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U.S. Department of State

Diplomacy in Action

South America


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Argentina

I. Summary

Argentina is not a major drug producing country, but it remains a transit country for cocaine flowing from neighboring Bolivia, with undetermined quantities of the drug also being moved through Argentina in international transit from Peru and Colombia. Within the last several years, Argentina has become a transit area for Colombian heroin enroute to the U.S. East Coast (primarily New York), although there is no evidence that the quantities involved significantly affect the U.S. According to Argentine government (GOA) statistics, domestic drug use is growing. Although the overall number of people arrested for possession and trafficking declined by a small amount last year, the number of seizures increased. This is indicative of a more focused use of investigative resources by the GOA, where trafficking organizations are being targeted instead of individual violators. Still, the smuggling of coca leaf into Argentina from Bolivia remains a problem, with 92,333 kilograms of coca leaf seized by Argentine authorities in 2000.

While cognizant of its responsibilities in the interdiction area, the Argentine government focuses its counternarcotics efforts on demand reduction. Federal counternarcotics policy is coordinated by the Secretariat for the Prevention of Drug Addiction and Narcotics Trafficking (SEDRONAR). The government has several national security forces involved in counternarcotics efforts, and provincial police forces also play an integral role.

There has also been some positive movement on money laundering legislation in 2000. Argentina is a party to the 1988 UN Drug Convention.

II. Status of Country

Argentina is not a major drug producing country. According to the first national survey on drug use, released in June 1999, 2.9 percent of adults between the ages of 16 and 65 said they had consumed an illegal drug in the previous 30 days. Marijuana is the most popular illegal drug consumed, with cocaine HCl and inhalants ranked second and third. Illicit cultivation remains negligible. There is very limited refining or manufacturing of illicit drugs, with small amounts being produced in the country. Most Argentine officials agree that the trafficking of narcotics through Argentina is a problem, although it has remained difficult to quantify the flow with any degree of accuracy. Argentina has a large and well-developed chemical industry which manufactures almost all the precursors necessary for the processing of cocaine. Buenos Aires also has a sophisticated financial sector, which could be used for money laundering operations.

Bolivia is the primary source of cocaine entering Argentina. Some drugs, such as marijuana, enter via Paraguay and Brazil. Within the past several years, the trafficking of Colombian heroin through Argentina to the U.S. East Coast has increased significantly. Seizures of psychopharmaceuticals, such as "ecstasy," continue to occur. Amphetamine seizures are increasing as well.

Commercial aircraft, private and commercial vehicles, containerized rail cargo, and foot traffic all serve as means of entry of drugs into Argentina. The thousands of uncontrolled airfields and small municipal airports, combined with the continuing lack of national radar coverage are factors which make Argentina attractive to potential traffickers. Riverine traffic from Paraguay and Brazil is another probable method for moving narcotics into and through Argentina. Drug shipments out of the country are mostly via commercial aircraft or through Argentina's maritime port systems. Couriers of cocaine from Buenos Aires' Ezeiza International Airport are primarily destined for Europe, South Africa, and Australia. Air couriers of heroin are primarily destined for the United States. Maritime transport from Argentina is conducted by passengers, bulk cargo and possibly containerized cargo departing from Argentine ports.

As a member of MERCOSUR, Argentina cannot open and inspect sealed containers from another member state which are passing through the country in transit. These sealed and uninspected containers are considered to be a high trafficking threat.

III. Country Actions Against Drugs in 2000

The government actively opposes drug trafficking and the sale and use of illegal narcotics within the country. Argentina is party to the 1988 UN Drug Convention. In 1989, the Argentine congress passed the laws necessary to bring the 1988 UN Drug Convention into effect. Various presidential decrees since then have targeted money laundering and allowed asset seizures. In 1998, a witness protection program for key witnesses in drug-related prosecutions was created.

Argentina remains very active in multilateral counternarcotics organizations such as the Inter American Drug Abuse Commission (CICAD), the International Drug Enforcement Conference (IDEC), and the UNDCP. In 2000, Argentina continued to urge MERCOSUR to play a larger role in money laundering and chemical precursor diversion investigations. The GOA also hosted the IDEC in 2000.

Demand Reduction. The GOA has traditionally focused its narcotics efforts on demand reduction. Drug use is treated as a medical problem and addicts are eligible to receive government subsidized treatment. Buenos Aires province (the most heavily populated) has its own well-established demand reduction program which coincides with the province probably hosting the most drug users.

Law Enforcement Efforts. Argentina has many federal and provincial police forces involved in the counternarcotics effort. The primary federal forces involved are the Federal Police (who also have jurisdiction for crimes committed in or connected to the city of Buenos Aires), the Gendarmerie Nacional (border police), the National Customs Service, the National Air Police, and the National Coast Guard. The provincial police forces of Buenos Aires, Salta, and Jujuy are also very involved in the counternarcotics campaign.

All of Argentina's security forces face continuing severe counternarcotics budget limitations which have hampered investment in training and equipment. Also, a lack of coordination between the many, and at times, competing, law enforcement organizations continues to lessen GOA effectiveness. The GOA recognizes this problem and has taken some steps to try to alleviate it.

Marijuana seizures were up dramatically from 1999 as were heroin seizures. In 1999, 57,276 kilograms of marijuana, 34 kilograms of heroin and approximately 1.2 metric tons of cocaine base and hydrochloride were seized. In 2000, 23,464 kilograms of marijuana, 47.4 kilograms of heroin and over two metric tons of cocaine base and hydrochloride were seized in Argentina. However, drug arrest statistics declined in 2000, from 6,367 arrests in 1999 to 7,171 arrests in 2000. The U.S. Embassy believes this demonstrates a more focused use of GOA law enforcement investigative resources, where trafficking organizations are being targeted instead of the individual violator.

Corruption. The recently restructured De La Rua government has reiterated that the fight against corruption is one of its highest priorities. Argentina is a party to the Inter American Anti-Corruption Convention and has signed the OECD antibribery convention.

Agreements and Treaties. In 1990, Argentina and the USG signed a mutual legal assistance treaty that went into effect in 1993. In 1997, the USG and Argentina signed a new extradition treaty. The exchange of instruments of ratification took place on June 14, 2000 and the treaty went into effect on June 15, replacing an outdated treaty signed in 1972. A memorandum of understanding between the U.S. Treasury and SEDRONAR dealing with the exchange of financial information relating to money laundering was signed in 1995.

The GOA is a party to the 1988 UN Drug Convention. It also has bilateral narcotics cooperation agreements with many neighboring countries. The United Kingdom, Germany, Australia, France, and Italy provide limited training and equipment support. Argentina signed the UN Convention Against Transnational Organized Crime and its protocols in December 2000.

Precursor Chemical Control. Argentina has a well-developed chemical industry which produces many of the necessary solvents, acids, and oxidizing chemicals needed for the extraction of cocaine from the coca leaf and its subsequent purification. Argentine authorities seized 2,702.80 liters of chemicals in 2000.

A presidential decree signed in 1991 placed controls on essential chemicals and precursors, requiring that all manufacture, import or export of precursor chemicals (and certain pharmaceutical drugs) be registered with SEDRONAR. In 1996, another decree included the need for distributors and transporters to register. Until very recently, not much was done to verify the bona fides of chemical transfers. Due to resource constraints and deficiencies in the relevant earlier decrees, there have been very few investigations into suspicious chemical transfers.

SEDRONAR has recognized longstanding problems with the old chemical register. The GOA has introduced new and more secure import and export certificates. SEDRONAR has begun to rebuild a national database of producers and distributors to gain a better understanding of the scope of the problem and has formed an eight-person chemical investigation unit. The GOA has proposed to its neighbors that they work more closely together to monitor the flows of chemicals in the region. SEDRONAR officials say they are willing and able to exchange records with USG law enforcement authorities.

IV. U.S. Policy Initiatives and Programs

In 1989, the governments of the United States and Argentina signed a cooperation agreement against drug trafficking, which was implemented annually until 1995 through a series of memoranda of understanding. The programs continue, using money obligated during earlier years. During that time, USG assistance totaled approximately $2.9 million. Just over $2 million was used to supply equipment, with the balance used for training programs for Argentine law enforcement personnel.

Cooperation between the USG and Argentine authorities, both federal and provincial, continued to be excellent in 2000. The Northern Border Task Force (NBTF) and Group Condor, major DEA-supported initiatives in the frontier region with Bolivia, continue to produce noteworthy results. Both the NBTF and Group Condor devote all of their investigative resources to counternarcotics work. State Department funding has been used to provide equipment and training for both units. The NBTF and Group Condor have seized 368.2 kilograms of cocaine and arrested 25 traffickers in calendar year 2000. A major benefit derived from both the NBTF and Group Condor operations has been the cooperation between participating agencies in the conduct of joint investigations. The U.S. Embassy in Buenos Aires will continue to work with and train the various agencies involved in these groups to ensure continued success.

The U.S. Embassy funded the participation of a U.S. expert involved in the development of the "Partnership for a Drug Free Argentina." The Argentine Ad Council launched the program in late 1998. The ad council estimates that local media has donated over $18 million in free time and space. The campaign has been very successful, bringing in thousands of calls for information about prevention and rehabilitation programs. The U.S. Embassy was also active in sponsoring a successful series of seminars on drugs and the media.

The Road Ahead. The GOA should continue to focus its efforts on the critical northern border area where the vast majority of cocaine enters Argentina, without neglecting other potentially important areas such as the tri-border area where Argentina, Paraguay, and Brazil meet. The USG will work with the Argentine Customs Service and Air Police to target heroin trafficking to the U.S. East Coast and cocaine movements by couriers through Argentina's airports. The GOA should also determine the extent of South Atlantic maritime trafficking. The U.S. Embassy will continue to work with SEDRONAR to develop effective chemical controls and identify the illegal diversion of precursor chemicals.

Bolivia

I. Summary

Bolivia continues to be the model for the region in coca eradication. An extremely effective eradication program in the Chapare, previously Bolivia's principal coca-growing region has reduced the number of hectares of coca under cultivation to fewer than 600. Despite recent changes within the Banzer government and disturbances throughout the country, all commercially significant coca fields were eliminated from the Chapare by the end of 2000. The disturbances also negatively impacted the gains in counternarcotics alternative development production. Even though Bolivia produced less cocaine in 2000 than the year before, drug seizures increased, when expressed as a percentage of potential production. Enforcement of the anti-money laundering law was hampered by bureaucratic insufficiencies and legal restrictions, resulting in no arrests or prosecutions in 2000. It remains unclear if new regulations that will take effect in May 2001 will resolve the legal ambiguities regarding asset seizure and forfeiture.

A highly effective chemical interdiction program has forced Bolivian traffickers to continue to rely on inferior substitutes for scarce and expensive chemicals smuggled in from neighboring countries and to streamline the cocaine base and hydrochloride (HCl) production process. As a consequence, the purity of Bolivian cocaine has been greatly reduced. Most foreign traffickers now prefer to purchase base in Bolivia, or to import Peruvian base for transshipment and processing into HCl in Brazil, where essential chemicals are readily available. Counternarcotics alternative development initiatives in the Chapare continue to provide licit alternatives to coca. Bolivia is a party to the 1988 UN Convention.

II. Status of Country

During 2000, Bolivia continued to trail Colombia and Peru in the production of coca leaf and cocaine. In 2000, the Government of Bolivia (GOB) eradication program reduced coca cultivation by 33 percent nationwide—and by over 90 percent in the Chapare—from 21,800 hectares at the end of 1999 to 14,600 hectares by the end of 2000. Potential leaf production declined by 41 percent, from 22,800 metric tons to 13,400 metric tons, and potential cocaine production fell from 70 metric tons in 1999 to 43 metric tons. Since 1995, Bolivia's capacity to produce cocaine has been reduced from 240 metric tons to the lowest levels of cultivation and potential cocaine production since the USG began conducting imagery-based crop estimates for Bolivia in 1985.

At the end of 2000, Bolivia had a negligible amount of coca under cultivation in the Chapare region, having reduced the remaining 7,500 hectares to less than 600 hectares in December 2000. The remaining concentration of approximately 13,700 hectares is located in the Yungas region, and 300 hectares are under cultivation in Apolo. The Government of Bolivia (GOB) is currently preparing an eradication/coca reduction program for the Yungas to commence in March/April 2001. Article 29 of law 1008, Bolivia's basic counternarcotics law, presently allows for the cultivation of 12,000 hectares in the Yungas in order to satisfy legal demand. The same article permits the government periodically to reevaluate the needs of the legal coca market and revise the limit accordingly. The government plans to conduct such an evaluation during the coming year. The quantity of coca grown in Apolo is not considered significant, and no evidence suggests it is being grown for other than legitimate purposes.

III. Country Actions Against Drugs in 2000

Policy Initiatives. The bail provisions of the Code of Criminal Procedures (CCP) took partial effect on May 31, 2000, authorizing continued detention where the court determines a risk of flight or obstruction of justice exist. Key antinarcotics provisions, such as stricter rules of evidence, will not take effect until May 31, 2001, when the code takes full effect. Progress on complementary legislation, including the Public Ministry Law, Police Law, and Judicial Branch Law has been slow. The Public Ministry Law, which is designed to professionalize the prosecutorial function and give prosecutors greater independence and control over investigations, has passed the Lower House of Congress. In the floor debate, the National Revolutionary Movement (MNR) Party opposed an article that allows the Congress broad oversight over the Public Ministry, and is seeking to have this overturned in the Constitutional Tribunal. The Congress also decided to temporarily retain its control over the selection of district prosecutors, although this will pass to the Attorney General once a career prosecutorial service is established.

Cultivation. Total cultivation of coca in Bolivia was approximately 14,600 hectares at the end of 2000, 8,400 less than a year earlier. Of the total, 13,400 hectares were of mature, harvestable coca, a 22 percent reduction from the previous year. Only 900 hectares of new coca were planted.

One hectare of Chapare coca yields an average of 2.7 metric tons of sun-dried coca leaf, which, in turn, produces 7.3 kilos of cocaine. The eradication of 7,500 hectares of Chapare coca during this year, therefore, prevented approximately 55 metric tons of cocaine from being manufactured and exported to the U.S. and other destinations.

Production. For the sixth year in a row, total potential cocaine production in Bolivia has declined, from 240 metric tons in 1995 to 43 metric tons in 2000. Moreover, the destruction of 39,279 square meters of seedbeds ensures this trend will continue when the government's coca reduction effort moves to the Yungas in 2001.

Counternarcotics Alternative Development. The U.S. Agency for International Development (USAID), with funding from the Department of State's Bureau of International Narcotics and Law Enforcement Affairs, supports the GOB's alternative development activities which focus on consolidating the agricultural and infrastructure network, and enabling farmers to support themselves and their families without the need to cultivate coca. USAID-supported organizations are contributing to net coca reduction by providing alternative development assistance to those communities and farmer organizations that are willing to eliminate all of their coca plantings or have had all their coca eradicated forcibly.

As of September 30, 2000 the volume of licit alternative development production leaving the Chapare, as determined by the transport survey at the region's two points of exit, totaled $67.3 million, substantially above calendar year 1999's 12-month total of $58.2 million. Exports of Chapare licit fresh and processed crops totaled $3.6 million, less fees for services or dues paid by members. The number of domestic agribusinesses purchasing Chapare crops or supplying agricultural inputs had increased from 46 to 67 agribusinesses.

The three weeks of civil violence and road blockages in October, however, reduced overall economic activity in Bolivia by nearly half. Farmgate losses to the Chapare farmers participating in alternative development activities exceed $1.25 million and production infrastructure was destroyed by protesting coca growers (cocaleros). Hard-won market linkages with Argentine and Chilean buyers were also severely damaged by the inability of Chapare producers to comply with delivery contracts. The cocalero and other civil groups behind the violence and destruction have severely jeopardized what had been expanding eco-tourism and business investment opportunities, including causing the departure of financial institutions poised to begin investing and providing financial services in the Chapare.

Money Laundering. Implementation on the 1996 law against money laundering began in late 1999 when the financial investigative unit of the Superintendency of Banks established protocols with the Public Ministry and the Special Force for the Fight Against Narcotics (FELCN) for the transfer of information. However, various factors have hampered the effective enforcement of the law, including a) the lack of personnel and infrastructure in the Public Ministry and law enforcement agencies to be able to conduct criminal investigations, b) restrictions on the ability of the unit to monitor other financial institutions, such as stock, bonds, and insurance brokerages, and c) a constitutional prohibition on wiretapping. No arrests or prosecutions for money laundering violations occurred in 2000.

Asset Seizure. The Ministry of Government (MOG) has received technical assistance from USAID to regulate the seized assets regime established by the CCP. The seized assets regime will take effect on May 31, 2001, after the MOG publishes the required regulations. These new regulations should resolve the ambiguities and conflicts in the regime as set out in law 1008 and the supreme decree issued in the last year of the predecessor government. It is still unclear, however, if these new regulations will serve to revise the code provisions that appear to be unconstitutional, such as provisions that provide for the seizure and sale of the property of the accused before a final determination of guilt or innocence.

Extradition. Bolivia and the United States signed a bilateral extradition treaty in 1995. The treaty entered into force the following year and mandates the extradition of nationals for most serious offenses, including drug trafficking. The GOB has extradited two fugitives to the U.S. since January 1998, and has detained five others. All of these cases are related to narcotics charges.

Demand Reduction Programs. The GOB's budget contained little funding for the Vice Ministry for Prevention and Rehabilitation. The Vice Ministry, therefore, was unable to plan a comprehensive program of awareness and prevention. However, in conjunction with the Vice Ministry, the USG is supporting programs designed to focus on drug awareness education and counseling in public schools throughout Bolivia.

Law Enforcement Efforts. Even though Bolivia produced less cocaine in 2000 than the year before, drug seizures increased when expressed as a percentage of potential production. As of November 2000, 4.96 metric tons of cocaine derivatives were seized (but most of this was Peruvian in origin). Based on cocaine production estimates of 43 metric tons for Bolivia, the seizure amount is 11.5 percent of that estimated potential total. In 1999, the seizure rate was 9.8 percent of potential production, and 7.7 percent in 1998.

Most chemicals used in processing Bolivian coca leaf into cocaine base and HCl are smuggled from neighboring countries. With the effective chemical interdiction program that the GOB has established over the past three years, essential chemicals are hard to obtain or difficult to afford. This has forced the Bolivian traffickers to streamline the cocaine production process to reduce or eliminate the need for some chemicals, and to use inferior substitutes and recycling. The purity of Bolivian cocaine has consequently been reduced to as low as 37 percent. In addition, Bolivian traffickers continue to use mannitol and other cutting agents to make up the quantities requested by their customers. Demand for Bolivian cocaine HCl has fallen, as a result. Most foreign traffickers now prefer to purchase cocaine base, or import Peruvian base for transshipment and refining into HCl in Brazil, where essential chemicals are readily available.

Corruption. The GOB, as a matter of official policy, does not condone, encourage or facilitate any aspect of narcotrafficking.

In August, a former narcotics judge was sentenced to 12 years in prison for accepting a bribe in a 1999 narcotics trafficking case. This court decision represents the first time a Bolivian judge has ever been prosecuted and convicted under Bolivian narcotics statutes. The investigation, arrest, and sentencing of the judge represents a tremendous achievement for the counternarcotics effort in Bolivia. Prior to this, judges serving on the Santa Cruz narcotics tribunals engaged in corrupt activities with impunity, including receiving large bribes from narcotics defendants in exchange for sentence reductions, dismissal of criminal prosecutions, and returning seized assets before legal proceedings were completed. Those judges that considered themselves "untouchable" were effectively nullifying all of the counternarcotics law enforcement advances in eastern Bolivia through their criminal actions.

In September, the Santa Cruz District Appeals Court overturned a lower court decision which favored the Marino Diodato cocaine organization. The Appeals Court decision resulted in the conviction of leader Marino Diodato and four of his criminal associates on narcotics trafficking charges. The court sentenced Diodato to ten years in prison, and the four associates received prison sentences ranging from four to five years. Diodato's defense attorneys have filed an appeal with the Bolivian Supreme Court, which is under review. A final decision is expected in early 2001.

Agreements and Treaties. Bolivia is a party to the 1961 Single Convention on Narcotic Drugs, the 1972 Protocol thereto, and the 1971 Convention on Psychotropic Substances. Bolivia is also a party to the 1988 UN Drug Convention. Bolivia and the United States signed an extradition treaty in 1995, and the treaty has been in force since 1996. Bolivia signed the UN Convention Against Transnational Organized Crime and its protocols in December 2000.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. To ensure that the human rights of Bolivian citizens are respected by USG-supported counternarcotics forces, the mission made the prompt, thorough, and impartial investigation of all credible human rights violations a condition precedent for the disbursal of fiscal year 1999 and fiscal year 2000 Balance of Payment Program funds. The mission continues to help prepare Bolivian police and prosecutors for the implementation of the new Code of Criminal Procedure.

Bilateral Cooperation. The Bi-National Commission, chaired by the U.S. ambassador and the Vice-President of Bolivia, continues to meet regularly to monitor progress toward the goals set out in the USG-GOB counternarcotics agreements and to consider new programs and initiatives. The U.S. ambassador and senior members of the mission's counternarcotics team have also established a series of working lunches with GOB Cabinet ministers to discuss issues of mutual interest and goals for the completion of "Plan Dignidad," President Banzer's five-year plan to get Bolivia out of the drug circuit.

U.S. Customs sent two Customs Inspectors to Bolivia on a three-week mission to cover land border checkpoints in support of DEA's "Operation Gatekeeper." This operation is an ongoing joint initiative of DEA and the Bolivian National Police to control the flow of cocaine from the Chapare Valley and, thereby, the world's market. The U.S. Coast Guard maintains a long-term training team in country, working primarily with the Blue Devils Task Force riverine unit.

Road Ahead. During 2001, the GOB will split the Joint Task Force (JTF) to maintain a reduced number in the Chapare suitable for monitoring, maintaining security, and conducting eradication of replanted or residual coca. The other JTF members will be deployed in the Yungas to prepare for the implementation of an eradication program/coca reduction program there.

The aggressive eradication program of 1999 and 2000 outpaced the counternarcotics alternative development programs in the Chapare by a wide margin. The GOB with USAID assistance will accelerate the alternative development programs in the Chapare and lay the groundwork for an equally aggressive program in the Yungas.

Bolivia Statistics
(1992-2000)

 

2000

1999

1998

1997

1996

1995

1994

1993

1992

Coca

                 

Net Cultivation(1) (ha)

14,600

21,800

38,000

45,800

48,100

48,600

48,100

47,200

45,500

Eradication (ha)

7,653

16,999

11,621

7,026

7,512

5,493

1,058

2,397

3,152

Cultivation (ha)

22,253

38,799

49,621

52,826

55,612

54,093

49,158

49,597

48,652

Leaf: Potential Harvest(2) (mt)

13,400

22,800

52,900

70,100

75,100

85,000

89,800

84,400

80,300

HCl: Potential (mt)

43

70

150

200

215

240

255

240

225

Seizures

                 

Coca Leaf (mt)

51.85

56.01

93.72

50.60

76.40

110.09

202.13

201.25

188.90

Coca Paste (mt)

0.008

0.05

0.02

0.01

0.33

Cocaine Base (mt)

4.54

5.48

6.20

6.57

6.78

4.60

6.44

5.30

7.70

Cocaine HCl (mt)

0.72

1.43

3.12

3.82

3.17

3.59

1.02

0.31

0.70

Combined HCl & Base (mt)

5.26

6.91

9.32

10.39

9.95

8.19

7.46

5.61

8.40

Agua Rica(3) (ltrs)

15,920

30,120

44,560

1,149

2,275

16,874

16,874

14,255

50,820

Arrests/Detentions

2,017

2,050

1,926

1,766

955

600

1,469

1,045

1,226

Labs Destroyed

                 

Cocaine HCl

2

1

1

1

7

18

32

10

17

Base

620

893

1,205

1,022

2,033

2,226

1,891

1,300

1,393

(1) The reported leaf-to-HCl conversion ratio is estimated to be 370 kilograms of leaf to one kilograms of cocaine HCl in the Chapare. In the Yungas, the reported ratio is 315:1.

(2) Most coca processors have eliminated the coca paste step in production.

(3) Agua Rica (AR) is a suspension of cocaine base in a weak acid solution. AR seizures first occurred in late 1991. According to DEA, 37 liters of AR equal one kilograms of cocaine base.

Brazil

I. Summary

Although Brazil is not a significant producer of illicit narcotics, it continues to be a major transit country for illicit drugs shipped to the United States and Europe as well as a major producer of precursor chemicals. The two main counternarcotics events of 2000 were the Brazilian government's launch of Operation Cobra, and the clarification of the government's division of counternarcotics responsibilities. With Operation Cobra, Brazil is reinforcing its northern border with Colombia against any spillover resulting from implementation of Plan Colombia by the Colombian government. Re-organizing the assignment of counternarcotics responsibilities, the Brazilian government gave responsibility for supply reduction (interdiction) to the Brazilian Ministry of Justice or its sub-agencies (such as the Federal Police), and for demand reduction (treatment/prevention) to the Brazilian antidrug agency, known as SENAD.

According to Brazilian authorities, the country's domestic drug problem is increasing. Brazil continues to cooperate with its neighbors, particularly Peru and Colombia, to effectively control the remote frontier regions where illicit drugs are transported. Federal Police reported seizing four metric tons of cocaine in 2000, a figure supplemented by state, local, and highway police forces' narcotics seizures made but not reflected in the federal government statistics.

Brazil has a bilateral narcotics agreement and a memorandum of understanding (MOU) with the U.S. providing for bilateral counternarcotics cooperation. Brazil also cooperates bilaterally with several other countries and participates in multilateral counternarcotics initiatives, such as the UNDCP and the Organization of American States/Anti-Drug Abuse Control Commission (OAS/CICAD). Brazil is a party to the 1988 UN Drug Convention.

II. Status of Country

Although Brazil is not a significant drug producing country, it is a major transit country for cocaine base moving from Andean Ridge cultivation areas to processing laboratories in Colombia. It is also a conduit for cocaine hydrochloride (HCl) from Colombia and other neighboring countries to North America, Europe, and Brazilian cities. "Crack" cocaine is used among youth in the country's cities, particularly Sao Paulo.

Brazil has a large, sophisticated financial sector. Money laundering, which became a criminal offense in 1998, is associated with narcotics trafficking, contraband, and other corruption. In November, a parliamentary investigative commission estimated annual money laundering in Brazil at 50 billion dollars, half of which it attributed to narcotics. Brazilian administration officials counter this assertion by maintaining that there is no accurate estimate of the level of money laundering in Brazil.

The Brazilian Federal Police (DPF) planned and, in September, began implementation of Operation Cobra, an ambitious three-year inter-agency effort to prevent or address any possible spillover effect from the implementation of Plan Colombia by the Colombian government through allocation of greater resources in the Amazonian border area. Construction continued on the Amazon Surveillance System (SIVAM), which will provide an integrated air- and land-based radar system by 2002 to detect trafficking and other illegal aircraft activity in the lightly populated region.

III. Country Actions Against Drugs in 2000

Policy Initiatives. Operation Cobra (COlombia-BRAzil), reinforcing Brazil's government's presence along its 1,600-mile border with Colombia, will cover all major rivers between Brazil and Colombia. The DPF will also implement a tactical air patrol group to cover the entire region using fixed wing and rotary wing aircraft. All major Brazilian government agencies, including the military, Foreign Ministry, Customs, Justice Ministry, Money Laundering Council (COAF), Brazilian Intelligence Agency (ABIN), and Forestry Department (IBAMA), were consulted in the elaboration of the plan.

Brazil also continues to move ahead in counternarcotics judicial reform. In September, a week-long drug courts seminar funded by the Embassy's Narcotics Affairs Section was held in Rio de Janeiro, attended by more than 50 participants from seven Brazilian states including state judges and police. Five American drug court experts administered the seminar; speakers included a U.S. federal judge, the U.S. Ambassador, and the Brazilian Chief of Institutional Security for the Office of the President. According to reports, participants have begun to move ahead in the implementation of local drug courts to try drug-related offenses.

Accomplishments. The DPF made 1,240 narcotics-related arrests and seized four metric tons of cocaine and 50 kilograms of crack in 2000. Overall statistics are incomplete, however, since only those of the DPF are reported on a national basis; DPF sources estimate they record perhaps 75 percent of seizures and detentions.

Law Enforcement. The DPF seized four metric tons of cocaine in 2000. Marijuana (cannabis) seizures of 125 metric tons in 2000 were more than twice the 54.96 metric tons seized in 1999. One drug laboratory was also dismantled.

In 2000, the DPF focused efforts on the western Amazon region, continuing operations developed from "Operation Porras," which began in 1997. Another major operation in the region features trilateral cooperation among Brazil, Peru, and Colombia. Operation XXI was a joint Brazilian/Peruvian operation that focused on cocaine trafficking organizations. The vast Amazon region remains difficult to monitor adequately, with the transport of narcotics possible by air and along the extensive river system. Some authorities claim that a majority of the cocaine shipped down the Amazon is destined for the United States. Manaus, Macapa, and Belem serve as transshipment points for drugs coming from Colombia and Peru to ships bound for world markets.

Federal counternarcotics police and state authorities also have been investigating extensive domestic distribution networks that are in place in the major and secondary cities.

Illicit Cultivation/Production. There is no significant evidence of the cultivation of illicit drugs in Brazil with the exception of some cannabis grown primarily for domestic consumption in the interior of the northeast region. DPF analysts believe that international narcotics trafficking organizations may be investing in building cocaine processing laboratories in Brazilian territory because of the availability of precursor chemicals.

Money Laundering. In 2000, the Government of Brazil implemented money laundering reporting requirements, based on 1998 money laundering legislation and implementing regulations issued in 1999. The law makes money laundering a criminal activity and requires financial entities (ranging from banks to jewelry stores) to maintain records and report suspicious financial transactions. The Council for the Control of Financial Activities (COAF), which coordinates government efforts to counter money laundering, is the central recipient of reports regarding suspect financial activities; COAF reported an appreciable increase in the number of these reports in 2000. A number of bank accounts and other funds were blocked because of suspicion of money laundering. In some instances, funds were forfeited following judicial decisions.

Asset Seizure. Many assets, particularly motor vehicles, are seized during narcotics raids and put into immediate use by the DPF, under a 1999 executive decree. Other assets are auctioned and proceeds distributed based on court decisions. Federal Police records show that ten airplanes, 303 motor vehicles, and 143 firearms were seized and used in 2000.

Precursor Chemical Control. Brazil requires registration with federal narcotics police for all production, transport, and distribution of precursor chemicals. A 1995 law places 11 chemicals under federal control (24 more are under consideration), sets minimum thresholds for reporting and record keeping on transactions, provides for import and export licensing, and fixes substantial administrative penalties for noncompliance. While compliance with the permit process appears to be widespread, a lack of resources hinders active follow-up on shipments.

The DPF has initiated several programs aimed at controlling and disrupting the diversion of precursor chemicals from Brazil to cocaine producing countries, including training and interdiction operations with cyclical audits and investigations of Brazilian chemical firms. Brazil complies with agreements on record-keeping concerning transactions of precursor and essential chemicals, and has established procedures under which such records can be made available to other countries' law enforcement authorities.

Corruption. As a matter of government policy, Brazil does not condone, encourage, or facilitate production, shipment, or distribution of illicit drugs or laundering of drug money. In December 2000, the Brazilian congressional inspection commission on corruption called for the indictment of 827 persons, including several state and local politicians and former officials.

Agreements and Treaties. Brazil became a party to the 1988 UN Drug Convention in 1991. Bilateral agreements based on the 1988 convention form the basis for counternarcotics cooperation between the U.S. and Brazil. Brazil also has a number of narcotics control agreements with its South American neighbors, several European countries, and South Africa. In December 2000, Brazil signed the UN Convention Against Transnational Organized Crime and its protocols.

The U.S. and Brazil bilateral mutual legal assistance treaty (MLAT), signed in October 1997, was ratified by the Brazilian congress in December 2000. Upon entry into force, this treaty will support efforts by Brazil to deal with narcotics trafficking and organized crime, as well as other offenses.

Brazil and the United States are parties to a bilateral extradition treaty signed in 1961. Brazil cooperates with the United States and other countries in the extradition of non-Brazilian nationals accused of narcotics-related crimes. According to the Brazilian constitution, however, no Brazilian shall be extradited, except naturalized Brazilians in the case of a common crime committed before naturalization, or in the case where there is sufficient evidence of participation in the illicit traffic of narcotics and related drugs, under the terms of the law. There were no extraditions to the U.S. of persons accused of counternarcotics activities in 2000. However, there is one extradition request pending in the Brazilian Supreme Court concerning a DEA fugitive who was arrested in 2000.

Domestic Programs (Demand Reduction/Rehabilitation). SENAD continues to enjoy success with its toll-free number on drug information. Counternarcotics funds from FY 1999 and FY 2000 have been earmarked to fund a SENAD sponsored Brazil-wide survey of drug consumption, as well as to support demand reduction and drug education programs in Brazil. Continuing previous years' investments, the U.S. supported training sessions of PROERD officers, based on the American D.A.R.E. model. PROERD provides training to uniformed state military police drug education volunteers in 22 of Brazil's 26 states, as well as in the Federal District.

IV. U.S. Policy Initiatives and Programs

U.S. Policy Initiatives. U.S. counternarcotics policy in Brazil focuses on working with Brazilian authorities to assist them to identify and dismantle international narcotics trafficking organizations, reduce money laundering and increase awareness of the dangers of drug trafficking and drug abuse. Assisting Brazil to develop a strong legal structure for narcotics and money laundering control and enhancing cooperation at the policy level are key goals. Bilateral agreements provide for cooperation between U.S. agencies, the national antidrug secretariat and the Ministry of Justice.

Bilateral Cooperation. The DPF and SENAD continued to express their strong interest in active cooperation, particularly intelligence sharing, and coordination with the U.S. in drug control activities.

U.S. law enforcement agencies expanded their information sharing activities with Brazilian police authorities in 2000, and U.S. Drug Enforcement Administration (DEA) agents were invited to observe DPF operations in the Amazon region. Brazil cooperates with authorities in neighboring countries, particularly Colombia, Peru and Bolivia, to enhance regional counternarcotics efforts.

Bilateral programs that took place in 2000 included a regional two-week drug enforcement seminar in Brazil in January, a five-week special investigative unit seminar in the U.S. in August and September, a one-week precursor chemical control course in Brazil in September, and a two-week regional drug enforcement seminar (focusing on financial investigation) in Brazil in December. Additionally, a seminar for drug court professionals for 53 participants was given by the national association of drug court professionals in Rio de Janiero; with U.S. funding, a Brazilian expert on prevention attended a worldwide prevention conference in September, and several PROERD (D.A.R.E.) training programs were sponsored throughout Brazil.

The Road Ahead. The planning and implementation of the ambitious Operation Cobra in northern Brazil demonstrates the Government of Brazil's serious commitment to combat trafficking and production of illegal drugs. Further signs of Brazil's strong commitment to combat drug trafficking would include passage of omnibus counternarcotics legislation and pending legislation on serious crimes, including narcotics trafficking; continued high-level attention to counternarcotics efforts; further funding of counternarcotics programs and law enforcement agencies; and continued interdiction efforts in the regions most exploited by international narcotics traffickers.

Chile

I. Summary

Chile is not a center of illicit narcotics production, but is a transshipment point for cocaine products moving to the U.S. and Europe. Chile continues to be a source of precursor chemicals exported for use in coca processing in Peru and Bolivia. Through close cooperation with neighboring countries, Chile experienced significant drug control successes in 2000. The Chilean financial system, due to its relative sophistication and legislative gaps, is vulnerable to money laundering. Narcotics corruption is not a serious issue affecting Chile. Chile is a party to the 1988 UN Drug Convention and numerous multilateral and bilateral drug-related cooperation agreements. The Government of Chile (GOC) is increasing funding to school and community-based drug abuse and prevention programs in response to identified patterns of illegal use by youth and associated increased criminal activity.

II. Status of Country

Chile remains a source of precursor chemicals illegally diverted to neighboring countries for use in processing cocaine and a medium-level transshipment point for refined cocaine exported to the U.S. and Europe. Chile is not a producer country for narcotics, aside from very small quantities of coca paste and marijuana destined for domestic markets. A 1995 law criminalized illicit association, trade in precursor chemicals destined for use in narcotics refining, and money laundering and authorized wiretaps. Legislation to replace and strengthen the 1995 law is pending in the Chilean Congress.

Multilaterally, Chile is an active member of the Inter American Drug Abuse Control Commission (CICAD) and a strong supporter of efforts to promote an effective Multilateral Evaluation Mechanism (MEM). Chile is also a signatory to the newly created (December 2000) South American Financial Action Task Force on Money Laundering (GAFISUD). Bilaterally, in August 2000 the U.S. and Chile signed an umbrella agreement to provide a consultative mechanism for sharing information, strategy and resources to continue our joint efforts in the counternarcotics struggle.

III. Country Actions Against Drugs in 2000

Policy Initiatives. A comprehensive revision of Chile's 1995 counternarcotics law was undertaken in 1999 and proposed strengthening changes were drafted. The pending changes focus on authorizing flexibility in sentencing (currently, regardless of severity of the offense, the minimum sentence is five years), combating money laundering through mandatory reporting of transactions and creation of a financial intelligence unit, and harmonizing the drug code with Chile's ongoing legal reform. Chile is in the midst of a multi-year transition from a closed judiciary-driven criminal legal system to an adversarial system with opposing prosecuting and defending attorneys making arguments in open court.

The National Drug Control Council (CONACE), the GOC's drug coordinating body, and main conduit for demand reduction activities, has a total 2001 annual budget of approximately $15.2 million. This figure represents an over 30 percent real increase from its 2000 budget, reflecting the GOC's recognition that drug use is a significant problem in Chile. CONACE's demand reduction program for 2001 is $8.2 million: $3.1 million for community based prevention programs, $2.6 million for prevention targeted at schools and $2.5 million for drug treatment. Resources to be channeled to school and community based programs will double under this year's budget.

Drug Production, Flow, Transit. Smugglers from source countries make effective use of the extensive containerized cargo facilities at Chile's ten ports. Complicating Chilean authorities' challenges, treaty provisions from the late nineteenth century provide for inspection-free shipment of transiting cargo originating in Bolivia or Peru. Illegal coca products enter principally from Peruvian and Bolivian land points. While some coca paste is produced in Chile, the bulk flows from its neighbors south along the Pan American Highway to Santiago and points beyond. Refined cocaine is not processed in Chile but transits packaged for export via seaports. Chilean statistics put cocaine seizures at over ten metric tons in 2000, an increase from seizures in 1999. However, factoring out the nine metric ton seizure from January (discussed below), seizures of cocaine products were down 35 percent from the 1999 level of 2.5 metric tons. Seizures of marijuana totaled over two metric tons, primarily destined for domestic consumption, which was double the amount seized in 1999. In a new development, U.S.-bound heroin surfaced; 25 kilograms were seized at the Santiago airport during 2000, versus none in previous years.

Accomplishments. By working with its neighboring Latin American and U.S. law enforcement counterparts, Chile accomplished stunning control successes during 2000. In January, Chilean authorities seized nearly nine metric tons of refined cocaine hidden in a Panamanian-flag cargo ship making a call in the northern port of Arica. In August, following a four-year investigation, Chilean authorities participated in the dismantling of a precursor chemical diversion operation involving 11,000 tons of sulfuric acid manufactured in Chile for cocaine processing in Bolivia. Chilean authorities wrapped up 2000 with their largest ever seizure of marijuana (1.5 tons), dismantling a drug ring moving Paraguayan product through Argentina for distribution in Chile.

Money Laundering. Chile's financial system is relatively sophisticated and vulnerable to money laundering activities. Current legislation does not provide for mandatory reporting of either suspicious or high value transactions. Moreover, Chile has not yet established a distinct government organization to undertake financial intelligence analysis. Further challenging Chilean anti-money laundering law enforcement efforts, present legislation requires linkage to a drug crime as a prerequisite to a money laundering case. A full revision of the 1995 counternarcotics law is pending in Congress and provisions creating a financial intelligence unit and mandatory reporting requirements are integral components of the bill. Broadening the statute to encompass non drug-related offenses as predicate to a money laundering charge is not anticipated in this bill, but the GOC hopes to address this flaw in subsequent legislation yet to be introduced. Chile is a member of the South American Financial Task Force on Money laundering (GAFISUD).

Corruption. Corruption among officials and senior law enforcement personnel is not a major problem. Transparency International's 2000 Corruption Perceptions Index lists Chile as the 18th most transparent country in the world, only four spots below the U.S. and lengths ahead of its South American neighbors, all ranked below 45th place. Where officials have been accused of corruption, GOC institutions have investigated the allegations and imposed appropriate sanctions.

Treaties and Agreements. The U.S. and Chile are parties to a bilateral extradition treaty signed in 1900, and extraditions from Chile under this outdated instrument are arduous and expensive. The Chilean Ministry of Foreign Affairs is interested in principle in updating its extradition treaties with various countries, including the United States. The GOC has also indicated interest in the issue of asset forfeiture and asset sharing subsequent to seizure. Chile is a member of the Egmont Group, which promotes the sharing of data concerning financial crimes data among relevant national agencies. As a party to the 1988 UN Drug Convention, Chile continues to work toward compliance with its goals and objectives via its 1995 counternarcotics law with proposed changes. Chile is also a party to the 1971 UN Convention on Psychotropic Substances. In August 2000, the GOC and USG signed a new agreement for cooperation and mutual assistance in narcotics-related matters. Chile has similar agreements in force with the U.K., Spain, the EU and the Czech Republic. Bilateral agreement negotiations are underway with France, Germany, Russia, Poland, Romania, Ukraine, Turkey, Tunisia, Guatemala and Honduras. Chile signed the UN Convention Against Transnational Organized Crime in December 2000.

Demand Reduction/Domestic Programs. The Chilean public is concerned about rising drug use and distribution and associates these problems with rising street crime. CONACE's last comprehensive survey was conducted in 1998 and indicated that 70,000 Chileans (5.3 percent of the population) had used illegal drugs in the past year. According to CONACE, 15 percent of drug users are cocaine base or cocaine hydrochloride users, and 17 percent of the population has tried illicit substances at least once. Following on the 1998 survey, CONACE undertook a comprehensive survey of use by school age Chileans in late 1999. The results indicate that over 23 percent of Chilean high-school students had used illegal substances. This figure rose to over 47 percent for Santiago high school seniors. The single identifiable drug of choice was marijuana (22 percent) with use of coca products identified by 45 percent. Twenty-four percent cited "other illegal drugs", likely referring to inhalants or stimulants according to CONACE. These figures validated perceptions that illegal drug use by youth is a significant problem and led to sizeable increases in resources dedicated to school and community based prevention. Nongovernmental organizations (NGOs) are active in rehabilitation and education efforts, often with small grants from CONACE as part of a decentralized decision making initiative, and Chilean schools incorporate drug education in their curriculum using course materials designed by the NGO community.

IV. U.S. Policy Initiatives and Programs

U.S. support to Chile in 2000 reinforced ongoing joint U.S. Chilean priorities in five areas: 1) law enforcement and judiciary capacity building within the framework of the ongoing profound reform of the Chilean legal system; 2) diversion of precursor chemicals; 3) money laundering; 4) transshipment of illegal substances using containerized cargo; and 5) demand reduction. Throughout 2000, the U.S. Embassy sponsored seminars in both the U.S. and Chile to help prepare investigators, prosecutors, defenders, law school faculty, and judiciary officials for their roles in Chile's new adversarial criminal legal system. These programs included the State-sponsored participation of U.S.-based law schools and local law enforcement agencies as well as the U.S. Department of Justice. In March 2000, the Embassy brought a State Department-funded, U.S. Customs-provided course to share U.S. techniques and strategies to detect and thwart the latest methods of container alteration for the shipment of illegal drugs. In November 2000, the Embassy brought a State Department-funded team of money laundering experts to Chile to provide a week-long seminar on the latest trends and investigative techniques to over 40 of their Chilean counterparts from ten Chilean public and private sector organizations concerned with countering money laundering. In September 2000, with State Department funding and CONACE support, the U.S. Embassy let a contract to encourage a private sector based alliance to design and launch a massive antidrug media program. The contract provides support for a well regarded media consultant with a proven track record to develop a Chilean program based on highly successful models in both the U.S. (Partnership for a Drug Free America) and other Latin American countries.

The Road Ahead. In 2001, the USG intends to provide continued support to GOC efforts to combat narcotics-related problems listed above. Building on the successes of prior year programs, further capacity building surrounding judicial reform is planned. State Department-funded courses provided by the IRS regarding money laundering, by U.S. Customs on containerized cargo and by the DEA on precursor chemical diversion are all expected to take place in 2001. USG support to build a private sector-based, demand reduction-focused mass media program will likewise continue.

Colombia

I. Summary

Colombia produces and distributes more cocaine than any other country in the world and is also an important supplier of heroin. The situation has long been challenging, but it has reached crisis proportions in the last few years, with the enormous amounts of money generated by the drug trade fueling Colombia's long-standing, violent internal conflict. The illegal guerrilla and paramilitary groups that "tax" drug traffickers in return for protecting illicit cultivation and narcotics laboratories currently control almost half of Colombia's national territory, mostly in remote areas where government presence has traditionally been weak. More and more, these groups are entering into the production and trafficking phases of the narcotics business. As in previous years, their attacks on Colombian security forces and spray aircraft have hampered counternarcotics operations, especially in the guerrilla-controlled south, but also in paramilitary-dominated areas in the north. Although the Pastrana Administration remains committed to its peace dialogue with the two largest insurgent groups, the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN), its talks have shown few gains to date. After unilaterally withdrawing from the negotiating table November 14, the FARC reached an agreement with the GOC on February 9 to return to negotiations.

On July 13, 2000 President Clinton signed into law a comprehensive $1.3 billion assistance package in support of the Government of Colombia's (GOC) "Plan Colombia," an integrated strategy focusing on the peace process, the economy, the counternarcotics strategy, justice reform and human rights protection, and democratization and social development. It supplements ongoing U.S. counternarcotics programs totaling $330 million that were already in place. Under Plan Colombia, the U.S. will support justice sector reform and alternative development projects and will provide equipment, training, and technical assistance to the Colombian antinarcotics police and the military to increase their capability to eradicate illicit coca and opium poppy cultivation and to conduct interdiction operations. The initial geographical focus is in the department of Putumayo in southern Colombia, where the majority of illegal crops are cultivated and where the greatest number of illegal armed groups operates. To counter this threat, the U.S. aid package provides for the training and equipping of a Counternarcotics Brigade. The second battalion in the Brigade completed its training in December 2000 and, along with the first (which completed training in 1999), is now operational.

Despite budget cutbacks early in the year and increased ground fire attacks by guerrillas and paramilitaries on spray aircraft, the U.S.-supported GOC aerial eradication program had a successful year in 2000, treating approximately 47,000 hectares of coca and 9,000 hectares of opium poppy. The GOC has an integrated strategy of combining spraying of large industrial crops with programs in which small growers agree to voluntarily manually eradicate in exchange for alternative crop development assistance.

The Colombian National Police Antinarcotics Directorate (CNP/DIRAN) and the Fiscalia General de la Republica (national prosecutor's office), in conjunction with the DEA, culminated "Operation New Generation," a long-term investigation targeting several of the largest drug trafficking organizations operating in Colombia, in which 57 defendants were arrested.

Colombia is a party to the 1988 UN Drug Convention.

II. Status of Country

Colombia remains the world's largest cocaine base producer, with up to 580 metric tons produced in 2000 from indigenous coca. Up to three-quarters of the world's cocaine hydrochloride (HCl) is processed in Colombia from cocaine base imported from Peru and Bolivia and from locally grown coca. Coca cultivation in Colombia increased by 11 percent in 2000. Most of the increase occurred outside of the eradication areas. Despite efforts by the Government of Colombia to limit increases, cultivation expanded dramatically over the past three years. Estimated coca cultivation increased 19 percent in 1997, 28 percent in 1998 and 20 percent in 1999. Colombia is also a significant supplier of heroin to the United States, potentially producing up to eight metric tons (MT) yearly, virtually all of which is destined for the U.S. market.

III. Country Actions Against Drugs in 2000

Policy Initiatives. In 1999, Colombia began a pattern of judicial cooperation with the first extradition of a Colombian citizen to the U.S. in nine years. That pattern continued in 2000 with the extradition to the U.S. of 12 fugitives, including nine Colombian citizens, most on narcotics trafficking charges. Encouraged by this trend, the U.S. requested the extradition of 23 additional individuals in 2000. Drug kingpins Alejandro "Juvenal" Bernal-Madrigal and Fabio Ochoa-Vasquez, of the notorious Ochoa crime family, are among more than 50 fugitives, most of whom are Colombian citizens, currently under arrest and awaiting approval for extradition.

The Pastrana government has made clear, on many occasions, its opposition to official corruption. As a matter of policy, the GOC does not encourage or facilitate illicit production or distribution of narcotic or psychotropic drugs or other controlled substances, or the laundering of proceeds from illegal drug transactions. Appropriate legislation has been enacted to combat money laundering and related illegal financial flows associated with narcotics trafficking, and a unit exists within the Ministries of Justice and Finance to track these flows. Colombia's large commercial banks generally seek to cooperate with law enforcement authorities. Colombia's large number of small foreign exchange houses is more problematic. Colombia has joined in an initiative with the U.S., Venezuela, Panama, and Aruba to address the problem of the Black Market Peso Exchange (BMPE). The BMPE is the name given to a highly organized money-laundering system through which products such as liquor and domestic appliances are purchased abroad with narcotics-generated dollars, smuggled into Colombia and sold on the domestic market, producing pesos which can be introduced into the legitimate economy.

The second of three battalions in the Colombian Army's new Counternarcotics Brigade became operational in December 2000, with 614 troops. Together with the first battalion, which began operations one year earlier, the Brigade now numbers 1,545 troops. A 12-member joint Brigade staff comprised of officers from the Colombian Army, Navy, Air Force, and Counternarcotics police also completed training in December. The members of each unit have been vetted to ensure that there is no credible evidence that they have committed gross violations of human rights. A third battalion, which will include about 750 troops (590 of which have been vetted to date), will undergo training in 2001.

The DIRAN (Anti-Narcotics Police), with U.S. support, implemented an Airmobile Interdiction project, which will provide the DIRAN with a quick reaction force to support interdiction activities. One company was trained in 2000, and there are plans to establish two more companies.

Throughout 2000, the Asset Forfeiture Unit of the Fiscalia demonstrated its willingness to assist the U.S. Department of Justice to freeze and seize Colombian bank accounts used to launder drug proceeds related to U.S. investigations.

The Colombian Air Force (FAC) continued to improve its monitoring and interdiction abilities. In 2000, the FAC prevented nearly all illegal aircraft from entering Colombia's north coast. Most illegal Caribbean flights instead have returned via Venezuelan airspace. Tracking assistance from the U.S. has enabled the FAC to interdict aircraft entering Colombia's eastern borders beyond the range and coverage of existing ground based radars, resulting in a 30 percent increase in air interdiction operations and the destruction of almost twice as many aircraft. Seizures of aircraft by police as a result of FAC operations have continued at the previous year's rates. With additional Plan Colombia resources in 2001, the FAC's air interdiction capabilities should continue to improve. The DIRAN's civil aviation registration program, begun in 1999, inspected 398 aircraft in 2000, finding 58 violations with 20 testing positive for drug residue.

The aerial eradication program had a successful year. Due to budgetary constraints, operations out of the Forward Operating Location (FOL) in Larandia were sharply reduced and operations out of FOL San Jose de Guaviare were suspended in April. Operations in San Jose resumed in September. A total of approximately 47,000 hectares of coca and 9,000 hectares of opium poppy were treated in 2000. The coca total represents a slight decline from the 1999 totals and the poppy total is the highest ever. During the first quarter of the year, the GOC permitted spraying of 9,160 hectares of coca along the extreme northern and southern borders of the coca-rich Putumayo department. Coca spraying also took place for the first time in the departments of Norte de Santander, Nari�o, and Boyac�, areas in which illicit cultivation had previously not been significant enough to warrant the investment of resources, but where much new growth was seen in 2000. As paramilitary groups dominate the coca trade in Norte de Santander and Boyac�, these operations sent a message that the GOC will not tolerate drug traffickers of any stripe. The eradication program was hindered by 56 ground-fire attacks on spray planes—a 60 percent increase from 1999.

The aerial eradication program makes exclusive use of the herbicide glyphosate, which is mixed with water and two adjuvants, COSMO FLUX-411F and COSMO-IN-D. The U.S. Environmental Protection Agency (EPA) approved glyphosate for general use in 1974 and re-certified it in September 1993. It is approved by the EPA for use on various crops, forests, residential areas, and around aquatic areas. In its latest comprehensive review of studies on glyphosate, the EPA concluded that proper use would not cause adverse effects in humans.

With respect to environmental impact, glyphosate is not persistent in soil, it does not build up after repeated use, and it is biologically degraded rapidly by soil microbes. Because it bonds tightly with the soil, glyphosate is unlikely to leach into underground drinking water. Studies have shown glyphosate to be "practically non-toxic" to fish and, in long-term feeding studies of cows, chickens, and pigs, glyphosate was undetectable in muscle tissue, fat, milk, and eggs.

COSMO-IN-D and COSMO FLUX-411F, the adjuvants used in the aerial eradication in Colombia, are produced in Colombia, where the Ministry of Health has classified them as toxicity Category IV—lightly toxic. The EPA has determined that the ingredients in COSMO-IN-D and COSMO FLUX-411F are acceptable for use on food products when the label instructions are followed.

The Colombian Navy has credited a shipboarding agreement (signed by the GOC and U.S. in 1997) with the capture of over 23 tons of cocaine in 2000, and has described this agreement as one of its most effective counterdrug tools. The GOC also enacted two resolutions that should complicate the logistics and supply support to narcotraffickers at sea. The first lays out specific procedures and penalties concerning the control and vigilance of ships and boats. The second strengthens the penalties associated with carrying fuel in excess of the permit issued by the Captain of the Port (COTP) (to prevent refueling of "go-fast" boats at sea). It also increases penalties on operating without COTP permission or outside of areas specified by their permit, and carrying out operations with false or altered certificates. The penalties range from $8,000 to $11,000 and revocation of operator licenses/permits for individuals, and from $85,000 to $170,000 and loss of licenses/permits for corporations. Since diesel fuel is not regulated, traffickers are adjusting by putting diesel engines on smuggling boats, and by using boats with a greater range to reduce the need for refueling.

Prison security remains a serious problem in Colombia, where serious overcrowding, violence, and permissive conditions permit imprisoned traffickers to remain involved in their operations. The USG has provided $1.2 million to reform one high-security prison as a model. The GOC has been more inclined to build additional prisons than to reform prison administration.

The alternative development program is key to the GOC counternarcotics strategy, complementing interdiction and forced aerial eradication. It seeks to improve legal alternatives for small growers (less than three hectares) in coca and opium poppy growing areas. Plan Colombia will expand USAID programs, and it will continue to work closely with the GOC's National Alternative Development Plan (PLANTE) for several years. PLANTE has targeted 17,000 families (small producers of illicit crops) to sign voluntary illicit crop elimination agreements (specifying the timeframe and number of hectares to be eliminated) in exchange for assistance with alternative crops, livestock, forestry and community infrastructure projects.

Two key antinarcotics interdiction projects in 2000 were CNP training at ports and airports, with $2 million of U.S. Plan Colombia monies earmarked for this project and the Business Anti-smuggling Coalition, a private initiative providing technical assistance, training, and sponsorship to companies seeking to strengthen their exporting regimes.

Accomplishments. For 2000, the DIRAN reported the seizure of over 45 metric tons (mt) of cocaine HCl and cocaine base; 145 mt of coca leaves; 45 mt of marijuana; and 572 kilograms of heroin, morphine and opium; the destruction of 292 cocaine base labs; 55 cocaine HCl labs and 10 heroin labs; the capture of over 570 mt of solid precursor chemicals and over 688,000 gallons of liquid precursors; the seizure of 646 vehicles, 447 boats, 61 aircraft and 382 weapons; the destruction of 66 clandestine airstrips; and the arrest of over 8,600 persons. Most of these operations were done with DEA assistance as part of Operation "Green Jungle." Additionally, the CNP and the DAS (Administrative Security Department), with U.S. assistance, seized in 1999 and 2000 more than 21 million of counterfeit U.S. dollars, most of which were destined to drug trafficking groups.

In Operation New Generation, Colombian authorities, with the support of U.S. law enforcement, arrested 57 subjects and seized numerous assets, including large amounts of U.S. currency, and thousands of pages of documentary evidence. On September 22, 2000, the Colombian Fiscalia arrested a New York fugitive linked to approximately 50 kilograms of heroin seized in Ecuador, Argentina, Atlanta, and New York. The subject is believed to be the head of a heroin trafficking organization based in central Colombia. The United States has requested this subject's extradition to stand trial in federal district court in New York.

Although the U.S.-sponsored alternative development program began only in August 1999, it has already achieved important results. To date, 675 hectares of opium poppy have been eliminated in Tolima, 45 hectares of coca have been eliminated in Cauca, and 22 elimination agreements have been signed, 12 already resulting in illicit crop elimination. The most recent, signed on December 2 in Puerto Asis (Putumayo) with 539 small producer families, provides for voluntary elimination of approximately 916 hectares of coca.

Cooperation between and among the various branches of the Colombian armed forces and the police continued to improve. The armed forces conducted unilateral and joint counternarcotics operations with the police, deploying in areas where police face a significant guerrilla threat. The Air Force, Army, Navy, and Marines coordinated with the DIRAN in several joint counternarcotics operations in which they destroyed drug labs, confiscated narcotics and arrested individuals involved. In addition, the Colombian police and army have participated in intensive joint training to prepare the army's new counternarcotics battalion, which will assist the DIRAN during counternarcotics operations in the coca growing regions, especially in the south. The police and army have also agreed to work together on tactical operations that involve the new battalion. Co-located with the battalion in Tres Esquinas, the Joint Intelligence Center (JIC) includes personnel from both forces.

The year 2000 saw significant development in maritime drug-interdiction operations. Continued application of the maritime agreement resulted in the capture of more than 50 tons of cocaine at sea, according to Colombian Navy sources. There was further improvement in the intelligence and communications exchange process. JIATF-East conducted operations with the Colombian Navy in both the Caribbean and Pacific, resulting in further improvement in communication links with Colombian Navy operations centers in Bogota, Bahia Malaga, and Cartagena. Conferences are scheduled in early 2001 to continue the improvement process and to share tactical interdiction lessons learned.

Agreements and Treaties. Colombia is a party to the 1988 UN Drug Convention and the GOC's National Anti-Narcotics Plan of 1998 meets the strategic plan requirements of the Convention. Recent reforms have generally brought the government into line with the requirements of the Convention. In December 2000, Colombia signed the UN Convention Against Transnational Organized Crime and its Protocol to Prevent Trafficking in Persons.

Cultivation and Production. Coca and opium poppy remain the principal illicit crops grown in Colombia. In 1999, these crops were estimated to be 122,500 hectares and 7,500 hectares respectively. The United States Government estimates that in 2000 there were an estimated to be 136,200 hectares of coca under cultivation. At the time of publication, opium poppy cultivation totals for 2000 were not available. Coca, the predominant illicit crop, is grown mainly on the eastern plains in Guaviare and neighboring departments and along the Ecuadorian and Peruvian borders in the departments of Putumayo and Caqueta. Increasing amounts of coca are cultivated in the northern departments of Bolivar and Norte de Santander. Most opium is grown on the eastern slopes of the Central Cordillera Mountains in Tolima, Huila, and Cauca departments, with limited amounts in Norte de Santander, southern Bolivar, and Antioquia departments.

A recently completed USG study revealed that Colombian cocaine base laboratories operate at a significantly higher level of efficiency than those in Peru or Bolivia. This improved efficiency, combined with crop estimates and leaf yield figures, establishes the estimate of cocaine production in Colombia at 580 mt for CY 2000. Larger and ever more complex cocaine HCl laboratories are replacing the less sophisticated labs previously encountered. HCl laboratories can be found in all regions of the country, but are largely located in the plains and jungle regions, near the coca-growing zones under de facto guerrilla/paramilitary control. Numerous laboratories have been identified in extremely remote areas that are difficult to reach even by helicopter.

Colombia's heroin production in 1999 was estimated at nearly 8 metric tons, assuming a harvest of ten kilograms of opium gum from one hectare of opium poppy and conversion of ten kilograms of opium gum into one kilogram of heroin. These figures are based on traditional conversion calculations established for Southwest and Southeast Asia. These figures could be revised based on the results of a U.S. study expected to be completed in 2001. Opium gum estimates for 2000 were not available at the time of publication.

Colombia accounts for an estimated two percent of the world's opium poppy. Nearly all of the resulting heroin, however, is destined for the United States. Heroin production in clandestine laboratories in Colombia appears to be limited based on the size of the laboratories seized.

Minor marijuana cultivation remained in 2000, but was not significant.

Drug Flow/Transit. Colombia is the center of the international cocaine trade, with drugs flowing out of the country at a stable and constant rate. In addition to producing large quantities of cocaine base domestically, Colombian traffickers import cocaine base, by air and by river, from Peru and, to a lesser extent, from Bolivia. The base is converted into cocaine HCl at clandestine laboratories.

Colombia's coastal regions, which extend from Panama to Venezuela in the north and from Panama to Ecuador in the west, continue to flourish as major transshipment points for bulk maritime shipments of cocaine and marijuana. The vast majority of the drugs shipped from the coastal regions originate from production areas in the south central portion of the country as well as other less prolific growing areas in the northern third of Colombia. Most of the shipments are organized by the well-established trafficking organizations based in Cali, Medellin, Bogota and other cities throughout the country.

Fishing vessels transport large quantities of narcotics from Colombia to Mexico and/or other countries while en route to the United States to both the Atlantic and Pacific regions. They are often loaded/off loaded by go-fast boats operating from secluded coastal areas that rendezvous with the fishing vessels at sea. Fishing vessels have proven themselves to be well suited for smuggling operations as they have the ability to remain at sea for long periods, transit vast distances, draw minimal attention and hide among the vast numbers of legitimate fishing vessels.

Go-fast boats transport drugs directly from Colombia to other neighboring countries and Caribbean islands. They hug the coastline as they move north to secluded off-loading sites, or transit directly to neighboring Caribbean islands which serve as transshipment points. Some trafficking organizations use refueling ships that re-supply the go-fast boats on the high seas, extending their range in the Pacific Ocean.

Commercial cargo ships also transport drugs from Colombia directly to the United States and Europe. The drugs are often hidden in containerized cargo, bulk cargo, or hidden compartments built into the ship, and are loaded/off-loaded both in port and by the use of go-fast boats while at sea.

The recent seizure of a partially constructed, 100-foot submarine outside the city of Bogota reflects the versatility and financial resources of Colombian drug traffickers. Had it been completed, this submarine would have been capable of transporting up to ten metric tons of cocaine to the United States, about five percent of annual U.S. demand, while remaining at snorkel depth the entire trip. With an estimated total cost of 20 million dollars, this incident again demonstrates trafficker resources and ingenuity. Colombian cocaine trafficking groups generate billions of dollars in revenues each year, resources that increasingly have been used to purchase the best talent and technology available on the world market. While smaller semi-submersible vessels have been seized in the past, drug law enforcement officials do not believe that "drug submarines" are likely to become a significant threat or a common mode used to transport drugs.

Approximately 85 percent of the heroin seized by federal authorities in the northeastern United States is of Colombian origin, the majority of which is produced in Colombia and exported through the international airports in Bogota, Medellin, Cali, and, to a lesser extent, Barranquilla. The DEA believes that most of the heroin destined for the United States is transported from Colombia via couriers (or "mules") on commercial airlines. Currently, transportation routes generally include a stopover in intermediary countries in Central America, the Caribbean, and/or Mexico. The shipment is then transferred to a different mule, who then completes the delivery into the United States. Heroin seizures made by the Colombian National Police, with USG training and assistance, at Bogota El Dorado International Airport during the fourth quarter of 2000 indicate heroin shipments were primarily destined for the United States.

Domestic Programs. The National Directorate of Dangerous Drugs (DNE) develops overall drug policy in Colombia, while a new program within the Colombian Presidency, RUMBOS, manages prevention and demand reduction programs.

RUMBOS was created in 1998 as a response to the growing problem of drug use in Colombia, especially among young males, ages 12-17, in well-populated and economically developed areas such as the coffee producing region and cities such as Bogota, Medellin, and Cali. It works with other agencies to ensure that adequate treatment centers are available and presides over a demand reduction program in which 18 governmental and nongovernmental organizations participate. It also lends assistance to the regions and municipalities to help them create local prevention and treatment programs, with 27 of Colombia's 32 departments now receiving assistance.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. The U.S. continues to place its focus on institution building, especially within the law enforcement and judicial systems.

Bilateral Cooperation. USAID coordinates the USG's justice sector reform program in cooperation with the Department of Justice (OPDAT and ICITAP). Its programs will expand under Plan Colombia. They will focus on strengthening the effectiveness, transparency, and fairness of the Colombian criminal justice system. They will also increase citizen access to justice, primarily by promoting the transition to an accusatory system and establishing Casas de Justicia (Justice Houses. These will promote alternative dispute resolution mechanisms in marginalized communities, protecting defendants' rights, and facilitating cooperation among GOC judicial institutions and civil society. The first oral trial courtroom was recently established and 12 more are planned. Twelve Casas de Justicia have been established since 1995 (two in 2000) and there are plans to establish 28 more.

USAID has also expanded its ongoing human rights program to support key governmental and non-governmental organizations. A Human Rights Observatory and communications strategy have been established in the Office of the Vice President. USAID is supporting human rights training for the Human Rights Units of the Prosecutor General and Attorney General's offices; the development of a law on fundamental human rights and citizen duties; and programs to disseminate human rights information to regions and municipalities. An Early Warning System will be established in the Ombudsman's Office that will both alert authorities to possible violations and ensure rapid and effective response to communities under threat (e.g., massacres, forced displacement). USAID is expanding its support to human rights NGOs.

Training elements of the Department of Justice (OPDAT and ICITAP) have provided training in the U.S. to about 400 prosecutors and investigators in money laundering, human rights, anticorruption, and antinarcotics issues. This training, which will increase under Plan Colombia, establishes the mechanisms for bilateral evidence exchange and law enforcement relationships.

As a result of the U.S.-sponsored Port Security Program, a public-private partnership in which specially trained narcotics police carry out inspection and interdiction operations, the port authorities have seized more than 31 metric tons of cocaine and 60 of marijuana since late 1998, all at very little cost to the USG. The traffickers have responded by making elaborate and costly efforts to disguise cocaine inside machinery, bribe officials, and avoid the commercial ports by using "go-fast" boats or shipping via Ecuador and Venezuela.

The regular appropriation for the Narcotics Affairs Section (NAS) of the U.S. Embassy in Bogota was $53 million, with the largest sums going to support DIRAN air operations ($16.7 million) and the crop eradication program ($6 million). The DIRAN air service consists of 54 helicopters and 19 fixed wing aircraft. The USG-funded private contractor that provides support to the DIRAN's eradication program operates an additional 15 helicopters, ten spray planes, and three support planes.

In addition, the U.S. provided $96 million in 1999 and 2000 for the acquisition of six Black Hawk helicopters to enhance the DIRAN's counternarcotics capacity. Three were delivered in 1999 and three in 2000. The pilots and technicians for these new helicopters were trained in the United States. The USG is also upgrading the DIRAN's Huey helicopter fleet. The first nine of 15 upgrades scheduled for 2000 have been completed and the remaining six are scheduled for completion by the end of January 2001. With funds appropriated under the Plan Colombia emergency supplemental legislation, the U.S. will purchase nine additional spray aircraft for the CNP.

The U.S. also provided 21 UH-1N helicopters to the Colombian Army to support the new counternarcotics brigade, with 12 additional UH-1Ns due to arrive in January 2001. After a year of intensive training, helicopter operations began in December with full operational capability. Finally, in late January 2001, the CNP is scheduled to receive two C-26 reconnaissance aircraft.

The Road Ahead. The GOC's "Plan Colombia" recognizes the interrelated nature of Colombia's counternarcotics efforts and its peace process. In 2001, the foremost obstacles to curbing narcotics trafficking in Colombia will continue to be the guerrillas and paramilitaries, who depend heavily on substantial drug revenues to support their organizations. These armed groups, particularly the guerrillas, violently oppose police eradication operations and CNP/military interdiction efforts, as reflected by the "armed halt" of all activities in Putumayo called by the FARC in September. Nevertheless, PLANTE recently signed a voluntary elimination agreement in Putumayo. Colombian authorities anticipate that, over a two-year period, 8,700 small coca producers in Putumayo and their families will commit to voluntarily elimination of 20,000 hectares of coca.

The USG will continue working with the GOC to solidify reforms in the DIRAN and support Colombia's efforts to sustain and to improve the capability and efficiency of the judicial system, which remains one of the weakest links in the counternarcotics chain.

The Colombian military's counternarcotics role will broaden in 2001, as the army's counternarcotics battalions join to become the counternarcotics brigade. The U.S. will provide ongoing training and support for the brigade in 2001.

The aerial eradication program will also expand in 2001. The DIRAN, with U.S. support, plans to establish two bases for spray and escort aircraft. The DIRAN also plans to complete the organization, training, and equipping of two more airmobile interdiction companies and establish an Antinarcotics Training Center. The goals for aerial eradication in 2001 are 100,000 hectares of coca and 10,000 hectares of poppy.

Colombia Statistics
(1992-2000)

 

2000

1999

1998

1997

1996

1995

1994

1993

1992

Coca

                 

Potential Harvest (ha)

136,200

122,500

101,800

79,500

67,200

50,900

44,700

39,700

37,100

Eradication (ha)

47,000

43,246

19,000

5,600

8,750

4,910

793

959

Estimated Cultivation (ha)

183,200

98,500

72,800

59,650

49,610

40,493

38,059

HCl: Potential(1)(mt)

580

520

435

350

300

230

70

65

60

Opium

                 

Potential Harvest (ha)

7,500

6,100

6,600

6,300

6,540

20,000

20,000

20,000

Eradication (ha)

9,254

6,972

6,028

3,760

3,906

9,821

12,858

Estimated Cultivation (ha)

13,572

12,328

10,300

23,906

29,821

32,858

Cannabis(2)

                 

Potential Harvest (ha)

5,000

5,000

5,000

5,000

5,000

4,980

4,986

5,000

2,000

Eradication (ha)

20

14

50

49

Estimated Cultivation (ha)

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,050

2,049

Potential Yield (mt)

4,150

4,150

4,150

4,150

4,150

4,133

4,138

4,125

1,650

Seizures(3)

                 

Heroin/Morphine (mt)

0.572

0.504

0.317

0.261

0.183

0.419

0.181

0.261

0.05

Opium (mt)

0.183

0.100

0.120

0.036

0.078

0.128

0.261

0.43

Cannabis (mt)

46

65

69

136

235

166

2000

549

206

Base/Basuco (mt)

9.00

29.30

10.00

17.50

19.50

32.00

10.40

5.81

Cocaine HCl(4) (mt)

69.00

22.73

54.70

34.00

23.50

21.50

30.00

21.76

31.92

Total HCl/Base (mt)

69.00

31.73

84.00

44.00

41.00

41.00

62.00

32.16

37.73

Total Arrests

8,600

1,961

1,546

1,561

1,745

2,154

2,562

1,700

(1) Newly acquired data from field surveys has resulted in revised leaf yield and HCl production estimates from 1995 on.

(2) Reported cannabis cultivation has not been confirmed by USG survey.

(3) Seizure data show combined CNP and military figures. (4) Includes 24 metric tons of cocaine seized in maritime operations.

Ecuador

I. Summary

Ecuador continues to be a major transit area for drugs and precursor chemicals. Traffickers exploit Ecuador's porous borders with Colombia and Peru to consolidate smuggled cocaine and heroin into larger loads for bulk shipment to the U.S. and Europe hidden in containers of legitimate cargo. Ecuador continued to struggle with economic and political crises, including political turmoil in January 2000 which led to the ouster of the elected president and his replacement by his constitutional successor. Also in 2000, Ecuador became the first South American country to adopt the U.S. dollar as its national currency. The Ecuadorian congress enacted a new criminal justice procedural code which will fundamentally change its legal system from an inquisitorial to an accusatory-style one. The Ecuadorian National Police (ENP) seized more than three tons of cocaine and coca base, 109 kilograms of heroin, and 18 tons of marijuana. The ENP established a unified antidrug division to strengthen the management of drug law enforcement. A solid example of the close cooperation of the Government of Ecuador (GOE) with the USG in the fight against narcotics trafficking was the signing in November 1999 of a ten-year agreement permitting the U.S. to operate aerial counterdrug detection and monitoring missions from an Ecuadorian Air Force base in Manta. However, Ecuador's depressed economy and poor police/military coordination continue to hamper counterdrug efforts.

Ecuador is a party to and has enacted legislation to implement the provisions of the 1988 UN Drug Convention.

II. Status Of Country

Ecuador is one of the primary transit routes for cocaine and heroin from Colombia and Peru. The country serves as a major staging area for the transit of smuggled cocaine and heroin, which is hidden in bulk quantities in containers of legitimate cargo and shipped to the U.S. and Europe. Some small fields of poppies and coca have been found within Ecuador, which have been manually eradicated by the Ecuadorian Army and the Ecuadorian National Police. In addition, several small cocaine processing laboratories have been discovered and dismantled by the police. Ecuador's northern border area with Colombia is a major transit area for drugs, chemicals, arms and munitions. Due in part to increased insurgent/paramilitary violence across the border, Ecuador is facing a worsening security problem. The USG is working closely with the GOE to strengthen military and police control over the northern border region.

Cocaine is smuggled into Ecuador primarily by truck in large shipments of legitimate products via the Pan American Highway from Colombia and then loaded into export shipments in the seaports of Guayaquil, Manta and Machala. Coca base is also smuggled into Ecuador from Peru and Colombia. Outbound cocaine shipments are hidden in compartments in ocean-going vessels or concealed within containerized perishable (seafood, bananas, flowers) or bulk cargo. Heroin and cocaine are also frequently smuggled in passenger suitcases or by body carriers boarding international flights at the Quito and Guayaquil airports. A recent trend has been the increase in smuggling of coca base by trucks that cross into Ecuador's Sucumbios Province from Colombia's Putumayo Department and then return to Colombia on the Pan-American Highway, where it is refined into cocaine hydrochloride (HCl).

Ecuador is gradually recovering from a severe financial and economic crisis, with most of its major banks collapsing and requiring government intervention. The Ecuadorian government now controls about 75 percent of the country's banking sector. In 2000, Ecuador became the first South American country to adopt the U.S. dollar as its national currency. This measure was intended to stop the high inflation and depreciation of the currency which had paralyzed the economy. However, dollarization may also make Ecuador a more attractive site for money laundering and other financial criminal activity. Some narcotics profits from Colombia may have been invested in Ecuadorian real estate and businesses. Drug money laundering is illegal under the 1990 narcotics law. However, the Ecuadorian government presently has no effective means to investigate or prosecute such crimes.

III. Country Actions Against Drugs in 2000

In compliance with the 1988 UN Drug Convention, the GOE has passed legislation criminalizing the production, transport, and sale of controlled narcotic substances; the import, transport and/or use of essential chemicals without the written permission of the Ecuadorian National Drug Council (CONSEP); any attempt to conceal the profits from narcotics trafficking activities; the intimidation or corruption of judicial and public authorities for drug crimes; and illegal association related to drug trafficking and profiteering.

Policy Initiatives. The administration of President Gustavo Noboa, who succeeded President Mahuad on January 21, 2000, has made significant progress in strengthening bilateral counternarcotics cooperation with the U.S. CONSEP published a new national drug strategy in 1999, which clearly details the roles and responsibilities of GOE agencies, including the armed forces, in combating drug trafficking and consumption. During 2000, CONSEP continued to work on drafting reforms to the organic drug law. The GOE and USG also began negotiations on new initiatives to strengthen law enforcement, security and economic development on the northern border.

The Ecuadorian National Police (ENP) has primary responsibility for narcotics law enforcement in Ecuador. To strengthen the management of counternarcotics efforts, the ENP established a unified antidrug division in 1999. This new division has consolidated the various specialized police units (such as the provincial drug investigative offices, the mobile road interdiction group, the canine teams at airports and seaports, and various counterdrug intelligence units) into a single coherent organization. The police maritime cargo information coordination center (SIPA) in Guayaquil began operations. The ENP has established data communication links between SIPA, the Ecuadorian customs service, and the ENP antidrug division's intelligence center in Quito. With USG assistance, the ENP plans to establish new cargo inspection units at the major seaports of Manta and Machala, which will provide additional intelligence input into the SIPA.

In an effort to clean up the widespread corruption in Ecuador's customs service, the Ecuadorian military took it over in 1997. The GOE then privatized the customs service in May 1999. The new managers of Ecuadorian customs come from the private sector and have greatly streamlined cargo clearance procedures. Customs has also been increasingly cooperative with the ENP in exchanging information on inbound and outbound shipments. The U.S. Embassy, through the Narcotics Affairs Section (NAS), has established a U.S. Customs advisor position to provide technical assistance to the ENP and the customs service to strengthen control over the ports.

Due to Ecuador's severe economic crisis, the Superintendency of Banks has focussed its attention on the collapsing banking sector. Consequently, almost no investigations of money laundering were conducted in Ecuador during 2000.

In January 2000, the Ecuadorian government enacted a new criminal procedural code, which is intended to fundamentally change the country's criminal justice system from an inquisitorial to an accusatorial-style system. The new code, which will enter into force in July 2001, empowers the prosecutors (fiscalia) to investigate and prosecute crimes, and alters the role of judges to neutral arbiters presiding over oral trials. The ENP, fiscalia and judiciary have received USG training to help them assume their new roles in the accusatory criminal justice system.

Accomplishments. The GOE demonstrated its strong commitment to bilateral counterdrug cooperation with the USG by signing a ten-year agreement to permit U.S. aircraft to use Manta as a forward operating location (FOL) in November 1999. This agreement will permit Ecuador and the U.S. to work even closer in the detection and monitoring of clandestine aircraft transporting narcotics to Central America, Mexico and the Caribbean. The ENP had an outstanding year in making drug seizures and arrests in 2000. The police seized more than 3.3 metric tons of cocaine and coca base, 109 kilograms of heroin, and over 18 tons of marijuana. The reasons for the excellent interdiction performance this year were better use of intelligence, aggressive leadership, and effective use of canine interdiction teams at Ecuador's seaports and airports.

The Ecuadorian military has taken actions to strengthen security along Ecuador's border with Colombia. Following the 1998 signing of a peace treaty with Peru, the Ecuadorian Army and Navy (Marines) have redeployed additional forces to the northern border. The Army has established new battalions in Sucumbios Province, bordering Colombia's Putumayo Department which is the site of large cultivations of coca. The Ecuadorian Navy has established new units patrolling the coastal waterways bordering Colombia's Narino Department, which is also an area of drug production and trafficking.

Despite some improvements, uneven military-police cooperation in Ecuador remains a serious problem. The Ecuadorian Navy controls the country's ports, but cooperation with the police varies widely from port to port. Additional efforts must be taken in 2001 to increase the police presence in all major Ecuadorian seaports, particularly Manta and Machala.

Law Enforcement Efforts. In order to facilitate the working relationships of police and prosecutors under the new Ecuadorian criminal justice code, the ENP signed an agreement with the fiscalia in 1999. Under this agreement, the police and prosecutors have received joint training programs in criminal investigations and case management. The U.S. Department of Justice (OPDAT/ICITAP) has provided training courses to Ecuador to help prepare the police, judiciary, and fiscalia for their new roles under the new accusatory-style criminal justice system.

With U.S. Southern Command financial support, the ENP have completed construction of a highway inspection checkpoint at a strategic road junction in Baeza, east of Quito. The ENP is redeploying the NAS-supported mobile highway inspection unit (GEMA) to this location, which will assist the police in interdicting drugs, precursor chemicals, arms and munitions entering the Sucumbios/Putumayo border area with Colombia.

Corruption. The 1990 drug law (Law 108) contains a provision for prosecution of any government official, including a judge, who deliberately impedes the prosecution of anyone charged under that law.

As a matter of government policy, the GOE does not encourage or facilitate the illicit production or distribution of drugs, other controlled substances or the laundering of drug money. While narcotics-related corruption is a problem in Ecuador, in 2000 no senior Ecuadorian government official was identified as engaged in the production or distribution of drugs or in the laundering of illicit proceeds. However, in 2000 the U.S. Embassy had to terminate technical assistance to the fiscalia general (chief prosecutor's office) due to concerns of high-level corruption in cases involving politically powerful individuals accused of banking fraud and embezzlement.

Arrests and Prosecutions. Internationally, the USG and the GOE are working to strengthen law enforcement relationships, develop information sharing conduits, and bolster interdiction cooperation. Cooperation between the USG and GOE has resulted in several successful drug interdiction operations, the dismantling of trafficking organizations and the expulsion to the U.S. of third-country nationals indicted for narcotics trafficking crimes.

Agreements and Treaties. The extradition treaty between the USG and the GOE was signed in 1972 and supplemented in 1939. The Ecuadorian constitution prohibits the extradition of Ecuadorian nationals but Ecuador has cooperated with the USG to deport or extradite non-Ecuadorians. Although the USG and GOE have engaged in preliminary talks on revising the existing extradition treaty, the Ecuadorian bar on extradition of nationals is an obstacle to formal negotiations.

Ecuador is a party to the 1988 UN Drug Convention and has a narcotics law that incorporates the provisions of that treaty. In December 2000, Ecuador signed the UN Convention Against Transnational Organized Crime and its protocols.

The GOE is a strong supporter of regional cooperation and has signed bilateral counternarcotics agreements with the U.S., Colombia and Cuba, as well as the Summit of the Americas money laundering initiative, and the OAS/CICAD document on an antidrug hemispheric strategy. However, a bilateral maritime counterdrug agreement, first proposed in 1994, has received no attention from the GOE since early 1998.

In 1991, the GOE and the USG entered into an agreement on measures to prevent the diversion of chemical substances. In 1992, the two governments concluded an agreement to share information on currency transactions over $10,000.

The GOE has made progress in a number of important areas covered by the 1988 UN Drug Convention and OAS-CICAD model legislation, including upgrading its interdiction efforts, focussing on reducing the diversion of essential chemicals, and beginning implementation of a program to reduce money laundering.

Cultivation/Production. The GOE continues to be vigilant about preventing illicit drug cultivation and processing activities. There is no evidence of large scale, commercial coca or opium poppy cultivation in Ecuador. However, there is concern that coca cultivation could expand over the border into Ecuador as a result of Colombian government eradication efforts in Putumayo Department. The ENP has discovered and dismantled several small cocaine refining laboratories, processing coca paste imported from Peru and Colombia.

Drug Flow/Transit. Ecuador has been for years a major transit route for unrefined cocaine base shipped by air and overland from northern Peru to southern Colombia for processing; and has now become a major staging area for shipment of refined cocaine hydrochloride moved from Colombia through Ecuador's seaports to U.S. and European markets. Colombian traffickers also export heroin through Ecuador using body carriers through the country's airports. Ecuador is also an important transit country for precursor and essential chemicals, which are smuggled into Colombia and Peru for cocaine processing. A recent change to this pattern has been the discovery of several small cocaine refining laboratories within Ecuador. The GOE is combating the spread of drug production into Ecuador by intensifying highway interdiction efforts and continuing to monitor imports of chemicals by legitimate companies to prevent their diversion to illicit markets.

Demand Reduction. The most recent national survey by CONSEP indicated drug use in Ecuador to be at relatively low levels, with four percent of the respondents admitting to having used illicit drugs at least once in their lifetime. Ecuador's new national drug strategy has made demand reduction a high national priority. CONSEP has a very ambitious drug prevention program and the Ministry of Education has provided orientation seminars for the country's public school teachers. In addition, all public institutions, including the military, are required to establish drug prevention programs in the workplace.

IV. U.S. Policy Initiatives and Strategies

USG counternarcotics policy in Ecuador seeks to strengthen the technical capability of Ecuadorian police, military, and justice agencies to attack the narcotics trafficking problem in Ecuador, including improved border and port control, investigation and prosecution of narcotics trafficking organizations, and reduction of domestic drug consumption.

USG-provided training courses were held in the areas of judicial reform, cargo inspection techniques, radio communications, export document exploitation, chemical diversion, riverine operations, maritime counterdrug operations, and seaport control.

All initiatives and strategies were planned and coordinated with the Ecuadorian government via counternarcotics bilateral agreements with the ENP and CONSEP.

The U.S. Embassy has chaired meetings of a Mini-Dublin Group for Ecuador, which is intended to improve coordination of narcotics and law enforcement assistance programs among donor countries. The British, French, Spanish, and German embassies also are active in this group.

The Road Ahead. The USG will continue to work closely with the GOE on counternarcotics efforts. The U.S. will seek improved performance on military/police coordination, seaport control, and highway interdiction. Significantly larger U.S. assistance programs for drug interdiction and alternative development in 2001 will target the northern border. The reform of the Ecuadorian criminal justice system offers prospects for improvements in the investigation and prosecution of drug trafficking cases.

Ecuador Statistics
(1992-2000)

 

2000

1999

1998

1997

1996

1995

1994

1993

1992

Seizures

                 

Cocaine (mt)

1.72

9.240

10.770

2.160

9.800

4.400

2.186

1.039

3.750

Base, paste (mt)

1.601

0.900

0.690

1.605

0.530

0.250

0.192

0.335

0.505

Total Cocaine Products (mt)

3.3

10.140

11.460

3.765

10.330

4.650

2.378

1.374

4.255

Cannabis (mt)

18.263

3.030

17.730

0.022

0.200

0.200

0.131

0.183

0.631

Heroin (mt)

0.109

0.081

0.053

0.034

0.070

0.053

0.024

0.027

0.003

Labs Destroyed

                 

Cocaine

0

2

2

0

1

0

0

0

0

Arrests/Detentions

                 

Nationals

2,600

3,500

3,596

3,346

2,075

1,858

2,872

2,775

1,810

Foreigners

425

250

292

346

204

2,214

201

213

165

Total Arrests

3,025

3,750

3,888

3,692

2,279

4,072

3,073

2,988

1,975

Paraguay

I. Summary

The Government of Paraguay's (GOP) antidrug cooperation with the USG and other regional governments improved in 2000. Paraguay remains a transit country for approximately ten metric tons of largely Bolivian cocaine annually, as well as a source country for high-quality marijuana that is not trafficked to the United States. Paraguay is a large money-laundering center in Latin America, but it remains unclear how much may be drug-related. The GOP named a new head of the antidrug secretariat (SENAD) and its police unit (DINAR) who re-energized the GOP's antidrug efforts. SENAD formed a new unit to investigate major traffickers and their organizations, which led to the arrest of four major traffickers and the destruction of an aircraft ferrying cocaine to Brazil. Cocaine seizures remained stable at 1999 levels.

The Senate is considering a complete modernization of Paraguay's existing drug law, which includes long-sought authorities for police to use informants, and conduct undercover operations and controlled deliveries. While the GOP provided the Anti-Money Laundering Secretariat (SEPRELAD) with its first independent budget, no arrests or prosecutions of money launderers were made. The GOP also made little progress against official corruption and has not made progress in developing an effective antidrug and organized crime investigative and operational capability for the border areas. Paraguay enhanced its cooperation with its neighbors by signing agreements on judicial cooperation and information sharing, and by expelling a major trafficker to Brazil. While judicial cooperation remains weak, the Attorney General named special prosecutors with national jurisdiction to strengthen SENAD's counterdrug operations. Paraguay is a party to the 1988 UN Drug Convention.

II. Status of Country

Paraguay is a transit country for approximately ten metric tons of largely Bolivian and some Colombian cocaine annually, which is trafficked to Argentina, Brazil, the U.S., Europe, and Africa. No appreciable action has been taken by the GOP to effect controls over its lengthy and undeveloped land borders, extensive river network, numerous unpoliced airstrips (both registered and unregistered), and persistent official corruption that facilitate the cocaine trade.

Paraguay is also a large money-laundering center in Latin America. Although some Paraguayan officials believe that as much as 65 percent of money laundering may be generated from narcotics trafficking U.S. Government experts believe that 20 percent is a more accurate figure. This is the first year that the GOP has provided a budget to the Financial Analysis Unit (FAU) of SEPRELAD. While this gave the FAU the ability to develop cases against money launderers, no arrests or prosecutions were effected this year. There are a number of reasons why there has been no implementation of the 1997 anti-money laundering legislation. The SEPRELAD council decides which of the Suspicious Activity Reports (SARs) received from financial institutions, and analyzed by the FAU, will go forward for prosecution. This year, of 5,500 SARs that were analyzed by the FAU, only one case (not related to narcotrafficking) was recommended by the SEPRELAD council for prosecution. Only ten percent of the financial institutions that are supposed to report suspicious transactions actually do so. Also, no SARs for transactions of less than $10,000 were reported by these institutions. A cumbersome judicial process is largely responsible for consistently minimal success in the GOP's enforcement of its drug-related asset seizure and forfeiture laws.

III. Country Actions Against Drugs in 2000

Policy Initiatives. Toward fulfillment of its commitments under the 1988 UN Drug Convention, the GOP took important steps in 2000 including: the naming of a new head of the counterdrug secretariat (SENAD) who has re-energized the GOP's antidrug efforts; the creation within SENAD of a Major Violators Unit which focuses solely on major drug traffickers and their organizations; the signing of agreements with Paraguay's neighbors on judicial cooperation and information sharing; the expulsion of two major traffickers to Brazil; the naming by the Attorney General of special prosecutors with national jurisdiction to strengthen SENAD's counterdrug operations; and the funding of SEPRELAD's FAU for the first time since its creation in 1997. In addition, the Senate is considering a complete modernization of Paraguay's existing drug law, which includes long-sought authority for police to use informants, and to conduct undercover operations and controlled deliveries. These authorities will be key to SENAD's ability to successfully investigate and prosecute major drug traffickers, and to sustaining the accomplishments made in 2000 against trafficking organizations in Paraguay.

Accomplishments. The most significant counternarcotics achievements in 2000 were the arrest of Miguel Angel Arguello, a lieutenant in the Odumodu trafficking organization, the arrest of Colombian cocaine trafficker Julian Gutierrez Quiroga, and the arrest and expulsion to Brazil of fugitives Marcel Da Silva-Leandro and Jaime Amato Filho to face justice in that country. The arrests came as a result of the increased investigative focus of SENAD on the activities of the major cocaine trafficking organizations, and improved counternarcotics cooperation with its neighbors, such as Brazil.

Law Enforcement Efforts. The GOP provided counternarcotics cooperation to Drug Enforcement Administration (DEA) investigations and began to develop its capacity to carry out its own investigations with the creation of a Major Violators Unit (MVU) within SENAD. Those efforts resulted in the destruction of over 200 kilos of cocaine in a single incident in September, when SENAD agents engaged in a shoot-out with drug traffickers attempting to unload cocaine at a remote landing strip in the Chaco. SENAD destroyed 51,081 kilos of marijuana, seized 97 kilos of cocaine, arrested numerous low-level cocaine traffickers, and destroyed 580 hectares of marijuana fields. Asset seizures, an untested frontier for Paraguayan justice, were minimal.

Corruption. While the GOP recognizes corruption as a public policy challenge, it has not taken sufficient measures to prevent or punish public corruption in general, or specifically with respect to narcotrafficking. The USG remains concerned that reportedly corrupt police officials remain in key posts and are in positions to give protection to, or compromise law enforcement actions against narcotics traffickers.

Law 1340 of 1988 subjects public officials who engage in narcotics-related offenses to the maximum applicable penalties. While no current public officials were tried under this law in 2000, in October, former SENAD chief Jose Tomas Centurion was sentenced to seven years in prison for corruption during his tenure at the helm of the counternarcotics agency.

Judicial corruption was suspected in the release, for the second time in two years, of cocaine trafficker Nestor Baez, who was arrested for possession of 36 kilos of cocaine in 1998. In January 2000, at the beginning of the annual judicial recess, Baez was released from jail in a procedure fraught with irregularities. Despite extensive press coverage of the questionable judicial action by both the judge and the prosecutor, neither official was disciplined by the court. In August, SENAD legal advisor Cesar Nunez was fired on credible allegations of having had improper contact with Baez.

Agreements and Treaties. Paraguay is a party to the 1988 UN Drug Convention, as well as the 1961 Single Convention on Narcotic Drugs and its 1972 Protocol, and the 1971 Convention on Psychotropic Substances. It has ratified the OAS Convention on Corruption, signed the OAS/CICAD Hemispheric Drug Strategy, and agreed to the Declaration of Principles and plan of action adopted at the Summit of the Americas and at the 1995 money laundering ministerial. It entered into a bilateral assistance agreement with the United States in 1987, which was extended in 2000, meeting the requirements of the Chiles and Leahy amendments. Paraguay ratified a bilateral extradition treaty with the United States, including the extradition of nationals, in 1999. The U.S. Senate approved the treaty in October 2000. The treaty will enter into force upon the exchange of instruments of ratification. Paraguay has entered into tripartite law enforcement agreements with Argentina and Brazil, and with Argentina and Bolivia, and has similar bilateral agreements with Argentina, Brazil, Chile, and Venezuela. In December 2000, Paraguay signed the UN Convention Against Transnational Organized Crime and its protocols.

Cultivation and Production. Cannabis is the only illicit crop cultivated in Paraguay, and is harvested throughout the year. The GOP reports that approximately 2,500 hectares are under cultivation. According to SENAD, marijuana production is up in Paraguay over previous years, and has spread from the traditional growing areas in San Pedro and Amambay provinces to the neighboring provinces of Canindeyu and Caaguazu. Minor quantities of cocaine are reportedly processed in Pedro Juan Caballero and Ciudad del Este on the Brazilian border.

Drug Flow/Transit. Although it is difficult to say precisely how much cocaine is transiting Paraguay, USG law enforcement officials estimate that approximately 10 metric tons of mostly Bolivian cocaine transit Paraguay annually. Colombian and Peruvian cocaine is also penetrating Paraguay.

Demand Reduction Programs. SENAD has the chief coordinating role under the National Program Against Drug Abuse, and works with the Ministries of Health and Education, as well as with local non-governmental organizations. Paraguay has a relatively small but growing substance abuse problem. Esmelda Acosta, the head of SENAD's Office of Demand Reduction, has a small staff and limited budget, but is doing a tremendous amount of outreach work, particularly in the schools, to address the small but growing substance abuse problem in Paraguay.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. USG priorities are to disrupt narcotics trafficking through the training and equipping of an effective investigative and interdiction capability, to combat money laundering through effective implementation of the law criminalizing such activity, and to decrease public corruption. The GOP must remove the perception of guarantees of political protection or a free ticket out of jail if major drug traffickers or money launderers are arrested. To accomplish these goals, the USG will support the GOP's efforts to develop an effective antidrug and organized crime investigative and operational capability for the border areas; to pass legislation authorizing the use of informants, controlled deliveries and undercover operations, and criminalizing drug-related conspiracy; to strengthen democratic institutions, especially those connected to law enforcement; to facilitate international law enforcement cooperation through entry into force of a new bilateral extradition treaty; and to increase public awareness of the threat narcotics pose to Paraguayan society and democracy.

DEA provided two major training courses for SENAD special agents, and continued to work with SENAD, providing guidance on operations and investigations. The Department of State's Bureau of International Narcotics and Law Enforcement Affairs (INL) continued to support the detector dog program and sent three members of the SENAD canine unit and their dogs to Bolivia to participate in advanced training. INL also provided equipment and training support to SENAD, including the donation of ten vehicles to be used on counternarcotics operations. INL provided money laundering investigation training and an integrated computer system to the SEPRELAD FAU, which allowed them to fully computerize the collection and analysis of suspicious financial activity reports. The U.S. Embassy's Public Diplomacy section sent three IVP grantees, funded by INL, to the United States to participate in counternarcotics journalism and international narcotics matters training programs.

The Office of Defense Cooperation (ODC) sent a military information support team to Paraguay to train GOP officials working in demand reduction efforts. The ODC also sent officers and special agents to a Counterdrug Operations course conducted at the School of the Americas and to a U.S. Southern Command (USSOUTHCOM)-sponsored United Counterdrug Conference on chemical control information sharing.

The Road Ahead. The GOP needs to consolidate its beginnings of success against narcotrafficking and use that momentum to get tough on money launderers and corrupt public officials. To do that, the GOP must continue to pursue investigations against major cocaine traffickers, make significant drug seizures and arrests, carry out successful prosecutions, prevent the release of arrested drug traffickers by corrupt judges and prosecutors, and implement the anti-money laundering law and provisions of the antidrug law aimed at punishing and preventing official corruption.

During 2001 the USG will continue strengthening SENAD'S antinarcotics, Major Violators and Financial Investigation Units, as well as SEPRELAD's Financial Analysis Unit, through training, technical assistance, equipment donations, and operational support. The USG will also work with the executive and legislative branches on passage of tougher antinarcotics law enforcement legislation that explicitly authorizes police to use informants, and to conduct controlled deliveries and undercover operations. ODC is working on procuring immediate USSOUTHCOM support for counterdrug training deployments for the SENAD and an increase in education training funds to send more military and SENAD officers to the Counterdrug Operations course.

Peru

I. Summary

Despite the political turbulence in Peru during 2000, the Government of Peru (GOP) made progress on all major components of its counternarcotics program. Political unrest and instability reached a peak with the ousting of the de facto director of the National Intelligence Service Vladimiro Montesinos, and with President Fujimori's resignation on November 20. The interim Peruvian government revealed evidence of corruption in the outgoing government and made sweeping changes in the military, police and intelligence organizations. Despite these dramatic changes, there was a reduction in the total amount of coca cultivated in Peru. Interdiction to disrupt the activities of narcotics traffickers resulted in the arrest of principals in major drug trafficking organizations, and the destruction of cocaine processing labs. There was one major seizure of cocaine hydrochloride (HCl) and one interception of a smuggling aircraft during the year. Private shipping companies are making progress in their ability to monitor sea cargo container shipments. Major challenges remain to strengthen police forces to better cope with riverine, overland and maritime smuggling channels and to improve financial investigative units.

Over 6,200 hectares of coca were eradicated manually, which contributed to the overall 70 percent reduction in coca cultivation over the past six years. Eradication efforts were suspended at various times during the year: during the presidential campaign, when police security was unavailable, during a period of negotiations with the GOP over the operation of U.S. owned UH-1H helicopters, and finally after violent demonstrations against eradication by coca-growing communities. Notwithstanding the turmoil, the transition government has restated its commitment to the reduction of coca cultivation. There was a significant increase in the number of opium poppy fields discovered and destroyed by the GOP during 2000; however, information on the extent of opium poppy cultivation throughout Peru remained scarce.

The counternarcotics alternative development program achieved significant results, increasing the gross value of licit agricultural production to $64.6 million in targeted areas. This exceeds the gross value of coca leaf production in the same areas by ten percent, and marks a notable decline in the illicit economy based on coca. Alternative development has also assisted in raising the percentage of coca area households with access to basic services from 16 percent to 49 percent.

Peru is a party to the 1988 UN Drug Convention, and has signed counternarcotics cooperation agreements with most of its regional neighbors.

II. Status of Country

The price of coca remained high during the year, reflecting trafficker success in transporting drugs from Peru to external markets, and returning to make additional purchases. The GOP continued to conduct interdiction activities. These initiatives became more effective once U.S.-owned helicopters became regularly available, after the successful conclusion of bilateral negotiations over their terms of operation. Despite rehabilitation of about 1,500 hectares of previously abandoned coca, there was a net decrease from 38,700 hectares in 1999 to 34,100 in 2000. This represents an overall reduction of area under cultivation of about 70 percent over the last six years.

Most eradication was in areas near Aguaytia and in the Upper Huallaga Valley. CORAH, the GOP coca eradication entity, began eradication in the intensively cultivated areas of Aucayaco and Tingo Maria in the Upper Huallaga Valley, but stopped in the face of coca farmer demonstrations. The GOP has stated its commitment to eradicate coca in the Monzon area of the Huallaga Valley in 2001. Toward that end, its negotiations with coca-growing communities have identified potential alternative development activities to offset negative effects on the local economy.

Traffickers have significantly increased the use of riverine transport, overland transport, and maritime shipment from Callao and other Peruvian ports to export large shipments of cocaine base and hydrochloride. Maritime transport of drugs increased in 2000, with a growing percentage of drugs destined for Europe. There is increasing evidence that traffickers are processing cocaine hydrochloride (HCl) at laboratories both west of the Andes, and near the borders with Brazil, Colombia, and Bolivia.

An increase in poppy cultivation is a growing cause for concern. So is the identification and seizure of a morphine- producing laboratory in Peru. Poppy cultivation is illegal, and the Peruvian National Police (PNP) take prompt action to destroy poppy cultivations. To illustrate: in 1999, only 55 kilograms of latex gum were seized and 34,000 plants discovered and eradicated; in 2000, the figures jumped to 710 kilograms of gum and a staggering 2.4 million plants. The national drug police, DINANDRO, recently made its first seizure of heroin and it appears that some Colombia-based cocaine traffickers are also trafficking in heroin. Colombian traffickers are providing small farmers with seeds from Colombian poppies, offering technical assistance and cash loans, and buying the resulting crop.

III. Country Actions Against Drugs in 2000

Policy Initiatives. During the latter half of 2000, the GOP initiated an ambitious effort to develop an effective 2001-2005 Counternarcotics Strategy, to replace the current (1994-2000) strategy. With Contradrogas, the GOP drug control agency, in the lead, the GOP has conducted meetings of GOP agencies, NGOs, and the international community. A basic strategy document should be ready for review and approval by the GOP in early 2001. Related to these efforts, DINANDRO developed a five-year source zone initiative in March 2000, focusing law enforcement and interdiction activities in the major coca-growing valleys.

In general, the GOP has been very active in regional and multilateral counternarcotics coordination efforts. In August 2000, Contradrogas took the initiative to organize an Andean regional alternative development conference in Lima. The concept was to begin to plan on a regional basis. Colombia hosted a follow-on conference to discuss a unified approach toward the U.S. on Andean trade preference issues. Contradrogas and the UNDCP jointly sponsored a workshop to discuss harmonization of money laundering legislation in the Andean Community.

Accomplishments. In 2000, CADA, the GOP's alternative development measuring and monitoring agency (a division of CORAH), completed its measurements of coca cultivation in the Aguaytia and Alto Huallaga areas. CADA's professional, computer-generated maps, coordinated with aerial estimates, have become the benchmark for coca cultivation estimates, and are relied upon by the European Union (EU) and other groups providing alternative development assistance to Peru. Although the cultivation of opium poppies is illegal in Peru, the GOP has not yet directed CADA to measure poppy cultivation.

Law Enforcement Efforts. In January 2000, DINANDRO arrested Adolfo Cachique Rivera (whose brothers, Segundo and Abelardo were arrested earlier), co-head of a major Peruvian cocaine base trafficking organization. His arrest effectively ended the illegal cocaine operations of this organization, which had exported multi-kilogram quantities of cocaine base to Brazil and Colombia for over nine years. Luis and Jose Aybar-Cancho, the heads of a major arms and drugs trafficking organization, were also arrested. Their dealings are alleged to have involved retired military officers. There were also allegations that the deal was facilitated by several high-ranking members of the GOP, which led to charges of corruption at the highest levels. This may have been one of many factors that contributed to the previous government's eventual downfall.

In terms of drug interdiction, the GOP cooperated with the DEA and Chilean authorities in the nine ton seizure of cocaine from a maritime shipment in the Chilean seaport of Arica. There were also two successful interceptions of trafficker aircraft by the Peruvian Air Force (FAP) during 2000. One of these interceptions highlighted significant interagency Peruvian cooperation between the air force and police, which forced the traffickers to burn their aircraft and sacrifice its drug payload. As a result of improved intelligence sharing and coordination between the police and air force, other attempts by trafficker aircraft to enter Peru to retrieve cocaine shipments were aborted.

While the total amount of drugs seized in 2000 declined, the PNP destroyed several cocaine hydrochloride laboratories. The PNP Chemical Control Unit conducted over 1,000 regulatory and criminal investigations of suspected chemical companies in 2000, making 41 arrests, seizing over 158 metric tons of controlled precursor chemicals, and closing six chemical companies. GOP legislation passed in 1999 has enhanced the PNP's ability to regulate chemical companies, and increased the number of chemicals regulated; however, the law needs to be amended and strengthened to include criminal penalties for violators.

Regarding GOP efforts to interdict riverborne drug shipments, DINANDRO and the Peruvian Coast Guard have improved their coordination and operational capabilities with USG-donated equipment. However, for the program to be successful, they must develop and share intelligence, and cooperate in investigations with land, sea and air components. The effectiveness of the riverine program is thus far moderate, but there are clear indications that, as the program evolves, it will become an effective tool for interdiction and deterrence of narcotics movement along Peru's vast waterways. The USG-supported/Peruvian-operated Joint Peruvian Riverine Training Center (JPRTC) continues to train personnel and there is an initiative to make it a regional school.

With USG support, the GOP and private shipping companies are improving their abilities to monitor sea cargo container activities. Private shipping companies have been instrumental in providing the PNP with intelligence to support major ongoing investigations of Peruvian and other international trafficking organizations attempting to utilize sea cargo containers to transport multi-ton shipments of cocaine to the U.S., Mexico, and Europe. As Peruvian ports are privatized, the possibility of emulating Colombia's fee-supported port security program also increases. Airline personnel have been vital to the successes of Peruvian authorities, both PNP and Customs, in detecting the smuggling of cocaine by passengers exiting Peru to international destinations.

Corruption. The current administration of President Paniagua does not condone, encourage or facilitate drug trafficking. Although there is no firm evidence of a drug tie, former de facto intelligence chief Vladimiro Montesinos is alleged to have over $70 million in Swiss bank accounts and there are as yet unproven but credible allegations of additional accounts in other countries. The Congress is investigating these allegations, and a corruption commission has been established. Numerous officials have been fired or retired in an effort to achieve honest and responsive government in the post-Fujimori era.

Agreements and Treaties. The GOP strongly supports the objectives of the 1991 USG-GOP counternarcotics bilateral framework agreement and the 1988 UN Drug Convention, to which Peru has been a party since 1992. Peru is also a party to the 1961 UN Single Convention, the 1972 protocol thereto, and the 1971 Convention on Psychotropic Substances. There is also a cash transaction information exchange agreement between the USG and Peru. Negotiations for a modernized U.S.-Peruvian extradition treaty have been under way since 1998 and the new Peruvian government has expressed a willingness to see these through to completion.

Peru is a party with other Andean nations to a 1996 chemical control agreement with the European Union. In addition, Peru has bilateral drug control agreements with several other Latin American countries; the most recent, with Brazil, was signed in November 1999. In December 2000, Peru signed the UN Convention Against Transnational Organized Crime and its protocols.

Drug Flow/Transit. During 2000, there was a significant increase in clandestine cocaine HCl processing laboratories along the coastal areas, particularly near Lima, where Peruvian seaports were used for multi-ton shipments of cocaine HCl to the U.S., Mexico and Europe.

Alternative Development Progress. In 2000, the GOP's USG-supported counternarcotics alternative development program continued to operate in six coca cultivation zones. Because the high price of coca leaf has encouraged rehabilitation of coca fields, sustainability will depend on coordination of alternative development with the disincentives of crop eradication and interdiction. The GOP alternative development program is aimed at strengthening local government, providing access to basic services and providing sustainable, licit economic opportunities. Micro- and small credit assistance are available, and the alternative development program has initiated emergency assistance to at-risk households in the Upper Huallaga to help as they transform from dependence on the illicit coca economy.

Following the 1998 Brussels Donors Consultative Group meeting arranged for the Peruvian Government by the Inter- American Development Bank and Organization of American States Drug Control Commission (OAS/CICAD), 19 donors pledged a total of U.S. $272 million for counternarcotics alternative development in Peru. Disbursements from other countries have been slow, however, delaying implementation of many programs.

Domestic Programs (Demand Reduction). A cadre of NGOs cooperates with Contradrogas to address Peruvian drug consumption. Ironically, at least some of the rise in domestic drug consumption is due to successful interdiction, as traffickers unable to get drugs out of the country were forced to develop domestic markets. Surveys show that the number of first-time drug users is rising, albeit from a low starting point, and that the age of first use is dropping. A recent poll by CEDRO, an influential NGO, indicated that most Peruvians now consider drugs to be one of the greatest threats facing Peru. A private sector group "Alianza para un Peru sin Drogas" ("Alliance for a Drug-Free Peru"), founded in 1999 and modeled on the U.S. "Partnership for a Drug-Free America" and similar Latin American initiatives has continued to be active in developing TV spots and other prevention messages aimed particularly at children.

IV. U.S. Policy Initiatives and Programs

Bilateral Cooperation. In 2000, the U.S. Embassy adopted a source zone counternarcotics strategy to improve its support to GOP counternarcotics efforts in the main coca-producing valleys of Peru. These source zones are where illicit coca and poppy are produced, initial processing is carried out and precursor chemicals and money must flow to support the narcotics business. This focus should enhance the GOP's ability to disrupt outbound movements of drugs by detecting them at or near their point of origin. USG training in detection of contraband, for customs officers as well as airline and airport employees, resulted in a significant increase in arrests and seizures of passengers body-carrying cocaine HCl from Lima to the U.S. and other international destinations. In addition, a USG-provided X-ray machine, installed in October 2000, will enhance the ability of airport authorities to detect illegal transportation of cocaine.

The GOP and USG have worked closely to implement the successful eradication and alternative development programs. Fourteen USG-owned helicopters are flown and maintained by the GOP to provide transportation for coca eradication and interdiction. Helicopter pilots and mechanics receive training in the United States, which benefits Peru's counternarcotics aviation program. USG law enforcement agencies have, through extensive classroom and on-the-job training, enhanced GOP counterpart abilities to gather/share intelligence and conduct long-term and complex investigations. There has also been improvement in GOP operational efforts on rivers and roads.

The USG is supporting GOP efforts to make the airbridge denial program more effective by increasing the GOP's ability to enhance airborne radar support, overhauling Tucano and A-37 engines, stationing FAP aircraft at sites that will allow a more timely response, and working to increase the availability of FAP intercept aircraft. The USG Army Corps of Engineers recently built and donated a facility for the FAP in Iquitos, and is constructing a FAP facility at Puerto Maldonado to cover aerial trafficking routes in the south. In addition, major construction has been undertaken in Pucallpa, including a police command facility to support enhanced operations in the main drug-producing valleys.

The Road Ahead. New elections and a policy to fight corruption bode well for counternarcotics work. Peru's significant reduction of coca under cultivation proves that its strategy is working. However, with higher prices being paid for coca, farmers will be tempted to abandon licit crops. It is essential that manual eradication of illegal coca crops, counternarcotics-related alternative development, rehabilitation of the airbridge denial program, and land and maritime/riverine interdiction all continue, closely coordinated as complementary programs. The GOP should also refine relevant laws, especially as they pertain to money laundering, asset seizure, and chemical controls.

Peru Statistics
(1992-2000)

 

2000

1999

1998

1997

1996

1995

1994

1993

1992

Coca

                 

Net Cultivation (ha)

34,100

38,700

51,000

68,800

94,400

115,300

108,600

108,800

129,100

Eradication (ha)

6,200

13,800

7,825

3,462

1,259

0

0

0

0

Cultivation (ha)

40,200

52,500

58,825

72,262

95,659

115,300

108,600

108,800

129,100

Leaf (Potential Harvest) (ha)

60,975

69,200

95,600

130,600

174,700

183,600

165,300

155,500

223,900

HCl (Potential) (mt)

154

175

240

325

435

460

435

410

550

Seizures

                 

Coca Leaf (mt)

55.0

164.3

132.9

146.8

99.1

33.4

25.2

25.0

Coca Paste (mt)

7.7

0.75

Cocaine HCl (mt)

2.70

3.59

1.70

2.30

1.01

7.65

0.10

0.47

0.23

Cocaine Base (mt)

9.01

6.65

19.70

8.80

18.68

15.00

10.60

5.3

6.7

Total Cocaine (mt)

11.70

10.24

21.40

11.10

19.69

22.65

10.70

5.77

6.93

Aircraft (items)

2

11

7

22

4

13

7

Uruguay

I. Summary

Uruguay is not a major drug producing or transshipment country. Nevertheless, the Government of Uruguay (GOU) supports efforts to combat drug trafficking and domestic drug consumption. In 2000, the Uruguayan National Police received authority to assist other GOU agencies in antinarcotics enforcement and drug seizures, and drug-related arrests increased dramatically during 2000. The GOU has taken measures to regulate financial activities, reducing the potential for money laundering. The Police Anti-Drug Directorate (DGRTID) established a Financial Investigations Unit (FIU) in order to present more complete evidence in narcotics-related prosecutions. Uruguay is a party to the 1988 UN Drug Convention.

II. Status of Country

Domestic drug consumption is relatively low, although some drug survey data suggests that consumption of marijuana and synthetic drugs, such as ecstasy and LSD, may be increasing. Uruguay is neither a major drug producing country nor a major drug transit country. Seizures of small quantities of drugs from persons traveling from Argentina and Brazil to Europe suggest that traffickers occasionally use Uruguay to "launder" the origin of shipments. The movement of maritime containers through the port of Montevideo remains an area of concern, as does effective implementation of precursor chemical controls.

As a regional financial center, Uruguay is susceptible to possible money laundering. Uruguay has historically attracted foreign monetary deposits due to its economic and political stability as well as liberal currency exchange and bank secrecy laws. Narcotics-related money laundering is illegal, and although Uruguay has bank secrecy laws, financial institutions must provide certain information upon the request of the Central Bank. Banks (including offshore banks), currency exchange houses and stockbrokers are required to report transactions of over $10,000 to the Central Bank; however the Central Bank does not routinely review these records. The Organization of American States (OAS) and the USG provided the Central Bank with computers and software to maintain a database and analyze patterns of transactions, and training of database technicians is being scheduled.

III. Country Actions Against Drugs in 2000

Policy Initiatives. President Batlle has publicly expressed a favorable attitude toward legalization of drugs, however counternarcotics efforts remain a state priority (although funding levels are relatively low). The Anti-Drug Secretariat (SND) was set apart from the Deputy Chief of Staff in the Office of the Presidency and a SND General Secretary was created by presidential decree shortly before ex-President Sanguinetti left office. President Batlle returned authority for the SND to Deputy Chief of Staff Leonardo Costa on June 7 by presidential decree. The SND is responsible for coordinating GOU counternarcotics efforts and is developing a counternarcotics master plan.

Accomplishments. No evidence exists of any significant cultivation or production of illicit drugs in Uruguay. Although Uruguay is not a major transshipment country, seizures indicate that some drugs enter the country through Brazil and Argentina. The Uruguayan Coast Guard recently improved its computerized network and database in order to record persons and vessels passing through Uruguayan territorial waters.

The Uruguayan National Police were given jurisdiction for narcotics enforcement in 2000, an authority which formerly rested solely with the Police Anti-Drug Directorate (DGRTID). Police officials may now target local narcotics distributors and assist the DGRTID, which has limited personnel resources. To increase the effectiveness of this plan, DGRTID has begun training police officials in antinarcotics enforcement. DGRTID remains responsible for large-scale counternarcotics investigations and operations.

Antidrug legislation passed in October 1998 made narcotics-related money laundering a crime. The Central Bank requires banks (including offshore banks), currency exchange houses and stockbrokers to record transactions over $10,000. It also requires all entities under its jurisdiction to report suspicious financial transactions to a financial information analysis unit, which is being created within the Superintendency of Intermediary Financial Institutions. Computers and software are being installed at the Central Bank to enable financial analysis to detect money laundering. Financial investigations, which are not routine and must be court ordered, have been effective in identifying appropriate accounts on some occasions.

Uruguayan judges have the authority to issue seizure orders, without prior notice, for possible asset confiscation or forfeiture. Vehicles and assets directly linked to narcotics activities have been confiscated, however cash and other assets less easily tied to narcotics activities are not usually seized. DGRTID has opened a financial investigations unit with the objective of presenting judges with more complete financial information to facilitate the seizure of a wide range of assets.

Uruguay is active in international antinarcotics efforts. Uruguay and other participants in the Southern Cone Working Group of the International Conference for Drug Control regularly exchange narcotics-related information. The GOU cooperates with the USG and Argentine and Brazilian officials in efforts to control cross-border movements of persons and drugs. The USG and GOU have an extradition treaty and a mutual legal assistance treaty (MLAT) in effect.

Law Enforcement Efforts. GOU antinarcotics enforcement efforts resulted in increased seizures and more successful prosecution of drug-related crimes in 2000 than in previous years. By November 2000, the quantity of marijuana seized had increased from 494 kilograms in 1999 to 804 kilograms in 2000; cocaine seizures had increased slightly (20 kilograms in 2000); and seizures of ecstasy and LSD had increased ten fold from 88 kilograms in 1999 to 881 kilograms in 2000. The participation of non-DGRTID police officers in antidrug efforts has contributed to better enforcement. DGRTID and Coast Guard effectiveness has also increased due to improved investigative procedures and equipment.

Drug arrests and convictions also increased dramatically during 2000, from 195/65 (arrests/convictions) in 1999 to 536/122 (arrests/convictions) in 2000. An increased focus on local traffickers and networks by ordinary police units may account in part for the increased number of arrests. Major traffickers and their organizations remain the principal concern of DGRTID investigations. Better coordination and cooperation between enforcement agencies and the judiciary along with an emphasis on case preparation is expected to improve the conviction rate.

Corruption. The "Ley Cristal" (Transparency Law), which entered into force in January 1999, criminalizes a broad range of potential abuses of power by government office holders, including the laundering of funds related to public corruption cases, and institutes financial disclosure requirements for high ranking GOU officials. The GOU does not encourage or facilitate drug production, trafficking or money laundering nor is there any evidence that senior GOU officials have done so. Public officials who know of a drug-related crime or incident and do nothing about it may be charged with a "crime of omission" under the Citizen Security Law.

Agreements and Treaties. The USG and GOU have cooperated on narcotics-related extraditions and have an extradition treaty, signed in 1973, which went into force in 1984. A Mutual Legal Assistance Treaty (MLAT), signed in 1991, which entered into force in April 1994, has also been effectively implemented. The Mutual Evaluation Mechanism (MEM) adopted by the Organization of American States Drug Control Commission (OAS/CICAD) in October 1999 is being implemented by the GOU. Uruguay is a party to the 1988 UN Drug Convention. In December 2000, Uruguay signed the UN Convention Against Transnational Organized Crime and its protocols.

Cultivation/Production. There is no significant cultivation or production of illicit drugs in Uruguay.

Drug Flow/Transit. Uruguay is not a major drug-transit country. The porous border between northern Uruguay and Brazil is the major entry point for drugs destined for domestic use and/or international transshipment, principally to Europe. The large amount of containerized cargo passing through the port of Montevideo may be susceptible to narcotics shipments.

Demand Reduction. There are signs that low levels of drug consumption in Uruguay are slowly rising, and the National Anti-Drug Secretariat (SND) has coordinated demand reduction programs to counter this trend. Domestic efforts have included teacher training, public outreach and seminars and programs based in community centers and sports clubs. The Alliance for a Drug Free Uruguay directs an extensive media campaign, which has significantly increased public awareness of narcotics-related issues in the past few years.

IV. U.S. Policy Initiatives and Programs

U.S. Policy Initiatives. USG programs support GOU counternarcotics efforts, especially in the areas of money laundering controls, counternarcotics enforcement, and demand reduction.

Bilateral Cooperation. The USG and GOU cooperate on a wide range of law enforcement issues. USG funds provided through bilateral cooperation agreements have provided equipment and training to enhance GOU efforts to combat drug use and trafficking. GOU officials, private and public bankers, judges and prosecutors participated in a multi-agency money-laundering seminar presented in August 2000. The national drug awareness media campaign has also benefited from USG assistance.

The Road Ahead. Money laundering continues to be an area of concern, and will receive USG support. Training is being planned for the technicians who will run the Central Bank database and analytical software programs for anti-money laundering monitoring. A seminar designed to support implementation of money laundering legislation will take place in 2001. Procurement of equipment, which will enhance DGRTID and Coast Guard investigative capabilities, is also being planned. Support of antidrug canine breeding and training programs will continue.

Venezuela

I. Summary

Venezuela is a significant transit route for illegal drugs destined for the U.S. and Europe (by some USG estimates, over 100 metric tons of cocaine transit Venezuela annually). The vast majority of this traffic consists of cocaine and heroin from neighboring Colombia. The Government of Venezuela (GOV) continued to combat narcotics trafficking and drug consumption in 2000, despite considerable change in the political system including a new constitution adopted in December 1999 that mandated the election of a new unicameral National Assembly. The GOV introduced new policy initiatives and enhanced law enforcement efforts to combat drug trafficking and related crime. Cooperation with U.S. law enforcement agencies was very good and one complex joint operation led to the seizure of 8.8 metric tons of cocaine, numerous arrests in Venezuela and the expulsion of two significant third-country narcotraffickers to the U.S. for trial. During the year, Venezuelan prosecutors took steps to fulfil their new responsibilities under the new penal code introduced in 1999. The National Antidrug Commission introduced new initiatives in 2000 to expand demand reduction programs, to increase Venezuelan participation in multilateral antidrug initiatives, and to improve eradication efforts aimed at small areas of coca and opium poppy cultivation that spill over into Venezuelan territory from Colombia.

The GOV continued to place a high priority on reducing corruption. Reorganizations in law enforcement agencies and the customs service led to large-scale dismissals of those suspected of involvement in corruption. However, new legislation to give police necessary tools to aid investigations was not adopted partly because the new National Assembly did not begin work until October 2000. The GOV continued to attempt to conduct aerial interdiction operations against drug smuggling aircraft unilaterally in 2000 but these actions were largely ineffective (although air transits through Venezuelan airspace by drug smugglers decreased significantly during the year).

Venezuela is a party to the 1988 UN Drug Convention.

II. Status of Country

Venezuela is located on a major route for illegal drugs produced in Colombia and destined for the U.S. and Europe. Most of the drugs are smuggled by land into Venezuela and then concealed in commercial cargo leaving major Venezuelan ports. Air passengers and cargo on commercial air carriers on the more than 25 flights a day to U.S. destinations are another means of drug transit. Small private aircraft and boats are also used to carry drugs through Venezuelan airspace or territorial waters to Caribbean transshipment points. During 2000, investigations uncovered evidence of increasing numbers of large-scale shipments of cocaine to Europe through Venezuela.

Drug trafficking organizations also use Venezuela as a location to divert essential and precursor chemicals used in the production of illegal drugs in drug source countries, and use Venezuela's modern financial, real estate and tourism sectors to launder drug profits. The GOV has introduced effective U.S.-style currency transaction reporting requirements for banks, but investigation and prosecution of money laundering is hampered by lack of legislation and effective police work.

Some spillover of Colombian coca and opium poppy cultivation has traditionally occurred along the Venezuelan border in sparsely populated areas. One small, mountainous area along the northern part of the border is used to grow opium poppy but heroin processing is carried out in Colombia and the problem has been limited to a cultivation area of under 50 hectares by continued aggressive eradication and expulsion activities by the Venezuelan military. During 2000, the GOV expressed growing concern about Colombian coca plantations on Venezuelan territory and the military initiated intensified manual eradication operations targeting these areas.

III. Country Actions Against Drugs

Policy Initiatives. During 2000, the National Antidrug Commission (CONACUID) continued to implement a four-year national strategic antidrug plan. CONACUID focussed on improving demand reduction efforts and police coordination. New legislative policy initiatives were limited by the fact that the National Assembly mandated by the new constitution was elected in July and only began work in October. However, at the end of 2000 the National Assembly began consideration of the Chavez Administration's plan to create a single, national police force. The new force is designed to overcome problems of rivalry, inefficiency and corruption that have plagued existing law enforcement organizations. The Administration also prepared draft legislation to improve chemical precursor control and a separate law to strengthen currency transaction reporting requirements for consideration by the Assembly.

The GOV decision in 1999 to monitor and track on its own suspected drug smuggling aircraft using Venezuelan airspace on their way to or from drug deliveries in the Caribbean and to prohibit U.S. aircraft from carrying out such operations over Venezuela, led to many flights successfully evading detection. While the Venezuelan military continued to cooperate closely with U.S. forces with regard to information on suspect aircraft and launched their own aircraft, aerial interdiction efforts were largely unsuccessful. An apparent change in drug trafficking air operations, however, led to a major reduction in such flights through Venezuelan airspace in the second half of the year.

Accomplishments. In a major step forward for law enforcement cooperation in 2000, the National Guard branch of the Venezuelan Armed Forces jointly conducted an extremely complex operation with U.S. Customs, DEA and European law enforcement officials to break up a major Colombian narcotics smuggling ring operating in Venezuela. The organization had been responsible for several multi-ton loads of cocaine shipped in freighters to the U.S. and Europe. Following an intensive surveillance and monitoring operation with the full participation of the National Guard, 8.8 tons of cocaine were seized in different locations in eastern Venezuela in July and more than ten individuals of varying importance in the organization were arrested. Two third-country nationals who helped run the organization were expeditiously expelled to the U.S. for prosecution. The other individuals were brought to trial at the end of the year in Venezuelan courts.

Cooperation was also very good with the other major law enforcement body with responsibility for drug cases in Venezuela, the Technical Judicial Police (PTJ). In a wide variety of cases involving heroin smuggling, cocaine "mules," and use of air cargo shipments, the PTJ worked closely with DEA and significant seizures and a number of arrests resulted from these operations.

The GOV enhanced efforts to collect information to deter money laundering in 2000, working closely with banks and other financial institutions and in September introduced new regulations that further strengthened the already stringent currency transaction reporting based on U.S. reporting requirements. CONACUID initiated steps to implement the recommendations from a late-1999 evaluation of Venezuelan financial controls by the Caribbean Financial Action Task Force.

CONACUID also implemented nation-wide plans to improve domestic demand reduction programs including systematic efforts to collect data on illegal drug use patterns and work on centralized and regional drug treatment programs.

The GOV continued to be concerned about small coca and opium poppy plantations operated by Colombians just inside the Venezuelan border. Intensified manual eradication operations by the armed forces in 2000 kept this cultivation to very limited areas. In late 2000 CONACUID initiated a coordinated plan to measure and calibrate eradication programs to systematically counter this problem. CONACUID also continued to coordinate improved chemical precursor control mechanisms and Venezuela participated in operation "Seis fronteras" with six other South American countries. This operation, designed to improve regional cooperation to counter precursor chemical diversion, resulted in the seizure of 1,200 liters of the chemical acetone (used in the production of cocaine) and the arrest of two individuals for diversion in Venezuela.

Law Enforcement Efforts. Venezuelan law enforcement authorities seized approximately 15 metric tons of cocaine in 2000. This figure shows a trend of increased seizures over previous years and demonstrates continued commitment by Venezuelan law enforcement. The number of arrests of individuals for drug-related offenses dropped significantly in 2000 largely because of difficulties with the implementation process for the new penal code that continued throughout the year.

The amount of heroin seized increased in 2000 to 134 kilograms, from the previous year's figure of 40 kilograms. In one indication of increased cooperation, in 2000 DEA worked more than 60 drug cases with Venezuelan law enforcement authorities as compared to only 46 cases in 1999.

Venezuelan law enforcement authorities continued to focus drug interdiction efforts at border entry points, airports and seaports. In 2000, Operation Orinoco and other, smaller-scale investigations provided evidence of GOV interest in directing efforts at breaking up trafficking organizations operating in Venezuela. CONACUID played a leadership role as the coordinator of the national antidrug strategy and worked with law enforcement and the military to improve anti-money laundering efforts, chemical precursor control, and eradication of illegal drug cultivation. Law enforcement activities were hampered in 2000 by continued reorganizations and government-wide austerity measures introduced by the Chavez Administration as part of a move to redirect government spending to social welfare programs.

Although law enforcement agencies and the Ministry of Defense received adequate resources to carry out counternarcotics activities, operational budgets were extremely tight and U.S. law enforcement agencies assisted with operational funds for some activities.

Corruption. The Government of Venezuela does not as a matter of policy or practice encourage or facilitate drug trafficking or money laundering, nor are its senior officials proven to engage in, encourage, or facilitate such activities. In 2000, the Chavez Administration continued to focus on combating corruption in law enforcement and the judicial sector. In addition to police reorganization and large-scale dismissals, in late 2000 the GOV charged the head of the Customs authority with corruption (non-drug-related) and investigated and suspended numerous officials in that organization. Extensive investigations into port operations led to cases against numerous officials and extensive reorganization. In the judicial sector, investigations of corruption or misuse of office by judges continued and in 2000 another 200 judges were investigated. Almost 100 of these judges were suspended.

The Chavez Administration also took the positive step of reopening some drug-related investigations that had been stalled, including one case involving a particularly important drug-related money laundering operation on the border with Colombia which had seen extensive U.S. law enforcement cooperation. While none of the cases were successfully closed in 2000, law enforcement officials were encouraged by this action.

Agreements and Treaties. Venezuela is a party to the 1988 UN Drug Convention. Key bilateral agreements with the U.S. include a ship-boarding agreement from 1991, updated with a new protocol in 1997, a customs mutual legal assistance agreement, and an aerial hot pursuit arrangement (non-operative in 2000). In 1997, the U.S. and Venezuela signed a bilateral mutual legal assistance treaty (MLAT). Although ratified by the U.S., the MLAT was not acted on by the Venezuelan National Assembly in 2000 and accordingly has not yet entered into force. The U.S. and Venezuela are also parties to an outdated 1922 bilateral extradition treaty; unfortunately, Venezuela's 1999 constitution expressly prohibits the extradition of Venezuelan nationals. This provision hampers Venezuela's ability to develop effective extradition relations with the U.S. and other countries in the hemisphere, many of which are eliminating, rather than erecting, barriers to extradition.

Venezuela is an active participant in multilateral antidrug and anti-money laundering efforts. In November, Venezuela was elected Vice-President of OAS/CICAD (The Inter-American Drug Abuse Control Commission). Venezuela was a key participant in hemispheric efforts to develop a multilateral evaluation mechanism to improve antidrug cooperation. The GOV also participated in the Caribbean Financial Action Task Force and other anti-money laundering organizations. In December 2000, Venezuela signed the UN Convention Against Transnational Organized Crime and its protocols.

In 2000, Venezuela continued to expand contacts with its Caribbean neighbors and signed counternarcotics cooperation agreements with Trinidad and Tobago and Guyana and explored better cooperation with other Caribbean states. The GOV also expanded cooperation with Europe in the demand reduction area and the GOV signed an agreement with the European Union to establish an information-gathering center on drug consumption trends in Venezuela and in the region.

Drug Flow/Transit. Most illegal drugs smuggled through Venezuela are concealed in commercial air and sea cargo. The GOV continued to devote considerable effort to interdiction efforts in major ports and airports in 2000. U.S. Customs teams provided training and exchange programs in these areas with the National Guard in key entry and exit points during 2000 and most large seizures were made in these locations during the year. While cooperation with the military on counternarcotics issues continued throughout the year, the Chavez Administration cancelled some previously scheduled U.S. military counternarcotics training missions in mid-2000. In-country counternarcotics training missions had not resumed by the end of the year.

Security was improved at Venezuela's major international airport and planning began for enhanced security upgrades at other airports with international departures.

An extremely successful USG program which involves the Venezuelan private sector in drug interdiction efforts is the U.S. Customs Service Business Anti-Smuggling Coalition (BASC) program. The program, which seeks to increase the effectiveness of law enforcement officers in their efforts to deter narcotics smuggling in commercial cargo shipments and conveyances by enhancing private sector security programs, continued to be a success story in 2000 and saw strong interest from Venezuelan companies seeking to prevent infiltration of drugs in shipments to the U.S. The two BASC chapters in Venezuela grew to include 156 private sector members in 2000. U.S. Customs officers were deployed to Venezuela twice during the year in support of this program. This program comes in the context of the U.S. Customs Americas' Counter Smuggling Initiative (ACSI).

U.S. law enforcement agencies worked with counterparts to support operations in the U.S. designed to break up trafficking organizations. One notable operation involving a Colombian cocaine smuggling organization resulted in the arrest of two Colombians in Venezuela, several arrests in New York and the seizure of 130 kilograms of cocaine in Venezuela. The case contributed to the break up of a U.S. cocaine distribution network and the USG is working with Venezuela for the extradition of one of the Colombian suspects to stand trial in the U.S.

Despite these efforts, drugs continued to pass through Venezuela's ports and airports and the GOV said reorganizations (particularly in the customs service, but also in the National Guard) would be designed to enhance interdiction efforts at these locations.

Demand Reduction Programs. CONACUID continued its focus on nation-wide demand reduction programs in 2000 and focussed on drug use information collection and on treatment programs in addition to its programs with the schools and the private sector. CONACUID established a new model treatment center in Caracas and planned to expand the model to other regions. Contacts with non-governmental organizations involved in demand reduction and treatment programs improved in 2000.

IV. U.S. Policy Initiatives and Programs

The USG seeks to assist the GOV to improve its ability to prevent the use of its territory as a route for illegal drugs destined for the U.S. and to prevent the diversion of essential and precursor chemicals used in the production of illegal drugs. The U.S. will also support measures to combat international money-laundering activities in Venezuela. In order to help the GOV combat corruption that facilitates operations by drug trafficking organizations, the USG is also helping to strengthen the judicial system with a particular focus on effective case management and investigations. Specific objectives to accomplish these goals include providing equipment and training to law enforcement agencies working against drug-trafficking and related crime, assisting the armed forces to carry out effective counternarcotics operations, aiding implementation of control regimes related to money laundering and chemical controls, and providing assistance to Venezuela's implementation of its new penal system.

Bilateral Cooperation. The USG has extensive cooperative programs with Venezuela including those conducted by INL, the U.S. Customs Service, DEA, the Department of Justice, FBI and the Department of Defense. The USG has signed agreements with the Venezuelan Ministry of Defense, CONACUID, the Technical Judicial Police, the Ministry of Interior and Justice, the Attorney General's office, the Superintendancy of Banks and the Ministry of Production and Commerce to support counternarcotics programs focussing on interdiction, money laundering, chemical control and reinforcement of the judicial system. These agreements provide for provision of equipment, training and other assistance to implement shared counternarcotics goals.

Cooperation under all these agreements has been expanded under the Chavez Administration, and with U.S.-provided regional support funds from the Plan Colombia supplemental legislation, additional support will be given to all these programs to offset the regional implications of that major initiative against illegal drug production in Colombia.

The Road Ahead. Venezuela will continue to be vulnerable to drug flows from Colombia and related problems such as money laundering as that country's production increases and with the implementation of the Plan Colombia initiative against drug production. The GOV plans to intensify its efforts to combat corruption but is also committed to reorganization of its law enforcement agencies in order to more effectively counter any spillover. The GOV is also committed to participation in regional approaches to the drug problem which can be the basis for considerable success against drug trafficking organizations. The USG will continue to work with the GOV in the context of these regional efforts and to expand law enforcement cooperation to counter narcotics related activities in Venezuela.

Venezuela Statistics
(1992-2000)

 

2000

1999

1998

1997

1996

1995

1994

1993

1992

Seizures

                 

Cocaine HCl (mt)

15.03

12.48

7.30

14.58

5.60

6.17

5.10

2.00

4.19

Other Cocaine (Basuco) (mt)

0.14

0.62

1.30

1.60

1.60

1.60

1.60

1.30

1.61

Total Cocaine Products (mt)

12.43

13.10

8.60

16.18

7.20

7.77

6.70

3.30

5.80

Cannabis (mt)

15.17

19.69

4.50

5.52

5.30

13.70

10.00

1.00

2.61

Heroin (mt)

0.13

0.04

0.04

0.11

0.07

0.10

0.02

0.02

0.01

Arrests

                 

Nationals

2,341

6,414

7,242

4,880

3,000

812

Foreigners

275

216

289

499

600

210

Total Arrests

2,616

6,630

7,531

5,379

3,600

1,022

 

 [End.]



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