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 2013 INCSR, published in March 2013, covers the year January 1 to December 31, 2012 and is published in two volumes, the second of which covers money laundering and financial crimes. 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 current foreign operations appropriations act 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 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).
Several years ago, pursuant to The Combat Methamphetamine Enforcement Act (CMEA) (The USA Patriot Improvement and Reauthorization Act 2005, Title VII, P.L. 109-177), amending sections 489 and 490 of the Foreign Assistance Act (22 USC 2291h and 2291) section 722, the INCSR was expanded to include reporting on the five countries that export the largest amounts of methamphetamine precursor chemicals, as well as the five countries importing the largest amounts of these chemicals and which have the highest rate of diversion of the chemicals for methamphetamine production. This expanded reporting, which appears in this year’s INCSR and will appear in each subsequent annual INCSR report, also includes additional information on efforts to control methamphetamine precursor chemicals, as well as estimates of legitimate demand for these methamphetamine precursors, prepared by most parties to the 1988 UN Drug Convention and submitted to the International Narcotics Control Board. The CMEA also requires a Presidential determination by March 1 of each year on whether the five countries that legally exported and the five countries that legally imported the largest amount of precursor chemicals (under FAA section 490) have cooperated with the United States to prevent these substances from being used to produce methamphetamine or have taken adequate steps on their own to achieve full compliance with the 1988 UN Drug Control Convention. This determination may be exercised by the Secretary of State pursuant to Executive Order 12163 and by the Deputy Secretary of State pursuant to State Department Delegation of Authority 245.
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 actions 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 2013 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 limited information is available, we have included whatever data the responsible post could provide.
The country chapters report upon actions taken - 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 understandings 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 for 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."
THE WHITE HOUSE
September 14, 2012
Presidential Determination No. 2012-15
MEMORANDUM FOR THE SECRETARY OF STATE
SUBJECT: Presidential Determination on Major Illicit Drug Transit or Major Drug Producing Countries for Fiscal Year 2012
Pursuant to Section 706(1) of the Foreign Relations Authorization Act, FY03 (P.L. 107-228)(the FRAA), I hereby identify the following countries as major drug transit and/or major illicit drug producing countries: Afghanistan, The Bahamas, Belize, Bolivia, Burma, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, India, Jamaica, Laos, Mexico, Nicaragua, Pakistan, Panama, 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 (the FAA), one of the reasons major drug transit or illicit drug producing countries are placed on the list is the combination of geographic, commercial, and economic factors that allow drugs to transit or be produced, even if a government has carried out the most assiduous narcotics control law enforcement measures.
Pursuant to Section 706(2)(A) of the FRAA, I hereby designate Bolivia, 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. Included in this report are justifications for the determinations on Bolivia, 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 Bolivia, Burma and Venezuela are vital to the national interests of the United States.
Afghanistan produces approximately 90 percent of the world’s illicit opium. Nearly all of this cultivation occurs in four southern and western provinces. Instability in the area allows criminal networks, insurgent groups, and illicit cultivation and drug production to thrive. While Helmand Province continues to be the largest poppy-cultivating area, the United States and the United Nations Office on Drugs and Crime (UNODC) estimate that cultivation in Helmand decreased between 35 and 39 percent, respectively, since 2008, to roughly 63,000 hectares.
The strategic objective of Afghanistan’s Ministry of Counter Narcotics (MCN), as stated in its National Drug Control Strategy, is “to create a secure environment for a healthy society with a strong licit economy, through evidence-based policy-setting, effective coordination and full accountability to the people of Afghanistan and our government.” The ongoing Good Performer Initiative, now in its sixth year, rewards provinces for successful counternarcotics performance. In 2011, 22 of Afghanistan’s 34 provinces qualified for $19.2 million in development projects as the result of their poppy reduction efforts.
Afghanistan’s gains remain fragile. Reducing illegal cultivation and trafficking are closely linked to broader economic opportunity, security and the ability of the government of Afghanistan to project the rule of law. International support for the Afghan National Drug Control Strategy, including from the United States, is designed to bolster the country’s drug control undertakings and is directly tied to the success of the country’s wide-ranging national objectives to improve peace, security and economic development.
This year, the Caribbean was examined for its relative importance as a transit zone for illegal substances destined for U.S. markets. Without factoring in illegal maritime and air drug smuggling believed to be destined for Europe and beyond, approximately 5 percent of all drugs destined for United States are estimated to pass through the majors list countries of The Bahamas, Dominican Republic, Haiti and Jamaica. As traffickers constantly reorder their routes and methods, the United States and other donors continue to believe that countering the drug trade in the Caribbean is in our national interest, as well as that of the countries themselves. Without the rule of law, well-run institutions, and effective drug interdiction, the viability of the broad range of national and regional goals adopted by the Caribbean countries is threatened.
European, Canadian and U.S. bilateral drug control support, as well as the Caribbean Basin Security Initiative, contribute to the region’s ability to prevent and address drug trafficking and related violence and crime in the Caribbean. Similarly, key undertakings by the Organization of American States and UNODC in the region – especially those aimed at bringing long-term stability to Haiti – are an important part of the policy and assistance mosaic for smaller countries seeking to build on the successes of broad regional policies and programs.
United States analysts estimate that approximately 95 percent of illegal drugs cultivated and produced in South America destined for the United States are smuggled through Central America, Mexico and the Eastern Pacific, primarily using maritime conveyances and illegal air flights. In response, the United States launched the Central American Regional Security Initiative (CARSI) in 2008, which was further expanded when I announced the Central America Citizen Security Partnership in San Salvador in March 2011. Through CARSI and the Partnership, the United States has focused its crime prevention, counternarcotics, law enforcement and security assistance, and bolstered rule of law institutions in Central America. The region also has strengthened cooperation through the Central American Integrated System (SICA) to promote citizen security and other programs. Multilateral cooperation to stem the flow of precursor chemicals from as far away as China that are used to produce illegal methamphetamine in Central America is an important component of SICA’s unprecedented regional cooperation. Similar objectives are achieved through U.S. support for Mexico’s drug-control policies and programs under the Merida Initiative.
Several other countries were evaluated for inclusion in this year’s list, but are not determined to be major drug transit and/or major illicit drug producing countries. For example, Canada has taken effective steps to stem the flow of synthetic MDMA (ecstasy) across its shared border with the United States, a problem of growing concern during the past several years. The country continues its robust efforts to production, distribution, and consumption of various illegal drugs. As part of its 5-year National Anti-Drug Strategy, Canada has rolled out new initiatives specifically intended to fight the trafficking of marijuana and synthetic drugs. As detailed in the March 2011 report on precursors by the International Narcotics Control Board, Canada broadened its existing Controlled Drugs and Substances Act to prohibit any person from possessing, producing, selling or importing material intended to be used in the illegal manufacture or trafficking of methamphetamine or ecstasy. The United States has also collaborated with Canada on a National Northern Border Counternarcotics Strategy that defines in detail the wide range of initiatives underway to combat all phases of drug trafficking. Bilateral initiatives focus on programs to stem the two-way drug trade between Canada and the United States.
You are hereby authorized and directed to submit this report, with its Bolivia, Burma and Venezuela memoranda of justification, under Section 706 of the FRAA, to the Congress, and publish it in the Federal Register.
MEMORANDUM OF JUSTIFICATION FOR MAJOR ILLICIT DRUG TRANSIT OR ILLICIT DRUG PRODUCING COUNTRIES FOR FY 2013
During the past 12 months the Government of Bolivia has failed demonstrably to make sufficient efforts to meet its obligations under international counternarcotics agreements or to uphold the counternarcotics measures set forth in Section 489 (a)(1) of the Foreign Assistance Act (FAA) of 1961, as amended.
The United States recognizes that Bolivia has taken some steps to stem illegal drug trafficking and production, and remains committed to the bilateral dialogue designed to establish the basis for a cooperative and productive relationship, especially to agree on joint actions to be taken regarding issues of mutual interest, including counternarcotics.
During the last year, the United States maintained its support for the Government of Bolivia’s counternarcotics programs. The government’s efforts, particularly those supported by the U.S. Government, continued to achieve some goals in interdiction and eradication. However, after Colombia and Peru, Bolivia remains the world’s third largest producer of coca leaf for cocaine and other illegal drug products.
Bolivia’s ability to interdict drugs and major traffickers diminished following its January 2009 expulsion of U.S. Drug Enforcement Administration (DEA) personnel, while the country’s performance in targeting and dismantling foreign drug trafficker organizations operating in Bolivia has improved marginally in recent years. This achievement is through Bolivia’s national efforts and cooperation with neighboring countries, most notably Brazil. Expelling DEA in 2009 has seriously harmed Bolivia’s counternarcotics capability, especially in regard to interdiction. Taken as a whole, eradication and interdiction results have not been adequate to compete with the rising drug trends that have brought Bolivia back to high coca cultivation and cocaine production levels.
The 2011 U.S. Government coca cultivation estimate for Bolivia of 30,000 hectares was slightly lower than the 2010 estimate of 34,500 hectares. The U.N. Office of Drugs and Crime estimated 31,100 hectares of cultivation for 2011, a slight increase over its 2010 estimate of 30,900 hectares. While Bolivia has not yet reversed the increases in net coca cultivation of the past several years, it appears that production has stabilized. Still, the latest U.S. Government estimate of pure cocaine potential production has increased 28 percent from 205 metric tons to 265 metric tons. This increase is due to more efficient processing methods and the growing maturity of existing fields, which contribute to higher yields.
Moreover, Bolivia did not maintain adequate controls over licit coca markets to prevent diversion to illegal narcotics production or close illegal coca markets, and it failed to develop and execute a national drug strategy. Bolivia's efforts to amend the UN 1961 Single Convention on Narcotics Drugs with the aim of removing references to traditional uses for coca leaf including coca leaf chewing were unsuccessful, and the country has since presented a denunciation to the United Nations that made its withdrawal effective January 1, 2012. Bolivia immediately applied to rejoin the Convention, with a reservation to permit the consumption, use, cultivation, trade in and possession of the coca leaf in its natural state for “cultural” and “traditional” purposes. Such action would commercialize the coca leaf and permit coca chewing in Bolivia, which would otherwise be prohibited under the Single Convention, and which only provides limited exemptions for medical or scientific purposes. Bolivia is a signatory to the 1971 and 1988 United Nations Conventions.
Bolivia has taken some narcotics control actions in the past year, but taken as a whole, the country has made a negligible contribution to the worldwide effort to control drugs, thus justifying the “failed demonstrably” finding again for the country. Government policies and actions are not in line with international drug control standards. These include what many countries, and drug control experts, consider Bolivia’s promotion of the idea that coca leaf can be used generally for commercial products, as well as its de facto allowance of 20,000 hectares of legal cultivation, 8,000 more than the 12,000 hectare limit set by the country’s national law.
Unlike other coca growing countries, Bolivia has not implemented many of the U.N.-mandated controls over coca, where some cultivation is permitted for traditional use. The Bolivian government promotes a policy of “social control” of illicit and excess coca cultivation. The policy has diminished violence, but it has not yielded reductions in excess production. Bolivia does not have controls in place to strictly enforce licensing and registration for coca growers, possession of harvested crops, controls over licit markets, and ensuring “licit” products are de-alkalinized.
As a matter of policy, Bolivia does not encourage or facilitate illegal activity associated with drug trafficking, although there have been arrests of corrupt senior counternarcotics police officials, both inside and outside Bolivia, for facilitating drug shipments. In June 2011, former chief Bolivian counternarcotics officer, Rene Sanabria, pleaded guilty to U.S. federal cocaine trafficking charges. Sanabria was the head of an elite drug intelligence unit at the time of his arrest.
The United States encourages Bolivia to strengthen its efforts to achieve tighter controls over the trade in coca leaf to stem diversion to cocaine processing, in line with international treaties; protect its citizens from the deleterious effects of drugs, corruption, and drug trafficking; and achieve net reductions in coca cultivation.
For the near term, drug traffickers will continue to exploit opportunities to process abundant coca leaf available in Bolivia into cocaine base and cocaine hydrochloride. To diminish Bolivia’s appeal to drug traffickers, further government action is required to improve the legal and regulatory environment for security and justice sector efforts to effectively combat drug production and trafficking, money laundering, corruption, and other transnational crime, and bring criminal enterprises to justice through the rule of law.
Bolivia’s efforts during the past 12 months fall short of its obligations to the international community as outlined in the United Nations conventions and bilateral agreements. In accordance with Section 481 (e)(4) of the FAA, the determination of having failed demonstrably does not result in the withholding of humanitarian and counternarcotics assistance. It is in the vital national interest of the United States to grant a waiver so that funding for other assistance programs may be allowed to continue.
MEMORANDUM OF JUSTIFICATION FOR MAJOR DRUG TRANSIT OR ILLICIT DRUG PRODUCING COUNTRIES FOR FY 2013
During the past 12 months the Government of Burma has failed demonstrably to make sufficient efforts to meet its obligations under international counternarcotics agreements or to uphold the counternarcotics measures set forth in Section 489 (a)(1) of the Foreign Assistance Act of 1961(FAA) , as amended. However, during this time period, the Burmese Government has undertaken political and economic reforms to address many of the United States’ longstanding concerns regarding governance, democratization and human rights. Given the government’s demonstrated commitment to reform, and promising signs of action on future poppy eradication, it is in the interest of the U.S. Government to grant Burma a National Interest Waiver (NIW) as part of the 2013 Majors List process.
According to the 2012 International Narcotics Control Strategy Report (INCSR), Burma remains the second largest cultivator of illegal opium poppy in the world. A significant increase was noted from 2010 to 2011. Since 1996, there has been a sharp increase in production, consumption, and export of synthetic drugs, especially amphetamine-type stimulants (ATS). ATS attributed to Burma are trafficked along new routes to Thailand, China and Lao People’s Democratic Republic. The Mekong River is a vital trafficking route and there are growing signs of new routes to the western part of Burma for onward trafficking to South Asia. Reports from India, Nepal and Bangladesh indicate that South Asia is also increasingly affected by the trafficking of methamphetamine pills originating in Burma.
According to government statistics, officials have destroyed 23,584 ha of opium poppies since the beginning of 2012 compared to 7,058 ha in 2011. Similarly the country eradicated 8,268 ha of opium poppy in 2010 compared to only 4,087 ha in 2009. Burma has indicated a willingness to work regionally on counternarcotics initiatives; re-engaged with the international community including the UN Office on Drugs and Crime (UNODC); expressed its desire to cooperate with the United States as part of its reform process, including in cooperative programs to combat illegal drugs; and seeks to improve its counternarcotics cooperation with China and Thailand. At the same time, Burma’s current counternarcotics performance is not sufficient to meet its international counternarcotics cooperation obligations. The Burmese government needs to dedicate adequate resources to its counternarcotics efforts, increase illegal crop eradication, and redouble its efforts to obtain ceasefires with ethnic minorities and document narcotics trafficking by the United Wa State Army.
The decision to grant Burma a National Interest Waiver reflects political change taking place in Burma and the country’s interest in improving its international drug control cooperation. Since its formation in March 2011, Burma’s civilian government has undertaken important political and economic reforms. In late 2011, Secretary Clinton made an historic visit to Burma and committed to supporting Burma’s reform process and matching “action-for-action,” including resumption of counternarcotics cooperation, which had been suspended in 2004 by the Burmese Government. After Secretary Clinton’s visit, and following additional reforms, the United States announced an exchange of ambassadors to restore full diplomatic relations with Burma and an easing of certain travel, financial, and investment related sanctions.
In accordance with Section 481 (e)(4) of the FAA, the determination that Burma has failed demonstrably does not result in the withholding of humanitarian and counternarcotics assistance. It is in the vital interest of the United States to grant a National Interest Waiver to Burma.
MEMORANDUM OF JUSTIFICATION FOR MAJOR DRUG TRANSIT OR ILLICIT DRUG PRODUCING COUNTRIES FOR FY 2013
During the past 12 months, the Government of Venezuela has failed demonstrably to make sufficient efforts to meet its obligations under international counternarcotics agreements or to uphold the counternarcotics measures set forth in Section 489(a)(1) of the Foreign Assistance Act of 1961(FAA), as amended.
Venezuela’s porous western border with Colombia, weak judicial system, inconsistent international counternarcotics cooperation, and generally permissive and corrupt environment make the country one of the preferred trafficking routes out of South America for drugs to consumer markets. As a matter of stated policy, Venezuela does not encourage, support, or facilitate illegal activity involving drug trafficking. However, individual members of the government and security forces were credibly reported to have engaged in or facilitated drug trafficking activities. According to U.S. Government cocaine-movement estimates, by the end of 2011, an estimated 161 to 212 MT of cocaine likely departed from Venezuela to global destinations, the same amount estimated as in 2010. Suspected narcotics trafficking flights depart from Venezuelan states bordering Colombia. Almost all illegal drug flights arriving in Honduras, the region’s largest center for airborne drug smuggling, originate from Venezuela.
Venezuela reported that it seized 42 MT of illegal drugs in 2011, compared to 63 MT in 2010. While Venezuela publicly reports such seizures, it does not share the data or evidence needed to verify drug destruction. The country also published statistics on arrests and convictions for drug possession and trafficking, although no information was available on the nature or severity of the drug offenses. Effective prosecution of drug traffickers is hindered by corruption and a lack of judicial independence. Venezuela is a party to all relevant international drug and crime control agreements, including the 1988 U.N. Convention.
With the last year, Venezuela transferred three major drug traffickers to the United States, including Maximiliano Bonilla Orozco, aka “Valenciano,” one of Colombia’s most-wanted drug traffickers, and Oscar Martinez Hernandez, aka “El Cali.” Between January and October 2011, the Venezuelan reported that it captured 21 individuals for whom there were international warrants for drug-related offenses.
Since ceasing formal cooperation with the U.S. Drug Enforcement Administration (DEA) in 2005, the Venezuelan government has maintained only limited, case-by-case counternarcotics cooperation with the United States. Cooperation has consisted mainly of coordination of fugitive deportations from Venezuela to the United States and maritime interdiction activities carried out by the U.S. Coast Guard (USCG). Venezuela continued to grant permission to the USCG to board Venezuelan-flagged vessels on the high seas suspected of being engaged in narcotics trafficking, and there were two such events since September 2011. Venezuelan authorities required that the Coast Guard return all confiscated vessels, suspects, and contraband identified during these operations. There was no subsequent provision of information to U.S. officials regarding the drug trafficking organizations involved or the prosecution of suspects. Venezuela’s limited counternarcotics cooperation with the United States draws into question the government’s intent to uphold its international commitment to combat drug trafficking.
Despite proposals from the United States, Venezuela has not signed the updated addendum to the 1978 Bilateral Counternarcotics Memorandum of Understanding that was negotiated in 2005. Venezuelan officials have stated publicly that the country will neither sign a bilateral agreement nor cooperate with the United States on counternarcotics.
Venezuela took some positive steps in the region regarding counternarcotics issues. Venezuela increased counternarcotics cooperation with Colombia and continued to deport fugitives to Colombia and other countries. During 2011, Venezuela captured and transferred to Colombia five members of the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army. These groups rely heavily on drug trafficking to fund their operations and often seek safe haven in Venezuela. However, the Venezuelan government did not take action against government and military officials known to be linked to the FARC. On September 8, 2011, the U.S. Department of Treasury designated four senior government officials pursuant to the Foreign Narcotics Kingpin Designation Act for acting for or on behalf of the FARC, often in direct support of its narcotics and arms trafficking activities.
A determination as having failed demonstrably does not affect funding for humanitarian and counternarcotics programs. A U.S. vital national interest waiver for Venezuela permits support for other programs critical to U.S. foreign policy interests.
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 on September 14, 2012, consistent with section 706(1) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228):
Afghanistan, The Bahamas, Belize, Bolivia, Burma, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, India, Jamaica, Laos, Mexico, Nicaragua, Pakistan, Panama, Peru, and Venezuela.
Of these 22 countries, Bolivia, Burma, and Venezuela were designated by the President as having “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. The President determined, however, in accordance with provisions of Section 706(3)(A) of the FRAA, that continued support for bilateral programs in Bolivia, Burma and Venezuela are vital to the national interests of the United States.
Major Precursor Chemical Source Countries
The following countries and jurisdictions have been identified to be major sources of precursor or essential chemicals used in the production of illicit narcotics:
Afghanistan, Argentina, Bangladesh, Belgium, Bolivia, Brazil, Burma, Canada, Chile, China, Colombia, Egypt, Germany, India, Indonesia, Iraq, Mexico, the Netherlands, Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, and the United Kingdom.
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, Bolivia, Brazil, British Virgin Islands, Burma, Cambodia, Canada, Cayman Islands, China, Colombia, Costa Rica, Cyprus, Dominican Republic, France, Germany, Greece, Guatemala, Guernsey, Guinea-Bissau, Haiti, Hong Kong, India, Indonesia, Iran, Iraq, Isle of Man, Israel, Italy, Japan, Jersey, Kenya, Latvia, Lebanon, Liechtenstein, Luxembourg, Macau, Mexico, Netherlands, Nigeria, Pakistan, Panama, Paraguay, Philippines, Russia, Singapore, Somalia, Spain, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, and Zimbabwe.
Further information on these countries/jurisdictions 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."