International Narcotics Control Strategy Report, 1996
CANADA, MEXICO, AND CENTRAL AMERICA
The Government of Belize (GOB) recognizes the problem of drug transit through its territory and the contribution of drug trafficking to domestic crime. However, counternarcotics efforts have been undermined by frequent failures to pursue accused criminals or secure convictions in the court system. Politics, incompetence, and corruption have accompanied undermanned and poorly equipped police investigative efforts.
On the positive side of the ledger, Belize acceded to the 1988 UN Convention, signed a stolen car treaty, and passed new money laundering legislation. The Belizean Police Force (BPF) and the Belize Defense Force (BDF) are active at the working level in the fight against drugs and cooperate with US officials. An extradition treaty, a mutual legal assistance treaty, and an overflight amendment to the existing shiprider agreement are under active negotiation.
II. Status of country
Contiguous borders with Guatemala and Mexico, large tracts of forested land, a long unprotected coastline, a thousand or more cayes, many inland waterways, large unpopulated jungle and coastal areas and a rudimentary infrastructure for combating drug trafficking make Belize a potentially significant transshipment point for cocaine and more recently, heroin.
III. Country Actions Against Drugs in 1996
Policy Initiatives. With USG assistance, the GOB continued to professionalize and upgrade the equipment of the BPF, to improve its ability to combat narcotics trafficking and violent crime. Upon USG request, the GOB has supported cooperative efforts to reduce drug trafficking through its borders, and to combat the crime associated with such trafficking. The GOB has participated in regional counternarcotics efforts such as Operation Unidos II. The GOB has participated in exercises involving our maritime counternarcotics agreement. The USG made considerable progress on the negotiation of an overflight amendment to the shiprider agreement.
In November, the GOB signed a stolen car treaty with the USG. Implementation of the treaty will begin in 1997, pending ratification by both sides. The GOB actively cooperates with and encourages USG aerial reconnaissance mission. These are followed by manual eradication of marijuana fields and seedlings which it views as more effective, and more environmentally sound. Indications are that the level of marijuana cultivation has remained stable. Although authorities destroyed thousands of plants in various operations, they made no arrests. The GOB's enactment of money laundering legislation demonstrates an effort to deny criminal entities a base of operation in Belize; to date there is no indication of significant money laundering in Belize.
Accomplishments. The GOB, with USG assistance, installed 12 computer workstations in the JICC (Joint Intelligence Coordinating Center). The workstations are linked to a central coordinating center in Belmopan. At a JICC managers conference in Santo Domingo, Belize was cited as a model for JICC operations throughout the Caribbean.
The GOB seized a drug trafficking aircraft and arrested the soninlaw of Minister of Home Affairs Elito Urbina. The aircraft carried 386 kgs of cocaine and was tracked with the assistance of USG law enforcement officials. No convictions were obtained in this case, however, owing to mismanaged investigations and the destruction of files in a mysterious police car fire. A DEAled operation resulted in the first ever seizure of heroin in Belize, and resulted in one conviction. A combined BDF/BPF maritime operation led to the seizure of a gofast boat and a quantity of cocaine in Belizean waters. The Belize airports authority made several seizures of cocaine with the help of detector dogs.
Law Enforcement and Transit Cooperation. Narcotics are transiting the country with little resistance from the GOB. In April , for example, a USG Counternarcotics Canine Unit visited Belize. At the port of Belize the dogs were unable to perform as the smell of drugs was so strong in the warehouse they suffered from sensory overload.
Belize actively cooperates with both Mexican and Guatemalan authorities to combat drug trafficking or other serious crime. The GOB participated with Mexico and other Central and South American countries in Operation Unidos II.
Counternarcotics activities are centralized in a committee containing various elements of the BPF and the BDF, with a dedicated group of investigative police officers drawn from the Violent Crimes Unit. A recent restructuring within the BPF is expected to focus on counternarcotics matters in 1997. Management changes within the police force are expected to rework promotions and posting procedures, increase community policing, and decrease police brutality. The USG also has urged BDF to establish a dedicated CN unit. In November, amidst some acrimony, Minister of National Security Dean Barrow chose new Police Chief Ornell Brooks to succeed retiring Sherman Zuniga. Commissioner Brooks' commitment to strong counternarcotics action is yet untested.
The GOB considers traffic in crack cocaine to be the biggest major internal drug problem, primarily because of the associated criminal activities that accompany hard drug use. Belize had its first reported seizure of heroin in 1996 when five pounds were intercepted through the mail. Though increased attention to antinarcotics matters has been demonstrated by the Ministry of National Security, securing convictions and impartial police investigations is a recurring problem. Convictions may often be more difficult to obtain due to family connections of defendants and conflicts of interest within the closeknit Belizean elite.
Corruption. Information regarding drugrelated corruption has come to the attention of US Embassy officials, especially concerning the BPF, Customs Service, and Immigration Service. The recent failure to bring charges against the son of Home Affairs Minister Elito Urbina, and the acquittal of the same Minister's soninlaw, raised concerns on how effectively high profile defendants can be brought to justice. In fact, Belize has no history of ever sending a prominent citizen to jail since independence.
Agreements and Treaties. In October, Belize acceded to the 1988 UN Convention. In November, the GOB signed the first stolen car treaty in Central America. In 1992, Belize set the standard for maritime counterdrug cooperation by signing a maritime counterdrug agreement with the US. An overflight/ordertoland amendment to this treaty is under negotiation, but progress is slow and problematic.
In December, the GOB and USG reached tentative agreement on extradition and mutual legal assistance treaties. More recently, however, the GOB has raised new concerns about the treaties and requested that further negotiations take place. Until a new treaty enters into force, the 1972 USUK Extradition Treaty continues to be applicable to Belize.
Cultivation and Production. There is still illicit cultivation of marijuana in Belize, but at reduced levels from the widespread cultivation of a decade ago; at that time, Belize ranked fourth in worldwide production. The BDF routinely conducts manual marijuana eradication efforts at times involving modest fields, with from 500 to several thousand plants. Owners of fields are said to be hard to identify or claim no knowledge of illicit crops, so that are virtually no arrests. A June aerial reconnaissance mission detected no significant increase or decline in marijuana cultivation. There is no evidence of traffic in precursor chemicals in Belize. There are almost no industries in Belize requiring the use of these types of chemicals. The GOB, in support of the UN Convention on Psychotropic Drugs, developed a precursor chemical program. There is no evidence of production of drugs other than marijuana in Belize.
Money Laundering/Asset Seizures. On August 1, 1996, the Offshore Banking Act and the Moneylaundering Prevention Act became effective. As yet, the Central Bank of Belize (CBB) has not licensed any offshore banks, although they have received numerous inquiries. The Moneylaundering Prevention Act criminalizes moneylaundering, and authorizes the freezing and forfeiture of assets.
In October, Belize joined 19 other Caribbean and Central American countries and signed a memorandum of understanding (MOU) on the prevention and control of money laundering. By signing the MOU, Belize also formalized its membership in the Caribbean Financial Action Task Force (CFATF).
The GOB recently began to seize assets connected to drug trafficking. A gofast boat and a twinengine aircraft were seized in connection with drug trafficking interdiction this year. The final disposition of these assets has yet to be decided by the courts. The Director of Public Prosecutions and a senior police officer in May attended a USGsponsored asset forfeiture conference in Trinidad.
Domestic Programs/Demand Reduction. Demand reduction is coordinated by the National Drug Abuse Control Council (NDACC) which provides drug abuse education, information, counseling, rehabilitation and outreach. NDACC is actively developing its six regional offices in the corresponding districts of Belize. The Orange Walk NDACC center opened amid a great deal of publicity; Orange Walk is considered the leading area of drug activity in Belize. Other centers are being upgraded in the Cayo district and Placentia village. The NDACC Director was the recipient of a USISsponsored International Visitors Program grant. NDACC was an active participant in the UNDCP and OAS/CICADsponsored development of a national drug abuse control strategy master plan. Pride Belize Foundation, a local private voluntary organization, received drug prevention support through the Civic Action Against Drug Abuse (CADA) funded by USAID.
IV. US Policy Initiatives and Programs
Policy Initiatives. The GOB began to move forward on several treaties and areas of cooperation. The USG initiatives in Belize provided support to the GOB in developing a sustainable infrastructure which will allow it to combat its drug problems effectively. Support includes equipment and training for the JICC, Police, BDF, and the VIU and assistance with aerial reconnaissance. The GOB also requested and received the support of the USG counternarcotics activities and training.
Bilateral Cooperation. The GOB's accomplishments in 1996, such as its recent accession to the 1988 UN Convention, were achieved only after the US and other countries exerted intense, coordinated pressure. The USG urged the GOB to demonstrate its willingness to cooperate with the US in achieving reasonable counternarcotics goals and objectives.
The Road Ahead. Belize's air space skies, coastline and
rivers are largely uncontrolled. The potential exists for Belize
to be a major transshipment point for cocaine, marijuana, and
more recently heroin. This is especially true as pressure on other
avenues of transport increases and Belize becomes an avenue of
opportunity. Marijuana cultivation, though not expanding in quantity,
requires monitoring and periodic eradication. Belize needs to
take adequate steps on its own to meet the goals and objectives
of the 1988 UN Convention, including the signing of an MLAT and
a new extradition treaty. Belize must resist drug trafficking
primarily through the efforts of the BPF and the BDF.
Illicit drugs bound for the US transit Canada and vice versa. The Government of Canada (GOC) cooperates closely with the USG on narcotics interdiction efforts, and actively participates in international antidrug fora. Canada's open financial system, high volume of crossborder trade with the US, and lack of legal reporting requirements for large cash transactions, make it an easy target for drugrelated and other types of money laundering. Canada is considering strengthening its money laundering laws. Some precursor and essential chemicals in Canada are diverted to illicit drug manufacturers, and a portion enters the US at land border crossings. The chemicals involved are used mainly in the manufacture of methamphetamine. Canada is a party to the 1988 UN Convention.
II. Status of Country
Canadian officials credit the country's solid institutions with fostering public respect for the law and keeping narcotics abuse a manageable problem. While the GOC emphasizes demand reduction in its counternarcotics policy, it is also active in domestic and international supply control efforts.
Cannabis is the principal illicit substance of abuse in Canada. Up to half the cannabis consumed is produced locally, much of it grown hydroponically. Cocaine (including crack) is the second most popular drug; authorities estimate there are over 250,000 cocaine users in Canada. Although an increase in the purity of heroin in western Canada has led to a higher number of overdoses and related deaths, the overall heroin user population remains constant at 35,00040,000.
III. Country Actions Against Drugs in 1996
Policy Initiatives. The House of Commons passed a bill that will enter into force in early 1997 which will grant the Royal Canadian Mounted Police (RCMP) greater powers in conducting narcoticsrelated investigations.
Canada actively participates in international antidrug fora including the Dublin Group, Financial Action Task Force, the InterAmerican Drug Abuse Control Commission of the Organization of American States (CICAD), and the UNDCP. Canada provided $1 million to UNDCP for 1996 and 1997, and contributed approximately $217,000 to CICAD during the same twoyear period. Canada also assigned a demand reduction expert to CICAD for two years beginning in June.
Agreements and Treaties. In 1990, Canada ratified the 1988 UN Convention. The USG and Canada have longstanding agreements on law enforcement cooperation, including a customs mutual assistance agreement, a mutual legal assistance treaty (MLAT), and an extradition treaty with an amending protocol. In 1996, the US agreed to permit the RCMP to join the El Paso Intelligence Center (EPIC) on a limited basis. This will permit the RCMP to make realtime data checks of suspected drug traffickers. Canada has also acceded to the World Customs Organization's 1977 International Convention on Mutual Administrative Assistance for the Prevention, Investigation, and Repression of Customs Offences. Annex 10 of this Convention, which Canada has accepted, deals with assistance in action against the smuggling of narcotic drugs and psychotropic substances.
Enforcement Efforts. RCMP statistics for the first six months of 1996 report seizures of 43 kgs of heroin (compared to 128 kgs for all of 1995), 778 kgs of cocaine (1,544 kgs for all of 1995), 5,500 dosage units of LSD (49,019 for all of 1995) and over 15,000 kgs of hashish (21,504 kgs for all of 1995).
Corruption. Corruption of public officials is not a problem in Canada. The GOC prosecutes suspected cases of malfeasance.
Cultivation/Production. Marijuana is grown for domestic use in Canada. Authorities seized 62,631 marijuana plants in the first six months of 1996.
Drug Flow/Transit. Drugs are smuggled into Canada both for domestic use, and for transshipment to the US, although we have no evidence that the amounts of drugs transiting Canada have a significant effect on the US. In addition, some illicit substances destined for Canada travel from or through the US. Heroin and marijuana arrive by sea and land into Canada, cocaine and hashish by sea. Traffickers use couriers, hide drugs in commercial shipments and send drugs via international mail.
Demand Reduction/Domestic Programs. The GOC, along with nongovernmental organizations, offers drug abuse education programs. However, acrosstheboard budget cuts in the federal government have also affected the health sector in Canada and have reduced resources for demand reduction. The GOC in 1996 emphasized assisting indigenous peoples to resist propane and gluesniffing.
IV. US Policy Initiatives and Programs
Bilateral Cooperation. US law enforcement agencies enjoy excellent cooperation with their Canadian counterparts in narcotics control efforts. Canada and US customs services share drug enforcementgenerated assets and personnel, and work closely to control drug smuggling.
The Road Ahead. The USG looks forward to continuing its already excellent law enforcement cooperation with Canada and will encourage continued GOC support and participation in international antidrug fora such as CICAD.
Costa Rica is a transshipment area for South American cocaine and heroin smuggled to the US and Europe. Money laundering in banking and real estate associated with tourism is a problem, although it is difficult to quantify. President Figueres has assigned a high national priority to fighting drug trafficking and money laundering. In October, the Government of Costa Rica (GOCR) hosted the annual ministeriallevel meeting of the Caribbean Financial Action Task Force and formally established a National Money Laundering Commission. Costa Ricans have become increasingly concerned by rising domestic drug consumption and related crimes. The GOCR is a party to the 1988 UN Convention.
II. Status of Country
Costa Rica's geographic location on the Central American isthmus makes it increasingly important as a transshipment and temporary storage area for cocaine smuggled to the US and Europe. During 1996, traffickers transported increasing quantities of cocaine and heroin through Costa Rica by diverse methods, including small aircraft, surface vehicles, couriers, and maritime vessel. Costa Ricans have become more concerned over rising levels of local consumption of crack cocaine and its effect on violent crime. The GOCR attempted to meet threats posed by drug trafficking by adopting strict antidrug measures. Resource constraints, however, limit enforcement actions, and drug trafficking continued to outstrip antidrug efforts.
In 1996, new leadership was installed to head Costa Rica's Counternarcotics Intelligence Center (CICAD), which operates the country's Joint Information Coordination Center (JICC). In May, the GOCR and the US signed a memorandum of understanding (MOU) on CICAD operations, including qualifications of key personnel. In November, the CICAD Executive Director and the DEA signed an agreement on safeguarding classified information which restored intelligence sharing with CICAD in December.
III. Country Actions Against Drugs in 1996
Policy Initiatives. The Figueres administration continued its efforts to professionalize its police forces, including revamping the Public Security Ministry's basic police course for new recruits at the National Police School. In October, Justice Minister Castro hosted the annual ministeriallevel Caribbean Financial Action Task Force (CFATF) meeting, which adopted a framework agreement on operations. During the conference, President Figueres emphasized the importance of measures against money laundering by establishing a National Money Laundering Commission. Late in the year, Costa Rican police intensified border and highway inspections as part of a regional counternarcotics exercise, Operation "Unidos II." The JICC operated under a new director and deputy director.
Accomplishments. USCosta Rican efforts against drug trafficking are productive and harmonious. There has been excellent cooperation among GOCR counterdrug police units, especially the narcotics section of the Organization of Judicial Investigation (OIJ) and the Drug Control Police (PCD) of the Public Security Ministry, with these agencies conducting several joint operations. Public Security Ministry personnel destroyed cannabis plants growing in the mountainous regions of northern and southern Costa Rica. The GOCR periodically consents to the extradition of criminal suspects, including drug traffickers, to other countries. The Costa Rican Supreme Court fully validated the USG/GOCR bilateral extradition treaty in December. It had held the treaty "inapplicable" in 1993, thus requiring the use of domestic law for extraditions to the US. The National Drug Council (CONADRO) began implementation of its national drug prevention plan and supervised demand reduction committees throughout Costa Rica. The Health Ministry operates a stringent program to control precursor chemicals and prescription drugs. In December, EPIC restored intelligencesharing with CICAD.
Law Enforcement Efforts. The OIJ operates a small, professional counterdrug section that specializes in international cases, while the PCD focuses on efforts to counter domestic drug trafficking. Both units employed courtordered wiretaps in major drug cases under the authority of a 1994 wiretap law. DEA and GOCR police collaborated closely in many drug seizures and arrests. This cooperation led to the seizure of over 1,993 kgs of cocaine and 17.7 kgs of heroin. Costa Rican police also arrested 624 people. At year's end, crack cocaine had figured in 60 percent of all drug arrests while marijuana and cocaine were involved in approximately 35 percent of arrests.
Corruption. President Figueres has pledged repeatedly to prosecute all cases of official corruption. Midlevel personnel, including local police commanders, have been dismissed, transferred, or prosecuted. No accusations have been directed at senior officials for drugrelated corruption. With GOCR cooperation, US authorities in Florida arrested a former Costa Rican immigration officer involved in heroin smuggling.
Agreements and Treaties. During most of the year, the GOCR responded to US extradition requests by applying domestic law, since, as noted previously, the Costa Rican Supreme Court in 1993 had declared the bilateral extradition treaty "inapplicable". In December, the court found the bilateral extradition treaty applicable in all cases except that which occasioned its 1993 decision. This ruling, once applied, will again permit extraditions under the treaty. In September, Costa Rica ratified the 1988 UN Convention. Costa Rica is a party to the Permanent Central American Commission's Counterdrug Agreement. The GOCR has entered into bilateral narcotics control agreements with Mexico and Colombia and has a border cooperation agreement with Nicaragua on fighting drug trafficking, illegal immigration, and transport of stolen vehicles. GOCR police agencies or prosecutors signed agreements with counterparts in Panama, Germany, the US, and various Central American countries.
Cultivation and Production. Authorities destroyed numerous, mostly small and widely dispersed, plots of cannabis cultivation in mountainous regions in northern and southern Costa Rica. While overall production remains relatively low, it shows a tendency towards production for export, instead of solely for domestic consumption. CICAD reports some 110,000 cannabis plants destroyed during the year.
Drug Flow and Transit. Traffickers use Costa Rica as a transshipment area for cocaine and heroin moving from Colombia to the US and Europe. Recent, relatively large, seizures of cocaine suggest that Colombian trafficking organizations also have started to use Costa Rica as a temporary storage area prior to onward shipment.
Demand Reduction/Domestic Programs. The GOCR and the public have become more concerned over increased domestic drug use, particularly of crack cocaine. The National Drug Council (CONADRO) published a national drug prevention plan focusing on drug education and prevention. CONADRO oversees 15 regional, 54 county, and 104 local demand reduction committees in communities throughout the country. In December, CONADRO hosted a meeting of these committees in Puntarenas to evaluate drug prevention activities. Separately, Costa Rican police officers participate in a fairly active program of drug education courses at public schools modeled after the USoriginated Drug Abuse Resistance Education (DARE) program. In 1997, the GOCR will host the first hemispheric conference on evaluation of drug prevention programs under OAS sponsorship.
IV. US Policy Initiatives and Programs
Policy Initiatives. USG goals are to enhance GOCR detection and interdiction capacity, detect and destroy marijuana fields, support drug awareness programs, and strengthen regional antidrug cooperation. Specific objectives include: providing specialized training for the PCD; professionalizing police forces; upgrading secure communications for the OIJ narcotics section; restoring JICC effectiveness; enhancing precursor chemical controls; and improving the operational capabilities of the Public Security Ministry's Air and Maritime sections.
Bilateral Cooperation. The USG provided overseas law enforcement inspection training to OIJ narcotics section, PCD, and Customs agents; specialized drugenforcement training to OIJ narcotics section investigators; and two boarding officer instructor courses for 22 members of the Public Security Ministry's Maritime section. The USG provided a trained drugdetector dog to the GOCR and trained a PCD dog handler. The USG also provided two computer terminals for the Health Ministry's precursor chemicals and prescription medicines department, donated office supplies to CONADRO in support of its drug awareness programs, sponsored firearms training for PCD agents, purchased a 22foot utility boat for use by the Maritime Section in patrolling coastal waters and canals on the Caribbean coast, and provided assistance to the GOCR for participation in Operation "Unidos II".
The Road Ahead. The USG will work with the GOCR to curtail the use of Costa Rica as a drug transshipment and storage area, discourage drug consumption, fight corruption, and counter money laundering. The GOCR should continue efforts to develop professional police forces, strengthen laws against drug trafficking and money laundering, and reinitiate effective use of the bilateral extradition treaty.
El Salvador is a transshipment point for cocaine moving to the US. Trafficking and local consumption have increased, although the available statistics do not indicate that these problems have yet become critical. The country's political stability and economic strength, together with a police force still in development, will likely offer a more attractive target to traffickers. Under the leadership of President Armando Calderon Sol, the Government of El Salvador (GOES) voices a policy of strict opposition to the illegal drug trade. However, the lack of comprehensive legislation and the continuing reorganization of the AntiNarcotics Division (DAN) of the National Civilian Police (PNC) are impediments to a clear antinarcotics strategy. Small quantities of cannabis are grown in El Salvador for domestic consumption. Money laundering has not been detected, but may be an emerging threat. El Salvador is a party to the 1988 UN Convention.
II. Status of Country
While seizures of cocaine are relatively low, there is anecdotal evidence that significant amounts of cocaine transit El Salvador destined for the US. There is no proof that money laundering is taking place. However, the tremendous growth of the country's financial sector, its stable currency, and the lack of legislation against money laundering make El Salvador ripe for such activity. The Central American Money Laundering Agreement of July 1996, as well as US training initiatives, have heightened attention to this issue. Salvadorans are now drafting legislation to confront this threat and the USG is working with the government in this effort.
III. Country Action Against Drugs in 1996
Policy Initiatives. The GOES is aware of the dangers of drug trafficking and money laundering, but has yet to implement an effective narcotics control policy. The recent passage of a landmark reform of the Salvadoran criminal procedures code, and the expected passage of related legal and judicial reforms, should provide a needed basis for the application of existing antinarcotics legislation, and for the development of effective legislation against money laundering.
Law Enforcement Efforts. Difficulties in law enforcement were primarily responsible for the low amount of cocaine seized in 1996 (68 kgs) which does not reflect the magnitude of the country's trafficking problem. The DAN successfully reestablished itself after rebuilding in 1995, and the Director exhibits a highlevel of commitment to creating an effective organization. However, the DAN was only deployed to border posts in 1996 and still does not have a full complement of posts throughout the country. The DAN also lacks a maritime interdiction capability, and has scarce resources to reimburse the Salvadoran Navy for antinarcotics operations. Based on the success of the USsponsored antinarcotics canine program in El Salvador, the PNC established its own canine school.
Corruption. The GOES's anticorruption campaign appears to have yielded notable successes in the case of the PNC, and specifically the DAN. Cases of individual corruption among police officers appear to be prosecuted diligently. The Supreme Court has undertaken a wideranging program of review of all the country's judges, and will replace those found to be corrupt or incompetent. The recently passed criminal procedures code provides a basis upon which to modernize the criminal system.
Agreements and Treaties. The USEl Salvador extradition treaty, which dates from 1911, was not invoked for narcoticsrelated extraditions in 1996. El Salvador's 1983 Constitution prohibits extradition of Salvadoran nationals. Application of the 1988 UN Convention suffered due to a weak judicial system, but judicial and legal reforms were passed and are scheduled for implementation in early 1998.
Domestic Programs/Demand Reduction. With Salvadoran government support, D.A.R.E.America sponsored its first full year of activities, graduating 500 persons from its programs. FundeSalva runs one of the most effective demand reduction programs in Central America.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. The USG is working to make the DAN an effective and a selfsufficient unit. It supports agent training, and specifically technical training for eradication programs. It also supported money laundering courses. The US extended its support for the Joint Information Coordinating Center (JICC) and, with US computer equipment and training, the JICC was upgraded to a 24hour operation with the capacity for realtime information exchange with US and regional law enforcement agencies. The USG has provided crime scene and surveillance equipment, and upgrades to the communications system. The region's only successful canine program was maintained with USG assistance, including the provision of USsourced veterinary support and the construction of permanent kennels. USG funding made possible joint operations between the DAN and the Salvadoran Navy, providing important training for maritime interdiction.
The Road Ahead. Owing largely to USG efforts, Salvadorans are increasingly aware of and concerned about the country's vulnerability to money laundering. This threat, and the rise in domestic consumption of illegal drugs, has provided an impetus for efforts to develop a coordinated strategy to implement what has long been a stated goal: effective antinarcotics enforcement. Judicial and legal reforms will provide the basis for more effective prosecution. The DAN, and the PNC as a whole, continue to develop, and the effective deployment of the PNC throughout the country something which is still being implemented will provide the basis for enforcement. That said, the PNC provides the model for neighboring police forces, who will undergo their own reorganization in the coming years.
The USG role is to aid in the fulfillment of the PNC's planned
development, to press for effective implementation of existing
laws and treaties, to assist in the development of needed laws,
and to cooperate in the fight against official corruption.
Guatemala has long been a significant country in the transshipment of cocaine from Colombia to the US; it is also a producer of small amounts of opium and marijuana. Recent information indicates that significant quantities of ephedrine are being diverted through Guatemala to Mexico and the US. The Government of Guatemala (GOG) has made the fight against narcotics a major priority and has cooperated with the USG in countering this threat. This year, the GOG concluded a comprehensive peace accord which ends Guatemala's 36year internal conflict.
The Department of Antinarcotics Operations (DOAN), a specially trained and equipped command within the Guatemalan Treasury Police, carries out narcotics investigations, interdiction operations, and opium poppy and marijuana eradication, with support from the USG. In 1997, the DOAN will become a part of the newly unified civil national police force while continuing its identity as the lead counternarcotics agency in Guatemala.
GOG antidrug authorities seized about 4 mt of cocaine in 1996, a 400 percent increase over 1995. In addition, aerial and ground operations eradicated virtually all the known cultivation of opium poppy grown in remote areas of Guatemala's interior. Guatemala is a party to the 1988 UN Convention, but has not yet implemented many of its provisions.
II. Status of Country
In the 1980s, Guatemala became the Colombian cartels' preferred location in Central America for cocaine transshipment destined for the US via Mexico. As the Guatemala/US air interdiction programs became more effective, the trafficking organizations shifted to land and sea smuggling modes, turning Guatemala into a major staging area for overland shipments from Panama and seaborne shipments originating in Colombia, Panama, and elsewhere. In 1996, approximately 4 mt of cocaine were seized in Guatemala, a fourfold increase over the previous year. The 1996 seizures included the interception of a major air shipment.
In the highlands of the San Marcos and Huehuetenango departments of western Guatemala, indigenous farmers cultivate opium poppy in small mountainous plots of land. The GOG permits USsupported aerial eradication missions and mounts manual eradication operations that have successfully reduced the crop to negligible levels.
The large Peten region of northern Guatemala bordering on Belize and Mexico is the site of cannabis production. A large seizure of processed, packaged marijuanacomprising most of the marijuana seized in 1996strongly indicates that much of this marijuana production may be intended for export. Small amounts of cannabis also are grown throughout the country for domestic consumption. DOAN units in both the highlands and the Peten specialize in manual eradication operations, and other drugrelated investigations.
GOG experts estimate that at least one out of four Guatemalan adults suffers from some sort of chemical dependency, principally alcohol abuse. Illicit drug use has not been effectively documented, but GOG officials believe it has increased steadily since 1990 and contributes to the extremely high level of violence in the country, especially in the capital city.
III. Country Actions Against Drugs in 1996
Policy Initiatives. President Arzu's government made narcotics control a major policy issue. A revitalized Executive Secretariat for the Commission Against Addiction and Illicit Traffic of Drugs (SECCATID) developed a national counternarcotics master plan, which is expected to be implemented early in 1997. The GOG also made firm commitments to provide additional resources in 1997 to its counternarcotics agenciesprimarily the DOAN and the special narcotics prosecutors of the Public Ministry.
Accomplishments. For the first time, the GOG Executive Secretariat of the SECCATID played a major role in guiding the InterMinisterial Coordinating Committee established by the 1992 narcotics law. This first effort at overall coordination bodes well for future success in this area. The GOG also sustained very credible antinarcotics enforcement programs, primarily through the DOAN, but also in other areas of the government such as the Attorney General's office.
The DOAN's drug eradication units were brought to full strength after extensive training programs. The DOAN routinely conducts both national and regional operations with US assistance and is planning for more frequent but smaller operations in 1997.
Major seizures of cocaine by DOAN units in the field and increases in staffing were positive accomplishments, as was the move of the Guatemalan antinarcotics Joint Information Coordination Center (JICC) to new, fully equipped facilities with increased datalinks to other GOG institutions. There was steady progress in narcoticsrelated prosecutions.
Law Enforcement Efforts. The GOG works closely with the USG to stem the flow of drugs through Guatemala. The DOAN and National Police target major trafficking organizations within Guatemala. A recent restructuring of security at the international airport has allowed for a major increase in cooperation between airport and USG personnel. Additional security measures and profiling training are being provided and the existing Customs and Immigration functions strengthened.
The newly constituted and equipped JICC provided vital information to investigative units and is increasing its capabilities to collect and analyze narcotics information. The GOG also made significant efforts to increase the DOAN's manpower and to make the DOAN a key unit in the restructured civilian police organization, scheduled for implementation in 1997. The selffinanced port security program was expanded to the second port of Santo Tomas.
The lack of radar coverage and often inadequate warning times, significantly reduced the aerial interdiction of cocaine. A large air seizure, 359 kgs, was the result of a combination of alert reaction to an intercepted track, and a little luck. Meanwhile, larger loads of cocaine are seized through investigation of vehicular and maritime smuggling routes. The size of these seizures, one over 1,200 kgs, are indications that Guatemala is still a major transshipment country for the Colombian traffickers.
The 1992 narcotics law permits the seizure of assets directly involved in narcotics offenses but few assets were confiscated in 1996; however, in some cases courts have allowed seized assets to be used by law enforcement agencies.
Diversion of precursor chemicals passing through Guatemala is a rising problem. Ephedrinea precursor used to produce the stimulant methamphetaminefrom Europe has been imported into Guatemala and often diverted to Mexico. There is currently no law in Guatemala that regulates chemical imports for drug production or reexport. The GOG, however, has requested and will receive USG technical assistance on how to combat this illicit trafficking.
The government introduced legislation into the Congress in late 1996 to consolidate police training of the National and Treasury Police, and to unify the two public security forces, as required by the peace accords.
Corruption. Corruption is endemic in Guatemala and permeates all levels of government. Despite the authority to create special narcotics courts (in the 1992 narcotics law) to help control narcoticsrelated corruption, the Supreme Court has yet to establish them. A large contraband ring was dismantled in September. It reached many parts of the military, National Police, Customs, and Immigration. Though Guatemala's counternarcotics programs were not directly involved, they were affected by the fallout from the case through the dismissal of Vice Minister of Government Mario Rene Cifuentes and the third in command at the Treasury Police. Neither has been charged in connection with the case.
The GOG does not, as a matter of government policy, encourage or facilitate illicit production or distribution of narcotic or psychotropic drugs or controlled substances, or the laundering of proceeds from illegal drug transactions. In addition, no senior government official facilitates or encourages the illicit production or distribution of such drugs or substances or the laundering of proceeds from illegal drug transactions.
Cultivation and Production. The GOG maintained significant pressure on the illicit cultivation of opium poppy and cannabis with USGassisted aerial spray operations and manual eradication operations by the DOAN. Eradication of known opium and marijuana crops is a major success story for Guatemala. Aerial and manual eradication in 1996 destroyed virtually all the identified opium poppy crop, and 84.2 percent of the cannabis crop (estimated at 253.7 hectares).
After having reached an alltime high of more than 2,500 hectares in 1991, the opium poppy crop in Guatemala was systematically reduced to an estimated 12 hectares in 1996. Typical opium poppy fields today measure less than onefifth of a hectare and are located in very steep and narrow mountain ravines, at elevations up to 10,000 feet.
Drug Flow/Transit. Guatemala's civilian public security forces, led by the DOAN and assisted by the USG, investigate and attack suspected distribution organizations. Authorities seized almost 4 mt of cocaine, up from one mt in 1995. A major air seizure of 359 kgs in June suggests that traffickers are again beginning to use light planes to deliver cocaine to Guatemala.
The GOG has increased its efforts to identify and attack transportation networks, coordinating closely with the USG and regional partners in Central America. A newly formed joint task force composed of DOAN and National Police, with USG collaboration has been instrumental in recent seizures involving truck containers.
Money Laundering. The potential for money laundering remains very high because of the weak monitoring and control of financial transactions, and the lack of laws specifically designed to combat money laundering. The USG is working with the Ministry of Government to develop a task force that will collect information concerning money laundering and investigate major traffickers. With strict bank secrecy laws and without a specific money laundering law, the GOG has not conducted financial investigations or controlled suspected money laundering.
Agreements and Treaties. Guatemala is a party to the 1961 UN Single Convention and its 1972 Protocol, the 1971 UN Convention on Psychotropic Substances, as well as the 1988 UN Convention. While aggressive interdiction and eradication operations, investigations of trafficking organizations, and other law enforcement efforts by the GOG have been fully consistent with the goals and objectives of the 1988 UN Convention, many aspects of the convention have not been codified into law, including the provisions on extradition, money laundering, and chemical controls. This lack of legislation continues to hamper law enforcement efforts. The Arzu administration has made drug control a high priority and is working closely with the USG on a number of these fronts. With the peace accords signed at the end of 1996, we anticipate greater progress toward enactment of this legislation in 1997.
There have been no fugitives extradited by the GOG to the US since the 1995 extradition of an American citizen wanted on narcotics charges, despite a number of US requests. The USG has no mutual legal assistance treaty with Guatemala.
Domestic Programs/Demand Reduction. SECCATID, which reports to the Vice President, has limited financial resources for drug education and awareness programs, but is attempting to increase its funding base through private sector support. The newly appointed and energized staff is actively engaged in the demand reduction effort.
IV. US Policy Initiatives and Programs
Policy Initiatives. The major US policy objective is to cooperate with and support the civilian law enforcement agencies tasked with narcotics interdiction, eradication, and prosecution. Institutional reforms are underway in the DOAN, and elements of the judicial branch.
The opium poppy crop has been kept under control by an integrated program of helicopter reconnaissance of the growing areas, limited helicopter spray operations, and ground eradication operations conducted by the DOAN. Additional emphasis must be placed on manual eradication, public awareness programs, and USG support to GOG counternarcotics agencies to prevent Guatemala from returning to the ranks of significant opium producers.
Bilateral Cooperation. In September, the USG and the GOG signed letters of agreement on counternarcotics cooperation. In these agreements, the GOG committed itself to increase funding and staffing for public security functions, including narcotics control.
The Road Ahead. In 1997, Guatemala will be at peace for the first time in 36 years. At the same time, strong public concern about violence and criminality is shaping public policy. Narcoticsrelated issues will figure prominently in the GOG's game plan, although funding will remain difficult. While enhanced civilian law enforcement is one of the GOG's highest priorities, counternarcotics programs will have to compete with pressure to commit scarce resources to peace initiatives and public sector social programs.
Major cocaine transshipment is expected to continue for the foreseeable future, and air transshipment of cocaine could become a more serious problem because of the lack of air interdiction assets. Therefore, the USG will focus on developing a more professional DOAN force and an effective CN intelligence capability, combined with training support for the narcotics prosecutors and members of the judicial system. The GOG antinarcotics forces, assisted by the USG, will develop qualitatively and quantitatively, with more effective investigative and law enforcement units to control transshipment, expanded case management and tracking, an increased data collection and analysis capability, and greater regional cooperation.
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Honduras is a narcotics transit country. The Honduran Police cooperate readily with the USG on drug control, but with limited success. In 1996, the Public Ministry created a Counternarcotics Section with its own special prosecutor. Much needed legislation in areas such as money laundering and asset seizure is expected to be adopted in 1997. Honduras is a party to the 1988 UN Convention.
II. Status of country
Honduras is not a significant drug producing country, but it serves as a transit point for illicit drugs. Honduras is vulnerable to the transit of narcotics overland because of limited customs controls, lowpaid border officials, and a high volume of legitimate commercial vehicular traffic. Maritime trafficking is also relatively riskfree as the Navy is untrained in counternarcotics operations and has poorly maintained boats and only limited fuel. Traffickers conceal drugs in containers of frozen seafood shipped to the US which are difficult to inspect without damaging the contents.
III. Country Actions Against Drugs in 1996
Policy Initiatives. Honduras does not have a counternarcotics master plan but the Public Ministry in 1996 created a Counternarcotics Unit with its own prosecutor. The unit has 25 trained officers but suffers from a shortage of resources, including basic transportation. The GOH has been working on comprehensive money laundering legislation and new legislation on asset seizures. Both measures are expected to be adopted in 1997. It is drafting a comprehensive law on precursor chemicals which should be submitted to Congress in 1997.
Accomplishments. Cocaine seizures were up significantly, from 400 kgs in 1995 to 3,275 kgs in 1996. The Joint Information Coordination Center (JICC), established in 1993, aided law enforcement efforts by providing critical tactical information on drug trafficking. Demand reduction efforts have been increased due to the increase in trained personnel working in the area.
Law Enforcement Efforts. Counternarcotics is a priority for the GOH but its effectiveness is hampered by a lack of resources and insufficient coordination among law enforcement entities. There were 681 suspects arrested for narcotics offenses during the year, with 26 categorized by the DEA as major offenders.
Corruption. Corruption exists but is difficult to quantify. An active duty military officer sentenced to prison for narcotics trafficking in 1995 remains jailed, demonstrating at least some progress in ending of the traditional impunity enjoyed by the Honduran elite.
Agreements and Treaties. The GOH is an active member of the CICAD (InterAmerican Drug Abuse Control Commission), and has bilateral counternarcotics agreements with the US, Mexico, Belize, Jamaica, Venezuela and Colombia. There is no agreement with the US on money laundering or precursor chemicals. An extradition treaty between the US and Honduran dates back to the 1920's.
Cultivation/Production. Marijuana is the only illegal drug cultivated in Honduras. Although the GOH authorities use aerial photography, it has no sophisticated technology to determine crop size. Aerial herbicides are not used as illegal crops are cultivated alongside food sources.
Drug Flow/Transit. The majority of drugs in Honduras transit the country or its territorial waters. It is estimated that 90 percent of the drugs that enter the country are destined for the US.
Domestic Programs/Demand Reduction. Alcohol abuse and inhalants remain the most serious Honduran substance abuse problems, followed by marijuana and cocaine abuse. Crack cocaine use is limited but rapidly increasing on the north coast. The Honduran Institute for the Prevention of Alcoholism and Drug Abuse works with the Ministries of Public Health and Public Education, as well as with private sector groups, and manages an active demand reduction program. Hundreds of parents, school teachers and business leaders have participated in drug education workshops, leading to the creation of several communitybased drug prevention campaigns and programs. The Honduran DARE program is wellorganized and graduated more than 3,000 students from drug education programs in 1996. Plans are underway to expand this program with the training of additional police officers.
IV. US Policy Initiatives and Programs
Policy Initiatives. The goal of antinarcotics cooperation is to strengthen the capability of the GOH to suppress the trafficking, consumption and export of illicit narcotics. The USG works with the GOH specifically to develop the GOH counterdrug infrastructure and intelligence gathering and analysis capabilities, to increase interdiction and eradication efforts, and to reduce illicit drug demand.
Bilateral Cooperation. The USG and GOH maintain a bilateral Counternarcotics Committee. In 1996, the main recipients of USG assistance were the Public Ministry's Counternarcotics Unit, the Bay Island Task Force, demand reduction programs, and the JICC. Additionally, military training exercises have enhanced the armed forces' ability to support counternarcotics operations.
The Road Ahead. The GOH is firmly committed to the battle
against illegal drugs. The USG will support GOH efforts to professionalize
the antinarcotics unit of the Public Ministry, create a viable
deterrent to transit by sea, obtain and use counternarcotics intelligence,
and reduce demand. We will also encourage the speedy passage of
pending antinarcotics legislation.
Taking full advantage of the 2,000mile border between Mexico and the United States and the massive flow of legitimate trade and traffic, wellentrenched polydrugtrafficking organizations based in Mexico have built vast criminal empires that produce illicit drugs, smuggle hundreds of tons of South American cocaine, and operate drug distribution networks reaching well into the continental United States. Mexico is the principal transit route for South American cocaine, a major source of marijuana and heroin, as well as a major supplier of methamphetamine to the illicit drug market in the US. The drug trade and other criminal activities generate huge cash proceeds; given the intimate ties between the two countries' financial systems, and the absence of adequate controls in the Mexican system, Mexico has become a major money laundering center and the preferred international placement point for US dollars. Drug cartels launder the proceeds of crime in legitimate businesses in both the US and Mexico, favoring transportation and other industries which can be used to facilitate drug, cash and arms smuggling or to further money laundering activities.
The Government of Mexico (GOM) continued a comprehensive antidrug strategy, encompassing efforts to attack the drug trafficking organizations, combat money laundering and chemical diversion, eradicate drug crops, interdict drug shipments, and increase public awareness. The GOM intensified its investigations of major narcotrafficking organizations, particularly the Amado Carrillo Fuentes Organization (Juarez Cartel), the Arrellano Felix Organization (Tijuana Cartel), the Caro Quintero Organization, and the Garcia Abrego Organization (Gulf Cartel). The GOM arrested a number of major traffickers, including Juan Garcia Abrego, head of the Gulf Cartel and one of FBI's "Ten Most Wanted" fugitives; Jose Luis Pereira Salas, linked to the Cali and the Juarez cartels; and Manuel Lopez Rodriguez, a major maritime operator linked to Jose Castrillon. Drugrelated arrests and seizures of cocaine, heroin, and marijuana were up over 1995; eradication results were down slightly for opium poppy but up for cannabis.
Mexican Attorney General Antonio Lozano Gracia continued a twoyear effort to restructure Mexico's federal police forces and attack corruption within the criminal justice system. The Mexican Congress passed penal code reforms to criminalize money laundering and establish some controls on chemical diversion; it also passed an organized crime bill which authorizes use of modern investigative techniques, such as electronic surveillance, witness protection, and prosecution for criminal association and conspiracy. However, persistent corruption at all levels of government, frequent changes in personnel, and lack of followthrough on government commitments have combined to hinder Mexico's ability to implement its antidrug strategy.
During 1996, the US and Mexico established a HighLevel Contact Group (HLCG) on narcotics control to explore joint solutions to the shared drug threat, to coordinate the full range of narcotics issues, and to promote closer law cooperation. The GOM acknowledged the need to strengthen its counterdrug capabilities, given the serious threat posed by organized crime, and signed several technical, training, and materiel support agreements with the USG, as well as one on operational coordination. The GOM extradited thirteen fugitives to the US, including three individuals with claims to Mexican citizenship, and expelled Garcia Abrego and Pereira Salas. Garcia Abrego was sentenced by a United States court to 11 consecutive life terms in prison and fined $128 million.
II. Status of Country
Organized crime in Mexico poses multiple threats to the United States. These include production and distribution of illicit narcotics and money laundering. The immense, twoway flow of people and commerce facilitates crossborder smuggling of drugs, weapons, cash, stolen vehicles, migrants, and other contraband. Although precise figures are not available, USG antidrug agencies estimate that Mexicobased trafficking organizations control the movement of several hundred metric tons (mt) of cocaine, 56 mt of heroin, and up to 7,000 mt of marijuana to the United States. Cocaine is smuggled into Mexico from Colombia and other departure points in South America by all conceivable transportation modes. When not transported by traffickeroperated aircraft or maritime vessels, it is often mixed in with legitimate cargo shipments. Traffickers change their smuggling patterns, shifting from use of large cargo aircraft to greater dependence on maritime vessels, such as cargo containers and private sea vessels, air drops to fast boats off the coasts, and light aircraft flights into southern Mexico.
Mexicobased trafficking organizations now dominate the production and distribution of methamphetamine in the US. Methamphetamine consumption is rising in the US and health experts project that it may replace cocaine as the drug of choice in the future. Multiton shipments of precursor chemicals, notably ephedrine, have been traced to Mexico. The GOM took steps to control this diversion through legislation, increased seizures, and increased cooperation with supplier nations in Europe and Asia.
Mexico has long been a significant producer of opium gum and heroin destined for US consumption. Left unchecked, the 1996 crop could conceivably have produced nearly 13 mt of heroin. Through eradication, the GOM reduced the potential net production to 5.4 mt.
Mexico produces and imports chemicals used in the production of illicit drugs and is the primary entry point for ephedrine, used in the manufacture of methamphetamine. Mexican organized crime controls the manufacture, sale and distribution of methamphetamine in the US. Mexico is also an important source of designer drugs, illicit steroids and dangerous pharmaceuticals, such as flunitrazepam (major brand name "Rohypnol"; abused in the US and other countries in "date rape" situations and in combination with illicit drugs such as heroin), diazepam and clorazepam, often obtained directly from pharmacies or through fraudulent prescriptions and then diverted to illicit channels.
According to the GOM, drug abuse in Mexico remains low, but the most recent national drug use survey revealed an alarming increase in drug abuse along the US border and in large cities and tourist areas. Intravenous drug use, notably heroin, was on the rise in areas along the northern border. GOM health officials estimated that there were 2,0003,000 active heroin users in Ciudad Juarez alone. Drugrelated HIV cases are also on the rise.
III. Country Actions Against Drugs in 1996
Policy Initiatives. The GOM recognizes that drug abuse, trafficking and production pose a serious threat to national sovereignty and to the health and well being of its populace. Its counternarcotics strategy seeks to attack all phases of the drug problem, from production to consumption. During 1996, the Mexican Congress approved changes to the Mexican criminal code criminalizing money laundering and chemical diversion, and passed an organized crime bill, enhancing police investigative authorities. President Zedillo substantially increased the role of the Mexican military in interdiction and combatting drug trafficking organizations.
In March, Mexico and the United States agreed to establish a senior bilateral coordination mechanism to oversee and advance bilateral counterdrug cooperation. The resulting HighLevel Contact Group (HLCG) on narcotics control brought together the most senior USG and GOM narcotics control authorities. The HLCG met in Mexico City in March to establish priorities and develop a plan of action; in Washington in July to review strategy and progress on joint programs; and in Mexico City in December to review progress on specific action plans and goals for 1997.
Mexican Attorney General Antonio Lozano Gracia continued his twoyear effort to restructure his ministry (PGR) and attack official corruption. Major changes occurred within the PGR throughout the year, aimed principally at rooting out corruption. In August, the Attorney General removed approximately 1,250 agents and administrative personnel for corruption. Lozano was replaced by President Zedillo in December 1996 for lack of progress in several highprofile assassination investigations and for allegedly permitting leaks of information on high profile cases. Jorge Madrazo Cuellar, president of the National Human Rights Commission, succeeded him as Attorney General, declaring that he would use the full force of the law to confront organized crime, especially drug trafficking.
The senior leadership of Mexico's counterdrug effort was replaced along with Lozano in December, including the Commissioner of the National Institute for Combatting Drugs (INCD), Director General of the Center for Drug Control Planning (CENDRO), and the Director of the Federal Judicial Police. This was the second change in leadership for each of these institutions during 1996. These and other key law enforcement positions were filled with active duty or former military personnel as part of a policy shift by the GOM aimed at energizing counterdrug operations. In Mexico City, for example, a retired Army General became chief of police and appointed other officers to run 18 police stations in the Federal District. The President further selected the first active duty military officer to head the uniformed branch of Mexico's federal customs service.
This change has not been without negative repercussions. The experiment of replacing police personnel by military personnel in Chihuahua, reported on in the 1996 INCSR, was abandoned as unsuccessful. The increased role of Mexican Army forces in counternarcotics operations along the northern border resulted in numerous incidents in which Mexican army units came in close proximity to US Border Patrol elements on the MexicoUS border, including several unauthorized entries of armed Mexican patrols into US territory. Channels of communication were opened between Mexican Army commanders and Border Patrol sector chiefs to reduce risks to personnel in the field. General Jesus Gutierrez Rebollo, the military officer appointed as Commissioner of the National Counternarcotics Institute (INCD) in December, was removed by the GOM in February 1997 for alleged narcocorruption.
Traditionally, Mexico only extradited US citizens and citizens of third countries to the US, as the Mexican Constitution prohibits extradition of Mexican nationals except under "exceptional circumstances." President Zedillo, however, approved findings of "exceptional circumstances" in the cases of three fugitives with courtupheld claims to Mexican citizenship, thereby permitting their extradition to the US This was an important milestone in bilateral law enforcement cooperation. The Mexican Secretariat of Foreign Relations (SRE) continued to develop criteria for extraditions of Mexican citizens.
The economic crisis, combined with growing concern in Mexico about the increasing threat posed by drug trafficking and organized crime, convinced the Zedillo Administration to modify the 1992 policy of "Mexicanization" under which Mexico had assumed full funding of its counternarcotics programs. This permitted limited renewal of US technical and material assistance.
Corruption. In his September StateoftheNation address, President Zedillo acknowledged that corruption was deeply rooted in Mexican institutions and in the general social conduct of the nation. He added that the creation of a new culture of respect for law must start with public officials. He confirmed the determination of his Administration to confront official corruption and announced a government initiative to gradually eliminate it. This approach includes a higher military law enforcement profile combined with vigorous police and prosecutor anticorruption reforms by the Mexican Attorney General. The GOM signed the Organization of American States Corruption Convention, which was ratified unanimously by the Mexican Senate in October.
Attorney General Lozano's reorganization of the PGR was the beginning of a longterm effort to clean up and professionalize federal law enforcement. Lozano dismissed over 1,250 officials for incompetence and/or corruption, and revamped hiring, training and internal controls. Mass firings of state and local police also took place for various crimes and dereliction of duty. Under the public information coordination provisions of the 1995 Public Security Reform law, these names were passed to a federal police register to prevent rehiring by other police entities.
Thanks to the Zedillo Administration's efforts to uncover corruption, a great deal of information on the subject surfaced in 1996. A Mexican judge charged Raul Salinas de Gortari, brother of the former president, with amassing an illicit fortune of almost $24 million. In May, the GOM seized 117 kgs of cocaine base during a raid on a ranch in Quintana Roo owned by a senator from the ruling PRI party. A senior official in the Ministry of Tourism, involved in the decisionmaking process on legalizing gambling, was arrested and charged with illegal enrichment and related offenses.
Despite progress, and close cooperation with the US and other countries, serious problems remain. The Organized Crime Bill's provisions, along with personnel and other structural changes that have been made, could assist the GOM in countering entrenched official corruption. Enforcement, however, remains a daunting prospect, as the arrest of the new INCD Commissioner demonstrated.
Law Enforcement Efforts. Mexico took active steps to interdict narcotics and precursor chemicals, to eradicate illicit drug cultivations, to arrest and prosecute criminals, and to reduce domestic demand for illicit drugs, in furtherance of the goals and objectives of the 1988 UN Convention. Drugrelated killings across the country, including the assassinations of eight federal law enforcement officials assigned to Tijuana, gave tragic proof of President Zedillo's designation of drug trafficking as the principal threat to Mexico's national security.
Mexico's 1996 drug seizures increased over 1995, including 23.8 MT of cocaine, 1,015 MT of marijuana, 363 kgs of heroin and 171.7 kgs of methamphetamine. Nineteen drug labs were dismantled, up from nine in 1995 and 1994, including one cocaine processing lab. The GOM reported the arrest of 11,283 individuals (11,076 Mexican and 207 foreigners) on drugrelated charges, up from 9,901 in 1995. Mexico intensified its investigations of criminal organizations linked to drug trafficking. Among the most prominent arrests of major traffickers or associated criminals were:
Juan Garcia Abrego, Gulf Cartel leader on FBI's Ten Most Wanted list who masterminded multiton cocaine shipments via Mexico into the United States for many years;
Jose Luis Pereira Salas, a money launderer, broker, and load organizer for the Cali and Juarez Cartels;
Manuel Lopez Rodriguez, a presumed head of the Mexico based operations of regional members and Jose Castrillon Henao;
John Benjamin Warda, a US fugitive, on the FBI's Ten Most Wanted list, who escaped to Mexico in 1994 after being convicted and sentenced to 18 years on drug charges;
Jorge MendozaGrimaldo, a Mexican citizen fugitive convicted of distributing large quantities of cocaine and marijuana;
Pedro and Oscar LupercioSerratos, key associates of the Arrellano Felix organization; and
Gilberto VasquezCulebro and Gerardo CruzPacheco, suspected hitmen in the ArellanoFelix Organization, for the September murder of a senior MFJP Commander, Ernesto IbarraSantes.
Regrettably, other efforts met with less success. A Mexican court dismissed in January 1997 narcotics charges against Hector Palma Salazar, a major narcotrafficker arrested in 1995. The Munoz Talavera conviction achieved several years ago in relation to the 21 mt cocaine seizure in Sylmar, California was overturned on appeal. Also, two of Pereira Salas' accomplices were released by corrupt officials.
Looking at the broader picture, GOM law enforcement authorities and military personnel have not dismantled any major drug trafficking organizations. The organizationfocused bilateral task forces hold the greatest promise for success against these cartels, but GOM failure to provide either the financial resources or immunities and other protection for US law enforcement personnel, have undermined the ability of these units to fulfill their mission.
Mexico launched several national and international counterdrug surge operations in 1996. In March, the PGR's overland interdiction program Operation "Cobra" conducted an 11state surge operation focused on interdicting drugs and precursor chemicals; 2.1 mt of cocaine were seized. In May, the PGR and Mexican military forces conducted a fivestate surge operation against air, land and maritime targets in southern Mexico. In November, Mexico, seven Central American and three Andean nations conducted a tenday regionwide operation called "Unidos II."
Drug Flow/Transit. Interdiction activities resulted in a notable reduction of detected air shipments of illicit drugs in highspeed aircraft in the past year. Traffickers reacted quickly by shifting more of their operations to maritime smuggling. US experts estimate that, while many traffickers are increasingly using Eastern and Western Caribbean routes, Mexico continues to be the transshipment point for between 5060 per cent of USbound cocaine shipments and as much as 80 per cent of the methamphetamine precursors.
AntiCrime Legislation. In terms of longrange impact, Mexico's most significant success in 1996 was in legal reform. The Penal Code reforms passed in May criminalized money laundering. The GOM committed to enhance this legislation by implementing currency and suspicious transaction reporting requirements. The GOM has established a Financial Crimes Investigations Unit [See Money Laundering Chapter]. The Organized Crime Bill, passed in November, will give the GOM, when implemented, a whole new arsenal of investigative and prosecutorial tools, including electronic surveillance, witness protection, undercover operations, plea bargaining, and prosecution for criminal association. The Organized Crime Bill also permits the GOM to confiscate any material used in the production or transportation of any illicit item or substance and the seizure and forfeiture of assets involved in any illicit activity. The GOM froze local and regional bank accounts and confiscated suspected trafficker assets in 1996, including an estimated $3 million in real estate holdings belonging to Juan Garcia Abrego. Many of the attempted forfeitures have since been unfrozen and released.
Chemical Control. The GOM took a number of important steps to address the suspected largescale diversion of ephedrine and other precursor chemicals by polydrug cartels. The Mexican Penal Code was amended to criminalize certain kinds of chemical diversion, focusing specifically on the precursors required to manufacture methamphetamine, such as ephedrine and pseudoephedrine. The GOM strengthened regulations to ensure that commercial chemicals are used only for legal purposes. A US/Mexico chemical working group was established to advance cooperation in this area and a special PGR/INCDDEA task force was formed in Guadalajara to target the primary methamphetamine manufacturing and distributing organizations. The GOM also established bilateral consultation mechanisms with the governments of countries which produce or export methamphetamine precursors to ensure that shipments cannot be made to Mexico without the prior notification and approval of Mexican authorities. The GOM reinforced this by restricting importation of such chemicals to eight Mexican ports and indicated this might be further restricted to four. In related enforcement actions, the GOM seized 6.76 mt of ephedrine.
Cultivation and Production. Opium poppy and cannabis cultivation is illegal in Mexico and subject to forcible eradication by government forces. Land used for illicit drug crop cultivation is also subject to seizure. The GOM continued its established programs to locate and eradicate opium poppy and cannabis around the country. Eradication duties are divided between the PGR and the Mexican military. The Army's massive field presence in manual eradication operations, about 12,000 personnel during peak seasons, combined with Mexican navy eradication operations in coastal areas, are responsible for about 75 percent of the eradication performed. The PGR's aerial eradication program accounts for about 25 percent of the eradication totals.
The GOM does not make statistical estimates of illicit drug crop cultivation, but US analysts estimate that in 1996 Mexican growers cultivated 13,000 hectares of opium poppy, on par with 1995. They cultivated approximately 18,700 hectares of cannabis in 1996, up slightly from 18,650 in 1995. The GOM reported that its eradication campaign destroyed 14,671 hectares of opium poppy (down 5 per cent from 1995), and 22,769 hectares of cannabis (up 6 per cent). Since the inception of largescale drug crop reduction efforts over two decades ago, eradication alone has proven insufficient to eliminate illicit drug crop production, but it has certainly kept it in check.
Due to factors such as replanting of fields, incomplete destruction of cultivations, etc., the USG has developed a methodology to estimate the overall impact ("effectiveness") of eradication efforts. US analysts estimate that the GOM effectively eradicated 7,900 hectares of opium poppy (down from 8,450 in 1995), leaving approximately 5,100 hectares of harvestable cultivation, which could have yielded 54 mt of opium gum (5.4 mt of heroin). Compensating for increased eradication effort, traffickers have steadily increased the amount of poppy hectarage under cultivation during the past decade, resulting in a relatively steady supply of opium gum, 4060 mt. US analysts estimate that some 12,200 hectares of cannabis were eradicated effectively in 1996, up from 11,750 in 1995. This would have left approximately 6,500 hectares of harvestable cultivation, which could have yielded 3,400 mt of usable marijuana. Cannabis cultivation has declined by over half in the past decade.
Demand Reduction Programs. As drug abuse in Mexico crept upwards, limited government, volunteer and community treatment facilities attempted to cope with new patients. The Mexican Federal Government conducted no significant demand reduction programs in 1996 but state governments, universities, and nongovernmental organizations supported prevention and rehabilitation programs. Mexico cooperated with other nations in the hemisphere by sharing its experience in developing comprehensive drug abuse prevention programs. The US and Mexico established a bilateral working group on demand reduction under the auspices of the HighLevel Contact Group to exchange information, research findings, etc.
Agreements and Treaties. Mexico is a party to the 1988 UN Convention, the 1961 UN Single Convention on Narcotic Drugs and the 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. Mexico has signed several other international antidrug agreements, such as the Declaration of Ixtapa (1990) and the Hemispheric AntiDrug Strategy (1996), which commit signatories to take strong action against drug trafficking, including controlling moneylaundering and chemical diversion.
Mexico has bilateral narcotics accords with 21 countries. The GOM gave special emphasis to cooperation with the countries of Central America through information exchange, combatting criminal organizations, and coordinated activities to eradicate crops, conduct investigations, carry out legal proceedings, and prevent and reduce the demand for drugs in the region. The GOM also developed cooperative agreements with South American, Asian and European countries that have expertise in narcotics control. The USG signed a technical support letter of agreement with the Office of the Attorney General (PGR) for five counternarcotics projects and another with the Mexican Office of the Treasury to support a money laundering investigative unit.
IV. US Policy Initiatives and Programs
Policy Initiatives. USG narcotics control policy toward Mexico seeks to strengthen and support the political commitment and institutional capability of the Mexican government to take effective action against drug production and trafficking, to work with the GOM to apprehend and prosecute the trafficker leadership and disrupt or dismantle their operations, and to strengthen US interdiction on the border to complement GOM efforts, e.g., through cooperative initiatives to increase the effectiveness of counternarcotics activities. Senior officials from the GOM and USG held numerous meetings on narcotics issues throughout 1996:
Director of the White House Office of National Drug Control Policy Barry McCaffrey led a delegation to Mexico in March to discuss counterdrug cooperation, resulting in the creation of the HighLevel Contact Group. The Group met in Washington in July, and again in Mexico City in December. Technical working groups met throughout the year.
Secretary of State Warren Christopher led a Cabinetlevel delegation to the XIII USMexico Binational Commission meeting in Mexico City in May, which included a working group on Legal Affairs and AntiNarcotics Cooperation cochaired by Attorneys General Reno and Lozano.
A Senior Law Enforcement Plenary group, chaired by the PGR and US Department of Justice, met on counternarcotics and crime issues throughout the year.
In May, Members of the Mexican and US congresses met in Mexico for the annual session of the InterParliamentary Union. The agenda included a discussion of ways to improve bilateral counternarcotics cooperation. The two delegations agreed to expand the dialogue.
A Mexican congressional delegation, led by the chairman of the newlycreated Committee on Combatting Narcotics Trafficking, visited Washington for meetings with US counterparts. The visit broke political ground by significantly increasing the role of the Mexican Congress in drugrelated issues.
Bilateral Cooperation. The HighLevel Contact Group (HLCG) brought the highest USG and GOM authorities on narcotics control together on a regular basis and permitted a thorough and systematic review of the full range of narcotics issues. The March meeting established priorities and develop a plan of action. The July meeting outlined the basis for the joint strategy and reviewed progress on cooperative activities. At the December meeting, the Group approved a binational threat assessment and reviewed progress on specific action plans and goals for 1997 which will be used as the basis for a joint counternarcotics strategy. Members of HLCG working groups met throughout the year to advance cooperation in various technical areas, such as money laundering, chemical control, and demand reduction. Working groups created by the HighLevel Contact Group on Narcotics (HLCG) and the Senior Law Enforcement Plenary Group, cochaired by the PGR and the Department of Justice, met throughout the year to advance cooperation, legal development, training, and information exchange.
Mexico also hosted several other highlevel narcoticsrelated working visits in 1996 from the US Secretary of State, Attorney General, Secretary of Defense, and other highranking USG officials. Many Cabinetrank GOM officials, such as the Secretaries of Foreign Relations and Defense and the Attorney General, also visited the United States to discuss narcotics control issues. In order to enhance understanding of US criminal law, the GOM and USG sponsored a fourweek course on the subject for Mexican judges, prosecutors, and law enforcement officials in Mexico City.
Militarytomilitary cooperation expanded significantly in 1996 under the auspices of a bilateral working group. Counternarcotics emerged as a principal area of mutual interest and resulting program activity. The US Department of Defense provided training, technical and material assistance to the Mexican Secretariat of National Defense initiative to develop special antidrug response forces to support police interdiction efforts. In November, the US Department of Defense delivered 20 helicopters to the Mexican Army for its use in counterdrug operations; 53 more are to be provided in 1997.
In May, DEA, FBI and the US Customs Service signed an agreement with the PGR on cooperation with, and support for, counterdrug task forces located in northern Mexico. These units are complemented by similar interagency task forces on the US side of the border set up under the US Department of Justice's Southwest Border Initiative. In September, the PGR and the Secretary of Treasury and Public Credit (Hacienda) signed letters of agreement allowing the US Embassy's Narcotics Affairs Section to provide direct support for law enforcement and eradication operations and money laundering investigations, respectively. The USG followed up on a 1995 lease of 12 helicopters for the PGR's interdiction fleet with a transfer of spare parts and 12 decommissioned helicopters ("hulks"). The US Department of Defense also provided training slots for PGR pilot instructors and other key support personnel. In all, the USG provided training to nearly two hundred PGR and military personnel at US facilities.
The GOM provided support to a number of US investigations and testimony by GOM officials was critical in several US court cases. Likewise, USG agencies cooperated with the GOM's treasury department (Hacienda) on many of its investigations. The bilateral Financial Information Exchange Agreement (FIEA) served as a useful mechanism for sharing information on currency transactions through financial institutions.
As mentioned earlier, the US and Mexico made significant progress in addressing the problem of fugitives, including the first extraditions ever to the US of Mexican citizens under the "exceptional circumstances" provisions in Mexico's extradition law. This was an important milestone in bilateral law enforcement cooperation. In addition, the GOM has agreed to extradite to the US, as soon as he is arrested, Rodolfo Romero, a Mexican national wanted in the US for the murder of an Arizona police officer. At USG request, Mexico also arrested and expelled a number of fugitives to the United States, who otherwise would have been subject to lengthier, costlier extradition procedures. The GOM expelled a number of infamous nonMexican and dual nationals fugitives to the US, including: Juan Garcia Abrego, John Benjamin Warda and Francis Michael Carden, and Bolivian trafficker Jose Luis Pereira Salas, who was deported from Mexico and then arrested in Miami en route to Bolivia.
The Road Ahead. Mexico and the United States have agreed to undertake activities to enhance cooperative efforts against drug abuse, trafficking and production. The working groups of the HighLevel Contact Group will soon begin to map out a specific strategy to meet this goal. The elements will include: strengthening institutional capacities of law enforcement agencies, maritime and air interdiction, control of illicit drug cultivation and production, training and equipment, combatting criminal organizations, and reducing demand for illicit drugs. The USG will increase technical and material assistance and training, particularly to specialized police and military units and to support money laundering investigations.
While there has been progress, both unilaterally by the GOM and bilaterally with the USG, the threat posed to both nations by criminal organizations based in Mexico is grave. A substantiallygreater level of effort and of bilateral coordination is required if the two governments are to have a significant impact on those organizations or their transborder operations.
GOM actions against the Juarez Cartel of Amado Carrillo Fuentes in early 1997 demonstrated that even determined law enforcement actions can be thwarted by cartel counterintelligence capabilities. The GOM's arrest of Mexico's senior drug law enforcement officer, INCD Commissioner Jesus Gutierrez Rebollo, on charges of collusion with the Carrillo Fuentes organization, further demonstrated the severity of the corruption problem.
Despite the goodwill and determination of both governments, there are a number of obstacles and impediments which must still be addressed not the least of which are corruption, sovereignty sensitivities, and differences in legal systems and investigative approaches but there are now new mechanisms for addressing them. It is clear that 1997 will be a watershed year for determining the course of the bilateral struggle against this common threat.
In 1997, based on bilateral discussions, the USG will look for the GOM to make progress in achieving its objectives of:
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Nicaragua is a drug transit country with a growing consumption problem. Lack of budgetary resources inhibit government efforts to combat drug trafficking. The Nicaraguan National Police (NNP) is poorly trained and equipped, and the country's antiquated judicial system has a mixed record in convicting captured traffickers. US legislative restrictions on assistance to Nicaragua, conditioned in part on human rights performance, preclude normal USG cooperation with the Nicaraguan police and army. Nonetheless, there is very good working level cooperation between the GON and the USG on law enforcement matters. At the GON's request, the USG has agreed to open a DEA office in Managua in 1997. The GON participated in several regional counternarcotics operations and is a party to the 1988 UN Convention.
II. Status of Country
Drug traffickers' use of Nicaraguan territory as a transit point between South and North America increased during the year. A very limited police presence on the Atlantic coast have made the region a haven for drug traffickers. The country's nascent consumption problem also grew, spreading from coastal areas to interior urban centers, where small distribution networks developed. There is some cultivation of cannabis, principally for domestic consumption.
III. Country Actions Against Drugs in 1996
Policy Initiatives. After a successful threemonth trial period, the GON requested that the USG open a permanent DEA office in Managua. The GON's money laundering bill languished in committee in the National Assembly. The government's interagency Drug Council developed a "Master Plan for the Prevention of Drug Trafficking," but the plan had not been implemented by year's end. The GON attended the annual InterAmerican Drug Abuse Control Commission (CICAD) meeting, participated in the drafting of the hemispheric antidrug strategy but did not sign it. USG officials were granted permission on several occasions to enter Nicaraguan territorial waters and airspace to track suspected drug traffickers. The GON clearance process for such requests, however, is ad hoc and often caused delays that inhibited timely interdiction efforts.
Accomplishments. In spite of the limited resources available for narcotics interdiction, Nicaraguan authorities made some notable cocaine seizures. A GON/USG operation at Corn Island in November resulted in the seizure of 400 kgs of cocaine. The GON participated in three successful regional interdiction operations. The NNP mounted successful marijuana eradication efforts in the northwestern and northeastern sections of the country.
Law Enforcement Efforts. The NNP is the primary law enforcement agency on drug matters. Its interdiction efforts, however, are greatly hampered by a lack of counternarcotics training, intelligence capabilities, and even the most basic equipment and materials. The Army supports the National Police in interdiction operations and purchased three patrol boats to undertake maritime interdiction patrols and to respond to requests for assistance. The NNP arrested traffickers, resulting in seizures of cocaine and marijuana, but the judicial system often was unable to produce convictions.
Corruption. Extremely low police salaries and intimidation of judicial officials undermine interdiction efforts. In August, a jury exonerated six suspects "for lack of evidence" who had been arrested while trafficking 1,401 kgs of cocaine. The case demonstrated serious weaknesses in the judicial system. The present Supreme Court President recognizes this problem and is committed to effective reform.
Agreements and Treaties. Nicaragua became a party to the 1988 UN Convention in 1990. There is an extradition treaty between the US and Nicaragua, but the extradition of Nicaraguan nationals is prohibited by the Nicaraguan constitution. The GON signed a drug control cooperation agreement with Cuba in 1996.
Drug Flow/Transit. The sparsely inhabited, and partially uncharted Atlantic coast region, with its porous coastline, and cays and islands, is a haven for Colombian drug traffickers. Traffickers use Nicaragua's Corn Islands and the Miskito Cays as drug transit points to Mexico and the US. Traffickers move drugs to the mainland via fast boats and then ship them north in cargo containers containing perishables. They move smaller quantities from points south up the Pacific coast and via the Pan American highway.
Domestic Programs/Demand Reduction. Drug consumption in Nicaragua is growing, with cocaine and evidence of crack on the Atlantic coast and in Managua. The Ministries of Education and Health, as well as the Nicaraguan Fund for Children and Family (FONIF), undertook demand reduction campaigns within the limits of their modest budgets.
IV. US Policy Initiatives and Programs
Policy Initiatives. The US goal is to encourage Nicaraguan leaders to establish effective mechanisms to control illegal narcotics trafficking. We encourage the GON to expand regional security cooperation including joint action against illegal narcotics. The USG has repeatedly reminded Nicaraguan officials that direct USG assistance to law enforcement entities is legislatively restricted by Nicaragua's limited progress on outstanding human rights issues. We have urged them to move rapidly to remove this obstacle in order to proceed with more effective counternarcotics cooperation.
Bilateral Cooperation. Bilateral cooperation consists principally of NNP/DEA information exchanges and interdiction cooperation. The USG disbursed $4,500 for demand reduction programs to the "Centro Amigos," a Managua drug rehabilitation and vocational training center for children. USG/GON cooperation culminated in November in the successful execution of "Unidos II," a regionwide interdiction exercise.
The Road Ahead. We will encourage the GON to develop its national drug control strategy and interagency policy coordinating mechanism as called for in the Summit of the Americas. The USG will encourage the newly elected Aleman government to act quickly on outstanding human rights cases, which at present inhibit greater bilateral assistance to the police. In the meantime, we intend to investigate aggressively the prospects for narcoticsrelated assistance from a variety of USG agencies. We will ensure that the new GON realizes our interest in passage of the money laundering bill and in badly needed judicial reform.
Narcotics consumption and trafficking will increase in Nicaragua unless greater resources can be brought to bear to confront the traffickers' efforts to take advantage of this country's vulnerabilities. Domestic consumption will likely rise in step with improving economic conditions and increasing local narcotics availability.
Panama continued to make progress in drug control in 1996. Spurred on by last year's legislation tightening money laundering regulations, the Government of Panama (GOP) made Latin America's first Financial Analysis Unit operational, resulting in the presentation of patterns of money laundering to the GOP's National Security Council for eventual prosecution. In one of the region's most significant arrests, the GOP captured the Cali Cartel's primary maritime smuggler, Jose Castrillon Henao, who is scheduled for trial in 1997. The USG provided six helicopters to the GOP in late 1996, for the express purpose of combatting narcotics.
The GOP made major seizures on land and in territorial waters, cooperating fully with all USG requests to board and search suspect Panamanianflagged vessels. The GOP's achievements in 1996 included an eradication campaign which resulted in the elimination of the country's fledgling coca cultivation and significant damage to cannabis cultivation, aggressive prevention and education campaigns, and the firstever conviction of a major money launderer from the Colon Free Zone. The GOP needs to continue to follow up in arresting and convicting major money launderers, improve interdiction capabilities, curb both money laundering and drug trafficking activities in the Colon Free Zone, and make effective use of the Financial Analysis Unit.
II. Status of Country
Panama is a major financial and commercial center, ideally positioned for narcotics smuggling and illicit financial transactions. Money laundering is a major problem in Panama. Local factors facilitating money laundering include bank secrecy, inadequate controls on cash and commodity imports/exports, lax incorporation regulations, and a dollarbased economy. Definite steps to improve regulations included the startup of the Financial Analysis Unit, and the establishment of computerized data bases for tracking financial movements in the Colon Free Zone. The GOP also established a Financial Investigative Unit which prepares money laundering cases for prosecution.
Although not a large grower of coca or marijuana, Panama is a major drug transit point due to its close proximity to the drug growing and manufacturing countries of South America. Authorities seized 25.8 mt of drugs, 80% of which represent drugs interdicted from international trafficking and transhipment sources. The USG's loan of six helicopters should assist the GOP in its improving interdiction capability.
III. Country Actions Against Drugs in 1996
Policy Initiatives. The Perez Balladares administration strengthened the government's antimoney laundering policy, including new legislation which will help Panama to fulfill its obligations under the 1988 UN Convention. Additional legislation has been promised for 1997.
Accomplishments. The key law enforcement development was the arrest of the Cali Cartel's key operative Jose Castrillon Henao. Authorities seized a total of 25.8 mt of illegal drugs during the year, one 18 mt seizure of marijuana, and the rest mostly cocaine, including a 7.8 mt maritime seizure. This is almost four times the amount seized in 1995 which totalled seven mt. There were 1,249 drugrelated arrests in 1996, much higher than the 886 arrests in 1995. Over $7 million was confiscated from bank accounts and another $281,000 in cash from individuals involved in drug trafficking.
Law Enforcement Efforts. The Joint Information Coordination Center (JICC) improved intelligence collection and analysis through training seminars and new Guardian computer software. The JICC participated with the Judicial Technical Police (PTJ) and other law enforcement agencies during operations in various sections of the country. The DEA oversees the JICC; the Center's cooperation with US authorities has resulted in major drug seizures.
Panama is not a major producer or significant consumer of essential chemicals. It processes small amounts of cocaine. Law 13 of 1994 establishes penalties for the illicit manufacture, use, and transport of precursors. Several chemical companies were examined during the year, based on USG information; however; none were charged with wrongdoing.
Corruption. GOP law enforcement agencies continued to crack down on corruption. Some 250 Customs employees were dismissed for corruption. More than a dozen policemen from the PNP and a similar number from the PTJ's investigative police have been fired for corruption. The Immigration Service moved strongly against narcoticsrelated corruption by firing 32 employees.
Corruption in the judiciary is a problem. The Legislative Assembly's ongoing impeachment proceeding involving the Supreme Court revealed considerable evidence of corruption. In June, President Perez Balladares acknowledged that accused trafficker Jose Castrillon Henao made contributions to his 1994 election campaign. A subsequent investigation by the Attorney General revealed the contributions were handled by Second Vicepresident Felipe Virzi.
Agreements and Treaties. Panama is party to the 1988 UN Convention, the 1961 Single Convention on Narcotic Drugs and its 1972 Protocol, and the 1971 Convention on Psychotropic Substances. The GOP ratified a mutual legal assistance treaty (MLAT) with the US in 1991; the final agreement was put into effect in 1995. The GOP is an active participant in CICAD, and participates in the Caribbean Financial Action Task Force (CFATF) and the Basel Committee's Offshore Group of Bank Supervisors (OGBS).
The USG signed four new letters of agreement with the GOP in 1996. They included Ministry of Government and Justice, Ministry of Finance and Treasury, Public Ministry, and Ministry of Education. In October, the USG proposed a new agreement concerning expanded maritime counter narcotics cooperation with the GOP.
Illicit Cultivation and Production. Panama is a smallscale producer of marijuana and coca leaf. Panama's National Air Service (SAN), supported by USG aircraft and crews, successfully carried out coca and marijuana eradication campaigns during the year, and eradicated approximately 125 hectares of coca in February in the Darien Province along the border with Colombia. Upon return in September, a T65 Thrush team and SAN reconnaissance missions revealed that the previous task force had completely destroyed coca cultivations in the traditional growing areas and that growers were making no effort to replant fields. Reconnaissance missions confirmed that glyphosate spraying had no adverse environmental effect on the area, as the fields were overgrown by jungle flora. New marijuana fields were found and the team sprayed over 50 hectares in the Las Perlas Islands, off Panama's Pacific Coast. Continued, periodic Thrush deployments will be necessary to control marijuana and ensure that coca will remain extinct.
Drug Flow/Transit. Although authorities seized extremely large amounts of marijuana on several occasions, the majority of the drug seizures in Panama are of cocaine; lesser amounts of heroin also are being found. Panama is a drug transit country. Interceptions are up over previous years, but illegal drugs continue to transit Panama by sea, air, and land routes. There were maritime seizures in Panamanian territorial waters or port facilities on both coasts.
Money Laundering. The GOP's Financial Analysis Unit (FAU) became fully operational in Jul. The FAU receives and processes data from multiple sources. The Financial Investigative Unit (FIU), which is under the direction of the PTJ, will be fully operational in early 1997. While awaiting a new computer LAN system, which is being purchased with USG assistance, the FIU already has received training in money laundering and financial crimes from ICITAP and the FBI, and is being trained on its new software. Both the FAU and the FIU expect to develop major money laundering cases for prosecution by the Public Ministry.
Presidential Executive Decree 234 of October 17, 1996 will implement Panamanian Law 46 which was promulgated on November 17, 1995. This new decree requires exchange houses, finance companies, insurance companies, and others to report transactions over $10,000 directly to the FAU. The Colon Free Zone companies submit summary lists to the FAU and report individual transactions to the Free Zone Directorate. Reporting requirements include cash, travelers' checks, bearer payment orders, or deposits on the same date or in close dates during a work week, or by the same issuer or issuers of the same market.
Banking Commission Accord Number 296 of October 31, 1996 became effective on December 2. This accord implements Panamanian Law 46 of November 1995 as well. Accord 296 requires banks to establish a suspicious transaction registry for possible drugrelated crimes. The registry is to include identity, origin of operation, dates, amounts, and type of information. The new regulation lists 13 different kinds of suspicious transactions, 11 unusual operations, 16 suspicious activities related to information requirements, five suspicious transfers, and five suspicious changes in the pattern of business. Panama's first money laundering trial, a case against three Colon Free Zone businessmen began November 6, 1996 in Colon. The court's ruling is still pending. Accused money launderer Alberto Laila pleaded guilty on December 19 of engaging in major money laundering operations in the Colon Free Zone and was given a fouryear prison sentence.
Asset Seizure. Panamanian law provides for seizure of narcoticsgenerated proceeds, but assets are rarely forfeited. A draft law was presented by the GOP's Attorney General through the Government, Justice, and Constitutional Affairs Committee on December 1995 which would reform certain judicial code provisions, particularly those relating to asset forfeiture, allowing seized assets to be used by GOP agencies. The draft law is being processed in the Legislative Assembly. Thereafter, it will be thoroughly debated before going to the full Assembly. Passage of the legislation would allow for mutual asset sharing between the US and Panama.
Domestic Programs/Demand Reduction. The use of cocaine and its derivatives, crack and "bazuco", has reached epidemic levels in Panama, which has the highest levels of cocaine addiction in Central America. The Ministry of Education takes the lead in demand reduction activities. In 1997, 2,000 youth leaders from public schools will receive training in prevention and reduction techniques. The Ministry of Education has also started two new programs. A "JointheWinners" program for students from 612 years of age teaches the dangers of drug usage and stresses selfesteem. "Smoke Hunters," teaches the dangers of smoking tobacco and marijuana. The USG sponsored two US experts in treatment, rehabilitation, and prevention to speak at a national drug conference. They also met with the Minister of Education, leaders of Cruz Blanca, and Hogares Crea, as well as the first lady of Panama and the Panama coalition for a drug free community. The USG provided reference materials to the Ministry of Education's national drug awareness resource center.
Demand reduction efforts also are carried out by the National Commission for the Prevention and Study of Drug Related Crimes (CONAPRED), the Ministry of Health, and leading NGO's such as Pride/Panama and Cruz Blanca.
IV. US Policy Initiatives and Programs
Policy Initiatives. The USG provides material, information and training to the GOP to improve the performance of its counternarcotics institutions. This assistance is used against money laundering and trafficking organizations and to disrupt the flow of drugs and drug funds. The USG is committed to strengthening Panama's judicial system, encouraging revised laws and regulations, and ensuring strict law enforcement.
Bilateral Cooperation. USG and GOP law enforcement agencies cooperate by conducting joint investigations, sharing intelligence, and collaborating on the interdiction of illegal narcotics. The USG has comprehensive counternarcotics programs with the GOP and supports several extensive narcoticsrelated assistance projects, including long term onsite assistance to the SMN by deployed US Coast Guard International Maritime Law Enforcement Team (IMLET) members. The GOP must be encouraged to continue its multilateral cooperation as was accomplished in the Castrillon case, and with regional governments, during Operation Unidos II.
In 1996, 16 National Air Service personnel received training from the International American Air Forces Academy, and a total of 46 National Maritime Service (SMN) students graduated from the US Navy's Naval Small Craft Instruction and Technical Training school (NAVSCIATTS) in Panama. In February 1996, the USG and SMN conducted an "Operation Vista" which resulted in 27 atsea boardings. During September and October, the SMN and USG conducted another "Operation Vista" involving five SMN vessels. The SMN seized two vessels suspected of narcotic trafficking, a fishing vessel and a fast boat. They found cocaine traces on both vessels, but no drugs.
The GOP is making progress toward accomplishing the goals of its bilateral agreements with the USG for maritime law enforcement and chemical control. The GOP has pledged to sign a ship boarding agreement in 1997. The PTJ provided information on suspected essential chemical shipments, and has participated in regional conferences on slowing down the flow of precursor chemicals into the region.
The Road Ahead. The GOP must improve existing institutions, continue to improve its legal base, and take appropriate action in the areas of investigation and prosecution of money laundering, trafficking offenses, and court prosecution. The judicial process is a weak link in the overall administration of justice. The GOP still is not fully providing asset forfeiture assistance to the US or other countries. Due to limited resources and expertise, the GOP will seek foreign assistance to build effective institutions. The USG's objectives for 1997 include better implementation of money laundering controls, bringing more money launderers to trial, improved interdiction efforts, automation of merchandise movement in the Colon free zone, institutionalized coordination of national drug control policies, and tighter customs controls at ports and airports. The GOP needs to move forward with building a base/shipyard for the SMN on the Atlantic coast, along with a resupply facility in San Blas for both the SMN and the SAN. The USG also hopes to create SAN selfreliance through the appropriate use of six INL helicopters in both crop continued advancement in demand reduction programs.
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