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International Narcotics Control Strategy Report, 1998
Released by the Bureau for International Narcotics and Law Enforcement Affairs,
U.S.Department of State 
Washington, DC, February 1999

BRAZIL 

I. Summary 

Brazil made substantial progress in heightening its counternarcotics
posture in 1998. President Fernando Henrique Cardoso declared
illicit narcotics a matter of national concern and created a new
National Anti-Drug Secretariat (SENAD) to coordinate all counternarcotics
programs and efforts. In February, Brazil's congress, passed long-pending
anti-money laundering legislation, and enacted legislation permitting
the military to intercept unauthorized civilian aircraft, including
those suspected of smuggling narcotics. However, a two-year-old
omnibus counternarcotics bill remained pending in the Congress
at year's end. 

Brazil continues to be a major transit country for illicit drugs
shipped to the United States and Europe, and the country's domestic
drug problem continues to grow. A wave of violence striking Sao
Paulo and Rio de Janeiro is closely linked with drugs and was
a major factor in the President's decision to form SENAD and appoint
Brazil's first drug czar. 

Brazil's large territory, especially the sparsely populated Amazon
region, provides traffickers with numerous air, river, and road
routes, as well as seaports and airports, to transship illicit
drugs. Brazil cooperated with its neighbors, particularly Peru
and Colombia, to apply pressure on the smuggler "air bridge"
flights that carry illicit drugs across western Brazil. 

Federal Police reported having seized just over six metric tons
of cocaine in 1998, nearly two metric tons more than was seized
in 1997. However, as Brazil has no system for compiling all drug
seizure and arrest statistics, including those generated by state
and local police forces, it is believed that actual narcotics
seizures may well be higher than those reflected in Federal Police
reports. 

Although there is no large-scale illicit drug crop cultivation,
Brazil is a major producer of precursor chemicals and synthetic
drugs. 

As one of its primary tasks, the new SENAD has been assigned the
duty of coordinating all counternarcotics interdiction efforts,
to include those of local, state, and Federal Police, and the
Brazilian military. The recently named head of SENAD, a retired
army general, faces the challenge of enhancing interagency cooperation.
Meanwhile, the resources of the Federal Police--Brazil's primary
interdiction agency--continued to be stretched. Responding, in
part, to public pressure, Brazilian authorities on all levels
of government continued to expand drug awareness and education
programs in 1998; SENAD is also charged with developing and overseeing
drug demand reduction and education, as well as drug rehabilitation
programs. 

Brazil signed the 1988 UN Drug Convention in 1991 and endeavors
to meet all the goals and objectives of the convention. An omnibus
counternarcotics law, approved by the Lower House of the Brazilian
Congress (the Chamber of Deputies) in December 1996 and which
would formally implement most remaining aspects of the UN Drug
Convention, awaits final action in the Brazilian Senate. Although
the draft law was scheduled to come to a vote at the end of 1998,
a delay ensued when a National Narcotics Conference called for
key changes to be incorporated into the bill. 

Brazil has a bilateral narcotics agreement and a Memorandum of
Understanding (MOU) with the U.S. that provide for bilateral counternarcotics
cooperation. Brazil also cooperates bilaterally with several other
countries and participates in multilateral counternarcotics initiatives
such as the UN Drug Control Program (UNDCP) and the Organization
of American States/Anti-drug Abuse Control Commission (OAS/CICAD).

II. Status of Country 

Brazil is primarily a conduit for cocaine base moving from the
Andean Ridge cultivation areas to processing laboratories in Colombia.
It is also a transit point for cocaine hydrochloride (HCl) bound
from Colombia and other neighboring countries to North America,
Europe, and Brazil's own population centers. A low-grade, boiled-base
cocaine, locally dubbed "crack," developed in Bolivia,
has found its way to the country's southern cities. Finally, there
are indications that small but growing quantities of heroin entered
the country from Colombia. 

In recent years, Brazil's vast western region has been used by
narcotics traffickers to sustain an "airbridge" to avoid
the airspace in Peru and Colombia, which maintain active aerial
interdiction policies. An extensive Amazonian riverine transportation
network also helps carry drugs to Atlantic ports for transshipment
elsewhere. This network is also used to transport precursor chemicals,
many of which are manufactured in Brazil, to narcotics processing
laboratories upriver, primarily in Colombia. 

In Brazil's southern region, drugs are coming from Bolivia and
Peru (moved via overland and aerial routes) to the major cities
which, according to surveys and other data, have the highest rates
of drug usage in the country. Major seaports at Santos, Rio de
Janeiro, and Rio Grande, as well as international airports at
Sao Paulo, Rio de Janeiro, and Porto Alegre, serve as dispatch
points for these drugs. 

Brazil's Congress in February 1998 passed a law criminalizing
money laundering for the first time. Brazil's strict bank secrecy
laws and its highly developed financial networks make the country
vulnerable to money laundering activity. For example, sizable
amounts of cash are deposited in small banks in border areas,
particularly in the Brazil-Paraguay-Argentina tri-border area,
then transferred from these small border banks to larger financial
institutions in the country's banking centers. 

The Brazilian Congress in February 1998 also approved a law that
authorized the military to interdict civilian aircraft, with force
if necessary. We understand that the Brazilian Government may
decide to use this new law in some circumstances to disable aircraft
in flight carrying suspected narcotics traffickers. As of year's
end, the Brazilian Government was developing regulations governing
appropriate application of the law. Brazil has already begun to
put in place an Amazon Surveillance System (SIVAM) to provide
an integrated air and land-based radar system to detect trafficking
and other illicit activity in the thinly populated region.

Drug usage, primarily among young people, continues to climb.
Abuse of hard drugs such as the local version of "crack"
cocaine and similar substances increased in Brazilian cities and
even in some smaller towns along trafficker routes. Sharing of
needles by drug abusers is contributing to the spread of AIDS.
U.S.-supported drug demand reduction projects, exist in several
cities, and the new Anti-Drug Secretariat has as part of its mandate
the duty to develop and oversee drug prevention and treatment
programs. 

III. Country Action Against Drugs in 1998 

Policy Initiatives. Brazil's major counternarcotics policy initiative
was the formation of the new National Anti-Drug Secretariat (SENAD),
which establishes a venue reporting through the head of the military
household directly to the President, for coordinating counternarcotics
activities nationwide. Key legal initiatives, such as passage
of money laundering and aerial interdiction legislation, confirmed
Brazil's commitment and provided important tools for use in counternarcotics
efforts. 

While omnibus counternarcotics legislation still awaits approval
in the Brazilian Senate, indications are that the bill reportedly
is being held to allow SENAD input for suggested changes to the
draft law. In addition, at the behest of his new drug czar, President
Cardoso signed several decrees to support counternarcotics programs,
including one that permits the government to seize and auction
off assets belonging to suspected narcotics traffickers before
they have been convicted. A revised National Defense Policy, inaugurated
in late 1996, extends the military's border control mandate to
include defense against organized crime elements. While the policy
does not specifically target narcotics smuggling, it has allowed
the military to assist police counternarcotics operations in the
Amazon. 

Federal Police heightened surveillance of the Amazon region and
also carried on lengthy counternarcotics investigations countrywide.
As a result of these efforts, total Federal Police cocaine seizures
were somewhat above the relatively low levels achieved in 1996
and 1997, but marijuana seizures were significantly down about
10 percent from 1997. Staffing, resources, and coordination problems
continue to significantly hamper the Federal Police and other
law enforcement agencies. The lack of a centralized arrest and
seizure reporting system contributes to the appearance that interdiction
efforts yield only limited results. 

Accomplishments. Federal counternarcotics interdiction
efforts focused on the Amazon region in 1998. The Federal Police
seized 250 kilograms of cocaine HC1, the biggest seizure of the
year. For the year ending in July 1998, Federal Police operations
in the Amazon region (operation Porras II and Bloqueio) had netted
seizures of 985 kilograms of cocaine, 16 aircraft, 32 boats, and
a variety of other contraband goods valued at approximately $5.2
million. Federal Police also had destroyed 18 clandestine airfields,
some of which were subsequently rebuilt. In addition, 96 suspects
were indicted, and 46 suspects arrested and charged with drug
trafficking offences. 

Federal Police in March 1998 seized 950 grams of heroin (the largest
heroin seizure in Brazil since 1994) that an Italian national
was bringing in through Rio's international airport. The Italian,
who owned a guest house in the resort town of Porto Seguro in
Bahia, had brought the drug from India and apparently was planning
on distributing it locally in Porto Seguro. 

As an illustration of the possible magnitude of state-level seizures
not included in centralized statistics, the Rio de Janeiro state
civil police reported taking 570 kilograms of cocaine and 4 metric
tons of marijuana, in the month of September. Earlier in the year,
400 Sao Paulo state military police and 200 Denarc civil police
counternarcotics agents occupied a favela, or urban slum, in east
Sao Paulo that is the main supplier of drugs to the "ABC"
industrial area south of the city, and other parts of Sao Paulo.
Among the 32 individuals detained was Jeonildes Lima Santos, believed
to be Sao Paulo's main drug trafficker. Police seized 5 kilograms
of local "crack" 40 kilograms of cocaine HCl, and 27
weapons including a submachine gun, pistols, revolvers, and a
rifle. 

Lacking inclusion of comprehensive state-level seizures, Federal
Police reports would not provide a very complete picture of Brazil's
counternarcotics activities. 

Illicit Cultivation/Production. Except for some cannabis
grown primarily for domestic consumption in the interior of the
northeast region, there is no evidence of significant cultivation
of illicit drugs in Brazil. Authorities identified no coca or
opium cultivation in 1998 and, for the first time in five years,
two cocaine-producing laboratories were identified. Brazil does
produce illicit psychotropic drugs, such as LSD and amphetamines,
as well as anabolic steroids and such "designer" drugs
as Rohypnol, the so-called "date rape" drug, which is
smuggled to Florida.

Distribution. Extensive domestic distribution networks
have developed in major and secondary metropolitan areas in Brazil.
Federal counternarcotics police and state authorities have initiated
investigations of these networks, which are largely responsible
for the significant increase in violence experienced by such cities
as Sao Paulo and Rio de Janeiro. Access to the favelas, surrounding
several cities in Rio de Janeiro, Sao Paulo, and Porto Alegre,
is controlled by local drug lords. 

Sale, Transport, and Financing. Federal Police in 1998
continued to focus their efforts on the western Amazon region,
which began in 1997 as "Operation Porras." Despite these
successes, law enforcement efforts were hampered by a lack of
resources and the vast Amazon region remains difficult to police
adequately, with narcotics moving across the region both by airplane
and along the extensive river system. Some authorities maintain
a majority of the cocaine shipped down the Amazon is destined
for the United States. Manaus, the largest fresh-water port on
the river, and Macapa and Belem on the Atlantic, serve as transshipment
points for drugs coming from Colombia, Peru, and Bolivia to be
switched to ships bound for the U.S. and elsewhere. 

Extradition. Brazil does not extradite its own citizens.
Brazil cooperates with other countries in the extradition of non-Brazilian
nationals accused of narcotics-related crimes. Brazil and the
U.S. are parties to a bilateral extradition treaty signed in 1961.
In April 1998, Brazil allowed the extradition to the U.S. of an
accused Colombian narcotics smuggler linked to multi-ton cocaine
shipments. 

Mutual Legal Assistance. The U.S. and Brazil signed a bilateral
Mutual Legal Assistance Treaty (MLAT) during the visit of President
Clinton to Brazil in October 1997. The U.S. Senate ratified this
agreement in January 1999, but it still awaits the advice and
consent of the Brazilian senate. When it goes into effect this
treaty will support efforts by Brazil to deal with narcotics trafficking
and organized crime, as well as other offenses. 

Law Enforcement and Transit Cooperation. Top Brazilian
counternarcotics officials in the SENAD in 1998 expressed a strong
interest in more active cooperation, and coordination with the
U.S. in drug control activities. 

U.S.Drug Enforcement Administration (DEA) agents were again invited
in 1998 to observe Federal Police operations in the Amazon region,
and information sharing with Brazilian authorities has progressed
well. Cooperation with authorities in neighboring countries, particularly
in Colombia, Peru, and Bolivia, also enhanced regional efforts
to hinder the smuggler "air bridge." 

Precursor Chemical Control. Brazil, South America's largest
producer of industrial chemicals, requires registration with federal
narcotics police for all production, transport, and distribution
of precursor chemicals. A 1995 law places eleven chemicals under
control, sets minimum thresholds for reporting and record keeping
on transactions, provides for import and export licensing, and
fixes substantial administrative penalties for noncompliance.
However, a lack of resources prevents active government follow-up
or verification of most shipments and/or their ultimate destinations,
although compliance with the permit process at least appears to
be widespread. Nevertheless, diversion of chemicals such as ether
and acetone to neighboring Colombia, Peru, and Bolivia occurs.
The United Nations Drug Control Program (UNDCP) in September 1998
initiated a $9 million program, for increasing precursor chemical
control.

Demand Reduction. With the creation of SENAD in 1998, Brazil
elevated its focus on drug demand reduction and education, as
well as on rehabilitation of drug users, to the highest level.
At the end of November 1998, SENAD hosted a National Anti-Drug
conference attended by nearly 2,000 interested professionals and
other parties from throughout the country. The conclusion of this
conference was that, as a matter of national policy, Brazil should
put even more focus on demand reduction, education, and treatment
than on interdiction. Most of Brazil's demand reduction efforts
are aimed primarily at young people, who constitute the largest
group of drug users. TheU.S., through its counternarcotics funds,
helps support demand reduction and drug education programs in
Brazil. One major focus has been on the PROERD (Programa Educacional
de Resistencia a Violencia e as Drogas) program, based on the
American DARE (Drug Abuse Resistance Education) model. PROERD
provides training to uniformed state military police drug education
volunteers in 17 of Brazil's 26 states, as well as in the federal
district. A major accomplishment in 1998 was the decision by the
acting public security director in the state of Rio de Janeiro
to reinstitute PROERD, which had been closed down by his predecessor
in 1995. As a symbol of its support for Brazil's efforts with
PROERD, DARE International will hold its worldwide conference
in February 1999 in the state of Sao Paulo, which has been the
focus of all PROERD programs in Brazil since the demise of the
Rio program in 1995. Most Brazilian states and cities conduct
some drug awareness campaigns.

Law Enforcement Efforts. The Federal Police seized 5.8
metric tons of cocaine in 1998, nearly 2 metric tons more than
they seized in 1997 but nearly double the 3.1 metric tons seized
in 1996. Marijuana (cannabis) seizures of just under 29 metric
tons were about 10 percent below 1997 levels, when nearly 32 metric
tons were taken. Seizures of marijuana were markedly up in the
southeastern and central regions and down in the main marijuana
cultivation areas in the northeast. Most cocaine seized derived
from the northern region, including the majority of the Amazon
region. Seizures of psychotropic drugs registered a 40-fold increase
over the 1997 level, but about a quarter of the total psychotropics
taken in 1998--25,000--were taken in just three raids in one day
in the Northeastern state of Ceara. 

U.S. efforts were successful in helping to block the court-approved
transfer to Manaus of Antonio Mota Graca, a major Brazilian trafficker
responsible for facilitating a large part of the Cali drug cartel's
cocaine in and through Brazil to international markets. Federal
Police suspected that Mota Graca was planning to escape following
his transfer to Manaus. 

Corruption. The Brazilian government, as a matter of policy
and practice, does not condone production, shipment, or distribution
of illicit drugs or laundering of drug money; nor do senior government
officials engage in, encourage, or facilitate such activities.
Brazil's new money laundering legislation contains provisions
to assist law enforcement in uncovering and hindering official
corruption as well. 

Agreements and Treaties. Brazil became a party to the 1988
UN Drug Convention in 1991, although it still lacks legislation,
in the form of the pending omnibus counternarcotics bill, formally
implementing all of the provisions of the Convention. Legislation
outlawing money laundering was passed in February 1997. While
the provisions of the pending omnibus law are needed to bring
Brazil into full compliance with the UN convention, in practice
Brazil meets many of its overall objectives. Bilateral agreements
based on the 1988 convention form the basis for counternarcotics
cooperation between the U.S. and Brazil. Brazil also has bilateral
narcotics control agreements with all its South American neighbors,
and with Germany and Italy. The Federal Police share liaison on
counternarcotics matters with the U.S., Germany, Great Britain,
France, The Netherlands, and Italy through narcotics officers
of those countries posted to their embassies in Brasilia. Brazil
has agreements facilitating extradition and integrating police
operations with its Mercosur partners (Argentina, Uruguay, and
Paraguay) and participates in a wide range of counternarcotics
programs sponsored by UNDCP. 

IV. U.S. Policy Initiatives and Programs 

Policy Initiatives. U.S. counternarcotics policy in Brazil focuses
on working with Brazilian authorities to identify and dismantle
international narcotics trafficking organizations, reduce money
laundering, and increase awareness of the dangers of drug trafficking
and abuse. Assisting Brazil to develop a strong legal structure
for narcotics and money laundering control and enhancing cooperation
at the policy level are key goals. Bilateral agreements, provide
for cooperation between U.S. agencies and the National Anti-Drug
Secretariat, the Federal Police, other federal and state agencies,
PROERD, and other organizations. 

Bilateral Cooperation. The Brazil President's new drug
czar expressed strong interest in a close and cooperative relationship
with the U.S. in counternarcotics matters, but relations on the
working level with some agencies, notably the Federal Police,
could be improved. 

Bilateral programs that took place in 1998 included. a month-long
training course offered by DEA in the Washington area for a group
of Federal Police officers hand-picked to be part of a special
intelligence counternarcotics unit; attendance of three Brazilian
officials to an OAS-funded Regional Port Security Course in Lima
during October 1998; a week-long port inspection training program
offered by the U.S. Coast Guard and the U.S. Customs Service (The
course, held at the Port of Santos, Latin America's busiest port,
concentrated on narcotics interdiction and was attended by officials
from the Federal Police, Internal Revenue Service (Customs) and
the port guard); two training programs offered by the Alcohol,
Tobacco and Firearms Bureau of the U.S. Department of Treasury
(ATF) to federal and state police officials on control of illicit
arms trafficking; continuation of the "administration of
justice" program offered by the U.S. Department of Justice
that helps train judicial task forces; provision of printed materials,
translations, and interpretation services for a judges' seminar
in Manaus focusing on property seizures in narcotics arrests;
a week-long training course for nearly 40 community organizations
in Rio de Janeiro on community mobilization for drug awareness,
demand reduction, and treatment programs; six of nine modules
of the "therapeutic community" course offered by Daytop
International to local agencies and groups in Sao Paulo, with
the remaining modules to be given early in 1999; and DARE/PROERD
mentor training in Sao Paulo. In addition, Brazil sent officials
from several civilian and military agencies to take part in the
three-part "United Counter Drugs '98" exercise-conference
sponsored by SOUTHCOM in Miami and Key West, Florida. 

The DEA continued to support Federal Police counternarcotics operations
in the Amazon region throughout 1998, assisting with information
sharing and facilitating cooperation with police authorities in
neighboring Colombia, Peru, Bolivia, and Venezuela. DEA plans
to assist a joint anti-drug task force at the Sao Paulo international
airport in cooperation with Brazilian customs, the Federal Police,
and Sao Paulo civil police still await action by the Federal Police
to complete preparations for the project. 

The Federal Police department in October opened its new jungle
survival school in the Amazon jungle 30 km from Manaus and began
operations by offering specialized jungle operations training
to police officials from Brazil, Peru, and Ecuador. DEA agents
taught some modules of the course, and future plans call for inviting
participation by Colombia, Bolivia, and Venezuela. 

In 1998, the U.S. provided both technical and monetary assistance
for demand reduction programs in several Brazilian cities and
states. 

The Road Ahead. High-level Brazilian officials, including the
President's recently appointed national drug czar, have expressed
a strong interest and commitment to enhanced bilateral cooperation
with the U.S. in the fight against narcotics trafficking. The
Government of Brazil has demonstrated an increased willingness
to work closely with its neighbors in fighting the narcotics trade.
Further signs of Brazil's strong commitment to combat drug trafficking
would include passage of omnibus counternarcotics legislation,
promulgation and enforcement of money laundering regulations,
continued high-level attention to counternarcotics efforts, further
funding of counternarcotics programs and law enforcement agencies,
and a continued interdiction effort in regions most exploited
by international narcotics traffickers. 

[end of document]

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