[Federal Register Volume 66, Number 48 (Monday, March 12, 2001)]
[Presidential Documents]
[Pages 14454-14474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6296]


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  Federal Register / Vol. 66, No. 48 / Monday, March 12, 2001 / 
Presidential Documents  

[[Page 14454]]


                Presidential Determination No. 20001-12 of March 1, 
                2001

                
Certification for Major Illicit Drug Producing 
                and Drug

                Transit Countries
                Memorandum for the Secretary of State

                By virtue of the authority vested in me by section 490 
                (b) (1) (A) of the Foreign Assistance Act of 1961, as 
                amended (the ``Act''), I hereby determine and certify 
                that the following major illicit drug producing and/or 
                major illicit drug transit countries 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, People's Republic of China, Colombia, 
Dominican Republic, Ecuador, Guatemala, India, Jamaica, Laos, Mexico, 
Nigeria, Pakistan, Panama, Paraguay, Peru, Thailand, Venezuela, and Vietnam

                By virtue of the authority vested in me by section 490 
                (b) (1) (B) of the Act, I hereby determine and certify 
                that, for the following major illicit drug producing 
                and/or major illicit drug transit countries that do not 
                qualify for certification under section 490 (b) (1) 
                (A), the vital national interests of the United States 
                require that assistance not be withheld and that the 
                United States not vote against multilateral development 
                bank assistance:

Cambodia and Haiti

                Analysis of the relevant U.S. vital national interests 
                and risks posed thereto, as required under section 490 
                (b) (3) of the Act, is attached for these countries.

                I have determined that the following major illicit drug 
                producing and/or major illicit drug transit countries 
                do not meet the standards for certification set forth 
                in section 490 (b):

Afghanistan and 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 2001. Given that 
                the performance of each of these countries has 
                differed, I have attached an explanatory statement for 
                each of the countries subject to this determination.

[[Page 14455]]

                You are hereby authorized and directed to report this 
                determination to the Congress immediately and to 
                publish it in the Federal Register.

                    (Presidential Sig.)B

                THE WHITE HOUSE,

                    Washington, March 1, 2001.

Billing code 4710-10-M


[[Page 14456]]

                Annual Drug Certification Determinations Pursuant to 
                the Foreign Assistance Act

                Statements of Explanation

                Afghanistan

                    Afghanistan continues to be the world's largest 
                opium producer after another year of major increases. 
                Despite severe drought conditions in much of the 
                country, reliable United States Government estimates 
                indicate that cultivation increased by 25 percent and 
                potential production reached 3,656 metric tons. 
                Afghanistan was responsible for 72 percent of the world 
                illicit opium supply. Traffickers of Afghan heroin 
                continued to route most of their production to Europe, 
                but also targeted the United States. United States 
                seizure data suggest that at least five percent 
                (approximately one metric ton) of the heroin imported 
                into the United States originates in Afghanistan.
                    The Taliban and Northern Alliance factions vie for 
                national control of Afghanistan and both control 
                territory used by cultivators, refiners and 
                traffickers. United Nations Drug Control Programme 
                (UNDCP) and non-governmental organization (NGO) efforts 
                at supply and demand reduction have had little success 
                due to the lack of cooperation and support from the 
                Afghan factions. The factions, especially the Taliban, 
                which controls 96 percent of the territory where poppy 
                is grown, promote poppy cultivation to finance weapons 
                purchases as well as military operations. Those in 
                positions of authority have made proclamations against 
                poppy cultivation, but they have had little or no 
                effect on the drug trade, which continues to expand.
                    The Taliban issued in late July a new ban on poppy 
                cultivation. At the end of the year, evidence showed 
                that the area under cultivation was down substantially 
                over the previous year. However, it is not clear to 
                what extent the Taliban will enforce the ban on a 
                continuing basis. Nor is it clear that a ban on poppy 
                cultivation will impede a drug trade suspected by the 
                international community to have large quantities of 
                opium in storage. The announcement of the opium ban has 
                caused opium prices to rise, a boon for traffickers 
                sitting on large stockpiles. Neither the Taliban nor 
                the Northern Alliance has taken any significant action 
                to seize stored opium or precursor chemicals, or to 
                arrest and prosecute drug traffickers. On the contrary, 
                authorities continue to tax the opium poppy crop at 
                about ten percent, and allow it to be sold in open 
                bazaars, and to be traded and transported. While there 
                have been credible reports of significant reductions in 
                poppy cultivation, it will not be possible to assess 
                the extent of any eradication or reduction in 
                cultivation until mid-2001. The Taliban made no 
                discernible attempt to enforce earlier decrees in 1997 
                and 1999 that banned or reduced poppy. Rather, 
                cultivation increased countrywide in those years.
                    Drug production in and trafficking from Afghanistan 
                has a negative effect on the region. The drug trade 
                corrupts local authorities, is the major factor behind 
                skyrocketing regional heroin addiction in refugee and 
                indigenous populations, and is responsible for 
                increased levels of terrorism and drug-related violence 
                in neighboring countries. The Afghan drug trade also 
                undermines the rule of law by generating large amounts 
                of cash, contributing to regional money laundering and 
                official corruption in countries with weak economies 
                and institutions.
                    United States officials have repeatedly urged 
                Taliban officials to respect and implement 
                Afghanistan's international obligations on terrorism, 
                illicit drugs, and human rights. No Afghan faction took 
                any significant steps to achieve the goals and 
                objectives of the 1988 UN Drug Convention. In the 
                absence of an effective central government, a trained 
                anti-drug force, and an operational drug policy, there 
                is virtually no counterdrug law enforcement in 
                Afghanistan.

                The Bahamas

[[Page 14457]]

                    The Bahamas is a major transit country for U.S.-
                bound cocaine and marijuana from South America and the 
                Caribbean. The Government of the Commonwealth of the 
                Bahamas cooperates with the United States Government to 
                interdict drugs in Bahamian territory, reduce drug 
                demand, combat exploitation of the offshore financial 
                sector by money launderers and other financial 
                criminals, and enhance the ability of the Bahamian 
                judicial system to prosecute and convict drug 
                traffickers and money launderers.
                    During 2000, The Bahamas continued its active 
                participation in Operation Bahamas and Turks and Caicos 
                (OPBAT), a three-nation interdiction effort against air 
                and maritime drug smuggling. Total Bahamian cocaine 
                seizures were 47 percent higher than in 1999; marijuana 
                seizures were up five percent.
                    In June 2000, the Financial Action Task Force 
                (FATF) named The Bahamas a non-cooperative jurisdiction 
                due to deficiencies in its anti-money laundering 
                regime, and in July 2000, the United States Treasury 
                Department advised U.S. banks to closely scrutinize all 
                transactions with Bahamian banks. In response, the 
                Government of the Commonwealth of the Bahamas passed 
                legislation to strengthen its anti-money laundering 
                regime, to create a Financial Intelligence Unit (FIU), 
                to reform its strict banking secrecy rules, and to more 
                effectively regulate International Business Companies 
                (IBCs). The Bahamas also created a separate unit within 
                the Attorney General's Office to process Mutual Legal 
                Assistance Treaty (MLAT) requests and cleared its 
                backlog of outstanding United States Government 
                requests. With full implementation of its new anti-
                money laundering legislation, establishment of the FIU, 
                and continued improvement in international cooperation 
                via full and rapid responses to MLAT requests, The 
                Bahamas could become less attractive to financial 
                criminals.
                    The Government of the Commonwealth of the Bahamas 
                has not begun to implement the recommendations of a May 
                2000 assessment by the Organization of American States 
                Inter-American Drug Abuse Commission (OAS/CICAD) of The 
                Bahamas precursor chemical control system, which 
                included legislative actions, awareness-raising, and 
                institutional development.
                    During 2000, the Government of the Commonwealth of 
                the Bahamas ratified the Inter-American Convention 
                Against Corruption and successfully prosecuted two 
                corrupt police officers for drug trafficking. The 
                Bahamas is a party to the 1988 UN Drug Convention and 
                works to meet the goals and objectives of that 
                Convention.

                Bolivia

                    In 2000, the Government of Bolivia eliminated all 
                commercially significant coca cultivation in the 
                Chapare, Bolivia's principal coca-growing region. With 
                only 14,600 hectares remaining under cultivation in all 
                of Bolivia, largely in the Yungas region, Bolivia's 
                potential cocaine production was reduced from 70 metric 
                tons in 1999 to 43 metric tons in 2000.
                    Plans are underway to initiate coca eradication and 
                counterdrug alternative development in the Yungas 
                region, where 12,000 hectares of legal and 1,700 
                hectares of illegal coca remain. The Government of 
                Bolivia is also undertaking a reevaluation of the needs 
                of the legal coca market, with a view to revising 
                downward the legal maximum amount that can be grown. 
                There are no reports of diversion to the illegal 
                markets of the 300 hectares of illegal coca in the 
                Apolo region. Eradication forces will remain in the 
                Chapare to eliminate the last 600 hectares of coca and 
                to fully enforce the provisions of Bolivia's anti-drug 
                law.
                    Violent disturbances in October failed to derail 
                the progress in coca eradication; however, their 
                negative impact on overall economic activity in Bolivia 
                was significant. The disturbances also threatened 
                counterdrug alternative development production 
                infrastructure and hard-won market linkages with 
                Argentine and Chilean buyers.
                    Enforcement of Bolivia's anti-money laundering 
                legislation was not effective in 2000, and there were 
                no arrests or prosecutions. The asset seizure and 
                forfeiture regime remains mired in bureaucratic and 
                legal ambiguities.

[[Page 14458]]

                 It is unclear if new regulations planned to take 
                effect in May 2001 will resolve attendant 
                constitutional questions. The chemical interdiction 
                program, however, was highly successful in 2000, and 
                continued to force Bolivian traffickers to rely on 
                inferior substitutes for scarce and expensive chemicals 
                smuggled in from neighboring countries and to 
                streamline the cocaine base and hydrochloride (HCl) 
                production process. This resulted in the further 
                reduction of the purity of Bolivian cocaine, causing 
                most foreign traffickers to purchase base in Bolivia or 
                import Peruvian base through Bolivia for transshipment 
                and processing into HCl in Brazil where essential 
                chemicals are readily available.

                Brazil

                    Brazil continues to be a major transit country for 
                illicit drugs shipped to the United States and Europe 
                as well as a major producer of precursor chemicals. The 
                Government of Brazil's two main counterdrug events of 
                2000 were the launch of Operation Cobra and the 
                clarification of the division of counterdrug 
                responsibilities. Operation Cobra reinforces Brazil's 
                northern border with Colombia against any spillover 
                resulting from implementation of Plan Colombia by the 
                Government of Colombia. In addition, the Government of 
                Brazil reorganized its counterdrug effort to give 
                responsibility for supply reduction (interdiction) to 
                the Ministry of Justice and its sub-agencies (including 
                the Federal Police) and responsibility for demand 
                reduction (treatment and prevention) to SENAD, its 
                federal anti-drug agency.
                    Brazil's domestic drug problem is increasing. 
                Regionally, Brazil continues to cooperate, particularly 
                with Colombia and Peru, to effectively control the 
                remote frontier regions where illicit drugs are 
                transported. Federal Police reported seizing more than 
                four metric tons of cocaine in 2000, a figure which 
                does not reflect the additional drug seizures made by 
                state, local, and highway police forces. A record 
                amount of cannabis, 157 tons, was also reported seized. 
                Brazil improved its precursor chemical controls.
                    Law enforcement cooperation overall increased, as 
                well, among Brazilian law enforcement agencies and 
                regionally, particularly with Paraguay. Brazil made 
                progress in implementing its money laundering 
                legislation. In its bilateral relationship with the 
                United States, the Brazilian Congress ratified the 
                Mutual Legal Assistance Treaty in December, and resumed 
                negotiations on a Customs Mutual Assistance Agreement.

                Burma

                    The world's second largest source of illicit opium 
                and heroin, Burma accounts for approximately 80 percent 
                of the total production of Southeast Asian opium, 
                although production has declined yearly since 1996. 
                Poppy cultivation expanded in 2000 to 108,700 hectares, 
                a 21 percent increase over the 89,500 hectares 
                cultivated in 1999. Because of localized bad weather, 
                Burma produced 1,085 metric tons of opium in 2000, a 
                decrease of 5 metric tons from the 1,090 metric tons 
                produced in 1999. Heroin seizures declined for the 
                third straight year, and opium seizures rose only 
                slightly. Heroin seized in 2000 totaled 171 kilograms 
                compared to 273 kilograms in 1999 and 404 kilograms in 
                1998. Opium seizures in 2000 totaled 1,528 kilograms 
                compared to 1,445 kilograms seized in 1999 and 5,394 
                kilograms seized in 1998. Only two heroin refineries 
                were destroyed through November 2000. The Government of 
                Burma claimed to have eradicated 10,985 acres under 
                poppy cultivation in 2000.
                    In 2000, Burmese officers seized approximately 27 
                million methamphetamine tablets, a decrease from the 
                nearly 29 million seized in 1999 and only a small 
                fraction of the total produced in Burma. Seizures of 
                ephedrine, the precursor used to manufacture 
                methamphetamines, also declined from nearly 6,500 
                kilograms in 1999 to approximately 2,700 kilograms in 
                2000.
                    The Government of Burma pursued a cautious, low-
                risk counterdrug program, introduced no new counterdrug 
                policies, continued to exert little direct pressure on 
                major drug organizations, and made almost no attempt to 
                seize drugs or destroy illegal drug factories in United 
                Wa State Army-controlled territories.

[[Page 14459]]

                    The Government of Burma continued to pursue and 
                arrest individual drug traffickers, including members 
                of some former insurgent groups, but has been unwilling 
                or unable to take on the most powerful groups directly. 
                The cease-fire agreements signed with these insurgent 
                groups often implicitly condone their continued 
                participation in drug production and trafficking, at 
                least over the short term. The ethnic drug-trafficking 
                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 Government of Burma expressed support for poppy 
                eradication and crop substitution, but allocated few 
                resources to such projects. Its 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 
                Government of Burma's ability to continue or expand its 
                counterdrug 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. Government 
                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 is impossible to measure 
                accurately.
                    The Government of Burma continued to refuse to 
                transfer to U.S. custody 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 Government of Burma's counterdrug efforts in 
                2000 showed progress in a number of areas: 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 expanded, 
                however, if they are to have a significant impact on 
                the overall trafficking problem.
                    On balance, the United States Government remains 
                concerned that Burma's efforts are not commensurate 
                with the extent of the illicit drug problem within its 
                borders. Large-scale poppy cultivation and opium 
                production continues, and enormous quantities of 
                methamphetamines are produced. The Government of 
                Burma's effective toleration of money laundering, its 
                unwillingness to implement its counterdrug laws, and 
                its failure to transfer notorious traffickers under 
                indictment in the United States are all serious 
                concerns.

                Cambodia

                    Cambodia remained a weak link in the region's 
                efforts to combat the drug trade. Through 1998, chronic 
                political instability hindered Cambodia's ability to 
                mount a sustained counterdrug effort. Cambodia's 
                institutions are now only slowly improving. The 
                Government of Cambodia recognizes that its counterdrug 
                performance to date has been inconsistent and often 
                ineffective, and there is widespread recognition that 
                the country must be more aggressive in tackling drug-
                related issues.
                    There was some progress in improving law 
                enforcement and limiting corruption in 2000, but there 
                was insufficient progress for Cambodia to qualify for 
                full certification.
                    There were positive developments reported. 
                Cambodia's lead counterdrug agency, the National 
                Authority for Combating Drugs (NACD), cooperates 
                closely with the U.S. Drug Enforcement Administration, 
                regional counterparts, and the UNDCP. Cambodia is a 
                party to the 1993 Regional Memorandum of Understanding 
                on Drug Control, and is also a party to a six-country 
                Subregional Action Plan for Drug Control. In mid-2000, 
                the United States Government permitted mid-level 
                Cambodian officials to participate

[[Page 14460]]

                in courses at the International Law Enforcement Academy 
                (ILEA) in Bangkok, an initial step toward fulfilling 
                critical training shortcomings.
                    The Government of Cambodia continued to have some 
                success in combating illegal cultivation of marijuana. 
                The military conducted numerous sweeps against 
                marijuana producers in the major growing zones and 
                destroyed 60 hectares in 2000, three times the previous 
                total. However, seizures of harvested marijuana 
                declined. The Prime Minister spoke out forcefully 
                against corruption. He fired some high level officials, 
                including a provincial governor and his staff, for 
                involvement in illegal logging, and publicly threatened 
                to fire another governor for failure to act against 
                illegal marijuana cultivation.
                    Despite those positive developments, corruption in 
                Cambodia remained prevalent. Until this crucial problem 
                is more fully addressed, effective law enforcement will 
                remain elusive. The institutions needed to combat 
                illegal drugs remain in a nascent state, and neither 
                the institutions nor many of the officials within them 
                are sufficiently competent to address the problems they 
                face. This combination of a lack of competence and 
                continued corruption results in Cambodia failing to 
                meet the standards for full certification.
                    A vital national interests certification is 
                necessary again this year to protect U.S. vital 
                national interests in Cambodia. Democracy in Cambodia 
                is progressing. This year the legislature passed laws 
                to create an international tribunal to bring to trial 
                the former leaders of the Khmer Rouge, a major step 
                towards greater international acceptance and one that 
                will require donor assistance to Cambodia. Should 
                sanctions be imposed, it would not be possible for the 
                United States Government to assist in strengthening 
                Cambodia's democratic development. Cambodia remains 
                vulnerable to drug trafficking and other crime due to 
                the weakness of its institutions, a vulnerability that 
                will also put at risk its immediate neighbors. This 
                vulnerability would only be exacerbated by the 
                consequences of decertification. The risks to democracy 
                in Cambodia and to regional stability outweigh the 
                risks posed by Cambodia's failure to fully implement 
                effective drug control.

                China

                    The People's Republic of China (hereafter, China) 
                continued a multifaceted approach to combat the use and 
                trafficking of illicit drugs. Preliminary figures 
                suggest that heroin seizures will mirror those in 1999, 
                which fell steeply from record levels in 1998, but most 
                seizures of Burmese heroin now take place in China. 
                Seizures of amphetamine-type stimulants (ATS) 
                skyrocketed in 2000, demonstrating the growing threat 
                from synthetic drugs in China.
                    For the first time, Chinese authorities provided 
                the United States Government with samples of drugs 
                seized en route to the United States. China cooperated 
                with the United States and other countries in providing 
                pre-export notification of dual-use precursor 
                chemicals, and continues to cooperate actively on 
                operational issues with the U.S. Drug Enforcement 
                Administration through its office in Beijing. China 
                eliminated new anonymous bank accounts to combat money 
                laundering.
                    China's domestic counterdrug strategy emphasizes 
                both education and rehabilitation. The approach 
                includes anti-drug education for all school children, 
                warnings to citizens of the link between intravenous 
                drug use and HIV/AIDS, and a pilot ``drug free 
                communities'' program.
                    During 2000, China cooperated with the UNDCP and 
                regional states on projects on demand-reduction and on 
                crop-substitution in Burma and Laos. The United States 
                and China signed a Mutual Legal Assistance Agreement in 
                June 2000, but China has not yet activated the 
                bilateral Customs Mutual Assistance Agreement signed in 
                1999. In October, China signed a Memorandum of 
                Understanding with Thailand to enhance counterdrug 
                cooperation and in November signed a bilateral 
                cooperation accord with Laos on transnational crimes, 
                including illicit drug trafficking. China is a party to 
                the 1988 UN Drug Convention, the 1961 UN Single 
                Convention on Narcotic

[[Page 14461]]

                Drugs and its 1972 Protocol, and the 1971 UN Convention 
                on Psychotropic Substances.
                    Law enforcement cooperation with the United States 
                Government has advanced over the last three years, but 
                China frequently does not respond to U.S. requests for 
                information or responds too late to be of operational 
                value. China has also continued its nonengagement in 
                the Asia-Pacific Group on Money Laundering and did not 
                pursue membership in the Financial Action Task Force.
                    Despite some shortcomings, China 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 of the 
                1988 UN Drug Convention.

                Colombia

                    Colombia remains the world's largest cocaine 
                source, with 80 percent of the world's cocaine 
                hydrochloride produced, processed or transported 
                through Colombia. Still, Colombia met the certification 
                criteria in 2000 due to significant gains it made in 
                combating illicit drugs and its full cooperation with 
                U.S. counterdrug efforts throughout the year. The 
                Government of Colombia continues to demonstrate its 
                resolve in combating the illegal drug industry and had 
                a number of concrete achievements in 2000.
                    In December, the Government of Colombia initiated 
                the counterdrug component of ``Plan Colombia,'' the 
                comprehensive strategy to address the many interrelated 
                challenges facing the country. The United States 
                Government supports this multi-year Colombian 
                initiative and provided partial funding for it through 
                a supplemental appropriation in 2000. Importantly, both 
                ``Plan Colombia'' and the Pastrana administration's 
                National Drug Control Strategy couple alternative 
                development with aerial eradication of illicit crops, 
                recognizing that neither can succeed without the other.
                    In 2000, major cooperative efforts, such as 
                Operation New Generation, resulted in the arrests of 
                key traffickers. Meanwhile, important judicial 
                cooperation resulted in the extradition of 12 fugitives 
                to the United States, nine of whom are Colombian 
                nationals.
                    The Colombian National Police (CNP) continued its 
                outstanding counterdrug efforts. The CNP received 
                increased support from the Colombian Armed Services and 
                began joint operations in southern Colombia with the 
                Army's counterdrug battalions.
                    The Government of Colombia once again made 
                significant advances in combating maritime trafficking, 
                independently and bilaterally. The port security 
                program resulted in the seizure of 29 metric tons of 
                cocaine and demonstrated the potential of cooperation 
                between government and private industry. The Colombian 
                Navy has described a shipboarding agreement (signed in 
                1997) as one of its most effective counterdrug tools 
                and has credited this agreement with the capture of 
                over 23 tons of cocaine in 2000. The Government of 
                Colombia also enacted resolutions meant to disrupt the 
                logistics support to drug traffickers at sea by 
                improving monitoring of ships and boats and increasing 
                the penalties associated with carrying fuel in excess 
                of levels specified in issued permits.
                    The Government of Colombia has improved the 
                Colombian Air Force's (FAC) monitoring and interdiction 
                abilities. In 2000, the FAC effectively prevented 
                illegal aircraft from entering Colombia's north coast. 
                The CNP's civil aviation registration program, begun in 
                1999, inspected 398 aircraft in 2000, finding 58 
                violations with 20 testing positive for drug residue.
                    The aerial eradication program succeeded in 
                treating approximately 47,370 hectares of coca, a 
                slight decrease from last year's level, and roughly 
                9,000 hectares of opium poppy, the most ever in 
                Colombia. The CNP also had another strong year in the 
                realm of enforcement, with seizures of large amounts of 
                cocaine hydrochloride and base, coca leaf, heroin, 
                morphine and opium.

[[Page 14462]]

                    The Government of Colombia also took an important 
                step in combating financial crime when it joined the 
                Governments of Aruba, Panama and Venezuela, as well as 
                the United States, in establishing a multilateral 
                initiative to address the Black Market Peso Exchange 
                (BMPE). The BMPE is a highly organized money-laundering 
                system through which products such as liquor and 
                domestic appliances are purchased abroad with drug-
                generated dollars, smuggled into Colombia, and then 
                sold on the domestic market, thereby generating pesos 
                which can be introduced into the legitimate economy.
                    Overall, Colombia continued as a leader in 
                counterdrug efforts in 2000 and demonstrated its 
                staunch commitment to cooperate fully with the United 
                States in combating this shared problem.

                Dominican Republic

                    The Dominican Republic is a major transit country 
                for South American drugs, mostly cocaine, moving to the 
                United States. The country is used by drug smugglers as 
                both a command-and-control center and transshipment 
                point. Increasing amounts of designer drugs, especially 
                ecstasy, are being moved from Europe through the 
                Dominican Republic to Puerto Rico and the U.S. 
                mainland.
                    While extradition of fugitives to the United States 
                has become more routine as our bilateral extradition 
                relationship continues to improve, there still is no 
                regular process. A more consistent and predictable 
                extradition process remains a key U.S. objective in its 
                bilateral relations with the Dominican Republic. The 
                Dominican Republic is designated a major money 
                laundering country, but is not a regional financial 
                center. The Dominican Republic is a party to the 1988 
                UN Drug Convention and its counterdrug efforts are 
                consistent with the goals of the Convention.
                    In 2000, the Government of the Dominican Republic 
                continued to cooperate fully with the United States 
                Government on counterdrug goals and objectives. In 
                April, the Government of the Dominican Republic 
                submitted legislation to strengthen money-laundering 
                regulations; the legislation is currently awaiting 
                passage by the legislature. The new administration of 
                Hipolito Mejia, installed in August 2000, has pledged 
                full cooperation with the United States and other 
                countries in counterdrug activities. A National Drug 
                Plan for the years 2000-2005, published in August, will 
                guide its efforts.
                    Through December, with U.S. cooperation and 
                assistance, the Dominican Republic's National Drug 
                Control Agency (DNCD) seized 1,270 kilograms of 
                cocaine, 2,900 kilograms of cannabis and 20 kilograms 
                of heroin, and also made 4,625 drug-related arrests. In 
                November, the United States and the Dominican Republic 
                concluded a new, four-year, overflight agreement that 
                permits United States Government aircraft to fly 
                through the airspace of the Dominican Republic in 
                pursuit of smugglers' aircraft. Also in 2000, the DNCD 
                and the military established three special land control 
                units and three coastal units to protect the country's 
                border with Haiti and its coastline from drugs 
                transiting the country.

                Ecuador

                    Ecuador continues to be a major transit area for 
                drugs and precursor chemicals. Traffickers exploit 
                Ecuador's porous borders with Colombia and Peru to 
                consolidate smuggled cocaine and heroin into larger 
                loads for bulk shipment to the United States and Europe 
                hidden in containers of legitimate cargo.
                    Ecuador continued to struggle with economic and 
                political crises, including events in January 2000 
                which led to the ouster of the elected president and 
                replacement by his constitutional successor. Also in 
                2000, Ecuador became the first South American country 
                to adopt the U.S. dollar as its national currency.
                    The Ecuadorian National Police (ENP) seized more 
                than three tons of cocaine and coca base, 109 kilograms 
                of heroin, and 18 tons of marijuana.

[[Page 14463]]

                 The ENP established a unified anti-drug division to 
                strengthen the management of drug law enforcement, and 
                created an internal affairs unit. Ecuador's depressed 
                economy and continued lack of police/military 
                coordination, however, hamper counterdrug efforts. 
                Ecuador improved its enforcement of regulations on 
                controlled precursor chemicals.
                    The Ecuadorian Congress enacted a new criminal 
                justice procedural code, which will fundamentally 
                change its legal system from an inquisitorial to an 
                accusatory-style one. Ecuador also began to enact 
                legislative reforms related to money laundering, and to 
                legalize the use of controlled deliveries and 
                undercover operations as law enforcement tools. A joint 
                Ecuadorian task force, including financial intelligence 
                units, addressed coordination of drug trafficking and 
                money laundering investigations. Ecuador participated 
                in the OAS/CICAD initiative, the Mutual Evaluation 
                Mechanism (MEM).
                    Ecuador has cooperated with the United States in a 
                very significant way by permitting the United States 
                Government to establish and operate, at an Ecuadorian 
                Air Force base in Manta, a forward operating location 
                (FOL) for regional aerial counterdrug detection and 
                monitoring missions.

                Guatemala

                    The Government of Guatemala cooperated with the 
                United States Government in combating drug trafficking 
                in Guatemala. Guatemala is a party to the 1988 UN Drug 
                Convention, and most Guatemalan law enforcement 
                activities are consistent with its goals and 
                objectives. Once a major producer of opium, Guatemala's 
                sustained eradication efforts have reduced opium 
                cultivation and maintained it at insignificant levels. 
                Nevertheless, Guatemala remains a major drug-transit 
                country for South American cocaine en route to the 
                United States and Europe. In 2000, the Government of 
                Guatemala made an effort to increase its law 
                enforcement capabilities to counter the constant flow 
                of drugs transiting the country. However, drug seizures 
                declined significantly due to the tremendous turnover 
                in personnel in law enforcement and other government 
                agencies, corruption, and an acute lack of resources.
                    Professionalization of the National Civilian 
                Police's Department of Anti-Narcotics Operations 
                (DOAN), the main Guatemalan counterdrug force, is a 
                primary objective for the Government of Guatemala. It 
                is attempting to develop an effective, integrated 
                counterdrug and related law enforcement training 
                program that will improve the quality of the DOAN and 
                to enhance interdiction and eradication operations.
                    The Government of Guatemala increased the Public 
                Ministry's special anti-drug staff and continued with a 
                U.S.-funded program of professionalization for 
                prosecutors and the judiciary that included anti-
                corruption training. The Guatemalan Supreme Court 
                established special ``high impact'' courts to handle 
                drug-trafficking and other cases deemed too sensitive 
                for the regular court system. Despite these measures, 
                success in prosecuting major traffickers has been 
                limited. With U.S. assistance, the Public Ministry 
                created the Anti-Corruption Prosecutor's office which 
                has initiated nearly a thousand cases against 
                government officials although none have gone to trial.
                    The Government of Guatemala is considering draft 
                money laundering legislation and has signed (but not 
                ratified) the Central American Convention for the 
                Prevention of Money Laundering and Related Crimes.

                Haiti

                    The record does not support certification of Haiti 
                as having fully cooperated with the United States or 
                taken adequate steps on its own to achieve full 
                compliance with the goals and objectives established by 
                the 1988 UN Drug Convention, to which Haiti is a party. 
                However, it is in the vital national interests of the 
                United States to continue to provide U.S. foreign 
                assistance to Haiti.
                    Haiti remains a significant transshipment point for 
                drugs, primarily cocaine, moving through the Caribbean 
                from South America to the United

[[Page 14464]]

                States. Although cocaine flow through Haiti decreased 
                during 2000, only some of the decrease is attributable 
                to the efforts of the Haitian Government.
                    The Government of Haiti cooperated with the United 
                States Government in a limited number of areas. These 
                areas included: U.S. Coast Guard and multilateral 
                maritime interdiction efforts; expulsion of two non-
                Haitian fugitives; ratification of both a bilateral 
                maritime law enforcement agreement and the Inter-
                American Convention Against Corruption; and enactment 
                of a National Drug Control Strategy and anti-money 
                laundering laws.
                    However, the Government of Haiti failed to take 
                other significant counterdrug actions. It did not: 
                enact asset forfeiture and precursor chemical 
                legislation; draft and introduce anti-corruption 
                legislation; expand the anti-drug unit of the National 
                Police to the agreed-upon size; or fully implement a 
                Memorandum of Understanding among key law enforcement 
                and related agencies to ensure interagency counterdrug 
                cooperation. In addition, it showed no increase in 
                seizures of illegal drugs, including cocaine, nor in 
                the number of arrests of major traffickers. Neither did 
                it successfully prosecute money-laundering cases, nor 
                secure the forfeiture of trafficker assets. Finally, 
                the Government of Haiti did not conclude a counterdrug 
                Letter of Agreement with the United States Government.
                    Vital national interests of the United States 
                require that assistance to Haiti be maintained. 
                Continued assistance for programs to alleviate hunger, 
                increase access to education, combat environmental 
                degradation, and incubate civil society in the 
                hemisphere's poorest country is vital to strengthening 
                democracy, promoting economic growth, and reducing 
                pressure for illegal immigration. Terminating these 
                programs could prompt Haitian authorities to end their 
                cooperation in the repatriation of Haitian immigrants 
                interdicted at sea. These programs also address the 
                root causes of poverty and hopelessness in Haiti, which 
                are important contributing factors behind Haitian 
                involvement in the drug trade.
                    Therefore, the risks posed to the vital national 
                interests of the United States by a cutoff of bilateral 
                assistance outweigh the risks posed by Haiti's failure 
                to cooperate fully with the United States Government, 
                or to take adequate steps on its own, to achieve full 
                compliance with the goals and objectives established by 
                the 1988 UN Drug Convention.

                India

                    India is one of the world's top producers of licit 
                opium and is the sole producer of licit opium gum. It 
                is a key heroin transshipment country due to its 
                location between Southeast Asia and Southwest Asia, the 
                two main world sources of illicitly grown opium. India 
                is a modest but apparently growing producer of heroin 
                for the international market. The Government of India 
                continues to tighten controls to curtail diversion of 
                licit opium, but an unknown yet significant quantity of 
                licit opium finds its way to illicit markets. There was 
                a significant increase in diversion of licit opium from 
                the 1999 crop, but the 2000 crop suffered much less 
                diversion.
                    Under the terms of internationally agreed 
                covenants, and to meet U.S. certification requirements, 
                India is required to maintain licit production of opium 
                and carry over stocks at levels no higher than those 
                consistent with world demand, i.e., to avoid excessive 
                production and stockpiling which could ``leak'' into 
                illicit markets. India has complied with this 
                requirement.
                    Though the 1999 and 2000 licit opium gum harvests 
                had identical weather conditions, enhanced enforcement 
                during the harvest and weighing period prompted farmers 
                to turn in higher yields in 2000. The level of 
                diversion from the licit opium crop, while always 
                difficult to estimate, clearly declined from an 
                alarming level in 1999, when up to 300 metric tons of 
                opium gum may have been diverted to the black market. 
                The success seen in 2000 appears due in large part to 
                the more aggressive Government of India drug control 
                efforts during the harvest and collection period of the 
                crop. Licit opium diversion controls included re-
                surveys of plots after the planted

[[Page 14465]]

                crop reached a particular stage of growth to ensure 
                that the area under cultivation matched that licensed. 
                Cultivation more than five percent above the licensed 
                amount was destroyed, and the cultivator was liable to 
                prosecution. India has continued to tighten controls on 
                diversion and in 2000 agreed to a Joint Licit Opium 
                Poppy Survey (JLOPS) agreement with the United States, 
                a significant step in fighting diversion. The survey 
                will provide a firmer scientific basis for minimum 
                qualifying yields for farmers.
                    Poppies are grown illicitly in India in the 
                Himalayan foothills of Kashmir and Uttar Pradesh, and 
                in northeast India near the Bangladesh and Burmese 
                borders. The quantities of illicit production appear 
                relatively small. ``Brown sugar'' heroin, originating 
                in India, is available in Nepal, Bangladesh, Sri Lanka, 
                and the Maldives. Since January 1999, Indian 
                authorities have seized more than 337 kilograms of 
                refined ``white-powder'' heroin, at least part of which 
                was produced in India, destined for Sri Lanka. The 
                Central Bureau of Narcotics (CBN) began organized poppy 
                eradication campaigns in Arunachal Pradesh four years 
                ago. In its first campaign in 1997, the CBN destroyed 
                35 hectares of opium poppy. This increased to 95 
                hectares in 1998, and 248 hectares in 1999. In 2000, 
                153 hectares were destroyed.
                    In 2000 an estimated 1,089 kilograms of heroin were 
                seized, up 27 percent from 1999 (861) and 66 percent 
                over 1998 (655). Opium seizures totaled 2,218 
                kilograms, up from 1,635 in 1999 and 2,031 in 1998, 
                occurring mostly in the poppy growing areas.
                    Indian controls on precursor chemicals have reduced 
                the availability of these chemicals to the illicit 
                market. Nevertheless, illicit diversion of precursor 
                chemicals from India continued to occur. Indian 
                authorities have been very cooperative with the U.S. 
                Drug Enforcement Administration in sharing information 
                from no-objection certificates, in verifications of 
                end-users, and in notifications of seizures of India-
                produced chemicals.

                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 2000, the Government of Jamaica made some 
                progress toward meeting the goals and objectives of the 
                1988 UN Drug Convention. Increased trafficking through 
                Jamaica indicates the need for its Government to 
                intensify and focus its law enforcement efforts and to 
                enhance its international cooperation.
                    In 2000, the Government of Jamaica amended its 1996 
                Money Laundering Act to add fraud, corruption, and 
                firearms trafficking as predicate offenses. Further 
                action is needed, however, to bring Jamaica in line 
                with international standards, including an improved 
                asset forfeiture regime and an operational financial 
                analysis unit. In 1999, the Government of Jamaica 
                enacted legislation enabling asset-sharing agreements 
                with other governments; an agreement with the United 
                States is pending.
                    In April 2000, the Government of Jamaica brought 
                into force a Precursor Chemicals Act, budgeted for 
                implementation of chemical controls, and is taking 
                action, with U.S. assistance, to comply with 
                recommendations provided by the Organization of 
                American States Inter-American Drug Abuse Control 
                Commission's Precursors Control Project. Although the 
                Government of Jamaica made progress in implementing the 
                recommendations contained in a 1997 port security 
                assessment and increased security presence at its 
                ports, drug traffickers continue to use Jamaica's air 
                and seaports. The United States Customs Service reports 
                that Jamaica is the embarkation point of the largest 
                number of passengers arrested with drugs at U.S. 
                airports. While evidence from drug detection 
                technology, such as ion scan, can be exploited under 
                certain conditions, the Government of Jamaica should 
                consider providing specific legislation to admit this 
                type of evidence in Jamaican courts. In December 2000, 
                the Government of Jamaica introduced a wiretap bill in 
                Parliament.

[[Page 14466]]

                    The Fugitive Apprehension Team, a special police 
                unit dedicated to the apprehension and eventual 
                extradition of criminals wanted by the United States, 
                aided by officers of the United States Marshals 
                Service, made over 20 arrests in 2000, more than double 
                the number in 1999. The Government of Jamaica 
                extradited 10 people to the United States in 2000 and 
                is actively working on over 40 cases. Legislation 
                creating drug courts came into force in 2000; the 
                courts should begin sitting in 2001.
                    Corruption continues to undermine law enforcement 
                and judicial efforts against drug-related crime in 
                Jamaica. The Government of Jamaica reintroduced in 
                Parliament its anti-corruption bill, which passed in 
                December, and amendments to strengthen the Parliament 
                (Integrity of Members) Act. Implementation of these 
                bills and ratification of the Inter-American Convention 
                Against Corruption could help the Government of Jamaica 
                root out corruption in the public sector.
                    A significant increase in the flow of cocaine 
                through Jamaica in the first half of 2000, coupled with 
                reduced cocaine seizures and marijuana eradication by 
                the Government of Jamaica, indicates that more 
                intensive law enforcement action with enhanced 
                international cooperation is necessary to disrupt drug 
                trafficking and production activities in Jamaican 
                territory and waters. Such actions include the arrest 
                and prosecution of significant drug traffickers 
                operating in Jamaica, dismantling of small independent 
                groups that conduct the drug trade, and increased drug 
                seizures and eradication. As it agreed to do in 1998, 
                the Government of Jamaica should develop a vetted 
                special investigative unit to identify and target 
                significant drug traffickers. Jamaican forces 
                participated in combined operations with the United 
                States under a bilateral maritime agreement, but should 
                take full advantage of the agreement in order to reduce 
                the drug flow through Jamaica. U.S. law enforcement 
                agencies note that cooperation with their Jamaican 
                counterparts is generally good, but could be 
                significantly improved.
                    The Government of Jamaica has in place a national 
                drug control strategy that covers both supply and 
                demand reduction; specific goals and objectives, 
                together with measures of effectiveness, should be 
                incorporated in this strategy. Jamaica is a party to 
                the 1988 UN Drug Convention.

                Laos

                    Laos remains the world's third largest producer of 
                illicit opium, behind Burma and Afghanistan. For the 
                2000 growing season, the United States Government 
                estimates Laos's potential production at 210 metric 
                tons, which is substantially greater than the 1999 
                estimate of 140 metric tons. Opium cultivation 
                increased six percent. The higher production estimate 
                can be attributed to improved weather conditions and an 
                increase in estimated yields, although the increase in 
                cultivation also contributed to a lesser degree.
                    Laos continued to cooperate with the United States 
                Government in crop substitution projects. Most crop 
                substitution project areas funded by the United States 
                Government continued to show low levels of opium 
                cultivation. As a first step for the new Lao-American 
                project in Phongsali Province, construction began on a 
                72-kilometer road that will link remote, opium-
                cultivating villages. The Government of Laos also 
                continued cooperation in Houapanh Province.
                    In March, the Government of Laos held its first 
                national conference on drug control, at which 
                counterdrug strategies and work plans were formulated. 
                In October, Laos formally committed itself to 
                eliminating opium by 2008 and all drugs by 2015, in 
                accordance with the political statement and plan of 
                action enacted by the Association of Southeast Asian 
                Countries at a UNDCP Congress in Bangkok. The 
                Government of Laos continued to work closely with the 
                UNDCP to develop a master plan for opium elimination 
                and to raise funds for that effort.
                    Cooperative efforts on law enforcement also 
                continued. New counterdrug law enforcement offices 
                opened in Champasak and Houapanh provinces,

[[Page 14467]]

                and the office in Udomxai moved to quarters refurbished 
                with U.S. assistance. Seizures of heroin and 
                methamphetamine increased sharply, and the Lao police 
                cooperated with United States Government officials in 
                counterfeit U.S. currency investigations. Police 
                performance and law enforcement in general, however, 
                continued to fall short of goals. Counterdrug police 
                units need more training and better coordination. The 
                Government of Laos is not yet a party to the 1988 UN 
                Drug Convention; its stated goal is ratification of the 
                convention in the near future, as agreed by all 
                participants in the 1998 UN General Assembly Special 
                Session on Drugs.

                Mexico

                    Sharing a nearly 2000-mile border with the United 
                States, much of the drug-related criminal activity in 
                Mexico is linked to the U.S. illicit drug market. 
                Mexico is a major source of opium poppy and cannabis. 
                It is also a major drug transit country for cocaine, 
                heroin, methamphetamine and cannabis, and Mexican-based 
                organized crime plays a significant role in drug 
                distribution in the United States.
                    Both the Governments of Mexico and the United 
                States recognize that bilateral cooperation is 
                essential to effective action against these transborder 
                criminal groups as well as against other aspects of the 
                shared drug problem. The drug issue is among the top 
                issues on the bilateral agenda. Greater information 
                sharing and the establishment of formal mechanisms to 
                achieve our shared goals, particularly on drug 
                interdiction and money laundering, characterized 
                bilateral counterdrug cooperation in 2000.
                    The Government of Mexico continued its broad-based 
                program to combat drug trafficking and related crimes, 
                as well as to address a worrisome increase in drug 
                abuse. Drug-related violence, particularly along the 
                border with the United States, remained a major 
                concern. The Government of Mexico made progress in its 
                efforts to dismantle the transborder drug cartels, 
                particularly the Tijuana-based Arellano Felix 
                Organization. Mexican military and law enforcement 
                authorities arrested both the cartel's chief of 
                operations and its financial manager. These and other 
                high profile arrests represent significant 
                accomplishments for Mexico's counterdrug agencies.
                    Mexico's eradication program is one of the largest 
                and most aggressive in the world. Eradication, coupled 
                with severe drought, reduced cultivation by almost 50 
                percent from 1999 to approximately 1,900 hectares. This 
                resulted in record low levels of opium poppy 
                production, and heroin production fell from just over 4 
                metric tons in 1999 to only 2.5 metric tons in 2000, a 
                record low.
                    The Mexican financial system remains vulnerable to 
                international money laundering, particularly given the 
                large amounts of drug proceeds being laundered by 
                Mexico-based criminal organizations. The Government of 
                Mexico took important steps in 2000 to strengthen its 
                anti-money laundering infrastructure. Recent 
                legislative modifications and regulations lowered the 
                threshold for declarations of large amounts of currency 
                or monetary instruments and imposed requirements on 
                non-bank financial institutions; this should improve 
                the Government of Mexico's ability to detect money 
                laundering and to prosecute money laundering cases.
                    Since much of the money laundered in Mexico 
                originates in the United States, there is extensive 
                bilateral cooperation in this area. In 2000, the 
                Governments of Mexico and the United States signed an 
                agreement to facilitate tracking the movement of large 
                sums of money between the two countries. In June 2000, 
                Mexico became a member of the Financial Action Task 
                Force, the leading international body dedicated to 
                fighting money laundering. The Government of Mexico 
                also enacted legislation to strengthen reporting 
                requirements for large-value domestic currency 
                transactions. Aggressive enforcement of these 
                regulations will be needed to safeguard the integrity 
                of Mexico's financial institutions.
                    Regarding the return of fugitives, the Mexican 
                Supreme Court ruled that the extradition of Mexican 
                nationals is permissible under Mexican law.

[[Page 14468]]

                 This reversed several lower court rulings that 
                prevented the extradition of Mexican nationals facing 
                criminal charges in the United States. Although issued 
                in 2001, the decision represents the culmination of a 
                sustained effort by the Zedillo Administration to 
                strengthen bilateral law enforcement cooperation. In 
                addition, the Mexican Senate ratified the temporary 
                surrender protocol to the bilateral extradition treaty, 
                which, likewise, will enhance cooperation in bringing 
                fugitives to justice.
                    The Government of Mexico increased its efforts to 
                reduce the demand for drugs domestically, giving 
                special attention to the northern border, where the 
                incidence of drug abuse and drug-related violence, is 
                up to three times the national average. Cross-border 
                cooperation on drug abuse and crime prevention has been 
                increasing. For example, Baja California's Secretariat 
                of Education and the San Diego School District have 
                initiated a pilot project introducing a curriculum on 
                the ``culture of lawfulness'' to help young people 
                better understand and thus resist involvement in crime 
                and corruption. The appointment of a ``drug czar'' for 
                demand reduction brought new attention to federal 
                efforts to reduce drug use.
                    In its struggle against drugs, Mexico still faces 
                daunting challenges. One of the most difficult is 
                corruption within the law enforcement institutions 
                fostered by drug trafficking organizations. The Zedillo 
                Administration continued to promote reform efforts, but 
                these were undermined by such factors as administrative 
                shortcomings in its law enforcement agencies, i.e., low 
                salaries and a lack of operational funds and equipment. 
                President Fox campaigned on a platform of fighting 
                crime and corruption, and has undertaken reorganization 
                and reform of the justice sector, sending a strong 
                signal of commitment.
                    The Governments of Mexico and the United States 
                continue to build upon the existing infrastructure of 
                counterdrug policy coordination mechanisms, training 
                and information sharing, equipment and technical 
                assistance, as well as bilateral law enforcement 
                cooperation, through the development of bilateral 
                agreements, multilateral mechanisms, and working-level 
                communications. Step by step, the United States and 
                Mexico will expand this infrastructure and work to 
                remove legal impediments and other roadblocks to 
                effective cooperation against transnational criminal 
                organizations.

                Nigeria

                    The Government of Nigeria made significant efforts 
                in 2000 to address its drug trafficking problem. 
                Democratically elected President Obasanjo has publicly 
                denounced drug trafficking. The Nigerian National 
                Assembly passed tough anti-corruption legislation that 
                created an anti-corruption commission with broad 
                powers. The Obasanjo Administration supported the 1990 
                National Drug and Law Enforcement Agency (NDLEA) Act 
                Number 33, which dictates that Nigerians convicted of 
                drug offenses abroad will be arrested upon their 
                deportation back to Nigeria, and, if convicted, be 
                liable for a minimum of five years additional 
                imprisonment.
                    In 2000, the Government of Nigeria demonstrated its 
                commitment to counterdrug cooperation by transferring 
                to U.S. custody four fugitives, including two 
                individuals indicted for serious drug and drug-related 
                offenses and designated under the Foreign Narcotics 
                Kingpin Designation Act. Alhaji Bello Lafiaji, the new 
                chief of the NDLEA (which has primary responsibility 
                for combating drug smuggling and drug abuse), also 
                declared an all-out offensive against drug trafficking, 
                called for the harmonization of Nigeria's drug 
                legislation, and sought increased international 
                assistance for the drug agency.
                    Nigerian counterdrug efforts during 2000 primarily 
                focused on the interdiction of couriers transiting 
                Nigeria's airports as well as a public campaign focused 
                on destroying plots of cultivated marijuana throughout 
                the country. The NDLEA's most successful interdictions 
                have taken place at Nigeria's international airports, 
                forcing smugglers to change tactics and ship contraband 
                via Nigeria's five major seaports or across its porous 
                land borders. The NDLEA reported a total of 107 
                kilograms of cocaine and heroin seized

[[Page 14469]]

                during 2000, as well as the arrest of 1,881 drug 
                traffickers during the first ten months of the year. 
                Several Nigerian customs officials involved in an 
                attempt to smuggle heroin to the United States were 
                apprehended and now face trial for their crime. In 
                addition, a Nigerian military general was court 
                martialed, stripped of his rank, and dismissed from the 
                Army; he remains in the custody of military officials 
                after being implicated in a heroin smuggling case, 
                while he was stationed in Pakistan.
                    The NDLEA conducted an active eradication campaign 
                in 2000 and reported a total of 961,345 kilograms of 
                cannabis destroyed. Recently, the NDLEA has highlighted 
                this eradication campaign by inviting dignitaries to 
                the various destruction ceremonies around the country 
                and releasing press reports highlighting their 
                eradication activities.
                    Cooperation between Nigerian and U.S. law 
                enforcement agencies was good during 2000. However, law 
                enforcement efforts are often stymied by the slow pace 
                of the Nigerian judicial system, which can be 
                attributed to both intimidation and corruption of the 
                judiciary by criminal organizations. In addition, 
                within the judicial system, the Government of Nigeria 
                needs to establish a reliable extradition process that 
                will allow extradition requests to be heard 
                expeditiously and fairly.
                    Nigeria is a hub of money laundering and criminal 
                financial activity, not only for the West African sub-
                region, but also increasingly for the entire continent. 
                Nigerian money laundering is directly linked to drug 
                trafficking, as well as such related activities as 
                document, immigration and financial fraud. In response 
                to international concerns, the Government of Nigeria 
                has taken positive steps to combat criminal activity 
                and has become closely involved with U.S. law 
                enforcement agencies in attempting to address financial 
                crimes and money laundering in Nigeria.

                Pakistan

                    Pakistan is an important transit country for Afghan 
                opiates and cannabis. In 2000, Pakistan sharply reduced 
                poppy cultivation, dropping from 1,670 to 515 hectares, 
                a 67 percent decrease from 1999. Government of Pakistan 
                counterdrug cooperation with the United States 
                Government was excellent. Interdictions of heroin 
                increased 85 percent and several major traffickers were 
                arrested. The Government of Pakistan has prevented the 
                reemergence of large heroin/morphine processing 
                laboratories. However, there was little progress in 
                2000 on pending extradition cases of drug fugitives.
                    Pakistan almost achieved its ambitious goal of 
                eliminating opium production by the year 2000. While 
                Pakistani opium production has plummeted, the tripling 
                of poppy cultivation in Afghanistan since 1993 and 
                growth in sophistication of the Afghan drug trade are 
                putting enormous pressure on the Government of 
                Pakistan's border control efforts and Pakistani 
                society. This means more drugs transiting Pakistan, a 
                growing addiction problem, and more cash available for 
                bribery and official corruption.
                    Pakistan's illicit drug seizures were up 
                significantly compared to the same period in 1999. 
                During the first 10 months of 2000, 7.4 metric tons of 
                heroin, 7.8 metric tons of opium, and 108.1 metric tons 
                of hashish were seized (compared to 4.0, 12.9 and 70.0 
                metric tons, respectively, in 1999). Seizures of acetic 
                anhydride, an important precursor chemical for 
                producing illicit drugs, consisted of small 
                consignments originating in India. The Anti-Narcotics 
                Force's (ANF) seizures of heroin and cannabis set 
                records in 2000.
                    The prosecutions of most drug and other criminal 
                cases in Pakistan are protracted. Corruption and low 
                salaries threaten the integrity of law enforcement and 
                judicial institutions throughout Pakistan. Judges grant 
                continuances; defendants file delaying interlocutory 
                appeals; witnesses are reluctant to testify; and 
                bribery can influence case outcomes. The trial of Sakhi 
                Dost Jan Notezai, a prominent drug trafficker and 
                suspected member of the Quetta Alliance trafficking 
                syndicate, finally concluded this year after seven 
                years of proceedings. He received a sentence of life in 
                prison and forfeited his

[[Page 14470]]

                assets. The case of another alleged drug trafficker, 
                Munawar Hussain Manj, a former member of Pakistan's 
                National Assembly, is still pending in the superior 
                court, after five years of proceedings. The case of 
                Rahmat Shah Afridi, owner of an English-language daily 
                and an influential politician from the Northwest 
                Frontier Province, arrested in early 1999, also is 
                pending. One positive step was the establishment of 
                five special drug courts in 2000, although they are not 
                yet fully operational and lack realistic operating 
                budgets.
                    The ANF continues to cooperate effectively with the 
                U.S. Drug Enforcement Administration to raise 
                investigative standards. The creation of the Special 
                Investigative Cell (SIC), trained and equipped by the 
                United States, has been a milestone in improving the 
                Government of Pakistan's counterdrug efforts. The SIC 
                targets major drug trafficking organizations and first 
                year results have been encouraging. With this success, 
                plans are underway to expand SIC operations.

                Panama

                    The Government of Panama continued to demonstrate 
                its willingness to combat transnational drug 
                trafficking. 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, weak 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.
                    The Government of Panama's interdiction of illicit 
                drugs in 2000 increased significantly over 1999, with 
                record seizures of heroin and first ever seizures of 
                MDMA (Ecstasy). It enacted two laws and issued two 
                executive decrees that greatly strengthen Panama's 
                money laundering laws and the ability to share 
                information with international counterparts. Panama 
                took steps toward implementing its comprehensive 
                chemical control program by establishing a control 
                board that will coordinate government entities and the 
                private sector. In addition, as a step towards 
                combating financial crime, the Government of Panama 
                joined the multinational initiative to address the 
                Black Market Peso Exchange.
                    The highest U.S. bilateral counterdrug priorities 
                in the coming year will be signing a full six-part 
                counterdrug maritime agreement and assisting the 
                Government of Panama in curbing corruption, 
                implementing anti-money laundering legislation, 
                increasing security and oversight of the Colon Free 
                Zone, and improving prosecutions of money launderers 
                and drug traffickers. Other U.S. priorities in Panama 
                include supporting the Government of Panama's efforts 
                to: build a highly professional interagency counterdrug 
                task force; develop the capability to control sea 
                lanes, rivers, island and coastal regions, and the 
                Canal area; and limit cross-border criminal influence. 
                With the commitment of the Moscoso administration, the 
                United States Government is hopeful that there will be 
                measurable progress in these areas in 2001.

                Paraguay

                    Paraguay remains a transit country for 
                approximately 10 metric tons of mostly Bolivian cocaine 
                annually, as well as a source country for high-quality 
                marijuana that is not trafficked to the United States. 
                Paraguay is a large money-laundering center in Latin 
                America, but it remains unclear how much may be drug-
                related. Paraguay is a party to the 1988 UN Drug 
                Convention.
                    The Government of Paraguay improved its anti-drug 
                cooperation with the United States Government in 2000. 
                It named a new head of the anti-drug secretariat 
                (SENAD) who reenergized anti-drug efforts by forming a 
                new unit to investigate major traffickers and their 
                organizations. This initiative led to the arrest of 4 
                major traffickers and the destruction of an aircraft 
                ferrying cocaine to Brazil. Cocaine seizures remained 
                stable at 1999 levels. Paraguay enhanced its 
                cooperation with its neighbors by signing agreements

[[Page 14471]]

                on judicial cooperation and information sharing, and by 
                expelling a major trafficker to Brazil. While judicial 
                cooperation remains weak, the Paraguayan Attorney 
                General named special prosecutors with national 
                jurisdiction to strengthen SENAD's counterdrug 
                operations.
                    Although anti-drug cooperation with the United 
                States Government improved in 2000, the Government of 
                Paraguay still has much to accomplish. The Paraguayan 
                Senate is considering a complete modernization of 
                existing drug law, but it failed to pass long sought 
                authorities for police to use informants and to conduct 
                undercover operations and controlled deliveries. These 
                authorities will be key to investigating and 
                prosecuting major drug traffickers, and sustaining the 
                successes of 2000 against trafficking organizations in 
                Paraguay.
                    The Government of Paraguay provided the Anti-Money 
                Laundering Secretariat with its first independent 
                budget, but has not shown much improvement on combating 
                money laundering. Only one money-laundering case was 
                recommended for prosecution, and no arrests were made 
                in 2000. A cumbersome judicial process is largely 
                responsible for consistently minimal success in the 
                Government of Paraguay's enforcement of its drug-
                related asset seizure and forfeiture laws. The 
                Government of Paraguay also made little progress 
                against official corruption and has not made progress 
                in developing an effective anti-drug and organized 
                crime investigative and operational capability for the 
                border areas.
                    While action against money laundering and official 
                corruption, passage of legislation for modern police 
                authorities, and controlling its borders remain 
                important areas needing improved cooperation by the 
                Government of Paraguay, the United States Government is 
                impressed with the steps taken against some of the 
                major trafficking organizations operating in Paraguay.

                Peru

                    Despite the political turbulence in Peru during 
                2000, the Government of Peru made progress on all major 
                components of its counterdrug program. Over 6,200 
                hectares of coca were eradicated manually, which 
                contributed to a 12 percent cultivation reduction in 
                2000, and an overall 70 percent reduction in coca 
                cultivation over the past six years. The Peruvian 
                transition government has restated its commitment to 
                the reduction of coca cultivation. There was a 
                significant increase in the number of opium poppy 
                fields discovered and destroyed by the Government of 
                Peru during 2000; however, information on the extent of 
                opium poppy cultivation throughout Peru remained 
                scarce.
                    In January 2000, the Peruvian National Police 
                arrested Adolfo Cachique Rivera, co-head of a major 
                Peruvian cocaine base trafficking organization. His 
                arrest effectively ended the illegal cocaine operations 
                of this organization, which had exported multi-kilogram 
                quantities of cocaine base to Brazil and Colombia for 
                over nine years. Luis and Jose Aybar-Cancho, the heads 
                of a major arms and drugs trafficking organization, 
                were also arrested.
                    While the total amount of drugs seized in 2000 
                declined, the Peruvian National Police destroyed 
                several cocaine hydrochloride laboratories. The police 
                chemical control unit conducted over 1,000 regulatory 
                and criminal investigations of suspected chemical 
                companies in 2000, making 41 arrests, seizing over 158 
                metric tons of controlled precursor chemicals, and 
                closing six chemical companies. The Government of Peru 
                cooperated with the U.S. Drug Enforcement 
                Administration and Chilean authorities in the nine-ton 
                seizure of cocaine from a maritime shipment in the 
                Chilean seaport of Arica. There were also two 
                successful interceptions of trafficker aircraft by the 
                Peruvian Air Force (FAP) during 2000. One of these 
                interceptions highlighted significant interagency 
                Peruvian cooperation between the air force and police, 
                which forced the traffickers to burn their aircraft and 
                sacrifice its drug payload.
                    The counterdrug alternative development program 
                achieved significant results, increasing the gross 
                value of licit agricultural production to $64.6

[[Page 14472]]

                million in targeted areas. This exceeds the gross value 
                of coca leaf production in the same areas by ten 
                percent, and marks a notable decline in the illicit 
                economy based on coca. Alternative development has also 
                assisted in raising the percentage of coca area 
                households with access to basic services from 16 
                percent to 49 percent.
                    New elections and a policy to fight corruption bode 
                well for counterdrug work. Peru's significant reduction 
                in the amount of coca cultivated proves that its 
                strategy is working. However, with higher prices being 
                paid for coca, farmers will be tempted to abandon licit 
                crops. It is essential that manual eradication of 
                illegal coca crops, counterdrug-related alternative 
                development, the airbridge denial program, and land and 
                maritime/riverine interdiction all continue as closely 
                coordinated complementary programs. The Government of 
                Peru should also refine relevant laws, especially as 
                they pertain to money laundering, asset seizure, and 
                chemical controls.

                Thailand

                    Thailand has one of the world's most effective 
                illicit drug crop control programs. United States 
                analysts estimate that Thailand's opium production in 
                the 2000 growing season remained at a maximum of 6 
                metric tons. Cultivation remained under 1,000 hectares 
                for the second year in a row, although there was a 
                slight increase to 890 hectares. Continuing trends 
                established in previous years, opium farmers are 
                cultivating smaller, more isolated fields and engaging 
                in multiple cropping to avoid eradication.
                    Thailand remains a major drug transit country; a 
                significant amount of heroin transits Thailand on its 
                way to the United States. Throughout 2000, Thailand 
                continued its long tradition of cooperation with the 
                United States and the international community in anti-
                drug programs. With U.S. Drug Enforcement 
                Administration support, the Royal Thai Police (RTP) 
                established the fourth in a series of specially trained 
                drug law enforcement units to target major trafficking 
                groups. Despite treatment, epidemiology of substance 
                abuse, and demand reduction programs, the epidemic of 
                methamphetamine abuse grew, especially among the young. 
                The methamphetamine problem underscored the need for 
                cost effective community-based models of addiction 
                treatment and additional abuse-prevention training for 
                both public and private sector health professionals.
                    Thailand enhanced its leadership role in 
                transnational crime issues by co-managing the 
                International Law Enforcement Academy (ILEA) in Bangkok 
                with the United States. The bilateral extradition 
                relationship continues to be highly successful, and 
                Thailand continues to extradite its nationals to the 
                United States under the treaty. Indeed, Thailand is one 
                of the top countries in the world in cooperating with 
                the United States on extradition requests. Extensive 
                cooperative law enforcement programs continued to bear 
                fruit. According to Royal Thai Government figures, 290 
                kilograms of heroin were seized and 9 methamphetamine 
                labs were destroyed during the first 10 months of 2000. 
                Despite Thailand's good record on counterdrug 
                enforcement, many elements of government and society 
                remain rampantly corrupt.
                    2000 was also a productive year for legislation and 
                regulation. Implementing regulations for the 1999 Money 
                Laundering Control Act came into effect in October, 
                2000. The Act requires reporting for most financial 
                transactions of more than 2 million baht (approximately 
                $50,000). A senior police official has been named to 
                head the 64-person money laundering control office. The 
                Thai Cabinet approved accession to the 1988 UN Drug 
                Convention and final arrangements are being undertaken 
                by the Ministry of Foreign Affairs.

                Venezuela

                    Venezuela is a significant transit route for 
                illegal drugs destined for the United States and 
                Europe; by some United States Government estimates, 
                over 100 metric tons of cocaine transit Venezuela 
                annually. The vast majority of this traffic consists of 
                cocaine and heroin from neighboring Colombia.
                    Cooperation with U.S. law enforcement agencies was 
                very good, with one complex joint operation leading to 
                the seizure of 8.8 metric tons of

[[Page 14473]]

                cocaine, numerous arrests in Venezuela, and the 
                expulsion of two significant third-country drug 
                traffickers to the United States for trial. The 
                Government of Venezuela expanded its already extensive 
                cooperation with the United States through counterdrug 
                programs focusing on interdiction, money laundering, 
                chemical control and reinforcement of the judicial 
                system. The Organization of American States Inter-
                American Drug Abuse Commission (CICAD) elected 
                Venezuela to its Vice-Presidency. The Government of 
                Venezuela continued to attempt to conduct aerial 
                interdiction operations against drug smuggling aircraft 
                unilaterally in 2000; while these actions were largely 
                ineffective, during the same period air transits 
                through Venezuelan airspace by drug smugglers decreased 
                significantly.
                    The Government of Venezuela continued to combat 
                drug trafficking and consumption in 2000, despite 
                considerable change in the political system (including 
                a new constitution adopted in December 1999 that 
                mandated the election of a new unicameral National 
                Assembly). New policy initiatives were introduced, and 
                the Government of Venezuela enhanced law enforcement 
                efforts to combat drug trafficking and related crime. 
                Seizure figures for the calendar year were up from the 
                preceding year for both cocaine (15 metric tons from 
                12) and heroin (134 kilograms from 40).
                    During 2000, Venezuelan prosecutors took steps to 
                fulfill their new responsibilities under the new penal 
                code introduced in 1999. The National Anti-drug 
                Commission introduced new initiatives in 2000 to expand 
                demand reduction programs, to increase Venezuelan 
                participation in multilateral anti-drug initiatives, 
                and to improve eradication efforts aimed at small areas 
                of coca and opium poppy cultivation that spill over 
                into Venezuelan territory from Colombia. Venezuela 
                prepared draft legislation to improve chemical 
                precursor control, and participated in a multilateral 
                effort to improve regional cooperation countering 
                precursor chemical diversion.
                    The Government of Venezuela continued to place a 
                high priority on reducing corruption. Reorganization of 
                law enforcement agencies and the customs service led to 
                large-scale dismissals of those suspected of 
                involvement in corruption. However, new legislation to 
                give police necessary tools to aid investigations was 
                not adopted, partly because the new National Assembly 
                did not begin work until October 2000.
                    The Government of Venezuela enhanced its efforts to 
                collect information to deter money laundering, 
                introducing new regulations to further strengthen 
                already stringent currency transaction reporting based 
                on U.S. reporting requirements, and taking steps to 
                implement Caribbean Financial Action Task Force 
                recommendations. The Government of Venezuela should 
                adopt appropriate legislation to criminalize the 
                laundering of proceeds from all serious crimes.

                Vietnam

                    Vietnam intensified its efforts to combat the 
                production, trafficking, and use of illicit drugs. Due 
                to improved weather, Vietnam saw a 10 percent increase 
                in poppy cultivation to 2,300 hectares in 2000 from 
                2,125 hectares in 1999. Potential opium production in 
                2000 increased 36 percent to 15 metric tons from 11 
                metric tons in 1999. The Government of Vietnam 
                continued its efforts to reduce poppy cultivation 
                through education, eradication, and crop-substitution 
                programs. Drug seizures increased in most categories, 
                although amounts seized were still small. Law 
                enforcement officers seized 60 kilograms of heroin, 567 
                kilograms of opium, 2,200 kilograms of marijuana, 
                119,465 vials of addictive drugs, 66,192 doses of 
                heroin, and 6,783 tablets of amphetamine-type 
                stimulants (ATS), including methamphetamine. The 
                quantities of opium, vials of addictive drugs, and 
                tablets of ATS interdicted increased by 26.5 percent. 
                Vietnam cooperated with the U.S. Drug Enforcement 
                Administration, which opened an office in Hanoi in 
                February 2000, and signed a counterdrug agreement with 
                Japan in February 2000 providing for information 
                sharing and training.
                    The Government of Vietnam received increased 
                counterdrug funding from the United States, up from 
                $11.6 million in 1999 to $14.3 million in 2000.

[[Page 14474]]

                 The Government of Vietnam drafted a new two-stage 
                Master Plan for 2001-2010. The Plan entailed 14 
                projects to combat drug production and trafficking and 
                to strengthen education and drug-treatment programs, as 
                well as an intensified one-year, six-point counterdrug 
                program. The Government of Vietnam restructured and 
                rationalized its drug control institutions. The 
                National Assembly passed a counterdrug law, drafted 
                with U.S. assistance, and legislation criminalizing 
                money laundering.
                    The United States and Vietnam have not yet 
                concluded a counterdrug agreement. Vietnam has not 
                fully eradicated poppy crops, and farmers reverted to 
                poppy cultivation in some high-poverty rural areas, 
                increasing the total to 2,300 hectares devoted to poppy 
                crops. Revisions to the Penal Code that criminalize 
                money laundering took effect on July 1, 2000. Vietnam's 
                new banking law also requires financial institutions to 
                report suspicious transactions, although they are only 
                reported to a central authority upon request.
                    Despite some notable shortcomings, Vietnam has made 
                a vigorous effort to combat drug production and 
                trafficking. There is no question that the Government 
                of Vietnam at the highest levels fully realizes the 
                threat drugs present to Vietnamese society and is doing 
                everything possible to counter the availability and use 
                of illicit drugs.

[FR Doc. 01-6296
Filed 3-9-01; 9:06 am]

Billing code 4710-10-P