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U.S. DEPARTMENT OF STATE 
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT
MARCH 1995
BUREAU FOR INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS


	CHEMICAL CONTROLS

Introduction

Except for cannabis and raw opium, all illicit drugs require some processing before they are usable or marketable.  As part of the effort to curb drug production, international consensus has developed in the last five years around control of the key chemical inputs for illicit drug manufacture.  These chemicals are listed in the annexes of the 1988 UN Convention.  The distinction between precursor and essential chemicals is a technical one: precursors become part of the finished drug, usually a synthetic drug; and essential chemicals are primarily used in the refining process for the drug, usually heroin or cocaine, and do not become part of the drug.

The most effective system of international chemical control would ensure that before a shipment of regulated chemicals is authorized to leave an exporting country, the end-use and the end-user for the proposed transaction in the importing country are verified and certified as legitimate.  Controls must be shipment-specific.  While experience has shown that controls are more effectively applied in the exporting country than in the importing country, an effective system involves controls in chemical exporting, transit, and importing countries, and continual and timely communication between exporting and importing/drug producing countries to verify end-use.

Much has been accomplished towards a global chemical control regime based on the principle of international cooperation in regulating commerce in drug-related chemicals.  The framework for an international system of chemical control was set forth in the 1991 Final Report of the Chemical Action Task Force (CATF), chaired by the U.S., which was mandated by the Group of Seven Industrialized Countries to develop practical procedures for chemical control, building on the relevant provisions of the 1988 UN Convention.

With the April 1992 approval of the addition of 10 chemicals to the original list annexed to the 1988 UN Convention, the 22 most important drug-related chemicals are now subject to the Convention's international chemical control regime.  Nearly 100 countries have become parties to the convention.

To facilitate chemical control implementation, the Customs Co-operation Council has assigned discrete tariff codes in the Harmonized System of Customs Nomenclature to each of the chemicals specified in the Convention.

Diversion Patterns have remained essentially the same as those spelled out in the April 1994 INCSR.  The three most common are:

1.  Chemicals are imported legally into the drug-producing country with a valid import license issued either to a front company, or to a legitimate company, and subsequently diverted.  In this case, the importing country does not adequately investigate the legitimate end-use of the chemicals before issuing its import license, and the exporting country makes no independent effort to ensure legitimate end-use, accepting the import license at face value.

2.  Chemicals are imported into a neighboring country, diverted, and smuggled into a drug-producing country.  This occurs because the conduit countries do not adequately investigate the legitimate end-use before allowing imports and re-exports, nor do the chemical source countries ensure the legitimate end-use of regulated chemicals before authorizing shipment.

3.  Chemicals are manufactured in neighboring countries, diverted from domestic commerce, and smuggled into drug producing countries.  Inadequate internal controls make this type of diversion possible.

As authorities take countermeasures to prevent diversion, traffickers react by shifting among the diversion patterns.  Effective import controls in drug-producing countries will be met by increased smuggling.  Smuggling of domestically produced chemicals increases when imports are more effectively controlled.  In the case of precursor chemicals used for the manufacture of synthetic drugs in the United States, there has been an increase in the use of multiple transactions, brokers, and alternative source and transit countries.

1994 Chemical Control Developments

In early 1994, the Departments of Justice (including DEA), Treasury (including Customs) and State cooperated to review progress to date in chemical control and to develop a forward-looking strategy for an expanded U.S. and international program to control diversion of precursor and essential chemicals.

The participants concluded that:

	"Domestic and international efforts in chemical control are on the right path.  The problem of chemical diversion has received increased international attention at policy and operational levels.  States and international organizations have achieved a consensus on appropriate international controls, and the U.S. and many other countries have enacted adequate national laws.  There have been some encouraging recent signs on both domestic and international fronts.  However, the global system of controls remains less than wholly efficient because it has not been fully implemented.  The reasons for this vary from country to country, but generally include:  (1) insufficient time to create the necessary administrative infrastructures, (2) lack of political will, (3) lack of resources, (4) lack of training, and (5) lack of communication internationally and between domestic enforcement agencies."
 
The strategy addresses these problems at both the policy/political and operational levels.  It emphasizes multilateral cooperation in recognition of the international nature of the issue, usually involving diversion from commercial chemical transactions between third countries, and the need to enlist international support for chemical control training and assistance programs.  Some of the most important developments in 1994 supportive of this policy include:

--  The Inter-American Drug Control Commission (CICAD) of the Organization of American States (OAS) reconvened its chemical experts' group in May 1994 to assess progress in adopting and implementing the OAS Model Chemical Regulation.  In response to a U.S. suggestion, representatives from the European Union (EU) were invited.  The meeting recommended, inter alia, that the EU and the CICAD meet and agree on the basis elements for cooperative agreements between the EU and OAS member states for controlling chemical commerce to prevent diversion.  The fall 1994 CICAD meeting endorsed the chemical experts' recommendation, and it was one of the items cited for special support during the December 1994 Miami Summit of the Americas.  The CICAD/EU discussions on the basic elements of agreements are underway.

--  In February 1994, the UNDCP and the INCB held the first of two workshops on precursor control in Southeast Asia.  The workshop was hosted by the Government of Thailand and a special financial contribution was made by the United Kingdom.  The second workshop was held January 30-February 3, 1995, in Manila hosted by the Government of the Philippines and with continuing financial support from the United Kingdom.

--  UNDCP in August 1994 disseminated "Guidelines for Use by National Authorities in Preventing the Diversion of Precursors and Essential Chemical."  The Guidelines build on the chemical control provisions of the 1988 UN Convention and draw on the recommendations of the CATF.  They provide the basis for national implementation of comprehensive, complementary chemical control regimes that will permit the inter-governmental cooperation essential for chemical diversion control.

--  In October 1994, DEA, with significant financial support from the European Union, held a conference in Austria on drug and chemical diversion control for policy- and senior-level officials from ten Newly Independent States (NIS).  The conference helped to establish a dialogue with NIS policy-level officials on the problems of illicit drug transit, manufacture, and uncontrolled trade in pharmaceuticals, steroids, and chemicals.  Major topics of discussion were the need for adequate legislation and international treaty compliance, and the need to establish or strengthen national frameworks for administering drug and chemical regulatory and enforcement programs.

--  In the fall of 1994, seven South American countries (Bolivia, Peru, Chile, Brazil, Argentina, Paraguay, and Uruguay) cooperated in a joint operation - "Border Crunch" - to stem the flow of precursor chemicals into Bolivia.  Conducted with U.S. support and assistance, the operation was directed primarily at smuggling of chemicals into Bolivia and succeeded in temporarily disrupting that traffic.  Border Crunch also demonstrated the importance of chemical control to deny regulated chemicals to smugglers, thereby preempting smuggling across porous borders where smuggling of all types is common.

--  India and Pakistan held discussions under the auspices of UNDCP to improve bilateral counternarcotics cooperation.  In late 1994, the two governments signed an agreement to cooperate in controlling the smuggling of chemicals and narcotics between the two countries.

--  In March 9, 1994, the Colombian National Police, in coordination with other national law enforcement authorities, raided the offices and storage facilities of Holanda Chemical International.  Authorities seized 1,754 MT of chemicals, enough to process 135.5 MT of cocaine.  The raids were based on information developed by the U.S. (DEA) and Colombian law enforcement authorities.

--  Operational cooperation between U.S. and German authorities increased, with the result that German authorities suspended three additional shipments of regulated chemicals to Latin America.  Additionally, German authorities have on several occasions provided intelligence regarding proposed critical chemical shipments to sensitive areas.  Cooperation with Dutch authorities at the operational level is also improving.

1994 Chemical Control Review

The conclusion of the participants who worked together in 1994 to develop a forward-looking chemical control strategy that "the global system of [chemical] controls remains less than wholly efficient" remains valid.  However, progress has been made in each deficiency noted in the strategy.  For example:

--  There has been an additional year to create the necessary infrastructure for chemical control.  The Colombian chemical seizures and the increasing German/US cooperation in chemical control provide evidence that these systems can work.

--  Political will to adopt and implement chemical control regimes is increasing as demonstrated by the beginning of Indo/Pakistani cooperation to control chemical smuggling.

--  More resources are being applied to chemical control.  In Border Crunch, seven South American countries were willing to devote resources to enforcement of chemical control laws.

--  In an area as technical and potentially hazardous as chemical control, the need for training has been increasingly recognized.  The UNDCP/INCB chemical control workshops in Bangkok and Manila are helpful precedents for a multilateral approach to the problem in terms of both financing and participation.  In addition, the OAS series of chemical training seminars continues in Latin America and the Caribbean.

--  Communications internationally and between domestic agencies are improving.  Meetings such as the Austria meeting organized by DEA opened new channels of international communication.  Operations such as Border Crunch improve cross-border law enforcement communication and cooperation, and domestic cooperation, by involving law enforcement agencies not primarily involved with chemical control.

1995

In 1995, the emphasis in chemical control will continue to shift from forging international consensus on cooperative procedures for chemical control, something largely achieved, to the implementation of these procedures.  This requires a coordinated response from chemical manufacturing and exporting countries, transit countries, and chemical importing countries.  Single-country efforts leave loopholes that are rapidly exploited.

We will work with chemical manufacturing and exporting countries to improve control of chemical exports to drug-producing countries.  We will encourage support for the multilateral chemical control training initiatives of the UNDCP and the INCB.  We will support the rapid realization and implementation of the OAS/EU initiative to facilitate bilateral agreements between the EU and OAS member states for chemical control.  And we will continue our own chemical control programs as a demonstration of the validity, feasibility and effectiveness of chemical control.

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