enforcement has been 
                uneven, yielding few seizures and no convictions. 
                Nigeria is a party to the 1988 UN Drug Convention.
                    Newly-elected President Obasanjo retired 143 
                military officers tainted by positions they held during 
                the military government. Anti-corruption legislation 
                has been proposed, but is stalled in the senate. 
                Sporadic progress against corruption within the NDLEA 
                contributed to its reputation as Nigeria's most 
                professional law enforcement body. The NDLEA made 
                regular arrests of individual drug couriers in 1999, 
                but did not arrest or prosecute any major traffickers. 
                Assets have been seized, but no forfeitures, which 
                require convictions, have been made. The NDLEA chairman 
                was briefly held in contempt for refusing to release 
                several hundred thousand dollars worth of vehicles 
                while their owner's case proceeds slowly through the 
                legal system. The DEA received good cooperation from 
                the NDLEA, but rampant corruption prevents sharing of 
                sensitive information. NDLEA actions at airports, 
                including breaking up a ring that involved airline and 
                government employees, have made trafficking through 
                airports more risky. There is an active cannabis 
                eradication program, but figures are not available and 
                supply easily meets demand. NDLEA has opened well-
                publicized anti-drug clubs at the universities, 
                supplying them with anti-drug literature and videos.
                    Nigeria is one of the most important countries in 
                Africa. What happens in Nigeria politically and 
                economically will, to a large degree, determine whether 
                there is stability and progress toward democracy and 
                economic reform in West Africa. If Nigeria's ongoing 
                transition fails, the result might easily be an 
                implosion of government and the collapse of the 
                economy, triggering a humanitarian disaster in Africa's 
                most populous country (over 100 million people) and a 
                destabilizing exodus of Nigerians to neighboring 
                states. Such an upheaval could also disrupt the 
                movement of high-quality Nigerian oil, which accounts 
                for more than seven percent of total U.S. petroleum 
                imports.
                    If, on the other hand, Nigeria's transition 
                succeeds, it will be an example to all of Africa, and 
                that success has the potential to promote economic 
                growth and greater transparency in government. Nigeria 
                could become an engine for growth in West Africa. A 
                stable and democratic Nigeria will permit greater 
                cooperation between law enforcement agencies, and the 
                opportunity to reduce the impact of the Nigerian 
                criminals who prey on the American people.
                    The military's acceptance of its appropriate role 
                in a functioning democracy, and the new civilian 
                government's ability to govern, will be critically 
                impaired if Nigeria is deprived of the full range of 
                USG support. Building a political consensus and meeting 
                the challenges of a collapsing economy will also depend 
                in no small part on outside assistance and expertise.

[[Page 15813]]

                    Denial of certification would block assistance the 
                new democratically-elected government needs to meet 
                these challenges, seriously damaging the prospects for 
                success of stable, transparent democracy in Nigeria. 
                U.S. vital national interests require providing 
                humanitarian, economic and security assistance to 
                Nigeria as well as counter-drug assistance from all 
                sources. The risk of not doing so now would jeopardize 
                not only Nigeria's fledgling democracy, but also 
                Nigeria's attempts to reinvigorate its failing economy 
                and support for democracy and peacekeeping throughout 
                the region. Further, any new civilian government's 
                ability to work with the USG on all issues, including 
                counter-drug and other law enforcement, will depend on 
                its access to multilateral lending and U.S. technical 
                and economic assistance. The risks posed by the cutoff 
                of assistance clearly outweigh the risks associated 
                with GON's inadequate counter-drug performance over the 
                past year.
                    Pakistan
                    In 1999, Pakistan made progress towards eliminating 
                opium production by the year 2000 by reducing poppy 
                cultivation by 48 percent. The poppy crop fell to a 
                record-low of 1570 hectares. Cooperation on drug 
                control with the USG has been excellent and the 
                formation with DEA assistance of a Special 
                Investigative Cell (SIC) within the Anti-Narcotics 
                Force (ANF) was a major achievement. The overall record 
                on drug interdiction was encouraging, with heroin 
                seizures up 57 percent and several arrests of high-
                profile traffickers. The resolve of the Government of 
                Pakistan (GOP) to prevent the reemergence of heroin/
                morphine laboratories remained firm. Pakistan 
                extradited four drug fugitives to the United States and 
                arrested six others, a significant improvement on 
                previous years. Efforts to extend application of the 
                Control of Narcotic Substances Act (CNSA) and the Anti-
                Narcotics Force Act (ANFA) to tribal areas in North 
                West Frontier Province (NWFP) are continuing.
                    Pakistan's cabinet approved the drug control master 
                plan in early 1999, but implementation has been slowed 
                by a lack of funds. The GOP's counter-drug policies and 
                cooperation with the USG were unaffected by the October 
                1999 coup. Pakistan is a party to the 1988 UN Drug 
                Convention.
                    Pakistani law enforcement tripled opium seizures 
                from 3.65 to 11.50 metric tons, and increased heroin 
                seizures by 57 percent, from 2.36 to 3.90 metric tons. 
                Pakistan's illicit drug seizures were up significantly 
                compared to the same period in 1998. The ANF is 
                Pakistan's principal drug law enforcement agency. In 
                1999 the GOP began to examine ways to strengthen the 
                institutional capacity and performance of the ANF. With 
                DEA assistance, the ANF formed a vetted unit, or 
                Special Investigative Cell, thereby improving 
                intelligence collection and investigative capacity, and 
                took steps toward recruiting new personnel. The ANF 
                also arrested two politically powerful traffickers, one 
                a prominent journalist and influential politician, the 
                other a member of the then-ruling party, leading to the 
                break-up of a gang of corrupt officials posted at 
                Islamabad airport. All are awaiting trial.
                    1999 was a record setting year for ANF seizures of 
                heroin and opium recovered in individual raids (a 213 
                percent increase in heroin seizures), with ANF 
                Baluchistan making major contributions. Particularly 
                noteworthy were a 760 kilogram heroin seizure in Kharan 
                District of Baluchistan and a seizure in Turbat 
                District of Baluchistan of 2951 kilograms of opium, 
                2580 kilograms of hashish and 111 kilograms of heroin. 
                Apart from the ANF, the law enforcement agencies most 
                actively engaged in drug seizures include the police, 
                customs and the Frontier Corps.
                    In a major improvement over previous years, in 1999 
                the GOP arrested six drug fugitives and extradited four 
                defendants to the United States. There are 15 pending 
                extradition requests. In Baluchistan the ANF and 
                Frontier Corps detected and challenged a number of 
                Afghan convoys, resulting in firefights and seizures of 
                5.8 metric tons of opium, 1.1 tons of heroin, and seven 
                vehicles. The killing of three traffickers and serious 
                wounding of one ANF soldier may reflect the increased 
                challenges posed by well-armed traffickers.

[[Page 15814]]

                    There were no convictions of major drug traffickers 
                in 1999. Prosecution continued to drag out in the 
                courts. However, the GOP has funded the establishment 
                of five special drug courts to process drug cases more 
                efficiently. Chemical controls are adequate, but there 
                is still diversion of acetic anhydride from licit 
                imports. Pakistan is not a major money laundering 
                country, but, given the level of drug trafficking, 
                smuggling, and official corruption, money laundering 
                almost certainly occurs, mostly by means of unofficial, 
                traditional money transfer facilities, known as 
                ``hawala.''
                    The USG believes that Pakistan made an excellent 
                contribution to international drug control efforts. We 
                will support GOP efforts to target major heroin 
                trafficking organizations and increase seizures of 
                large shipments of opiates and precursor chemicals.
                    Panama
                    The Government of Panama (GOP) continues to 
                demonstrate its willingness to combat transnational 
                drug trafficking. The GOP seized significant amounts of 
                illicit drugs in 1999, despite apparent changes in 
                trafficking routes. The new Mireya Moscoso 
                administration has demonstrated its commitment to 
                combat drug trafficking, money laundering, and other 
                transnational crimes. Immediately after taking office, 
                the new administration set up an anti-corruption unit 
                in the Ministry of Economy and Finance. Panama's law 
                enforcement agencies continue to maintain excellent 
                relations with their U.S. counterparts.
                    Panama is a major transshipment point for illicit 
                drugs smuggled from Colombia. Cocaine is stockpiled in 
                Panama prior to being repackaged for passage to the 
                United States and Europe. Panama's location, largely 
                unpatrolled coastlines, advanced infrastructure, 
                underdeveloped judicial system, and well-developed 
                financial services sector make it a crossroads for 
                transnational crime, such as drug trafficking, money 
                laundering, illicit arms sales and alien smuggling. 
                According to USG statistics, GOP agencies seized 2,576 
                kilograms of cocaine, 1,558 kilograms of marijuana, 46 
                kilograms of heroin, and 600 liters of acetic 
                anhydride; they also made 131 arrests for international 
                drug-related offenses in 1999.
                    The GOP continued to implement its own national 
                counter-drug plan, the ``National Drug Strategy 1996-
                2001.'' Panama also made significant progress in 
                implementing its comprehensive chemical control 
                program.
                    The highest U.S. priorities in the coming year will 
                be signing a full six part bilateral counter-drug 
                maritime agreement, expanding anti-money laundering 
                legislation, increasing efforts to control the Black 
                Market Peso Exchange, and improving prosecutions of 
                money launderers and drug traffickers. Other U.S. 
                priorities in Panama include: supporting the GOP's 
                efforts to build a highly-professional, interagency, 
                counter-drug task force; developing the capabilities to 
                control sea lanes, rivers, island and coastal regions, 
                and the Canal area; and limiting cross-border criminal 
                influence. With the seriousness and commitment of the 
                new Moscoso administration, the USG is hopeful that 
                there will be measurable progress in these areas in 
                2000.
                    Paraguay
                    Paraguay is a major drug-transit country for 
                significant amounts of largely Bolivian cocaine and is 
                also a major money-laundering center in Latin America 
                (although it remains unclear what portion of money 
                laundering can be attributed to drug trafficking).
                    USG experts estimate that between 15 and 30 metric 
                tons of cocaine may transit Paraguay annually en route 
                to Argentina, Brazil, the United States and Europe. Of 
                this estimated amount, only 95 kilos of cocaine were 
                seized in 1999; moreover, only 211 arrests of low-level 
                marijuana and cocaine traffickers were effected, mostly 
                prior to April 1999. Paraguay is a source country for 
                high-quality marijuana. Although none of it enters the 
                United States, the Government of Paraguay (GOP) seized 
                record amounts of marijuana and eradicated 900 of the 
                estimated 2,500 hectares of marijuana fields.

[[Page 15815]]

                    In July 1999, a new penal code was enacted that 
                criminalizes conspiracy. This will allow the 
                prosecution of those who benefit from criminal 
                activity, but who are not the material perpetrators of 
                the crime. However, extensive training of prosecutors 
                and judges will be required before this new law can be 
                fully implemented. One major Brazilian trafficker, 
                arrested in 1997, was extradited to Brazil. The 
                legislature approved the bilateral extradition treaty 
                signed in 1998.
                    However, the GOP failed to accomplish the majority 
                of counter-drug goals for 1999 in a manner sufficient 
                for full certification. Since 1995, legislation has 
                been pending to provide police and prosecutors with 
                modern legal tools, such as use of informants, 
                controlled deliveries, and undercover investigations. 
                The Gonzalez Macchi administration submitted another 
                draft of the legislation to the Paraguayan Congress, 
                but it is the third administration to do so without the 
                legislation being passed. The GOP did not investigate, 
                arrest or prosecute any major drug traffickers, nor did 
                it take sufficient measures to prevent or punish public 
                corruption in general, or specifically with respect to 
                drug trafficking. The GOP did not implement the 1996 
                money laundering law by arresting or prosecuting 
                violators. Furthermore, the GOP did not provide 
                operational funding or adequate resources for the anti-
                money laundering secretariat, SEPRELAD, to enable it to 
                function as an independent organization (although in 
                December 1999 a budget was approved for 2000). The GOP 
                also failed to show progress toward development of an 
                effective anti-drug and organized crime investigative 
                and operational capability for the border regions.
                    Denial of certification would, however, cut off 
                civilian and military assistance programs designed to 
                strengthen Paraguay's democratic institutions and 
                promote modern civil-military relations. Strengthening 
                democracy in Paraguay is a U.S. vital national 
                interest, and failure in this effort would affect 
                negatively all other U.S. interests, including 
                cooperation with respect to illicit drugs, terrorism, 
                intellectual-property piracy, and environmental 
                preservation. The events of 1999--which included 
                defiance by then-President Cubas of the Supreme Court, 
                the assassination of Vice President Argana, the killing 
                of student demonstrators, the impeachment and 
                resignation of Cubas, drought, rural unrest, and the 
                reported presence of fugitive former general and coup 
                plotter Lino Oviedo--demonstrate the many challenges 
                facing Paraguayan democracy. They also contributed to 
                the GOP's unsatisfactory counter-drug performance. 
                Denial of certification would undermine the U.S. 
                ability to strengthen Paraguay's democratic 
                institutions and would put at risk all other U.S. vital 
                national interests.
                    The risks posed to the totality of U.S. interests 
                (e.g., promotion of democracy and transnational crime 
                cooperation) by a cutoff of bilateral assistance 
                outweigh at this point the risks posed by the GOP's 
                failure to cooperate fully with the USG, or to take 
                fully adequate steps on its own, to achieve the goals 
                and objectives of the 1988 UN Drug Convention.
                    In 2000, the GOP needs to translate its oft-stated 
                political will into concrete action against major drug 
                traffickers, money laundering, and official corruption.
                    People's Republic of China
                    The People's Republic of China (PRC) continued to 
                take strong, effective steps to combat the use and 
                trafficking of illicit drugs in 1999. Although 
                preliminary figures indicate that seizures of heroin 
                declined significantly from 1998's record level 
                (possibly because of a decline in production in Burma), 
                China's heroin seizures still accounted for the great 
                majority of heroin seized in all of Asia. Seizures of 
                methamphetamine and other amphetamine-type stimulants 
                soared, while those of precursor chemicals and opium 
                remained at previous years' levels. China cooperated 
                with the United States and other countries in providing 
                pre-export notification of dual-use precursor 
                chemicals. Government officials estimate that more than 
                ten percent of China's 1.3 billion citizens viewed a 
                nationwide anti-drug exhibition. DEA

[[Page 15816]]

                opened an office in Beijing. China continues to 
                cooperate actively on operational issues with U.S. 
                drug-enforcement officials. Domestically, China began a 
                ``Drug Free Communities'' program to eliminate drug 
                trafficking and abuse as well as drug-related crime.
                    During 1999, China cooperated with the UNDCP and 
                regional states on a number of projects to reduce 
                demand for illicit drugs. China also supported 
                effective crop-substitution programs in Burma and Laos.
                    The United States and the PRC signed a Customs 
                Mutual Assistance Agreement that will enhance 
                communications and accelerate the flow of counter-drug-
                related intelligence. China is a party to the 1988 UN 
                Drug Convention as well as to the 1961 UN Single 
                Convention and its 1972 Protocol, and the 1971 
                Convention on Psychotropic Substances.
                    U.S.-PRC cooperative law enforcement has advanced 
                over the last two years, but China frequently does not 
                respond to USG requests for information, and when it 
                does, the responses often arrive too late to be of 
                operational value. China has also failed to enforce 
                vigorously and to strengthen anti-money-laundering 
                legislation. For a number of reasons, China has also 
                continued its non-engagement in the Asia-Pacific Group 
                on Money Laundering and did not pursue membership in 
                the Financial Crimes Task Force.
                    Despite those shortcomings, the PRC has acted 
                forcefully to stop the production, trafficking in, and 
                use of illicit drugs within its borders and within the 
                region, and is committed to achieving the goals and 
                objectives of the 1988 UN Drug Convention.
                    Peru
                    In 1999, the Government of Peru (GOP) made 
                excellent progress in achieving its goal of eliminating 
                illegal coca cultivation. Despite the rehabilitation of 
                some previously abandoned coca fields, an additional 24 
                percent of coca cultivation was eliminated in 1999, for 
                an overall reduction of 66 percent over the last four 
                years. Contributing to this reduction was a 1999 manual 
                coca cultivation eradication total of 15,000 hectares. 
                The GOP counter-drug alternative development program, 
                working through 103 local governments, almost 700 
                communities, and more than 15,000 farmers, 
                significantly strengthened social and economic 
                infrastructure in these areas and helped shift the 
                economic balance in favor of licit activities. In 
                January 2000, the GOP held a conference in Paris to 
                promote alternative development support among major 
                donor countries.
                    However, there is also increasing evidence that 
                traffickers are processing cocaine hydrochloride within 
                Peru's borders, setting up laboratories near the 
                borders with Brazil, Colombia, and/or Bolivia, so that 
                they can leave the country quickly without risk of 
                interception. There were no interceptions or forcedowns 
                of trafficker aircraft by the Peruvian Air Force (FAP) 
                airbridge denial program in 1999--a tribute to the 
                strong deterrent effect this program has had on the 
                aerial transport of drugs. Recent seizures provide 
                evidence that drug traffickers are using maritime 
                shipment of cocaine from Callao and other Peruvian 
                ports, riverine transport, and overland transport to 
                move drugs out of Peru to evade aerial interdiction of 
                trafficking aircraft. Private shipping companies, 
                encouraged by the GOP, monitored sea cargo container 
                activities during 1999, which led to the seizure by the 
                Peruvian National Police of over five tons of cocaine 
                base and cocaine hydrochloride bound for Europe.
                    Reliable reports and eradication campaigns indicate 
                that Peru has an emerging opium poppy cultivation 
                problem. Cultivation of opium poppy is illegal in Peru; 
                whenever such plantings are identified, the GOP takes 
                prompt action to destroy them. Reliable reports 
                indicate that 55 kilograms of latex gum were seized in 
                1999, and 34,000 plants were eradicated.
                    In December, the Peruvian National Police arrested 
                major drug trafficker Segundo Cachique Rivera. The 
                Peruvian National Police chemical control unit 
                conducted over 1,500 regulatory and criminal 
                investigations of suspect

[[Page 15817]]

                businesses in 1999, making 58 arrests and seizing over 
                112 tons of controlled chemicals and two chemical 
                companies. The GOP also passed new legislation to 
                enhance the control of precursor chemicals.
                    Peru's significant reduction of coca under 
                cultivation proves that its strategy is working. 
                However, with higher prices being paid for coca, many 
                farmers will be tempted to abandon licit crops. It is 
                essential that manual eradication of illegal coca 
                crops, counter-drug related alternative development, 
                reinvigoration of the airbridge denial program, and 
                land and maritime/riverine interdiction all continue as 
                complementary programs. The GOP should also refine 
                relevant laws, especially as they pertain to money 
                laundering, asset seizure, and chemical controls.
                    Taiwan
                    The United States considers Taiwan a major transit 
                point for drugs affecting the United States due to its 
                geographic location, its role as a regional 
                transportation/shipping hub, and the activities of 
                organized crime groups. Taiwan in 1999 continued its 
                aggressive domestic counter-drug program and its 
                effective cooperation with the United States, through 
                the American Institute in Taiwan (AIT). Through October 
                1999, Taiwan authorities investigated 68,612 new drug 
                cases, an increase of 48.9 percent over the same time 
                period in 1998. The authorities seized more illicit 
                drugs, primarily methamphetamine-type stimulants, in 
                the first ten months of 1999 than all of 1998. Although 
                indictments and convictions for drug-related offenses 
                on Taiwan continued to fall in 1999, the decline 
                reflects the first full year in which a law, allowing 
                first-time addicts to participate in drug treatment 
                programs in lieu of imprisonment, has been in force.
                    Taiwan cannot be a signatory to the 1988 Drug 
                Convention because it is not a UN member. Taiwan 
                authorities, nonetheless, have passed and implemented 
                laws bringing Taiwan into compliance with the 
                Convention's goals and objectives. Taiwan also 
                continued to expand counter-drug cooperation with U.S. 
                law enforcement agencies, through AIT.
                    Encouraged by AIT and DEA, Taiwan authorities 
                passed two key drug laws to control both the 
                manufacture and sale of phenylpropanolamine (PPA). The 
                laws allow pre-export notification on shipments of PPA 
                to other countries and establishes a new agency to 
                monitor the production, use, and sale of drugs. Taiwan 
                has continued to strengthen its efforts to stop drug 
                trafficking and is addressing domestically and in 
                conjunction with the international community the 
                problem of money laundering.
                    Through AIT, Taiwan and U.S. law-enforcement 
                agencies cooperated closely on investigations and joint 
                operations concerning drug trafficking and related 
                crimes. Taiwan authorities worked with the United 
                States and other countries on anti-money laundering 
                efforts. Taiwan is an active participant in the Asia-
                Pacific Group on Money Laundering and the Egmont Group.
                    Thailand
                    At the time that the List of Major Drug Producing 
                and Transiting Countries was prepared at the end of 
                last year, information then available indicated that in 
                excess of 1000 metric tons of opium was cultivated in 
                Thailand. However, success with eradication programs 
                during the current crop year seems to have reduced 
                cultivation to well under that figure. Thailand remains 
                a major drug transit country as a significant amount of 
                heroin transits Thailand on its way to the United 
                States. Indeed, Thai authorities recently made a number 
                of large seizures of heroin headed for the United 
                States.
                    Thailand continued its long tradition of 
                cooperation with the United States and the 
                international community in anti-drug programs. The 
                Royal Thai Government (RTG) added to its leadership 
                role in transnational crime issues by co-managing the 
                International Law Enforcement Academy (ILEA) with the 
                USG in Bangkok. Thailand is one of the top three 
                countries in the world in cooperating with the United 
                States on extradition requests. Additional defendants 
                arrested in 1994's operation ``Tiger Trap'' were 
                extradited and extensive cooperative law enforcement 
                programs continued to bear fruit.

[[Page 15818]]

                    Thailand has one of the most effective crop 
                substitution and opium eradication operations in the 
                world. 1999 poppy cultivation was down 38 percent from 
                1998 and opium production was down 62 percent. 
                Eradication destroyed 50 percent of the crop leaving an 
                estimated 6 metric tons remaining. Cultivated acreage 
                has been slashed 91 percent since the onset of the 
                eradication program in 1984. With DEA support, the 
                Royal Thai Police (RTP) established the second in a 
                series of specially-trained drug law enforcement units 
                to target major trafficking groups. Overall, RTG 
                efforts to target trafficking organizations have 
                proceeded well, with numerous cases involving 
                organizations with trafficking links opened in 1999.
                    More elements of the new Constitution came into 
                force further strengthening rule of law and the 
                judicial system, and providing a firm basis for further 
                modernization and institutionalization of Thai society. 
                Thai civil society is developing rapidly and a press 
                with few restraints and the plethora of NGOs bring 
                increasingly strong public attention to official 
                corruption. A significant number of low and middle-
                ranked officers in the military and police were 
                disciplined for corruption, although arrests for 
                corruption continued to focus on lower-ranking officers 
                and officials.
                    The RTG is close to deciding whether to accede to 
                the 1988 UN Drug Convention. Passage of money 
                laundering legislation was the last main requirement. 
                Passage is expected in the March 2000 parliamentary 
                session.
                    The USG considers Thailand an important ally in 
                combating the production and flow of illicit drugs. Our 
                two countries have been working together to fight 
                production and trafficking of narcotics with great 
                success for over three decades, and DEA considers its 
                cooperation with Thailand to be one of its most 
                successful overseas partnerships anywhere in the world.
                    Venezuela
                    By some estimates, over 100 metric tons of cocaine 
                transit Venezuela annually en route to destinations in 
                the United States and Europe. Venezuela is also a 
                transit route for precursor chemicals used in the 
                production of illicit drugs in the Andean source 
                countries, and its financial sector is a prime 
                destination for laundering proceeds from Colombian 
                cocaine trafficking organizations.
                    Venezuelan law enforcement agencies had increased 
                success in drug interdiction in 1999, particularly on 
                land and at major ports. Cocaine seizures rose to 13.1 
                metric tons from 8.6 metric tons in 1998. This 
                improvement reflects both the increase in drug 
                transshipment through the country in 1999 and the high 
                level of tactical cooperation between Venezuelan and 
                U.S. law enforcement agencies. The Government of 
                Venezuela (GOV) also augmented its efforts to interdict 
                chemical precursors, after establishing in 1998 a set 
                of regulations to track the diversion of chemicals used 
                in drug production. Working closely in conjunction with 
                DEA, Venezuelan law enforcement officials seized over 
                110 tons of potassium permanganate, a prime chemical 
                used in the production of cocaine, and signed an 
                agreement with the Government of Colombia to exchange 
                information on chemical precursor movements.
                    Corruption has traditionally hampered the 
                effectiveness of Venezuela's law enforcement and 
                judicial institutions. The GOV took concrete steps 
                against corruption in 1999, initiating investigations 
                of corrupt officials and overseeing the implementation 
                of a new criminal code which has the potential to 
                provide a more efficient, transparent system of 
                justice.
                    To consolidate these important advances, the GOV 
                should take certain measures to improve its 
                performance, specifically: pass needed anti-organized 
                crime legislation; reenter negotiations with the USG on 
                a comprehensive maritime agreement; take the necessary 
                steps to permit the extradition of Venezuelan nationals 
                accused of drug-related crimes or organized crime 
                activity; and continue to enhance and refine 
                multilateral counter-drug interdiction cooperation.

[[Page 15819]]

                    Vietnam
                    As a national priority in Vietnam, the fight 
                against illicit drugs is second only to poverty 
                reduction. In 1999 Vietnam fought on two fronts: 
                against the production and use of drugs as well as 
                against cross-border trafficking of drugs. Vietnam, 
                with 2,100 hectares under poppy cultivation and a 
                potential of 11 metric tons of opium production, 
                intensified efforts to eradicate poppy crops. 
                Authorities also successfully eradicated 860 of an 
                estimated total of 1,000 hectares used for cannabis 
                cultivation in 1999.
                    The Government of Vietnam (GOV) instituted an 
                augmented prevention campaign to reduce domestic drug 
                use and abuse. Also in 1999 Vietnam stiffened law-
                enforcement campaigns against drug traffickers and 
                toughened prosecution to achieve a record number of 
                arrests and convictions. Authorities prosecuted 3,310 
                drug-related cases involving 4,952 defendants. Of cases 
                brought to trial, 35 received a death sentence and 21 
                were sentenced to life imprisonment. A high-profile 
                anti-corruption campaign was implemented and included 
                public trials of high-ranking government and party 
                officials involved in illicit drug and other smuggling.
                    Due, in part, to its location so close to the 
                ``Golden Triangle,'' Vietnam is a major transit point 
                for opium and heroin. To address this problem, the GOV 
                set up special task force units to combat drug 
                trafficking along the borders, and police, customs and 
                border forces arrested 19,010 drug criminals, an 
                increase in arrests of 31 percent over last year. Drug 
                interdictions increased by 32 percent, with seizures of 
                51.8 kilograms of heroin, 314 kilograms of opium, and 
                369 kilograms of cannabis. In its first year of 
                operation (September 1998-September 1999), the marine 
                police force began patrols to detect drug trafficking. 
                Vietnam also tightened oversight and control of 
                precursor chemicals, transferring responsibility for 
                monitoring to the Ministry of Public Security, Ministry 
                of Public Health, and Department of Customs, and set up 
                a Precursor Chemical Control Force in the Ministry of 
                Health.
                    In 1999 GOV began work on preparing draft counter-
                drug legislation to modernize organized-crime statutes 
                and techniques, enhance law-enforcement efforts, and 
                strengthen compliance with the 1988 UN Drug Convention, 
                to which Vietnam is a party. Vietnam is negotiating 
                counter-drug agreements with China and several EU 
                countries, has cooperated with Interpol, and has worked 
                closely with U.S. law-enforcement agencies. In April 
                1999 the Vietnamese Police joined the ASEANOPOL 
                Criminal Information System. UNDCP is assisting Vietnam 
                revise its Master Plan against drugs and craft its new 
                counter-drug legislation. Vietnam supports UNDCP 
                projects targeting demand reduction, crop substitution 
                and suppression of drug trafficking.
                    The United States and Vietnam have not yet 
                concluded a counter-drug agreement. The GOV has not 
                fully eradicated poppy crops, and farmers reverted to 
                poppy cultivation in some high-poverty rural areas, 
                bringing an additional 645 hectares under cultivation 
                in 1999 and increasing the total to 2,100 hectares 
                devoted to poppy crops. Vietnam's National Assembly 
                approved penal code revisions that criminalize money 
                laundering for the first time. The provisions will take 
                effect on July 1, 2000. Vietnam is working with the 
                World Bank to develop a money-laundering section in 
                draft banking legislation.
                    Despite some notable shortcomings, Vietnam has made 
                a vigorous effort to combat drug production and 
                trafficking. There is no question that the GOV at the 
                highest levels fully realizes the threat drugs present 
                to their own people and society and is doing everything 
                possible to counter the availability and use of illicit 
                drugs.

[FR Doc. 00-6471
Filed 3-22-00; 10:39 am]
Billing code 4710-10-M