Index of "International Narcotics Control Strategy Reports"
Index of "Treaties and Legal Information" ||
Electronic Research Collections Index ||
U.S. DEPARTMENT OF STATE
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT
BUREAU FOR INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS
CANADA, MEXICO AND CENTRAL AMERICA 117
Costa Rica 126
El Salvador 130
Belize's uncontrolled coast and large interior give it the potential to be a significant transshipment point for cocaine moving from South America to the United States. It is a limited producer of marijuana. The Belizean police and the Belize Defense Force (BDF) cooperate with USG officials on counternarcotics efforts, and the Government of Belize (GOB) recognizes the problem of drugs transiting through its territory and the contribution drug trafficking makes to domestic crime. However, the GOB does not give high priority to antidrug efforts. Belize has not acceded to the 1988 UN Convention.
II. Status of Country
Contiguous borders with Guatemala and Mexico, dense unpopulated jungle, a long unpatrolled coastline, numerous inland waterways, and a rudimentary drug control ucture make Belize a potentially significant cocaine transshipment point. Existing intelligence on trafficking, although sparse, suggests that Belize -- especially its air space and maritime territory -- may be a significant transit area for cocaine. The withdrawal of British Forces from Belize in October, 1994 removed a major deterrent to drug trafficking through this largely uncontrolled territory.
III. Country Actions Against Drugs in 1994
Policy Initiatives. The GOB's agreement with the USG concerning maritime counterdrug operations is considered to be a model for this type of agreement. In September, the U.S. Coast Guard conducted its first ship visit under this agreement and returned in December for a training mission.
Accomplishments. The activities of Belize's primary counternarcotics unit, the Serious Crimes Squad (SCS), were limited by re-assignment of its members from counternarcotics to crime suppression within Belize City. This shift resulted in limited counternarcotics coverage in rural districts. In March 1994, the police, assisted by DEA, arrested two of the country's biggest cocaine traffickers and seized approximately 115 kgs of cocaine. In December, the traffickers were released because of "weak evidence".
Belize has almost no industries requiring cocaine-essential chemicals, and there is no evidence of chemical diversion.
An investigation by DEA and Belizean police resulted in two seizures totaling 636 kgs of cocaine in January 1995. The lift those busts gave counternarcotics efforts was offset in part by the GOB's decision to prohibit, for environmental reasons, aerial eradication of cannabis.
Money Laundering. Although money laundering is considered a major potential problem in Belize, the country has no laws that criminalize money laundering or regulate the movement of currency. Belizean law allows unrestricted use of bearer-negotiable instruments to conduct financial transactions. Over 1,000 companies are registered under the International Business Companies act (IBC). The Bank of Belize revealed that a significant increase in the amount of U.S. dollars was exported from Belize to correspondent banks. While there is no evidence that Belize is currently an active money laundering location, loose regulations governing off-shore investments are of concern. Belize's asset seizure procedures are cumbersome and little used in drug cases. The Financial Investigation Unit that was initiated in 1993 ceased operations in 1994 because of a lack of funding.
Law Enforcement Efforts. The GOB considers crack cocaine its biggest drug problem, primarily because of the threat it poses -- via crime -- to the tourism industry. However, targeting of major cocaine traffickers by the GOB has not been a priority. The police lack the equipment, training, and staffing to actively target major trafficking organizations.
Corruption. The GOB has not focused systematically on combatting possible official corruption. Contrary to past predictions, anti-corruption legislation was not established in 1994. There is no evidence that the GOB encourages or facilitates illicit production, distribution, or transit of drugs as a matter of policy. Occasional allegations of official involvement in drug trafficking remain unsubstantiated.
Agreements and Treaties. Belize is party to the 1961 Single Convention and the Protocol thereto, but has not acceded to the 1988 UN Convention. Extradition with the U.S. is governed by the 1972 U.S./UK treaty, which remained in effect after Belizean independence.
Cultivation/Production. Belizean police conduct manual eradication of modest fields of marijuana, the only drug produced in Belize. The GOB relies on temporary deployments of INM aircraft to perform the bulk of aerial reconnaissance of cannabis cultivation. In January 1995, the GOB withdrew permission for aerial eradication, citing environmental concerns. INM eradication aircraft were deployed in Belize at the GOB's request when the policy change was announced.
Drug Flow/Transit. A number of factors make Belize an attractive site to transship illicit drugs moving north from South America. Belize has 200 miles of coastline protected by a barrier reef, 200 cays, numerous airstrips, two deep water ports servicing containerized cargo, and land borders with Guatemala and Mexico. The GOB has neither effective maritime enforcement, nor radar capability.
Demand Reduction. The National Drug Abuse Council (NDAC) maintains six offices to provide education on prevention, alternatives to drug use, research and information, legal reform, and treatment and rehabilitation. Through its six district coordinators, NDAC maintains extensive outreach programs in schools and rural communities nationwide. Work continues on the development of a management information system to track the extent of the drug problem.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. U.S. strategy in Belize has been to assist the GOB in developing a sustainable infrastructure that will allow it to effectively combat its drug problems. In addition to equipment and training for the SCS, Joint Information Coordination Center (JICC), and BDF, the USG supports marijuana eradication and drug interdiction.
Road Ahead. Faced with the potential of becoming a substantial drug transit point, Belize will resist drug trafficking primarily through the efforts of the Belize police force supported by the Belize Defense Force. These groups will need USG assistance to continue developing counternarcotics capability. Belize's ability to prevent a resurgence in cannabis cultivation will be severely tested by relying solely on manual eradication teams in light of the January 1995 decision to prohibit aerial eradication.
[CHART: BELIZE STATISTIC CHART]
[GRAPHIC: BELIZE - COCAINE SEIZURES 1990-1994]
Canada remains a conduit for illicit drugs destined for the United States, a destination for drugs imported through the U.S. to Canada, and a popular money laundering point. In February 1994, Canadian law enforcement authorities seized a record five-ton shipment of cocaine in Nova Scotia. The Canadian Parliament, in 1994, drafted a comprehensive counternarcotics bill which expands the number of controlled drugs.
Canada discourages narcotics abuse and trafficking within its borders, and it cooperates closely with the USG and international anti-drug fora to control the illicit drug trade. It is a member the Financial Action Task Force, the Dublin Group and the UNDCP. Canada ratified the 1988 UN Convention in 1990.
II. Status of the Country
Canada enjoys solid institutions, responsive government, a fair judiciary, and competent law enforcement agencies. In this environment, public respect for the law is high, and narcotics abuse, while growing, is still manageable. The Government of Canada (GOC) emphasizes demand reduction, but it also is active in supply control efforts, both within the country and internationally.
Cannabis remains the principal illicit substance of abuse in Canada. Authorities believe that 30 percent of the cannabis consumed is produced locally, up from 25 percent in previous years. Cocaine (including crack) is the second most popular drug. Authorities estimate there are 250,000 cocaine users. GOC authorities are concerned about the growing use of heroin, particularly in the large cities. They estimate there are 35,000-40,000 heroin users.
Canada is a target for drug-related money laundering, due to the openness of its financial system, the high volume of cross-border trade and financial flows between the U.S. and Canada, and the lack of legal reporting requirements for large cash transactions. The USG believes several billion dollars are laundered here each year. Canada has anti-money laundering laws to deter money laundering activity.
GOC authorities believe precursor and essential chemicals are diverted to illicit drug manufacturers, and a portion enters the United States at land border crossing points. This diversion mainly involves precursor chemicals used in the methamphetamine manufacturing processes. Canada has placed a number of precursor chemicals on its export control list, and authorities monitor the trade of these chemicals.
III. Country Actions Against Drugs in 1994
Policy Initiatives. The GOC participates in international antidrug fora, including the Dublin Group, Financial Action Task Force (FATF), the Inter-American Drug Abuse Control Commission (CICAD) of the OAS, and the UNDCP. Canada contributed approximately CICAD in 1994.
Accomplishments. The Canadian Parliament drafted a bill to consolidate Canada's drug control legislation in 1994. The bill provides for a comprehensive framework to control the import, export, production, distribution and use of illicit drugs. It provides for seizure and forfeiture of drug-trade derived assets, and expands the number of controlled drugs. It is expected to be voted on in 1995.
The Royal Canadian Mounted Police (RCMP) streamlined its operations to reduce duplication of efforts, and prioritize its anti-narcotics activities to investigate major drug trafficking organizations. A RCMP representative was added to the Maritime Command Operations Center of the Department of National Defense to enhance the Center's ability to detect maritime drug traffickers in Canadian coastal waters.
Agreements and Treaties. Canada ratified the 1988 UN Convention in 1990 and it is meeting the Convention's goals and objectives. The USG and GOC have a Mutual Legal Assistance Treaty and an extradition treaty. In August, the U.S. and Canada negotiated an asset sharing agreement under which Canada will be required to share seized and forfeited assets with the USG. The agreement is pending signature to bring it into force. The USG has shared forfeited assets with Canada under the MLAT on several occasions. During 1994, Canada extradited numerous individuals wanted in the United States on drug-related charges.
Law Enforcement Efforts. The GOC drug seizure statistics for 1994 are not yet compiled; however, GOC authorities seized a record five-mt cocaine shipment from Venezuela in February 1994. In 1993, authorities seized 2,753 kgs of cocaine, 153 kgs of heroin, 7.3 mt of marijuana and 56.6 mt of hashish. They arrested 10,000 suspects on drug-related charges in 1993. Authorities also seized $21 million in the first six months of 1994 ($9 million in 1993).
Corruption. Public corruption is not considered a significant problem in Canada. The GOC does not condone drug trafficking or the laundering of drug money. GOC officials are prosecuted as a matter of law and policy, if involved in malfeasance of any kind.
Cultivation/Production. GOC authorities believe marijuana is grown for personal use; however, they do not believe any is exported. Law enforcement authorities destroyed 1,200 cultivations of marijuana in 1993.
Drug Flow/Transit. Drugs are smuggled into Canada for use in the domestic market and transshipment to the United States. Some illicit drugs destined for the Canadian market come from or through the United States. Heroin arrives in Canada by air, cocaine is transported from South America via air and maritime conveyance, hashish and marijuana by sea and overland. Traffickers use couriers or hide drugs in commercial shipments. They also use international mail.
Demand Reduction Programs. Canadian drug strategy focuses on demand reduction. A number of government and non-governmental groups offer drug abuse education to target groups deemed to be at risk of using illicit drugs. In 1994, the GOC developed new drug abuse education materials for the aboriginal communities, to meet their special needs.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. Law enforcement cooperation between the GOC and the USG is excellent. Canadian and U.S. Customs work closely together to control drug smuggling, and share enforcement-generated assets and personnel.
The Road Ahead. The key USG objective is to build on already excellent law enforcement cooperation. In 1995, the USG will encourage greater Canadian maritime cooperation in the Caribbean with the U.S., United Kingdom, France, and the Netherlands. The USG also will encourage Canada's continued support and participation in a variety of international fora, including the Dublin Group, FATF, CICAD and UNDCP.
Costa Rica is a transit point for cocaine and heroin passing from Andean producers to Europe and the U.S. Costa Ricans are alarmed by the growing domestic consumption of cocaine and the crime it produces. Evidence suggests that money laundering activities increased in 1994. On taking office in May 1994, President Jose Maria Figueres made counternarcotics an important national priority. He promoted both improved law enforcement and greater regional cooperation. Although the GOCR scored several significant seizures of cocaine, it was hampered by a lack of financial resources needed to develop a professional police force and maintain an inventory of aircraft and boats. Costa Rica ratified the 1988 UN Convention in 1991.
II. Status of Country
Cocaine is smuggled through Costa Rica by small planes, human couriers, speedboats along the coast, and vehicles on the Pan American highway. Limon, the country's busiest port, is a hub for drug smuggling because of its accessibility to Colombia's San Andres island and Nicaragua's east coast. Heroin continues to move through Costa Rica in shipments of a kilogram or more, often hidden on human "mules."
Costa Ricans consistently rate drugs as a top concern and are alarmed by domestic use of crack cocaine, which is cheap, easily obtainable, and engenders crime and corruption. While Costa Rica has adopted a tough anti-drug policy, its law enforcement agencies do not have adequate equipment to deter traffickers effectively.
III. Country Actions Against Drug in 1994
Policy Initiatives. President Figueres has emphasized his determination to deny traffickers the use of Costa Rica as a transit point for drugs. However, his administration's action plan to coordinate counternarcotics among official agencies was not made public in 1994. More vigorous action is needed for the GOCR to meet more fully the goals and objectives of the 1988 UN Convention. President Figueres was actively involved with the other Central American presidents who committed their governments to joint counternarcotics and police training actions.
Accomplishments. In February, GOCR officials cooperated in a money laundering investigation and raid of an exchange house that allegedly laundered several hundred thousand dollars a day. Later, Costa Rica participated in a hemisphere-wide operation against a Colombian-based money laundering network. In April, Nicaraguan and Costa Rican law enforcement officials cooperated on the interdiction of a speedboat loaded with 650 kgs of cocaine. The GOCR participated in a joint investigation with DEA which resulted in dismantling a cocaine transportation organization operating in Costa Rica, Europe, and the U.S. In September, the Costa Ricans, suspecting a drug-cash transfer, arrested a U.S. citizen with $1.6 million that was later discovered to have been from a robbery in the U.S.
Law Enforcement Efforts. The Judicial Police (OIJ) maintains a small, professional counternarcotics unit which specializes in international cases. For domestic enforcement, the GOCR strengthened the National Drug Police (PCD). However, low salaries, insufficient training, high job turnover, and limited resources impede formation of a more effective force. A new law to begin the process of police professionalization went into effect in August. The legislature also approved in 1994 a law authorizing court-ordered wiretaps in drug cases. The Joint Anti-drug Intelligence Center (CICAD) improved collection and dissemination of narcotics intelligence and actively participates in the JICC/Sentry program. In December, the National Drug Council (CONADRO) announced it would create 100 community-based demand reduction committees.
Corruption. The GOCR states that it is committed to prosecute all cases of official corruption, regardless of the offender's rank. No high- level officials have been linked to drug-related corruption, although allegations of corruption have been directed at a few working level officials and police. At the end of 1994, three OIJ agents were awaiting trial for suspected involvement in a drug-related killing.
Agreements and Treaties. In 1993, the Supreme Court of Costa Rica declared the 1982 U.S./Costa Rican extradition treaty "inapplicable." As a result, Costa Rica relies on its domestic extradition law as authority for responding to U.S. extradition requests. During 1994, Costa Rica extradited to the United States seven individuals wanted on drug-related charges, including four Colombian fugitives arrested in the 1992 "Green Ice" sting. Costa Rica's reliance on its domestic extradition law, however, is causing significant problems in the USG/GOCR extradition relationship because of constant changes in internal legal requirements, and the absence of a viable provisional arrest mechanism.
Cultivation/Production. Marijuana is the only drug produced in Costa Rica and is used for domestic consumption. Some 800 ha of cannabis are scattered about the Cordillera de Talamanca region on the Atlantic coast. It is also cultivated along the sparsely populated northern frontier.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. USG goals are to build the institutional capacity of Costa Rican law enforcement agencies to detect and interdict cocaine and heroin shipments, eradicate marijuana production, advance drug awareness programs, and strengthen regional and international counternarcotics cooperation. Specific objectives include additional training for the PCD, professionalization of the counternarcotics police, support for CICAD (JICC), and improvements in operational and maintenance capabilities of the air and maritime sections.
Bilateral Cooperation. During 1994, the USG contributed maintenance supplies to the Ministry of Public Security air and maritime sections and surveillance equipment to the OIJ. JICC personnel attended training courses and conferences in the U.S., and DEA sponsored two regional conferences in San Jose on essential chemicals and executive leadership.
Road Ahead. The USG seeks close cooperation with the GOCR to curtail the use of Costa Rica as a transit point, to reduce drug use, and to combat corruption and money laundering. The GOCR should continue building its law enforcement institutions to implement effective judicial action against drug traffickers and money launderers. In addition to strengthening its laws on money laundering, the GOCR should shoulder more of the burden in the fight against narcotics. Finally, the GOCR should pursue appropriate steps to reinstate the U.S.-Costa Rica extradition treaty.
[CHART: COSTA RICA STATISTIC CHART]
El Salvador is a transshipment point for cocaine moving from South America to the United States. President Armando Calderon Sol, elected in June, has spoken out forcefully against narcotics trafficking and money laundering, but he has yet to implement a clear antidrug strategy. The antinarcotics unit (DAN) is struggling through the early stages of its integration into the National Civilian Police (PNC) and will not be fully operational until mid-1995. Small amounts of marijuana are grown in El Salvador for domestic consumption. Cocaine use is not widespread but is growing. The USG is not aware of any significant money laundering activity. El Salvador has ratified the 1988 UN Convention.
II. Status of Country
Its position along an important transit route makes El Salvador vulnerable to exploitation by traffickers. Seizures indicate that significant amounts of cocaine enter El Salvador for transshipment to the U.S. via the Pan American highway, in small planes flying up the Pacific coast, and through maritime ports. This trend was accelerated by reduced law enforcement presence in El Salvador during the transition from the old National Police (PN) to the new National Civilian Police (PNC) that was mandated by the Peace Accord. No discernible money laundering has been detected, but El Salvador's rapidly expanding economy and banking system, its freely traded currency, large remittances from the U.S., and weak judicial system make the country potentially vulnerable.
III. Country Action Against Drugs in 1994
Policy Initiatives. This was a year of transition for the GOES and police, especially the antinarcotics unit. After taking office in June, President Calderon Sol was slow to name some key antidrug officials, and he did not establish an effective antinarcotics policy. The GOES did not actively implement counternarcotics measures that had been the subject of legislative action prior to 1994: the transfer of the counternarcotics unit to the PNC and implementation of the country's modern anti-narcotics law.
Law Enforcement Efforts. The decline in cocaine seizures from 8.1 mt in 1993 to 400 kgs in 1994 was due primarily to law enforcement problems. The transition from the old PN to the PNC gave the country a better trained professional police force but at the cost of valuable experience. The DAN's capabilities were eroded by disputes among the GOES, the FMLN, and the UN mission (ONUSAL) over how to implement its integration into the PNC. All experienced members of the DAN will be required to train for five to ten months at the new police academy. Most will probably not be returned to the DAN and will be replaced by new officers.
Corruption. The Calderon Sol administration has taken a strong public stand against corruption. Two ministers close to the president resigned after accusations of financial wrongdoing. A senior antidrug official resigned due, in part, to allegations of involvement in corrupt schemes. Investigations of possible narcotics-related corruption in the judiciary were underway at the end of the year.
Agreements and Treaties. The U.S. has a bilateral extradition treaty with El Salvador, but no narcotics-related extraditions have been requested. The GOES acceded to the 1988 UN Convention in 1993 and passed implementing legislation shortly thereafter, but the GOES has not yet taken significant action to implement these laws.
Cultivation/Production. Marijuana for local consumption is the only drug produced in El Salvador.
Demand Reduction. The GOES has no major demand reduction programs. A private foundation, Fundesalva, which received funding support from USAID, is considered one of the best in the region at promoting drug awareness.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. The USG is working to increase GOES awareness of the importance of drug control efforts. We are also making a major effort to maintain a functioning antinarcotics unit as the DAN's experienced members pass through the police academy, and new, inexperienced PNC officers and agents are rotated in. DOJ/ICITAP funds an American trainer to provide dedicated narcotics training at the police academy. INM funds a program to train Salvadorans to assume responsibility for counternarcotics training. The USG signed a new agreement in March with the GOES to provide $129,000 in INM funds for necessary equipment and training.
The Road Ahead. The legal foundations for an effective anti-narcotics program are in place. The primary challenge is to increase the political will of the GOES to combat drugs. The secondary challenge is to maintain the morale and the skills of the DAN during its transition into the PNC. The USG will work closely with the new government to implement the terms of the 1988 UN Convention. We will also press to ensure that Calderon Sol and the new Supreme Court adhere to their commitment to combat corruption and reform the judicial system.
[CHART: EL SALVADOR STATISTIC TABLES]
Situated half-way between Colombia and the United States, Guatemala continues to be a major transit country for cocaine as well as a producer of opium and marijuana. The Government of Guatemala (GOG) recognizes the dangers drug trafficking poses to its society and has developed supply and demand reduction programs. With USG support, specially trained and equipped units of the Guatemalan Treasury Police eradicated 150 ha of opium poppy. Working unilaterally and in cooperation with the USG, the GOG seized 1.9 mt of cocaine in 1994.
II. Status of Country
With hundreds of unmonitored airfields and a good network of roads leading to Mexico, Guatemala became the Colombian cartels' choice in Central America for cocaine transshipment in the early 1990s. As GOG/USG air interdiction units repeatedly captured light, cocaine-laden aircraft, traffickers shifted to land and sea smuggling.
In the mountainous regions of San Marcos and Huehuetenango, indigenous farmers cultivate opium poppy in small, isolated plots. The continuing insurgency, plus difficulties in communications and logistics, complicate eradication efforts. Nonetheless, GOG ground eradication and U.S.-supported aerial eradication have reduced opium poppy crops to negligible levels. There are no reports of heroin labs in Guatemala. The vast Peten region near the Belize border is the site of cannabis cultivation. Small amounts of cannabis are also grown throughout the country for domestic consumption. USG-trained Department of Anti-Narcotics Operations (DOAN) units in both the highlands and the Peten specialize in manual eradication and drug-related investigations.
Drug and alcohol education groups estimate that 25 percent of all adults suffer from chemical dependency, primarily alcohol abuse. However, illicit drug use has increased markedly over the last three years, contributing to the country's extremely high level of violence.
The actual amount of drug money laundering through Guatemala is unknown, although one financial exchange house was temporarily closed as part of a multinational crackdown on a known Cali-based organization. Money laundering has not been criminalized, and the lack of controls make the potential for financial crime quite high.
There is no law in Guatemala regulating chemical imports. The level of trafficking in essential chemicals is unknown. However, diversion of precursor chemicals may be rising.
III. Country Actions Against Drugs in 1994
Policy Initiatives. President de Leon Carpio appointed the Vice President to head a commission to provide counternarcotics policy direction. The GOG provided $150,000 to support the National Council for the Prevention of Alcohol and Drug Addiction (CONAPAD) which coordinates antidrug public information campaigns. Recognizing the ever-shifting character of cocaine smuggling, at the end of 1994 the GOG was attempting to restructure the DOAN and increase its staff size to improve its investigative efforts, road and seaport inspection, and planning and training. The successful Port Security Program was being expanded from Puerto Santo Tomas to Puerto Barrios. An antinarcotics hotline was established for people to report suspected drug activity.
Accomplishments. Although the GOG is a party to the 1988 UN Convention, it has no comprehensive national drug strategy. Counternarcotics programs are divided among several ministries and are not well coordinated at policy levels. Nonetheless, the GOG sustained credible and aggressive interdiction and eradication programs.
Law Enforcement Efforts. Although no detected air smuggling events occurred in Guatemala in 1994, several suspect planes by-passed Guatemala and continued into Mexico. To maintain a deterrent posture, DOAN air-mobile units responded to several tracks that violated Guatemalan airspace. The DOAN -- independently and with U.S. assistance -- has been successful in targetting major trafficker organizations which have become fragmented and difficult to investigate. In 1994, the Ministry of Government developed a plan to annually train 500 National and Treasury Police members by implementing internationally designed curricula, including counternarcotics courses.
The 1992 narcotics law permits government seizure of assets directly involved in narcotics offenses. However, this provision has not been tested in court. The constitution prohibits confiscation of other trafficker assets.
Corruption. Corruption is a major problem in Guatemala. The GOG does not, as a matter of policy or practice, encourage or facilitate the production or distribution of illicit narcotics or laundering of drug money. Corruption in the courts, however, is a major problem that the administration has begun to tackle with USG-backed initiatives. Despite the authorization of special narcotics courts, the Supreme Court did not take action to establish them.
Agreements and Treaties. Guatemala is party to the 1961 UN Single Convention on Narcotic Drugs and its 1972 Protocol, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Convention. While aggressive interdiction, eradication and investigation by the GOG are fully consistent with the goals of the 1988 Convention, many of its clauses, including money laundering and chemicals controls, have not been implemented through necessary legislation. The new Congress has begun to provide better budgetary support to counternarcotics programs, and the de Leon administration is meeting the goals of its bilateral drug control agreements with the United States.
Cultivation and Production. From a high of 2,500 ha in 1991, opium poppy in Guatemala has been systematically reduced to an estimated 50 ha. Located in narrow ravines, at elevations up to 10,000 feet and measuring less than one-fifth of a hectare, poppy fields are increasingly difficult to distinguish from legitimate crops with similar characteristics. From May to February, three separate poppy crops can be harvested. During 1994, aerial and manual eradication destroyed 75 percent of the estimated 200 ha of opium poppy and half of the estimated 200 ha of cannabis.
Drug Flow/Transit. Guatemala is a major transit country of cocaine from South America to the United States. Reports suggest that traffickers have shifted emphasis away from light plane deliveries to vehicular and maritime (both container and small boats) methods of shipment. Major seizures at the port of Santo Tomas illustrate that sea-going containers and boats are being used increasingly.
Domestic Programs. USAID manages a narcotics education project to support workshops and drug prevention activities through training, technical assistance, and funding of private and public sector groups, including CONAPAD. At a recent USG-funded workshop CONAPAD developed a broad-based strategy to address drug awareness and education, but follow-up has been hindered by CONAPAD's limited financial resources. There are several small private demand reduction organizations in Guatemala. The GOG is against legalization of drugs and continues to support -- albeit in a small way -- drug education programs.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. Many of Guatemala's current counternarcotics programs began as USG policy initiatives. There is moderate optimism that Guatemala's courts will be reformed. As the peace process continues, such reforms will need to progress quickly. In addition to destroying fields that may be inaccessible to aircraft, Treasury Police units add a law enforcement presence in growing areas and occasionally make arrests of growers. With the opium poppy crop now under control, a continuing suppression program is to be implemented using ground eradication and occasional TDY support of INM spray aircraft.
Bilateral Cooperation. Bilateral cooperation counternarcotics programs are generally satisfactory, given the limited resources of the GOG for public security. Results in extradition cases of suspected traffickers have been mixed. One trafficker was extradited in 1994 and three narcotics-related cases were in various phases of processing at year's end. It is unclear if recent judicial reforms will make the extradition process more efficient.
The Road Ahead. Major cocaine transshipment is expected to continue. With USG assistance, the GOG will develop effective investigative and law enforcement units to control transshipment. Progress in judicial reform will lag behind. Essential chemical diversion and money laundering could become significant problems if effective legislation is not introduced and passed soon. Opium poppy and cannabis cultivation will be controlled through combined USG/GOG efforts. The GOG will increase public education campaigns against drug abuse which will grow as traffickers pay for transportation support with cocaine for local sale instead of dollars. This internal cocaine trafficking will fuel domestic violence and strain even more the already shaky civilian police force.
[CHART: GUATEMALA STATISTIC TABLES]
[GRAPHIC: COCAINE SEIZURES 1989-1994]
There is significant land and maritime transit of drugs through Honduran territory, but airborne transit is minimal. Marijuana is the only drug produced in Honduras, and it is for local consumption. Honduran police and armed forces cooperate readily with DEA, but their efforts are hampered by inefficiency, corruption, and lack of expertise in the complexities of counternarcotics operations. There is limited money laundering activity in Honduras. Honduras is a party to the 1988 UN Convention.
II. Status of Country
Honduras straddles the Central American isthmus through which drugs from South America pass via land and water routes on their way to the U.S. Vehicles can cross Honduras on the Pan-American highway in a few hours. At the borders, low-paid officials are susceptible to corruption, which, combined with limited custom controls and the large volume of legitimate vehicular commercial traffic, makes Honduras a low-risk transit point for drugs.
The small Honduran Navy is ill-trained for counternarcotics operations, and patrols by its boats are restricted by limited funding for fuel and other expenses. Honduras' Bay Islands have a long tradition of smuggling and limited government presence. Honduras' active fishing fleet provides perfect cover for maritime trafficking. Traffickers conceal drugs in containers of frozen seafood which, owing to risk of spoilage, are not routinely inspected.
Airborne transit of drugs is limited by the Honduran Air Force, which shot down drug planes on three occasions in the past decade, and by the country's scarcity of clandestine strips connected by good roads. Money laundering may be growing, but the extent of the problem is unknown. Legislation to criminalize money laundering was included in an overall bank reform effort that was bogged down in congress at the end of the year. It is expected to be passed in 1995. There is no law on essential chemicals.
III. Country Actions Against Drugs in 1994
Policy Initiatives. The GOH created a new elite counternarcotics division in the police and an autonomous narcotics prosecutor's office. INM funding in support of Honduras' Joint Information Coordination Center (JICC) was matched by GOH funds.
Accomplishments. Honduras recognizes that drug trafficking is a threat to national sovereignty. Achievements in 1994 include the first asset seizure action, a demand reduction initiative on the Bay Islands, and the agreement by the Central American presidents to create a regional counternarcotics organization which, when realized, will include a regional counternarcotics training entity in Tegucigalpa.
Law Enforcement Efforts. DEA continues to work closely with Honduran law enforcement agencies. Without this cooperation, few, if any, narcotics cases would be successfully concluded. In recent years, the USG devoted $190,000 to the JICC, an amount exceeded by the GOH contribution of $212,000. DEA has described the Honduran JICC as the best of its size in Latin America.
Corruption. New anti-corruption legislation was being drafted at the end of 1994. Corruption exists, but it is difficult to estimate its extent. The administration of President Reina has taken a strong public stand against corruption.
Agreements And Treaties. Honduras has a counternarcotics master plan patterned on the 1988 UN Convention, to which it is a party. Honduras is also an active member of CICAD (Inter-American Drug Abuse Control Commission) and has bilateral agreements with Mexico, Belize, Jamaica, Venezuela and Colombia. Honduras has a bilateral extradition treaty with the U.S. There are no agreements with the U.S. on money laundering or precursor chemicals, but Honduras has signed a tax information exchange agreement with the U.S. The GOH has made progress in accomplishing the goals of its bilateral counternarcotics agreements with the U.S.
Domestic Programs. The country's main addiction problems are glue-sniffing and alcohol, although consumption of crack cocaine and marijuana are also in evidence. Recognizing the potential for growth in domestic cocaine consumption, the GOH supports an active demand reduction program coordinated by the Institute for the Prevention of Alcoholism and Drug Abuse which works with private sector groups as well as the Ministries of Public Health and Public Education. The GOH is engaged in antidrug activities to the extent possible, given limited resources, corruption and endemic inefficiency.
IV. U.S. Policy Initiatives and Programs
The goal of U.S. policy is to help establish an institutional capability within the GOH to suppress the trafficking, consumption and export of illicit narcotics. INM funds are expended in support of the JICC, a drug canine unit, supplies and equipment, vehicle maintenance, radio repeaters, demand reduction, and the formation of an interdiction unit called the Bay Island Task Force.
The Road Ahead. The USG believes Honduras is committed to the antidrug fight. However, without USG assistance, the GOH lacks the resources, equipment, and trained personnel for effective counternarcotics operations. Honduras will continue to require assistance to combat use of its territory by narcotraffickers.
[CHART: HONDURAS STATISTIC TABLES]
Mexico is a major source country for marijuana and heroin available in the U.S. and is the principal transit route for cocaine entering the U.S. It is also a major money laundering center. It is therefore critical to U.S. drug control efforts. The Government of Mexico's (GOM) counternarcotics effort had mixed success in 1994, the final year of the Salinas administration. While heroin and precursor chemical seizures and the destruction of clandestine labs increased, cocaine seizures and illicit crop eradication declined from 1993 levels. The armed insurrection in Chiapas, along with the assassinations of two high-ranking members of the Institutional Revolutionary Party (PRI), shocked the nation, and diverted some GOM attention and resources from anti-drug programs.
There was good cooperation between Mexican and U.S. law enforcement agencies, notably in cocaine interdiction, but the interception of drug-laden cargo jets is one of the most difficult and critical challenges currently facing the GOM. The USG continued to provide technical advice and training funded by the GOM to personnel of the Mexican National Institute to Combat Drugs (INCD). The new President of Mexico, Ernesto Zedillo vowed to combat drug trafficking and unveiled an ambitious plan for judicial reform, which the Mexican Congress swiftly approved. The new Attorney General has also pledged to pursue institutional reform of Mexican law enforcement agencies to counter official corruption and strengthen legal controls over money laundering and precursor chemicals.
II. Status of Country
Mexico is a major supplier of both heroin and marijuana to the U.S., supplying 20 percent of the heroin seized in the U.S. (based on number of seizures), and 60-80 percent of the foreign-grown marijuana available in the U.S. The porous 2,000 mile U.S./Mexico border is ideal terrain for drug smugglers, and facilitates the entry of over half of all cocaine entering the U.S. Mexico is also a significant producer of methamphetamine, "designer" drugs, and illicit steroids. Mandrax (methaqualone) continues to be manufactured clandestinely. In the wake of tightened U.S. control on precursor and essential chemicals, it has become a transit country for these chemicals.
Although illicit drug use in Mexico remains relatively low, the results from a 1993 national drug use survey showed one-time cocaine use had risen over baseline data (1988). Mexican society and the government are alarmed over increasing violence evidenced by incidents such as the drug-related bombing attempt at a hotel in Guadalajara, a series of kidnappings of wealthy individuals, and a number of execution-style killings in Tijuana and other northern cities. Many Mexicans believe that organized crime is behind the still-unsolved assassination in September 1994 of PRI Secretary General Jose Francisco Ruiz Massieu.
Mexico is a major money laundering center, as a mid transfer point for narcotics proceeds being sent to Colombia as well as a destination point for laundering proceeds from narcotics sales by Mexican drug organizations. Although the GOM has increased sanctions against money laundering in its fiscal code, the financial system remains vulnerable to drug-related transactions. Foreign and domestic currency movements are unmonitored and there are no mandatory reporting requirements relating to cash deposited in banks or wire transfers. However, the GOM has imposed some controls. Individuals entering the country with the equivalent of $10,000 or more in cash must declare it to GOM authorities.
Mexico produces and imports precursor and essential chemicals used in the production of heroin, cocaine and other illicit pharmaceuticals. While the chemicals used in heroin production are manufactured locally, Mexico imports excessively large amounts of potassium permanganate, an essential ingredient in the conversion of coca paste to base, and ephedrine, which is used to produce methamphetamine. The GOM made record ephedrine seizures in 1994.
III. Country Actions Against Drugs in 1994
Policy Initiatives. Under President Carlos Salinas de Gortari, Mexico declared drug trafficking a grave threat to the health of its citizens and its national security. Mexico's antidrug strategy focused on demand reduction, interdiction, eradication, and international cooperation. The GOM's performance in these areas in 1994 was consistent with Mexico's obligations under the 1988 UN Convention, to which it is a party, but more progress is needed in areas such as money laundering, chemical controls, and crop eradication. President Ernesto Zedillo Ponce de Leon, who took office on December 1, 1994, reaffirmed the GOM's commitment to combatting drug trafficking and unveiled an ambitious plan for judicial reform within a few days of his inauguration. The primary goals of this initiative are to make Mexico's law enforcement and justice system officials more accountable to the Mexican people; to establish a greater degree of separation of powers; to rationalize Mexico's duplicative systems of public security; and to eliminate official corruption within law enforcement and the judiciary. The legislative reform package was approved by overwhelming majorities in both houses of congress, and will take effect as soon as it has been approved by the required number of Mexican state legislatures.
The GOM and the USG signed a Financial Information Exchange Agreement (FIEA) in October 1994 to facilitate the exchange of information on currency transactions through financial institutions to combat illegal transborder activity. Unfortunately, Mexico has no legal requirement that financial institutions report large currency transactions to banking or law enforcement authorities and no requirement that separate records of such transactions be maintained. Several major bilateral money laundering investigations are being conducted by the GOM's treasury department (Hacienda) in cooperation with the IRS, U.S. Customs, DEA, and FBI.
Accomplishments. Mexico's multi-faceted CN effort in 1994, yielded mixed results. Cocaine seizures fell to the lowest level of Salinas' six-year administration and drug crop eradication also declined. Some of the performance problems and loss in momentum in drug control can be attributed to the assassinations of two political leaders, the revolt in Chiapas, presidential elections, and subsequent change in administration.
Mexican authorities seized 22 mt in 1994 (down from 46.2 mt in 1993). Marijuana seizures held steady at 392 mt. Heroin seizures rose by 555 percent, from 62 kgs to 297 kgs. Part of the decrease in cocaine seizures was the result of the inability of the GOM to interdict and seize, even when detected, the traffickers' fast-moving cargo and corporate jets, hauling multi-ton loads of cocaine into Mexico from South America. Only one such aircraft has been captured to date, after being disabled during landing. These aircraft are also believed to transport bulk shipments of currency from Mexico to South America. The increase in heroin seizures is credited to the effective use of federal highway checkpoints and searches at ports of entry, as well as a significant seizure of Asian heroin in Baja California in early 1994.
Reforms to the Mexican Penal Code, promulgated in 1993, entered into force in February 1994 raising the maximum drug penalty to 40 years in prison. The most severe penalties apply to narcotraffickers considered to be participating in organized crime.
Approximately 12,415 ha of opium poppy were cultivated in Mexico in 1994, an increase from the 11,780 ha estimated to have been cultivated in 1993. The GOM reported eradicating 11,036 ha of opium poppy in 1994, down from 13,015 in 1993. USG experts estimate that approximately 6,620 hectares of opium poppy were eradicated effectively in 1994 ("effective eradication" rates are an estimate of the actual amount of drug crop destroyed, factoring in replantings after spraying or cutting, repeated spraying of one area, etc.). Net production of opium gum, after eradication, is estimated at 60 mt, up from the 1993 estimate of 49 mt.
Approximately 19,045 ha of marijuana were cultivated in Mexico in 1994, down from 21,190 ha in 1993. The GOM reported eradicating 14,227 ha of marijuana in 1994, down from 16,645 ha in 1993. USG experts estimate that approximately 8,495 ha of marijuana were eradicated effectively in 1994. The decrease in eradication was due, primarily, to the Mexican military's preoccupation with the Chiapas crisis. Net production of marijuana (dried/usable), after eradication, is estimated at 5,540 mt, down from 6,280 mt in 1993.
Mexico hosted a conference on regional approaches to drug control in Central America in January 1994. The annual U.S./Mexico Binational Commission (BNC), which consists of 14 working group sessions, including one on Legal Affairs and Anti-Narcotics Cooperation, was held in Mexico in May.
The USG and GOM signed several new bilateral law enforcement agreements in 1994: a simultaneous criminal investigation program (September) to achieve greater efficiency in information exchange in cases involving potential criminal tax offenses; the Financial Information Exchange Act (October) to combat financial crimes on both sides of the border, especially by drug traffickers; and an anti-abduction treaty (November), in response to ongoing GOM concerns over the issue of transborder abductions.
Law Enforcement. Close law enforcement cooperation between the GOM and USG continued throughout 1994. The interdiction of cocaine shipments by the Northern Border Response Force (NBRF), or "Operacion Halcon," remained the focus of bilateral interdiction efforts. NBRF operations intercepted 18.5 mt of cocaine (including 2.5 mt from a Caravelle cargo jet captured on the ground in August), 11 aircraft, 2 vessels and 48 vehicles, and resulted in the arrests of 95 traffickers.
The PGR launched three separate law enforcement surge actions in the states of Sonora, Chihuahua and Michoacan to disrupt air and land drug movement. This type of operation is unprecedented in Mexico's counterdrug efforts in terms of the massive logistics involved, as well as the degree of interagency and bilateral cooperation required in its implementation.
The GOM arrested three key figures in the notorious Gulf (Matamoros) Cartel. Humberto Garcia Abrego, brother of the organization's leader, Juan Garcia Abrego, was arrested on money laundering charges following an intensive joint investigation by the office of the Attorney General of Mexico (PGR), Hacienda, and DEA. Raul Valladares del Angel, a close associate of Juan Garcia Abrego and Carlos Resendez Bertolousi, the financial brain of the Gulf Cartel, were also arrested. In addition, Mexican law enforcement personnel arrested Bernardo Araujo Hernandez, second in command of the Arellano Felix trafficking organization, also known as the Tijuana or Pacific Cartel. Miguel Angel Felix Gallardo, one of Mexico's major cartel leaders, received a 40-year prison sentence for several drug-related crimes, including his participation in the 1985 killing of DEA Special Agent Enrique Camarena and his Mexican pilot. In addition, major drug fugitive Juan Chapa Garza was deported in 1994 to face prosecution in the United States.
The PGR/DEA bilateral working group on precursor chemicals carried out investigations and seizures during 1994 which documented that at least 100 mt of ephedrine were imported into Mexico in 1994. Mexican drug cartels find the ephedrine/methamphetamine business attractive because the profit margins exceed those of cocaine, and they are not dependent on the Colombian cartels for their supply. The Mexican Congress adopted only minor changes in the general health law, which still lacks sufficiently severe penalties to be an effective control regime.
The GOM confiscated over $18 million in general assets from suspected drug traffickers, including the freezing of local and regional bank accounts. Many of these seizures resulted from bilateral investigations.
President Zedillo named Antonio Lozano Gracia as the new attorney general in December. Lozano was given a mandate by the President to clean up the Mexican justice system, beginning with his own ministry (PGR). Lozano is a highly respected legislator from the opposition National Action Party (PAN); he is the first opposition party member to hold a Cabinet-level position in a PRI Administration. This was a bold move by Zedillo and should enhance his government's ability to pursue legal and judicial reform and to uncover official corruption.
In 1994, two U.S. Coast Guard/Mexican Navy coincidental operations were conducted (one in the Gulf of Mexico and one on the Pacific coast). Both were successful regarding information sharing, professional exchanges, shipriders, and direct communications. These operations have grown from a single U.S. Coast Guard cutter and one Mexican Navy vessel, to recent operations of two US Coast Guard cutters and one aircraft with six Mexican Navy patrol boats and three aircraft. Despite this cooperative effort, no seizures were made in 1994.
Corruption. The GOM does not, at a matter of policy, encourage or facilitate production or distribution of illicit drugs or money laundering. Although former Attorney General Humberto Benitez Trevino, appointed in May, announced a nationwide program to purge the Federal Judicial Police of corruption and human rights abuses, corruption remains deeply entrenched. Eduardo Valle Espinoza, a former special advisor to the PGR, alleged that Mexico was living under "a narcodemocracy." He was particularly critical of the GOM's inability to arrest drug trafficker Juan Garcia Abrego.
In August, the GOM captured a Caravelle cargo jet which had been used to transport cocaine to Mexico from South America. Although initial reports indicated that up to ten metric tons were aboard the Caravelle, authorities reported the seizure of only 2.5 mt. A PGR investigation of this inconsistency has been inconclusive.
Agreements and Treaties. Mexico has bilateral narcotics accords with 21 countries and is a party to the 1988 UN Convention. Mexico is also a party to the 1961 UN Single Convention on Narcotic Drugs and its 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. Mexico also signed the OAS Declaration and Program of Action of Ixtapa which commits signatories to enact comprehensive antidrug programs, including money laundering and chemical controls.
The U.S./Mexico extradition treaty dates from 1978. Extradition proceedings in Mexico are generally slow. Mexican policy is not to extradite its nationals, such as fugitive Raul Valladares del Angel, who is wanted on drug charges in Texas. However, the GOM is working to improve domestic prosecution of such individuals under Mexican law, as an alternative to extradition. Unfortunately, because of limitations in Mexican law on the use of information and evidence obtained through such sources as wiretaps, confidential informants, and cooperating co-defendants, it is extremely difficult, if not impossible, for the USG to pursue the domestic prosecution of narcotics traffickers in Mexico. Mexico extradited six American fugitives and deported several others to the U.S. during 1994; several of these were narcotics cases. The USG currently has requests pending for the extradition of several suspected drug traffickers. The U.S./Mexico Mutual Legal Assistance Treaty (MLAT) greatly facilitated the exchange of evidence during 1994.
Cultivation and Production. Mexico is a leading producer of opium poppy and marijuana. Mexican marijuana and heroin (processed in Mexico) is destined to the U.S. The highest percentage of illegal drug crop cultivation was in the states of Sinaloa, Jalisco, Guerrero, Michoacan, Sonora, and Nayarit. While the GOM made no crop estimates and set no destruction goals in 1994, it compiles monthly eradication figures. The Secretariat of National Defense used imagery from monthly aerial survey flights conducted by the Mexican Air Force to plan manual eradication efforts by the Mexican Army.
Drug Flow/Transit. Traffickers reacted quickly in 1994 to detection operations targeted at their transportation networks. In response to NBRF interdiction program successes early in the year, traffickers increased use of high-speed cargo jets. Corporate and cargo jet aircraft can generally outrun the detection and tracking assets available to Mexico. They also blend in with commercial cargo and passenger aviation, making identification difficult. The payload capacity of these cargo jets permits one flight to replace 10-15 general aviation flights. In response to the increased use of high-speed cargo jets, Mexico coordinated multi-agency response plans and implemented procedures to track and identify executive commercial jet aircraft. The PGR is developing a night-flying helicopter interdiction capability to counter trafficking flights at dusk or during the night. The USG is providing equipment and instruction to the PGR.
Demand Reduction. There is an extensive network of government, volunteer and community organizations involved in drug prevention, research, treatment, and education in Mexico. Results published in October from the national drug use survey (financed partially by the USG) indicated that cocaine consumption had risen slightly among one-time users since the last survey in 1988. However, the survey also found that one-time consumption of any illegal drug had fallen from 4.4 percent to 3.9 percent during the same period. The GOM plans to pursue comprehensive drug abuse prevention programs through multilateral organizations, such as CICAD.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. USG narcotics control policy toward Mexico has three objectives: 1) strengthening the political commitment and institutional capability of the GOM to enable it to take effective measures against drug production and trafficking; 2) crippling the trafficking organizations that operate in Mexico by apprehending and prosecuting the trafficker leadership and disrupting or dismantling their operations; and 3) developing cooperative initiatives along our common border to increase the effectiveness of counternarcotics activities.
Bilateral Cooperation. Mexico continued the process of "Mexicanization" (full funding) of its antidrug programs in 1994. Remaining USG funds from prior year commitments were spent on enhancing the PGR aviation maintenance base at Guadalajara, improving communications systems used in the NBRF interdiction program, and analyzing and publicizing the results of the 1993 northern border and national household drug surveys. The Zedillo administration, following the recommendation of the Salinas administration, is expected to extend the lease for 12 USG helicopters being used by the PGR for counternarcotics operations.
The USG provided law enforcement training programs for GOM officials on air, land, and sea interdiction, money laundering investigative techniques, night flights, advanced piloting and customs procedures.
U.S. Coast Guard (USCG) contact with Mexico is primarily through the USCG Attache in Mexico City. The USCG and Mexican Navy are also in the process of exploring possible arrangements to post a Mexican liaison officer at the USCG command centers in Los Angeles and New Orleans. The liaisons would be direct communications links between the USG and the GOM for the execution of search and rescue and law enforcement cases.
The Road Ahead. Drug trafficking poses daunting challenges to Mexico. Despite some notable achievements and considerable investment of human and financial resources, the GOM has not yet effectively addressed the more sophisticated measures taken by international drug traffickers, the expansion in opium poppy cultivation, money laundering, chemical diversion, entrenched official corruption, and narcotics-related violence.
The early actions taken by President Zedillo and Attorney General Lozano are encouraging. The judicial reform package, if fully implemented, would address many of the systemic weaknesses that have undermined the Mexican counternarcotics effort in the past. Close cooperation with the U.S. and other governments in the region will also be critical. The U.S. and Mexican governments already have held senior-level discussions to outline areas for expanded cooperation combatting drug trafficking, chemical diversion, organized crime, money laundering, and other crimes and to improving cooperation in bringing fugitives to justice, extradition, prisoner transfers and domestic prosecution. Bilateral working groups were established to pursue these issues.
The USG will continue to offer technical support to Mexico in strengthening its counternarcotics infrastructure, institutions and interdiction capabilities.
[CHART: MEXICO STATISTIC TABLES]
Nicaragua is a drug transit country that is also experiencing a growing consumption problem. In 1994, the Chamorro government enacted narcotics legislation that brought Nicaragua closer to compliance with the 1988 UN Convention, which it ratified in 1990. Despite this initiative, a weak judiciary and an out-matched police force lack the resources and training to prevent the drug situation in Nicaragua from worsening.
II. Status of Country
The country's isolated east coast, poor infrastructure, poverty, unemployment, and political uncertainties permit easy passage for traffickers. Greater vigilance by neighboring countries will result in a trafficking increase in Nicaragua. Drug use, while negligible, is on the increase, especially on the Atlantic coast where packets of narcotics wash ashore after being dumped from vessels. Marijuana, for local consumption, is the only drug produced in Nicaragua.
III. Country Actions Against Drugs in 1994
Policy Initiatives. The Government of Nicaragua (GON) enacted major antidrug legislation in July to address all aspects of narcotics trafficking including money laundering. The new law upgraded the coordinator of the Interagency Narcotics Committee to a full time position. The committee has yet to meet.
Accomplishments. Although the lack of a DEA office in Nicaragua hampers some counternarcotics operations, Nicaragua's police force has worked in conjunction with DEA in Costa Rica on several successful activities. A local DEA office has been suggested by some GON officials, but has not been formally requested.
Law Enforcement Efforts. A January operation in conjunction with officials from DEA Costa Rica netted 450 kgs of cocaine in an airdrop that led to the arrest of seven Nicaraguans and five Guatemalans. In April, Nicaraguan and Costa Rican authorities, assisted by DEA, seized 650 kgs of cocaine and arrested six individuals from a Colombian vessel. Despite a lack of counternarcotics training, equipment, and funding, the police unilaterally made several drug-related arrests and seizures.
Corruption. The Nicaraguan Judicial System is weak and can not protect judges and jurors from the influence and intimidation of traffickers. In a case against twelve accused traffickers, none was convicted in spite of ample evidence for conviction. Police suspect the outcome of the trial was influenced by drug money. Low police salaries increase opportunities for corruption. Rumors regarding police corruption in May led Minister of Government Alfredo Mendieta to publicly deny police involvement in narcotics trafficking.
Agreements and Treaties. Nicaragua became a party to the 1988 UN Convention in 1990, but has not acted to meet fully the goals and objectives of the Convention. No new agreements were signed in 1994. In September, the GON hosted a regional international drug enforcement conference which resulted in a signed accord of professional cooperation between Central American police agencies. Nicaragua's extradition treaty with the U.S., which dates from 1905, has not been used in recent years.
Drug Flow/Transit. Recent cocaine seizures indicate a substantial increase in cocaine transiting Nicaraguan territory. The Atlantic coast region with its porous coastline, offshore cays, and islands, is heavily used for cocaine transiting from Colombia to North America and the Caribbean.
Domestic Programs. Small narcotics education programs exist, primarily among NGO's. Nicaragua's lack of an effective drug policy and coordination mechanism hampers a more focused effort.
IV. U.S. Policy Initiatives And Programs
Policy Initiatives. The U.S. encourage the GON to bolster its narcotics civilian and police capabilities, but lack of progress on human rights issues precludes any direct USG assistance to the police.
Bilateral Cooperation. Bilateral agreements signed in 1991 and 1992 were recently amended to support demand reduction projects submitted by the Nicaraguan Interagency Drug Council.
Road Ahead. Nicaragua's narcotics problems will continue to increase as police resources fail to match trafficking efforts. The Atlantic coast area will grow as a drug transit point. The USG will press for implementation of the new narcotics law, for greater prosecutorial and judicial accountability in cases involving suspected traffickers, and for implementation of the 1988 UN Convention.
[CHART: NICARAGUA STATISTICAL TABLES]
Panama's progress on drug control during most of 1994 was hampered by a change of administration. Before leaving office, the Endara government passed a new national drug law and established cross-border currency controls. However, it failed to implement specific counternarcotics measures.
The administration of Perez Balladares, which took office in September, adopted a policy of extensive money laundering controls to be implemented in 1995. The new administration did not, however, develop a comprehensive policy for interdiction, demand reduction, crop eradication and corruption. Nonetheless, there was tangible progress in those areas. Seizures of cocaine rose dramatically, augmented by a 3.5 mt seizure in June -- the second largest single Panamanian seizure on record. Panama is a party to the 1988 UN Convention.
II. Status of Country
Panama is a financial and commercial center whose geographic location makes it an ideal conduit for cocaine transiting from the Andean region to the U.S. and Europe. A dollar-based economy, the Colon Free Zone (CFZ), weak controls on cash and commodity imports/exports, and lax incorporation regulations, make Panama particularly vulnerable to the laundering of drug profits. Although drug-related money laundering is illegal, only one case has been prosecuted. The National Banking Commission (CBN) has not detected money laundering in the banking system, and the Attorney General's staff has not carried out sophisticated investigations on its own. Panama's slow judicial system frustrates swift prosecution of traffickers. Despite these drawbacks, the GOP has made progress in interdicting drugs and creating public awareness of drug abuse. The Perez Balladares administration indicated clearly its intention to remedy Panama's institutional flaws. Panama is not considered a major producer of coca, but small amounts have been grown there.
III. Country Actions Against Drugs in 1994
Policy Initiatives. Although Endara's administration lacked specific policy definition and coordination, it passed a national drug law (Law 13) that contained provisions to facilitate investigation and prosecution of narcotics-related crime. The law created two new drug prosecution offices, expanded the definition of money laundering, and re-allocated the burden of proof in forfeiture proceedings.
After taking office in September, the Perez Balladares administration recognized that it must develop effective counternarcotics institutions to implement new laws and policies. It created a national anti-money laundering policy which commits Panama to fulfill its obligations as a party to the 1988 UN Convention.
Accomplishments. Panama is generally meeting the objectives of the 1988 UN convention covering interdiction, demand reduction, chemical control, and narcotics crop eradication. Some progress was also made in money laundering control. However, weak and selective enforcement of existing statutes has prevented the GOP from fully implementing them.
Law Enforcement. Law enforcement agencies continued to expand operations and training in 1994. Some detainees were released from prison on questionable technicalities and others "escaped." Cooperation with DEA was good at the working level. Unilateral drug seizures by the Judicial Technical Police (PTJ) and Customs increased in 1994. There were two USG/Panama maritime interdiction campaigns. Seizures of cocaine increased dramatically and included the second largest cocaine seizure in Panamanian history. Despite recurring leadership problems, the Joint Information Coordination Center (JICC) improved intelligence collection and analysis through innovative training seminars. The JICC provided intelligence for several major cocaine seizures. In the past, Panama has frozen assets at the request of the USG, but frequently has then either lifted the freeze, or failed to follow through with forfeiture of the property.
Money Laundering. In response to USG concerns over money laundering, the Endara administration passed new cross-border currency controls in March. During President Perez Balladares' first month in office, his administration promulgated "know-your-customer" practices for attorneys to prevent abuse of Panamanian corporations. In November, the new administration developed money laundering controls that mandate establishment of a financial investigations unit, a data collection center, and increased regulatory authority for the National Banking Commission. The Panamanian Banking Association endorsed "know-your-customer" practices, and major banks now have compliance officers sensitized to money laundering risks. The GOP is aware of the need to carry out successful investigations and prosecutions of money laundering cases.
Asset Seizure. Although Panamanian law provides for seizure of narcotics-generated proceeds, forfeiture of assets rarely occurs. During 1994, U.S. Customs agreed to share with the GOP approximately $40,000 in seized assets.
Precursor Chemicals. Panama is neither a major producer nor a significant consumer of essential chemicals. It is not a major processing country for cocaine or heroin products. Law 13 establishes penalties for the illicit manufacture, use, and transport of precursors.
Corruption. The GOP does not encourage or facilitate illicit production or distribution of drugs, or the laundering of illicit proceeds. In 1994, for unexplained reasons, charges of narcotics-related corruption were not as prevalent as in the preceding two years. Weak law enforcement follow-through has frustrated efforts to punish corruption within Customs, the police, and the judiciary. However, rooting out corruption is a high profile component of Perez Balladares' antidrug policy. The GOP arrested several PTJ agents allegedly responsible for the October 1994 "escape" of an individual detained on drug trafficking charges.
Agreements and Treaties. Panama is party to the 1988 UN Convention, the 1961 Single Convention on Narcotic Drugs, the 1972 Protocol amending the Single Convention, and the 1971 Convention on Psychotropic Substances. The GOP ratified a mutual legal assistance treaty (MLAT) with the U.S. in 1991, but the U.S. Senate has not given its advice and consent. The National Assembly approved border cooperation agreements with Costa Rica and Colombia in August 1994. The GOP is an active participant in CICAD and participates in the Caribbean Financial Action Task Force (CFATF).
Cultivation and Production. Panama is a small-scale producer of coca leaf. In the Darien region, 90 ha of coca were destroyed by a March 1994 GOP-conducted aerial eradication program supported by technical cooperation from Colombia and the USG. Panama also staged several manual eradication operations against illicit marijuana plantations which are cultivated in small amounts for local consumption.
Drug Flow/Transit. Seizures of cocaine and, to a lesser degree, heroin indicate that drugs are sent to Panama via sea and air, repackaged, and sent out of the country via port or airport facilities. Loads also move overland through Panama to Mexico and the U.S. Most large seizures occurred in the CFZ and in the port facilities that service the CFZ. In September, Perez Balladares named a tough-minded administrator to head the CFZ.
Demand Reduction Program. Drug abuse in Panama (believed to have the highest level of cocaine addiction in Central America) is recognized by the public as a serious problem at all levels of society. Demand reduction efforts are carried out by the National Drug Prevention and Rehabilitation Committee (CONAPRED), the Ministries of Health and Education, and leading NGO's such as Pride/Panama and Cruz Blanca. With the assistance of USG funding, Cruz Blanca developed beneficial drug prevention programs.
U.S. Policy Initiatives and Programs.
Policy Initiatives. The USG assists the GOP to improve the performance of its counternarcotics institutions through the provision of materiel, information, and training. This assistance is aimed at targeting trafficking organizations, thwarting money laundering, and disrupting the flow of drugs and drug funds. The USG also seeks to strengthen Panama's judicial system, encourage revision of laws and regulations, and ensure strict law enforcement.
Bilateral Cooperation. USG and Panamanian law enforcement agencies conducted joint investigations, shared intelligence, and collaborated on the interdiction of illegal narcotics. INM has comprehensive counternarcotics programs with the GOP and supports several extensive narcotics-related assistance projects. USAID's Administration of Justice program continued to improve Panamanian judicial procedures and performance. National Air service personnel received training through USG-funded courses, and 925 police officers were trained in courses in Panama. For ten months, US Coast Guard teams conducted INM-sponsored training of the National Maritime Service (SMN) which also sent 45 sailors to the Naval Small Craft Training School (NAVSCIATTS).
The GOP is making progress toward accomplishing the goals of its bilateral agreements with the USG for maritime law enforcement and chemical control. The PTJ has provided information on suspected essential chemical shipments. In 1994, the GOP extradited one accused drug trafficker to the U.S., and there were five other narcotics-related extradition requests pending.
The Road Ahead. The GOP must take steps to translate its policies into concrete action, particularly in the areas of investigation and prosecution of money laundering and trafficking offenses. For example, it remains to be seen whether the GOP will provide meaningful asset forfeiture assistance to the U.S. and other countries. Enforcement of existing laws should be tightened to promote effective prosecution in the courts. To build effective institutions, the GOP will require foreign assistance to compensate for its limited resources and expertise. The USG's specific objectives for 1995 include implementation of money laundering controls, implementation of cross-border currency declarations, institutionalized coordination of national drug control policies, and tighter customs controls at ports and airports.
[CHART: PANAMA STATISTICAL TABLES]
[GRAPHIC: PANAMA - COCAINE SEIZURES 1989-1994]
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