Drug Control: U.S. Heroin Control Efforts in Southwest Asia and the
Former Soviet Union (Briefing Report, 05/09/97, GAO/NSIAD-97-148BR).

Pursuant to a congressional request, GAO provided information on: (1)
the extent of the opium and heroin production threat in Southwest Asia,
Russia, and the Central Asian Republics; (2) efforts by the United
States to address this threat; (3) the obstacles to counternarcotics
strategies and programs in these regions; and (4) the status of efforts
to control diversion of opium produced in India for use by U.S.
pharmaceutical companies.

GAO noted that: (1) despite a significant increase in Southwest Asia
opium poppy cultivation and production from 1987 to 1996, Southwest
Asian heroin is not presently a major threat to the United States,
according to the U.S. Drug Enforcement Administration (DEA); (2) Russia
and the Central Asian Republics of the former Soviet Union have not been
classified as major opium producers, but Southwest Asian opium and
heroin trafficking routes have expanded in the region; (3) except for
Pakistan, the United States has provided very limited drug control
assistance to Southwest Asia, Russia, and the Central Asian Republics;
(4) the primary obstacles to drug control efforts are the lack of
government control of opium poppy cultivation areas in Southwest Asia
and the lack of resources and institutional capability in Russia and the
Central Asian Republics; and (5) India's inability to control diversion
of its licit opium crop continues to be a drug control concern,
according to the Department of State and DEA.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-97-148BR
     TITLE:  Drug Control: U.S. Heroin Control Efforts in Southwest Asia 
             and the Former Soviet Union
      DATE:  05/09/97
   SUBJECT:  Drug trafficking
             Narcotics
             Foreign governments
             Federal aid for criminal justice
             Agricultural production
             Pharmaceutical industry
             Law enforcement
             International cooperation
             International relations
             Political corruption
IDENTIFIER:  Asia
             Afghanistan
             Pakistan
             India
             Iran
             Russia
             Kazakhstan
             Kyrgyzstan
             Tajikistan
             Turkmenistan
             Uzbekistan
             Burma
             National Drug Control Strategy
             South America
             UN International Drug Control Program
             Soviet Union
             
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Cover
================================================================ COVER


Briefing Report to the Chairman, Caucus on International Narcotics
Control,
U.S.  Senate

May 1997

DRUG CONTROL - U.S.  HEROIN
CONTROL EFFORTS IN SOUTHWEST ASIA
AND THE FORMER SOVIET UNION

GAO/NSIAD-97-148BR

Drug Control

(711242)


Abbreviations
=============================================================== ABBREV

  AA - acetic anhydride
  ANF - Anti-Narcotics Force
  CBN - Central Bureau of Narcotics
  DEA - Drug Enforcement Administration
  MT - metric ton
  ONDCP - Office of National Drug Control Policy
  UNDCP - United Nations Drug Control Program

Letter
=============================================================== LETTER


B-276822

May 9, 1997

The Honorable Charles E.  Grassley
Chairman, Caucus on International
  Narcotics Control
United States Senate

Dear Mr.  Chairman: 

In response to your request, this report provides information on (1)
the extent of the opium and heroin production threat in Southwest
Asia, Russia, and the Central Asian Republics\1 and the immediate
threat to the United States, (2) efforts by the United States to
address this threat, and (3) the obstacles to counternarcotics
strategies and programs in these regions.  You also expressed
interest in the status of efforts to control the diversion of opium
produced in India for use by U.S.  pharmaceutical companies.  This
report summarizes information we provided to your staff on April 22,
1997. 


--------------------
\1 For the purposes of this report, Southwest Asia includes
Afghanistan, Pakistan, India, and Iran.  The Central Asian Republics
are defined as Kazakstan, Kyrgyzstan, Tajikistan, Turkmenistan, and
Uzbekistan. 


   BACKGROUND
------------------------------------------------------------ Letter :1

Heroin is the second most dangerous drug threat to the United States
behind cocaine.  According to the 1997 National Drug Control
Strategy, there are about 600,000 heroin addicts in the United
States.  Heroin use is not as prevalent among young people as
marijuana or cocaine, but growing numbers of teenagers and young
adults are experimenting with the drug.  Moreover, the number of
heroin-related emergency room admissions has more than doubled during
the 1990s, from 34,000 in 1990 to 76,023 in 1995.  Opium poppy, the
plant from which opium is derived and then processed into heroin, is
grown primarily in three regions of the world--Southeast Asia,
Southwest Asia, and Latin America.  Heroin is transported to the U.S. 
market through a global array of trafficking networks and a diverse
set of criminal organizations. 

In addition to illicit opium poppy cultivation resulting in heroin
production, several countries legally produce opium for medical
purposes.  The United States attempts to assure a flow of reasonably
priced opium to meet U.S.  national medical needs and to limit the
number of nations involved in the trade through import permits issued
to U.S.  pharmaceutical companies.  India is the world's largest
producer of licit opium for use in pharmaceutical products (849
metric tons (MT) during the 1995-96 crop year) and is the source of
most of the processed opium gum imported by U.S.  pharmaceutical
companies.  U.S.  manufacturers value the high alkaloid content of
Indian opium gum for production of drugs like the painkiller
oxycodone. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Our review indicated the following: 

  Despite a significant increase in Southwest Asian opium poppy
     cultivation and production from 1987 to 1996,\2

Southwest Asian heroin is not presently a major threat to the United
States, according to the U.S.  Drug Enforcement Administration. 

  Russia and the Central Asian Republics of the former Soviet Union
     have not been classified as major opium producers, but Southwest
     Asian opium and heroin trafficking routes have expanded in the
     region. 

  Except for Pakistan, the United States has provided very limited
     drug control assistance to Southwest Asia, Russia, and the
     Central Asian Republics. 

  The primary obstacles to drug control efforts are the lack of
     government control of opium poppy cultivation areas in Southwest
     Asia and the lack of resources and institutional capability in
     Russia and the Central Asian Republics. 

  India's inability to control diversion of its licit opium crop
     continues to be a drug control concern, according to the
     Department of State and the Drug Enforcement Administration. 


--------------------
\2 Most of the increase was due to expansion in Afghanistan, where
opium poppy cultivation doubled from 18,500 hectares to 37,950
hectares from 1987 to 1996 and opium production tripled from 415 MTs
to 1,230 MTs from 1990 to 1996.  Afghanistan's opium production
output of 1,230 MTs was second only to Burma's 2,560 MTs worldwide in
1996. 


   EXTENT OF HEROIN THREAT
------------------------------------------------------------ Letter :3

U.S.  distribution of heroin from Southwest Asia is limited mainly to
Southwest Asian ethnic areas in a few large urban centers.  As we
reported in March 1996,\3 Southeast Asia, primarily Burma, still
supplies much of the heroin consumed in the United States.  In
addition, South American produced heroin is readily available in
several major U.S.  markets.  While some Southwest Asia heroin is
sold in the United States, the vast bulk of the heroin produced in
Southwest Asia is destined for the European market due to the easier
accessibility and established trafficking routes between the two
regions. 

The State Department has reported under the U.S.  drug certification
process\4 that no region of the former Soviet Union has exceeded the
threshold of 1,000 or more hectares of illicit opium cultivated or
harvested during a year needed to qualify as a major opium producer. 
However, U.S.  officials have made only limited attempts to determine
the amount of cultivation occurring in the region.  In addition, U.S. 
counternarcotics officials have reported that since the fall of the
former Soviet Union, Russian and other ethnic-based Central Asian
organized crime groups have expanded drug trafficking routes for
Southwest Asian opiate products by taking advantage of the lack of
border controls and ill-equipped and insufficiently trained national
law enforcement authorities throughout this region. 


--------------------
\3 Drug Control:  U.S.  Heroin Program Encounters Many Obstacles in
Southeast Asia (GAO/NSIAD-96-83, Mar.  1, 1996). 

\4 Section 490 of the Foreign Assistance Act of 1961, as amended,
requires withholding of bilateral foreign assistance and opposition
to multilateral assistance to major illicit drug-producing countries
and major drug transit countries.  These provisions will not apply in
cases in which, under section 490(b), the President determines and
certifies to Congress that either (1) the country has cooperated
fully during the previous year with the United States or has taken
adequate steps on its own to achieve compliance with the goals and
objectives established by the 1988 United Nations Convention Against
Illicit Traffic in Narcotic Drugs and Psychotropic Substances or (2)
vital national interests of the United States require support for
such assistance.  The act provides further, that if the country is a
licit producer of opium, the President may only make the
certification if the President determines that the country (1)
maintains licit production and stockpiles at levels no higher than
those consistent with licit market demand and (2) has taken adequate
steps to prevent significant diversion of its licit cultivation and
production into illicit markets and to prevent illicit cultivation
and production. 


   THE UNITED STATES HAS A LIMITED
   DRUG ASSISTANCE PROGRAM
------------------------------------------------------------ Letter :4

The United States has focused most of its efforts to address the drug
threat in Southwest Asia on Pakistan because the government there has
had the most conducive atmosphere to accept drug control assistance. 
From fiscal year 1990 to 1996, the Department of State spent about
$24 million to support drug control efforts, including development of
Pakistani law enforcement capability and opium poppy crop
elimination, and for demand reduction.  The Drug Enforcement
Administration (DEA) maintains a presence in Pakistan to assist the
development of law enforcement institutions and the dismantling of
drug trafficking groups and their processing centers, and to provide
regional coverage of Afghanistan and the Central Asian Republics. 

The United States does not have a direct counternarcotics program in
Afghanistan due to the lack of a central government caused by an
ongoing civil war.  However, the Department of State provides limited
assistance through donations to the activities of the United Nations
Drug Control Program (UNDCP) and support for crop control and demand
reduction projects from its mission in Islamabad, Pakistan.  During
fiscal years 1990-96, the Department of State provided $942,000 for
its crop control projects implemented by non-governmental
organizations in Afghanistan and earmarked $2.6 million for UNDCP
activities.  In India, the Department of State has a limited
assistance program supporting law enforcement training and
information sharing, providing equipment, and improving diversion
controls on precursor chemicals that can be used to manufacture
illicit narcotics and licit opium production.  According to the
Department of State, the United States does not provide
counternarcotics assistance to Iran due to the lack of bilateral
relations between the two countries and has decertified Iran for
cooperation on drug control since 1987. 

Direct State Department counternarcotics assistance programs began in
Russia during fiscal year 1994, and funding for the Central Asian
Republics was started during fiscal year 1996.  From fiscal year 1994
to 1996, the Department of State provided about $1.1 million to these
countries to support establishment and strengthening of host
government institutions, law enforcement training, and provision of
equipment, such as handcuffs, forensic and drug testing kits,
vehicles, fuel, and communications gear.  The U.S.  counternarcotics
presence is limited to a recently opened law enforcement section and
a DEA attache office at the U.S.  embassy in Moscow.  In the Central
Asian Republics, the Department of State relies on various officials
at its posts for counternarcotics reporting, and DEA provides
regional coverage from its attache offices in Pakistan. 


   MAJOR OBSTACLES IN THE REGION
------------------------------------------------------------ Letter :5

Drug control efforts supported by the United States and other donors
face significant obstacles in Southwest Asia, Russia, and the Central
Asian Republics.  According to U.S.  counternarcotics officials, the
primary obstacle to addressing the heroin threat from Southwest Asia
is the lack of a central government in Afghanistan.  Further, while
the Taliban militia control most of the country and over 90 percent
of the opium cultivation areas, its drug control commitment is
suspect, and there are no national law enforcement authorities that
could implement an effective program.  According to the Department of
State, U.S.  assistance in Pakistan has increased that nation's law
enforcement capability and facilitated eradication efforts.  However,
lack of government control of key opium poppy cultivation and
processing areas and corruption have hampered progress.  Department
of State and DEA officials told us that there are numerous obstacles
in Russia and the Central Asian Republics, including lack of national
counternarcotics plans, law enforcement institutions with limited
training and funding, poorly policed borders, and corruption
facilitated by the entrenched presence of Russian organized crime. 
While the United States and other donors have begun implementing drug
control programs in the former Soviet Union to address these issues,
these efforts are still in their nascent stages. 


   STATUS OF INDIA'S EFFORTS TO
   CONTROL LICIT OPIUM DIVERSION
------------------------------------------------------------ Letter :6

While the government of India has imposed controls in recent years
that have enhanced its ability to prevent diversion, the government
agency responsible for monitoring the licit crop is understaffed and
cannot provide effective oversight over all of the licit opium crop. 
Furthermore, farmers can easily exceed the minimum opium yield
required to retain a government license.  They may sell the
additional production to the government or choose to divert the
excess into the illegal market.  Farmers have strong financial
incentives to divert excess portions of their licit crops since they
can obtain substantially better prices for opium offered on the
unofficial market as compared to the government rate.  The government
of India estimates that only small amounts of licit opium are
diverted annually into illicit channels, but U.S.  counternarcotics
officials told us that the amount diverted may be as high as 20
percent.  India has not allowed the United States to participate in a
joint opium crop yield survey, so future agreement on the amount
diverted is unlikely.  However, U.S.  officials told us that most of
the diverted opium is consumed by addicts in India and the
surrounding region and does not constitute a direct threat to the
United States. 

Further information about regional opium production and trafficking
threats, U.S.  drug control efforts, obstacles to U.S.  efforts, and
issues associated with India's attempts to control licit opium
diversion are contained in briefing sections I, II, III, and IV,
respectively. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

In commenting orally on a draft of this report, the Department of
State, DEA, and ONDCP advised us that they generally agreed with the
information presented and that they had no substantive comments.  The
Department of State and DEA provided some suggested technical
corrections and we incorporated them in the text where appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

We obtained information on the opium production and trafficking
threat in Southwest Asia, Russia, and the Central Asian Republics
from intelligence assessments compiled by DEA and U.S.  intelligence
agencies.  Opium poppy cultivation and production statistics in
Southwest Asia for the period 1987-96 were derived from the
Department of State's International Narcotics Control Strategy Report
issued in March 1997.  These figures represent the best available
U.S.  estimates on the cultivation and production threat.  To obtain
information on the Southwest Asian heroin threat to the United
States, we reviewed DEA and Office of National Drug Control Policy
(ONDCP) reports on the prevalence of heroin from this region in the
U.S.  market and discussed this data with appropriate agency
officials. 

We identified U.S.  drug control efforts and obstacles to their
implementation in Southwest Asia, Russia, and Central Asia by
reviewing planning and program documents, including cables,
correspondence, and official reports from the Department of State,
DEA, and ONDCP and supplemented this information in discussions with
agency officials.  We obtained funding information on State
Department efforts by reviewing budget documents and verifying
amounts with officials responsible for individual country programs. 
In addition, we gathered data and held discussions with agency
officials on the status of counternarcotics efforts conducted by
governments of heroin-producing and trafficking countries in
Southwest Asia, Russia, and the Central Asian Republics.  We also
reviewed UNDCP documents on its ongoing and proposed drug control
activities in Southwest Asia and the Central Asian Republics and
identified U.S.  funding earmarked to support these efforts during
fiscal years 1990-96. 

We gathered information on issues associated with India's attempts to
control diversion of its licit opium crop from official reports
issued by the Department of State and DEA and supplemented the
information with interviews of appropriate officials at these
agencies. 

We conducted our review from November 1996 through April 1997 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :8.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date.  At that time, we will send copies to the
Secretary of State; the Administrator, DEA; the Director, ONDCP; and
interested congressional committees.  We will make copies available
to other interested parties upon request. 

The major contributors to this report were Louis Zanardi and Daniel
Tikvart.  If you or your staff have any questions concerning this
report, please call me on (202) 512-4268. 

Sincerely yours,

Jess T.  Ford, Associate Director
International Relations and Trade Issues


BRIEFING SECTION I HEROIN THREAT
============================================================== Letter 



   (See figure in printed
   edition.)


   SOUTHWEST ASIAN HERION IN THE
   UNITED STATES
------------------------------------------------------------ Letter :9

According to the Drug Enforcement Administration (DEA), Southwest
Asia is presently not a major source of heroin in the United States. 
Most of the heroin produced in Southwest Asia is destined for
consumption regionally or in the European market due to the easier
accessibility and established trafficking routes between the two
regions.  DEA reports that the distribution of Southwest Asian heroin
arriving in the United States is limited to large urban centers with
significant Southwest Asian ethnic populations, including Chicago,
Detroit, Los Angeles, and New York City.  Furthermore, according to
DEA, the low purity of Southwest Asian heroin limits its
competitiveness with heroin from Colombia and Southeast Asia.  In
1995, average retail purity levels for Southwest Asian heroin (35
percent) lagged behind regional averages for Southeast Asia (45
percent) and especially South America (56 percent).  Higher purity
levels allow users to injest heroin through nasal inhalation rather
than injections using hypodermic syringes.  Inhalation is easier than
injection and users avoid contracting the diseases associated with
using needles. 

Although there was an increase in the proportion of Southwest Asian
heroin in the total net weight of heroin seized in the United States
from 1994 to 1995 (up from 6 percent in 1994 to 16 percent in 1995),
DEA reported that this rise did not reflect a greater availability of
heroin from this region in the U.S.  market.  DEA officials explained
that 1995 data included one large seizure that skewed 1995 results. 
Excluding this seizure, Southwest Asian heroin represented about 6
percent of the total net weight of U.S.  heroin seizures, the same
amount as in 1994. 




   (See figure in printed
   edition.)


   WORLDWIDE ILLICIT OPIUM
   PRODUCTION BY COUNTRY, 1987-96
----------------------------------------------------------- Letter :10


In 1996, worldwide illicit opium production reached the record level
of about 4,300 metric tons (MT), according to the Department of
State.  Most of this production occurred in two countries--Burma and
Afghanistan.  Burma accounted for about 60 percent of worldwide
production, or
2,560 MTs; Afghanistan produced almost 30 percent, or 1,230 MTs. 
Other countries such as Laos, Vietnam, Pakistan, Colombia, Mexico,
and India produced the remaining amount.  Moreover, United Nations
Drug Control Program (UNDCP) figures, derived from an on-the-ground
survey, indicated that opium production in Afghanistan for 1996
exceeded 2,000 MTs.  Specifically, the survey indicated that between
55,000 and 58,000 hectares of opium poppy were under cultivation and
could yield between 2,200 and 2,300 MTs of opium. 



   (See figure in printed
   edition.)


   SOUTHWEST ASIAN ILLICIT POPPY
   CULTIVATION, 1987-96
----------------------------------------------------------- Letter :11

Overall illicit poppy cultivation increased significantly from 1987
to 1996 in Southwest Asia.  Most of the increase was due to an
expansion of cultivation in Afghanistan.  In 1996, farmers in
Afghanistan cultivated 37,950 hectares of poppy, making it the
world's second largest grower behind Burma, which cultivated 163,100
hectares according to the Department of State.  Afghanistan's
cultivation expanded rapidly from 1990 to 1996, more than tripling
during that period. 

During the same time frame, illicit opium poppy cultivation in
Pakistan remained stable until 1996, when there was a 51-percent
decrease from 1995.  U.S.  officials attributed the decline to poor
weather, decreases in regional opium prices, and the success of
alternative development projects in the area.  With regard to the
alternative development projects, U.S.  officials told us that they
had not conducted overall evaluations of their impact, but
cultivation decreases in regions of U.S.  project assistance were
most dramatic.  However, according to DEA, regional opium prices are
now at their highest levels in recent years and DEA officials believe
that Pakistan's overall illicit opium production will increase to
previous levels. 

Illicit poppy cultivation also occurred in India and Iran.  India had
about 3,100 hectares of illicit poppy under cultivation in 1996--down
from the 4,750 hectares reported in 1995.  Due to the lack of
diplomatic relations between the United States and Iran, illicit
cultivation in Iran was difficult to confirm.  However, the
Department of State reported that in 1993, when the last U.S. 
assessment of a portion of Iran was conducted, there were
approximately 3,500 hectares of illicit poppy under cultivation that
could yield between 35 and 70 MTs of opium production. 



   (See figure in printed
   edition.)


   SOUTHWEST ASIAN ILLICIT OPIUM
   PRODUCTION, 1987-96
----------------------------------------------------------- Letter :12


Southwest Asian opium production closely tracked opium poppy
cultivation statistics.  For example, Afghanistan's opium production,
like poppy cultivation, has almost tripled since 1990, and Pakistan's
1996 opium production has declined by 52 percent from the 1995 level. 
In addition, there was more Afghan opium being processed at Afghan
laboratories instead of in Pakistan.  According to DEA, Pakistani
opium production should rebound to previous levels and could possibly
exceed the 140 to 160 MT level.  While India's illicit opium and
heroin production capability was small in comparison to Afghanistan's
and Pakistan's, it was a major international manufacturer (40,000 MTs
annually) of acetic anhydride (AA), a key chemical needed to convert
opium into heroin.  According to DEA, a substantial portion of
diverted worldwide AA supplies originated in India.  Drug traffickers
smuggled undetermined amounts of AA to heroin processing sites in
both Southeast and Southwest Asia.  According to the State Department
and DEA, controls implemented by the government of India in 1993 have
reduced AA availability for illicit purposes.  Data on Iran's illicit
opium production is difficult to obtain.  The Department of State
reported that in 1987, Iran may have produced 300 MTs of opium.  In
1993, based on limited information, the official U.S.  assessment
estimated that Iranian production ranged from 35 to 70 MTs per year. 




   (See figure in printed
   edition.)


   RUSSIA AND THE CENTRAL ASIAN
   REPUBLICS
----------------------------------------------------------- Letter :13


U.S.  officials do not know the exact extent of opium poppy
cultivation in Russia and the Central Asian Republics because there
have been only limited attempts to survey suspected cultivation
areas.  While cultivation areas exist, the U.S.  government has not
classified countries in this region as major poppy cultivators or
opium producers.\1 U.S.  officials also told us that most of the
poppy cultivated is harvested in the form of crushed poppy straw and
is consumed locally. 

Since the breakup of the Soviet Union, Southwest Asian drug
traffickers have increased their use of transit routes through the
Central Asian Republics and Russia as a supplement to traditional
routes through the Balkans and the Mediterranean, according to DEA
reporting.  Most of the heroin transiting the Central Asian Republics
and Russia is destined for consumers in European markets, but local
consumption is also increasing.  According to DEA, Europe is the
traditional market for Southwest Asian heroin due to its easier
accessibility and the existence of established drug trafficking
networks. 

Heroin is not used in large quantities by opiate abusers in Russia
and the Central Asian Republics.  However, U.S.  counternarcotics and
government officials in the region believe that heroin abuser
populations are likely to expand and create more demand for illicit
drugs in these countries as opium, heroin, and other illicit drugs
become more readily available. 




   (See figure in printed
   edition.)


--------------------
\1 In terms of opium production, the United States defines a major
illicit drug producing country as one in which 1,000 hectares or more
of illicit opium poppy is cultivated or harvested during a year.  To
date, the United States has not identified amounts that meet or
exceed this threshold of cultivation in these countries. 


   RUSSIA AND THE CENTRAL ASIAN
   REPUBLICS (CONT.)
----------------------------------------------------------- Letter :14

Russian organized crime groups and their counterparts in the Central
Asian Republics have been moving a variety of illicit drugs,
including opium, opium poppy straw, and heroin, throughout the former
Soviet Union.  According to DEA, drug trafficking was one of many
illegal enterprises managed by these crime groups:  others involved
racketeering, prostitution, extortion, moving stolen property,
weapons and alien smuggling, and money laundering. 

According to DEA, Russian organized crime money laundering from drug
trafficking and other illegal activities has been corrupting Russian
and Central Asian governmental and financial institutions and
increasing capital flight from these countries.  In 1995, for
example, approximately 25 percent of the commercial banks in Moscow
was reported by DEA to be controlled by organized crime.  Corruption
among law enforcement authorities in Russia and the Central Asian
Republics supported by organized crime has also been growing.  For
example, in some Central Asian countries, extremely low pay for
border guards has fostered susceptibility to payoffs from drug
traffickers.  Moreover, a 1996 law enforcement report indicated that
Russian citizens have been increasing their monetary deposits in
financial institutions and investments outside of Russia both as an
alternative source for laundering illegal proceeds and because
legitimate Russian citizens lacked faith in the financial system. 


BRIEFING SECTION II U.S.  DRUG
CONTROL EFFORTS IN THE REGION
============================================================== Letter 



   (See figure in printed
   edition.)


   U.S.  INTERNATIONAL HEROIN
   CONTROL STRATEGY OBJECTIVES
----------------------------------------------------------- Letter :15


U.S.  international heroin control strategy objectives include
strengthening international cooperation for efforts against drug
traffickers, assisting source and transit countries in developing
comprehensive counternarcotics policies, implementing law enforcement
efforts aimed at disrupting and destroying drug trafficking
organizations, using the drug certification process to promote
effective counternarcotics activities in heroin producing and
trafficking nations, and promoting multilateral efforts such as those
of UNDCP in countries where U.S.  bilateral influence is limited. 
The United States pursues these objectives in a variety of countries
and regions where opium and heroin are produced and trafficked.  U.S. 
heroin control efforts are greater in countries where the United
States has a cooperative relationship and where the host government
has the resources and ability to control production and trafficking
areas.  In Southwest Asia, the U.S.  ability to achieve these
objectives is limited by the lack of host government control of areas
where opium poppy cultivation and heroin processing and trafficking
occurs.  In Russia and the Central Asian Republics, host governments
lack counternarcotics resources and capability and have sought U.S. 
counternarcotics assistance and cooperation on drug control. 




   (See figure in printed
   edition.)


   AFGHANISTAN
----------------------------------------------------------- Letter :16


Because Afghanistan lacks a central government, the United States, in
1996, did not have an active program with that country directed
toward controlling illicit opium poppy cultivation or opium and
heroin trafficking.  In fact, the United States decertified
Afghanistan for not cooperating in counternarcotics activities from
1987 to 1992 and from 1995 to 1997.  The 1997 decertification
decision was based on Afghanistan's large amount of opium poppy
cultivation (37,950 hectares in 1996) and its lack of law enforcement
action against drug trafficking activity. 

Without a diplomatic presence in Afghanistan, the United States
carries out its drug control efforts through the Narcotics Affairs
Section at the U.S.  mission in Islamabad, Pakistan.  During fiscal
years 1990-96, the Department of State provided $947,000 for (1)
opium poppy crop control and demand reduction projects run by
nongovernmental organizations and (2) a limited amount of law
enforcement training.  The scope of these projects has been small in
comparison to the rapid expansion of opium production in part because
Afghanistan has no central government and the United States has
concerns about the strength of the Taliban commitment to illicit
opium crop reduction.  The intent of these programs has been to keep
the United States involved in drug control activities and to create a
foundation for establishing a bilateral program in the future.  In
lieu of a larger U.S.  effort, the United States is encouraging its
European allies that are more directly affected by Afghanistan's
opium production to increase their counternarcotics efforts. 

After the Soviet Union invaded Afghanistan in 1979, DEA closed its
office in Kabul, the capital of Afghanistan, but continued to collect
intelligence on drug trafficking activities in Afghanistan from its
offices in Pakistan.  According to DEA officials, the lack of a
central Afghani government and national law enforcement elements
makes it difficult to gather drug trafficking information. 

In addition to direct assistance, from fiscal year 1990 to 1996, the
United States provided about $2.6 million of earmarked funds to UNDCP
counternarcotics institution building and opium supply reduction
activities in Afghanistan.  UNDCP is preparing to begin a 4-year,
$16-million project focused on institution building, poppy crop and
demand reduction, and a drug control monitoring system.  The State
Department has donated $1.6 million to support this project. 




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   PAKISTAN
----------------------------------------------------------- Letter :17

Between fiscal year 1990 and 1996, Pakistan was the main focus of
U.S.  counternarcotics efforts in Southwest Asia.  During the period,
the Department of State provided $24.35 million to support three
primary programs:  (1) development of law enforcement institutions,
(2) elimination of opium poppy crops, and (3) reduction of Pakistani
demand.  During fiscal year 1996, the State Department provided $2.5
million for these programs ($1.23 million for law enforcement
support, $640,000 for illicit crop control, and $630,000 for
administrative support) and directed its effort through the Narcotics
Affairs Section at the U.S.  embassy in Islamabad with a staff of 3
Americans (2 direct hire staff in Islamabad and 1 personal service
contract staff in Peshawar) and 13 foreign service nationals.  In
addition, DEA's 16-member staff worked with the Pakistani government
to arrest the heads of major trafficking organizations, shared
counternarcotics intelligence with the Pakistani police, and provided
law enforcement training.  DEA's regional office also had
responsibility for drug control efforts in Afghanistan and the
Central Asian Republics. 

U.S.  assistance for Pakistani law enforcement authorities primarily
supported the Anti-Narcotics Force (ANF), but also included Customs,
the Frontier Corps, and the Coast Guard.  The fiscal year 1996 law
enforcement support program consisted of training and provision of
equipment such as communications gear and vehicles.  According to the
Department of State, this assistance increased the professionalism of
host nation drug enforcement agencies and is expected to enable ANF
and Pakistani Customs to expand their operations by opening offices
and raising staffing levels.\2

Pakistan bans opium poppy cultivation and supports eradication
efforts in areas under firm government control.  The United States
supported Pakistani efforts to extend the ban and eradication
campaigns to hard-to-reach regions of the Northwest Frontier Province
by providing road construction, crop substitution, and developmental
assistance.  Road construction in poppy growing areas increased the
ability of Pakistani law enforcement to conduct eradication efforts
and pursue destruction of heroin-processing laboratories.  To assist
farmers in developing alternative crops, the program provided
agricultural supplies such as farm equipment and seeds, technical
expertise, electrification, and water supplies.  State Department
officials told us that other factors also contributed to Pakistan's
production decline in 1996, including heavy opium poppy cultivation
in Afghanistan that depressed opium prices in Pakistan and increased
the economic viability of alternative crops such as wheat and
tomatoes.  Despite this decline, Pakistani opium production should
rebound to previous levels and could possibly exceed the 140- to
160-MT level according to DEA. 

The United States also supported a demand reduction project that has
a goal of reducing Pakistan's population of 1.5 million heroin
addicts.  According to the State Department, the U.S.  program
bolstered ANF projects to increase public awareness of the dangers of
abusing illicit drugs.  However, no formal evaluations of project
impact have been performed. 




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--------------------
\2 In 1996, the State Department offered to lease six UH-1H
helicopters at no cost to ANF to assist interdiction efforts against
drug trafficking caravans.  The government of Pakistan did not
respond, however, and the helicopters were ultimately reassigned for
use elsewhere. 


   INDIA
----------------------------------------------------------- Letter :18


From 1990 to 1996, the Department of State provided $245,000 to
support law enforcement training and to enhance diversion controls on
licit opium production.  DEA maintains a small presence in India and
facilitates counternarcotics investigations and training.  The United
States is encouraging the government of India to invest more
resources in its counternarcotics police and control of precursor
chemicals that can be used to manufacture illicit narcotics and to
update its asset seizure, asset forfeiture, and money laundering
laws.  India has consistently received full certification for
cooperation on drug control issues with the United States. 




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   IRAN
----------------------------------------------------------- Letter :19


Iran is a major transit country for illicit opiate products moving
from Pakistan and Afghanistan to processing sites in Turkey and drug
consumers in Europe and the United States.  In 1993, when the last
U.S.  assessment of poppy cultivation in a limited area in Iran
occurred, there were an estimated 3,500 hectares under cultivation
that could produce between 35 MTs and 70 MTs of opium--small amounts
compared to those of Afghanistan and Pakistan. 

The United States does not maintain diplomatic relations with Iran
and has decertified Iran for counternarcotics cooperation since 1987. 
The lack of bilateral relations restricts the amount of information
the United States has about Iranian opiate control efforts and thus
makes it difficult to estimate the size of Iran's opium poppy crop or
assess Iran's efforts to interdict drug trafficking. 

The government of Iran has ratified the 1988 U.N.  drug control
convention\3 and claims it engages in a variety of counternarcotics
efforts, including control of opium poppy cultivation and
interdiction of drugs.  According to the State Department, other
countries have reported that Iranian opium poppy cultivation has
declined in response to the increasing availability of opium from
Afghanistan and that Iranian law enforcement authorities with
counternarcotics responsibilities have made large seizures of heroin
and opium.  Iran participates in an agreement with Pakistan and UNDCP
to control drug trafficking in the region. 




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--------------------
\3 The 1988 United Nations Convention Against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances seeks international
consensus on criminalizing the production of and trafficking in
illicit drugs.  The convention provides the legal framework for
countries to legislate controls and to cooperate with each other on
drug control issues. 


   RUSSIA AND THE CENTRAL ASIAN
   REPUBLICS
----------------------------------------------------------- Letter :20

U.S.  counternarcotics efforts in Russia and the Central Asian
Republics are designed to address the basic drug control needs of
countries emerging from the influence of the former Soviet Union. 
According to U.S.  drug control officials, countries in this region
are willing to cooperate on drug control issues but generally lack
the means to implement effective programs without assistance.  U.S. 
drug control objectives in the region include (1) establishing and
strengthening law enforcement institutions, (2) implementing U.N. 
drug control conventions and other legislative and regulatory
mechanisms necessary for effective drug control efforts, (3)
increasing awareness of drug abuse and supporting the development of
demand reduction programs, and (4) encouraging other donors such as
UNDCP to increase their drug control activities. 

Most of the direct U.S.  counternarcotics funding that these
countries receive supports law enforcement training and provision of
equipment such as handcuffs, forensic and drug testing kits, and
communications gear.  National law enforcement authorities generally
lack adequate resources to control borders, make arrests, or conduct
investigations, according to U.S.  drug control officials and
reports. 

The U.S.  government has encouraged countries in the region to accede
to U.N.  drug control conventions and has provided advice on how to
design essential drug control legislation and national drug control
strategies that would bring them into compliance.  Kazakstan is not
yet a party to the 1988 U.N.  drug control convention.  However,
according to the State Department, Kyrgyzstan, Tajikistan,
Turkmenistan, Uzbekistan, and Russia have acceded to U.N. 
conventions but must pass legislation to fully implement them. 

The United States has supported UNDCP drug control efforts in the
region through earmarked contributions.  UNDCP has provided technical
assistance in implementing national drug control policies,
strategies, and legislation, and enhancing cooperation between
countries in the region.  In 1996, the five Central Asian Republics
and UNDCP signed a memorandum of understanding designed to enhance
drug control cooperation between these countries. 




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   edition.)


   U.S.  DRUG CONTROL EXPENDITURES
   IN RUSSIA AND THE CENTRAL ASIAN
   REPUBLICS, FISCAL YEARS 1994-96
----------------------------------------------------------- Letter :21


U.S.  drug control programs in the region are new and small in scope
relative to those in drug producing and transit regions where the
United States has traditionally supplied assistance.  Between fiscal
year 1994 and 1996, the State Department provided about $1.1 million
in direct support and earmarked about $1.45 million for UNDCP
activities during fiscal years 1993-96.  About $800,000 of the direct
assistance went to Russia beginning in fiscal year 1994; the
remainder was divided among the five Central Asian Republics.  The
United States also provided training and technical assistance to law
enforcement institutions in Russia and the Central Asian Republics
with Freedom Support Act funds.  According to Department of State
officials, in fiscal year 1996, approximately $3.7 million of Freedom
Support Act funding enabled counternarcotics-related training
designed to address illicit drug trafficking, organized crime, and
illegal money laundering activities. 

U.S.  drug control staffing in Russia and the Central Asian Republics
is also limited.  In 1995, the State Department opened a law
enforcement section that had drug control responsibilities at the
U.S.  embassy in Moscow with one U.S.  staff.  In 1996, DEA opened a
one-person attache office.  Neither agency has a direct drug control
presence in the Central Asian Republics, although the State
Department tasks embassy officials at its various posts with periodic
reporting and delivery of assistance, and DEA provides regional
coverage from Pakistan. 


BRIEFING SECTION III IMPEDIMENTS
TO U.S.  DRUG CONTROL EFFORTS
============================================================== Letter 



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   edition.)


   AFGHANISTAN
----------------------------------------------------------- Letter :22

A major obstacle to progress in controlling the illicit drug industry
in Afghanistan is the lack of a central government committed to
controlling opium poppy cultivation areas and implementing drug
control programs.  According to State Department officials, no
national law enforcement authority exists.  While the Taliban militia
controls approximately two-thirds of the country, including Kabul,
its commitment to drug control is unclear.  According to DEA, the
Taliban militia have punished traffickers and destroyed opium poppy
crops during its drive to consolidate control.  However, DEA and the
State Department also report that Taliban commanders have allowed
farmers to continue to cultivate poppy and produce opium.  The
Department of State and DEA have reported that the Taliban and other
factions tax opium poppy and other agricultural products in areas
they govern.  As the Taliban and other factions continue to vie for
control of the country, drug control remains a low priority in
Afghanistan. 

An additional obstacle to drug control programs in Afghanistan is the
lack of alternative sources of income for farmers living in poppy
cultivation areas.  The Soviet invasion in the 1980s and the
continuing civil war devastated the local economy and infrastructure
in poppy cultivation areas.  Opium production increased dramatically
in the early 1990s as the population, including returning Afghan
refugees, found it difficult to market traditional food crops and
turned to poppy cultivation to supplement their incomes.  According
to a Department of State official, even if a strong central
government is established, substantial outside donor assistance for
reconstructing the economy and implementing alternative development
programs would be required to achieve long-term success in reducing
the opium poppy crop and addressing recent increases in heroin
processing activity. 




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   edition.)


   PAKISTAN
----------------------------------------------------------- Letter :23

The most significant barrier to drug control in Pakistan is that the
Pakistani government does not control the Northwest Frontier
Province, where most opium production occurs.  Local tribal groups
were given control when the area was divided upon the British
departure from the region, and the government is reluctant to
interfere with their rule and illegal drug processing and trafficking
activities, fearing a civil war.  As a result, few raids have been
mounted against heroin processing laboratories.  Although thousands
of drug trafficking arrests and drug seizures are made annually, most
arrests involve low-level traffickers.  Furthermore, convictions for
drug trafficking offenses are often difficult to obtain in the
Pakistani courts.  According to a 1996 law enforcement report,
Pakistani law enforcement officials displayed little initiative in
pursuing major traffickers and were hampered by lack of wiretap
authority in building their cases against traffickers.  As a result,
DEA efforts to obtain the arrest of major traffickers are often
impeded. 

The ANF has encountered numerous obstacles since it was created in
1994 to replace the Pakistan Narcotics Control Board.  The Pakistan
Narcotics Control Board was responsible for drug enforcement but was
disbanded due to lack of accomplishments and the prevalence of
corruption within the organization.  According to the State
Department, the ANF's performance has been hampered by insufficient
funding, inadequate staffing, and leadership turnover.  For example,
in 1996, ANF staff numbered less than 1,000 and the majority of them
lacked adequate law enforcement experience. 

Another impediment to effective drug control is corruption within the
law enforcement community.  According to DEA, law enforcement and
prosecutorial systems have been subverted by wealthy and politically
influential drug traffickers.  The poor pay that Pakistani law
enforcement officials earn increases their susceptibility to
corruption.  In 1996, the State Department reported that senior ANF
officials were responsible for perpetrating a 2-ton opium seizure
that was a hoax.  Finally, the Pakistani counternarcotics police lack
a bureaucratic system for identifying, investigating, and
recommending action against corrupt officers despite problems with
corruption in its predecessor organization. 

Pakistan's slow executive, legislative, and judicial processes impede
drug control efforts as well.  For example, Pakistan's national
5-year counternarcotics plan developed in 1995 has not yet been
approved.  According to the State Department, Pakistan's parliament
has delayed final passage of a comprehensive counternarcotics law and
has not passed legislation that would criminalize money laundering. 
In addition, the slow pace of Pakistan's judicial process delays
prosecution and sentencing of drug traffickers and limits the number
of extraditions of major traffickers.  For example, a State
Department report notes that a verdict has yet to be announced in the
case of one major trafficker 3 years after the end of the trial. 




   (See figure in printed
   edition.)


   RUSSIA AND THE CENTRAL ASIAN
   REPUBLICS
----------------------------------------------------------- Letter :24

In 1996, Russia and the Central Asian Republics faced a number of
significant obstacles to implementing drug control programs.  First,
comprehensive national drug control policies, strategies, and
legislation either did not exist or were not yet fully developed. 
For example, Kazakstan, Krygyzstan, Turkmenistan, and Uzbekistan were
still devising national drug control strategies.  The State
Department reported that Krygyzstan did not have laws that covered
asset seizure or money laundering, and Uzbekistan did not have
effective money laundering legislation or asset seizure regulations. 
Russia still lacks adequate money laundering laws and regulations. 

Moreover, counternarcotics police forces have not received sufficient
training, equipment, and general funding support, which impeded their
ability to combat drug production and trafficking.  For example, the
State Department reported that in 1996, the President of Kyrgyzstan
ordered a 30-percent cut in manpower in government agencies,
including the lead drug control agency.  In Kazakstan and Tajikistan,
budget and/or fuel shortfalls severely hampered poppy eradication
efforts.  Also, Uzbekistan did not have a sufficient counternarcotics
police force, and customs officials at border checkpoints lacked
training in detecting drug smugglers. 

In addition, corruption has impeded law enforcement effectiveness at
all levels.  For example, the State Department reported that while
the United States had no reports of high-level government officials
involved in the drug trade in Russia, many observers believed that
most political parties receive support from Russian organized crime
groups, some of which are involved in narcotics trafficking.  At the
working level, border control officials in the region generally
received low salaries and were susceptible to bribes.  In addition,
there were allegations of direct participation by law enforcement
authorities in the drug trade according to the State Department.  For
example, in Tajikistan, Tajik and Russian border guards were alleged
to have been involved in trafficking drugs.  Also, in Kyrgyzstan, the
State Department reported that seized drugs may have been resold by
law enforcement personnel. 


BRIEFING SECTION IV CONTROLLING
DIVERSION OF INDIA'S LICIT OPIUM
PRODUCTION
============================================================== Letter 



   (See figure in printed
   edition.)


   BACKGROUND
----------------------------------------------------------- Letter :25

India is the world's largest producer of licit opium for use in
pharmaceutical products (849 MTs during the 1995-96 crop year) and is
the only country that still produces opium gum for export, according
to the Department of State.  Opium gum is valued highly by
pharmaceutical companies for its high alkaloid content needed in
manufacturing drugs like the painkiller oxycodone.  The government of
India licenses farmers to cultivate poppy and produce opium in
specified areas.  Approximately 78,000 farmers were licensed in the
1995-96 crop year.  To retain a license, a farmer had to produce a
minimum of 46 kilograms of opium per hectare of poppy cultivation. 
After production was completed, the government of India paid farmers
about $10 per kilogram of opium produced. 

To ensure a flow of reasonably priced opium that meets U.S.  national
medical needs and to limit the number of nations involved in the
licit opium trade, the United States implemented the "80/20 rule" in
1981.  The "80/20" rule (21 C.F.R.  1312.13) provides that at least
80 percent of licit opium imported into the United States must have
as its original source India and Turkey; not more than 20 percent can
have as its original source Australia, Hungary, Poland, France, and
the former Yugoslavia.  According to U.S.  officials, India is the
primary supplier of licit opium to the United States because India is
the only country in the world that produces licit opium gum--a form
of opium containing essential chemicals needed by U.S. 
pharmaceutical companies.  Other countries, such as Turkey, produce
licit opium in the form of concentrate of poppy straw that does not
have a high level of certain alkaloids that U.S.  drug manufacturers
seek. 




   (See figure in printed
   edition.)


   DIVERSION ISSUES
----------------------------------------------------------- Letter :26

The government of India acknowledges that there have been diversions
of licit opium into illegal channels but at the low annual levels of
about 5 percent.  However, U.S.  counternarcotics officials believe
that 15 to 20 percent of the licit crop may have been diverted.  The
United States has not accepted India's lower estimates because it has
not directly participated in surveys of the opium crop with the
Indian government.  While Indian agricultural scientists had worked
with U.S.  counterparts to design a 1996 survey, the Indian
government did not allow direct U.S.  participation.  Significantly,
U.S.  officials told us that most of the diverted opium crop was
consumed by the large number of addicts in India and the surrounding
region. 

In 1996, incentives for farmers to divert licit opium remained strong
since farmers could achieve yields over the minimum requirement, and
unofficial prices were significantly higher than the government rate. 
Last year, the Indian government offered the opium farmer about $10
for each kilogram of opium produced for yields up to 60 kilograms per
hectare and increased payment to $17 per kilogram for yields over
this threshold.  However, the unofficial price for opium was $200 per
kilogram.  According to U.S.  counternarcotics officials, Indian
opium farmers can easily achieve yields above the minimum requirement
and therefore have strong financial incentives to divert portions of
their excess crop to the unofficial market. 

India's lack of accountability over its legal opium stockpile became
evident when India experienced shortfalls in meeting contracts with
U.S.  and other international pharmaceutical companies in 1994 and
1995.  An inventory in 1994 showed that there was a shortfall of over
300 MTs in India's licit opium stockpiles.  According to State
Department and DEA reports, the shortfalls occurred because of the
Indian government's failure over a 14-year period to reconcile
inventory records with on-hand stocks and because of evaporation and
wastage of stock due to poor storage and handling techniques. 
Although no studies were done to validate the evaporation
explanation, DEA officials told us that they believe only a small
amount of this shortfall may have been diverted.  They noted that
there was no evidence of a substantial increase in the supply of
illicit opium or heroin available in India during this time frame. 
In 1995, shortages in meeting demand continued, while orders in 1996
were just met despite an increase in authorized cultivation. 
According to the Department of State, the stockpile depletion and
inability to meet current demand are expected to restrict the amount
of potential diversion for the short term until stockpiles are
reestablished. 




   (See figure in printed
   edition.)


   INDIA'S EFFORTS TO CONTROL
   LICIT OPIUM DIVERSION
----------------------------------------------------------- Letter :27


The government of India has taken some steps to improve its ability
to control diversion of legal opium during the last several years. 
For example, over the past 5 years, the government of India has
raised the minimum yield for licensed opium farmers to ensure that
only the most productive ones participate.  By increasing the yield
requirement, the government of India is able to force farmers to
deliver more of their crop, reducing the opportunity for diversion. 
According to the State Department, the minimum yield for the 1996-97
crop year will be increased from 46 to
48 kilograms per hectare for most growing areas.  Farmers who fail to
meet minimum yields face the risk of losing their licenses.  The
yield requirement's effectiveness is dependent on enforcing the
relicensing procedure.  According to DEA, in 1996, 26,739 farmers who
failed to meet the minimum yield during the 1995-96 growing season
were allowed to continue growing opium poppies, under the condition
that farmers who again failed to meet the minimum yield for the
1996-97 season would be permanently delicensed.  Further, in 1995, in
Uttar Pradesh, a state where significant diversion was occurring, the
government reduced the allowable cultivation amount to 200 hectares. 
To lower the chances of diversion during harvesting operations,
paramilitary and police personnel are deployed at vulnerable points. 
U.S.  counternarcotics officials told us that the Indian government
has increased controls over its opium stockpile by improving (1) the
reliability of its inventories, (2) the security conditions at its
storage facilities to prevent theft and evaporation loss, and (3) the
security at processing facilities through monitoring equipment
provided by the Department of State. 




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   edition.)


   INDIA'S EFFORTS TO CONTROL
   LICIT OPIUM DIVERSION (CONT.)
----------------------------------------------------------- Letter :28

During 1996, the Indian government monitored the production process
by measuring fields and performing periodic crop inspections by local
village officials and CBN agents.  The government designated village
headmen, usually the most productive opium farmers in the local
community, to license farmers, to ensure that farmers did not
overplant, and to confirm that minimum yields were met. 

However, inherent weaknesses made it difficult to prevent some
diversion from occurring.  According to DEA, farmers avoided
monitoring by extending their legal fields by several rows or
cultivating poppy on unregistered land.  U.S.  estimates of diversion
from licensed fields include overplanting based on spot checks
conducted by DEA and information obtained from the CBN, although this
practice is not as prevalent as farmers who misrepresent their opium
production yields.  As previously discussed, the State Department
estimates that India also had about 3,100 hectares of illicit opium
poppy cultivation in 1996 grown by unlicensed farmers.  In addition,
licit opium farmers paid village headmen and CBN officials to ignore
overplanting.  Farmers unable to meet minimum yield requirements
obtained waivers from corrupt officials, claiming weather and pest
damage, and thus were able to retain their licenses.  Further, while
CBN had monitoring responsibilities, it was understaffed and only
able to monitor a small percentage of the crop. 


*** End of document. ***