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United States Department of State Bureau for International Narcotics and Law Enforcement Affairs International Narcotics Control Strategy Report Volume I Drug and Chemical Control March 2007 Embargoed until March 1, 2007 12:30 p.m.

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United States Department of State Bureau for International Narcotics and Law Enforcement Affairs

International Narcotics Control Strategy Report

Volume I

Drug and Chemical Control

March 2007

Embargoed until March 1, 2007

12:30 p.m.

Table of Contents

i

Table of Contents

Volume I

Introduction ..........................................................................................1 Legislative Basis for the INCSR ................................................................................................................. 3 Presidential Determination.......................................................................................................................... 7

Policy and Program Developments .................................................13 Overview for 2006 ....................................................................................................................................... 15 Demand Reduction ..................................................................................................................................... 25 Methodology for Estimating Illegal Drug Production........................................................................... 27 Worldwide Illicit Drug Cultivation ............................................................................................................ 29 Worldwide Potential Illicit Drug Production........................................................................................... 32 Parties to the 1988 UN Convention.......................................................................................................... 35

USG Assistance .................................................................................42 Department of State (INL) Budget............................................................................................................ 44 International Training................................................................................................................................. 48 Drug Enforcement Administration........................................................................................................... 52 United States Coast Guard........................................................................................................................ 64 U.S. Customs and Border Protection...................................................................................................... 67

Chemical Controls .............................................................................71 Introduction ................................................................................................................................................. 73 Executive Summary.................................................................................................................................... 73 Background ................................................................................................................................................. 74 Major Chemical Source Countries ........................................................................................................... 80 Methamphetamine Chemicals .................................................................................................................. 87 Combating Methamphetamine Control Act (CMEA) Reporting .......................................................... 89

South America....................................................................................95 Argentina ...................................................................................................................................................... 97 Bolivia ......................................................................................................................................................... 100 Brazil ........................................................................................................................................................... 105 Chile ............................................................................................................................................................ 109 Colombia .................................................................................................................................................... 112 Ecuador ...................................................................................................................................................... 121 Paraguay .................................................................................................................................................... 126 Peru ............................................................................................................................................................. 130 Uruguay ...................................................................................................................................................... 136 Venezuela ................................................................................................................................................... 139

Canada, Mexico and Central America............................................145 Belize........................................................................................................................................................... 147 Canada........................................................................................................................................................ 150 Costa Rica .................................................................................................................................................. 154 El Salvador ................................................................................................................................................. 157

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Guatemala .................................................................................................................................................. 160 Honduras.................................................................................................................................................... 164 Mexico......................................................................................................................................................... 167 Nicaragua ................................................................................................................................................... 173 Panama....................................................................................................................................................... 176

The Caribbean.................................................................................. 181 The Bahamas............................................................................................................................................. 183 Cuba ............................................................................................................................................................ 186 Dominican Republic ................................................................................................................................. 190 Dutch Caribbean ....................................................................................................................................... 194 Eastern Caribbean .................................................................................................................................... 198 French Caribbean ..................................................................................................................................... 202 Guyana........................................................................................................................................................ 204 Haiti ............................................................................................................................................................. 208 Jamaica....................................................................................................................................................... 211 Suriname .................................................................................................................................................... 216 Trinidad and Tobago ................................................................................................................................ 219

Southwest Asia ................................................................................ 224 Afghanistan................................................................................................................................................ 226 Bangladesh ................................................................................................................................................ 234 India............................................................................................................................................................. 237 Nepal ........................................................................................................................................................... 247 Pakistan...................................................................................................................................................... 251 Sri Lanka .................................................................................................................................................... 258

Southeast Asia................................................................................. 262 Australia ..................................................................................................................................................... 264 Burma ......................................................................................................................................................... 267 Cambodia ................................................................................................................................................... 274 China ........................................................................................................................................................... 279 Hong Kong ................................................................................................................................................. 284 Indonesia.................................................................................................................................................... 288 Japan........................................................................................................................................................... 291 Laos............................................................................................................................................................. 294 Malaysia...................................................................................................................................................... 302 Mongolia..................................................................................................................................................... 306 North Korea................................................................................................................................................ 308 The Philippines ......................................................................................................................................... 310 Singapore ................................................................................................................................................... 315 South Korea ............................................................................................................................................... 318 Taiwan......................................................................................................................................................... 321 Thailand...................................................................................................................................................... 324 Vietnam....................................................................................................................................................... 333

Europe and Central Asia................................................................. 339 Albania........................................................................................................................................................ 341 Armenia ...................................................................................................................................................... 345 Austria ........................................................................................................................................................ 348 Azerbaijan .................................................................................................................................................. 352 Belarus........................................................................................................................................................ 355 Belgium....................................................................................................................................................... 359

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Bosnia and Herzegovina.......................................................................................................................... 363 Bulgaria ...................................................................................................................................................... 367 Croatia ........................................................................................................................................................ 370 Cyprus ........................................................................................................................................................ 373 Czech Republic ......................................................................................................................................... 377 Denmark ..................................................................................................................................................... 382 Estonia ........................................................................................................................................................ 384 Finland ........................................................................................................................................................ 388 France ......................................................................................................................................................... 392 Georgia ....................................................................................................................................................... 395 Germany ..................................................................................................................................................... 398 Greece......................................................................................................................................................... 401 Hungary ...................................................................................................................................................... 404 Iceland ........................................................................................................................................................ 408 Ireland ......................................................................................................................................................... 412 Italy .............................................................................................................................................................. 416 Kazakhstan ................................................................................................................................................ 419 Kyrgyz Republic ........................................................................................................................................ 424 Latvia........................................................................................................................................................... 429 Lithuania..................................................................................................................................................... 431 Macedonia .................................................................................................................................................. 434 Malta ............................................................................................................................................................ 438 Moldova ...................................................................................................................................................... 442 Montenegro................................................................................................................................................ 445 Netherlands................................................................................................................................................ 447 Norway........................................................................................................................................................ 455 Poland......................................................................................................................................................... 458 Portugal ...................................................................................................................................................... 461 Romania...................................................................................................................................................... 464 Russia ......................................................................................................................................................... 467 Serbia .......................................................................................................................................................... 473 Slovakia ...................................................................................................................................................... 476 Slovenia ...................................................................................................................................................... 479 Spain ........................................................................................................................................................... 481 Sweden ....................................................................................................................................................... 485 Switzerland................................................................................................................................................. 489 Tajikistan .................................................................................................................................................... 494 Turkey ......................................................................................................................................................... 499 Turkmenistan............................................................................................................................................. 502 Ukraine........................................................................................................................................................ 506 United Kingdom ........................................................................................................................................ 511 Uzbekistan.................................................................................................................................................. 516

Africa and the Middle East ..............................................................520 Angola......................................................................................................................................................... 522 Benin ........................................................................................................................................................... 523 Egypt ........................................................................................................................................................... 525 Ethiopia....................................................................................................................................................... 528 Ghana.......................................................................................................................................................... 530 Iran............................................................................................................................................................... 536 Israel............................................................................................................................................................ 543 Jordan......................................................................................................................................................... 548 Kenya .......................................................................................................................................................... 551 Lebanon...................................................................................................................................................... 555

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iv

Morocco...................................................................................................................................................... 559 Mozambique............................................................................................................................................... 563 Namibia....................................................................................................................................................... 567 Nigeria......................................................................................................................................................... 569 Saudi Arabia .............................................................................................................................................. 573 Senegal ....................................................................................................................................................... 575 South Africa ............................................................................................................................................... 578 Swaziland ................................................................................................................................................... 584 Syria ............................................................................................................................................................ 586 Tanzania ..................................................................................................................................................... 589 Togo ............................................................................................................................................................ 593 Uganda........................................................................................................................................................ 595 United Arab Emirates ............................................................................................................................... 597

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v

Common Abbreviations

ARS Alternative Remittance System CBP Customs and Border Protection CBRN Caribbean Basin Radar Network CFATF Caribbean Financial Action Task Force DARE Drug Abuse Resistance Education DEA Drug Enforcement Administration DHS Department of Homeland Security DOJ Department of Justice DOS Department of State DTO Drug Trafficking Organization ESF Economic Support Fund EU European Union EXBS The Export Control and Related Border Security Assistance

(EXBS) Program FATF Financial Action Task Force FB Federal Bureau of Investigation FinCEN Financial Crimes Enforcement Network FIU Financial Intelligence Unit FSA FREEDOM Support Act GCC Gulf Cooperation Council IBC International Business Company ICE Immigration and Customs Enforcement ICITAP International Criminal Investigative Training Assistance Program IMF International Monetary Fund INCSR International Narcotics Control Strategy Report INM See INL INL Bureau for International Narcotics Control and Law Enforcement

Affairs/(Matters) IRS Internal Revenue Service IRS/CID Internal Revenue Service, Criminal Investigation Division JICC Joint Information Coordination Center JIATF-S/W Joint Interagency Task Force South and Joint Interagency Task

Force West MLAT Mutual Legal Assistance Treaty MOU Memorandum of Understanding NBRF Northern Border Response Force NNICC National Narcotics Intelligence Consumers Committee OAS Organization of American States OAS/CICAD Inter-American Drug Abuse Control Commission OFC Offshore Financial Center OPBAT Operation Bahamas, Turks and Caicos OPDAT Office of Overseas Prosecutorial Development Assistance and

Training SECI South East Europe Cooperative Initiative

vi

SEED Support for East European Democracy Act (1994) UN Convention 1988 United Nations Convention Against Illicit Traffic in Narcotic

Drugs and Psychotropic Substances UNODC United Nations Office for Drug Control and Crime USAID Agency for International Development USCG United States Coast Guard USG United States Government ha Hectare HCl Hydrochloride (cocaine) Kg Kilogram Mt Metric Ton

vii

International Agreements

1988 UN Drug Convention United Nations Convention Against

Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988

UN Single Drug Convention United Nations Single Convention on

Narcotic Drugs, 1961 as amended by the 1972 Protocol

UN Psychotropic Substances Convention United Nations Convention on

Psychotropic Substances, 1971 UN Convention Against Transnational

Organized Crime: United Nations Convention Against Transnational Organized Crime and its supplementing protocols

UNCAC UN Convention against Corruption

Trafficking in Persons Protocol Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime

Migrant Smuggling Protocol Protocol Against the Smuggling of

Migrants by Land, Air and Sea, supplementing the United Nations Convention against Transnational Organized Crime

Firearms Protocol Protocol against the Illicit

Manufacturing of and Trafficking in Firearms, Their Parts and Components and Ammunition, supplementing the United Nations Convention against Transnational Organized Crime

vii

Introduction

1

INTRODUCTION

Introduction

2

Introduction

3

Legislative Basis for the INCSR

The Department of States International Narcotics Control Strategy Report (INCSR) has been prepared in accordance with section 489 of the Foreign Assistance Act of 1961, as amended (the "FAA," 22 U.S.C. 2291). The 2007 INCSR, published in March 2007, covers the year January 1 to December 31, 2006 and is published in two volumes, the second of which covers money laundering and financial crimes. It is the 24th annual report prepared pursuant to the FAA. The INCSR addresses the reporting requirements of section 489 of the FAA (as well as sections 481(d)(2) and 484(c) of the FAA and section 804 of the Narcotics Control Trade Act of 1974, as amended.

Section 706 of the FRAA requires that the President submit an annual report no later than September 15 identifying each country determined by the President to be a major drug-transit country or major illicit drug producing country. The President is also required in that report to identify any country on the majors list that has "failed demonstrably . . . to make substantial efforts" during the previous 12 months to adhere to international counternarcotics agreements and to take certain counternarcotics measures set forth in U.S. law. U.S. assistance under the current foreign operations appropriations act may not be provided to any country designated as having "failed demonstrably" unless the President determines that the provision of such assistance is vital to the U.S. national interests or that the country, at any time after the Presidents initial report to Congress, has made "substantial efforts" to comply with the counternarcotics conditions in the legislation. This prohibition does not affect humanitarian, counternarcotics, and certain other types of assistance that are authorized to be provided notwithstanding any other provision of law.

The FAA requires a report on the extent to which each country or entity that received assistance under chapter 8 of Part I of the Foreign Assistance Act in the past two fiscal years has "met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances" (the "1988 UN Drug Convention"). FAA 489(a)(1)(A).

This year, pursuant to The Combat Methamphetamine Enforcement Act (CMEA) (The USA Patriot Improvement and Reauthorization Act 2005, Title VII, P.L. 109-177), amending sections 489 and 490 of the Foreign Assistance Act (22 USC 2291h and 2291) section 722, the INCSR has been expanded to include reporting on the five countries that export the largest amounts of methamphetamine precursor chemicals, as well as the five countries importing these chemicals and which have the highest rate of diversion of the chemicals for methamphetamine production. The expanded reporting also includes additional information on efforts to control methamphetamine precursor chemicals: pseudoephedrine, ephedrine, and phenypropanolamine, as well as an economic analysis that estimates legitimate demand for methamphetamine precursors, compared to actual or estimated imports. The CMEA also now requires a Presidential report by March 1, 2007, certifying which of the five countries that legally exported and the five countries that legally imported the largest amount of precursor chemicals (under FAA section 490) are fully cooperating.

Although the Convention does not contain a list of goals and objectives, it does set forth a number of obligations that the parties agree to undertake. Generally speaking, it requires the parties to take legal measures to outlaw and punish all forms of illicit drug production, trafficking, and drug money laundering, to control chemicals that can be used to process illicit drugs, and to cooperate in international efforts to these ends. The statute lists action by foreign countries on the following issues as relevant to evaluating performance under the 1988 UN Drug Convention: illicit

Introduction

4

cultivation, production, distribution, sale, transport and financing, and money laundering, asset seizure, extradition, mutual legal assistance, law enforcement and transit cooperation, precursor chemical control, and demand reduction.

In attempting to evaluate whether countries and certain entities are meeting the goals and objectives of the 1988 UN Drug Convention, the Department has used the best information it has available. The 2007 INCSR covers countries that range from major drug producing and drug-transit countries, where drug control is a critical element of national policy, to small countries or entities where drug issues or the capacity to deal with them are minimal. The reports vary in the extent of their coverage. For key drug-control countries, where considerable information is available, we have provided comprehensive reports. For some smaller countries or entities where only limited information is available, we have included whatever data the responsible post could provide.

The country chapters report upon actions taken - including plans, programs, and, where applicable, timetables - toward fulfillment of Convention obligations. Because the 1988 UN Drug Conventions subject matter is so broad and availability of information on elements related to performance under the Convention varies widely within and among countries, the Departments views on the extent to which a given country or entity is meeting the goals and objectives of the Convention are based on the overall response of the country or entity to those goals and objectives. Reports will often include discussion of foreign legal and regulatory structures. Although the Department strives to provide accurate information, this report should not be used as the basis for determining legal rights or obligations under U.S. or foreign law.

Some countries and other entities are not yet parties to the 1988 UN Drug Convention; some do not have status in the United Nations and cannot become parties. For such countries or entities, we have nonetheless considered actions taken by those countries or entities in areas covered by the Convention as well as plans (if any) for becoming parties and for bringing their legislation into conformity with the Conventions requirements. Other countries have taken reservations, declarations, or understanding to the 1988 UN Drug Convention or other relevant treaties; such reservations, declarations, or understandings are generally not detailed in this report. For some of the smallest countries or entities that have not been designated by the President as major illicit drug producing or major drug-transit countries, the Department has insufficient information to make a judgment as to whether the goals and objectives of the Convention are being met. Unless otherwise noted in the relevant country chapters, the Departments Bureau for International Narcotics and Law Enforcement Affairs (INL) considers all countries and other entities with which the United States has bilateral narcotics agreements to be meeting the goals and objectives of those agreements.

Information concerning counternarcotics assistance is provided, pursuant to section 489(b) of the FAA, in section entitled "U.S. Government Assistance ."

Major Illicit Drug Producing, Drug-Transit, Significant Source, Precursor Chemical, and Money Laundering Countries Section 489(a)(3) of the FAA requires the INCSR to identify:

(A) major illicit drug producing and major drug-transit countries;

(B) major sources of precursor chemicals used in the production of illicit narcotics; or

(C) major money laundering countries.

These countries are identified below.

Major Illicit Drug Producing and Major Drug-Transit Countries

Introduction

5

A major illicit drug producing country is one in which:

(A) 1,000 hectares or more of illicit opium poppy is cultivated or harvested during a year;

(B) 1,000 hectares or more of illicit coca is cultivated or harvested during a year; or

(C) 5,000 hectares or more of illicit cannabis is cultivated or harvested during a year, unless the President determines that such illicit cannabis production does not significantly affect the United States. FAA 481(e)(2).

A major drug-transit country is one:

(A) that is a significant direct source of illicit narcotic or psychotropic drugs or other controlled substances significantly affecting the United States; or

(B) through which are transported such drugs or substances. FAA 481(e)(5).

The following major illicit drug producing and/or drug-transit countries were identified and notified to Congress by the President on September 15, 2006, consistent with section 706(1) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228):

Afghanistan, The Bahamas, Bolivia, Brazil, Burma, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, and Venezuela.

Of these 20 countries, Burma and Venezuela were designated by the President as having failed demonstrably during the previous 12 months to adhere to their obligations under international counternarcotics agreements and take the measures set forth in section 489(a)(1) of the FAA. The President also determined, however, in accordance with provisions of Section 706(3)(A) of the FRAA, that support for programs to aid Venezuelas democratic institutions is vital to the national interests of the United States. The Presidents report also singled Bolivia out for a special review by March 15, 2007, of its performance in completing certain counternarcotics benchmarks because of its policies that have allowed the expansion of coca cultivation and initially slowed the pace of eradication.

Major Precursor Chemical Source Countries The following countries have been determined to be major sources of precursor or essential chemicals used in the production of illicit narcotics:

Argentina, Brazil, Canada, China, Germany, India, Mexico, the Netherlands, and the United States.

Information is provided pursuant to section 489 of the FAA in the section entitled "Chemical Controls."

Major Money-Laundering Countries A major money laundering country is defined by statute as one "whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking." FAA 481(e)(7). However, the complex nature of money laundering transactions today makes it difficult in many cases to distinguish the proceeds of narcotics trafficking from the proceeds of other serious crime. Moreover, financial institutions engaging in transactions involving significant amounts of proceeds of other serious crime are vulnerable to narcotics-related money laundering. This years list of major money laundering countries recognizes this relationship by including all countries and other jurisdictions, whose financial institutions engage in transactions

Introduction

6

involving significant amounts of proceeds from all serious crime. The following countries/jurisdictions have been identified this year in this category:

Afghanistan, Antigua and Barbuda, Australia, Austria, Bahamas, Belize, Bosnia and Herzegovina, Brazil, Burma, Cambodia, Canada, Cayman Islands, China, Colombia, Costa Rica, Cyprus, Dominican Republic, France, Germany, Greece, Guatemala, Guernsey, Haiti, Hong Kong, India, Indonesia, Iran, Isle of Man, Israel, Italy, Japan, Jersey, Kenya, Latvia, Lebanon, Liechtenstein, Luxembourg, Macau, Mexico, Netherlands, Nigeria, Pakistan, Panama, Paraguay, Philippines, Russia, Singapore, Spain, St. Kitts and Nevis, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, and Venezuela.

Further information on these countries/entities and United States money laundering policies, as required by section 489 of the FAA, is set forth in Volume II of the INCSR in the section entitled "Money Laundering and Financial Crimes."

Introduction

7

Presidential Determination

White House Press Release

Office of the Press Secretary

Washington, DC

September 15, 2006

Presidential Determination No. 2006-24

Pursuant to section 706(1) of the Foreign Relations Authorization Act, FY03 (Public Law 107-228) (FRAA), I hereby identify the following countries as major drug transit or major illicit drug producing countries: Afghanistan, The Bahamas, Bolivia, Brazil, Burma, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, and Venezuela.

A countrys presence on the Majors List is not necessarily an adverse reflection of its governments counternarcotics efforts or level of cooperation with the United States. Consistent with the statutory definition of a major drug transit or drug producing country set forth in section 481(e)(2) and (5) of the Foreign Assistance Act of 1961, as amended (FAA), one of the reasons that major drug transit or illicit drug producing countries are placed on the list is the combination of geographical, commercial, and economic factors that allow drugs to transit or be produced despite the concerned governments most assiduous enforcement measures.

Pursuant to Section 706(2)(A) of the FRAA, I hereby designate Burma and Venezuela as countries that have failed demonstrably during the previous 12 months to adhere to their obligations under international counternarcotics agreements and take the measures set forth in section 489(a)(1) of the FAA. Attached to this report (Tab A) are justifications for the determinations on Burma and Venezuela, as required by section 706(2)(B).

I have also determined, in accordance with provisions of Section 706(3)(A) of the FRAA, that support for programs to aid Venezuelas democratic institutions is vital to the national interests of the United States.

Although President Karzai has strongly attacked narcotics trafficking as the greatest threat to Afghanistan, one third of the Afghan economy remains opium-based, which contributes to widespread public corruption. The government at all levels must be held accountable to deter and eradicate poppy cultivation; remove and prosecute corrupt officials; and investigate, prosecute, or extradite narcotics traffickers and those financing their activities. We are concerned that failure to act decisively now could undermine security, compromise democratic legitimacy, and imperil international support for vital assistance.

We are concerned with the decline in Bolivian counternarcotics cooperation since October 2005. Bolivia, the worlds third largest producer of cocaine, has undertaken policies that have allowed the expansion of coca cultivation and slowed the pace of eradication until mid-year, when it picked up.

Introduction

8

The Government of Bolivias (GOB) policy of zero cocaine, but not zero coca has focused primarily on interdiction, to the near exclusion of its necessary complements, eradication and alternative development. However, the GOB has been supportive of interdiction initiatives and has had positive results in seizing cocaine and decommissioning rustic labs. We would encourage the GOB to refocus its efforts on eliminating excess coca, the source of cocaine. This would include eradicating at least 5,000 hectares, including in the Chapare region; eliminating the cato exemption to Bolivian law; rescinding Ministerial Resolution 112, Administrative Resolution 083, and establishing tight controls on the sale of licit coca leaf for traditional use; and implementing strong precursor chemical control measures to prevent conversion of coca to cocaine. We plan to review Bolivias performance in these specific areas within 6 months.

The Government of Canada (GOC) continued to effectively curb the diversion of precursor chemicals that are required for methamphetamine production to feed U.S. illegal markets. The GOC also continued to seize laboratories that produce MDMA/Ecstasy consumed in both Canada and the United States. The principal drug concern was the continuing large-scale production of high-potency, indoor-grown marijuana for export to the United States. The United States enjoyed excellent cooperation with Canada across a broad range of law enforcement issues and shared goals.

The Government of Ecuador (GOE) has made considerable progress in combating narcotics trafficking destined for the United States. However, a dramatic increase in the quantity of cocaine transported toward the United States using Ecuadorian-flagged ships and indications of increased illegal armed group activity along Ecuadors northern border with Colombia remain areas of serious concern. Effective cooperation and streamlined maritime operational procedures between the U.S. Coast Guard and Ecuadorian Navy are resulting in an increase in the amount of cocaine interdicted. Building on that cooperation, we will work with Ecuador to change the circumstances that make Ecuadorian-flagged vessels and Ecuadorian citizenship so attractive to drug traffickers.

As a result of the elections in Haiti, the new government now has a clear mandate from the Haitian people to bring crime, violent gangs, and drug trafficking under control. We urge the new government to strengthen and accelerate ongoing efforts to rebuild and reform Haitis law enforcement and judicial institutions and to consult closely with the United States to define achievable and verifiable steps to accomplish these goals.

While Nigeria continues to take substantive steps to curb official corruption, it remains a major challenge in Nigeria. We strongly encourage the government to continue to adequately fund and support the anti-corruption bodies that have been established there in order to fully address Nigerias ongoing fight against corruption. We urge Nigeria to continue improving the effectiveness of the National Drug and Law Enforcement Agency and, in particular, improve enforcement operations at major airports/seaports and against major drug kingpins, to include targeting their financial assets. We look forward to working with Nigerian officials to increase extraditions and assisting in drug enforcement operations.

Although there have not been any drug seizures or apprehensions of drug traffickers with a connection to the Democratic Peoples Republic of Korea (DPRK) since 2004, we remain concerned about DPRK state-directed criminal activity. The United States Government has made clear to the DPRK that an end to all involvement in criminal activity is a necessary prerequisite to entry in the international community.

Introduction

9

Under provisions of the Combat Methamphetamine Epidemic Act (CMEA), which modified Section 489(a) of the Foreign Assistance Act of 1961, as amended, and Section 490(a) of the FAA, a report will be made to the Congress on March 1, 2007, naming the five countries that legally exported the largest amount of methamphetamine precursor chemicals, as well as the top five methamphetamine precursor importers with the highest rate of diversion for illicit drug production. This report will be sent concurrently with the International Narcotics Control Strategy Report, which will also contain additional reporting on methamphetamine precursor chemicals pursuant to the CMEA.

You are hereby authorized and directed to submit this report under Section 706 of the FRAA, transmit it to the Congress, and publish it in the Federal Register.

GEORGE W. BUSH

MEMORANDUM OF JUSTIFICATION FOR PRESIDENTIAL DETERMINATION ON MAJOR DRUG TRANSIT OR ILLICIT DRUG PRODUCING COUNTRIES FOR FY 2007

Venezuela

Venezuela failed demonstrably to make sufficient efforts during the last 12 months to meet its obligations under international counternarcotics agreements and U.S. domestic counternarcotics requirements as set forth in section 489(a)(1) of the Foreign Assistance Act of 1961, as amended.

This determination comes as the result of Venezuelas lack of effective response to specific United States Government requests for counternarcotics cooperation as well as the countrys continued lack of action against drug trafficking within and through its borders commensurate with its responsibilities to the international community.

Venezuelas importance as a transshipment point for drugs bound for the United States and Europe has continued to increase in the past 12 months, a situation both enabled and exploited by corrupt Venezuelan officials. The Venezuelan media provided an example of this corruption when they reported that Venezuelan police re-sold the vast majority of a 9,400 kg cocaine seizure to drug traffickers in July of this year (Venezuela does not allow independent verification of seizure amounts). Seizures of illegal drugs transiting the country have fallen, according to DEA estimates. The volume of cocaine transiting the country is expected to continue to rise substantially in 2006. The most dramatic increase in cocaine departing Venezuela was to non-U.S. destinations, primarily Europe. The vast majority of cocaine going to the United States or Europe goes by sea. However, an increasing proportion is being moved by non-commercial air through the Caribbean toward the United States. The number of suspected drug flights departing Venezuela and going to Hispaniola and the Caribbean more than doubled in 2005 and has continued that rising trend in the first half of 2006.

Venezuela has not used available tools to counter the growing drug threat. It has not strengthened inspections or security along its border with Colombia; it has not utilized judicial wiretap orders to investigate drug cases; it has not attempted meaningful prosecution of corrupt officials; and it has not renewed formal counternarcotics cooperation agreements with the United States Government.

Introduction

10

The role and status of the DEA in Venezuela remains in limbo since the host country refuses to sign a memorandum of understanding authorizing Drug Enforcement Administration presence, even after successfully concluding a lengthy process of negotiation with U.S. officials. Venezuela also has not signed a letter of agreement that would make nearly $3 million from FY 2005 available for United States Government cooperative counternarcotics efforts.

Last year Venezuela was found to have failed demonstrably as a partner in the war on drugs, in part because it ended most air interdiction cooperation, refused to grant U.S. counternarcotics over flights of Venezuela, curtailed most military and law enforcement counternarcotics cooperation, replaced its most effective counternarcotics officials, and failed to effectively implement its own money laundering and organized crime legislation. All of these issues remain outstanding in 2006.

The United States is very concerned about the continued deterioration of democratic institutions in Venezuela as reflected in the increased executive control over the other branches of government, threats to judicial independence and human rights, and attacks on press freedoms and freedom of expression.

A vital national interests certification will allow the United States Government to provide funds that support programs to aid Venezuelas democratic institutions, establish selected community development projects, and strengthen Venezuelas political party system.

MEMORANDUM OF JUSTIFICATION FOR PRESIDENTIAL DETERMINATION ON MAJOR DRUG TRANSIT OR ILLICIT DRUG PRODUCING COUNTRIES FOR FY 2007

Burma

Burma failed demonstrably to make sufficient efforts during the last 12 months to meet its obligations under international counternarcotics agreements and U.S. domestic counternarcotics requirements as set forth in section 489(a)(1) of the Foreign Assistance Act of 1961, as amended.

Burma remains the worlds second largest producer of illicit opium. Burmese opiates continue to pose a threat in Asia. Additionally, amphetamine-type stimulants (ATS) produced and trafficked from Burmese territory continue to threaten the entire region. Burma has not taken decisive action against drug gangs, such as the United Wa State Army (UWSA), which continue to operate freely along Burmas borders with China and Thailand. These criminal organizations increasingly threaten Asia with the crystalline form of methamphetamine called Ice.

The efforts of the Government of Burma (GOB) to combat the production and trafficking of methamphetamine have been unsatisfactory. Even as methamphetamine production and trafficking have increased in recent years, seizures continue to be disappointing, and the GOB has not been forthcoming with verifiable statistics. It failed to establish a mechanism for the reliable measurement of ATS production and, once again, did not cooperate in the joint United States/Burma crop survey.

The GOB continued to take no action in response to the indictments in January 2005 by the U.S. Justice Department against eight leaders of the UWSA. The failure to take action against these

Introduction

11

accused ringleaders, responsible for a good deal of human misery in Asia and beyond, demonstrates the Burmese Governments failure to take serious action against drug activity on its territory.

The Government of Burma has failed to indict and prosecute any Burmese military official above the rank of colonel for drugrelated corruption.

Burma has failed to expand demand-reduction, prevention, and drug-treatment programs to reduce drug use and control the spread of HIV/AIDS. The Global Fund for Aids, TB and Malaria had approved grants totaling $98.5 million for Burma but withdrew in late 2005 due to the governments onerous restrictions and lack of full cooperation.

The international Financial Action Task Force (FATF) continues to list Burma as one of only two Non-cooperative Countries. At the heart of Burmas problems with international financial authorities is its weak implementation of anti-money laundering controls, with the result that narcotics traffickers and other criminal elements are still able to launder the proceeds of their crimes through Burmese financial institutions.

While the picture of Burma's counternarcotics efforts remains overwhelmingly negative, there were some positive aspects. The GOB, with the U.S. Drug Enforcement Administration and the Australian Federal Police, disrupted two international trafficking syndicates that are associated with the United Wa State Army (UWSA), a kingpin organization, and have ties throughout Asia, India, and North America. In September 2005, the GOB seized a UWSA-related shipment of approximately 496 kg of heroin bound for China via Laos. The seizure led to the arrest of 80 suspects, including two of UWSA Chairman Bao Yu Xiangs family members, and the seizure of assets, including $1.3 million in cash. A second, related investigation from December 2005 through April 2006 culminated in the arrest of 30 subjects and the seizure of $2.2 million in assets and significant quantities of morphine base, heroin, opium, weapons, methamphetamine tablets and powder, crystal methamphetamine, pill presses, and precursor chemicals.

Released on September 18, 2006

Introduction

12

Policy and Program Development

13

POLICY AND PROGRAM DEVELOPMENTS

Policy and Program Development

14

Policy and Program Development

15

Overview for 2006

Challenges to the illicit drug trade continued on many levels this year; to meet these challenges the international community shared a clear vision of the dangers of narcotic drugs and the need to pursue a mix of law enforcement, demand reduction, and prevention policies. Our international partners in this fight include countries whose developing economies and democratic institutions are threatened by these dangerous commodities, which mortgage the future of their people and their environment.

Cocaine and marijuana cultivation are generally steady. The worlds largest supplier of cocaine, Colombia, has shown the political will and tenacity to fight both the cultivation and trafficking of the drug. A growing concern worldwide is the prevalence of amphetamine-type stimulants (ATS), which can be manufactured using easily available, licit materials. The resurgence of Afghan opium cultivation has increased the flow of heroin to Europe, Russia and the Middle East, which undermines those societies and the consolidation of democracy and security in Afghanistan.

Controlling Supply Cocaine, synthetic amphetamine-type stimulants (ATS), marijuana and heroin are the drugs that most threaten the United States and its allies, while opium cultivation in Afghanistan threatens the consolidation of democracy in that fragile state. The USG's goal is to reduce and ultimately cut off the international flow of illegal drugs. Our primary strategy targets drug supply at critical points along a grower-to-user chain that links the consumer, in the case of cocaine or heroin, with the growers cultivating coca or opium poppies. Intermediate links are the processing (drug refining), transit (transport) and wholesale distribution stages.

Our international programs target the first three links of the grower-to-user chain: cultivation, processing, and transit. The closer we can attack to the source, the better are our chances of halting the flow of drugs altogether. Crop control is the most cost-effective means of cutting supply. Drugs cannot enter the system from crops that were never planted, or have been destroyed or left unharvested; without the crops there would be no need for costly enforcement and interdiction operations. Prevention is a focus of all our international programs, but it has limited application. Nor is eradication a 'silver bullet'. The most effective means of eradication, aerial application of herbicide, is not legal or feasible in many countries and is expensive to implement where it is permitted. Destroying a lucrative (albeit illegal) crop carries enormous political, economic and social consequences for the producing country, so developing, implementing, and reaping the benefits of viable, licit alternatives for the affected populations are critical.

In addition, there is the increasing threat from non-organic drugs, such as ATS, for which physical eradication is impossible. Instead, attacking synthetically produced drugs requires a legal regime of chemical controls and law enforcement efforts aimed at thwarting diverters and destroying laboratories. Thus, our international programs must focus upon all the links in the supply-to-consumer chain: the processing and distribution stages, the interdiction of drug shipments, and attention to the money trail left by this illegal trade. Our programs shift resources to those links where we can achieve both an immediate impact and long-term results, through the right combination of effective law enforcement actions, alternative development programs, and international cooperation.

Cocaine Coca Eradication: The rate of U.S. cocaine consumption has declined over the past 10 years, but cocaine continues to be a major domestic concern. According to the July 2006 interagency

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assessment of cocaine movement, between 517-732 metric tons of cocaine hydrochloride (HCl) depart South America for the United States annually, feeding addiction, fueling crime, and damaging the economic and social health of the United States. As all cocaine originates in the Andean countries of Colombia, Peru, and Bolivia, we channel a significant portion of our international resources toward eliminating coca cultivation, disrupting cocaine production, and preventing the drug from reaching the United States.

Colombia, the source of roughly 90 percent of the cocaine destined for the U.S. and other world markets, leads the world in coca cultivation. Peru and Bolivia are a distant second and third respectively. By the end of 2006, the Colombian government reported eliminating over 213,724 hectares of coca. Aerial eradication removed 171,613 hectares of this amount, far surpassing the previous record of 138,775 hectares sprayed in 2005. Meanwhile, manual eradication destroyed the other 42,111 hectares. If harvested and refined, this eradicated coca could have yielded hundreds of metric tons of cocaine worth billions of dollars on U.S. streets.

Bolivia and Peru, which had substantially reduced their coca cultivation in the past five years, now face the erosion of these achievements. Politically well-connected and active cocalero (coca grower) associations link coca cultivation to issues of cultural identity and national pride and are stepping up efforts to challenge eradication efforts. Traffickers are continuing to exploit these growers unions.

Cocalero influence has been greatest in Bolivia, where their leader, Evo Morales, won the country's presidency in December 2005. Initial USG estimates for total cultivation in 2006 show increases in most parts of the country. Cocalero activism and the government's desire to avoid violent confrontation have contributed to the rise in coca cultivation. Though the total cultivation estimate for 2005 is half of Bolivia's peak cultivation figure of 52,000 hectares in 1989, the trend is disquieting. Moreover, the level of eradication in 2006 was the lowest in more than ten years. A new integrated alternative development approach in the Chapare region of Bolivia provides for participation by municipalities in the Government of Bolivias decisions on development implementation and monitoring of programs. This approach is helping to reduce coca-related conflict and strengthen local commitment to licit development.

In Peru, the government planned and mounted an aggressive eradication campaign. The programmed coca eradication goal was increased to 10,000 hectares a 20 percent increase from 2005. In 2006 total eradication was 12,688 hectares. The Government of Peru adopted the United Nations estimate of 48,200 hectares of coca under cultivation. This figure reflects the Peruvian Governments intensified eradication efforts in 2006 and the total amount is considerably less than the peak of 115,000 hectares ten years ago. However, cocaleros engaged in numerous violent acts to resist eradication. The Sendero Luminoso terrorist group has openly identified with coca growers and drug traffickers, and organized increasingly violent ambushes of police and intimidation of alternative development teams in coca growing areas.

We continue to support efforts by the governments of the coca-growing countries to eliminate illegal coca within each country's individual context. Alternative development programs offer farmers opportunities to abandon illegal activities and join the legitimate economy, and thereby play a vital role in countries seeking to free their agricultural sector from reliance on the drug trade. In the Andean countries, such programs play a vital role in providing funds and technical assistance to strengthen public and private institutions, expand rural infrastructure, improve natural resources management, introduce alternative legal crops, and develop local and international markets for these products.

Cocaine Seizures: Colombian interdiction programs seized 170 metric tons of cocaine in the course of the year, Colombias second highest cocaine seizure of the past 10 years. Colombian forces destroyed 200 cocaine HCl and nearly 2,000 cocaine base labs (up from 773 last year).

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Other important drug-affected countries in the Hemisphere also reported seizing impressive amounts of cocaine: Bolivia, 14 metric tons up from 11.5 metric tons last year; Peru, 19.77 metric tons reflecting a steady increase during the past five years; and Mexico, 21 metric tons. Seizure numbers for Venezuela were not available at publication date.

Interdiction in the Transit Zone: Since no attack on supply within source countries could be exhaustive, the international community must continue to help police key transit zones, specifically for us the route for cocaine moving north out of South America. This has required a well-coordinated effort between the governments of the transit zone countries and the USG. Due to continued high levels in collection and cooperation with allied nations and post-seizure intelligence in the last several years, we now enjoy better actionable intelligence within the transit zone. The Joint Inter-Agency Task Force South, working closely with international partners from throughout the Caribbean Basin, has focused its and regional partners intelligence gathering efforts to detect and monitor maritime drug movements while maneuvering interdiction assets into position to affect a seizure. The USG's bilateral agreements with Caribbean and Latin American countries have eased the burden on these countries' law enforcement assets to conduct at seaboardings and search for contraband, while allowing the USG to gain jurisdiction of cases and remove the coercive pressure from large drug trafficking organizations on some foreign governments. This team effort removed over six metric tons of cocaine from the maritime transit zone in 2006.

Synthetic Drugs Amphetamine-Type Stimulants: Global demand for amphetamine-type stimulants (ATS), such as methamphetamine, amphetamine, and MDMA (Ecstasy), has steadily increased throughout both the industrialized and the developing world. ATS drugs have displaced cocaine as the drug of choice in many countries, especially in those of Central and Northern Europe, and Southeast Asia. The relative ease and low cost of manufacturing ATS drugs from readily available chemicals appeals as much to small drug entrepreneurs as to the large international syndicates. Since they do not rely on organic sources such as coca and opium, synthetics allow individual trafficking organizations to control the whole process, from manufacture to sale on the street. Synthetics can be made anywhere and offer enormous profit margins.

With respect to methamphetamine use, the Administrations 2006 Synthetic Drug Control Strategy - A Focus on Methamphetamine and Prescription Drug Abuse (June 2006), a companion document to the Presidents National Drug Control Strategy, states that since 2001, regular use of any illicit drug among youth (8th, 10th, and 12th graders) has declined by 19 percent, and regular use of methamphetamine use is down by 36 percent. Transnational drug trafficking organizations, based in Mexico and California, control a large percentage of the U.S. methamphetamine trade. Mexico is the principal foreign supplier of methamphetamine and most frequently used transit country for ATS precursors (especially pseudoephedrine-PSE and ephedrine) destined for the United States. USG drug enforcement authorities believe that PSE and ephedrine imported into Canada is no longer a serious threat due to stricter law enforcement controls in Canada since 2002.

There is a worldwide trend of increasing methamphetamine or other ATS drug trafficking and consumption. However, statistical information suggests that the activity of small toxic laboratories in the United States is declining; lab seizures decreased 42 percent from 2004 (10,015) to 2005 (5,846) and preliminary DEA data for 2006 show continued declines. Current drug lab and seizure statistics indicate that roughly 80 percent of the methamphetamine in the U.S. comes from larger labs, increasingly in Mexico, while the much-diminished remainder comes from small toxic labs. Production and trafficking is now concentrated in areas such as Baja California, Michoacan, Jalisco and Sinaloa, where well-established major drug organizations have their infrastructures. The Government of Mexico (GOM) continued to react strongly over the past year to chemical diversion

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and methamphetamine manufacture, implementing strict precursor chemical import quotas and internal chemical distribution controls. Sales of pharmaceutical product containing pseudoephedrine are also controlled and limited in Mexico. Chemical control is one of the closest areas of U.S./Mexican law enforcement cooperation.

Ecstasy: There continues to be substantial global demand for MDMA (Ecstasy), the amphetamine analogue 3, 4-methylenedioxymethamphetamine. Clandestine laboratories in the Netherlands, and to a lesser extent in Belgium, are the principal suppliers of MDMA to the international market, with significant Ecstasy production in Canada. The Netherlands continued to make progress in attacking Ecstasy, including some significant seizures and arrests of members of an alleged large-scale smuggling ring. Labs in Poland and elsewhere in Eastern Europe are major suppliers of amphetamines to the European market, with the United Kingdom and the Nordic countries among the heaviest European consumers of amphetamine. In the United States, Ecstasy use has plummeted among the teenage population most at risk, and according to the December 2006 Monitoring the Future report, regular usage rates among teenagers are less than half of what they were in 2001.

Pharmaceutical Abuse, and the Internet: An area of growing concern is the abuse of pharmaceutical drugs, especially among teenagers. For example, the December 2006 Monitoring the Future survey shows that the past year abuse of OxyContin increased 30 percent since 2002, still representing small numbers of actual uses compared to other drugs, but the only drug category for which there is a significant increase. In addition, sedatives such as Vicodan are being abused in increasing amounts. Many of these drugs are available over the Internet, through Internet doctors prescribing drugs without seeing patients, and through pharmacies that accept unverified or even substandard prescriptions. Some pharmaceuticals are being diverted to the United States from international sources, but the extent is not yet known.

Cannabis (Marijuana) Cannabis production and marijuana consumption is a problem in nearly every world region, including in the United States. However, the December 2006 Monitoring the Future study shows that, while marijuana continues to be the most commonly used illicit drug among teens within the United States, current use has dropped by 25 percent over the past five years. Drug organizations in Mexico and Canada produce more than 4,000 metric tons of marijuana, which is then marketed to the more than 20 million users in the United States. Canada produces approximately 800 metric tons of high potency marijuana, which is marketed, increasingly, nationwide in the United States, along with marijuana from Colombia, Jamaica, and possibly Nigeria. Domestic production of marijuana may rival that of foreign sources.

According to the Drug Enforcement Agency (DEA)s 2006 National Drug Threat Summary, marijuana potency has increased sharply. Of great concern is the high potency, indoor-grown cannabis produced on a large scale in Canada. Plants are grown in laboratory conditions using specialized timers, ventilation, moveable lights on tracks, nutrients sprayed on exposed roots and special fertilizer that maximize THC levels. A portion of domestic production is also grown under these hydroponic conditions. The result is a particularly powerful, dangerous, and addictive drug. Despite suggestions that marijuana use has no long-term consequences, the latest scientific information indicates that marijuana use is a common first step to the abuse of more serious drugs, and that the drug itself is associated with learning difficulties, memory disturbances, and schizophrenia.

Opium and Heroin Opium poppy is the source of heroin. Containing its cultivation presents its own set of challenges. Unlike coca, which currently grows in significant amounts in only three Andean countries, opium

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poppy is cultivated in multiple locations worldwide. Specifically, poppy is produced in Colombia, Mexico, Southeastern Asia and Southwestern Asia. Afghanistan is the worlds largest producer of opium poppy, accounting for over 90 percent of the world's opium gum production. In contrast to coca, a perennial that takes at least a year to mature into usable leaf, opium poppy is an easily planted annual crop, and with the correct care and climate, can yield as many as three harvests per year. The gum is harvestable in less than six months.

Most of the heroin used in the United States comes from poppies grown in Colombia and Mexico, though their opium gum production accounts for less than four percent of the world's total production. Mexico supplies most of the heroin found in the western United States. Colombia supplies most of the heroin east of the Mississippi. Eliminating poppy cultivation in Colombia and Mexico is crucial to reducing U.S.-bound heroin flows, and long-standing joint eradication programs in both countries continue with our support Colombian law enforcement and alternative development programs eradicated 1,929 hectares of opium poppy in 2006. Of these, 232 hectares were sprayed and 1,697 hectares uprooted through manual eradication programs.

In 2006, the Government of Mexico (GOM) reported eradicating slightly over 16,831 hectares of opium poppy, down from more than 20,000 in two of the last three years. While the GOM has not provided any official reasoning for the reduction, it is possible that resources had to be re-directed to address pressing events throughout the year.

Afghanistan supplies all but a small amount of the heroin going to Europe, Russia, the Middle East and even much of Asia. Heroin produced from Afghan opium also finds its way to the United States. Due to the limited reach of Afghan law enforcement, endemic corruption, and a weak judicial system, the Afghan Government has been unable to prohibit opium cultivation. The year 2006 saw a substantial increase in poppy cultivation, at 165,000 hectares up from 107,400 hectares in 2005. Eradication, consisting of manual and mechanical efforts, increased in 2006 to 15,300 hectares from 2005s total of 5,000 hectares. UN Office of Drugs and Crime Director Antonio Costa has warned that there could be a wave of overdose deaths in Europe and Russia accompanying the surge of available heroin.

The USG, in close coordination with the GOA, focuses on a five-pillar counternarcotics strategy that includes public information, alternative livelihoods, eradication, interdiction, and law enforcement/justice reform. The strategy, with continued support from the international community, bolsters the considerable efforts of the Government of Afghanistan to deliver a tough message to its people that drugs are the nations most serious enemy. We support the Government of Afghanistans work to demonstrate decisive leadership, including reaching out to the provinces, strengthening the rule of law and law enforcement capabilities, tackling corruption, and taking resolute measures against illegal narcotics. Through USAID, we will continue to work to develop alternative sources of income to poppy. We further recognize the need to disrupt the networks that finance, supply, and equip the traffickers who threaten the government and people of Afghanistan.

Controlling Drug-Processing Chemicals Cocaine, synthetic drugs and heroin cannot be manufactured without certain critical chemicals, most of which also have entirely licit uses. These widely used chemicals are diverted by criminals to illicit use in narcotics manufacture. Government controls strive to differentiate between licit use and illicit diversion. Substitutes for unavailable chemicals can be used for some of the chemicals used in the drug manufacturing process, but there are some chemicalsfor example potassium permanganate for cocaine and acetic anhydride for heroinfor which there are few readily obtainable substitutes. Some synthetic drug manufacture requires even more specific precursor chemicals, such as ephedrine and pseudoephedrine. These chemicals, used primarily for pharmaceutical purposes, have important but specific legitimate uses. They are commercially traded in smaller quantities to discrete users. Governments must have efficient legal and regulatory

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regimes to control such chemicals, without placing undue burdens on legitimate commerce. In 2006 the United States, other major chemical trading countries, and the United Nations (UN) focused their efforts to improve controls on chemicals used for manufacturing synthetic drugs. Most significant was adoption of a U.S.-initiated resolution by the March 2006 UN Commission on Narcotic Drugs that requested countries to provide to the International Narcotics Control Board (INCB) estimates of their legitimate requirements for these and other synthetic drug chemicals. The INCB, an independent and quasi-judicial organization within the United Nations charged with monitoring the implementation of international drug control treaties, plays a central coordinating role in their implementation. This measure will allow authorities in exporting and importing countries to do a quick reality check on proposed transactions, especially as traffickers turn to countries not normally trading in these chemicals as conduits for diversion.

Virtually all other chemicals used in illicit drug manufacture are traded widely in international commerce. Therefore, extensive international cooperation is required to prevent their diversion from licit commercial channels. Two ongoing multilateral law enforcement operations targeting key chemicals provide frameworks for this cooperation. Project Cohesion targets potassium permanganate and acetic anhydride and Project Prism targets synthetic drug precursor chemicals.

This topic is addressed in greater detail in the Chemical Control Chapter of the INCSR.

Drugs and the Environment Impact of Spray Eradication: Questions inevitably arise over the environmental risks of regular use of herbicides on illegal drug crops. Colombia is currently the only country that conducts regular aerial spraying of coca and opium poppy. The Colombian government has approved the herbicide that is being used to conduct aerial eradication in the growing areas. The only active ingredient in the herbicide used in the aerial eradication program is glyphosate, one of the most widely used agricultural herbicides in the world, which has been tested in the United States, Colombia, and elsewhere. The U.S. Environmental Protection Agency (EPA) approved glyphosate for general use in 1974 and re-registered it in September 1993. EPA has approved its use on food croplands, forests, residential areas, and around aquatic areas. It is one of the top five pesticides, including herbicides, used in the United States, and one of the most widely used in the world, including in Colombia and Ecuador. Colombias spray program represents a small fraction of total glyphosate use in the country, and carefully follows all label requirements and environmental protocols in its spray operations.

Impact of Drug Cultivation and Processing: Coca cultivation has a devastating impact on the environment. In the Andean region, it has led to the destruction of approximately six million acres of rainforest in the past 20 years. Working in remote areas beyond settled populations, coca growers routinely slash and burn virgin forestland to make way for their illegal crops. Tropical rains quickly erode the thin topsoil of the fields, increasing soil runoff, depleting soil nutrients, and, by destroying timber and other resources that would otherwise be available for more sustainable uses, illicit coca cultivation decreases biological diversity. The destructive cycle continues, as growers regularly abandon non-productive parcels of depleted forestland to prepare new plots. At the same time, traffickers destroy jungle forests to build clandestine landing strips and laboratories for processing raw coca and poppy into cocaine and heroin.

Illicit coca growers use large quantities of highly toxic herbicides and fertilizers on their crops. These chemicals qualify under the U.S. Environmental Protection Agency's highest classification for toxicity (Category I) and are legally restricted for sale within Colombia and the United States. Coca farmers also use glyphosate, although unlike government programs they generally use concentrations that exceed label requirements. Production of the drugs requires more, and more dangerous, solvents and chemicals. One kilogram of cocaine base requires the use of three liters of concentrated sulfuric acid, 10 kilos of lime, 60 to 80 liters of kerosene, 200 grams of potassium

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permanganate, and one liter of concentrated ammonia. These toxic pesticides, fertilizers, and processing chemicals are then dumped into the nearest waterway or on the ground. They saturate the soil and contaminate waterways and poison water systems upon which local human and animal populations rely.

Environmental damage hits close to home. Increasingly, marijuana-processing operations are taking place in U.S. national parks, especially in California and Texas due, in part, to increased eradication efforts in Mexico. The cultivation of marijuana on public lands poses a serious threat to the safety of the public, law enforcement personnel, and other public employees. It also creates a significant threat to the environment and our natural resources. In the State of California, the number of plants eradicated is substantial and violence associated with marijuana cultivation is on the rise.

In 2006, the National Park Service and other law enforcement officials conducted operations in several national parks in California, including Yosemite National Park and Sequoia-Kings Canyon National Parks. At Californias Point Reyes National Seashore, in August 2006, law enforcement and national park officials raided several marijuana grow sites and confiscated approximately 20,000 marijuana plants with an estimated street value of $50 million. The areas under cultivation suffered extensive resource damage from the growing operations. Growers are killing wildlife, diverting streams that contain threatened species of fish, using harmful pesticides and bringing the presence of violence to these unspoiled areas. Overall, the DEAs Domestic Cannabis Eradication Program has been successful in targeting the illicit cultivation and production of marijuana. Over the past two years the program has seen impressive results. Program effectiveness measured by marijuana plants eradicated increased almost 24 percent from calendar year (CY) 2004 to CY 2005 (3,200,121 plants in CY 2004 to 4,209,086 in CY 2005). Final figures are still being compiled for 2006. Currently available data indicates that eradication of marijuana plants increased to about 5.1 million plantsan increase of 16 percent from CY 2005. Currently available asset seizure data for 2006 shows an increase of about 55 percent from CY 2005 levels, to over 75.8 million dollars.

Meanwhile, for each pound of methamphetamine produced in clandestine methamphetamine laboratories, five to six pounds of toxic, hazardous waste are generated, posing immediate and long-term environmental health risks, not only to individual homes but to neighborhoods. Poisonous vapors produced during synthesis permeate the walls and carpets of houses and buildings, often making them uninhabitable. Cleaning up these sites in the United States and Mexico requires specialized training and costs an average of $2,000 to $4,000 per site.

Attacking Trafficking Organizations The drug trade depends upon reliable and efficient distribution systems to get its product to market. While most illicit distribution systems have short-term back-up channels to compensate for temporary law enforcement disruptions, a network under intense enforcement pressure cannot function for long. In cooperation with law enforcement officials in other nations, we target the leadership of the main trafficking groups, and focus on the operations along the network that bring drugs to the United States. Our goal is to disrupt and dismantle these organizations, to remove the leadership and the facilitators who launder money and provide the chemicals needed for the production of illicit drugs, and to destroy their networks. By capturing the leaders of trafficking organizations, we demonstrate both to the criminals and to the governments fighting them that even the most powerful drug syndicates are vulnerable to concerted action by U.S. and host-government authorities.

Mexican drug syndicates oversee much of the drug trafficking in the United States. They have a strong presence in most of the primary U.S. distribution centers. The USG and Mexico cooperate against major drug trafficking organizations in both countries and secure mechanisms for data sharing. As a result, and showing strong political will to fight this problem at home, Mexican

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Federal enforcement and military authorities have inflicted considerable damage on several important trafficking organizations. Mexican counternarcotics enforcement actions in 2006 included arrests of over 11,000 drug traffickers, including many significant leaders, lieutenants, operators, money launders and enforcers. Mexican authorities also conducted increasingly sophisticated organized crime investigations, continuing marijuana and poppy eradication and strong bilateral cooperation on interdiction. Sensitive Investigative Units within the Mexican Federal Investigative Agency serve as effective mechanisms for sharing sensitive intelligence data in both directions without compromise and play an important role in successful investigations against drug trafficking organizations on both sides of the border.

Extradition Extradition to the United States is still the sanction international drug criminals fear most. The government of Mexico recently sent a strong message when it extradited those major traffickers wanted in the United States whose appeals against extradition had been exhausted. The host of notorious foreign drug criminals serving long prison terms in the U.S. is a sober reminder to the most powerful international criminals of what can happen when they can no longer use bribes and intimidation to manipulate the local judicial process. Governments are increasingly willing to risk domestic political repercussions to extradite drug kingpins to the United States, and international public acceptance of this measure has steadily increased.

Colombia has an outstanding record of extradition of drug criminals to the United States, and the numbers have increased even more in recent years. Extraditions to the U.S have increased dramatically during President Uribe's administration, with a four-year total of 417 as of December 2006. Prominent and significant traffickers extradited in 2006 include Gabriel Puerta-Para; FARC associates Desar Augusto Perez-Parra and Farouk Shaikh-Reyes, who were the first FARC associates ever to be successfully prosecuted in the United States for drug offenses; and AUC associates Huber Anibal Gomez Luna, Freddy Castillo-Carillo, and Jhon Posada-Vergara. The Colombians also continue to provide excellent investigative and trial support related to the trials of FARC leaders Juvenal Ovidio Ricardo Palmera Pineda and Nayibe Rojas Valderrama.

In late 2005, the Mexican Supreme Court overturned the prohibition on the extradition of fugitives facing life imprisonment without possibility of parole, removing an obstacle to the extradition of the most serious drug traffickers. In 2006, for the fifth consecutive year, Mexican authorities extradited record numbers of fugitives to the United States. In 2006, Mexico extradited 63 fugitives, up from 41 in 2005. In 2006, Mexico also deported 150 non-Mexicans in lieu of extradition, many of whom were wanted on U.S. drug charges. The most notable drug trafficker extradited in 2006 was Javier Torres Felix, a top lieutenant in the Zambada organization.

In January 2007, the Government of Mexico extradited 15 defendants to the United States, for the first time sending several high-level traffickers whose extraditions had been delayed for some time due to judicial appeals or pending Mexican charges. These include figures from the Gulf cartel, the Sinaloa cartel and the Arellano Felix organization.

In July 2006, Baz Mohamed, the first Afghan heroin kingpin ever extradited from Afghanistan, pled guilty in Manhattan federal court to conspiracy to import heroin into the United States. President Bush had designated Baz Mohamed as a foreign narcotics kingpin under the Foreign Narcotic