The manufacture of cocaine, heroin and synthetic drugs requires chemicals. Chemical diversion control is a proactive and straightforward strategy to deny traffickers the chemicals they must have to manufacture illicit drugs. It involves the regulation of licit commerce in the chemicals most necessary for drug manufacture to ensure that only transactions for which legitimate end-uses have been established are permitted to proceed, thereby preventing the diversion of drug-producing chemicals from licit trade to illicit drug manufacture. Since it involves regulation of licit commerce, chemical control is a cost-effective strategy aimed at preventing illicit drugs from entering clandestine criminal channels.
The essential element of effective international chemical control is rapid multilateral exchange of information between competent national authorities on proposed transactions in regulated chemicals in order to identify and stop or seize those shipments involving chemicals likely to be diverted to illicit drug manufacture. National control systems alone cannot prevent diversion. The USG continues to seek the establishment of formal and informal mechanisms for this information exchange.
Chemical control is complicated by the widespread international commerce in many of the chemicals required for illicit drug manufacture. Most of them have extensive commercial applications and are available from many source countries.
Chemical control is also a strategy to prevent a crime. It requires the examination of proposed commercial transactions, the bulk of which are legitimate - an examination that requires chemical traders and manufacturers to provide commercial information to the exporting country's authorities. At least a portion of this information must be shared with other governments to ascertain the legitimacy of the proposed end-use, and to prevent traffickers from turning to alternative chemical source countries when transactions in one country are denied.
Because of its nature, many governments consider chemical control a trade issue to be handled by trade ministries/agencies with a bias towards promoting, not regulating trade. This leads to a reluctance to share the information they receive from domestic companies in the course of implementing national chemical control regimes. This reluctance is reinforced by the concerns of companies that the information they have provided will reach competitors.
The challenge is to develop and gain acceptance of multilateral mechanisms for the exchange of information necessary for the effective implementation of national chemical control regimes, including procedures for identifying and bringing under control substitute chemicals, while respecting the legitimate commercial interests involved. A key element of this will be greater recognition that chemical control is also a law enforcement strategy to be administered with law enforcement agencies to curb criminal activity.
A second challenge is to promote the establishment of effective national chemical control regimes that are consistent with and reinforce these multilateral cooperative mechanisms.
International Framework for Chemical Control
The need for chemical control has been internationally accepted. Article 12 of the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988 UN Drug Convention) establishes the obligation for parties to the Convention to control their chemical commerce to prevent diversion to illicit drug manufacture. The two tables of the Annex to the Convention list 22 chemicals as those most necessary for drug manufacture and, therefore, subject to control.
In 1990, the Inter-American Drug Abuse Control Commission of the Organization of American States (CICAD) approved Model Regulations for the control of drug-related chemicals that set a high standard for government action. In June 1999, the Model Regulations were updated to cover all the chemicals included in the 1988 UN Drug Convention, and to strengthen domestic and international chemical controls and enforcement authorities. Many Latin American countries have adopted chemical control laws and regulations based on the CICAD Model Regulations.
The United States and other governments use the annual meetings of the United Nations Commission on Narcotic Drugs (CND) to promote international acceptance of chemical control and to highlight emerging chemical control concerns. The CND is also used to focus international attention on the use by traffickers of substitute chemicals in place of those controlled under international conventions, particularly in the manufacture of synthetic drugs such as methamphetamine.
The June 1998 "United Nations General Assembly Special Session Devoted to Countering the World Drug Problem Together" (UNGASS) was an important vehicle for promoting chemical control. Two of the five action plans adopted by the Special Session - those dealing with amphetamine-type stimulants and their precursors and the control of precursors - were directly connected to chemical control.
The USG has a major chemical control agreement with the European Union, signed on May 28, 1997. The value of the agreement is that it is with a 15-member state organization representing many of the world's major chemical manufacturing and trading nations. It also importantly provides for the exchange of information on chemical transactions with third countries.
At Mexico's request, the U.S. and Mexico are now negotiating a memorandum of understanding on chemical control.
The huge trade in chemicals, both domestic and international, offers multiple opportunities for traffickers to obtain through diversion from legitimate commerce the chemicals they require. They use a variety of tactics, exploiting legal and regulatory weaknesses, to circumvent national chemical control laws and regulations. The following are some of the more common diversion methods.
There is some recycling of the solvents used in illicit drug manufacture; recycling cannot be used for acids, alkaline materials or oxidizing agents. Since recycling requires some sophistication, and there is a loss of chemical with each recycling process, it is not a preferred method for unsophisticated heroin and cocaine labs.
1999 Chemical Diversion Trends
The continuing increase in the illicit manufacture of amphetamine-type-stimulants, the growth of heroin manufacture in Afghanistan, and the impact of intensive international cooperation in the control of potassium permanganate have been the major factors that influenced chemical diversion trends in 1999.
Abuse of amphetamine-type-stimulants (ATS) is a growing concern, particularly in East and Southeast Asia. The increased demand for ATS generates an increased demand for the chemicals required for their manufacture. Burma is emerging as a major center for ATS manufacture; the fact that it shares borders with India and China, two important producers of ephedrine, a key ATS precursor chemical, facilitates this. Ephedrine can be diverted from domestic trade in these countries, thereby avoiding international controls, and smuggled across porous borders to Burmese ATS labs.
Afghanistan has no domestic industry capable of producing the chemicals required for heroin manufacture and no operational chemical control system. This means the chemicals required for heroin manufacture can be imported, to the extent international trade with Afghanistan exists and chemical-source countries are willing to authorize exports of controlled chemicals to the country under these circumstances. Now smuggling via Pakistan, the Central Asian states and the Persian Gulf is probably a more significant source, as the obvious lack of chemical controls in Afghanistan increases the reluctance of chemical source countries to authorize exports.
Potassium permanganate was one of two chemicals identified in the UNGASS Precursor Chemical Action Plan for controls stricter than those required by the 1988 UN Drug Convention. Specifically, exporting countries would be required to provide pre-export notification for any shipments of the chemical when requested by the importing country. Acetic anhydride was the other chemical identified for special attention. These two were chosen because they are "choke" chemicals, chemicals that are central to the manufacture of cocaine and heroin respectively, and difficult to substitute in the manufacturing process.
The UNGASS Precursor Chemical Action Plan has been a key factor in the international acceptance of "Operation Purple," targeting potassium permanganate. The operation was launched in February 1999 at a DEA-organized meeting in Madrid, Spain. The concept is that exporting countries will notify importing countries of all proposed transactions involving over 100 kilograms of potassium permanganate. The importing country will verify legitimate end use of the chemical prior to shipment, and those shipments that are authorized will be tracked from origin to final end-use.
The Multilateral Chemical Reporting Initiative, which the U.S. initiated in 1997, is providing the procedures and the vehicle for the information exchange required by Operation Purple.
The Madrid meeting agreed to begin Operation Purple for a six-month trial period. It became operational on April 15, 1999.
A second Operation Purple meeting was organized by DEA in October 1999. Participants reviewed progress and agreed to extend the operation through the year 2000.
From April 15, 1999 through December 31, 1999, Operation Purple tracked 248 shipments totaling 7,778,012 kilograms of potassium permanganate. Of these, 32 shipments totaling 2,225,893 kilograms were stopped or seized. Participation in Operation Purple has expanded to 18 countries, the UN International Narcotics Control Board, ICPO/INTERPOL, and the World Customs Organization.
Operation Purple has made it more difficult for traffickers to obtain potassium permanganate. There are reports that in Colombia traffickers are carefully husbanding the chemical and only bringing it to labs when it is needed, rather than stockpiling it at the labs. In Bolivia, there are reports that traffickers are foregoing the oxidation stage in cocaine manufacture because of problems obtaining sufficient potassium permanganate, resulting in a less pure and satisfactory product. There are also reports that traffickers are smuggling cocaine base from Bolivia to other countries for final processing due to a shortage of potassium permanganate.
The Road Ahead
Chemical control has been accepted by law enforcement agencies worldwide as a valid counternarcotics strategy. A principal obstacle to its more widespread adoption remains the proclivity of many governments to consider chemical control as a trade issue to be handled by trade ministries/agencies with a bias toward promoting, not regulating, trade. This leads to a reluctance to participate in the multilateral information initiatives required for effective chemical control.
Therefore, despite its demonstrated success, chemical control needs to be more widely exploited by law enforcement agencies as a law enforcement strategy. Regulatory agencies need to be convinced that chemical control can be effectively achieved without harm to indigenous commercial interests, and that law enforcement agencies have an essential role in its implementation. When implementation of chemical control regimes is restrained by commercial concerns, criminals can more easily obtain the chemicals they require for illicit drug manufacture, hindering international cooperative efforts against criminal drug trafficking.
The success of Operation Purple, implemented largely by law enforcement agencies, demonstrates that chemical diversion can be attacked without jeopardizing legitimate commercial interests. It also demonstrates the magnitude of the diversion problem, and the positive contribution of successful diversion control programs to our overall counternarcotics objectives.
The feasibility of intensive control efforts targeting the heroin essential chemical acetic anhydride (AA) needs to be explored. Operation Purple demonstrates that this approach works. Intensive controls on acetic anhydride will be difficult, however, given the number of countries producing AA and its vast international trade.
Any initiative targeting acetic anhydride diversion must be multilateral and include concerned international organizations such as the International Narcotics Control Board. The specific citing of acetic anhydride in the UNGASS Precursor Chemical Action Plan provides an opening for a multilateral initiative and an incentive for countries to participate. The challenge will be to develop procedures and mobilize support for them to exploit the opening.
Major Chemical Source Countries
The countries in this section are those with large chemical manufacturing and trading industries that have significant trade with drug-producing regions and those countries with significant domestic chemical commerce liable to diversion and smuggling into neighboring drug-producing countries. Many other countries manufacture and trade in precursor chemicals, but not on the scale, or with the broad range of precursor chemicals, of the countries in this section. These designations are reviewed annually.
Article 12 of the 1988 United Nations Convention against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances (1988 UN Drug Convention) is the international standard for national chemical control regimes and for international cooperation in their implementation. The Annex to the Convention lists the 22 chemicals most essential to illicit drug manufacture. The Convention includes provisions for maintaining records on transactions involving such chemicals, and provides for their seizure if there is sufficient evidence that they are intended for illicit drug manufacture.
Chemical diversion control within the European Union (EU) is regulated by two EU regulations binding on all Member States. The first regulation, issued in 1990, meets the chemical control provisions of the 1988 UN Drug Convention. The second regulation, issued in 1992, expanded the first to incorporate the more comprehensive recommendations contained in the 1991 G-7 Chemical Action Task Force Report. The EU regulations include provisions for record keeping on transactions in the chemicals listed in the 1988 UN Drug Convention, require a system of permits or declarations for exports and imports of regulated chemicals and authorize governments to suspend chemical shipments. EU member states implement the regulations through national laws and regulations.
The EU regulations govern the regulatory aspects of chemical diversion control. Member States are responsible for the criminal aspects, investigating and prosecuting violators of the national laws and national regulations implementing the EU regulations.
The U.S./EU Chemical Control Agreement, signed May 28, 1997, is the formal basis for U.S. and EU Member State cooperation in chemical control. Our bilateral chemical control cooperation is good with the Member States and many are participating in and actively supporting voluntary initiatives such as the Multilateral Chemical Reporting Initiative and Operation Purple.
Germany and The Netherlands, with large chemical manufacturing or trading sectors and significant trade with drug-producing areas, are considered the major European chemical source countries. Other European countries have important chemical industries, but the level of chemical trade with drug-producing areas is not as large and broad-scale as that of Germany and The Netherlands.
The German chemical industry produces, distributes, consumes, and exports significant quantities of the chemicals listed in the 1988 UN Drug Convention. Germany is a party to the Convention. Its chemical handlers comply with German chemical control legislation, which is well structured, in accord with EU regulations and meets Convention requirements. German authorities maintain an outstanding system of voluntary cooperation with the chemical industry. However, there is no effective control over brokers who handle international transactions in third countries.
Germany has a very active joint Federal Police/Customs unit that handles chemical control and chemical diversion investigations. Cooperation between the German authorities and other national and international authorities is excellent. Germany has participated in and fully supported the Multilateral Chemical Reporting Initiative and Operation Purple. A senior DEA chemical diversion investigator was posted to Germany in September 1999. The official works closely with the joint police and customs unit. The result is excellent information exchange, both informally and within the context of the U.S./EU Chemical Control Agreement.
The Netherlands is primarily a chemical trading country with major transit and storage capacities for large quantities of chemicals traded in international markets by brokers and distributors. The Dutch have excellent chemical diversion control laws in place, meeting the requirements of EU regulations and the 1988 UN Drug Convention, to which the country is a party. However, The Netherlands is also an important producer of illicit synthetic drugs, primarily amphetamine-type-stimulants, the manufacture of which requires diverted chemicals.
The Dutch work closely with U.S. authorities on chemical control and diversion investigations. This cooperation includes informal information sharing and formal sharing under the U.S./EU Chemical Control Agreement. In 1999, DEA continued to arrange participation by Dutch investigators in U.S. clandestine laboratory training.
During 1999, the unit responsible for implementation of the chemical control laws, the Economic Control Service (ECD), was given more resources to investigate violations and potential violations of these laws. The ECD was also transferred from the economic ministry to the finance ministry, raising concerns that this could lessen criminal enforcement priorities in favor of revenue issues. Shortly after the transfer, The Netherlands withdrew from a DEA-organized conference in Hong Kong to review the progress of Operation Purple, increasing these concerns.
China. China has one of the world's largest chemical industries. Chemicals required for the manufacture of illicit drugs are manufactured, distributed, consumed, and exported by Chinese business. China is a vigilant monitor of precursor chemical exports. It is a party to the 1988 UN Drug Convention and has regulations for record keeping and export/import control for the 22 chemicals in the Convention. It also requests a "letter of no objection" from importing countries prior to authorizing exports of methamphetamine precursor chemicals.
The Chinese Public Security Bureau maintains a chemical control unit that performs regulatory audits on Chinese chemical companies. Provincial police throughout China are tasked with monitoring chemical companies in their respective provinces.
Chinese authorities have a difficult task. With a remote 2,000-kilometer border with Burma, smuggling of domestically traded chemicals to traffickers in that country is a problem. The volume of international trade makes complete monitoring difficult. Nevertheless, preliminary figures for 1999 indicate that seizures of illegally diverted chemicals will approach the prior year's record levels.
Chemical control is one of the strongest aspects of bilateral U.S./Chinese counternarcotics cooperation. Information is exchanged frequently and the Chinese have been active participants in Operation Purple targeting the key cocaine chemical, potassium permanganate.
India. The Indian chemical industry includes large-scale manufacture, consumption and export of controlled chemicals. India is a party to the 1988 UN Drug Convention, but it does not have legislation meeting all the Convention's chemical control provisions or covering all 22 chemicals in its annex.
Indian chemical control initiatives concentrate on the chemicals most likely for diversion. Acetic anhydride, a key heroin essential chemical sought by traffickers in both Burma and Afghanistan, is strictly controlled near the Indo/Burmese and Indo/Pakistani borders. Regulations also require sellers of the chemical to establish the identity of buyers before sales can be completed. A February 1999 seizure in the United Arab Emirates of 9 metric tons of Indian-origin acetic anhydride bound for Afghanistan indicates traffickers are utilizing other routes.
Ephedrine and pseudoephedrine, precursor chemicals for amphetamine-type-stimulants (ATS), are also subject to special controls. Indian authorities notify DEA of any significant export shipments and do not authorize them until DEA issues a letter of no objection. Domestic diversion of the chemicals for smuggling into Burma seems to be growing to meet demand from increasing illicit ATS production there. Significant seizures have been made in Northeast India, the natural smuggling route to Burma.
The Indian Central Bureau of Narcotics and the DEA have a good working relationship including exchange of information. In addition to the letter of no objection procedures for ephedrine and pseudoephedrine, the Government of India has been a full participant in Operation Purple targeting potassium permanganate.
Argentina. The Argentine chemical industry produces all but two of the necessary solvents, acids and oxidizing agents commonly used in the manufacture of cocaine. The exceptions are potassium permanganate and chloroform.
Argentina is a party to the 1988 UN Drug Convention. A 1989 law meets the Convention's requirements for record keeping, import and export licensing, and the authority to suspend shipments. Presidential Decrees in 1991 and 1996 added the requirement that all manufacturers, importers, exporters, distributors, and transporters be registered with the Secretariat for the Prevention of Drug Addiction and Narcotics Trafficking (SEDRONAR).
SEDRONAR is short of resources and little has been done to verify the legitimacy of transactions in controlled chemicals. New and more secure import and export certificates have been introduced and efforts continue to rebuild a national database of chemical producers and distributors to gain a better understanding of the chemical diversion problem. In late 1999, the government began implementing measures to revise the country's chemical control laws and address staffing issues for the chemical control authorities.
This is important given Argentina's shared border with Bolivia. In 1999, a large seizure of Argentine chemicals was made in Bolivia and an additional 25,000 liters of acetone were seized at the border between Argentina and Bolivia. While these represent successes in chemical control, they are also indicative of the magnitude of the problem.
Argentine authorities share chemical control information with U.S. officials on request.
Brazil. Brazil has South America's largest chemical industry. In addition, it imports significant quantities of chemicals to meet its industrial needs.
Brazil ratified the 1988 UN Drug Convention in 1991, but it has not yet adopted legislation necessary to fully implement it. National chemical control laws require registration with the Federal Narcotics Police of chemical producers, transporters and distributors. A 1995 law places 11 chemicals under federal control, sets minimum thresholds for record keeping and reporting of transactions in them, and provides for import and export licenses. There are substantial administrative penalties for non-compliance.
Compliance with chemical control laws appears to be widespread, but a lack of resources (3 Federal Police agents and 8 clerical workers to check on 22,000 chemical firms) prevents active federal follow-up and verification of most shipments to their final destinations. Authorities are dependent on chemical companies for information on shipments of controlled chemicals such as acetone and ether to neighboring Bolivia, Colombia and Peru.
Some synthetic drugs are produced illicitly in Brazil using chemicals diverted from domestic commerce. In addition, because of the relative availability of necessary chemicals, there are indications that traffickers may be investing in cocaine processing labs in Brazil to process coca leaf and/or cocaine base smuggled from neighboring countries in response to improved chemical control programs in those countries.
The United Nations International Drug Control Program has an ongoing nine million U.S. dollar chemical control program in Brazil, to which the Brazilian Government is contributing eight million dollars. The program is reportedly progressing satisfactorily.
The U.S./Brazilian Counternarcotics Agreement provides the formal basis for bilateral cooperation in chemical control, including information sharing. Brazil also participates in two voluntary information exchange arrangements with the U.S., the Multilateral Chemical Reporting Initiative and Operation Purple, the multilateral effort targeting potassium permanganate.
Mexico. The large Mexican chemical industry includes manufacturers, distributors and end-users of most of the chemicals required for illicit drug manufacture. Mexico is an importer and transit country for potassium permanganate from Asia to other Latin American countries. It is also an important entry and transit point for ephedrine, pseudoephedrine and phenypropanolamine used in the illicit manufacture of amphetamine-type-stimulants in Mexico and the U.S.
Comprehensive chemical control legislation adopted in 1997 places 24 chemicals under government regulation: 13 precursor chemicals used in the manufacture of synthetic drugs and 11 essential chemicals used in refining opium and coca leaf into heroin and cocaine. In September 1999, implementing regulations were published which defined reporting and notification requirements for both the import and export of these chemicals, explained what constituted end-use, and authorized Mexican government agencies to share information with other governments. These laws and regulations meet the requirements of the 1988 UN Drug Convention to which Mexico is a party.
The U.S. and Mexican Governments have established a bilateral chemical control working group as a formal mechanism for cooperation and information exchange in chemical control matters. In 1999, the group placed special emphasis on methamphetamine trafficking, chemical control training and the drafting of a memorandum of understanding on chemical control cooperation. Late in 1999, Mexico joined Operation Purple, the multilateral initiative targeting potassium permanganate.
Mexico faces a considerable challenge in implementing its chemical control legislation. Responsibility for various aspects of chemical control is spread among seven agencies, which have some way to go towards better coordination and communication among themselves.
Major Heroin and Cocaine Manufacturing Countries
Heroin and cocaine manufacture requires significant quantities of chemicals. Most major manufacturing countries for these illicit drugs do not produce all the required chemicals, and traffickers must meet the majority of their chemical requirements from external sources. This section summarizes the sources of chemicals used in heroin and cocaine manufacturing countries and these countries' initiatives to control these chemicals.
Afghanistan. Afghanistan has emerged as the world's largest manufacturer of heroin. The chemicals required for this manufacture must come from abroad. Although Afghanistan is a party to the 1988 UN Drug Convention, there is no viable chemical control system.
Europe, the Central Asian States and India are the principal sources for chemicals, either shipped directly to Afghan entities or to nearby countries and smuggled into Afghanistan. The Central Asian States and Persian Gulf countries have been used as smuggling routes.
Burma. Burma has dropped to number two in worldwide heroin production, but there has been a significant increase in the manufacture of amphetamine-type-stimulants (ATS). Burma does not have a viable chemical control system. The bulk of the key chemicals required for illicit drug manufacture, most importantly acetic anhydride for heroin and ephedrine for ATS, are smuggled across porous borders from China and India, where they were diverted from domestic commerce. The Burmese Government seized 6.43 metric tons of ephedrine in 1999, most of it coming from India.
Bolivia. Bolivia is a party to the 1988 UN Drug Convention and has the legal framework for implementing its chemical control provisions. The Bolivian chemical police, GISUQ, have been very active in doing so.
Most of the chemicals used by traffickers for the processing of coca leaf into cocaine products are smuggled into Bolivia from neighboring countries. Diversion from licensed imports is considered small. An effective chemical interdiction program has made many smuggled chemicals hard to get or prohibitively expensive. As a result, Bolivian lab operators are using inferior substitutes such as cement instead of lime, and sodium bicarbonate instead of ammonia, and they are recycling solvents such as ether. They have also virtually eliminated the oxidation phase, which requires potassium permanganate, in their cocaine processing. The result is that the purity of Bolivian cocaine HCl has been reduced to as low as 47 percent. There are reports that traffickers are smuggling cocaine base into neighboring countries for final refining into cocaine HCl.
Bolivia participates in both the Multilateral Chemical Reporting Initiative and Operation Purple.
Colombia. Colombia is the world's largest producer of cocaine and an important producer of heroin. Most of the chemicals required for this production are imported into the country with facially valid import licenses and are subsequently diverted. Lesser amounts are smuggled in from neighboring countries, Brazil, Ecuador and Venezuela.
Colombia is a party to the 1988 UN Drug Convention and the country's chemical control laws meet or exceed the provisions of the Convention. However, the system for issuing import permits weakens implementation. The permits are not reliable proof that the legitimate end-use for controlled chemicals has been verified prior to their issuance. The permits are also issued for lengthy time periods, rather than on a shipment-by-shipment basis. DEA now requires documentation identifying the ultimate consignee and the end-use for all U.S. exports, and transshipments through the U.S., of potassium permanganate and the solvents necessary for cocaine production destined for Colombia before shipments may proceed.
Colombian authorities are making a determined effort to improve enforcement of chemical control laws. Particular emphasis has been placed on the key cocaine chemical, potassium permanganate. A National Action Plan for the Control of Potassium Permanganate has been developed and Colombia actively participates in Operation Purple. A study is underway to determine the legitimate national requirements for the chemical and a special group has been established to visit all commercial establishments that have inventories greater than 15 kilograms. Among the findings thus far are that potassium permanganate is being imported disguised as other chemicals and that much of the diversion takes place in quantities less than 5 kilograms. The government is considering a proposal to eliminate the regulatory threshold of 15 kilograms.
Peru. Peru produces most of the chemicals necessary for cocaine base manufacture, but not for cocaine HCl. The country is a party to the 1988 UN Drug Convention and has laws meeting its chemical control provisions.
The Peruvian National Police chemical control unit, DICIQ, is active in enforcing these laws. In 1999, it conducted over 1,500 regulatory and criminal investigations of suspect businesses and seized over 112 metric tons of controlled chemicals. The government also enacted a law mandating DICIQ to take a 5-gram sample of all cocaine seizures to develop a signature analysis of the chemicals used in cocaine manufacture.
Peruvian industry does not produce potassium permanganate. In 1999, DICIQ continued its initiative to track shipments from the importer to the final end-user. Peru also participates in Operation Purple.