Legislative Basis for the INCSR
The Department of State's International Narcotics Control Strategy Report (INCSR) has been prepared in accordance with section 489 of the Foreign Assistance Act of 1961, as amended (the "FAA," 22 U.S.C. � 2291). The 2006 INCSR, published in March 2006, covers the year January 1 to December 31, 2005 and is published in two volumes, the second of which covers money laundering and financial crimes. It is the 23rd annual report prepared pursuant to the FAA. In addition to addressing the reporting requirements of section 489 of the FAA (as well as sections 481(d)(2) and 484(c) of the FAA and section 804 of the Narcotics Control Trade Act of 1974, as amended), the INCSR provides the factual basis for the designations contained in the President's report to Congress on the major drug-transit or major illicit drug producing countries initially set forth in section 591 of the Kenneth M. Ludden Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2002 (P.L. 107-115) (the "FOAA"), and now made permanent pursuant to section 706 of the Foreign Relations Authorization Act, Fiscal Year 2003 (P.L. 107-228) (the "FRAA").
Section 706 of the FRAA requires that the President submit an annual report no later than September 15 identifying each country determined by the President to be a major drug-transit country or major illicit drug producing country. The President is also required in that report to identify any country on the majors list that has "failed demonstrably . . . to make substantial efforts" during the previous 12 months to adhere to international counternarcotics agreements and to take certain counternarcotics measures set forth in U.S. law. U.S. assistance under the FY 2004 FOAA may not be provided to any country designated as having "failed demonstrably" unless the President determines that the provision of such assistance is vital to the U.S. national interests or that the country, at any time after the President's initial report to Congress, has made "substantial efforts" to comply with the counternarcotics conditions in the legislation. This prohibition does not affect humanitarian, counternarcotics, and certain other types of assistance that are authorized to be provided notwithstanding any other provision of law.
The FAA requires a report on the extent to which each country or entity that received assistance under chapter 8 of Part I of the Foreign Assistance Act in the past two fiscal years has "met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances" (the "1988 UN Drug Convention"). FAA � 489(a)(1)(A).
Although the Convention does not contain a list of goals and objectives, it does set forth a number of obligations that the parties agree to undertake. Generally speaking, it requires the parties to take legal measures to outlaw and punish all forms of illicit drug production, trafficking, and drug money laundering, to control chemicals that can be used to process illicit drugs, and to cooperate in international efforts to these ends. The statute lists action by foreign countries on the following issues as relevant to evaluating performance under the 1988 UN Drug Convention: illicit cultivation, production, distribution, sale, transport and financing, and money laundering, asset seizure, extradition, mutual legal assistance, law enforcement and transit cooperation, precursor chemical control, and demand reduction.
In attempting to evaluate whether countries and certain entities are meeting the goals and objectives of the 1988 UN Drug Convention, the Department has used the best information it has available. The 2006 INCSR covers countries that range from major drug producing and drug-transit countries, where drug control is a critical element of national policy, to small countries or entities where drug issues or the capacity to deal with them are minimal. The reports vary in the extent of their coverage. For key drug-control countries, where considerable information is available, we have provided comprehensive reports. For some smaller countries or entities where only sketchy information is available, we have included whatever data the responsible post could provide.
The country chapters report upon actions-including plans, programs, and, where applicable, timetables-toward fulfillment of Convention obligations. Because the 1988 UN Drug Convention's subject matter is so broad and availability of information on elements related to performance under the Convention varies widely within and among countries, the Department's views on the extent to which a given country or entity is meeting the goals and objectives of the Convention are based on the overall response of the country or entity to those goals and objectives. Reports will often include discussion of foreign legal and regulatory structures. Although the Department strives to provide accurate information, this report should not be used as the basis for determining legal rights or obligations under U.S. or foreign law.
Some countries and other entities are not yet parties to the 1988 UN Drug Convention; some do not have status in the United Nations and cannot become parties. For such countries or entities, we have nonetheless considered actions taken by those countries or entities in areas covered by the Convention as well as plans (if any) for becoming parties and for bringing their legislation into conformity with the Convention's requirements. Other countries have taken reservations, declarations, or understanding to the 1988 UN Drug Convention or other relevant treaties; such reservations, declarations, or understandings are generally not detailed in this report. For some of the smallest countries or entities that have not been designated by the President as major illicit drug producing or major drug-transit countries, the Department has insufficient information to make a judgment as to whether the goals and objectives of the Convention are being met. Unless otherwise noted in the relevant country chapters, the Department's Bureau of International Narcotics and Law Enforcement Affairs (INL) considers all countries and other entities with which the United States has bilateral narcotics agreements to be meeting the goals and objectives of those agreements.
Information concerning counternarcotics assistance is provided, pursuant to section 489(b) of the FAA, in section entitled "U.S. Government Assistance."
Major Illicit Drug Producing, Drug-Transit, Significant Source, Precursor Chemical, and Money Laundering Countries
Section 489(a)(3) of the FAA requires the INCSR to identify:
(A) major illicit drug producing and major drug-transit countries,
(B) major sources of precursor chemicals used in the production of illicit narcotics; or
(C) major money laundering countries.
These countries are identified below.
Major Illicit Drug Producing and Major Drug-Transit Countries
A major illicit drug producing country is one in which:
(A) 1,000 hectares or more of illicit opium poppy is cultivated or harvested during a year;
(B) 1,000 hectares or more of illicit coca is cultivated or harvested during a year; or
(C) 5,000 hectares or more of illicit cannabis is cultivated or harvested during a year, unless the President determines that such illicit cannabis production does not significantly affect the United States. FAA � 481(e)(2).
A major drug-transit country is one:
(A) that is a significant direct source of illicit narcotic or psychotropic drugs or other controlled substances significantly affecting the United States; or
(B) through which are transported such drugs or substances. FAA � 481(e)(5).
The following major illicit drug producing and/or drug-transit countries were identified and notified to Congress by the President consistent with section 706(1) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228):
Afghanistan, The Bahamas, Bolivia, Brazil, Burma, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, and Venezuela.
Major Precursor Chemical Source Countries
The following countries have been determined to be major sources of precursor or essential chemicals used in the production of illicit narcotics:
Argentina, Brazil, Canada, China, Germany, India, Mexico, the Netherlands, and the United States.
Information is provided pursuant to section 489 of the FAA in the section entitled "Chemical Controls."
Major Money Laundering Countries
A major money laundering country is defined by statute as one "whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking." FAA � 481(e)(7). However, the complex nature of money laundering transactions today makes it difficult in many cases to distinguish the proceeds of narcotics trafficking from the proceeds of other serious crime. Moreover, financial institutions engaging in transactions involving significant amounts of proceeds of other serious crime are vulnerable to narcotics-related money laundering. This year's list of major money laundering countries recognizes this relationship by including all countries and other jurisdictions, whose financial institutions engage in transactions involving significant amounts of proceeds from all serious crime. The following countries/jurisdictions have been identified this year in this category:
Afghanistan, Antigua and Barbuda, Australia, Austria, Bahamas, Belize, Bosnia and Herzegovina, Brazil, Burma, Cambodia, Canada, Cayman Islands, China, Colombia, Costa Rica, Cyprus, Dominican Republic, France, Germany, Greece, Guatemala, Guernsey, Haiti, Hong Kong, Hungary, India, Indonesia, Isle of Man, Israel, Italy, Japan, Jersey, Latvia, Lebanon, Liechtenstein, Luxembourg, Macau, Mexico, Netherlands, Nigeria, Pakistan, Panama, Paraguay, Philippines, Russia, Singapore, Spain, St. Kitts and Nevis, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, and Venezuela.
Further information on these countries/entities and United States money laundering policies, as required by section 489 of the FAA, is set forth in Volume II of the INCSR in the section entitled "Money Laundering and Financial Crimes."
White House Press Release
Office of the Press Secretary
September 15, 2005
Presidential Determination No. 2005-36
Pursuant to section 706(1) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107 228)(FRAA), I hereby identify the following countries as major drug transit or major illicit drug producing countries: Afghanistan, The Bahamas, Bolivia, Brazil, Burma, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, and Venezuela.
A country's presence on the Majors List is not necessarily an adverse reflection of its government's counternarcotics efforts or level of cooperation with the United States. Consistent with the statutory definition of a major drug transit or drug-producing country set forth in section 481(e)(2) and (5) of the Foreign Assistance Act of 1961, as amended (FAA), one of the reasons that major drug transit or illicit drug producing countries are placed on the list is the combination of geographical, commercial, and economic factors that allow drugs to transit or be produced despite the concerned government's most assiduous enforcement measures.
Pursuant to section 706(2)(A) of the FRAA, I hereby designate Burma and Venezuela as countries that have failed demonstrably during the previous 12 months to adhere to their obligations under international counternarcotics agreements and take the measures set forth in section 489(a)(1) of the FAA. Attached to this report (Tab A) are justifications for the determinations on Burma and Venezuela, as required by section 706(2)(B).
I have also determined, in accordance with provisions of section 706(3)(A) of the FRAA, that support for programs to aid Venezuela's democratic institutions, establish selected community development projects, and strengthen Venezuela's political party system is vital to the national interests of the United States.
I have removed China and Vietnam from the list of major drug transit or major illicit drug producing countries because there is insufficient evidence to suggest that China is a major source zone or transit country for illicit narcotics that significantly affect the United States. There is insufficient evidence to refute claims by the Government of Vietnam that they have virtually eliminated opium poppy production. Additionally, although cooperation with United States law enforcement is limited, there are no indications of a significant Vietnam based drug threat to the United States.
Despite the Government of Afghanistan's counternarcotics efforts, we remain concerned about the disturbing magnitude of the drug trade and the prospect that opium poppy cultivation will likely increase in 2006. We are also concerned about government corruption, especially at the regional and local levels, impeding counternarcotics efforts. For these efforts to be effective, government corruption with respect to the opium economy must be seriously addressed by both local and central government authorities.
The Government of Canada has made real progress in curbing the diversion into the United States of pseudoephedrine, which fuels the production of methamphetamine. There are indications, however, that Canadian based criminal groups are increasingly involved in the production of MDMA (ecstasy) destined for the United States. Large scale cross-border trafficking of Canadian grown marijuana remains a serious concern. The United States appreciates the excellent law enforcement cooperation with Canada in combating these shared threats.
While Haiti made efforts this year to improve its performance, we reiterate our concerns from last year about the Interim Government of Haiti's inability to effectively organize Haitian law enforcement resources to permit sustained counternarcotics efforts. Further, the national criminal justice system must be significantly strengthened in order to be effective and gain public confidence.
The Government of The Netherlands has achieved considerable success in countering the production and flow of MDMA (ecstasy) to the United States, and The Netherlands is commended for its enhanced efforts. In the coming year, the United States would like to build upon our law enforcement cooperation with the Dutch government through advancements in mutual legal assistance and direct engagement between our respective police agencies.
Drug trafficking, money laundering, and other organized criminal activity in Nigeria remain major sources of concern to the United States. Progress over the past year on anti money laundering controls is welcome, but much remains to be done to make such controls effective. Implementing anti corruption policies must advance more quickly, as corruption at all levels of government continues to hamper effective narcotics law enforcement. In addition, measures similar to those taken to improve drug law enforcement at Nigeria's main airport need to be expanded to, and replicated at, Nigeria's seaports, where drug trafficking is a growing concern. Finally, the National Drug Law Enforcement Agency (NDLEA) and other counternarcotics institutions should work towards developing the mindset and capacity to pursue investigations, and prosecutions of major drug traffickers based in the country.
We remain concerned with the continued involvement by the Democratic People's Republic of Korea (DPRK) in criminal activity, including drug production and drug trafficking. Given the close relationship between Japanese and Chinese criminal elements and DPRK drug traffickers in past smuggling incidents, there is a real possibility of continuing DPRK involvement in drug trafficking, even when a given incident appears only to involve ethnic Chinese or other organized Asian criminal groups.
You are hereby authorized and directed to submit this determination to the Congress and to publish it in the Federal Register.
GEORGE W. BUSH
Annual Presidential Determinations of Major Illicit Drug-Producing and Drug-Transit Countries
Statement by the Press Secretary
President Bush has authorized the Secretary of State to transmit to Congress the annual report listing major illicit drug-producing and drug-transit countries (known as the "Majors List"). The same report contains Presidential determinations of the countries that have "failed demonstrably" to make substantial efforts during the previous 12 months to adhere to international counternarcotics agreements and to take the counternarcotics measures specified in U.S. law.
In his report, the President identified as major drug-transit or major illicit drug-producing countries: Afghanistan, The Bahamas, Bolivia, Brazil, Burma, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, and Venezuela.
The President removed China and Vietnam from the list of major drug-transit or major illicit drug-producing countries.
The President also reported to Congress his determination that Burma and Venezuela have "failed demonstrably," during the previous 12 months, to adhere to their obligations under international counternarcotics agreements and take the measures set forth in U.S. law. However, the President also determined to maintain U.S. programs that aid Venezuela's democratic institutions, establish selected community development projects, and strengthen Venezuela's political party system.
The certification determinations required the President to consider each country's performance in areas such as reducing illicit cultivation, interdiction, law enforcement cooperation, extraditing drug traffickers, and taking legal steps and law enforcement measures to prevent and punish public corruption that facilitates drug trafficking or impedes prosecution of drug-related crimes. The President also considered efforts taken by these countries to stop production and export of, and reduce the domestic demand for, illegal drugs.