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US DEPARTMENT OF STATE
BUREAU OF INTERNATIONAL NARCOTICS MATTERS

INTERNATIONAL NARCOTICS CONTROL STRAGEGY REPORT
APRIL 1994


SOUTHEAST ASIA AND THE PACIFIC              251  
     Australia                              253  
     Burma                                  255  
     China                                  261  
     Hong Kong                              265  
     Indonesia                              269  
     Japan                                  272  
     Laos                                   274  
     Malaysia                               279  
     New Zealand                            283  
     Philippines                            285  
     Singapore                              288  
     Taiwan                                 291  
     Thailand                               293  
     Vietnam                                301  



AUSTRALIA

I.  Summary

Australia is primarily a narcotics-consumer country, which is becoming more significant as a transit point.  Some heroin may be transitting Australia bound for the US market.  Cocaine is being shipped from the US and South America to Australia.  Australia may also be serving as a transshipment and transit point for South American cocaine destined for Southeast Asian markets.  Australian enforcement authorities appear aware of the seriousness of this threat.

II.  Status of country 

Illicit drug use is recognized as a growing problem in Australia.  Primary drugs of abuse are marijuana and amphetamines, which are produced locally for local consumption.  Some amphetamines are smuggled into New Zealand.  Heroin remains a serious problem, while the use of cocaine, smuggled in from both the US and South America, is growing.  Hashish from Lebanon and Southwest Asia is also a concern.  Tasmania's licit poppy industry has effective controls against diversion, and thus does not pose a threat.

III.  Country Actions Against Drugs.

Policy initiatives.  The GOA pursues a vigorous international anti-drug policy and strongly supports international action and cooperation against drug trafficking.  The 1993-97 National Drug Strategy Plan, part of the National Campaign Against Drug Abuse (NCADA), outlines in detail the GOA's domestic approach to drugs, using a harm-minimization approach.  This plan emphasizes alcohol and tobacco use reduction, with illicit drug use a secondary issue by comparison.  However, GOA law enforcement agencies strongly pursue anti-drug efforts because drug use is a significant cause of social disruption, and a concern to the community.  Australia is an active participant in the Commission on Narcotic Drugs and the Dublin Group.

Accomplishments.  The GOA is conducting a strong counter-drug campaign, endorses UN narcotics goals, and is a party to the 1988 UN Convention.  Six state and three GOA federal agencies devote considerable resources toward combatting the drug problem.  The Australian Federal Police (AFP) and DEA maintain representatives in each others' countries to coordinate their efforts against drug trafficking.

Corruption.  Political and police corruption are routinely reported upon in the press.  In all instances of official corruption, strong action is taken by the authorities for prosecution of criminal behavior.  The USG has no information that the GOA facilitates the illicit production or distribution of illegal drugs, or the laundering of drug money, or that any senior official engages in drug trafficking or the laundering of drug proceeds.

 Agreements and treaties.  A mutual legal assistance treaty with the US is under negotiation. The US-Australia extradition treaty is in effect.  Australia cooperates closely with the US and third countries to counter money laundering, and is active in the Financial Action Task Force.

Cultivation/production.  Domestic marijuana is the only known cultivated illicit drug in Australia.  Despite aggressive eradication efforts by the GOA, crop size has remained generally stable in recent years.  GOA law enforcement authorities report an increase in the use of sophisticated indoor and hydroponic growing operations.

Drug flow/transit.  DEA reporting strongly indicates that Australia is being targeted by South American cocaine trafficking organizations as a transit point for narcotics destined for the Asian market, as well as being a market itself.

IV.  US policy initiatives and programs:

US policy initiatives.  The primary USG goals are the assessment of trafficking trends between Australia and the US, and assistance in gathering intelligence on drug trafficking groups and their effects on international markets.

Bilateral cooperation.  The GOA and USG exchange narcotics intelligence and extradite narcotics criminals between the two countries.  The FBI and AFP have a joint working group to target the organizations behind the Australian drug trade.  Both the FBI and the DEA make USG counternarcotics training available to GOA law enforcement authorities.  

The road ahead.  The US will continue to address the transshipment issue with the GOA, and to assist the GOA in dealing with the increasing cocaine traffic emanating from the US and South America.



BURMA

I.  Summary.

The Government of Burma has not undertaken serious or sustained narcotics control efforts since 1988, despite frequent public statements and some law enforcement actions.  Burma is the world's largest source of illicit opium and heroin:  estimated potential opium production in 1993 was a record 2,575 metric tons, as estimated hectarage increased over seven percent.  The insurgent Kachin ethnic group did reduce opium cultivation and production in areas under its control.  Approximately 60 percent of US heroin comes from Southeast Asia, and almost all of that from Burma. 

The government continued its political and military accommodation of several insurgent/trafficking groups. However, there was no evidence of the reduced opium production which the government claims is the objective of these arrangements.  Burma did permit efforts by UNDCP to implement its regional strategy (involving Burma, China, Laos, and Thailand), and showed increased activity in law enforcement.  However, seizures and arrests were insignificant compared to the extent of the narcotics trade.  UNDCP crop reduction projects have yet to make meaningful progress, and are on such small scale that they can only serve as models.  Burma failed to fulfill its commitment to conduct a baseline aerial survey of the UNDCP project areas.  Burma is a party to the 1988 UN Convention. 

II.  Status of Country.

Opium is cultivated mostly in the rugged mountains of the Shan State.  For decades, much of this area has been outside central government control and under the sway of insurgents or private armies that support themselves in part through the drug trade.  Since 1990, the GOB has reached accommodations with several border insurgent groups, including the Wa and Kokang, offering them a degree of political autonomy and development assistance in exchange for an end to their insurgencies against the central government.  The GOB claimed that its assistance under these accords would permit these groups to end their reliance on opium production for their livelihoods in six years for the Kokang and ten for the Wa.  The effect, however, has been to give these groups a freer hand in cultivating opium poppy and in narcotics trafficking; the accords have not reduced production.  The Wa since 1989 have expanded their control of areas where much of Burma's opium is produced and have begun operating their own refineries, despite their leadership's claims they no longer support narcotics production.  Kokang opium poppy acreage did decline over the past year, though some of the decline may have been the result of factional fighting earlier in the year.  However, credible reports suggest the accords with the GOB permitted extensive Kokang and Wa business activities financed at least in part by drug sales.

Thailand is Burma's largest narcotics conduit to the world market, but heroin also is shipped via southern China to Hong Kong and through southern Burma to Malaysia and Singapore.  Some drugs also flow to India and Bangladesh.

Part III.  Country Actions Against Drugs in 1993

The GOB combatted illicit narcotics until 1988 mainly because drug revenues supported insurgent groups, especially the Burmese Communist Party (BCP).  After the 1988 coup, the GOB concentrated its police and army resources on internal controls.  It ceased aerial opium crop eradication programs and continued only minimal narcotics law enforcement.  Opium poppy cultivation thereafter rose sharply, including in areas under government control.  The greatest increases in cultivation, however, have come in the Wa area, where this insurgent/trafficking group also began operating narcotics refineries.  A proposed UNDCP-funded impact project, apparently accepted by the GOB in late 1993, is targeted specifically at the Wa area; it remains to be seen, however, how it will affect the situation.  The Kokang Chinese continue as major traffickers even though a modest UNDCP development effort has already begun in their area.

The Shan United Army (SUA) is another powerful drug trafficking and heroin refining organization.  The GOB has provided some military support for the Wa's ongoing war with the SUA.  As a result, the Wa have enlarged their area of control to include significant territory along the Thai border.  The GOB conducts its own military operations against the SUA from time to time, leading to heavy casualties, but few drug seizures.  Despite the encroachment by the Wa and occasional forays against it by the Burmese military, the SUA is well entrenched in its enclaves along the Thai/Burma border.

Policy Initiatives.  In 1990, the GOB legitimized several trafficking insurgent groups.  Burmese officials say that farmers under the influence of these groups lack economic alternatives to opium cultivation.  The GOB asserts that its focus will be on long-term rural development to create alternative incomes for poppy growers.  The GOB claims it spent about 1.5 billion kyat since 1989 on border area development, and has sought assistance from the UNDCP under its regional narcotics strategy that includes Thailand and China.  The UNDCP program seeks reduced drug supply and demand, as well as increased law enforcement.  The terms of the GOB's agreements, permitting several ethnic insurgent groups to transform their armed forces into local militia, raise serious doubts about the possibility of effective GOB law enforcement in those areas.

Accomplishments.  The GOB took some steps to combat narcotics production and trafficking during the year,  but not sufficient to have a major impact on the overall drug picture.  The GOB used such counternarcotics actions to improve its international image, but combatting narcotics has not been a top priority for the GOB.

Burmese authorities eradicated about 604 hectares of opium poppy in 1993 and destroyed five heroin refineries surrendered by Kokang and Wa leaders.  Foreign participants in GOB-arranged trips to the border region saw evidence of the nascent development efforts to phase out opium poppy cultivation.   However, it is doubtful that cultivation will decrease significantly in the near future, given the limited nature of these programs, as well as the lack of central government control over the drug-producing areas.

There has been an increase in enforcement activity by police narcotics task forces and army personnel in recent years, particularly in central Burma.  Burmese authorities took steps to increase the number of task forces to 17 in 1993, and reported 7,520 drug arrests.  According to official statistics, authorities seized 280 kgs of heroin, 2,420 kgs of opium and 1,325 gallons of precursor chemicals, reflecting the adoption of more effective investigatory techniques.  These led to the seizure of 1,000 gallons of acetic anhydride in November--the largest ever in Burma.

Burma to some extent increased cooperation with its neighbors in battling drugs.  In September, Burma and Bangladesh discussed a possible drug control agreement.  In cooperation with the UNDCP, Burma, China, Thailand and Laos signed an agreement in New York in October pledging narcotics control cooperation.  Rangoon hosted in November the third round of narcotics consultations held under the tripartite agreements among Burma/China/UNDCP and Burma/Thailand/UNDCP.  In October, Burmese officials also held talks with the Indian authorities under their bilateral narcotics agreement concluded in March 1993.

The GOB approved full implementation of the UNDCP's two three-year rural development projects in eastern Shan State to reduce illicit drug production.  A UNDCP-funded drug abuse education project has been underway in one township of northern Shan State since mid-1993; another slated for eastern Shan State and Thailand was near agreement at the end of 1993.

Law Enforcement Efforts.  The GOB adopted a new Narcotic Drugs and Psychotropic Substances law which closed several gaps in the 1974 legislation.  It criminalized money laundering and moved Burma toward compliance with other aspects of the 1988 UN Convention, on which it is modelled; it appears to be a significant improvement over earlier legislation.  Its ultimate effectiveness, however, will depend on interpretation and enforcement.  With UNDCP assistance, the GOB will be sending drug investigating and prosecuting officials abroad to learn more about implementing and enforcing this type of legislation.

Burmese narcotics control policies and activities are coordinated by the Central Committee for Drug Abuse Control (CCDAC), chaired by the Home Affairs Minister.  Key enforcement agencies are the People's Police Force (PPF), the Burmese Army and the Burmese Air Force.  The National Intelligence Bureau (NIB), the Directorate of Defense Services Intelligence (DDSI) and the Bureau of Special Investigation are also involved in narcotics control.  Since 1988, the Burmese military has assumed direction over narcotics control, although operational responsibility remains with the police.

While the GOB notes the USG's indictment of SUA leader Khun Sa, it has denied that a valid US-Burmese extradition treaty exists from the British colonial era.  However, the GOB also has declared Khun Sa a criminal under Burmese law and professes a willingness to prosecute him in Burma if caught.  Moreover, the GOB recently suggested that it might be willing to turn Khun Sa over to the US, if he is captured, regardless of the ambiguities about the British-era treaty.

Corruption.  Narcotics corruption is a problem in Burma.  Multiple, reliable reports confirm that lower-level civilian officials, and Police, Customs and Army personnel are paid to acquiesce or participate in drug trafficking; There are occasional, unsubstantiated allegations of corruption among senior Burmese officials.  In 1993, the GOB took actions against select military and civilian officials believed to have cooperated with narcotics traffickers.  They were either transferred or forced to resign.

Agreements and Treaties.  The GOB is a party to the 1988 UN Convention, but made reservations on extradition and the submission of disputes to the World Court.  Burma also signed the 1961 Single Convention on Narcotic Drugs and is in the process of acceding to its 1972 Protocol, as well as the 1971 Convention on Psychotropic Substances.  It has no bilateral narcotics agreement with the United States.

Cultivation/production.  Far and away the world's leading opium poppy cultivator, Burma produced an estimated 2,575 metric tons of opium on 165,800 hectares in the 1992-93 crop season--increases of approximately 13 percent and 8 percent, respectively, and over 50 percent of the world's potential illicit output.  The major growing area is the Shan plateau--extending almost the full length of the mountainous Shan state, with an average elevation of 1,000 meters.  Fields range in size from 0.1 to 4.0 hectares, averaging 0.5 hectare.  Opium poppies are also grown in Kachin, Chin, and Kayah states.

Residents in the growing areas are dependent on income from opium poppy for survival, but chiefs in some areas also coerce farmers to cultivate as much opium poppy as the labor supply allows.  No longer concentrated only along the Thai/Burma border, heroin refineries are now also found along the Chinese border in areas controlled by the Wa and the Kokang Chinese.

The GOB's rural development program ultimately might offer the infrastructure and other facilities to enable poppy growers to find other sources of income, but obstacles, including the lack of resources and difficulty of access, are daunting.  Moreover, as long as Rangoon remains preoccupied with political/security matters, high levels of drug production and trafficking will almost certainly continue.

Domestic programs (demand reduction).  The Ministries of Education and Information carry out preventive education.  The Ministry of Health manages drug treatment and detoxification operations in six major and 24 smaller centers.  One center in Rangoon handles 5,000-6,000 patients annually.  The Ministry of Social Welfare oversees drug rehabilitation efforts.

Domestic addiction is becoming a more serious problem, particularly with increased affluence in certain urban areas including Mandalay.  Treatment programs for addicts are severe--they must register and undergo compulsory treatment/ rehabilitation, including six weeks of detoxification treatment for heroin addicts--but relapse rates are high.  Since 1974, officials have registered approximately 14,000 heroin addicts, 34,000 opium addicts, and over 5,000 persons addicted to other substances.  Informed observers  put the total addict population at 150,000 or more, out of a population of 43 million.  Opium and heroin are frequently smoked.  However, widespread use of injectable narcotics has augmented the number of drug-related AIDS cases and positive HIV tests.  There are no reliable figures for overdose deaths, nor is it possible to estimate accurately total illicit narcotics consumption.

Some knowledgeable observers believe that the GOB's increasing concern about AIDS, especially among military personnel, has been a factor in the modest increase of narcotics control activity over the past three years.  Official statistics indicate that over 60 percent of addicts recently tested were HIV positive.

IV.  US Policy Initiatives and Programs

Policy Initiatives.  From 1990 to 1993, the USG has not certified Burma as cooperating fully or taking steps on its own to control narcotics under section 490 of the Foreign Assistance Act of 1961, as amended.  The USG has encouraged the GOB to play a responsible role in curbing drug production, processing and trafficking on its territory.  To this end, the USG supports appropriate multilateral efforts through the UNDCP and other UN agencies, if the GOB grants adequate access to project areas and permits monitoring of progress by UN officials.  The USG maintains close contact with UNDCP, which has a representative in Burma and a small staff, including two field workers.

Bilateral cooperation.  This is limited principally to activities of the DEA, which exchanges information and conducts liaison and joint enforcement activities with Burmese drug enforcement officials.  In 1993, DEA and Burmese drug enforcement officials did conduct three joint undercover operations leading to arrests, including two major narcotics traffickers, and the dismantling of a significant drug trafficking organization.  An investigation in August resulted in the seizure of 165 kgs of opium.  In February 1993, the USG carried out with GOB assistance a scientific collection of opium poppy samples to improve estimates of Burmese opium production.

Road Ahead.  The future of USG counternarcotics cooperation with Burma depends upon the Burmese government's readiness to engage in serious law enforcement, fulfill its international commitments under the 1988 UN Convention, and address constructively its internal political and ethnic problems.  USG certification would be predicated on serious Burmese steps toward meeting the Convention's objectives, including much more extensive opium eradication and interdiction, destruction of many more refineries, antismuggling activities aimed at heroin-related essential chemicals from China and India, and arrests of major traffickers.  An external assistance program could then mesh rural development and crop substitution with training and equipment to allow GOB agencies to carry out their law enforcement responsibilities more effectively.


[Chart:  Statistical Tables]



CHINA 

I.  Summary.

The leaders of the People's Republic of China (PRC) have taken a tough stance against narcotics trafficking and use.  China is a major export route for Golden Triangle heroin and, with drug addiction on the rise, a consumer of narcotics as well.  Growing investment increases opportunities for money laundering.  China launched a major anti-corruption campaign which may aid narcotics control efforts.  China has met or is seeking to meet the goals and objectives of the 1988 UN Convention by enhancing law enforcement measures and increasing public education and international cooperation.  It expanded regional narcotics cooperation in a Memorandum of Understanding signed this year with Burma, Laos, Thailand and the UNDCP.

Although China expresses a desire for increased counternarcotics cooperation with the US, the level of US-PRC cooperation has been limited by the unresolved case of smuggler Wang Zongxiao, a Chinese drug trafficker who requested political asylum in the US in 1990 after Chinese authorities send him to testify in a narcotics prosecution known as the "Goldfish case.".  However, DEA has been able to continue liaison and training activities in China, and some Chinese narcotics officials indicate that the newest US court ruling prohibiting the USG from returning Wang to China should not stand in the way of increased bilateral cooperation.  The USG will appeal this ruling.  China is a party to the 1988 UN Convention. 

II.  Status of country

China is a major transit route for heroin and other opiates from the Golden Triangle.  Its expanding transport and communication links facilitate the movement of illicit narcotics as well as legitimate trade.  Burma is the source of most heroin transiting China.  Although drug shipments continue by road from Burma through southern China to Hong Kong for overseas distribution; air and rail routes are increasingly used as well, extending trafficking and use into China's interior provinces.  Illicit drugs are smuggled from the south China coast across the strait to Taiwan.  China is also a source for essential chemicals.

The USG believes US and Asian trafficking networks are expanding their operations on Chinese soil.  Heroin production appears to be limited, but China produces an undetermined amount of opium, principally for domestic consumption.  China's attractive investment climate provides a fertile ground for money laundering.  There are no money-laundering laws, although officials believe laws on fraud and concealing the source of assets would cover money laundering offenses.

The government's official estimate of 250,000 registered drug addicts remains unchanged from last year;  however, informed observers believe the size of the addict population is two or three times that, and probably has increased sharply over the past year.  Most drug addicts are teenagers.  Addiction is highest in Yunnan Province, bordering Burma, but is also increasing in Guangdong, Guangxi, Guizhou, Gansu, Shanxi and Sichuan provinces.  AIDS and HIV-positive cases also have increased, particularly in Yunnan Province.  According to official PRC estimates, sixty percent of these cases are linked to intravenous heroin injection.  Drug-related crimes are also rising.

III.  Country Actions Against Drugs in 1993

Policy Initiatives.  China's narcotics control program indicates that it is trying to meet the goals and objectives of the 1988 UN Convention.  The National Narcotics Control Commission (NNCC) directs the PRC's counternarcotics efforts.  The NNCC oversees narcotics control efforts by 16 government ministries and agencies and the Drug Administration Bureau, which oversees pharmaceutical production.  A National Association for Drug Abuse Prevention was established in Beijing in December to promote prevention, treatment and rehabilitation.  Chinese authorities announced that "defense fronts" were formed in the border areas of Yunnan and Guangxi provinces.  These will attempt to block the flow of drugs into the country, monitor drug activities in the region, and strengthen control over domestic trafficking routes.  China participates in the UNDCP-sponsored subregional drug eradication project with Laos, Burma and Thailand.

Accomplishments.  Arrest and seizure data for 1993 shows increases both in trafficking and in interdiction efforts.  China participated in the October UN Special Session on Narcotics and signed a memorandum of understanding with Thailand, Laos and Burma.  PRC narcotics officials met with representatives of the UNDCP, Thailand and Burma in Rangoon in November to discuss cooperating in drug interdicting and demand reduction.

The PRC also continued limited international cooperation with Interpol to track organized crime groups involved in narcotics trafficking.  The government sponsored an international police seminar in Beijing in November, which included DEA and FBI representatives. 

Law enforcement Efforts.  PRC officials recognize China's growing narcotics problem and are determined to combat it.  In 1990, the Standing Committee of the National Peoples Congress passed an narcotics control directive in 1990 which covers possession, trafficking, and manufacturing of drugs,  and includes asset forfeiture and conspiracy sections.  However, enabling legislation is not in place for all elements of the directive.   

Corruption.  The PRC takes a strong stand against official corruption, and has laws dealing specifically with officials found guilty of involvement with the narcotics trade. Chinese leaders in 1993 launched a highly publicized anti-corruption campaign; thus far, these have resulted in the prosecution and execution of minor officials.  However, China's rapid economic growth and commercial liberalization have spawned corruption.  There is no evidence of high-level official corruption or involvement in narcotics trafficking, but there are numerous, unconfirmed reports of narcotics-related corruption among lower-level officials.

Agreements and Treaties.  The PRC is a party to the 1988 UN Convention, as well as the 1961 Single Convention and its 1972 Protocol, and the 1971 Convention on Psychotropic Substances.

Cultivation/production.  There are reports, but no firm evidence, of small scale heroin production in China.  There appears to be scattered opium poppy cultivation in a number of areas, but we believe this to be for domestic consumption.  PRC officials estimate that 10-20 percent of the illicit opium seized last year was domestic in origin.
 
Drug flow/transit.  Most heroin entering China is produced in Burma, near the Chinese border.  Traffickers usually bring in heroin through Yunnan Province, and officials report that the quantity is increasing.  Much of the opium smuggled into China, however, comes from Vietnam; it is believed that some of the heroin circulated in China originates there as well. 

Domestic Programs.  The PRC encourages citizens to report on drug smuggling and use.  In Yunnan, where local demand reduction efforts are most organized, antidrug organizations identify drug users, provide treatment and try to prevent addicts from returning to drugs.  Addicts are encouraged to register and receive treatment at government treatment centers.  Officials claim addicts arrested for criminal acts receive treatment in reeducation facilities.  The Ministry of Health continues to pursue the integration of modern detoxification methods with acupuncture and other Chinese-developed treatments; it also has sought Western-style training, including from programs from Daytop Village.  Public health officials established a drug treatment center in Kunming, using Daytop's therapeutic community approach to rehabilitation.

China mounted publicity campaigns in 1993 to educate the populace about the dangers of drug use.  In December, the Ministry of Health admitted publicly that narcotics abuse is a serious problem in China and that publicity on the drug threat was still inadequate.  The official media highlighted drug control campaigns in Guangdong and Guangxi provinces, and reported harsh sentences given to drug dealers.

IV.  US Policy Initiatives and Programs

Policy Initiatives.  The USG seeks a closer dialogue with China on the international and regional narcotics situation, and an exchange of information on trafficking networks, narcotics investigations, and demand reduction initiatives in China.  It also encourages regional cooperation on counternarcotics projects.

Bilateral Cooperation.  Chinese officials indicated a strong interest in greater international cooperation, including efforts with American law enforcement agencies.  US information-sharing initiatives had met with little response from the Chinese previously.  Although a 1993 US Court ruling Chinese drug trafficker Wang Zongxiao could not be forced to return to China has impeded bilateral cooperation on narcotics, some PRC officials now indicate a desire to concentrate instead on increased cooperation.

PRC officials participated in several USG-funded training programs addressing asset forfeiture, narcotics enforcement, forensic chemistry, chemical controls, and customs narcotics enforcement.

The Road Ahead.  PRC officials are well aware of China's serious narcotics problem and are trying hard to curb its spread before it gets worse.  Therefore, they will continue to press for more international cooperation.  The USG will continue to provide narcotics-related information to Chinese authorities, and will encourage a two-way flow of information.  The USG also will amplify training programs and encourage more exchange visits between US and PRC law enforcement officials.

[Charts:  Statistical Tables; China: Heroin Seizures 1989-1993]



HONG KONG

I  Summary

Despite laudable enforcement efforts by local authorities, Hong Kong remains a significant center for the transshipment of heroin from Southeast Asia to the US and elsewhere.  Traffickers use the territory to arrange deals and launder the proceeds from these and other illicit transactions.  Although Hong Kong is not a party to the 1988 UN Convention, the territory's counternarcotics efforts effectively comply with most of the goals and objectives of the agreement.  The Hong Kong government is now drafting a revised drug trafficking ordinance to more fully conform with the recommendations of the Financial Action Task Force, in which it is an active participant.  Bilateral cooperation between USG law enforcement agencies and their HKG counterparts is excellent.  Asset seizures in response to US civil or criminal forfeiture requests continue to increase.  The Hong Kong Government is consistently responsive to US extradition applications.

II.  Status of Country

Hong Kong brokers and financiers play a prominent role in international heroin trafficking, and the territory remains a significant transit point, although, according to DEA, not to the same extent as in past years.  While Thai trawler shipments to Hong Kong continue, there are indications that heroin shipments transported overland through southern China are now either being smuggled to Taiwan or cached at locations on China's eastern coast, rather than being smuggled into Hong Kong as in the past.  As East Asia's most important financial center, regional and local drug traffickers use the territory to launder their proceeds both through the banking system and the largely unregulated non-banking sector (money changers, gold shops, and money lenders).  As a free port, Hong Kong is a major regional transit point for a broad spectrum of chemicals, including precursors.

III.  Country Action Against Drugs in 1993

Policy Initiatives/Accomplishments.  Although Hong Kong is not explicitly covered by the legal regime established by the 1988 UN Convention, the territory's active counternarcotics effort represents substantial compliance with its goals and objectives.  The Hong Kong government (HKG) continues to revise its laws and procedures to meet the provisions of the convention.  Hong Kong is an active participant in the Financial Action Task Force (FATF), and subscribes to the 1971 Convention on Psychotropic Substances.

The HKG has taken a broad range of positive actions on the prosecution of traffickers and implementation of financial controls, and cooperates extensively with USG enforcement efforts. The illegal supply of dangerous drugs, such as heroin, opium, morphine and cannabis, is an indictable offense in Hong Kong. Under the Dangerous Drugs Ordinance, anyone found guilty of trafficking or manufacturing these drugs faces a maximum penalty of life imprisonment and a fine of about $650,000.  The 1989 Drug Trafficking (Recovery of Proceeds) Ordinance empowers the government to  trace, freeze and confiscate proceeds of persons convicted of drug trafficking offenses and allows for the prosecution of those that assist in the laundering of drug proceeds. The Pharmacy and Poisons ordinance, the 1975 Acetylating Substances (Control) Ordinance, and various other statutes allow the HKG to monitor and control the trade in a number of the chemicals listed in the 1988 UN convention, including precursor elements.

Law Enforcement Efforts.  The narcotics branch of the Royal Hong Kong Police and the Customs and Excise Department are highly professional law enforcement organizations.  The authorities reported 9,075 drug-related arrests in the first nine months of 1993, versus 9,613 arrests for all of 1992.

Corruption.  The USG is not aware of any narcotics-related corruption among senior government or law enforcement officials in Hong Kong, nor does the HKG as a matter of policy encourage or facilitate the illicit production or distribution of drugs or other controlled substances.  Hong Kong has a comprehensive anti-corruption ordinance enforced by the Independent Commission Against Corruption (ICAC) that reports directly to the governor.

Agreements and Treaties.  The HKG is beginning to set up law enforcement structures to be in place post-1997.  Using a model text approved by the Sino-British Joint Liaison Group (JLG), the HKG has negotiated agreements for return of fugitive offenders with several countries.  Two rounds of negotiations regarding an extradition agreement have been held with the USG but no progress was made in 1993; a third round will be held in the spring of 1994.  The JLG is considering the text of a model mutual legal assistance agreement that would continue to apply post-1997.  The USG looks forward to receiving an invitation to negotiate such an agreement on an expedited basis once JLG approval of a model text is obtained, which we hope is soon.  In July 1993, the US and Hong Kong renewed until January 1995 the existing bilateral narcotics agreement.  The agreement facilitates mutual assistance with regard to the freezing and forfeiture of the proceeds and instrumentalities of drug trafficking. Although there is no evidence that the basic legal system of Hong Kong will not remain in place, each of the territory's statutes must be reviewed and approved by the Sino-British Joint Liaison Group.

Drug Flow/Transit.  In addition to heroin transit noted above, cannabis is smuggled into Hong Kong mainly from Thailand, Vietnam, and the Philippines;  cannabis resin enters from Nepal, India, and Pakistan;  and methylamphetamine moves through Hong Kong from China to Japan and the Philippines.  Nearby cities in southern China have been used by trafficking syndicates for temporary storage of heroin and other drugs, and traffickers frequently recruit and train couriers and smugglers to bring these drugs into Hong Kong.

Domestic Programs.  The number of registered drug abusers in Hong Kong was about 14,228 in the first nine months of 1993.  Heroin no. 4 remains readily available in the territory and is the major drug of abuse.  Since the introduction of legislation to tighten the retail sale of cough mixtures  in January 1993, marijuana has replaced cough medicine to become the second most widely-used drug by Hong Kong teenagers.  There is some abuse of cocaine in the entertainment industry and among the younger affluent population.  There are reports that drug abuse by addicts under 21 years of age has shown the greatest increase in the last 12 years.

The HKG runs an extensive preventive education and publicity program to reduce drug abuse in the territory.  Under the direction of the governor's Action Committee Against Narcotics and the Narcotics Division of the Security Branch, the Police Department's Narcotics Division organized programs throughout the year to highlight the government's anti-drug message with the help of various local government boards and voluntary groups.  The narcotics division also conducted a program of presentations to students in primary six and the territory's secondary schools.

The HKG maintains three major drug treatment and rehabilitation programs:  mandatory treatment carried out by the correctional services department, outpatient methadone maintenance under the Department of Health, and a voluntary inpatient program conducted by the Society for the Aid and Rehabilitation of Drug Abusers. Other treatment, counselling and public education programs operated by various volunteer agencies complement these major programs.  In the first nine months of 1993, over 10,000 individuals were admitted to various treatment institutions.

IV.  US Policy Initiatives and Programs

US Policy Initiatives.  The USG seeks to broaden the already excellent cooperative liaison and operational relationship with HK agencies and lay the groundwork for the transition to Chinese sovereignty in 1997.

Bilateral Cooperation.  USG-HKG law enforcement cooperation is excellent, as reflected in the discussion above.

Road Ahead.  In the lead-in to 1997, the USG will work closely with the HKG to ensure the continuation of the close relationship, and to revise the legal framework for cooperation.  The HKG is expected to propose that we hold talks on a mutual legal assistance agreement which would extend beyond July 1, 1997 once the UK-PRC Joint Liaison Group agrees on a model text, as well as on an extradition agreement.

[Chart:  Statistical Tables]



INDONESIA

I.  Summary

Indonesia is not a major narcotics processing country or a narcotics money laundering center.  Some heroin transits Indonesia to the US;  little of the domestic marijuana production enters the US market.  Drug abuse is a small but growing problem, and the Government of Indonesia (GOI) views drug abuse and narcotics trafficking as major long-term threats to social stability.  USG-Indonesian law enforcement cooperation is good, and led to an increase in heroin seizures in 1993.  Indonesia has signed but is not yet a party to the 1988 UN Convention. 

II.  Status of country

The only illicit drug produced in significant quantities in Indonesia is marijuana, but no reliable production estimate exists, and we believe little if any enters the US market.  Indonesia's island geography and proximity to some of the world's busiest international waters provide countless opportunities for narcotics and other smuggling.

As other Southeast Asian countries clamp down on heroin trafficking, Indonesia may become an attractive transit point for trafficking organizations, due in part to limited enforcement resources, and to a less severe law enforcement climate than its neighbors.  USG information indicates a sharp increase in heroin No. 4 moving through Indonesia to the US illicit market during 1993: in 1992 10.9 kilos of confiscated heroin were in this category; in 1993 this grew to more than 120 kg.

III.  Country Actions Against Drugs in 1993

Policy Initiatives.  The Indonesian National Police (INP) and Indonesian Customs continued efforts to combat narcotics in Indonesia.  We expect that enforcement efforts will continue as the GOI strives to increase tourism.

Accomplishments.  In both Jakarta and Bali the GOI has taken the initiative against West African heroin traffickers.  The INP assisted DEA in a controlled delivery in Jakarta that led to a seizure of 6.4 kilos of heroin in Philadelphia.  Several months later a similar operation led to an INP heroin seizure and several arrests.  INP and Customs have also made several seizures of heroin at the Bali and Jakarta airports.

Law Enforcement Efforts.  Indonesia's legislation and legal structure are technically adequate to prosecute those involved in the abuse, production, and trafficking of illicit drugs.  Indonesia is not a signatory of the 1971 UN Convention on Psychotropic Substances nor does Indonesia's 1976 narcotics law cover psychotropic drugs.  While these drugs are regulated and trafficking in them is illegal, this omission complicates police efforts to curb the growing problem of psychotropic drug use.  Work on a draft law to bring Indonesia into conformity with the 1971 Convention continues.  The GOI is a signatory to the 1988 UN Convention but has not yet deposited its instrument of ratification.  However, a draft law implementing the Convention has been forwarded to the state secretary and may be sent to the Parliament in the 1994 legislative session.
 
Corruption.  The Indonesian press has publicized incidents of corruption, although government officials have not been accused publicly of involvement.  Government policy does not encourage or facilitate illicit drug production, distribution, or money laundering.  The USG has no evidence of any senior government official involvement in the production or distribution of drugs or in money laundering.

Agreements and Treaties.  Indonesia has bilateral extradition agreements with Malaysia, the Philippines and Thailand.  Drug offenders may also be extradited to other countries under existing law.  Indonesia participates in international narcotics control efforts and is a member of the UN Commission on Narcotic Drugs.

Cultivation/Production.  Cannabis is grown widely, but especially in Aceh Province in northern Sumatra.  A psilicybin-type mushroom enjoys a small market among foreign tourists.  There is no known cultivation of opium poppies.  Police have not found heroin or cocaine laboratories in the country, though one report claims illegal heroin labs operate aboard fishing vessels in the Straits of Malacca.  Local officials believe the opiates and cocaine available locally come from abroad.  The USG believes that the GOI's underfunded marijuana eradication programs have had a limited impact on domestic production.  

Domestic Programs.  Domestic drug abuse is a small but growing problem.  According to police reports, approximately 95 percent of drug abusers in the capital are between the ages of 15 and 26, and abuse is spreading from upper to middle and lower class youth.  Combinations of alcohol, sedatives and marijuana are increasingly popular.  Some adolescents have turned to solvent abuse (paint thinner, gasoline, glue).  According to an INP estimate, Indonesia now has approximately 110,000 drug and alcohol abusers.  The GOI views drug abuse and narcotics trafficking as major long-term threats to social stability, and it therefore coordinates efforts to increase public awareness about the dangers of drug abuse through the Departments of Health, Education and Culture, Religion, and Information.  Youth and women's organizations are also active in public awareness campaigns, and religious organizations are involved in prevention, treatment and rehabilitation.  It is difficult to evaluate success because of weak statistical data.

IV.  US Policy Initiatives and Programs

US Policy Initiatives.  The US urges the GOI to ratify the applicable UN Conventions on illicit drugs and advocates increased cooperation among ASEAN nations to control production and trafficking.  

Bilateral Cooperation.  Realizing the emerging threat of Indonesia as a major transit point for US bound heroin, DEA has begun working more closely with the Indonesian law enforcement community to address this issue.  During 1993 the USG provided several training programs to members of the INP, Customs, and sea communications units.  A small grant has provided computer equipment for the INP to improve its counternarcotics capabilities.  The USG also sent several members of the INP to the US for further training.

Road Ahead.  In 1994, Indonesia will participate in several USG sponsored training programs.  DEA plans to conduct specialized airport profile and controlled delivery training for the Indonesian law enforcement community.  US Customs and the US Coast Guard will present training programs in Indonesia in 1994, participants from Indonesia will be sent to DEA training in the US, and the DEA will continue to work closely with the INP on illicit drug seizures.



JAPAN

I.  Summary

Japan is not a significant producer of illicit narcotics;  the principal drug of abuse is methamphetamine, generally smuggled to Japan from Taiwan, as well as from Korea, Hong Kong and the Philippines.  Japan has ratified the 1988 UN Convention and has enacted several laws in recent years to bring its legal system into conformance with the treaty.  Some money laundering takes place in Japan, though its scale is unclear.  Over the past two years, Tokyo has contributed over $23 million in overseas development assistance targeted for counternarcotics programs.  The USG is not aware of any significant narcotics-related corruption.

II.  Status of country

The drug problem in Japan remains small by international standards, the most widely abused drug being methamphetamine, abuse of which predates World War II;  police estimate 400,000 current addicts.  There is some use of heroin, and cocaine use is increasing.

In late 1991, the Government of Japan (GOJ) enacted legislation to bring its legal system into compliance with the 1988 UN Convention.  The new laws, thus far little used, tighten controls on money laundering, organized crime, and precursor chemicals, and, for the first time, authorize use of controlled deliveries in anti-narcotics operations.  Japan's licit opium poppy industry has what are judged to be effective controls against diversion.

III.  Country action against drugs in 1993

Accomplishments.  There has been some progress in the control of precursor chemicals and the use of controlled deliveries since the abovementioned legislation was enacted.  Japanese authorities have been less aggressive in enforcing the new money laundering statute;  the law itself is fairly weak and applies only to drug-related money laundering.  In addition, police and prosecutors are generally unfamiliar with money laundering, the result being that few pursue cases or attempt prosecution.

The US and Japan have no narcotics-specific bilateral agreements.  Legislation granting law-enforcement authorities the kind of powers enjoyed by counterparts in the US is relatively new and underutilized.  Asset seizure/forfeiture is still infrequent, and police rarely carry out undercover operations.

Drug Flow/Transit.  Besides the probable increase in cocaine trafficking, Nigerian heroin rings use Tokyo as a transit point for shipments of heroin originating from Southeast Asia.  Though we have little basis upon which to estimate the volume of this traffic, DEA Tokyo reports a slight increase in the abuse of heroin in recent months.  There have also been more instances of Thai and Chinese nationals trying to transship heroin through Japan.
 
Demand Reduction Programs.  Abuse prevention programs have increased, but remain limited due primarily to the small scale of the drug problem.  For the past 20 years, methamphetamine abuse has remained Japan's primary problem.  In 1991, over 16,000 persons were arrested on charges related to the methamphetamine traffic--this remains the largest number of individuals arrested within a year. 

IV.  US policy initiatives and programs

The USG seeks to assist Japanese police efforts, e.g. through criminal record checks and training assistance.  A Japanese national police agency drug enforcement division superintendent was assigned to DEA Los Angeles for four months in 1993, a program DEA hopes to continue.  We also encourage further tightening of currency controls to discourage money laundering.



LAOS

I.  Summary

Laos' estimated opium production declined 22 percent in 1993 from 1992, principally as a result of adverse weather conditions.  Estimated area under cultivation, however, showed no decline.  Opium crops have declined 50 percent and opium poppy hectarage 37 percent since the initiation of USG and UNDCP-funded rural development/opium replacement programs in 1989.  However, Laos is still the third largest producer of illicit opium.

Narcotics arrests and seizures increased during the past year; both highland and lowland Lao were arrested on charges involving opium, heroin and marijuana traffic.  After much delay, the police counternarcotics unit established by the Government of Laos (GOL) Council of Ministers in 1992 is beginning to function, supported by the USG.  However, much of its attention appears to have been devoted to marijuana eradication, a simpler and politically less sensitive target than opium production or heroin trafficking.

Narcotics corruption is widespread among civilian and military personnel, although we do not believe the Lao Government actively encourages or facilitates narcotics activity as a matter of state policy.  Some senior officials are likely aware of illicit activities, but lack the resources, power, or will to stop them.  Nevertheless, senior Lao officials insist that anyone involved in the narcotics trade will be arrested and prosecuted.

Laos' narcotics control efforts take place almost entirely with foreign assistance or under foreign pressure.  The GOL has not been responsive to enforcement information-sharing requests, nor has it sustained pressure to reduce opium cultivation.  Its narcotics control performance is inadequate, but must be viewed in the context of a very poor country with limited training and educational opportunities and a poorly developed administrative system.  Laos is not a party to the 1988 UN Convention. 

II.  Status of Country

The GOL pursues opium reduction through development and through limited law enforcement action.  USG estimates indicate a 37 percent reduction in illicit opium cultivation since 1989.  Cultivation in the USG-funded Houaphan Project area has dropped by more than 50 percent since our first project agreement with the GOL in 1989.  The GOL states it is committed to decreasing opium poppy production, but admits that this program competes with other GOL priorities for funds, and is hampered by the GOL's limited management and administrative skills.

The USG and UNDCP attribute the reduction in opium poppy cultivation and production to pressure from district officials combined with crop reduction by villagers in expectation of project benefits; increased arrests and seizures which deter buyers and ultimately growers; and a government information program stressing the negative consequences of illicit trafficking and drug use.

III.  Country Actions Against Drugs in 1993

Policy Initiatives.   In January, the Prime Minister issued a formal decree to each province to organize an anti-drug committee and to cooperate with the National Commission for Drug Control and Supervision in extension, education and training.  The decree requires the provincial committees to publicize existing laws and regulation, educate the public about the dangers of drugs and seek public cooperation in eliminating illicit narcotics.

The GOL publicized narcotics-related arrests, seizures, penalties, and has made its counternarcotics statistics available.  DEA maintains contact with law enforcement officials through liaison officers stationed in Udorn, Thailand.  Lao cooperation thus far has been limited to the acceptance of training and equipment.

The GOL participated in a USG-funded opium yield study in the Houaphan and UNDCP project areas which provided the best data yet on opium production yields in Laos.  The GOL is considering a UNDCP-produced narcotics action plan projecting activities through the year 2000.  UNDCP representatives claim that most parts of the plan have been agreed upon and final approval is expected soon.

At the UN plenary sessions on international cooperation against narcotic drugs and psychotropic substances, the GOL joined representatives of China, Thailand and the UNDCP in signing a memorandum of understanding (MOU) to strengthen regional cooperation in illicit drug control.  Laos plans to host the first meeting of the group to explore ways to implement the MOU.

Accomplishments.  The USG has been working to provide the GOL with the resources necessary to developed the counternarcotics unit into a cohesive and identifiable unit.  The government facility for the unit is being renovated and planning is underway for training of the unit's personnel.  The GOL and USG signed a second law enforcement agreement in September to support this activity.

In the Houaphan crop replacement project, construction of roads and mini-hydroelectric/irrigation dams is moving ahead.  Lao Customs used a US Customs advisor to help prepare standard operating procedures for the border facility at the new bridge connecting Laos and Thailand. Great Britain and Australia provided narcotics and customs training for the Lao Customs Service.

Law Enforcement Efforts.  Authorities greatly increased narcotics-related arrests.  Statistics provided by the Interior ministry (MOI), while sketchy, indicate 99 arrests for the first six months of l993, 22 more than the total reported for all of 1992.  Other cases reported to the US Embassy add an additional 21 arrests to the total.  Provincial narcotics committees were responsible for the destruction of numerous marijuana plantations; on two occasions, members of the counternarcotics unit were mobilized to support such operations.  Partial-year seizure statistics, however, show a decline from 1992.

Corruption.  The USG received reports of widespread military and official corruption and collusion in narcotics production and trafficking.  However, we do not believe that the Lao Government as a matter of policy encourages or facilitates the illicit production or distribution of drugs or the laundering of drug money, although some senior government officials probably are aware of these activities.  Senior Lao officials insist that anyone involved in the narcotics trade will be arrested and prosecuted.

Agreements and Treaties.  The US and Lao governments signed a MOU on narcotics cooperation in 1989 and have signed an agreement on the Houaphan crop replacement project each year since.  The GOL also concluded the first agreement with the USG in 1992 to support a Lao law enforcement unit.  A second agreement was signed in September.  The law enforcement project assists Lao Customs in equipping its regional centers and provides training. It also supports the Lao National Commission for Drug Control and Supervision.

Laos does not have an extradition or mutual legal assistance treaty with the US but has agreed informally to cooperate in deporting drug traffickers.  In 1992, the GOL deported an American narcotics fugitive into USG custody for prosecution.  Laos has been a party to the 1961 UN Single Convention since 1973.  Although Laos has not yet become a party to the 1971 and the 1988 UN conventions, the GOL is cooperating with the UNDCP and other donors.  Senior GOL officials claim the government accepts the 1988 UN Convention in principle, but has only begun to develop the legal structures to meet the goals and objectives of the convention.

Cultivation/Production.  Opium poppy cultivation is spread throughout the 10 northern Lao provinces where opium traditionally has been used.  The USG estimates that Laos could have produced 180 metric tons of opium in 1993, down from an estimated potential production of 230 metric tons in 1992.  The decrease is primarily due to weather. There are no accurate statistics on domestic consumption in Laos, but estimates vary from 50 to 100 metric tons.  Much of the opium poppy is grown by hilltribes in areas with limited central government presence.  These areas are poor, isolated and often inaccessible during the rainy season.  The Lao Government called for bilateral and multilateral assistance for crop substitution projects; it insists that opium cultivation cannot be eliminated without alternative income sources for farmers.  Experience in the Houaphan and in UNDCP project areas suggests that this is a valid approach to eliminating illicit poppy cultivation. 

Drug Flow/Transit.  The Lao Government recognizes its limited ability to control the flow of illicit narcotics both within and across its borders because of its lack of resources and access to many border areas.  Laos maintains an official presence on its borders with Thailand, Burma, China, Vietnam, and Cambodia only at major population centers and river crossings.  Foreign law enforcement and customs officials are training Laotian authorities to improve their enforcement capabilities.

Information is limited on narcotics trafficking through Laos; we are unable to establish the extent of domestic Lao involvement in trafficking, nor the degree to which Laos is used as a transit country.  However, Louang Namtha province has been identified as a route for opium and heroin from or through Laos to China, while Bokeo and Oudomsay provinces on the Thai border  serve as exit and transit areas in northwest Laos.  Opium from northeast Laos is reportedly shipped through Vientiane and Bolikhamsay provinces to Thailand.  The extent of trafficking to or through Vietnam and Cambodia has not been established, nor do we have information supporting involvement in trafficking from Laos by governments in the region (China, Vietnam, Cambodia and Thailand, Burma).

Demand Reduction.  The Lao Government undertook a public awareness program to stress the dangers of narcotics use and trafficking.  With help from the USG and UNDCP, it also established integrated rural development projects to address opium poppy cultivation and opium use through health, education, and other government services.  These projects, as well as the GOL's public awareness program, may have reduced demand.

IV.  US Policy and Initiatives

Policy Initiatives.  The USG objectives in Laos are to help the GOL eliminate opium poppy cultivation, and to suppress illicit trafficking.  The Houaphan Project has been the primary vehicle to reduce cultivation. Senior Lao officials consider it the most successful project of its kind in the country.

The project is now complemented by the USG program to support narcotics law enforcement and interdiction.  This includes assistance for the special counternarcotics unit, Customs narcotics control efforts, and the Lao National Commission for Drug Control and Supervision.

Bilateral cooperation.  There has been substantial progress in meeting the goals of the Houaphan crop replacement project and key construction components are moving forward.  The law enforcement project also is advancing, albeit very slowly. Laos continues to cooperate with US Customs and the DEA.

The road ahead.  The USG hopes to persuade the Lao Government to act more aggressively on law enforcement.   The USG also will press Laos to become a party to the 1988 UN Convention, and adhere to its goals and objectives.  The Lao Government should adopt stronger measures against narcotics-related corruption, and publicly punish those involved.  

[Chart:  Statistical Tables]



MALAYSIA

I.  Summary and Status of Country

Malaysia is an important consumer and transit point for Golden Triangle heroin, some of which is also processed in the country from imported opium or derivatives.  Traffickers smuggle heroin base into Malaysia from Burma and Thailand and convert it to heroin No. 3 for local consumption; heroin No. 4 from Burma and Thailand transits Malaysia en route to markets in the United States, Australia and Europe.

While low-level corruption facilitates persistent drug trafficking and abuse, Malaysia pursues aggressive law enforcement efforts under one of the most severe drug laws in the world.  The Government of Malaysia (GOM) recognizes the seriousness of the narcotics threat domestically and internationally, and conducts a serious, well-funded and well-administered anti-narcotics program, which includes law enforcement, primary prevention, treatment and education.

Malaysia and the United States have an established history of anti-narcotics cooperation. During 1993, the USG and GOM cooperated in conducting demand reduction and drug law enforcement training programs.  Having arrested a major Burmese drug trafficker at USG request in 1992, the GOM assisted efforts to have him expelled to a neighboring country and ultimately into US custody after an extradition case failed and was dismissed in January 1993.

II.  Country Actions Against Drugs in 1993

Policy initiatives.  The fight against drug abuse and trafficking has been a top GOM national security priority since 1983.  An Anti-Narcotics Committee reports directly to the Prime Minister, and its executive arm, the Anti-Narcotics Task Force (ANTF), operates as the key GOM anti-narcotics coordinating body.

The GOM's second five year anti-narcotics plan retains current anti-narcotics priorities: prevention and enforcement, rehabilitation, manpower development, international cooperation and coordination.  Malaysia's drug laws rank among the world's most severe, but the GOM also has an active public awareness program.  Using school programs, television spots by entertainers, fund-raising walkathons and conferences, the program seeks to spur greater involvement by parents and community organizations in the campaign against drugs.  Existing treatment centers have a capacity of 10,000; additional centers with about 2,600 places are under construction or repair.  Rehabilitation services are also provided in voluntary and private centers.  A police anti-drug unit has 1,775 personnel; nearly 1,400 customs officers conduct anti-smuggling operations, including anti-narcotics work, but only 48 officers in the preventive division specialize in counter-narcotics efforts.

Accomplishments.  Malaysia ratified the 1988 UN Convention in May 1993, and the Convention entered into force for Malaysia in September 1993.  Although it has not yet completely met all the objectives of the convention, Malaysia has been drafting appropriate implementing legislation, in most cases to augment existing laws. 
 
Law enforcement efforts.  Malaysia's drug laws rank among the world's most severe.  The Dangerous Drugs Act mandates the death sentence for narcotics trafficking, and possession of relatively small quantities of proscribed drugs creates a legal presumption of intent to traffic.  The Dangerous Drugs (Special Preventive Measures) Act of 1985 empowers the government to detain suspected drug traffickers without trial.  From January to November 1993, Royal Malaysian Police arrested 673 suspected traffickers under this Act; 658 of these were ordered detained under the Act's preventive detention provision.  Most observers admit that Malaysia needs to enact adequate criminal conspiracy laws, but law enforcement officials say preventive detention laws are easier and cheaper to enforce.

Drug money laundering is a criminal offense under the 1988 Forfeiture of Property Act.  Only one person has been charged under this provision since 1988; the case is under appeal.  The GOM is expected to introduce new legislation in 1994 widening police powers to confiscate proceeds of serious crimes, augmenting existing asset seizure laws applying only to narcotics trafficking suspects.

Malaysia passed a new extradition act in February 1992.  In addition, bilateral extradition treaties are in force with the US, Thailand and Indonesia.  Talks continue between Malaysia and the United States on a new bilateral extradition treaty.  The government plans to introduce new legislation permitting Malaysian law enforcement agencies to render mutual legal assistance, and to streamline procedures for concluding MLA treaties with other countries.  Malaysian law enforcement officials have expressed interest in concluding an MLAT with the United States.  Mutual legal assistance agreements are in force with Hong Kong and the United Kingdom.  The United States and Malaysia signed a Memorandum of Understanding in 1989 on bilateral narcotics cooperation.  Malaysia has generally met the goals and objectives of this MOU.

Corruption.  Corruption exists in some of Malaysia's law enforcement agencies, particularly in Penang, where ethnic-Chinese "triad" gangs control most narcotics trafficking.  Police have difficulty recruiting ethnic Chinese officers for anti-narcotics work, and ethnic Malay officers have difficulty penetrating Chinese narcotics trafficking rings.  Although no senior government officials are known to engage in narcotics production, distribution or money laundering, some police and prison officials were charged with corruption and involvement in narcotics trafficking during 1993.  The Royal Malaysian Police (RMP) have a diciplinary division which addresses allegations of corruption and misconduct within the force.

Agreements and treaties.  Malaysia is a party to the 1961 Single Convention on Narcotic Drugs, the 1972 Protocol to the Convention and the 1971 Convention on Psychotropic Substances.  In 1993, Malaysian and US officials revived negotiations on an extradition treaty; talks are continuing.  The United States and Malaysia signed a Memorandum of Understanding in 1989 on bilateral narcotics cooperation.

Cultivation/Production.  Some marijuana is cultivated in Malaysia, chiefly in Sabah and Sarawak.  GOM and private observers believe yields to be small.  Heroin no. 3 is refined from imported heroin base;  in 1993 several heroin no. 3 conversion laboratories were seized, according to media reports.
 
Drug flow/transit.  We believe heroin smuggling into Malaysia is centered in northwest Malaysia, chiefly the islands of Penang and Langkawi, and across the land border with Thailand.  Increased controls along this land border have resulted in more smuggling by sea.  In 1993, reports continued that narcotics are being shipped directly to Malaysia from Burma, but evidence is scarce.

Domestic programs.  The GOM points to a decrease in the growth rate of the new addict population as evidence of the effectiveness of its demand reduction policies.  A total of 20,236 persons were confirmed as drug addicts in 1992; 61.7 percent (12,486 persons) were relapsed addicts.  The number of new addicts detected in 1992 was roughly the same as in 1991.  Overall, the rate of new addictions appears to be decreasing:  14,624 new addicts were registered in 1983, but the 1992 total was 7,750, a decrease of about 53 percent.  Recidivism continues to be significant, with about 62 percent of registered addicts in 1992 being relapsed former addicts.

Bilateral cooperation.   Cooperation between Malaysia and the US in 1993 included demand reduction and law enforcement programs financed by grants from the State Department's Bureau of International Narcotics Matters (INM) and carried out by DEA, US Customs, US Coast Guard, and contract treatment and demand reduction personnel.  US and Malaysian officials signed a Letter of Agreement in September enabling the USG to provide equipment to support demand reduction programs and drug law enforcement efforts.  However, DEA continues to be disappointed by the lack of spontaneous and regular cooperation from the RMP.

The road ahead. The United States will continue its bilateral cooperation with the government of Malaysia, seeking to:

-- identify, target, and immobilize major drug traffickers and their organizations operating in Malaysia.

-- seek GOM passage of appropriate implementing legislation to conform with the 1988 UN convention.

-- conclude a new bilateral extradition treaty.

-- encourage the GOM to amend legislation to give extraterritorial application to the Dangerous Drugs Act.

-- explore negotiating a Mutual Legal Assistance Treaty.

-- conduct drug enforcement and interdiction training for Malaysian law enforcement agencies.

-- conduct demand reduction training for GOM agencies via the anti-narcotics task force.

-- encourage the GOM to participate constructively in regional and international drug control initiatives, including exchanging narcotics intelligence on traffickers within the southeast Asia region.

[Chart:  Statistical Tables]



NEW ZEALAND

I. Summary 

New Zealand is not a major narcotics producing, trafficking, or money laundering country.  Cannabis is the principal focus of Government of New Zealand (GNZ) enforcement and demand reduction activities, although LSD is also being seized in significantly larger amounts.  The National Drug Intelligence Bureau (NDIB) is the lead agency in these efforts, though its resources are limited.   A recently enacted asset seizure law is undergoing its first test in court, while draft money laundering legislation will, when enacted, move the GNZ closer to full compliance with the 1988 UN Convention Against Illicit Traffic in Narcotics, which the GNZ has signed but not ratified.  

II.  Status of Country

New Zealand has been experiencing growing drug production and trafficking problems.  Cannabis cultivation has been increasing in spite of active eradication efforts by the GNZ authorities.

III.  Country Actions Against Drugs in 1993

Corruption.  The USG has no knowledge of instances of official corruption related to illicit drugs.

Agreements and Treaties.  The GNZ has no formal bilateral narcotics agreements with other countries.  It uses existing customs, police and Interpol arrangements and informal relationships.  Law enforcement cooperation is excellent.  

Cultivation/Production.  The GNZ believes it has a proportionately significant home-grown drug problem, mainly cannabis.  By the end of 1993 seizure of cannabis plants will exceed the record of 287,550 seized in 1992.  More is being seized but more is available on the streets.  GNZ officials are faced with more sophisticated drug production and distribution coupled with a slight decrease in their own resources.  

Drug Flow/Transit.  The GNZ seized in 1993 252 kilograms of hashish oil enroute to the US.  This was the first such seizure made and is perhaps a portent of things to come.  In addition, the GNZ authorities arrested several persons carrying heroin where New Zealand was not believed to be the final destination.

Domestic Programs.  The GNZ places great emphasis on demand reduction and rehabilitation and the Ministry of Health is an integral component of the NDIB.  The Drug Abuse Resistance Education (DARE) programs, adopted from the original program in Los Angeles, California is promoted actively and is considered an effective means to reach younger school children.

 IV.  US Policy Initiatives and Programs

Despite the absence of formal narcotics agreements, the GNZ cooperates with USG counternarcotics organizations in a noteworthy manner.  The USG provided information and encouragement for the enactment of asset seizure legislation, and will encourage in similar fashion the enactment of money-laundering legislation.

The Road Ahead.  The USG will assist the GNZ with relevant training, share USG legislation and related information for consideration by GNZ authorities, and provide information on narcotics trafficking through appropriate channels.



PHILIPPINES

I.  Summary.

Marijuana and hashish form the basis of the Philippines' illicit drug production and exports.  Abundant and low-cost methamphetamine, known locally as "shabu", is popular among Filipino drug users.  The Philippines is a transit point for heroin and methamphetamine destined principally for points in east Asia, the Pacific, and the United States.  The lack of money laundering and asset forfeiture laws hinders law enforcement personnel trying to combat drug trafficking.  In 1993, the Philippines cooperated with the USG in law enforcement efforts aimed at reducing marijauna cultivation and interrupting the flow of heroin through the country.  In November, the US and the Government of the Philippines (GOP) agreed to negotiate extradition and mutual legal assistance treaties.  The Philippines has signed the 1988 UN Convention, but has not yet ratified it.

II.  Status of country.

Ideal growing conditions, lax law enforcement, and widespread official corruption make the Philippines a substantial producer and exporter of marijuana, mostly to Australia, Japan, and the US  Hashish is also produced for export.  Methamphetamine ("shabu") is imported from China, although interdiction of some precursor chemicals indicates some is also produced locally.

Due to weak customs controls, the Manila and Cebu international airports are transit points for Golden Triangle heroin destined for the US and Europe.  In March, authorities seized 8.65 kilograms of Southeast Asian heroin at the Manila airport in transit from Bangkok to the United States.

III.  Country action against drugs in 1993.

Policy initiatives.  While committed to narcotics eradication, prevention of drug abuse, and combatting drug trafficking, severe budgetary constraints, inadequate training of personnel, and official corruption have hampered GOP efforts.  Nonetheless, the Dangerous Drugs Board (DDB) participates in regional and international counternarcotics fora.  The DDB monitors most precursor chemicals listed in the 1988 UN Convention.  The Police Narcotics Command (NarCom), the law enforcement arm of the DDB, cooperates closely with the US and other foreign governments in interdiction and other counter-narcotics operations.

Law enforcement efforts.  Although Philippines law enforcement efforts to combat drug trafficking have made some progress, they are hampered by close ties between drug organizations and law enforcement or other official personnel, and by the absence of money laundering and asset forfeiture laws.  Legislation to establish such laws is under consideration by the Philippines Congress.

Corruption.   Anti-corruption laws exist but are not stringently enforced.  President Ramos has publicly emphasized his determination to ferret out corrupt government officials, and some progress has been made.  In April 1993 the PNP dismissed 68 senior officers; in August, two senior PNP  officers suspected of being major drug traffickers were arrested for the kidnapping of a Taiwanese businessman.  The GOP does not as a matter of policy encourage or facilitate any illegal narcotics activities.  In spite of much speculation that top government officials are involved in drug trafficking, no arrests or indictments have been made.

Agreements and treaties.  In their November 1993 meeting in Washington, Presidents Ramos and Clinton agreed to begin negotiations on extradition and mutual legal assistance treaties.  The Philippines has signed but not ratified the 1988 UN Convention.

Cultivation and Drug flow/transit.  Marijuana is grown throughout the country, with major production areas in the mountains of Mindanao and northern Luzon.  Courier-borne heroin transits the Philippines' international airports, particularly Manila's.  Marijuana and hashish leave the country mainly by private boats and shipping containers.  Methamphetamine arrives by private boats and shipping containers, and leaves the country by couriers and mail.

Domestic demand reduction efforts.  The government demand reduction effort consists primarily of drug abuse education and activity programs in schools and communities.  The ASEAN Training Center for Preventive Drug Education is located in the Philippines.  Training for programs in elementary schools was provided by the US-based Drug Abuse Resistance Education Foundation (DARE) to police officers.

IV.  US Policy Initiatives.

Goals and objectives.  The USG seeks to disrupt the movement of drugs to the US from and through the Philippines.  To this end, DEA works with Philippine law enforcement agencies to improve narcotics interdiction efforts.  The USG encouraged the GOP to carry out several marijuana eradication campaigns in 1993.  The GOP carries out demand reduction efforts under its own initiative.  GOP officials are aware of the need for additional legislation to meet the requirements of the 1988 UN Convention.  Progress in this area, however, is extremely slow.

Bilateral cooperation.  In September, USG and GOP officials signed a letter of agreement under which the US will provide $50,000 to establish a narcotics traffickers database at NarCom headquarters and the Manila airport.  The Philippines is adequately meeting the goals of the agreement.  In September, NarCom carried out a US Navy-funded marijuana eradication program in northern Luzon.  The USG carries out institution-building programs to improve GOP narcotics investigative and interdiction capabilities.

The road ahead.  The USG seeks to improve GOP drug law enforcement capabilities and reduce marijuana cultivation, methamphetamine production and export, and heroin transit.  The narcotics traffickers database and the proposed extradition and mutual legal assistance treaties should enhance these efforts.

[Chart:  Statistical Tables]



SINGAPORE

I. Summary 

Singapore does not produce or process narcotics, but international traffickers use Singapore as a storage and transit point.  The government effectively directs its enforcement resources mainly against domestic drug traffic and abuse.  The authorities have increased efforts to intercept traffickers transitting Singapore, and are sharing intelligence with other countries in the region. The government also stepped up its attention to addict rehabilitation.  Singapore hosted the April Financial Action Task force (FATF) meetings, and introduced legislation that could lead to sharing financial information about money launderers.  Singapore has not acceded to the 1988 UN Convention. 

II. Status of Country 

Singapore does not produce or process narcotics.  It has a strict and frequently enforced capital punishment for trafficking and prides itself on a "no exceptions" policy:  a Dutch citizen was sentenced to death for trafficking heroin, and his appeal was denied in November.  Traffickers are increasing the use of minors as couriers, since they are exempt from the capital punishment.  By the end of 1993, 94 traffickers were been sentenced to death; 40 were executed.  The government maintains a rehabilitation program, as do private organizations. 

Curbing the transshipment of narcotics through Singapore remains the greatest challenge to enforcement.  Resources are devoted principally to domestic enforcement, unless international investigations warrant special attention.  Enforcement has been stricter at the seaport and at the causeway into Malaysia than at the airport, although there have been well-publicized cases of couriers intercepted at the airport as well.  There were some improvements during the past year.  Singapore began to expand international intelligence sharing, and the government cooperated with USG on the extradition of drug suspects; four were extradited to the US.

III. Country Actions Against Drugs in 1993 

Policy Initiatives.  The Parliament passed legislation to implement the seizure of assets law passed in 1992.  The government also indicated its willingness to conclude an agreement with the US to facilitate the sharing of money laundering information.  
 
Accomplishments.  The government responded positively to US extradition requests during the year and is also receptive to USG overtures for an agreement on asset seizure and the sharing of money laundering information.  However, the government first wants to apply the new assets seizure law to domestic cases beginning in 1994. 

Law Enforcement Efforts.  Singapore's Central Narcotics Bureau (CNB) is very effective, and substantially free from corruption.  Singapore does not produce precursor chemicals.  However, the government could improve the monitoring of distribution and sale of such chemicals.

 Agreements and Treaties.  Singapore is a member of the FATF, and adheres to an extradition treaty signed between the US and the UK during the colonial period.  Singapore has not acceded to the 1988 UN convention, but is party to the 1961 UN Convention on Narcotics Drugs, its 1972 protocol, and the 1971 UN Convention on Psychotropic Substances.

Drug Flow/Transit.  As noted, Singapore is a transhipment point for narcotics.  Shipments of heroin in containerized cargo are re-labelled "Product of Singapore" and given a new bill of lading.

Demand Reduction Programs.  Singapore's death penalty for drug trafficking has a significant deterrent effect. The government has an extensive rehabilitation program for addicts, although its effectiveness has sometimes been questioned.  There are also privately sponsored rehabilitation programs such as that conducted by the council for the development of the Singapore Muslim community. Qualifying private programs may receive matching funds from the government to support their efforts. 

IV. US Policy Initiatives

The Road Ahead.  The USG will seek to persuade Singapore to ratify the 1988 UN Convention, and obtain its cooperation in monitoring distribution and diversion of precursor chemicals.  In 1994, the US will pursue negotiation of a comprehensive treat with Singapore covering mutual legal assistance in criminal matters. 

[Chart:  Statistical Tables]



TAIWAN

I.  Summary

Taiwan is a market and transshipment point for Southeast Asian heroin, a safe haven for drug fugitives, and increasingly plays a role in money laundering.  Taiwan also produces illicit amphetamines.  Authorities are increasingly involved in combating the rapidly growing drug abuse problem.  Taiwan's drug laws are being strengthened. Taiwan authorities are working with the international community to investigate and prosecute traffickers.  The National Police Administration Criminal Investigative bureau (CIB) cooperated with DEA in a controlled delivery operation which resulted in prosecutions. 

II. Status of Territory

Opium is not produced in Taiwan, but Southeast Asian heroin does transit its ports; authorities intercepted several shipments arriving by sea from Thailand or via the Chinese mainland.  Amphetamine abuse is still the largest domestic drug problem, but Taiwan also faces rapidly growing heroin abuse.  USG information indicates that, in addition to illegal amphetamine producing labs in Taiwan, illegal labs on the Chinese mainland have also been financed by traffickers from Taiwan.

III. Territory Action Against Drugs in 1993

Initiatives and Accomplishments.  Taiwan is pursuing greater international cooperation in dealing with drug issues, but there have been only limited efforts to implement key provisions of the 1988 UN Convention, such as control of precursor chemicals, and increased investigation of money laundering operations.  

Law Enforcement Efforts/Corruption.   Both the Ministry of Justice Investigative Bureau (MJIB), and the National Police Administration (NPA) enforce drug laws and investigate drug offenses.  The MJIB has placed counternarcotics under its economic crime unit with a ten-person task force responsible for directing the bureau-wide enforcement of Taiwan laws.  The NPA's CIB plays the largest role in drug enforcement.  In 1993 there were no reports of corruption in connection with narcotic law enforcement.

Cultivation/Production.  There is no significant cultivation of opium poppy or cannabis in Taiwan.  Authorities raided six amphetamine drug labs during the year, resulting in the seizure of approximately 1,190 kgs of amphetamines and 100 kgs of raw materials. 

Drug flow/transit.  Heroin is the principal drug transiting Taiwan, although USG information indicates that amphetamines are sent to Japan and the Philippines either from or via Taiwan.  Heroin is smuggled mainly by ship and is difficult to detect, given Taiwan's heavy merchant marine traffic.   Officials claim that the bulk of heroin seized is for domestic use, but some evidence suggests that at least a portion is destined for the international market.  Imported amphetamines usually enter by fishing boats originating in the China mainland.

 Domestic Programs.  Authorities estimate there are 30,000-40,000 heroin addicts in Taiwan, but caution that this is a tentative figure at best.  The extent of Taiwan's domestic drug abuse problem is suggested by arrest statistics; authorities arrested 40,977 drug offenders in the first 10 months of 1993 (32 percent of all arrests), compared with only 3,327 arrests in 1990.  Officials readily admit that amphetamine usage is a growing problem among students, farmers and laborers in Taiwan's fast-paced society.  According to press reports, 2.4 percent of female and 3.7 percent of male high school students use amphetamines.  Taiwan conducts a public education campaign on the dangers of drug abuse, using radio and TV spots, posters, and public events.

IV. US Policy Initiatives and Programs

There is no extradition agreement between the US and Taiwan; the return of fugitives sought by in the US is extremely limited under Taiwan law.  Authorities have expressed a willingness to discuss an extradition agreement, and the issue is currently under review.

Bilateral Cooperation/Road Ahead.  The US and Taiwan signed an agreement in 1993 to  facilitate cooperation on criminal investigations.  For the future, the US will urge Taiwan to fulfill more fully its international responsibilities through increased drug intelligence exchanges; additional financial controls to address money laundering; a review of passport laws to prevent Taiwan from becoming a safehaven for international fugitives; and the establishment of an effective chemical control regime.



THAILAND

I. Summary

Thailand is still the primary conduit for heroin from the Golden Triangle sold in the US, but is no longer a primary producer of opiates for the international market.  In 1993 Thailand increased its resources devoted to narcotics interdiction, public education, and drug treatment.  It sought regional cooperation with Laos and Burma, worked well with Malaysia, and cooperated actively with US law enforcement agencies.  Some police counternarcotics functions have improved through a recent reorganization.  The US and Thailand have an extradition treaty, although extradition of Thai nationals is discretionary.  The US and Thailand exchanged instruments of ratification of a mutual legal assistance treaty in 1993.

Nonetheless, progress in major cases still depended largely on USG initiation and direction, and use of legal remedies was slow.  For example, after many years of USG pressure, Thailand passed narcotics conspiracy and forfeiture laws in 1991;  cases under the assets seizure law are in progress, but none has concluded.  Widespread police and military corruption, expanding narcotics trade with Burma, and the involvement of influential Thai and Sino-Thai private citizens and government officials undermine the effectiveness of law enforcement counternarcotics units.

Money laundering increased as Thailand became a more significant financial center, but the government has not enacted money laundering legislation.  Obstacles included the narcotics involvement of some politicians and the banking industry's concern.  Elements of the Thai military and police maintain contacts with the Shan United Army (SUA) (or Mong Tai Army), which operates in Burma near the Thai border.  They also tolerate arms and precursor chemical sales to the SUA and some other trafficking groups, as well as the licit trade which sustains their illicit activities.  Thailand is not a party to the 1988 UN Convention. 

II.  Status of Country 

Hilltribes in northern Thailand have cultivated opium poppy for decades.  Production of opium as a cash crop is more recent and has grown with expansion of international heroin markets.  Development efforts supported by foreign donors over the past thirty years gradually integrated many of the hilltribes into the Thai social mainstream and provided substitute crops and other economic alternatives to poppy cultivation.  There is still a domestic market for Thai opiates to help supply the country's addict population; Thailand actually is a net importer of opiates.  Most heroin refining operations are located across the borders with Burma and Laos, but small heroin labs appear occasionally in Thailand's rugged northern highlands. 

In the northeast, Thailand produces high-quality marijuana for the international market in the northeast.  Marijuana is also cultivated increasingly in southern and northern Thailand. 

 Thailand's major importance internationally is as a trafficking route, rather than a heroin producer.  Thailand is the preferred route for heroin coming out of the Golden Triangle because it has a better transportation and communications infrastructure than some neighboring countries.  Road building and other economic development helped reduce opium production in northern Thailand but made heroin trafficking easier.  The increase of Thai exports, particularly containerized exports, expanded smuggling opportunities for large drug shipments.  Golden Triangle heroin also moves south by land and sea to Malaysia and Singapore.  Thai law enforcement pressure may have contributed to the growing flow of heroin through China, India and other routes, although most of the Golden Triangle heroin destined for the US probably still passes through Thailand. 

While it was previously believed many of the Thai and Sino-Thai traffickers bypassed the formal Thai banking system, implementation of the new asset forfeiture legislation provided additional insights into narcotics-related financial transactions in the formal Thai banking system.  The Thai government is aware of the problem of narcotics-related money laundering, but has yet to present legislation to address the issue. 

Thai highways are an important route for precursor chemicals supplying the heroin labs across the northern borders.  Interdicting the traffic in chemical precursors for heroin labs is complicated by refiners who produce their own precursors, such as acetic anhydride, from widely available feedstock.

III.  Country Actions Against Drugs in 1993 

Policy initiatives.  The Thai are entering the third year of the government's  narcotics control plan for 1992-96.  The plan sets out the country's primary narcotics goals: elimination of narcotics production through crop control, eradication, and improvement of intelligence; reduction of narcotics trafficking by increasing the number of arrests of major drug traffickers by 10 percent and targeting drug organizations under conspiracy and asset forfeiture laws; and reduction of drug abuse through enhanced education and treatment.  In support of narcotics programs, the Thai spent upwards of $50 million in FY 1993.

International Agreements and Treaties.  Thailand is a party to the 1961 UN Single Convention on Narcotic Drugs, its 1972 Protocol, and the 1976 UN Convention on Psychotropic Substances.  A new extradition treaty with the US came into force in 1991;  the Thai have cooperated with US extradition requests, but the treaty covers Thai nationals only on a discretionary basis.  The parliament passed enabling legislation for the Mutual Legal Assistance Treaty (MLAT) in 1992, and the instruments of ratification were exchanged in June.  

Thailand was an active observer in meetings of the Chemical Action Task Force in Washington in 1991, and the Thai police co-sponsored a regional seminar on precursor controls in late 1993 with the assistance of DEA.  Officials are seeking to conform Thai regulations to those recommended by the Chemical Action Task Force; Thailand already has a substantial body of legislation in place to control precursor chemicals.  
 
Authorities brought 32 cases under the asset seizure laws promulgated in 1991, but none was concluded by early 1994.  The pace of these cases is discouraging, but is no slower than other complex cases before the Thai judicial system.  The government is focusing on the money laundering issue and sponsored a major seminar for legal experts and law enforcement officials in September.  The government plans to send a high-level Ministry of Finance delegation to the US to learn more about money-laundering legislation. 

Law Enforcement Efforts.  Office of the Narcotics Control Board (ONCB) statistics for seizures through early December project heroin seizures in Thailand for 1993 of just over 1,900 kgs, in comparison to 996 kgs seized in 1992.  Authorities stepped up law enforcement operations; over 85,000 arrests for drug offenses are projected for 1993, based on reporting through June.  Marijuana seizures through June were reported to be 20 metric tons--lower than for the same period in 1992.  There were three reports of heroin refineries operating in Thailand; authorities seized two refineries. 

US-supported law enforcement assistance programs focus on dismantling drug trafficking organizations and arresting high-level traffickers.  In cooperation with the DEA, Thai law enforcement authorities have pursued several investigations against key targets.  Cases were initiated against 46 Class I traffickers.  Recent cases led to the arrest of a major Chinese trafficker with connections to Burmese producers, and a Thai Army major general involved in financial aspects of the drug trade.  

The PNSB improved its antinarcotics capability.  Divisions in ONCB and PNSB focused on asset seizure cases and the administration of seized asset programs.  The ONCB reported 32 cases at some stage of legal process, with three cases in court.  Assets currently under control of the board amount to more than $3 million. 

Corruption.  Thailand does not, as a matter of government policy, encourage or facilitate the trafficking of illegal drugs.  However, the potential rewards from the drug trade, coupled with relatively lenient attitudes toward official corruption, entice varying degrees of involvement of some Thai government officials.  Thai Government policies promoting trade and commerce with Burma indirectly may have facilitated drug trafficking.  Inspection that could help stem the flow of heroin at legal checkpoints often is ineffective because of bribery among Customs agents.  Traffickers also use alternate routes not controlled by border checkpoints in the mountainous areas of the north.  

Thai government and military relationships with armed trafficking bands developed over decades of anti-communist cooperation in the north and, more recently, through legal and illegal commercial interests, have helped to sustain connections between some Thai officials and ethnic groups in Burma and Laos which traffic in narcotics.  In this environment, there are continuing reports that some Thai police, army, and civilian officials facilitate and profit from drug trafficking.  The Thai government says it will take action against corrupt officials, and it has done so in the past, but the number of high-level cases is small.

 Cultivation/Production.  Opium has been produced for decades in the northern Thai highlands, principally by hilltribes who are not culturally, linguistically or, sometimes, legally part of mainstream Thailand. (Before opium production became illegal in Thailand in 1958, ethnic Thai were already involved as growers and middlemen.)  Opium is used by the hilltribes for medicinal purposes, and as a cash crop where the lack of roads makes the marketing of licit produce difficult.  The government directly reduces opium production by sending Army prevention patrols into growing areas before the growing season, and by conducting manual eradication operations during it.  The Army's commitment to eradication is tempered by its interest in not alienating the hilltribes.

As a result of eradication, poppy fields are now more dispersed, smaller, intermingled with other crops, and planted in staggered cycles, making detection and eradication more difficult or too costly.  Some hilltribe farmers continue to cultivate opium due to the ready market.  The 1992/93 eradication campaign was less successful than in the previous two years, due in part to poor coordination by the agencies involved and competing demands on army personnel.  Very favorable weather during the growing season produced high per hectare yields:  an estimated 14.4 kgs/ha yields totaled net opium production of approximately 42 metric tons in 1993.  The 1993/94 campaign has been more effective because of more direct involvement by the leadership of the Royal Thai Army.

Methodology.  Total hectarage of opium cultivation in Thailand is calculated by systematic aerial surveillance and technical analysis by Thai and USG analysts.  Yield was estimated at 11.5 kgs of opium per hectare as a result of comprehensive USG/Thai field studies conducted in 1991 and 1992.  The 1992 yield study produced the 14.4 kg/ha ratio.  Opium converts to heroin at a weight ratio of about 10 to 1.

Drug Flow/Transit.  As noted, Thailand is the major export route for Golden Triangle heroin from Burma.  Thailand's own opiate production has declined over the past ten years to the point that domestic demand now exceeds domestic production, making Thailand a net opium/heroin importer.

Demand Reduction.  Drug prevention information is integrated into the Thai educational curriculum in primary and secondary schools and broadcast nationally in television spots and radio programs.  Teachers must take at least one course in drug prevention education and schools operate drug prevention outreach centers.  Thai drug treatment efforts include inpatient and outpatient detoxification, therapeutic communities, religiously-based rehabilitation institutions, and self-help efforts.  Thai health authorities consider amphetamine and inhalant abuse the most widespread drug abuse problems, although particular attention is also being given to the high incidence of HIV/AIDS infection among IV drug users.  Officials are aware of the rapid increase of heroin addiction among hilltribe youth in the north and among Muslim youth and fishermen in the south.  Many demand reduction and detoxification programs are assisted by foreign countries and international non-governmental organizations (NGOs).  ONCB has stated it intends to devote more public and private domestic resources to demand reduction. 

IV.  US Policy Initiatives and Programs 

Policy Initiatives. The USG seeks increased Thai and international focus on drug trafficking as a threat to Thailand's society and its national security.  It assists Thailand in operational programs to counter the threat of drug trafficking and supports actions targeted at arrests of key drug traffickers.  The USG also promotes initiatives and programs to eliminate opium poppy cultivation, through eradication and support for viable economic alternatives for farmers, and assistance for demand reduction. 

Bilateral Cooperation.  Thailand and the US have long cooperated on curbing narcotics, including law enforcement, crop control and demand reduction.  The Thai work closely with the USG on extradition requests.  The USG provides equipment and technical expertise to enhance enforcement and support crop eradication.  The Thai have significantly increased their own spending on narcotics control in recent years. 

Our joint narcotics law enforcement effort is multi-faceted.  DEA cooperates closely with the Narcotics Suppression Bureau, units of the Border Patrol Police, the Provincial Police, and elements of the Law Enforcement Division of the ONCB providing intelligence, operational support and expertise in many major narcotics cases.  INM supplies non-lethal commodity support for law enforcement units, as well as training.  US Customs provides training for Royal Thai Customs units.  The Defense Department, through US Customs, supports a regional center in Phuket, Thailand, to monitor the movements of small vessels suspected of smuggling drugs.  In addition, DOD has supported other programs to monitor and interdict illicit drug shipments. 

Germany, Norway, Australia and the UNDCP, as well as the Thai themselves (e.g., the Royal Projects) fund development efforts in the northern hilltribe areas.  The USG assists with small infrastructure projects in areas generally not receiving development assistance from other sources.  We have urged other international donors to tie development assistance to cessation of opium poppy cultivation.  The Thai Third Army, with help from Border Patrol and Provincial Police, conducts an annual eradication campaign from November through January.  Eradication campaign management is a cooperative effort between Thai Army, BPP, and ONCB, and the USG agencies. 

USIS works with various elements of the RTG, the media, and NGOs to raise public awareness of the dangers of drug abuse and to build public support for more effective policies and enforcement.  USIS publicizes US narcotics policies and programs in Thailand and internationally, through foreign correspondents.  USIS has conducted seminars, scheduled speakers, distributed videos, and arranged public opinion research on Thai attitudes toward narcotics use, policy, and the US role.  The USIS quarterly, "Seripharb", recently featured a series of articles on drug abuse and drug control for its Thai readership. 

The Road Ahead.  As long as Thailand is a key route for heroin trafficking destined for the US, the USG will support narcotics enforcement cooperation.  This will assist Thailand in strengthening its drug control institutions and in developing a more coordinated law enforcement approach to target key traffickers and their assets.  Given Thailand's rapid economic growth, direct US foreign assistance, especially in rural development, will at some point cease.  Economic development, coupled with expected reduced opium cultivation, hopefully will lead to increased Thai Government attention to underlying problems that hamper drug control efforts, such as corruption and public awareness of the threat.  

The primary goal for Thailand should be compliance with the 1988 UN Narcotics convention by introducing money laundering controls.  Thailand has a good record in crop control, law enforcement, and demand reduction which it is beginning to share with neighboring countries.  These efforts to build regional cooperation, through initiatives, such as the new UN agreements with other producer/trafficker countries in the area, will benefit Thailand as well. 

Many Thai fully realize the negative implications for Thailand and the world of the narcotics economy, but the enormous profits to be gained from the drug trade tempt others to further their own interests to the detriment of society as a whole.  The RTG can combat this by elevating the importance accorded to the drug issue and by devoting more of its own resources and energies to the fight against narcotics.


[Charts:  Statistical Tables; Thai Heroin Seizures 1989-1993]



VIETNAM

I.  Summary

Vietnamese officials have publicly stated that their country faces a drug addiction problem and that opium cultivation and use are growing.  While most production is probably consumed domestically, outside observers also believe that Vietnam is being used as a transit country for Golden Triangle opiates destined for Western markets.  Increasing international travel and trade to and with Vietnam will increase the potential for narcotics trafficking.

II.  Status of Country

The Government of Vietnam (SRV) has become increasingly concerned with domestic narcotics production, trafficking and use in recent years.  Opium, grown principally by ethnic minority groups in the northern highlands, is the principal concern;  marijuana is grown in southern provinces.  Vietnam's addict population is not estimated at 150,000, some of whom abuse prescription pharmaceuticals.  There are no reliable estimates for opium cultivation, although anecdotal information suggests at least several thousand hectares.

Recognizing its drug problem, the SRV first sought assistance from the United Nations Drug Control Program (UNDCP) in 1991, and there is now a UNDCP national program office in Hanoi.  The SRV is preparing to adopt a UNDCP-prepared counternarcotics master plan.  It is also in the process of acceding to the three international narcotics conventions of 1961, 1971 and 1988, but seeks to resolve certain technical and financial question before doing so.

Vietnam has arrested public officials involved in narcotics trafficking and corruption and has publicized these cases.  The USG does not have information suggesting that the SRV permits or engages in narcotics trafficking as a matter of policy, nor that senior officials are engaged in or tolerate narcotics trafficking.

Vietnamese police personnel with counternarcotics responsibility have participated in USG-sponsored training programs in Asia.
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