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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

Southeast Asia

International Narcotics Control Strategy Report
Bureau for International Narcotics and Law Enforcement Affairs
March 2005

[This text has been revised since its original posting to the website; see version as released to Congress.]


I. Summary

Australia is a committed partner in international efforts to combat illicit drugs, according high priority to drug-related issues, both internationally and domestically. Australia manages the diverse legal, health, social and economic consequences of drug use through comprehensive and consistent policies of demand and supply reduction, and circumscribed harm reduction initiatives. Australia is party to the 1988 UN Drug Convention.

II. Status of Country

Australia is a consumer nation for illicit drugs. There is no evidence indicating that narcotics destined for the U.S. are transiting Australia. U.S. and Australian law enforcement agencies have excellent cooperation on narcotics matters. While domestically produced marijuana is the most abused drug in Australia, the use of MDMA (Ecstasy) and methamphetamine has risen drastically in the past few years. The UN 2004 World Drugs Report indicated that Australia has one of the highest rates of MDMA and methamphetamine abuse in the world. There are also indications that the use of cocaine has increased throughout Australia in recent years. Although the use of heroin has declined since 2000, law enforcement and health officials continue to aggressively target heroin trafficking and abuse.

III. Country Actions Against Drugs in 2004

Policy Initiatives. The Federal Government continues to vigorously pursue polices that attempt to both prevent and treat illegal drug use. Launched in 1997, Prime Minister Howard’s National Illicit Drug Strategy, called "Tough on Drugs," outlines a program to address drug issues. Australia has committed more than US$750 million (AU$1 billion) to the Strategy. (NOTE: Throughout this report, figures are in U.S. dollars, calculated at an exchange rate of A$1 equals U.S. $0.75) Since 2002, following the Federal Government’s creation of the Australian Crime Commission, state and federal investigators have increased their cooperation, bolstered their enforcement responses to serious crimes such as drug trafficking, and improved prosecution at the appropriate state or federal level. The Federal government committed an additional $187.4 million in 2003 to the "Tough on Drugs" program to reduce the supply of, and demand for, illicit drugs.

In 2004, the Australian government instituted a national program to educate customs officers, container examiners and other law-enforcement personnel on the precursor chemicals used in the creation of synthetic narcotics. It also increased the budget for drug research by $3 million. This additional $3 million is being used to research pseudoephedrine, a common ingredient in cold and cough medicine, which is also a precursor to methamphetamine. The government hopes to develop a pseudoephedrine product that cannot be used as a precursor chemical for methamphetamine. There is an ongoing campaign to prevent illegal sales of pseudoephedrine in Australia. The government also introduced technology in 2004 to help combat narcotics trafficking, most notably a neutron scanner to screen air cargo and an advanced ion scanner that enables customs officials to determine drug type quickly.

Accomplishments. The Australian government continues to implement extensive multi-faceted programs to combat drug trafficking and use in Australia. Throughout 2004, Australian law enforcement officials seized record amounts of Ecstasy and crystal methamphetamine. These seizures were consistent with the reported increased use of these drugs throughout Australia. In addition to these seizures, Australian law enforcement officials worked closely with law enforcement agencies from Fiji, Vanuatu, the U.S., New Zealand and throughout Asia to dismantle an Asian organized crime group that was establishing large-scale crystal methamphetamine production labs in Fiji and in several Asian countries. It is believed that much of the methamphetamine produced at these labs was destined for Australia. State Police agencies continue to report increases in the number of clandestine methamphetamine labs seized throughout the country. The agencies believe that the level of sophistication in many of these labs has advanced. Australian efforts to control the availability of the precursor chemical pseudoephedrine have led to the increase in illegal bulk pseudoephedrine import attempts into Australia. In May 2004, an Australian multi-agency law enforcement effort resulted in the seizure of approximately 1.5 tons of pseudoephedrine in the Philippines destined for Australian methamphetamine production groups. The trial for defendants arrested as a result of the April/May 2003 seizure of 125 kilograms of heroin from the North Korean cargo vessel MV Pong Su is scheduled to begin in January 2005.

Law Enforcement Efforts. Australian law enforcement agencies continued their aggressive counternarcotics efforts in 2004. Responsibility for these activities is divided among the Federal government—primarily the Australian Federal Police (AFP), the Australian Customs Service (ACS), the Australian Crime Commission (ACC) and the Therapeutic Goods Administration (TGA)—and state/territorial police services throughout the country. The AFP maintains 68 officers in 32 overseas liaison posts in 26 countries to assist in narcotics investigation. Liaison Officers, particularly those in the Pacific Islands and throughout Asia, also assist local law enforcement agencies in training and institution building. The AFP and other Australian law enforcement agencies continue to have close working relationships with U.S. agencies including the DEA and FBI. In recent years, the AFP has increased its liaison network in order to focus on transnational crime, including drug trafficking, terrorist activities and people smuggling. Recently, there has been an increase in cocaine couriers using South Africa to transport cocaine into Australia.

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 state police officers have been investigated and tried for drug-related corruption, corruption is not common or widespread.

Agreements and Treaties. The U.S. and Australia cooperate extensively in law enforcement matters, including drug prevention and prosecution, under a bilateral mutual legal assistance treaty and an extradition treaty. The USG has a Customs Mutual Assistance Agreement (CMAA) with Australia. Australia is a party to the 1988 UN Drug Convention, the 1971 UN Convention on Psychotropic Substances, and the 1961 UN Single Convention as amended by its 1972 Protocol. Australia is a party to the UN Convention against Transnational Organized Crime and its protocol against migrant smuggling.

Cultivation/Production. Cannabis is the only significant illicit drug cultivated in Australia. The use of hydroponic growth sites has been increasing throughout the country in recent years. The cannabis grown in Australia is primarily destined for the domestic market and there is no evidence that Australian marijuana reaches the U.S. in any significant quantity. Australia has a well-established and controlled licit opium crop (12,000 hectares) on the island of Tasmania. Although recent significant seizures of foreign produced methamphetamine may be signaling a change in trafficking patterns, a majority of amphetamine and methamphetamine consumed in Australia is produced in small, often mobile, domestic clandestine laboratories.

Drug Flow/Transit. Historically, Australia has been the target for Asian-based criminal groups trafficking in heroin. This trend is continuing and many of these organizations are also involved in the trafficking of methamphetamines into Australia. The primary source for heroin in Australia continues to be the Golden Triangle area of Laos, Burma and Thailand. Ecstasy consumed in Australia is primarily imported from Europe with some shipments transiting Asia prior to arrival in Australia. South American cocaine trafficking organizations are utilizing the improved transportation/commercial links between Australia and South America to facilitate the smuggling of cocaine. Couriers from South America are intercepted at international airports on a regular basis.

Domestic Programs. The Federal Government has continued to pursue an aggressive policy to prevent and treat drug use. The Prime Minister’s National Illicit Drug Campaign committed the equivalent of $4 million to drug prevention programs in schools and $40 million for compulsory education and a treatment system for drug offenders.

Under Australian law, 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 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.

Although the Federal Government opposes supervised injecting rooms, the legal authority to provide injecting rooms rests with the health and law enforcement agencies in the States and Territories. In May 2001, the State of New South Wales passed legislation to permit the licensing and operation of an injecting center for a trial period of 18 months. This trial period has been since extended to October 2007. The center, which is now in operation, provides for medically supervised heroin injections. The Australian Capital Territory has passed similar legislation but has not opened an injection center.

IV. U.S. Policy Initiatives and Programs

U.S. Policy Initiatives. U.S. counternarcotics activities in Australia feature strong ongoing U.S.-Australian collaboration in investigating, disrupting, and dismantling international illicit drug trafficking organizations. In mid-2002, the U.S. and Australia signed a Memorandum of Understanding to outline these objectives.

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. Australian counternarcotics efforts throughout Asia and the Pacific Islands continue to be extremely robust. The U.S. can expect strong bilateral relations with Australia on counternarcotics issues. The two countries will continue to work closely in support of the UN Drug and Crime Program and other multi-lateral fora.


I. Summary

Burma is the world’s second largest producer of illicit opium and a primary source of amphetamine-type stimulants (ATS) produced in Asia. However, annual production of opium has declined for eight straight years and in 2003 Burma produced 292 metric tons of opium, less than five percent (4.8 percent) of the opium produced in Afghanistan. Burma’s opium is grown predominantly in the border region of Shan State, in areas controlled by former insurgent groups (less than one percent of Burma’s poppy crop is grown outside of Shan State).

Ethnic Wa cultivators along the Chinese border now account for 65 percent of Burma’s total poppy crop, and major Wa traffickers continue to operate with impunity. The United Wa State Army (UWSA) has pledged to end opium production and trafficking at the end of the 2005 poppy harvest, but the government has been unable to curb other Wa drug activities and UWSA involvement in methamphetamine production and trafficking remains a serious concern. During the 2004 drug certification process, the USG determined that Burma was the only country in the world that had "failed demonstrably" to meet its international counternarcotics obligations.

The Burmese government has for several years extended its counternarcotics cooperation with other countries in the region, including the opening over the past three years of five border liaison offices on the Chinese and Thai borders, and annual joint operations with China that have destroyed several major drug trafficking rings. Burma is a party to the 1961 UN Single Convention, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Drug Convention.

II. Status of Country

Burma is the world’s second largest producer of illicit opium, but produces only a small fraction of the opium now produced in Afghanistan. Eradication efforts and enforcement of poppy-free zones have combined to depress cultivation levels for the past four years. According to the UNODC, a persistent and strong demand in Asia for opiates and a falling supply in the Golden Triangle region have led to an 80 percent increase in Burmese village-level opium prices.

Declining poppy cultivation has also led to a sharp increase in the production and export of synthetic drugs. According to a joint U.S./Burma opium yield survey, in 2004 the total land area under poppy cultivation was 30,900 hectares, a 34 percent decrease from the previous year. Estimated opium production in Burma totaled approximately 292 metric tons in 2004, a 40 percent decrease from 2003 and an 89 percent decline over the past eight years. In 2004, the average opium yield dropped eight percent from 2003 to 9.5 kilograms/hectare, well below the peak level of 15.6 kilograms/ha recorded in 1996.

Burma plays a leading role in the regional traffic of 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 India using precursors imported from those countries.

According to GOB figures, during the first ten months of 2004, ATS seizures totaled over 8 million tablets, more than double 2003 seizures. Aside from these seizures, the government did not take significant steps to stop ATS production and trafficking. Authorities reported that they destroyed one ATS lab in 2004.

Opium, heroin, and ATS are produced predominantly in the border areas of Shan State, areas controlled by former insurgent groups. Starting in 1989, the Burmese government negotiated a series of individual cease-fire agreements, allowing each of several ethnically distinct tribal peoples limited autonomy and continued narcotics production and trafficking activities in return for peace.

Since the mid-1990s, however, the Burmese government has elicited "opium-free" pledges from each cease-fire group and, as these pledges have come due, has stepped up law-enforcement activities against opium/heroin in the respective cease-fire territories. The government has yet to put significant pressure on the UWSA to stop illicit drug production or trafficking and the Wa, despite a pledge to be poppy-free in 2005, remain the country’s leading poppy growers and opium producers. According to many reports, the Wa are also major manufacturers and traffickers of ATS pills.

Burma has a small, but growing drug abuse problem.

III. Country Actions Against Drugs in 2004

Policy Initiatives. Burma’s official 15-year counternarcotics plan, launched in 1999, calls for the eradication of all narcotics production and trafficking by 2014, one year ahead of an ASEAN-wide plan of action that calls for the region to be drug-free by 2015. The plan is to proceed in stages, with eradication efforts coupled to alternative development programs in individual townships, predominantly in Shan State. The government initiated its second five-year phase in 2004. U Sai Lin’s Special Region No. 4 around Mong La has been opium-free since 1997; the Kokang Special Region No. 1 banned poppy cultivation in 2003 after missing a 2000 deadline; and the Wa Special Region No. 2, after several postponements, plans to implement a ban in June 2005.

However, according to the 2004 joint U.S./Burma opium yield survey, poppy cultivation within Wa territories now represents 65 percent of the total Burma crop.

The most significant multilateral effort in support of Burma’s counternarcotics efforts is the modest UNODC/Wa project financed by the United States, Japan, and Germany. UN Human Security Funds also contributed to UNODC-implemented activities parallel to this project. The UNODC/Wa project was initially a five-year, $12.1 million supply-reduction program to encourage alternative development in territory controlled by the UWSA. In order to meet basic human needs and ensure the sustainability of a projected UWSA opium ban in 2005, the UNODC extended the project until 2007, increased the total budget to $16.8 million, and broadened the scope from 16 villages to the entire Wa Special Region No. 2.

In 2003, the UNODC also established a new project in the Wa and Kokang areas ("KOWI") aimed at supporting the humanitarian needs of farmers who have abandoned poppy cultivation. The idea is to prevent any return to poppy cultivation and thus to sustain drug control efforts in the long term. Altogether 18 partner organizations--including the WFP, the FAO, and INGOs--are coordinating activities under the KOWI umbrella. The goal of these interventions, many of which commenced in 2004 or are scheduled to start in early 2005, is to provide assistance to poppy farmers and their families facing the loss of their primary source of income.

Japan and Italy were early donors to UNODC, and KOWI partners received support from Australia, Germany, the European Commission (and ECHO), New Zealand, Sweden, Switzerland, and the United Kingdom. UNODC plans to phase out its participation by 2007.

Bilateral counternarcotics projects include a small, U.S.-financed crop substitution project in northern Shan State (Project Old Soldier) and a substantial Japanese effort to establish buckwheat as a cash crop in the Kokang and Mong Ko regions of northeastern Shan State. No U.S. counternarcotics funding directly benefits or passes through the GOB.

The Government of Burma, under a 1993 Narcotics Drugs and Psychotropic Substances Law, has in the intervening years issued notifications controlling 124 narcotic drugs, 113 psychotropic substances, and 25 precursor chemicals. Burma enacted a Mutual Assistance in Criminal Matters Law in April 2004 and, in support of a 2002 Control of Money Laundering Law, enacted in December 2003 "Rules for Control of Money Laundering Law."

Law Enforcement Measures. The Central Committee for Drug Abuse Control (CCDAC)--which is comprised of personnel from the police, customs, military intelligence, and army--leads drug-enforcement efforts in Burma. The 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, the CCDAC suffers badly from a lack of adequate resources to support its law-enforcement mission.

Narcotics Seizures. Summary statistics provided by Burmese drug officials indicate that during the first ten months of 2004, Burmese police, army, and the Customs Service together seized approximately 579 kilograms of raw opium, 958 kilograms of heroin, 128 kilograms of marijuana, 59 kilograms of morphine, and just over 8 million methamphetamine tablets. Opium, heroin and morphine seizures represent approximately 2.3 percent of Burma’s 2003-year maximum potential opium production

Although seizures of raw opium decreased from 2003, seizures of heroin again doubled for the second year in a row, including a massive heroin bust of almost 600 kilograms in July along Burma’s southern coast, leading to an international investigation, including the Burmese Police Force and DEA that resulted in 35 arrests and the seizure of significant assets and property. Seizures of ATS in 2004 also doubled, reversing a downward trend and providing compelling evidence of growth in ATS production and trafficking. In July 2004, Burmese authorities seized 5.5 million ATS tablets in a single bust in northern Shan State.

Through October 2004, according to official statistics, Burma arrested 3,436 suspects on drug related charges. In 2004 Burmese authorities also arrested and extradited 12 Chinese and 2 Thai drug traffickers, and have handed over 32 other Chinese traffickers to China during the past three years.

The government dismantled only one heroin refinery through the first ten months of 2004, compared to 24 over the previous two years. The GOB also reported the destruction of one methamphetamine laboratory. Both facilities were located in northern Shan State. The government eradicated 3,052 hectares (7,545 acres) of opium poppy in 2004, a fraction of the crops destroyed earlier. However, given a significant decline in the land under poppy cultivation, eradicated acreage represented nearly eight percent of the total 2003-04 crop. Overall eradication accounts for almost one-third of the reduction in area under poppy cultivation since 2001.

Corruption. There is no reliable 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 border areas, are widely believed to be involved in facilitating the drug trade; and some officials 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 were punished for narcotics-related corruption or drug abuse between 1995 and 2003. Of the 200 police officers, 130 were imprisoned, 16 were dismissed from the service, 7 were forced to retire, and 47 were demoted. In October 2004, the military junta ousted Prime Minister General Khin Nyunt, accusing him and hundreds of his military intelligence subordinates of corruption, including illegal activities conducted in northern Shan State. However, none of these officials has been charged with drug-related offenses and no Burma Army officer over the rank of full colonel has ever been prosecuted for drug offenses.

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 (ratified in 1991). In September 2003, the 1971 UN Convention on Psychotropic Substances took effect in Burma. 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.

Over the past several years, the Burmese government has extended its regional counternarcotics cooperation, including the signing in 2001 of Memoranda of Understanding (MOUs) with both China and Thailand; the opening over the past three years, with UNODC support, of five border liaison offices on the Chinese and Thai borders to facilitate the sharing of intelligence; annual joint operations with China that have destroyed several major drug trafficking rings; and the establishment with Thailand of three joint "narcotics suppression coordination stations."

Cultivation and Production. According to the 2004 U.S./Burma joint opium yield survey, opium production declined in Burma for the eighth straight year. The survey also found that the maximum potential yield for opium in Burma in 2004 totaled 292 metric tons, down 40 percent from the previous year.

Over the past eight years, opium production in Burma has declined by more than 88 percent. During the same period, the total area under cultivation has also dropped by over 80 percent, from 163,100 hectares in 1996 to approximately 30,900 hectares in 2004 (a 38 percent drop for the year). Due in part to poor rainfall, yields have also declined from an estimated 16 kilograms per hectare in 1996 to about 9.5 kilograms per hectare in 2004.

Results from a UNODC-sponsored survey throughout Shan State in 2004 largely corroborated the findings of the U.S./Burma joint opium yield survey. According to UNODC, the area under poppy cultivation in 2004 declined by 29 percent from the previous year and by 73 percent since 1996. UNODC also determined that potential opium yield declined in 2004 by 54 percent.

According to the GOB, Thailand planned to contribute an additional $700,000 to an opium crop substitution and infrastructure project in southeastern Shan State, having provided $960,000 since launching the project in 2002. While not formally funding alternative development programs, the Chinese government has encouraged investment in many projects in the Wa area, particularly in commercial enterprises such as tea plantations and pig farms and has assisted in marketing those products in China through relaxation of duty taxes. Also in 2004, with the support of UNODC, Burma and Laos agreed to conduct joint patrols along the Mekong River.

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 (UWSA), the ethnic Chinese Kokang, and the Shan State Army-South (SSA-S). Heroin and methamphetamine produced by these groups are trafficked overland (or via the Mekong River) primarily through China, Thailand, India, and, to a lesser extent, Laos, Bangladesh, and Burma itself. Heroin seizures in 2004, and subsequent investigations, revealed the increased use by international syndicates of the Rangoon international airport and port for trafficking of drugs to the global narcotics market.

Demand Reduction. The overall level of drug abuse is low in Burma compared with neighboring countries, in part because many Burmese are too poor to afford a drug habit. Deteriorating economic conditions will likely stifle significant growth in consumption. However, 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 one percent of the population). Most drug users, particularly among the older generation, use opium, but NGOs and community leaders report increasing use of heroin and synthetic drugs, particularly among disaffected youth in urban areas and workers in ethnic minority mining communities. The UNODC estimated that in 2003 there were at least 15,000 regular ATS users in Burma and a joint UNODC/UNAIDS/WHO study estimated that there are between 30,000 and 130,000 injecting drug users. There is also a growing HIV/AIDS epidemic, linked in part to intravenous drug use. According to a UNODC regional center, an estimated 24 percent of all intravenous drug users in Burma have tested positive for the HIV/AIDS virus, with a range of 10 to 73 percent depending on the specific location. Infection rates are highest in Burma’s ethnic regions, and specifically among mining communities in those areas, where opium, heroin, and ATS are readily available.

Burmese demand reduction programs are in part coercive and in part voluntary. Addicts are required to register with the GOB and can be prosecuted if they fail to register and accept treatment. Altogether, more than 21,000 addicts were prosecuted for failing to register between 1994 and 2002. The GOB has not provided 2003-04 data. Demand reduction programs and facilities are strictly limited, however. There are six major drug treatment centers under the Ministry of Health, 49 other smaller detox centers, and eight rehabilitation centers which, together, have reportedly provided treatment to about 55,000 addicts over the past ten years. There are also a variety of narcotics awareness programs conducted through the public school system. In addition, the government has established demand reduction programs in cooperation with NGOs. These include programs with CARE Myanmar, World Concern, and Population Services International (PSI), all of which focus on injecting drug use as a factor in the spread of HIV/AIDS.

IV. U.S. Policy Initiatives and Programs

Policy and Programs. The USG suspended direct counternarcotics assistance to Burma in 1988, when the Burmese military began its suppression of the pro-democracy movement. The USG now engages the Burmese government in regard to narcotics control only on a very limited level. DEA, through the U.S. Embassy in Rangoon, shares drug-related intelligence with the GOB and conducts joint drug-enforcement investigations with Burmese counternarcotics authorities. The U.S. also conducted opium yield surveys in the mountainous regions of Shan State in 1993 and 1995 and annually from 1997 through 2004 with assistance provided by Burmese counterparts. These surveys give both governments an accurate understanding of the scope, magnitude, and changing geographic distribution of Burma’s opium crop.

The Road Ahead. The Burmese government has in recent years made significant gains in reducing opium poppy cultivation and opium production and cooperated with UNODC and major regional allies (particularly China and Thailand) in this fight. Although large-scale and long-term international aid--including development assistance and law-enforcement aid--is necessary to help curb drug production and trafficking in Burma, the military regime’s ongoing political repression has limited international support of all kinds, including support for Burma’s law enforcement efforts.

Furthermore, a true opium replacement strategy must undertake an extensive range of counternarcotics actions, including crop eradication, effective law enforcement, alternative development, and support for former poppy farmers to ensure sustainability. The Government of Burma must foster cooperation between itself and the ethnic groups involved in drug production and trafficking, especially the Wa, and enforce counternarcotics laws to eliminate poppy cultivation and opium production.

The USG believes that the Government of Burma must continue to reduce poppy cultivation and opium production; prosecute drug-related corruption, especially corrupt government and military officials who facilitate or condone drug trafficking and money laundering; take action against high-level drug traffickers and their organizations; enforce its money-laundering legislation; and expand demand-reduction, prevention, and drug-treatment programs to reduce drug use and control the spread of HIV/AIDS. The GOB must also address the explosion of ATS that has flooded the region by gaining support and cooperation from the ethnic groups, especially the Wa, who manufacture and distribute ATS, as well as through closing production labs and preventing the diversion of precursor chemicals needed to produce synthetic drugs. The USG also urges the GOB to stem the growth of a domestic market for the consumption of ATS before this problem becomes more significant.


I. Summary

The number of drug-related investigations, arrests and seizures in Cambodia continued to increase in 2004. This reflects an alarming escalation in drug activity and perhaps some increase in law enforcement capacity. The government is concerned at the increasing use of amphetamine-type stimulants (ATS) among all socio-economic levels. The government’s principal counternarcotics body, the National Authority for Combating Drugs (NACD), cooperates closely with DEA, regional counterparts, and the United Nations Office on Drugs and Crime (UNODC). Cambodia is not a party to any of the major UN drug conventions but is studying all of them and expects to become a party in 2005.

II. Status of Country

Cambodia has experienced a significant increase in recent years in the amount of amphetamine-type stimulants (ATS) transiting from the Golden Triangle. The UNODC estimates that more than 100,000 methamphetamine tablets enter Cambodia each day, some 25 percent of which are thought to be re-exported to Thailand. In addition, Cambodian authorities believe that foreign crime syndicates, working in concert with Cambodian nationals, have set up mobile laboratories within Cambodia that produce ATS for local distribution and export to Thailand. Cocaine use by wealthy Cambodians and foreigners in Cambodia is a relatively small but worrisome new phenomenon.

There is some evidence that precursor chemicals imported from Vietnam and Thailand for industrial use in Cambodia—including methanol, sulfuric acid, toluene, and ephedrine—are being diverted for illicit drug production. There is also evidence that sassafras extract, from a naturally occurring tree species in Cambodia, is being smuggled in large quantities from Cambodia to Vietnam, where it is further processed to create an MDMA (i.e., "Ecstasy") precursor.

Cambodia is not a producer of opiates or coca-based drugs; however, it serves as a transit route for heroin from Burma and Laos to international drug markets. In-country sources estimate that 10 to 20 kilograms of heroin are trafficked through Cambodia daily in the form of small-scale shipments. In addition, apparently reliable reports indicate that more sizeable amounts, somewhere in the region of 50 to 100 kilograms per month, transit into Vietnam on a relatively frequent basis. There are indications of involvement by military personnel in these activities. The amount of heroin seized in the United States in recent years that is traceable to Cambodia is small.

There are no reliable figures available from either the Cambodian government or the UNODC on the current amount of marijuana produced in Cambodia, although some estimates place total production at more than 1,000 tons annually, most of which is cultivated for export. Much of the production occurs in Cambodia’s northwest provinces and is reputed to be "contract cultivation" with Cambodians operating with the financial help, and 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. Quantities coming to the United States are not sufficient to have a significant impact on the United States.

III. Country Actions Against Drugs in 2004

Policy Initiatives. Cambodian law enforcement agencies suffer from limited resources, lack of training, and poor coordination. The National Authority for Combating Drugs (NACD), which was reorganized in 1999, has the potential to become an effective policy and coordination unit. With the backing of the Cambodian government, the UNODC launched in April 2001 a four-year project entitled "Strengthening the Secretariat of the National Authority for Combating Drugs (NACD) and the National Drug Control Program for Cambodia". This project seeks, inter alia, to establish the NACD as a functional government body able to undertake drug control planning, coordination, and operations. The UNODC intends to continue the project beyond 2005 if funding continues.

During 2004, the UN and other donors provided the NACD with vehicles, office and audiovisual equipment, and local area computer network (LAN) servers and computers to support staff e-mail, the NACD website, and law enforcement computer-based training centers (CBT) in three key provinces. In addition, the UNODC supplied 12 provincial drug control committees and two new border liaison offices with motorcycles, radios, cameras, computers, scanners and office equipment to facilitate drug use and trafficking surveillance and on-line data collection efforts and to strengthen sub-regional cross-border law enforcement cooperation. The German government donated a computer to the NACD in 2004 and continued to provide a drug control expert to work within the NACD to help increase the organization’s capacity and to develop demand reduction and treatment programs. The UNODC sponsored 4 Cambodian participants in a 2-week intensive harm-reduction training course in 2004.

Accomplishments. During 2004 the NACD began to implement Cambodia’s first-ever 5-year narcotics control master plan (2004-2008) focused on demand reduction, supply reduction, drug law enforcement, and expansion of international cooperation. A draft of the master plan is awaiting review by the National Assembly. The NACD trained 36 policemen in drug identification in 2004. This training complements donor-provided training to increase local law enforcement capacity to test seized substances for use as evidence in criminal trials.

In December 2004, a National Assembly special review committee discussed the 1961, 1971 and 1988 UN Drug Conventions. It is expected that the three conventions will be ratified in the coming year.

Law Enforcement Efforts. In the first 11 months of 2004, 474 people (mostly Cambodians) were arrested for various drug-related offenses. This is an increase over arrests during this same period in 2003, which numbered 305. Police arrested 2 people in heroin-related cases in 2004, including a notorious head of an international heroin ring with Triad (Organized Chinese Criminal) connections. This was the most significant counternarcotics operation in which Cambodian authorities have ever participated. Another key case involved the arrest of 3 international MDMA ("Ecstasy") traffickers and the seizure of 4,500 MDMA tablets in August 2004.

Total seizures of heroin in 2004 were 2.15 kilograms, a considerable decrease over 2003 seizures, which totaled more than 46 kilograms. Most of the confiscated heroin was discovered in postal shipments. Six people were arrested in ketamine-related cases in 2004 and 25,000 bottles of ketamine were seized. Police also confiscated 2,600 kilograms of sulfuric acid (used as precursor chemical) in a 2004 case. Police arrested 372 people in methamphetamine-related cases in 2004 and seized over 860,000 methamphetamine pills. This is a significant increase over 2003 seizures, which totaled 210,000 pills. Police confiscated over 600,000 methamphetamine pills trafficked from Laos during a single bust in early 2004. This cache was more than 10 times larger than any previous seizure in Cambodia.

Cambodian legal penalties for drug-related offenses are extremely weak, allowing for maximum penalties of just $5,000 or a somewhat theoretical 10 years imprisonment. The NACD has drafted an amendment to the drug law that would stiffen punishment for drug traffickers. The draft legislation, which is expected to be promulgated in the coming year, provides for a maximum penalty of $1 million fine and life imprisonment, and would allow proceeds from the sale of seized assets to be used towards law enforcement and drug awareness and prevention efforts.

Corruption. Corruption remains pervasive in Cambodia, making Cambodia highly vulnerable to penetration by drug traffickers and foreign crime syndicates. Senior Cambodian government officials assert that they want to combat trafficking and production, however, corruption, abysmally low salaries for civil servants, and an acute shortage of trained personnel severely limit sustained advances in effective law enforcement. The judicial system is weak, and there have been numerous cases of defendants in important criminal cases having charges against them dropped after paying relatively small fines. In 2004 there were preliminary discussions within the Cambodian government and international community on ratifying the UN convention on corruption sometime in 2005, drafting a domestic anticorruption law, and establishing an anticorruption commission.

Agreements and Treaties. Cambodia has signed but not ratified the 1961 UN Single Convention and its Protocol. It has not signed the 1971 UN Convention on Psychotropic Substances or the 1988 UN Drug Convention. In December 2004 the National Assembly began to review all three UN Drug Conventions. It is expected that the conventions will be ratified in the coming year.

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 upon request and presentation of an appropriate warrant. The U.S. Embassy in Phnom Penh has been assured that such cooperation will continue.

Cultivation/Production. During 2004, over 14 hectares of cannabis plantations were destroyed. Eleven people were arrested for ATS production and drug-making equipment was seized.

Drug Flow/Transit. Cambodia shares porous borders with Thailand, Laos, and Vietnam and lies near the major trafficking routes for Southeast Asian heroin. The UNODC has reported that drugs enter Cambodia via the northern border. Some heroin and marijuana are believed to enter and exit Cambodia via locations along the gulf—including the deep water port of Sihanoukville—as well as the river port of Phnom Penh. The country’s main international airport, Pochentong International Airport in Phnom Penh, and the regional airport in Siem Riep, suffer from lax customs and immigration controls. Some illegal narcotics are believed to transit these airports en route to foreign destinations.

Domestic Programs (Demand Reduction). The number of Cambodians using illicit drugs, including ATS and heroin, has increased steadily since the mid-1990’s. Despite awareness-raising efforts, the Cambodian populace has an extremely limited understanding of the associated risks. A rapid assessment of illicit drug use in Cambodia conducted by the WHO, UNAIDS and CDC in 2004, indicates a high level of drug abuse, particularly in Cambodia’s capital, Phnom Penh, and a growing problem in the Cambodian countryside. Researchers found that users regularly shared needles, tended to engage in unsafe sexual behavior, and sometimes sold their blood for money to purchase narcotics, thereby increasing the public health risk of HIV and other blood borne illnesses. Nearly 40 percent of the respondents were unaware of the risks of HIV transmission through illicit drug use.

With the assistance of the UNODC, UNICEF, the World Health Organization (WHO), CDC, the Japanese International Cooperation Agency (JICA) and NGOs, the NACD is attempting to boost awareness about drug abuse among Cambodians—especially Cambodian youth—through the use of pamphlets, posters, and public service announcements. The NACD and the National Aids Authority have established a working group to focus on harm reduction strategies.

The government has sought outside assistance for programs on drug treatment and rehabilitation centers for drug addicts and vocational training centers for severe addicts. Several national and international NGOs operate in Cambodia with mandates that directly or indirectly relate to drug control issues, including harm reduction and demand reduction. A Japanese-funded treatment and rehabilitation project is being developed to establish centers in Phnom Penh, Battambang and Poipet to provide services to addicts and to help develop the capacity of health and human services to deal effectively with drug treatment issues. The project will link Cambodia with international treatment groups, including the National Institute for Drug Abuse (NIDA).

IV. U.S. Policy Initiatives and Programs

Cambodia is a fragile, flawed democracy. For the first time in over three decades, there has been relative political stability since the formation of coalition governments following national elections in 1998 and 2003. However, Cambodia is plagued by many of the institutional weaknesses common to the world’s most vulnerable developing countries. The challenges for Cambodia include: nurturing the growth of democratic institutions and the protection of human rights; providing humanitarian assistance and promoting sound economic growth policies to alleviate the debilitating poverty that engenders corruption; and building human and institutional capacity in law enforcement sectors to enable the government to deal more effectively with narcotics traffickers.

Bilateral Cooperation. U.S.-Cambodia bilateral counternarcotics cooperation is hampered by restrictions on official U.S. assistance to the central government of Cambodia 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. DEA provided basic narcotics training to Cambodian counternarcotics police in December 2004. During this same month, DOD conducted the first in a series of Joint Interagency Task Force—West (JIATF—West) training missions. The three-week mission trained personnel from the Cambodian police, military, and the Immigration Department. The training was conducted in Koh Kong province and was designed to increase the capacity of Cambodian security forces that are charged with controlling the Thai-Cambodian border. In 2004, the U.S. provided support for a UNODC project to conduct a national survey to collect baseline data on illicit drug use and the associated HIV/AIDS risk. This is the first such study to be conducted in Cambodia and will provide key information needed to develop an effective counternarcotics/HIV Treatment/Prevention strategy for the country.

The Road Ahead. Cambodia is making progress toward more effective institutional law enforcement against illegal narcotics trafficking; however, its capacity to implement an effective, systematic approach to counternarcotics operations remains low. The NACD faces many challenges, including exceedingly low salaries, corruption, lack of authority to recruit its own staff, and heavy dependence on foreign agencies. Efforts to develop effective counternarcotics strategies are further limited by the lack of comprehensive data on the extent and nature of illicit drug use in Cambodia.

Instruction for mid-level Cambodia law enforcement officers at the International Law Enforcement Academy in Bangkok (ILEA) 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, coordination of operations and intelligence gathering.

However, after 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.


I. Summary

The People’s Republic of China (PRC) is a major factor in the regional drug market, serving as a transit country and an important producer/exporter of Amphetamine Type Stimulants (ATS). The PRC continues to have a domestic heroin problem along with an upsurge in the consumption of synthetic drugs such as Ecstasy (MDMA) and crystal methamphetamine, known locally as "ice". PRC authorities view drug trafficking and abuse as a major threat to national security, the economy and national and regional stability, but corruption in far-flung drug producing and drug transit regions of the PRC limit what dedicated enforcement officials can accomplish. Authorities continue to take steps to integrate the PRC into regional and global counternarcotics efforts. The PRC is a party to the 1988 UN Drug Convention.

Cooperation with United States counternarcotics officials has steadily improved over the past year. This was highlighted by a joint operation involving the DEA and several PRC law enforcement agencies in October 2004, which led to the world’s largest seizure of Mandrax, totaling 18 metric tons. In 2004, the Chinese Government also continued to provide U.S. counternarcotics officials with samples of drugs seized on a case-by-case basis.

II. Status of Country

Mainland China is situated adjacent to both the major narcotics producing areas in Asia, Southeast Asia’s "Golden Triangle" and Southwest Asia’s "Golden Crescent." While the "Golden Triangle" area poses a longstanding problem, PRC officials admit that the "Golden Crescent" is a source for increasing amounts of illicit drugs trafficked into western China, particularly Xinjiang Province. The PRC itself is also an important producer of ATS. Diverted Chinese precursor chemicals sustain synthetic drug production in many other countries, including ones as far away as Belgium and the Netherlands. According to the PRC Government, drug abuse in China continues to rise and there were, as of 2004, 1.6 million registered drug addicts, double the number in 1995. Youths made up 74 percent of the registered drug addicts. The majority of registered drug addicts are heroin users. Illegal drug use was recorded in 2,148 cities, counties, and districts across China. The PRC Government reports about 25,000 deaths of drug addicts from overdoses in past years (seeking data for 2004).

As the PRC’s economy has grown and its society has opened up over the last decade, the country’s youth have come to enjoy increasing levels of disposable income and freedom. This has been associated with a dramatic increase in drug abuse among the country’s youth in large and mid-sized cities. In large cities like Beijing and Shanghai a Western style rave culture has begun to take root, accounting for the increasing popularity of recreational drugs, such as Ecstasy and ATS, particularly at local nightclubs. Despite increased awareness by police and several highly publicized campaigns, results have been limited.

With a large and developed chemical industry, China is one of the world’s largest producers of precursor chemicals, including acetic anhydride (AA), potassium permanganate, piperonylmethylketone (PMK), pseudoephedrine, and ephedra. China monitors all 22 of the chemicals on the 1988 UN Drug Convention watch list. PRC authorities claim to have seized over 96 tons of precursor chemicals August through November 2004. China continues to be a strong partner of the United States and other concerned countries in implementing a system of pre-export notification of dual-use precursor chemicals.

III. Country Actions Against Drugs in 2004

Policy Initiatives. In June 2004, the PRC published an authoritative five-year plan to tackle the drug problem, which provided the Ministry of Public Security (MPS) with a mandate to step up counternarcotics efforts. The national budget for counternarcotics efforts has seen regular increases. While the MPS’s National Narcotics Control Commission (NNCC), China’s counternarcotics coordinating body, received an annual budget of less than $1 million in the mid-1990’s, by 1998 this amount had increased to approximately $4.5 million and to about $17.5 million in 2003 Sources say funding was flat this year, but we have not received official statistics yet. The total narcotics budget, however, is significantly higher, because each province administers its own counternarcotics budget.

Accomplishments. The September 2004 seizure of 10 tons of pseudoephedine tablets in Los Angles was the result of strengthened bilateral cooperation with U.S. law enforcement agencies (see below under law enforcement cooperation). China continued to cooperate with regional and international partners to stem drug trafficking. China has eradicated opium poppy cultivation and PRC authorities continue efforts to destroy illicit drug laboratories within China’s borders.

Law Enforcement Efforts. The Chinese Government has continued its aggressive counternarcotics campaign. The coordination between China’s Beijing-based counternarcotics efforts and those at the provincial level has grown substantially with increased training and exchange programs. In November 2004, the Anti-Smuggling Bureau (ASB) in Guangdong seized 469 kilograms of MDMA tablet inside shipping containers.

In order to increase its effectiveness in law enforcement, the NNCC reorganized its enforcement operations, establishing separate heroin and ATS enforcement groups at both the ministerial and provincial levels. Prior to 2003, enforcement was handled by one organization and focused primarily on heroin. With this reorganization, the NNCC can better focus on ATS enforcement.

In 2004, PRC authorities continued to strengthen cooperation with U.S. law enforcement entities. As an example, the September 2004 seizure of 10 tons of pseudoephedine tablets in Los Angles resulted from strengthened bilateral cooperation with U.S. law enforcement agencies. The MPS continues to provide strategic and concrete information to its DEA counterparts to actively target drug rings. In addition, the MPS routinely facilitates travel of U.S. law enforcement personnel based at the U.S. Embassy in Beijing. In part due to international cooperation with its neighbors in the Golden Triangle, the MPS reports that poppy cultivation in Laos and Burma has been reduced by 44,000 hectares in recent years, which amounts to a 27 percent decrease in the total area of production since 1995.

Corruption. Official corruption in China is a serious problem. Anticorruption campaigns have led to arrests of many lower-level government personnel and some more senior-level officials. Most corruption activities in the PRC involve abuse of power, embezzlement and misappropriation of government funds, but payoffs to "look the other way" when questionable commercial activities occur are clearly another major source of official corruption in China. While narcotics-related official corruption exists in China, it is seldom reported in the press. MPS takes allegations of drug-related corruption seriously, launching investigations as appropriate. Most cases appear to have involved lower-level district and county officials. There is no specific evidence indicating senior-level corruption in drug trafficking. Nevertheless, the quantity of drugs trafficked within the PRC raise suspicions that official corruption is a factor in trafficking in certain provinces bordering drug producing regions, such as Yunnan, and in Guangdong and Fujian, where narcotics trafficking and other forms of transnational crimes are prevalent. Official corruption cannot be discounted among the factors enabling organized criminal networks to operate in certain regions of China, despite the best efforts of authorities at the central government level. As a matter of government policy or practice, China does not encourage or facilitate the laundering of proceeds from official drug transactions, nor are there any indications that senior PRC officials engage in laundering the proceeds from illegal drug transactions. Narcotics-related corruption does not appear to have adversely impacted on-going law enforcement cases in which U.S. agencies have been involved.

Agreements and Treaties. China actively cooperates with other countries to fight against drug trafficking. The U.S. and the PRC cooperate in law enforcement efforts under a mutual legal assistance agreement signed in 2000. China is a party to the 1988 UN Drug Convention, as well as to the 1961 UN Single Convention and its 1972 Protocol and the 1971 Convention on Psychotropic Substances. In January 2003, the United States and China reached agreement on the Customs Mutual Assistance Agreement (CMAA.) The PRC continues to cooperate with DEA’s chemical initiatives, "Operation Purple" and "Operation Topaz," and strictly regulates the import and export of precursor chemicals. Leakage into the illicit market nevertheless occurs despite this effort.

The PRC continued its participation in the "ASEAN and China Cooperative Operations in Response to Dangerous Drugs (ACCORD)." China, along with its ASEAN partners, held meetings in order to map out a regional counternarcotics cooperative mechanism in pursuit of making the region drug-free by 2015. In June, Burma, China, India, Laos and Thailand signed the Chiang Rai Declaration pledging to implement cooperative counternarcotics programs and exchange counternarcotics information. The PRC also continues to participate in UN Office of Drugs and Crime (UNODC) demand reduction and crop substitution efforts in areas along China’s southern borders. China routinely participates in counternarcotics education programs sponsored by the International Law Enforcement Academy (ILEA), located in Bangkok, Thailand. The PRC actively participates in the annual International Drug Enforcement Conference (IDEC) and Regional Targeting Meetings, which are intended to boost regional law enforcement cooperation against drug trafficking.

The Chinese Government sometimes conducts drug operations with its neighbors. In 2004, Burma-China cooperation led to the closure of 9 heroin-processing plants in Burma. The joint operations netted 275 kilograms of semi-processed heroin, 120 kilograms of ATS, 26 tons of poppy seeds and 47 tons of precursor chemicals.

Cultivation/Production. The PRC has effectively eradicated the production of drug-related crops within China. Opium appears no longer to be cultivated in China. The PRC is a main source for natural ephedra, which is used in the production of methamphetamine. China is also one of the world’s largest producers of synthetic ephedra. However, ephedra is also used for legitimate medicinal purposes. The Chinese central Government—supplemented by stricter controls in critical provinces, notably Yunnan and Zhejiang—makes laudable efforts to control exports of this key precursor. Despite these efforts, there is little question that some Chinese ephedra finds its way into the illicit market, both in China and abroad.

The PRC Government continues to make shutting down illicit drug laboratories a top priority. MPS seized 198 drug-processing laboratories between July and August 2004.

Drug Flow/Transit. China continues to be used as a transshipment route for drugs produced in the "Golden Triangle" to the international market, despite counternarcotics cooperation with neighbors such as Vietnam, Thailand and Burma. Drug transportation in Yunnan and Guangdong Provinces has been especially pervasive. While China’s southern and southwestern provinces constitute the PRC’s major drug flow and transit areas, Chinese authorities acknowledge that western China is experiencing significant problems as well. They claim that drugs such as opium and heroin are being smuggled into Xinjiang Province and are then distributed throughout China. The border areas with North Korea are also problematic, with amphetamine and heroin production possible on both sides of the border.

Domestic Programs (Demand Reduction). According to the MPS, China had 1.6 million illegal drug users registered by law enforcement departments. The majority of registered drug users are addicted to heroin. The Ministry of Education (MOE) has expanded drug education and prevention programs, aimed at preventing children from ages 12 to 18 from getting involved in drugs. Chinese officials report the distribution of over 1.16 million drug education posters and 580,000 leaflets in 2002, reaching out to an estimated 300 million people In 2004, major cites such as Shanghai and Beijng introduced drug education into the curriculum for all elementary school students.. China gave higher priority to controlling of the spread of HIV/AIDS in 2004. The MPS also stepped up campaigns targeting young people in its fight against banned narcotics, and created more drug-free residence communities and villages for rehabilitating addicts.

IV. U.S. Policy Initiatives and Programs

Bilateral Cooperation. Counternarcotics cooperation between China and the United States continues to develop in a positive way. This cooperation is yielding significant operational results. The information shared by China is leading to progress in attacking drug-smuggling rings operating between the two countries. Chinese authorities continue to share drug samples with U.S. colleagues on a case-by-case basis. In August 2004, the DEA, in conjunction with the NNCC, convened two conferences on precursor chemical control in Shanghai and Nanling, Guangxi Province to provide training to law enforcement officers from China police and customs.

Road Ahead. While China has on occasion provided the DEA with samples of drugs seized in the PRC intended for U.S. markets, the U.S. Government would welcome routinely receiving samples of all drugs seized by Chinese authorities. Despite these issues, bilateral cooperation remains on track and should steadily improve over the coming year.

Hong Kong

I. Summary

Hong Kong is not a major transit/transshipment point for illicit drugs destined for the international market because of its efficient law enforcement efforts, the availability of alternate transport routes, and the development of port facilities elsewhere in southern china. Some traffickers continue to operate out of Hong Kong to arrange shipments from nearby drug-producing countries via Hong Kong to the international market, including to the United States. The government of the Hong Kong special administrative region (HKSARG) actively combats drug trafficking and abuse through legislation and law enforcement, treatment and rehabilitation, preventative education, research work and international cooperation. The 1988 United Nations convention against illicit trafficking in narcotics drugs and psychotropic substances, to which the People’s Republic of China (PRC) is a party, applies to Hong Kong. Prior to its reversion to the PRC in 1997, Hong Kong was also a party to this convention.

II. Status of Country

Hong Kong’s position as a key port city in close proximity to the golden triangle and Mainland China historically made it a natural transit/transshipment point for drugs moving from southeast Asia to the international market, including to the united states. In recent years, Hong Kong’s role as a major transit/transshipment point has diminished due to law enforcement efforts and the availability of alternate routes in southern china. Despite the diminished role, some drugs continue to transit Hong Kong to the United States and the international market. Drug-traffickers continue to use Hong Kong as their base of operations, including many investors involved in international drug trafficking activity who reside in Hong Kong.

Hong Kong law enforcement officials continue to maintain cooperative liaison relationships with U.S. Counterparts in the fight against drugs. Hong Kong is not a producer of illicit drugs. According to Hong Kong authorities, drugs seized in Hong Kong are smuggled in mostly for local consumption and to a lesser extent for further distribution in the international market, including the United States. Hong Kong experienced an overall decrease in drug abuse in 2004. According to the Hong Kong central registry of drug abuse (CRDA), in the first three quarters of 2004 (January-September), 12,003 drug abusers were reported, a drop of 6.5 percent from the 12,838 reported in the same period in 2003. Heroin was the most commonly abused drug, involving some 72 percent of the 12,003 persons for whom drug information was reported in the first three quarters of 2004. Of the overall total, 17 percent abused ketamine, while 11 percent took triazolam/midasolam and 7 percent used cannabis. In 2004, the total number of arrests for drug offenses in Hong Kong declined by 8.08 percent, compared to 2002.

The Hong Kong government again gave a high priority to tackling psychotropic substance abuse in 2003 and 2004. The Hong Kong government has identified the continuing prevalence of psychotropic substance abuse and the growing trend of young people to experiment with drugs as their major area of concern in the battle against drug abuse and trafficking. Although there was a 14 percent increase in the number of young people arrested for drug offenses from 2003 to 2004 (from 1213 to 1384), the total was less than the 1577 arrested in 2002.

III. Country Actions Against Drugs in 2004

Policy Initiatives. In policy-making and coordination efforts, the Hong Kong government’s narcotics division of the security bureau acts on the advice of the action committee against narcotics (ACAN). ACAN is a non-statutory advisory body comprised of 17 members from the fields of social work, education, medicine and community service. The Hong Kong commissioner for narcotics and an official representing the director of health also serve on ACAN. ACAN works to ensure policy coordination among the various Hong Kong government departments in the effort to stop illegal trafficking of drugs and abuse.

The Hong Kong government issued a revised code of practice for dance party organizers in January 2003 to provide guidance to the organizers of these events on the prevention of drug abuse and other crimes. Under the amended regulations, organizers of dance parties are required to obtain a "places of public entertainment license" from the food and environmental hygiene department for holding such parties in premises that are not otherwise licensed.

Law Enforcement Efforts. Hong Kong’s law enforcement agencies, the Hong Kong police, and Hong Kong customs and excise department (HKCED) place high priority on meeting the objectives of the 1988 UN Drug Convention. Their counternarcotics efforts focus on the suppression of drug trafficking and the control of precursor chemicals. The Hong Kong police have adopted a three-level approach to combat narcotics distribution: at the headquarters level, the focus is on high-level traffickers and international trafficking; the regional police force focuses on trafficking across police district boundaries; and the district level police force has responsibility for eradicating street-level distribution.

HKCED’s chemical control group, in cooperation with the U.S. DEA office in Hong Kong, closely monitors the usage of precursor chemicals and tracks the export of suspicious precursor chemical shipments to worldwide destinations. HKCED also does mid-high level narcotics investigations in addition to export monitoring.

In 2003, due to high profit margins, Guam emerged as a new market for mainland China-produced "ice" (crystal methamphetamine). In February 2003, a joint investigation between Hong Kong customs and U.S. DEA led to the seizure of 2.8 kilograms of ice from a parcel that arrived in Guam from Hong Kong and was bound for the United States. In 2004, a similar shipment bound for the United States was seized in Hong Kong.

In 2004, several cocaine seizures in Hong Kong of approximately 60 kilograms have exceeded the combined cocaine seizures of 2002 and 2003 by a wide margin. It appears that cocaine abuse is becoming more prevalent in the East Asia region.

The narcotics bureau of the Hong Kong police cooperates with the PRC, Canada, Australia, the United States, and countries throughout Southeast Asia in combating international drug trafficking. Both the Hong Kong police and HKCED maintain excellent regional cooperation with DEA and regional law enforcement agencies to target significant drug organizations.

Corruption. There is no known narcotics-related corruption among senior government or law enforcement officials of the Hong Kong SAR. 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. 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.

Drug Flow/Transit. Some drugs continue to flow through Hong Kong for the overseas market, including the United States. Traffickers use land routes through Mainland China to smuggle heroin into Hong Kong. The heavy volume of vehicle and passenger traffic at the land boundary between PRC and Hong Kong continues to pose difficulties in the fight against the trafficking of drugs into Hong Kong.

In an effort to eradicate Hong Kong’s role as a transit/transshipment point for illicit drugs, the HKSARG maintains 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.

International Cooperation. Hong Kong maintains close links with the United Nations, the world health organization (WHO), Financial Action Task Force (FATF), INTERPOL and the World Customs Organization (WCO) as well as individual governments around the world in combating narcotics trafficking and abuse. Hong Kong has "mutual legal assistance in criminal matters treaties" with the United States, Australia, France, the United Kingdom, New Zealand, Italy, South Korea, Switzerland, Canada, the Philippines, Portugal, Ireland, the Netherlands, Ukraine, Singapore and Belgium. Hong Kong has also signed surrender of fugitive offenders agreements with 13 countries including the U.S., and transfer of sentenced persons agreements with seven 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. Through their established liaison channels they exchange operational intelligence on drug trafficking, money laundering and control of precursor chemicals.

Because of the unique "one country, two systems" environment in which Hong Kong operates, Hong Kong’s law enforcement and customs operations around the time of reversion (July 1997) operated less efficiently with their mainland counterparts than they do now. In the last few years, liaison information sharing and data-networking functions, such as customs information, have been formalized and have been successful in increasing the levels of inter-system cooperation and efficiency. Because intermittent drug trafficking through Hong Kong often involves mainland China aspects, foreign law enforcement agencies in Hong Kong such as the U.S. DEA have benefited from the increased level of PRC-Hong Kong cooperation.

Domestic Programs. In 2003, the Hong Kong government’s preventative education policy efforts continued to focus on youth and parents. The Hong Kong government has provided a comprehensive drug prevention program throughout Hong Kong’s education system. The narcotics division worked closely with the Action Committee Against Narcotics (ACAN) to promote counternarcotics education among youth. In 2004, school drug education programs were extended to non-Chinese speaking children (including English School Foundation (ESF) and international schools and local schools serving students of South Asian origin). The Hong Kong government’s narcotics bureau also partners with youth organizations and uniform groups such as Junior Police Call, the Hong Kong Red Cross and the Scout Association of Hong Kong to promote the counternarcotics message to youths through the train-the-trainer approach. Corporate volunteers also helped the Hong Kong government promote the counternarcotics message during the year. For example, one of Hong Kong’s largest electric power companies distributed counternarcotics leaflets to customers as bill inserts. In June, the Hong Kong Government formally opened the Drug InfoCentre (DIC), funded by the Hong Kong Jockey Club. The DIC is the first exhibition centre in Hong Kong dedicated to counternarcotics education.

The Hong Kong government collects information on drug abuse cases through the Central Registry of Drug Abuse (CRDA) from reports sent to it by law enforcement, treatment agencies and welfare organizations. The information is used for statistical analysis and research purposes. CRDA’s reports are published regularly on the trends and major characteristics of drug abusers. In November 2003, the CRDA began a computer system redevelopment project to enhance the functionality of the system, however, that project has not yet been completed.

On the research front, two studies commissioned by ACAN were completed in 2004. The first, which was a three-year longitudinal study of chronic drug abusers in Hong Kong, was disseminated to drug treatment and rehabilitation agencies. The second report was designed to obtain information on abusers who cross the border into the mainland to abuse drugs. Among the report’s findings was that one of the most popular reasons for abusing drugs in the mainland was the lower prices. The narcotics division has exchanged and discussed the findings with relevant authorities from Guangdong province, PRC and Macau.

Cultivation and Production. Hong Kong is not a producer of illicit drugs.

IV. U.S. Policy Initiatives and Programs.

The U.S. Government and the HKSARG continue to promote sharing of proceeds from joint counternarcotics investigations. In May 2003, Hong Kong began participating in the U.S. Container Security initiative (CSI), which U.S. law enforcement believes will increase the potential for identifying shipments of narcotics. Hong Kong is also an active participant in The International Law Enforcement Academy (ILEA).

The Road Ahead. The Hong Kong government has proven to be a reliable and valuable partner in the fight against drug trafficking and abuse. Hong Kong law enforcement agencies, arguably among the most effective in the region, continue to cooperate with the U.S. counterparts. The U.S. Government will continue to encourage Hong Kong to maintain its active role in counternarcotics efforts.


I. Summary

Although Indonesia is not a major drug producing, consuming, or drug transit country, Indonesia continues to have a growing problem in all three areas. The Indonesian National Police (INP) have participated in several international donor-initiated training programs and continue to commit increased resources to counternarcotics efforts. The INP has received U.S. assistance, including vehicles, software, safety and tactical equipment to support its efforts against crime and drugs. INP efforts are firmly based on counternarcotics legislation and international agreements. The INP relies heavily on assistance from major international donors, including the U.S. Indonesia is a party to the 1988 UN Drug Convention.

II. Status of Country

All major groups of illegal drugs are readily available in Indonesia: methamphetamine, in its crystalline and tablet forms, Ecstasy (MDMA), heroin, cocaine, and marijuana. The INP reports that the majority of heroin seized in Indonesia originates in Afghanistan. Indonesian authorities report that much of the heroin trade in Indonesia is controlled and directed by West African and Nepalese traffickers, often utilizing Thailand and Singapore as transit points for their couriers. Methamphetamine used in Indonesia is both imported and produced by domestic clandestine laboratories. According to reports, MDMA is primarily imported from the Netherlands; however, clandestine MDMA labs have been seized in Indonesia. Marijuana is produced domestically, harvested in North Sumatra, especially in Aceh province. In the past, INP has alleged that the Free Aceh Movement (GAM), a separatist movement, is involved in marijuana production to support its operations. Recent eradication operations by the INP, which have led to major seizures, and arrests seem to confirm this. INP reported the seizure of over 40 tons of marijuana and the arrest of a number of GAM members who were guarding marijuana production fields as a result of these operations. According to the INP, GAM levies a tax on marijuana production, which is controlled primarily by trafficking organizations based in Jakarta. Although cocaine seizures continue to occur in major Indonesian airports, the market for cocaine in Indonesia is believed to be very small.

III. Country Actions Against Drugs in 2004

Policy Initiatives. The Indonesian counternarcotics code is sufficiently inclusive to enable police, prosecutors, and the judiciary to arrest, prosecute, and adjudicate narcotics cases; however, the continued lack of modern detection, enforcement and investigative methodologies and technology, as well as the presence of pervasive corruption, are the greatest obstacles to advancing counternarcotics efforts.

Accomplishments/Law Enforcement Efforts. The National Narcotics Board (BNN) continues to strive to improve interagency cooperation in drug enforcement, interdiction, and precursor control. In 2004, BNN revised its mission statement to place more emphasis on improvement of enforcement efforts by Indonesian law enforcement agencies. Within the coordinating authority of BNN, plans have been developed for a Joint Interagency Counterdrug Operations Center and Network. The purpose of this program would be to improve coordination and information exchange between various Indonesian law enforcement agencies related to drug enforcement.

The INP Narcotics and Organized Crime Directorate continues to improve its ability to investigate and dismantle international drug trafficking syndicates. The Narcotics Directorate has become increasingly active in regional targeting conferences designed to coordinate efforts against transnational drug and crime organizations. The maritime counternarcotics effort depends on a myriad of Indonesian law enforcement agencies. Efforts to define the roles of these agencies, including the Navy and the INP Air and Sea police continue in an effort to avoid duplication. The Indonesian courts have sentenced approximately 21 drug traffickers to death since January 2000. In 2004, the Indonesian government began to carry out these sentences, executing three individuals.

Agreements and Treaties. Indonesia is a party to the 1988 UN Drug Convention, the 1971 UN Convention on Psychotropic Substances, and the 1961 UN Single Convention, as amended by the 1972 Protocol. Indonesia has signed, but has not yet ratified, the UN Convention on Transnational Organized Crime, and is a signatory to the UN Convention Against Corruption.

Cultivation/Production. Indonesia produces significant amounts of marijuana; however, most is believed to be for domestic consumption.

Corruption. As a matter of government policy and practice, the GOI does not encourage or facilitate the illicit production or distribution of drugs or the laundering of proceeds from illegal transactions. Corruption in Indonesia, however, is endemic, despite its domestic laws, and seriously limits the effectiveness of all law enforcement, including narcotics law enforcement. The recently elected administration has made anticorruption efforts a major policy initiative.

IV. U.S. Policy Initiatives and Programs

Bilateral Cooperation. Indonesia and the United States maintain excellent law enforcement cooperation on narcotics cases. During 2004, the United States sponsored hundreds of INP officers to attend training at the International Law Enforcement Academy (ILEA) in Bangkok, and to State department-funded training in Indonesia. In 2004, DEA provided training in the areas of drug intelligence analysis and precursor control. Indonesia continues to work closely with the DEA regional office in Singapore in narcotics investigations.

The Road Ahead. In 2005, the U.S. will assist the BNN and its member agencies in developing the Counterdrug Operations Center and Network. The goals of the project are to standardize and computerize the reporting methods related to narcotics investigations and seizures, to develop a drug intelligence database, and to build an information network designed to connect all of the provinces of Indonesia.


I. Summary

Although Japan is not a major producer of drugs, it is one of the largest methamphetamine markets in Asia, with approximately 600,000 addicts and 2.18 million casual users nationwide. These 2004 figures are the same as those of 2003. During 2004, Japanese authorities seized 387 kilos of methamphetamine and over 413,000 tablets of MDMA (Ecstasy), an increase in Ecstasy seizures of 21 percent (71,640 tablets) from 2003 figures.

II. Status of Country

Japan is not a significant producer of narcotics. f Licit cultivation of opium poppies, coca plants, and cannabis for research is done on a modest scale and is strictly monitored and controlled by the Ministry of Health, Labor and Welfare. Methamphetamine is Japan’s most widely abused drug. Approximately 90 percent of all drug arrests in Japan involve this substance. In spite of this significant methamphetamine abuse problem, there is no evidence of clandestine manufacturing in Japan. Ephedrine, the primary precursor for the manufacture of methamphetamine in Asia, is strictly controlled under Japanese law.

Japanese (GOJ) authorities unofficially estimate that 10-20 metric tons of methamphetamine are trafficked annually into Japan. This estimate is unchanged from 2003, which stated that the GOJ estimated that 2.18 million users consume 11 grams per person annually. Through October 2004, law enforcement officials seized 378 kilograms of methamphetamine. GOJ authorities believe the majority of the methamphetamine smuggled into Japan is refined and/or produced in the People’s Republic of China (PRC), Taiwan, and the Philippines. Some illicit methamphetamine also probably comes from North Korea, but relative quantities are hard to determine.

Methamphetamine trafficking remains a significant source of income for Japanese organized crime. The illegal immigrant population in Japan also participates actively in drug trafficking. As in 2003, heroin imports from Southeast Asia into Japan significantly decreased this year, with 23 grams of heroin and 174 grams of opium seized through October 2004. Heroin, marijuana and hashish use continues to be significantly lower than that of other illegal drugs in the country.

Seizures of cocaine increased significantly in 2004, with 86 kilos seized through October, compared with 2.3 kilos seized in 2003. The large increase over the previous year is mainly due to two significant seizures of cocaine originating from Colombia, 44 kilos and 28 kilos respectively. The 44-kilo seizure was taken from a Panamanian-flagged tuna vessel, and the 28-kilo seizure from a Federal Express shipment.

III. Country Actions Against Drugs in 2004

Policy Initiatives. DEA Tokyo works closely with the GOJ to add synthetic drugs of abuse to Japan’s list of prohibited drugs. During 2002-2003, the GOJ enacted legislation making possession, sale, and/or use of Benzylpiperazine (BZP), trifluoromethylphenylpiperazine (TFMPP), Psilocybin ("magic mushrooms"), Gamma Hydroxybutyrate (GHB), and 4-Methylthioamphetamine (4-MTA) illegal. Japanese officials are currently considering adding Ketamine, AMT, BZP, and 5-MeO-DIPT (Foxy Methoxy) to the list of prohibited drugs.

The DEA is renewing its agency-wide emphasis on money laundering investigations related to drug trafficking and will host a money laundering seminar in Tokyo in April 2005.

Accomplishments. DEA Tokyo promotes regional cooperation through the Asian Drug Enforcement Conference (ADEC) and the International Drug Enforcement Conference. DEA Tokyo continues to serve as an advisory, support and training resource to the Japan National Police Agency (NPA) in the planning and production of the annual ADEC conference, as well as several other regional seminars held annually in Japan. ADEC’s primary objectives are to promote the exchange of strategic intelligence regarding international drug trafficking organizations and establish a regional network of law enforcement officials and agencies dedicated to drug enforcement efforts. In February 2004, 130 officials from 28 countries, and members of the UNODC and INTERPOL attended the 9th annual ADEC conference hosted by the NPA.

In July 2004, the Suspicious Transaction Reporting Office (STRO) of the Commercial Affairs Department, Singapore Police Force and the Japan Financial Intelligence Office (JAFIO) established a cooperative framework for the exchange of financial intelligence related to money laundering or terrorist financing. In December 2004, the JAFIO and the U.S. Financial Crimes Enforcement Network signed a similar agreement facilitating information exchange regarding suspicious transactions possibly linked to terrorist financing and/or money laundering/narcotics trafficking.

The U.S.-Japan Mutual Legal Assistance Treaty (MLAT) was signed in 2003 and ratified in 2004. The MLAT paves the way for Japan’s Ministry of Justice and NPA to directly ask the U.S. Justice Department for cooperation and information and vice versa.

Law Enforcement Efforts. In August 2004, DEA Tokyo initiated a joint investigation with NPA’s Drugs & Firearms Control Division, Kanagawa Prefecture Police and U.S. Naval Criminal Investigative Service to intercept multiple packages containing MDMA tablets mailed from Seattle to a U.S. military base in Japan. This international controlled delivery resulted in the arrests of two U.S. nationals and the seizure of 50,000 tablets of MDMA. The MDMA was sourced to violators in Vancouver, Canada.

Japanese authorities seized 378 (as stated above) kilograms of methamphetamine in 2004. Police counternarcotics efforts tend to focus on Japanese organized crime groups, the main smugglers and distributors of drugs. In addition to smuggling and distribution activities, Japanese law enforcement officials are paying increased attention to drug-related financial crimes. The Financial Services Agency received 18,768 reports of suspicious transactions in 2003.

Between 1992 (when the Asset Seizure Law took effect) and 1999, the NPA seized a total of about $7.23 million in drug proceeds in 82 investigations. However, the NPA and Customs advise that financial 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 GOJ officials being involved in drug-related corruption in Japan in 2004.

Agreements and Treaties. Japan 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. An extradition treaty and a customs mutual assistance agreement are in force between the United States and Japan. A mutual legal assistance treaty has been submitted to the Senate for advice and consent to ratification. Japan has signed but has not yet ratified the UN Convention on Transnational Organized Crime.

Cultivation/Production. Japan is a member of the Chemical Action Task Force (CATF) and controls 28 chemicals. 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. For example, Japan is one of only a handful of countries that refine ephedrine, a chemical used to treat nasal/breathing problems. Ephedrine is also an essential ingredient in methamphetamine. The DEA Country Attaché in Japan, working closely with his Japanese counterparts, closely monitors end users of dual use precursors.

Drug Flow/Transit. With minor exceptions, all drugs illicitly trafficked into Japan are smuggled from overseas. According to the NPA, Taiwan, China, the Philippines, and North Korea are principle sources. China remains the primary source for methamphetamine seized in Japan, with major seizures of methamphetamine also coming from Taiwan and Malaysia. While not previously identified as a significant source of illicit drugs, Canada was the source country of 44.5 kilos of methamphetamine and 60 kilos of marijuana seized through October 2004. There were no confirmed drug seizures linked to North Korea in 2004, though some drugs listed as coming from China may have some connection with North Korea. While methamphetamine prices dropped significantly during the first five months of 2004, prices rose again in June and stabilized at 2003 levels.

Domestic Programs (Demand Reduction). Domestic programs focus primarily on interdiction. Drug treatment programs are small and generally run by private organizations. The Japanese Government provides narcotics-related counseling focused on drug prevention and supports the rehabilitation of addicts at prefectural centers. The Japanese Government continues to support a number of drug awareness campaigns designed to inform the public about the growing use of stimulants in Japan, especially among junior and senior high school students. The Ministry of Health and Welfare, along with prefectural governments and private organizations, continues to administer national publicity campaigns and promote drug education programs at the community level.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. U.S. goals and objectives include Strengthening enforcement cooperation, including participation in controlled deliveries and drug-related money-laundering investigations; encouraging more demand reduction programs; encouraging effective use of anticrime legislation and government agencies responsible for financial transaction oversight

The Road Ahead. DEA Tokyo will work closely with its Japanese counterparts and offer support in conducting international money laundering investigations. In addition, DEA Tokyo will continue to carry out an aggressive education program with Japanese Customs and NPA officials to foster knowledge of money laundering investigations, and their relationship to narcotics trafficking and terrorist financing.


I. Summary

The Government of Laos (GOL) continued to make some progress in its counternarcotics efforts during 2004. Most notable progress was registered in its efforts to eliminate opium poppy cultivation. Specific actions included: continued cooperation and progress with the U.S.-GOL bilateral program; pursuit of relatively low-level traffickers; improved counternarcotics cooperation with the U.S. by the GOL’s Customs Department; continued counternarcotics cooperation with the United Nations Office of Drugs and Crime (UNODC) and several non-governmental organizations (NGOs); a sustained campaign to eradicate illicit opium poppy; an increased tempo of counternarcotics public awareness activities, especially concerning amphetamine-type stimulants (ATS); and cooperation on HIV/AIDS, an issue related to drug use.

The Ministry of Public Security’s (MPS) cooperation with the DEA Vientiane Country Office (VCO) was minimal—there was no direct actionable or enforcement-related cooperation with DEA. Corruption remains an ongoing and severe problem; GOL law enforcement authorities failed to arrest any major drug traffickers; and provincial counternarcotics units (CNU) have shown limited results after several years of USG support. The GOL devoted few of its own modest resources to fighting drugs, relying overwhelmingly on the donor community. During 2004, Laos became a party to the 1988 UN Drug Convention. Laos is also a party to the 1961 Single Convention and the 1971 Convention but has not ratified the 1972 Protocol to the 1961 Convention. Laos is a member of INTERPOL.

II. Status of Country

Laos is landlocked and about 80 percent mountainous. The country borders Burma, Thailand, the PRC, Vietnam, and Cambodia. It is among the least developed countries in Asia, with a per capita income of only about $320 per year. The population is approximately 5.7 million and includes 49 distinct ethno-linguistic groups. Social indicators are among the worst in the world--infant mortality is 87 per 1,000 births and life expectancy is about 55 years. Health care service coverage is very poor and children die mainly from malaria, acute respiratory infections, diarrhea, malnutrition, and various vaccine-preventable diseases. The growth and consumption of opium, concentrated among minority hill tribe peoples, is closely related to poverty. While illicit opium production is declining, Laos still ranks as the third largest grower, although cultivation lags well behind Burma and Afghanistan. Generally, opium poppy is cultivated (and consumed) in the country’s northern region. UNODC estimates that about half is consumed domestically (often for traditional medicinal use) and the other half is exported, generally regionally. Cultivated area in opium poppy estimates vary widely, ranging from a recent GOL estimate of just over 3000 hectares to the USG 2004 estimate of 10,000 hectares. The GOL claims that its estimate takes into account 2004 eradication efforts. UNODC estimates about 6,600 hectares of cultivation, based on its 2004 survey.

Laos has significant structural limitations, including (1) limited capacity for sustainable opium elimination, due to insufficient alternative development; (2) limited capacity for drug demand reduction, due to a lack of data and familiarity with key approaches and concepts; (3) very limited drug law enforcement capability, both among police and administration of justice; (4) lack of data and information on drugs and crime; (5) a lack of drugs and crime legislation, as well as a near absence of implementing regulations; (6) limited human resources in the drug and crime sectors, due to the lack of training at all levels; and (7) a limited penitentiary system, which, like most of the Lao public sector, suffers from neglect and insufficient resources.

In addition to illegal opium cultivation, Laos is a significant transit country for narcotics (mostly heroin and amphetamine-type stimulants (ATS) and precursors. Narcotics transit Laos to Vietnam, Cambodia, and Thailand; some are probably destined for the international market. There are reports that, due to the severe crackdown of ATS in Thailand during the first few months of 2003, some ATS and heroin production may have moved from northern Thailand into Laos, but DEA has not yet confirmed this, at least partly due to the lack of investigative cooperation from the Lao. Other law enforcement officials have noted that, improved law enforcement efforts in Burma and the PRC are likely to expand drug production and trafficking in Laos, where there are many remote areas generally beyond the reach of law enforcement authorities. Precursor chemicals appear to be widely available in Laos and there are few regulatory controls. There are also reports of small amounts of cannabis growing in southern Laos, according to UNODC. The Thai crackdown could also result in increased cannabis production in southern Laos. The Mekong River is an important factor in the trafficking process, since it transverses the country and is minimally patrolled, although this may improve in 2005 with increased Thai-Lao cooperation.

ATS is a problem that is growing rapidly in Laos, both in the rural areas as well as the urban centers. ATS is apparently transiting Laos from the Golden Triangle region and/or may be produced in Laos. The GOL vehemently denies that there is any ATS production in the country.

While information regarding cannabis is sketchy at best, DEA believes that there is limited production in southern Laos and cannabis appears readily available in that region. There may be some contract growing for Thai traffickers. According to Lao Customs and the state-controlled media, Customs officials seized 710 kilograms of cannabis in Boulikhamsay Province (located in central Laos) on December 5 and 9.

III. Country Actions Against Drugs in 2004

Policy Initiatives. The structure of the GOL’s counternarcotics efforts is built around the Lao National Commission for Drug Control and Supervision (LCDC). LCDC is also the main counterpart for the U.S. bilateral assistance program. The Minister to the President’s Office and Chairman of LCDC is currently Soubanh Srithirath. At the most senior level, the Prime Minister, Bounnhang Vorachit, is also the President of the Central Steering Committee for Drug Prevention, but responsibility for day-to-day management rests with Minster Soubanh. Other Commission members include representatives from the Ministries of Foreign Affairs, Public Security, Justice, Health, Education, and Agriculture. In addition, the Department of Customs (under the Ministry of Finance) and the Council of Ministers, are also represented on the Commission. Within the MPS, the Drug Control Department (DCD) has administrative and some operational responsibilities. The exact nature of cooperation and coordination between LCDC and DCD is not always clear, but in general, MPS is a powerful force within the GOL bureaucracy. In Laos’ system of "vertical structure," individual provinces have a Provincial Committee for Drug Control (PCDC) that reports to LCDC. The USG bilateral program provides administrative support for those offices, as well as LCDC, DCD, and seven provincial counternarcotics units (CNUs). DCD and the provincial CNUs serve as the primary counternarcotics law enforcement arm in Vientiane and those provinces.

The main drug law is Article 135, adopted in 1990. This article prohibits drug trafficking, as well as the manufacture of heroin and other narcotics. In 1996, the GOL modified Article 135 and made opium production illegal. In 2001, penalties under Article 135 became more severe, including the death penalty for production, trafficking, and the distribution of heroin (more than 500 grams), amphetamines (more than three kilograms). Other penalties include up to five years imprisonment for possession of less than two grams of heroin.

The USG focuses on helping the GOL achieve three primary counternarcotics objectives: elimination of opium poppy cultivation, suppression of illicit drug and precursor chemical trafficking, and drug education and treatment programs. The USG has addressed the first goal through bilateral integrated rural development projects. The USG works closely with the UNODC and other donors of development assistance to ensure that counternarcotics objectives are included in all rural development programs in northern Laos. Suppression of trafficking is pursued through support of the CNUs and Lao Customs.

While there were no new major policy initiatives during 2004, the GOL leadership regularly emphasized the importance of fighting drugs in a variety of fora. On October 8, Minister Soubanh told the UN General Assembly’s Third Committee that, "Illicit drug production, trafficking, and abuse threaten our security and stability and jeopardize development." In the same speech, Soubanh noted that the GOL is "gravely concerned" about the spread of ATS in Laos. In late April, Mr. Linthong Phetsavan, Head of LCDC’s Permanent Secretariat, told a multilateral meeting in Thailand that, "eradicating Laos’ culture of opium is a top national priority."

The 2001 Seventh Party Congress has had an important impact on national drug policy. During that congress, the Party decreed that Laos would be "opium free" by the end of 2005. Essentially, this resolution has been the driving force behind the GOL’s aggressive opium eradication policy since 2001. The decree has pushed GOL policy implementation towards eradication and detoxification and put additional pressure on national and provincial officials to meet the 2005 goal. This has led to controversy within the donor community, some of whom believe that the GOL’s goal is not obtainable without undue hardship in the northern provinces.

Accomplishments. UNODC officials said that, over the past few years, the GOL has shown a "higher level of commitment" in dealing with the drug problem, especially concerning opium eradication. However, officials said that they are "less impressed" by the GOL’s commitment to fighting ATS and heroin trafficking/abuse. Minister Soubanh, summarizing this year’s drug activity, said in November that, the "most important GOL accomplishment" in 2004 was the opium eradication campaign. According to Soubanh, at the beginning of 2004, there were about 7,800 hectares of poppy—as of November 2004, the number of hectares is "around 3,000," due mainly to GOL eradication efforts since the February UNODC survey, he claimed. In 2004, the GOL declared five provinces as "poppy free." There is some anecdotal evidence that the pace of eradication is also leading to a type of "professional grower," i.e., farmers contracted by traffickers to specifically grow poppy in the more remote areas. In addition, there is anecdotal evidence that, with the opium disappearing, addicts are turning to ATS or any other drugs that they can get their hands on. Some foreign officials also fear that heroin use could increase.

Law Enforcement Efforts. In late August, Thai and Lao officials met at the seventh annual Lao-Thai Meeting on Narcotics Law Enforcement Cooperation. At the meeting, the two sides agreed to improve bilateral cooperation, including an enhanced riverine program to patrol the Mekong River from the Thai-Lao border at Nong Khai (Friendship Bridge) and in Xaiaboury Province, which shares a 650 kilometer border with Thailand. The two sides also agreed to establish an online system to monitor cross border movements aimed at reducing the flow of illegal drugs and other contraband.

During 2004, Lao DCD cooperation with the DEA was virtually non-existent; there was no direct actionable or enforcement-related cooperation with DEA and efforts to establish direct links with DCD have thus far been unsuccessful. A senior MPS official appointed as DEA’s "direct link" proved ineffective and has reportedly been transferred to another position. DEA has provided information to DCD, but has received almost no feedback, other than some very basic telephone subscriber information. DEA’s law enforcement counterpart at LCDC has provided arrest and seizure statistics on somewhat more regular intervals compared to 2003.

Working directly with Lao Customs appears to be showing more promise, according to DEA. In November, Lao Customs detained two Taiwanese heroin traffickers transiting the Vientiane International Airport en-route to another Asian destination. They were arrested holding about 800 grams of heroin. Lao Customs officials provided quick feedback to DEA on the case. During 2004, Lao Customs also provided DEA information on several other active drug related cases in a timely manner.

According to information provided by UNODC for the first six months of 2004, there was a generally upward trend in seizures, other than opium. In all 2003, law enforcement entities seized 39 kilograms of heroin; in the first six months of 2004, 55 kilograms were seized. Despite this improvement, DEA believes that the seizures represent the "tip of the iceberg" of the amount of heroin transiting Laos. Regarding ATS, in 2003, 1.2 million tablets were seized. In the first six months of 2004, law enforcement seized 3.02 million (about one-third in one seizure). Concerning opium, seizures are apparently headed downward, not surprising, since there has been considerable eradication. The last USG opium yield survey "ground truthing" revealed that it is getting harder and harder to find less opium. In 2003, GOL law enforcement seized 241 kilograms of raw opium; during the first six months of 2004 law enforcement seized 43 kilograms. Cannabis seizures appear about the same as 2003. During the first six months of 2004, GOL law enforcement seized 1,806 kilograms; in 2003, law enforcement seized 4,578. Regarding arrests for all drugs, UNODC figures through June 2004 suggest a decline compared to 2003. In 2003, there were 226 drug cases resulting in 445 persons arrested; through June 2004, there were only 79 cases, although those cases resulted in 227 arrests.

The GOL continued a policy of strict punishment for drug offenses. During 2004, there were reports of death sentences and long jail terms for drug traffickers. We have not been able to confirm whether any death sentences related to drugs were carried out in 2004.

GOL law enforcement authorities do not believe that major trafficking syndicates are responsible for moving drugs in and out of Laos. However, DEA is concerned that, with the crackdown in Thailand, more significant traffickers have begun to view Laos as a relatively risk free transit route and storage location.

Resource constraints within the GOL continued to be a major problem in 2004. LCDC, like much of the rest of Laos’ public sector, is essentially bankrupt. In November, Minister Soubanh lamented that LCDC’s budget from the GOL "suffered a 20 percent cut—from 50 million kip (about $6375) to 40 million kip ($5100). Seven embassy visits to provincial narcotics enforcement units (CNU) since August have revealed that much of their equipment is outdated and/or inoperable. Most officers have received little training, although some commanders and/or deputy commanders have attended ILEA courses. Generally, office equipment, hand-held radios, and motorbikes are not working. Some buildings are in disrepair. According to LCDC officials, they are unable to finance any repairs themselves and must wait for donor assistance. Among the CNUs visited in 2004, generally, transportation and communication resources are weak and drug testing kits either missing or outdated. CNU officials consistently told NAS and DEA that, in order to operate effectively, they need additional training for the rank and file officers as well as updated equipment such as cameras and night vision goggles.

Corruption. The Lao Government takes a strong stance against official corruption, including narcotics-related corruption. But Drug Czar, Minister Soubanh, acknowledges that "corruption is a big problem." He attributed the problem to the very low salaries paid to law enforcement officials and the "temptation" to profit from drug trafficking. Soubanh said that at Cabinet meetings the Prime Minister reiterates that corruption in the public sector, including narcotics, "will not be tolerated." While firm evidence regarding narcotics related corruption is hard to come by, there have been reports that GOL and military officials may be facilitating drug trafficking to some extent. Recognizing the need for further assistance in anticorruption measures, the GOL is working with Sweden to develop appropriate anticorruption enforcement measures. Concerning narcotics-related corruption, the GOL did demonstrate a willingness in 2004 to take limited action, prosecuting several low and mid-level border officials for accepting bribes.

Agreements and Treaties. The USG and GOL 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. An MOU for demand reduction was added to the bilateral program in 2002. 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 U.S., it has in the past cooperated in deporting drug traffickers to the United States, generally via Thailand.

The 1988 UN Drug Convention entered into force in Laos on 30 December 2004. Laos is also a party to the 1971 UN Convention on Psychotropic Substances; and the 1961 UN Single Convention. Following its ratification the 1988 UN Drug Convention, GOL officials have stated that the GOL is committed to working with UNODC to pass legislation, such as chemical control and money laundering regulations, necessary to bring Lao law into compliance with the Convention.

Cultivation/Production. The USG 2004 estimate for poppy cultivation is 10,000 hectares. About 85 percent of the crop is concentrated in Phongsaly, Houaphan, Luang Prabang, and Oudomxa1 provinces in northern Laos. USG methodology included 280 imagery samples from USG satellites and ground visits to 12 fields in Phongsaly, Xieng Khuang and Luang Prabang provinces. With USG support, UNODC and the GOL conducted an opium yield survey in 2004. According to the survey report published in June, there were about 6,600 hectares of opium poppy cultivation. The UNODC effort included limited satellite surveys based on commercially available imagery, as well as ground surveys and interviews with village headmen and household heads in 388 villages in 11 provinces. The satellite images in the UNODC survey were used to crosscheck the results of the ground survey.

Officially, the GOL admits to only about 3,000 hectares of opium cultivation as of November 2004. The GOL bases this figure on the UNODC/GOL figure minus eradication since the survey. Senior LCDC officials maintain that the USG overestimates the size of the opium crop, in part by misjudging the degree of intercropping of opium among other licit crops.

Potential opium production dropped significantly, although the USG figure is still somewhat higher than the UNODC/GOL survey. According to USG figures, 2004 potential production is about 49 metric tons, a huge drop from the 2003 figure of 200 metric tons. The UNODC/GOL figure is 43 metric tons. According to UNODC, the drop in yield was mainly due to "unfavorable growing conditions and an ensuing drought. Regarding yield per hectare, the UNODC/GOL figure is actually somewhat higher (6.5 kilograms per hectare) than the USG figure of 4.9 kilograms per hectare.

While the USG and GOL disagree on the amount of poppy cultivation that still exists, there is no disagreement that there has been a significant decline since 1998, when there were nearly 30,000 hectares of opium poppy throughout northern Laos. Based on USG strategic goals and the Embassy’s Mission Performance Plan, opium poppy elimination in Laos represents a genuine success story.

The cornerstone of the USG-GOL bilateral counternarcotics program are the two LAPs(Lao Assistance Projects) in Luang Prabang and Phongsaly provinces. These two integrated rural development projects account for about 70 percent of the NAS bilateral program budget (not counting salaries and administrative costs). In 2004, the LAP in Luang Prabang province, begun in 2003, moved briskly into the implementation stage, which included the construction of the project offices and several roads and supplementary assistance to agriculture, education, health, and community development sectors.

Concerning the LAP/Phongsaly project, during 2004, the LAP nearly completed a new 23 kilometer road to reach new project target villages; introduced new crops, such as coffee, tea, and galanga; implemented village-based handicrafts; provided over 200 cattle to establish "cattle banks" in project villages; installed clean water systems in 15 villages; trained health volunteers and provided medicine chests in several villages; and detoxed about 200 opium addicts.

Drug Flow/Transit. While DEA, UNODC, and the GOL agree that significant amounts of drugs are transiting Laos, DEA has not yet identified a firm case of heroin entering the U.S. directly from Laos. According to DEA and U.S. Customs officials, there has been some individual smuggling of opium via the mail between Hmong in Laos and the U.S., a trend which seems to have increased in 2004, according to DEA and U.S. Customs officials. A major problem faced by the GOL is the inability to control the long borders with Thailand and the PRC, as well as shorter borders with Burma and Cambodia. The Mekong River is a major conduit for trafficking, according to DEA, and it is only patrolled in a few areas. Many key drug areas, especially in the north, are virtually inaccessible to GOL officials. There is some border control near major population areas, along principal land routes, and at established river crossings, but it is not particularly difficult for traffickers to circumnavigate. Ironically, as the country’s highway system continues to improve, this is likely to facilitate illegal trafficking of drugs, people, logs, and other contraband. Various NGO and other foreign officials are especially concerned over the potential impact of the Kunming-Bangkok trans Asia highway that will pass through Luang Nam Tha province.

Domestic Programs/Demand Reduction. While opium is still generally the drug of choice in Laos, ATS use is spreading rapidly. During 2004, ATS appeared to get more attention among GOL officials. There may be more high-level attention because, unlike opium use, ATS use affects the families of the elite, either directly or indirectly. While in the recent past, most ATS use appeared confined to the larger urban centers and the more affluent, there is evidence that it is spreading into remote areas. In June, Houaphan Province’s Vice Governor said that ATS "may overtake" opium, as opium cultivation declines. UNODC has also reported that, while opiates are declining, ATS use appears to be increasing.

During 2004, the GOL, with assistance from UNODC and other donors, moved ahead on its national program for demand reduction. According to Minister Soubanh, the main activity during 2004 was a campaign (funded by the U.S.) to implement ATS drug testing in various secondary schools around the country. In Khammouan Province, testing results revealed relatively high positive rates (up to 15 percent of those tested). A LCDC official characterized these results as "surprising". Other activities include construction of ATS treatment facilities in Savannakhet province and Champassak province, which should be completed by the end of 2005. The USG is fully engaged in assisting the GOL to treat drug addiction. The USG has contributed significantly to ongoing UNODC activities through a $167,000 capacity building project. Part of this funding is helping UNODC to train Lao health professionals to form a drug-counseling network. U.S. funding is also supporting a major UNODC/GOL effort in community-based opium detoxification throughout northern Laos.

According to the GOL, the HIV infection rate in Laos is relatively low compared to its neighbors. But beyond this accurate impression, statistics are so poor that the scope of the problem is essentially unknown. The GOL reports 1,212 HIV-positive individuals and, since 1990, 486 AIDS-related deaths (26 during 2004). However, five of Laos’ 18 provinces have not reported any HIV/AIDS data whatsoever. Accordingly, most foreign observers believe that the official numbers under-report the problem. Systematic and nationwide surveillance for HIV is not yet in place, so the future course of the epidemic is uncertain. Because Laos is surrounded by countries that have significant numbers of HIV infections, such as China, Thailand and Vietnam, it is "likely that the epidemic will continue to spread in Laos in the absence of appropriate interventions." UNODC officials said that the main reason that Laos has been spared the higher rates of HIV infection is because there is little intravenous drug use compared to neighbors like Thailand and Vietnam. However, UNODC is "concerned" that there could be social and behavioral changes due to other drug use, especially ATS, that could lead to higher HIV rates. The GOL is beginning to demonstrate an increasing awareness and concern over the problem and appears to have a growing awareness of the nexus between HIV/AIDS and drugs.

IV. U.S. Policy Initiatives and Programs

Since 1989, the USG has provided approximately $38 million to support the GOL’s counternarcotics control program. During 2004, the U.S.-GOL bilateral counternarcotics program continued to make progress. GOL officials continued to be enthusiastic participants in USG-sponsored training at the Bangkok International Law Enforcement Academy (ILEA). Through November, 76 GOL officials had attended various ILEA courses, ranging from basic narcotics to post blast investigations.

Multilaterally, Laos worked closely with UNODC, especially in alternative development and opium detoxification. The USG contributes to some of these activities. In the northern part of Phongsaly province, UNODC is implementing, with financial assistance from the USG and others, an alternative development project aimed at the reduction of opium poppy cultivation. The USG also contributes to UNODC’s Program Facilities Unit (PFU), an administrative unit that supports various UNODC/LCDC activities aimed at alternative development, demand reduction, and law enforcement. UNODC is also implementing a village-based development project in Houaphan province, partially financed by the USG. The aim of this project is to reduce opium cultivation through micro development at the village level in one of northern Laos’ poorest areas.

The Road Ahead. The GOL is acutely aware of the threat of drugs and of Laos’ growing domestic drug problem, especially regarding ATS. However, there is still reluctance, especially within MPS, to cooperate on a bilateral basis with DEA. On a more positive note, we expect to see continuing and growing bilateral law enforcement cooperation with Lao Customs. During 2004, as in previous years, the GOL made progress with programs aimed at dealing with various facets of the drug problem, most notably in opium poppy eradication. However, it is clear that, in order to make significant progress in arresting major traffickers and seizing large quantities of drugs, the GOL will have to upgrade its law enforcement capacity. As with most other facets of the GOL public sector, this will not be possible without more resources. The USG-GOL bilateral program will continue and the focus is likely to remain on crop control and development assistance to northern Laos. How much progress the GOL makes in battling drugs and drug traffickers is likely to depend on how much the GOL is able to improve its public sector performance. In a country with few financial resources, this will continue to present the GOL and foreign donors a major challenge.


I. Summary

Malaysia has not produced a significant amount of illegal drugs in the past, but a large seizure of precursor chemicals and the destruction of a lab producing crystal methamphetamine last year suggests the past situation might be changing. Heroin and other drugs from Southeast Asian countries transit Malaysia, but there is little evidence that significant amounts of illegal drugs reach the U.S. market through Malaysia. Domestic drug abuse continues to grow, though the government has established a "drug-free by 2015" policy. Malaysia’s competent counternarcotics officials and police officers have the full support of senior government officials. Cooperation with the U.S. on combating drug trafficking is excellent, and led to high-profile arrests and seizures in 2004. The U.S. maintains active and successful programs for training Malaysian counternarcotics officials and police. Malaysia is a party to the 1988 UN Drug Convention, and has a bilateral extradition treaty in force with the U.S.

II. Status of Country

While Malaysian officials have expressed concern about rising rates of drug addiction in their country, there is little evidence that Malaysia is a source country or a transit point for U.S.-bound illegal drugs. Narcotics imported to Malaysia include heroin and opium from the nearby Golden Triangle area, and other drugs, primarily amphetamine type stimulants (ATS) including crystal methamphetamine and Ecstasy. These imports either transit Malaysia bound for other markets such as Thailand, Singapore, and Australia, or are consumed domestically. The drugs of choice for Malaysian users are heroin, morphine, marijuana, and methamphetamines, according to government statistics. The Malaysian government identified over 34,000 drug addicts during the first ten months of 2004 through reporting from police, community organizations, and treatment centers, bringing the total since 1988 to over 255,000. Malaysia itself does not produce a significant amount of illicit drugs.

III. Country Actions Against Drugs in 2004

Policy Initiatives. Malaysia launched a long-term effort in 2003 to reduce drug use to negligible levels by 2015. Senior officials including the Prime Minister speak out strongly and frequently against drug abuse. The National Anti-Drugs Agency (NADA, formerly called the National Drugs Agency) is the policy arm of Malaysia’s counternarcotics strategy, coordinating demand reduction efforts with various cabinet ministries. The agency targets its efforts toward youth, parents, students, teachers, and workers, while trying to identify particularly vulnerable groups. The NADA’s extensive efforts engage schools, student leaders, parent-teacher associations, community leaders, religious institutions, and workplaces. In October the Prime Minister chaired the first meeting of a new Cabinet Committee on Eradication of Drugs, composed of 20 government ministers. Parliament passed a bill in 2004 to give NADA authority to make drug-related arrests, in addition to the agency’s policy responsibilities. The stated vision is eventually to put all counternarcotics efforts under one organization.

Accomplishments. The Malaysian police, in cooperation with other international agencies including DEA, in 2004 raided a crystal meth lab near the capital of Kuala Lumpur, seizing enough precursor chemicals to produce two tons of "ice," the largest ever such seizure in Malaysia and one of the largest in Southeast Asia. Fifteen persons were arrested in the raid, which is part of a larger multi-national effort to combat Asian drug-trafficking syndicates. In another joint operation, again involving DEA and agencies from several other nations, Malaysian intelligence-sharing helped lead to a massive lab seizure in Fiji. Malaysia and seven other Southeast Asian countries signed a multilateral treaty on Mutual Legal Assistance in Criminal Matters in November 2004. It will go into effect when ratified by the various countries’ governments. The treaty is limited by clauses that make legal assistance subject to the parties’ domestic laws, but signals a desire to improve regional law enforcement cooperation.

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. Malaysia enforces a mandatory death penalty against major drug traffickers, though judges often seek ways to apply lesser sentences. The narcotics division of the Royal Malaysia Police (RMP) benefits from excellent and innovative leadership, and is well respected in the region for its modernization efforts. There was a 34-percent increase in drug-related arrests for the period January to September 2004, compared with the same period in 2003. Malaysian law provides for the seizure of assets from the proceeds of narcotics crimes. For the first nine months of 2004, according to the NADA, police sealed U.S. $7.7 million and confiscated $425,000 worth of drug-related criminal assets, both substantial increases from the previous year.

Corruption. No senior officials were arrested for drug-related corruption in 2004 and there was no evidence that the government tolerates or facilitates the production, distribution, or sale of illegal drugs. Malaysia’s Anti-Corruption Agency has power to investigate crimes and arrest suspects, while prosecution of corruption cases falls to the attorney general.

Agreements and Treaties. Malaysia is a party to the 1988 UN Drug Convention and, as noted, has signed the ASEAN MLAT. Malaysia is negotiating an MLAT with Australia. The U.S.-Malaysia Extradition Treaty went into effect in 1997.

Drug Flow/Transit. Malaysia’s geographic proximity to the heroin production areas and methamphetamine labs of the Golden Triangle leads to smuggling across Malaysian borders, destined for Australia and other markets. Ecstasy from Amsterdam is flown in to Kuala Lumpur International Airport (KLIA) for domestic use and distribution to Thailand, Singapore, and Australia. While drugs transiting Malaysia do not appear to make a significant impact on the U.S. market, there are indications that third-country nationals are using Malaysia as a transit point for modest shipments of U.S.-bound heroin. There is also at least some production of ATS in Malaysia, in light of the take-down of a large methamphetamine lab last year, and the seizure of a substantial quantity of precursor chemicals awaiting use at that lab.

Domestic Programs (Demand Reduction). Demand reduction programs in public schools and a drug-free workplace prevention program continued in 2004. The NADA has expanded the scope of its antiEcstasy demand reduction drive to include all types of ATS. Government statistics indicate that 11,045 persons were undergoing treatment at Malaysia’s 28 public rehabilitation facilities as of September 2004, similar to the number last year. The U.S. funded, through the Colombo Plan, two innovative faith-based training seminars on addiction therapy for Afghan religious leaders, held in Malaysia in May and December. In addition, the U.S. sponsored training in 2004 for Malaysian therapists and family members through the Daytop International organization, and other demand reduction programs.

IV. U.S. Policy Initiatives and Programs

Bilateral Cooperation. U.S. counternarcotics training continued in 2004 via the International Law Enforcement Academy (ILEA) in Bangkok and the "Baker-Mint" program sponsored by the U.S. Department of Defense. Baker-Mint aims to raise the operational skill level of local counternarcotics law enforcement officers. The Department of State Assistant Secretary, International Narcotics and Law Enforcement, visited Malaysia in May 2004, meeting with senior police officials and community drug treatment leaders.

Road Ahead. United States goals and objectives for the year 2005 are to: encourage the Malaysian government to use existing aiding and abetting laws more effectively against drug traffickers, and to enact narcotics-related conspiracy laws; and to continue the excellent cooperation between Malaysian and U.S. law enforcement authorities. United States law enforcement agencies will take advantage of enhanced cooperation with Malaysian authorities to interdict drugs transiting Malaysia, and to follow regional and global leads. U.S.-funded counternarcotics training for Malaysian law enforcement officers will continue.


Drug trafficking and abuse are not widespread in Mongolia but continue to rise and draw the attention of the government and NGOs. Mongolia’s young burgeoning urban population is especially vulnerable to the growing drug trade. The government continues to implement the National Program for fighting Narcotics and Drugs adopted in March 2000. The National Council headed by the Minister of Justice coordinates implementation of this program. The program is aimed at preventing drug addiction, drug related crimes, creating a legal basis for fighting drugs, elaborating counternarcotics policy, and raising public awareness of the drug abuse issue.

Mongolia’s long unprotected borders with Russia and China are vulnerable to all types of illegal trade, including drug trafficking. Illegal migrants, mostly traveling from China through Mongolia to Russia and Europe, sometimes transport and traffic drugs. Police suspect that trafficking in persons and prostitution are also connected to the drug trade.

The government has made the protection of Mongolia’s borders a priority. U.S.-sponsored projects to promote cooperation among security forces (support for conferences) and training have provided some assistance. A lack of financial and technical capacity and resources, along with corruption in police forces, and many other parts of government, hinder Mongolia’s ability to patrol its borders, detect illegal smuggling, and investigate transnational criminal cases. Mongolia is a party to the 1961 UN Single Convention and its 1972 Protocol, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Drug Convention. The government of Mongolia attempts to meet the goals and objectives of international initiatives on drugs, where possible. The United States and Mongolia have in force a customs mutual legal assistance agreement.

Occasional reports indicate that the availability and use of marijuana, heroin, amphetamines, and over-the-counter drugs have increased. The Mongolian government, alert to precursor chemical production and export issues, has closed suspected facilities, but foreign interest in the production, export and transit of precursor chemicals in Mongolia continues to surface. Mongolian internal corruption and financial crimes appear unrelated to narcotics activities. The weakness of the legal system and financial structures (i.e., the absence of anti-money laundering and antiterrorist financing legislation), however, 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 increases concern about a rise in transnational organized crime. Mongolian law enforcement agencies have proven inadequate to the task of detecting and cracking down on the activities of organized crime elements from Russia and China. The reopening of the North Korean Embassy in Ulaanbaatar in August 2004 also heightens concern that the North Korean Government, through its Embassy in Ulaanbaatar, may again seek (as it did in the late-1990s) to finance North Korean diplomatic and other activities through narcotics trafficking, counterfeiting or other illicit activity.

The Mongolian government and law-enforcement officials have increased their participation in international fora focused on crime and drug issues. Mongolia has observer status in the Asia-Pacific Group on Money Laundering and has committed to adhere to Financial Action Task Force (FATF) standards, while seeking participation and eventual membership in the FATF. Domestic, non-governmental organizations work to fight drug addiction and the spread of narcotics, as well as trafficking in women and children. International donors are working with the government to help Mongolia develop the capacity to address narcotics and related criminal activities before they become an additional burden on Mongolia’s development. U.S. government assistance in these efforts includes international visitor programs on transnational crime and counternarcotics, as well as training by regional representatives of the Drug Enforcement Agency, the U.S. Customs Service, the Internal Revenue Service and the U.S. Secret Service.

North Korea

I. Summary

For decades, North Koreans have been apprehended trafficking in narcotics and engaged in other forms of criminal behavior, including passing counterfeit U.S. currency and trade in copyright products. Numerous instances of North Korean drug trafficking and trade in copyright products, and other criminal behavior by North Korean officials, in many cases using valuable state assets, such as military-type patrol boats, has caused many observers and the Department to come to the view that it is likely, though not certain that the North Korean Government sponsors such illegal behavior as a way to earn foreign currency for the state and for its leaders. This report discusses instances of North Korean involvement in drug trafficking during 2004.

II. Status of Country

On two occasions in 2004 North Korean diplomats were arrested for involvement in narcotics smuggling. In June, Egyptian law enforcement authorities detained two North Korean diplomats working in the Commercial Office at the North Korean Embassy in Egypt for attempting to deliver 150,000 tablets of Clonazipam. Clonazipam is a Schedule IV benzodiazepine used to treat seizures and anxiety. Both North Korean diplomats were expelled from Egypt.

In December, Turkish authorities arrested two North Korean diplomats suspected of smuggling synthetic drugs destined for Arab markets. The diplomats, assigned to North Korea’s Embassy in Bulgaria, were caught in a drug raid in Turkey and found to be carrying over half a million Captagon tablets. The Captagon, a synthetic drug taken as an aphrodisiac, had a "street value", i.e., illicit market value, of seven million dollars. The North Korean diplomats were returned to Bulgaria, but were expelled by the Bulgarian government.

These two incidents are the first to come to light in several years involving DPRK officials stationed abroad at embassies caught smuggling narcotics. It is impossible to say with certainty that such individuals were acting under the instructions of their government, and were thus engaged in state trading of narcotics. Neither Captagon, an amphetamine-type stimulant, nor Clonazipam, a central nervous system depressant, has been associated with instances of DPRK trafficking in the past.

DPRK officials have ascribed past instances of official misconduct to the individuals involved, and stated that these individuals would be punished in the DPRK for their crimes. There is no information available indicating if the DPRK diplomats involved in these two drug smuggling incidents were, in fact, punished upon their return to North Korea.

North Korean defectors and informants report that large-scale opium poppy cultivation and production of heroin and methamphetamine occurs in the DPRK. A defector identified as a former North Korean high-level government official wrote in a February 2004 "Jamestown Review" article that poppy cultivation and heroin and methamphetamine production were conducted in North Korea by order of the regime. The government then engaged in drug trafficking to earn large sums of foreign currency unavailable to the regime through legal transactions. This article and similar reports by defectors have not been conclusively verified by independent sources. Defector statements however, are consistent over years, and occur in the context of multiple narcotics seizures linked to North Korea.

There were also reports in 2004 of more organized smuggling of heroin along the DPRK’s border with China. Traffickers living in North Korea reportedly contacted individuals in China to act as heroin couriers ("drug mules"). It is unclear whether the heroin in question was produced in the DPRK. North Korean and Chinese border guards were reportedly complicit, since they received payments from the traffickers. The presence of North Korean residents in China might well encourage this type of trafficking. Regular refugee traffic and other border trade, often facilitated by bribes, opens the way to drug smuggling. There is also other evidence of close cooperation between Chinese criminals and North Korean criminals in heroin and methamphetamine smuggling to foreign markets.

In addition, several drug traffickers arrested for smuggling methamphetamine into South Korea over the last year have indicated to authorities that the drugs originated from North Korea and were transshipped through China. Methamphetamine is the drug of choice for South Koreans.

There were no seizures of methamphetamines in Japan during 2004 linked to North Korea. As much as 30 percent to 40 percent of methamphetamines seized in Japan in past years have been linked by Japanese enforcement officials to the DPRK. The origin of heroin and methamphetamine seized on Taiwan during 2004, where DPRK-linked drugs have been seized in the past, generally was ascribed to domestic manufacture, to South East Asia or to China, not to sources in the DPRK. The street price for drugs did not change significantly in either Japan or Taiwan, so if past shipments from the DPRK stopped, they were replaced by traffickers operating elsewhere.

The "Pong-Su" incident in Australia in 2003 drew worldwide attention to the possibility of DPRK state trading of drugs. The "Pong Su" is a sea-going cargo vessel, owned by a North Korean enterprise, which was seized in Australia in mid-April 2003 after reportedly delivering a large quantity of pure heroin to accomplices on shore. The "Pong Su" case trial began in late January in Australia and is expected to continue for at least four to five months. The North Korean Captain of the "Pong Su", and other senior officers, will face prosecution for complicity in smuggling the heroin to Australia, and a North Korean communist "Party Secretary" found aboard the "Pong Su", will also face prosecution for complicity in the smuggling, in accordance with evidence developed during an investigation by the Australian Federal Police (AFP) and the Australian Crime Commission. The disposition of the "Pong Su" itself will be determined later this year. The vessel has been in Australian custody since it was seized in the wake of the smuggling incident. During the time it was held, government investigators and prosecutors, as well as defense counsel have had access to the vessel in preparing their respective cases.

Beyond the incidents described above, no additional information about DPRK-linked drug trafficking entered the public record during 2004. As the Department of State noted in its report on North Korea in the March 2004 INCSR, the cumulative impact of drug smuggling incidents linked to North Korea over years in a context of other admitted DPRK state-directed criminal activity, such as the Japanese kidnapping incidents, support the Department’s conclusion that it is likely, though not certain that the DPRK is state trading narcotics. There is also strong reason to believe that methamphetamine and heroin are manufactured in North Korea as a result of the same state-directed conspiracy behind trafficking. The United States will continue to monitor developments in North Korea to test the validity of the judgment that drugs are probably being trafficked under the guidance of the state, and to see if evidence emerges confirming manufacture of heroin and methamphetamine.


I. Summary

Palau is not a major drug trafficking or producing country or a source of precursor chemicals for production of narcotic drugs, although the possibility for drug transit exists. To curtail drug use, Palau has ongoing counternarcotics campaigns, as well as drug treatment and counseling programs.

Palau is not a party to the 1988 UN Drug Convention, but it is a party to the 1961 UN Single Convention on Narcotic Drugs, as amended by the 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances.

II. Status of Country

The Republic of Palau is an island nation with a population of approximately 20,000, and a constitutional government whose structure is comparable to that of the United States. Palau is a former UN trust territory of the United States that became independent on October 1, 1994. There is some crime in Palau, but it is not a major drug trafficking or producing country or a source of precursor chemicals for production of narcotic drugs.

Palau is an attractive tourist destination, especially for divers. The island has good air connections to many regional destinations. The possibility for drug transit exists. Authorities are aware of this danger and take steps to counter it through attentive enforcement. The USG has no evidence that any high-level official in Palau facilitates drug trafficking for personal gain. Small-scale corruption, which might facilitate trafficking, is a possibility; but Palau authorities, focused on maintaining Palau as an attractive tourist destination, are attentive to corruption and punish it when it comes to their attention.

III. Country Actions Against Drugs in 2004

There were 10 cases involving possession or trafficking in methamphetamine, and 33 cases of possession or trafficking in marijuana in 2004. Authorities also destroyed approximately 7,795 marijuana plants. The Ministry of Justice and Ministry of Health have ongoing counternarcotics campaigns, as well as drug treatment and counseling programs.

IV. U.S. Policy Initiatives and Programs

U.S. law enforcement officials have conducted training for local law enforcement officials. Cooperation in law enforcement between the United States and Palau is mutual and professional.

The Philippines

I. Summary

Philippine law enforcement agencies redirected resources in 2004 to target major traffickers and large clandestine drug labs. Although official Philippine government arrest and seizure statistics reflect an overall decline (with the exception of marijuana), the 2004 figures likely indicate a more accurate accounting by Philippine law enforcement. The dismantling of four clandestine methamphetamine laboratories in the last half of December 2004 may raise some seizure statistics to levels close to 2003’s totals. The Philippine government continues to develop a dedicated counternarcotics capability in the Philippine Drug Enforcement Agency (PDEA), established by the Government of the Republic of the Philippines (GRP) in 2002. The Philippines continues to be a major producer of crystal methamphetamine. Evidence indicates some links between terrorist organizations and drug trafficking. The Philippines is a party to the 1988 UN Drug Convention.

II. Status of Country

Domestic production of crystal methamphetamine, locally known as "shabu," exceeds demand, with most of the precursor chemicals smuggled into, or illegally diverted after importation into the Philippines from the People’s Republic of China (PRC), including Hong Kong (HKSAR). Dealers sell shabu in crystal form for smoking. There is no production or distribution of methamphetamine in tablet form. Producers make methamphetamine in clandestine labs through a hydrogenation process that uses palladium and hydrogen gas to refine the liquid mixture into crystal form. PRC- and Taiwan-based syndicates have established all of the Philippines’ clandestine methamphetamine labs using a network of ethnic compatriots with the necessary technical skills. The Philippines also serves as a transshipment point for further export of methamphetamine of foreign manufacture to Australia, Canada, Japan, Korea, the U.S. (including Guam), and Saipan.

The Philippines also produces, consumes, and exports marijuana. Philippine authorities continue to encounter difficulties stemming production. Marijuana cultivation is generally in areas inaccessible to vehicles and/or controlled by insurgent groups. Corruption and inefficiency among government officials also complicate eradication efforts. Most of the marijuana produced in the Philippines is for local consumption, with the remainder smuggled to Australia, Japan, Malaysia, Taiwan, and Europe.

Methyl-dioxy-methamphetamine (MDMA), commonly known as Ecstasy, is a popular recreational drug in the Philippines. Philippine authorities report use among young, prosperous adults, particularly in bars and clubs. Anecdotal reports cite increased availability, but enforcement actions against MDMA did not increase in 2004.

III. Country Actions Against Drugs in 2004

Policy Initiatives. The Arroyo Administration continues to concentrate on the full and sustained implementation of counternarcotics legislation and the institution building of PDEA as the lead counternarcotics agency. PDEA conducts investigations and continues to develop a training program. President Arroyo in 2002 created by executive order the Philippine National Police’s (PNP) Anti-Illegal Drugs Special Operations Task Force (AIDSOTF). AIDSOTF’s mission is to maintain law enforcement pressure on narcotics traffickers while PDEA builds its capacity.

Accomplishments. Illicit Cultivation. In 2004, Philippine law enforcement again joined with units from the Armed Forces of the Philippines (AFP) to launch marijuana eradication operations, some of which took place in territory controlled by armed insurgent movements. A new focus on significant drug traffickers rather than small-scale marijuana farmers produced several large seizures, resulting in a 1400-fold increase in dried marijuana leaves (332,690 kilograms) and a 420 percent increase in marijuana sticks. Using manual techniques to eradicate marijuana, government entities successfully uprooted and destroyed 2,361,581 plants and seedlings. They also confiscated 5 kilograms of seeds. The seized and eradicated marijuana crop was valued at $155 million, up from $10.7 million in 2003.

Production. Philippine authorities dismantled 11 clandestine methamphetamine laboratories in 2004, the same number as in 2003. GRP law enforcement officials cite four factors behind the existence of domestic labs: 1) the simplicity of processing ephedrine into methamphetamine on a near one-to-one conversion ratio; 2) the crackdown on drug production facilities and processed methamphetamine in other methamphetamine-producing countries; 3) the lesser danger in trafficking in methamphetamine precursors (ephedrine) compared to the finished product; and 4) the lack of law enforcement expertise and statutory power to detect precursor chemicals used in clandestine labs and prosecutions that are limited to finished product rather than the potential output. GRP authorities seized a total of 756 kilograms of methamphetamine, with an estimated value of $27,013,306, and 5,791 kilograms of ephedrine (including pseudo-ephedrine and chlorephedrine), essential precursors in the production of methamphetamine. While these numbers are down from 2003’s totals, raids on four clandestine labs in the last half of December 2004 could raise total 2004 seizure statistics close to 2003’s levels totals once the GRP releases these latest figures.

Distribution. According to the PDEA, the Philippines arrested 25,221 people for drug related offenses in 2004, a decrease of 7,929 individuals from 2003. The decline reflects the new strategy to concentrate on larger distributors rather than users and low-level dealers. GRP authorities filed criminal charges in 17,887 drug cases. PRC- and Taiwan-based traffickers remain the most influential foreign groups operating in the Philippines. According to PDEA, Philippine authorities arrested and/or disrupted the operations of 127 out of the 295 local drug rings and syndicates.

Sale, Transport, And Financing. The Philippines exports certain domestically produced drugs and is also used as a transshipment country. Illegal drugs enter the country through seaports, economic zones, and airports. With over 36,200 kilometers of coastline and 7,000 islands, the Philippine archipelago is a drug smuggler’s paradise. Vast stretches of the Philippine coast are virtually un-patrolled and sparsely inhabited. Traffickers use shipping containers, fishing boats, and cargo ships (which off-load to smaller boats) to transport multiple hundred kilogram quantities of methamphetamine and precursor chemicals. Deficits in equipment, training, and intelligence sharing hamstring marine interdiction efforts between the AFP and law enforcement.

The DEA Manila Country Office and Joint Inter-Agency Task Force-West (JIATF-W) are developing a plan to create three maritime counternarcotics fusion centers in the Philippines. The primary center will be located in PDEA Headquarters in Metro Manila, with two satellite centers in Poro Point, La Union (Northern Luzon), and the headquarters of the Naval Forces Western Mindanao, Zamboanga Del Sur (Southern Mindanao). Officers from the Philippine Navy, Coast Guard, PNP-Maritime Group, and PDEA will staff the facilities. The purpose of the fusion centers will be to gather information about maritime drug trafficking and other forms of smuggling and provide actionable target information that the agencies at the information centers can use to investigate and prosecute drug trafficking organizations. Construction of these centers will begin in January 2005. The Philippines is also a transshipment point for further export of crystal methamphetamine to Japan, Australia, Canada, Korea, the U.S (including 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.

Demand Reduction. The Comprehensive Dangerous Drugs Act of 2002 includes provisions mandating drug abuse education in schools, the establishment of provincial drug education centers, drug-free workplace programs, and other demand reduction clauses. Abusers who voluntarily enroll in treatment and rehabilitation centers are exempt from prosecution for illegal drug use. While preliminary 2004 figures are not yet available, residential and outpatient rehabilitation centers reported 5,965 admission cases in 2003. Statistics from rehabilitation centers highlight the following: 1) the majority of patients are in the 20-29 age group; 2) the mean age of drug users is 28 years old; 3) methamphetamine and/or marijuana are the drugs of choice; 4) the ratio of male to female users is 11:1. Officials of the Philippine Department of Interior and Local Government, which has overall jurisdiction over both law enforcement and demand reduction efforts, have indicated a desire for a program similar to the Partnership for a Drug-Free America. The Dangerous Drugs Board (DDB) estimates that the total number of regular drug users in the Philippines is approximately 1.8 million (about 2.2 percent of the population). DDB continues to study the issue to determine the number of addicts or abusers involved in each drug category.

Law Enforcement Efforts. Throughout 2004, Philippine authorities continued to link drug trafficking activities and terrorist organizations. The Abu Sayyaf Group (ASG), a U.S. and UN-designated Foreign Terrorist Organization operating in extreme southwest Philippines, collects money from drug smugglers by acting as protectors for foreign trafficking syndicates. The ASG also controls a thriving marijuana production site in Basilan. In the Central and Western Mindanao areas controlled by the Moro Islamic Liberation Front (MILF), 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. According to government estimates, the Communist New People’s Army (NPA), another U.S.-designated Foreign Terrorist Organization, but operating countrywide, receives money for providing safe haven and security for many of the marijuana growers in the northern Philippine and collects "revolutionary taxes" on the sale of drugs.

Major evidentiary and procedural obstacles exist in the Philippines in building effective narcotics cases. Restrictions on the gathering of evidence hinder narcotics investigations and prosecution. Philippine laws regarding electronic surveillance and bank secrecy regulations also constrain the ability of prosecutors to build narcotics cases. The 1965 Anti-Wiretapping Act prohibits the use of the information gleaned as a result of wiretapping and the consensual monitoring of conversations as evidence in court. Crimes against the state such as treason and sedition are the only exceptions to the Act. There are also no provisions to seal court records to protect confidential sources and methods. Pervasive problems in the law enforcement and criminal justice systems (i.e., rampant corruption, low morale, inadequate salaries, recruitment and retention difficulties, and lack of cooperation between police and prosecutors) hamper narcotics investigations and prosecutions. Perennial backlogs in the judicial system impede further the already slow pace of proceedings in narcotics cases. Under the Comprehensive Dangerous Drugs Act of 2002, only those courts designated as "Special Drug Courts" can hear drug cases, obliging GRP prosecutors to move cases previously filed in other courts into the Special Drug Courts. The Comprehensive Dangerous Drug Act also prohibits plea-bargaining in exchange for testimony; the GRP can reward cooperation with the filing of lesser charges, but not by reduced sentences.

GRP law enforcement agencies receive and act upon drug shipment intelligence from regional partners. They are less efficient in developing and transmitting intelligence on outbound shipments. Corruption within the GRP, including law enforcement and customs agencies, diminishes the effective inspection of inbound and outbound shipments.

Corruption. Corruption among the police, judiciary, and elected officials continues to be a significant impediment to Philippine law enforcement efforts. However, GRP policy clearly prohibits senior GRP officials from engaging in, encouraging, or facilitating the illicit production or distribution of narcotic drugs or substances, or the laundering of proceeds from illegal drug actions. There have been recent cases of PDEA officers arrested for dealing drugs and selling seized chemicals. The GRP’s Office of the Ombudsman in 2004 undertook vigorous prosecution of significant corruption cases, including against senior civilian and military officials.

Agreements and Treaties. The Philippines 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 Philippines is a party to the UN Convention Against Transnational Organized Crime and its protocols on migrant smuggling and trafficking in women and children. The Philippines also is a signatory to the UN Convention Against Corruption. The U.S. and the Philippines cooperate in law enforcement matters through an extradition treaty and a mutual legal assistance treaty, both of which entered into force in 1996.

Cultivation/Production. Authorities have identified at least 98 marijuana cultivation sites spread throughout nine different regions of the Philippines. The largest areas of marijuana cultivation are the mountainous areas of Northern Luzon, Central Visayas, and central, southern, and western Mindanao.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. The USG’s main counternarcotics policy goals in the Philippines are to: 1) work with local counterparts to provide an effective response to counter the burgeoning clandestine production of methamphetamine; 2) cooperate with local authorities to prevent the Philippines from being used as a transit point by trafficking organizations affecting the U.S.; 3) promote the development of PDEA as the focus for effective counternarcotics enforcement efforts in the Philippines; and 4) develop a improved statutory framework for controls of drug and precursor chemicals.

Bilateral Cooperation. In the largest single raid of a clandestine lab in Philippine history, Philippine authorities in September, acting on intelligence developed from a joint USG-RP-Hong Kong (HKSAR) investigation, raided a methamphetamine mega-lab located in Cebu. GRP authorities arrested eleven people from the Philippines, Taiwan, and the PRC (including Hong Kong)—all of them ethnic Chinese—and seized 498 kilograms of chlorephedrine and 80 gallons of liquid methamphetamine. The raid and arrests highlighted the Philippines’ transition into a major methamphetamine producer and the role of transnational criminal group in production.

Road Ahead. The GRP is committed to sustaining PDEA’s funding and staffing requirements in 2005. The USG plans to continue work with the GRP to promote law-enforcement institution building and encourage anticorruption mechanisms via our new JIATF-West presence as well as ongoing programs. Strengthening the counternarcotics bilateral relationship serves the national interests of both nations.


I. Summary

The Government of Singapore (GOS) effectively enforces its stringent counternarcotics policies through strict laws (including the death penalty), vigorous law enforcement, and active prevention programs. Singapore is not a producer of precursor chemicals or narcotics, but as a major regional financial and transportation center it is an attractive target for money launderers and drug transshipment. Corruption cases involving Singapore’s counternarcotics and law enforcement agencies are rare, and their officers regularly attend U.S.-sponsored training programs (as well as regional fora on drug control). Singapore is experiencing a slight increase in drug-related crime. Ketamine-related offenses still constitute a small portion of overall drug offenses; however, documented Ketamine abuse is on the rise. Singapore is a party to the 1988 UN Drug Convention.

II. Status of Country

In 2004, there was no known production of illicit narcotics or precursor chemicals in Singapore. The Central Narcotics Bureau (CNB) works with the DEA to closely track the import of modest amounts of precursor chemicals for legitimate processing and use in Singapore. CNB’s precursor unit monitors and investigates any suspected diversion of precursors for illicit use. The CNB also monitors precursor chemicals that are transshipped through Singapore to other regional countries; however, neither Singapore Customs nor the Immigration and Checkpoints Authority (ICA) keep data on in-transit or transshipped cargo unless there is a Singapore consignee involved in the shipment. Singapore notifies the country of final destination before exporting transshipped precursor chemicals. Abuse of heroin, methamphetamine, and Ketamine is on the rise.

III. Country Actions Against Drugs in 2004

Policy Initiatives. Singapore has continued to pursue a strategy of demand and supply reduction for drugs. This plan has meant that, in addition to arresting drug traffickers, Singapore has also focused on arresting and detaining drug abusers for treatment and rehabilitation. The Misuse of Drugs Act (MDA) gives the CNB the authority to commit all drug abusers to drug rehabilitation centers for mandatory treatment and rehabilitation.

Law Enforcement Efforts. Arrests for drug-related offenses registered a sharp decline of 47 percent from 2002 to 2003 (no 2004 information was available). The number of persons detained for trafficking offenses, and arrests for abuse and possession also declined. Arrests of first-time heroin abusers fell by 78 percent. Authorities executed 56 major operations during which they crippled 30 drug syndicates and arrested a total of 74 traffickers and 1,993 abusers. The largest marijuana seizure for CNB was 9.3 kilograms of cannabis. Seizures of MDMA declined by 38 percent between 2002 and 2003, however there was an 11 percent increase in the amount of MDMA abusers arrested. The following statistics reflect 2003 arrests related to specific drugs and the corresponding percentage increase or decrease as compared to 2002 arrests: 567 heroin arrests (-74.63 percent), 114 Ecstasy arrests (+16.32 percent), 260 cannabis arrests (+41.3 percent), 369 methamphetamine arrests (-40.48 percent), and 497 Ketamine arrests (+97.22 percent).

In 2003, authorities also seized approximately 94,200 nimetazepam or Erimin 5 tablets (a depressant), an increase of about 140 percent over 2002 seizures.

Corruption. The CNB is charged with the enforcement of Singapore’s counternarcotics laws. The CNB and other elements of the government are effective and there are few cases of corruption.

Agreements and Treaties. Singapore is a party to the 1988 UN Drug Convention, the 1961 UN Single Convention on Narcotic Drugs and its 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. Singapore and the United States continue to cooperate in extradition matters under the 1931 US-UK extradition treaty. In 2000, Singapore and the United States signed a Drug Designation Agreement (DDA), strengthening existing cooperation between the two countries on drug cases. In the past, the lack of such a bilateral 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 has signed mutual legal assistance agreements with Hong Kong and ASEAN. Singapore has signed, but has not yet ratified, the UN Convention against Transnational Organized Crime.

Cultivation/Production. There was no known cultivation or production of narcotics in Singapore in 2003 or 2004.

Drug Flow/Transit. Singapore has the busiest (in tonnage) seaport in the world, and approximately 80-90 percent of the goods handled by its port are in transit. Due to the extraordinary volume of cargo that is shipped through the port, it is likely that some of that cargo could contain illicit materials.

Singapore does not require shipping lines to submit data on the declared contents of transshipment cargo, unless there is a Singapore consignee to the transaction. The lack of such information makes enforcement a challenge. Absent specific information about a drug shipment, GOS officials have been reluctant to impose tighter reporting or inspection 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 transshipment port. However, scrutiny of goods at ports has increased. In January 2003, Singapore’s new export control law went into effect; while the law seeks to prevent the flow of WMD-related goods, the controls introduce scrutiny of some transshipped cargo. In March, Singapore became the first Asian port to commence operations under the U.S. Container Security Initiative (CSI), under which U.S. Customs personnel prescreen U.S.-bound cargo. While this initiative is aimed at preventing weapons of mass destruction from entering the U.S., the increased information and scrutiny could also aid drug interdiction efforts.

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, although the rehabilitation regime is rigorous. The government may detain addicts for rehabilitation for up to three years. In an effort to discourage drug use during travel abroad, CNB officers may now require urinalysis tests for Singapore citizens and permanent residents returning from outside the country. Those who test positive are treated as if they consumed the illegal drug in Singapore.

Adopting the theme "Prevention: The Best Remedy," Singapore authorities organize sporting events, concerts, plays, and other activities to reach out to all segments of society on drug prevention. Drug treatment centers, halfway houses, and job placement programs exist to help addicts reintegrate into society. At the same time, the GOS has toughened antirecidivist laws. Three-time offenders face long mandatory sentences and caning. Convicted drug traffickers are subject to the death penalty, regardless of nationality.

IV. U.S. Policy Initiatives and Programs

Bilateral Cooperation. Singapore and the United States continue to enjoy good law enforcement cooperation. In FY04, approximately 24 GOS law enforcement officials (including approximately 14 from the CNB) attended training courses at the International Law Enforcement Academy (ILEA) in Bangkok on a variety of transnational crime topics.

The GOS has cooperated extensively, with the U.S. and other countries, in drug money laundering cases, including some sharing of recovered assets.

The Road Ahead. The United States will continue to work closely with Singapore authorities on all narcotics trafficking and related matters. Increased customs cooperation under the Container Security Initiative and other initiatives will help further bolster law enforcement cooperation.

South Korea

I. Summary

Narcotics production or abuse is not a major problem in the Republic of Korea. However, continuing intelligence indicates that large quantities of drugs are smuggled through South Korea en route to the United States as well as other countries. South Korea in recent years has become a favored transshipment location for drug traffickers due to the country’s reputation for not having a drug-abuse problem. This, combined with the fact that the South Korean port of Pusan is the second largest port in East Asia, makes Korea an attractive location to divert illegal shipments coming from more suspect countries. In response, the South Korean government has taken significant steps to thwart the transshipment of drugs through its borders.

Club drugs such as Ecstasy and LSD continue to grow in popularity among college students. Most of the LSD and Ecstasy used in South Korea comes from North America or Europe. However, methamphetamine continues to be the drug of choice for Koreans. The Republic of Korea (ROK) is a party to the 1988 UN Drug Convention.

II. Status of Country

Drugs encountered in South Korea continue to consist of methamphetamine, marijuana, and club drugs such as LSD, Ecstasy and ketamine. The numbers of persons arrested in South Korea for use of psychotropic substances, mostly club drugs, increased from 3,657 persons to 4,478 persons (a 23 percent increase) while persons arrested for marijuana use fell from 1,276 to 940 (a 26 percent decrease). The overall arrest rate for drug offenders increased slightly, from 6,086 arrests in 2003 to 6,529 arrests in 2004. It should be noted that these figures for both years are based on the first ten months of the year. Total figures for 2004 were not available.

III. Country Actions Against Drugs in 2004

Policy Initiatives. In 2004, the ROK National Assembly confirmed newly amended legislation, which enhances the control of certain precursor chemicals. Previously, Korean authorities could only bring administrative charges of mislabeling against companies that transshipped precursor chemicals through Korea. The recent legislative action enhances the controls and enforcement procedures of the host government and allows for criminal sanctions. Unfortunately, the lead agency for this initiative, the Korean Food and Drug Administration (KFDA), has extremely limited resources and is only able to assign a limited number of persons to monitor the precursor chemical program. Still, this proactive legislation demonstrates South Korea’s recognition of the need for an enhanced precursor chemical program.

Accomplishments. The ROK has identified the transshipment of narcotics and the export of precursor chemicals as its most serious narcotics trafficking issues, and has taken aggressive, proactive steps in response. To curb the flow of drugs through airports, South Korea law enforcement has increased its presence and implemented tighter screening processes, including enhanced procedures for examining persons, luggage, express mail and cargo. To better manage the export of precursor chemicals, the ROK created a precursor chemical program with greater power to punish offending companies.

In 2003, no cargo containers routed through Korea were identified carrying drugs or precursor chemicals, although intelligence indicated that these items had successfully transshipped through ROK ports. However, in 2004, the DEA and the Korea Customs Service tracked two large transshipments of illicitly diverted precursor chemicals as they were transshipped through the country, with resulting seizures at the final destinations.

Law Enforcement Efforts. In the past year, the Korean National Police Agency reassigned 175 police to a newly created narcotics detail, creating dedicated narcotics enforcement teams at 14 of the major metropolitan provincial districts. This is the first time that South Korean police officers are being assigned solely to narcotics investigations. However, while the Korean National Police Agency can make arrests, they have limited investigative authority. The police are expected to immediately report the case to the Ministry of Justice Prosecutor’s Office, which will usually assume jurisdiction of the investigation.

The DEA Seoul Country Office provided for a one-week training session on narcotics investigations, at the Korean Police University for members of the Korean National Police Agency’s narcotics units, the Korea Customs Service, the Korean National Intelligence Service, the Korean Maritime Police and the Korean Supreme Prosecutor’s Office. This training is again scheduled for 2005, with an advance course being considered for 2006.

Corruption. Although isolated reports of official corruption continue to appear in the ROK’s vigorous free press, there continues to be no evidence that any official corruption adversely influenced narcotics law enforcement in Korea. It is not government policy to facilitate illicit production or distribution of narcotics.

Agreements and Treaties. The U.S. and Korea have an extradition treaty and a mutual legal assistance treaty in force. South Korea is a party to the 1988 UN Drug Convention, the 1971 UN Convention on Psychotropic Substances, and the 1961 UN Single Convention, as amended by its 1972 Protocol. South Korea has signed, but has not yet ratified, the UN Convention on Transnational Organized Crime, and is a signatory to the UN Convention Against Corruption. Korean authorities are exchanging information with international counternarcotics services such as UNODC, INTERPOL and have placed National Police and/or Customs Attaches in Thailand, Japan, Hong Kong, China and the United States. South Korea has several bilateral mutual legal assistance treaties with other countries.

Illicit Cultivation and Production. Legal marijuana and hemp growth is licensed by local Health Departments. The hemp is used to produce fiber for traditional hand-made ceremonial funeral clothing. Every year, each District Prosecutor’s Office, in conjunction with local governments, conducts surveillance into suspected or known illicit marijuana growing areas during planting or harvesting time periods in an attempt to match the number of seeds farmers reported planting to mature crops and limit illicit diversion. Last year, a marked decrease of 5,599 plants were seized by local authorities, however, this year, the number of plants seized is extremely high at 58,755 plants. The DEA Office in Seoul suggests that because the limited number of crops in the ROK is heavily dependent on natural phenomenon such as drought, monsoons, etc, the percentages can vacillate greatly from year to year. Opium poppies are grown in the Kyonggi Province and farmers have traditionally used the harvested plants as a folk medicine remedy to treat sick pigs and cows. Opium is not normally processed from these plants for human consumption. All poppies are grown illegally; South Korea forbids the growing of poppies for any reason. Each year, each District Prosecutor’s Office, in conjunction with their respective local governments, conduct surveillance into the suspected or known poppy growing areas during planting and harvesting time periods.

Drug Flow/Transit. Few narcotics originate in South Korea for use within country, and none are known at this time to be exported out of the country. However, Korea does produce and export the precursor chemicals Acetone, Toulene and Sulfuric Acid. Most Koreans who attempt to smuggle methamphetamine into Korea are coming from China, and on a few occasions the smugglers have indicated that the methamphetamine originated from North Korea and was simply transshipped through China.

A majority of the LSD and Ecstasy used in South Korea has been identified as coming from North America or Europe. The amount of seizures of Ecstasy went up exponentially from 2,575 tablets in 2003 to 20,358 tablets in 2004. Persons living in metropolitan areas of Korea, as well as USFK (United States’ Forces Korea) employees and dependants are known to use marijuana originating from South Africa and Nigeria, whereas those living in rural areas appear to obtain their marijuana from locally produced crops.

The areas of origin for the transshipped narcotics include Thailand, China, North Korea and Canada for heroin; Iran and South Africa for marijuana and hashish; United States and Spain for Ecstasy; and China, Thailand, Philippines and North Korea for methamphetamine. Chemicals used for manufacturing illicit drugs, such as potassium permanganate, ephedrine and acetic anhydride, originate mostly in China for transshipment to South America and the Middle East region. Seizures of trafficked marijuana were down by half, from about 29 kilograms in 2003 to approximately 16 kilograms in 2004. This is probably a result of stepped up customs procedures at the airports and seaports. Heroin is generally not used by Koreans; cocaine is used only sporadically with no indication of its use increasing.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives and Programs. DEA and Immigration and Customs Enforcement (ICE) work closely with Korea narcotics law enforcement authorities, and the DEA considers the working relationship excellent.

Bilateral Cooperation. The DEA in Seoul completed a survey of chemical monitoring programs operating in other Asian countries and forwarded the results to the Korean Food and Drug Administration to highlight the importance of the steps being taken by neighboring countries. DEA also works closely with the Korea Customs Service, which monitors airport and drug transshipment methods and trends, including the use of international mail by drug traffickers.

Road Ahead. While the Korean law enforcement agencies all strive to combat narcotics use and trafficking within their country, South Korea is also looking forward to a more global approach to address the forces outside of Korea. In addition, Korean authorities have expressed concern that the popularity of South Korea as a transshipment nexus may lead to a greater volume of drugs making its way onto Korean markets. Korean authorities fear increased accessibility and lower prices could stimulate increased drug usage domestically.


I. Summary

In 2004, the Taiwan authorities implemented counternarcotics legislation containing more severe punishments and stricter prosecutorial guidelines passed by the Legislative Yuan in 2003. Cooperation on drug trafficking issues continues to be guided by the Mutual Legal Assistance Agreement (MLAA) between the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) in the United States. Although there is little evidence to suggest that Taiwan is becoming a transit/trans-shipment point for drugs bound for the U.S., one disturbing trend has emerged: in 2004, several Taiwan nationals were arrested at crystal methamphetamine "mega labs" located throughout the East Asia/Pacific (EAP) region. Based on these laboratory seizures and arrests, it is apparent that Taiwan-based organizations are exporting skilled lab technicians to manufacture large quantities of methamphetamine in other countries.

Taiwan is not a member of the UN and therefore cannot be a party to the 1988 UN Drug Convention. Nevertheless, Taiwan authorities have amended and passed legislation consistent with the goals and objectives of this Convention.

II. Status of Country

The People’s Republic of China (PRC), North Korea, and Thailand are the primary sources of drugs smuggled into Taiwan. In 2004, Taiwan continued to see a rapid increase in the distribution and use of crystal methamphetamine and club drugs such as MDMA and ketamine. Taiwan has also experienced an increase in the importation of marijuana from Canada. In 2004, a number of heroin seizures were made in Thailand destined for Taiwan, as well as seizures in Taiwan of drug shipments originating from Thailand. Several Taiwan based organizations continue to have a direct impact on the United States, to include the shipment of precursor chemicals and drugs to the West Coast and Canada. However, enhanced airport interdiction, coast guard and customs inspection, surveillance and other investigative methods have prevented serious flows of heroin and other drugs from Taiwan into the U.S.

III. Country Actions Against Drugs in 2004

Policy Initiatives. In 2004, laws passed by the Legislative Yuan (LY) with regard to narcotics enforcement were implemented. The laws allowed for the use of controlled deliveries as a tool for drug law enforcement. The LY is also currently considering legislation that will permit the use of confidential sources and undercover operations. In 2004, Taiwan also implemented statutes containing more severe punishments, stricter prosecutorial guidelines and the addition of Schedule 4 drugs to comply with the UN Drug Convention. Taiwan is also reportedly considering the establishment of a drug enforcement administration largely modeled after the U.S. DEA. Although only in the preliminary stages of discussion, this proposal would create one primary drug investigative agency by merging several drug law enforcement units currently working under the auspices of different agencies.

Accomplishments. A provision permitting samples of seized narcotics to be shared with other law enforcement authorities, including DEA’s Drug Signature Program (drug origin) is now in effect and has been implemented. In 2004, DEA received several samples of heroin from various law enforcement agencies in Taiwan. In a combined effort with local authorities, DEA also successfully performed the first controlled delivery in Taiwan in 2004. The operation resulted in the arrest of one individual and the seizure of approximately 4.7 kilograms of cocaine, currently the largest seizure of cocaine documented by Taiwan law enforcement authorities.

Law Enforcement Efforts. The Ministry of Justice continues to lead Taiwan’s drug enforcement efforts with respect to manpower, budgetary and legislative responsibilities. However, the Ministry of Justice Investigation Bureau (MJIB), the National Police Administration’s Criminal Investigation Bureau (NPA/CIB), Foreign Affairs Police Bureau, Aviation Police Bureau, Military Police Command, Coast Guard and Customs all contributed to the counternarcotics effort in 2004. For instance, Taiwan authorities provided information to the DEA Hong Kong Country Office (HKCO) that led to the successful dismantling of several drug-manufacturing facilities located in the East Asia/Pacific (EAP) region. Taiwan authorities continue to share valuable intelligence and coordinate investigative activities with U.S. counterparts and are currently investigating several large United States-impact organizations involved in the trafficking of methamphetamine. Additionally, MJIB has provided valuable assistance to the DEA on several significant money laundering operations.

From January through September 2004, Taiwan authorities seized 1,360.81 kilograms of methamphetamine, 2,693.74 kilograms of semi-processed amphetamine, 470.78 kilograms of heroin, 296.96 kilograms of MDMA, 517.56 kilograms of ketamine and 35.48 kilograms of marijuana.

Corruption. There is no indication that either the Taiwan authorities, as a matter of policy, or senior officials in Taiwan encourage or facilitate illicit production or distribution of narcotics or psychotropic drugs or other controlled substances, to include the laundering of proceeds from illegal drug transactions. No cases of official involvement in narcotics trafficking were reported in 2004.

Agreements. In 1992, AIT and its 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 and remains the primary avenue for cooperation.

Drug Flow/Transit. The PRC, North Korea and Thailand remain the principal sources for heroin, methamphetamine, and club drugs for Taiwan. Fishing boats, cargo containers and couriers are still the primary means of smuggling these types of drugs into Taiwan, but there has also been a marked increase in the number of drug seizures at Taiwan’s international airports. Seizures of methamphetamine on Taiwan also increased dramatically in 2004. As of October 2004, Taiwan authorities reported the seizure of 12 methamphetamine labs of various sizes. This increase can be attributed to the crackdown on such facilities in the PRC and a relocation of manufacturers to Taiwan.

Domestic Programs. The Ministry of Education and the Taiwan National Health Administration continue to forge partnerships with various civic and religious groups to sponsor periodic campaigns to raise awareness about the dangers of drug-use and educate the public about the availability of treatment programs.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. The United States’ main counternarcotics policy goal, in cooperation with Taiwan, continues to be a coordinated effort to prevent Taiwan from returning to its earlier status as major transit/transshipment point for U.S.-bound narcotics. In 2004, the DEA HKCO provided several training seminars to many of Taiwan’s law enforcement agencies, focusing on undercover and controlled delivery operations, financial investigations, methamphetamine laboratory safety and airport interdiction. The DEA HKCO also coordinated the visit of four prosecutors from the Taiwan Ministry of Justice and one MJIB Senior Special Agent to the United States for training and familiarization with the investigation and prosecution of drug cases in both the U.S. federal and state legal systems.

The counternarcotics authorities on Taiwan continue to regularly share intelligence and investigative leads with the DEA, and in turn, enjoy a close working relationship with DEA’s Hong Kong office and AIT’s Regional Security Office. In 2004, MJIB, Coast Guard and NPA police units participated and cooperated with DEA in joint investigations. As a result of this close working relationship, several significant arrests and drug seizures were made throughout the EAP region.

Road Ahead. AIT and DEA anticipate building upon and enhancing what is already an excellent working relationship with Taiwan’s counternarcotics agencies. The Taiwan Ministry of Justice, Department of Prosecutorial Affairs anticipates that the LY will pass the pending undercover legislation in 2005 and that this legislation will greatly enhance counternarcotics efforts in Taiwan. The DEA expects to conduct additional training in anticipation of the undercover legislation being implemented, as well as training for financial and money laundering investigations. DEA also intends to expand the Drug Signature Program to receive more samples of heroin and other drugs seized in Taiwan.


I. Summary

Thailand continued to be a leading regional partner in combating drug trafficking and other transnational crimes. It did so by ratifying a number of multilateral conventions and passing legislation implementing these conventions into domestic law, diligently honoring bilateral treaties, vigorously enforcing money laundering and narcotics law, adopting new criminal laws and procedures and cooperating closely with counterparts, bilaterally, regionally and internationally. Thailand was not included in the President’s 2004 annual report to Congress of major narcotics producing or trafficking countries. This was the first time that Thailand was not listed as a major producing or transit country, and it reflects the overall progress Thailand has achieved over many years in its efforts to combat narcotics production and trafficking. For the past five years, Thailand has not been a major source country for opium and heroin, and for the past three years, the U.S. Government has not included Thailand in its annual survey of opium poppy cultivation and heroin production in Southeast Asia. In 2002-2003, opium production in Thailand was estimated to be only 320 hectares, of which 90 percent was eradicated before it could be harvested. This year’s goal is 100 percent eradication.

Thailand is a major victim of trafficking in amphetamine-type stimulants (ATS), which are primarily manufactured in Burma. Narcotics abuse is recognized by the Thai government and people to be a major national security problem, and an important threat to the safety and health of the Thai people. The Thai government has had successes in implementing its comprehensive national strategy to combat illicit drug abuse, trafficking and production by controlling drug demand through prevention and treatment, and reducing drug supply by drug law enforcement, interdiction and drug crop elimination. In early 2003, Thai authorities launched a far reaching "war on drugs," which resulted in a large reduction in abuse and trafficking as measured by higher prices, reduced availability and consumption, and a drastic drop in seizures, because drugs never reached Thai streets. However, it also led to charges that some authorities had been complicit in extra-judicial killings of suspected drug traffickers. Occasional reports of extra-judicial killings by police of suspected traffickers, reportedly in self-defense, continue to appear in the Thai press. On December 3, 2003, Prime Minister Thaksin declared victory in the war on drugs. Follow-on "phases" of the campaign continued throughout 2004. Efforts were focused on an "area approach" to demand reduction and community based efforts to ensure that villages and communities remained drug free.

Drugs smuggled into Thailand also transit to other countries including the U.S. No quantified information on the extent of such transit is available. The U.S., as a matter of policy, encourages Thailand to continue to implement its national drug control strategy, and to maintain and enhance its regional leadership role and growing status as a donor of drug control assistance to other countries. Thailand is a party to the 1988 UN Drug Convention.

II. Status of Country

Thailand does not produce heroin, Ecstasy, ketamine, or cocaine, although all of these drugs were trafficked into and through Thailand in 2004. There is limited cultivation of cannabis, and some methamphetamine is manufactured in Thailand, although such production is considered statistically insignificant when compared to the volumes of methamphetamine smuggled from Burma. The most commonly abused drugs in Thailand in 2003 were krathom, (a mild stimulant that grows wild throughout much of the country), ATS and cannabis. ATS is most frequently encountered in the form of pills or tablets whose purity averages about 25 percent methamphetamine (locally called "yaba"-"Mad Medicine"). Most ATS consumed in Thailand is produced and smuggled from Burma. Many traditional heroin trafficking organizations in Burma participate in this traffic, but the United Wa State Army (UWSA) dominates ATS manufacturing and smuggling. According to private and public surveys, ATS abuse remains prevalent throughout Thailand, despite large reductions following the Royal Thai Government’s (RTG) "war on drugs". One potential side effect of this 2003 campaign has been changes in use patterns of Thai abusers. Late in 2004, there were reports of an increasing popularity in the use of crystallized methamphetamine known as "Ice." Seizures in 2004 included quantities of both methamphetamine powder and "Ice."

Although still limited relative to ATS, the availability and use of Ecstasy, ketamine and cocaine is a growing concern. Ecstasy remains an expensive party drug with a largely "high society" or foreign clientele. Most Ecstasy is smuggled from Europe, often via intermediate countries, although there is evidence of some Ecstasy production in the region. Because of an increased focus on Ecstasy by Thai law enforcement, Ecstasy seizures became routine in 2004, with many resulting from undercover operations by the Thai police. Ketamine is also encountered as a limited "club drug", and its popularity rose in 2004. Thai authorities seized 135 liters of ketamine in January 2004. There were again a significant number of cocaine seizures in 2003, although the quantities involved in each individual seizure remained modest. West African trafficking organizations, dominated by Nigerians, control the bulk of the cocaine market. Much of the cocaine imported by West Africans using couriers sent to South America is re-distributed within the region. Thailand has ceased to be a source of heroin. Its harvestable opium poppy crop has been below the U.S. statutory definition of a major producer (1000 hectares) every year since 1999. The U.S. Government has not included Thailand in its annual opium poppy crop survey for Southeast Asia since 2002. No heroin production laboratories have been found in Thailand for years. Heroin seizures in 2004 began to increase in size, and the overall amount of heroin seized in 2004 increased to 685 kilograms. The UN Office on Drugs and Crime (UNODC) considers that most of the diminishing quantity of heroin produced in Burma and Laos reaches other markets through southern China, although stringent law enforcement pressure there in 2004, caused some traffickers to seek new routes through Thailand.

III. Country Actions Against Drugs in 2004

Policy Initiatives. Following the initial phase of the war on drugs, the RTG launched phase two of the campaign from May 1-December 2003. The focus of this phase was rehabilitation, supervision and treatment of drug abusers to enhance community strength against drug use at the village level. At the end of the second phase, 83,947 villages/communities were declared drug free with 2,767,885 volunteer counternarcotics coordinators in place. These coordinators were responsible for watching to ensure that drug users or traffickers did not return to the areas under their responsibility. During 2004, the Royal Thai Government continued with various phases of its war on drugs after Prime Minister Thaksin declared "victory" in the campaign on December 3, 2003. Phase three took place from December 3, 2003-September 30, 2004 and focused on maintaining sustainable drug free communities.

In early 2003, the RTG established the National Command Center for Combating Drugs (NCCD) under Deputy Prime Minister Chavalit as the highest level planning and policy level organization on developing counternarcotics policies and programs. This body was set up to enhance coordination among government agencies and bring added high level attention and support to the war on drugs. In addition to the NCCD, the Office of the Narcotics Control Board (ONCB) underwent a reorganization and expansion during 2004. The number of regional offices of ONCB doubled from four to eight. Similar plans to decentralize the national police force are under consideration.

Internationally, Thailand continued to expand its role as a donor, as well as a recipient, of drug control assistance. Thailand continued efforts to enhance drug control cooperation with Burma, including implementing a Thai-funded alternative development project to reduce poppy cultivation at the Yaung Kha site along the border. The RTG announced that it will fund the construction and operation of a drug abuse treatment clinic near the border in south-central Laos, at a cost of approximately $600,000.

Accomplishments. During 2004, Thai authorities from the Royal Thai Police (RTP) and ONCB de-classified wiretap evidence gathered during Thai investigations and shared with the U.S., in effect, permitting its use in U.S. investigations. Although no formal plea bargaining legislation is yet in place, Thai officials continue to permit and use reduction of sentences for convicted drug offenders that cooperate with authorities. Parliament continued to consider a more general law on plea bargaining in criminal cases, controlled deliveries, establishment of a witness protection program and other improvements in substantive and procedural criminal law.

ONCB in its role as a central authority for coordinating drug law enforcement issued instructions to coordinate complicated drug cases between various agencies such as the police and prosecutors. Legislation on conspiracy and asset forfeiture in drug cases was implemented throughout the country. ONCB organized judicial seminars in which over 350 judges from the courts of first instance located in every province of the country attended to receive training in trying complicated drug cases. In November, the Attorney General’s Office announced the formation of a special prosecution task force to work alongside police in cases of special public interest.

The newly enacted Special Investigations Act (SIA) (2004) helped establish the Department of Special Investigation (DSI), a still-evolving elite law enforcement agency modeled in part on the FBI. In furtherance of that role, DSI was placed under the Ministry of Justice to give it independence from the RTP. The SIA clarified that DSI’s jurisdiction includes transnational cases, investigation of influential persons, and a wide variety of financial crimes. The SIA gives DSI express authority to wiretap telephones and other electronic communications, and to offer the intercepts as courtroom evidence. The SIA concludes with unprecedented authority for investigator-prosecutor teamwork during the investigative stage of more complex cases. DSI ended the year with what was reported to be one of the largest seizures to date of counterfeit consumer goods.

The RTG is also a full partner in counternarcotics matters related to mutual legal assistance, cooperation on drug-transit and operational freedoms. The RTG responds to U.S. requests for information or evidence made pursuant to the bilateral mutual legal assistance treaty, providing items such as surveillance tapes, phone subscriber information, investigative background materials, etc. Thailand is among the most cooperative partners of the U.S. in regard to suppressing drug transits and targeting influential, transnational drug syndicates that engage in trafficking. Thailand also gives U.S. drug law enforcement entities considerable investigative leeway, permitting such agencies to use virtually any investigative tool available to them in the U.S.

Law Enforcement. According to ONCB, seizures for most types of narcotics continued to decrease in 2004 as a result of Thailand’s successful war on drugs. The only categories that increased were heroin; 685 kilograms in 2004 vice 436 kilograms in 2003; raw opium 1,173 kilograms in 2004 vice 267 kilograms in 2003; ketamine 162 kilograms in 2004 vice 98 kilograms in 2003; codeine 1,026 kilograms in 2004 vice 941 kilograms in 2003; psychotropic substances 71 kilograms in 2004 compared to 36 kilograms in 2003. Methamphetamine seizures declined greatly from 6,442 kilograms to 2,082 kilos. Ecstasy seizures declined from 33 kilograms to 21 kilos, cocaine went from 11 kilograms to 7 kilograms and ice (crystal methamphetamine) declined from 48 to 34 kilograms in 2004. Dried cannabis went from 13,771 kilograms last year to 7,062 kilograms in 2004, while fresh cannabis went from 5,878 kilograms last year to 4,555 kilograms in 2004. The number of arrests also declined dramatically from 107,823 in 2003 to 37,121 in 2004. As of October, 2004, 81,184 prisoners were detained for drug offenses, 78 of them on death row.

For much of 2004, the high prices and limited availability of methamphetamine generated by the war on drugs in 2003 persisted. In the latter half of the year, however, seizure quantities of methamphetamine began to creep upward. Police effectiveness has precluded a return to pre-2002 levels of trafficking but law enforcement efforts are not likely to sustain the reduced trafficking levels indefinitely. In declaring victory in the war on drugs in December 2003, the Prime Minister’s office issued the following statistics: 43,621 drug producers and dealers turned themselves in, arrests were made of 92,436 drug abusers and 753 importers, 21,855 key drug traders, 22,890 drug retailers, and 1,257 state officials, while six major drug trafficking rings led by "influential figures" were dismantled.

Over the past few years, most heroin seizures were modest, in the five to twenty kilogram range with an occasional large seizure. In 2004 there were more seizures in the twenty to seventy kilogram range. One trafficking organization under investigation by DEA and Thai police is associated with the seizure of 127.4 kilograms of heroin between January and June 2004. There was a seizure of 43.4 kilograms of heroin in Taiwan in January 2004 and another of 64.6 kilograms in June 2004. Both of these commercial maritime shipments of heroin had arrived in Taiwan from Thailand. In late 2004, Thai and Chinese authorities cooperated to seize in China 463 kilograms of Burmese heroin that had been smuggled into China for re-export to Europe. The suspected kingpin, Liu Gang-yi was arrested in Bangkok on October 29 and deported to China shortly thereafter. At least some of these shipments may have been destined for North America.

Corruption. As a matter of government policy, the Royal Thai Government 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 transactions. Nevertheless, public corruption is a serious problem in Thailand, and is recognized as such. Historical and cultural attitudes of deference to individuals of wealth, high social standing or official position have contributed to public acquiescence toward corruption. 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 transnational and organized crime to facilitate or protect illegal activities including drug trafficking, trafficking in persons, fraudulent document production, migrant smuggling, money laundering and other crime contribute to corruption in law enforcement and judicial institutions. Security of complex investigations against major drug traffickers has been maintained and no major investigations have ever been compromised by the Thai. In January 2004, a former member of NSB was given the death sentence for his complicity in trafficking one million tablets of methamphetamine. Also in the second quarter, one Border Patrol Police officer in Nong Khai Province and a former BPP officer in Chiang Rai were also arrested for trafficking in methamphetamine. Moreover, a former deputy governor of Chiang Rai and Phrae provinces was removed from his post to an inactive position, reportedly because he was involved in taking bribes from one of the largest drug traffickers in the province. Police are investigating the case, and arrests of police, prosecutors, and other local officials are anticipated.

One nondrug related case originated by the National Counter-Corruption Commission (NCCC) (an autonomous institution established by the 1997 Constitution) demonstrated that political prominence is no longer necessarily a guarantee of impunity. The Supreme Court’s special political corruption chamber convicted a politically prominent man, who served at various times in five ministerial positions, of accepting bribes in connection with procurement of hospital supplies while he was Minister of Health in 1998-9. The ex-minister jumped bail but was captured in September and is now serving a 15-year prison sentence. This is the first time that a former minister has been convicted on such a corruption charge. Corruption is certainly the most difficult and durable problem faced by Thailand’s entire law enforcement and criminal justice system. However, the Thai government has displayed its willingness, backed by growing popular support, to implement effective measures to prevent, or to investigate and punish, such public corruption.

In September, the Prime Minister announced a new "war against corruption." Early measures taken included: a multi-agency agreement to pool resources in corruption investigations and an agreement between the Anti-Money Laundering Office (AMLO) and the NCCC to expedite asset seizure procedures for politicians and civil servants found guilty of corruption.

Agreements and Treaties. Thailand is a party to the 1988 UN Drug Convention, the 1961 Single Convention on Narcotic Drugs and the Convention on Psychotropic Substances. Thailand has signed but has not yet ratified the UN Convention against Transnational Organized Crime and the UN Convention Against Corruption.

On September 20, 2004, the United States Ambassador and the Ministry of Foreign Affairs’ Director General for Technical and Economic Cooperation signed a bilateral agreement on narcotics control and law enforcement assistance, with initial funding for U.S. Fiscal Year 2004. Thailand has bilateral treaties with the United States on extradition, mutual legal assistance, and the execution of penal sentences. Thailand routinely responds to requests from the United States for assistance under the mutual legal assistance treaty, and repatriates qualified American prisoners under the execution of penal sentences treaty. During 2004, Thailand concluded bilateral agreements with a number of other countries for cooperation in drug law enforcement and related matters.

Cultivation/Production. Through one of the most successful drug crop control programs in the world, Thailand has ceased to be a source of heroin or of significant quantities of opium. In June 2004, Thai officials from ONCB and the Royal Thai Army’s Third Army released their estimate of the opium poppy cultivation for the 2003-2004 growing season. According to this estimate, opium poppy cultivation in Thailand reached a record low of 128 hectares compared to 842 hectares for the 2002-03 season, 1,257 hectares in 2001-2002 and 1,103 hectares in 2000-2001 growing season. Much of the cultivation occurred in extremely difficult terrain in Tak, Chiang Rai and southern Chiang Mai provinces. Thai officials estimated they eradicated up to 90 percent of production. Although overall cultivation continues to decline, the opium cultivation survey and eradication campaign remain a necessary deterrent against technological innovations and other strategies used by farmers to avoid eradication. Farmers replanted poppy in areas once harvested or eradicated by government officials while attempting to grow two or three crops in a single season. Opium was interspersed with legitimate crops to avoid detection by aerial survey.

Some cultivation of cannabis occurs on both sides of the Mekong River in Thailand and Laos. ONCB believes most cannabis consumed in Thailand is smuggled over the borders from Laos and Cambodia—as is the case for most of the marijuana that transits on its way to international markets.

Production in Thailand of refined opiates ceased with elimination of large-scale poppy cultivation. Years ago, several heroin processing laboratories were found and destroyed annually. None have been found in Thailand for several years. There have been some small-scale "kitchen" methamphetamine laboratories, but ONCB considers that the vast bulk of ATS drugs sold in Thailand are produced in Burma. However, in November 2004, the first full circle methamphetamine lab since 1997 was discovered in Pathum Thani, a suburb of Bangkok. There is no known production of other illicit drugs or controlled substances in Thailand.

Drug Flow/Transit. The U.S. Government annual survey of opium poppy cultivation in Southeast Asia for 2003 indicates that potential opium production in the region was about one-quarter the production estimated in 1993. Ten years ago, Thailand was the primary transit route for Burmese-origin heroin. UNODC now estimates that most of the steadily diminishing amount of heroin produced in Burma and Laos reaches world markets through China. Neither Thai nor other law enforcement authorities possess quantifiable information on the volume or destination of heroin, cannabis or other drugs that may transit Thailand destined for markets in other countries. Methamphetamine, cannabis, opiates and other illegal drugs smuggled into Thailand are largely destined for sale and consumption among Thailand’s large and well-documented population of illegal drug users. There is also transit of illegal drugs through Thailand to other countries, although its exact extent cannot be quantified. Methamphetamine produced in Burma enters Thailand largely across its northern land borders. Methamphetamine is also smuggled through Laos and Cambodia to destinations in Thailand. Drugs are generally carried across uncontrolled parts of the borders—or carried across the Mekong border by small boat—by individuals or groups of couriers often associated with organizations such as the UWSA. Armed clashes between drug couriers and the Border Patrol Police or RTA are not unusual. A number of police and RTA personnel, and substantially more couriers, have been killed or wounded. Once within Thailand, drugs are consolidated and smuggled, generally by road, to Bangkok or other metropolitan markets. Several cases are discovered each year of smuggling of Burmese-origin ATS pills to destinations in the U.S. or other countries, generally by international mail or parcel service. However, ATS used in Thailand is mostly in pill form, while the most common form for abuse of this drug in the U.S. and most other countries is the crystalline form known as "ice". Heroin that is sold to Thailand’s domestic population of addicts (estimated variously between 30,000 to 50,000) is generally smuggled by the same routes, and same groups, as methamphetamine.

In early July 2004, two traffickers were arrested and authorities seized 140,000 methamphetamine tables when a joint task force of the Mekong River Operations Unit stopped a speedboat on the Thai side of the river in Chiang Rai Province. Burmese-based trawlers are frequently used to move heroin and methamphetamine into provinces in the isthmus of Thailand, especially Ranong and Phang Nga provinces. Drug loads are often concealed in cover loads of seafood that are offloaded at shore facilities. Sometimes, the drugs are offloaded in boat-to-boat transfers at sea. One commercial maritime shipping venture involving drugs being shipped to Taiwan was uncovered in the second quarter. A shipment with a total of 100 blocks of heroin (totaling 43 kilograms) was uncovered from 40 of the 500 cartons of squid in the shipment. Another Taiwan connection was made in February when three Taiwanese were arrested in Bangkok and charged with attempting to ship twenty slabs of heroin from Bangkok to a buyer in Malaysia.

As always, couriers remain a popular method of smuggling for organizations attempting to get illegal drugs into, out of, or through Thailand. Five West African couriers were arrested in December 2003 and January 2004 as they attempted to smuggle heroin from Pakistan through Thailand to Indonesia. The male couriers were normally ingesting anywhere from 1,000 to 1,500 grams while the female couriers were generally carrying about 1,000 grams of heroin on their bodies or concealed in luggage. The West Africans also continue to use a plethora of routes and methods to get cocaine into Thailand from South America. Often Thai females are used between South America and Bangkok, often passing through South Africa, Indonesia or Malaysia en route. Express mail services also sustain their role as popular means for international smuggling. Numerous examples of drugs being mailed from Thailand to the United States and around the world can be found each month. For example, in 2004 heroin, opium, and methamphetamine have been mailed to locations in the U.S. as diverse as North Carolina, California and Alaska. However, other countries around the world also seize drugs or controlled substances that were mailed from Bangkok. For example, early in 2004, two separate seizures of steroids were made in Costa Rica from packages originating in Thailand. Further, the mail services continue to also be used to import controlled substances and drugs into Thailand. A typical example was the seizure at the Miami International Airport of 5.5 pounds of cocaine secreted in a Sky Net parcel. The parcel was mailed in Peru and was sent to an address in Bangkok.

UWSA methamphetamine production laboratories were increasingly being moved away from the Burmese-Thai border to more remote, less visible locations deeper in the jungles. The methamphetamine is often consolidated for shipment in Tachilek and other border areas in Burma. Thai officials speculate that Tachilek will become even more important as a transit location. Besides Tachilek, the smuggling routes between Burma/Laos and northeastern Thailand as well as the routes involving Burma-Laos-Cambodia-Vietnam, are increasingly important. Multiple organizations transport the drugs (primarily heroin and methamphetamine) down the Mekong River and into Nong Khai Province. From there, the drugs are shipped southward to Songkhla for eventual delivery into Malaysia. Other organizations favor the Laos to Cambodia or Vietnam route. Heroin moving from Laos into Vietnam is often shipped out to the international markets by organizations of ethnic Vietnamese. Heroin and methamphetamine that is smuggled from Laos into Cambodia is either exported to international market through Cambodian ports or makes it way back into Thailand across jungle borders.

Domestic Programs/Demand Reduction. The RTG has undertaken a massive narcotics demand reduction program in the past few years as part of it war on drugs. The government realizes that demand reduction is a central and vital part of a successful, long term narcotics control program. Over 320,000 drug users turned themselves into authorities in 2003. However, in 2004 that number dropped to only around 30,000. According to surveys by university networks and government agencies, the number of persons who used illegal drugs dropped precipitously in 2004. The RTG intensified efforts to disseminate public awareness and prevention measures and to expand substance abuse treatment available to users. ONCB and the Ministry of Public Health are responsible for coordinating prevention and treatment programs, with participation by other agencies, and by NGO’s through a national Anti-Narcotics Coordinating Committee. The Ministry of Education has incorporated drug awareness and prevention messages in school curricula at all levels. The RTG attempted to identify and target potential drug users and institute preventive campaigns involving a wide variety of activities designed to keep this group away from drugs. A permanent epidemiological network involving Chulalongkorn and other universities in each of the four major regions of Thailand supports design of prevention strategies with timely information about use patterns and motivations among affected groups. Thailand is active in the international network of public/private sector drug prevention organizations. This network mobilizes public opinion against narcotics abuse. King Bhumipol’s eldest daughter, Princess Ubonratana, leads a nationwide campaign called, "To Be Number One" designed to keep youth from drug abuse through a variety of activities designed to develop self-confidence, and to encourage users to attend treatment and rehabilitation programs. The organization had over five million members as of 2004.

To encourage users and addicts to identify themselves for treatment, campaigns have been launched to educate addicts/users, their families, and the general public that addiction should be seen as a disease and users as "patients." There is an on-going campaign to modify the attitude of the public to forgive addicts and users and rehabilitate them within their communities, while maintaining a zero tolerance policy on drug use. Depending on the addict/users circumstances there are a variety of treatment options available—voluntary, compulsory and within the correctional system. In 2004, the Ministry of Public Health further expanded ATS treatment programs, particularly those based on the Matrix model developed at UCLA. Community-based behavioral modification outpatient treatment centers for ATS abuse now exist in locations around the country and are being further expanded as health care workers are trained and capacity increased. The RTG has expanded drug abuse treatment in the correctional system, in collaboration with Daytop International. The Department of Corrections has implemented therapeutic community programs in juvenile corrections and intake centers. The RTG also continued camps operated by the armed forces, which provide three to nine months of rehabilitation for drug-dependent prisoners nearing the end of their terms. Thailand also continued sentencing drug-dependent first offenders charged with possession of small quantities of drugs to mandatory substance abuse treatment as an alternative to incarceration, in accordance with the Narcotics Rehabilitation Act of 2002.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. U.S. drug control policy goals consistent with past years’ are to encourage the RTG to:

  • Maintain all elements of its successful opium poppy crop reduction program, and extend that expertise also to other countries such as Burma, Laos and Afghanistan; b) Develop and implement more effective criminal investigation and prosecutorial laws, procedures and methods; c) Strengthen enforcement against money laundering; d) Continue as a leader in regional activities under the "ACCORD" Plan of Action, continue and expand Thailand’s leadership in regional and international drug and crime control; e) Enhance measures against corruption and promote integrity in public institutions.

  • The U.S. International Narcotics Control and Law Enforcement (INCLE) assistance program in Thailand is one of the oldest in the world, and has provided over $85-million since its inception in the 1970’s. Beginning with FY 2001, this program has included increasing assistance to improve the institutional capabilities of the criminal justice system in general, including but not specifically limited to drug crime, and to improve capabilities against non-drug crimes that are also international policy concerns of the U.S. Longstanding INCLE projects for support of drug law enforcement and opium poppy crop control will continue to be substantially reduced in FY 2004. The United States will therefore encourage the RTG to employ its own resources, as it has increasingly done in recent years, to support interdiction and drug law enforcement, opium poppy crop control, and other aspects of its national strategy against the abuse, trafficking and production of illicit drugs.

  • The United States Mission in Thailand includes offices of the Drug Enforcement Administration, the Federal Bureau of Investigation, the U.S. Secret Service, the Department of Homeland Security (Immigration and Customs Enforcement), and the Diplomatic Security Service. Agents of these agencies cooperate closely with Thai authorities in investigations of drug trafficking organizations and related offenses, as well as non-drug crimes. U.S. and other foreign immigration officials assigned to embassies in Bangkok operate a full-time Immigration Control Experts office at the Bangkok International Airport to assist Thai authorities to identify malafide international travelers, including drug couriers. Among the law enforcement agencies resident in Thailand, the Drug Enforcement Administration (DEA) has the lead role for counternarcotics investigations and operations. Under the guidance of the Ambassador, the DEA conducts joint investigations with its Thai counterparts in an aggressive effort to combat common drug trafficking threats. During 2004, the DEA in Thailand expanded its investigative initiatives to greater reflect and contribute to the execution of the United States’ national drug strategy. In two areas, in particular, the DEA in Thailand attempted to advance counternarcotics capabilities of Thai law enforcement entities while significantly contributing to reduced drug flow into the U.S. and more effective prosecutions of transnational drug traffickers operating out of the Kingdom of Thailand.

Bilateral Cooperation. The first policy and enforcement initiative of note was a vastly increased emphasis in 2004 on Thailand-based drug traffickers distributing pharmaceuticals and other controlled substances directly to consumers in the United States. Beginning in November 2003 and continuing throughout most of 2004, the DEA worked with Royal Thai Customs (RTC) to identify, target and dismantle a Bangkok based organization that was mailing pharmaceutical drugs such as Xanax, Valium, and diazepam to U. S. consumers. Recognizing that abuse of pharmaceuticals is one of the fastest growing and most persistent abuse problems in the U.S., the DEA dedicated considerable resources to properly implement this new initiative and set up a task force composed of the DEA, the RTC, the Thai Transnational Crime Division (CSD), the Royal Thai Postal Authority, and members from two the DEA’s Sensitive Investigative Units began a concentrated effort to identify and investigate the Thailand-based individuals that were involved in illegally supplying U.S. consumers.

The second initiative of note undertaken by the DEA in Thailand during 2004 was the close coordination with Thai authorities with regard to information received during court-authorized wiretaps in Thailand. Previously, information gathered on such legal wiretaps was passed to the United States as an integral part of joint investigations. However, that information could only be used for intelligence and lead purposes, and not in court cases in the United States. During 2004, the DEA in Thailand began investigating a transnational drug trafficking syndicate based in Bangkok. This organization traffics in cocaine and heroin in a number of countries throughout the world, including Thailand, the United States, and numerous other countries. Recognizing the scope and significance of this organization, Thai authorities revised their policies and agreed to permit the information intercepted inside Thailand to be used in courts in the United States. This opened the door to greatly enhanced investigations because it permitted, for the first time, drug law enforcement agencies in other jurisdictions in the U.S. and other countries to use leads obtained in Thailand to initiate court-authorized wiretaps in their own jurisdictions.

The Road Ahead. Despite reduction of U.S. financial assistance, RTG agencies concerned with drug law enforcement, opium poppy crop control, and drug abuse prevention and treatment, will continue with their own resources to effectively and successfully implement all aspects of Thailand’s comprehensive national strategy against abuse, trafficking and production of illicit drugs. Thailand will further expand its role as a regional leader in drug control and efforts against related forms of transnational crime, will continue to cooperate closely with the international community on these issues, and will continue to increase its participation as a provider of expertise and donor of assistance in these areas. Further legislation to employ advanced techniques for investigation and prosecution of drug and other serious criminal offenses will be approved over the next few years. This can be expected to address, among other issues, more extensive types of plea bargaining, co-conspirator and cooperating defendant testimony, witness protection, and controlled deliveries. Concerned Thai criminal justice institutions, with U.S. assistance, will become proficient in use of such laws, procedures and practices for prosecution of transnational and organized crime. Close cooperation between Thailand and the U.S. will continue on drug and other crime control issues. Extradition and mutual legal assistance relationships, and investigative cooperation between law enforcement authorities, will remain strong. Regional cooperation against transnational crime will be further promoted through continued effective operation of ILEA/Bangkok.

Action to prevent, control, disclose and punish public corruption will remain the most difficult long-term challenge to the RTG. Over the next several years, the RTG should begin to develop improved public ethics regimes, internal oversight mechanisms, and mechanisms to more effectively enlist public participation and support in measures against official corruption. Thailand should move as promptly as possible to complete necessary domestic legislative procedures to enable it to ratify the UN Convention Against Transnational Organized Crime and the UN Convention Against Corruption and should give special attention to designing and implementing specific measures to promote public integrity and prevent official corruption, such as those identified in the UN Corruption Convention.


I. Summary

The Government of Vietnam (GVN) continued to make progress in its counternarcotics efforts during 2004. Specific actions included: sustained efforts of counternarcotics law enforcement authorities to pursue drug traffickers; increased attention to interagency coordination; continued cooperation with the United Nations Office on Drugs and Crime (UNODC); increased attention to both drug treatment and harm reduction; an increased tempo of public awareness activities; and additional bilateral cooperation on HIV/AIDS. Additionally, in March, the U.S.-Vietnam counternarcotics Letter of Agreement (LOA), which was negotiated to permit the United States to provide counternarcotics assistance to Vietnam, entered into force, and the two sides completed the first of the LOA projects. However, real operational cooperation between Vietnamese law enforcement and DEA’s Hanoi Country Office (HCO) was minimal. Vietnam 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.

II. Status of Country

GVN, UNODC and law enforcement officials no longer consider cultivation a major problem, despite the fact that Vietnam meets the U.S. legislative definition of a "major drug-producing" country based on a 2000 USG imagery-based survey showing 2,300 hectares of poppy cultivated in the northern and western provinces of Lai Chau, Son La and Nghe An. The GVN claims a much lower figure (32.5 hectares) and official UNODC statistical tables no longer list Vietnam separately in drug production analyses. Cultivation in Vietnam probably accounts for about one percent of cultivation in Southeast Asia, according to a law enforcement estimate; DEA has no evidence of any Vietnamese-produced narcotics reaching the United States. There appear to be small amounts of cannabis grown in remote regions of southern Vietnam. Vietnam has not been considered a source or transit country for precursors. Heroin from the Golden Triangle and China transits Vietnam en route to Taiwan, Hong Kong and, increasingly, Australia, and during 2004, large amounts of cannabis, heroin and synthetic drugs entered Vietnam from Cambodia. GVN authorities are particularly concerned about rising amphetamine-type stimulant (ATS) use among urban youth and, during 2004, increased the tempo of enforcement and awareness programs that they hope will avoid a youth epidemic.

Despite some high-profile cases in 2004, lack of training, resources and experience both among law enforcement and judicial officials continues to plague Vietnamese counternarcotics efforts. In addition, resource constraints in drug law enforcement and treatment are pervasive. Drug laws remain very tough in Vietnam. Possession of 100 grams of heroin or five kilograms of opium gum or cannabis resin or 75 kilograms of cannabis or opium plants may result in the death penalty. For possession or trafficking of 600 grams or more of heroin, the death penalty is mandatory.

Foreign law enforcement sources do not believe that major trafficking groups have moved into Vietnam. Relatively small groups—perhaps five to 15 individuals, who are often related to each other—do most narcotics trafficking. DEA believes that as Vietnam becomes a more "attractive" transit country, larger trafficking groups could become more prominent.

III. Country Actions Against Drugs in 2004

Policy Initiatives. The structure of the GVN’s counternarcotics efforts is built around the National Committee on AIDS, Drugs and Prostitution Control (NCADP), which includes a broad spectrum of GVN ministries and mass organizations. In addition, MPS has a specialized unit to combat and suppress drug crimes. According to UNODC, during 2004 the GVN continued to focus on the drug issue, which included an increase in attention from the state-controlled media and GVN-funded training courses, conferences, and international delegations. Many provinces and cities implemented their own drug awareness and prevention programs, as well as demand reduction and drug treatment. The GVN views drug awareness and prevention as a significant objective in its fight against drugs as well as an integral part of its effort to comply fully with the 1988 UN Drug Convention. The GVN has continued to rely heavily on counternarcotics information campaigns, culminating in the annual drug awareness week in June. Officially sponsored activities cover every aspect of society, from schools to unions to civic organizations and government offices. This year, the GVN also made a particular effort to de-stigmatize drug addicts in order to increase their odds of successful treatment. Enforcement played a significant role in the GVN’s 2004 counternarcotics activities as well. In 2004, May, June and July saw significant drug seizures in Ho Chi Minh City and Hanoi as well as provinces throughout the country.

At a March NCADP-organized conference, participants at the conference stated that drug crimes are on the rise, and drug seizure data shows a large increase in both the number of drug cases and the per-case quantity of drugs seized. The drug addiction relapse rate is still high, at about 70 percent. According to official numbers released at the conference, there are 160,670 drug users nationwide with 80 treatment centers providing treatment to over 40,000 drug addicts. One of the main outcomes of a high-priority USG-funded UNODC project was the establishment of six interagency counternarcotics enforcement task force units in six border "hotspot" areas. The establishment of these task forces represented a high mark in the normally weak interagency cooperation process among Vietnamese security forces.

Accomplishments. In 2004 the GVN established a narcotics branch in the Department of Crime Statistics in the Supreme People’s Procuracy. The new office improved the GVN’s collection and sharing of crime statistics. In March the GVN made some final changes that allowed the entry into force of the letter of agreement on counternarcotics activities between the United States and Vietnam. The first project under the LOA, a training course for counternarcotics police and customs officers from all over Vietnam, occurred in Hanoi in August. U.S. Customs and Border Protection agents who taught the course reported that it had an effect immediately: using the new search techniques he had learned in the training the week earlier, one of the inspectors discovered an Australia-bound heroin courier.

Law Enforcement Efforts. The GVN continued a policy of strict punishment for drug offenses. Seizures of opium, heroin, and amphetamine-type stimulants (ATS) increased during the year. According to GVN statistics, during the first six months of calendar year 2004, there were 5,376 drug cases involving 8,484 traffickers with larger amounts of heroin and synthetic drugs seized. Total seizures include 100.3 kilograms of heroin, 53.3 kilograms of opium, 622.7 kilograms of cannabis, 23,902 methamphetamine tablets and 4,128 ampoules of addictive pharmaceuticals and other substances.

All international law enforcement representatives in Vietnam acknowledged that real operational cooperation on counternarcotics cases is minimal or nonexistent due to legal prohibitions against foreign security personnel operating on Vietnamese soil. Without changes in Vietnamese law to permit foreign law enforcement officers to work on drug cases in Vietnam, "cooperation" will remain a function of information exchange and Vietnamese police carrying out law enforcement activities on behalf of foreign agencies on a case-by-case basis. During 2004, GVN law enforcement authorities did not provide meaningful cooperation to DEA’s Hanoi country office. DEA agents have not been permitted to work with GVN counternarcotics investigators officially. Cooperation was limited to receiving information from DEA and holding occasional meetings. Thus far, the counternarcotics police have declined to share information with DEA or cooperate operationally. GVN officials explain that drug information is subject to national security regulations and not releasable to foreigners. To date, there has been nothing concrete to indicate that the GVN has any intention of taking the necessary administrative or legislative steps to permit DEA to expand beyond its current liaison role.

Corruption. In 2004 the GVN made anticorruption policy statements at all levels of government and conducted some high-profile corruption cases involving politically connected government officials, but did not single out narcotics-related corruption for specific attention. The USG has 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. Concerning narcotics-related corruption, the GVN did demonstrate willingness in 2004 to prosecute officials, though the targets were relatively low-level. The UN, law enforcement agencies, and the GVN continue to view corruption in Vietnam as an endemic problem that exists at all levels and in all sectors. Vietnam ranks 97 out of 104 countries in the World Economic Forum’s corruption index. The GVN’s own estimates state that as much as 19 percent of the investment in major infrastructure projects is lost to poor management and corruption. Vietnam has signed the UN Convention against Corruption, and endorsed a regional anticorruption action plan at an ADB (Asia Development Bank) meeting in Manila. Recognizing the need for more anticorruption assistance, the GVN signed an agreement with Sweden in September 2002 for research on socio-economic policy and anticorruption measures. Under the $2.7 million project, scheduled to run from the end of 2002 through 2005, Sweden will provide resources to assist Vietnam in developing appropriate anticorruption policies.

Agreements and Treaties. Vietnam 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. Vietnam is currently precluded by statute from extraditing Vietnamese nationals, but the GVN is contemplating legislative changes. However, at the request of the USG (and in accordance with the 1988 UN Drug Convention), Vietnam has in the past agreed to rendition requests and has returned two non-Vietnamese nationals to the U.S. Vietnam has signed but has not yet ratified the UN Convention on Transnational Organized Crime.

Cultivation/Production. Small amounts of opium are grown in hard-to-reach 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 opium poppy 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 2000. There have been reports in past years concerning probable indications of ATS production, as well as some seizures of equipment (i.e., pill presses). DEA also turned up information pointing to an extremely large methamphetamine lab in Ho Chi Minh City in 2004. As part of its efforts to comply fully with the 1988 UN Drug Convention, the GVN continued in 2004 to eradicate poppy when found, and to implement crop substitution. The GVN appears sincere in its poppy eradication efforts. However, GVN officials have admitted that 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’s Ministry of Agriculture and Rural Development (MARD) continues to support crop substitution projects in various provinces, including a large (partially USG financed) project in Nghe An. The GVN has tasked MARD with developing a national crop substitution proposal to include in the GVN’s 2006-2010 Master Plan.

Drug Flow/Transit. While law enforcement sources and UNODC believe that significant amounts of drugs are transiting Vietnam, DEA has not yet identified a case of heroin entering the United States directly from Vietnam. More commonly, drugs, especially heroin and opium, enter Vietnam from Laos and Cambodia, making their way to Hanoi or especially to Ho Chi Minh City, where they are transshipped by air or sea to other countries. The Australia-Vietnam heroin smuggling channel is significant. The ATS flow into the country during 2004 continued to be serious and not limited to border areas. According to Vice Minister of Public Security Le The Tiem, in addition to opium or heroin, ATS can now be found throughout the country. According to "Phap Luat" (Law) newspaper, ketamine has emerged this year in Hanoi and other major cities. Law enforcement agencies gave warnings of the spreading use of ketamine in nightclubs and discos and called for stricter control of diversion from legal sources.

Domestic Programs/Demand Reduction. Within the GVN, the Ministry of Culture and Information (MCI) is responsible for public drug control information and education among the general population. The Ministry of Education and Training (MOET) carries out awareness activities in schools. Counternarcotics material is available in all schools and MOET sponsors various workshops and campaigns at all school levels. MOET reported that drug abuse remains a problem among the students in 51 universities, colleges and vocational schools in 50 provinces and cities. In its 2004 drug activity report, SODC reported that the border forces continued to play an "active role" in disseminating counternarcotics information to border villages and communes.

According to UNAIDS and the GVN, nearly 70 percent of cumulative HIV/AIDS cases in Vietnam are related to injection drug use. Furthermore, HIV surveillance indicates that nationwide, more than 30 percent of IDUs are HIV-infected; this percentage is much higher (60-80 percent) in Ho Chi Minh City, (65-85 percent) in Quang Ninh Province and other northeastern provinces. Vietnam has a network of drug treatment centers. According to MOLISA, with three new facilities in Binh Phuoc (2) and Hanoi (1), there are now 74 centers at the provincial level and 7,100 treatment facilities at lower levels. The provincial centers have a capacity of between 100 to 3,000 addicts each. According to Vice Minister of Public Security Le The Tiem, the addiction growth rate has been reduced, but the absolute number of addicts keeps increasing. As resources permit, localities have tried to increase the percentage of drug users in treatment centers (as opposed to permitting "community treatment," a kind of outpatient drug treatment program). Hanoi, for example is attempting to put all known drug addicts in treatment centers and to launch a pilot compulsory treatment program in Gia Lam and Dong Anh Districts. This effort has been slowed by overcrowding and under capacity. Vietnam has also strived to integrate addiction treatment and vocational training to facilitate the rehabilitation of drug addicts. These efforts include tax and other economic incentives for businesses, which hire recovered addicts. Despite these efforts, at most 18 percent of recovered addicts find regular employment, and there has been some domestic criticism that keeping recovering addicts in supervised "employment parks" is a way of applying administrative punishment through "detention" in a way that fails to ensure the detainees’ civil rights. HIV/AIDS is a serious and growing problem in Vietnam and one that is closely related to intravenous drug use. In July 2004 Vietnam was designated the 15th focus country of PEPFAR (President Emergency Plan for AIDS Relief) and USG’s funding for FY05 is expected to be $32 million. The Emergency Plan will support existing agencies working in HIV/AIDS in Vietnam, including USAID, U.S. CDC, DOL and DOD. The USAID budget for FY 2004 was $4.5 million for HIV/AIDS, administered through several non-governmental organizations. USAID’s funding level will rise to $9.2 million in 2004.

IV. U.S. Policy Initiatives and Programs

In 2003, Vietnam and the United States completed and signed a bilateral counternarcotics agreement, which came into force in 2004. The agreement included counternarcotics and law enforcement projects totaling $333,390. It represents the first direct bilateral counternarcotics program assistance to Vietnam. The USG currently funds training annually for some GVN law enforcement officers and other officials involved in the legal arena for courses at the International Law Enforcement Academy (ILEA) in Bangkok. During calendar year 2004, U.S. Embassy Hanoi sent 65 Vietnamese law enforcement officers for training at the Academy. The USG also contributes to counternarcotics efforts through the UNODC. During 2004, the USG made contributions to two projects: "Measures to Prevent and Combat Trafficking in Persons in Vietnam," and "Interdiction and Seizure Capacity Building with Special Emphasis on ATS and Precursors." The ATS project achieved its main goals in 2004 with the signing of an interagency MOU and the establishment of six interagency task forces at key border "hotspots" around the country.

The Road Ahead. The GVN is acutely aware of the threat of drugs and Vietnam’s increasing domestic drug problem. However, there is continued suspicion of foreign law enforcement assistance and/or intervention in the counternarcotics arena, especially from the United States. During 2004, as in previous years, the GVN made progress with ongoing and new initiatives aimed at the law enforcement and social problems that stem from the illegal drug trade. Notwithstanding a lack of meaningful operational cooperation with DEA, the GVN continued to show a willingness to take unilateral action against drugs and drug trafficking. Vietnam still faces many internal problems that make fighting drugs a challenge. With the entry into force of the counternarcotics LOA, the USG can look forward to enhanced counternarcotics cooperation in the area of assistance to Vietnamese law enforcement agencies. Operational cooperation, however, remains on hold pending the development of a legal framework in Vietnam to allow foreign law enforcement officers to carry out operations on Vietnamese soil, or the signing of a bilateral agreement between the United States and Vietnam that would create a mechanism for joint investigation and development of drug cases. Neither the legal overhaul nor the bilateral agreement seems likely to occur in the short term.

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