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MARCH 1995

SOUTH AMERICA                                          61
Argentina                                              63
Bolivia                                                67
Brazil                                                 73
Chile                                                  78
Colombia                                               81
Ecuador                                                89
Paraguay                                               99
Peru                                                   99
Uruguay                                               107
Venezuela                                             110


I.  Summary

Argentina faces increasing problems with illegal narcotics.  There is little cultivation or production of illicit drugs, but there is increasing transshipment through Argentina  and growing domestic consumption.

The government is firmly opposed to drug trafficking and to the domestic sale and consumption of illicit drugs.  Argentina is a party to the 1988 UN Convention. The government has an anti-narcotics secretariat to oversee a national plan against narcotics.  The country's police and security forces actively combat the narcotics trade, but overlapping responsibilities and interservice rivalries limit effective coordination.  Argentina's cumbersome legal system slows the prosecution of criminal offenses.  In December, the congress passed legislation permitting police to conduct undercover operations, make international controlled deliveries, and negotiate plea bargaining; this should facilitate narcotics related prosecutions.

Money laundering is a growing problem in Argentina.  It is a criminal offense when explicitly linked to narcotics activity.  Argentina is active in the OAS money laundering task force and is working to implement the 1988 UN Convention provisions on money laundering.  To date, the authorities have not concluded any successful money laundering prosecutions, although some suspects are now charged and awaiting trial.

Judicial and police officials systematically track assets in narcotics arrests and seize assets when they are clearly connected to a narcotics crime.  Argentina produces precursor chemicals, which are also imported from the US and Europe.  There are laws prohibiting the chemical diversion to illicit drug production, but controls are ineffective.

II.  Status of Country

Argentina increasingly is challenged by the illegal drug trade, although the dimensions of the problem are significantly less than in the major producing countries elsewhere in the hemisphere.  There is very little cultivation of illicit crops. Small amounts of drugs are refined in the northern part of the country near the Bolivian border, and in small "kitchen" labs in the province of Buenos Aires.  However, there is ample evidence of a significant increase in shipments of drugs through the country from major producing countries in the region.  There are also strong indications of increasing drug consumption by Argentines.

 The government strongly opposes narcotics production and trafficking and has in place programs of prevention and control.  Over the past year, there has been increased awareness in the government and among the public of the threat posed by narcotics trafficking, money laundering, and other drug-related criminal activity. 

As Argentina's role as a transshipment country increased, law enforcement agencies have seized increasingly large narcotics shipments, especially cocaine, some in excess of 300 kgs.

Drug Flow/Transit.  Bolivia is the most common source of cocaine; larger shipments often enter Argentina on private aircraft that can land at thousands of uncontrolled airfields or at the many small municipal airports.  Drugs also enter the country by railroad, most often in sealed containers;  if destined for transshipment to a third country, these cannot be inspected by Argentine customs authorities.  Most large narcotics shipments leave Argentina via the port of Buenos Aires concealed in containerized cargo, usually bound for the US or Europe.

Demand/Consumption.  Argentine authorities are increasingly concerned about the growing domestic consumption of narcotics.  As more drugs enter the country, greater quantities are available for local use.  The strong economic growth of the past several years and the increasing wealth of a substantial portion of the Argentine population has made the country an increasingly lucrative market for drug dealers.  Public health officials, educators, labor leaders, and others have expressed their concern about the widespread availability of drugs and their growing use, particularly by young people.

III.  Country Actions Against Drugs

Policy Initiatives.  The Government of Argentina actively opposes drug trafficking; President Carlos Menem designated the counternarcotics effort a top government priority.  Menem has assumed a very prominent personal role on this issue, and has been involved in antidrug rallies and other demand reduction events.  The Argentine government strongly supported the US backed anti-narcotics initiatives at the Summit of the Americas.

Argentina has had a Secretariat for Prevention of Drug Abuse and Narcotics Trafficking almost from the beginning of the Menem administration in 1989.  The Secretary, the country's top drug control official, is appointed by the President.  Dr. Alberto Lestelle, the incumbent secretary, serves as the country's coordinator for all counternarcotics efforts; these include many domestic drug prevention programs, as well as   government participation in international narcotics control conferences and seminars.

Agreements and Treaties.  Argentina is a party to the 1988 UN Convention, the 1961 Convention, and its 1972 Protocol, and the 1971 Convention on Psychotropic Substances.  In addition, Argentina and the US have an extradition treaty, a mutual legal assistance treaty, and a narcotics cooperation program letter of agreement.  Argentina has  sought to fulfill the goals and objectives of the bilateral letter of agreement on narcotics cooperation.  In 1989, the congress passed a major narcotics control bill to enact into law the commitments made at the 1988 UN Convention.  Subsequent presidential decrees have strengthened parts of the law, such as those against money laundering and permitting asset seizures.  Argentina is also an active participant in the Inter-American Drug Abuse Control Commission (CICAD), and hosted the CICAD biannual meeting held in March.

Corruption.  The Argentine government, as a matter of policy, does not encourage or facilitate the production or distribution of drugs, or the laundering of drug profits, although there is some corruption.

Law Enforcement.  There are major problems in coordination among the various law enforcement agencies involved in counternarcotics efforts.  The Drug Secretariat does not have enforcement powers and lacks effective coordinating authority over the antidrug efforts of security forces and police agencies which are decentralized and fragmented.  The Federal Police have jurisdiction throughout the country, and serve as the local police and fire department in the federal district.  The National Gendarmeria is responsible for the nation's borders and rural areas.  Airports are the responsibility of the Air Force Military Police.  Provinces have their own police departments.  The Buenos Aires provincial police is the largest police agency in the country.  The various components of the country's law enforcement network have overlapping responsibilities and institutional rivalries that complicate Argentina's drug control efforts.

The entire security apparatus has systemic problems, including a low level of investigative expertise, antiquated equipment, a minimal capacity for forensic analysis, and voluminous and time-consuming paperwork requirements.  Because of strict economic austerity measures, all Argentine law enforcement agencies face severe budget limitations that largely preclude investments in new equipment and training, multilateral operations, or additional manpower.

Argentina's legal system hampers effective counternarcotics efforts.  It is burdened by a massive backlog of cases, cumbersome evidentiary rules, and delays due to inadequate staff and outdated equipment.  The rules of criminal procedure slow, and sometimes halt, complex investigations.  Under current law, there is little the police can legally do without the approval of a judge.  Investigative judges are immediately appointed upon the commission of a crime, and police and prosecutors must obtain their permission to conduct investigations.

Witnesses only can be interviewed by magistrates and testimony is laboriously transcribed onto written records.  Argentina's extremely restrictive rules of evidence hinder any investigation of conspiracies or other complex crimes.

In an important breakthrough, the Argentine Congress unanimously passed legislation in December allowing members of the police and security forces to operate as undercover agents in drug-related cases.  The law also permits international controlled deliveries, and allows judges to reduce sentences or drop charges against suspects who cooperate in drug investigations.  Previously, judges had dismissed dozens of solid cases against drug traffickers because of suspicions that police had violated laws prohibiting the use of undercover agents.

IV.  US Policy Initiatives and Programs

Policy Initiatives. USG and Argentine authorities cooperated closely on narcotics control matters.  Since 1988, the US has provided narcotics assistance valued at $2.75 million.  The current memorandum of understanding on drug control is a one-year agreement for $302,800.  There are sub-projects under this agreement to provide drug detector dogs and training to the police; provide support for the customs chemical control program; offer training on money laundering; and provide training in interdiction and demand reduction. This assistance is channeled through the drug secretariat.

The Road Ahead.  The USG will work closely with Argentine officials in the implementation of the law allowing undercover agents and controlled deliveries, and will support efforts to broaden the law to allow for use of informants.  The USG also will seek to overcome technical and bureaucratic obstacles which now stand in the way of making the US-funded "Joint Information Command Center" (JICC) fully operational.  The US also is prepared to assist the Argentine government to modernize procedures for monitoring the entry and exit of persons from the country, and to develop more reliable identity documents.


I.  Summary

Bolivia remains the second largest producer of coca leaf, after Peru.  Coca grown in Bolivia is the basis for about one-third of the world's cocaine.  In 1994, Bolivia continued to participate in USG-funded drug interdiction and chemical control programs and initiated a regional program to enhance the interdiction of essential chemicals.  The GOB has made no effort to establish money laundering controls or an effective asset seizure program.  After a brief operation to eradicate illegal coca forcibly in February met with violent opposition, the Government of Bolivia (GOB) abandoned meaningful efforts to reduce cultivation.  The GOB signed an agreement in September with pro-coca groups in which it agreed to consider promoting coca to the international community and to turn over title of government park lands to coca growers.  Bolivia made no progress in achieving a workable mechanism through which to extradite drug traffickers to the United States.  In 1994, Bolivia made little progress in achieving the goals of the 1988 UN Convention and lost ground previously achieved through coca eradication in prior years.  

II.  Status of Country

Most of the coca in Bolivia is grown in small plots (less than a hectare) in the Chapare region, with lesser amounts in the Yungas and Apolo regions.  The coca leaf is processed into cocaine base at sites adjacent to coca fields; the cocaine base is then gathered at collection points in the Chapare and other parts of the country.  Some of the base is refined into cocaine hydrochloride (HCl) in Bolivia, but most is purchased by Colombian middlemen for final processing in Colombia.  Recently, more HCl laboratories have been detected in the Chapare region in addition to those located in remote regions of the country.  Some cocaine base is believed to be moved to Brazil to be refined in laboratories in western Brazil.  Cocaine base is also used for barter for stolen cars, electronic equipment, and other contraband from Brazil.

Surveys show that coca cultivation expanded by two percent in 1994 as a result of declining eradication and increased planting.  Coca leaf production expanded by six percent, due to the combination of increased cultivation and maturation of crops planted two years ago.

Most of the chemicals used in processing cocaine base and HCl in Bolivia come from Chile, Argentina and Brazil.  Although most of these chemicals are smuggled into Bolivia, increasing amounts enter the country through legal means and are then diverted to cocaine production.  On paper, Bolivia has a rigorous and complete system for chemical imports.  An office of the Ministry of Government, the National Directorate for the Registry and Control of Controlled Substances and Precursors, tracks and controls and licenses the import and use of 42 essential chemicals.  However, Bolivian Customs is weak in controlling chemicals at the borders while insufficient numbers of National Directorate field inspection personnel has led to reports of phantom companies receiving licenses.

Despite these problems, the GOB made progress in controlling essential chemicals in 1994.  The Customs Service named a new director and replaced several notoriously corrupt agents.  Bolivia developed a regional chemical control operation with neighboring countries to enhance controls at Bolivia's borders.  The Customs Service worked effectively with the Chemical Control Police and related agencies during this operation.  The Chemical Control Police is a small, but highly motivated and competent investigative body which the GOB plans to expand in 1995.

Money laundering is not a criminal offense and banks have no legal requirement to report large or suspicious transactions.  Because of strict bank secrecy laws, law enforcement officers need court orders to gain access to bank records.  The approximately 170 exchange houses in Bolivia are not effectively regulated.  Bolivia has taken no steps to implement a formal mechanism for exchange of financial information.

Under current law, the forfeiture of a seized asset depends on the successful conviction of the asset's owner.  Under the Bolivian criminal system, obtaining a conviction can take years, during which time the government is liable for any loss or degradation of seized assets that are not eventually forfeited.  The office of seized assets now controls upwards of $300 million in property, but is unable to provide an accurate inventory of the property under its control or to protect those assets from misappropriation.

III.  Country Actions Against Drugs in 1994

Policy Initiatives.  Bolivia's counternarcotics master plan was created in 1988 through the implementation of the 1988 Bolivian Coca and Controlled Substances Law (Law 1008).  This law calls for the gradual eradication of coca, with yearly targets of eradication, through voluntary or forced removal of plants, contingent upon international development assistance.  In 1994, the GOB eradicated  1,058 hectares of coca, thus failing by a wide margin to meet the yearly eradication targets of 5,000 - 8,000 hectares required by Law 1008.

In February, the GOB briefly undertook a campaign of forced eradication of coca plants growing next to cocaine base laboratories.  Coca growers mounted resistance, which grew violent, and the government ceased eradicating.  Elements of the coca growers later began a campaign of intimidation against growers who had expressed willingness to eradicate their crops in exchange for money and other benefits.  As a result, voluntary eradication dropped off sharply.  

President Sanchez de Lozada is seeking to develop a strategy to eliminate illegal coca from the country without the use of measures he considers to be divisive, such as forced eradication.  In 1994, however, the GOB made no measurable progress toward creating a plan to carry out this strategy.

Accomplishments.  The police undertook four operations aimed at specific trafficker activities.  One operation targeted maceration pits and laboratories in the Chapare, one was designed to block the entry of buyers into the Chapare and the shipment of drugs from the region.  A later operation was aimed at stopping the flow of chemicals into the Chapare; it was followed by  an operation to stop chemicals at the Bolivian borders.  This border control initiative is continuing and the GOB is coordinating efforts with law enforcement agencies in neighboring countries.  These operations have disrupted some trafficker operations and have caused traffickers to change their modes of operation.  The operations have also reportedly resulted in stockpiles of chemicals and cocaine base, as traffickers wait for a reduction in police vigilance.

In separate operations, GOB forces destroyed two major cocaine HCl laboratories, one before it went into operation.  The police estimate that each could produce multi-tons of cocaine per month.  In 1994, the GOB seized 7.46 metric tons of cocaine base and HCl combined.

Law Enforcement Efforts.  Working closely with DEA and supported by Bolivian military units, the counternarcotics police were active and successful in drug enforcement initiatives.  In 1994, counternarcotics forces arrested two traffickers with ties to the Medellin cartel:  Isaac Chavarria and Jose Faustino Rico Toro.  Chavarria is being held pending trial for narcotics trafficking in Bolivia.  Rico Toro, who was appointed to the position of commander of the counternarcotics police in 1991 by former President Paz Zamora, was arrested and held in custody pending a court ruling on an extradition request from the United States, based on his indictment on drug charges in Miami.

Corruption.  The Sanchez de Lozada administration is committed to combatting corruption.  As a matter of government policy, the GOB does not condone, encourage, or facilitate illicit production or distribution of controlled substances, or the laundering of proceeds from illegal drug transactions.  Senior officials do not engage in, encourage, or facilitate illicit production or distribution of drugs, or the laundering of proceeds thereof.  Despite the conscientious efforts at the highest levels of the GOB, corruption pervades the Bolivian government and judicial system, with direct involvement in narcotics trafficking within some elements of the Bolivian armed forces.

Effective enforcement of the country's counternarcotics laws has been hampered by corruption.  The property of arrested narco-traffickers has been returned to the control and management of their families.  A narcotics police captain was arrested as he attempted to sell more than 60 kilos of cocaine to undercover agents.  A judge and high-ranking prison official are charged with the illegal release of a convicted trafficker.  There is reason to believe that Colombian traffickers and their Bolivian accomplices, who were arrested plotting a major prison break, were assisted by certain police officials.

The GOB has taken steps to address corruption.  Throughout 1994, the GOB continued its probe of Chavarria's and other trafficker ties to and the longstanding relationship of convenience with Paz Zamora and members  of his Movement of the Left (MIR) political party.  On December 16, the Bolivian Congress voted to recommend the impeachment ("juicio de responsabilidades") of Paz Zamora.  A leader of the MIR party, Oscar Eid, was arrested on December 26 on charges stemming from the MIR investigation.  The Supreme Court President and a Supreme Court Justice were impeached in 1994 on non-drug related corruption charges and removed from the Court.

Agreements and Treaties.  Bolivia is a party to the 1961 Single Convention on Narcotic Drugs, its 1972 Protocol, and the 1988 UN Convention.  Extradition requests are based on the US-Bolivia extradition treaty of 1900, as amended by the aforementioned conventions to include drug-related crimes as extraditable offenses.  The Supreme Court did not recognize the validity of this legal argument in extradition requests brought before it in 1994.  In 1994, the USG had 36 extradition requests pending in Bolivia.  The Court considered extradition requests for drug traffickers Felipe Roca Ali and Rolando Suarez Landivar in 1994, but did not reach a decision on these cases by the end of the year.  A Supreme Court vote on the extradition of Faustino Rico Toro resulted in a tie; auxiliary judges were brought in to fill vacancies temporarily, and the augmented Court voted to extradite in early 1995.  The USG vigorously protested the Court's release from detention of Rico Toro to "house arrest" while a decision on his extradition was pending.

The United States and Bolivia negotiated a new extradition treaty, reaching agreement on a joint draft in 1990.  The agreement, which encompasses drug trafficking offenses, was never signed by the Paz Zamora administration nor has the Sanchez de Lozada government endorsed it.

Cultivation and Production.  Bolivia accounts for roughly one-third of the world's coca leaf production.  The Chapare and Yungas regions are the principal growing areas.  Bolivian law allows for the legal cultivation of coca in specified "traditional" areas, primarily in the Yungas, for domestic use in tea and for chewing, although this section of the law is in conflict with the 1961 UN Convention.  The law limits coca production to that necessary to satisfy the demand for traditional uses, but in no case to exceed 12,000 hectares.  Most of the coca in the Chapare and other areas at the time of Law 1008's enactment was declared "excess and transitional" and was to be gradually eradicated, subject to adequate international financing for crop substitution and alternative development programs. Coca grown outside these two areas or planted in transitional areas after 1988 is illegal and subject to immediate eradication.  Under Law 1008 the use of herbicides to eradicate coca is illegal.

There were 48,100 hectares of coca under cultivation in Bolivia in 1994.  Some 1,058 hectares were eradicated, while an estimated 2,000 hectares of new coca were planted in 1994, resulting in a net increase in cultivation of about 900 hectares.  Coca from the Yungas region is preferred for chewing and tea, due to its texture and taste, and most of this coca is consumed locally in leaf form.  In contrast, some 97 percent of the 75,900 metric tons of coca leaf harvested in the Chapare region is processed into cocaine.  Field testing done in 1993 determined that 390 kilograms of Chapare coca leaf is needed to produce a kilogram of pure cocaine.

Demand Reduction Programs.  Drug abuse, primarily of inhalants, is increasing among Bolivia's youth.  The GOB's Directorate for Prevention of Drug Dependency and for Mental Health (PREID) provides treatment and rehabilitation programs.  Two private sector programs, the Educational System Against Drug Addiction (SEAMOS) and the Narcotics Education Center (CESE), carry out drug addiction awareness programs.  CESE operates a drug hot-line and has a pilot program funded by UNDCP to expand its drug education program throughout Bolivia.  SEAMOS has developed into the leading mass media drug campaign organization in Bolivia.  It receives most of its support through sponsorship by the Confederation of Bolivian Private Entrepreneurs, which indicates the commitment of the Bolivian private sector to work against drug addiction.

IV.  US Policy Initiatives and Programs 

Policy initiatives.  The US counternarcotics goal in Bolivia is to eliminate the cultivation of illegal coca and the production of cocaine and to assist the GOB to develop the capability to combat narcotrafficking on its own.  In achieving these goals, the US is committed to strengthening democracy and encouraging economic growth and stability.

Bilateral Cooperation.  Bolivia and the United States have a bilateral counternarcotics, military, and development agreement.  In 1994 the GOB accomplished some of the commitments it made in the agreement, notably its promise to staff and otherwise support various counternarcotics activities.  Bolivian agencies have performed well, often admirably, in drug interdiction and related law enforcement efforts undertaken through the agreement.  The GOB also cooperates fully in USAID-supported alternative development programs.  However, in 1994 the GOB failed to eradicate coca and to extradite drug traffickers as it committed to do under the bilateral agreement and through its ratification of the 1988 UN Convention.

Road Ahead.  The GOB claims to be seeking to develop a national consensus on addressing the coca problem.  It is working to develop a comprehensive plan for the elimination of illegal coca through large-scale development of economic alternatives to coca cultivation and trafficking.  On-going development projects have proved effective:  according to USAID surveys, USG-supported development efforts contributed to a one-third increase (around 12,000 hectares) of licit crops in the Chapare region in 1994.  The USG maintains that development is an essential element of a Bolivian comprehensive drug control strategy, but, as the rise in coca cultivations in the Chapare shows, development alone will not reduce coca and cocaine.  Parallel disincentives to grow coca must be a part of the strategy.



I.  Summary

Brazil's former President, Itamar Franco, in 1994 took steps to increase his government's focus on narcotics problems.  Brazil continues to plan for the construction and use of a radar system, for which the Export-Import Bank has approved financing, to detect drug trafficking and other activity in the Amazon.  The Brazilian Federal Police Drug Division (DPF/DRE) seized a record 11.8 metric tons (mt) of cocaine, surpassing the 1993 rate of over seven metric tons.  A high-level Brazilian delegation of counternarcotics officials visited Washington, seeking enhanced counternarcotics policy expertise.  President Franco signed a decree on chemical control during the last days of his administration.  

Increases in Brazil of drug abuse, narcotics trafficking, money laundering, and illicit diversion of chemicals could potentially weaken government institutions.  An international major donor group, the Dublin Group, indicated that Brazil should focus more attention to its growing drug problem.  Newly-elected President Fernando Henrique Cardoso has spoken of his intentions to strengthen the Brazilian government's counternarcotics focus and increase international cooperation.  President Cardoso's and Justice Minister Jobim's attention to Brazil's growing narcotics problem and support for counternarcotics enforcement will be crucial to the success of Brazilian counternarcotics efforts in 1995.  

Brazil ratified the 1988 United Nations Convention in 1991, and has cooperated with the USG since 1987 via bilateral narcotics control agreements.  However, the Brazilian Congress has not yet passed legislation, first introduced in 1991, to implement the 1988 UN Convention.  

II.  Status of Country

Brazil is a major transit country for cocaine from Colombia destined for the US and Europe.  Diversion of precursor chemicals, both imported to Brazil and produced there, remains a significant problem.  The late 1994 signing of then-President Franco's decree on chemical control demonstrates that Brazil has begun to take steps to control such illicit diversion.  

Brazil's largely unregulated banking system and strict bank secrecy laws attract money launderers.  Despite a lack of specialized legislation on money laundering control, the DPF/DRE has engaged the judicial apparatus and focused on using existing legislation to combat fraud in financial transactions.  

In the past, the Brazilian government has identified a few cocaine processing laboratories within its territory, but in 1994 identified none.  Cultivation of coca is insignificant.  Cultivation of cannabis and use of marijuana, on the other hand, is a major concern to Brazil, but marijuana is apparently not exported.  The DPF/DRE in 1994 destroyed 886 mt of cannabis plants.  
III.  Country Actions Against Drugs in 1994

Policy Initiatives.  The Brazilian government appointed a new National Drug Secretary in 1994.  The new Secretary introduced a chemical control decree, which was signed by President Franco.  The UN Drug Control Program (UNDCP) located its office in the same building as the Drug Secretariat, enhancing coordination between those organizations.  One of their primary objectives is to improve the administration of the Asset Forfeiture Fund (FUNCAB).  The Brazilian government in late 1994 deployed the military to Rio de Janeiro's slums in a joint effort with local police to control drug trafficking and its attendant crime and violence there.  The DPF/DRE counternarcotics force participated in November in a regional chemical control operation.  

The Brazilians requested and received Export-Import Bank financing for a radar system envisioned for counternarcotics and other purposes, the Amazon Surveillance Project (SIVAM).  The Brazilians continue to work to implement the radar system, and plan for Project Pro-Amazonas, the stationing of DPF/DRE units at strategic points near Brazil's western border, to provide airfield interdiction and arrest capabilities.

Accomplishments.  The Brazilian government took steps to comply with the 1988 UN Convention in law enforcement and international cooperation.  The DPF/DRE disrupted four major international cocaine trafficking networks.  One such network included Brazilian trafficker Vincente Wilson Ramos-Rivera, who attempted to transport over seven tons of cocaine to the US in one shipment.  Others included the Brazilian connection of the Rendon-Robayo organization, the Ramon Flores-Cuellar organization, and the Paulo Sergio Tomas Brazilian organization.  The USG continues to benefit from Brazilian cooperation in law enforcement investigations and extradition.  Brazil extradited to the US two Americans arrested on narcotics trafficking charges.  

Brazil continues to implement its asset seizure laws.  FUNCAB increased its resources by approximately $611,000, which will be used to fund law enforcement and demand reduction projects.  Some of the Brazilians' DPF/DRE resources bolstered donor funds to support DPF/DRE operations and training.  The DPF earmarked the required amount of money provided by the government to renovate several DPF/DRE border field posts, and to upgrade some DPF/DRE equipment.  However, the DPF/DRE requires an infusion of Brazilian government funds to restructure its force and hire and train new agents.  

Corruption.  As a matter of policy and practice, the Government of Brazil (GOB) does not condone illicit production or distribution of drugs, or the laundering of drug money.  We know of no senior GOB officials engaged in or encouraging such activity.  During the past year, the DPF/DRE made no new narcotics-related corruption arrests among its ranks.  However, corruption remains a problem in other levels of the Brazilian government, particularly state and local police.  

Agreements and Treaties.  Brazil ratified the 1988 UN Convention in 1991.  The Brazilian Congress is still contemplating implementing legislation submitted that year.  The government overall meets the goals and objectives of the 1988 UN Convention, but increased focus on controlling chemicals and on implementing legislation to conform to the Convention would boost its counternarcotics performance.  Brazil continues to participate in international investigations and extraditions to dismantle narcotics trafficking organizations.  It has renewed bilateral counternarcotics agreements with the USG and Germany.  Brazil engages also in law enforcement liaison with the USG, Great Britain, France, Germany and the Netherlands.  

Drug Flow/Transit.  International drug mafias continue to expand narcotics trafficking operations in Brazil.  Brazil's increased level of cocaine seizures in 1994, 11.8 mt, indicates increased trafficker use of Brazil and greater DPF/DRE efficiency at seizing cocaine.  The June seizure of 7.3 mt and four seizures of over 200 kilograms (kg) of cocaine, enroute to the US and Europe, confirms Brazil's status as a major transit country.  

Demand Reduction Efforts.  Dominated by local government and non-governmental organizations (NGOs), Brazil's demand reduction programs comprise surveys of drug use, rehabilitation of addicts, and outreach in schools.  The results of a 1993 survey of drug use among junior high, high school students and street children pointed to an increase in substance abuse.  Solvents are still the chemical of choice, with prescription drugs and marijuana in second and third places, respectively.  The Brazilian government has not yet signed a demand reduction agreement with the USG for this year.  The Drug Abuse Resistance Education (D.A.R.E.) program in the state of Rio de Janeiro and in the city of Sao Paulo conveys to school children the dangers of drug abuse.  The well-received D.A.R.E. program is envisioned to expand into a nation-wide program with increased bilateral support.  The Ministry of Education drafted a plan addressing the need for education about prevention of drug abuse in Brazil.  

IV.  US Policy Initiatives and Programs

USG counternarcotics assistance seeks to build institutions enhancing Brazilian efforts to seize cocaine shipments transiting Brazil and to dismantle international drug mafias.  The USG provides equipment, training, and operational support to the DPF.  Other anti-drug initiatives include public awareness, demand reduction, chemical control, and reduction of money laundering.  Brazil authorities achieved two major bilateral goals:  a seizure rate that exceeded USG projections and the disruption of four major international drug mafias.  In 1995, The US Customs Service will conduct a money laundering seminar to provide a forum for bankers, judges, and other Brazilian officials to discuss money laundering control measures.  

Although such counternarcotics operational successes warrant commendation, counternarcotics initiatives in Brazil have not received high level political support.  The Dublin Group, an international anti-drug assistance forum, has voiced strong concern about the Brazilians' lagging  progress in enacting legislation to control chemicals and in increasing funding for the DPF to counter the international drug mafia that transships cocaine through Brazil to the US and Europe.  Passage of counternarcotics legislation and increased support for the DPF/DRE would help allay such concerns conveyed by the international community.  

Road Ahead.  Passage of legislation to bring Brazil into compliance with the 1988 UN Convention and the creation of a national drug strategy would enhance Brazil's counternarcotics stance.  Vigorous implementation of the new chemical control decree would mitigate Brazil's status as a major source and transit point for essential chemicals.  USG bilateral counternarcotics agreements on law enforcement continue to focus on building institutions to target international drug mafias.  The most crucial element in Brazil's counternarcotics efforts will likely be the amount of high-level attention that is directed to stopping the increasing trafficker use of Brazil as a major drug transit, and potential drug processing country.  




I. Summary

Chile is a transit country for South American cocaine smuggled to world markets. It also is a potential money laundering center because of its proximity to producer countries and the strength of its economy and banking system.  The Government of Chile (GOC) has taken measures to combat trafficking.  In August, the congress passed sweeping new counternarcotics legislation that, for the first time, criminalizes money laundering, and regulates precursor chemicals.  It also gives the police authority to use modern law enforcement techniques.   The law was promulgated in January 1995.  Law enforcement agencies have coordinated their counternarcotics activities with authorities in neighboring countries and in international meetings.  USG provided the GOC with training and equipment to support the implementation of Chile's 1990 national drug policy.  Chile is a party to the 1988 UN Convention.

II.  Status of Country

With a booming economy, Chile is ideal for drug money laundering.  With the new counternarcotics law, money laundering is now illegal and precursor chemicals can no longer be legally stored and shipped to other destinations.  Authorities are concerned about the movement of drugs across northern Chile for onward shipment by sea, as well as by a rise in domestic consumption.  Cocaine seizures increased 50 percent, from 813 kgs in 1993 to 1.2 mt in 1994.

III.  Country Action Against Drugs in 1994

Policy Initiatives.   The Chilean Congress in August passed new national counternarcotics legislation which defines and imposes sanctions for money laundering, establishes controls on precursor chemicals, authorizes police undercover work, permits the forfeiture of trafficker assets, and updates the criminal drug code.  In January 1995, President Frei promulgated the  legislation.  A constitutional tribunal ruled unconstitutional provisions of the new law permitting prosecutors access to bank records without prior judicial authorization, but the Frei Administration has indicated it will submit amended legislation to meet these objections.  In February, Chile took part in the first subregional meeting of counternarcotics representatives from Argentina, Bolivia and Peru to discuss goals and strategies for coordinating their policies.  The GOC held discussions with USG officials in September about the possible negotiation of a modern extradition treaty.  In addition, the GOC has expressed an interest in a mutual legal assistance treaty with the US

Accomplishments.  Chile attempted to meet its commitments under the 1988 UN Convention through its new counternarcotics law, which deals with money laundering, asset seizure, precursor chemicals, and modern law enforcement techniques.  The legislation also deals with demand reduction activities and rehabilitation training.  The GOC sought to  expand drug information sharing with Argentina and Bolivia.  Chile also served as the president of the OAS Inter-American Drug Abuse Control Commission (CICAD) and hosted the October CICAD gathering.

Law Enforcement Efforts.  Law enforcement authorities helped to eliminate major trafficking organizations in 1994.  The police opened up new channels of communications with their Bolivian counterparts in February.  As a follow-up to the April International Drug Enforcement Conference (IDEC) in Quito, the GOC police hosted a meeting to plan a coordinated operation with neighboring countries.  The police authorities increased cocaine seizures by approximately 50 percent in 1994, confiscating 1.2 mt -- up from 813 kgs in 1993.  

Corruption.  President Frei was active in speaking out against public corruption, citing this as a high national priority.  Most public officials, along with the courts and police services, enjoy a generally good reputation for honesty and professionalism.  As a matter of government policy, the GOC does not encourage or facilitate in any way the illicit production or distribution of drugs or other controlled substances, or the laundering of drug money.  There were no narcotics-related corruption charges brought against any senior public official in 1994.

Agreements and Treaties.  Chile is a party to the 1988 UN Convention, the 1961 Single Convention, as well as its 1972 Protocol, and the 1971 Convention on Psychotropic Substances.  Chile and the US have a 1994 counternarcotics cooperation agreement, under which the USG provided the GOC $170,000 in equipment, training and demand reduction assistance.  Chile improved its cooperation with Bolivia in February, agreeing to unify policies to curb drug consumption in high risk regions of both countries.  In October, Chile and Argentina signed accords to promote better coordination against drug trafficking and consumption.  The GOC is working to fulfill the goals and objectives of the 1988 UN Convention.

Cultivation/Production.  Chile is not a significant drug cultivating or producing country.  It does not cultivate coca, plants and all cannabis cultivation is illegal.  Most marijuana grown illegally in Chile is harvested in the central part of the country.  It is of poor quality and is chiefly consumed domestically.

Drug Flow/Transit.  Chile is an attractive air and maritime route for Bolivian and some Colombian traffickers who use it as a transshipment point to world markets.  In addition, illicit drugs move in significant quantities from Bolivia across Chile's northern border for transshipping through Chilean ports.  In addition, as Chile's economy expands, more and more narcotics move south to the Santiago area for domestic consumption.

Domestic Programs (Demand Reduction).  GOC ministries are in general agreement as to the importance of drug abuse prevention and education, and the need to build more effective programs in this area.  However, there is insufficient funding for demand reduction programs, and the GOC has had limited success in coordinating demand reduction activities nationwide.  The GOC offers some training.  The private sector and local communities also offer training in the northern part of the country where consumption is a greater problem.
IV.  US Policy Initiatives

The USG provided support for the implementation of effective money laundering and precursor chemical controls, as well as for improvements in drug awareness and trafficking investigations.

Bilateral Cooperation (Accomplishments).  The USG helped Chile to eliminate a Colombian maritime trafficking organization that used Chile as a transshipping route.  INL funded two money laundering training and education seminars in 1994.  It also sponsored a precursor chemical seminar in March and a customs interdiction training seminar in April, and supported Chilean participation  in a narcotic detection dog trainer program.  Ranking GOC police officials took part in US-sponsored executive training.

Road Ahead.  In anticipation of effective implementation of the new counternarcotics law, the USG will concentrate on training programs in money laundering  and demand reduction, the creation of a police chemical control unit, and the elimination of trafficking organizations.  The USG will discuss the possibility of negotiating a modern extradition treaty, as well as a bilateral mutual legal assistance accord.


I.  Summary.

Colombia is the world's primary cocaine production center.  As the home to the dominant drug syndicates, it currently occupies a central role in the fight against international narcotics trafficking.  In 1994, Government of Colombia (GOC) efforts to confront this menace achieved limited success in the tactical arenas of narcotics interdiction, illicit crop eradication, and essential chemical seizures.  Weak legislation, corruption and inefficiency hampered efforts to bring mid and high level narcotics traffickers to justice.  No drug-related assets were forfeited, while already lenient sentences were further reduced pursuant to automatic sentencing reductions.  This failure of the Colombian political establishment to support the efforts of counternarcotics forces operating on the ground is the principal reason for Colombia's lackluster performance in 1994.

II.  Status of Country.

In addition to being the world's leading producer and distributor of cocaine, Colombia is also a major cultivator of coca, marijuana, opium poppy, and a producer of heroin.  Colombian narcotics labs have an estimated yearly production capacity of 600-720 metric tons of cocaine HCl and may also have the capacity to produce 20 metric tons of heroin each year, the majority of which is bound for the US.  Ninety percent of the coca and cocaine base used by Colombian labs to make cocaine HCl originates in Bolivia and Peru.  Colombian coca fields provide the remaining ten percent.  Cocaine is the most serious drug problem facing the US  The social costs it imposes are measured both in the lives it ruins through addiction, and the violence it fosters.  Three-quarters of the cocaine available worldwide comes from Colombia.

Colombia is also home to the world's primary cocaine trafficking syndicates.  Taking advantage of the fragmentation of the Medellin syndicate and the killing of kingpin Pablo Escobar in December 1993, the Cali syndicate has for several years dominated the cocaine trade in Colombia and exercises a powerful influence worldwide.  The Cali kingpins and their key lieutenants are well known to law enforcement both in Colombia and the United States.  Criminal cases and warrants exist against many of them, sometimes in both countries, yet only a handful have been arrested -- none in 1994.  The fragmentation of the Medellin syndicate did not reduce the drug flows from Colombia.  

Colombia has also become a major money laundering center.  With no laws specifically prohibiting money laundering, and a booming economy, major narcotics traffickers easily conduct financial transactions to legitimize their ill-gotten gains.  This poses a significant threat to the Colombian economy, as numerous efficient businesses are forced out of the market by inefficient competitors created by the traffickers solely to launder their illegal drug funds.  If this situation continues, Colombia's ability to remain competitive in the international economic arena will be severely damaged.

III.  Country Action Against Drugs in 1994.

Policy Initiatives.

The Colombian Congress ratified the 1988 UN Convention in 1994, with certain significant and broadly articulated reservations and declarations in such areas as extradition, asset forfeiture, and maritime interdiction.  The convention entered into force for Colombia in September 1994.  In April, the GOC approved the aerial application of the herbicide glyphosate against coca cultivation.  In November, the Colombian national police (CNP) initiated an aggressive plan to eradicate coca and opium poppy cultivation in Colombia.  With the support of the GOC National Directorate of Dangerous Drugs (DNE), the operation has withstood continued attacks by drug interests and their supporters against the aerial application of herbicides.  At one point, the government rejected an agreement reached between protesting coca cultivators and a government-sanctioned commission which proposed to effectively legalize the cultivation of small plots (up to 3 hectares/ 7.5 acres in size) of illicit crops.

Accomplishments.  The Samper Administration launched an initiative to develop a hemispheric money laundering convention and hosted a meeting of money laundering experts in November.  This initiative was discussed at the Summit of the Americas and further meetings on money laundering will take place.  Despite these stated intentions, money laundering is not yet a crime in Colombia, nor has the country adopted the OAS Model Regulations on narcotics money laundering and asset forfeiture.  The Colombian Congress failed to pass an anti-corruption statute which the Samper Administration considered to be the centerpiece of its 1994 legislative agenda.  Facing stiff opposition, the Samper Administration, after extraordinary political maneuverings, successfully defeated in late November a bill which would have eliminated Colombia's anti-narcotics/ terrorism court system and made it impossible to prosecute illicit enrichment as a separate and distinct criminal offense.  The GOC expects narcotics interests to try to insert the key elements of this defeated effort into other legislation.  The Administration sent to Congress a bill amending the constitution in order to nullify the constitutional court's May 5th ruling which legalized the possession and use of small quantities of certain drugs for personal consumption. This bill failed for lack of a quorum before the Colombian Congress recessed on December 16.

Law Enforcement Efforts.  The Prosecutor General's office (Fiscalia) is being restructured to strengthen its investigative capabilities, especially in the area of money laundering and corruption.  In October, the Fiscalia issued an arrest warrant for narcotics trafficking charges against Cali syndicate kingpin Miguel Rodriguez Orejuela.  The government also issued additional arrest warrants against him and his brother Gilberto in late 1994.  Although both remain at large, the GOC has begun a trial in absentia against Miguel.   The country's new top prosecutor has taken other positive steps such as, revoking "safe conduct" passes that had been issued to high-level Cali traffickers by his predecessor in the previous administration. 

The assignment of former anti-narcotics Chief General Rosso Serrano as the new Director General of the Colombian National Police (CNP) seems designed to strengthen efforts to address corruption and narcotics control.  It may counter the effect of the police reorganization in which the Anti-narcotics Directorate (DIRAN) was downgraded by two organizational levels to a division (DANTI).  The new administration is also revamping the Federal Department of Security (DAS).

Despite these organizational changes, DANTI's efforts against certain production, distribution and transportation networks were heroic.  It demonstrated an ability to make effective use of resources obtained with USG assistance in damaging individual components of the drug syndicate network.  Unfortunately, none of these efforts have been sufficient to inflict mortal wounds on the syndicates.

The Colombian constitution prohibits extradition of Colombian nationals, thereby precluding US prosecution of most of the notorious trafficking leadership.  Unfortunately, the GOC has not itself mounted successful legal actions against major narco-traffickers.  Moreover, Colombia has continually permitted major traffickers to receive utterly unwarranted benefits for surrendering, has imposed on them sentences wholly out of keeping with the gravity of their offenses as provided in US provided evidence, and has entirely failed to force them to disgorge their ill-gotten gains.  Indeed, despite the GOC's assurances that it would take steps to ensure that traffickers receive sentences commensurate with the seriousness of their crimes, including the forfeiture of criminally derived assets, it has done little to rectify the weaknesses in its legal system.  Finally, Colombia has not been able to assure the safety of witnesses or their loved ones.  For all these reasons, the United States had to suspend evidence sharing in new cases.

Colombia's asset seizure laws are confusing and lack structure.  The GOC's ability to successfully implement this legislation has been limited by its inability to compile evidence, prosecute, and convict defendants on criminal charges.  Existing statutes allow the GOC temporarily to seize the property and assets of an individual, subject to a criminal investigation or proceeding.  Property rights are forfeited if the individual is convicted of a crime, or if the owner does not officially defend those rights within a year after having been summoned.  In reality, however, seized assets of identified criminals are regularly returned for failure of the government to make prosecutable cases.

Corruption.  In late 1993, the Fiscalia had over 15,000 active criminal corruption investigations filed against government officials.  These investigations occasionally led to dismissal or retirements, but rarely to criminal prosecution.  53 percent of those sanctioned between 1991 and 1993 were high-level officials.  In August, the Colombian Attorney General named 21 members of Congress who are being investigated for corruption by his office and other GOC entities.  Some of these have since been cleared.  There is no indication of the number of government officials who were sanctioned for corruption or the nature of the sanction for 1994.  In the last four years, the CNP has dismissed over 14,000 officers for corruption, including 100 implicated in recent scandals at Bogota's international airport and in Cali.
Agreements and Treaties.  Colombia is party to the 1961 UN Single Convention, its 1972 Protocol, the 1971 UN Convention on psychotropic drugs, and the 1988 UN Convention.  The constitutional court approved the 1988 convention's ratification by congress, with several potentially significant reservations in the areas of extradition, confiscation, and maritime interdiction.  The convention entered into force in September 1994.  Colombia has signed a nonreciprocal agreement with the US on asset sharing, and an agreement on chemical control.  The legality of a series of cooperative agreements between the GOC and nine other countries, however, was challenged before the constitutional court in November.  Among these were a July 1990 memorandum of understanding on asset sharing between the GOC and the US and a February 1991 declaration of intent on evidence sharing.  The constitutional court decided that, although never ratified by congress, the instruments had taken on the characteristics of treaties.  The court labeled the arrangements "irregular" and called on the president to resolve the legal issues surrounding these arrangements.  The GOC and the USG have agreed to proceed directly under the 1988 UN Convention.

The GOC has not brought into effect a previously negotiated and signed mutual legal assistance treaty with the US.  Prior to enactment of any further understandings or agreements on counter- narcotics, however, the GOC must resolve questions raised by the constitutional court as to the legality and efficacy of existing measures which lack congressional approval.

Cultivation/production.  CNP has conducted opium poppy eradication in southwestern Colombia since March 1992. In February 1994, DNE granted authorization to CNP to begin aerial eradication of coca as well.  After a series of administrative delays, CNP started coca fumigation operations in April.  CNP opened another eradication front against opium poppy in northern Colombia in August.  This was done with the joint cooperation of the USG, which provided additional financial, equipment, personnel and herbicide resources for this endeavor.  Progress throughout the year was not exceptional, but in early November the CNP reinvigorated operations with an aggressive plan to eradicate more than half of the coca and opium poppy in Colombia in the shortest period of time.  The high results obtained during the last two months of the year (roughly one third of the year's eradication effort was accomplished in November and the first week of December) brought 1994 eradication numbers in line with those of 1993.  Nevertheless, total opium poppy eradication was about 50 percent  less than last year.   While the effort against coca greatly surpassed that of 1993, when only manual eradication was in effect, it fell short of expectations.  We anticipate that the GOC will continue to face organized and vocal opposition to its eradication program.

Led by the CNP, GOC efforts against cocaine production exceeded that of 1993. Over 60 metric tons of cocaine HCl and base were seized and some 550 labs were destroyed, 15 of which were capable of producing 500 kilograms or more of cocaine per week.  More than 180 metric tons of marijuana were also seized in Colombia. The CNP helped to disrupt cocaine transport routes throughout Colombia by seizing 28  narco-trafficker aircraft and by destroying 21 clandestine airstrips used by traffickers. Unfortunately, the GOC performance did not match that of 1991, when over 86 metric tons of cocaine were seized.  The efforts against heroin and marijuana were also poor, considering the continued increase in production and shipment to the US of both drugs.  Additionally, the inability of the GOC to control open narcotics trafficking in certain parts of its territory, especially San Andres Island, prevented greater inroads against the flow of narcotics to the United States.


The GOC has focused even less on the internal distribution of narcotics than it has on international trafficking.  Domestic distribution and consumption are treated as issues of public order rather than of narcotics control.  On May 5, the constitutional court declared unconstitutional two articles of Colombia's anti-narcotics statute which penalized drug possession and use.  The Samper administration introduced a bill to penalize drug possession for personal use, which failed to pass for lack of a quorum before Congress recessed in December.  

IV. US Policy Initiatives and Programs.

Policy Initiatives.  USG narcotics control goals in Colombia focus on institutional development of the legal system and narcotics enforcement elements of the GOC.  The primary USG narcotics control goals in Colombia are to: reduce the flow of narcotics from Colombia to the US by focusing resources on the identification, investigation, prosecution, and appropriate punishment -- including  disgorgement of ill gotten gains -- of narcotics traffickers; to reduce the cocaine and heroin production potential of Colombia by developing the CNP's capability to aerially eradicate large sectors of illicit cultivations; to encourage, and assist through training, the GOC to enact and effectively implement legislative reforms.  Legislation should include comprehensive statutory authority targeting asset forfeiture, the organization leadership of the narco-trafficking syndicates, and an overhaul of the sentencing authority to ensure the imposition of sentences which are commensurate with a defendant's culpability and which do not award meritless sentence reductions as a matter of course.  The GOC must also be encouraged to accept its international obligations to implement the cooperative mechanisms of the 1988 U.N. Convention, to enact and fully implement legislation giving effect to the OAS/CICAD Model Regulations (particularly with respect to money laundering), and to bring into force the US-Colombian Mutual Legal Assistance Treaty or, in the alternative, to become a party to the OAS regulations.  


Other areas in which the USG seeks to assist the GOC are to develop the institutional capabilities of the Federal Department of Security (DAS) to detect and document money laundering activity and perpetrators, develop the institutional capabilities of the Colombian National Police (CNP) Anti-Narcotics Division (DANTI) to interdict narcotics laboratories  and shipments, coordinate with other international donors, particularly members of the mini-Dublin group, in assisting the GOC to carry out selected alternative development initiatives, assist the GOC in reducing domestic consumption of illegal narcotics, and improve DANTI and DAS counternarcotics intelligence, financial investigative, and aviation skills through quality training programs.

The US Agency for International Development (USAID), Department of Justice International Criminal Investigative Training Assistance program (ICITAP), and Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL) Narcotics Affairs Section (NAS) conduct ongoing programs with key elements of the GOC judiciary and narcotics enforcement entities.  Among many of the other US agencies involved in this effort are the Department of Defense (DOD), the Drug Enforcement Administration (DEA), and various offices of the Department of Justice (DOJ).

The USAID justice sector reform project (JSRP) assists the GOC in its long term efforts to restructure key sector entities, with special emphasis on the criminal justice system.  The JSRP also seeks to improve the effectiveness of the judiciary and the office of the prosecutor general, to expand access to the judicial system, and to strengthen judicial protection capabilities.  This is being accomplished through training, technical assistance, and a number of sub-projects being carried out in selected geographical jurisdictions.

USAID has provided training to magistrates and judges on the provisions of the new (1993) criminal procedures code and sponsored short term visits to the United States and selected Latin American countries for members of the superior judicial council and the prosecutor general's office to give them the opportunity to observe effective court administration and demand reduction programs.  In 1994, more than 2,300 judges, prosecutors, investigators and administrative support personnel benefited from training provided directly by USAID or under its cooperative agreement with the Colombian foundation for higher education (FES).

Through ICITAP, 516 GOC investigators and forensic specialists were trained in courses offered both in Colombia and in the United States.  ICITAP also provided 15 weeks of technical assistance to GOC law enforcement agencies in the areas of judicial protection, forensic development, and curriculum development.  Additional professional training for prosecutors will begin in early 1995 under the auspices of the DOJ office of professional and development training (OPDAT).

The NAS Colombia national police program focuses on developing the institutional and tactical capabilities of the CNP to conduct interdiction and eradication missions.  NAS sponsored DOD and commercial aviation training for 310 CNP anti-narcotics aviators, mechanics, and logisticians in 1994.  An additional 233 anti-narcotics policemen participated in training related to tactical interdiction skills.  Most courses were taught by DOD and provided several hours of instruction in human rights awareness.  In addition to training, NAS provided aircraft parts for the  CNP anti-narcotics airwing consisting of 40 helicopters and 20 airplanes.  The INL Air Wing provided half a dozen T-65 Turbo Thrush spray planes, instructors, and technical advisors to support CNP's surge in eradication operations.  NAS also provided commodities to support more than 30 DANTI interdiction, eradication, and intelligence units deployed throughout Colombia. 

V.The Road Ahead

We note with satisfaction that President Samper, in a February 7 speech, outlined a broad ranging counternarcotics strategy which addresses eradication of coca cultivations in two years, production and distribution systems, initiatives to combat money laundering and illicit enrichment.  President Samper also called the current judicial system an open door to impunity and said the sentencing process would be strengthened.  These initiatives, if pursued aggressively, attack many of the key areas in which Colombia's antidrug performance in 1994 was insufficient. 



I.  Summary:

Ecuador is a major transit country for cocaine shipped from Colombia to the United States and Europe, serving as a link for Cali traffickers to launder money and to import precursor chemicals into Colombia.  The Government of Ecuador (GOE) cooperates with the USG to seize cocaine, reduce money laundering, and dismantle international drug mafias.  Drug kingpin Jorge Reyes Torres, leader of the Jorge Reyes Torres Organization (JRTO), is jailed in Ecuador awaiting trial.  The JRTO shipped an estimated 30-50 mt of cocaine annually to the US  Ecuador enacted laws on money laundering in compliance with the 1988 United Nations Convention and the Organization of American States (OAS) model legislation.  The GOE in 1994 signed an asset sharing agreement with the USG, implemented a money laundering agreement, and completed a licit chemical use study.  However, credible allegations of corruption within the judiciary in narcotics cases increased, and prosecution of major narcotics traffickers continued to move slowly.  Ecuador in 1990 ratified the 1988 UN Convention.  

II.  Status of Country:

Unlike neighboring Colombia and Peru, Ecuador is not a major producer or processor of cocaine.  However, traffickers use Ecuador as a bridge to ship processed cocaine from Colombia and essential chemicals into Colombia.  Ecuador is also a money laundering center.  Drug use is increasing within Ecuador, particularly in coastal cities.  The GOE, with USG assistance, has an active detection and narcotics eradication program.  The GOE dismantled or disrupted the activities of six Ecuadorian drug organizations with ties to the Cali drug mafia in 1994.  The government intensified interdiction efforts along the Pan American Highway, carrying out operations against traffickers using the highway to transport drugs through Ecuador.  Ecuador's ability to control money laundering would be enhanced by greater enforcement of requirements for banks to report suspicious transactions.  

III.  Country Actions Against Drugs in 1994:

Policy Initiatives.  The Ecuadorian police obtained limited access to financial institutions for money laundering investigations.  Although police obtained sufficient evidence to arrest several top level bank officials on money laundering charges, Ecuadorian judges--who may have been bribed or intimidated by traffickers--delivered not guilty verdicts in the cases.  

The Ecuadorian government seized assets valued at about $18 million in 1993-4.  However, this is significantly less than the assets seized in 1992, when Jorge Reyes Torres, leader of the largest trafficking organization in Ecuador, was arrested and his assets were seized.  The GOE and USG signed a bilateral agreement to share seized assets in 1994.  Ecuador received $330,000, which the GOE used for law enforcement, hiring  a qualified attorney to pursue prosecutions of major narcotics traffickers.  The attorney has expertise in prosecuting narcotics cases, familiarity with the rulings of Ecuadorian judges, and knowledge of the Reyes Torres case in particular.  

Under the 1990 Ecuadorian National Drug Strategy, the National Drug Council (CONSEP) coordinated a study of the legitimate demand for precursor and essential chemicals, the first step toward implementing a program to limit legal imports and illicit diversion of such chemicals.  The Ministry of Education, with USG assistance, began to train school teachers in drug abuse prevention and other demand reduction techniques.  

Accomplishments.  Police seizures of cocaine HCl more than doubled in 1994 over the previous year, seizing over two metric tons (mts), compared with just over one ton in 1993.  CONSEP and the police seized in 1994 over 31 mt of cocaine and 2,000 gallons of essential chemicals, including acetone and sulfuric acid.  With USG and UN Drug Control Program (UNDCP) assistance, the police upgraded their drug detector dog program.  There are plans to construct a canine training facility in Quito.  

Law Enforcement Efforts.  The GOE passed legislation in 1990 criminalizing the production, transport, and sale of controlled narcotics; the import, transport and/or use of essential chemicals without the written permission of CONSEP; any attempt to conceal the profits from narcotics trafficking activities; the intimidation or subornation of judicial and public authorities for drug crimes; and illegal association related to drug trafficking and profiteering.  

Ecuador's Narcotics and Psychotropic Substances Act of 1991 provides measures for the seizure and forfeiture of the instrumentalities used in, and the proceeds derived from, narcotics trafficking offenses.  The law also created the National Council for the Control of Narcotics and Narcotics Substances (CONSEP), which is charged with maintaining and disposing of forfeited property.  The USG has not made any requests to Ecuador for judicial forfeiture assistance.  Pursuant to an asset sharing agreement executed by the USG and Ecuador in June, the USG transferred approximately USD 330,000 to CONSEP in recognition of Ecuador's assistance to the DEA.  The USG anticipates transferring $3.8 million to CONSEP in 1995 from the assets of trafficker Reyes Torres, which were recovered by the US from Switzerland.  

The GOE's legislative and operational actions comply with the 1988 UN Convention and OAS model legislation.  However, judicial action in enforcing such legislative mandates is minimal, threatening the integrity of Ecuador's court system and inviting further abuses of the administration of justice in Ecuador.  

The GOE centralized most drug enforcement activities in the Ecuadorian National Police (ENP), although the Customs Inspection Service (CIS) still claims a role in such work.  Negotiations are ongoing to formally designate the ENP as the primary counternarcotics agency in Ecuador.  The armed forces have responsibility to support the police in counternarcotics  activities.  A military patrol destroyed three hectares (ha) of coca plants in a remote northern border area early in 1994.  The GOE suspended combined police/military operations along the Putumayo River border with Colombia after a 1993 attack by suspected Colombian guerrillas.  The police and military have prepared preliminary strategy documents for conducting joint operations in that region; such joint operations would reduce drug trafficking activity.

CONSEP is the principal government coordinator on narcotics matters, the agent for all seized assets, and the regulatory agency for the import and internal movement of precursor and essential chemicals.  However, CONSEP needs increased funding from the GOE to enhance the effectiveness of its counternarcotics activities.  

The Ecuadorian government, with INL-provided Thrush aircraft, conducted aerial missions to search for new opium poppy and coca cultivations and processing facilities.  The GOE identified no illicit crops or labs, but inclement weather forced the postponement of further search flights.  Operations are scheduled to resume in early 1995.  

The ENP dismantled or disrupted the operations of six narcotics trafficking organizations, seizing over two mt of cocaine Hcl, and arresting over 50 suspects, including ten Colombian nationals.  The Police Intelligence Center (CICC) increased its training and automated its intelligence database files.  Police regional offices began to submit regularly intelligence reports with key information essential to dismantling international drug mafias.  

The INTERPOL counternarcotics training center (CCA) provided basic anti-narcotics training to 262 narcotics police agents and basic intelligence training to 47 selected INTERPOL personnel.  

Corruption.  As a matter of government policy, the GOE does not encourage or facilitate the illicit production or distribution of drugs, other controlled substances, or the laundering of drug money.  However, corruption remains a serious problem at all levels in the police, and there are credible allegations of corruption within the judiciary which increase as more major narcotics traffickers are tried.  Nonetheless, no senior official in the current administration has been identified as engaged in the production or distribution of drugs or in money laundering of drug proceeds.  Ecuador's 1990 narcotics law includes provisions for prosecuting government officials who impede the prosecution of individuals charged under that law.

President Sixto Duran-Ballen addressed the December 1994 Miami Summit of the Americas on anti-corruption efforts.  Vice President Alberto Dahik is active in Transparency International, a non-governmental group dedicated to reducing official corruption.  The Ecuadorian government must increase its own efforts to reduce judicial corruption and to reform the judiciary.  Outdated judicial practices and incidents of judicial corruption inhibit the ability of the government to effectively prosecute narcotics traffickers, such as Jorge Reyes Torres.  Ecuador lacks credible institutions to effectively monitor cases of judicial corruption.  The current system set up to address cases of judicial corruption needs serious reform to ensure its effectiveness.  
The Ecuadorian National Police Commander, General Guido Nunez Bano, resigned following allegations of abuse of authority and illegal enrichment.  The investigation continues.  Two cases of judicial corruption languish within Ecuador's judicial system.  

Agreements and Treaties.  Ecuador and the USG signed a bilateral project agreement in September that provides assistance to CONSEP.  No project agreement was signed in 1994 with the ENP.  However, unspent funds from prior year agreements will continue to sustain the ENP project.  The goals of the ENP project are to improve police effectiveness by providing equipment and training in counternarcotics enforcement and intelligence analysis.  Ecuador and Colombia signed an agreement establishing a joint committee on border security.  In June, the two nations held a joint police/military counternarcotics planning exercise, Fuerzas Unidas 95.

The GOE in 1991 entered into an agreement with the USG on preventing the illicit diversion of essential chemicals.  The GOE in 1992 concluded a Currency Transaction Reporting (CTR) requirement on amounts over $10,000.  However, the GOE has not implemented the CTR requirement in enforcing its anti-money laundering agreement.  

Although the USG and the GOE have signed a bilateral extradition treaty, the Ecuadorian constitution prohibits the extradition of Ecuadorian nationals, and the treaty does not provide for provisional arrest.  Ecuador has cooperated with the USG in efforts to deport or investigate international drug traffickers.  The government entered into preliminary discussions with the USG in 1994 to negotiate a Mutual Legal Assistance Treaty (MLAT).  

Cultivation/Production.  There is currently no evidence of significant drug cultivation in Ecuador.  Traffickers grow small plots of coca and opium poppy in Ecuador, particularly on the northern border with Colombia.  Ecuadorian authorities remain vigilant and quickly destroy illicit crops.  Joint USG-GOE flights are expected to continue in 1995.  

Drug Flow/Transit.  Colombian groups take advantage of Ecuadorian seaports to export cocaine via commercial maritime vessels to the US and Europe.  Colombian traffickers also smuggle essential chemicals through Ecuador into Colombia.  The Pan American Highway, Ecuadorian airspace, and poorly monitored ports are the primary means of transshipment.  The US Customs Service has agreed to provide temporarily a port inspector at the Port of Guayaquil to advise the GOE on how to enhance security and to improve import/export procedures.  The GOE is also seeking to establish an aircraft intercept capability by constructing a permanent radar site in eastern Ecuador.  

Demand Reduction.  Drug use is increasing in Ecuador's large coastal cities.  CONSEP plans to conduct in 1995 two epidemiological studies.  Representatives from CONSEP attended several conferences on prevention of drug abuse and rehabilitation methods.  The Ministry of Education, with USG assistance, began to train school teachers in drug abuse prevention methods for the primary and secondary curricula.  
US Policy Initiatives and Programs.  The USG seeks to increase the political will of the Ecuadorians to address the narcotics problem; and to improve Ecuador's institutional capability to target major narcotics traffickers, intercept drugs and chemicals, reduce money laundering, and effectively target and prosecute major narcotics traffickers.  The USG works with the ENP, CONSEP, the Armed Forces, the Customs Service and voluntary agencies.  USAID's Rule of Law program is designed to reform the judicial system on a broader scale.  

The Road Ahead.  The GOE is working to implement controls on the import and internal movement of essential chemicals, and to provide police and detector dog coverage to Ecuador's vulnerable narcotics transit areas.  As recently as February 1995, Ecuadorian authorities demonstrated energetic cooperation with the USG by seizing in Guayas province over three tons of cocaine, the largest seizure in Ecuadorian history.  Ecuador must use existing CTR requirements and automated information for police investigations to counter money laundering.  The GOE in 1994 failed to carry out judicial reform to conclude prosecutions of major narcotics traffickers, specifically Jorge Reyes Torres.  USG assistance will focus on enhancing Ecuadorian efforts to meet counternarcotics goals, particularly in chemical controls and in the prosecution of major narcotics traffickers.  


I.  Summary

Paraguay is a transit route for cocaine shipped primarily from Bolivia, and perhaps increasingly from Colombia, to Argentina and Brazil for onward shipment to the United States and Europe.  High-quality cannabis is grown for domestic consumption and export to Argentina and Brazil.  President Juan Carlos Wasmosy has stressed his personal commitment to combatting narcotics trafficking, but the GOP has yet to take practical steps to identify, prevent and punish public corruption that facilitates the trafficking and transshipment of narcotic and psychotropic drugs and other controlled substances.  A lack of political will to investigate vigorously allegations of official corruption has undercut Paraguay's drug control program.  Given this situation, Paraguay cannot be considered to be in compliance with the 1987 bilateral counternarcotics agreement with the USG, which seeks to eliminate the illicit production, processing, trafficking, and consumption of narcotics in Paraguay and the transit of narcotics through contiguous territorial waters.  Paraguay is a party to the 1988 UN Convention.  

II.  Status of the Country

Paraguay's extensive river network, numerous unregistered airstrips, poorly policed borders, widespread official corruption, and historical status as a major smuggling route all combine to make it an attractive transit route for narcotics.  Intelligence sources indicate that multi-hundred kilogram shipments of cocaine regularly pass through Paraguay.  Most of this cocaine originates in Bolivia, but Colombian traffickers are also developing routes through Paraguay.  Paraguay is considered to be a major money laundering center, based on its extensive re-export trade and its expanding and poorly regulated financial sector.  Paraguay is not considered to be a producer of, or major transit country for, precursor and essential chemicals, nor is it a major center of cultivation or production of illicit substances.

III.  Country Action Against Drugs in 1994

Policy Initiatives.  The GOP continued the cooperative effort of stationing USG counternarcotics aircraft in Paraguay.  It ratified a bilateral financial information exchange agreement with the USG.  The Anti-narcotics Executive Secretariat (SENAD) commissioned a national drug control strategy that, while completed, has not yet been adopted.  The Congress is considering money laundering legislation, which may be voted upon in the March 1995 session.

Accomplishments.  On September 10, in a joint operation with DEA, the Paraguayan narcotics police seized 756 kilograms of cocaine.  This was the largest drug seizure ever in Paraguay and it resulted from the successful, well-coordinated use of the undercover "controlled delivery" tactic.

 Law Enforcement Efforts.  Paraguayan law enforcement authorities did not provide adequate cooperation during the first half of 1994, and a major narcotics investigation was very probably compromised.  Commencing in August, the quantity and quality of cooperation increased, highlighted by the 756 kilo seizure.  The October 10 assassination of SENAD Director Ramon Rosa Rodriguez sidetracked law enforcement efforts for two months.  The new SENAD director has stated his commitment to a cooperative drug control effort and plans to carry out widespread changes in the composition of SENAD and the national antinarcotics police.

To date, Paraguayan law enforcement efforts have not focused on major drug traffickers and organizations.  This has hampered cooperation with DEA.  In 1994, 29 persons were sentenced to prison for narcotics trafficking; all were low-level traffickers.

In 1994, Paraguayan law enforcement authorities seized a total of 806 kilograms of cocaine and 3.08 metric tons of marijuana, and arrested 58 traffickers of illegal drugs.  GOP forces destroyed 232 hectares of cannabis fields.  The GOP seized 15 vehicles in 1994 in narcotics-related investigations; the total value of these vehicles and other seized assets is estimated at less than $100,000.

Corruption.  As a matter of government policy, Paraguay does not encourage or facilitate illicit production or distribution of narcotic or psychotropic drugs or other controlled substances, or the laundering of proceeds from illegal drug transactions.  Several high-level officials in the government and the armed forces are suspected of facilitating the illicit transit of such drugs or substances, and of engaging in, encouraging and facilitating the laundering of proceeds from illegal drug transactions.  No hard evidence exists, however, to corroborate these suspicions.

Although President Wasmosy has vowed to combat official corruption, the GOP has yet to take an aggressive investigative stance to identify, prevent, and punish public corruption that facilitates the trafficking and transshipment of narcotic and psychotropic drugs and other controlled substances.  The GOP has taken steps to prevent criminal acts that would discourage the investigation or prosecution of such acts, as when it provided police protection to a journalist who publicized the illegal use of airstrips by smugglers.  Paraguay's constitution and laws criminalize narcotics trafficking and the corruption that facilitates its existence.

Agreements and Treaties.  Paraguay ratified the 1988 UN convention in 1990 and is a party to the 1961 Convention, and its 1972 Protocol.  It has a tripartite narcotics enforcement agreement with Argentina and Bolivia, and has similar bilateral agreements with Brazil and Venezuela.  It signed a bilateral assistance agreement with the United States in 1987, which has been extended annually, meeting the requirements of the Chiles amendment.  It also agreed to the declaration of principles and plan of action adopted at the Summit of the Americas.  Paraguay and the United States have a little-used bilateral extradition treaty, through which a Brazilian national was extradited from Paraguay on cocaine trafficking charges.
Cultivation and Production.  Cannabis is the only illicit crop known to be cultivated in Paraguay, and is harvested throughout the year.  The GOP has estimated that 1,500 hectares are under cultivation, mostly in the Northeast, a figure the USG cannot confirm.  This is less than the 2,300 reported last year, although anecdotal evidence indicates that the area under cultivation has increased over the past year.  The GOP does not utilize a scientific methodology for determining crop size and yields.

Demand Reduction Programs.  Paraguay's narcotics abuse problem is small, but anecdotal evidence indicates it is growing.  The Ministries of Health and Education work with non-government organizations to provide drug education programs in the Paraguayan schools.

IV.  US Policy Initiatives and Programs.

Policy Initiatives.  The major US objectives are to improve Paraguay's investigative capabilities, which could then be used to disrupt narcotics trafficking; prevent Paraguay from becoming a money laundering center; reverse the spread of narcotics-related corruption; fortify democratic institutions, especially those connected to law enforcement; and increase public awareness of the threat narcotics trafficking poses to Paraguay's democratic development.

Bilateral Cooperation.  The USG provided technical, communications, intelligence and financial assistance for ten counternarcotics field operations in 1994.  INL provided funding for detector dog support, communications and computer equipment.  USG support for motor vehicle maintenance was suspended after police officials failed to account for money spent.

The Road Ahead.  The extent of future USG cooperation will depend on the GOP's political will to take practical and effective measures to combat narcotics trafficking.  This will be measured by the performance of the GOP in investigating major cocaine traffickers, as well as in making significant seizures and arrests.  During 1995, the USG will seek to improve Paraguayan drug law enforcement investigative capabilities, cooperate with SENAD in targeting major narcotics traffickers and trafficking organizations, work with the Paraguayan Congress on passage of money laundering legislation, provide money laundering training for law enforcement and financial institution personnel, assist the judicial branch in dealing with narcotics-related cases, and cooperate with SENAD and the executive branch on the adoption of a national drug control strategy.  A capable and cooperative SENAD leadership is a prerequisite to achieving many of these objectives.



I.  Summary

Peru is the world's largest producer of coca. The estimated number of hectares under cultivation in 1994 (108,600) did not increase over the 1993 estimate, although coca leaf production rose by six percent over 1993 estimates.  Government of Peru (GOP) counternarcotics activities increased significantly in many areas.  The GOP approved a comprehensive national plan for drug prevention and control, with a goal of 50 percent reduction in coca farming population by the year 2000.  Under a stringent new law against opium production or trafficking, numerous small areas of poppy were destroyed by the GOP.  In December, police for the first time seized a commercial quantity of opium raw material.  In July, the GOP resumed systematic eradication of new coca in seedbeds, and by year-end had eradicated the estimated equivalent of 4,960 hectares of mature cultivation.  The GOP, however, continued to oppose the eradication of mature coca plants without increased alternative development assistance from foreign donors.  The GOP is a signatory to the 1988 UN Convention.

Peruvian armed forces counternarcotics missions continued to increase, with large seizures of illegal drugs, chemicals and other contraband.  Joint operations by the Peruvian military and police became more frequent.  Several senior officers and numerous other military and police officers faced corruption charges in military and civilian courts.  Corruption, made more attractive by grossly inadequate official salaries, remains an impediment to drug law enforcement.  In cooperation with UNDCP, the GOP implemented alternative development projects for coca reduction, complemented by a growing number of IFI-funded economic infrastructure projects indispensable for alternative development goals.  The GOP has advanced toward the goal of creating a coherent strategy to eliminate illicit cocaine production, but needs to integrate its alternative development and enforcement efforts in order to achieve a net coca reduction throughout the country.

II.  Status of Country

Peru's 108,600 hectares of coca estimated by the USG annual crop survey in 1994 represent over 50 percent of the world's total coca supply.  Cultivation in 1994 was essentially unchanged from that of 1993 (108,800 hectares), which in turn had been a significant net decrease from the 1992 high of 129,100 hectares.  The drop is attributable to a combination of natural and economic factors, as well as the cumulative impact of counternarcotics efforts of all types, in the Huallaga Valley.  In 1994, cultivation continued to decline in the Upper Huallaga Valley; and for the first time, there was a decline in cultivation in the Central and Lower Huallaga.  Cultivation increased by over 20 percent in the Aguaytia-Pachitea Valleys, and by nearly 15 percent in the Apurimac Valley, where prior to 1994, counternarcotics activities were virtually nonexistent.  However, new cultivation in 1994 in these areas was considerably less (6,800 hectares) than new cultivation observed  in 1993 (10,200 hectares).  The estimated of coca leaf increased by six percent from an estimated 155,500 metric tons in 1993 to approximately 165,300 metric tons in 1994.

Peru is mainly a supplier of semi-finished raw material (cocaine base) for processing to cocaine hydrochloride (HCl) in Colombia and elsewhere.  Most coca is grown by individual farmers in plots averaging about one hectare; 60 percent or more process the product themselves for sale to trafficking organizations.  Trafficking organizations in Peru purchase, consolidate and export cocaine base, rather than processing it themselves.  However, repeated seizures of cocaine hydrochloride (HCl) on the Pacific coast confirm that final processing also exists, and is increasing.  Most cocaine base is moved out of Peru by twin engine general aviation aircraft.  These are typically Colombian and arrive in Peru only to pick up cocaine base.  Pickup locations vary depending on economic conditions and intensity of law enforcement activities.  At the end of 1994, the main points of international pickup were in the Pachitea and Apurimac areas, and illegal airstrips on the Brazil border.

Peru is not a significant international money laundering center.  However, deregulation and full convertibility of Peruvian currency (the Sol) under President Fujimori's far-reaching economic reform program make it relatively simple to manage illegal funds repatriated for raw material purchase and other expenses, including corruption, personal consumption by traffickers, and growing investment in licit sectors.

There is domestic production of most chemicals essential to cocaine base processing.  Potassium permanganate and organic solvents are imported in licit commerce.  Chemicals are normally diverted from the licit economy on the Pacific coast and moved by land to drug processing centers in the trans-Andean jungle areas.  The GOP-controlled chemical regulatory system includes a joint office of the Ministry of Industry's controlled chemical unit (licensing and regulation of licit import, manufacture, sale and use), the National Police Anti-Drug Directorate (DINANDRO) controlled chemical division and customs service.  The Peruvian chemical regulatory system is assessed by DEA as probably the most advanced in South America.

Until 1994, no significant opium poppy cultivation had been discovered.  In December, DINANDRO made the first seizure in Peru of a commercial quantity (about 600 kilograms) of opium poppy straw, representing production of 2-3 hectares or more.

III.  Country Action Against Drugs in 1994

In 1994, the GOP took concrete actions toward meeting goals and objectives of the 1988 UN Convention in most respects, and took measures to punish several senior police and military officers and numerous other officials for drug-related public corruption. 

Policy Initiatives:  in September, the GOP approved a national plan for drug prevention and control, which UNDCP considers among the best in the region.  It defines measures to eliminate illegal drug production, trafficking and abuse, including eliminating all coca cultivation destined for illicit uses.  It states the goal of reducing by 50 percent the population dependent on coca by the year 2000, through alternative development leading to voluntary abandonment of coca.  It is a framework within which donors can coordinate support for a long-term GOP effort to reduce and eliminate illicit coca production.  On June 1, the GOP approved a law with strict penalties for any aspect of opium poppy cultivation trafficking or use.  It requires destruction of any poppy found in Peru.  In several trans-Andean areas from northern Peru to the far south, police or armed forces discovered and destroyed small plots of poppy, apparently experimental or pilot cultivation. 

At the Rio Group Summit in September, President Fujimori proposed harmonization of drug-related criminal law of Rio Group countries.  The specific proposal prepared by the Ministry of Justice is a comprehensive compendium of enhanced criminal law, including controlled delivery, conspiracy, reversal of burden of proof in illicit enrichment actions, extradition, electronic evidence, etc.  This proposal is under review by Rio Group Foreign Ministries.  President Fujimori emphasized the importance of this initiative at the Summit of the Americas in December.

Accomplishments.  In July, the GOP resumed systematic eradication of new coca found in seedbeds (suspended in November 1993 by the USG for budgetary reasons), and by year's end had manually eradicated 74,400 square meters of coca seedbeds, the estimated equivalent of 4,960 hectares of mature cultivation.  The Peruvian National Police Anti-Drug Directorate (DINANDRO) reported seizing approximately 831,226 US dollars, 19,034 Peruvian soles, 46,650 Ecuadorian sucres, and 197,500 Colombian pesos in connection with drug trafficking offenses.  The GOP cooperated with UNDCP alternative development projects in parts of the Upper and Central Huallaga, Aguaytia and Pachitea Valleys, and the Urubamba Valley in Cuzco.  In November, UNDCP initiated a new German-funded project in parts of the Apurimac Valley.  GOP army engineer units undertook significant road infrastructure rehabilitation in less secure areas.  Resumption of IFI lending was followed by World Bank and Inter-American Development Bank projects to rehabilitate over 1500 kilometers of roads and improve electric power facilities, indispensable to alternative development.  In October, the GOP prepared its first regional alternative development concept for a five-year, $111 million program (with an additional $70 million in IFI-funded transportation and energy infrastructure) for the Upper Huallaga Valley. The USAID Upper Huallaga area development project ended in December 1993.  In 1994, the GOP cooperated in the design of a new USG-funded alternative development project, expected to be ready in early 1995.

Law Enforcement Efforts:  Police and armed forces seized over 10.5 mt of cocaine base, nearly double the 1993 total.  Nearly 6 mt was seized by armed forces, of which about three quarters was based on information provided by police.  Seizure of over three tons in a single raid at an airstrip in the Manu national park in February was the largest single seizure in  Peru in 1994.  An additional 93.7 kgs of refined cocaine was also seized in 1994.  In January 1994, at GOP request, Colombian authorities arrested major Peruvian trafficker Demetrio Limonier Chavez-Penaherrera (aka "Vaticano"), who lived in Cali for much of 1993, and returned him to Peru.  He was tried by a military court and is serving a 30-year sentence; other members of his family organization are also serving prison terms.  Assets valued at over $5 million were seized following Vaticano's arrest.  Overall, Peruvian law enforcement agencies made over 6,586 narcotics-related arrests, a third of which was for trafficking offenses.  The air force maintained detachments to control 16 legal airports in coca regions, and blocked over two dozen clandestine airstrips using expired air munitions.  In addition to joint operations involving one or more armed services and police, there are now several instances of joint service counternarcotics bases at which police or air force counternarcotics personnel are located on army or navy installations in less secure areas.  DINANDRO continued to develop its "intelligence group," which with USG support and DEA liaison assistance now has field offices in six locations outside Lima to pursue investigations of major trafficking organizations.

The GOP continued to augment resources devoted to counternarcotics.  Two transport and three utility aircraft were assigned to the police aviation directorate for counternarcotics and other missions; nine boats were purchased for police river drug patrol use; fax machines and other equipment were provided by the GOP for drug police.

The USG's suspension in May of radar data sharing to the Peruvian Air Force (due to legal concerns regarding the use of force) essentially halted air interdiction efforts for the balance of 1994.  On December 8, however, under the terms of legislation approved by the US Congress in August, President Clinton determined that US cooperation could resume.

The cumulative impact of enforcement efforts disrupted several major trafficking organizations, significantly increased costs and risks of their activities, and disrupted the illegal agro-industry sufficiently to impair the confidence of coca farmers in several areas.  This is the key economic impact sought at a strategic level from enforcement to support alternative development cocaine supply reduction goals in Peru.

Corruption:  As a matter of government practice or policy, the GOP does not encourage or facilitate illicit production or distribution of narcotic or psychotropic drugs or other controlled substances, nor the laundering of proceeds from illegal drug transactions.  No senior official of the GOP is known to engage in, encourage or facilitate the illicit production or distribution of such drugs or substances, or the laundering of proceeds from illegal drug transactions.

Corruption is a pervasive individual, but not an institutional phenomenon in Peru.  Specific instances of formal GOP action against official corruption are often difficult to corroborate.  Police and armed forces officials have faced disciplinary action for drug-related corruption, in military and civilian courts.  An illustrative listing of cases published by the media (none known to be contradicted by other available information) is as  follows: Army Gen. Jaime Rios Araico, political-military commander for the Huallaga front in 1991, was under investigation by a civilian criminal court, and has been convicted in a civilian court for his alleged association with "Vaticano" and other drug traffickers.  Army Gen. Eduardo Bellido Mora, Huallaga front commander in 1992-3 and currently military attache in Israel, is under investigation by a civilian court. 

On December 14, the army public information office published a communique which stated that the army inspector general had investigated approximately 200 cases of alleged corruption that resulted in disciplinary action up to dismissal from service, and described a series of measures to prevent corruption or identify and punish corrupt army personnel, ranging from assignment of additional officers to inspector general offices and earlier entry of the inspector general in cases of alleged corruption, to enhanced personnel benefits for persons serving in coca producing emergency zones that are the most exposed to corruption.

A senior Huallaga front staff officer told a US official that over 40 army personnel in the Huallaga front were disciplined for drug-related corruption in 1994.  Three DINANDRO lieutenant colonels were cashiered for malfeasance in handling the "Vaticano" case.  The Interior Minister announced that 15 police were discharged for various irregularities relating to drug cases.  A judge in Ayacucho ordered the arrest of 21 police for drug trafficking; the Attorney General (Fiscal de la Nacion) appointed a special prosecutor to investigate alleged police and military corruption in the Ayacucho region.  In Tingo Maria, 31 special operations police were convicted, partly on the basis of testimony from their superiors, on drug trafficking charges in civilian criminal court.  Three police radio operators who provided information to drug traffickers were under investigation; two are in custody, a third is a fugitive.  In a public ceremony in Huamanga (Ayacucho), 27 police were discharged for drug trafficking or corruption.

There was almost continuous coverage all year of stories on alleged drug corruption, including allegations by former army officers, charges of police malfeasance or corruption, and stories of corrupted small military units in drug areas.

Agreements and Treaties:  Peru has been party to the 1988 UN Convention since 1992.  It is also a party to the 1961 Convention, the 1972 Protocol, and the 1971 Convention.  It has bilateral agreements with the US on chemical control, money laundering/cash transactions (Kerry Amendment), and tax information exchange.  Pursuant to the 1988 Convention, the GOP considers its existing 1900 bilateral extradition treaty with the US to cover drug trafficking offenses as extraditable offenses.  The GOP has signed bilateral narcotics control project agreements with the USG annually.  Peru is a member of the UN Commission on Narcotic Drugs, and OAS/CICAD, where in 1994 the GOP chaired a working group on alternative development.  In April, the GOP concluded a subregional cooperative agreement with Argentina, Bolivia, Chile and UNDCP.  Peru has bilateral drug cooperation agreements with most neighbors and with major European states.  In 1994, it signed new agreements with Colombia and Guatemala.
Cultivation/Production.  In addition to the coca and poppy production discussed above, there is small-scale cultivation of cannabis in several areas, for individual consumption or local retail sale. Production of pharmaceuticals is not subject to adequate control and commercial sale, but illicit traffic and abuse do not appear to be major problems.  There was no use of aerially-applied herbicides for narcotics control purposes in Peru in 1994.  President Fujimori continues to oppose eradication of mature coca plants until foreign donors provide greater levels of alternative development aid to the peasants who grow coca as a cash crop.

Drug Flow/Transit.  There were indications in 1994 of significant traffic in coca leaf and cocaine products across the border from Bolivia near Lake Titicaca.  Its extent is not known, but its scale is not significant compared with drug production and export by Peru.

Domestic Programs/Demand Reduction.  There is growing awareness of cocaine abuse and concern over quality of drug education and treatment.  In a recent non-governmental survey, a significant number of respondents reported abuse of some form of processed cocaine.  The most active drug education/demand reduction agency is the USAID-supported non-governmental organization CEDRO (Center for Information and Education Against the Abuse of Drugs).  Education Ministry drug awareness material is incorporated in primary and secondary school curricula, and its technical committee on drug abuse prevention (COPUID) is taking a more visible role as a policy advocate for drug awareness and prevention on a government-wide basis.

IV.  US Policy Initiatives and Programs

US Policy Initiatives.  The USG goal is to reduce, and ultimately eliminate, production of cocaine, by developing an autonomous GOP institutional capability to define and implement a comprehensive counternarcotics strategy.  This goal coincides with the goal of the GOP national drug plan, except with regard to long-term implications of GOP policy on domestic licit use of unprocessed coca.

Bilateral Cooperation (accomplishments).  The GOP is implementing the bilateral chemical control agreement.  The USG made no requests for drug-related cooperation under other agreements including cash transactions, tax information exchange and extradition.  The USG has not sought to negotiate a new extradition treaty nor a mutual legal assistance treaty.  The current narcotics control project agreement entered into force on August 29, 1994; negotiation for FY-95 will begin shortly; at GOP request, it will include a formal review of bilateral cooperation to date, and review of the bilateral narcotics control agreement of May 1991.  There was no USAID-funded alternative development project in 1994; there has been no US grant military assistance since 1992.
Road Ahead.  Regardless of means or resources, eliminating an illegal industry of the scale and geographic scope of the Peruvian cocaine industry in the near term is not possible.  However, this must be Peru's long term objective.  Realistic objectives for 1995 are:  (1) the GOP will complete essential implementing plans under its national plan; (2) GOP enforcement programs will have an observable impact to disrupt additional major trafficking organizations identified as targets; (3) alternative development projects financed by the USG, other donors or the GOP (with, to the extent relevant, IFI-funded infrastructure support) will result in identifiable cases of farmers who abandon coca in favor of other crops; (4) the GOP will destroy all poppy encountered, and eradicate new coca in seedbeds intensively enough to check expansion in the Aguaytia valley; (5) GOP efforts against drug-related corruption will increase, and begin to be perceived by the armed forces and police as a serious, enduring commitment to eliminate such corruption. 



I.  Summary

Uruguay is an important financial center within the Southern Cone of South America.  Economic stability, unrestricted currency exchange and strict bank secrecy laws and tax advantages have made the country a haven for Argentine and Brazilian investors.  These conditions create the potential for large-scale money laundering, although USG law enforcement agencies have uncovered only a few such cases.  Previous investigations undertaken in South America show that Colombian drug trafficking cartels have laundered money in Uruguay.  The country's location also makes it a natural transit point for drugs transported between Argentina and Brazil as well as to the US and Europe.  In 1994, narcotics abuse, trafficking, and money laundering were viewed as increasingly important problems in Uruguay.  On the other hand, cultivation of drugs and production of precursor chemicals are not problems in Uruguay.  The Government of Uruguay (GOU) has cooperated with the USG on a number of narcotics investigations and control programs.  Uruguay is a party to the 1988 UN Convention.

II.  Status of Country

Economic stability, unrestricted currency exchange, and longstanding bank secrecy laws have made Uruguay an attractive location for bank deposits primarily for Argentines and Brazilians.  These conditions may also facilitate drug money laundering, but there is little information to determine the extent.  Uruguayan law requires that banks and exchange houses record all transactions in excess of $10,000.  The central bank, however, does not monitor or review the activities of financial institutions, including the exchange houses.  Previous investigations and trials with the cooperation of Uruguayan authorities have shown that Colombian drug cartels laundered money in Uruguay.  Money laundering itself is not a crime under Uruguayan statutes, unless the launderers acted as accessories to crimes recognized under the law, such as narcotics trafficking.  In 1994, the Uruguayan parliament considered a comprehensive updated version of the 1974 counternarcotics law which included anti-narcotics money laundering language.  Although approved by the Senate, this legislation did not reach a vote in the lower house.

III.  Country Actions Against Drugs

Policy Initiatives.  Legislation to regulate narcotics money laundering failed to reach the floor of the Chamber of Deputies before the conclusion of the parliamentary session in mid-October, 1994.  The USG-supported Joint Information Coordination Center (JICC), which includes the Counternarcotics Police, the Coast Guard, and the Customs Service became operational in late 1994.

Accomplishments.  Uruguay's senate ratified the UN Convention in September, 1994, completing Uruguayan legislative action; thus, the only pending step is the deposit of the instrument of ratification.  A program and timetable to meet the Convention's objectives will be prepared by the incoming Sanguinetti Administration.  The GOU has approved all recent USG narcotics-related extradition requests (however, Uruguayan judges refuse to grant extradition requests based on money laundering alone, because money laundering is not a crime in Uruguay, unless tied to certain crimes specified under the law).  The GOU also has approved Argentine extradition requests for narcotics traffickers.  A counternarcotics assistance treaty with the UK entered into force January 20, 1994.

Law Enforcement Efforts.  Uruguayan law enforcement agencies are ill equipped, underpaid, and poorly trained to implement aggressive law enforcement operations against narcotics trafficking.  In a reaction against human rights abuses during the military dictatorship, the courts and the GOU strictly respect privacy rights.  According to GOU sources, Uruguayan authorities in 1994 charged 89 persons with drug crimes and seized only about 31 kilos of marijuana, 19.5 kilos of cocaine, 142 grams of coca leaf, and twelve marijuana plants.

Corruption.  Uruguay's ethics law for public officials (Ley Cristal) represents an effective deterrent against corruption.  However, low salaries for lower ranking officials presents a potential for corruption.  In addition, each police officer or customs agent is held personally responsible for damages related to official actions -- which serves as a further impediment to vigorous enforcement of anti-narcotics laws and regulations.  As a matter of government policy, the GOU does not encourage or facilitate in any way illicit production or distribution of drugs or other controlled substances, or the laundering of drug money.  There is no evidence that any senior GOU official engages in drug production or distribution or money laundering.

Agreements and Treaties.  The USG and the GOU have a valid extradition treaty signed in 1973.  The US-Uruguay MLAT entered into force in May, 1994.  Similar bilateral legal assistance agreements signed with Spain, the UK, and Brazil are still under consideration by the Uruguayan parliament.  The Uruguayan Senate ratified the 1988 UN Convention in September, completing the domestic ratification process.  Uruguay will formally become a party to the Convention upon deposit of its instrument of ratification.  Uruguay is a party to the 1961 Convention, the 1972 Protocol, and the 1971 Convention.

Drug Flow/Transit.  Seizures of cocaine in Uruguay and testimony of traffickers regarding their routes and plans for distribution demonstrate that drug traffickers are increasingly using Uruguay as a transit point for shipments of illegal drugs.  In one case, three Nigerian citizens who boarded an Aeroflot flight in Montevideo were arrested in Moscow for cocaine possession.

Domestic Programs.  Private organizations and local governments are responsible for implementing almost all demand reduction and drug treatment programs in Uruguay.  Lacking adequate funding, the National Commission for the Prevention and Repression of Illicit Traffic and Abuse of Drugs, which coordinates the GOU's drug strategy, has been unable to organize a nationwide demand reduction program.  Under the FY-93/94 USG-GOU narcotics bilateral assistance agreement, there is funding for a demand reduction pilot program for Montevideo and the interior.  In 1994,  at the instance of First Lady Julia Pou de Lacalle, the GOU established the first public drug treatment facility which, when it becomes operative, will provide residential treatment for 30 drug addicts.

IV.  USG Policy Initiatives and Programs

USG Goals and Objectives.  The USG counternarcotics effort in Uruguay focuses on money laundering, drug transit, demand reduction, and precursor chemical control.  The GOU's reception of the US MLAT implementation team and the GOU's preparation prior to the visit demonstrated the GOU's willingness to cooperate with the USG on law enforcement issues.  The JICC began operating in 1994 and will increase the capability of the US and Uruguay to exchange information as the system expands to encompass additional GOU agencies and locations.

Uruguayan law enforcement agencies continue to focus more of their intelligence collection efforts on drug trafficking.  GOU police units who have attended USG law enforcement training courses have made several arrests of international narcotics traffickers.  However, GOU agencies have not made large seizures of illegal drugs to accompany the arrests.  The GOU has cooperated with the USG on the goals and objectives of the bilateral narcotics agreement.

Road Ahead.  The inauguration of a new administration in March, 1995 provides a unique opportunity for Uruguay to join with other nations of the region which have already declared money laundering to be a criminal offense.  Efforts are needed to convince a larger segment of the GOU and the Uruguayan public that narcotics trafficking and drug abuse pose serious threats to Uruguay's society.  Primarily because of other economic and political problems in Uruguay, the GOU and the public in general thus far have focused only limited attention to the growing threat posed by illegal drugs.


I.  Summary:  

Venezuela is a major transit country for drugs produced in Colombia and destined for the US and Europe.  It is also a bridge for essential chemicals used by the Cali drug mafia to process cocaine.  Venezuela has succeeded in containing its 1994 illicit crop cultivation.  The Venezuelan government cooperated with the USG in locating and aerially eradicating with herbicides about 1,100 hectares (ha) of opium poppy and coca in the Sierra de Perija region.  However, drug traffickers and insurgents from Colombia regularly operate along Venezuelan borders.  Incidents of corruption have shaken public confidence in the Venezuelan judicial system and other democratic institutions.  

President Rafael Caldera took office in 1994; he replaced the interim President Ramon J. Velasquez, elected by Congress to complete Carlos Andres Perez' suspended term.  Former President Perez is on trial under house arrest on charges of embezzlement.  Weaknesses in the Venezuelan judicial system were evident when the interim president erroneously pardoned a convicted narcotics trafficker, and a judge released all defendants in a major money laundering case.  Drug seizures by Venezuelan law enforcement agencies increased significantly in 1994.  Legislation which would strengthen sanctions against money laundering has been pending in the Venezuelan Congress since 1993.  

The Government of Venezuela (GOV) ratified in 1990 the 1988 UN Convention, with reservations on its extradition provisions.  

II.  Status of Country:

The narcotics threat against Venezuela has broadened to include illicit drug crop cultivation.  With USG technical assistance, the Venezuelan National Guard (GN) identified and destroyed 1,100 hectares (ha) of coca and opium poppy.  

Colombian cocaine, and some heroin, transships Venezuela concealed in containerized shipments on private and commercial maritime vessels and on aircraft.  Increased seizures of cocaine and heroin by Venezuelan law enforcement agencies suggest both better enforcement and increased use of Venezuela by traffickers.  There was an increase in seizures abroad of cocaine which had passed through Venezuela, mainly discovered in multi-ton loads concealed in legitimate cargo.  

Traffickers smuggle essential chemicals through Venezuela to Colombia via major ports and on Venezuela's road and river systems.  Venezuela has not yet established chemical control guidelines that would bring it into compliance with the 1988 UN Convention.  The USG worked with the Venezuelan government to include conspiracy provisions in legislation, bringing the country into compliance with the 1988 UN Convention.  The GOV has criminalized narcotics trafficking, possession, and processing.

 Venezuela has a growing drug consumption problem.  There are plans to conduct a nationwide epidemiological survey to determine the scope of the problem.  Data from the survey will be used to design future rehabilitation and abuse prevention programs.  

III.  Country Actions Against Drugs in 1994:

Policy Initiatives.  Venezuela has signed annual narcotics control agreements with the USG since 1987, and cooperates with neighboring countries in law enforcement efforts.  However, the Venezuelan government lacks a comprehensive narcotics strategy which establishes counternarcotics goals and objectives and which unites the country's fragmented law enforcement agencies to confront the drug problem.  President Caldera appointed in May a new director of the National Drug Commission (CONACUID); in August, he submitted a draft national drug control strategy for presidential approval.  

The USG provides counternarcotics assistance to the Venezuelan National Guard (GN), the Judicial Technical Police (PTJ), the Intelligence Service (DISIP), the Venezuelan Coast Guard, and voluntary anti-drug organizations involved in demand reduction.  The GOV completed two radar facilities in the Caribbean Basin Radar Network (CBRN) and repaired several elements of its national air defense system.  The Ministry of Justice prison reform project augments the Administration of Justice program and the World Bank Judicial Infrastructure Project.  The USG worked with law enforcement authorities to dismantle trafficking organizations tied to the Cali drug mafia.  However, lower level corruption in the GN limited the effectiveness of USG counternarcotics efforts.  

Accomplishments.  The government located and eradicated about 1,100 ha of illicit poppy and coca in the Sierra de Perija region bordering Colombia.  The authorities applied the herbicide glyphosate to the illicit drug crops, using INL-provided Turbo Thrush spray aircraft.  At the same time, a GN task force manually eradicated 26 ha of coca and 86 ha of opium poppy.  

The GOV's 1993 narcotics law increased criminal penalties to 15-25 years imprisonment for narcotics offenses.  It also increased punishment for public officials charged with such crimes.  The law criminalizes money laundering associated with narcotics trafficking, and requires banks to maintain records that are available to law enforcement authorities.  However, the law falls short of 1988 UN Convention standards by failing to criminalize money laundering as a stand-alone crime; it also lacks conspiracy provisions.  Venezuela has enacted laws providing for the forfeiture of property connected with drug trafficking.  Additionally, Venezuelan law allows for such property to be used for anti-narcotics efforts.  The USG has not made any forfeiture-related legal assistance requests to Venezuela in the past year.  The Venezuelan government in a 1992 case-specific asset sharing agreement received $1.3 million. 

The GN, with USG assistance, investigated and arrested over 35 money launderers connected to the Cali drug mafia, but a corrupt judge dismissed the arrest warrants.  The Venezuelan Supreme Court overturned the initial decision and reopened the case.  A re-arrest and prosecution of these money launderers would demonstrate the Venezuelan judiciary's ability to carry out its responsibilities.  

The Venezuelan national constitution prohibits the extradition of Venezuelan nationals to other countries.  Venezuela reserved its acceptance of the extradition articles of the 1988 UN Convention in its 1990 ratification.  The 1993 narcotics law does not change the extradition law, but does provide for the expulsion of foreign nationals convicted of narcotics offenses.  An extradition treaty has been in effect with the USG since 1923, but extradition requests from the US have rarely met with success.

The GOV cooperates with legal assistance requests from other governments.  In 1994, Venezuela expelled seven criminals to Italy, some of whom were charged with narcotics offenses.  A US Coast Guard cutter detained four Colombians on a Venezuela-registered vessel loaded with 900 kilograms (kg) of cocaine.  However, the GOV delayed two weeks in asserting its jurisdiction.  The two-week delay inhibited the functioning of the 1991 Maritime Law Enforcement Agreement.  

The 1993 narcotics law broadens the Venezuelans' authority to control all essential chemicals listed in the Vienna Convention, but the chemical control system still is inadequate.  In one successful example, raids against Holland Chemical International offices induced the company to agreed to stop importing certain precursor chemical into Venezuela, including acetone and toluene.    

Demand Reduction.  The USG and Venezuela signed a Memorandum of Understanding in March 1992 to build public support for joint counternarcotics programs under which the USG supports demand reduction programs conducted by various agencies.  The USG and Venezuela in 1994 signed an agreement for CONACUID to conduct a nationwide epidemiological survey.  It will determine the direction of new GOV rehabilitation and prevention of drug abuse programs.  

Law Enforcement Efforts.  Law enforcement cooperation continued between the USG and the Venezuelan PTJ, GN, and DISIP, with an increase in cocaine seizures, but a slight decrease in heroin seizures.  Cocaine seizures in 1994 totalled 5.1 mt, and cocaine base (basuco) 1.6 mt, up from 2.0 mt of cocaine and 1.3 mt of basuco in 1993.  The 1994 amount of 15.7 kg of heroin is down from the 1993 rate of 18.0 kg.  Police arrested 3,600 persons in 1994, down from 5,100 in 1993.  Police authorities in other countries, including the US, seized over 30 mt of narcotics which traversed Venezuelan ports, concealed mainly in legitimate cargo.  

Corruption.  Corruption has hindered effective counternarcotics efforts.  While the 1993 narcotics law strengthened criminal sanctions against corruption by public officials, including judges, there have been few successful prosecutions, reflecting the corrupting influence of the traffickers.  The GOV does not, as a matter of policy, encourage illicit production or distribution of drugs or the laundering of drug money. The Venezuelans are seeking to use the funds for police training purposes.  A convicted narcotics trafficker, Larry Salvador Tovar Acuna, fraudulently obtained in October 1993 a pardon from interim President Velasquez.  Nine persons, including eight government officials, were arrested following investigations revealing that Tovar's family bribed officials to expedite the pardon.  The USG and Venezuela have filed extradition requests with the Colombian government for Tovar Acuna.  In 1994, prosecution of the money launderers tied to the Cali drug mafia was stalled by suspected judicial corruption.  
Cultivation/Production.  The USG and Venezuela cooperated during 1994 in a comprehensive aerial eradication project, destroying 1,100 ha of coca and opium poppy crops in the Sierra de Perija region of Zulia state near the western border with Colombia.  The Venezuelan GN also participated in overflights to identify more illicit crops and processing facilities in the states of Tachira, Apure, Amazonas, and elsewhere in Zulia state.  The Venezuelan government formally authorized the use of glyphosate to eradicate all illicit drug crops.  

Agreements and Treaties.  Venezuela is a party to the 1961 UN Convention on Narcotic Drugs, as amended, the 1972 UN Convention on Psychotropic Substances, and the 1988 Vienna Convention.  The GOV has signed the Inter-American Convention on Mutual Legal Assistance.  Not yet in force, the Convention provides for multilateral mutual legal assistance in Latin America.  The GOV also participates actively in the deliberations of the OAS Money Laundering and Chemical Control Task Forces.  Venezuela has entered into bilateral agreements with Colombia and other neighboring countries on law enforcement cooperation.  Venezuela has signed annual narcotics control agreements with the USG since 1987.  Venezuela continues to generally meet the goals and objectives of narcotics control agreements, with vigorous performance in eradication, but needs to focus on effective implementation of agreements in maritime law enforcement and chemical and money laundering control.  Prosecution of corrupt officials, covered under bilateral agreements, also requires more GOV attention.  

Drug flow/transit.  Illicit drugs are shipped overland from Colombia to Venezuela.  Couriers carry small loads across the border, while larger traffickers conceal their shipments in containerized cargo.  Evading law enforcement, they ship them by sea to the US and Europe through Venezuela's poorly monitored ports and by air through poorly monitored airports or airstrips.  

IV.  US Policy Initiatives and Programs:  

Policy Initiatives.  The USG's international narcotics control policy is designed to strengthen the GOV's ability to conduct counternarcotics and anti-money laundering operations, to develop a national drug control strategy, and to bolster the Venezuelan legal system's capacity to prosecute cases.  Key to the success of the program is the extent of support from the government leadership for taking stringent measures against traffickers.  

Bilateral Cooperation.  USG counternarcotics assistance has focused on enhancing the investigative and operational capabilities of the GN and the PTJ.  The USG has provided training, equipment, and vehicles.  The USG continues to provide support to the GN's detector dog school, which contributes to regional training initiatives.  US Customs presented a contraband enforcement training program to the GN in 1994.  Judicial and prison reform projects began this year.  There were also continued efforts to develop greater public concern about narcotics trafficking and money laundering.  
Venezuelan control of its airspace is critical to curbing the narcotics trafficking to the US and Europe.  Effective use of the two new CBRN radar units and Venezuela's own air defense system would enhance actions against narcotics trafficking aircraft.  

The Road Ahead.  Successful eradication, increased seizures, and active investigative work indicate that USG programs are improving Venezuelan capabilities.  The USG will continue to pursue the development of a national drug control strategy, reforms of the judicial system, and improvements in the prison system.  With increased resources from the Caldera administration, Venezuela's counternarcotics effectiveness should improve.  Emphasis should remain on adopting a national counternarcotics strategy, establishing Venezuelan control over its borders and airspace, reducing money laundering, reforming the judiciary, and curbing official corruption.  
[CHART:  Venezuela Statistic Tables]
[GRAPHIC:  venezuelan Cocaine/Basuco Seizures 1989-1994] 
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