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International Narcotics Control Strategy Report, 1996 Released by the Bureau for International Narcotics and Law Enforcement Affairs, U.S. Department of State Washington, DC, March 1997

We made solid gains against the drug trade in 1996. Working with our allies in the Western Hemisphere, the USG­led effort pressed the drug syndicates at their most vulnerable points. We interrupted their preferred trafficking approaches to the United States, forcing them to shift to longer routes in the Eastern Caribbean. We helped the drug source countries to eradicate coca plantations and opium poppy fields. The year's most successful operation was the disruption of the "air­bridge" that carried the bulk of Peruvian cocaine base to Colombia for processing and distribution. The cut­off not only deprived the Colombian trade of essential basic materials, but so depressed the price of coca leaf in Peru that growers abandoned fields in the coca­rich Upper Huallaga Valley. The exodus lowered Peru's coca cultivation in 1996 by 18 percent to the lowest levels in a decade. This was a significant change for the world's largest coca­growing country.

In Bolivia, the government's voluntary coca eradication program surpassed its annual target, kept cultivation levels from significantly expanding, and reduced potential coca leaf production by 12 percent. Unfortunately, this decline was more than offset by a 32 percent increase in both coca cultivation and potential coca leaf production in Colombia, despite an aggressive aerial eradication program by Colombian enforcement authorities. Colombian coca cultivation has nearly tripled since 1987 and the disruption of the Peruvian air­bridge may have served to reinforce to the Colombian drug cartels the importance of controlling all facets of cocaine production at home. Yet despite the Colombian expansion, total Andean coca cultivation was still two percent below 1995 levels.

Other progress. There was progress in other areas as well. Many governments strengthened their enforcement and judicial systems to make it more difficult for powerful drug syndicates to operate with impunity or to manipulate the courts. Several governments enacted anti­money laundering measures to narrow the drug syndicates' opportunities for safe placement of their fortunes. And, in a few cases, traffickers even saw governments impose the sanction they fear most: expulsion or extradition to the United States. The sentence imposed on Mexican Gulf Cartel boss Juan Garcia Abrego, expelled by Mexico to the US in early 1996­­11 life terms, a $128 million fine, and the forfeiture of $350 million in assets­­should send a powerful message to other foreign traffickers under indictment in the United States. We have been negotiating new agreements with governments that still have formal prohibitions on extraditing their nationals. Such extradition restrictions offer nationals who commit crimes in the US a safe haven at home, particularly in countries where corruption is widespread. We were pleased, therefore, that in November 1996 a new treaty between the US and Bolivia entered into force and provides for the extradition of Bolivian nationals to the US for narcotics offenses and other serious crimes. In addition, in early 1997, the US and Argentina initialled what could be termed a "model" extradition treaty. We hope to see other countries follow suit in the near future.

Since effective interdiction in Central America and the western Caribbean has pushed trafficking routes eastward, the USG has been solidifying bilateral cooperation with the key countries of the eastern Caribbean. During 1996, we negotiated an assortment of extradition, mutual legal assistance treaties and/or maritime agreements with Trinidad, Barbados, Antigua, Dominica, Grenada, St. Kitts, St. Lucia, and St. Vincent. A new extradition treaty with France will cover the French Caribbean Départements of Martinique and Guadeloupe. These agreements will give us important new tools with which to fight drug trafficking and prevent the eastern Caribbean from becoming the drug trade's dominant theater of operations. We and our principal allies in the anti­drug effort can take pride in these achievements: they confirm the general soundness of our approach. Our joint efforts are keeping the drug trade at bay­­no easy feat in the post Cold War era when drug trafficking, terrorism, and international organized crime promise to become three of the dominant forces threatening democratic order and international stability in the next few years.

Disturbing elements. Yet not all the news was good. The drug trade remains a dynamic and formidable adversary. Even after suffering considerable losses, its wealth, power, and organization equal or even exceed the resources of many national governments. Despite the USG­led effort, in 1996 hundreds of tons of cocaine flowed not only to the United States and Western Europe, but to markets in Latin America, Asia, Africa, and the countries of the former Soviet Union. The lines between cocaine and heroin­consuming countries are blurring. Cocaine and heroin trafficking, once limited to a few major routes and destinations in North America and Europe respectively, has become all but universal.

Historically, drug abuse patterns have followed generational rhythms, alternating between waves of stimulant and depressant abuse. That pattern may be changing. We are now seeing more dual drug use, with users combining cocaine and heroin to offset each drug's respective stimulant and depressant effects. In this year's INCSR chapters we see references to "poly­drug use" in a variety of countries. We are no exception. The United States, once the world's primary cocaine user, is now also consuming increasing quantities of high­purity heroin. Europe, traditionally the major Western market for heroin, has acquired a voracious appetite for cocaine and amphetamines. Colombian cocaine syndicates have established distribution centers on virtually every continent. The relatively straightforward diagrams of trafficking routes of a decade ago have become today's complex webs, linking virtually every country in the world to the main drug production and trafficking centers. And new connections sprout every month in unlikely places. In October 1996, Italian anti­drug forces broke up a trafficking ring in an otherwise obscure small southern Italian town that had served as an entrepot for heroin from the Balkan Route, Colombian cocaine that had entered through Holland, and Moroccan hashish that had transited Spain.

We are also witnessing changes in the way the various syndicates do business. Large Mexican drug organizations have gained control of much of the US­bound cocaine traffic formerly dominated by the Colombians. Meanwhile, Colombian cocaine syndicates have turned increasingly to heroin production. A substantial amount of the heroin seized on the east coast of the United States in 1996 can be traced to Colombian refiners. At the same time, Nigerian smuggling organizations that formerly specialized in heroin shipments have branched out into cocaine. Crack cocaine addiction, once viewed distantly by much of the world as a curse peculiar to America's inner cities, is becoming common throughout the hemisphere. The Government of Belize now considers crack its greatest domestic drug problem. In Costa Rica, crack figured in 60 percent of arrests in 1996. In Sao Paulo, Brazil, it has become the drug of choice and principal addiction of the city's "Street Children." And there were reports that it is being used increasingly in the Netherlands, as well as in that country's former colonial possession, the Netherlands Antilles. Crack cocaine seizures there have increased dramatically, particularly in Curacao. The fight, quite clearly, is far from over.

The Threat of Synthetics: Methamphetamine. The spread of crack is not the only bad news. Amphetamines are back in force, this time globally. These synthetic drugs, which have been gaining popularity over the last half decade, are well on their way to becoming the drug­control nightmare of the next century. Methamphetamines, hybrid cousins of the "speed" of the 1960's, are challenging or even displacing cocaine as the stimulant of choice on the world drug market. The demand for methamphetamines generally, and MDMA ("Ecstasy") in particular, has been increasing not only in the industrialized nations, but in most of the countries of the developing world. Methamphetamine's relative ease of manufacture from readily available chemicals appeals as much to small drug dealers as to the large international syndicates, since neither has to rely on vulnerable crops such as coca or opium. Synthetics allow trafficking organizations to control the whole process, from manufacture to sale on the street. Synthetics yield large profit margins and can be made anywhere. Mexico is the principal supplier for the United States, but there are centers of methamphetamine production in countries as far apart as Poland, Japan and the Philippines. There have even been reports of some heroin refiners in Burma adding methamphetamine to their product line. Ecstasy has developed almost an international cult following, to the point that there are Internet sites giving detailed instructions on how to make and use MDMA "safely."

Unpublicized progress. But we should not overrate the power of the drug trade. Viewed out of context, the many achievements of individual countries may seem insignificant. Small steps do not grab headlines; many never come to the attention of the media. The countless routine drug seizures, the jungle drug labs or airstrips destroyed every day, the arrests of corrupt officials, or the improved performance of police and judicial authorities benefitting from USG assistance receive at best only fragmentary coverage in the world media. But these small steps add up to important and lasting gains at the expense of the drug trade. As we have seen, cumulative achievement pays off. Over the long term, such steady progress offers the best hope for transforming a potential threat to the stability of nations into a manageable nuisance.

Controlling Supply: The Importance of Crop Reduction. Though we must reduce consumption at home, our success in keeping illegal drugs from ever reaching the US depends on how effectively we attack drug supply beyond the country's borders. For the drugs that threaten us most­­cocaine and heroin­­a five­stage, grower­to­user chain connects the drug producer abroad with the consumer in the United States. At one end is the farmer growing coca or opium poppies in the Andes or Burma; at the other is the cocaine or heroin addict in a US town or city. In between lie the processing (drug refining), transit (shipping), and wholesale distribution stages. We cannot reduce the flow of drugs to the United States unless we strike as close as possible to the source. Thus, the USG's international drug control programs target the first three links of the chain: cultivation, processing, and transit. We stand our best chance if we can eliminate the first stage, cultivation, altogether. By eliminating drug crops on the ground, no drugs can enter the system. It is the equivalent of removing a malignant tumor before it can spread. And it is by far the most cost­effective means available, as the costs rise exponentially at each subsequent intervention point. Since large­scale eradication, however, is not politically feasible in many countries, we must also aggressively attack drug refining and transshipment while we determine the most suitable means of reducing drug crops in a given national context.

Coca Reduction. The coca crop offers the most immediate opportunity for radical reductions. For now, at least, extensive coca cultivation occurs in only three countries­­Peru, Bolivia and Colombia. In countries that grow coca with a high alkaloid content, current studies indicate that, on average, every 200 hectares of coca eradicated deprives the drug trade of a metric ton of refined cocaine. A coca field is a large, stationary target; a load of finished cocaine distributed among trucks, boats, and aircraft is not. Even manual eradication, therefore, can play an important role. But we have better means available. Modern agricultural spray aircraft could, in a matter of months, take out a large percentage of the coca crop using environmentally safe herbicides. Since it takes two years for a coca bush to become productive, intensive aerial spraying campaigns could unquestionably cripple the cocaine trade for at least two years.

Eradication, however, is not a panacea; there are other means of reducing crops. The right combination of effective law enforcement actions and alternative development programs has also proven successful. The USG has therefore concentrated on working with the governments of the Andean coca growing countries to find the best way to eliminate illegal coca. Though all three governments agree in principle that coca cultivation must be reduced, only Colombia permits aerial eradication. Bolivia, where some coca is reserved for traditional uses (i.e., chewing), will only allow manual eradication of illegal coca, a process that is slow as well as dangerous to eradication personnel. Peru, the largest cultivator, has been ambivalent, because it also produces some coca leaf for traditional purposes. In the past, its government would destroy seedbeds, but was not prepared to risk the political and economic consequences of eradication without assured, long­term compensation from abroad for displaced farmers. In 1996, however, it agreed to eradicate some coca in national parks and in abandoned fields. Our goal in the coming year will be to work with the governments of all three countries to implement much greater coca reduction programs in order to starve the drug syndicates of the cocaine that keeps them in business.

Political Will. The key to dealing with drug supply, however, is an intangible: political will. The best­trained, best­equipped anti­drug units cannot succeed for long without the determined commitment of their country's political authorities to take the often painful measures that can mortally wound the drug trade. Where political leaders have had the courage to put the long­term national interest ahead of short­term economic and political considerations, we have seen the drug trade suffer. And where they have compromised, we have seen the drug syndicates prosper accordingly.

Drug organizations learned long ago that where political will is weak it can establish a profitable and insidious modus vivendi with a government. In potentially unstable political and economic circumstances, political leaders at many levels may be tempted to negotiate an informal pax narcotica. In return for the benefits of large immediate cash flows into the economy (or into their political coffers), they confine their counternarcotics operations to sectors least likely to trigger a backlash from drug interests. For instance, the government of a major drug cultivation country can focus on interdiction rather than eradication. The authorities in a major drug refining country can eradicate crops yet permit drug syndicates to prosper by exploiting corrupt enforcement and timid judicial systems. Governments of offshore financial centers may crack down on trafficking, while profiting from drug revenues protected by bank secrecy and lax laws that facilitate money laundering. In all cases, the short­term political peace or personal prosperity that corrupt politicians enjoy only allow drug interests to dig in for the long term. Therefore, a basic tenet of USG antidrug policy is to strengthen political will in the principal drug producing and transit countries by preventing drug interests from becoming entrenched. When that occurs, corruption inevitably follows. And we have seen that large­scale corruption, by vitiating the rule of law, soon places democratic government in jeopardy.

Corruption. The fight against the drug trade is really part of a broader struggle against corruption. Like an opportunistic disease that breeds only amidst social and moral decay, the drug trade needs corruption in order to flourish. Drug organizations wield a powerful instrument for corrupting an already weak society: money. In terms of weight and availability, there is currently no commodity more lucrative than drugs. They are relatively cheap to produce and offer enormous profit margins that allow the drug trade to generate criminal revenues on a scale without historical precedent. Assuming an average retail street price of one hundred dollars a gram, a metric ton of pure cocaine has a retail value of $100 million on the streets of the US; more, if the drug is cut with additives. Thus the 100 or so metric tons of cocaine that the USG typically seizes each year could theoretically be worth as much as $10 billion to the drug trade ­­ more than the gross domestic product of many countries. Even if only a portion of these profits returns directly to the drug syndicates, we are still speaking of hundreds of millions, if not billions, of dollars. To put these sums into perspective, in FY 1996 the total USG budget for international drug control operations was approximately $1.6 billion. That equates to 16 metric tons of cocaine; the drug trade has lost that much in two shipments and scarcely felt the loss.

Wealth on that scale confers on large trafficking organizations a practically unlimited capacity to corrupt. In many ways, it makes them a greater threat to democratic government than most insurgent movements. Guerrilla armies or terrorist organizations seek to topple governments by force; drug syndicates, like termites, destroy them quietly from within. In theory, when a country's interior or defense minister, attorney general, or even president, is on its payroll, the drug trade can assure itself a secure operating environment. And the longer established the drug organization, the stronger its capacity to corrupt.

The ultimate fear of all democratic leaders should be that one day traffickers might take full control of a country by putting a majority of elected officials, including the president, directly on the payroll. While this has yet to occur, we have seen some uncomfortably close near misses. The more we help reduce corruption, the less likely is the prospect of a viable "narcocracy" in this hemisphere.

The Certification Process: A Weapon Against Corruption. Drug corruption, like any form of subversion that lives on decay, is a creature of the shadows. Since it shuns the light, the best way to attack drug corruption is to expose it regularly to public scrutiny. The USG every year shines the equivalent of an international spotlight on corruption through the drug certification process. Section 490 of the Foreign Assistance Act requires the President to certify annually that each major drug producing or transit country has cooperated fully or has taken adequate steps on its own to meet the goals and objectives of the 1988 UN Convention, including rooting out public corruption. Governments that do not pass the test lose eligibility for most forms of US military and development assistance; they also face a mandatory "no" vote by the USG on loans in six multilateral development banks.

The Process Works. The certification process has proved to be a remarkably effective diplomatic instrument for keeping all governments aware of the need to pull their weight in the international antidrug effort. By now, most governments are aware that US law requires the President to provide an annual assessment of counternarcotics performance. And most know that the outcome of that assessment depends heavily on their efforts throughout the year. The drug certification process holds them publicly responsible for their actions before their international peers. Though many governments understandably resent the process, most governments try to ensure that they receive full certification the following year. They know that the President of the United States would not make such a serious determination without sound, objective evidence. The purpose of the law is not to punish; it is to hold every country to a minimum acceptable standard of cooperation, either by meeting the goals and objectives of the 1988 UN Drug Convention or by their own efforts. We believe that openness is one of the best safeguards against corruption. Most governments also recognize that we are not asking any country to do the impossible. By regular and sustained collaboration throughout the year we work with most of the governments concerned to establish realistic goals for certification purposes. We know that some governments face greater obstacles than others and we take that into account.

NEXT STEPS

Though the drug trade is powerful, we have shown that it is far from invincible. It cannot exist independently of the governments in whose territories it operates. We will continue to attack the drug trade at four critical points: at the source, by eliminating drug crops; in processing, by destroying labs and disrupting the flow of the necessary processing chemicals; in the distribution system, by interdicting large drug shipments; and in its financial dealings, by interrupting drug money flows. It is most vulnerable at the crop cultivation and financial operations stages. We already have programs to eradicate crops. We will be making these more effective. But we need now also to strengthen our collective efforts against the illegal drug conglomerates' financial operations.

Cutting Off the Money Flow. The drug trade in effect operates a self­perpetuating wealth creation process that transforms a crude, common natural product into one of the world's most lucrative commodities. But this process can only function when fueled by a steady flow of drugs to generate the money the drug syndicates require to stay in business. And the trafficking organizations can only remain viable with ready access to the money necessary to buy and process the drugs. Since the drug trade, like a legitimate enterprise, partially finances future growth by borrowing against future earnings, every metric ton of drugs that does not make it to market represents a potential loss of tens of millions of dollars in essential revenue. At the same time, blocked revenues cannot be reinvested in new drug crops, arms, bribes and other vital requirements for survival. By cutting off one or both of these critical ingredients for long enough, we can weaken and perhaps eventually destroy today's drug syndicates.

When it comes to cashing in its profits, the drug trade is a prisoner of its success. To be useful, drug profits must eventually pass through legitimate international banking channels subject to government oversight. Like a tank rolling up to a drive­in teller, the huge profits that make drug trafficking so powerful would be hard for most banks to miss. These are not low profile transactions. Though we have seen a great improvement in the willingness of many governments to examine suspicious transactions, there are still too many countries where the drug trade can safely bank or invest its gains. We will work closely with governments bilaterally and through the Financial Action Task Force to improve oversight mechanisms, implement tougher money laundering laws, and develop means of quickly identifying, freezing, and seizing drug profits before they can be invested. We will also review further sanctions under the International Economic Emergency Powers Act to keep the drug trade from exploiting legitimate companies for criminal purposes. Drug trafficking may lose some of its appeal if there is nowhere to spend the profits.

We must therefore reduce and eventually eliminate illicit drug crops altogether. At the same time, we must improve cooperative law enforcement efforts to dismantle trafficking organizations, to control drug­essential chemicals, and to keep drugs from entering the pipeline. We must press for serious judicial reform to put and keep traffickers in jail, and, where appropriate, to extradite them to countries where they can receive an impartial trial. We must find better ways of targetting the drug trade's profits, while strengthening asset seizure laws and reducing bank secrecy. And we must develop profitable, legitimate alternatives to drug crops, while increasing drug awareness, education, and prevention activities.

Finally, all governments must recognize that international stability and national sovereignty will never be secure as long as the drug trade prospers. The drug trade survives by a strategy of "corrupt and divide". It needs a secure operating environment where a weak or venal government will let it raise its crops, refine and move its drugs to market, and shelter its profits. Its nightmare is a tight circle of committed governments that leave it no emergency haven for operations. So far it has not had to worry unduly; since even well­intentioned governments can be hobbled by corruption, particularly in times of economic and political instability.

A fundamental goal of our diplomatic strategy is to make democratic governments recognize that the drug trade threatens their national survival as greatly as any insurgent movement or external enemy. While the United States will continue to provide the international leadership and a large share of the resources to eliminate drugs, our democratic allies must also recognize that ultimately national self­interest alone must determine counternarcotics policy. For, in the end, it is not only the fate of one regime that is at stake; it is the future of democratic government itself.

COCAINE

Stopping the flow of cocaine to the United States remains our main international drug control priority. Cocaine still poses the most serious drug threat to the United States. Crack, the smokeable variety of cocaine, is one of the most addictive drugs on the market. Besides quickly ensnaring its victims, crack is a euphoric stimulant which often provokes violent behavior in users. From the drug trade's vantage point, it is an ideal drug: it is cheap, potent, addictive, widely available, and most important of all, immensely profitable. Crack sales fuel much of the drug violence in America's largest cities, as gangs compete for lucrative sales territory while addicts steal to feed their habit. Though overall cocaine use has dropped markedly since the unbridled consumption of the mid 1980's, it has started to rise among high school students. In a classic case of failing to learn from history, a new generation is experimenting with cocaine, unaware of­­or consciously rejecting­­the potentially devastating consequences of cocaine.

Despite current antidrug efforts, hundreds of tons of cocaine enter the US every year by land, air, and sea. Even the 100 metric tons or so of cocaine that the USG typically seizes annually have little discernible effect on price or availability. The combination of strong demand and extraordinary profits continue to make the United States the cocaine trade's foremost single market, for the time being at least.

Other parts of the world, however, are also being assailed by cocaine trafficking. For at least half a decade, the South American cocaine syndicates have been shipping hundreds of tons to Europe. Although the principal markets are in the most affluent cities of Western Europe, the syndicates are doing a brisk business in Eastern and Central Europe, as well as in the CIS and NIS countries. The Colombian syndicates have set up distribution centers in Poland and the Czech Republic. The gold­rush spirit that has created a new class of hustling entrepreneurs in Russia and the countries of the former Soviet Union is ideally suited to the consumption of cocaine and other stimulants. And the drug trade is making the most of its opportunity to exploit the new wealth, ambition, and tastes of these ideal customers.

Africa has also attracted the cocaine syndicates' attention. Nigerian trafficking groups are moving significant amounts of cocaine from South America to all parts of Africa. Because of the Nigerian role in the global movement of drugs, West Africa has become an important transit area for cocaine bound for destinations throughout Africa. Ghana seized more cocaine than Jamaica­­over a quarter of a metric ton in the first nine months of 1996 alone­­twenty times more than Ghanaian authorities had seized in all of 1995. Cocaine has also continued to enter South Africa in important quantities for consumption in the country and for transshipment to other destinations in Africa and Europe. South African enforcement authorities are establishing working links with their Brazilian counterparts to help break up the Nigerian trafficking groups responsible for most of the cocaine flow into Southern Africa.

Source and Transit Country Highlights. Bolivia exceeded its 1996 eradication goal by manually eradicating over 7,500 hectares of illegal coca. While this effort kept coca cultivation at about 1995 levels, it reduced potential coca leaf production by 12 percent. Bolivian enforcement authorities seized 6.8 metric tons of cocaine base and 3.2 metric tons of cocaine HCl.

In Colombia, government forces, assisted by the USG, sprayed over 16,000 hectares of coca. Despite this effort, Colombian coca cultivation increased by 32 percent, the largest relative increase to date in any coca­growing country. We are evaluating the influence of a number of possible causes: a decision by the Colombian drug syndicates to lessen their dependence on Peruvian coca and cocaine, pressure on coca growers by insurgents seeking additional revenue, or factors such as wet weather interfering with herbicide efficacy. The Colombian National Police reported seizing 16 metric tons of cocaine HCl in 1996, less than in previous years, but nonetheless a sizable quantity.

In addition to its effective disruption of the air­bridge to Colombia, the Government of Peru nearly doubled its seizures of cocaine base to 18 metric tons, while tripling its seizures of coca leaf. The government expanded its program to eradicate seedbed to a few hectares of young coca in a national park. By years end, a total of 1,200 hectares had been eradicated. Peruvian authorities also arrested one of Peru's most sought­after drug barons, Willer "Champa" Alvarado Linares, after Ecuadorian authorities deported him from Ecuador to his native Peru. He joined other former drug lords Abelardo Cachique Rivera and Demitrio "Vaticano" Chavez Penaherrera in prison. Vaticano was sentenced to 25 years in prison in October 1996.

Central American governments maintained active interdiction programs in 1996. Panama, seized nearly eight metric tons of cocaine, thirty percent more than in the previous year. Panamanian authorities arrested an important member of the Cali Cartel, Jose Castrillon Henao. Panama's National Air Service, supported by USG aircraft, eradicated over 125 hectares of coca along Panama's border with Colombia. As in past years, these operations further underscored not only the feasibility but also the efficacy and environmental acceptability of aerial applied herbicides against coca.

Costa Rica and Honduras increased their anti­drug efforts in reaction to growing crack cocaine use. Working closely with USG authorities, Costa Rican police seized nearly two metric tons of cocaine. Cocaine seizures in Honduras increased nearly ten­fold (from 400 kilograms in 1995 to 3.275 metric tons in 1996.) Honduran authorities believe that most of this cocaine was intended for the US market.

In 1996, traffickers altered the smuggling patterns into Mexico, shifting from the use of large cargo aircraft to maritime cargo containers, private sea­going vessels, air drops to fast boats off the coasts, and light aircraft flights into southern Mexico. Mexican authorities seized 23.6 metric tons of cocaine in 1996, a slight increase over the 1995 figure. In 1996, for the first time Mexican authorities also reported finding and destroying a cocaine processing lab, another sign that Mexican organizations are continuing to usurp the power of the Colombian syndicates.

The USG added Aruba to its list of major drug transit countries in 1996. Because of its geographic location off the coast of Venezuela, Aruba serves as a major transshipment point for cocaine and heroin from Colombia, Venezuela, and Suriname to the US and Europe. Indications of significant increases in large­scale smuggling and trafficking, and slow progress on implementation of money laundering legislation and extending extradition to Aruban nationals, raised the level of US concerns. The USG was also concerned over credible reports that some members of the Aruban government met regularly with individuals associated with drug trafficking and money laundering syndicates. By the end of 1996, the Aruban parliament had enacted some measures to address money laundering and had begun considering bills to strengthen law enforcement measures against drug trafficking and money laundering.

The USG estimates that over 150 metric tons or more transit the Caribbean annually en route to the US. In 1996, there was substantial drug trafficking through the Eastern Caribbean gateways to US ports of entry in both the main island and Vieques island of Puerto Rico and the US Virgin Islands. The USG has designated Puerto Rico and the US Virgin Islands as a high intensity drug­trafficking area, and has provided special funding to combat the problem Large quantities of cocaine are regularly smuggled into Puerto Rico from the Lesser Antilles, which includes territories of the United Kingdom (UK), the Netherlands, and France. Because of British, Dutch and French links with the region, the Eastern Caribbean has become a transit route to Western Europe. British authorities believe that approximately 30 percent of the drugs brought into the UK come from or through the Caribbean.

HEROIN AND OPIATES

A deadly partnership between cocaine and heroin has been developing over the past few years. Though cocaine long ago displaced heroin as America's most dangerous illegal drug of choice, heroin has been gradually creeping back onto the US drug scene, not as rival, but as a partner Taken along with cocaine, it can moderate cocaine's stimulant effects. By itself, it can provide a mellow euphoria. Once déclassée as the drug of dead­end derelicts, heroin unfortunately may be acquiring a false respectability among younger drug users.

Though just as deadly and addictive as cocaine, heroin, as an opiate, has a special property that appeals to the drug trade and the addict alike: it permits many addicts to develop a long­term tolerance to the drug. Whereas constant cocaine use may kill a regular user in five years, a heroin addiction can last a decade or more, as long as addicts have access to a maintenance "fix." Some heroin addicts on maintenance doses have been known to preserve the facade of a normal life for years. For the drug trade, this insidious property holds out the long term promise of a steady customer base.

Unfortunately the US customer base may be on the rise. Estimates of the US heroin addict population, which for two decades had remained steady at 500,000 individuals, are being revised upward. Evidence of combined drug use suggests that more of the US's 2 million­plus hard­core cocaine addicts are using heroin to cushion the "crash" that follows the euphoria of using crack. Moreover, the heroin addict no longer need be the archetypal junkie shooting up heroin with a dirty needle. The high purity Colombian heroin now available in the US can be snorted like cocaine. This not only frees the user from the need for syringes but from the fear of contracting AIDS from infected needles. In order to develop an assured and profitable market in the United States, the drug trade seems to be counting on a new generation's ignorance of the devastating consequences of heroin use.

Heroin's popularity elsewhere in the world seems assured. Since opium poppies can grow in almost any country, there is no dearth of heroin. The USG estimates for 1996 place potential opium production at nearly 4,300 metric tons, probably a record amount. Sixty percent of that quantity grows in Burma, which by itself probably could satisfy world heroin demand. A bumper crop in Southeast Asia more than offset a drop in Southwest Asian production, which by itself meets most of Europe's heavy heroin needs, while satisfying important domestic demand in many of the source countries. As the chapters in this report indicate, heroin availability­­and addiction­­is rising throughout Europe and the countries of the former Soviet Union. The Balkan Route's northern, central, and southern branches form the artery carrying high quality Afghan heroin into every important market in Europe. With Nigerians controlling much of the intercontinental heroin trade, Africa is an important region for not only heroin trafficking but for transshipment to European destinations. Southeast Asia, the world's largest source of heroin, not only contributes to the bulk of world supply but is an important consumer of heroin itself. As the region's economies boom, we can expect to see an even greater rise in heroin consumption. Even China, which once had all but eliminated heroin addiction, is experiencing a serious rise in teenage addiction. In short, except from the vantage point of the heroin trade, the near­term outlook is not encouraging.

Source and Transit Country Highlights.

In Southeast Asia's Golden Triangle region, the world's major source of opium, opium poppy cultivation increased for a second consecutive year. Burma remains the bread­basket of the opium trade, since it accounts for 65 percent of estimated total world opium poppy cultivation and 60 percent of estimated total potential opium gum production. Estimated production in Burma increased by nine per cent in 1996, for an estimated total of 2,560 metric tons, sufficient to produce 256 metric tons of heroin­probably more than enough to meet most of the world's heroin needs. Production in Laos also increased by 11 per cent, for an estimated total of 200 metric tons, or about 7 per cent of the Southeast Asian total. Production in Thailand increased in 1996 despite an aggressive eradication campaign, but remained minimal, accounting for only about one per cent of Southeast Asian production. From these figures it is clear that Burma remains the leading producer of heroin worldwide, and it remains the main overall source for heroin sold in the U.S. The USG's first survey of drug cultivation in Vietnam revealed 3,150 hectares of opium poppy, potentially capable of yielding 25 metric tons of opium gum.

Opium poppy cultivation dropped by 9 percent in Southwest Asia, after a 45 percent rise the year before. Afghanistan's poppy crop, the largest in the region, declined marginally. Pakistan's cultivation, on the other hand, fell by more than half following extension of the poppy ban in the Northwest Frontier Provinces. Afghan opium is the source of most of Europe's heroin. Sophisticated Pakistani trafficking organizations operating out of Quetta, Pakistan, smuggle heroin base and morphine out of Afghanistan to the international market. These groups place orders with the Afghani processors and arrange for transshipment of the drugs from Afghanistan through Pakistan and to Iranian or Turkish buyers who move it through Iran and into international drug channels. Most Afghan opium is destined for processing into heroin in Turkey. The finished heroin is sold primarily in Europe, while a limited quantity goes to the United States

Southwest Asian heroin continues to pour into Europe along the Balkan Route. With the branching of the route­­northwards to Romania, Hungary, and the Czech and Slovak Republics; southwards through Croatia, Slovenia, the Former Yugoslav Republic of Macedonia, Greece and Albania­­each of these countries now faces important domestic drug problems. Turkish trafficking groups, with distributors in ethnic enclaves in major European cities, control much of the Balkan Route heroin trade.

Russia is playing an increasingly pivotal role in Europe and Central Asia. Criminal organizations that had successfully operated under the Soviet regime entered the post­Cold War era with smuggling and distribution networks already in place. Using heroin sources established during the Soviet Union's war with Afghanistan, ethnically based gangs­­many from the Caucasus­­have burgeoned into major players in the European drug trade. They can use their networks to move Southwest Asian heroin through Central Asia to Russia and then onto destinations in the Baltics and Western Europe. Russian authorities noting a rampant increase in domestic drug use believe that there are now over 2 million drug users in Russia, with the numbers growing every year.

The Central Asian countries of Kazakstan, Kyrgyzstan, Tajikistan, and Uzbekistan, formerly important poppy growing regions for the Soviet Union, are well placed to be conduits for much of this drug traffic. Kazakstan provides a bridge for Southeast Asian heroin to move to Europe and Russia from Asia. The other countries offer profitable access routes for Southwest Asian, primarily Afghan, heroin into Russia, the NIS and Europe. Heroin, which can fetch high prices in Russia and Europe, has been a tempting source of cash to finance the civil wars in Afghanistan and Tajikistan.

Nigeria is critical to the heroin trade. Nigeria is Africa's most significant transshipment point. But Nigerians also surface as the heroin traffickers par excellence on every continent. Though they are among the principal smugglers of Southeast Asian heroin into the United States, Nigerians are regularly arrested in Bangkok, Rio de Janeiro, New York, Moscow, Riyadh, Bombay, etc. Unfortunately, rampant corruption at all levels of government in Nigeria virtually assures Nigerian trafficking organizations a favored place in the heroin trade.

Colombia is the Western Hemisphere's largest grower of opium poppies. Colombian heroin is being sold in greater quantities in the United States, and poses a particular threat because of well established marketing strategies and channels developed by cocaine traffickers. In addition, Colombian heroin is of high purity. For 1996, USG estimates showed Colombian opium poppy cultivation at 6,300 hectares, four percent less than last year, but enough to yield an estimated 63 metric tons of opium gum, or 6.3 tons of heroin, assuming no losses. Venezuela's border with Colombia has made it a potential poppy growing country. So far, however, USG­assisted eradication efforts have kept growth to insignificant levels. Over the past three years, the eradication program has destroyed over 3,000 hectares of opium poppy in the Sierra de Perija region along the Colombian border.

Mexico is Latin America's second largest cultivator of opium poppies. The 1996 crop was almost identical to the previous year's. After Mexican government eradication operations destroyed 7,900 hectares of poppy, there were 5,100 hectares available for exploitation by the drug syndicates, with an estimated potential yield of 54 metric tons of opium gum, or 5.4 metric tons of heroin. Though most of this heroin is destined for US markets, a USG­supported national drug use survey revealed a significant rise in intravenous heroin use in Mexican cities along the northern border with the US.

INTERNATIONAL ORGANIZATIONS

International organizational efforts continue to be a key component of the overall US counternarcotics strategy. Through multilateral organizations the United States has the opportunity to multiply contributions from other donors and decrease the perception that drugs are exclusively a US problem. The US participation in multilateral programs also supports indigenous capabilities in regions where the US is unable to operate bilaterally for political or logistical reasons. Moreover, the US contributions to UNDCP have had significant impact on the operations and expansion of UN counternarcotics programs and policy.

UNDCP has increased the number of projects as well as expanded the scope of its effort to include emerging drug source areas such as Vietnam, Cambodia, and the Central Asian states. US contributions to UNDCP have had significant impact on the operations and expansion of UN counternarcotics programs and policy. In the past year, the level of US contributions has also led to increased commitment from other donors, whose primary vehicle for international drug control efforts continues to be the UN. Recent US contributions to UNDCP have led to: an expansion of the Southeast Asia program which targets the largest opium producer, Burma through a cooperative program that includes China, Thailand, and Laos. In addition to new programs in Vietnam and Cambodia the program now includes a pilot project in the Wa­controlled area of Burma and a project for the Kachin­controlled area;

-- development of a program to support the eradication campaign in key opium cultivation areas in the second largest opium producer, Afghanistan;
-- provision of UNDCP chemical control investigative training and administrative advice in Southwest Asia and Latin America;
-- continuation of a maritime cooperation program;
-- establishment of a regional training project in the Caribbean to train prosecutors and judges in order to improve conviction rates on narcotics­related cases;
-- the continuation of a demand reduction training center for Central European nations;
-- provision of legislative advice which led to significant changes in antidrug laws in Central Europe and the Newly Independent States (NIS) in order to implement the 1988 UN Convention;
-- coordination of bilateral and multilateral assistance to Eastern Europe and the NIS, and provision of training and advice to bolster law enforcement and customs institutions.

INTERNATIONAL DEMAND REDUCTION

Our international demand reduction programs are designed to help

-- Strengthen the ability of host nations to conduct more effective demand reduction efforts on their own;
-- Encourage drug producing and transit countries to invest resources in drug awareness, demand reduction, and training to build public support and political will for implementing counternarcotics programs;
-- Improve coordination of and cooperation in international drug awareness and demand reduction issues involving the US, donor countries, and international organizations; and
-- Utilize accomplishments in the international program to benefit US demand reduction services at home.

Because of INL­funded training and technical assistance, host governments have been able to engage their own national institutions, communities and resources to reduce their demand for illicit drugs. INL, moreover, has been able to convince other donor countries and international organizations to provide support to priority USG international demand reduction programs.

Significant demand reduction accomplishments include the following:

-- Countries in Latin America and South Asia continued to developed and staff their own drug treatment/prevention programs.
-- Countries in South America implemented their own national level drug awareness campaigns, in addition to conducting their own national level epidemiological surveys.
-- Countries in South America and Asia conducted their own bilateral and regional demand reduction training, based on information learned in INL­funded courses.
-- The European Community, UNDCP, OAS, UNICEF, Colombo Plan, and host governments co­sponsored with INL regional training events in Latin America, South Asia, and Eastern Europe, and the development of specialized drug prevention projects for high­risk youth in Latin America.

CHEMICAL CONTROLS

The diversion of chemicals from legitimate commerce to illicit drug manufacture cannot be prevented on an individual country basis; there are too many alternative source countries for adept traffickers to turn to when effective controls deny them chemicals from one particular country. Nor can chemical diversion control be only the responsibility of chemical source countries; importing countries where diversion takes place must cooperate in efforts to ensure that their imports of drug precursor and essential chemicals are for legitimate purposes.

Developing the necessary cooperation among chemical source countries and between chemical source countries and chemical importing countries to curtail chemical diversion has been the principal international policy­level objective of the USG in chemical control. We are seeking to increase recognition of the need for cooperation, and working with other major chemical source and importing countries to develop mutually agreed procedures to achieve it.

The 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988 UN Convention) is the fundamental instrument for international counternarcotics cooperation. Article 12 of that Convention sets out the basic obligations of signatories in chemical control, and the tables in its Annex identify the 22 chemicals most necessary to drug manufacture and, therefore, subject to control.

Many major chemical source and drug producing countries have laws and regulations to fulfill their chemical control obligations under the 1988 UN Convention. Many of these are compatible, being based either on the 1990 Model Chemical Regulations of the Inter­American Drug Abuse Control Commission (CICAD) or the 1991 recommendations of the G­7 Chemical Action Task Force.

Therefore, the foundation for international cooperation exists. Its essential elements are communication between enforcement authorities, respect for each others' denials of authorizations to export (so traffickers cannot acquire chemicals from another source country), and common ground rules for handling transactions with sensitive drug producing areas.

FINANCIAL CRIMES AND MONEY LAUNDERING

There were a number of significant developments in the money laundering sphere in 1996:

-- United States agencies began implementing the Presidential Decision Directive announced in October 1995. US agencies drew upon numerous data sources, including the INCSR, reports from investigative and regulatory agencies, and from posts abroad, to assess which money laundering and/or financial crime situations affected US national security interests ­­ including drug trafficking but also contraband smuggling, arms sales, terrorist financing, sanctions violations and sales of weapons of mass destruction. Where deemed necessary, teams of US officials visited governments to secure agreements on actions to be taken.

-- There was demonstrable progress by several Western Hemisphere governments on actions taken in accord with the agreements on standards and objectives reached through the communique issued at the conclusion of the Summit of the Americas Ministerial Conference on Money Laundering in December 1995, which established an action plan for the 34 governments of this Hemisphere.

-- There has been continued progress by the Financial Action Task Force (FATF), including the beginning of the second round of mutual evaluations of each of its 26 members. FATF also demonstrated the political will to admonish its own members for shortcomings, notably Turkey and Greece. FATF also approved proposals to update its universally­accepted 40 recommendations to reflect new typologies and methodologies.

In addition, evaluations of members of the Caribbean FATF were begun; there was further enhancement of the Asian outreach program; a common forum for major international bankers and government policymakers was organized; and an international conference of financial intelligence units in 1995 led to the establishment of a significant number of such units around the world in 1996.

-- In 1997, a potentially high­impact external relations program begun by FATF in 1992­93 resulted in agreements with the Council of Europe, the Offshore Group of Banking Supervisors, and the CFATF. The program will to secure evaluation by outside experts of many of the governments which FATF and these other groups had worked with to determine whether the majority of financial center countries were adhering to the international consensus on money laundering laws.

-- The year saw increased cooperation with foreign governments on major money laundering cases; as well as an increase in asset sharing with cooperative governments and an increase in the number of governments with whom the US has mutual legal assistance agreements.

-- As in 1995, additional financial center governments, adopted broad, new anti­money laundering policies and/or laws, while a number of governments were in the final stages of presenting/adopting new legislation.

METHODOLOGY FOR ESTIMATING ILLEGAL DRUG PRODUCTION

How much do we know? This report contains tables showing a variety of illicit narcotics­related data. While these numbers represent the USG's best effort to sketch the dimensions of the international drug problem, the picture is not as precise as we would like it to be. The numbers range from cultivation figures, relatively hard data derived by proven means, to crop production and drug yield estimates, softer figures where many more variables come into play. We publish these numbers with an important caveat: the yield figures are potential, not actual numbers. Although they are useful for examining trends, they are only approximations. They should not be treated as hard data.

Since much information is lacking on yields, the numbers are subject to revision as more data become known. The nature of the illegal drug trade, in which the traffickers take great pains to maintain the security of their activities, makes it difficult to develop precise information. This is particularly relevant given the tremendous geographic areas that must be covered, and the difficulty of collecting reliable information in diverse and treacherous terrain.

What We Know With Reasonable Certainty. The most reliable information we have on illicit drugs is how many hectares are under cultivation. For more than a decade and a half, the USG has estimated the extent of illicit cultivation in a dozen nations using proven methods similar to those used to estimate the size of licit crops at home and abroad. We can thus estimate the area under cultivation with reasonable accuracy.

What We Know With Less Certainty. Where crop yields are concerned, the picture is less clear. How much of a finished product a given area will produce is difficult to estimate, since small changes in such factors as soil fertility, weather, farming techniques, and disease can produce widely varying results from year to year and place to place. In addition, most illicit drug crop areas are inaccessible to the USG, making scientific information difficult to obtain. Moreover, we must stress that even as we refine our methods of analysis, we are estimating potential crop available for harvest.

Not all of these estimates allow for losses, which could represent up to a third or more of a crop in some areas for some harvests. Thus the estimate of the potential crop is useful in providing a theoretical, comparative analysis from year to year, but the actual quantity of final product remains unclear.

Since cocaine has been at the top of the USG's drug­control priority list, the USG has been trying to develop better yield data. USG confidence in coca leaf yield estimates has risen in the past few years, based upon the results of field studies conducted in Latin America. Five years ago, after completing preliminary research, the USG for the first time began to make its own estimate of dry coca leaf yields for Bolivia and Peru instead of relying solely on reports from the governments of those countries. Additional research and field studies have helped refine these estimates and make similar improvements possible in estimates of other drug crops. In all cases, multiplying average yields times available hectarage indicates only the potential, not the actual final drug crop available for harvest.

Harvest Estimates. Estimating the quantities of coca leaf, opium gum, and cannabis actually harvested and available for processing into finished narcotics remains a major challenge. While we are making progress, at this time we cannot accurately estimate this amount with precision for any illicit crop in any nation.

While farmers naturally have strong incentives to maximize their harvests of what is almost always their most profitable cash crop, the harvest depends upon the efficiency of farming practices and the wastage caused by poor practices or difficult weather conditions during and after harvest. Up to a third or more of a crop may be lost in some areas during harvests.

In addition, mature coca (three to six years old), is more productive than immature or aging coca. Variations such as these can dramatically affect potential yield and production. Furthermore, if we continue to see limitations in the expansion of new coca we may begin to see dramatic declines in the next few years in productivity of existing fields. Factors such as this will produce fluctuations in estimates.

Additional information and analysis may enable us to make adjustments for these factors in the future. Similar deductions for local consumption of unprocessed coca leaf and opium may be possible as well through the accumulation of additional information and research.

Processing Estimates. The wide variation in processing efficiency achieved by traffickers complicates the task of estimating the quantity of cocaine or heroin that could be refined from a crop. These variations occur because of differences in the origin and quality of the raw material used, the technical processing method employed, the size and sophistication of laboratories, the skill and experience of local workers and chemists, and decisions made in response to enforcement pressures. (See Yield Estimates below.)

The actual amount of dry coca leaf or opium converted into a final product during any time period remains unknown, given the possible losses noted earlier. There are indications, however, that cocaine processing efficiencies may not be as high as previously supposed, leaving traffickers with considerable room for improvement. Nevertheless, increasing seizure rates can affect the future profitability of the industry, and raise the cost of doing business.

Figures Will Change as Techniques and Data Quality Improve. Are this year's figures definitive? Almost certainly not. Additional research will produce revisions to USG estimates of potential drug production. This is typical of annualized figures for most other areas of statistical tracking­­whether it be the size of the US wheat crop, population figures, or the unemployment rate­­that must be revised year to year. For the present, however, these statistics represent the state of the art. As new information becomes available and as the art improves, so will the precision of the estimates.

STATUS OF POTENTIAL WORLDWIDE PRODUCTION

In evaluating the figures below, one must bear in mind that they are theoretical. They represent estimates of potential production­­the amounts that the USG estimates could have been produced if, and only if, all available crops were to be converted into finished drugs. Since these estimates make no allowance for losses, actual production is probably lower than our estimates. The figures shown are mean points in a statistical range.

Potential Opium Production. In Southeast Asia, estimated opium cultivation and production in the Golden Triangle countries rose in 1996. According to USG estimates, in 1996, growers in Burma, Laos, and Thailand cultivated an estimated 190,520 hectares of opium poppy, potentially yielding 2,790 metric tons of opium gum. This is an eight percent increase in estimated cultivation and a nine percent increase in production over the 176,745 hectares and 2,564 metric tons estimated for 1995.

In Burma, estimated opium poppy cultivation increased by some six percent to 163,100 hectares over the 154,070 hectares reported for 1995. In 1996, estimated production rose by nine percent to 2,560 metric tons compared to the 2,340 metric tons reported last year. Weather conditions were largely responsible for the increase in the crop. In Laos, estimated cultivation increased significantly by 28 percent to 25,250 hectares from the 1995 figure of 19,650 hectares, estimated production rose by 11 percent to 200 metric tons from the 1995 figure of 180 metric tons. Estimated opium poppy cultivation in Thailand increased by approximately 24 percent to 2,170 hectares from the 1,750 hectares observed last year. Thailand had an estimated potential production of 30 metric tons­­20 percent more than the 25 metric tons estimated in 1995. In 1996, the USG's first survey of Vietnam revealed opium poppy cultivation of 3,150 hectares yielding an estimated 25 metric tons of opium. The USG did not conduct a survey in China's Yunnan Province in 1996.

Opium poppy cultivation in Southwest Asia declined by nine percent in 1996, after rising for the two previous years. A significant reduction in opium poppy cultivation in Pakistan accounted for the drop. Total hectarage for Afghanistan and Pakistan fell from 45,690 hectares in 1995 to 41,350 hectares in 1996. Total potential production for both countries declined from 1,405 metric tons to 1,305 metric tons. Afghan hectarage fell from 38,740 in 1995 to 37,950 in 1996. The estimated yield fell by two percent from 1,250 metric tons in 1995 to 1,230 metric tons in 1996. Pakistan's hectarage dropped from 6,950 hectares in 3,400 hectares in 1996. Estimated yield fell more than half from 155 metric tons of opium in 1995 to 75 metric tons in 1996. India's illicit cultivation declined from 4,750 hectares of opium poppy in 1995, with a potential yield of 77 metric tons of gum to 3,100 hectares potentially producing 47 metric tons of opium in 1996. We have no firm data about poppy cultivation or opium production in Iran. The USG estimated in 1992 that Iran had approximately 3,500 hectares of opium poppy with a potential yield of 35 metric tons to 70 metric tons. There has been no new information in 1996.

The USG is still examining the illicit drug crop situation in Russia and the Central Asian countries formerly part of the Soviet Union. While some of these countries may be able to produce significant opium poppy harvests, the USG still lacks sufficient data to identify and measure all suspected cultivation areas.

In the Western Hemisphere, the opium poppy growing countries have maintained active crop control efforts despite continuing campaigns by criminal organizations to expand the areas under cultivation. In Colombia, USG estimates showed Colombian opium poppy cultivation at 6,300 hectares, four percent less than last year, but enough to yield an estimated 63 metric tons of opium gum, or 6.3 tons of heroin, assuming no losses. In Mexico, the 1996 crop was almost identical to the previous year's. After Mexican government eradication operations destroyed 7,900 hectares of poppy, there were 5,100 hectares available for exploitation by the drug syndicates, with an estimated potential yield of 54 metric tons of opium gum, or 5.4 metric tons of heroin. Guatemala's poppy cultivation remains at minimal levels after government efforts.

Coca Cultivation. Worldwide coca cultivation dropped from last year's record of 214,800 hectares to 209,700 in 1996. Despite an active eradication program, Colombia experienced an increase in coca cultivation to 67,900 hectares at the end of 1996. This was a 32 percent increase over the 1995 total of 50,900 hectares. In Bolivia, government forces eradicated 7,512 hectares, leaving 48,100 hectares under cultivation. This is a negligible decrease from 1995's estimate of 48,600 hectares. Some coca is cultivated in inaccessible areas of Brazil, but its extent is unknown. Ecuador has only negligible amounts of coca.

COCAINE YIELD ESTIMATES

The cocaine yield figure is offered with the same caveat as the crop harvest yield data: it is a figure representing potential production. It is a theoretical number. It does not in every case allow for losses or the many other variables that one would encounter in a "real world" conversion from plant to finished drug. In fact, the amount of cocaine HCl actually produced is probably lower. A USG team that studied cocaine processing in Bolivia's Chapare region in 1993 found that in the laboratories under observation processing efficiency was lower than previously thought. The estimate for Bolivia was reduced accordingly and the figure published as a point estimate rather than as a range.

In 1996, taking into account estimates of local consumption and local seizures, the USG calculates that if virtually every coca leaf were converted into cocaine HCl, and there were no losses because of inefficiency, bad weather, disease, or the deterrent effects of law enforcement, 760 metric tons of cocaine HCl theoretically could have been available from Colombia, Bolivia, and Peru for worldwide export. This figure includes 435 metric tons potentially available from Peru, 215 metric tons potentially available from Bolivia, and approximately 110 metric tons potentially available from Colombia. In publishing these numbers, we repeat our caveat that these are theoretical numbers, useful for examining trends. Though research is moving us closer to a more precise cocaine yield estimate for Latin America, we do not yet know for certain the actual amount available for distribution.

CONSUMPTION DATA

Most of the chapters in this report contain some user or consumption data. For the most part, these are estimates provided by foreign governments or informal estimates by USG agencies. There is no way to vouch for their reliability. They are included because they are the only data available and give an approximation of how governments view their own drug abuse problems. They should not be considered as a source of data to develop any reliable consumption estimates.

MARIJUANA PRODUCTION.

Cannabis cultivation dropped in Mexico in 1996 to 6,500 hectares with a potential yield of 3,400 metric tons. This is a seven percent drop from 1995's figure of 6,900 hectares, with a potential yield of 3,650 mt. Mexican law enforcement agencies eradicated, 12,200 hectares of cannabis in 1995. In Colombia's traditional cannabis growing zones, where intensive eradication in previous years had virtually destroyed the crop, there was a resurgence of cultivation in 1993 to an estimated 5,000 hectares. That estimate did not change in 1996. Jamaica's cannabis crop rose to 527 hectares in 1996 up from 305 hectares in 1995, a 73 percent increase. The 1996 potential yield was also up an estimated 73 percent to 356 metric tons from 206 metric tons in 1995. We recognize that there may be considerable undetected cannabis cultivation in Central and East Asia, and on the African continent, though there is no evidence that any of this cannabis significantly affects the United States. As we gather more accurate information, we will report significant findings in future INCSRs.

CULTIVATION AND PRODUCTION CHARTS

click here for WORLDWIDE cultivation TOTALS

click here for Worldwide production totals

UN CONVENTION SIGNATORIES

click here for un charts

FY 1996-1998 FISCAL SUMMARY AND FUNCTIONAL BUDGET

LEGISLATIVE BASIS FOR THE INCSR

The Department of State's International Narcotics Control Strategy Report (INCSR) has been prepared in accordance with §489 of the Foreign Assistance Act of 1961, as amended (the "FAA," 22 U.S.C. §2291).

The 1997 INCSR is the eleventh annual report prepared pursuant to the FAA. In addition to addressing the reporting requirements of FAA §489 (as well as § 481(d)(2) and § 804 of the Narcotics Control Trade Act of 1974, as amended), the INCSR provides the factual basis for the Presidential narcotics certification determinations for major drug producing and/or drug­transit countries required under FAA §490. FAA §490 requires that fifty percent of certain kinds of assistance be withheld from all such countries identified and reported to Congress by the President November 1 OF EACH YEAR, pending the President's March 1 certification determinations. If a country is not certified, most foreign assistance is cut off and the United States is required to vote against multilateral development bank lending to that country.

Among other things, the statute asks, with respect to each country that received INL assistance in the past two fiscal years, for a report on the extent to which the country has "met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances." FAA §489(a)(1)(A). Similarly, the President's certification determination depends in part on whether a country, during the previous year, has cooperated fully with the United States, or has taken adequate steps on its own, to achieve full compliance with the goals and objectives established by the 1988 UN Drug Convention. FAA §490(b)(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 this 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 are meeting the goals and objectives of the 1988 UN Drug Convention, the Department has used the best information it has available. The 1997 INCSR covers countries that range from major drug producing and drug­transit countries, where drug control is a critical element of national policy, to mini­states, where drug issues and/or the capacity to deal with them are minimal. The reports vary in the extent of their coverage. For key drug­control countries, where considerable information is available, we have provided comprehensive reports. For some smaller countries 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 between countries, the Department's views on the extent to which a given country is meeting the goals and objectives of the Convention are based on the overall response of the country to those goals and objectives.

Some countries are not yet parties to the 1988 UN Drug Convention; Some do not have status in the united nations that would allow them to become parties. For such countries, we have nonetheless considered actions taken by those countries in areas covered by the Convention, and plans (if any) for becoming parties and for bringing their legislation into conformity with the Convention's requirements. For some of the very smallest countries, the Department has insufficient information to make a judgment as to whether the goals and objectives of the Convention are being met.

Except as noted in the relevant country chapters, INL considers all countries with which the USG 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) in sections entitled "FY 1996­1998 Fiscal Summary and Functional Budget" and "Other USG Assistance Provided."

Statement on Certification

FAA §490(b)(2) requires that, in making determinations regarding full certification, the President consider the extent to which each major drug producing or drug­transit country has:

met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances including action on such issues as 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;

accomplished the goals described in an applicable bilateral narcotics agreement with the United States, or a multilateral agreement; and

taken legal and law enforcement measures to prevent and punish public corruption­­especially by senior government officials­­that facilitates the production, processing , or shipment of narcotic and psychotropic drugs and other controlled substances, or that discourages the investigation or prosecution or such acts.

The statute provides, alternatively, that a country that cannot be certified under the foregoing standard may be certified on the grounds that "vital national interests of the United States require" that assistance be provided to and the United States not vote against multilateral development bank lending to such country. FAA §490(b)(1)(B).

Major Drug Producing, Drug Transit, Significant Source, Precursor Chemical, and Money Laundering Countries.

Section 489(a)(3) requires the USG to identify: (A) major illicit drug producing and major drug­transit countries, (B) major sources of precursor chemicals used in the production of illicit narcotics; and (C) major money laundering countries. These countries are identified below.

Major Drug Producing and Drug­Transit Countries:

A major illicit drug producing country is one in which: (A) 1,000 hectares or more of illicit opium poppy are cultivated or harvested during a year; (B) 1,000 hectares or more of illicit coca are cultivated or harvested during a year; or (C) 5,000 hectares or more of illicit cannabis are 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 illicit drug­transit 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 are major drug producing and/or drug­transit countries have been identified and notified to Congress by the President pursuant to 490(h) of the FAA for this year: Afghanistan, Aruba, The Bahamas, Belize, Bolivia, Brazil, Burma, Cambodia, China, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, Hong Kong, India, Iran, Jamaica, Laos, Lebanon, Malaysia, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, Syria, Taiwan, Thailand, Venezuela, and Vietnam.

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, China, Germany, India, Mexico, and the Netherlands. Information is provided pursuant to § 489 in the section entitled "Chemical Controls."

Major Money Laundering Countries:

A major money laundering country is one whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking. FAA §481(e)(7). The following countries have been identified this year in this category: Antigua, Argentina, Aruba, Austria, Brazil, Canada, Cayman Islands, China, Colombia, Costa Rica, Cyprus, Dominican Republic, Germany, Hong Kong, India, Israel, Italy, Japan, Liechtenstein, Luxembourg, Mexico, the Netherlands, Netherlands Antilles, Nigeria, Pakistan, Panama, Paraguay, Peru, Russia, Singapore, Spain, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United Kingdom, United States, Uruguay, and Venezuela. Further information on these countries and United States money laundering policies, as required by section 489, is set forth in the section entitled "Financial Crimes and Money Laundering."

INTERNATIONAL TRAINING

International anti­narcotics training is managed and funded by INL, and carried out by the DEA, U.S. Customs Service, and U.S. Coast Guard. Major objectives are: contributing to the basic infrastructure for carrying out counternarcotics law enforcement activities in countries which cooperate with the U.S.; improving technical skills of drug law enforcement personnel in these countries; and increasing cooperation between U.S. and foreign law enforcement officials. Over 6,700 persons participated in the U.S. Government's international narcotics control training program in FY 1996, an increase of approximately one­third from FY 1995. Included in this total were individuals trained by DEA using funding from the Department of Justice's Asset Forfeiture Fund.

INL training has become increasingly focused on encouraging foreign law enforcement agency self­sufficiency through infrastructure development. The effectiveness of our counternarcotics efforts overseas should be viewed in terms of what has been done to bring about the establishment of effective host country enforcement institutions, thereby taking drugs out of circulation before they begin their journey toward the U.S. U.S. law enforcement personnel stationed overseas are increasingly coming to see their prime responsibility as promoting the creation of host government systems which are compatible with and serve the same broad goals as ours.

During FY 1996, law enforcement training devoted increased attention to the development and support of infrastructure building in those countries which posed the greatest threat to the U.S. as a result of their role as source or transit countries for narcotics destined for the U.S. INL received positive feedback both from U.S. Embassies and foreign governments on the continuing benefits gained from this training.

INL­funded training will continue to support the major U.S. and international strategies for combatting narcotics trafficking worldwide. Emphasis will be given to promoting training on a regional basis, and to contributing to the activities of international organizations, such as the UNDCP and the OAS. Through the meetings of major donors, the Dublin Group, UNDCP and other international fora, we will coordinate with other providers of training, and urge them to shoulder greater responsibility in providing training which serves their particular strategic interests.

Programs dealing with financial crimes (i.e., methods for promoting asset seizure and combatting money laundering) will continue to expand. INL will maintain its role of coordinating the activities of U.S. law enforcement agencies in response to assistance requests from U.S. Embassies. This will avoid duplication of effort, and ensure that presentations represent the full range of U.S. Government policies and procedures.

Number of Participants Number of Programs

Drug Enforcement Administration

Training in U.S.:

Executive Observation Program 10 10
Special Observation Program 85 376
International Visitors Program 985 746
Forensic Chemist Seminar 422
Int'l Narcotics Enf. Mgt. Seminar 47 2

Training in Host Countries:

In­Country Drug Enforcement Seminar 292 16
Advanced Drug Enforcement Seminar 366 8
Int'l Asset Forfeiture Seminar 175 4
Airport Operations 43 2
Methods of Instruction 20 1
(ILEA) Int'l Law Enf. Academy 350 5
Other 765 15

Subtotal 3,180 1,187

U.S. Customs Service

Training in U.S.:

Executive Observation Program 8 4
International Visitor Program 519 135
Carrier Initiative Program 37 1

Training in Host Countries:

Overseas Enforcement Training 567 19
Contraband Enforcement Team 145 4
Train­the­Trainer Workshop 99 8
Money Laundering Seminar 527 4
Carrier Initiative Program 822 5

Subtotal 2,724 180

U.S. Coast Guard

Training in Host Countries:

Maritime Law Enforcement 749 29
Port Security and Safety Course 86 3

Subtotal 835 32

TOTAL INL TRAINING FY 96 6,739 1,399

OTHER US ASSISTANCE PROVIDED

Section 489 (b)(2)(B) requires the INCSR submission to include a report specifying the assistance provided by the United States to support international narcotics control efforts. In addition to the budget for INL, which is provided in the Executive Summary, the report is also to include information on assistance provided or to be provided by the Drug Enforcement Administration, the U.S. Customs Service, and the U.S. Coast Guard to various countries, and information on any assistance provided or to be provided by such governments to those agencies. This information has been prepared by the three agencies and is provided in this section.

DRUG ENFORCEMENT ADMINISTRATION

The preeminent responsibility of the Drug Enforcement Administration (DEA) is to reduce and ultimately minimize the impact posed by illicit drugs to our nation. All cocaine and heroin as well as some marijuana and other dangerous drugs are produced outside the United States. These illicit drugs are smuggled from the countries of their source, usually through other countries to the U.S. Therefore, the reduction of illicit drug availability in the U.S. requires a strong international counternarcotics strategy. In cooperation and coordination with other nations, as well as other U.S. agencies, DEA strives to concurrently suppress illicit drug production; disrupt the availability of these drugs in the distribution chain; arrest and prosecute those involved in any aspect of illegal drug trafficking; and seize their profits and assets.

The primary contribution of DEA in implementing our international counternarcotics strategy is accomplished through the 70 offices that DEA maintains in 50 countries worldwide. The DEA overseas mission is fivefold:

(1) Conduct bilateral investigative activities,
(2) Coordinate intelligence gathering,
(3) Engage in foreign liaison,
(4) Coordinate training programs for host country police agencies, and
(5) Assist in the development of host country drug law enforcement institutions.

In most countries where DEA maintains offices, DEA carries out all of the above functions with emphasis determined on the basis of the conditions existing in each country. In some instances, where the Host Nation's drug enforcement system is advanced, a DEA Country Office may limit its function to selected activities instead of the full range of programs indicated above.

With the exception of DEA's training mission which is addressed elsewhere, the following are a few examples of the assistance DEA provided host nation counterparts in furtherance of our mission during 1996:

(1) Bilateral Investigations:

DEA's Country Offices work with elements of the Host Nations (HN) Law Enforcement Agencies (LEA) to investigate activities of drug traffickers that lead to indictments and prosecutions in either the host country, the U.S. or a third country. Whenever appropriate and feasible, intelligence information on major traffickers operating in host countries is shared with HN LEAs to enhance their investigative knowledge. Some examples of DEA's work with HN LEAs follow:

On January 14, 1996, after an extensive joint investigation, officers from the National Institute for the Combat of Drugs, in cooperation with the DEA Mexico City Country Office, arrested Juan Garcia­Abrego in Monterrey, Nuevo Leon, Mexico. He is the leader of a major international polydrug trafficking organization based out of Matamoros, Tamaulipas and Monterrey, Nuevo Leon, Mexico that was responsible for importing and distributing multi­ton quantities of cocaine and marijuana throughout the United States. Shortly after his arrest, the Mexican Government expelled him to the U.S. to face outstanding drug trafficking charges on file in the U.S. District Court for the Southern District of Texas. On October 16, 1996, after a month long trial, a jury found Garcia­Abrego guilty on all twenty­two counts of the indictment which included charges of drug trafficking, money laundering and operating a Continuing Criminal Enterprise. The jury also increased the dollar amount of forfeitable assets from $275.1 million to $350 million. On January 31, 1997, the court sentenced Juan Garcia­Abrego to eleven life sentences for eleven drug offense convictions. He also received an additional 180 years for money laundering charges. In addition, the judge fined Garcia­Abrego $128,000,000 over and above the jury's previous forfeiture of assets.

In Thailand, during 1996, the infamous heroin warlord, Chang Chi­fu, a.k.a Khun Sa, surrendered his Shan United Army (SUA) to Burmese authorities, ending an era in southeast Asia heroin trafficking history. In large measure, his surrender was due to cooperative efforts between DEA and Thai drug law enforcement authorities, in which key members of Chang's heroin empire were indicted in the United States and arrested in Thailand for extradition to the United States. Due to disruption of heroin production by the SUA in Burma, remnants of the SUA attempted to establish heroin refining laboratories on the Thailand side of the border. Through joint DEA­Thai intelligence collection and investigative activity, three of these refineries were seized by Thai Border Patrol Police during the year.

During April 1996, the Panamanian Judicial Technical Police and the Public Ministry's Drug Prosecutor's Office, with the assistance of the DEA Panama Country Office, arrested Jose Castrillon­Henao for cocaine conspiracy. Jose Castrillon­Henao is a major cocaine trafficker and money launderer. Numerous DEA domestic and foreign offices contributed their expertise in the analysis of seized documents that pertained to the legal and financial matters of Castrillon and his associates.

In 1996, as a result of joint investigations by DEA Lima, Peru Country Office and the Peruvian Police Anti­Drug Directorate (DINANDRO), a number of significant enforcement actions were undertaken by the host country. These actions resulted in the seizure of 20 tons of cocaine, over 365,000 kilograms of essential chemicals, and over 5 million dollars in trafficker assets. One of the most noteworthy investigations led to the arrest of Willer Alvarado­Linares (a.k.a. Champa) who was Peru's most wanted drug trafficker.

In Colombia, DEA conducts numerous bilateral investigations with the Colombian National Police (CNP) in support of its drug law enforcement operations. In 1996, under Operation Emerald Clipper, 36 aircraft were seized as a direct result of the DEA support of this program. The total value of the seized aircraft is $17,530,000. As a result of Operation Emerald Clipper and the successes of the program, the CNP has developed a general aviation inspection program concept that is being turned into law. This will enable the CNP to search suspect aircraft with greater ease and authority. The law will increase the ability of the CNP to seize illegal aircraft, resulting in their forfeiture.

In August 1995 the Bern, Switzerland Country Office and the Swiss National Police initiated a routine investigation that, with the assistance of several other DEA offices, subsequently uncovered illegal assets hidden by the Raul Salinas cocaine trafficking organization. As a result, in 1996, Swiss authorities have blocked more than 103 million dollars of suspected narcotics proceeds in over twenty Swiss bank accounts.

Through cooperative investigations by DEA and Thai authorities, Anan Detnambanchachai, one of those responsible for a shipment of 168 kilograms of heroin seized in New Orleans, Louisiana, in 1993 was indicted in the United States and arrested by Thai authorities. Thai authorities are holding Anan Detnambanchachai pending extradition to the United States. During the joint investigation, DEA and Thai officials obtained information concerning the shipment of 72 kilograms of heroin to Singapore. This information was passed to Singapore authorities who made that nation's largest heroin seizure ever. The heroin en route from Singapore to Fiji, was destined for either Australia or the United States. Also, in another joint investigation, Thai authorities arrested Li Yun Chung and Cha Chung Chang for their involvement in the shipment of 486 kilograms of heroin seized in Oakland, California in 1991. This heroin seizure remains the largest ever in the United States.

In 1996, the Venezuelan National Guard and the office of Venezuela's Attorney General, in cooperation with the DEA Caracas, Venezuela Country Office and the DEA New York Field Division, successfully completed the first judicially authorized controlled delivery of approximately 570 kilograms of cocaine from Venezuela to the United States. This represents a departure from the historical condemnation by the Venezuelan authorities of any use of controlled deliveries as an enforcement tool and will pave the way for similar operations in the future.

In November, the Guatemalan Treasury Police, in conjunction with the DEA Guatemala City, Guatemala Country Office, seized 1,004 kilograms of cocaine. As part of the follow­on investigation, two bi­national controlled deliveries occurred. In the first controlled delivery, 254 kilograms were delivered to suspects in Guatemala while the second controlled delivery took place in Houston, Texas. These controlled delivery in Houston exposed and disrupted four cocaine distribution cells including a major Canadian distribution network. It also exposed an elaborate food canning operation located in Houston which concealed cocaine in sealed cans for shipment to the east coast. An additional 263 kilos of cocaine were seized in Houston , along with numerous arrests in Texas and New Jersey as a result of the investigation.

The Argentine Prefectura Naval, the Buenos Aires, Argentina Country Office, and the DEA Baltimore, Maryland Resident Office conducted a joint investigation of the cocaine trafficking activities of Oscar Menjibar, a major Salvadoran trafficker. The investigation resulted in the seizure of 22 kilograms of cocaine and the arrest of Menjibar and two of his principal associates. During the investigation, the Prefectura Naval conducted their first successful undercover operation since the passage of the Argentine Narcotics law reforms of 1994.

Nigerian traffickers, centered in Bangkok, Thailand, smuggle Southeast Asian heroin to international destinations, particularly to the United States. The Royal Thai Police and DEA have worked closely together to identify and take enforcement action against these heroin organizations. During 1996, much of these joint investigative activities were directed toward one organization that was supplying heroin to other Nigerian trafficking groups in Chicago and Boston. In a coordinated, worldwide law enforcement operation called Global Sea, Thai authorities arrested the principal sources of supply and are holding them for extradition to the United States.

In November, the Costa Rican Judicial Police with assistance from the DEA San Jose Country Office investigated a Costa Rican export company that transported large quantities of cocaine concealed within legitimate fruit and vegetables containers destined for Miami and New York. During the investigation, Costa Rican officials seized 645 kilograms of cocaine from the organization. Officials arrested one U.S. citizen, two Dominicans, two Colombians and one Costa Rican. This was the second largest seizure of cocaine in Costa Rica to date.

As a direct result of the effective working relationship between DEA Bolivia and the Bolivian National Police, 20 persons, including family members of Jose Luis Pereira­Salas, and Colombian national David Jaimes­Tarasona, an associate of the Miguel Rodriguez­Orejuela organization, were arrested in June 1996, in phase two of an investigation that had netted 10 arrests and 85 kilograms of cocaine HCL in April. In addition, 25 kilograms of cocaine HCL were seized, along with 10 vehicles, 6 residences, and 2 cattle ranches. The successful culmination of the investigation was a direct result of extensive cooperation between DEA offices in Bolivia, Mexico and Miami, Florida.

In April 1996, a bilateral investigation conducted by the DEA Hong Kong Country Office and the Royal Hong Kong Police Narcotics Bureau resulted in the seizure of 600 kilograms of heroin in Guangdong Province, People's Republic of China. A major heroin smuggling group based in Hong Kong planned to transport the heroin to the city of Guangzhou in Guangdong Province and onward to Hong Kong. Evidence indicated that this group is responsible for smuggling approximately 100 shipments involving unknown quantities of heroin during the two years prior to this seizure. Additional investigations by DEA offices in the Far East and New York have established that this smuggling group has previously supplied heroin to traffickers in the United States and that a portion of the heroin seized in Guangdong Province was intended for distribution in the United States.

On June 5, 1996, the Colombian National Police, as part of a joint investigation with the DEA Bogota, Colombia Country Office and the Miami Field Division, conducted a total of 38 raids in Bogota, Medellin and Cali, Colombia. Six defendants were arrested in Colombia and 123 bank accounts were frozen. At the same time, the Miami FD, arrested 4 defendants, including the target of the investigation, Blanca Ortiz­Piedad, who is a branch manager of Bank Atlantic in Miami, Florida. Approximately 1,100 accounts at the bank were frozen by the DEA Miami Field Division. These arrests and seizures were the result of a 5­month investigation by the Miami FD and the Bogota Country Office.

In 1996, Thai authorities extradited Thanong Siripreechapong to the United States. He is an accused international marijuana smuggler, who used his ill­gotten gains to buy his way into the Thai Parliament. Much of the evidence that will be used to prosecute Thanong was collected jointly by the DEA Bangkok, Thailand Country Office and the Thai drug law enforcement authorities. This marks the first case where Thai authorities extradited a Thai citizen to the United States to face drug trafficking charges.

The DEA Istanbul, Turkey Resident Office initiated an investigation with the Turkish National Police which culminated in a 55 kilogram seizure of heroin in Spokane, Washington. This investigation involved Abdul Wahid, the courier, and Mohammed Ramzan, the source of supply from Pakistan. DEA undercover Special Agents arrested Abdul Wahid in the United States at the time of the seizure. The United States is requesting the extradition of Mohammed Ramzan from Pakistan. To date this is the largest heroin seizure in the state of Washington.

The Nicosia, Cyprus Country Office and the Lebanese Internal Security Force began a multi­national investigation into the cocaine trafficking organization of Simone Hayek and William Moises. The investigation resulted in the arrest of 14 defendants in Lebanon and the seizure of 116 kilograms of cocaine. The Hayek and Moises organization had smuggled the cocaine via containerized cargo ship from Venezuela. Through leads developed in Lebanon, and with the assistance of the Nicosia Country Office and the Milan Resident Office, Italian authorities seized 400 additional kilograms of cocaine in Italy. The Nicosia Country Office, reviewing seized documents, discovered three bank accounts used by the organization in Miami, Florida. In a separate investigation of an organization connected with Hayek and Moises, the DEA Miami Field Division arrested seven defendants and seized 503 kilograms of cocaine.

(2) Coordinate Intelligence Gathering:

The Drug Enforcement Administration in Thailand worked with Thai drug law enforcement authorities throughout 1996, targeting major international drug trafficking organizations. The remnants of the Shan United Army (SUA) were a priority focus during the year, however the focus began to shift to the United Wa State Army (UWSA) which appears to have filled much of the heroin production void left by the surrender of Chang Chi­fu and his SUA. Joint intelligence collection activities have identified the UWSA as also being a principal producer of methamphetamine, another serious drug of abuse in Asia.

The DEA London, England Country Office provided to Her Majesty's Customs & Excise intelligence, developed by the Los Angeles Field Division, concerning suspected drug trafficking of a Turkish national, residing in the United Kingdom. The London Country Office conducted close liaison with H. M. Customs & Excise regarding the Turkish subject. The investigation revealed that the Turkish subject had contacts in the United States with whom he was trying to arrange a trade of multi­kilogram quantity of cocaine for the same quantity of heroin.

Additionally, this subject had invested some of his drug proceeds in the United States. This investigation concluded with the arrest of four defendants in London and the seizure of 90 kilograms of heroin. Subsequent investigation revealed that this organization had successfully imported more than 300 kilograms of heroin into the United Kingdom. All of those arrested have been convicted in court and have received lengthy prison sentences. Asset forfeiture proceedings are underway on drug assets in the United States.

Acting on information provided by the DEA Chiang Mai, Thailand Resident Office, the Thai Border Patrol Police, on April 15, 1996, seized a heroin refinery and a methamphetamine laboratory in northern Mae Hong Son Province. Estimates are that the refinery, operated by the former Shan United Army (SUA), produced between 700 to 1,400 kilograms of heroin in a two month period. This was the largest heroin refinery complex ever seized in northern Thailand. Follow­up investigations revealed a second heroin refinery in the same region. On July 4, 1996, the Thai Border Patrol Police seized this refinery and found 85 kilograms of opium, large amounts of precursor chemicals and lab equipment, as well as 200 gallons of heroin in solution.

In 1996, DEA offices throughout Bolivia worked closely with the Bolivian Special Intelligence and Operations Group (GIOE) units on more than a dozen active long­term investigations, as well as on numerous short­term cases. The GIOE is a combined intelligence­operations unit which functions primarily in major urban areas. It is made up of non­uniformed counterdrug forces working closely with DEA Agents in Santa Cruz, Cochabamba, and La Paz.

On July 11, 1996, acting on intelligence information provided by the Tokyo, Japan Country Office, Japanese police and customs officials seized a total of 552 kilograms of methamphetamine and arrested two Japanese nationals at a shipping port in Yokohama. This constituted the largest methamphetamine seizure ever made in Japan.

(3) Engage in Foreign Liaison:

As a result of the many law enforcement successes in Thailand over the past two years, heroin, while still brokered in Bangkok, is increasingly reaching international markets through new routes in Laos, Cambodia and Vietnam. In order to counter this new threat, the DEA Bangkok, Thailand Country Office has enhanced liaison with drug law enforcement authorities in these countries through routine liaison visits, sharing of information, training, and recommendations to the Department of State for provision of basic police equipment. One result of this regional liaison has been the agreement by the Government of Laos to allow DEA to assign a Special Agent to the United States Embassy in Vientiane after a hiatus of over 20 years. In Cambodia and Vietnam, liaison activities have assisted in more clearly defining the exploitation of these countries by drug trafficking organizations, recommending programs to counter these threats, and enhancing the capabilities of their respective police organizations to deal with the drug threat.

During 1996, DEA was instrumental in the development and implementation of the People's Republic of China (PRC) Chemical Control Program. Annually, the PRC imports multi­ton quantities of acetic anhydride and exports multi­ton quantities of ephedrine and pseudoephedrine throughout the world. This new chemical control initiative provides the PRC National Narcotics Control Commission with the framework needed to close the loop on the diversion of chemicals used to manufacture heroin and methamphetamine.

In February 1996, the DEA Athens, Greece Country Office organized a Balkans Area Drug Law Enforcement Conference in Thessaloniki, Greece. For the first time, drug law enforcement officials from Greece, Albania, the Former Yugoslavian Republic of Macedonia, Bulgaria, and Turkey, met to discuss regional drug issues. The three­day conference provided the opportunity for an exchange of drug­related information, intelligence, and permitted attendees to present an overview of their efforts in their respective countries. The participants made plans to reconvene annually.

During 1996, the DEA Hong Kong Country Office provided Hong Kong authorities with information and materials that assisted in the passage of chemical control legislation in Hong Kong. This legislation empowers the newly enhanced Hong Kong Customs and Excise Department (HKCE) Chemical Control Division with the legal tools to effectively arrest and prosecute precursor chemical traffickers. Through the use of this legislation, in July, 1996, HKCE in conjunction with the DEA Hong Kong Country Office and the DEA Mexico City Country Office was able to identify, target and seize 2,750 kilograms of ephedrine at a train station in Pantaco, Mexico. Follow­up investigations and shared intelligence revealed that the ephedrine shipment originated in China and was transshipped through Los Angeles, California destined for a major Mexican methamphetamine trafficking group.

In August 1996, the Brussels Country Office brought together French, Belgian, Dutch and Spanish police officers in an international cocaine and heroin investigation. The case involved Turkish heroin traffickers wishing to trade heroin for cocaine. In an undercover operation, Belgian police "flashed" cocaine and orchestrated the arrests of five Turks and the seizure of thirty­five kilograms of heroin at the Belgian and Dutch border.

In 1996, the Nicosia Country Office was instrumental in urging the Government of Lebanon to pass money laundering legislation in accordance with the 1988 U.N. Convention.

In 1996, the Government of Turkey voted in favor of the Law to Prevent Money Laundering. The new legislation identifies money laundering as a criminal offense. The DEA Ankara Country Office played a part in persuading the Government of Turkey to approve this law.

During 1996, Major General Thanat Phakdipat, Royal Army of Thailand, was convicted in United States District Court at Eugene, Oregon, for his role in smuggling heroin to the United States. He is the first high ranking Thai military office ever convicted in the United States. Under the Thai­US Mutual Legal Assistance Treaty, the DEA Bangkok, Thailand Country Office, for the first time, used video­teleconferencing to enable testimony of witnesses to be taken at trial without requiring travel of these witnesses to the United States. This institutional capability will save valuable resources in the future.

4) Coordinate Training Programs for Host Country Police Agencies:

Addressed in the International Training Section

(5) Assist in the Development of Host Country Drug Law Enforcement Institutions:

In September 1996, the DEA Bogota, Colombia Country Office assisted the Colombian National Police (CNP), in the establishment of a communications intercept facility in San Jose del Guaviare. The facility is manned by CNP personnel and is providing current information on transportation routes, cocaine processing sites, as well as drug traffickers' communications.

During 1996, the DEA Seoul, Korea Country Office worked closely with the Korean Prosecutor's Office in the establishment of a Bilateral Task Force to identify and target methamphetamine smugglers. Also, the DEA Seoul Country Office was instrumental in providing support to the Korean Prosecutor's Office that assisted in the passage of asset forfeiture legislation and the establishment of Korea's first Asset Forfeiture Task Force.

In 1996, the DEA San Jose, Costa Rica Country Office, in cooperation with Costa Rican authorities, re­established the Joint Intelligence Coordination Center whose operations were suspended due to political interference. The Center encourages multi­national cooperation in the collection, analysis, and dissemination of drug law enforcement information.

The DEA Quito, Ecuador Country Office provided financial support, specialized training, and advice in the field of roadblock operations to the recently created Ecuadoran Mobile Interdiction Unit, a specialized entity of the Ecuadoran National Police. The DEA support resulted in two significant chemical seizures in the latter part of 1996.

The DEA Guatemala City, Guatemala Country Office, in 1996, assisted the Guatemalan Treasury Police and the National Police in creating an Anti­Narcotic Task Force that consists of officers from both police agencies. The new unit develops investigative leads on major cocaine traffickers. The Task Force brings together elements from two agencies that traditionally have worked at cross purposes. In addition, the Guatemala City Country Office has assisted the Department of Guatemalan Anti­Narcotic Operations (DOAN) in developing investigative procedures for initiating long­term drug investigations. This includes establishing computerized suspect data bases with procedural requirements for reporting on suspects.

As part of its effort to strengthen the drug enforcement capability of the Bolivian National Police (FELCN), the DEA La Paz, Bolivia Country Office arranged, in March 1996, for 40 members of the FELCN to attend an intelligence computer course in preparation for the establishment of the FELCN National Computer Intelligence Network.

During 1996, the DEA Tokyo, Japan Country Office assisted the Government of Japan to establish a central intelligence office on narcotics and smuggling. This office serves as a repository for actionable intelligence and has improved its response capability.

click here for Asset Sharing Chart

UNITED STATES COAST GUARD

INCSR (FY1996/1997)

Combined Operations: Coast Guard counterdrug law enforcement in the Caribbean and maritime borders of Latin America is largely dependent on international combined operations. Partnering with law enforcement officials of other nations helps develop indigenous interdiction forces and enhances the cumulative impact of interdiction against drug traffickers in the region. Combined operations with foreign maritime forces provide practical training for foreign, as well as Coast Guard personnel.

CARIBE VENTURE is a recurrent series of multinational operations in the Eastern Caribbean. The Coast Guard sponsored four of these operations in FY1996 and has extended CARIBE VENTURE 1/97 throughout the first half of FY1997. Participants extend legal authority to law enforcement officials of other nations that permit entry and pursuit of suspects through sovereign sea and air spaces. International partners presently include: United Kingdom dependent territories, the Netherlands Antilles, French West Indies, Dominican Republic, Antigua & Barbuda, St Kitts & Nevis, Anguilla & Montserrat, and Dominica. Other RSS member nations participate in combined operations that are conducted in the vicinity of territorial sea and airspaces.

Operation GALLANT SHIELD is a bilateral combined operation scheduled for FY97 that dedicates law enforcement assets from Martinique and the Coast Guard to maritime traffic in the vicinity of the French West Indies. Approval of entry and overflight authority into French territorial waters is a genuine sign of growth in drug enforcement. This combined operation will also enhance interoperability procedures and equipment.

HALCON is a series of counterdug and alien migrant operations between the USG and the Dominican Republic (DomRep). The November 1996 HALCON V operation featured increased coastal patrols with new small boats in DomRep and extended overflight authority for USG aircraft.

OPBAT is an ongoing interdiction program involving forward staged USCG and Army air assets, DEA agents, along with Bahamian Police and Turks and Caicos Islands Police forces. There are three primary staging sites for Coast Guard and Army helicopters which may respond to targets throughout the Bahamas and Florida Straits. Exportable OPBAT style techniques are currently being considered for implementation in high drug trafficking areas throughout the transit zone.

OPVISTA missions are conducted quarterly by a high or medium endurance cutter operating in the Caribbean or Eastern Pacific. These Visits for International Exchanges and Technical Assistance help foster closer working relations between law enforcement officials and highlight the importance of international cooperation.

Law Enforcement Detachments (LEDETS) are largely responsible for the success of combined operations. Coast Guard currently deploys LEDETS on British and Dutch warships which extends the Coast Guard's unique maritime law enforcement authority. Foreign vessels with embarked LEDETS made five significant drug seizures in 1996.

The Coast Guard also conducts coincidental operations with the Mexican Navy in the Gulf of Mexico and the Eastern Pacific. During these operations, Coast Guard and Mexican Naval units operate simultaneously, and exchange on­scene information which may assist in interdiction of drug traffickers. The coordination and frequency of these operations is expected to increase in FY 1997.

Maritime CD Agreements: Coast Guard officers are key members of interagency US delegations traveling to Caribbean countries to negotiate bilateral maritime counterdrug agreements. Clauses of the "Six Part" model agreements include shipboarding, shiprider, pursuit, entry­to­investigate, overflight, and order to land. Coast Guard officials are also assisting the State Department in negotiating agreements to improve maritime migrant interdiction operations.

Coast Guard officers are also posted in key embassies of source and transit zone countries. Current billets include: the Bahamas, Colombia, Haiti, Mexico, and Panama. These officers coordinate a significant amount of informal training and assistance to host nation forces by visiting Coast Guard cutter and aircraft crewmembers.

Training: The Coast Guard deploys Mobile Training Teams (MTTs) to source and transit zone countries at the request of foreign governments. Short term law enforcement MTT normally consist of four instructors who conduct classroom and hands­on training. During FY 1996, MTTs provided instruction to over 2,000 students in 45 different countries. Long term training is being conducted with Bolivian, Colombian, Haitian, and Peruvian, law enforcement and military agencies.

International Training Division (ITD) personnel may be deployed for several months where longer presence is warranted. These instructors train foreign law enforcement authorities on coastal waterways management, and help establish permanent training programs in countries such as Bolivia and Panama. These self sustaining schools are revisited periodically by MTT personnel.

Coast Guard resources also extend training to foreign shipriders, and participate in cooperative multinational training exercises, such as Operation TRADEWINDS. This exercise is an annual program focused on increasing operational compatibility among neighboring law enforcement forces in the Eastern Caribbean.

The following pages provide actual and projected training and assistance events for FY 1996 and FY 1997.

click here for Coast Guard Assistance Chart part 1
click here for Coast Guard Assistance Chart part 2

UNITED STATES CUSTOMS SERVICE

International drug interdiction training is a vital segment of the activities, interests, and mission of the US Customs Service. Training is funded and approved by the Department of State and provided to drug control agencies with an interdiction responsibility in countries considered significant to US narcotics control enforcement efforts.

FY 1996, 47 programs were conducted. These programs involved 37 participants in the US and 1,750 participants in 30 foreign countries. This annual schedule included 4 Executive Observation Programs (EOP); 16 Overseas Enforcement Training (OET) Programs for individual countries; 3 Regional Overseas Enforcement Training (ROET) Programs for two or more countries; 5 Train­the­Trainer Workshops (T3W) for individual countries; 1 Regional Train­the­Trainer Workshop (RT3W) for two or more countries; 4 Contraband Enforcement Team (CET) Training Programs ­ 3 with 2 separate phases and 1 with 3 separate phases; and 1 Money Laundering Seminar (MLS).

In addition to the normal schedule of International Narcotics Control Training programs conducted under the auspices of INL, US Customs has carried out a number of narcotics control projects making use of funds outside of the annual INL allocation. These programs were in response to high priority concerns. Among these are the following:

-- Carrier Initiative Programs conducted in Barbados, Chile, Dominican Republic, Ecuador, Guatemala, Haiti, Panama, Peru, as well as a site survey/assessment in Peru. A Super Carrier program was also conducted in Venezuela. Many of these courses were at least partially funded by international carriers or trade organizations and a number of them were done at the conclusion of other scheduled training programs, with little additional cost.

-- A special airport and Customs anti­smuggling assessment was provided for South Africa in conjunction with a scheduled drug interdiction school.

-- The scheduled programs for Paraguay and Haiti included innovative multi­site operational practical exercises involving container search and land/port interdiction techniques. As noted below, these programs were instrumental in creating an environment where seizures were made both in the U.S. and in the host countries.

-- A Customs Mutual Assistance Agreement (CMAA) was signed with Ireland. In conjunction with the CMAA signing, a drug interdiction/investigations/intelligence gathering program focusing on interagency cooperation was provided to Irish drug control agencies.

FY­1996 was the sixth year in which INL has funded training in narcotics security techniques provided by US Customs to managers and employees of commercial transportation companies under the Carrier Initiative Program (CIP). During FY 1996, INL­funded ClP training was presented to 859 employees in 6 programs. These programs were offered in the following countries: Peru, as well as a site survey/assessment in Peru, Guatemala, Barbados, Ecuador, 1 in the US (Miami). A Super Carrier program was also conducted in Venezuela. Costs relating to these programs are partially offset by the sponsoring commercial transportation companies.

Particularly noteworthy in assessing the past year's program is the submission of reports of increased law enforcement activities related to the training. There were, for example, measurable results: Upon conclusion of the basic back­to­back drug interdiction schools in Haiti, our field team leader created a "heightened enforcement awareness" at JFK airport, for flights from Haiti and the Dominican Republic. Few seizures had been made from Haitian flights for several months, but on 6/27/96 in the PM, CET, using intensified search parameters, discovered a "false mail bag", which contained 37.3 lbs of cocaine. The JFK CET also discovered 1.07 lbs of heroin on/in a passenger (swallower) from the Dominican Republic. During the training program, the team learned that the enforcement officers in the Dominican Republic believed that only cocaine and not heroin was transiting their country. This seizure information has been communicated to the DEA Attache who has briefed the Dominican Republic agencies.

In addition, the training team leader in a follow­up call to Haiti, was advised that recently trained customs/ enforcement officers and Carrier Initiative Program trained employees made the following three seizures, with no prior information:

-- 80 kilos of cocaine in four suitcases;
-- 10 kilos in a passenger's carry­on bag;
-- 2 kilos on a passenger (body carry).

In the trip report for the Paraguay Overseas Enforcement Training Program, the Team Leader stated the following concerning a field practical exercise conducted during the program: "Our visit to Encarnacion was ended on a very positive note. The group was working the long­range omni buses. We were working jointly with Customs and Dinar (Police). The Customs team member from El Paso boarded a bus with a Paraguayan Customs inspector. The Paraguayan inspector detected bricks of marijuana in the overhead luggage area and also under several seats. Total weight of the marijuana was six kilos. This was the very first seizure ever by Customs at the Port of Encarnacion. The smuggler was an older man who had boarded the bus just outside of Asuncion. This bus company was not one that the inspectors considered "high risk."

In FY 1996, our international training efforts have, as in the past, also emphasized cooperation with other US Government drug enforcement agencies. Cooperation was also emphasized with other nations and international bodies. We maintain an extensive network of drug control liaison contacts in the US, as well as with a number of major donor countries and international organizations, enabling us, among other things, to avoid duplication of training.

In FY 1996, the US Customs Service shared financial assets on 7 occasions:

ARUBA $41,475.86
GOVERNMENT OF SWITZERLAND $335,408.42
UNITED KINGDOM $135,124.97
CANADA $12,365.08
CANADA $1,425.05
STATES OF JERSEY $1,049,991.25
ROYAL CAYMAN ISLANDS $12,484.65

TOTAL: $1,588,275.28

Participants Programs

Training in the US:

Executive Observation Program 8 4
Carrier Initiative Program­Miami 37 1

Training in host countries:

Overseas Enforcement Training 567 19
Contraband Enforcement Team1 45 4
Train­the­Trainer Workshop 99 8
Money Laundering Seminar 527 4
Carrier Initiative Program 822 5

SUBTOTAL 2,205 45

[end of document]

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