Certifications for Major Narcotics Producing and Transit Countries

[Federal Register Volume 60, Number 46 (Thursday, March 9, 1995)]

[Presidential Documents]

[Pages 12859-12881]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 95-5850]

Presidential Documents

Federal Register / Vol. 60, No. 46 / Thursday, March 9, 1995 /

Presidential Documents

___________________________________________________________________

Title 3--

The President

[[Page 12859]]

Presidential Determination No. 95-15 of February 28,

1995

Certifications for Major Narcotics Producing and

Transit Countries

Memorandum for the Secretary of State

By virtue of the authority vested in me by section

490(b)(1)(A) of the Foreign Assistance Act of 1961, as

amended, (``the Act''), I hereby determine and certify

that the following major drug producing and/or major

drug transit countries/dependent territories have

cooperated fully with the United States, or taken

adequate steps on their own, to achieve full compliance

with the goals and objectives of the 1988 United

Nations Convention Against Illicit Traffic in Narcotic

Drugs and Psychotropic Substances:

The Bahamas, Brazil, China, Dominican Republic,

Ecuador, Guatemala, Haiti, Hong Kong, India, Jamaica,

Laos, Malaysia, Mexico, Panama, Taiwan, Thailand,

Venezuela, and Vietnam.

By virtue of the authority vested in my by section

490(b)(1)(B) of the Act, I hereby determine that it is

in the vital national interests of the United States to

certify the following countries:

Bolivia, Colombia, Lebanon, Pakistan, Paraguay, and

Peru.

Information on these countries, as required under

section 490(b)(3) of the Act, is attached.

I have determined that the following major producing

and/or major transit countries do not meet the

standards set forth in section 490(b):

Afghanistan, Burma, Iran, Nigeria, and Syria.

I have made these determinations, taking into account

the factors set forth in section 490 of the Act, and

based on the information contained in the International

Narcotics Control Strategy Report of 1995. Because the

performance of these countries varies, I have attached

an explanatory statement in each case.

You are hereby authorized and directed to report this

determination to the Congress immediately and to

publish it in the Federal Register.

(Presidential Sig.)

THE WHITE HOUSE,

Washington, February 28, 1995.

STATEMENT OF EXPLANATION

The Bahamas

U.S.-Bahamian drug enforcement cooperation under

Operation Bahamas and Turks & Caicos (OPBAT) has been

excellent and resulted in a dramatic reduction in the

flow of drugs through The Bahamas into the United

States, as indicated by vastly reduced drug-seizure

levels over the last several years. Nevertheless, The

Bahamas remains a major transit country for U.S.-

[[Page 12860]] bound Colombian cocaine and Jamaican

marijuana. As a major financial center, The Bahamas is

vulnerable to money laundering. The Bahamas is a party

to the 1988 UN Convention. The Ingraham government has

taken a firm stand against drug trafficking, drug abuse

and money laundering and worked diligently during 1994

to fulfill the goals and objectives of the UN

Convention and U.S.-Bahamian bilateral counternarcotics

accords.

During 1994, Bahamian maritime cooperation with the

United States was excellent under the terms of several

bilateral agreements and arrangements. The Government

of the Commonwealth of the Bahamas (GCOB) moved to

improve cooperation with the Cuban government when

traffickers intensified their exploitation of Cuban

territory to avoid OPBAT enforcement efforts. The GCOB

generally responds positively to specific U.S. requests

under our Mutual Legal Assistance Treaty. In 1994, the

GCOB took judicial action against three public

officials for drug-related corruption: a prison

official, an immigration officer and a customs officer.

The GCOB took several strong steps to improve its

drug-trafficking-control tools. The new U.S.-Bahamas

extradition treaty entered into force in 1994. The GCOB

also adopted legislation, based on U.S. law, making it

a crime to engage in a continuing criminal enterprise

related to narcotics trafficking. Working closely with

the USG, the GCOB placed special emphasis on

strengthening its judicial system by increasing its

courts budget, implementing a court automation system,

and enacting stronger bail and sentencing legislation.

In 1994, the GCOB drafted stronger money laundering

legislation, which it expects Parliament to approve in

1995. When enacted, this legislation will criminalize

money laundering. The GCOB agreed to an evaluation of

its money laundering controls by the Caribbean

Financial Action Task Force, also expected to take

place during 1995. We urge continued vigilance by The

Bahamas on possible money laundering through shell

corporations and international business companies,

which are proliferating in The Bahamas and elsewhere in

the Caribbean. Although Bahamian law renders the assets

of a convicted drug offender subject to forfeiture, in

practice asset forfeiture has been difficult to

implement. No procedures exist for civil asset

forfeiture in narcotics cases.

Brazil

Brazil is a major transit country for cocaine from

Colombia destined for the United States and Europe.

Increased cocaine and precursor chemical trafficking

and money laundering contribute to Brazil's escalating

narcotics problem; corruption allegations against

counternarcotics officials in Brazil persist.

Despite these problems, Brazil endeavors to meet

the goals and objectives of the 1988 UN Convention, and

has succeeded in some significant interdiction efforts.

The government has made progress towards complying with

the UN Convention in law enforcement, asset forfeiture,

extradition, and anti-corruption. The Brazilian

government generally meets the goals of bilateral

counternarcotics agreements with the USG on enforcement

and demand reduction.

Brazil's increased seizure rate in 1994 of 11

metric tons of cocaine marks both heightened trafficker

use of Brazil and improved abilities of the Brazilian

Federal Police Counternarcotics Unit (DPF/DRE).

Brazilian non-governmental organizations (NGOs) hosted

seminars by U.S. police in schools to voice the message

against drug abuse. The DPF/DRE has targetted and

disrupted major Cali-connected drug trafficking

organizations.

However, the Brazilian government has not hired new

police or provided increased funding for the DPF/DRE.

The Brazilians have not yet enacted legislation first

proposed in 1991 to implement effectively the goals and

objectives of the 1988 UN Convention, nor has it

drafted a national drug control strategy. Brazil has

not yet proposed specialized anti-money

launder [[Page 12861]] ing legislation, but requires

reporting of cash transactions involving amounts over

$10,000.

The international consultative forum, the Dublin

Group, has focused worldwide donor attention on the

need for Brazil to pay greater attention to

counternarcotics issues and urged the GOB to take more

vigorous action against its growing drug problem.

Newly-elected President Cardoso is expected to take

such action to confront narcotics traffickers.

Brazil's former President Franco signed a decree

increasing the DPF's licensing and oversight

responsibility for chemicals. The DPF/DRE initiated a

sea/airport security program, and continued to seize

drugs by riverine and ground law enforcement methods.

Brazil continues to plan for a radar system (SIVAM),

financed by the Export-Import Bank, to detect narcotics

trafficking aircraft in the Amazon.

China

The Government of the People's Republic of China

(PRC) is committed to combatting narcotics trafficking

and use. China is a major transit route for heroin from

neighboring Burma, Laos and Vietnam to the United

States and other overseas markets. Drug addiction,

which was effectively stamped out following the

founding of the PRC in 1949, is once again on the rise.

Thanks to China's expanding economy and increasing

openness to the outside world, narcotics consumption

within the PRC is growing. In addition, opportunities

for investment in China provide greater potential for

money laundering.

Chinese enforcement efforts continue to be vigorous

and were stepped up in 1994. Strong laws based on a

national directive issued in 1990 call for the death

penalty for many drug-related crimes. Hundreds of drug

criminals are executed in accordance with these laws

annually. Narcotics trafficking in Yunnan province,

which borders Burma, decreased in the latter part of

1994. The Chinese arrested major figures in two drug

trafficking groups based in Burma, the Kokang and the

Wa. Better surveillance of the Burmese border, improved

intelligence work, and better control of precursor

chemicals have also contributed to at least a temporary

decrease in trafficking in Yunnan. PRC counternarcotics

officials project no increase in national trafficking

figures over 1993 levels. The PRC has taken a strong

stand against official corruption, and has laws dealing

specifically with government officials who are found

guilty of the use, manufacture or delivery of

narcotics.

The United States and China do not have a bilateral

counternarcotics agreement in place. China has met, or

is actively seeking to meet, the goals and objectives

of the 1988 UN Convention, to which it is a party, by

continuing its efforts to enhance law enforcement

measures, public education, and international

cooperation.

Illicit opium cultivation exists in remote, often

roadless areas of Yunnan province and is suspected to

exist in scattered pockets in other parts of China. The

authorities are committed to eradicating opium

cultivation when it is detected. Yunnan province

cultivation is estimated at 1,965 hectares, capable of

yielding approximately 25 metric tons of opium gum.

Impediments to bilateral cooperation remain. The

Chinese frequently cite the 1993 U.S. court decision

blocking the forced return to China of a Chinese drug

trafficker (``goldfish case'') as an obstacle to U.S.-

China counternarcotics cooperation, but these same

officials state that they would like to expand

bilateral cooperation in the future.

Dominican Republic

The United States Government and the Government of

the Dominican Republic (GODR) maintained close,

effective counternarcotics cooperation in 1994, despite

tensions over the disputed Dominican presidential

election and over Haiti. The Dominican Republic

intensified its counternarcotics effort and improved

interagency/inter-service cooperation under the

leadership of the new director of the National

Directorate of Drug Control (DNCD). [[Page 12862]] GODR

personnel, working with U.S. law enforcement, made

several multi-hundred kilo cocaine seizures in 1994.

The GODR was especially helpful in arranging the return

of several major drug figures who were fugitives from

U.S. justice.

Threat assessments indicate an increased flow of

narcotics into the Dominican Republic from Haiti,

especially since the September 1991 coup in Haiti.

Maritime shipments from Panama are also increasing. The

DNCD and Dominican Navy, working in concert with DEA,

interdicted one such maritime shipment on November 22,

seizing nearly a metric ton of cocaine and uncovering a

major smuggling operation.

During 1994, a wide range of USG-financed

professional training (law enforcement, drug abuse

prevention, financial investigations, and canine

handling assessment) was provided to DNCD personnel and

other military and civilian officials. The GODR

complied fully with its commitments under the bilateral

counternarcotics assistance agreement.

The Dominican Republic became a party to the UN

Convention in late 1993 and has taken action consistent

with the goals and objectives of the UN Convention.

Additional legislation, however, is needed in areas

such as money laundering and asset seizure to enable

the GODR to comply more fully with the Convention. The

GODR has been active in the Inter-American Drug Abuse

Control Commission and the United Nations Drug Control

Program. It hosted the 1994 United Nations Heads of

Narcotics Law Enforcement Agencies Conference for Latin

America and will host the Latin American International

Drug Enforcement Conference in April 1995. It has

established cooperative relationships with a number of

other governments in the hemisphere, most recently

signing a bilateral drug cooperation agreement with

Venezuela.

The GODR still faces many challenges in

establishing an effective national anti-drug effort.

While it has taken steps to address narcotics-related

and other official corruption, corruption continues to

undermine GODR law enforcement efforts. Anti-drug

legislation, while strengthened, has serious flaws; in

the area of money laundering control, for example, the

Dominican legislature removed prison sentences, leaving

only moderate fines for bankers convicted of

involvement in laundering activities. The GODR will

resubmit the package in 1995 to correct this.

Ecuador

Ecuador is a bridge between the world's largest

supplier of coca leaf, Peru, and the world's major

processor of cocaine hydrochloride, Colombia.

Traffickers use Ecuador as a transit point to ship 30-

50 metric tons (mt) of cocaine per year to the United

States and Europe, as well as to smuggle chemicals into

Colombia for cocaine processing. Money launderers take

advantage of Ecuador's loose banking laws and extensive

offshore banking system to conceal the illicit nature

of their proceeds.

Ecuadorian judges are subject to trafficker

intimidation and subornation, which has obstructed

efforts to bring Cali-connected kingpin Jorge Reyes

Torres to justice. Corrupt judicial practices have

precluded indictments in Reyes Torres-related cases,

specifically the Banco De Los Andes case. Stronger

resolve by the Government of Ecuador (GOE) to confront

judicial corruption will be necessary to successfully

conclude the Jorge Reyes Torres case and other

counternarcotics initiatives.

Ecuador made significant strides this year toward

complying with the 1988 UN Convention, to which it is a

party. The government has taken steps to generally meet

the goals of bilateral counternarcotics agreements with

the USG on enforcement, demand reduction, and

prosecutions of major narcotics traffickers. The GOE

enacted a law based on OAS model legislation on asset

sharing and completed a study to determine the amount

of licit chemical use in Ecuador. [[Page 12863]]

However, the Ecuadorians should strive to control

trafficking in precursor and essential chemicals by

creating an effective monitoring and control system

based on the results of the completed study. Ecuador is

making efforts to control money laundering by involving

the police, Superintendency of Banks, and the National

Drug Council (CONSEP) in collaborative investigations.

The USG has provided Thrush aircraft to identify

illicit crop cultivation in Ecuador. None was

discovered in 1994, but search flights will continue in

1995. Ecuador is progressing in implementing its

National Drug Strategy. Ecuador signed an asset-sharing

agreement with the USG in 1994. A limited amount of

asset-sharing has already taken place based on this

agreement. The Ecuadorians used the funds for law

enforcement purposes. Ecuador continues to work toward

sharing the remainder of $3 million in assets forfeited

in the Reyes Torres investigation.

The USG counternarcotics assistance program helps

Ecuador to reduce money laundering, control essential

chemicals, and buttress the judiciary's ability to

preserve democracy by enforcing the rule of law.

Guatemala

The Government of Guatemala (GOG) has successful

programs to reduce demand, cultivation, and transit of

illicit narcotics.

With USG technical support, specially trained units

of the Guatemalan Treasury Police conduct ongoing

eradication that has reduced opium poppy cultivation to

minimal levels. Persistent attempts to revive poppy

cultivation are the focus of a continuing suppression

program which includes detection and eradication.

Guatemala's hundreds of small, unmonitored

airfields connected by good roads appear to have almost

been forsaken by traffickers moving cocaine in small

planes to the United States from South America. In

response to DEA's Operation Cadence and GOG vigilance

in-country, traffickers are increasingly transporting

drugs overland and by sea. During 1994, over 1.5 metric

tons of cocaine were seized outside Guatemala as a

result of Guatemalan-based intelligence. Almost two

metric tons were seized in-country.

The GOG's aggressive investigation, interdiction

and eradication operations are consistent with the

goals of the 1988 UN Convention, to which Guatemala is

a party. However, Guatemala lacks legislation needed to

implement the Convention in areas such as money

laundering and essential chemical control. Money

laundering has not been criminalized in Guatemala and

is not considered a significant problem.

Corruption, especially in the judicial branch, is a

major problem in Guatemala. The GOG has begun to focus

attention on corruption, particularly in the courts

where several judges were relieved of their positions

for releasing prisoners under allegedly questionable

circumstances. The GOG does not, as a matter of policy

or practice encourage or facilitate illicit narcotics

production or distribution, or laundering of drug

proceeds.

Guatemala continues to accomplish the goals of its

bilateral narcotics agreements with the USG for drug

eradication, interdiction, and demand reduction. The

USG is working with the GOG to implement cost

reductions while retaining the high level of

effectiveness demonstrated by Guatemala's

counternarcotics programs.

Haiti

Because of its ideal geographic location for

smuggling, the island of Hispaniola has long been a

significant transit point for cocaine destined for U.S.

and European markets. The unstable political situation

and weak government institutions in Haiti facilitated

narcotics trafficking for many years. The opportunities

for traffickers to take advantage of these conditions

were even greater after the September 1991 coup which

ousted President Jean Bertrand Aristide. Multi-hundred

kilo and multi-ton shipments of cocaine

[[Page 12864]] transited the country frequently. The

USG has received credible, but unsubstantiated, reports

for many years that the Haitian military was involved

in assisting traffickers. However, the USG was unable

to determine the veracity of reports that the de facto

regime or the military hierarchy secretly condoned such

activity.

Until the legitimate government of Haiti was

restored in September 1994, the USG maintained only

limited counternarcotics cooperation with the de facto

regime in Haiti, largely through the Haitian Center for

Information Coordination (CICC), which the United

States helped establish in 1987. The de facto

government undertook some drug enforcement efforts and

made a number of cocaine seizures in the 2-60 kg range

in 1993-1994, some in cooperation with USG law

enforcement personnel from the U.S. Embassy. However,

suspected multi-ton shipments transited Haiti unimpeded

until the country was subjected to an international

maritime blockade in April 1994.

Drug trafficking was among the six issues President

Clinton listed in early 1994 as key areas of U.S.

concern relating to Haiti. Growing drug trafficker

influence in Haiti may well have impeded the return of

democracy, sound administration of justice and economic

recovery. The Aristide administration, working with the

international community, has initiated an extensive

administration of justice and police reform program.

Former military and police personnel suspected of

involvement in drug trafficking are being excluded from

the new civilian police corps and the reorganized

military.

This massive and critical reform is the most

important step that the Government of Haiti can take at

this stage to attack the narcotics problem at its core.

Since the restoration of the Aristide government, the

USG-led Multinational Force and the International

Police Monitors have played a large role in law

enforcement in Haiti. These efforts have included

control of the major ports and airfields, and

supervising and monitoring the interim Haitian police.

This, and all other relevant activity, is undertaken

with the full concurrence of the Haitian government.

The Aristide government cooperated completely with the

United States in all aspects of this effort.

In the future, the restored Aristide government

will need to take a number of other measures to address

drug trafficking more effectively: it should become a

party to the 1988 UN Convention, establish a national

council to coordinate Haitian counternarcotics

activities, implement money laundering controls, and

forcefully address the problem of narco-corruption

within the police and military forces.-

Hong Kong

Hong Kong is not a party to the 1988 UN Convention,

but the territory's counternarcotics efforts

effectively comply with most of the goals and

objectives of the agreement. Hong Kong takes serious

and effective measures to combat narcotics trafficking.

Nevertheless, Hong Kong remains an important

transshipment center for heroin from Southeast Asia.

Due to enforcement efforts and changes in trafficking

patterns, the volume of drugs passing through Hong Kong

seems to be dropping. The amount of heroin detected

transiting Hong Kong for Taiwan, Japan, and the United

States fell during 1994 and heroin arriving in Hong

Kong is increasingly intended for domestic consumption.

The USG is not aware of any narcotics-related

corruption among senior government or law enforcement

officials in Hong Kong. Hong Kong has a comprehensive

anti-corruption ordinance that is effectively enforced

by an independent commission that reports directly to

the Governor.

Hong Kong continues to serve as a major center of

money laundering of drug proceeds by local and regional

groups trafficking in heroin. Passage of the new

Organized and Serious Crimes Ordinance improves the

Hong Kong Government's (HKG) ability to prosecute money

launderers. The HKG is in the final stages of drafting

amendments to the Financial Recovery [[Page 12865]] of

Proceeds Act to conform more fully with the Financial

Action Task Force recommendations and the UN

Convention.

There is a bilateral narcotics agreement, which

facilitates asset freezing and asset forfeiture. The

Hong Kong Government and the USG have worked closely

together on U.S. extradition requests, although there

is some concern that overly strict application of Hong

Kong evidentiary requirements has made extradition

difficult in some cases. Overall bilateral cooperation

on drug enforcement efforts is very good.

India

India is the world's largest producer of licit

opium and the largest supplier to the U.S.

pharmaceutical industry. Opium is diverted from legal

production, and there is substantial illicit opium

cultivation in certain districts. India is also a

transit route for heroin from nearby producing

countries, and an exporter of methaqualone and heroin

precursor chemicals en route to the Middle East,

Africa, Europe and North America.

As a licit producer of opium, India must meet an

additional certification requirement. In accordance

with Section 490(c) of the Foreign Assistance Act, it

must maintain licit production and stockpiles at levels

no higher than those consistent with licit market

demand and take adequate steps to prevent significant

diversion of its licit cultivation and production into

illicit markets and to prevent illicit cultivation and

production.

The United States and India conducted an intensive

dialogue on narcotics issues, with meetings of a Joint

Working Group and a 1994 visit by Dr. Lee Brown. With

U.S. encouragement, India maintained during 1994 a

promising narcotics dialogue with Pakistan on cross-

border smuggling of heroin and precursor chemicals,

despite poor bilateral relations in other areas.

Over the past several years, the Government of

India (GOI) has taken steps to reduce licit opium

stockpiles and the potential for diversion of licit

opium to the illicit market. The total area licensed

for cultivation was kept at about 14,000 hectares (ha)

in the 1993/4 crop season and physical controls on

harvested opium were enhanced. In 1994, in the course

of taking the first physical inventory in many years,

it became clear that real stocks on hand were far lower

(by 800 metric tons) than official inventories and that

supplies were insufficient to fulfill 1994 contractual

requirements. An International Narcotics Control Board

audit described the failure to have maintained adequate

inventory records as a violation of the 1961 Single

Convention on Narcotics Drugs. No adequate accounting

of several hundred tons of the discrepancy between book

stocks and real stocks has been made. New storage and

accounting controls put into place in 1994 should

reduce potential for diversion from licit stocks.

To combat large-scale diversion by growers, the GOI

has slowly increased minimum qualifying yields (MQY) on

licensed growers. MQY was raised from 40 kg per ha to

43 kg/ha for the 1994/5 growing season. An unreleased

GOI crop survey reportedly suggests that MQY could be

raised by a substantially greater amount. The United

States raised with India the need for a scientific crop

yield survey in the near future so that MQY can be

raised to a level high enough to prevent substantial

diversion to the illicit market.

To cope with the 1994 opium shortfall and rebuild

an appropriate reserve stockpile, the GOI decided in

1994/5 to expand the cultivated area to about 24,000

hectares, but to improve security by concentrating

production in a more limited region, granting

additional hectarage to farmers with a history of high

yields, and delicensing some 40,000 farmers whose opium

deliveries to the GOI fell below the MQY. This

expansion in cultivated area raises concern about the

potential for increased diversion.

The Government of India cooperates well with the

United States on individual cases of trafficking. There

has been little success, however, in cracking major

smuggling rings, pointing up a continuing lack of

resources and personnel, including lack of

intelligence-gathering capability and high-level

political [[Page 12866]] support, allocated to

narcotics enforcement. There were no seizures of heroin

laboratories in 1994. The United States has no specific

knowledge of any senior GOI officials encouraging or

facilitating trafficking or money laundering.

Allegations of corruption among lower-level judicial

and law enforcement personnel are widespread, but

successful prosecutions rare.

Illicit cultivation of opium is concentrated in the

state of Jammu and Kashmir, in remote areas of Uttar

Pradesh, and in other areas where political

disturbances and inadequate enforcement resources kept

GOI eradication efforts to a minimum. The GOI cited

bureaucratic difficulties in turning down a U.S. offer

of partial U.S. funding for an aerial crop survey in

1994. Illicit opium production is estimated to be in

the range of 80 metric tons on 5,500 hectares, with

reported eradication of about 100 hectares.

India is a party to the 1988 UN Convention and has

made some progress toward precursor chemical control

and law enforcement cooperation. However, India has not

yet passed asset seizure legislation or implemented

recommendations of the Financial Action Task Force.

Although India did not sign a bilateral agreement with

the United States in 1994, the goals of a 1993

agreement aimed at improving security at the opium

factories are being achieved.

India fulfilled the requirement of FAA Section

490(c) to maintain licit production and stockpiles at

levels no higher than consistent with market demand.

The GOI addressed a number of the specific U.S.

concerns expressed in 1994 bilateral narcotics

consultations, which focussed on better controls on

licit opium production. For 1994, India's efforts to

impose necessary controls on licit opium and

cooperation with DEA and other endorsement agencies

justify continued certification. In 1995, significant

additional steps will need to be taken if full

certification is to continue. Areas of outstanding

concern include: quantifying real licit opium yields;

revising MQY to appropriate levels; eradicating illicit

cultivation; taking effective action against major

narcotics trafficking syndicates and kingpins; and

implementing effective measures on money laundering and

asset seizure.

Jamaica

Jamaica is both a major producer of marijuana and a

flourishing transshipment site for South American

cocaine en route to the United States, The Bahamas,

Canada and Europe. There is scant evidence of money

laundering at this point. Jamaica is not yet a party to

the 1988 UN Convention. However, the Government of

Jamaica (GOJ) took adequate steps during 1994 to

fulfill the goals and objectives of both the Convention

and U.S.-Jamaican counternarcotics agreements.

The GOJ made progress during 1994 in strengthening

its narcotics control effort. Jamaica's Forfeiture of

Assets Act, which allows for criminal but not civil

forfeiture, went into effect in August. The GOJ also

amended its Dangerous Drugs Act to provide for tougher

fines and longer imprisonment for drug offenders. The

GOJ continued work on money laundering control

legislation and expects to present it to Parliament

before April 1995. With the adoption of money

laundering legislation, Jamaica will have the full

range of implementing legislation for the 1988 UN

Convention, which it then intends to ratify. In 1994,

the GOJ submitted to Parliament enabling legislation to

permit Jamaican ratification of the U.S.-Jamaica Mutual

Legal Assistance Treaty, and the GOJ expects passage

soon.

Throughout 1994, the GOJ continued its excellent

cooperation on extradition. GOJ drug enforcement

agencies also continued to cooperate well with the U.S.

Drug Enforcement Administration (DEA). These agencies

have recognized the need to bring major traffickers to

justice and break up trafficker networks and are taking

appropriate steps. Recognizing the necessity of prompt

prosecution and conviction, the GOJ has begun to work

with the USG on judicial reform, the objectives being

to improve the flow of cases through Jamaica's court

system and obtain more convictions. Although we know of

no GOJ prosecutions of officials for corruption in

1994, the GOJ, [[Page 12867]] and especially the Police

Commissioner, has attempted to de-politicize the police

force and control corruption, largely by transferring

suspect personnel. The Commissioner fully supported the

USG's revocation of the visas of several police

officers suspected of drug trafficking, as permitted

under U.S. law. The GOJ's major demand reduction

program, a UNDCP-funded project, is not making

appreciable progress at this time due to internal

problems within the National Council on Drug Abuse.

During 1994, the GOJ revitalized its marijuana

eradication program. In November, the Jamaica Defense

Force (JDF), Jamaica Constabulary Force (JCF) and DEA

cooperated to estimate the total amount of illegally-

grown marijuana. The JDF and JCF quickly organized a

task force to eradicate the marijuana detected during

the estimation exercise. During 1994, the GOJ

eradicated 692 hectares of marijuana, a 52 percent

increase over 1993 eradication.

Laos

Laos is not a party to the 1988 UN Convention, but

has drafted a comprehensive drug control program that

commits it to the goals of the Convention. As part of

this program, the government has pledged to become a

party to the Convention no later than the year 2000. A

letter of agreement on counternarcotics signed in 1989

is the basis for ongoing drug control projects funded

by the USG. These projects consist of an alternative

crop development project and a law enforcement support

project. In 1994, police units supported by the law

enforcement project became operational and began to

make arrests. Road building, dam site preparation and

other basic development work was undertaken in the crop

development project.

Based on USG estimates, Laos remains one of the

world's major producers of opium, although production

has been on a declining trend since 1990. Due primarily

to weather, opium cultivation and yield fell sharply

during the 1993/4 growing season. USG estimates for the

1994 crop show a decrease in cultivation of

approximately 29 percent, from 26,040 hectares in 1993

to 18,520 in 1994. Production of opium gum dropped even

more significantly, from about 180 metric tons in 1993

to only 85 metric tons in 1994, a decline of 53

percent. Opium cultivation is not illegal under

existing statutes.

In the past year, the Lao government has moved

forward in its anti-narcotics efforts through

continuation of both bilateral and multilateral

programs. Bilateral agreements signed with the USG

continued the crop control project in Houaphan Province

and the law enforcement project. An additional crop

control project has been approved, which will be

implemented by Norwegian Church Aid/UNDCP. An active

UNDCP program also operates an alternative development

program aimed at opium crop control. The Lao special

counternarcotics unit, which was formed as a result of

the 1992 bilateral USG-Lao law enforcement project

agreement, is now functioning and had some successes in

1994 in heroin interdiction efforts. Lao customs has

worked closely and effectively with the special unit in

several significant seizures of illicit drugs and in

follow-on investigations.

There have been allegations of military and

official collusion in narcotics production and

trafficking, but there is no solid evidence of official

corruption. Lao government employees receive low pay,

making them susceptible to corruption and low-level

corruption is assumed to exist. There is no clear

evidence that the Lao government as a matter of policy

encourages or facilitates the illicit production or

distribution of drugs or the laundering of drug money.

Malaysia

Malaysia ratified the 1988 UN Convention in 1993

and has worked cooperatively with the USG, as well as

taking adequate steps on its own, to fulfill the

Convention's goals and objectives. The USG and the

Government of Malaysia (GOM) continue strong

antinarcotics cooperation. Several important steps

forward in bilateral cooperation were made this year.

The two govern [[Page 12868]] ments renewed efforts to

collect and analyze intelligence on international drug

trafficking, and the Drug Enforcement Administration

and the Royal Malaysian Police restored their

cooperative relations. A bilateral agreement to assist

in demand reduction programs is being implemented

effectively. Negotiations for a new U.S.-Malaysia

extradition treaty are proceeding.

The Government of Malaysia considers the narcotics

problem a priority issue. Malaysia pursues an

aggressive enforcement policy under one of the most

severe drug laws in the world. A well-funded

counternarcotics program emphasizes both enforcement

and demand reduction.

Illicit heroin processing, heroin trafficking, and

growing addiction continue to be serious problems in

Malaysia. Traffickers smuggle heroin base into Malaysia

from Thailand and Burma and refined heroin continues to

transit Malaysia en route to the United States and

other Western markets.

During 1994, there were no notable cases of

corruption involving narcotics. However, Penang, where

Chinese triad gangs control most narcotics trafficking,

is still considered to be vulnerable to corruption and

gang members are believed to be involved in attempts to

engage law enforcement officials in various forms of

corruption. Corruption continued to be addressed by law

enforcement agencies. The Royal Malaysian Police

continued to take precautions against potential

corruption by a careful selection of officers for its

anti-narcotics unit and frequent transfers within the

unit. Although some law enforcement officials have been

charged with corruption in the past, there has been no

evidence of corruption among senior officials.

Despite severe legal penalties for both drug use

and trafficking, drug trafficking remains a major

problem. Illicit narcotics generally continue to be

available at stable prices for the local addict

population.

There is no evidence that Malaysia is a significant

center for money laundering now, but the Malaysian

government is concerned that a new offshore financial

center may be vulnerable to money laundering activities

and is looking for ways to head off this threat.

Mexico

The United States Government and the Government of

Mexico (GOM) maintained close counternarcotics

cooperation in 1994, the final year of the Salinas

administration, in keeping with the commitments of the

bilateral agreement on cooperation in combatting

narcotics trafficking and drug dependency (Chiles

Amendment Agreement). Mexico continued its multi-

faceted national campaign against production,

trafficking and abuse of illegal drugs, meeting many of

the goals and objectives of the 1988 UN Convention.

However, the results of this campaign were mixed, with

cocaine seizures falling to the lowest level of

Salinas' tenure (about 21 mt) and few major traffickers

arrested and prosecuted. Narco-corruption remains a

serious impediment to effective drug law enforcement.

Eradication of opium poppy and cannabis also declined

substantially. One factor causing the decline may have

been the diversion of military personnel and resources

to handle the political uprising in the state of

Chiapas. On the positive side, heroin seizures

increased to about 300 kilograms, more than the

previous five years combined. Seizures of precursor and

essential chemicals and destruction of clandestine

laboratories likewise increased. Money laundering,

particularly the large-scale conversion of cash from

the United States, remains a major problem in Mexico,

which the GOM has not yet effectively curbed.

The decline in cocaine seizures was due to a number

of factors. Much of the Mexican Attorney General's

Office was devoted to investigating the assassinations

of the leading Presidential candidate and the Secretary

General of the ruling PRI party. Also, to avoid

detection by U.S. and Mexican air interdiction systems,

traffickers increased the use of fast moving cargo

jets, each transporting huge quantities of cocaine into

Mexico. Only one of these aircraft was seized; the U.S.

and Mexican governments are sharing intelligence and

upgrading equipment to address this

situation. [[Page 12869]]

Despite commendable efforts by the Salinas

administration to tackle endemic corruption with the

Mexican police and judicial systems, including hundreds

of dismissals and numerous prosecutions, the measures

taken did not turn the tide. Anti-corruption actions,

as well as efforts to build strong anti-drug

institutions, were undermined by narco-influence (and

money) and frequent personnel turnovers, especially in

1994.

The actions taken by newly-inaugurated President

Ernesto Zedillo are encouraging. Zedillo stated

publicly that narcotrafficking presented the single

greatest threat to the national security of Mexico.

Within a few weeks of taking office, he promulgated a

sweeping judicial reform package, which was

overwhelmingly approved by the Mexican Congress. The

Zedillo administration has also pledged to pursue

institutional reform of Mexican law enforcement

agencies to counter official corruption and to

strengthen legal controls over money laundering and

precursor chemicals.

Panama

Panama is a major money laundering center, a

producer of coca leaf, and a transit point for cocaine

destined for the United States.

For most of 1994, Panama was preoccupied by

election year politics and the transition of

administration from President Endara to President Perez

Balladares. Nonetheless, there were significant policy

and legislative initiatives on the counternarcotics

front.

Two important counternarcotics achievements were

enacted by the Endara administration before it left

office: the establishment of cross-border currency

controls and the passage of Law 13 which expanded the

Government of Panama's (GOP) ability to investigate and

prosecute narcotics-related crime.

Since taking office in September 1994, the

administration of Perez Balladares acknowledged that

narcotrafficking and narcotics-related money laundering

threaten Panama's political and economic stability. In

an effort to prevent abuse of incorporation laws, the

new President issued a decree mandating attorneys to

follow ``know-your-customer'' practices. He then

established a special commission to develop money

laundering controls. The resulting policy statement

prescribed a number of far-reaching changes. For

example, it criminalized drug-related money laundering,

mandated suspicious transaction reporting, and extended

cash transaction reporting obligations to non-financial

institutions. Moreover, Panama's new controls include

strengthening the regulatory authority of the National

Banking Commission and developing a financial analysis

center, an investigations unit, and a prosecutor's

office to develop cases of financial crime.

Panama was generally successful in meeting the

goals and objectives of the 1988 UN Convention and

bilateral counternarcotics agreements with the United

States. The GOP's aggressive eradication efforts

continued, and interdiction operations showed a marked

improvement. To combat money laundering and corruption,

the administration of Perez Ballardares moved rapidly

on the policy front but was unable to begin

implementation of controls before the end of the year.

Several middle- and low-level officials were

investigated for corruption and, in a few cases,

dismissed. The GOP does not, as a matter of policy or

practice, encourage or facilitate illicit narcotics

distribution, corruption, or laundering of drug

proceeds.

In 1994, Panama developed a framework on which it

can wage a campaign against traffickers and money

launderers. In 1995, the measure of the GOP's

counternarcotics programs will be the degree to which

it builds upon that framework by implementing controls,

seizing assets, and prosecuting offenders.

Taiwan

Changing drug trafficking patterns in East Asia

have created a growing heroin trafficking problem in

Taiwan. Domestic demand for heroin has risen sharply,

and Taiwan has also emerged as an important center for

the transshipment of heroin. Over the past three or

four years, Taiwan authorities [[Page 12870]] have made

drug enforcement a priority and heroin seizures have

risen sharply, climbing to over one metric ton in 1993.

Taiwan is not a party to the 1988 UN Convention,

but the vigorous drug enforcement campaign mounted by

the Taiwan authorities demonstrates substantial

progress toward meeting some of the goals of the

Convention, and shows Taiwan is taking adequate steps

on its own to address the problem of heroin

trafficking. However, legislation and agreements do not

yet exist to implement the provisions of the Convention

regarding asset forfeiture, controlled delivery,

extradition, mutual legal assistance and illicit

traffic by sea. Taiwan authorities have expressed an

interest in developing agreements in some of these

areas. There were no reported incidents of police

corruption involving drugs. There is no evidence of

senior Taiwan officials being involved with the illegal

drug trade.

Working cooperation between the Drug Enforcement

Administration and both the Taiwan National Police and

the Ministry of Justice Investigation Bureau has been

good. Efforts are being made to enhance enforcement

cooperation and Taiwan authorities have expressed

interest in entering into a bilateral counternarcotics

agreement under the auspices of the Taipei Economic and

Cultural Representative Office in the United States and

the American Institute in Taiwan.

Thailand

Thailand is the main transit route for the illicit

drug production from the Golden Triangle. Successful

eradication and development efforts have reduced opium

cultivation far below the amounts grown in the

neighboring countries of Burma and Laos. Due to the

efforts of the Thai Government authorities, 1994

cultivation of illicit opium was only 2,110 hectares,

yielding 17 metric tons of opium.

Drug enforcement cooperation is very good and

improved even further in 1994. In a precedent-setting

cooperative law enforcement operation, the Royal Thai

government in November 1994 arrested ten major

traffickers under indictment in the United States who

form part of drug lord Khun Sa's Shan United Army (SUA)

infrastructure and proceedings to extradite the

fugitives to the United States are now pending in Thai

courts. During 1994, Thailand also took action to close

off its northern border, reducing the flow of supplies

and other logistical support to the SUA in Burma.

Efforts continue to enhance judicial cooperation and

the Thai Cabinet has just moved to permit the courts to

consider the extradition of a former Thai Member of

Parliament under indictment in the United States on

large-scale marijuana smuggling charges.

Thailand is a leader in regional drug control

programs and shares its expertise through agreements

with neighboring countries and the United Nations and

through training and cooperative enforcement

activities.

Thailand remains vulnerable to money laundering due

to the relatively low level of sophistication of the

Thai banking system and the presence of an active

quasi-legal non-bank financial system. Thailand is now

in the process of drafting money laundering

legislation. Drug-related corruption of some

politicians and police officials remains a problem.

A bilateral agreement with the United States

supports law enforcement cooperation and crop control,

including eradication of opium poppies and Thailand has

performed well under that agreement. Thailand is not a

party to the 1988 UN Convention, but is a party to the

1961 Single Convention on Narcotic Drugs, its 1972

Protocol, and the 1971 Convention on Psychotropic

Substances.

Venezuela

Venezuela is a major drug transit country.

Traffickers ship an estimated 100-200 metric tons (mt)

of cocaine annually through Venezuela. Precursor and

essential chemical trafficking and money laundering are

also serious problems in Venezuela. The Venezuelan

judiciary's marginal ability to resist

[[Page 12871]] the corruptive influence of traffickers

has hampered counternarcotics efforts in that country.

Venezuela has taken adequate steps to meet the

goals and objectives of the 1988 UN Convention, to

which it is a party, especially in its vigorous

response to illicit crop cultivation. Venezuela quickly

eradicated in 1994, with USG assistance, over 1,000

hectares of coca and opium poppy cultivation in Zulia

state near its western border with Colombia. The

government generally meets the goals of bilateral

counternarcotics agreements with the USG. In addition,

the Venezuela-Colombia border agreement to keep

Venezuela free of narcotics traffickers and the

successful eradication effort indicates serious

Government of Venezuela (GOV) interest in preventing

traffickers from making incursions into Venezuela.

Seizures of cocaine increased in 1994 to 5.0 mt,

indicating both more trafficker use of Venezuela and

better interdiction of cocaine by Venezuelan

counternarcotics forces. Venezuela's bilateral

agreement with the United States to conduct

counternarcotics air interdiction operations reflects

invigorated cooperation on strategic initiatives.

In 1994, the Guardia Nacional (GN) seized 5.0 mt of

cocaine and 15 kilograms (kg) of heroin. However, the

recent arrests of two GN members for trafficking 250 kg

of cocaine through Maiquetia Airport evinces corruption

problems at lower levels in the organization. The GN

quickly removed the two soldiers and began an

investigation of the unit.

Although President Caldera has spoken out strongly

against narco-corruption, most recently at the December

Summit of the Americas, corruption in Venezuela remains

a serious problem. A convicted trafficker, Larry Tovar

Acuna, fled to Colombia after fraudulently obtaining a

pardon, and the Venezuelan government made an

extradition request to Colombia for Tovar. In addition,

a corrupt judge released members of the Sinforoso

Caballero money laundering organization. The Venezuelan

Supreme Court reopened the case and investigated the

judge.

Venezuela has not yet approved its draft national

counternarcotics strategy and has not begun to control

precursor and essential chemicals. With more attention

from President Caldera, Venezuela's compliance with

bilateral agreements on chemical control and money

laundering measures should improve.

Vietnam

The Socialist Republic of Vietnam has a significant

opiate abuse problem and is emerging as a location for

drug trafficking. Illicit opium production exceeded

1,000 hectares, but the precise extent of cultivation

remains unclear. Estimates have ranged as high as

14,000 hectares during the 1992/3 growing season. The

government is undertaking a serious eradication effort

and has pledged to eliminate opium cultivation, which

exists primarily in relatively inaccessible regions of

the north.

Opiate addiction in urban areas is a serious

problem. The government, with the aid of the United

Nations International Drug Control Program (UNDCP), is

formulating a drug control plan to combat both

production and consumption in Vietnam. Economic reforms

and the growing overall volume of the Southeast Asian

heroin trade have made Vietnam an emerging transit

point for heroin destined for Taiwan, the United States

and other locations.

Corruption is a complicating factor in domestic

enforcement efforts, but there is no evidence that the

government tolerates, condones or profits from drug

trafficking activity.

The government is not a party to the 1988 UN

Convention, but is developing a program to work toward

fulfillment of the goals and objectives of the

Convention. This program is embodied in the drug

control plan being drafted with the assistance of

UNDCP. In coordination with UNDCP, the government is

drafting legislation that meets the goals of the

Convention. [[Page 12872]]

There is no bilateral counternarcotics agreement

between the United States and Vietnam. However,

informal discussions have begun between representatives

of the Socialist Republic of Vietnam and the USG about

counternarcotics cooperation and the Vietnamese

response has been positive.

VITAL NATIONAL INTERESTS JUSTIFICATION

Bolivia

Bolivia is the world's second largest producer of

coca leaf after Peru and the second largest producer of

cocaine after Colombia. Most of the cocaine refined

from Bolivian coca leaf is consumed in the United

States.

Bolivia was highly successful in counternarcotics

law enforcement operations during 1994. The Government

of Bolivia (GOB) conducted four major operations

designed to block trafficker movements, seized two

large cocaine HCl laboratories, and arrested major

traffickers with links to the Medellin drug mafia. GOB

forces foiled Colombian traffickers and their Bolivian

accomplices attempting a prison break at a maximum

security facility and arrested the prison warden for

complicity in the plot. Throughout 1994, the GOB

continued its probe of alleged trafficker ties to

former President Jaime Paz Zamora and members of his

Movement of the Left (MIR) political party. In June,

the Bolivian Congress removed two Supreme Court

justices for corruption.

President Sanchez de Lozada is seeking to develop a

strategy to eliminate illegal coca from the country

without the use of measures he considers to be

divisive, such as forced eradication. In 1994, however,

the GOB made no measurable progress toward creating a

plan to carry out this strategy.

In February 1994, the GOB briefly undertook a

campaign of forced eradication which resulted in a

violent reaction by coca growers. Voluntary,

compensated eradication dropped off sharply and new

plantings increased, resulting in a net increase in the

area of coca under cultivation.

The Sanchez de Lozada administration has supported

USG efforts to extradite drug traffickers, but such

efforts stalled in the Bolivian Supreme Court in 1994.

In early 1995, however, prominent trafficker Jose

Faustino Rico Toro was declared extraditable. Thirty-

five other extradition requests by the United States

are pending with Bolivia. The GOB has declined to sign

an extradition treaty negotiated in 1990, but in early

1995, the Sanchez de Lozada administration proposed a

new draft treaty, which USG officials are reviewing.

It is in the vital national interests of the United

States to maintain and increase the level of

cooperation with Bolivia, the world's second largest

coca and cocaine producer. Denial of certification

would likely terminate much of Bolivia's multilateral

development bank assistance, which would have an

extremely harmful effect on the Bolivian economy. It

would reduce significantly the resources available to

the GOB to combat narcotics trafficking and would

foster conditions in which more Bolivians would be

driven to engage in illicit coca cultivation and

trafficking.

Because the World Bank and Inter-American

Development Bank are Bolivian's largest aid donors, USG

opposition to loans to Bolivia by those institutions

would result in strident calls within Bolivia for the

GOB to cease its counternarcotics cooperation with the

USG. Economic instability could lead to a loss of

confidence throughout the country and thereby serve to

undermine Bolivia's still-fledging democratic

institutions. Should Bolivia's current democratically-

elected government be followed by an authoritarian

regime, narcotraffickers might gain a strong foothold,

as they did in the corrupt dictatorships of the early

1980's. Preserving and promoting democracy in Bolivia

is in the U.S. national interest of enhancing democracy

throughout the Western Hemisphere.

In 1994, although the GOB's efforts and cooperation

with the USG on interdiction and on broader political

issues were substantial, its overall

[[Page 12873]] counternarcotics efforts were not

adequate to meet the goals and objectives of the 1988

UN Convention. Nevertheless, the risks posed to vital

U.S. national interests from the possible consequences

of terminating U.S. assistance, as noted above, greatly

outweigh the risks posed by the lack of complete GOB

cooperation on counternarcotics. With recent positive

signs of action from the GOB, the USG will enter into

further discussions to secure commitments for action in

key areas.

Colombia

In 1994, Colombia remained the world's largest

supplier of cocaine and the source of virtually all the

cocaine imported into the United States. There are

currently more than 111,000 acres (45,000 hectares) of

coca being cultivated, a 13.3 percent increase over

1993 and, if such cultivation is not contained and

crops are not eradicated, Colombia could soon surpass

Bolivia as the second largest source of coca after

Peru. Colombia is also a significant supplier of heroin

and one of the largest cultivators of opium poppy in

the world, along with Burma, Afghanistan and Laos.

Recent data indicate that after having been suppressed

over the last few years, Colombia's marijuana

cultivation and export to the United States is again

increasing. The expected diminution in the movement and

flow of narcotics originating in Colombia as a result

of the destruction of the Medellin syndicate in 1993

did not materialize. It is apparent that the removal of

Pablo Escobar and his drug empire from the Colombia

narcotics scene only benefited the now-dominant

syndicate headquartered in the city of Cali.

During 1994, the USG and the Government of Colombia

(GOC) collaborated on a number of fronts against the

scourge of narcotics trafficking in both countries. The

GOC had some successes. GOC performance on a number of

critical issues, however, was inadequate. Among the

successes attained by the GOC were ratification of the

1988 UN Convention which entered into force for

Colombia in September 1994, the legalization of the

herbicide glyphosate for use against coca cultivation,

the defeat of a bill in Congress supported by narco-

traffickers that would have diluted the existing

illicit enrichment law, the indictment of Miguel

Rodriguez Orejuela, and an aerial eradication campaign

against illicit cultivation, which the GOC has pressed

in the face of large-scale protests by the cultivators.

Colombia remains the only producer of coca currently

permitting aerial eradication of illegal crops.

Individual police and other officials operating at

the ground level show considerable determination to

bring narcotics traffickers to justice. Sporadic and

ambivalent support by some quarters of the Colombian

political establishment prevents significant damage to

the Colombian drug syndicates. In 1994, the GOC took no

legislative steps to reverse the 1993 revision of the

criminal procedures code which made it more difficult

to bring mid-level and senior syndicate heads to

justice. As a result, following the trend set in 1993,

there were no arrests, incarcerations, or fines imposed

on such traffickers. In addition, a number of

previously convicted traffickers were able to benefit

from significant reductions in their sentences pursuant

to Colombia's woefully lenient sentencing laws. The

GOC's inability to protect and use information provided

to them by the U.S. Justice Department has made

impossible a full resumption of our previous law

enforcement evidence-sharing relationship. The GOC has

been informed that evidence obtained in the United

States will not be provided for any new criminal cases

pending a successful resolution of old cases for which

we have provided evidence.

In 1994, total drug seizures through interdiction

efforts were above those of 1993 but did not reach the

levels accomplished in 1991 (86.35 mt) as the USG had

recommended to the GOC. Performance on eradication has

improved, but results to date have not met

expectations. Even with increased USG-provided air and

herbicide assets, the amount of opium poppy eradicated

was almost 50 percent less than in 1993. As for coca

the numbers are impressive (4,500+ hectares vs. 793 ha

in 1993). They might have been [[Page 12874]] greater

had not local grower protests temporarily brought the

program to a near halt in December.

In excess of 15,000 active criminal corruption

investigations have been filed by the Attorney General

against government officials, including 21 Colombian

members of Congress. In 1994, there were no senior

government officials indicted for corruption. Although

Colombia and the United States in 1980 signed a Mutual

Legal Assistance Treaty, Colombia has failed to ratify

the treaty, and it has not entered into force. The

Colombian Congress did not pass bills introduced by the

Samper administration to counter money laundering

activities and asset retention by illegal enterprises

and those who participate in them. There was

insufficient progress to detect and remove those

corrupt officials primarily involved in

counternarcotics efforts. There continues to be a

problem with drug syndicate control of sovereign

territory, such as San Andres Island.

The performance of two successive governments of

Colombia during 1994 on the counternarcotics front did

not meet the expectations agreed upon between our

governments in numerous official and non-official

meetings on the subject. Certain performance criteria

were set out with the GOC in order to advance our joint

commitments to this problem. Despite a national

election and promises by the new government, Colombia

did not meet these performance criteria nor did it take

adequate steps on its own to achieve full compliance

with the goals and objectives established by the 1988

UN Convention. As a result, the activities of the

Colombian drug syndicates continue to ensure that the

flow of cocaine, heroin and marijuana from Colombia to

the United States remains undiminished.

There was a demonstrable absence of support by some

quarters of the political establishment to buttress the

gains achieved by GOC institutions operating at the

ground level. There were no efforts made in the areas

of judicial reform, capture and incarceration of

syndicate heads, or the strengthening of executive

institutions to counter the successful efforts of the

trafficking syndicates. Lack of action by the Congress

on GOC-introduced legislation also remains a problem.

Vital U.S. national interests would be at risk if

we were to deny Columbia certification. As Colombia is

the primary source of cocaine to the United States,

continued cooperation with the GOC is very important to

this country. A vital national interest certification

will ensure that USG policy and assistance remain

focused on developing more effective Colombian anti-

drug efforts, while acknowledging that GOC actions to

date have not had the desired impact on the flow of

illegal narcotics to the United States. Further, such a

certification allows the United States to continue

working closely with Colombia on the other important

issues on our bilateral agenda: promoting human rights,

advancing free trade, and cooperating in international

fora.

If Colombia were not certified, the USG would be

required to vote against multilateral development

lending. Termination of such assistance would have an

adverse effect on the Colombian economy, reducing the

resources available to the GOC to combat narcotics

trafficking and fostering conditions in which more

Colombians would be encouraged to engage in illicit

coca cultivation and trafficking. Moreover, Colombia

would find it more difficult to get international

donors to help fund its projected alternative

development scheme. Columbia's planned purchase of a

U.S. radar system using Export-Import Bank financing

would be cancelled, further reducing Colombia's

interdiction capabilities.

While the GOC needs to do more in its efforts

against drugs, the decrease in narcotics cooperation

that would likely attend denial of certification would

result in even more narcotics entering this country.

Decertification would result in strident nationalistic

calls on the GOC to cease its CN cooperation with the

USG. In short, the risks associated with denying

certification to Colombia are greater than the risks

associated with Colombia's failure in the last year to

cooperate fully with the United States, or to

[[Page 12875]] take adequate steps on its own, to

combat narcotics. Continued cooperation with the GOC

will serve our drug control interests. Contrary to our

national interests, the net result of decertification

would be an increase in the flow of narcotics from

Colombia to the United States and in the number of

deaths among American drug victims.

Lebanon

Lebanon remained a major nexus for narcotics

production and trafficking in 1994. Lebanese success in

dramatically reducing the cultivation of both opium and

cannabis in 1994 was offset by the continued processing

of imported narcotics. Lebanese production facilities

maintained pre-eradication levels of output. The

Syrians have been cooperative in facilitating some

advances in the Lebanese counternarcotics effort.

However, no processing laboratories in Lebanon were

dismantled in 1994 and the number of heroin and cocaine

laboratories increased significantly. The volume of raw

opium and cocaine flowing into Lebanon for processing

and reexport offset the decreased volume of opium and

cannabis cultivated in the Biqa' Valley.

In addition to significant successful eradication

efforts, positive developments in Lebanon during 1994

include the lifting of immunity to permit prosecution

of a legislator alleged to be corrupt, and the

initiation of investigations of other public figures.

There was also a marked increase in the number of small

seizures and arrests reported in Lebanon, a major

seizure of cocaine base in the port of Beirut was

recorded, and a major importer of pharmaceuticals was

also arrested on suspicion of diverting chemicals to

illicit laboratories.

Although Lebanon has signalled its intent to

accede, it is not yet a party to the 1988 UN Convention

and has not met some of the goals and objectives of the

Convention. Lebanon does not have a bilateral narcotics

agreement with the United States.

The threat posed to the United States by drug

trafficking and processing in Lebanon remains real.

However, Lebanon's inability to confront in a wholly

successful manner the narcotics threat, or to cooperate

fully with the United States reflects, in part, the

weakness of its institutions and regional political

dynamics. Moreover, the stability, peace, and economic

development of Lebanon are important to the stability

of the Middle East region. The United States' vital

national interests in continuing assistance to Lebanon

and in furthering regional stability outweigh the

threat posed by drug trafficking through Lebanon to the

United States.

Pakistan

Pakistan is both a producer and an important

transit country for opiates destined for international

drug markets. Laboratories in Pakistan's Northwest

Frontier Province process opium grown there and in

neighboring Afghanistan. The USG estimates that about

one-tenth of heroin consumed in the United States

originates in Southwest Asia, much of it produced in

the illegal labs in Pakistan. During the 1993-94 crop

year, Pakistan produced about 160 metric tons of opium

from about 7,300 hectares of poppy.

Despite limited progress in some areas, in 1994 the

Government of Pakistan laid the foundation for

significant progress in early 1995.

The GOP extended, by decree, the 1930 Narcotics Law

to the tribal areas, increased significantly seizures

of opium and heroin, increased financial resources

devoted to combatting illicit narcotics processing and

trade, and in several meetings with Government of India

officials agreed to expand counternarcotics

cooperation. It also initiated twelve new asset seizure

cases in 1994 and used the media to alert the public to

the GOP counternarcotics efforts and the dangers of

narcotics.

There was limited progress in other areas. Despite

the GOP extension of the 1930 Narcotics Law to the

frontier areas, few major drug traffickers were

arrested or prosecuted during calendar year 1994. None

of the new asset seizure cases has been prosecuted.

Pakistan marginally extended the [[Page 12876]] opium

cultivation ban while eradication equaled only 1993's

total eradication. Poppy cultivation was up 16 percent

in 1994, although the overall level of cultivation has

remained more or less constant over the last five

years.

By year end, Pakistan had drafted and vetted

legislation to bring Pakistani law into conformance

with the 1988 UN Convention, to which Pakistan is a

party, and to prevent drug money laundering. President

Leghari promulgated the legislative package as a

temporary decree January 9, effective for 120 days

after disagreements in the cabinet precluded submission

to the National Assembly. Legislative action will be

required to make it permanent. Politically difficult

efforts to curb corruption in GOP law enforcement

agencies and the courts have been modest.

Building on the foundation laid in 1994, Pakistan

intensified its anti-narcotics efforts in 1995. The

government began an eradication campaign in Bajaur

Agency in January 1995 and created a demand reduction

office. It also announced on January 25 that it had

frozen $68 million in assets of narcotics traffickers.

In a late January raid on a drug warehouse in the

Northwest Frontier Province, 132 metric tons of drugs,

primarily hashish, were seized. Recently, the GOP

indicated a willingness to proceed expeditiously on

outstanding extradition requests. Pakistan recently

expanded the poppy ban in the NWFP.

Vital U.S. national interests could be damaged if

Pakistan were to be denied certification. Pakistan is a

strategically-located, moderate Islamic state with a

nuclear weapons capability. Pakistan has provided

troops for UN peacekeeping operations, most recently in

Bosnia and Somalia, and has cooperated in the

international fight against terrorists. The Government

of Pakistan has also used its moderating influence with

other Islamic countries. Decertification would be

viewed in Pakistan as abandonment of a loyal ally and

would endanger U.S./Pakistani dialogue and cooperation

on these vital issues. It could also undermine

Pakistan's ongoing efforts to address the drug problem,

including cooperation by Pakistani anti-narcotics

forces with DEA and the embassy narcotics affairs

section.

The risk to these vital U.S. interests, and

particularly our narcotics cooperation efforts,

outweighs the potential gain from decertifying Pakistan

for its inadequate efforts to combat narcotics.

Pakistan is the conduit for opium and morphine base

from Afghanistan, the second largest opium producer in

the world. If the surge of Afghan drugs is to be

stemmed, we need more Pakistani cooperation. Morale in

Pakistan's anti-narcotics organizations could be

adversely affected by decertification.

Although Pakistan is currently prohibited from

receiving many forms of aid by the Pressler Amendment,

denial of certification would add a requirement to vote

against Pakistan in multilateral development banks.

Access to such loans is vital to Pakistan. During the

period of national interest certification, the USG will

redouble its efforts to assist the GOP in improving its

anti-narcotics performance to meet the criteria for

full certification.

Paraguay

Paraguay is used as a transit route for cocaine

shipped primarily from Bolivia, and perhaps

increasingly from Colombia, to Argentina and Brazil for

onward shipment to the United States and Europe. High-

quality marijuana is exported to Argentina and Brazil

and consumed within Paraguay. Paraguay is potentially a

major money laundering center, based on its extensive

re-export trade and its expanding and poorly regulated

financial sector.

President Juan Carlos Wasmosy, Paraguay's first

democratically-elected civilian President in over five

decades, has stressed his personal commitment to

combatting narcotics trafficking. He has continued

authorization to stage USG counternarcotics

surveillance aircraft in Paraquay and submitted to

Congress legislation to control money laundering.

Nevertheless, he failed in 1994 to act decisively when

brought information relating to corruption within the

GOP's counternarcotics leadership. As a result,

Paraquay's co [[Page 12877]] operation in drug law

enforcement was weak in the first half of the year, and

one criminal investigation was very probably

compromised due to corruption. A lack of political will

to uncover what is widely believed to be extensive

official corruption led to an overall weak drug control

program. Given this situation, Paraguay cannot be

considered to be in compliance with the goals of the

1987 bilateral counternarcotics agreement with the USG,

which seeks to eliminate the illicit production,

processing, trafficking, and consumption of narcotics

in Paraguay and the transit of narcotics through

contiguous territorial waters.

Cooperation briefly improved in mid-year, resulting

in a successful joint investigation with the Drug

Enforcement Administration that netted 756 kilos of

cocaine, the largest seizure ever in Paraguay. In

October, the head of the anti-narcotics secretariat

(SENAD) was assassinated, apparently in a personal

dispute, disrupting further drug enforcement

investigations for the remainder of the year. The new

head of SENAD has expressed commitment to a cooperative

drug control effort and has promised to carry out

widespread changes in the composition of SENAD and the

national anti-narcotics police. The USG remains

concerned, however, that the Paraguayan military's

control over SENAD will cloud any efforts to change the

organization fundamentally.

The Government of Paraguay (GOP) made some progress

toward meeting the goals and objectives of the 1988 UN

Convention when the Paraguayan Congress ratified a

financial information exchange agreement with the USG.

However, until the GOP takes credible action to

investigate allegations of corruption and to promote an

aggressive investigative stance against those aiding

drug trafficking, it cannot be considered to be fully

cooperating with the United States, or to be taking

adequate steps on its own, to comply with the goals and

objectives of the 1988 UN Convention.

Despite its concerns about the GOP's lack of

political will to seriously address drug trafficking,

the USG is cognizant that Paraguay remains a young,

fragile democracy. The consequences of decertification

would likely have a significant adverse impact on

Paraguay's ability to consolidate and sustain its

fledgling democracy. The USG believes that its long-

term counternarcotics goal for Paraguay, the promotion

of strong, independent, credible institutions of

government able to defeat drug trafficking, is best

served by fully supporting the continued growth of

democracy. Such support is in the vital national

interest of the United States. Therefore, the vital

U.S. national interest of promoting democracy outweighs

the risks posed by the lack of full GOP cooperation on

counternarcotics.

Peru

Vital U.S. national interests would be harmed if we

deny certification to Peru. Peru remains the largest

source of coca leaf in the world, making continued

cooperation with the Government of Peru very important

to the United States. In 1994, there was no measurable

reduction in the flow of coca base from Peru to

Colombia and no systematic mature coca eradication.

While the amount of coca under cultivation remained the

same, coca leaf production increased by six percent due

to new, more productive coca plantings in expanded new

areas that are superseding older areas, such as the

Huallaga Valley. A vital national interests

certification will ensure that U.S. Government policy

and assistance remain focused on reducing the

cultivation of coca and implementing the Peruvian drug

strategy promulgated in 1994. Further, such a

certification will allow the United States to continue

working closely with Peru on other important issues

such as democracy, economic reform and human rights.

In September, the Government of Peru (GOP) approved

a national drug plan that defines measures to eliminate

illegal drug production, trafficking and abuse,

including eliminating all coca cultivation destined for

illicit uses. It also established timetables and

assigned responsibilities for implementing sectoral

plans and programs, including a national alternative

development program. In June, the GOP passed a

stringent law with strict penalties [[Page 12878]] for

any aspect of opium poppy cultivation trafficking or

use, which requires destruction of any poppy found in

Peru. The GOP cooperated on most counternarcotics

matters contained in its bilateral narcotics agreement

with the United States, and took some steps to comply

with the goals and objectives of the 1988 UN

Convention. However, it made no progress toward the

critical goal of reducing mature coca cultivations.

In 1994, there was concrete evidence of refined

cocaine HCl processing and shipment from Peru to Mexico

by Peruvian trafficking organizations, raising the

specter of Peru as a potentially large-scale cocaine

refining and shipping center, similar to Colombia.

Police and armed forces seized over 9 mt of cocaine

base through November 1994, exceeding the 1993 total.

Nearly 6 mt were seized by the armed forces, using

police intelligence. In January 1994, at GOP request,

Colombia arrested major Peruvian trafficker Demetrio

Limonier Chavez-Penaherrera (``Vaticano''). He was

tried in Peru and is serving a 30-year sentence. There

were similar successes against other major Peruvian

trafficking organizations. The Peruvian Air Force (FAP)

continued to implement an air intercept program with A-

37s and Tucano aircraft, despite the USG shutdown of

intelligence sharing in May (which has now resumed

pursuant to a U.S. Presidential Determination).

The GOP has cooperated with UN Drug Control Program

alternative development projects in parts of the

Huallaga, Aguaytia, Pachitea and Urubamba valleys.

Resumption of international financial institution

lending was followed by World Bank and Inter-American

Development Bank projects to rehabilitate over 1500

kilometers of roads, and improved electrical power

facilities in areas affected by the coca economy. Such

improvements in infrastructure facilitate the

production and transport of alternative licit crops.

Coca seedbed eradication was resumed in July, and has

had a measurable impact on efforts to reduce the

cultivation of coca in specific areas.

Alternative development programs in or near coca-

producing regions will set the stage for future coca

crop reduction. The GOP must integrate alternative

development efforts with actual net reduction of coca

cultivation and prevent the expansion of new coca

cultivation areas in order to comply with 1988 UN

Convention goals and U.S. and Peruvian drug plans.

A decrease in narcotics cooperation with the GOP

would result in more cocaine entering the United

States. The risks associated with denying certification

to Peru are greater than the risks associated with

Peru's failure in the past year to cooperate fully with

the United States, or take adequate steps on its own to

reduce coca cultivations.

STATEMENT OF EXPLANATION

Afghanistan

In 1994, opium poppy cultivation in Afghanistan

increased dramatically amid ongoing civil war,

widespread lawlessness, and poor economic

opportunities. According to USG estimates, opium

production in Afghanistan rose 38 percent to

approximately 950 metric tons of opium in 1994.

Cultivated hectarage rose 39 percent to 29,180

hectares. USG analysis indicates Afghanistan remains

the second largest opium producer in the world.

The nominal Government of Afghanistan was unable to

eradicate systematically poppy plants, investigate or

prosecute traffickers, or impede the transportation of

opium, morphine base, or other narcotics. Few

provincial leaders apart from Haji Qadir, Governor of

poppy-rich Nangarhar, attempted to disrupt the

cultivation or trafficking through the areas under

their control. Haji Qadir in late 1994 began a campaign

of plowing under Nangarhar's newly-planted poppy

fields. Despite a demonstration of poppy-plowing for

the benefit of U.S. and other international officials,

we are unable to judge the extent or efficacy of

Qadir's campaign. [[Page 12879]]

Afghan traffickers continued development of new

trafficking routes through the Newly Independent

States, supplementing existing routes through Pakistan

and Iran.

Reports continue to allege the direct involvement

of some factional leaders, particularly small-scale

independent ``commanders,'' in narcotics production and

trafficking and the indirect involvement of others who

provide security to the narcotics trade in return for

payment.

There is no functioning bilateral agreement between

Afghanistan and the United States. While Afghanistan

ratified the 1988 UN Convention in 1992, it has made

virtually no progress in achieving its goals.

The tremendous increase in poppy cultivation during

1994, combined with the inadequate efforts to eliminate

cultivation and trafficking, precludes a determination

that Afghanistan has cooperated fully with the United

States or taken adequate steps on its own to meet the

goals and objectives established by the 1988

Convention. The core problem in Afghanistan is the

absence of a functional central government. Although

the USG has vital national interests in fostering the

re-establishment of a functioning central government

that could cooperate with us on regional security

issues and drug eradication, USG assistance for such

purposes falls largely outside the definition of U.S.

assistance that would be cut off by denial of

certification, at least this fiscal year. Accordingly,

denial of certification is appropriate.

Burma

Burma remains the world's largest producer of

illicit opium and heroin and the Government of Burma

(GOB) continues to treat counternarcotics efforts as a

matter of secondary importance. Estimated opium

production in 1993/94 was 2,030 metric tons and illicit

poppy cultivation covered 146,600 hectares. Opium

production fell by 21 percent, due principally to poor

weather. There were some modest signs of greater

government efforts in counternarcotics. One of the

results of a Burmese Army campaign against the Shan

United Army (SUA) of Khun Sa was to restrict the opium

supply and drug trafficking routes of the SUA. The GOB

has also begun to show signs of willingness to

cooperate in counternarcotics efforts and has agreed to

facilitate an opium yield survey in 1995 and to allow

the UN Drug Control Program (UNDCP) to perform an

aerial survey of project areas. Domestic enforcement

efforts have also shown some marginal improvement with

regional task forces under the Burmese police becoming

more active in drug enforcement. These efforts,

however, fall short of what is required to address

seriously the drug problem in Burma.

The government's ability to suppress Burma's opium

and heroin trade is severely limited by lack of access

to and control over the areas in which most opium is

grown and heroin processed. Well-equipped ethnic armies

sheltered in these remote mountainous regions have been

permitted wide-ranging, local autonomy in exchange for

halting their active insurgencies against Rangoon. At

the same time, opium poppy cultivation has soared in

the base areas of the insurgent groups, especially in

the Wa hills, despite nominal commitments by insurgents

and the government alike that efforts would be made to

reduce opium growing. Direct government complicity in

the drug trade does not appear to be a problem among

senior officials, but narcotics corruption is a problem

among lower level officials.

Multilateral drug control projects in enforcement

and alternative development under the UNDCP involving

cooperative efforts between Burma, China and Thailand

are underway. These projects continue to receive

support from the international community. Project scale

is small, however, and the overall impact of these

efforts on the huge opium cultivation problem in Burma

has been extremely limited so far.

Burma is a party to the 1988 UN Convention and has

enacted some legislation in conformity with the

Convention, but has not made a strong effort to enforce

these laws. There has been no bilateral

counternarcotics [[Page 12880]] agreement with the USG

since the State Law and Order Restoration Council

assumed power in 1988.

Iran

Iran is a major drug transit country. Reportedly,

almost half the morphine base that arrives in Turkey

monthly for processing as heroin passes through Iran.

It also continues to grow opium poppy in remote

provinces. Although the USG did not estimate production

in 1994, the USG does not believe cultivation

diminished significantly as we know of no eradication

campaigns. The 1993 estimate was about 3,500 hectares

of cultivation with a yield of between 35 and 70 metric

tons of opium.

Iran is a party to the 1988 UN Convention and has

undertaken at least some activities to fulfill the

goals and objectives the Convention established. Since

Iran and the United States do not have diplomatic

relations and have not cooperated in counternarcotic

efforts, the U.S. has been unable to ascertain the

extent or adequacy of Iran's undertakings. There is no

bilateral counternarcotics agreement in place between

Iran's government and the USG.

According to both Iranian radio reports and Iranian

government reports to the UN Drug Control Program

(UNDCP), the Government of Iran (GOI) is waging a

vigorous campaign to eradicate trafficking through

Iran. Almost daily radio reports announce substantial

morphine base and heroin seizures. Reportedly many

individuals are arrested and later executed for drug

trafficking. The USG cannot verify many of these

reports as it has no representatives in Iran. UNDCP

observers have viewed some seizures, including 30 tons

of opium in one exhibit bond room. Interpol statistics

for 1994, probably based on Iranian government reports,

state Iran seized 112 tons of opium, 800 kilograms of

heroin and 15 tons of morphine base. However, despite

claims about the high level of Iran's counternarcotics

effort, the level of drugs arriving in Syria and Turkey

has not noticeably decreased.

UNDCP representatives have verified that Iran has

fortified frontier guard posts with Pakistan and dug a

trench to prevent crossing between posts in an effort

to decrease trafficking. Intelligence reports suggest

that border guards continue to be bribed to permit drug

caravans through, however. The USG believes drug-

related corruption continues to be a serious problem

among Iran's law enforcement and security services. The

USG does not know the extent to which Iran enforces its

prominently advertised campaign to prevent and punish

public corruption.

Human rights organizations and some Iranian exiles

accuse Iran of executing dissidents on false charges of

drug trafficking.

Nigeria

A major transit country for Asian heroin and Latin

American cocaine destined for the United States and

numerous other points around the world, Nigeria remains

the focal point for most West African trafficking

organizations. Corruption in the Nigerian Drug Law

Enforcement Agency (NDLEA) and other law enforcement

agencies has not been addressed adequately, thereby

hindering counternarcotics efforts. The export of

Nigerian drug trafficking to Liberia and other West

African counties is of particular concern. The NDLEA's

focus in 1994 remained almost exclusively on drug

couriers rather than on leaders of drug trafficking

groups.

The Government of Nigeria (GON) did begin to show

concern about international and domestic drug abuse

during 1994. The GON prepared a draft national drug

policy plan aimed at rooting out trafficking and

substance abuse. The GON formed a ministerial level

task force on drug abuse which will develop a drug

control strategy by mid-1995. In late December, the GON

appointed a special advisor on drugs, money laundering,

and advance fee fraud whose task is to coordinate the

anti-drug efforts of the NDLEA, the police, and the

customs agency. In 1994, the GON returned to the United

States three drug barons responsible for heroin

rings. [[Page 12881]]

These steps may have potential for significant

improvement in Nigeria's anti-drug efforts. We will

evaluate at an early stage if they and other steps are

being implemented effectively and if these steps are

followed by additional anti-drug measures.

While the United States welcomes the positive steps

taken during the past year, Nigeria did not meet the

goals and objectives of the 1988 UN Convention. Nigeria

did not effectively implement its bilateral agreement

with the United States.

Based on a complete and thorough review of the

GON's counternarcotics actions throughout 1994,

Nigeria's prominent role in international narcotics

trafficking, and its failure in 1994 to make

significant progress in meeting the goals and

objectives of the 1988 UN Convention, the threat posed

to the United States by drug trafficking by Nigerians

through Nigeria and elsewhere justifies continued

denial of certification.

Syria

Syria is a transit point for narcotics flowing

through the Middle East to Europe and, to a lesser

extent, the United States. In addition, Syria continues

to have a responsibility for assisting Lebanese

authorities in ending drug production and trafficking

through Lebanon because of the presence of some 30,000

Syrian troops in the Bekaa Valley. In 1994, Syria

continued and expanded its cooperation with Lebanese

authorities to eradicate opium poppy and cannabis

cultivation in the Bekaa Valley, significantly reducing

opium and cannabis cultivation. Syrian forces increased

seizures of cocaine, heroin, and hashish and raised the

number of arrests of drug traffickers in Syria and

Lebanon. Syrian military authorities in Lebanon

assisted in a significant seizure of cocaine base

delivered to Beirut's port during 1994. Despite these

efforts, however, the flow of narcotics did not

diminish in 1994.

The Syrian government has reiterated its

willingness to pursue all information regarding the

possible production of narcotics in Lebanon and Syria.

However, neither the Syrian nor the Lebanese

authorities moved successfully against cocaine or

heroin laboratories operating in either country. There

were a significant number of arrests in Syria for drug-

related offenses, but despite reports of individual

Syrian military officials profiting from the drug trade

in Lebanon, no corruption investigations or charges

were brought against any Syrian government or military

officials in 1994.

The USG does not provide Syria with bilateral

assistance and does not support loans for Syria in

multilateral institutions.

Syria is a party to the 1988 UN Convention. While

Syria greatly improved its performance in reducing

illicit cultivation and increased seizures in Lebanon,

it did not meet some of the other goals and objectives

of the 1988 UN Convention. Syria does not have a

bilateral narcotics agreement with the United States.

[FR Doc. 95-5850

Filed 3-6-95; 4:03 pm]

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