Certification for Major Narcotics Producing and Transit Countries

[Federal Register Volume 62, Number 48 (Wednesday, March 12, 1997)]

[Presidential Documents]

[Pages 11589-11614]

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

[FR Doc No: 97-6231]

[[Page 11587]]

_______________________________________________________________________

Part IV

The President

_______________________________________________________________________

Presidential Determination No. 97-18--Certification for Major Narcotics

Producing and Transit Countries

Presidential Documents

Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 /

Presidential Documents

___________________________________________________________________

Title 3--

The President

[[Page 11589]]

Presidential Determination No. 97-18 of February 28,

1997

Certification 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 Narcotics

Drugs and Psychotropic Substances:

Aruba, The Bahamas, Bolivia, Brazil, Cambodia, China,

Dominican Republic, Ecuador, Guatemala, Haiti, Hong

Kong, India, Jamaica, Laos, Malaysia, Mexico, Panama,

Paraguay, Peru, Taiwan, Thailand, Venezuela, and

Vietnam.

By virtue of the authority vested in me 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 major illicit drug producing and/

or transit countries:

Belize, Lebanon, and Pakistan.

Analysis of the relevant U.S. vital national interests,

as required under section 490(b)(3) of the Act, is

attached. I have determined that the following major

illicit drug producing and/or major transit countries

do not meet the standards set forth in section 490(b)

for certification:

Afghanistan, Burma, Colombia, Iran, Nigeria, and

Syria.

In making these determinations, I have considered the

factors set forth in section 490 of the Act, based on

the information contained in the International

Narcotics Control Strategy Report of 1997. Because the

performance of each of these countries/dependent

territories has differed, I have attached an

explanatory statement for each of the countries/

dependent territories subject to this determination.

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, 1997.

[[Page 11590]]

STATEMENTS OF EXPLANATION

Aruba

Aruba is a major trafficking and staging point for

international narcotics trafficking organizations which

transship cocaine and heroin from Colombia, Venezuela

and Suriname to the United States and Europe. Its key

position near the Venezuelan coast with air and sea

links to South America, Europe, Puerto Rico and other

Caribbean locations makes it a prime transshipment

point. Drug shipments are made primarily via

containerized cargo, but commercial airlines and cruise

ships are also used. Although USG law enforcement

agencies estimate that about 155 mt of cocaine are

transshipped through the Caribbean to the United States

annually, and that more than 100 international

trafficking organizations operate in that region, Aruba

seized only about 170 kg of cocaine and about 2\1/2\ kg

of heroin in 1996.

Money laundering organizations use legitimate

companies as fronts to invest in land development and

other construction projects. The Government of Aruba's

(GOA) Free Trade Zone (FTZ), casinos and resort

complexes are reported to be attractive venues for

money laundering and smuggling. A joint Dutch-Aruban

Commission in 1996 issued recommendations to improve

regulation of the FTZ, and invited a U.S. Customs

technical expert to help implement those

recommendations. Legislation on the FTZ, casinos and

off-shore corporations is pending.

Aruba is a part of the Kingdom of the Netherlands

(GON), and has independent decision-making ability in

many drug policy areas. The Kingdom of the Netherlands

(GON), a party to the 1988 UN Drug Convention, has not

yet extended it to Aruba. The Aruban legislature is in

the final stages of considering comprehensive criminal

law reform, expected to be adopted in 1997. The law

would create a basis for the Kingdom's extension of the

1988 UN Drug Convention, for expanded investigative

powers for local law enforcement, as well as for

extradition of nationals subject to service of

sentences in Aruba.

The GOA participated with the Netherlands, the

Netherlands Antilles in the establishment of a joint

Kingdom-Caribbean Coast Guard, designed to patrol the

Kingdom's Caribbean coastal waters to interdict drug

shipments. The GOA established money transaction

monitoring entities to review unusual transactions in

the banking sector. Aruban law enforcement officials

participated in USG-sponsored training courses for drug

enforcement during 1996. The GOA has taken limited

steps to punish corrupt officials, and replaced senior

police and justice officials in Aruba.

Corruption is a problem that hinders effective

efforts against international narcotics traffickers. A

joint Netherlands Antilles and Aruba court denied a USG

extradition request for a Colombian narcotics

trafficker in 1996. Despite these problems, Aruba

generally cooperated with the USG to meet the goals and

objectives of the 1988 UN Drug Convention.

The Bahamas

Over the past ten years, successful combined U.S./

Bahamian counternarcotics efforts have dramatically

reduced the amount of cocaine and marijuana transiting

The Bahamas en route to the United States. This

downward trend has continued over the last several

years. Nevertheless, significant quantities of illicit

drugs continue to pass through The Bahamas. The Bahamas

is also a dynamic financial services center and a tax

haven with bank secrecy laws, which are both factors

conducive to money laundering. Some marijuana is grown

in The Bahamas, but the country is not a major drug

producer.

The Government of the Commonwealth of The Bahamas

(GCOB) vigorously strives to combat drug trafficking

and is extraordinarily cooperative with USG counterdrug

efforts. The first country to ratify the 1988 UN Drug

Convention, The Bahamas took further steps during 1996

to implement

[[Page 11591]]

it. Strong anti-money laundering legislation and

implementing regulations entered into force in 1996.

During the year, the GCOB continued its successful

efforts to strengthen its justice system, with

assistance from the USG. U.S. and Bahamian law

enforcement officials continued to work closely

together to apprehend drug traffickers. Domestic drug

abuse remains a problem, but the number of new drug

users has declined notably since the mid-1980s. Over

the past several years, The Bahamas has prosecuted and

convicted some middle and low-level officials on

charges of narcotics corruption. The GCOB is also

making some headway in its efforts to forfeit and

dispose of trafficker assets.

Although enormous progress has been made, more can

be done. In coming years, The Bahamas should continue

to improve the effectiveness with which its justice

system handles drug cases, further emphasize forfeiture

of trafficker assets and effectively enforce its new

anti-money laundering controls.

Bolivia

The Government of Bolivia sustained an intense

counternarcotics effort again in 1996, cooperating

fully with the USG, and took adequate steps toward full

compliance with the goals and objectives of the 1988 UN

Drug Convention.

Bolivia's coca crop is the third largest in the

world, behind Peru and Colombia, but the high yield of

Bolivian coca makes Bolivia second only to Peru in

terms of the production of cocaine alkaloid. The vast

majority of the coca for cocaine production is

cultivated in Bolivia's Chapare region. Coca growers

produce cocaine base in rudimentary laboratories, then

sell it to more sophisticated organizations which

convert cocaine base into cocaine hydrochloride.

Bolivia is believed to be the world's second leading

producer of refined cocaine hydrochloride.

During 1996, the Government of Bolivia (GOB)

eradicated over 7,500 hectares of coca in the Chapare--

the highest level of eradication since 1990. Despite

the GOB's commitment to this program, eradication

reduced Bolivia's coca crop by only one percent, as new

coca cultivation, both within and outside of the

Chapare, almost offset eradication. Total potential

cocaine production in 1996 declined by an estimated 10

percent, however, from 240 metric tons in 1995 to some

215 metric tons of cocaine HCl. New coca does not

become harvestable--and capable of producing the

cocaine alkaloid--for two years.

In order to confront the problem of new planting,

the government launched late in 1996 an expanded

campaign to detect and destroy new coca and seedbeds.

For the first time, the GOB also fully applied the

letter of its own law, arresting several peasants for

planting new coca.

The Minister of Justice produced a package of

legislative reforms, designed to modernize Bolivia's

criminal justice sector. Among the reforms were strong

anti-money laundering provisions. The government

presented the package to the Bolivian Congress in

January 1997, and is seeking passage before the June

1997 presidential elections. In addition, a new

extradition treaty between the United States and

Bolivia, which allows for the extradition of Bolivian

nationals, entered into force in November 1996.

Overall cocaine base and HCl seizures increased in

1996 compared to 1995, and HCl seizures in the second

half of the year increased dramatically. The government

established a Chemical Control Directorate. Meanwhile,

an expanded and increasingly effective Chemical Police

Unit, aided by counterdrug forces in the Chapare, made

chemical seizures well above 1995 levels. The

government's Seized Asset Directorate, created in

December 1995, began operations, while asset seizures

increased by some 36 percent over 1995.

In the coming year, the GOB must work to eliminate

and prevent new coca cultivation, fully applying the

Law 1008 prohibition on new planting, and reduce coca

cultivation in the Chapare by at least 10 percent. The

[[Page 11592]]

GOB should press for the passage and rapid

implementation of a money laundering law along with a

revised Code of Criminal Procedures. Faced with an

increasingly sophisticated group of Bolivian

trafficking organizations, the GOB's enforcement

strategy must more effectively target cocaine HCl

processing and trafficking organizations, as well as

Chapare-based cocaine base laboratories. In addition,

we expect the GOB to ensure that the Blue Devils

Riverine Task Force can fully exercise its drug

enforcement authority and product results consistent

with its resources.

Brazil

International narcotics traffickers use Brazil to

transship cocaine primarily from Colombia, Peru and

Bolivia to the United States and Europe. Brazil serves

as an increasingly significant transit route for air

shipments of cocaine base from Peru to cocaine labs in

Colombia. Cocaine also transits the country by river

and overland routes. Law enforcement agencies estimate

that ten to twenty mt of cocaine transit Brazil

annually, of which Brazilian authorities seized about

three mt of cocaine in 1996, a decline from last year's

almost six mt. Despite the decline, Brazil fully

cooperated with the USG to advance the goals of

bilateral agreements and the 1988 UN Drug Convention.

In 1996, the area of Brazil bordering Peru was

heavily used as a staging area for air shipments of

cocaine destined for the United States. Brazilian

trafficking organizations reportedly provided fuel and

airstrips for illicit trafficking purposes.

To address this threat, Brazilian authorities

destroyed several airstrips, and commendably repeated

operations when traffickers rebuilt those cratered

airstrips. In a strong commitment to regional

cooperation, Brazilian police cooperated with Peruvian

and Colombian police to deter trafficking in the tri-

border area between their respective countries.

Focussing on the maritime trafficking problems in

Brazil's major seaports, which function as conduits for

cocaine shipped to the United States, Brazil

participated in one U.S. Customs port assessment visit

to the major ports of Rio de Janeiro and nearby Santos.

Brazil also tightened enforcement over its chemical

companies.

Brazil entered into an agreement with the USG to

train police-prosecutor-judge task forces to bolster

the Government of Brazil's (GOB) counternarcotics

effort and to enhance coordination between judges,

prosecutors and police. Corruption is a problem in mid

and lower levels of the DPF that hinders effective

enforcement efforts to control drug trafficking through

Brazil.

Authorities disrupted the Saavedra-Shapiama

Organization, which trafficked cocaine from the Amazon

region to the United States. With USG assistance,

Brazilian authorities in good faith continue to

investigate this and other narcotics trafficking

organizations in the Amazon region. In May 1996, the

Brazilian Senate approved the Amazon Surveillance

System (SIVAM). SIVAM is a detection and monitoring

system that will be used to protect the Amazon region,

in part against illicit narcotics trafficking.

Although the Brazilian government did not sign a

Letter of Agreement (LOA) that would have renewed

counternarcotics cooperation with the USG in 1996, the

GOB has demonstrated a strong interest in continuing

its counternarcotics relationship with the USG. The

almost $1 million of 1996 counternarcotics funding

meant for Brazil instead funded the Organization of

American States Anti-Drug Abuse Control Commission

(OAS/CICAD). In addition to demonstrating a commitment

to cooperate further with the USG on counternarcotics,

Brazil participated in important multilateral

counternarcotics initiatives, including an OAS/CICAD

meeting in Uruguay.

Other efforts point of Brazil's achievements in

1996. It proposed a National Drug Enforcement Plan in

1996. It also hosted several meetings of the of the

mini-Dublin Group in Brasilia to coordinate

counternarcotics assistance from major donors,

primarily European nations. Demand reduction and other

multilateral efforts have successfully raised the

profile of the danger of

[[Page 11593]]

drug trafficking and abuse in Brazil. Although bank

secrecy remained a formidable obstacle in the battle

against money laundering, and money laundering occurred

in Brazil's banks and exchange houses, in 1996 the

congress initiated debate on a bill to counter money

laundering.

Cambodia

In 1996, Cambodia made significant efforts toward

addressing drug trafficking and transit problems, which

the Royal Government of Cambodia has acknowledged.

There is a significant flow of heroin transiting

Cambodia which affects the U.S. and other countries.

The National Assembly passed a comprehensive

counternarcotics law on December 3, 1996. The statute,

drafted with UNDCP assistance and advice, includes

tough anti-money laundering provisions and commits the

government to becoming a party to the 1988 UN Drug

Convention.

Other measures taken by the RGC, either separately

or in cooperation with the U.S. and other governments

and international organizations, include reorganizing

its ill-trained and equipped 900-person National Anti-

Narcotics Unit into a more effective 40-person National

Anti-Drug Unit, participating in UNDCP conferences, and

seeking other avenues to broaden cooperation with

surrounding countries and the international community.

Cambodian drug interdiction efforts resulted in the

seizure of 40 kilograms of heroin and the arrest of 12

heroin couriers working for Nigerian trafficking

organizations. The RGC also continued a program of

marijuana eradication.

The skeletal nature of Cambodia's law enforcement

infrastructure, coupled with an impoverished economy,

continues to impede efforts as assembling comprehensive

information about the drug trade in and through the

country. These weaknesses have also made the task of

providing appropriate assistance more critical and, at

the same time, more difficult. The single most

important issue Cambodia faces with regard to its drug

trafficking problem, however, is the issue of drug-

related corruption. After the publication in 1995 of

allegations tying key political and business figures to

the drug trade, the RGC publicly called for information

which would aid in the prosecution of any such person.

There have, however, been no results yet reported in

connection with these charges. The U.S. will be looking

for efforts to deal vigorously with drug-related

corruption, which would otherwise eventually undermine

Cambodia's credibility on the issue of narcotics

control. USG efforts to assist Cambodia in building

stronger law enforcement and judicial institutions are

based on the premise that the upper levels of the RGC

will thus have available the appropriate means for

dealing with the issue.

China

China continues to play a key role as a major

transit route for Southeast Asian heroin destined for

the U.S. and other Western markets. Addiction and

violent crime associated with China's proximity to the

Golden Triangle and its flow of narcotics continue to

engage the attention of Chinese authorities. In April

1996, China's Ministry of Public Security began a

nationwide anti-crime campaign called ``Strike Hard,''

which placed special emphasis on drug interdiction

efforts: opium seizures in the first ten months of 1996

were up 26 percent over all of 1995, and heroin

seizures in the first ten months of 1996 were up 47

percent over the entire amount seized in 1995. China

continues to be an active participant in the United

Nations Drug Control Program and in 1996 signed mutual

legal assistance treaties, with specific attention to

narcotics trafficking, with Russia, Mexico and

Pakistan. It is also a party to the 1988 UN Drug

Convention.

Counternarcotics and law enforcement cooperation

with the United States continues to be uneven, although

senior U.S. and Chinese officials have publicly

recognized the common interest in enhanced cooperation.

Lower level officials continue to express a desire to

expand cooperation, and working-level dialogue and

information sharing have improved and expanded in some

respects. Chinese officials participated in a two-week

regional co

[[Page 11594]]

operation seminar in Bangkok conducted by DEA and in a

program to help law enforcement officials detect and

prevent illegal transshipments of precursor chemicals.

U.S. Customs representatives also taught interdiction

techniques to Chinese officials in Sichuan Province.

But China in 1996 also denied, ``for now,'' a USG

request to be allowed to open a joint DEA/FBI office at

the U.S. Embassy in Beijing.

China's continued strong stand against crime and

official corruption has been widely publicized. Chinese

leaders and law enforcement authorities have recognized

that rapid economic growth has contributed to the

spread of corruption, including among lower level

officials. Penalties for such transgressions are severe

and include execution.

China is a major chemical producer. The interest

PRC officials have shown in techniques for controlling

sales and shipments of chemical precursors indicates

growing recognition of China's role as a target for

criminals seeking to illegally procure or divert such

chemicals. China's recognition of its susceptibility to

money laundering also appears to be growing, but

domestic mechanisms for assessing and addressing the

problem are only beginning to catch up to the

challenge.

Dominican Republic

In 1996, the Dominican Republic's attention was

focused on election year politics. As a result,

although the out-going government cooperated with

counternarcotics operations, it has left the new

administration with unresolved, long-term narcotics-

related issues and an environment of public concern

about corruption. Despite the absence of a master plan,

the Government of the Dominican Republic (GODR) remains

deeply committed to the war against narcotics

trafficking and consumption.

Following its installation in August 1996, the

Fernandez administration made an anti-corruption agenda

and judicial reform high priorities of the GODR.

However, the GODR lacks effective enforcement

mechanisms to eliminate the corruption which undermines

the country's fragile democratic institutions.

Additionally, the country's largely unpatrolled coast,

its porous border with Haiti, and poorly paid and

under-equipped police and military make it attractive

to Dominican and Colombian drug transshipment

organizations and domestic drug traffickers. The

majority of Dominicans condemn the use of illegal drugs

and support GODR efforts to combat narcotics

trafficking; drug consumption levels are considered

low.

The Government of the Dominican Republic cooperated

fully with the United States Government on

counternarcotics objectives and goals. Among the GODR's

accomplishments was the arrest of the Cali cartel's

Rolando Florian-Feliz, the DR's most wanted narcotics

trafficker.

Due to the absence of effective government

supervision of exchange houses or remittance operations

and the presence of large cash flows which could hide

money laundering activity, it is believed that

narcotics money continues to be laundered in the

Dominican Republic. Money laundering is not likely to

diminish until the GODR aggressively implements the

money laundering legislation. Many Dominicans who have

committed serious crimes in the United States continue

to find refuge in the Dominican Republic, since local

law bars extradition of nationals. While 1996

negotiations for a new extradition treaty with the

former government did not reach a successful

conclusion, the USG is currently assessing a resumption

of talks with the Fernandez administration.

Neither the GODR itself nor senior government

officials encourage, facilitate, or engage in drug

trafficking or money laundering as a matter of

government policy. No evidence exists that senior

government officials are involved in drug distribution

or money laundering. No senior government official has

been indicted for drug-related corruption in 1996.

[[Page 11595]]

Ecuador

International narcotics traffickers from Colombia

and Peru intensified their efforts to transship cocaine

and coca base through Ecuador. Trafficking

organizations ship about 20-40 metric tons (mt) of coca

base from Peru through Ecuador to Colombia for refining

into finished cocaine, and about 30-50 mt of cocaine

through Ecuador to the United States and Europe.

Ecuador seized almost nine mt of cocaine in 1996.

Traffickers continued to transship cocaine overland

and by river, and to smuggle chemicals into Ecuador via

the Pan American Highway and Ecuador's extensive river

network, sometimes committing armed robberies of truck

drivers transporting chemicals from petroleum companies

in Ecuador's jungle region.

Ecuadoran authorities responded commendably to

counter traffickers, placing emphasis on Guayaquil as a

favored cocaine transshipment point. Authorities made a

nearly seven mt seizure of cocaine from a fishing

vessel, the Don Celso, and had it returned from

international waters to search it in Guayaquil.

Traffickers had loaded the cocaine into the fuel tanks

of the 150-ft. fishing vessel.

The Ecuador National Policy (ENP), with USG

assistance, identified a major cocaine processing

facility just west of Quito in a town called Santo

Domingo de los Colorados. Authorities dismantled the

lab, but many said it demonstrated a shift in

trafficker activity from neighboring countries to

Ecuador.

The Government of Ecuador (GOE) demonstrated its

commitment to regional counternarcotics cooperation

efforts. In an unprecedented law enforcement

cooperation effort with Peru, Ecuadoran police deported

to Peru Willer Alvarado Linares, a.k.a. ``Champa,'' a

Peruvian drug kingpin with close ties to the Cali

Cartel. With USG assistance, the ENP dismantled a major

drug trafficking organization in Ecuador reportedly run

by a Cali-connected trafficker, Jose Castrillon Henao.

Ecuadoran authorities continued the prosecution of

Jorge Hugo Reyes Torres, a jailed drug kingpin, also

tied to Cali.

Although police-military cooperation, maritime

cooperation, and inadequate money laundering

legislation remained problems, GOE officials made a

good faith effort to resolve these issues. The GOE

participated in drug enforcement and customs training

courses, continued some information-sharing efforts,

and attended a money laundering seminar.

The Ecuadoran Supreme Court entered into an

agreement with the USG on administration of justice.

The USG bought five computers and a laser printer in

support of Ecuador's ambitious judicial reform effort.

Allegations of corruption in the judiciary and in other

branches of the government plagued the former Bacaram

administration, and now plague the current

administration of interim President Alarcon, hindering

effective counternarcotics efforts.

Despite these problems, Ecuadoran government

officials demonstrate continued interest in working

with the USG to address more effectively narcotics

trafficking problems that threaten to erode democratic

institutions. Ecuador is a party to the 1988 UN Drug

Convention and has bilateral agreements with the USG.

Ecuador has fully cooperated with the USG to advance

the goals and objectives of these agreements.

Guatemala

Despite the political distractions of the ongoing

peace process, Guatemala continued to cooperate fully

with U.S. counternarcotics goals and objectives. Law

enforcement cooperation between Guatemala and the

United States has been excellent. With USG support,

Guatemalan government (GOG) counternarcotics officials

seized almost four metric tons of cocaine, a

significant increase over previous years.

[[Page 11596]]

GOG experts estimate that at least one out of four

Guatemalan adults suffers from some sort of chemical

dependency, principally alcohol abuse. Illicit drug use

has not been effectively documented, but GOG officials

believe it has increased steadily since 1990 and

contributes to the extremely high level of violence in

the country, especially in the capital city.

The Department of Anti-Narcotics Operations (DOAN),

the country's principal counternarcotics organization,

fully cooperated with USG agencies on information-

sharing, joint operations, and special investigations

targeting international drug trafficking networks. Also

in 1996, a major corruption ring centered on customs

tax evasion and extortion was uncovered, giving the GOG

further impetus to criminalize money laundering and

develop the capability to investigate suspect financial

transactions.

Recent information indicates that significant

quantities of precursor chemicals, mostly ephedrine,

are being diverted through Guatemala to Mexico and the

United States. The government has not yet taken steps

to halt that traffic, which is not currently illegal in

Guatemala. The GOG has, however, requested and will

receive USG technical assistance on how to combat this

illicit trafficking. In early 1997, Guatemala hosted a

regional seminar to address the problem of the control

and regulation of precursor chemicals.

The GOG does not, as a matter of government policy,

encourage or facilitate illicit production or

distribution of narcotic or psychotropic drugs or

controlled substances, or the laundering of proceeds

from illegal drug transactions. In addition, no senior

government official facilitates or encourages the

illicit production or distribution of such drugs or

substances or the laundering of proceeds from illegal

drug transactions.

Haiti

Haiti continues to cooperate with U.S.

counternarcotics goals and objectives. The Government

of Haiti (GOH) confronts a staggering array of issues

that compete for the attention of its already stretched

professional and managerial talent and consequently

impedes rapid progress on counternarcotics issues.

Despite these obstacles, the GOH made definite progress

in counternarcotics issues in 1996.

The GOH began to reform its existing narcotics laws

and to develop a national narcotics plan and money

laundering legislation. With USG support, a Haitian

Coast Guard (HCG) unit was established; a

Counternarcotics Unit (CNU) was trained; and new chiefs

for both units were installed. The changeover in

leadership of the CNU proved particularly time-

consuming and, despite sincere efforts, the CNU was not

functioning in its permanent quarters at the airport by

the end of 1996. Nevertheless, the commitment of the

Haitian National Police (HNP) leadership to maintain

high standards of performance within these two units is

notable.

The HCG began operating in August 1996 and scored

two major cocaine seizures amounting to 938 kgs. in its

first two months of operation. The interdiction and

maritime boarding experience in these two operations

represented a training opportunity that contributed to

the HCG's ability to eventually conduct independent

operations.

The USG has made a strong commitment to assist

Haiti in establishing stable democratic institutions.

As a part of this effort, the USG intends to work with

the GOH towards conclusion of a bilateral maritime

agreement, and to continue its efforts to assist the

GOH with its narcotics-related agenda and legal reform

programs. The USG will also assist the HNP in

establishing regional law enforcement contacts and

continue to provide support for both the HCG and the

CNU.

In 1996, the GOH continued to give USG officials

high-level assurances of its commitment to drug

control, and those assurances have been supported by

concrete progress in establishing Haitian counter-drug

institutions. How

[[Page 11597]]

ever, Haiti still has a number of major goals to

achieve before it will be able to take significant,

independent action in counternarcotics.

Hong Kong

Hong Kong's role as a money laundering base for the

international drug trade continues to grow, while its

role as a transit point for drugs appears to have

lessened. There were no drug seizures in the United

States in the first 10 months of 1996 unequivocally

linking Hong Kong to the U.S. as a transit point for

drugs. The overall pattern of drug trafficking in the

region, however, continues to point to Hong Kong as a

key transshipment point for drugs destined for the U.S.

and other Western markets.

Hong Kong authorities continued to strengthen the

legislative framework for combatting narcotics

trafficking. They extended licensing controls to an

additional 21 precursor chemicals, introduced

implementing legislation for bilateral extradition

agreements and proposed legislation establishing

heavier sentences for drug traffickers who target the

young. On December 20, 1996, the U.S. and Hong Kong

signed an agreement for the surrender of fugitive

offenders (an extradition agreement) and the two sides

have initialled a Mutual Legal Assistance Agreement

that will expand the basis for mutual legal assistance

over a wide range of criminal activity, including that

currently covered by a Bilateral Narcotics Agreement,

which will be terminated by its terms on June 30, 1997.

Hong Kong's mature and experienced law enforcement

structure is characterized by dedication and no

reported narcotics-related corruption among senior

officials. Cooperation between the United States and

Hong Kong on matters relating to drug trafficking and

money laundering continues to be excellent.

India

India is the sole producer of licit opium gum for

the pharmaceutical industry, a significant cultivator

of opium poppies in remote regions of northwest and

northeast India and a transit country for opiates from

both Southwest and Southeast Asia. Controls over the

licit opium industry have been continuously tightened

for the past five years but, due to the method of

production, some diversion probably continues. The

well-developed transportation infrastructure in India,

combined with porous borders from neighboring source

countries, has made India an attractive transit country

for traffickers.

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.

In 1996, India continued to take steps to curtail

diversion of licit opium, which remains a concern. The

minimum qualifying yield (MQY) for relicensing to

cultivate opium poppy was raised from 46 to 48

kilograms per hectare in most growing areas, and

offenses related to cultivation and embezzlement of

opium are now on par with other trafficking crimes.

Sentences of up to 20 years' imprisonment can be

imposed.

Although the Government of India (GOI) did not

agree to direct USG participation in the 1996 opium

yield survey, it did allow U.S. scientists to observe

the survey and to work with Indian scientists to

include new parameters in future opium yield surveys. A

comprehensive opium yield survey verifies data on crop

yields, establishes practicable levels of MQY, and

better quantifies diversion.

Indian opium gum, a principal source of the baine

and other alkaloids essential to certain

pharmaceuticals, is in demand by U.S. and other

pharmaceutical firms. India once again increased opium

poppy cultivation because of the pharmaceutical demand

and a desire to establish once again a stockpile

[[Page 11598]]

against a crop disaster. Opium production rose to 849

mt in 1996 from 833 mt in 1995 (all measures at ten

percent moisture).

India has illicit opium poppy cultivation,

primarily in areas such as Jammu and Kashmir, where GOI

control is challenged by insurgent groups. USG remote

sensing in 1996 indicated illicit cultivation on 3,400

hectares, with a theoretical yield of 47 metric tons of

opium, a decrease from the previous year's estimate.

However, despite efforts by the GOI based on suspect

coordinates provided by the USG, it was able to find

only small areas of poppy cultivation.

The GOI continues to make progress in controlling

the production and export of precursor chemicals. The

GOI has a cooperative relationship with the DEA,

especially on precursor chemical issues, and has agreed

not to allow any shipment unless DEA issues a letter of

non-objection. Trafficking in illegally produced

methaqualone (mandrax), a popular drug in Africa, is

still believed to be a major problem, although seizures

fell in 1996.

Authorities have had limited success in prosecuting

major narcotics trafficking organizations because of

the lack of enforcement funding and weaknesses in the

investigations infrastructure. The GOI stresses

cooperation among law enforcement entities. India

cooperates in ``controlled deliveries'' that have

resulted in arrests in six countries.

The USG receives reports of narcotics-linked

corruption, but cannot independently verify the extent.

No senior-level politician or bureaucrat has been

accused of narcotics-related corruption.

India is party to the 1988 UN Drug Convention, and

Indian officials state that it is drafting legislation

needed on asset seizures and money laundering. In the

meantime, its law enforcement agencies are without the

tools to achieve fully the Convention's goals and

objectives.

India fulfilled the requirements of FAA Section

490(c) to maintain licit production and stockpiles at

levels no higher than consistent with market demand. It

also continued to take steps to reduce diversion from

the licit crop, although not agreeing to use a crop

yield survey as the basis for setting the minimum

qualifying yield for license renewal. The GOI, upon

receipt of information on suspected illicit crops,

acted promptly to seek out and destroy the plots. For

1996, India's efforts meet the additional certification

requirements of FAA Section 490(c). The United States

continues to work with the GOI in the following areas:

taking effective action against major narcotics

trafficking syndicates and kingpins; implementing

effective measures on money laundering and asset

seizure; permitting U.S. participation in opium crop

surveys; and eradicating illicit poppy cultivation.

Jamaica

Jamaica produces marijuana and is a significant

cocaine transit country. The Government of Jamaica

(GOJ) made some progress during 1996 to achieve the

goals and objectives of the 1988 UN Drug Convention, to

which it became a party in December 1995. In December

1996, the Jamaican parliament passed a money laundering

law, which, although somewhat limited in scope in that

it criminalizes only the laundering of the proceeds of

drug-related crime, is the beginning of a money

laundering control regime. Although the GOJ has yet to

prosecute asset forfeiture cases under the relevant

1994 act, it did establish a special unit which is

currently investigating two such cases. Action on

drafting a precursor chemical bill was deferred to

1997. GOJ-USG negotiations on a maritime

counternarcotics cooperation agreement, which commenced

in 1996, had been impeded by Jamaica's declaration of

exclusive law enforcement authority in its exclusive

economic zone (EEZ). In December 1996, the GOJ withdrew

its EEZ declaration, and negotiations resumed in

February 1997, in a spirit of cooperation and

willingness to conclude an agreement. Although the rate

of extraditions declined markedly, from six in 1995 to

one (under a waiver of extradition) in 1996, partly

attributable to new Jamaican legal procedures regarding

appeals, the GOJ expelled or deported to the U.S. eight

U.S.-citizen fugitives during

[[Page 11599]]

1996. However, a sizeable number of extradition

requests to the GOJ remain open.

According to DEA, Jamaican police counternarcotics

cooperation in 1996 remained at the high levels of

1995, but drug arrests, cocaine seizures, and cannabis

eradication fell somewhat below the goals and

objectives of our bilateral letter of agreement (LOA).

Signed by the GOJ and USG, the 1996 LOA set an

objective of significantly increasing drug arrests and

cocaine and heroin seizures. Drug-related arrests in

1996 (3,263) were down slightly from the 1995 level

(3,705). Cocaine seizures in 1996 (236 kg) were also

reduced from the 1995 level (571 kg). Heroin seizures

increased slightly in 1996 (1 kg) compared to 1995

(zero kg). Marijuana seizures, on the other hand,

increased significantly (52.99 mt in 1996, compared to

37.20 mt in 1995), bolstered by one very large seizure

late in 1996. The 1996 LOA set an eradication goal of

800 hectares of cannabis. During 1996, 473 hectares

were eradicated, compared to 695 hectares in 1995, with

the area under cultivation estimated to be the same

both years. U.S.-provided helicopters used to assist

eradication efforts were grounded for safety reasons

for part of the year.

Jamaica's National Council on Drug Abuse (NCDA)

continued its demand reduction efforts, becoming

increasingly self-reliant and prominent. Jamaica's

national drug control strategy has been drafted and is

awaiting government approval for implementation. The

GOJ has not formally charged any senior government

official with drug-related activity, but several

Jamaican policemen and court employees have been

arrested and charged on drug and drug-related charges.

The Jamaican media continues to report allegations of

drug-related corruption among public officials

including the police.

In 1997, in order to fully carry out the goals and

objectives of the 1988 UN Drug Convention, the GOJ

needs to strengthen its money laundering control law,

pass a chemical control law, and continue to modernize

its full range of drug control laws and penalties.

Jamaica's greatest challenge will be decisive

implementation of such laws. The GOJ also needs to

conclude a maritime cooperation agreement, intensify

its effort to respond to U.S. extradition requests,

prosecute asset forfeiture cases, and increases the

conviction rate of those arrested for drug-related

crimes. On the bilateral level, in order to make better

use of U.S. counter-drug and anti-crime assistance,

Jamaica needs to intensify its drug law enforcement and

marijuana eradication efforts, tighten the security of

its export shipments to keep drugs out of them, and

participate fully in combined maritime counterdrug

operations. In addition, the GOJ needs to formally

approve its national drug control strategy and

systematically implement it. The GOJ should take

decisive measures to root out drug-related corruption

among public officials which undermines drug control

efforts.

Laos

Laos is still a distant third, after Burma and

Afghanistan, in world production of illicit opium. The

1995/96 growing cycle saw an estimated increase of 11%

in opium production over the 1994/95 level; this was a

little over 50% of the record level set in 1989.

Regions of Laos covered by USG- and UNDCP-funded crop

substitution projects, however, saw only low levels of

poppy cultivation. In May, the Lao Government passed an

amendment to its existing drug control law which banned

opium production and increased penalties for

trafficking. It believes, however, that rigorous

enforcement of the provision outlawing opium production

requires adequate programs to provide alternative

sources of income to farmers and continues to press its

case for adequate assistance from the international

community to enable it to fully implement its anti-

narcotics action plan.

Reservations about its ability to enforce the

legislation banning opium production notwithstanding,

the Government of Laos continued to participate

actively in regional counternarcotics efforts. It

signed a UNDCP-sponsored project document on regional

law enforcement cooperation and hosted a regional

working level conference on the trafficking of

precursor chemicals

[[Page 11600]]

and the involvement of West African drug traffickers in

Southeast Asia. Bilateral cooperation with the United

States, however, remained at the center of Laos'

counternarcotics endeavors. USG funding of the Houaphan

crop control project continued, and the Lao formed two

additional Special Counternarcotics Units, one in

Savannakhet and one in Bokeo, with USG assistance. In

November, the Lao Government approved the assignment of

a DEA representative to the American Embassy in

Vientiane. Overall Lao cooperation with the USG on

counternarcotics matters remains excellent; while low-

level corruption is assumed to exist, there is little

to indicate high-level or systematic drug-related

corruption in the Lao government. Laos' vigorous

enforcement over the coming year of its newly enacted

laws outlawing opium production and increasing the

penalties for drug trafficking will be an important

signal of its long-term commitment to controlling its

drug problem.

Malaysia

Malaysia is a transit country for heroin bound for

the U.S., Europe and other destinations. Malaysia's

anti-trafficking laws include a mandatory death

sentence for convicted traffickers. Law enforcement

authorities are pressing for enactment of a conspiracy

law to enable prosecution of traffickers who escape

prosecution under existing criminal statutes. In

addition, the Government of Malaysia has instituted a

number of bureaucratic measures, including the

establishment of a new interagency group headed by the

Prime Minister, to bolster enforcement and demand

reduction activities. Malaysia is also a party to the

1988 UN Drug Convention.

Cooperation between Malaysian law enforcement

officials and DEA continued to expand in 1996.

Negotiation of a bilateral Mutual Legal Assistance

Treaty between Malaysia and the U.S. is proceeding

smoothly. Both governments hope to conclude the treaty

in 1997. Malaysia and the United States also cooperated

on drug abuse prevention (demand reduction) programs,

many of them directed at rehabilitation center inmates.

These programs are of particular concern to the

Malaysian Government in view of rising addiction rates.

Existing rehabilitation centers have also been a focal

point of the lower-level narcotics-related corruption

which is known to exist: guard and treatment center

employees have sold narcotics to inmates. The Malaysian

Government has proposed an amendment to the Dangerous

Drugs Act to strengthen the penalty for such

activities.

Malaysia is also beginning to look toward money

laundering as a vulnerable point in its overall legal

and institutional structure. Senior government

officials have publicly expressed concern about

possible misuse of Malaysia's offshore financial

center, Labuan, to launder money. Malaysia has now

endorsed the Commonwealth Secretariat's efforts to

produce model anti-money laundering legislation.

Mexico

The Government of Mexico's (GOM) 1996 counter-drug

effort produced encouraging results and notable

progress in bilateral cooperation. President Zedillo

has declared the major drug trafficking organizations,

and the corruption they foster within governmental

structures, to be Mexico's principal national security

threat. He has intensified the country's counter-drug

effort, in keeping with international human rights

norms, both through legal reforms and operationally,

through the expanded participation of the nation's

military services.

Drug seizures and arrests increased in 1996.

Mexican authorities seized 23.8 mt of cocaine, 383 kgs

of heroin, 1015 mt of marijuana, 171.7 kgs of

methamphetamine and 6.7 mt of ephedrine (its chemical

precursor), and destroyed 20 drug labs. Police arrested

11,283 suspects on drug-related charges. Authorities

arrested a several major traffickers: Juan Garcia

Abrego, Gulf cartel leader and one of the FBI's ``Ten

Most Wanted'' fugitive; Jose Luis Pereira Salas, linked

to the Cali and Juarez cartels; and Manuel Rodriguez

Lopez, linked to the Castrillon maritime smuggling

organization.

[[Page 11601]]

The Mexican Congress passed two critical pieces of

legislation which have armed the GOM with a whole new

arsenal of weapons to use to combat money laundering,

chemical diversion and organized crime. The GOM

established organized crime task forces in key

locations in northern and western Mexico in cooperation

with U.S. law enforcement. In an effort to confront

widespread corruption within the nation's law

enforcement agencies, former Attorney General Lozano

dismissed over 1250 federal police officers and

technical personnel for corruption or incompetence,

although some have been rehired, and the GOM indicted

two former senior GOM officials and a current

Undersecretary of Tourism. He also sought to expand

cooperation with the United States and other

governments.

The United States and Mexico established the High-

Level Contact Group on Narcotics Control (HLCG) to

explore joint solutions to the shared drug threat and

to coordinate bilateral anti-drug efforts. The HLCG met

three times during 1996 and its technical working

groups met throughout the year. Under the aegis of the

HLCG, the two governments developed a joint assessment

of the narcotics threat posed to both countries which

will be used as the basis for a joint counter-drug

strategy.

U.S.-Mexican bilateral cooperation on drug law

enforcement continued to improve in 1996, particularly

in the areas of money laundering, mutual legal

assistance, and criminal investigations. The USG

provided training, technical, and material support to

personnel of the Office of the Mexican Attorney General

(PGR), the National Institute to Combat Drugs (INCD),

the Mexican Treasury, and the Mexican armed forces. The

Government of Mexico established the important

precedent of extraditing Mexican nationals to the

United States under the provision of Mexico's

extradition law permitting this in ``exceptional

circumstances.'' This paves the way for further

advances in bringing fugitives to justice. Both

governments returned record numbers of fugitives in

1996.

Even with positive results, and good cooperation

with the U.S. and other governments, the problems which

Mexico faces remain daunting. The Zedillo

Administration has taken important beginning steps

against the major drug cartels in Mexico, and towards

more effective cooperation with the United States and

other international partners, but the strongest groups,

such as the Juarez and Tijuana cartels, have yet to be

effectively confronted. The level of narcotics

corruption is very serious, reaching into the very

senior levels of Mexico's drug law enforcement forces,

as witnessed by the February 1997 arrest of the

recently-appointed national counternarcotics

coordinator. President Zedillo acted courageously to

remove him as soon as the internal Mexican

investigation revealed the problem, but this has been a

set-back for Mexico's anti-drug effort, and for

bilateral cooperation.

Mexican police, military personnel, prosecutors,

and the courts need additional resources, training and

other support to perform the important and dangerous

tasks ahead of them. Progress in establishing controls

on money laundering and chemical diversion must be

further enhanced and implemented. New capabilities need

to be institutionalized. Above all, the GOM will have

to take system-wide action against corruption and other

abuses of official authority through enhanced screening

personnel in sensitive positions and putting into place

ongoing integrity controls.

While there are still serious problems, and a

number of areas in which the USG would like to see

further progress, the two governments have agreed on

the parameters of a joint approach to combat the

narcotics threat, and are at work on developing this

strategy. The drug issue will remain one of the top

issues in the bilateral agenda and will be one of the

main issues discussed during President Clinton's

planned visit to Mexico in April.

Panama

Panama continued to cooperate with the United

States to achieve our counternarcotics goals and

objectives in 1996. The Government of Panama's (GOP)

achievements in 1996 included an eradication campaign

which re

[[Page 11602]]

sulted in the elimination of the country's fledgling

coca cultivation and significant damage to marijuana

cultivation, aggressive and effective prevention and

education campaigns, and the first-ever conviction of a

major money launderer from the Colon Free Zone. In one

of the region's most significant arrests, the GOP

captured the Cali cartel's primary maritime smuggler,

Jose Castrillon Henao, who is scheduled for trial in

1997. The USG provided six helicopters to the GOP in

late 1996, for the express purpose of combatting

narcotics.

Following up on full congressional certification

for the past two years, and spurred on by last year's

legislation tightening money laundering regulations,

the Government of Panama made Latin America's first

financial analysis unit operational, resulting in the

presentation of patterns of money laundering to the

GOP's National Security Council for eventual

prosecution.

Panama continues to be a major financial and

commercial center ideally positioned for narcotics

smuggling and illicit financial transactions. Money

laundering remains the primary problem in Panama. Local

factors facilitating money laundering include bank

secrecy, the Colon Free Zone, inadequate controls on

cash and commodity imports/exports, lax incorporation

regulations, and a dollar-based economy. The GOP has

taken definite steps to address these problems,

including the start-up of a financial analysis unit and

the establishment of computerized data bases for

tracking financial movements in the Colon Free Zone.

The GOP also established a financial investigative unit

which will prepare cases of money laundering for

prosecution. Armed with more effective legal, policy,

and institutional underpinnings, the GOP expects to

counter money laundering activities more successfully

in 1997.

The GOP needs to continue to crack down on both

money laundering and drug trafficking, follow through

on reports of suspicious transactions by arresting and

convicting major money launderers, improve interdiction

capabilities, and make effective use of the financial

analysis unit.

Paraguay

The government of Juan Carlos Wasmosy cooperated

fully with the United States in 1996. Government of

Paraguay (GOP) anti-drug efforts improved

substantially, and the government took adequate

measures to further its compliance with the goals and

objectives of the 1988 UN Drug Convention. Scarce

resources, public corruption, and an only partially-

reformed legal system remain obstacles to more

effective counternarcotics action, but the GOP has

demonstrated its commitment to combatting the drug

trade.

President Wasmosy appointed an activist Director to

the National Anti-drug Executive Secretariat (SENAD) in

June, who immediately sought a closer, more productive

relationship with the United States and with Paraguay's

neighbors. Assuming the post with a reputation for

honesty, Carlos Ayala made cocaine trafficking groups

the SENAD's top priority. He has removed anti-drug

officers implicated in corrupt practices, and focused

Paraguay's investigative resources on Paraguay's top

traffickers. Under Ayala's leadership, SENAD developed

a comprehensive national anti-drug strategy, which

President Wasmosy presented to the nation in late fall.

Ayala also launched a new approach to combat drug

abuse.

The Paraguayan Congress, with strong support from

the executive branch, in December enacted an anti-money

laundering law consistent with international standards.

SENAD Chief Ayala initiated a revision of Paraguay's

anti-narcotics statute which would explicitly authorize

undercover operations and controlled deliveries. The

GOP is pushing for congressional approval of the

amendment early in 1997.

The SENAD continued large-scale marijuana

eradication operations, worked closely with DEA on

training and equipping the Anti-narcotics Police

(DINAR) Special Intelligence and Investigative Unit,

and assessed the threat of precursor chemical

trafficking and diversion in Paraguay. Meanwhile, on

the international front, the GOP signed agreements with

Brazil and Argen

[[Page 11603]]

tina to cooperate in combatting trans-border criminal

activity, including drug trafficking, and Paraguayan

officials initiated working-level coordination meetings

with counterparts in these countries. The SENAD also

agreed with Bolivian counterparts to share intelligence

and to conduct joint operations.

In 1997, the GOP should secure passage of a

strengthened anti-drug law and begin to forcefully

implement its new money laundering statute. The USG

will assist the GOP in creating an interagency

financial crimes investigative unit. Paraguay also must

improve its ability to investigate drug and other

organized crime groups in the tri-border area,

particularly in the cities of Pedro Juan Caballero and

Ciudad del Este, and we expect the GOP to pursue key

drug trafficking and corruption cases in the coming

year.

Peru

Peru is the world's largest coca producer. The USG

has consistently urged the Government of Peru (GOP) to

fulfill its signatory obligations under the 1961 Single

Convention and the 1988 UN Drug Convention,

particularly with regard to reducing its coca

production. In 1996, the GOP cooperated fully with the

United States in efforts to achieve the goals and

objectives of the UN drug conventions. Last year, total

coca cultivation decreased by 18 percent, from 115,300

hectares in 1995 to 94,400 hectares in 1996. The level

of cultivation in Peru was the lowest since 1986.

Contributing to the reduction was widespread

abandonment of coca fields by farmers due to depressed

cocaine base prices. Cocaine base prices were held

below the break-even point by Peruvian National Police

and Peruvian Air Force actions against the narcotics

trafficking transportation infrastructure. During 1996,

the joint USG-GOP alternative development program

established a foothold to begin economic restructuring

in coca cultivating areas. Some 226 communities signed

agreements to reduce illicit coca cultivation by

approximately 15,000 hectares over the next five years,

in exchange for assistance to increase productivity and

income from licit alternative crops.

Peruvian National Police operations seized greater

amounts of cocaine base and coca leaf, but less cocaine

hydrochloride (HCl) than in 1995. Efforts to arrest and

prosecute major Peruvian traffickers maintained the

GOP's stiff narcotics policy, and contributed to

disarray among major trafficking organizations. Still,

there was strong evidence that Peruvian traffickers

continued to refine cocaine hydrochloride and ship it

directly to Mexico for distribution in the United

States. President Fujimori continued to take a tough

public stance against narcotics corruption, and in 1996

created a special drug court system to handle drug

offenses. The U.S. Embassy reported that incidents of

military and police drug corruption were quickly

addressed by the GOP.

In April 1996, the GOP passed Law 824, which

established a civilian drug council (CONTRADROGAS).

CONTRADROGAS was created to coordinate the efforts of

the various GOP agencies involved in counternarcotics

efforts, and to implement the Peruvian National Drug

Strategy announced in 1994.

In 1997, the GOP must mount an aggressive effort to

attract additional donor funding to expand alternative

development efforts while coca farmers are still

receptive to licit economic alternatives. The GOP must

also ensure that the narcotics law enforcement effort

which has suppressed cocaine base prices is intensified

to address riverborne narcotics traffic and sustain the

existing aerial intercept effort.

Taiwan

Taiwan's geographical location relative to the

Golden Triangle and its importance as an advanced

regional transportation and shipping center make it a

major transit point for drugs destined for the U.S. and

other markets. Taiwan authorities dispute this

assessment, citing reduced seizures and arrests as a

signal of the deterrent effect of their considerable

counternarcotics

[[Page 11604]]

efforts. The pattern of trafficking in the region,

however, suggests that because of its geographic

location and its ports, Taiwan will remain a target for

drug traffickers. Taiwan law enforcement authorities,

in fact, recently expressed concern that Hong Kong-

based drug traffickers may be collaborating with Taiwan

organized crime groups to transfer their base of

operations to Taiwan before Hong Kong reverts to

Chinese sovereignty in July of 1997, and their

cooperation with the U.S. on counternarcotics efforts

continues to be good.

Taiwan's law enforcement cooperation with DEA

(under the auspices of the American Institute in

Taiwan) and other U.S. agencies expanded in 1996.

Taiwan is setting up a new National Drug Intelligence

Center; we envisage increased cooperation with U.S. law

enforcement agencies resulting from this. The American

Institute in Taiwan and the Taiwan Economic and

Cultural Representative Office continue to negotiate a

Memorandum of Understanding to provide a framework for

even broader counternarcotics cooperation. Taiwan has

been conducting an aggressive anti-crime campaign on

other fronts, as well, including prosecuting cases of

public corruption. There are, however, no known cases

of official involvement in narcotics trafficking.

In 1996, Taiwan also passed money laundering

legislation meant to bring it into closer conformity

with the goals and objectives of the 1988 UN Drug

Convention. While the law enhances the ability of law

enforcement officials to deal with the problem, it

requires a number of revisions to enable Taiwan to meet

international standards.

Thailand

Thailand remains a major transit route for drugs

destined for the U.S. and other markets and produces

about one per cent of Southeast Asia's opiates. It

continues to serve as a model for the region as a

result of its successful efforts to control opium

production and its commitment to prosecuting drug

producers and traffickers. Opium production in the

1995/96 growing season increased from an estimated 25

metric tons in the previous season to 30 metric tons.

The upsurge in opium and heroin prices shortly after

the destabilization of Khun Sa's trafficking operations

in Burma was largely responsible for more widespread

opium cultivation. Thailand's actions to close off

sections of the Thai border with Burma, however, had

helped create the conditions leading to Khun Sa's

decision to reach a settlement with the SLORC.

In January of 1996, Thailand extradited a former

Member of Parliament to the United States for

prosecution on drug trafficking charges. Two

``Operation Tiger Trap'' defendants (part of drug lord

Khun Sa's trafficking operation) were also extradited

to the U.S. later in the year. Thirteen individuals

have been arrested thus far in connection with this

major ``sweep.''

Thai cooperation with U.S. law enforcement

officials remains excellent. Thailand's Office of the

Narcotics Control Board and the Police Narcotics

Suppression Bureau continue to exhibit a high degree of

professionalism. Corruption continues to be a problem

in the Police Department, which lacks an effective

internal security apparatus to hold officers

accountable for wrongdoing. Elements of the Royal Thai

Army and Thai Customs have also been publicly accused

of corruption. The Royal Thai Government as a whole,

however, supports a policy of active measures against

drug production and trafficking.

Thailand is vulnerable to money laundering. A bill

to enact legislation has been stalled for a number of

years. In late November, the newly-elected Prime

Minister promised the President that the legislation

would be given special handling to hasten its passage.

Passage of appropriate anti-money laundering

legislation would enable Thailand to become a party to

the 1988 UN Drug Convention.

Like other countries in the region, Thailand may

find itself becoming an even larger market for the

region's opium, heroin and amphetamine

[[Page 11605]]

production as the region's economic expansion

continues. We will be urging Thailand to enact a

conspiracy law to further enhance its ability to mount

effective counternarcotics efforts and to establish an

amplified crop control program.

Venezuela

Venezuela continued to be a major transit country

for cocaine shipped from Colombia to the United States,

and for chemicals transhipped through Venezuelan ports,

as well as a money laundering center. Law enforcement

agencies estimate that between 100-200 metric tons (mt)

of cocaine are shipped through Venezuela to the United

States and Europe. The Government of Venezuela (GOV)

seized only about six mt of cocaine, almost identical

to the amount it seized in 1995. Heroin seizures

declined by 27 percent, from 96 kilograms (kg) in 1995

to 70 kg in 1996.

A significant decision this year was President

Caldera's appointment of a politically powerful drug

czar and elevation of this position to a cabinet rank.

However, the GOV must produce more concrete

counternarcotics results to match this demonstration of

political will during the next year.

Venezuela's main port, Puerto Cabello, is a favored

point for illicit smuggling by narcotics trafficking

syndicates. The same is true of other ports along

Venezuela's long coastline. Venezuela's airspace offers

further opportunities for trafficking. Traffickers

transport cocaine by small aircraft primarily to

Venezuela's border states of Tachira and Apure.

Traffickers risk little by transporting cocaine through

Venezuela due to weak and ineffectual law enforcement

interdiction efforts.

The United States designated Venezuela as a

recipient of more than $12 million worth of USG

drawdown defense equipment. The Venezuelan Armed Forces

adopted a counterdrug strategy, which defines its role

as supporting the National Guard (GN) and police

forces. The GOV is working with the United States to

create a Joint Police/Military Counternarcotics

Intelligence Center. However, much more needs to be

done to improve communication and coordination between

the GN and the Navy, Air Force and Army to implement

the strategy.

Maritime cooperation was disrupted by GOV denials

of four USG requests from United States Coast Guard Law

Enforcement Detachments from third country vessels to

board suspected Venezuelan narcotics trafficking

vessels in international waters. However, USG and GOV

authorities are currently seeking to broker a maritime

agreement.

Although the GOV lacks effective controls over

certain precursor chemicals, it made significant

seizures of chemicals at Puerto Cabello. The GOV also

continued to make significant progress against illicit

cultivation. Venezuelan authorities identified

replantings of about 500 hectares (ha) of coca and

opium poppy fields in the Sierra de Perija region on

the border with Colombia. With USG assistance, those

replantings were eradicated. Since 1994, joint efforts

have reduced estimated illicit plantings from 1,000 ha

to 200 ha.

The GOV permitted the basing of United States

military assets and personnel in Venezuela in an effort

to cooperate on Operation Laser Strike, a United States

Southern Command regional air interdiction operation.

Money laundering in Venezuela continued in its

financial network of banks and non-bank institutions

because of weak banking supervision and regulatory

authority. Although Venezuela passed a drug law in 1993

that included provisions on money laundering, key

provisions are lacking, including one on conspiracy.

Allegations of corruption plague the judicial

branch and some elements of the GN. Law enforcement

agencies believe that corruption in the GN is a

problem, hobbling the effectiveness of counternarcotics

efforts. These shortfalls have raised the USG's concern

about trafficking through Venezuela to the United

States. Venezuela must move swiftly to reform its

judicial

[[Page 11606]]

branch, whose corruption threatens to prevent Venezuela

from combatting its drug problem and from protecting

its democratic institutions and national territory from

international drug traffickers.

Despite such problems, eradication efforts, the

elevated rank of the drug czar, Venezuela's first

national epidemiological survey, and other

counternarcotics efforts reflect the GOV's spirit of

cooperation to advance the goals and objectives of the

1988 UN Drug Convention and bilateral agreements with

the United States. However, the USG will scrutinize

Venezuela's efforts in the coming year and will expect

the GOV to be vigorously engaged in increased

cooperation on drug interdiction, money laundering,

chemical control, anti-corruption efforts and

conclusion of a comprehensive bilateral maritime

cooperation agreement.

Vietnam

Vietnam's increased trade and tourism have opened

new routes for Southeast Asian heroin shipments to such

consumer markets as Australia, North America and

Europe. The SRV continues to battle against narcotics

trafficking but has yet to overcome problems of

corruption within the military and police. The SRV

does, nonetheless, appear to be actively engaged on the

counternarcotics issue, conducting a demand reduction

media campaign as well as police operations and crop

eradication programs. SRV statistics reflect

cultivation of 1800 hectares of opium poppy during

1995/96. USG estimates, however, place the cultivation

level at 3,150 hectares.

Vietnam created a Drug Control Master Plan in 1995

which calls for the eradication of opium cultivation by

the year 2000. In October of 1996, the SRV promulgated

implementing regulations for articles of the criminal

code related to narcotics. The new regulations permit

asset seizures in narcotics cases. Vietnam joined the

Association of Southeast Asian Nations Drug Control

Cooperation Program in 1996. Vietnam has also stated

that it expects to ratify the 1988 UN Drug Convention

in 1997. It is currently drafting a comprehensive

narcotics control law, based on the tenets of the 1988

Convention, which is expected to go before the National

Assembly in 1997. The law will include statutes related

to the control of chemical precursors and provide for

controlled shipments as an investigative technique.

SRV interdiction efforts resulted in 6,000

narcotics-related arrests in 1996, twice as many as in

1995. SRV law enforcement agencies are working with the

UNDCP to create special counternarcotics squads across

the country. U.S.-SRV cooperation on narcotics issues

expanded throughout 1996. Training initiatives included

DEA training for Ministry of Interior narcotics control

teams in Hanoi and U.S. Customs Service training for

Vietnamese customs officers in Ho Chi Minh City.

Several senior Vietnamese narcotics officers also

traveled to the United States for consultations with

U.S. counterparts. The U.S. hopes to increase the level

of its assistance to Vietnam. To that end, it plans to

engage the SRV in drafting a Memorandum of

Understanding on counternarcotics cooperation; a

successful outcome, however, will depend to a great

extent on the SRV's coming to grips with the

conditionality involved in any expanded U.S.

assistance.

VITAL NATIONAL INTERESTS JUSTIFICATIONS

Belize

Because of a significant increase in the detected

activities of Colombian drug trafficking organizations

in Belize in 1995, Belize was added to the list of

major drug producing and transit countries for 1996.

Belizean traffickers are also working with Mexican

groups to move the Colombian cocaine north to the

United States. These criminal activities continued

throughout 1996, but the ability of the Government of

Belize (GOB) to combat them was severely undermined by

deeply-entrenched corruption, which reaches into senior

levels of government.

[[Page 11607]]

The GOB's accomplishments weighed against those

areas where progress was lacking have led to a decision

to consider denial of certification of Belize. The

GOB's accomplishments in 1996, such as its recent

accession to the 1988 UN Drug Convention and passage of

money laundering legislation, were achieved only after

the United States and other countries exerted intense,

coordinated pressure. Belizean cocaine seizures were

down 36 percent and marijuana eradication decreased by

4 percent from 1995. Finally, the record of arrests and

convictions of major drug dealers was, likewise,

disappointing. During 1996, the GOB took no meaningful

steps to uncover or punish official corruption.

Bungled investigations, along with several high-

profile trials ending in acquittal, including the

prosecution of the Home Minister's son-in-law for

running an illegal airstrip and two immigration

officials fired from their jobs and accused of

corruption in an alien smuggling case, have, at a

minimum, demonstrated the GOB's deficiencies in its

efforts.

The USG urged the GOB to demonstrate its

willingness to cooperate with the United States in

achieving reasonable counternarcotics goals and

objectives. The GOB, however, is not fully cooperating

or taking adequate steps to meet the goals and

objectives of the 1988 UN Drug Convention, especially

promises made by the GOB toward the end of the year to

complete a new extradition treaty and a mutual legal

assistance treaty. The GOB has been operating under a

US-UK extradition treaty.

Denial of certification would be contrary to U.S.

vital national interests because it would require the

U.S. to vote against multilateral development bank

funding for Belize, an important element in supporting

our long-term democracy and economic development goals

for the country. Such multilateral support reinforces

U.S. counternarcotics assistance which is designed to

help Belize develop strong, independent and credible

institutions capable of bringing traffickers to

justice, stemming the flow of narcotics through the

country and better guarding its own borders.

Although Belize's counternarcotics efforts fell

short of full cooperation during 1996, the GOB did take

steps which demonstrated an effort to work with the

USG. It is in the vital national interests of the

United States to improve the GOB's counternarcotics

efforts and ensure that they are given the attention

required.

Lebanon

Lebanon appears to have succeeded in the struggle

against illicit crop cultivation due to the joint

Lebanese-Syrian eradication efforts since 1992. There

appears to be no cultivation of opium and the cannabis

cultivation (for hashish production) also has all but

disappeared. There are some small farms in the Baalbek-

Hermel region which are still engaged in illicit

cultivation, but they appear to be few in number. When

such farms are discovered, arrests are made immediately

and the crops are eradicated. Lebanese Internal

Security Forces (LISF) and the Lebanese Armed Forces

(LAF), with assistance from the Syrian Army, reported

eradication of approximately 70,000 square meters of

cannabis in the Baalbek-Hermel region of the Bekaa

Valley during June and July. There were no other

reported eradication efforts during the year.

However, Lebanon remains a significant transit

country for the purposes of re-export of cocaine, and

many small ``home''-type labs for processing opium into

heroin are still reported to operate in the Bekaa

Valley. Several areas of the Bekaa Valley are not under

the effective control the Government of Lebanon (GOL),

and these areas are vulnerable to the establishment of

illegal labs.

Although local authorities deny money laundering is

a serious problem, Lebanon still presents itself to

narcotics traffickers as a venue for money laundering

due to bank secrecy laws, which do not allow for

official discovery. Corruption remains endemic through

all levels of Lebanese society, reportedly including

law enforcement bodies.

[[Page 11608]]

In March 1996, the GOL acceded to the 1988 UN Drug

Convention, but with formal reservations regarding

certain provisions of the Convention, including those

which relate to bank secrecy. The United States has

already indicated its intention to formally object to

these reservations if Lebanon does not withdraw them.

Parliament is studying a draft anti-drug code, which

would make money laundering a crime.

The GOL has displayed a willingness to cooperate

with USG agencies during 1996. Unfortunately, Lebanon's

reservations to some of the provisions of the 1988 UN

Drug Convention suggest that the political will is not

yet sufficient to comply fully with world standards.

Lebanese trafficking continues to pose a threat to

U.S. citizens and interests. On the other hand, the

United States considers the provision of assistance

which encourages the continued development of Lebanon's

economy and infrastructure as critical to peace and

stability in the Middle East, which is also of vital

importance to U.S. interests and stability. These

factors, combined with Lebanon's sustained positive

performance in eradication and other anti-narcotics

efforts, outweigh the threat posed by drug trafficking

through Lebanon to the United States.

Pakistan

Pakistan is an important transit country for

opiates from Afghanistan, a source country for

approximately 75 metric tons of opium, and a processing

country for domestic opium and opium from Afghanistan.

Most opium poppy cultivation and most laboratory

production of morphine base and heroin in Pakistan

takes place in the Northwest Frontier Province (NWFP),

which borders Afghanistan. Pakistan has a bilateral

agreement with the United States that provides funding

for law enforcement, roads and crop substitution in the

NWFP, and demand reduction activities.

Under the government of Benazir Bhutto, Pakistan's

counternarcotics efforts from January through October

1996 were seriously deficient. However, the interim

government of Meraj Khalid, which replaced the Bhutto

government in November, took a number of significant

counternarcotics actions in accordance with the U.S.-

Pakistani bilateral agreement and the 1988 UN Drug

Convention.

The primary counternarcotics achievement of the

Bhutto government was a reduction in the cultivation of

opium poppy. USG estimates of land used for opium poppy

decreased 51 percent to 3,400 hectares and the estimate

of production decreased 52 percent to 75 metric tons

from the previous year. The Bhutto government also

extradited Sialek Jan, wanted by the USG on narcotics

trafficking charges in March. However, under Bhutto,

Pakistani authorities failed to act on DEA information

on specific cases of trafficking, severely cut the

budget of the Pakistani Anti Narcotics Force (ANF),

failed to act on recommendations of the UN Drug Control

Programs (UNDCP) for improvements to the Narcotics

Substances Act, and failed to interdict trafficking

caravans in Baluchistan Province. During Bhutto's

tenure, corruption was a significant problem, with ANF

officials suspected of perpetrating a hoax seizure of

opium base in June, and subsequently covering up their

actions.

Pakistani President Leghari November 5 dismissed

the Bhutto government for corruption and mismanagement,

an act subsequently upheld by the Pakistani Supreme

Court. Corruption is a severe and chronic problem in

the Pakistani government, including the ANF, which has

no bureaucratic system, such as an internal affairs

section for identifying, investigating and recommending

action against corrupt officers. No one in a policy-

making position in either the Bhutto or interim

government has been accused of narcotics-related

corruption. Sufficient legislation exists to control

and punish public corruption but it is seldom enforced.

The interim government in November initiated a

comprehensive process for holding public officials

accountable for corrupt practices.

[[Page 11609]]

The interim government in November and December

1996 promulgated changes to the Narcotics Substances

Act as suggested by UNDCP, restored some funds to the

ANF, conducted two major raids on heroin laboratories

in NWFP, extradited to the United States accused

trafficker Nasrullah Henjrah, and arrested another

individual on the U.S. extradition request list, Nasir

Ali Khan.

During the course of the year, the Government of

Pakistan froze $3.5 million in assets from 21

traffickers and seized 5.4 metric tons of opium and 2.0

metric tons of heroin. These figures represent declines

from those of 1995.

Pakistan is a party to the 1988 UN Drug Convention,

which it ratified in October 1991, but implementing

legislation on money laundering has not yet been

drafted. The revisions to the Narcotic Substances Act

approved by the interim government bring asset seizure

and controlled delivery standards to the levels

demanded by the Convention.

Vital U.S. national interests could be damaged if

Pakistan, under the newly-elected government of Nawaz

Sharif, were to be denied certification. Pakistan is a

moderate Islamic state with a nuclear weapons

capability. Pakistan is the largest contributor of

troops for UN peacekeeping operations and has provided

key cooperation in the international fight against

terrorism. Denial of certification would be viewed in

Pakistan as abandonment of a loyal ally and would

endanger U.S.-Pakistani dialogue on vital issues.

Denial of certification could also bring to a halt the

counternarcotics momentum started in November by the

caretaker government, and could negatively prejudice

the newly elected government against counternarcotics

cooperation with the United States.

Denial of certification would further endanger U.S.

interests by requiring the United States to vote

against Pakistan in multilateral development banks

(MDBs). The United States has an interest in seeing

that the MDBs continue their support of activities such

as the GOP's Social Action Program and its Financial

Sector Reform Project, which are essential to

Pakistan's human and economic development. Pakistan is

one of the largest beneficiaries of World Bank and

Asian Development Bank programs.

These risks to vital U.S. interests outweigh any

potential gain from denying certification to Pakistan.

Pakistan is a primary conduit for opium and morphine

base from Afghanistan, the second largest opium

producer in the world. With continuing conflict and no

central government in Afghanistan, Pakistan's

cooperation is particularly important in stopping

Southwest Asian drugs.

During the period of vital national interests

certification, the United States will strive to work

with senior officials of the new government to achieve

the goals of the UN Drug Convention.

STATEMENTS OF EXPLANATION

Afghanistan

Afghanistan is second only to Burma as a producer

of illicit opium, producing approximately 30 percent of

the world illicit supply. Production flattened in 1996,

after steep annual increases earlier in the decade.

U.S. satellite surveys indicated a very small decrease

in both cultivation and production, to 37,950 hectares

and 1230 metric tons, respectively.

Civil war not only continued but intensified in

Afghanistan during 1996. Between September and

December, the Taliban, a movement started by religious

students, expanded the territory it controls. The

Taliban now control 90 percent of the land on which

opium poppy is cultivated. The Taliban have now

controlled the province producing the greatest quantity

of opium for over two years. Both USG and UN Drug

Control Program (UNDCP) surveys indicate that there

were no concerted eradication efforts in 1996.

[[Page 11610]]

Law enforcement actions were virtually non-

existent. None of the factions controlling territory

made a serious attempt to disrupt narcotics

trafficking. Granted that none of the factions has an

effective law enforcement bureaucracy, the ease with

which narcotics caravans and refineries continued open

operations was nevertheless remarkable. In the few

instances the USG knows of where arrests were made,

most suspects were released upon payment of a bribe.

Taliban leaders, in particular, expressed a desire

to cooperate on counternarcotics with U.S. and UNDCP

officials. However, the major opium refining operations

are located in Taliban-controlled territory, and the

Taliban appear to have done nothing to date to

discourage cultivation of opium poppy. The leaders

state they cannot do so until international donors

provide crop substitution and other assistance.

Many sources have reported that all major factions

require farmers to pay a tax on their opium production.

Some reports also indicate that deeper involvement in

trafficking is also common among Afghan leaders.

The USG strongly promotes the UN Special Mission to

Afghanistan's efforts to develop a broad-based national

government that can address the problems of narcotics,

terrorism and humanitarian concerns. We assist the

peoples of Afghanistan, subject to resource

availability, primarily through UN programs aimed at

humanitarian relief, reconstruction, and

counternarcotics.

Inasmuch as legislation makes special allowance for

continuation of such assistance generally and of

assistance for Afghanistan specifically,

notwithstanding any other provision of law, denying

certification to Afghanistan would have minimal effect

in terms of implementation of this policy.

The continued large-scale cultivation and

trafficking in Afghanistan, combined with the failure

to initiate law enforcement actions, preclude a

determination that Afghanistan has taken adequate

counternarcotics steps on its own or that it has

sufficiently cooperated with the USG in

counternarcotics efforts, although Afghanistan is a

party to the 1988 UN Drug Convention. Accordingly,

denial of certification is appropriate.

Burma

Burma produced 84% of the opium cultivated in Asia

in 1996 and remains the world's largest producer of

opium and heroin. Continuing lack of resources and

commitment to effective drug control policies led to

near record levels of opium cultivation, totaling

163,000 hectares with a potential yield of 2,560 metric

tons of opium gum, or enough to produce 250 tons of

heroin. While the State Law and Order Restoration

Council (SLORC) claimed an improvement in its record

with regard to drug and precursor chemical seizures,

these efforts were marginal, both in terms of results

and in view of the overall level of opium production

and trafficking in Burma. The drug lord Khun Sa

continues to be exempt from prosecution or extradition.

Ethnic drug trafficking armies such as the United Wa

State Army (UWSA) and the Myanmar National Democratic

Alliance Army (MNDAA), having negotiated ceasefires

with the SLORC which permit them limited autonomy,

remain armed and heavily involved in the heroin trade.

Their leaders have used their relationship with Rangoon

to increase their wealth, but prosperity has not

filtered down to the ordinary people in the areas they

control. Lack of enforcement against money laundering

and an underdeveloped banking system have created an

economic environment increasingly conducive to the use

of drug profits in legitimate commerce. While there is

no evidence that the government per se encourages or is

involved in the drug trade, drug money is beginning to

permeate the economy.

The SLORC announced no new drug control policy

initiatives in 1996. It did conduct some

counternarcotics activities in areas controlled by the

Kachin Defense Army, the Kokang Army, the MNDAA and the

UWSA,

[[Page 11611]]

seizing a total of 493 kilos of heroin, over three tons

of ephedrine, 5,677,525 amphetamine tablets and 2668.4

gallons of acetic anhydride. These actions did not

seriously threaten the drug trafficking activities of

the organizations in question. The unprecedented

chemical precursor and amphetamine seizures, however,

have alarmed Burmese authorities because they signal a

possible future stimulants problem for the Burmese.

Negotiations involving the Burmese Government,

UNDCP, and Wa leaders on the ``Drug Control and

Development in the Wa Region of Shan State'' project

concluded in November. The goal is to bring about a

gradual reduction of opium cultivation in the Wa area.

The Burmese Cabinet has not yet formally approved the

project. While the project is designed to incorporate a

monitoring and evaluation component, donors have

concerns about implementation.

USG engagement of the Burmese government on

counternarcotics issues remains limited. DEA maintains

a liaison operation with Burmese police and military

units involved in drug enforcement activities. The

Burmese have also invited USG participation in a third

joint opium yield survey in the Shan State. The U.S.

will consider further assistance only upon the Burmese

Government's demonstration of a strong commitment to

narcotics control, the rule of law and significant

political reform.

Colombia

In 1996, as in previous years, Colombia remained

the world's leading producer and distributor of cocaine

and an important supplier of heroin and marijuana. In

the same year, coca cultivation in the country

increased by approximately 30 percent.

As in 1995, the Colombian Government made only

limited progress in 1996 against the pervasive,

narcotics-related corruption from which it suffers. In

a process which can only be described as flawed,

President Samper was exonerated of charges of

corruption by the Colombian Congress. Moreover, Samper

remained unwilling to confront fully the drug interests

that contributed heavily to his Presidential campaign.

President Samper pledged to push for stricter

sentencing laws in 1994, but there was only limited

progress in 1996 to advance Congressional passage of

legislation which would increase sentences for

traffickers and money launderers. As an apparent

consequence, the Rodriguez Orejuela brothers--the

notorious Cali drug leaders--received very light prison

sentences which were not commensurate with their

crimes. The Colombian government did not respond to the

USG's request for extradition of four major drug

traffickers and for most of the year it took no action

in response to reliable USG information that narcotics

traffickers continue to run their operations from

prison. Troubling also was Samper's promotion and

public praise for a drug-tainted military general--

behavior which reinforces USG concern about the

credibility of his stated commitment to serious

narcotics control for Colombia.

On the eradication front, the Colombian

Government's strong opposition to testing more than one

granular herbicide--in an effort to replace less

effective liquid herbicides--is especially problematic

in light of the significant expansion in coca

cultivation.

On the positive side, the serious work on the part

of the Colombian National Police (CNP) as well as

select elements of the military to confront drug

trafficking must be highlighted. Government agreement

to expand coca and opium eradication was taken on with

determination by the CNP despite significant challenges

including physical threats and lack of proper

resources. In this regard, the USG was encouraged by

evidence of increased cooperation from the Colombian

military for the CNP in support of illegal crop

eradication. The CNP and military also worked closely

to counter narco- and guerrilla-sponsored public

demonstrations against eradication.

[[Page 11612]]

There were signs that newly appointed members of

the cabinet are determined and committed to advance

important counternarcotics objectives. A noteworthy

achievement--pushed also by private Colombian

citizens--was pressure on the Congress which resulted

in passage, with retroactivity, of an asset forfeiture

law. However, its constitutionality is already being

challenged by those who would be affected by its

implementation. In November, bilateral agreement was

reached to expedite shipboarding procedures and a

maritime agreement was signed in February 1997. The CNP

and the Prosecutor General continued their efforts

against corruption by firing corrupt police and

prosecutors and by continuing investigations targetted

against official corruption. However, without

determined and committed leadership, much-needed legal

reform and a supportive political environment, real

drug control successes by the CNP and other entities

will be thwarted.

Progress observed in some areas holds promise for

serious drug control efforts in Colombia in the future.

Nevertheless, because of high-level corruption, the

privileged treatment accorded to major traffickers

currently in jail, light sentencing of traffickers and

the government's continued stand against extradition,

the USG cannot certify Columbia as fully cooperating

with the United States on drug control, or as having

taken adequate steps on its own to meet the goals and

objectives of the 1988 UN Drug Convention.

Iran

Iran remains an important transit country for

opiates from Afghanistan and Pakistan destined

primarily for processing in Turkey. The USG has no

recent surveys of opium poppy cultivation in Iran, but

other sources believe cultivation has decreased,

possibly as a result of the influx of cheap Afghan

opium.

The Government of Iran (GOI) has ratified the 1988

UN Drug Convention, but the USG remains unaware of the

passage of implementing legislation that would bring

Iran into compliance with the requirements of the

Convention. According to UN Drug Control Program

(UNDCP) and International Narcotics Control Board

(INCB) missions that have visited the country, and

reports received from countries with embassies in Iran,

the GOI is attempting to meet at least some of the

goals and objectives of the Convention. The USG cannot

evaluate Iranian claims as we do not have diplomatic

relations. There is no bilateral narcotics agreement or

cooperation and Iran's performance is measured solely

against the standards of the 1988 UN Drug Convention.

The GOI has, according to reports by other nations,

begun reaching out to Western countries in a very

tentative fashion, seeking to establish a working

counternarcotics relationship. There are, however,

countervailing pressures and we know of no working law

enforcement relationship. The GOI, Pakistan and UNDCP

participate in a tripartite UNDCP law enforcement

project, to which Iran contributes important resources

according to UNDCP. In 1995, the latest year on which

Iran reported, it claims to have seized 126 mt of

opium, 2 mt of heroin and 11 mt of morphine, as well as

lost 133 citizens in battles against traffickers. The

USG cannot verify these claims. The level of narcotics

arriving in Turkey does not appear to have diminished

according to USG sources.

Credible reports have been received that corruption

remains a problem. There have been accusations of

corruption against individuals with access to very high

levels of power. Low-level corruption remains a problem

judging by the number of caravans that successfully

evade massive physical barriers at Iran's eastern

border. We do not know how extensively or how equitably

Iran administers its anti-corruption program.

Sentences imposed for narcotics trafficking are

very harsh and 1,000 people have been executed for

trafficking since 1989.

[[Page 11613]]

Nigeria

Nigeria is the focal point of West African

narcotics trafficking. Narcotics producing and

trafficking organizations in Asia, South America and,

increasingly, Nigeria itself either use Nigeria as a

transshipment point or rely on Nigerian courier

networks to transport Asian heroin and South American

cocaine destined for U.S. or European markets. Nigerian

trafficking organizations are among the leading

carriers of Southeast and Southwest Asian heroin into

the United States. In addition, Nigerian traffickers

ship cannabis--the only illicit drug produced in

Nigeria--to Europe and other West African countries.

The Government of Nigeria (GON) has failed to address

corruption adequately among law enforcement and other

government agencies, hindering counternarcotics

efforts.

Although the Nigerian Drug Law Enforcement Agency

(NDLEA), the one positive internal agency working

against drug trafficking in Nigeria, has attempted to

combat trafficking and corruption, the GON has left it

woefully underfunded. Lack of coordination among

police, intelligence and other law enforcement agencies

also prevents effective progress against narco-

traffickers.

Nigerian trafficking organizations operate

sophisticated money laundering operations in addition

to controlling courier networks. These organizations

have been quick to adapt in response to vigorous

international law enforcement, as well as to efforts

made by the NDLEA within Nigeria. They have found new

ways to evade detection and to alter and expand their

narcotics smuggling routes and markets; as GON

counternarcotics efforts have effectively reduced the

amount of drugs shipped through international airports

within Nigeria, courier networks have increasingly

relied on overland shipments to transport narcotics.

Nigerian trafficking organizations actively recruit

couriers of diverse nationalities, backgrounds and

ages.

Perhaps the most glaring omission by the GON is its

failure to provide funding for its law enforcement

employees, thus making them ever more vulnerable to

bribery and related forms of corruption, and to provide

funding for implementation of its laws and strategies.

Most law enforcement employees are paid far less than

is sufficient to feed, clothe and house their families.

In addition, the GON has taken no meaningful steps

towards cooperation with the United States on

extraditions, information sharing or prosecution of

arrested fraud suspects; nor has it moved significantly

towards meeting the goals and objectives of the 1988 UN

Drug Convention.

Syria

For several years, Syria has been an important

transit country for drugs flowing into and out of

Lebanon and, in many cases, on to Europe and the United

States. The increase in seizures in 1996 over 1995

(especially of hashish) points to increased vigilance

by Syrian authorities, but could imply as well that the

total flow of drugs across Syria is increasing.

Additionally, the presence of approximately 25,000

Syrian troops in the Lebanese Bekaa Valley makes Syrian

cooperation with Lebanese officials a substantial

element in the fight against drug production and

trafficking there. Allegations of corruption against

Syrian military officials stationed in Lebanon

continued in 1996.

The Government of Syria (SARG) restructured its

Syrian National Police force in 1996, thus creating a

separate and independent Counter-Narcotics Division.

The SARG continued to assist anti-narcotics efforts in

Lebanon during 1996, donating more than a million fruit

trees for the Lebanese crop substitution program.

Though widespread reports claim that Syrian military

and security personnel continue to profit from the drug

trade, the SARG neither initiated corruption

investigations nor brought anti-narcotics charges

against any of these individuals in 1996.

Syria is a party to the 1988 UN Drug Convention.

Though Syria made significant progress in some anti-

narcotics efforts in 1996, including more aggressive

seizures of hashish and various types of amphetamines,

it did

[[Page 11614]]

not meet some of the other goals and objectives of the

1988 UN Drug Convention; specifically, the SARG did not

move aggressively enough against narcotics transiting

Syrian territory, especially to and from Lebanon, it

did not take sufficient action towards locating and

dismantling drug laboratories in Syrian-controlled

areas of Lebanon, and it ignored serious allegations

against Syrian officials of involvement with drug

traffickers. Syria does not have a bilateral narcotics

agreement with the United States.

[FR Doc. 97-6231

Filed 3-11-97; 8:45 am]

Billing code 4710-10-M