Mary Beth Polley: Hi, good evening everyone from the Asia-Pacific Regional Media Hub in Manila. I’d like to thank our participants from across Asia for joining us. Today we are pleased to be joined from Washington by Deputy Assistant Secretary for International Narcotics and Law Enforcement James A. Walsh.

DAS Walsh will brief you on drug trends in the Asia-Pacific and the nexus for the U.S. opioid crisis, as well as U.S. efforts across the region to combat drugs. In a moment I will turn it over to DAS Walsh for his opening remarks and then we will go to Q & A. Today’s call is on the record and with that I’ll turn it over to DAS Walsh.

DAS Walsh: Thank you. And thank you for taking the time out of your evening to join this call. I am looking forward to our discussion about drug trends in the Asia-Pacific and current U.S. opioid crisis and our engagement in the region to combat these drugs.

So the bureau that Mary just discussed is the International Narcotics and Law Enforcement Affairs Bureau called INL, which I am currently leading. And our mission is to advance U.S. drug policy goals on the international stage. And given this epidemic level of our overdose deaths in the United States and signs we see that newly emerged actors are spreading this drug crisis far beyond U.S. borders, this issue is currently a very high priority for us.

As you know, we are in the midst of a crisis here in the United States and the toll we’re seeing is depressingly high. In 2016 there were over 63,600 drug overdose deaths. That’s a 21 percent increase from the year before and basically amounts to 175 deaths every day.

President Trump has recognized this and declared it a national public health emergency, and he is focusing the federal government’s law enforcement prevention, and recovery resources to combat and treat this epidemic.

This public health crisis stems from the use of heroin and primarily heroin laced with illicit fentanyl, often without the user knowing it. And this fentanyl is a synthetic opioid, can be fifty times more potent than heroin, with as little as two milligrams being potentially lethal.

And now we are starting to see carfentanil in the United States which is 100 times more potent than fentanyl, so you can imagine how deadly these drugs are.

So the heroin and fentanyl we see in our streets is not produced in the United States. The majority of this heroin that’s coming into the United States does come from Mexico and the fentanyl is generally sourced from China. These drugs are brought in through a variety of routes including smuggling and, in a frightening twist, through internet orders shipped by small mail-order packages directly to the United States, Canada, or Mexico. Given these transnational aspects of the crisis, there is no solution that does not include an international component.

So the United States greatly values our cooperation we have with these countries in Asia. We cannot do this alone.

In addition, we have our multilateral venues which are very important forums for us for fighting these drugs. In March 2017, the UN Commission on Narcotic Drugs, voted unanimously to control two of the most common chemicals used by criminals to produce illicit fentanyl. And these efforts and this approval would not have been accomplished without the members in Asia supporting the United States. We will meet again with the CND in March and again we’re going to be pushing for more controls including 12 additional substances, including carfentanil to be scheduled.

We have seen positive results from our law enforcement cooperation between the United States and China. As a result of our cooperation, over the last two years China domestically controlled 138 of these fentanyl analogues and they are doing more to support us.

When President Trump visited China last November, he and President Xi agreed to increase cooperation in combating drugs, including on synthetic opioids. This high-level engagement enhanced ongoing working-level cooperation with China – in which INL plays a key role. And we were very pleased to hear that, on December 28, China’s Ministry of Public Security announced that China will control two important fentanyl precursors.

Of course our work in Southeast Asia with my bureau has been around for several years and we’re very proud of this work. But sadly, some of this illicit production that’s coming into the United States is being shifted into tactics. And one of the major challenges for law enforcement is facing is the cybersecurity anonymity of the Dark Web. This provides drug producers and traffickers a new way to move and sell their products.

So we are working to build partner nations’ capacity to combat this use of Dark Web and also the cryptocurrencies like Bitcoin that drug traffickers are using. For example, working through the United Nations we are establishing some training with cryptocurrencies in the region.

We are also supporting our various countries with drug demand reductions because of our policy includes both addressing supply and demand. And reducing drug demand is another essential pillar of our approach.

In December, I attended the International Society of Substance Use Professionals in Mexico, where over 2,500 of these global experts gathered to discuss cutting edge techniques to reduce demand for illicit drugs and improve treatment.

INL has drug demand programs also in the region including Burma, Indonesia, Laos, and the Philippines. And we are excited to be working with China on some of their drug demand programs as well.

Transnational Crime is another primary issue besides drugs. In addition to these narcotic traffickings, we address transnational criminal organizations in Asia. These organizations take on all kinds of illegal trafficking including arms, people, and wildlife. Not only do the trafficking networks and illicit markets undermine the rule of law but they weaken public institutions and they perpetuate corruption and contribute to this geopolitical tension throughout the region.

INL is proud to be overseeing many of these programs in Asia, including addressing these wildlife trafficking, maritime security, rule of law, cybercrime, and other transnational crimes.

These programs, along with INL’s counter-narcotics efforts, benefit not just the U.S. by reducing drug flows and other crime; they also make it harder for criminals to spread their products into markets in Asia.

So thank you very much for letting me talk to you this evening, and I look forward to your questions.

Mary Beth Polley: Thank you so much DAS Walsh for those remarks. We will now begin the question and answer portion of today’s call.

Question: Hi, thanks for the call. I have a very specific question. Two Chinese nationals were indicted in the U.S. late last year for selling controlled substances to the United States. My question is: What kind of access does U.S. law enforcement have, within China specifically to investigate these two cases. If you can please be specific about what kind of actions U.S. law enforcement can take on the ground in China and what kind of evidence was gathered, if any? And did you seek cooperation from China and what kind of cooperation did you receive? Thank you.

DAS Walsh: Thanks for that call. Unfortunately, I can’t be specific because of the criminal nature of these investigations. But I can tell you that our DEA counterparts have been working closely with their Chinese counterparts on collecting evidence and providing techniques on the appropriate evidence gathering. So, unfortunately, any other details I would have to defer you to the Department of Justice.

Question: I want to ask a question about the U.S. drug policy in Indonesia. Earlier you had mentioned that Indonesia is one of your focus country for combatting transnational crime and especially narcotics and drug distribution. So could you expand on the policy in Indonesia? Thank you.

DAS Walsh: Yes, thank you for that question. We actually have a very robust program in Indonesia supporting various law enforcement and rule of law programs including some maritime programs. So in addition, as I mentioned, we also have some demand reduction programs. These demand reduction programs provide universal treatment curriculum and universal prevention curriculum to various NGOS’s and your government. But primarily from a drug policy and drug support our approach has primarily been focusing on the fundamentals of policing and community policing in particular. So the idea is that if we get good community policing out into the streets, they will have better cooperation with citizens and better appreciation of identifying the trafficking trends.

Question: Good evening. How do you receive the Duterte administration’s war on drugs nearly two years after it started? And I would also like to get your comment on the resumption of visits of homes of drug suspects by the Philippine police. Despite an admission by their chief of abuses in the past involving corrupt police officers. Thank you.

DAS Walsh: Yes, thank you for that question. I’ve personally been tracking the drug campaign in the Philippines ever since President Duterte launched his drug war. We are aware that the police are continuing the resumption of their operations. As a matter of fact, I met with Chief Dela Rosa over a year ago when the campaign was starting and we were reminding them that the U.S. has certain human rights aspects in our laws that would restrict our assistance when supporting police. And since then we have reduced our support to the police because of some of the human rights concerns.

With that said, many folks have been tracking the EJKs in the Philippines and the trends are going down, so there is some encouragement that we are seeing some of our human rights training working. And so I would describe the United States as being cautiously optimistic in the trends when it comes to the appropriate way for a drug campaign. And so we are just going to monitor that and we are going to continue supporting the government of the Philippines with our rule of law, our demand reduction programs and our maritime assistance.

Mary Beth Polley: DAS Walsh, you used the term EJK, what does EJK refer to?

DAS Walsh: Extrajudicial killings.

Question: Hi, good evening. How effective are efforts by Southeast Asian countries in combatting cross border crime in general and drug trafficking specifically and how can they improve their efforts?

DAS Walsh: As you know, the trends in the United States are alarming and it’s not just in the United States, it’s everywhere else. We have a rapid, significant increase in production of heroin from Afghanistan, Burma and Mexico. So the heroin supply has gone up. In addition, we have these traffickers being more creative with synthetic opioids because they are so cheap to produce and then the profit margin is so high. So it’s gotten much more complex for law enforcement officials to disrupt these traffickers and minimize the availability of drugs.

With that said, at the end of the day, there are two things that I have known about the many years I have been working in this business that will be successful when it comes to interdicting and reducing the supply: 1) You have to have governance, you have to have access to your citizens and access to the places where these traffickers grow and produce these drugs. And that includes good border management. So we’ve been working a lot with border management. When I say border management, I mean both land, sea and air. The other component of it is addressing corruption and going after the money, and so that’s a tactic that the United States is looking when it comes to our interdiction and supply reduction strategies is that you have to follow the money. Our anti-money laundering campaign is going to be a key component of our strategy and something we will be working with Southeast Asian countries as well. And tying that into addressing some of the corruption issues if you have crooked officials, it makes it a lot harder.

Lastly, at the end of the day, and this is something the United States and the world has learned, for drug policy you have to have a demand reduction policy to go with it. And this is something we’ve learned in the United States and the President has stressed and so that is why we have drug demand reduction programs throughout the world.

Question: Any future programs to support Cambodia’s law enforcement agencies to deal with transnational crime? What has the U.S. done to support ASEAN anticrime efforts, so far?

DAS Walsh: Yes, thank you for that question from Cambodia. As you know, the United States does work and support ASEAN in particular on transnational crime issues. I would say specifically for Cambodia and the rest of ASEAN, we are expanding our effort to wildlife trafficking. And wildlife trafficking is a multi-billion dollar criminal enterprise that not only threatens targeted species and their ecosystems but also undermines rule of law and stability. And East Asia is a source, transit, and demand region for this trafficked wildlife. So we are looking to expand some of our wildlife trafficking programs. I know we have some presence and support in Cambodia and we’re expanding it to Laos. And we’re going to continue our work in Vietnam, Indonesia, Philippines, and Thailand; I believe I hit all of them.

Mary Beth Polley: Is there anything specific you want to highlight in regards to ASEAN?

DAS Walsh: For ASEAN we meet on an annual basis. And one of the things we like to address is addressing the transnational criminal organizations and I will go back to my point on money laundering and that is one of the things we will be pushing this year. We have been addressing wildlife trafficking. But I think the concerns we have with the trends with traffickers whether it’s for wildlife, it’s drugs or people, the use of the internet, use of cryptocurrencies is a trend that we have to start addressing and get ahead of. And so this will be something that we will be raising and have raised in the past but pressing more with ASEAN and working with them.

Question: Hi, thanks very much for allowing me to ask a question. We’re seeing huge quantities of meth being produced by the Golden Triangle cartels. And we’re seeing record high seizures as well. But it doesn’t seem to make any dent on either supply or increasing street prices. Do you think that regional and international drug agencies have dropped the ball a bit on the Golden Triangle cartels in recent years? And also are there any concerns that these cartels may switch to fentanyl, given they have shown they can very easily go from heroin to something synthetic like meth as well?

DAS Walsh: It’s a good question. I wouldn’t say that dropping the ball would be the right answer, I would just say, I go back to this new phenomenon where it’s so much easier to distribute drugs now through the Dark Web and through just cryptocurrency transactions for financial, that it’s just a lot easier for these traffickers to sell and move their products which makes me believe that, yes, I would expect and anticipate more synthetic opioids like fentanyl and carfentanil being trafficked or distributed. If you think about it, they have some connections through the chemical plants. A lot of times these precursor chemicals are something that they can make in their basement, just like methamphetamines, and so I think that trend will continue.

And going back to your question about methamphetamines and the production thereof and the increase of methamphetamines, which I know is the drug of choice in Southeast Asia. I’ll go back to my point about governance. This is some of the challenges I know that Burma has faced and the golden triangle. I know they had a tremendously huge drug seizure of late and that is encouraging. But if we don’t have access to these regions, we’re not going to be able to tackle it at its source. And if we can’t tackle it at its source, we are limited to managing our borders. As you know, at the borders there are just so many different places they can distribute; it just creates a lot of ease – it’s easy for these traffickers to move it.

Question: Hi James, I just want to ask a couple questions regarding the specific programs that you have in the Philippines with respect to the war on drugs. And from your assessment and from your monitoring, what is the effect of the war on drugs on the supply side of drugs in the Philippines? Has it been successful in limiting the amount of drugs coming into the country?

DAS Walsh: On your last question, has it been successful, I would say no. I don’t think the world has been very successful in tackling supply. I would say, describing success, we are never going to get rid of the supply of illicit drugs. I think that the idea and our strategy on tackling the supply is make that risk/reward ratio change to the point where risk is so high for these traffickers that it’s not worth it and they will go to some other way of producing or creating resources.

When it comes to addressing the Philippines and our specific programs, I would describe it as three areas: one are drug demand reduction programs which have increased of late, as a result of that campaign. And we’ve been working with several officials in the Philippines and you may have heard of recent announcements of our contributions there. Second, when I was out there, I got a good appreciation of the challenges within your rule of law, and really increasing and strengthening your capacity of your judicial system to actually process cases so there’s not a major delay which has caused a lot of frustration, I know, for many people. And third we have our maritime programs, which I think goes back to maritime awareness and that will address some of our trafficking challenges.

Question: Thanks so much for taking my question. I wanted to ask about recent legislative efforts and interests in the United States inimproving the labeling on packages that are coming in through the mail to the U.S. I wanted to know two things, first are you getting the kind of cooperation and participation from China that you would like to see? And secondly, given the relative ease with whichinformation can be faked in China, in terms of putting down sender information and package contents, how far do you think those declaration requirements would go in helping interdict illicit packages?

DAS Walsh: Our cooperation with China on these issues has been good. As I mentioned earlier in my opening remarks, the conversations between President Trump and President Xi later last year was encouraging and we have seen really good cooperation with China on many of these issues.

On the specific question related to, you talked about the vulnerabilities of our international mail, which I know there is a major report that came out from Congress, one of the things that report highlighted, that the use of what’s called Advanced Electronic Data or AED which is basically a digital encryption on the packages, is not really being used as widely as we’d like. With that said, I believe China has been starting to work on that but it’s not a requirement — they don’t have the capacity to actually have this AED digital version on all of our U.S. postal customs. So there is a lot of work to be done. With that said, it’s not the panacea that will resolve this, as you kind of highlighted. There’s going to be ways that traffickers are going find ways to get around this either through corruption or through diversion tactics.

But again, it’s one step that makes it harder for these criminals to actually traffic these synthetic opioids. Just like the scheduling, if I may shift and just highlight. That we scheduled fentanyl last year, and now while fentanyl is still being shipped, we are seeing reductions in the trafficking from China because of that. And our hope is that our policy includes scheduling, going after the AEDs, making it harder for them to ship it, going after the cryptocurrency and shutting down some of these Dark Web sites; a combination is what is going to be needed to reduce the supply and make it harder for these traffickers to ship these drugs.

Question: Hello, thank you for taking my question. You just said that methamphetamine is the drug of choice in Southeast Asia, [inaudible] as it’s called in the streets; it’s also very popular in China. Did you get any image, any assessments during your cooperation with Chinese narcotics control about the scale of the epidemic of fentanyl or opioids in China itself and is there any cooperation between the U.S. and China on prevention of treatments of addiction when it comes to fentanyl?

DAS Walsh: Yes, that’s a good question. In part of our conversations with China they, actually, as I mentioned earlier, are very interested in talking to the United States about what we do for drug demand reduction. Now, what I have heard from our Chinese counterparts is that ketamine is the synthetic drug that they have concerns with. So whether it’s ketamine or fentanyl or methamphetamines, there are still techniques that have been proven to be successful in prevention and treatment.

So I was pleased when I had a conversation with China back in December where they were very interested to continue this cooperation. And we agreed to have a delegation come visit the United States; working on those dates, hopefully sometime in April, where they will visit the United States to look at how we apply our drug demand reduction programs here. And then we can have that exchange on how we can address and tackle fewer drug addicts. But at the end of the day when it comes to the specific use of drug, I would have to defer to the Chinese government. They are best suited to answer the question on specific drug use in China.

Mary Beth Polley: DAS Walsh, I’d like to as the moderator just ask one final question. You mentioned the meeting you went to this fall to deal with treatment and prevention. Could you close out just by talking a little bit about what the general global conversation was on treatment and prevention? We’ve talked a lot about addressing the movement of drugs but what about treatment?

DAS Walsh: Yeah, thank you, Mary. It was really exciting to be there, it was the first time I’ve attended this conference. We had 2,500 participants, 65 countries attending. It’s going to be even bigger next year. I think it’s going to be in Kenya next year. The ideas that, as I mentioned earlier on, we have to own up to some of the responsibility that the drug consumption is happening in the United States and some of these other wealthy countries. But we are starting to see trends where it’s because the drug availability has gotten so cheap that you don’t have to be some wealthy country to have a drug consumption problem. And so the message was that this is a global problem. And to tackle this we have to have good global drug policy. And part of that policy includes addressing it from both the demand and supply side. On the demand side, getting those professionals together, we used evidence-based approach to basically recognize that some techniques work. And they are hard but they do work. And if we combine that with the right approach on the supply side, I am much more optimistic that we can address some of these concerns and, in particular, the opioid crisis that we are facing in the United States.

Mary Beth Polley: Thank you for that and thank you so much DAS Walsh for joining us so early here. And thank you all for participating so late at night in Asia.

U.S. Department of State

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