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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

SOUTH AMERICA

I. Summary

Argentina is not a major drug producing or drug transshipment country. However, it faces a growing problem with illegal narcotics, both in domestic use and in the flow of drugs transiting its territory. The Government of Argentina (GOA) actively opposes narcotics trafficking and the use of illegal drugs. In 1996, the GOA decreed a new "federal plan" against drugs, designed to coordinate federal and provincial government actions. The government also issued a decree with new regulations on precursor chemicals. The GOA sent a money laundering bill to the Congress, where the measure is under review. GOA security and police forces involved in counternarcotics efforts are large and generally efficient, but severe budgetary shortfalls and institutional rivalries hamper their efforts. The counternarcotics efforts of the country's largest provincial police force were seriously disrupted by widespread corrupt practices. The GOA is very active in the international counternarcotics fora. Argentina is a party to the 1988 UN Convention.

II. Status of Country

While Argentina is neither a major drug producing country nor a drug refining/manufacturing center, there is a general consensus among both official and private observers that the trafficking of narcotics through the country increased over the past few years. However, it is impossible to estimate the volume of the drug flow with any accuracy. In 1996, there was information indicating that diverted Rohypnol (flunitrazepam), the so­called "date­rape drug," from legitimate sources in Argentina is finding its way to the streets of the US.

Bolivia is the most common source of cocaine entering Argentina, although some cocaine and other drugs, such as marijuana, come in via Paraguay and Brazil. Means of entry into the country include use of private and commercial vehicles, containerized cargo on railways, and by courier. While there are indications of larger shipments entering the country on private aircraft, hard evidence on the number and frequency of such flights is lacking. Nonetheless, the existence of thousands of uncontrolled airfields and many small municipal airports in the northern part of Argentina are a likely means of introducing drugs into the country. Riverine traffic from Paraguay and Brazil is another method for moving narcotics into Argentina. Drug shipments out of Argentina are mostly either via couriers on commercial aircraft or through the port of Buenos Aires concealed in containerized or other cargo. Argentine authorities increasingly are concerned about evidence of growing domestic consumption of narcotics.

III. Country Actions Against Drugs in 1996

Policy Initiatives. The Government of Argentina is actively opposed to drug trafficking and to the sale and consumption of illegal narcotics within the country. Argentina is a party to the 1988 UN Convention. In 1989, the Congress passed a major anti­narcotics bill to enact into law the commitments made in 1988 in Vienna. Subsequent Presidential decrees have stiffened parts of the law, such as those targeting money laundering and permitting asset seizures. In 1991, the government promulgated a "National Plan Against Illicit Traffic of Drugs" which implemented a series of measures to strengthen government measures against drug traffickers.

Accomplishments. Argentina has had a "Secretariat for Prevention of Drug Abuse and Narcotics Trafficking" almost from the beginning of the Menem Administration in 1989. The Secretary, the country's "drug czar," is appointed by the President and has a staff of about 50 people. Julio Cesar Araoz is the incumbent Secretary. Appointed by President Carlos Menem in February 1996, Araoz was Minister of Health until 1993 and later a member of the Constitutional Convention. In his current position, he acts as the country's coordinator for all counternarcotics efforts, which involve domestic drug prevention and drug treatment programs along with active Argentine Government participation in international conferences and seminars on the global effort against illicit drugs. Taking over after the sudden dismissals of his two predecessors, Araoz has brought forceful leadership to the Secretariat. Like his predecessors, however, he is hampered by the statutory limitations on the Secretariat, whose "coordinating" role is often difficult to enforce.

In June, President Menem signed a decree establishing a new "federal plan" against narcotic drugs. The plan is designed to coordinate the counternarcotics efforts of the federal and provincial governments. In the decree, Araoz's secretariat is charged with identifying the extent of the narcotics problem, both in terms of use and trafficking, in each province and drafting a coordinated plan to address the problem on a national scale.

Argentina is active in multilateral counternarcotics organizations, such as the OAS Inter­American Drug Abuse Control Commission (CICAD), the International Drug Enforcement Conference (IDEC), and the UNDCP. In October, the GOA hosted the 20th CICAD meeting in Buenos Aires. Along with USG representatives at that meeting, Argentine officials actively pushed for approval of the Hemispheric Counter­Drug Strategy, later signed in Montevideo in December. GOA representatives were also present at the IDEC meeting in Mexico City in April. The GOA hosted a follow­up regional meeting in Buenos Aires in June. The GOA is also one of the signers of a memorandum of understanding with UNDCP (with Bolivia, Chile, and Peru) whose purpose is to develop a sub­regional drug control program. In 1996, seminars were held in each country on drug prevention (Argentina), chemicals (Bolivia), judicial system (Peru), and money laundering (Chile). A second round of seminars will be held in 1997, with the additional participation of Uruguay.

Enforcement Efforts. Argentina has large and generally efficient police and security force organizations, all of them with counternarcotics missions. The principal organizations involved in combating drug trafficking are the "Policia Federal" (police with jurisdiction for crimes originating in or connected to the federal capital), the "Policia de la Provincia de Buenos Aires" (the Buenos Aires Province Police), "Gendarmeria Nacional" (a semi­militarized Border Police), and the "Prefectura Nacional" (the Coast Guard). The police forces of other provinces, especially those of the northern provinces such as Salta and Jujuy, and the "Servicio Nacional de Aduana" (the Customs Service) also have counternarcotics responsibilities. In 1996, administrative oversight of the two national security forces (Gendarmeria and Prefectura) was shifted from the Defense Ministry to the Interior Ministry, although both forces retain their semi­militarized structure.

Because of strict economic austerity measures, all of Argentina's law enforcement agencies face severe budget limitations that largely prohibit investment in new equipment and training, or additional manpower. Moreover, an ongoing problem for the country's counternarcotics strategy is a lack of coordination among the various law enforcement agencies involved in the effort. The various components of the country's law enforcement network are decentralized and fragmented, and have overlapping responsibilities and institutional rivalries that undermine Argentina's counterdrug efforts.

One notorious drug­related case in 1996 dealt a setback to efforts to expand undercover operations against drug trafficking. Following the arrest of soccer promoter Guillermo Coppola, reputedly involved in cocaine distribution, Buenos Aires police undercover agents were charged with planting drugs and tampering with other evidence used against Coppola. The revelations immediately led to calls for repeal of the law allowing undercover agents and controlled deliveries. Although it is doubtful that those calls will be heeded, the affair will set back efforts to expand these necessary, but controversial, law enforcement tools.

The government introduced new machine­readable passports in 1996 and opened a solicitation for new tamper­resistant national identification cards. Argentina and its MERCOSUR colleagues have already agreed to produce and issue "smart" border crossing cards in selected frontier zones that will incorporate the latest technology for monitoring individuals potentially involved in transnational crimes.

Corruption. Both in the Buenos Aires Provincial Police and in Customs, allegations of widespread corruption by officials severely affected the counternarcotics unit in each organization. Customs operations across the board have seen their effectiveness erode because of ongoing public revelations of corrupt practices. In the second half of 1996, the government was forced to remove a wide swath of Customs officials allegedly responsible for allowing illegal entry of goods, a so­called "parallel Customs." The organization has also been criticized for permitting non­supervisory personnel to administer safe storage of confiscated goods, including intercepted narcotics shipments.

Agreements and Treaties. Argentina is a party to the 1988 UN Convention, the 1961 Convention, and its 1972 Protocol, and the 1971 Convention on Psychotropic Substances. In addition, Argentina and the US have an extradition treaty, a mutual legal assistance treaty, and a narcotics cooperation agreement. In October, Argentina and the US commenced negotiations for a new extradition treaty, and a treaty text was initialed in January 1997.

Drug Flow/Transit. During the first nine months of 1996, Argentine authorities seized almost 2,000 kgs of cocaine. Two of the most significant seizures took place at mid­year, 150 kgs seized on July 30 and 102 kgs seized on August 1. In both cases, the cocaine had originated in Bolivia and had been shipped into Argentina by land.

Demand Reduction. Argentine authorities are increasingly concerned over evidence of growing domestic consumption of narcotics. As more drugs enter the country, there are increasing quantities available for local use. A widely held view among police, public health officials, educators, labor union leaders and others is that drugs are readily available and that their use is growing, especially among young people. The changing economic patterns of the past several years have given some sectors of the population greatly increased disposable income, making the country an increasingly lucrative market for drug dealers. Conversely, there is a growing cadre of active drug distributors among many of those left behind by economic progress ­­ the large underclass of the unemployed, poor immigrants from neighboring countries, and petty criminals.

In December, the US Embassy sponsored a week­long visit by Roger Pisani, a US counter­drug media expert to explore the possibility of creating an Argentine version of the highly successful U.S. model "Partnership for a Drug Free America." The visit included meetings with a broad range of government officials, corporate officers, media representatives, and health services experts. The response to the visit was enthusiastic.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives. In 1989, the US and Argentine governments signed a cooperation agreement against drug trafficking which has been implemented annually through 1995 through a series of memoranda of understanding. Since 1988, USG assistance to Argentina destined for antidrug trafficking efforts has totaled about $2.9 million. Just over $2.0 million of that amount was for equipment, with the balance used for training programs for Argentine law enforcement personnel. The program with Argentina did not receive additional USG funds in 1996, since the GOA is implementing counternarcotics programs with prior year funds.

Bilateral Cooperation. Cooperation between USG and Argentine authorities on counternarcotics efforts was excellent in 1996. An important USG initiative was assistance to the GOA in creation of a "Northern Border Task Force." Initially, this task force will be made up of around 20 police officials, divided between the Gendarmeria and the Salta Provincial Police. The objective of the task force is to coordinate the actions of the principal police agencies at the point of entry of much of the cocaine that enters Argentina. The USG is cooperating with training and equipment. In October, DEA held a week­long training class in Salta, involving over 30 police officials from several northern provinces, some of them to be assigned to the task force. Also in October, DEA offered a similar training class, this time in Cordoba, for law enforcement authorities from the north/central region of the country.

The Road Ahead. In 1996, the GOA made progress in its efforts to get the US­funded "Joint Information Coordination Center" (JICC) fully operational. A new JICC director is in place and significant headway has been made in overcoming the principal obstacles standing in the way of this project. Nonetheless, some important problems remain to be solved and the US will work closely with GOA officials to ensure full utilization of the JICC.

The USG also will seek to share with the GOA its own experience in implementing laws regarding undercover agents and controlled deliveries. Additionally, the US believes the law should be broadened to allow for use of informants, a goal that was not realized in 1996.

I. Summary

Bolivia, the world's second leading source of cocaine, cooperated closely with the US on counterdrug efforts and took adequate steps toward full compliance with the goals and objectives of the 1988 UN Convention. Bolivia's coca crop is second only to Peru's in the production of the cocaine alkaloid, though it ranks third, behind Colombia, in terms of area under cultivation. Bolivia also is currently believed to be the world's second leading source of refined cocaine hydrochloride (HCl). Bolivian coca growers produce cocaine base in rudimentary laboratories, then transfer it out of the growing area for further processing and/or consolidation prior to export. Colombian traffickers have a diminished role in the country's drug industry, as Bolivian traffickers manage more sophisticated organizations which convert ever­increasing quantities of cocaine base into cocaine HCl.

During 1996, the Government of Bolivia (GOB) eradicated over 7,500 hectares (ha) of coca; however, replanting mostly negated the effects of eradication. The government launched late in 1996 an aggressive campaign to detect and destroy new coca and seedbeds, and arrested a number of peasants who planted illegal new coca. Cocaine base and HCl seizures increased in 1996 as did chemical and asset seizures. The Minister of Justice presented to the cabinet legislation criminalizing money laundering which will be introduced in the congress early in 1997. A new extradition treaty between the US and Bolivia entered into force in November 1996. Bolivia is a party to the 1988 UN Convention.

II. Status of Country

The cultivation of 7,000 new hectares of coca almost offset an otherwise impressive year of mature coca eradication. After destroying 7,512 ha of coca in the Chapare, total national cultivation was 48,100, reflecting a reduction of some 700 ha in the Chapare region, 200 ha in the Apolo region, and an increase of 400 ha in the traditional Yungas de La Paz region. Cultivation in each of the three regions was as follows: Chapare 33,000 ha; Yungas 14,400 ha; and Apolo 700 ha. Most Yungas coca reportedly is used for traditional purposes, such as chewing and in tea, while Chapare coca is used to produce cocaine.

Cocaine base largely is produced and moved out of the coca­producing regions by small­scale operators. Once out of the producing regions, a more sophisticated level of traffickers takes charge of moving the product abroad, typically in shipments of under a ton. Bolivian traffickers are increasing their marketing of finished cocaine which they move via Brazil, Chile, Argentina and Paraguay to European and US markets.

With the exception of sulfuric acid, virtually all chemicals required to process coca leaf into cocaine HCl must be imported. Law enforcement efforts against chemical smugglers, and those diverting legally imported chemicals for illicit purposes, were very effective in 1996. The largest identified operation for smuggling chemicals from Chile was shut down. The Controlled Chemicals Directorate made some progress in developing effective controls over the trade in chemicals used by cocaine processors, but full implementation was still some months off at the end of 1996.

The Ministry of Justice produced a draft revision of the penal code in 1996 that would criminalize money laundering. The bill, as revised in January 1997 and submitted to the Bolivian Congress by President Sanchez de Lozada, are in most respects consistent with international standards. The GOB is seeking passage of this legislation and a package of other judicial reforms before the June 1997 presidential elections.

III. Country Actions Against Drugs in 1996

Policy Initiatives. Bolivian counternarcotics efforts are governed by the Coca and Controlled Substances Law (Law 1008), passed in 1988. The law permits limited coca cultivation in traditional areas, declares illegal any coca cultivated elsewhere in the country, prohibits the planting of new coca outside the traditional areas, and dictates the phased and compensated eradication of coca in the largest growing area (the Chapare). It also prohibits the use of herbicides for eradicating coca.

The Bolivian Government manually eradicated 7,512 ha of coca in 1996, over a third more than in 1995 and well over the 5,000 ha minimum prescribed in Law 1008. However, approximately 7,000 ha of new coca detected during the period largely offset the eradication effort. In response, the government launched late in the year an enhanced program to detect and destroy new coca cultivation. The GOB also arrested a few peasants who planted illegal new coca ­­ creating a disincentive to coca cultivation ­­ and initiated a public campaign warning that those who plant new coca would be prosecuted.

In an effort to streamline counterdrug command and control, Bolivia's Special Forces for the Fight Against Drug Trafficking (FELCN) were completely reorganized in February 1996, from a combined military/police organization to a primarily police­based organization. Assisted by US advisors, the new director has focused on re­staffing and re­orienting FELCN toward more traditional investigative functions and will work to further consolidate centralized command and control of Bolivian CN forces in 1997.

The Justice Ministry developed legislation revising Bolivia's penal code which included provisions criminalizing money laundering. These provisions, as revised in January 1997 and submitted to the Bolivian Congress by President Sanchez de Lozada, are in most respects consistent with international standards. In addition, the GOB developed and submitted a package of legislation that would completely reform the Bolivian judicial system. Among the proposed reforms is a revised Code of Criminal Procedures intended to streamline the application of Bolivian criminal law. The Sanchez de Lozada Administration will seek passage of the entire package of reforms before the June 1997 presidential elections.

Accomplishments. Total potential cocaine production of the 1996 coca crop in Bolivia declined by an estimated 10%, from 240 metric tons (mt) in 1995, to some 215 mt of cocaine HCl, if all available coca leaf were processed into cocaine. While new planting largely offset eradication, new coca does not become harvestable ­­ and capable of producing the cocaine alkaloid ­­ for some two years.

Overall cocaine base and HCl seizures in 1996 surpassed 1995 totals, and HCl seizures in the second half of the year increased dramatically. An expanded and increasingly effective Chemical Police Unit (GISUQ), aided by counterdrug forces in the Chapare, also made chemical seizures well above 1995 levels. Asset seizures similarly increased some 36 percent over the same period in 1995.

After a few false starts, the Seized Asset Directorate created by supreme decree in December 1995, began operations in mid­year, and by October, had established offices in La Paz, Santa Cruz, Cochabamba and Trinidad. It completed inventories of property on hand and conducted test sales in several regions. Some judges, who had enjoyed a great deal of discretionary authority under the previous seized asset regime, failed to comply with the new procedures, slowing full implementation of the decree.

A new extradition treaty between the US and Bolivia entered into force in November. The first US request for provisional arrest for purposes of extradition under the treaty was forwarded to the Ministry of Foreign Affairs shortly thereafter. The new treaty should accelerate the processing of US extradition requests, as it specifically makes narcotics crimes extraditable offenses, thus removing one procedural defense relied upon in the past by drug traffickers challenging USG requests. This treaty clearly provides for the extradition of Bolivian nationals to the US for narcotics crimes.

Enforcement Efforts. The new FELCN director ­­ the first active duty National Police official selected for the post ­­ worked with US advisors to restructure the force, and to implement changes in the training regimen designed to further professionalize and increase its involvement in regional counternarcotics efforts. By mid­1996, Bolivian counternarcotics agencies, with US assistance, had dismantled five of the fifteen trafficking groups identified as priority targets in Bolivia.

In addition to the restructuring of the FELCN, the Chemical Police Unit (GISUQ) was expanded to include offices in Cochabamba, Santa Cruz, La Paz, and Oruro. Each office made multi­ton seizures in 1996. The La Paz office, in coordination with Chilean officials, dismantled two organizations estimated to be responsible for 80 percent of the essential chemicals smuggled from Chile to Bolivia.

Corruption. There were no new cases before the courts of public corruption during the year, although the charges brought against the chief political operative of former President Jaime Paz Zamora's party (MIR) ended in a conviction and a sentence of four years in jail. The present government does not condone, encourage or facilitate drug trafficking or money laundering, and is taking measures against the judges who have refused to comply with the Seized Assets Decree. Still, drug­related corruption is a problem in the courts, the military, and civilian counternarcotics agencies. The GOB response to allegations of official corruption is limited by the capabilities of investigative authorities to effectively prove and prosecute corruption. For example, a notoriously corrupt army colonel was detained during a FELCN raid of San Matias in October but was returned to duty when the FELCN was unable to produce sufficient evidence for prosecution.

Agreements and Treaties. Bolivia is a party to the 1961 Single Convention on Narcotics Drugs, its 1972 Protocol, the 1971 Convention on Psychotropic Substances and the 1988 UN Convention. Bolivia has complied fully with its obligations under bilateral narcotics control agreements with the US. As noted, a new extradition treaty between the US and Bolivia, signed in 1995, entered into force on November 21.

Cultivation and Production. Bolivia produces over a quarter of the world's coca leaf, which potentially yields about 30 percent of the world's cocaine supply. Law 1008 permits the cultivation of up to 12,000 ha of "traditional" coca, principally in the department of La Paz for use as a tea, for chewing, or for traditional ceremonies. The processing of this or any other coca to produce cocaine is illegal. Coca planted in the Chapare before the promulgation of Law 1008 is considered "excess and transitional." All other coca, including Chapare coca planted after 1988, is illegal. Under Law 1008, transitional coca must be eradicated at a rate of 5,000­8,000 ha per year, subject to the availability of funds for "alternative development" programs targeted at those individuals and communities eradicating coca. Though not established by law, cash compensation is paid to those who eradicate "transitional" coca voluntarily. Illegal coca is subject to eradication without the owner's consent and without compensation.

Coca leaf from the Yungas is widely preferred for traditional use due to its taste and texture; it is even available for sale in the Chapare. While most Yungas coca is consumed in leaf form, a growing amount is diverted to cocaine production. In the Chapare, 95 percent or more of the coca crop is intended for cocaine production. Apolo coca, meanwhile, is in rapid decline and is of little importance to the drug trade.

The USG estimates that total cultivation of coca in Bolivia in 1996 was 48,100 ha, 500 ha less than a year earlier. Of the total, 36,500 ha were of mature, harvestable coca, nine percent less than the previous year. During 1996, 7,512 ha of coca were eradicated in the Chapare, over a third more than during the previous year; it was mostly offset, however, by the planting of 7,200 ha of new coca country­wide. The government took aggressive steps in late 1996 to destroy new coca and deter its planting to ensure that future eradication of mature coca leads to a substantial reduction of the total coca crop.

According to a 1993 study by US experts, one hectare of mature Chapare coca yields on average 2.7 mt of coca leaf (sun­dried, the form in which it is marketed and processed); that amount of leaf can produce 7.44 kgs of cocaine. Put differently, 363 kgs of sun­dried leaf (0.134 ha) produce one kg of cocaine. Fully­dried Chapare coca is about sixteen percent lighter than sun­dried leaf and contains 0.72 percent cocaine, of which 45 percent is recoverable by typical cocaine base laboratories. Based upon these averages, the total potential cocaine production of the Chapare ­­ which now has 22,700 ha of mature coca under cultivation ­­ is some 170 mt, a 26 mt or 14 percent decline from the 1995 total of 196 mt. Based on these formulas, the eradication of 7,512 ha of coca prevented approximately 56 mt of cocaine from being manufactured and exported.

Demand Reduction/Domestic Programs. Drug abuse is a growing problem. A recently published study by the Bolivian NGO Celin found that almost 11 percent of respondents in urban areas had used inhalants, cocaine, marijuana or hallucinogens at some time, seven percent within the previous year. The GOB supports treatment and rehabilitation programs, while the drug awareness effort is led by two US­supported NGOs, SEAMOS and CESE. SEAMOS works principally on media campaigns and draws some support from the business community. CESE works with teachers and runs a drug hot­line. CESE's director is co­coordinator of the Drug Prevention Network of the Americas, a regional coalition of public/private sector organizations to strengthen international cooperation, and national prevention programs.

IV. US Policy Initiatives and Programs

Policy Initiatives. The US counternarcotics strategy for Bolivia seeks to combine a successful law enforcement program with voluntary and involuntary eradication efforts, in order to force coca growers to seek other, licit alternatives. Such alternatives are provided by a very successful alternative development program and Bolivia's general development efforts, substantially funded by the US. Alternative development efforts support licit agricultural production and investments in infrastructure and marketing in coca growing areas. New projects in the Chapare are targetted at communities which have complied with eradication agreements. Bolivian President Sanchez de Lozada has committed to the eradication of all coca above that permitted for traditional use by the turn of the century. US assistance to the law enforcement effort is focused on improving investigative capabilities as well as seizure results, and helping Bolivia to manage a professional antidrug force as a credible deterrent to coca growers who might seek to enter the cocaine processing and trafficking industry.

Bilateral Cooperation. Bolivia has met the terms and conditions of its bilateral drug control agreements with the US. It has made substantial progress toward full implementation of an effective seized asset regime, and legislation establishing money laundering as a crime is awaiting action by the cabinet. Bolivia achieved a minor net reduction of coca during 1996, and has agreed to an eradication target of 7,000 ha for 1997. The implementation of an effective campaign against new coca planting should contribute to substantial net eradication in future years.

Road Ahead. In 1996, eradication goals were achieved in a sustained, year­long effort; the desirability, or inevitability, of eradication has now been accepted by most Bolivians. US assistance programs will seek to consolidate eradication gains, and, after mid­1997 presidential elections, to engage the new government rapidly on the counterdrug issue. In addition to pressing the government to launch a sustained effort to eradicate new coca and seedbeds without compensation, the USG will urge Bolivia to reduce the level of compensation for the eradication of mature coca fields. The GOB has increased the risks of cultivating coca by announcing that those discovered planting new crops are subject to arrest; it will be critical for the GOB to follow through on this threat. We will seek rapid passage of the revised penal code criminalizing money laundering by the legislature, and will urge the Bolivian Government to address problems remaining in the seized asset program by passing legislation which eliminates apparent conflicts between last year's decree and Law 1008.

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I. Summary

Brazil continued to be a major trafficking zone for international narcotics syndicates that transship illicit drugs via aerial, riverine and overland routes primarily from Peru, Bolivia and Colombia. Aerial trafficking from Bolivia increased, and Brazilian traffickers are reported to have provided fuel and viable airstrips to facilitate such trafficking. Brazilian authorities destroyed some clandestine airstrips, but lack sufficient control over the Amazon region of Brazil to deter international narco­trafficking flights.

Brazilian Federal Police (DPF) cocaine seizures dropped for the second year in a row, from almost six metric tons (mt) in 1995 to just over three mt in 1996, but state police forces made several large seizures. The Government of Brazil (GOB) tightened its controls over precursor chemicals, used by Colombian and Bolivian traffickers in the processing of cocaine. Brazil increased its DPF presence in key trafficking areas along Brazil's borders and cooperated with Colombia and Peru in chemical interdiction operations.

Although Brazil has a bilateral counternarcotics agreement with the USG, Brazil did not sign the annual Letter of Agreement (LOA) with the US in 1996, which implements funding decisions on international counternarcotics cooperation. The reason given was that the amount of US assistance was too small when compared with such assistance given to other countries in the region, and when compared with the importance of the bilateral counternarcotics effort. As a result, important counternarcotics cooperation was stalled in some key areas as the USG was forced to cut off funding. Nevertheless, Brazil has demonstrated interest in continuing its counternarcotics relationship with the USG.

A money laundering bill proposed by the GOB was introduced into the Chamber of Deputies. Bank secrecy remains a strong barrier to effective anti­money laundering controls. The Chamber of Deputies passed an omnibus anti­drug law which would implement most aspects of the 1988 UN Convention, to which Brazil became a party in 1991. Brazil's Anti­Drug Abuse Fund (FUNCAB) remained focused primarily on domestic anti­drug efforts.

The Brazilian government announced a National Drug Enforcement Plan. Brazil continued its participation in multilateral counternarcotics initiatives, including the UN Drug Control Program and the Organization of American States/Anti­Drug Abuse Control Commission (OAS/CICAD).

II. Status of country

Brazilian territory is used for transit of cocaine from Colombia and increasingly, Bolivia and other Andean nations, to the US and Europe. Brazil also serves as a significant transit route for air shipments of coca base from Peru to cocaine processing labs in Colombia, and for precursor chemicals to Bolivia and Colombia. The area of Brazil bordering Peru has been heavily used as a staging area for air shipments of cocaine destined for the US.

Although Brazilian authorities destroyed several clandestine airstrips in this region in 1996, Brazil is unable to effectively deter traffickers from using the remote jungle area for illicit purposes. Colombian and Peruvian trafficking organizations continue to seek footholds in Brazil to take advantage of the relative lack of law enforcement presence in the Brazilian Amazon.

The Brazilian Senate reauthorized in May 1996 the Amazon Surveillance System (SIVAM), a $1.4 billion contract with a US firm to build an integrated air and land­based radar system that can detect illicit drug trafficking and other such activities in the Amazon region.

In late December, the government submitted legislation criminalizing money laundering and establishing an intelligence center to support the prosecution of financial crimes. However, money laundering is not a crime in Brazil. Strict bank secrecy remained a formidable barrier to effective investigation of financial crimes. Brazilian drug abuse control experts reported an alarming increase locally in the abuse of crack cocaine, almost unknown five years ago in Sao Paulo. Crack now accounts for about half the illicit drug trade in that city's metropolis, where dealers seek to addict street children as well as affluent adolescent users.

Some US. authorities estimate that between ten and twenty mt of cocaine flow through Brazil's virtually uncontrolled ports, rivers and airspace. Of that estimated amount, the DPF seized about three mt. There are difficulties in controlling remote jungle areas where trafficking is most intense. To limit trafficking in these areas, greater controls are needed. The country is also a source of anabolic steroids and flunitrazepam (Rohypnol, the so­called "date rape" drug) smuggled primarily to Florida. Brazil remains an attractive transit zone and money laundering nexus for international trafficking organizations.

III. Country Action Against Drugs in 1996

Policy Initiatives. The Brazilian Ggovernment proposed a National Drug Enforcement Plan, with provisions for combatting international narcotics trafficking. The plan calls for omnbus drug legislation to be signed into law and for a survey of drug consumption in Brazil. Enforcement elements of the plan include enhanced coordination among police units, improved training for DPF counternarcotics police, the use of counternarcotics police teams at sea and airports, and the formation of organized crime task forces.

In December, the lower house of the congress passed an omnibus anti­drug law designed to implement the 1988 UN Convention. However, this legislation has not been signed into law and has been stalled in the congress since 1991. Some of the provisions in the pending bill contemplate increased penalties for trafficking conspiracies, authorization of phone intercepts in drug investigations, piercing of bank secrecy, controlled deliveries, undercover operations and plea bargaining. It also has a requirement that defendants prove the legitimate acquisition of seized property in drug cases.

The Brazilian Government revised its national defense policy at the end of 1996. The revisions do not make specific reference to military involvement in counterdrug activities, but refer to defending national borders against organized crime elements which could constitute a threat to national security. The document focuses on the need to protect the Amazon region, where traffickers are increasing their illicit flights, airstrips and refueling points. Brazilian government officials attended, as observers, a US Southern Command conference on regional interdiction operations.

Brazil tightened its system of controls over the production and transport of precursor chemicals during 1996. However, Brazil's large chemical industry may still remain a key supplier of precursor chemicals to Colombia and Bolivia. Business registration fees paid to the Federal Police helped to increased FUNCAB funds, which are available to support law enforcement and demand reduction activities.

Accomplishments. The Cardoso administration initiated a number of projects to increase police capabilities for fighting organized crime and drug trafficking. Seven regional law enforcement coordination councils ­­ which include federal, state and local officials ­­ have been formed throughout the country. In 1996, the GOB hired about 1,000 police officers in the DPF. The GOB intends to increase DPF staffing to 20,000 over the next ten years, from its current level of about 5,000 agents. The police budget increased from $200 million at the beginning of the Cardoso administration to a projected $600 million for 1997. Other infrastructure enhancement plans, such as the Pro­Amazonas Project, are designed to provide better equipment and facilities to officers in the heavily trafficked Amazon region. However, the implementation of such plans and staffing remains to be seen.

The GOB's Anti­Drug Abuse Fund (FUNCAB) continued to expand during 1996. FUNCAB is a holding fund which receives money from two sources: license fees paid to the Federal police by companies which sell or transport precursor chemicals and funds raised through the auctioning of merchandise seized in counterdrug operations. FUNCAB paid for the DPF's Operation Ipiranga, in which several hundred agents were sent to Sao Paulo to carry out counterdrug road blocks and port patrols with the civil police.

UNDCP carries out an extensive program of cooperation with the GOB. The Health Ministry signed an agreement with UNDCP to carry out a multi­state drug abuse prevention program. The project included training for more than 5,000 educators in state and municipal schools. UNDCP also supported a drug prevention in the workplace program in conjunction with the Industrial Federation of the Rio Grande do Sul State.

Extradition. Brazil cooperated with other governments on the extradition of foreign individuals accused of narcotics­related crimes. However, it does not extradite its own nationals.

Law Enforcement Efforts. Cocaine seizures by the Federal police dropped for the second consecutive year, to just over three mt. In 1995, the DPF seized almost six mt and a single seizure in 1994 amounted to just over seven mt. In April 1996, DPF seized 196 kgs of Colombian cocaine, which was transported to Rio de Janeiro from Bolivia.

Six Colombian, Peruvian and Brazilian nationals were arrested. In May 1996, the DPF provided information to the Bolivian National Police which resulted in the seizure of 307 kgs of cocaine at the Brasilia airport in December and arrested eight couriers. In July 1996, DPF and state police officers in Rondonia seized 168 kgs of cocaine, transshipped from Bolivia, at a mobile roadblock in Brazil. State police organizations increased their cocaine seizures. For example, the Sao Paulo State Drug Police made one seizure of more than 200 kgs. More timely information sharing efforts and increased regional cooperation would probably enhance Brazil's counterdrug efforts.

Police investigated and disrupted the Saavedra­Shapiama narcotics trafficking organization, which operates in the tri­border area between Colombia, Bolivia and Peru. That organization directly supported clandestine narcotics flights from Peru that carried coca base to Colombia. Police arrested about 15 individuals in the tri­border region on drug charges. No dismantling of other major drug organizations was reported in 1996. In 1995, police disrupted the Branca and Morbach­Nieto drug trafficking organizations.

Corruption. As a matter of policy and practice, the GOB does not condone illicit production or distribution of drugs, or the laundering of drug money. The USG knows of no senior GOB officials engaging in or encouraging such activity. In 1996, a DPF agent in Rio de Janeiro was arrested for narcotics­related corruption. This agent was assigned to the Financial Division of the Rio police Superintendency, and had no connection with drug enforcement duties.

Agreements and Treaties. Bilateral agreements based on the 1988 U.N. Convention form the basis for cooperation between the USG and the GOB. An annual LOA between the USG and the Brazilian government is designed to renew such cooperation. In 1996, the Brazilian government did not sign its LOA with the USG, and the USG allocated the almost $1 million originally intended for Brazil to the OAS/CICAD.

Brazil has bilateral agreements on narcotics control with all of its South American neighbors, the US, Germany and Italy. The DPF carries out liaison with the US, Germany, Great Britain, France, the Netherlands and Italy through drug enforcement officers of those countries stationed at their respective embassies in Brasilia. Brazil has agreements on facilitating extradition and integrating police operations with its Mercosul partners, which are Argentina, Paraguay and Uruguay. The USG and Brazil have a bilateral extradition treaty, signed in 1961. The USG and GOB agreed to begin negotiating a bilateral Mutual Legal Assistance Treaty in 1996.

Brazil became a party to the 1988 UN Convention in 1991. Legislation that would implement the Convention and criminalize money laundering is lacking. Such legislation is needed to bring Brazil into compliance with the Convention. However, in practice, the GOB meets the 1988 UN Convention's overall goals and objectives.

Cultivation/Production. Marijuana cannabis continues to be centered in the interior regions of the northeastern part of Brazil. Such cultivation and consumption remain largely domestic problems. The DPF increased marijuana eradication campaigns during 1996, seizing just over 18 mt. Cannabis is generally not exported to other countries, and significant quantities are still imported from neighboring countries, most notably Paraguay. No cultivation of the Epadu variety of coca in the Amazon region was identified in 1996. No cocaine processing labs were identified in Brazil in 1996.

Drug Flow/Transit. Some USG law enforcement agencies believe that trafficking patterns are shifting into western and southwestern Brazil as traffickers make use of an alternative air bridge route in that part of Brazil. Local figures suggest that international traffickers from Bolivia and Colombia transship between ten and 20 mt of cocaine through Brazil every year. Some authorities believe the majority of the cocaine moving through the Amazon is shipped to the US.

As Bolivian processing of cocaine has increased, so has trafficking from Bolivia to Brazil. Traffickers use the Amazon region as a major staging area to repackage cocaine for shipment to the U.S. and Europe, to build airstrips for the illicit chain of trafficking events and to refuel narcotics trafficking planes. The DPF destroyed several illicit airstrips during 1996, but smugglers rebuilt them when the police departed the region. Brazil's vast territory remains uncontrolled, allowing international trafficking organizations to ship illicit drugs through that territory to the U.S. Traffickers also ship drugs via the Amazon River, from Peru to the port of Manaus, the largest fresh­water port on the Amazon. Cocaine can then be shipped out by air or through poorly monitored seaports.

Demand Reduction. Brazil carries out drug control programs focussing on both education about and treatment of drug abuse. Policies are developed in CONFEN, and implemented at the federal, state and local levels. CONFEN recently endorsed the program of the private­sector "Partnership Against Drugs", similar to the Partnership for a Drug­Free America in the US, which is carrying out a five­year campaign of media spots to alert the public to the dangers of drug abuse.

The USG and CONFEN reached agreement in May to fund pilot projects throughout Brazil for education and demand reduction. Of 110 proposals forwarded from governmental institutions, NGO's, universities, religious entities, and state drug councils, 26 received grants. A course in Manaus prepared teams from throughout the city to carry out prevention campaigns. Teachers and health professionals in the state of Paraiba attended training on how to organize and energize community efforts.

In June, Rio de Janeiro instructors of the PROERD program (based on the Drug Abuse Resistance Education ­ DARE model in the U.S.) provided mentor training to 20 volunteers from the Sao Paulo Military Police Training Academy. The Sao Paulo group will form a core group to increase drug awareness in the local school system.

The US hosted speaker programs to increase drug control awareness in Brazil. Dr. Herbert Kleber, a drug control expert from Columbia University, N.Y., and a former Office of National Drug Control Policy deputy in the Bush administration, addressed federal and state drug­control officials in several cities in Brazil.

IV. U.S. Policy Initiatives and Programs.

Policy Initiatives. Counternarcotics policy in Brazil focuses on dismantling international cocaine trafficking organizations, reducing money laundering, and increasing awareness of the dangers of drug trafficking and abuse. Building a strong legislative structure for narcotics control and enhancing cooperation at the policy level are also key goals. Through bilateral agreements between the USG and DPF, and between the USG and CONFEN, Brazil and the USG implement counternarcotics programs. There are currently no counternarcotics programs funded with International Narcotics Control funds with Brazil's state police forces.

Bilateral Cooperation. The US provided the DPF with operational support, equipment and training to identify and dismantle international narcotics trafficking organizations. Chemical control, anti­money laundering efforts, demand reduction and airstrip destruction in the Amazon region were key areas of cooperation. Information sharing efforts and joint investigations undergirded bilateral efforts to dismantle such organizations. Invigorated information sharing would more effectively stem the flow of trafficking from Brazil to the U.S.

The GOB participated in some training courses. The US Customs Service and Coast Guard presented a port security program in Rio and Santos to participants from several Brazilian agencies, focusing on infrastructure and inter­agency coordination necessary to facilitate shipments and address law enforcement concerns. More effort is needed to address the illicit drugs flowing through these ports.

The USG presented a three­week training program on financial investigations with Internal Revenue Service (IRS) trainers.

Six South American countries and the European Union attended a DEA­sponsored chemical control meeting in Rio de Janeiro. The participants agreed to cooperate on developing intelligence on movements of chemicals within the Amazon River Basin, establishing timely communications links to coordinate operations and enhancing resources dedicated to chemical controls. Representatives from Brazil, Peru and Colombia also agreed on forming a tri­border intelligence committee to improve coordination on chemical control issues in that heavily trafficked region.

In August, DEA Asset Forfeiture expert Robert Snider addressed audiences in several Brazilian cities on seizing trafficker assets and using the assets for law enforcement purposes. In September, Gerald Shur, founder of DOJ's Witness Protection Program, addressed senior government officials and NGO representatives in several cities in Brazil on how to safeguard witnesses who testify against drug kingpins in major trials.

Road Ahead. Bilateral talks on counternarcotics and law enforcement cooperation scheduled for 1997 are expected to prepare the way for rejuvenated engagement on regional counternarcotics efforts. The U.S. and other nations will look to Brazil for greater focus on increased participation in combatting international narcotics trafficking. Solid indications of Brazilian government support for counternarcotics cooperation would include omnibus counternarcotics and money laundering laws, more senior­level administration attention to counternarcotics efforts and increased control over narcotics trafficking incursions in the Amazon region.

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I. Summary

Chile's geographic location off main drug routes allowed it to avoid many of the problems created by illegal narcotics. However, this situation is changing as drug producers use Chile as a transshipment point to the US and Europe and as a conduit to obtain precursor chemicals. It is a potential major money laundering center because of the strength of the Chilean economy and banking system. Corruption is increasing, although it does not appear to be drug­related. Drug use, previously limited to the lower classes, has become more prevalent in the upper income neighborhoods and offices in Santiago. The Chilean Government strengthened laws punishing drug consumption, and increased its budget for counternarcotics operations. Chile is a party to the 1988 UN Convention, and is making progress in meeting the goals and objectives of the Convention.

II. Status of Country.

The 1995 counternarcotics law passed by the Government of Chile (GOC) was in response to concerns about the increase in the use of Chile as a transshipment point for drugs and precursor chemicals, and as a haven for drug money. Much hope was pinned on this bill when it was first presented to congress in 1994, but by the time it was finally passed into law, it had been seriously weakened. The government, though it has the will, does not yet have sufficient tools to stop the encroachment of illicit drugs into the country. Chile is not a producing country except for a small amount of cannabis grown for domestic consumption.

III. Country Actions Against Drugs in 1996

Policy Initiatives. Chile's most notable action was its participation in the Inter­American Drug Abuse Control Commission (CICAD) in Buenos Aires in mid­October. During this meeting, Chile took a leading role in approving the hemispheric counternarcotics strategy called for by the Miami Summit of the Americas. Chile also co­sponsored the UN Declaration on Crime and Public Security. Both public and private organizations have taken the initiative to raise public awareness of the dangers of drug abuse and to focus their efforts on prevention and rehabilitation.

Accomplishments. Though the 1995 law was a big step towards compliance with the 1988 UN Convention, more progress is needed in the areas of extradition and mutual legal assistance. However, in March the government did file the first suit for a money laundering case in Chile under the 1995 law. As of the end of the year, the case had yet to be completed. Additionally, as of March 1, 1996, the government began requiring exchange houses to issue receipts that identify both the buyer and the seller for all foreign exchange transactions of $10,000 or more. Copies of the receipts are sent to the Internal Tax Service. The Chilean Government is also in the last stages of considering a bill which would reform the judiciary, converting it from an inquisitorial to an adversarial system.

Law Enforcement Efforts. Chilean police seized 248 kgs of cocaine HCl, 855 kgs of cocaine base, and 405 kgs of marijuana during the year. This is indicative not only of an increase in drug trafficking and use, but also of the high priority assigned to counternarcotics police efforts. In addition, in early October the GOC established a rough counterpart to the U.S. State Department's INL bureau by creating the Office of Drugs, Terrorism, and Corruption within the Foreign Ministry.

Corruption. The corrupting influence of drug money is seen in the lower levels of the police and judiciary, although it does not seem to have taken hold at more senior levels. As a matter of policy, the GOC does not encourage or facilitate the illicit production or distribution of drugs, other controlled substances or the laundering of drug money. In the cases where police officials have been publicly accused of involvement in narcotics­related incidents, the institutions have taken steps to investigate the allegations and punish any wrong doing.

Agreements and Treaties. In an effort at modernization, the Foreign Ministry is attempting to update Chile's extradition treaties. The current US extradition treaty with Chile (signed in 1900) is outmoded and unsatisfactory, and a new treaty needs to be negotiated. However, Chile and the US have reached a draft agreement to exchange financial crimes investigative data with the US Financial Crime Enforcement Network (FINCEN). The GOC fulfills the terms and objectives of the 1994 USG­GOC bilateral narcotics agreement which supports GOC counternarcotics efforts. In January, the agreement of mutual assistance in combatting narcotics trafficking between Chile and the UK went into effect. Additionally, a broad framework agreement signed in June between Chile and the European Union provides, inter alia, for cooperation in the fight against narcotics trafficking. As a party to the 1988 UN Convention, Chile continues to work towards compliance with its goals and objectives through its 1995 drug law. Chile is also a party to the 1961 UN Single Convention, the 1972 Protocol thereto, and the 1971 UN Convention on Psychotropic Substances.

Cultivation/Production. The climate and geography of Chile are not conducive to the cultivation of coca or opium poppy, although a small marijuana crop is grown. Chilean marijuana is not of high quality and is only sold on the domestic market. There were no reported cases of outside groups using Chile as a base for the production of cocaine or heroin during the year.

Drug Flow/Transit. Northern Chile is the transit point for bulk shipment of precursor chemicals and narcotics going to and from neighboring narcotics­producing countries. Due to treaty restrictions, Chilean authorities cannot open or inspect shipments originating in Bolivia and in transit to a third country. It is suspected that the amount of narcotics smuggled via this traffic could be considerable. The length and ruggedness of Chile's border make it difficult to prevent the introduction of drugs into the country. The country's 3,928 miles of coastline, plus the normally extensive commercial activity of fruit, wine, and frozen seafood exports, make Chile an attractive location for transshipment of narcotics to the US, Europe, and Asia.

Demand Reduction/Domestic Programs. Seeking to curb drug use, the GOC strengthened laws punishing consumption and increased its demand reduction budget. The National Drug Council's (CONACE) drug education and prevention budget for 1996 was 1.125 billion pesos (about $2.6 million), and will double to 2.365 billion pesos ($5.6 million) in 1997. While narcotics consumption levels in Chile are quite low compared to other countries (most surveys indicate a drug use rate of under five percent), both general public attitudes and GOC budgets reflect rising concern and a belief in the urgency for increased demand reduction and abuse prevention efforts. There are many non­governmental organizations (NGOs) highly active in rehabilitation and drug education activities. All Chilean public and private schools incorporate at least some degree of formal drug education classes, most designed and implemented by these NGOs.

The government devotes significant resources to demand reduction activities. In 1996, CONACE administered its first "national project bank," distributing over 250 million pesos ($595,000) for community­level demand reduction projects. CONACE anticipates significant increases in project bank funds in the coming years. In addition, the National Youth Institute distributed over 220 million pesos in 1996 for similar education and prevention projects, and the Ministry of Education allocates funding for the drug education projects in public schools.

IV. US Policy Initiatives and Programs

Policy Initiatives. The USG provides small amounts of support for the implementation of effective money laundering and precursor chemical controls as well as promoting drug abuse awareness, education and rehabilitation efforts. These funds totalled $60,838 in 1996. Remaining resources will be allocated to training Chilean authorities in investigation, interdiction and demand reduction.

Bilateral Cooperation. Chile has increased its own drug budget and is reluctant to accept foreign assistance and the mandatory conditionalities on its end­use. No additional USG counternarcotics funding was made available to Chile in 1996.

The Road Ahead. The GOC's interest lies in training its existing law enforcement officers, prosecutors, magistrates, and certain private parties in methods of interdiction, control, and prevention. The USG will work to provide this training through the joint efforts of INL, DEA, FBI, USIS, and US Customs. Creating a self­sufficient, well­trained, and energized law enforcement establishment is the most cost­efficient method of combatting illegal narcotics in Chile.

I. Summary

In 1996, as in previous years, Colombia remained the world's leading producer and distributor of cocaine and an important supplier of heroin and marijuana. In the same year, coca cultivation in the country increased by approximately 30 percent.

As in 1995, the Colombian government made only limited progress in 1996 against the pervasive, narcotics­related corruption from which it suffers. In a process which can only be described as flawed, President Samper was exonerated of charges of corruption by the Colombian Congress. Moreover, Samper remained unwilling to confront fully the drug interests that contributed heavily to his Presidential campaign.

President Samper pledged to push for stricter sentencing laws in 1994, but there was only limited progress in 1996 to advance Congressional passage of legislation which would increase sentences for traffickers and money launderers. As an apparent consequence, the Rodriguez Orejuela brothers ­­ the notorious Cali drug leaders ­­ received very light prison sentences which were not commensurate with their crimes. The Colombian government did not respond to the USG's request for extradition of four major drug traffickers and for most of the year it took no action in response to reliable USG information that narcotics traffickers continue to run their operations from prison. Troubling also was Samper's promotion and public praise for a drug­tainted military general ­­ behavior which reinforces USG concern about the credibility of his stated commitment to serious narcotics control for Colombia.

On the eradication front, the Colombian Government's strong opposition to testing more than one granular herbicide ­­ in an effort to replace less effective liquid herbicides ­­ is especially problematic in light of the significant expansion in coca cultivation.

On the positive side, the serious work on the part of the Colombian National Police (CNP) as well as select elements of the military to confront drug trafficking must be highlighted. Government agreement to expand coca and opium eradication was taken on with determination by the CNP despite significant challenges including physical threats and lack of proper resources. In this regard, the USG was encouraged by evidence of increased cooperation from the Colombian military for the CNP in support of illegal crop eradication. The CNP and military also worked closely to counter narco­ and guerrilla­sponsored public demonstrations against eradication.

There were signs that newly­appointed members of the cabinet are committed to advance important counternarcotics objectives. A noteworthy achievement ­­ pushed also by private Colombian citizens ­­ was pressure on the Congress which resulted in passage, with retroactivity, of an asset forfeiture law. However, its constitutionality is already being challenged by those who would be affected by its implementation. On February 19, 1997, in a last­minute attempt, the Colombian Congress approved legislation increasing sentences for traffickers and money launderers. In November, bilateral agreement was reached to expedite shipboarding procedures and a maritime agreement was signed February 20, 1997. The CNP and the Prosecutor General continued their efforts against corruption by firing corrupt police and by continuing investigations targetted against official corruption. However, without determined and committed leadership, much­needed legal reforms and a supportive political environment, real drug control successes by the CNP and other entities will be thwarted.

II. Status of Country

Three­quarters of the world's cocaine is produced in Colombia from locally­grown coca and from coca products imported primarily from Peru and, to a lesser extent, from Bolivia. Current estimates indicate that cocaine HCL from Colombian leaf is about 15 percent of the world's total potential. However, recent photography shows that different varieties are also under cultivation. Although Colombia has surpassed Bolivia in coca cultivation since 1995, DEA estimates that Bolivian coca produces more cocaine from an equal amount of leaf (1). Colombia is also an important source of marijuana, opium poppy and processed heroin. According to USG estimates, Colombian produces 6.5 mt of heroin per year, and about 600­700 mt of cocaine HCL.

III. Country Actions Against Drugs in 1996

Policy Initiatives. The GOC's National Anti­Narcotics Plan of 1995 met the strategic plan requirements of the 1988 UN Convention. The plan defines ten policies for action over five years to attack the narcotics problem on every front, from judicial and law enforcement institution building to alternative development, to prevention and rehabilitation, and international cooperation.

Money laundering is a corollary of the cocaine trade in Colombia. Law 190 of 1995 makes money laundering a crime, but the legislation is weak, there is no coordinated implementation strategy, and the judicial system is unable to enforce it. The GOC anti­narcotics reform package, including legislation to increase sentences for narcotrafficking and money laundering, were debated in Congress in late 1996 and approved during an extraordinary session on February 19, 1997.

Asset seizure and forfeiture was contemplated to a limited extent in Law 30 of 1974, amended in 1986. After hesitating, the Congress enacted a new GOC­sponsored bill in December 1996, making asset forfeiture retroactive to the date on which the asset­generating activity became a crime. The bill was signed into Law 333 on December 19, 1996. The law will have to clear a constitutional challenge in court before we can evaluate its effectiveness. In addition, Colombia's asset forfeiture regime will only meet 1988 UN Convention standards when Congress passes an international asset forfeiture cooperation provision.

A top GOC priority was eradication of illicit crops within two years, beginning in 1995. GOC eradication goals for 1996 were 18,000 hectares of coca and 4,000 hectares of opium poppy. In October, the GOC agreed to a major policy change and approved full participation of US instructor pilots in the eradication program. Closer cooperation at the working level between the CNP and the US contract pilots resulted in improved operations, including more than 6,000 hectares sprayed in the last quarter of the year and the implementation of improved spray tactics. The Colombian Army's (COLAR) ground troop support provided a deterrent against ground fire. The effort, however, has not been without difficulties, including a rainy season which diluted the effectiveness of the herbicide, and the grounding of spray aircraft several times for security and technical reasons. Of greater concern, however, is a 32 percent increase in the acreage under coca cultivation; from 50,900 in 1995 to 67,200 in 1996.

The GOC alternative development program, "PLANTE" (Plan Nacional de Desarrollo Alternativo), approved in 1994, became operational in 1996. The program received matching funds from the UNDCP and the GOC ($2.5 million each), plus a $94 million loan from the Inter­American Development Bank. PLANTE helps small peasant farmer (1­3 hectares) switch to legal crops in areas where illicit cultivation is most prevalent, after illegal crops have been destroyed; it cannot assist farmers cultivating illicit crops in national parks. PLANTE is intended to supplement interdiction and eradication efforts. During 1996, PLANTE funneled about $7 million in credits to over 2,000 peasant families, mostly in two opium poppy growing areas.

The CNP and the DEA developed, but the GOC has not yet approved, a comprehensive civil aviation control program to identify illegally used or operated aircraft and facilitate their seizure/forfeiture. The program will require the registration and search/examination of all aircraft every six months.

Accomplishments. Military­police cooperation improved substantially. COLAR increased its support of the CNP eradication activities, dedicating one mobile brigade full­time to the task. Since mid­1996, the joint CNP/military task force operating in two of the primary coca cultivation/processing zones (Guaviare and Caqueta) established control over the area and seized thousands of gallons of liquid precursor chemicals, fertilizers, and vast amounts of cement and gasoline, substitutes for precursor chemicals. The COLAR also located and destroyed several cocaine laboratories. The COLAR did not receive direct USG assistance during 1996.

GOC security forces interdicted cocaine and heroin shipments to the US. and Europe and destroyed over 850 narcotics laboratories.

The Colombian Air Force (FAC) participated in 662 coordinated counternarcotics operations (with CNP and COLAR, among others). The FAC launched 172 intercept/interdiction missions against narcotrafficking aircraft/vessels resulting in 34 losses of trafficking assets. It also provided airlift support to CNP forces and transporting herbicides to CNP forward operating bases.

The Colombian Ministry of Defense agreed to the emplacement of an additional U.S. ground radar unit in Vichada Department, providing critical coverage of transit zones.

The GOC agreed to the participation of US civilian contract instructor pilots in the aerial eradication program. However, it approved only one granular herbicide for use against illicit crops, thereby precluding any comparative test to determine the safest and most effective for use in Colombia.

The Samper Administration introduced an anti­narcotics legislative package. One bill passed in December, but its implementation has run into delays. However, without an international assistance corollary provision, Colombia's asset forfeiture regime remains incomplete. The other two were approved by the Congress on February 19, 1997. Nevertheless, the GOC did not participate in the congressional debate on extradition, nor did it respond to the US request for the extradition of four Cali kingpins.

The remaining Cali kingpin and two second tier Cali mafia members surrendered to the GOC lured by the prospects of low sentences. Law enforcement agencies continued to target Cali kingpins business enterprises, specifically their financial infrastructure and front companies, seizing computer records and properties.

In accordance with our agreed­upon objectives, in November the USG and the GOC established expedited shipboarding procedures. On February 20, 1997, both governments signed a comprehensive maritime interdiction agreement.

Law Enforcement Efforts. The two top Cali mafia leaders, the Rodriguez Orejuela brothers, received shamefully light sentences not commensurate with their crimes. They continued to run their empires from jail, in spite of repeated USG warnings to the GOC. Jose Santacruz Londono, who escaped from prison in early 1996, was killed by the CNP during a gun battle while resisting arrest.

The last member of the Cali mafia inner circle at large, Helmer "Pacho" Herrera, surrendered on September 1, 1996, in the face of heavy police pressure against him and his family. Herrera was preceded by second tier capos Juan Carlos Ortiz Escobar ("Cuchilla") and Juan Carlos Ramirez Abadia ("Chupeta") who surrendered in March. All three benefited from current laws which offer sentence reductions in exchange for surrendering and pleading guilty. The latter two had their sentences reduced from 20 to 11 years and 24 to 13 years, respectively. Herrera has not been sentenced.

The GOC Special Search Group (Bloque de Busqueda), composed of specially­trained CNP and military personnel, kept pressure on narcotrafficking organizations through searches and seizures, causing several lower echelon leaders to turn themselves in during the year. The CNP confiscated ­­ and deciphered ­­ computers and documents, leading to further confiscations. The CNP searched and seized over 100 properties owned by Northern Cauca Valley traffickers. The properties were turned over to the Colombian National Drug Directorate (DNE) for custody, forfeiture and disposal. The value of those assets could run into the tens of millions of dollars.

CNP and military counternarcotics operations in 1996 produced the seizure of over 23.5 mt of cocaine HCL and 17.5 mt of cocaine base, 183 kgs of heroine and morphine, and 234.9 mt of marijuana; the destruction of 842 cocaine base and 19 cocaine HCL labs and nine heroin labs; the capture of over 73 mt of solid precursor chemicals and over 800,000 gallons of liquid precursors; the seizure of 557 vehicles, 192 boats, and 40 aircraft, and the arrest of 1,561 persons. The CNP also provided information that led directly to the seizure of 6.8 mt of cocaine HCL in transit to Mexico and the US. These figures are lower than last year's with the exception of the number of cocaine labs destroyed (861 in 1996 vs 396 in 1995), and total chemicals seized (800,000 gallons plus 73 mts in 1996 vs 221,000 gallons and 36 mt in 1995).

Seizure statistics have changed from the past year in part due to shifting law enforcement priorities and changes in trafficking patterns. For example, cocaine HCL labs are being built in more remote areas under dense jungle canopy, and out of the range of CNP/military aircraft. Increasingly, raids of sophisticated cocaine laboratories uncovered chemical recycling and recovery equipment. Reprocessing has apparently reduced the need for chemical shipments into the area. To avoid detection, traffickers have moved heroin laboratories to urban areas.

Colombian laws prohibit the cultivation and production of narcotics substances (Law 30 of 1974), and since 1995, there is a law ­­ albeit a weak one ­­ that criminalizes money laundering. However, weak enforcement of regulations against money laundering make it easy to launder drug proceeds.

The GOC shared with the USG information on money laundering activities during the first half of 1996. This evidence was used to identify and economically isolate trafficking enterprises, as, for example, through the US sanctions imposed pursuant to the International Emergency Economic Powers Act (IEEPA). GOC cooperation with international law enforcement entities, including intelligence sharing, was excellent.

In the first six months of 1996, CNP and INL aircraft on eradication missions were hit 24 times by ground fire. One USG­owned T­65 aircraft was shot down and its Colombian pilot killed.

Corruption. Corruption in Colombia is pervasive. The GOC made only limited progress on this area. President Samper, exonerated of charges of corruption by the Colombian Congress, failed to take concrete steps to combat the drug interests that funded his political campaign. Pressure brought to bear on legislators in mid­December during asset forfeiture deliberations is an example of how mafia members, even those in jail, can operate freely. The light sentences given to the Rodriguez Orejuela brothers for their serious crimes further underscores the presence of corruption in the Colombian legal system. Samper, as well as several of his close associates, had US visas revoked because of narcotics­related corruption.

The GOC produced reports on corruption, one covering government efforts to denounce and prevent corruption, and another presenting statistics on public officials subject to administrative inquiries in the first half of 1996. The reports, however, lack specificity. They fail to address what measures have been implemented to prevent, deter or investigate corruption, or to provide the results of cases of public officials found guilty or sanctions imposed on them.

The ouster of corrupt Attorney General (Procurador General) Orlando Vasquez Velasquez was a positive step against corruption.

The Prosecutor General's office continues to pursue vigorously the "Caso 8,000" narcotics­related corruption investigations of government officials. Forty­three prominent politicians are involved: 10 of which are detained, 12 are under preliminary investigation by the Supreme Court, and 21 are still under investigation. The CNP continues its purge of corrupt members, removing in 1996 an additional 2,000 policemen suspected of corruption and other crimes.

Agreements and Treaties. Colombia ratified the 1988 UN Convention in September 1994. However, Colombia submitted with its instrument of ratification important reservations and understandings on extradition, maritime cooperation, and money laundering. The GOC cooperates with the United Nations' local representative and the UNDCP in implementation of the convention. There are also joint projects involving international mutual legal assistance and control of money laundering and precursor chemicals.

Colombia signed a precursor chemicals agreement with the European Union on December 18, 1995, and is party to a Memorandum of Understanding (signed July 1990) with the U.S. on asset sharing. A February 1991 Declaration of Intent on evidence sharing with the USG has remained in suspension since 1994. FY­1996 bilateral agreements between the USG and the GOC on anti­narcotics assistance and cooperation were signed in August.

The GOC and the USG signed a maritime cooperation agreement in February 1997, including expedited procedures for shipboarding. USG and GOC officials signed a Letter of Agreement to fund the expanded aerial eradication program.

The bilateral extradition treaty between the US and Colombia, signed in 1979, is still in force as a matter of international law, although Colombia has failed to enforce the treaty due to problems with the internal legislation needed to render it applicable under domestic law.

The USG and the GOC also signed an agreement restructuring the Judicial Sector Reform Program, to focus on strengthening the Prosecutor General's office, the Ministry of Justice, the court system, the judicial police and the Public Defender's Office. The agreement emphasizes training, alternative dispute resolution and improved case load management information systems.

Cultivation and Production. Coca and opium poppy are the principal illicit crops cultivated in Colombia. The USG estimates these crops at 67,300 hectares and 6,300 hectares, respectively.

There has been a steady resurgence ­­ and a probable increase ­­ of cannabis cultivation since the last official estimate (1989) of 5,000 hectares. This is due to the low priority given to marijuana eradication by an over­stretched anti­narcotics police. Traditional growing areas are along the Venezuela border and the Sierra Nevada. Trafficking and consumption of marijuana in Colombia is increasing according to several Colombian NGO's.

Drug Flow/Transit. Colombia is the center of the international cocaine trade, with drugs flowing out of the country at a stable and constant rate, according to US law enforcement estimates. Colombian traffickers import cocaine base primarily from Peru and some from Bolivia, convert it as well as locally­produced base into cocaine HCL at clandestine laboratories, and smuggle the finished product abroad.

Imported cocaine raw materials are transported by air and increasingly by water routes. Cocaine HCL shipments out of Colombia are by sea (multi­ton shipments), or general aviation aircraft (400­800 kgs shipments) to Mexico, Central America and the Caribbean, or concealed in legitimate air and sea cargo destined for the U.S. and European ports. Although the GOC has taken positive steps to control trafficking through San Andres island, it continues as an important transit point for primarily maritime cocaine shipments.

Opium poppy cultivation and heroin production has joined traditional cocaine trafficking to create a double­barreled Colombian illicit drug threat. Recent DEA data, based only on seizures, determined that 62 percent of heroin seized in the US, and the majority of heroin sold along the eastern seaboard, is of Colombian origin. Most heroin shipped to the US from Colombia is believed to be carried by couriers on commercial flights.

Colombia accounts for an estimated 1.5% of the world's illicit opium production. Opium poppy is cultivated in Colombia's central Andean mountain ranges. Located in urban areas, most opiate laboratories are small operations using limited amounts of precursor chemicals and simple equipment to produce small quantities of drugs.

Most Colombian marijuana is smuggled by sea to Mexico for transshipment by land to the U.S. Although the U.S. is the primary consumer of Colombian marijuana, multi­ton shipments to Western Europe are on the increase.

Domestic Programs (Demand Reduction). The GOC's DNE administers cost­sharing drug abuse prevention and education projects with the UNDCP. The European Union (EU) provides most of its demand reduction assistance to Colombia through UNDCP. In 1996, the EU contributed about 20 percent ($3.7 million) of the UNDCP Colombia program budget. The DNE coordinates GOC demand reduction programs through governmental and non­governmental organization.

In 1996, the DNE began a second USG­sponsored epidemiological survey to update 1995 data on the size, distribution, and habits of the addicted population.

IV. US Policy Initiatives and Programs

Policy Initiatives. The USG stresses institution building, primarily within law enforcement institutions and the judicial system.

Bilateral Cooperation (Accomplishments). USG entities, including the DEA, the FBI, and USAID in conjunction with international training elements of the Department of Justice, work with GOC law enforcement agencies to improve the effectiveness of the Colombian judicial system by developing and refining law enforcement capabilities, training host nation counterparts, and bettering access, fairness and public perceptions of the justice system.

In FY­96, 2,500 prosecutors and investigators from Colombian law enforcement agencies were trained in criminal justice procedures. Officials trained in 1995 serve as instructors, thus multiplying the number of qualified justice sector officials. This and other improvements are accelerating the criminal caseload through the system. DOJ also provided specialized money laundering and asset forfeiture training for prosecutors.

In 1996, letters of agreement (LOA) between the USG and the CNP's DANTI and the DNE provided $13 million and $1 million, respectively. The CNP project enhances the institutional and tactical capabilities of the DANTI to conduct aerial eradication of illicit crops and interdiction of the finished product. In 1996, the USG sponsored Department of Defense and commercial aviation training for 333 anti­narcotics aviators, mechanics, and logisticians; provided parts and fuel to the anti­narcotics air wing of 42 helicopters and 22 fixed wing aircraft, including one CNP­owned T­65 turbo thrush spray aircraft; and provided ten T­65 turbo thrush spray aircraft, instructor pilots, and technical advisers in support of aerial eradication.

The Road Ahead. Progress in some areas holds promise for more effective cooperation with the USG to stop the flow of narcotics from Colombia.

USG resources will support Colombia's efforts to sustain and improve the capability and efficiency of the judicial system and to attack narcotics trafficking organizations. We expect to see progress, for instance, in the GOC's implementation of newly enacted legislation and on the extradition of nationals.

The USG will stress money laundering controls, air and coastal interdiction (to include internal aircraft controls), and infrastructure development. The aerial eradication program should gain momentum as the USG provides more and better technical assistance and aircraft, and the GOC approves the use of an effective granular herbicide.

(1) This figure assumes that all the coca grown in Colombia is of the epadu variety. Nevertheless, there is now photographic evidence that in some coca growing regions of Colombia there is another variety of coca similar to that grown in Peru and Bolivia, potentially capable of producing more cocaine per ton of leaf.

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I. Summary

Traffickers intensified their use of Ecuador in 1996 as a major transit country for cocaine shipped from Colombia to the US and Europe. A cocaine processing lab discovered in Santo Domingo de los Colorados, a town about 50 miles west of Quito, and a nearly seven­ton seizure of cocaine in the seagoing vessel "Don Celso", indicate traffickers processed and continued to move significant amounts of illicit drugs through Ecuador in 1996. Colombian narco­traffickers also smuggled precursor chemicals and laundered money extensively in Ecuador. Local figures suggest that narcotics trafficking organizations with ties to Colombian traffickers gained a foothold in Ecuador during the year. Traffickers in the new organizations reportedly ship between about 20­40 mt of coca base from Peru to Colombia for refining into cocaine hydrochloride (HCl) and between 30­50 mt of cocaine HCl from Colombia through Ecuador to the US and Europe. The ENP seized almost nine mt of cocaine and 70 kgs of heroin.

A major drug kingpin, Jorge Hugo Reyes Torres, remained jailed in Ecuador on narcotics trafficking charges. Through procedural tactics, his lawyers have been able to delay a verdict. Reyes Torres led the Jorge Reyes Torres Organization (JRTO), which shipped an estimated 30­50 mt of cocaine through Ecuador to the US and Europe.

The Government of Ecuador (GOE) cooperated fully with the USG against narcotics trafficking during 1996, although it did so with greater effectiveness on some fronts than others. The Ecuadoran National Police (ENP) dismantled the local organization reportedly run by Jose Castrillon Henao, believed to be a major maritime drug transportation network tied to the Cali Cartel. The ENP cooperated with Peruvian police to arrest and deport a major Peruvian trafficker, Willer Alvarado Linares ("Champa"), to Peru. Police also quickly dismantled the lab in Santo Domingo de los Colorados.

While police programs showed signs of increased professionalism, other counternarcotics programs are stalled. For example, maritime and radar information­sharing cooperation, and anti­money laundering and chemical diversion programs showed little progress. Police­military cooperation showed no discernible signs of advancing counternarcotics goals in 1996. Alleged judicial and other official corruption continue to hinder counternarcotics efforts in Ecuador.

Ecuador is a party to, and has enacted legislation to implement the provisions of the 1988 UN Convention.

II. Status of Country.

For the first time in ten years, traffickers established a cocaine processing laboratory in Ecuador. Capable of producing up to 250 kgs of cocaine per week, the lab operated for several months and was a major lab in the cocaine trafficking chain. Peruvian traffickers apparently began shipping coca base overland to the lab in Santo Domingo de los Colorados, demonstrating a shift in trafficking patterns through Ecuador.

Ecuador's ports, particularly Guayaquil, Esmeraldas and Manta, are major smuggling points, through which traffickers ship cocaine concealed in shrimp and other containerized cargo on seagoing vessels. Ecuador's northern border with Colombia is a heavily trafficked area, particularly for precursor chemicals. Smugglers ship chemicals from Ecuador on the well­maintained Pan American Highway to Colombia to process cocaine, and ship refined cocaine through Ecuador's ports to the US and Europe. Heroin is also shipped through Ecuador, primarily by passengers carrying small amounts on commercial airline flights.

Ecuador is thought to be a money laundering center because of its proximity to Colombia and the close economic and social ties between the two countries. Money laundering is illegal under the 1990 narcotics law. The law is weak, and conditions money laundering convictions on narcotics trafficking convictions. The wording of the law is vague, impeding adequate implementation. Several banks that maintain offshore offices have come under closer scrutiny owing to the 1994 banking reform legislation.

III. Country Actions Against Drugs in 1996.

Policy Initiatives. After President Abdala Bucaram Ortiz took office on August 10, he limited the role of counternarcotics coordinator, Vice President Rosalia Arteaga. The Ecuadoran people elected new congressional representatives, resulting in a change in the leadership of the Congressional Counternarcotics Committee. The committee chair, Patricio Viteri, had three studies completed to identify methods of laundering money in Ecuador. Although former President Bucaram said that control of Ecuadoran ports and money laundering would figure prominently on his agenda for the country, neither Viteri's nor Bucaram's measures resulted in improved laws or control over these serious problems. President Bucaram was removed from office in February 1997, and Interim President Fabian Alarcon took office until the August 1998 scheduled elections. Alarcon is appointing a new ministerial team. Based on past experience, we expect that the new president will support an active counternarcotics policy.

The Government of Ecuador (GOE) engages in some regional cooperation. It has counternarcotics agreements with Colombia and Cuba. It also played a role in multilateral initiatives, including the Miami Summit of the Americas money laundering initiative, and in the Organization of American States/Anti Drug Abuse Commission (OAS/CICAD) hemispheric Drug Strategy for the 21st Century. In March 1996, Ecuadoran bankers, judges, lawmakers and police attended a money laundering seminar in Quito, sponsored by the USG.

The National Drug Council (CONSEP) made preparations to develop an updated five­year national drug plan, with assistance from the UNDCP. CONSEP released a national one­year household survey of drug use, revealing minimal levels of drug abuse among the respondents.

Accomplishments. Police participated in regional efforts, dismantling a Cali­connected international drug trafficking organization reportedly run by the Jose Castrillon Henao maritime transportation network. The ENP made 18 arrests in this case, and is continuing the investigation with USG assistance. Ecuadoran National Police cooperated with Peruvian police to arrest and deport a major Peruvian trafficker, Willer Alvarado Linares ("Champa"). Linares was notorious for his violent tactics, including murders, in his international narcotics trafficking activities.

Police also made a nearly seven­mt cocaine seizure from the 150­ft. Ecuadoran fishing vessel, the Don Celso. A US Coast Guard Law Enforcement Detachment (LEDET) detained the ship in international waters, and returned the ship to Ecuador, at GOE request, to search it. Dockside in Guayaquil, USG and Ecuadoran authorities discovered the cocaine instead of tuna, which the ship's crew claimed to be transporting, even though they showed no outward signs of conducting legitimate tuna fishing. This multi­ton seizure indicates traffickers are increasingly turning to maritime shipment methods. Ecuador's understaffed and underfunded Customs organization, long coastline and many ports make it a prime transit route for narcotics trafficking.

Police dismantled the lab identified in Santo Domingo de los Colorados, pronouncing it a major trafficking problem and estimating a production capacity of at least 250 kgs of cocaine per week. That traffickers have begun processing operations in Ecuador may indicate a shift in or expansion of trafficker activity from neighboring countries. The USG and Ecuador are working to foster relationships, develop intelligence sharing conduits, and bolster interdiction cooperation between the ENP and the Armed Forces to counter the increasing transshipment problem.

In November, the GOE renewed cooperation with the UNDCP on a chemical control project. This opportunity should be exploited to assist Ecuador in controlling the precursor chemicals that flow through the country for illicit drug processing.

Chemicals flow relatively freely through Ecuador to be used in the processing of cocaine, recurring here in 1996, and in neighboring nations. Progress on developing an effective chemical control mechanism and money laundering legislation was slow. Traffickers are relatively free to conceal illicit proceeds in Ecuador's bank and non­bank institutions.

Law Enforcement Efforts. As mentioned above, the ENP seized nearly seven tons of cocaine aboard the Ecuadorian fishing vessel Don Celso, and dismantled a major cocaine processing laboratory in Santo Domingo de los Colorados. In April­May 1996, the ENP made a 575 kgs and a 375 kgs seizure of cocaine concealed in shipments of frozen seafood. Cocaine seizures during 1996 amounted to almost nine mt, primarily due to the nearly seven mt seizure. Police seized 70 kgs of heroin and arrested a total of 2,276 individuals on narcotics­related charges.

Also as mentioned above, in November, the Ecuadorian police cooperated with Peruvian police, to arrest Willer Alvarado Linares ("Champa") in Quito. Ecuadorian police and legal authorities deported the major Peruvian trafficker.

The ENP participated in the regional enforcement effort that dismantled the trafficking organization believed to be headed by Jose Castrillon Henao. In Ecuador, police have made 18 arrests in that case. The investigation continues.

The USG and CONSEP are working to resolve jurisdictional conflicts that block CONSEP from effectively executing its roles in controlling chemical diversion and money laundering. The USG will encourage lawmakers' influence to resolve the jurisdictional conflicts.

Narcotics detector dogs assist in the seizure of small amounts of drugs primarily from low­level traffickers. An assistance visit from U.S. Customs revealed minor problems in the training methods of the program. The improper use of pseudo­cocaine and other training aids resulted in "contamination", a problem which threatens to degrade the dogs' ability to identify effectively cocaine on the job. A follow­up visit is scheduled to assist in the implementation of US Customs' recommendations to correct the problem.

The mobile interdiction unit mounted operations in the regions of Ecuador most vulnerable to trafficking. The GOE has centralized most drug enforcement activities in the ENP.

The Ecuadoran Air Force is working to integrate its counternarcotics radar with existing A­37 interceptor aircraft to create an air interdiction capability. The Ecuadoran Army has trained with USG Special Forces personnel in counternarcotics training operations, focussing on the heavily trafficked area near the northern border with Colombia.

Construction on the Counternarcotics Training Center continues. The center will foster international cooperation and provide training opportunities for other Latin American students in counternarcotics activities.

In accordance with the 1988 UN Convention, the GOE has passed legislation criminalizing the production, transport and sale of controlled narcotic substances; the import, transport and/or use of essential chemicals without the written permission of CONSEP; any attempt to conceal the profits from narcotics trafficking activities; the intimidation or subornation of judicial and public authorities for drug crimes; and illegal association related to drug trafficking and profiteering. The GOE is active in some regional drug control initiatives. It was also the regional President of the Organization of American States/Anti­Drug Abuse Control Commission (OAS/CICAD) for 1996.

Corruption. The 1990 Narcotics Law contains a provision for the prosecution of government officials, including judges, who deliberately impede the prosecution of individuals charged under that law. As a matter of policy, the GOE does not encourage or facilitate the illicit production or distribution of drugs, other controlled substances or the laundering of drug money. While narcotics­related corruption is a serious problem in Ecuador, in 1996 no senior official was identified as engaging in the production or distribution of drugs or in the laundering of illicit proceeds.

Agreements and Treaties. Ecuador is a party to the 1988 UN Convention. In 1991, the GOE and the USG entered into an agreement on measures to prevent the diversion of chemical substances, and in 1992 the two governments concluded an agreement to share information on currency transactions over $10,000. However, neither government has exercised the agreement to date.

Although the USG and the GOE have a bilateral extradition treaty in force, the treaty is extremely outdated, signed in 1872. Ecuador has cooperated with the USG in efforts to deport or extradite non­Ecuadoran drug traffickers. Ecuador does not extradite its own nationals.

Cultivation/Production. No evidence of significant drug cultivation in Ecuador surfaced during 1996. The GOE agreed to conduct joint reconnaissance flights to identify illicit cultivation in 1995 and authorized aerial eradication with the use of the herbicide glyphosate that year. The GOE is vigilant about preventing illicit cultivation and processing activities.

Drug Flow/Transit. Ecuador is a major transit route for unrefined cocaine base shipped by air and overland from northern Peru to southern Colombia for processing, and for cocaine moved from Colombia through Ecuador's poorly monitored ports to the US and Europe. Colombian traffickers also use Ecuador to import essential chemicals, which are then smuggled into Colombia for cocaine processing. Traffickers use the Pan­American highway extensively to transport both processed cocaine and essential chemicals. They also smuggle essential chemicals through the Ecuador's eastern region, the Oriente, into southern Colombia. In 1996, traffickers began to steal chemicals from petroleum companies in the Oriente, sometimes in armed assaults against truck drivers transporting those chemicals. Traffickers shipped the chemicals by river, usually the Putumayo and the San Miguel, to Colombia.

Demand Reduction. CONSEP released the results of a national year­long epidemiological survey on drug use in Ecuador. The study demonstrated minimal levels of drug abuse, with four percent of respondents admitting to having used illicit drugs at least once in their lifetime. The survey had a margin of error of less than five percent. Most of the respondents were between ages 12 and 49.

Public institutions in Ecuador, including the military, are required to establish drug prevention programs in the workplace. The police are in the process of commencing a pilot Drug Abuse Resistance Education (DARE) program in the primary schools in the Pichincha province, where the capital, Quito, is located.

IV. US Policy Initiatives and Programs

Policy Initiatives. USG counternarcotics policy in Ecuador seeks to increase the political will of the GOE to address the narcotics trafficking problem in Ecuador. The USG works to build the institutional capability of the GOE to target major narcotics trafficking organizations, to stem the flow precursor chemicals flowing through Ecuador, to reduce the laundering of illicit drug proceeds and to effectively prosecute drug kingpins.

In an effort to reinvigorate its drug interdiction capability, Ecuador sought USG assistance to bolster its Customs service's ability to stop shipments of drugs from the country's largest industrial port, Guayaquil. To address the problem of the vulnerability of Ecuadoran ports, the GOE hosted a US Customs team that provided training in port security in Septembe in Guayaquil. There are plans for a US Customs port assessment team and other officials to visit, view port operations, and meet with GOE counternarcotics officials.

Bilateral Cooperation. The US and Ecuador cooperate by implementing bilateral counternarcotics agreements based on the goals and objectives of the 1988 UN Convention and have tailored other bilateral agreements to Ecuador's specific counternarcotics vulnerabilities. The USG and CONSEP, the USG and the Supreme Court, and the USG and the ENP have signed bilateral agreements to further these goals. Cooperation between the USG and the Ecuadoran Armed Forces completes the broad range of counternarcotics cooperation.

USAID funds a multi­year judicial reform program through the World Bank. Ecuador has since embarked on its own ambitious judicial reform program. To express support for Ecuador's judicial reform effort, the USG in 1996 bought five computers and a laser printer for Ecuador's Supreme Court to advance Ecuador's judicial reform effort by helping judges track opinions, rulings on cases, and changes in the judicial system.

The USG and GOE participated in February 1996 in a precedent­setting counternarcotics conference. Counternarcotics officials from both countries created joint task forces to pursue counternarcotics goals in financial investigations, chemical diversion and mobile road interdiction. However, the lack of a maritime agreement flaws otherwise good counternarcotics cooperation. Although USG and GOE authorities have worked to define Ecuador's territorial waters, Ecuador continues to claim 200 miles of territorial sea. This definition is out of conformity with the international Law of the Sea, which contemplates 12 miles of territorial sea off Ecuador's coast. USG and GOE officials continue to seek a viable maritime agreement to address the heavily trafficked waters on which traffickers have been known to ship multi­ton shipments of cocaine concealed in fishing and other vessels.

The Road Ahead. The USG will work closely with the GOE on counternarcotics, seeking enhanced cooperation on control of chemical diversion, money laundering and interdiction efforts, particularly of shipments of narcotics through Ecuador's major port of Guayaquil. Furthering police­military cooperation and signing a maritime counternarcotics agreement with the GOE also will be key counternarcotics goals for 1997. We will expect more effective coordination in efforts to address myriad problems in Ecuador's judiciary.

I. Summary

The Government of Paraguay's (GOP) counternarcotics efforts, and cooperation with the USG and regional governments, improved substantially during 1996. Paraguay is a transit country for Bolivian and Colombian cocaine en route to Argentina, Brazil, the US and Europe, as well as a source country for marijuana. There is significant money laundering in Paraguay, but it is unclear what portion is drug­related. To counter these threats, the GOP adopted its first national antidrug strategy; enacted strong, OAS/CICAD­consistent money laundering legislation; and entered into a regional law enforcement cooperation agreement with Brazil and Argentina, and an operational and intelligence sharing understanding with Bolivia. The new, activist anti­narcotics chief made cocaine trafficking a priority target for the first time. The ongoing reform of the legal system, scarce resources and public corruption are obstacles to more effective counternarcotics action, despite GOP actions to improve the situation in all three areas. Paraguay is a party to the 1988 UN Convention.

II. Status of the Country

Paraguay's geography ­­ its central location, extensive river network, and lengthy, often remote, land borders ­­ helped establish it as a long­time major smuggling center. With numerous unregistered airstrips and persistent wide­spread corruption, Paraguay's involvement has expanded to drug trafficking, reportedly facilitating the transit of multi­hundred­kilogram loads of cocaine monthly, primarily from Bolivia, to Argentine, Brazilian, US and European markets.

Paraguay has been attractive to money launderers due to the lack, until December, of money laundering legislation; a multi­billion dollar re­export trade centered in Ciudad del Este; and weak GOP regulation of the formal financial sector and non­existent supervision over the large, informal financial sector which services the contraband economy. Banking sources confirm that there is significant money laundering, although they claim it is fueled primarily by the regional contraband trade, tax evasion, and capital flight, rather than narcotics trafficking.

III. Country Action Against Drugs in 1996

Policy Initiatives. Paraguay made substantial progress in the counternarcotics area during the year. Congress, with strong support from the executive branch, in December enacted money laundering law consistent with the OAS/CICAD model regulations. The government signed agreements with Brazil and Argentina to cooperate in combatting trans­border criminal activity, including drug trafficking; the GOP is conducting working­level coordination meetings with counterparts in these countries. The National Anti­drug Executive Secretariat (SENAD), since June under the command of activist Carlos Ayala, developed a national antidrug strategy which President Wasmosy formally accepted. SENAD similarly adopted a national strategy against drug abuse, and agreed to share intelligence with Bolivian counterparts and to cooperate on joint operations. At the same time, Ayala ordered a SENAD­proposed revision of the antinarcotics law (Law 1340) which would explicitly authorize undercover operations and controlled deliveries; the GOP will push for congressional approval of the amendment early in 1997.

Meanwhile, the SENAD conducted large­scale marijuana eradication operations and worked closely with DEA on training and equipping the Antinarcotics Police (DINAR) Special Intelligence/Investigative Unit, and on a precursor chemicals monitoring survey. The GOP renewed its permission for USG counternarcotics aircraft to operate from and over Paraguay. The GOP has yet to adopt a timetable for meeting the goals and objectives of the 1988 UN Convention. However its commitment to do so is explicitly included in the new national antidrug strategy.

Accomplishments. The narcotics control airport unit showed marked improvement, making seizures of 22 kgs of cocaine and nine arrests. The DINAR Special Intelligence/Investigative Unit disrupted organized mail trafficking groups linked to Nigeria, West Africa, and South Africa. SENAD seized 56 kgs of cocaine, 43.3 mt of marijuana and destroyed 448 hectares of cannabis. SENAD authorities met with regional law enforcement counterparts to develop mechanisms for regional antidrug cooperation.

Enforcement Efforts. Paraguay provided full narcotics control cooperation during the year, especially following the appointment of Carlos Ayala as SENAD director in June. Paraguayan law enforcement agencies are focusing their efforts on major cocaine traffickers and organizations; a recent combined operation with Bolivian and Brazilian authorities resulted in the arrest of a well­known, local cocaine trafficker.

Corruption. The GOP recognizes corruption as a public policy challenge, but has taken only limited measures to prevent or punish public corruption in general, or specifically with respect to drug trafficking. That said, the arrest of a former port authority director and Colorado Party president, along with the replacement of several senior military officials following a failed coup attempt in April were positive steps toward developing institutions capable of withstanding and combatting corruption. Judicial reform continues, but is incomplete. All of Paraguay's judges and prosecutors were appointed within the past 20 months, and they are working with outdated penal and criminal procedure codes that lend themselves to complexities, non­transparency, and the inefficent handling of criminal cases. Major revisions to these codes are still pending before congress.

Corruption in the prison system resulted in the escape of at least five narcotics traffickers. In turn, this led to the release, based on the lack of corroborating testimony, of a senior regional Customs official arrested in a 31 kgs cocaine seizure. Law 1340 of 1988 subjects public functionaries that engage in drug­related offenses to the maximum applicable penalties. This law was not applied to any public official in 1996.

As a matter of government policy, Paraguay does not encourage or facilitate illicit production or distribution of narcotic or psychotropic drugs or other controlled substances, or the laundering of proceeds from illegal drug transactions. Reporting from a variety of sources indicates that there are individuals in all branches of government, the military and law enforcement organizations, who continue to engage in, encourage or facilitate the illicit production or distribution of such drugs or substances, or the laundering of proceeds from illegal drug transactions. Of particular concern are persistent reports of widespread corruption among local officials at all levels in the border cities of Ciudad del Este and Pedro Juan Caballero.

Agreements and Treaties. Paraguay ratified the 1988 UN Convention in 1990 and is a party to the 1961 Single Convention and its 1972 Protocol. In December it signed the OAS/CICAD Hemispheric Drug Strategy. It has also signed a tripartite law enforcement agreement with Argentina and Brazil, a tripartite narcotics enforcement agreement with Argentina and Bolivia, and similar bilateral agreements with Brazil and Venezuela. It entered into a bilateral assistance agreement with the US in 1987, which was extended in 1996. Paraguay has also agreed to the Declaration of Principles and Plan of Action adopted at the Summit of the Americas and at the 1995 money laundering ministerial. Paraguay and the US have a bilateral extradition treaty signed in 1973 which was employed to extradite a narcotics offender to the US in 1995.

Cultivation and Production. Cannabis is the only illicit crop cultivated in Paraguay, and is harvested throughout the year. The GOP estimates that roughly 2,500 hectares are under cultivation. There is evidence that minor quantities of liquid cocaine are produced in the Ciudad del Este area.

Drug Flow/Transit. Law enforcement and intelligence reports indicate that up to 1,500 kgs of cocaine transits Paraguay monthly, mostly from Bolivia. Colombian cocaine also is penetrating Paraguay.

Demand Reduction Programs. Paraguay has a relatively small but growing substance abuse problem. SENAD presented an updated National Program Against Drug Abuse in October. It coordinates educational activities with the Ministries of Health and Education, as well as with local non­governmental organizations.

IV. US Policy Initiatives and Programs

Policy Initiatives. USG priorities are to disrupt narcotics trafficking through the formation and training of an effective investigative capability; combat money laundering through effective implementation of the law criminalizing such activity, including the creation of an interagency financial crimes unit; decrease public corruption that facilitates impunity; strengthen democratic institutions, especially those connected to law enforcement; and increase public awareness of the threat narcotics pose to Paraguayan society and democracy.

Bilateral Cooperation. The USG provided technical, communications, intelligence and financial assistance for almost all counternarcotics field operations in 1996. DEA provided an aerial survey team that identified suspicious airstrips and properties in the Chaco desert region, as well as technical and operational assistance. INL provided funding for training and technical assistance, detector dog support, communications equipment, computers, investigative devices, and four­wheel drive vehicles. DOD conducted joint training with SENAD's interdiction unit.

The Road Ahead. In order to consolidate the progress made in 1996, the GOP must translate key political achievements ­­ the National Drug Strategy and strengthened legislation ­­ into concrete enforcement successes against narcotics traffickers, money launderers, and corrupt public officials. This means investigating major cocaine traffickers, making significant seizures and arrests, preventing the escape of arrested drug traffickers, and implementing the money laundering law and provisions of the antidrug law aimed at punishing and preventing official corruption. During 1997, the USG will seek to strengthen the narcotics investigative and tactical interdiction units through training, as well as technical and equipment assistance. The USG also will work with the executive and legislative branches on passage of tougher drug law enforcement legislation that explicitly authorizes controlled deliveries and undercover operations, as well as criminalizing conspiracy to engage in narcotics­related crimes. The USG will explore the possibility of modernizing the bilateral extradition relationship if it makes progress on the issue of the extradition of nationals.

I. Summary

Peru is still the world's largest coca producer. However, in 1996 total coca cultivation decreased by 18 percent, from 115,300 hectares in 1995 to 94,400 hectares in 1996. Peruvian coca farmers abandoned coca fields in many areas as cocaine base prices fell below the break­even point. Much of the GOP success was due to the Peruvian Air Force (FAP) aerial intercept program, which severed the Peruvian­Colombian air bridge used to export large quantities of cocaine base to Colombia from Peru's coca regions. The GOP's economic alternative development program took advantage of the depressed coca base prices and coca field abandonment and began the long process of negotiating with coca communities in key areas to induce coca reduction in exchange for sustained economic development in these areas.

Peruvian National Police (PNP) operations seized greater amounts of cocaine base and coca leaf, but less cocaine HCl than in 1995. Efforts to arrest and prosecute major Peruvian traffickers complemented the GOP's stiff narcotics sentencing policy, and contributed to disarray among major trafficking organizations. The Government of Peru (GOP) created a new system of national narcotics courts in 1996. The GOP passed Law 824, which defined the roles of the Peruvian military and police in counternarcotics efforts and established a civilian authority under the Minister of Health to lead the national counternarcotics effort. The GOP moved publicly against those responsible for incidents of narcotics corruption in its armed forces. The GOP fully cooperated with the USG in fulfilling the objectives of the USG­GOP counternarcotics framework agreement. These developments indicate that the GOP took actions to address the goals and objectives of the 1988 UN Convention, to which it is a signatory.

II. Status of Country

Peru's 94,400 hectares of coca in 1996, as estimated by the USG annual crop survey, indicates an 18 percent reduction from the 1995 survey results in 1995. This is the lowest level of coca cultivation noted in Peru since 1986. The 18 percent reduction takes into account the 1,259 hectares of coca manually eradicated by the GOP during the year.

Cocaine base is Peru's principal drug export. However, seizures of cocaine HCl and the existence of laboratories to manufacture it suggest that Peruvian cocaine HCl exports are a growing problem. The seizures of Peruvian HCl within Peru as well as other corroborating information shows that Peruvian traffickers are bypassing Colombia, and transporting HCl directly to Mexico. Coca is grown by individual farmers, most of whom process it themselves and sell cocaine base to trafficking organizations. Small amounts of marijuana and opium poppy cultivations are occasionally discovered and eradicated (as mandated by GOP law), but do not appear to pose a trafficking problem for the US.

Peru produces most chemicals essential to cocaine base processing. The GOP chemical regulatory system includes a joint office of the Ministry of Industry, the PNP counternarcotics directorate (DINANDRO) and Peruvian Customs. DEA assess the regulatory system as one of the most advanced in South America.

III. Country Actions Against Peru in 1996

Policy Initiatives. In April, the GOP passed Law 824, which established a civilian drug council ­­ CONTRADROGAS ­­ to be staffed by senior government and non­governmental experts on narcotics, and headed by the Minister of Health, Marino Costa Bauer. The government created CONTRADROGAS to coordinate the efforts of the various GOP agencies involved in counternarcotics efforts, and to implement some of the more important aspects of the Peruvian National Drug Strategy announced in 1994.

Law 824 also addressed the role of the Peruvian military in counternarcotics activities; initially it was interpreted by GOP officials as proscribing any kind of counternarcotics role for the Peruvian military. The US Embassy expressed concerns to the government that Law 824 could have a profound effect on the successful Peruvian Air Force effort to intercept trafficker aircraft, as well as dampen the early efforts of the Peruvian Navy to halt traffickers on the rivers. However, by late October, it was clear that the military would continue to play a limited role in counternarcotics, but that the Peruvian National Police would be given a broader mandate to oversee Peruvian counternarcotics law enforcement. To date, the full implications of this law on the overall GOP counternarcotics effort are undefined.

In September, a new national drug court system was inaugurated to try narcotics cases more quickly and reduce judicial corruption. These courts were also authorized to implement procedures to provide exemptions, sentence reductions and witness protection to people complicit in trafficking who collaborate with the GOP to dismantle trafficking organizations. The measure specifically excludes drug trafficking leaders from receiving these benefits.

The July 23 US­Peru Counternarcotics Operating Agreement commits Peru to present a national alternative development plan to the international community. However, the GOP did not convene a donor meeting in 1996, nor give priority to seeking international support for coca reduction­based alternative development assistance. Nevertheless, working with the World Bank, the Peruvian government did convene an international donor meeting to discuss alternative development, among other topics, in January 1997.

The GOP passed a new banking law in December which followed the OAS Drug Abuse Control Commission (CICAD) model legislation on money laundering. If appropriately enforced, the law will ensure the active participation of financial institutions in identifying suspicious transactions, and will also lift the veil of bank secrecy in cases of drug­related money laundering.

The GOP expanded the scope of its coca eradication efforts from coca seedbeds to include "young" coca (under two years old), abandoned coca away from populated areas, and all coca in Peru's national parks.

Law Enforcement Efforts. The USG­supported Peruvian Air Force (FAP) "air bridge denial" program, instituted in 1995, continued to deny traffickers the ability to transport cocaine base by air from Peru's coca cultivation areas. Fewer trafficking aircraft were detected flying from Peruvian coca cultivation areas, but it is apparent that drug traffickers are exploiting new smuggling methods and routes: overland to Ecuador and the Pacific coast; along Peru's extensive river network; and transporting drugs to clandestine airfields near the border with Colombia and Brazil. Despite the exploitation of other avenues of transportation, coca base prices remained low, and in some areas, prices dropped below the "break­even" point for coca farmers.

The GOP reported seizures of nearly 19 mt of cocaine base and over one mt of cocaine HCl. The Peruvian Coca Reduction Agency (CORAH) shifted its emphasis from coca seedbed eradication to young and mature coca, eradicating 1,259 hectares of young and mature coca in the latter half of the year. DINANDRO was effective in targeting major drug traffickers and their operations, and working with the Ecuadorian National Police to capture in November one of Peru's most sought after traffickers, Willer "Champa" Alvarado Linares.

DINANDRO participated in a number of joint operations with Colombian and Brazilian counterparts in the three nations' Amazonian tri­border area. The FAP initiated discussions with its Brazilian counterparts on counterdrug air bridge denial cooperation. At year's end, the talks were still at a preliminary stage.

Corruption. Public opinion and GOP official pronouncements soundly denounced all forms of official corruption, with a particular focus on corruption connected with the illegal drug trade. President Fujimori declared that GOP officials charged with narcotics violations would be severely dealt with. A major corruption scandal erupted in the second half of the year when one of Peru's biggest drug traffickers, "Vaticano," accused the GOP's senior intelligence advisor of accepting trafficker bribes. The jailed trafficker, who was convicted of both drug trafficking and terrorist association, subsequently retracted his allegations.

Several senior Peruvian army officers, including some generals, were under investigation on narcotics­related charges. One general was convicted. When drugs were found on Peruvian Navy ships and an Air Force aircraft, both GOP military and civilian authorities moved quickly to detain suspects and conduct investigations. Nevertheless, there is official drug­related corruption and it impedes counternarcotics law enforcement and prosecutions. Dismally low public sector salaries, especially for police and military officials, relative to Peru's high cost of living, exacerbate efforts to reduce lower­level corruption. The problem, however, reflects individual decisions to embrace corruption. There was no evidence of institutional corruption within GOP institutions, including the police and the armed forces. Despite allegations to the contrary, there was no evidence of illicit narcotics involvement by senior Peruvian Government officials.

Agreements and Treaties. Peru has been a party to the 1988 UN Convention since 1992. It is also a party to the 1961 UN Single Convention, the 1972 Protocol thereto, and the 1971 UN Convention on Psychotropic Substances. Peru and the USG have an extradition treaty in force, signed in 1899. There is also a Financial Information Exchange Agreement in force between the US and Peru. On July 23, the US and Peru signed new counternarcotics framework and operating agreements. Peru joined other Andean nations in 1996 in signing a chemical control agreement with the European Union. Peru has drug cooperation agreements with most South American countries and major European states.

Cultivation/Production. The 18 percent reduction in total coca cultivation in 1996 made coca cultivating communities more receptive to licit economic activities. The joint USG­GOP alternative development program made progress in establishing a foundation for economic restructuring in coca cultivating areas. Some 226 communities have signed agreements to reduce illicit coca cultivation by approximately 15,000 hectares over the next five years, in exchange for assistance to increase productivity and income from their licit alternative crops. In addition, the government has rehabilitated over 550 kilometers of farm­to­market roads in and around these areas, and completed over 100 community development activities to provide increased access to basic human services.

Drug Flow/Transit. There is growing evidence of cocaine base exports in small amounts over land borders with Chile and Ecuador. Cocaine HCl production is also believed to be transported directly from Peru to Mexico, bypassing Colombia.

Domestic Programs/Demand Reduction. The GOP increased its attention to the social consequences of illegal drug use while government agencies increased their participation in drug demand reduction activities. CONTRADROGAS has declared demand reduction a primary objective of the GOP effort. With USG support, the Peruvian non­governmental organization Center for Information and Education Against the Abuse of Drugs (CEDRO) continued its public education and drug treatment programs. The Ministry of Education's Technical Committee on Drug Abuse Prevention (COPUID) strongly promoted student and youth antidrug media campaigns and festivals. The Ministry of the Presidency's Directorate for Children's Issues took a leading role in coordinating GOP drug prevention activities for children under 18 years of age. Working closely with the USG, the PNP enthusiastically embraced community demand reduction programs, including training for scores of officers in different parts of Peru through drug prevention presentations.

IV. US Policy Initiatives and Programs

Policy Initiatives. A primary USG goal is to reduce and ultimately eliminate the exportation of refined coca products. Toward that end, USG counternarcotics activities in Peru include developing GOP counternarcotics capabilities to meet the changing circumstances of the illicit drug traffic. Since Peru shares this goal, it welcomes US counternarcotics assistance and advice.

Bilateral Cooperation. As noted, the USG and GOP signed a new five­year narcotics control framework agreement and INL project operating agreement. The USG and the GOP worked closely on developing intelligence on aerial narcotics trafficking and in pursuing major Peruvian narcotics traffickers. Peruvian police pilots and mechanics now operate and maintain INL­leased UH­1H helicopters dedicated to counternarcotics.

The GOP made a commitment to establish a riverine drug and essential chemical interdiction system which includes Peruvian police and armed forces participation. Senior GOP police officials met with US, Colombian and Brazilian counterparts to discuss joint riverine counternarcotics planning.

The GOP expanded its coca eradication program at USG request to include coca in national parks and young coca cultivations in outlying areas. These efforts complement the centerpiece alternative development program run by the Peruvian Ministry of the Presidency with funding and technical assistance from USAID and INL.

The Road Ahead. The key to coca reduction and eventual elimination of the 90 to 95 percent of Peruvian coca currently grown for the illicit market is to sustain low prices for coca leaf and cocaine base, which causes growers simply to abandon coca in preference for alternative economic activities.

Low coca prices have resulted from a strategy of expanding drug law enforcement and interdiction to significantly reduce the number of narcotics aircraft able to use Peruvian air space and to restrict the movement of narcotics on rivers and over land. In order to achieve lasting coca reduction, however, this strategy requires a strong alternative development effort with increased funding and timely availability of an integrated set of development opportunities to reduce coca, while sustaining and educating coca farmers in transition to legal pursuits so that they do not gro