U.S. Department of State

On December 31, 2002, the Prime Minister pledged additional resources to his 2001 initiative to fight drug use in Australia through comprehensive law enforcement efforts, boosting spending to U.S. $122 million over four years. On April 5, 2002, the Federal Government brought together state and federal officials at a Leaders' Summit on Transnational Crime and Terrorism. The Summit resulted in a reorganization of the Australian National Crime Authority (NCA, now the Australian Crime Commission) and increased the cooperation between state and federal investigators in responding to serious crimes such as drug trafficking and ensuring prosecution at the appropriate state or federal level.

Accomplishments. The Australian Government continues to pursue strong programs to combat drug trafficking and use, which target the drug trade at all levels of production, distribution, and end use. The Australian Government works closely with the United States on a range of drug issues, including through mutual legal assistance and extradition.

Law Enforcement Efforts. Law enforcement agencies continued aggressive counternarcotics law enforcement activities in 2002. Responsibility for these efforts is divided between the federal government—primarily the Australian Federal Police (AFP), the Australian Customs Service (ACS) and the National Crime Authority (NCA)—and the respective state police services. The AFP maintains overseas liaison posts to assist in narcotics-related investigations. Liaison officers, particularly those in the Pacific Island nations, also assist local law enforcement agencies in training and institution building. The AFP, both in Australia and overseas, has a close working relationship with U.S. agencies, such as the DEA and the FBI. In October 2001, the Prime Minister announced plans to deploy additional overseas liaison positions. The AFP has nearly doubled its overseas presence, allowing it to be more proactive in transnational drug trafficking. Seizures of cocaine by Australian Federal Police increased in the fiscal year ending June 30, 2002 to 1032.2 KG. State authorities seized 52 KG of cocaine in 2000-'01; state seizure figures for '01-'02 are not yet available Federal Police heroin seizures also increased this FY to 433.4 KG from 233.6KG in the preceding FY. State authorities seized 248.1 KG of heroin during FY00-FY01.

Corruption. The Australian Government is vigilant in its efforts to prevent narcotics related corruption. There is no indication of any senior official of the government facilitating the production or distribution of illicit drugs or aiding in the laundering of proceeds from such activities. Although some individual police force officers have been investigated concerning drug-related corruption, corruption is not common.

Agreements and Treaties. The United States and Australia cooperate in law enforcement matters under a bilateral mutual legal assistance treaty and an extradition treaty. Australia is a party to the 1988 UN Drug Convention, the 1971 UN Convention on Psychotropic Substances, and the 1961 UN Single Convention on Narcotic Drugs, as amended by the 1972 Protocol. The USG has a Customs Mutual Assistance Agreement (CMAA) with Australia. Australia signed the UN Convention Against Transnational Organized Crime in December 2000, but has not yet ratified it.

Cultivation/Production. The only significant illicit drug cultivation in Australia involves cannabis. There is no evidence that Australian illicit cannabis production reaches the United States in quantities sufficient to have a significant effect. Australia has a significant licit opium crop, primarily on the island of Tasmania. Controls against diversion of that crop are excellent. The majority of amphetamines and methamphetamines consumed in Australia are produced domestically in small, often mobile, laboratories.

Drug Flow/Transit. Australia has been and continues to be a target for Southeast Asian heroin trafficking organizations and South American cocaine traffickers. Laos, Burma, and Thailand continued to be the principal source of heroin trafficked into Australia. Law enforcement authorities estimate that around 80 percent of imported heroin comes from Burma. Until recently, Latin American countries had not been identified as sources of heroin imported into Australia. Some seizures between 1997 and 2002 have originated from that area, however. There has been an increase in detected amounts of amphetamine-type substances (ATS, a category that includes ecstasy and methamphetamines), imported from Asia. Ecstasy is mainly imported from Europe. The U.S. Embassy continues to examine whether these drugs are transiting Australia to the United States, but to date there has been no information that this is occurring.

Domestic Programs. The Federal Government continues to pursue the "Tough on Drugs" Strategy to reduce the supply of, and demand for, illicit drugs in Australia through comprehensive efforts in law enforcement, prevention, treatment, and education. This strategy provides U.S. $230 million toward demand reduction programs including education, prevention, treatment, monitoring, evaluation and research programs. Some of the key elements include: the diversion of illicit drug users from the criminal justice system into assessment, education, and treatment programs; a national drug information service to disseminate drug and alcohol information to all sectors of the community; enhanced drug education in schools; expanding and upgrading treatment services; and a comprehensive community wide education and information campaign.

Under the Australian federal system, the Federal Government has responsibility for national health and crime issues, while the States and Territories have responsibility for the delivery of health and welfare services. The Ministerial Council on Drug Strategy brings together the Federal, State and Territory Ministers responsible for health and law enforcement to determine national policies and programs to reduce the harm caused by drugs in Australia.

Bilateral Cooperation. Cooperation between U.S. and Australian authorities is excellent.

The Road Ahead. Australia shows no sign of lessening its commitment to the international fight against drug trafficking, particularly in Southeast Asia. The United States can expect excellent ongoing bilateral relations with Australia on the counternarcotics front, and the two countries should continue to work well together in UNODC and other multilateral forums.

In 2002, Burma also responded to rising international concerns regarding the quality of its anti-money laundering regime by enacting a powerful new money-laundering law that criminalizes money laundering in connection with virtually every type of major criminal activity. The first investigations under this law began in July, resulting in the seizure of several hundred thousand dollars in assets.

Burma also plays a major role in the regional traffic in amphetamine-type stimulants (ATS). Drug gangs based in the Burma/China and Burma/Thailand border areas annually produce several hundred million methamphetamine tablets for markets in Thailand, China, and other Southeast Asian states on the basis of precursors imported from neighboring states. Burma itself does not have a chemical industry and does not produce any of the precursors for methamphetamine or other artificial drugs. Neither is there any significant market in Burma for ATS. In 2002, ATS seizures declined from previous modest levels of approximately 10 million tablets. Aside from these seizures and the closing of a few production labs, the government did not take significant steps to stop ATS production and trafficking.

Opium, heroin, and ATS are produced predominantly in Shan State, in areas controlled by former insurgent groups. Starting in 1989, the Burmese government negotiated a series of cease-fire agreements with these groups, allowing each limited autonomy and a measure of development assistance in return for peace. Initially, these agreements permitted the former insurgents to continue their narcotics production and trafficking activities in relative freedom. Since the mid-1990s, however, the Burmese government has elicited "opium-free" pledges from each and, as these pledges have come due, has stepped up law-enforcement activities in the territories controlled by some of these groups.

In 2002, the Burmese government continued its crackdown in the Kokang region controlled by Peng Jiasheng's Myanmar National Democratic Alliance Army (MNDAA), which had pledged to be opium-free by 2000. The government modestly increased pressure on the Wa in 2002, closing down Wa liaison offices along the Thai border and arresting several Wa traffickers. The government claims it cannot crack down faster on the Wa because the Wa's opium-free pledge does not come due until 2005, and doing so would jeopardize Burma's national security, as the UWSA is a formidable military force. Under the terms of the cease-fire agreements, the Wa and other groups involved in the drug trade are largely immune from government action. For instance, Burmese troops cannot enter Wa territory without permission from the UWSA. Although unwilling to risk confronting the Wa, a potent organization with a well-manned and well-trained military force, the GOB did expand its modest police presence in the Wa territories in 2002. The government also took a more aggressive stance on traveling in Wa territory, informing UWSA officials of such visits rather than seeking their permission in advance. Nevertheless, the government has yet to put significant pressure on the Wa to stop illicit drug production or trafficking.

Despite agreements with the ethnic groups to set dates by which to be opium free, the results remain limited. Opium production and its profitability have not been replaced by substitute crops and alternative development projects that would provide farmers economically viable alternatives to poppy cultivation. For regions to become truly drug free, the government must make a considerable commitment, assisted, where possible, by the international community, to undertake an extensive range of counternarcotics actions, including crop eradication, effective law enforcement, and alternative development. The government must foster cooperation between the government and the ethnic groups involved in drug production and trafficking, including the Wa, to eliminate poppy cultivation and opium production.

The GOB must also address the explosion of ATS that has flooded Thailand and is trafficked to other countries in the region. It must make a firm commitment and make a concerted effort to stop production of ATS by gaining support and cooperation from the ethnic groups, including the Wa, involved in ATS, as well as through closing production labs and preventing the diversion of precursor chemicals needed to produce synthetic drugs.

Burma has a small, but growing drug abuse problem. While the government maintains that there are only about 70,000 registered addicts in Burma, surveys conducted by UNODC, among others, suggest that the addict population could be as high as 300,000 (i.e., still less than 1 percent of the population), with opium the major source of addiction. There is also a growing HIV/AIDS epidemic, linked in part to intravenous drug use. According to surveys, 57 percent of all intravenous drug users in Burma have tested positive for the HIV/AIDS virus.

The government has received very limited international assistance in support of these efforts. The most significant is the UN Office of Drugs and Crime's (UNODC) Wa Alternative Development Project (WADP), which is financed by the United States, Japan and, since 2002, Germany. A five-year, $12.1 million program, this project encourages alternative development in a small portion of the territory controlled by the United Wa State Army. There is also a small, U.S.-financed project in Northern Shan State (Project Old Soldier) and a Japanese effort to establish buckwheat as a cash crop in the Kokang and Mong Ko regions of northeastern Shan State. In addition, the Thai government agreed in 2001 to extend its own alternative development projects across the border into the Wa-controlled Southern Military Region of Shan State.

Narcotics Seizures. Summary statistics provided by the Burmese police indicate that the Burmese police, army, and the Customs Service together seized approximately 1,631 kilograms of raw opium, 285 kilograms of heroin, and 8.8 million methamphetamine pills during the first ten months of 2002. This compares with seizures of 1,629 kilograms of raw opium, 98 kilograms of heroin, and 32.4 million methamphetamine pills during all of 2001. The three-fold increase in heroin seizures reverses a four-year decline in such seizures. Although the explanation for decreased ATS seizures is unclear and may be related to adjustments in trafficking patterns, the relatively tiny amount seized had virtually no effect on the scope of the problem.

In 2002, the Ministry of Health issued notification No. 1/2002 identifying 25 substances as precursor chemicals and prohibiting their import, sale, or use in Burma. Seizures of precursor chemicals during the first nine months of 2002 included 1,220 kilos of ephedrine, 2,908 kilos of acetic anhydride, and 21,552 kilos of other chemicals. In 2001, the totals were 3,922 kilos of ephedrine, 12,318 liters of acetic anhydride, and 174,191 liters of other chemicals. Major cases in 2002 included the following:

Refineries. The government destroyed 7 heroin labs through the first nine months of 2002, compared to 14 in all of 2001. It also destroyed six meth labs during the first nine months of 2002, compared to three in all of 2001.

Eradication. The government eradicated more than 50,000 acres (20,000 hectares) of opium poppy over the past two crop years. Of this, 25,862 acres were destroyed during the 2001/2002 crop year; 26,113 acres were destroyed during the 2000/01 crop year. In addition, the government burned 164,000 kilos of poppy seeds capable of seeding more than 40,000 hectares during the six month period between April and October. According to the Burmese government, the destruction of those seeds, together with law enforcement actions is expected to reduce the acreage under opium cultivation by about half in 2003.

Law Enforcement Measures. Drug-enforcement efforts in Burma are led by the Central Committee for Drug Abuse Control (CCDAC), which is comprised of personnel from various security services, including the police, customs, military intelligence, and the army. CCDAC now has 18 drug-enforcement task forces around the country, with most located in major cities and along key transit routes near Burma's borders with China, India, and Thailand. As is the case with most Burmese government entities, CCDAC suffers badly from a lack of adequate resources to support its law-enforcement mission.

The legal framework for Burma's law enforcement efforts is provided by its 1993 Narcotic Drugs and Psychotropic Substances Law. As demanded by the 1988 UN Drug Convention, that law contains legal tools for addressing money laundering, the seizure of drug-related assets, and the prosecution of drug conspiracy cases.

With assistance from UNODC, the Burmese government is in the process of drafting a new Mutual Legal Assistance Law, which should lay the groundwork for judicial and law enforcement cooperation across borders in the prosecution of money laundering and other cases.

In 2001, for the first time, the government established a police and military intelligence presence in the Wa territories. In March 2002, it demanded that new counternarcotics decrees be issued by the Wa, the Kokang Chinese, and other cease-fire groups. Those decrees outlawed participation in any aspect of the narcotics trade. In April and May 2002, the GOB also demanded and received cooperation from the United Wa State Army in bringing to heel several major fugitives wanted by China. In addition, it has closed down the liaison offices of armed groups like the United Wa State Army, and of companies associated with those groups in Tachileik, Myawaddy, and other towns on the Thai/Burmese border. Finally, the GOB continued efforts to hold cease-fire groups to their pledges to end opium production in their territories. U Sai Lin's Special Region No. 4 around Mong La has been opium-free since 1997 and the Wa are, thus far, on track to eliminate opium by 2005. The Kokang Chinese missed their opium-free target (scheduled for the year 2000), but have paid a heavy price for that failure in terms of increased attention from both the Burmese and the Chinese police. Several of these same trafficking armies also control amphetamine production labs and extensive trafficking operations. These remain largely intact, and are a major factor in amphetamine trafficking in Southeast Asia and beyond.

The government continued its crackdown begun in 2001 on the array of militias (some government-sponsored village defense forces, and others the remnants of former insurgent bands) that the government had previously allowed to cultivate opium in the Kutkai-Lashio region of northern Shan State. According to military intelligence officials, with peace now prevailing in most of the countryside and the government no longer in need of the local security services these groups provided, steps are now being taken to slowly scale back their privileges, including the right to grow and traffic in opium.

Corruption. There is no direct evidence that senior officials in the Burmese Government are directly involved in the drug trade. However, lower level officials, particularly army and police personnel posted in outlying areas, have been prosecuted for drug abuse and/or narcotics-related corruption. According to the Burmese government, over 200 police officials and 48 Burmese Army personnel have been punished for narcotics-related corruption or drug abuse between 1995 and May 2002. Of the 200 police officers, 130 were imprisoned, 16 were dismissed from the service, 7 were forced to retire, and 47 were demoted. To our knowledge, however, no Burma Army officer over the rank of full Colonel has ever been prosecuted for drug offenses in Burma. This fact, the prominent role in Burma of the family of notorious narcotics traffickers (e.g., Lo Hsing Han Clan), and the continuance of large-scale narcotics trafficking over years of intrusive military rule have given rise to speculation that some senior military leaders protect or are otherwise involved with narcotics traffickers.

Agreements and Treaties. Burma is a party to the 1961 UN Single Convention, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Drug Convention. In addition, Burma is also one of six nations (Burma, Cambodia, China, Laos, Thailand, Vietnam) that are parties to UNODC's sub-regional action plan for controlling precursor chemicals and reducing illicit narcotics production and trafficking in the highlands of Southeast Asia.

In 2001, Burma signed additional counternarcotics MOUs with China (in January) and Thailand (in June). The MOU with China, in particular, laid down the ground rules for joint operations, which in turn led to a series of arrests and renditions of major traffickers during the spring and summer of 2002.

Burma's MOU with Thailand commits both countries to closer police cooperation in narcotics control. In August 2001, both countries also agreed to establish joint "narcotics suppression coordination stations" in the Chiang Rai/Tachileik, Mae Sot/Myawaddy, and Ranong/Kawthoung border areas. In addition, during Secretary Khin Nyunt's September 2001 visit to Thailand, Thailand also offered 20 million baht (about $440,000) for the establishment of a new alternative development program in the Southern Military Region of Shan State, which is now occupied by the United Wa State Army.

This nascent counternarcotics cooperation between Thailand and Burma was interrupted by tensions on the border during the summer of 2002. However, as tensions have eased, cooperation has resumed.

Cultivation and Production. According to the US/Burma Joint Opium Yield Survey, opium production declined in Burma for the sixth straight year in 2002. The survey found that the maximum potential yield for opium in Burma in 2002 totaled 630 metric tons, down 235 metric tons (or approximately 26 percent) from 2001. Over the past six years, opium production in Burma has declined by more than 75 percent, from an estimated 2,560 metric tons in 1996 to 630 metric tons in 2002. The area under cultivation has dropped by more than half, from 163,100 hectares in 1996 to approximately 77,000 hectares in 2002. Yields have similarly been cut by more than half, from an estimated 17 kilograms per hectare in 1996 to levels (about 8.0 kilograms per hectare in 2002) that are now comparable to those in neighboring states such as Laos.

Results from a UNODC-sponsored census survey throughout Shan State in 2002 largely corroborated these results. According to UNODC, Burma produced approximately 828 metric tons of opium on 81,000 hectares of land in 2002.

Drug Flow/Transit. Most ATS and heroin in Burma is produced in small, mobile labs located in the Burma/China and Burma/Thailand border areas, primarily in territories controlled by active or former insurgent groups. A growing amount of methamphetamine is reportedly produced in labs co-located with heroin refineries in areas controlled by the United Wa State Army, the Kokang Chinese, and the Shan State Army—South. Heroin and methamphetamine produced by these groups are trafficked primarily through China, Thailand and, to a lesser extent, Laos, India, Bangladesh, and Burma itself.

Precursors for refining these narcotic drugs are primarily produced in India, China, Thailand, and other regional states. Burma does not have a chemical industry and does not produce ephedrine, acetic anhydride, or any of the other chemicals required for the narcotics trade. Similarly, the major markets for all of these narcotic drugs lie in neighboring states. Relatively little is sold in Burma itself.

Demand Reduction. The overall level of drug abuse is low in Burma compared with neighboring countries. According to the GOB, there are only about 70,000 "officially registered" drug abusers in Burma. While this is undoubtedly an underestimate, even UNODC estimates that there may be no more than 300,000 people (still less than 1 percent of the population) who abuse drugs in Burma. Most, particularly among the older generation, use opium, but use of heroin and synthetic drugs is rising, particularly in urban and mining areas.

Burmese demand reduction programs are in part coercive and in part voluntary. Addicts are required to register and can be prosecuted if they fail to register and accept treatment. Altogether, more 21,000 addicts were prosecuted for failing to register between 1994 and April 2002.

Burma Statistics

(1993-2002)

Marijuana is cultivated primarily for export, with some domestic consumption. There are no reliable figures available from either the Cambodian government or the UNODC on the extent of cultivation or yield, although some estimates place total production at 700-1,000 tons annually. Marijuana production tends to be concentrated in the provinces of Koh Kong, Battambang, Kampot, Kandal, Kampong Cham, Kratie, Stung Treng, Preah Vihear and Banteay Meanchey. Marijuana is grown using traditional farming methods, with the harvest normally occurring between late December and early January. Much of the production is reputed to be "contract cultivation" by Cambodians operating under the control or influence of foreign criminal syndicates. Analysis of seizures in recent years indicates that Europe is the major destination for Cambodian cannabis, with other destinations including the United States, Australia and Africa. However, the amount entering the United States is not large enough to constitute a significant problem for the U.S.

Aside from marijuana, Cambodia's role in the international narcotics trade is as a transit route for Southeast Asian heroin to overseas markets, including China, Australia, Europe and the United States. There is little hard information available on the scale of heroin trafficked through Cambodia, but the amount of heroin seized in the United States in recent years that is traceable to or through Cambodia is small.

Cambodian authorities are becoming increasingly concerned with the significant increase in the amount of chemically based synthetic drugs coming into the country from Thailand and elsewhere in the region. Cambodian authorities believe that foreign crime syndicates, working in concert with Cambodian nationals, have set up highly mobile clandestine laboratories in Koh Kong, Banteay Meanchey and Battambang provinces (all along the Thai-Cambodia border) that are producing ATS, both for local distribution and export. There are indications that some stationary ATS production centers are being set up in Phnom Penh and elsewhere.

The NACD, which was reorganized in 1999, has the potential to become an effective policy and coordination unit for the government. With the backing of the Cambodian government, UNODC launched in April 2001 a two-phase, four-year $2.3 million "NACD Support Project" that is designed to strengthen the NACD Secretariat. This project seeks, inter alia, to establish the NACD as an independent functional government body able to undertake drug control planning, coordination and operations, as well to establish procedures for planning, operations and administration and to provide staff training, technical advice, basic transportation, communications and office equipment. In 2002, the NACD received two trucks, computers, drug testing equipment, motorbikes and office equipment from the UN and other donors. However, the UN suspended assistance in late 2002 amid allegations of diversion of assistance intended for the NACD. The allegations are currently under investigation.

Accomplishments. On January 9, 2002, the RCG held a ministerial level meeting of the NACD, which agreed on a four-point strategy for dealing with Cambodia's drug problem: 1) demand reduction; 2) production and distribution reduction; 3) law enforcement; and 4) international cooperation. It also recommended amendment of the Drug Control Law to correct shortcomings.

Cambodia discontinued the use of an Internet-based ship registry system, which was allowing potential drug smugglers and other international criminal elements to quickly obtain Cambodian registry for their vessels.

Law Enforcement Efforts. In the first 11 months of 2002, 240 persons were arrested for drug-related offenses, compared to 109 persons in 2001. This total included 16 Vietnamese and one Thai, in addition to a Taiwanese woman who was apprehended at the airport with 1.9 kilograms of heroin wrapped around her body. Six persons (two cases) were arrested for production of ATS.

Seizures of ATS have almost doubled every year since 1997. In 2002, police seized 130,000 tablets, versus 75,576 in 2001. Police seized only 1.9 kilograms of heroin in 2002, but destroyed 195,656 marijuana plants. Most of the plantations were along the Mekong River and adjacent to the Thai and Vietnamese borders.

Agreements and Treaties. Cambodia is not a party to the 1961 Convention on Narcotic Drugs and its 1972 Protocol, the 1971 Convention on Psychotropic Substances, or the 1988 UN Drug Convention. However, the comprehensive counternarcotics legislation passed by the National Assembly in December 1996 would enable Cambodia to become a party to the above Conventions and to implement the provisions of the Conventions. Currently, the Cambodian government is in active discussions with UNODC regarding technical assistance that would facilitate Cambodia's signing the three UN Drug Control Conventions, hopefully in the near future.

Cambodia has no extradition or mutual legal assistance treaty with the United States, but the Cambodian government has cooperated with U.S. law enforcement agencies regularly in the past by rendering or deporting persons wanted in the United States for crimes, including narcotics crimes, upon request and presentation of an appropriate warrant. The U.S. Embassy in Phnom Penh has been assured that such cooperation will continue. The Cambodian government concluded an extradition treaty with Thailand in 1998. The Cambodian government views bilateral and regional cooperation with neighboring states and with UNODC to be essential in its efforts to combat narcotics trafficking.

Cultivation/Production. Accurate estimates of the level of drug cultivation and production are difficult to come by. As in recent years, Cambodian authorities had some success in combating illicit cultivation during 2001. Some cannabis plantations and fields of varying sizes, totaling about 83,000 square meters, were destroyed.

Drug Flow/Transit. Cambodia shares porous borders with Thailand, Laos, and Vietnam and lies near the major trafficking routes for Southeast Asian heroin. The NACD has reported that drugs entered Cambodia in 2002 from the northern provinces of Stung Treng and Preah Vihear. Some heroin and marijuana are believed to enter and exit Cambodia via the deep water port of Sihanoukville (also known as Kampong Saom), the coastline of Koh Kong (near the Thai border) and Kampot (near the Vietnamese border) provinces, and the river port of Phnom Penh. In November, Hong Kong Customs Officers seized 360 kilograms of marijuana in a container shipped from Cambodia. The country's main international airport, Pochentong International Airport in Phnom Penh, suffers from lax customs and immigration controls, and some illegal narcotics are believed to transit there en route to foreign destinations. Under the Cambodian government's "Open Skies" policy, direct flights from major Asian gateways, including Bangkok and Singapore, began serving the regional airport in Siem Reap (location of Angkor Wat) in 2000. Customs and immigration controls in Siem Reap are rudimentary.

Bilateral Cooperation. U.S.-Cambodia bilateral counternarcotics cooperation is hampered by restrictions on official U.S. assistance to the central government that have remained in place since the political disturbances of 1997. Cambodia regularly hosts visits from DEA personnel based in Bangkok, and Cambodian authorities cooperate actively with DEA. U.S. officials raise narcotics-related issues regularly with Cambodian counterparts at all levels, up to and including the Prime Minister.

The Road Ahead. Mid-level Cambodian law enforcement officers have been attending training courses at the International Law Enforcement Academy in Bangkok (ILEA) since mid-2000, which has partially addressed Cambodia's dire training needs. The ILEA training has produced a small but growing cadre of Cambodian officials who are becoming familiar with modern police techniques including drug identification, investigations, coordination of operations and intelligence gathering. However, after their training they return to an environment of scarce resources and pervasive corruption. This situation will require a long period of sustained investment to change the culture.

Funding assistance is needed to allow working level Cambodian officials to participate in regional counter drug conferences, such as the annual meetings of the six greater Mekong sub-region countries that are signatories to the 1993 Memorandum of Understanding on Drug Control with the UNODC.

In sum, Cambodia is making incremental progress toward more effective institutional law enforcement against illegal narcotics trafficking. However, Cambodia's institutional capacity to implement an effective, systematic approach to counternarcotics operations is low.

In 2002, PRC authorities increased their level of cooperation with the U.S. in sharing drug-related strategic intelligence in several key investigations. Ministry of Public Security (MPS) officials routinely facilitated trips for U.S. law enforcement personnel based at the U.S. Embassy in Beijing. On several occasions, MPS provided vital intelligence information on suspected drug traffickers that resulted in the identification of several major suppliers to the U.S. drug market.

For details on the PRC's anti-money laundering initiatives in 2002, please see the Money Laundering section of this report.

Precursor Chemical Control. The PRC is a major producer of precursor chemicals. The PRC monitors all 22 of the chemicals on the 1988 UN Convention watch list. Several provinces, including Yunnan (which shares a border with Burma), have even more stringent controls than the Convention requires. In June 1999 and May 2000, the government issued regulations further tightening controls on transportation licenses for ephedrine. One result of this was to drive up the price and create a black market in the PRC for ephedrine. The PRC cooperates closely with the United States on chemical control issues. The two sides have in place a strong pre-export notification program for ephedrine, pseudoephedrine, and PMK 3,4. The PRC is a participant in "Operation Purple," a worldwide initiative to stem the diversion of potassium permanganate to cocaine syndicates, and in "Operation Icebreaker," a cooperative effort to combat the diversion of precursor chemicals for the production of crystal methamphetamine.

Corruption. PRC officials admit that corruption is one of the most serious problems the country faces. Continuing anticorruption campaigns have led to the arrest of hundreds of mostly low-level officials. Most official graft in the PRC involves misappropriation of funds, abuse of power, and embezzlement. Cases of narcotics-related corruption in the PRC are seldom reported in the press, and there is no indication that this problem is pervasive. The fact that large quantities of narcotics regularly transit the PRC suggests, however, that corruption in the PRC plays an important role in narcotics trafficking. As a matter of government policy or practice, the PRC does not encourage or facilitate the laundering of proceeds from official drug transactions, nor do any senior officials of the PRC engage in laundering the proceeds from illegal drug transactions.

Demand Reduction. Education and rehabilitation are important components of the PRC's counternarcotics strategy. According to official statistics, there were over 900,000 "registered" addicts in 2002, a figure PRC officials have cited for several years. The actual number of drug addicts is likely significantly higher. Individuals identified as addicts are subject to compulsory rehabilitation. The PRC continues to provide counternarcotics education to all school children, and has also taken steps to warn citizens about the link between intravenous drug use and HIV/AIDS. The PRC has continued to implement "drug free community" programs, in order to mobilize entire communities to work together to combat narcotics trafficking and encourage addicts not to relapse.

Agreements and Treaties. The PRC has signed more than 30 mutual legal assistance treaties with 24 countries. On March 8, 2001, a mutual legal assistance agreement between the PRC and the United States entered into force. It constitutes a powerful tool for obtaining evidence important to the U.S. investigation and prosecution of transnational criminals, including narcotics traffickers. In 1999, the PRC and the United States signed a bilateral customs mutual assistance agreement, but the PRC has not taken the steps needed to bring it into force. This agreement, if brought into force, would facilitate cooperation by customs officials and enhance the flow of narcotics intelligence. A May 1997 U.S.-PRC MOU on Law Enforcement Cooperation allowed the two sides to provide assistance on narcotics investigations and prosecutions on a case-by-case basis.

Illicit Cultivation/Production. The PRC's effective eradication program has largely eliminated commercial cultivation of drug-related crops. (Such cultivation was never significant.). The government continues to target small-scale cultivation in remote areas of the country's northwest. Ephedra, a plant from which the precursor for methamphetamine is made, grows wild in northern parts of the PRC. The government tightly controls exports of this key precursor.

Faced with a growing threat from methamphetamine and synthetic drugs such as ecstasy, the government continues to make closing down illicit drug laboratories a top priority. These efforts halted many illicit operations, but new ones continue to spring up, especially in the PRC's more remote locations.

DEA Beijing and MPS counternarcotics officers worked cooperatively to share strategic information in 2002. They shared a greater number and variety of drug samples than in 2001. In 2002, PRC police attended counternarcotics and general law enforcement training courses at the joint U.S.-Thai International Law Enforcement Academy (ILEA) in Bangkok. This important regional forum brought together police and other law-enforcement officials from throughout the region to improve technical capabilities and establish ties among regional counternarcotics and law-enforcement bodies. MPS counternarcotics officers regularly attended ILEA training courses, such as the Narcotics Unit Commanders Course and the Transport Interdiction Course, and they attended a training course organized by DEA for forensics officials.

The Road Ahead. Despite many significant advances, there is still room for improvement in U.S.-PRC cooperation on narcotics control. For example, the PRC authorities have thus far been unwilling to sign a Letter of Agreement (LOA) that the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL) requires as a matter of policy in order to provide in country counternarcotics and law-enforcement training and technical assistance programs in the PRC. Arriving at an early agreement on an LOA remains a key goal. Also, while considerable progress has been made in the sharing of drug samples, the United States continues to encourage the PRC to increase the number of seized narcotics samples that it is willing to share.

The United States will continue to monitor both the transshipment of Burmese heroin through the PRC and the threat posed by the explosive growth of methamphetamine trafficking in and from the PRC. PRC counternarcotics officials have consistently expressed the desire to expand and deepen cooperation with DEA, especially in the PRC's drug-plagued Yunnan, Guangzhou, and Fujian Provinces. DEA is presently preparing to meet this challenge by seeking PRC approval to bring additional personnel to the PRC to handle its increased workload.

Cultivation/Production. Fiji has a growing internal problem with the cultivation and sale of cannabis. Other than cannabis, neither Fiji nor Tonga produces any drugs. Neither plays any role in the procurement of precursor chemicals.

As the economy continues to worsen, an increasing number of farmers are switching to cannabis. There are no known incidents of export of cannabis from Fiji. Cannabis is the drug of choice primarily for economic reasons. The average income level in Fiji does not allow for the purchase or use of more expensive drugs. Cannabis seizures fell in 2002 from 2001's record 183.8 kilograms to 1.15 kilograms. However, record-keeping is complicated by the Government's practice of recording both grams of cannabis seized (in ready-to-sell form) and whole plants seized. While the kilograms of finished product seized in 2002 fell more than 94 percent from 2001, the number of whole plants seized increased from 515 in 2001 to 2,010 (or by 290 percent) in 2002.

Agreements and Treaties. Both Fiji and Tonga are parties to the 1988 UN Drug Convention and both are trying to meet the goals and objectives of the Convention. Fiji and Tonga are also parties to the 1961 UN Single Convention, as amended by the 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances.

The 1931 U.S.-UK Extradition Treaty remains in force between the United States and Tonga through a 1977 exchange of notes. Similarly, the 1931 U.S.-UK Extradition Treaty remains in force between the United States and Fiji through an exchange of notes that entered into force in 1973.

Corruption. The political instability caused by the overthrow of the previous government makes Fiji highly vulnerable to corruption, while poverty contributes to corruption in Tonga. Of particular concern in Fiji are the low salaries and status enjoyed by customs and immigration officials. The presence of increasing numbers of illegal migrants in Fiji has been connected with increased vulnerability to narcotics trafficking and, potentially, transiting terrorists.

The Road Ahead. The U.S. will continue to provide training in narcotics detection techniques in Fiji and Tonga.

Hong Kong and U.S. law-enforcement officials enjoy an excellent relationship in the fight against drugs. Hong Kong is not a producer of illicit drugs and drugs seized in Hong Kong are smuggled in mostly for local consumption and to a lesser extent for further distribution in the international market.

Hong Kong passed the Drug Dependent Persons Treatment and Rehabilitation Centers (licensing) Ordinance in April 2002. The ordinance makes it a statutory requirement for any drug- treatment and rehabilitation organization to apply for a license from the Director of Social Welfare. To follow-up on recommendations by the Task Force on Psychotropic Substance Abuse (established in 2000), an inter-departmental working group was established in October 2002 to review existing counternarcotics laws. In November 2002, places of Public Entertainment Ordinance, which will more strictly control the licensing of entertainment venues, was passed in order to control drug-abuse at rave parties and late-night entertainment venues.

HKCED has expanded its Narcotics Canine Unit in 2002. The Narcotics Canine Unit at present has 32 officers and 25 detector dogs, including eight passive alert dogs with two additional passive alert canine teams on the way. The detector dogs are deployed at passenger and cargo terminals, airport, border control points and container terminals. The enforcement capability of customs officials has been enhanced by installation of new, advanced detection equipment at border/control points. For example, HKCED has upgraded the container inspection facilities at Lok Ma Chau border in 2002 (busiest border control between Hong Kong SAR and PRC) by installing two sets of fixed x-ray vehicle inspection systems.

Corruption. There is no known narcotics-related corruption among senior government or law-enforcement officials. Hong Kong has a comprehensive anticorruption ordinance that is effectively enforced by the Independent Commission Against Corruption (ICAC), which reports directly to the Chief Executive. Nor are there any known senior government officials engaging in, encouraging, or facilitating the illicit production or distribution of such drugs or substances, or laundering money related to illegal drug transactions.

The HKSARG does not encourage or facilitate illicit production or distribution of narcotics or psychotropic drugs or other controlled substances, or the laundering of proceeds from illegal drug transactions.

Agreements, Treaties and International Cooperation. Hong Kong maintains close links with the United Nations, the World Health Organization (WHO), the Financial Action Task Force (FATF), Interpol and the World Customs Organization (WCO) as well as individual governments around the world. As of October 2002, Hong Kong had mutual legal assistance agreements with the U.S., France, Australia, the U.K., New Zealand, Italy, South Korea, Switzerland, Canada, the Philippines, Portugal, Ireland and the Netherlands. Hong Kong signed its agreement with the Netherlands in 2002. Hong Kong has also signed Surrender of Fugitive Offenders Agreements with 13 countries including the U.S., and Transfer of Sentenced Persons Agreements with eight countries, including the U.S. Hong Kong law-enforcement agencies enjoy a close and cooperative working relationship with their mainland counterparts, and counterparts in many countries, in the fight against narcotics trafficking. Through their established liaison channels, they exchange operational intelligence on drug trafficking, money laundering and control of precursor chemicals.

Drug Flow/Transit:. Although Hong Kong's role as a major drug transshipment/transit point has diminished over the years, a limited amount of drugs continue to flow through Hong Kong for the overseas market. Traffickers use land routes through mainland China to smuggle heroin into Hong Kong from the Golden Triangle for transit to the overseas market by utilizing Hong Kong's transportation and shipping infrastructures.

There were several seizures in 2002 of drugs transiting Hong Kong to the United States. In May 2002, U.S. authorities in Guam seized 5.2 kilograms of methamphetamine from Hong Kong. In August, Hong Kong authorities seized 5 kilograms of methamphetamine destined for the United States.

In an effort to eradicate Hong Kong's role as a transit/transshipment point for illicit drugs, the HKSARG has developed a database of information on all cargoes, cross-border vehicles, and shipping. The Air Cargo Clearance System, the Land Border System and the Customs Control System are all capable of quickly processing information on all import and export cargoes, cross-border vehicles and vessels.

Demand Reduction/Domestic Programs. While supply reduction remains Hong Kong's primary strategy against drug abuse, Hong Kong's domestic programs focus on preventive education aimed at youth and parents. Hong Kong provides a comprehensive drug prevention program through its existing education system. The Hong Kong Narcotics Division of the Security Bureau tasks Non-Government Organizations (NGO) to conduct drug educational programs at public schools and institutions. The Narcotics Bureau also sponsors programs aimed specifically at better educating parents and employees of youth organizations on drug abuse.

The Hong Kong government in 2002 launched new television programs aimed at curbing psychotropic substance abuse, strengthened the intervention services targeting high-risk groups, such as youth and school dropouts, and organized a new pilot program providing overnight facilities for drug abusers.

Hong Kong officials participated in several US-sponsored programs on narcotics. In 2002, Hong Kong sent approximately 10 law-enforcement officials to the International Law Enforcement Academy (ILEA) in Bangkok, Thailand. These officials participated in "Supervisory Criminal Investigator Course," "Airport Programs and Controlled Deliveries Course," and "Narcotics Unit Commander Course."

The Road Ahead. The Hong Kong government has proven to be a reliable and competent partner in the fight against drug trafficking and abuse. Hong Kong law enforcement officials, arguably some of the most effective in the region, continue to cooperate with their U.S. counterparts. The U.S. Government will continue to encourage Hong Kong to keep playing an active role in counternarcotics efforts.

Marijuana continues to be harvested in North Sumatra, particularly Aceh. The INP alleges that the Free Aceh Movement (GAM), a separatist organization, traffics in marijuana domestically to support its insurgent operations. However, the INP has produced no evidence to support this allegation. Arrests for distribution and possession of marijuana have increased significantly throughout the archipelago.

The coordinator of the National Anti Narcotics Movement (Indonesian acronym: "GRANAT"), the most prominent drug prevention NGO in Indonesia, confirms that heroin use is on the increase, particularly in metropolitan Jakarta. The INP reports that the majority of heroin seized in Indonesia comes from Afghanistan, by way of Pakistan. Transit from Thailand to Indonesia is the most favored route, either Bangkok to Jakarta or Bangkok to Singapore to Jakarta. Nigerian organized crime groups control heroin trafficking to Indonesia. These traffickers use Indonesian and Thai females as couriers.

While some drugs are produced domestically, international trafficking still represents the most prolific source of illicit drugs. Burma is the primary source of ecstasy and methamphetamine. They enter Indonesia through any one of hundreds of entry points throughout its vast archipelago. None of these entry points, including Jakarta, have adequate detection or enforcement mechanisms. Neither the Airport Police, the Navy, nor the Directorate of Customs and Excise are trained, equipped, funded or otherwise adequately supported to deter or detect drugs being smuggled by air or sea. The same can be said of the entities responsible for domestic enforcement—they are not up to the challenge.

Law Enforcement Efforts. The National Narcotics Bureau (BNN) is tasked with coordinating the activities of the various Indonesian government agencies involved in drug related programs. The BNN also has the authority to form a joint task force made up of officers from other Indonesian law enforcement agencies, if the individual case warrants. Enforcement efforts focus on the airport, using sniffer dogs and some limited contemporary equipment to interdict narcotics.

The Indonesian Navy is trying to police Indonesian waters more aggressively, including drug enforcement and interdiction, among their objectives. The realities of resource constraints, and the formidable challenge of an island nation impose stark constraints on this effort.

The Indonesian District Court which handles drug cases has sentenced at least 21 drug traffickers to death since January 2000. None of the convicted has been executed yet.

Drug seizure statistics show seizures are almost random, while official reports indicate a growing drug abuse. This fact suggests the need for substantial improvements in Indonesia's efforts to constrain the flow of narcotics.

Hundreds of police officers have been trained with U.S. support. The U.S. Embassy in Indonesia has a senior U.S. police advisor to oversee the Department of Justice's ICITAP office, and to support the DEA Singapore Country Office's assistance to the INP narcotics branch. In addition, USAID assistance to Indonesia includes improvements in administration of justice among its objectives, with an effort focused on judicial/prosecutor training and reform.

The Road Ahead. Over the short term, drug abuse in Indonesia is likely to increase. The Indonesian government will respond to this challenge with the assistance of the U.S. and other international donors. The U.S. will continue to assist Indonesian efforts at police and judicial reform.

Authorities continue to estimate methamphetamine trafficking into Japan to be between 10-20 metric tons per year. (Based on 2.18 million users consuming 11 grams per person annually.) Japanese law enforcement officials have made record methamphetamine seizures in the last three years. Through November 2002, 168 kilograms of methamphetamine were seized. Authorities believe the majority of the methamphetamine smuggled into Japan is refined and/or produced in the PRC, Taiwan, the Philippines, and North Korea.

Accomplishments. The United States and Japan are working on a final text for a mutual legal assistance treaty (MLAT). Once concluded, the MLAT is expected to expedite and strengthen law enforcement cooperation.

Japan, an active participant in, and financial supporter of the United Nations Office of Drug Control Program (UNODC) major donors group, provided important financial support to many UNODC programs.

Law Enforcement Efforts. Japanese authorities seized 168 kilograms of methamphetamine in the first eleven months of 2002. Authorities also seized 288 cc of liquid methamphetamine. Police counternarcotics efforts tend to focus on Japanese organized crime groups, the main smugglers and distributors of drugs. Police and prosecutors are hesitant to pursue cases in which the likelihood of a conviction is uncertain. In addition to smuggling and distribution activities, law enforcement officials are starting to pay increased attention to drug-related financial crimes. The Financial Services Agency received 13,725 reports of suspicious transactions in 2002.

Between 1992, when the Asset Seizure Law took effect, and 1999, the NPA has seized a total of about $7.23 million in drug proceeds in 82 investigations. However, the NPA and Customs advise that seizure statistics are no longer maintained. Japanese authorities seize money primarily as trial evidence. After conviction, judges may levy fines, impose tax penalties, or order the outright confiscation of narcotics related proceeds, but statistics on these actions are not maintained.

Corruption. There were no reported cases of drug-related corruption in Japan in 2002.

Agreements and Treaties. Japan became a party to the 1988 UN Drug Convention in 1992. Japan is also a party to the 1961 UN Single Convention on Narcotic Drugs, the 1972 Protocol amending the Single Convention, and the 1971 UN Convention on Psychotropic Substances. An extradition treaty and a customs mutual assistance agreement are in force between the United States and Japan. The United States and Japan are seeking to conclude a Mutual Legal Assistance Treaty.

Cultivation/Production. Although Japan is not a significant cultivator or manufacturer of controlled substances, it is a major producer of 60 types of dual-use precursor chemicals, which also have legitimate industrial uses. For example, Japan is one of only a handful of countries that produce ephedrine, a chemical used to create nasal/breathing problems. Ephedrine is also an essential ingredient in methamphetamine. Japan is a member of the Chemical Action Task Force (CATF) and controls 28 chemicals. The DEA Country Attach� in Japan, working closely with his Japanese counterparts, closely monitors end users of precursors.

Drug Flow/Transit. Almost all drugs illicitly trafficked in Japan are smuggled from overseas. According to the National Police Agency, the PRC, the Philippines, Taiwan and North Korea are principle sources.

The Government of Laos (GOL) has adopted a much stricter policy approach to drug control since 2001. In accordance with a prime ministerial order issued in late 2000, it outlined tough new measures for eliminating opium production, imposed the death penalty for certain drug-related crimes, and organized a national campaign to address the growing problem of methamphetamine abuse among teenagers. On the other hand, practical Lao efforts at law enforcement still fall well short of these ambitious policy goals. Lao law enforcement authorities, once again, failed to arrest any major drug traffickers. The GOL devoted few of its own resources to fighting drugs, relying overwhelmingly on the donor community for what was accomplished.

In April, 2001 the government passed new legislation imposing the death penalty for certain crimes relating to drug production and trafficking. Several traffickers have received this sentence although it is unclear whether the sentences will actually be carried out.

The USG remains the principal source of counternarcotics funds -now even underwriting some UNODC and other projects. In the past, Laos also cooperated with the German government on several crop-control projects and in the area of demand reduction. Several of these projects are now USG funded.

No new counternarcotics law enforcement offices (CNOs) were opened this year, as the U.S. has withheld further CNO funding until performance improves at existing CNOs, and/or the GOL allows the creation of a model CNO, which could be used to develop effective ways to improve overall counternarcotics efforts by the police. The amount of heroin and opium seized declined, and the Lao police provided no useful information to U.S. officials on any cases. Police performance in general, continued to fall far short of goals. Counternarcotics police units need more training and better coordination, and the government must take action against major traffickers and officials who support them.

Laos' location in the Golden Triangle makes it an important route for drug trafficking. This importance is increasing as Laos' physical and communications infrastructures gradually improve. USG assistance aims to help develop and upgrade Lao judicial and law enforcement institutions and enhance their ability to combat traffickers and their organizations, as well as fight narcotics-related corruption.

According to the UNODC, Laos also has the second highest rate of opium addiction in the world, behind Iran. The abuse of amphetamine type stimulants (ATS) has grown to epidemic proportions in the more urban areas and has finally caught the attention of influential policy makers.

The GOL continued to work closely with the UNODC on a master strategy for opium elimination that includes alternative development, law enforcement, and demand reduction elements. A couple of projects under that strategy, such as a UNODC designed drug treatment center in Vientiane, were started with USG funding. Most of the plan, however, has remained on the drawing board because of lack of funds. The GOL provides little of its own funding to the drug effort except through provision of personnel. The government's reliance on international donors to support its counternarcotics programs makes those programs extremely vulnerable to developments outside the control of Laos. The government needs to devote more of its own resources to the fight against drugs.

Accomplishments. As in previous years, the GOL and UNODC conducted an opium field survey of nearly 400 villages in 11 provinces of northern Laos. The survey produced new data that will aid the GOL and the donors in further refining their counternarcotics efforts. The Lao showed increased willingness to discuss regional drug issues with their neighbors, and with outsiders. The counternarcotics police in Phongsali have an ongoing operational level relationship with their Yunnanese counterparts, but this seems based more on personal contacts rather than any broader policy. Senior Lao police officials from provinces bordering Thailand met with their Thai counterparts to discuss measures for increasing drug interdiction cooperation. The Lao government also participated in a four-way Chinese counternarcotics initiative focused on the Mekong. This initiative also involves Thailand and Burma, since the planned development of the Mekong River as an international waterway is sure to bring about increased drug transport by boat. A number of Lao police have received training at the PRC police academy in Kunming.

Law Enforcement Efforts. The Department of State's Bureau of International Narcotics and Law Enforcement Affairs (INL) funds the administrative expenses of the Drug Control Department (DCD) of the Ministry of Interior (MOI). The DCD now supervises INL-funded counternarcotics police offices (CNOs) in ten provinces. The CNOs, along with other provincial police offices, reported 235 cases in 2002, resulting in the arrests of 472 suspects, of whom 142 were female and 8 were foreign nationals. This represents a substantial increase over 2001's 196 cases with 350 arrested. Most arrests were of small-scale traffickers. These cases lead to the seizure of 19.2 kilograms of heroin, 260 kilograms of opium, 1,488,395 methamphetamine tablets, and 3,008 kilograms of cannabis. Trafficker vehicles, weapons, and cash were confiscated in some cases.

Total seizures for heroin and opium decreased markedly from 2001, by 63 percent and 46 percent, respectively. However, seizures were up for methamphetamine, confirming that trafficking of methamphetamine has increased substantially. The police handled 19 per cent more cases than they did in 2001. These cases resulted in the arrest of 34 per cent more suspects than were arrested in 2002. Of the foreigners arrested, one was Ghanaian, one was Vietnamese and six were Thai. In the meantime, the governments of Vietnam and Thailand continue to report that they were seizing very large quantities of drugs incoming from Laos and arresting many Lao traffickers. Notwithstanding GOL and donor efforts to improve the counternarcotics enforcement, police coordination, both within the GOL system and bilaterally with the U.S. government, remained weak.

Corruption. The Lao government states that it does not encourage or facilitate the production or distribution of illicit drugs. The GOL also has stated that it will not tolerate narcotics-related corruption. However, given Laos' poverty, the very low salaries of Lao government employees, and the growing evidence of significant trafficking inside Laos, it must be assumed that some officials and military personnel receive bribes from illicit drug trafficking. Drug traffickers in Laos reportedly are receiving protection from senior level officials who themselves may be involved. The Lao government publicized the arrest of a Vientiane police officer for trafficking heroin and methamphetamine in March 2002; other officials were reportedly transferred or "kicked upstairs" when suspected of involvement in trafficking. Laos has not demonstrated a commitment to enforce its counternarcotics legislation against high-ranking or well-connected individuals.

Agreements and Treaties. The U.S. and Lao governments have signed a Memorandum of Understanding (MOU) on counternarcotics cooperation in crop control every year since 1990. Bilateral law enforcement project agreements have been signed annually since 1992. A new MOU for demand reduction was implemented this year. Both countries have expressed their intention to continue and expand this cooperation. Although the GOL does not have a mutual legal assistance or extradition treaty with the United States, it has in the past cooperated in deporting drug traffickers to the United States.

Laos is a party to the 1971 UN Convention on Psychotropic Substances and the 1961 UN Single Convention. Although Laos is not yet a party to the 1988 UN Drug Convention, the GOL strives to meet the goals and objectives of that Convention. The GOL is committed to becoming a party to the Convention in the near future, and is working with UNODC to pass legislation, such as chemical control and money laundering regulations, necessary to bring it into compliance with the Convention.

Cultivation/Production. Opium is produced in the ten northern provinces of Laos as a cash or barter crop and as a traditional medicine. It is also produced to supply the very large number of Lao opium addicts. The extreme isolation of most opium-producing communities and the absence of economic alternatives make opium a life-or-death crop for the area's subsistence farmers, many of whom are tribal people. Efforts to present these poor farmers with viable alternatives are truly challenging and important. Crop substitution and alternative development programs to provide subsistence farmers with viable alternatives are an essential element of any counternarcotics strategy in Laos.

For the 2002 growing season, the United States estimated Laos' potential production at 180 metric tons, a 14 percent decrease from 2001's potential production of 210 metric tons. However, poppy cultivation increased by five percent, from 22,000 hectares in 2001 to 23,200, returning it to the same levels as 2000. U.S. data indicates that Phongsali and Houaphan provinces continue to be the largest producers of opium poppy. The UNODC survey, on the other hand, shows an 18 per cent reduction in cultivation: down from 17,255 ha. in 2001 to 14,052 ha in 2002, with the largest cultivation in Huaphan and Luang Prabang. Actual Opium produced was estimated to have declined from 134 MT in 2001 to 112 Mt in 2002.

Drug Flow/Transit. The GOL's ability to control the flow of narcotics within the country and across its lengthy, porous borders is severely limited by lack of personnel, resources, and expertise. It also is hard for central government personnel even to reach isolated areas of the country. Effective control over borders with Thailand, Burma, China, Vietnam, and Cambodia exists only in the vicinity of major population areas, along principal land routes, and at established river crossings. As Lao road infrastructure improves, and as interdiction efforts on Burma's borders with China and Thailand grow more efficient, Laos is becoming a more popular route for illicit drugs. Vietnam and Thailand continued to report ever-increasing drug flows entering their territories via Laos. The U.S. Customs Service reported seizing a large number of parcels containing Lao-origin opium and heroin at U.S. ports of entry. The USG plans to provide two x-ray machines to monitor and deter use of this trafficking route.

Bilateral Cooperation. In 1999, the USG began funding a crop control and development project in Phongsali, one of Laos' most important opium-producing provinces. This project was modeled after the successful Lao-American Project in Huaphan province. The road building portions of several new projects have begun in Luang Prabang and Xayaboury. The USG also is supporting a new Lao initiative in the area of demand reduction for methamphetamine abuse, particularly among teenage students. Through December of 2002, 67 GOL police received in-country DEA training. More DEA and U.S. Customs training is planned for 2003, including special training on two U.S. purchased x-ray machines. Lao police, customs, and justice officials have been active participants in US-funded training sessions at the International Law Enforcement Academy (ILEA) in Bangkok. Approximately 320 Lao officials have been trained at ILEA since the academy began operations in February 1999-120 in 2002, alone.

Laos Statistics

(1993-2001)

The NNA is also coordinating demand reduction efforts with various cabinet ministries to target vulnerable populations, including long-haul truckers, impoverished fishing communities and residents of federal land grant settlements in provincial areas. The NNA continued to coordinate with the Ministry of Transportation to create drug-testing checkpoints at border areas and ad hoc road blocks to target long-haul truckers using methamphetamine. NNA and the Agriculture Ministry's Fisheries Department are targeting methamphetamine users in fishing communities where hard physical labor and long hours at sea invite methamphetamine use. Residents of federal land grant areas (known as felda settlers) are also being targeted because of the increased incidence of drug abuse and trafficking among these settlements. According to a Ministry of Health official, the ministry is working with the attorney general's chambers to draft amendments to the poisons act to strengthen existing laws against the diversion of precursor chemicals.

Accomplishments. A solid institutional and policy foundation supports Malaysian counternarcotics efforts. Prime Minister Mahathir and other senior Malaysian officials routinely speak out against drug use. Existing Malaysian law provides for the seizure of assets from the proceeds of narcotics crimes. Law enforcement efforts were focused on the sale, transport and distribution of narcotics, especially ATS, within Malaysia and abroad. The Malaysian parliament in 2002 passed legislation that allows Malaysia to enter into negotiation with the U.S. on a mutual legal assistance treaty (MLAT). An extradition treaty between the U.S. and Malaysia entered into force in 1997, but has not yet been tested.

Law Enforcement Efforts. Malaysian police have continued to investigate and prosecute narcotics crimes vigorously, identifying abusers and traffickers, and limiting the distribution, sale, and financing of illicit drugs in Malaysia. Narcotics arrests and seizures for the first ten months of 2002 were generally above year 2001 levels. Cocaine heroin and psychotropic pill seizures rose sharply. However, ecstasy and opium seizures declined. Between January and October 2002 law enforcement officers seized 398.6 kilograms of heroin, compared to 221.3 kilograms in the first ten months of 2001. During the same period, ecstasy seizures decreased from 345,254 pills in 2001 to 169,306 pills in 2002. However, seizures of psychotropic pills increased sharply from 108,042 pills in 2001 to 1,584,360 pills between January and October 2002. Drug-related arrests through October 2002 totaled 21,551 persons, a fifteen percent increase over total arrests during the corresponding period in 2001. Narcotics-related detentions without trial under Malaysia's "special preventive measures" between January and October increased from 1,665 in 2001 to 1,821 in 2002. Seizures of clandestine labs during this period increased to 23, up from 17 in 2001.

Corruption. Malaysia has an anticorruption agency with no power to prosecute, but with the power to investigate independently and make arrests. No senior officials were arrested for drug-related corruption in 2002 and there was no evidence that the government tolerates or facilitates the production, distribution, or sale of illegal drugs.

Agreements and Treaties. While the U.S.-Malaysian Extradition Treaty is relatively new, initial cooperation has been good. The Malaysian police are cooperating with U.S. officials in several cases that may ultimately lead to formal extradition of a suspect to the United States. Malaysia is a party to the 1988 UN Drug Convention.

Drug Flow/Transit. Malaysia's geographic proximity to the heroin production areas and methamphetamine labs of the Golden Triangle leads almost naturally to smuggling routes across Malaysian borders, primarily destined for Australia. While heroin and methamphetamines transiting Malaysia do not appear to make a significant impact on the U.S. market, there are indications that groups of third country nationals are using Malaysia as a transit point for modest shipments of heroin bound for the United States.

Road Ahead. U.S. Law enforcement agencies will continue to cooperate with Malaysian authorities to monitor and interdict drugs transiting Malaysia. U.S.-funded counternarcotics training for local law enforcement and modest assistance for domestic demand reduction and treatment programs will continue. The U.S. will continue to pursue an MLAT with Malaysia. A mutual legal assistance treaty would assist U.S. law enforcement in obtaining information and investigative assistance from Malaysian counterparts.

Mongolia is a party to the 1961 UN Single Convention, its 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. However, it is not a party to the 1988 UN Drug Convention, although consideration of becoming a party to the Convention continues. The Government of Mongolia attempts to meet the goals and objectives of international initiatives on drugs. The United States and Mongolia have in force a customs mutual legal assistance agreement.

Sporadic reports indicate that the availability and abuse of marijuana, heroin, amphetamines, and certain over-the-counter drugs have increased. The Mongolian government, now alert to precursor chemical production and export issues, has closed facilities suspected of diverting chemicals to elicit uses, but foreign (Chinese and Russian criminal groups') interest in the production, export, and transit of precursor chemicals in Mongolia continues to be reported, for example, in connection with planned investments, etc.. The weakness of the legal system and financial institutions leaves Mongolia vulnerable to exploitation by drug traffickers and international criminal organizations, particularly those operating in China and Russia.

Growth in international trade and the number of visitors to Mongolia increase concerns about a rise in transnational organized crime. Mongolia's inexperienced law-enforcement agencies find it difficult to deal with sophisticated criminal groups from Russia and China.

The Road Ahead. The U.S. has tried to assist Mongolia's own efforts to improve border control, and will continue to assist those efforts in the future.

The DPRK government, it is alleged, illicitly produces narcotic drugs and traffics in them to earn foreign exchange. Since such allegations are not made of other countries, it is appropriate to ask if other known actions of the DPRK give credence to such an allegation. During 2002, the DPRK government admitted involvement in kidnappings of Japanese nationals and admitted years of deception of the international community, as the regime attempted to develop nuclear weapons. Salvage of a sunken DPRK gun boat in waters off Japan also added to our knowledge of amphetamine trafficking to Japan from the DPRK. Collectively, these developments tended to strengthen suspicion that the DPRK might be involved in state-directed trafficking by demonstrating other sorts of rogue activities the DPRK is willing to engage in. It, nevertheless, remains possible that criminal elements, or some rogue military organization in the DPRK, are trafficking on their own, without formal state direction.

Two Drug Seizures With a DPRK Connection

On July 2, 2002, authorities on Taiwan apprehended nine men on suspicion of attempting to smuggle 79 kilograms of heroin with an estimated street value of NT 300-400 million dollars ($9-$12 million) from North Korea. The arrests came in the wake of a tip police on Taiwan received in 2001 indicating the existence of a North Korea-Taiwan smuggling scheme. Police on Taiwan note that the ring had already smuggled into Taiwan as much as 200 kilograms of heroin in the past four months.

The heroin seized in this incident had been placed on a North Korean naval vessel from which it was transferred to a Taiwan fishing vessel. Authorities on Taiwan report that corrupt North Korean naval officers facilitated the transaction. Police on Taiwan, who had been monitoring the fishing vessel, arrested seven of its crew along with two other suspects after it discharged its cargo in Keelung on Taiwan. Authorities on Taiwan were aware of this incident of trafficking well before the apprehension, and they have firmly established the connection between this incident and the DPRK.

On January 6, 2002, the Japanese Coast Guard seized 150 kilograms of methamphetamine from a Chinese ship off the coast of Fukuoka. The drugs seized were neatly packaged in one kilogram, vacuum packed bags with 15 bags to a crate. The drugs were of high purity, leading police to suspect DPRK manufacture. According to Japanese police, the Chinese vessel carrying the drugs had rendezvoused with a North Korean vessel in North Korean territorial waters to pick up the drugs. They were loaded aboard the Chinese fishing vessel by ten North Koreans in uniform. There were indications that the traffickers involved in this large-scale methamphetamine trafficking operation had connections to Hong Kong and Japanese organized crime and had earlier been involved in methamphetamine smuggling to the Philippines.

Both of the above seizures involve at-sea rendezvous with North Korean vessels and the presence of apparently official (i.e., uniformed) North Korea nationals and the use of state-owned assets (i.e., boats). Organized crime elements in Japan and Hong Kong and on Taiwan, depending on the incident, were also apparently involved with the North Koreans in on-going trafficking on a large scale. This pattern is typical of many recent trafficking incidents to Japan and to Taiwan, and suggests that similar trafficking is succeeding in both places, and perhaps elsewhere (viz., Philippines). Japanese police continue to point to North Korea as the source for a considerable share (ca. one-third) of the large quantities of methamphetamine smuggled into Japan.

No DPRK Trafficking to the U.S.; No Conclusive Evidence of Illicit Opium Production in North Korea

At least 63 hectares of opium poppy is licitly cultivated in the DPRK. DPRK officials readily acknowledged this cultivation, and showed it to recent visitors from the International Narcotics Control Board. It is apparently intended for domestic medicinal use. News reports after the INCB visit to North Korea noted that DPRK officials told the visiting INCB team the DPRK was considering becoming a party to international narcotics conventions.

Allegations of State-Sponsored Drug Trafficking

The major question dealt with in this report is whether drug trafficking with a DPRK connection is state-directed. The context for analyzing the limited information we have about this issue has changed significantly in the past year. Allegations of kidnapping of Japanese nationals and their forced re-settling in North Korea—viewed by many as too bizarre to receive serious consideration—have been confirmed. High-level North Korean officials have also admitted that for years the DPRK has attempted to develop nuclear weapons, while denying publicly that the DPRK was doing so.

A DPRK vessel, apparently scuttled by its crew when capture by the Japanese Coast Guard seemed imminent, was salvaged by the Japanese government. Reports indicate that the boat was similar in design, indeed perhaps identical, to DPRK vessels suspected of being engaged in drug smuggling. Moreover, a cell phone recovered from the vessel apparently contained stored phone numbers of known criminal elements (Yakusa) in Japan. These and other revelations from the DPRK (viz., famine deaths, refugee departures) suggest an increasingly desperate situation and/or a lack of concern for responsible state behavior, which might well include a willingness to engage in state-directed drug trafficking for profit. Nevertheless, it certainly remains possible, as investigators on Taiwan suggested in the incident described above, that criminal, rogue or corrupted elements among the DPRK population are trafficking for personal profit, without state involvement or direction.

Allegations of North Korean state complicity in the illicit narcotics trade and in other criminal enterprises remain profoundly troubling. Despite close and careful monitoring of North Korea by many law enforcement and foreign affairs agencies, the United States has not been able to determine the extent to which the North Korean government is involved in manufacturing and trafficking in illegal drugs.

The Road Ahead. The U.S. will continue to cooperate with the authorities of Palau on specific narcotics cases of mutual interest.

On June 7, the President signed a comprehensive counternarcotics law. The new legislation, titled the "Comprehensive Dangerous Drugs Act of 2002," replaces the antiquated "Dangerous Drugs Act of 1972" and dramatically strengthens the Philippines' counternarcotics efforts. Before the new law, GRP counternarcotics efforts were decentralized. Separate narcotics units existed in each Philippine law enforcement agency, competing for funding and jurisdiction. The new law established a "Philippine Drug Enforcement Agency" (PDEA) modeled after the U.S. DEA. Under its mandate, PDEA will absorb existing counternarcotics units and their responsibilities, with extensive screening of all officers. Following on the guideline of the Dangerous Drugs Act, President Arroyo appointed a PDEA Director General with the rank of Undersecretary, tasked with directing all counternarcotics-related operations.

An increase in the penalties (including the death penalty) for possessing small amounts of narcotics proved to be the most controversial elements of the law. For example, possessing over 10 grams (instead of the previous threshold of 40-50 grams) of opium, morphine, heroin, cocaine, cannabis resin, and designer drugs (like Ecstasy) now carries a penalty of life imprisonment or death (there is nothing in between presumably). The same penalties apply to possession of over 50 grams of crystal methamphetamine (only 25 percent of the previous threshold of 200 grams) or over 500 grams of cannabis (previously 750 grams). The accompanying fine for possessing these quantities remains at the Philippine peso equivalent of $10,000 to $200,000.

Persons who test positive for use of dangerous drugs will be required to complete 6 months of community service and rehabilitation for the first offense. The penalties for the second offense are 6 to 12 years in prison and a $1,000 to $4,000 fine. Noteworthy as well are requirements for drug testing for applicants for drivers or firearms licenses, and random drug-tests for students and government workers.

Accomplishments. In 2002, law enforcement agencies joined together with units from the Armed Forces of the Philippines to launch cannabis eradication operations. Some of the eradication campaigns took place in territory controlled by armed insurgent movements. Using manual techniques to eradicate cannabis, government entities successfully uprooted and destroyed 865,768 plants, 71,381 seedlings and 150 grams of seeds.

Philippine authorities estimate they seized record amounts of chemical and controlled precursors during 2002. GRP figures peg the amount of the confiscated goods at $48,638,908. Also seized was a significant number of state-of-the-art laboratory equipment used to produce crystal methamphetamine. One such laboratory seized in Valenzuela City in December 2002 yielded 400 kilos of crystal methamphetamine and 600 kilos of methamphetamine in liquid form. Authorities dismantled three other labs during the year, arresting several Chinese nationals.

Law Enforcement Efforts. In 2002, Philippine authorities drew clear linkages between drug trafficking activities and terrorist organizations. According to government estimates, the New People's Army (NPA), a U.S.-designated terrorist organization that operates throughout the Philippines, receives money for providing safe-haven and security for many of the cannabis growers in the northern Philippines and collects "revolutionary taxes" on the sale of drugs. The Abu Sayyaf Group (ASG), another terrorist gang operating in the extreme southwest, collects money from drug smugglers by acting as protectors for foreign trafficking syndicates and controls a thriving cannabis production site in Basilan. In Moro Islamic Liberation Front-controlled areas in Central and Western Mindanao, mounting evidence indicates the presence of several clandestine methamphetamine laboratories. The drugs produced by these labs are distributed within the Philippines and possibly exported to other countries. PDEA, in consultation with other Philippine law enforcement agencies and U.S. DEA, is working to investigate such terrorist group involvement in drug trafficking.

Philippine law enforcement officials arrested 25,076 individuals in counternarcotics operations including 14,297 users, 10,733 pushers, 43 financiers, and 3 cultivators. Of this total, 37 are foreign nationals.

Corruption. Corruption, among the police, judiciary, and elected officials, continues to be a significant impediment to Filipino counternarcotics law enforcement efforts. The GRP takes steps to investigate specific instances of corruption brought to the attention of authorities. In 2002 prosecutors charged laboratory technicians with stealing drug evidence and prison officials for aiding and abetting known drug dealers. It is often difficult to distinguish between corruption and negligence, as illustrated by one heavily publicized case where a suspected trafficker escaped from his detention cell at the former Philippine National Police Narcotics Group headquarters.

Agreements and Treaties. The Philippines is a party to the 1988 UN Drug Convention ,the 1961 UN Single Convention, as amended by the 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. The Philippines also ratified the UN Convention against Transnational Organized Crime, the Protocol to Prevent, Suppress and Punish Trafficking in Persons, and the Protocol against the Smuggling of Migrants. The U.S.-Philippines extradition and mutual legal assistance treaties of 1996 also remain in force.

Cultivation/Production. While the majority of the methamphetamine currently available in the Philippines is smuggled into the country, indigenous production of the drug continues to expand. Ephedrine, the main chemical used in the production of methamphetamine, clandestinely enters the Philippines from boats originating in China. The chemical is subsequently distributed to labs around the country.

Authorities calculate 98 identified cannabis plantation sites spread throughout nine different regions of the Philippines. The mountainous areas of northern Luzon, central Visayas, and central, southern and western Mindanao, account for the largest areas of cultivation.

Drug Flow/Transit. The Philippines is also an important transshipment point for narcotics heading elsewhere. Illegal drugs enter the country through seaports, economic zones, and airports. The Philippines, a nation with over 36,200 kilometers of coastline, is a smugglers' paradise. With over 7,000 islands, vast stretches of the Philippine coast are unpatrolled and uninhabited. Capitalizing on this phenomenon, drug traffickers use shipping containers, fishing boats, and cargo vessels, which off-load to smaller boats, to transport multiple hundred-kilogram quantities of methamphetamine and precursor chemicals. The country is also a transshipment point to further export of crystal methamphetamine to Japan, Australia, Korea, the U.S., Guam, and Saipan. Commercial air couriers and express mail services remain the primary means of shipment to Guam and to the mainland U.S., with a typical shipment size of one to four kilograms.

Traffickers using human couriers or "mules" to smuggle drugs sometimes use the Philippines as a transit point for heroin, but much less frequently than for the transshipment of methamphetamine. Heroin that is transshipped through the Philippines transits Thailand and Pakistan and is sometimes destined for mainland U.S., Guam, and Europe. In response to successful law enforcement efforts to stem courier activities, traffickers are looking for alternate shipment methods including using express mail services.Personal use and transshipment of cocaine continues in the Philippines albeit at much lower levels compared to methamphetamine. As in previous years, law enforcement officials seized express mail parcels containing cocaine. This cocaine originated in South America and was apparently destined for the Philippines and other countries in Southeast Asia.

The Road Ahead. The upcoming year promises to be a pivotal period in the Philippines' war on drugs. The GRP will need to find ways to fully implement the Comprehensive Dangerous Drugs Act of 2002. This includes addressing PDEA's funding and staffing requirements. The USG plans to continue to work with the GRP to promote law enforcement institution building and encourage anticorruption mechanisms. Strengthening the counternarcotics bilateral relationship serves the national interests of both nations.

As a result of Singapore's accession to the 1988 UN Drug Convention, the MDA was amended in 1998 to control the possession, supply, and manufacture of controlled substances. The amendment also provided regulations for the import, export, and transshipment of controlled substances. In May 2000, a new amendment to the MDA took effect, bringing two anesthetics under the law's purview. These substances are dihydroetorphine and remifentanil, both known to be over 100 times more potent than morphine. This amendment came about after a decision by the UN Commission of Narcotic Drugs to include both drugs in schedules to the 1961 UN Single Convention on Narcotic Drugs, to which Singapore is also a party.

On the legislative front, Singapore enacted the Mutual Assistance in Criminal Matters (MACM) bill in 2000. This law builds upon the Drug Trafficking Act (DTA) of 1993, which provided a mechanism for mutual assistance with other countries in the fight against international drug money laundering. The MACM consolidates the existing mutual assistance provisions of the DTA and provides for more forms of assistance than were previously available under Singapore law.

Law Enforcement Efforts. After a steady decline in total number of people arrested on charges of possession, use and trafficking in narcotics for six years, 2001 saw a rise in arrests. According to the most current statistics available, seizures for Ecstasy) more than doubled in 2001 compared to 2000 drug seizure statistics. Almost 24,000 MDMA tablets and 0.26 kilogram of powdered MDMA were seized in 2001. The Singapore Central Narcotics Bureau (CNB) reports that 24 of the 48 major operations it mounted in 2001 were against drug syndicates. In 2001, authorities seized over 106 kilograms of heroin, 23,845 tablets of Ecstasy, 8.9 kilograms of ketamine, and almost 1 million dollars worth of assets.

Corruption. The CNB is charged with the enforcement of Singapore's counternarcotics laws. The CNB and other elements of the government are effective and virtually free of any form of corruption.

Agreements and Treaties. Singapore is a party to the 1988 UN Drug Convention, the 1961 UN Single Convention on Narcotic Drugs, the 1972 Protocol amending the Single Convention, and the 1971 UN Convention on Psychotropic Substances. Singapore and the United States continue to cooperate in extradition matters under the 1931 U.S.-UK extradition treaty. On November 3, 2000, Singapore and the United States signed a precedent-setting Drug Designation Agreement (DDA), strengthening existing cooperation between the two countries. In the past, the lack of such a bilateral assistance agreement had been an occasional handicap. The agreement provides for cooperation in asset forfeiture and sharing of proceeds in narcotics cases; in 2002 one joint case resulted in a $1.9 million seizure of assets in Singaporean bank accounts.

The DDA has also facilitated the exchange of banking and corporate information on drug money laundering suspects and targets. This includes access to bank records, testimony of witnesses, and service of process. The DDA is the first such agreement Singapore has undertaken with another government. Singapore is negotiating similar accords with other nations. Singapore signed the UN Convention against Transnational Organized Crime in December 2000.

Cultivation/Production. There was no known cultivation or production of narcotics in Singapore during 2002.

Drug Flow/Transit. Singapore has the busiest (in tonnage) seaport in the world, and about 80 percent of the goods that enter its port are transshipped. Due to the sheer volume of cargo that transits the port, some of that cargo could contain illicit materials. The Government of Singapore (GOS) is aware of the problem and has taken action to stop the transshipment of illicit drugs, though there is room for improvement. Absent specific information about a drug shipment, GOS officials have been reluctant to impose tighter interdiction requirements at the port, out of concern that this would interfere with the free flow of goods and thus jeopardize Singapore's position as the region's primary shipping entry port.

Domestic Programs (Demand Reduction). Singapore uses a combination of punishment and rehabilitation against first-time drug offenders. Many first-time offenders are given rehabilitation instead of jail time. The government may detain addicts for rehabilitation for up to three years. In an effort to discourage Singapore citizens form using drugs during travel outside of Singapore, CNB officers may now require urinalysis tests for every Singapore citizen and permanent resident returning from outside the country. Those who test positive are treated as if they consumed the illegal drug in Singapore.

The GOS has cooperated extensively in drug money laundering cases, including some sharing of recovered assets. Singapore law permits foreign governments to seek mutual assistance in drug trafficking cases, including the production of bank records upon entry into force of a mutual legal assistance treaty or a drug designation agreement, such as the one the United States and Singapore signed in November 2000.

Agreements and Treaties. During 2002, the ROK signed a mutual legal assistance treaty with Indonesia in March. In February, the ROK and Japan signed an extradition treaty and the Korean National Assembly ratified this agreement in June.

Illicit Cultivation and Production. While methamphetamine was previously produced in the ROK, evidence suggests that this is no significant current production. In 2002, the Korean National Anti-Drug Program targeted domestically-produced marijuana and poppy. Between January and October, 18,446 poppy plants and 14,576 marijuana plants were seized, a marked increase from 2001. Marijuana is cultivated legally as hemp in Korea, and is used for fabrics and fertilizer. It is grown in the northeast and southwest regions of the ROK. A portion of the licit marijuana crop is diverted for illegal use.

Demand Reduction. The Supreme Prosecutors Office continues to actively support train-the-trainer programs to reduce demand for drugs. They send knowledgeable representatives throughout Korea to instruct school teachers on the perils of drug usage, how to identify drugs, and how to recognize and counsel students suspected of using drugs. Teachers then instruct their students about drugs during the regular school year. Additionally, a National Anti-Drug Association, operating as a civilian foundation, has begun an counternarcotics campaign through television and newspaper ads.

Law Enforcement Efforts. The Korean National Police Administration has begun to upgrade its narcotic enforcement efforts by the creation of an estimated 68 new drug investigation units, with 221 police officers being assigned to these new units. These units are to be assigned to each of the 68 major police stations in the country in an effort to combat the apparent rising drug problem. In 2002, the total amount of drugs seized upon entry at Korea's largest international airport increased more than 10 times in comparison with 2001. A total of 152 kilograms of drugs were seized, with 137.5 kilograms of that number cannabis. Seizure of Amphetamine Type Stimulants also increased sharply at Korea's main airport with 12.1 kilograms registered during 2002, up by 164 percent over 2001.

Corruption. Although isolated reports of official corruption appear in the ROK's vigorously free press. There continues to be no evidence that any official corruption adversely influenced narcotics law enforcement in Korea.

Drug Flow/Transit. Methamphetamine, mostly from China, but also reportedly from North Korea, is used in the ROK and also transits the country. Cocaine and heroin are also used in Korea and transit to other areas. Transiting methamphetamine is often destined for the U.S., moving from China and the Philippines, but not in large quantities. South East and South West Asian heroin have both been seized in Korea, but heroin abuse in Korea remains a minor problem. Cocaine seems to be used as a kind of club drug in Korea to substitute for methamphetamine. Yaba (Thai methamphetamine in pill form) has also been recently discovered entering the country. While locally grown marijuana is available, South African imported marijuana appears to dominate on the domestic market.

The Road Ahead. The U.S. will continue to work closely with Korean anti narcotics enforcement officials, especially in the Supreme Prosecutors Office and in the Customs service to assist enforcement efforts and to share lessons learned.

Accomplishments. With an eye to laying the foundation for the conclusion of an AIT-TECRO MOU on counternarcotics cooperation, the Minister of Justice initiated draft legislation for consideration by the Legislative Yuan, which would permit controlled deliveries and undercover operations in narcotics cases. The draft legislation is currently with the Legislative Yuan. At the same time, a provision permitting samples of seized narcotics to be shared with other law enforcement authorities, including for DEA's "signature program" (drug origin), is now in effect.

Corruption. There have been no reported cases of official involvement in narcotics trafficking on Taiwan. President Chen Shui-Bian's administration continues to make fighting political, economic, and judicial corruption one of its highest priorities. There is no indication that either the Taiwan authorities, as a matter of policy, or senior officials on Taiwan 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.

Agreements. In 1992, AIT (which represents the United States in dealings with Taiwan) and its Taiwan counterpart, TECRO, signed a Memorandum of Understanding on Counternarcotics Cooperation in Criminal Prosecutions, and in 2001, AIT and TECRO signed a Customs Mutual Legal Assistance Agreement. In March 2002, the AIT-TECRO Mutual Legal Assistance Agreement (MLAA) entered into force.

Drug Flow/Transit. The PRC remains the principal source for heroin and methamphetamine for Taiwan. The Taiwan islands of Kinmon, Matsu, and Penghu have been identified as major transshipment points for drug shipments from the PRC. Fishing boats and cargo containers are still the primary means of smuggling both types of drugs into Taiwan from the PRC. North Korea also seems to be a source of drugs for Taiwan. However, the MJIB has continued to see couriers posing as tourists with drugs strapped to their bodies or hidden in their clothing.

The counternarcotics authorities on Taiwan regularly share information with the DEA and enjoy a close working relationship with DEA's Hong Kong office and AIT's regional security office. The Regional Security Officer in AIT's Taipei office and the DEA have both noted improved cooperation with the MJIB, which they attribute at least in part to the entry into force of the AIT-TECRO MLAA. The MJIB, Coast Guard, and NPA police units have all actively participated and cooperated in DEA investigations. Events such as the week-long counternarcotics seminar presented by the DEA in Taipei for four different counternarcotics units and prosecutors have encouraged networking and cooperation among the Taiwan agencies and between them and AIT, DEA, and other USG agencies.

Road Ahead. AIT and TECRO will work on the proposed MOU on counternarcotics cooperation, covering undercover operations, controlled deliveries, maritime search and seizure, and the provision of samples of seized narcotics for the DEA's signature program. DEA hopes to conduct additional training with counternarcotics agencies on Taiwan, to continue to enhance its relationship with them to share intelligence in a timely manor, and to conduct more joint investigations.

In 2002, epidemic abuse of amphetamine-type stimulants (ATS), particularly among school-aged youth, remained Thailand's most serious illegal drug problem. Thai authorities estimate that some three million people use some illicit drugs, of whom about two and a half million use ATS. Drug abuse is acknowledged as a central challenge to national security and the safety and health of the population. The prison population has more than doubled in just five years(14 percent compounded annual growth rate), and over 65 percent of inmates are incarcerated for narcotics-related offenses. In the first ten months of 2002, over 200 individuals were sentenced to death for drug offenses, although only three were actually executed. Thailand continues to accord high priority to demand reduction through drug abuse prevention and treatment. In 2002, Thailand initiated mandatory treatment in camps operated by the Royal Thai Armed Forces as an alternative to penal incarceration for users who are first-time offenders.

The most commonly abused drugs in Thailand in 2002 were cannabis and Amphetamine-type Stimulants (ATS). In Thailand, the most often encountered forms of ATS (called "yaba") are pills or tablets whose purity in 2002 averaged about 25 percent. ATS is usually cut with caffeine, which led the Thai government to pass new legislation during 2002 that controls caffeine throughout the country. ATS abuse in Thailand is epidemic. Fueled by over-supply and low price, ATS abuse has become widespread across all socio-economic boundaries and ages. A particular concern is school-aged children. This significant growth in abuse and shift in abuse patterns has led the Thai government and public to view ATS abuse as a major national security problem for Thailand and an important threat to the safety and health of the Thai people. In his 75th birthday address to the nation His Majesty, the King, singled out narcotics abuse as Thailand's most serious problem.

Most of the ATS consumed in Thailand is produced and smuggled from Burma, where many traditional heroin trafficking organizations, especially the United Wa State Army (UWSA), dominate the lucrative ATS manufacturing and smuggling trade. From January through September 2002, the Royal Thai Government (RTG) reported seizing almost six metric tons (ca. 13,500 lbs.) of ATS drugs. Outside Southeast Asia, seizures of Golden Triangle ATS increased considerably in the United States during the past year. In one especially noteworthy case, over 75,000 UWSA-produced ATS tablets were seized in Sacramento, California from a single mail shipment that had originated in Thailand. 450,000 UWSA-produced ATS tablets were seized in Switzerland.

Although ATS is the principal drug of abuse in Thailand, there has been a rapid expansion in the availability and use of both cocaine and ecstasy. While ecstasy remains expensive, its retail price is slowly declining. Most ecstasy seized in Thailand is trafficked from Europe, often via neighboring countries, but there have been increasing indications of regional ecstasy production. Regional production may result in lower retail prices, even for European produced tablets, as suppliers compete for market share. Ketamine is another "club drug" that has been increasingly abused. Most Ketamine appears to originate in Pakistan.

Like ecstasy, cocaine experienced a growth year in 2002. Previously incidents of cocaine seizures were limited to a few occasions per year. During the past year though, cocaine was more commonly seen, often in seizures with other drugs. The West African trafficking community, dominated by Nigerian traffickers, still controls the bulk of the cocaine market in Thailand.

Effective October 9, 2002, the Thai Office Of The Narcotics Control Board (ONCB) was transferred from the Office of The Prime Minister to the Ministry of Justice. ONCB has continued to function as an effective institution for coordination of national drug control strategy, planning and intelligence. In December 2002, Thailand announced a joint command center to coordinate suppression of narcotics by different agencies would be established, reporting to Deputy Prime Minister and former Army Commander, Chavalit Younchaiyudh.

Thailand is a leader in the six-country sub-regional MOU among Burma, Cambodia, China, Laos, Thailand and Vietnam developed under the auspices of UNODC and other important regional efforts to coordinate counternarcotics efforts.

Hostilities on the border during May resulted in temporary suspension of bilateral counternarcotics cooperation between Thailand and Burma, but such activities resumed in October. Thailand offered a 20 million baht (U.S. $450,000) grant for poppy replacement, alternative development activities in a Wa controlled area of Burma near the border; preparation for construction of a school and health clinic is proceeding. Thailand considers effective action against drug trafficking and production in Burma indispensable to the success of its own national drug control strategy.

Accomplishments. During 2002 the RTG amended essentially all of its basic narcotics legislation. One change permits the use of wire tap evidence in narcotics cases. Drug users charged for first offenses may now be assigned by courts to mandatory substance abuse treatment, as an alternative to penal incarceration. Camps where such mandatory treatment will be provided have been established by all three services of the Royal Thai armed forces. Changes in law, which would allow other effective investigative methods, including witness protection, co-conspirator testimony, and greater use of electronic evidence, remain under consideration. U.S. experts have helped to influence many of these initiatives. In October, the chairman of the U.S. House of Representatives Narcotics Committee organized two State Department funded seminars on legislative reform for senior Thai officials and opinion leaders.

By the end of 2002, ILEA/Bangkok had trained over 3,000 law enforcement and judicial officials from most countries in the region. Since its establishment, the ILEA has operated in temporary facilities. In November 2001, the RTG offered a site for construction of a permanent facility for the ILEA. Architectural and design studies are being completed and ground breaking is scheduled for 2003.

The Thaksin Government has visibly increased demand reduction and drug prevention efforts with grass roots programs around the country. While drug trafficking is viewed as an evil to be suppressed with forceful measures, drug abuse is now more clearly recognized as a health issue. Over the course of 2001-2002, the RTG established a network of community-based and national level prevention and rehabilitation programs.

Law Enforcement Efforts. The ONCB and the Police Narcotics Suppression Bureau (PNSB) are primarily responsible for national-level drug law enforcement programs. These agencies operate in coordination with local police, and with enforcement authorities such as the border patrol police, provincial police, marine police, and the Royal Thai Customs Service on drug cases.

Close cooperation between the Thai police and the U.S. Drug Enforcement Administration has been sustained for almost 40 years. In concert with its Thai counterparts, DEA routinely conducts in-depth, joint investigations of the most active and most important drug trafficking organizations operating out of the Golden Triangle.

While the bulk of Burmese-produced heroin formerly transited Thailand on its way to international markets, for the last several years traffickers have begun using new routes. UNODC now estimates that about 60 percent of the heroin leaving the Golden Triangle passes through southern China. This is to a large extent, the result of effective interdiction by the Thai police. So successful have Thai police undercover operations been, that traffickers now frequently refuse to deal with new customers, require advance payment, and insist on payment in U.S. dollars.

During 2002, (figures are January-September), Thai authorities reported a total of 119,215 persons arrested for drug trafficking offenses. 525.0 kilograms of heroin, 6494.0 kilograms of methamphetamine or other ATS drugs, 7056 kilograms of cannabis, 33 kilograms of ecstasy and 675 kilograms of inhalants were reported seized. During 2002, over 200 defendants were sentenced to death for drug trafficking, and three such sentences (January-October) were carried out. Under Thai law, the death penalty may be imposed for production or international smuggling of as little as 100 grams (.036 oz) of heroin or pure amphetamines.

As part of a global DEA-advised/State department-funded program, the Royal Thai police have established specially selected, trained and equipped units targeted on trafficking to the U.S. The most recent of these units was formed to operate against the threat of maritime heroin smuggling.

Corruption. Public corruption is a serious problem in Thailand, and is recognized as such. Historical and cultural attitudes of deference to individuals of wealth, social standing or official position have contributed to acquiescence to corruption in years past. Low public sector salaries create the same incentives for corruption in Thailand as they do in many other countries. Many government officials live well above their identifiable means. Efforts by the illegal drug industry, or by other transnational criminal organizations, to facilitate their illegal activities have contributed to corruption in law enforcement and judicial institutions.

In its 2002 annual report, ONCB states that: "Major drug traffickers are still hiding themselves in Thai society. Those people include corrupt politicians and governmental officials who use their authorities to protect or facilitate the drug business. Most drug traffickers arrested in Thailand are still minor traffickers. Corrupt government officials who are involved in drug trafficking were from various organizations.. . . including law enforcement agencies." Forty-one officials were arrested for narcotics-related corruption, and almost 300 other officials were fired for it. A national corruption and drug complaint center was opened in early 2002 to elicit information from the public. The Prime Minister also set up a team to investigate politicians and government officials allegedly involved in the drug trade or other illegal businesses. In December, a former commander of a prison in Korat had assets seized by the Anti-Money Laundering Office for alleged involvement with a prison inmate in a narcotics deal in which 1.8 million ATS tablets and 31 kilograms of heroin were seized in Bangkok.

During the past year, DEA received credible information of corruption pertaining to 27 Thai Provincial Police officers assigned in northern Thailand. In mid-2002, two police officers, a Sgt. Major and a Lt. Col., were removed from their positions and placed under arrest in connection with the theft and resale of over 600,000 seized methamphetamine tablets.

In the past several years, the historical acquiescence toward many forms of public corruption has diminished. Recent laws have established a requirement for declaration of assets by cabinet ministers and over 900 senior officials. Such officials must also disclose assets and liabilities of their spouses and minor children. A national countercorruption commission was created by the 1997 constitution to administer the financial disclosure system, and to investigate suspected instances of public corruption. A number of officials at levels up to sub-cabinet status are presently under investigation for allegations of abuses such as procurement fraud or contract bid manipulation.

Over years, the Office of the Narcotics Control Board and the Police Narcotics Suppression Bureau, have exhibited a comparatively high degree of professionalism and honesty. Security of complex investigations against major drug traffickers sought for extradition to the U.S. has been maintained. Since the formation of Sensitive Investigative Units in Thailand in 1998, DEA has relied heavily on these units to advance U.S. and Thai counternarcotics operations. Corruption is certainly the most difficult and durable problem faced by Thailand's drug law enforcement and criminal justice institutions. However, the RTG has displayed a general willingness, backed by strong popular support, for legal and enforcement measures to prevent and punish such public corruption.

Agreements and Treaties. Thailand became a party to the 1988 United Nations Drug Convention in May 2002.

Cultivation/Production. Thailand has one of the most successful drug crop control programs in the world. The Royal Project which promotes reduction in the poppy crop by providing alternative licit livelihood to growers began in the early 1960s. In the 1990's, sustained alternative development efforts were complemented by systematic annual destruction of cultivated poppies by the Royal Thai Army and Border Patrol Police. The Thai Government reports that during the 2001-2002 growing season, there were an estimated 1,257 hectares cultivated in opium, a 13.91 percent increase in cultivation over the previous growing season. However, the government eradicated 79 percent of the crop, leaving a post-eradication production of 6.83 metric tons of opium gum. This is an insignificant fraction of opium production in the region, and is insufficient to supply even the domestic Thai population of opium and heroin users, who are now dependent on opiates trafficked from elsewhere.

Opium farmers, supported by financiers, increasingly used irrigation, fertilizers and other inputs on the crop to increase yield per hectare. They replanted some areas as many as four times following eradication. Planting at various intervals allowed the crop to mature at different times, complicating the eradication planning process. As a result of these techniques, ONCB estimated a hectare yield of 25.5 kilograms of opium for the 2001-2002 seasons versus an estimated 12.5 kilograms per hectare in the previous growing season. Thailand's annual survey of the illicit opium crop is technologically sophisticated and accurate. The ONCB survey chief is a consultant to the UNODC for applying Thailand's methodology in other developing countries with illicit drug crop cultivation problems.

Some cultivation of cannabis occurs on both sides of the Mekong River in Thailand and Laos, with processing in areas of both countries near the Mekong border. In its 2002 annual report, ONCB reported that seizures of dried cannabis from Laos increased from 3.5 metric tons in 2000 to 4.2 metric tons in 2001. It estimated that 1-2 tons of cannabis was smuggled into northeast Thailand each month. The report indicated that 35.95 tons of cannabis was destroyed by government troops during 2001/2002 compared to 18.77 tons the previous year. About 60 percent of this eradication occurred in Sakon Nakhon Province along the Mekong.

Production in Thailand of refined opiates has ceased with the substantial elimination of large-scale poppy cultivation. There is some production in Thailand of methamphetamine for domestic sale. During 2002 Thai authorities reported seizing six small mobile methamphetamine labs including one in Bangkok. However, DEA has no evidence to suggest that so-called "kitchen labs" are widely in use in Thailand. The large majority of ATS drugs sold in Thailand are produced in clandestine laboratories in Burma.

Drug Flow/Transit. Methamphetamine and opiates enter Thailand for consumption and for transit to the U.S. and other world markets. Thailand is, therefore, both a consuming and a transit country. Although methamphetamine remains Thailand's biggest abuse problem by far, DEA has observed substantial increases in trafficking of heroin, cocaine and ecstasy. Recent reports suggest that the Burma-based United Wa State Army is producing ecstasy that sells in Thailand for about one fourth the cost of European produced ecstasy.

Methamphetamine produced primarily in Burma continues to flood Thailand via overland routes from the north, northwest and west. Transportation of drugs across the border can take 5-10 days using hill tribe couriers mostly from villages on the Thai side of the border. Couriers are given vests loaded with up to 200,000 ATS tablets, although most loads are less. Couriers travel up to 15 kilometers a night through mountainous jungle. Some couriers are provided with automatic weapons and shootouts with Thai military and police officials are becoming an increasingly common phenomenon. A substantial number of Thai troops and police and an even larger number of couriers have been killed or wounded in firefights. After arriving at a drop-off site in Thailand, the couriers are paid and the drugs unloaded and consolidated for onward shipment via the excellent road transportation system in Thailand. Couriers are paid about $100 for overnight trips and over $200 for longer trips.

Methamphetamine seizures indicate that Golden Triangle produced ATS is making its way through Thailand or China to the world market. Mailed parcels from Thailand to Thai or Laotian nationals living in north-central and southern California have been found to contain methamphetamine tablets; the quantities being seized increased during 2002. In July, Chinese authorities intercepted a parcel bound for Vacaville, California, that contained 24,000 ATS tablets and in another case 75,000 ATS tablets from the region were seized in Sacramento, California. In addition, Swiss authorities seized 450,000 Wa-produced ATS tablets in 2001.

Neither Thai nor regional law enforcement agencies possess complete information on the volume of drug trafficking involving Thailand. Nevertheless, heroin seizures confirm intelligence indications that significant amounts of heroin transit Thailand. More and more destinations are being observed and more and more diverse concealment techniques are being used. During the past several years, there have been indications of an increase in the use of alternative smuggling routes for heroin through southern China, Laos, Vietnam and Cambodia. Maritime routes are also increasingly popular. The adoption of smuggling routes which avoid Thailand suggest traffickers respect Thai enforcement efforts. The international postal and express mail services, and human "mules" using commercial air carriers, remain common methods of smuggling heroin out of Thailand. One of the most difficult issues facing law enforcement is the level and sophistication of maritime heroin shipments.

Chinese, Thai, and Burmese traffickers still dominate the bulk heroin trafficking while West Africans remain the preeminent brokers of smaller quantities using a bevy of couriers. Russian and East European women, and females of other nationalities working for West Africans are carrying heroin out, and cocaine into Thailand. Nepalese traffickers have developed their own smuggling networks. U.S. and other foreign immigration officials in Bangkok have established at the international airport a 24-7 office to assist Thai authorities to identify mala fide travelers, including drug couriers, seeking to board flights to international destinations.

Domestic Programs/Demand Reduction. Drug prevention measures were targeted at three major groups; schools, communities and work place groups. From October 2001 to March 2002, 832,148 people from these groups participated in government drug prevention programs.

Demand reduction is based on parallel efforts to prevent potential abusers from ever starting, and reducing the number of current illicit drug users and addicts by drug abuse treatment programs. This includes a large set of programs for drug abuse treatment of addicts or users among the prison population, or for minor first-time offenders assigned by courts to non-voluntary four month drug abuse treatment programs in camps operated by the armed forces. Military trainers in the rehabilitation camps receive a "Fast Model" four-week training course in drug treatment and rehabilitation. During 2001-2002 a total of 400 military personnel from all three services received the training. Over 5,000 prisoners nearing the end of their sentences have received training at the camps. According to ONCB statistics, a total of 39,931 drug abusers received voluntary treatment at hospitals and drug abuse clinics in 2001.

The RTG through the Ministry of Interior began a "Social Order" campaign in 2001 which is designed to reduce social evils such as underage drinking, prostitution, and drug use by youth at entertainment sites, night clubs, etc. Police and government officials inspect such locations and subject patrons to urine tests for narcotics. If suspects test positive, they may be sent for non-voluntary drug rehabilitation.

ONCB and the Ministry of Public Health have general responsibility for coordinating prevention and treatment programs, with participation by other agencies and non- governmental organizations through a national NGOs Anti-Narcotics Coordinating Committee. A permanent substance abuse epidemiological network has been established to support design of effective prevention strategies with timely information about use patterns and motivations among affected sub-populations.

Thailand is active in the international network of public/private sector drug prevention organizations. This network mobilizes public opinion against the illegal drug trade, and promotes national efforts against abuse, trafficking and production of illicit drugs.

The Road Ahead. Thailand will continue to be a regional leader in drug control and in efforts against related forms of transnational crime. It will continue to cooperate closely with the international community on these issues.

Legislation to employ advanced techniques for investigation and prosecution of drug and other serious criminal offenses will be approved over the next few years. These will probably address, among other issues, plea-bargaining, co-conspirator testimony, witness protection, broadening of rules of evidence, electronic evidence. Taken as a whole, Thailand's implementation of its national drug control strategy will in general become increasingly effective.

Close cooperation between the U.S. and Thailand will continue on drug and other crime control issues. Extradition and mutual legal assistance relationships, and investigative cooperation between law enforcement agencies, will remain strong. Regional cooperation against transnational crime will be promoted through continued effective operation of the ILEA/Bangkok.

Thai authorities will begin to plan and implement measures to address new drug trafficking methods and routes. This will include measures to improve intelligence collection, operational planning and implementation against maritime drug trafficking, particularly in the Mekong River.

Thailand will continue its efforts to promote and enhance regional counternarcotics cooperation with particular emphasis on neighboring countries and China.

Thailand Statistics

(1993-2002)

Vietnam is not a source or transit country for precursor chemicals and does little to control precursor chemicals. According to UNODC, impediments to Vietnam adopting a more coherent precursor control policy are (1) several ministries have varying levels of authority over the use of different precursors, and (2) Vietnam lacks a specific legal framework related to precursor chemical control.

More significant drug issues in Vietnam are drug transshipment to other markets and the rising popularity of amphetamine-type stimulants (ATS) in Vietnam itself. Heroin from the Golden Triangle transits Vietnam from neighboring countries, such as Cambodia and China, enroute to Taiwan, Hong Kong and, increasingly, Australia. Heroin transiting Vietnam may also reach the United States through third countries.

In December 2000, the National Assembly passed a national law, which went into effect on June 1, 2001, on drug suppression and prevention. With UNODC assistance the GVN is developing implementing regulations to enable law-enforcement authorities to use techniques such as controlled deliveries, informants, and undercover officers.

Accomplishments. The Standing Office for Drug Control (SODC) reported several GVN steps in 2002 considered important in the fight against drugs. They also represented steps towards full compliance with the 1988 UN Drug Convention, for example: Deputy Prime Minister Khiem approved the allocation of $5.3 million for the period from 2002 to 2004 to provide the border defense forces engaged in combating the smuggling of drugs and other goods with technical and communications equipment at border posts.

The GVN issued two new decrees concerning drug treatmentto implement provisions of the 2001 counternarcotics law. Decree 34 lengthens the required stay in drug treatment centers from one to two years, and Decree 56 provides assistance for family and community-based treatment. GVN officials are optimistic that the decrees will provide a better policy framework for drug treatment issues.

With assistance from UNODC and support from several foreign donors, including the U.S., the GVN made progress in developing its long-term counternarcotics master plan. The plan includes many projects designed to improve enforcement, reduce opium poppy cultivation, and improve drug treatment. Three typical projects are crop substitution programs in the Ky Son District, strengthening law-enforcement's capacity to collect and deal with drug information, and enhancing the capacity to treat and rehabilitate addicts.

The GVN appears to have increased its counternarcotics spending in 2002. However, a direct comparison with 2001's figure (U.S. $6.3 million) is not possible because in 2002 SODC for the first time included expenditures at the provincial, district, and commune levels. According to SODC, the GVN at all levels expended approximately U.S. $13 million for counternarcotics activities in 2002.

The GVN continued a policy of strict punishment for drug offenses. "World Security" newspaper reported that between 1997 and September 2002, there had been 335 death sentences for drug offenses. Between 1997 and 2001, there were also 285 life sentences and 7,489 jail terms between 10 and 20 years, according to the same report.

Drug laws remain very tough in Vietnam. Possession of 300 grams of heroin or 10 kilograms of opium or cannabis resin or 75 kilograms of cannabis or opium plants may result in the death penalty. For possession or trafficking of 600 grams (ca. 1.35 lbs.) or more of heroin, death by a seven-man firing squad is "mandatory," according to another press report. Despite the tough laws, SODC reported in its 2002 report, "Drug Control Activities in Vietnam," that "drug trafficking continues to rise."

Despite Vietnam's limited resources and technical expertise, GVN counternarcotics officials and law-enforcement officers are reluctant to cooperate with DEA. DEA has not been permitted to work with GVN counternarcotics investigators or exchange drug-related case information. In April, the counternarcotics police declined to cooperate with DEA on a cross-border operation that could have netted 70 kilograms of heroin and broken two trafficking organizations. Vietnamese officials have not responded to other approaches from DEA to conduct joint operations or share information.

Corruption. Vietnam, as a matter of government policy, 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. There is no information linking any senior official of the GVN with engaging in, encouraging, or facilitating the illicit production or distribution of such drugs or substances, or the laundering of proceeds from illegal drug transactions. However, many observers are convinced that narcotics trafficking could not have reached the level it has in Vietnam without significant corruption, some of it at higher levels of the government and party.

The GVN has demonstrated a willingness to prosecute mid-level, and even some higher level officials, involved in narcotics-related corruption. A large corruption scandal, known locally as the "Nam Cam" case, has resulted in a number of senior officials, including two Communist Party Central Committee members and two Vice Ministers of Public Security, having been fired, demoted, or expelled from the Communist Party. Prime Minister Khai said in June that "anyone involved in the Nam Cam case will be brought to justice." Notwithstanding the Prime Minister's statement, there is increasing skepticism among law enforcement authorities on how far up the hierarchy the investigation will reach. Deputy Prime Minister Dung publicly denied that any officials above the Deputy Minister-level have been implicated in the case, contrary to press reports. The trial, originally scheduled for July was set back to November and then December. It is currently scheduled no earlier than February 2003.

Agreements and Treaties. The USG has no law-enforcement or counternarcotics treaties or agreements with Vietnam, although negotiations continued on a bilateral letter of agreement (LOA) in 2002. The GVN has also expressed an interest in negotiating a mutual legal assistance treaty with the USG.

Vietnam is a party to the 1988 UN Drug Convention. Vietnam is currently precluded by statute from extraditing Vietnamese nationals, but the GVN is contemplating changing its law, according to a Ministry of Foreign Affairs (MFA) official. However, in 2001 at the request of the USG Vietnam deported two non-citizens to the U.S., where they were wanted for various white collar and money laundering crimes.

Cultivation/Production. GVN and UNODC confirm that opium is grown in isolated upland and mountainous regions of some northwestern provinces, especially Son La, Lai Chau, and Nghe An Provinces. According to USG sources, the total number of hectares under cultivation has been reduced sharply from an estimated 12,900 hectares in 1993, when the GVN began opium poppy eradication, to 2,300 hectares in 2002. GVN estimates are much lower. UNODC and law enforcement sources do not view opium or heroin production as a significant problem in Vietnam. While the GVN does not admit that synthetic drugs are manufactured in the country, there have been unconfirmed reports in past years and more recent DEA information concerning limited ATS production as well as some seizures of equipment (i.e., pill presses). Small amounts of cannabis continue to be cultivated in Dong Nai province in southern Vietnam. According to an October "World Security" press report, law enforcement authorities uprooted about 16,000 marijuana plants in that province in southern Vietnam during the first eight months of 2002, compared to about 13,000 during all of 2001. Anecdotal evidence also suggests that there may be commercial crops of hemp in remote regions in the south.

As part of its efforts to comply with the 1988 UN Drug Convention, the GVN continued to eradicate poppy, when found, and to implement crop substitution, introducing other crops to replace opium poppy cultivation. Complete eradication is probably unrealistic, given the remoteness of mountainous areas in the northwest and extreme poverty among ethnic minority populations who sometimes still use opium for medicinal purposes. The GVN supports several projects to find alternatives to poppy with its own budget resources.

Drug Flow/Transit. While law enforcement sources and UNODC believe that significant amounts of drugs are transiting Vietnam, DEA has not yet identified a firm case of heroin entering the U.S. directly from Vietnam, although it appears some may be entering via Canada. More commonly, drugs, especially heroin and opium, enter Vietnam from the Golden Triangle, making their way to Hanoi and especially to Ho Chi Minh City, where they are transshipped by air or sea to the Philippines, Hong Kong, Taiwan, Japan, and, increasingly, Australia. Taiwan law enforcement authorities in May seized about 60 kilograms of heroin from a ship that originated in Ho Chi Minh City. Also in May, a Taiwan citizen and a Vietnamese accomplice were executed for producing and trafficking methamphetamine in Ho Chi Minh City, according to a press report. UNODC and DEA also believe that significant amounts of heroin and ATS enter Vietnam from China's Yunnan province. The GVN has also reported ATS shipments entering the country via Malaysia, Hong Kong, Laos, and Cambodia. Australian Federal Police (AFP) reported heroin and methamphetamine brought to Australia by Vietnamese couriers. There appear to be increasingly strong ties between drug criminals in Vietnam and the Vietnamese community in Australia.

In its 2002 drug activity report, SODC noted that the Vietnam—Lao border (particularly via the northwestern provinces of Lai Chau and Son La and the northern central provinces of Nghe An, Ha Tinh, and Thanh Hoa) is the main route for illicit drugs entering Vietnam and accounts for over 60 percent of the country's confiscated heroin and other addictive drugs. In Lai Chau, police in May arrested 30 traffickers, who admitted to trafficking about 5.5 kilograms of heroin from Laos to various northern locations, including Hanoi. The GVN also estimates that about 80 percent of confiscated ATS tablets entered Vietnam through the northern border provinces of Lao Cai, Quang Ninh, and Cao Bang. Marijuana, heroin, and some ATS tablets entered Vietnam via the Cambodian border. Hanoi and Ho Chi Minh City have the most significant drug-related activity; those two cities make up 51 percent of the drug cases and 56 percent of the drug-related offenders nationwide, according to the SODC report. Drugs also transit Vietnam from Laos via Nghe An Province and on to Vinh, which serves as a major port for land-locked Laos. Since there is considerable legitimate commerce from Laos, law enforcement sources reported that it is fairly easy to employ different concealment techniques.

Domestic Programs/Demand Reduction. The GVN views demand reduction as a key component of the fight against drugs as well as an integral part of its efforts to comply with the 1988 UN Drug Convention. The GVN carries out awareness activities in schools. Counternarcotics material is available in all schools and the government sponsors workshops and campaigns at all school levels. In February, over 15 million students entered a contest on "knowing the drug law." On several provincial trips, U.S. embassy officers heard from local citizens (not in the presence of GVN officials) that they are aware of drug issues through media campaigns directed at the general public as well as school students.

Recognizing the close link between drug use and HIV/AIDS (the GVN estimates 70 percent of the 56,000 confirmed cases of HIV/AIDS are drug related), the GVN in 2002 continued a public information campaign regarding HIV/AIDS awareness and the connection between drugs and HIV/AIDS. Press reports have stated the figure of sero-positives is around 150,000, but international experts estimate that the total number of cases could be as high as 600,000.

The USG also contributes to counternarcotics efforts through UNODC. During 2002, the USG made contributions to two ongoing UNODC projects: the National Drug Control Master Plan, which is intended to assist the NCADP to develop a 2001-2010 Master Plan for controlling drugs (Sweden and Italy are also donors); and the Ky Son Phase Two, a socio-economic development project to replace opium poppy cultivation (Germany, Luxembourg, Sweden and Japan are also donors.