THE WORLD OPIUM SITUATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01601R001000040003-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 85
• Document Creation Date: December 9, 2016
• Document Release Date: July 19, 2001
• Sequence Number: 3
• Publication Date: October 1, 1970
• Content Type: REPORT

Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Abuse of opium-based drugs has been on the rise
in the postwar period despite international efforts
to suppress it. The present system of international
controls is embodied in the 1961 Single Convention
on Narcotic Drugs, adopted under United Nations
auspices. By the time the Convention was adopted,
the controls over opium -- once it came into the
possession of the state export organizations and the
pharmaceutical firms -- had proved on the whole to
be quite effective. One of the main control problems,
continues to be the preventing of the diversion of
farm production directly into the illicit traffic.
In order to reduce leakage from the farm, the
Single Convention calls for the establishment of
state opium monopolies which are to designate areas
for legal poppy cultivation and license individual
farmers to grow the crop. The Convention also permits
exports only by those countries which legally ex-
ported it in the period prior to 1961: Turkey,
Bulgaria, India, Iran, the USSR, Greece, and Yugo-
slavia. To oversee compliance with its provisions,
the Convention established the International Nar-
cotics Control Board; however, the INCB has no
enforcement powers.
Notwithstanding the Convention's provisions,
illicit production has continued to flourish for
many reasons beyond the lack of enforcement authority
of the INCB. In addition to the inherently
difficult task of administering crop control, the
responsible factors include the persistence of con-
sumer demand and the limitations on the ability of
enforcement authorities to deal with illicit traders.
Given the present scale of opium-based drug abuse
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
it is unlikely to be lastingly suppressed without
greater international cooperation in treatment and
enforcement programs as well as in attempts to
control production directly. In any case, progress
will not be easy, because opium production and
consumption reflect larger problems of political,
social, and economic developments.
This report attempts first to estimate the scale
of world opium production and consumption and to
describe the patterns of illicit trade and its
organization at the wholesale level. Second, it
traces the history of the major changes in the
opium market in the postwar period. Finally, the
report discusses the problems involved in controlling
illicit production, consumption, and trade in opium
and its derivative products.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
The Production, Consumption
of Opium and Its Derivatives
Sources and Uses of Opium and Opiates
Opium is produced from several varieties of the
poppy plant, Papaver somniferum. This annual
plant rises three to four feet on a thin main stalk
and produces several blossoms and pod-like structures
about the size of an egg. Planted mostly as a fall
crop but sometimes also as a spring crop, it requires
intensive cultivation and much harvesting labor.
About two weeks after the blossoms fall the pods are
lanced by hand and the white latex-like raw opium
oozes out and coagulates. It is then collected by
scraping the gum from the pod. Upon further exposure,
the gum turns brown and hardens into a brick-like
form. The chief active chemical principle of opium
is the alkaloid morphine, the sole source of the drug's
simultaneously analgesic, narcotic, and addictive
properties.
In its pure state, opium may be eaten, smoked, or
drunk in potions. Eating and smoking are the pre-
dominate forms of consumption. Opium has a long
tradition. in folk medicine, and addiction to it is
to some extent associated with the alleviation of
physical pain in settings of poverty and low
standards of public health. The habitual use of
opium for nonmedicinal purposes also reflects long-
standing customs in many parts of the world. Only
relatively small amounts appear to be consumed by
people reacting to stress in settings of rapid
social change and conflicts between traditional and
modern values.
In modern medicine the use of raw opium has been
long superseded by its easily distilled derivatives
(opiates) in which the morphine content is isolated.
Most morphine is still produced from raw opium, but
increasingly it is being derived from the industrial
processing of poppy straw (pods and upper parts of
stalks). This yields no opium and results in the
direct production of morphine. The use of morphine
as an analgesic has fallen off especially since
World War II in favor of synthetic substitutes,
but the further processing of morphine into codeine,
the major antitussive in modern medicine, has been
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
on the rise. While addiction to morphine is now
a serious problem in only a few countries, heroin
addiction has spread to many. Heroin is a semi-
synthetic derivative of morphine obtained by the
action of acetic anhydride or acetylchloride on
morphine. Now generally regarded as having no
unique medical value, heroin is outlawed in most
countries. For the most part it is now produced
in small, crude clandestine laboratories.
In morphine the effects of opium are multiplied
several times and in heroin they are even more
intensified, particularly when the substances are
taken by injection. Euphoria and indifference to
pain and distress are heightened as are the after-
effects and addictive craving. Although a sub-
stantial portion of populations consuming opium may
be classified as users rather than addicts, in those
consuming morphine and heroin addiction is the
general rule. Addiction to heroin especially can be
associated with societies undergoing rapid social
change and with attendant conflicts between tradi-
tional and modern values. In contrast to opium
consumption, heroin consumption is essentially an
urban phenomenon restricted mostly to people under
40 years of age.
Zone of Production
The location and extent of opium poppy cultiva-
tion are profoundly influenced by factors of
climate, terrain, and economics. While the opium
poppy can be grown in a variety of soils, it dis-
likes heavy, clayey, or sandy soils. The plant
thrives in warm but not humid climates. It re-
quires only a moderate amount of water before and
during the growth cycle to insure profitable yields,
but rainfall during the harvest period can be dis-
astrous because it leaches alkaloids from the pod.
Much of the sometimes irrigated flat terrain of
mountain valleys, 3,000 feet or more above sea level,
in the Middle and Far East meets the climatic and
soil conditions well. Most world poppy cultivation
occurs within a zone extending from the Turkish
Anatolian Plain to Yunnan Province in China (see
Figure 1).
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
The greatest concentrations of opium poppy
acreage are in India and within the contiguous
areas occupied mostly by hill tribes of Burma, Laos,
and Thailand. India has well over 35,000 hectares
under cultivation, and the other Far Eastern areas
probably have a significantly larger acreage under
cultivation. In the region embracing the Pushtu-
speaking peoples of northwestern West Pakistan and
northeastern Afghanistan and in the Central Asian
republics of the USSR there is also extensive poppy
acreage. Turkish poppy cultivation was reported
to be 12,000 hectares in 1970, probably somewhat
less than in either Afghanistan, Pakistan, or the
USSR. The poppy acreage in Communist China is
unknown but may well be less than it is in Turkey.
Iran, which abolished production during 1956-68,
planned to have 12,000 hectares under poppy culti-
vation in the fall of 1970. The scattered cultiva-
tion in Mexico, South America, and parts of North
Africa is of very little significance compared with
the major growing areas. In all the above-cited
areas, poppy is raised by hand cultivation and
harvesting, chiefly to obtain raw opium. Poppy
is raised also by mechanical cultivation and har-
vesting on a relatively modest scale in Northern
and Eastern Europe and the European parts of the
USSR for the purpose of processing poppy straw into
morphine. In 1969, such processing accounted for
about 40% of world morphine production. An equally
important purpose of this European and Soviet cul-
tivation, however, is to obtain poppy seed for
bakery products.
In most opium-producing areas, poppy cultivation
represents only a minor portion of the cropped
land. Poppy farmers from Turkey and Iran through
India seldom devote more than one hectare to the
crop. In these producing countries the farmers
use the major part of their land to produce food
for their own needs, chiefly to produce wheat. In
some producing areas of the Far East, however,
poppy acreage represents a larger portion of the
cropped land. Among some of the Meo hill tribes
of northern Thailand pursuing a slash-and-burn
type of agriculture, half or more of the cropped
land may be in poppy, with the remainder in upland
rice. These farmers produce only part of the rice
they need for food, and hence they market part
of their opium for additional rice.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Beyond the need to produce food, another major
constraint on the extent of poppy cultivation arises
from its highly labor-intensive character. Some
authorities have estimated that from 175 to 250 hours
of labor are required to produce one kilogram of
opium. Although yields vary with soils, temperatures,
rainfall, and quality of seed, they also depend upon
farming techniques. Thus in practically all produc-
ing areas yields can be significantly increased with
proper irrigation. Moreover, because poppy rapidly
depletes the soil of nutrients, good yields can be
obtained only with fertilization or, at a minimum,
by rotating land used for poppy with other crops.
The most important determinant of yields, however,
is the amount of labor used. The plant cannot thrive
without thinning the young plants to allow for
proper spacing and without several hoeings and weed-
ings during the growth cycle. Harvesting, however,
requires the greatest amount of labor. Each of the
five or six pods growing on a single plant must be
lanced and then -- usually within a 24-hour inter-
val -- the gum must be collected. Lancing is
commonly done at least twice (with a one-week in-
terval between the first and second time) in Turkey
but may be done as much as six or eight times in
India. This harvesting labor is sufficiently time-
consuming to occupy entire families -- and sometimes
hired hands as well -- over periods extending from
two to three weeks to two months at times close
to the harvesting or planting of other crops. Be-
cause of the tremendous amount of labor it involves,
poppy tends to be raised only where labor is
abundant and cheap -- annual per capita incomes
range from $370 in Turkey to less than $100 in India
and the Far East.
The Economic Motivation to Produce
The farmer's income from poppy cultivation is
affected both by the yield he obtains and by the
quality of his product. These, in turn, reflect
to an important degree the intensity of his culti-
vation techniques and his care in developing quality
seed. In gross terms, yields are highest in India
(20 kilograms per hectare), but Indian opium is
commonly adulterated with seed, leaves, and even
foreign matter. Turkish yields during the late
1960s ran 15 to 16 kilograms per hectare. Afghani
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
and Pakistani yields may approximate the Turkish
but mainly because of adulteration. In Burma, Laos,
and Thailand, yields may amount to only about 8 to
10 kilograms per hectare. The quality of opium may
be defined as its morphine content. In Turkish
opium this ranges from 9% to 13%, the highest in the
world. In other producing countries the morphine
content is generally lower, varying from 4% to 12%.
In Turkey and India the farmer receives additional
income from the harvesting of poppy seed and straw.
In general the farm price of opium, both licit
and illicit, tends to decline moving from west to
east in a pattern corresponding with changes in
product quality. On the illicit market the price
to Turkish farmers is estimated to have been about
$25 per kilogram in 1969 (see Table 1).
Table 1
Prices to Farmer for Raw Opium
1969
Producing Country
Us $
per Kilogram
Turkey
Licit
11.00
Illicit
25.00
Pakistan
Licit
10.00
Illicit
12.00 to 15.00
India
Licit
10.00
Burma/Laos
Illicit
12.00
Iran
Licit
91.80 a/
a. Price for top-grade opium only.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
In Pakistan the illicit price averaged an estimated
$12 to $15 and in Burma, Laos, and Thailand about
$12. Prices to farmers on the licit opium market
vary less markedly, except for the special case of
Iran. In Turkey and India, the only significant
exporters of licit opium, the upper limit is de-
termined by the world market price. Both countries
export most of their licit production and attempt
to make a small profit on the export sales. For
Turkish opium the price was about $12 per kilogram
during most of the 1960s, and for Indian opium it
was about $1 less. Iran is a special case because
when it resumed licit production in 1969 it set a
producer price of $91.80 per kilogram for top-
grade opium and an average price of perhaps half
that amount in order to discourage leakage into
illicit market channels.
Even though the price for opium declines moving
eastward, poppy cultivation as an element of
farmers' incomes is usually more significant in
the eastern countries. In Turkey, for example,
earnings for the 70,000 farmers cultivating poppy
in the late 1960s averaged $70 to $80 per year, with
half this amount deriving from illicit production.
These earnings represented roughly 10% of the
average income in the major poppy-growing areas of
about $700 per farm and accounted for perhaps half
the cash income per farm. In India, 200,000 farms
each earned $70 to $75 on the average from poppy
cultivation. This could easily represent 15% to
20% of average total income per farm and probably
most of its cash income. In Burma, Laos, and
Thailand, opium is often the principal source of
farm income.
Given the climate and soil conditions of the
main opium-producing countries, there is no readily
substitutable crop that can yield a comparable
income return per unit of cultivated land. In West
Pakistan, for example, much of the area sown to
poppy could be used for high-yielding Mexican wheat,
but given current yields in the area, the return
to the farmer would be only about $50 per acre,
compared with the $90 realized from poppy. In
Turkey it might also be possible to raise Mexican
or other high-yielding varieties of wheat on some
poppy acreage and obtain the same return as in
Pakistan. The disparity between the income from
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
wheat and poppy per unit of land would be even
greater there, however, since the average price for
opium --- counting licit and illicit sales -- is
considerably higher than in Pakistan. In order for
wheat fully to compensate the farmer for forgoing
opium production, yields would have to be almost
doubled in Pakistan and in excess even of that in
Turkey. A recent UN survey of the poppy-growing
areas of northern Thailand concluded that the pros-
pects for developing an alternative crop to poppy
that would bring anything like commensurate returns
are not encouraging.
Licit Production, Consumption, and Trade
Licit opium production probably approaches 1,100
tons annually, or less than half of total world pro-
duction (see Table 2). India, with 750 tons of
licit output in 1968, far outranks any other
national producer. The USSR and Turkey, each with
an output of roughly 120 tons in 1968, are the
second-ranking producers. On the basis of the
likely medical requirements for its vast population,
production in Communist China can be estimated at
75 to 100 tons. Production in North Vietnam is
very much less. Pakistan, Japan, Bulgaria, and
Yugoslavia all produce only small amounts of licit
opium. In 1969, Iran produced 9 tons.
Practically all the world's licit opium pro-
duction is used for the manufacture of medicinal
opiates. Morphine production currently runs about
160 tons per year, with 40% originating from the
processing of poppy straw. In 1968, 30,000 tons
of poppy straw were processed, including 6,500
tons by the USSR. Other leading processors include
the Netherlands, Czechoslovakia, Hungary, and Poland.
The supply of opium is adequate for world medicinal
needs and, although prices for opium have risen
in the past year or so, this has reflected no long-
term shortages.
The major portion of licit opium produced --
about two-thirds of world production in the late
1960s -- is exported as raw material to pharma-
ceutical firms, chiefly in Western Europe and North
America. India accounted for more than 80% of
these exports in 1968 and Turkey for nearly all
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
0
-ri
cd U
4J 0
O rb
E- 0
$?
P4
O 0 OLn 000
LO O O N LO rl r-I
a% N r-I r-I r-I
0 0 Ln ri O r-I 0 0 0 0 0 0 0
-P N r-I j71.IJ bP -I-I 4-L 0 0 +I 4J
N r-I Q) Q) IRV N
Ln Z Ln Z Ln c) O LC) Ln
N I- I- O 0
01 r--I ri r-I
O O Ln 000
O O N LO Hr-A
N N H r-I
I~.
00I 101 000000
-1-L O I I -I-- I -N O O 4 -I--
H -~r N
Ln Ln O O Ln LO
r- N O O
ri H H r-I
0 0 Ln r- -I ' 4 H4 0
Ln N r1 b1 bn m -1--
N r-I H Q) Q) Q)
z z z Ln
r
cd cli
.r.1 .u
ri I~ 0I
?, r-i .{-I i-r R) 0
co Q) U) U) 9 0 0 0 r-i U I-I
-r.I x a 0 -ri 'IC 9 4 E -ri (n -r1 a)
rO )4 (!) 01 4 a-d is H R) 0 k
H E+ >4 04 173 U i GPI E-+ .VEr' 0
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
the remainder. Both countries sell most of their
licit output abroad. The USSR and China export
none of their opium production, and the USSR supple-
ments its domestic supply with substantial imports
from India. Exports of poppy straw also serve as
medicinal raw materials. World exports amounted to
6,560 tons in 1968, with 98% from Turkey.
A very minor portion of licit opium production
is used by some governments for the treatment of
addicts, mainly to provide maintenance dosages for
registered addicts. Maintenance programs are in
effect in India, Pakistan, and Iran. India
planned to dispense two tons of opium in 1970 to
registered addicts through authorized vendor out-
lets. This amount would account for only a small
percentage of total consumption by Indian addicts
and users. Pakistan's program is also small in
relation to total consumption. Iran began regis-
tering addicts only in late 1969. By March of
this year, 30,000 persons had registered, and by
mid-year the figure may have reached 50,000, or
perhaps 15% of the national addict and user popu-
lation. Though the quantity of opium provided
by government maintenance programs varies among
these countries, in each of them, as in other
victim countries, most addicts are supplied ex-
clusively by the illicit market.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Illicit Production and Consumption
The world's illicit production of opium is an
estimated 1,250 to 1,400 tons annually. The princi-
pal concentration of illicit production is the Far
East with the other areas tending to rank in
descending order of importance moving westward.
Together Burma., Laos, and Thailand account for an
estimated 700 to 750 tons, or more than half of
world illicit output, and Burma alone for about 30%.
Afghanistan-Pakistan is in second place as a pro-
ducing region., with an output on the order of 300
tons. Pakistan?s production of 175 to 200 tons is
about the same as India's. Turkey's illicit output,
estimated at 100 tons in 1968 and 1969, may not be
significantly less, Some opium is produced illicitly
on a very small scale in Mexico and in some South
American, North African, and Near Eastern countries.
Communist China's once vast illicit output dwindled
to insignificance in the latter 1950s. Illicit out-
put in the USSR, the Communist countries of Eastern
Europe, and North Vietnam is probably also insignif-
icant
It is possible that the user and addict popula-
tions consuming the world's illicit supply of opium
and opiates number at least two million persons
(see Table 3)m No firm data on these populations
are available for any individual country, and for
the most part the only estimates available are based
on the judgments of health or police authorities
or independent observers. Moreover, estimates vary
widely as to the populations in individual countries.
Yet practically all observers are agreed that the
largest single grouping of users and addicts consists
of overseas Chinese in the Far East and Southeast
Asia. Burma, Laos, and Thailand may together account
for.three-quarters of a million users and addicts,
with Burma having the largest share. Hong Kong alone
may account for another 150,000, indicating the
highest per capita opium-based drug abuse rate in the
world. The largest national populations of users
and addicts are in Burma and Iran where their number
in each could be 350,000. A likely figure for India
.is 250,000 to 300,000 persons and for the Afghanistan-
Pakistan region, perhaps 100,000 to 150,000. For
North America (mainly the United States) and Western
Europe the best estimates are more than 100,000 and
75,000, respectively.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Annual Consumption of Illicit Opium
and Opiates and Sources of Supply
Metric Tons of Raw-Opium
Country/Area
Users and Addicts a/
(Thousand)
Domestic Illicit
Supplies
Net Illicit
Imports
Iran
350
Negl.
Afghanistan/Pakistan
100 to 150
75 to 100
India
2.50 to 300
175 to 200
Negl.
Thailand
250
175
Negl.
Burma/Laos
500 -
350
Negl.
.Hong Kong-
150
--
105
Singapore/Malaysia
40
30
North America
100
40
Western Europe
75
--
30
Other b/
100
Negl.
70
a. Including heroin and morphine addicts whose consumption is converted
to units of raw opium equivalent.
b, Including Indonesia, South Korea, Japan, the Philippines, Taiwan,
Macao, North Africa, and the Near East.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Most of the world's users and addicts consume
opium in its raw form either by smoking or eating.
From Iran through India, eating is generally the
main form of consumption, whereas in the Far East
and Southeast Asia smoking is more common. In Iran
and all the countries now producing illicit opium,
except Turkey, user and addict populations are
traditionally found in both rural and urban areas
and among both the youth and older people. The
poppy-growing tribes of the Far East, in particular,
contain sizable numbers of users and addicts.
Turkey itself, however, has no significant user or
addict population.
The illicit consumption of opium derivatives --
overwhelmingly in the form of heroin -- is now a
major problem for many countries of the world. The
United States, with no addiction to raw opium, has
the largest single population of heroin addicts,
which is estimated to be more than 100,000. A major
heroin population of some 50,000 also exists in
Iran, while the total for Western Europe as a whole
may be on the order of 75,000. Addiction to heroin
also accounts for a significant and increasing part
of the opium consumed in Thailand, Hong Kong,
Taiwan, Japan, South Korea, and the Philippines.
Morphine accounts for a substantial share of the
opium consumed only in Singapore and Malaysia.
In the populations consuming opium or opiates
there is considerable variance among individuals re-
garding the amounts consumed. Consumption varies
with the form of the drug and the manner in which
it is taken as well as with the severity of the
habit or addiction and the availability of the drug
at any given time. Opium smokers may consume up to
five times more of the product than eaters. It
requires 10 units of opium to produce one like unit
of heroin, but because of the strength of the con-
verted substance, heroin addicts generally consume
less of their product in terms of raw opium than do
opium addicts. In the Far East, where heroin is
mostly smoked,the consumption of the average addict
is presumably greater than in Western countries,
where heroin is taken almost exclusively by injec-
tion.
If all these variable factors in consumption
are considered, only the roughest rule-of-thumb
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
estimate can be devised for. an average per capita
consumption in terms of opium among user and addict
populations. For this purpose the norms provided
by the Iranian maintenance dosage program for
registered opium addicts appear .to be useful. These
norms represent minimal requirements of an addict
population, allowing a daily ration of 4.7 grams
for smokers (roughly 1,700 grams per year) and one
gram for eaters (3.65 grams per year). Since the
available information'indi.cates Iran has some 200,000
opium eaters and..100,000 smokers plus 50,000 heroin
addicts, who' consume at' a minimum about the same
amount per person as US addicts, then the per capita
consumption for the entire user and addict population
would be about 700 grams annually.
The use of the Iranian consumption norms for
the major victim countries indicates that about
three-fifths of the world's illicit opium supply is
consumed within the political territories of the
producing. countries and handled through their
domestic black markets. Burma is the largest single
consumer among these countries and, combined with
Laos, the domestic user and addict population may
require:. some. 350 tons per year. Thailand's consump-
tion possibly approaches another 175 tons. India
probably absorbs between 175 and 200 tons of illicit
opium and Afghanistan-Pakistan about half the level.
The remainder of the world's illicit consumers
are-supplied by imports smuggled from the major.
producing.. countries. The largest market for such
imports is Iran, where they have reached a level of
.perhaps 250 tons.. The large consumer population of
Hong Kong probably absorbs more than 100 tons per
year .in.terms of opium equivalent. The other major
markets are the United States, with the estimated
smuggled: imports of 40 tons in opium equivalent,
.Singapore.and Malaysia combined (30 tons), and West-
ern Europe (30 tons). Lesser. markets may together
account for another 70 tons, including Japan,
Indonesia.,,_ South Korea, the Philippines, Taiwan,
Macao, and parts of North Africa and the Near East.
On the basis of the national origin of these
illicit. imports in the late 1960s, the major sources
arethe poppy-growing regions of Burma, Laos, and
Thailand and those of Afghanistan and Pakistan
(see Figure 2). An estimated two-thirds of the
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
latter region's output -- 175 to 200 tons -- is
smuggled-out, mostly to Iran's massive
Burma and. Laos together probably export
market.
about
30%
of their-combined output, or 150 to 200
tons,
to
other Far Eastern and Southeast Asian countries.
Thailand. consumes most of its production and exports
only 25. tons to the same markets. Sixty tons of
Turkey's illicit opium production of about 100 tons
in 196:8-and 1969 was the source of about 80% of the
heroin consumed in Western Europe and North America.
The remaining 40 tons was nearly all smuggled into
Iran. Small amounts of opium are smuggled into
India .(mainly from-Pakistan) and out of the country
(in several directions), but on a net basis India
is probably not-a significant exporter. The small
production of Mexico and some South American coun-
tries is nearly all exported to the United States.
Only a small amount -- perhaps only 5% -- of.the US
heroin supply was of Far Eastern origin in the late
1960s, and perhaps 15% entered from Mexico. A very
small amount of Western Europe's heroin came from
the Far East, India, and Pakistan. The latter two
countries also supplied small amounts to North
Africa and the Near East. There has been no evidence
of any illicit exports of opium originating from the
USSR and the East European Communist countries, or
in recent years from Communist China.
Except in Iran, a substantial part of the heroin
consumed in victim countries is manufactured abroad.
All of the North American supply so originates, the
bulk of it from Turkish morphine processed into
heroin in France. Other European countries are also
supplied for the most part by laboratories located
in France. Heroin laboratories have been observed
in Burma, Laos, and Thailand, and some of their
product is exported, chiefly to Hong Kong. That
colony is also a major site of heroin processing and,
like France, a source of heroin exports. Heroin
laboratories also have been detected in Mexico. In
Iran, virtually all the heroin consumed through the
1960s was processed within the country from opium
or morphine of Turkish origin.
Organization of the Illicit Trade
The illicit markets for opium and opiates are
seller's markets from which the major supplying
firms (individuals and organizations) receive very
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
high rates of return on their investment. Supplying
the US market offers the largest scope for profits,
as can be shown from the development of the price of
heroin in 1969: from a farm price of $25 per kilo-
gram for opium in Turkey to a wholesale price of
$22,000 Per kilogram for heroin in New York City to
a retail price of $88,000 for the product in adulte-
rated form (see Table 4). In Iran the $15 originally
paid to the Afghani or Pakistani farmer for a kilo-
gram of opium spiralled to $2,600 wholesale for the
like amount of heroin and to $13,000 retail. In
Hong Kong, $2,000 was about the average wholesale
price for heroin last year. In Pakistan, where little
if any heroin is consumed, the price for opium rose
from $15 per kilogram at the farm to $25 in Peshawar
to $75 in Karachi. In general, despite the large
gap between wholesale and retail price, the largest
profits are realized in the wholesale trade where
firms can handle large volumes of their product.
Typically, retail distribution is managed by dealers
selling relatively small quantities.
The wholesale firms trafficking in opium and
opiates operate as oligopolies. They are large and
few enough for each to exercise considerable influence
over the local or national market. Rarely, however,
do they choose to act independently. They normally
operate in explicit or implicit collusion to set
prices a.nd they tend to form cartels to divide up
national. markets. The established firms also seek
a stable environment that will allow them to restrict
output of rival firms and dependably to arrange for
the handling of large volumes with regularity.
Rather elaborate organization as well as careful
planning and efficiency of operations are required.
Characteristically, wholesalers also minimize the
legal risks to themselves from engaging in criminal
activity. In some cases they may not actually come
into direct contact with the contraband product and
restrict their role to financing, negotiating con-
tracts, and arranging through intermediaries for the
collection or delivery of supplies.
The movement of opium from Turkish farms to il-
licit markets to the East and West serves to illu-
strate the general rule of highly organized whole-
sale trade. The collection of raw opium from the
farmers is arranged by the so-called middlemen,
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Development of Retail Price of Heroin
in the United States and. Iran
1969
Price to farmer for opium
(In Turkey)
Wholesale price for heroin a/
(Marseilles)
Border price for heroin
(New York)
Wholesale price for heroin
(New York)
Retail price for heroin
(New York)
US $ per
Kilogram of
US $ per Raw Opium
Kilogram Equivalent
$25 --
$5,000 $500
$10,000 $1,000
$22,000 $2,200
$220,000 b/ $22,000
Price to farmer for opium
(In Afghanistan/Pakistan) $12 to $15 --
Border price for opium
(Afghanistan/Iran) $80 to $110 --
Wholesale price for heroin a/
(Teheran) $2,600 $260
Retail price for heroin
(Teheran) $13,000 $1,300
a. When raw opium is converted to morphine and heroin
the volume is reduced by a ratio of 10:1.
b. If sold as pure heroin. In fact, heroin is greatly
adulterated when it reaches the addict; the price for
adulterated heroin -- 40% purity -- would be about
$88,000 per kilogram.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
small-scale entrepreneurs who may deal with several
villages and who individually gather relatively
small quantities of the product. When the product
as raw material or in the form of morphine base
comes under the control of criminal syndicates in
Istanbul, however, the supplies have been aggregated
into relatively large amounts. These groups arrange
for the export of morphine base westward to France
through the use of smugglers who may carry it over-
land via Bulgaria or Yugoslavia and thence to Germany
where other operators arrange delivery to France.
They may also use smugglers who carry it directly to
Marseilles by boat. Turkish workers based in Europe
may be utilized for overland delivery and individual
sailors or entire crews for delivery by boat.
The morphine exported west from Turkey is all
delivered to a few nationally prominent criminal
syndicates in France which arrange for its conver-
sion into heroin and for delivery to European and
North American markets. The delivery to the North
American markets has been made by some smugglers
operating as individuals and others operating in
rather well-organized rings. In either event, during
the 1960s most of this heroin was delivered to 10 to
12 wholesale firms in the United States and Canada
that were major elements in the organized crime of
both countries, When arranging the export of morphine
and opium eastward to Iran, the Turkish syndicates
usually arranged for its movement to the border areas
and then for its smuggling into Iran both by groups
of Kurdish tribesmen via Iraq and by individual
Turkish smugglers directly to Iran. There the nar-
cotic substances were commandeered by wholesalers
who marketed some of the opium directly to retailers
and arranged for the conversion of morphine and some
of the opium into heroin before distribution.
In Afghanistan and Pakistan the first major
aggregation of opium for supplying the Iranian market
is usually the business of tribal chieftains near
the producing areas. These in turn deliver to groups
sufficiently organized to arrange transportation for
the contraband overland across Afghanistan to the
Iranian border, usually by means of trucks using the
cross-country northern highway. In the western border
area, delivery is usually made to tribal chiefs resi-
dent there whose tribesmen make the actual delivery
to Iran in armed gangs for small commission fees,
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
often in quantities of several hundred kilograms.
In the distribution of opium on the local black
market of Pakistan, tribal chiefs near the producing
areas of the country deliver their product to rings
which arrange for its movement southward as far as
Karachi. In India, where smuggling and black mar-
keting are major economic activities, the wholesale
trade in illicit opium may also invite a fairly
elaborate degree of organization.
The pattern of wholesale trade is most elaborate
in the Far East. The major flow of the traffic from
the producing areas of Burma, Laos, and Thailand is
directed through the Mekong River valley in the latter
two countries. Major cities in these two countries,
such as Luang Prabang, Vientiane, and Bangkok serve
both as final markets and transshipment points.
Thence a major part of the exported opium and heroin
is smuggled to Hong Kong which is also both a final
market and a transshipment point. Other routes pro-
ceed from the transshipment points in Laos and
Thailand directly to other markets in the Far East
(South Vietnam and Cambodia, for example), by land
through Thailand to Malaysia and Singapore, and by
boat or air to other countries. The first major
collections of the raw opium in Burma are made by
the so-called Kuomingtang Irregulars and guerrilla
armies of Shan tribal insurgents who themselves con-
vey the product southward for delivery to wholesale
operators in cities. The latter arrange for conver-
sion to heroin and for the domestic and export dis-
tribution of both opium and heroin. Often these
wholesalers are prominent local businessmen. In
Laos, both the Communist and the government armed
forces are major wholesalers of opium and heroin and
have been directly involved in large-scale smuggling
operations. In Hong Kong the most prominent importers
and wholesalers have also frequently been businessmen
whose other activities may have been largely licit.
in general the wholesale organizations trading
in opium and opiates seek to involve government
officials in their activities by corruption. Essen-
tially, the wholesalers want both legal protection
for themselves and insurance for the dependability
of their business operations. In order to provide
deliveries of contraband in large volumes and with
regularity, the wholesalers must indeed seek to cor-
.rupt officialdom at fairly high :Levels if possible.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
At the same time, officialdom itself may be vulner-
able to corruption because of the relatively large
compensation it can get for collaborating with the
major traders. For this reason, some officials have
been directly involved in marketing transactions.
Military officers, for example, were among those
recently executed for narcotics violations in Iran.
The involvement in the traffic of individual offi-
cials and. military officers in some other countries
has also been documented, as has the use of diplomatic
pouches for smuggling opium and heroin. In no country,
however, is there likely to be a flourishing illicit
trade in opium or heroin without the complicity of
at least a few key civil servants or police officials.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Postwar Changes in the Opium Market
Key Developments
The world market for opium has experienced dy-
namic change -- including two major upheavals --
from the beginning of the postwar period down to
the present. In order of importance the landmark
events were (1) the shutdown of China's vast illicit
market with the change of governments there in 1949,
and (2) the abolition of cultivation in Iran after
1955 coupled with the rapid suppression of China's
illicit production at about the same time. Although
the gradually increasing use of poppy straw and
changes in the medicinal uses of opiates have in-
fluenced world markets for opium, the major shifts
have resulted from government policies.
The market has demonstrated a continuous flexi-
bility in replacing sources of supplies that have
been eliminated, in responding to shifts in demand,
and in devising new traffic routes. The most
massive change in the market was the sudden closure
of the incomparably large Chinese illicit market,
which greatly reduced world demand for opium. In
response to abolition of poppy cultivation in Iran
and the sharp reduction or possibly cessation of
illicit cultivation in South China, new supplies
were developed in Afghanistan-Pakistan, India,
Turkey, and the hill areas of Burma, Laos, and
Thailand. Further changes in the world distribu-
tion of opium production appear to have been put
in motion as a result of a cutback in Turkish
production beginning in 1968.
Trends in Licit Production, Consumption, and Trade
World licit opium production has fluctuated
widely in the postwar years without any clearly
discernible long-term trend. The fluctuations may
chiefly reflect changes in demand coincident with
buildups and depletions of stockpiles. Production
was high in the early 1950s -- averaging 1,100 tons
annually -- probably because of a desire to replenish
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
stocks drawn down during World War II (see Table 5).
This was followed by a drop of about 25% in average
annual production until the late 1950s, after which
output rapidly soared to reach 1,500 tons in 1960,
or about 50% above the level of 1950. Production
remained high until the mid-1960s but has fallen
since then to an average of 800 to 900 tons per year.
As an indication of the probable drawdown of stocks
by pharmaceutical manufacturers in recent years,
annual average exports of opium were about the same
during 1959-63 and during 1964-68.
World Licit Opium Production
by Principal Country a/
Year
India
Turkey
USSR
Iran
Others
Total
1950
231
185
86
481
20
.1,003
1951
527
358
94
32
23
1,034
1952
350
466
104
131
19
1,070
1953
629
321
92
227
26
1,295
1954
438
71
103
144
17
773
1955
362
222
109
95
33
821
1956
348
277
105
--
51
781
1957
485
45
147
--
37
714
1958
657
162
93
--
27
939
1959
763
168
132
--
35
1,098
1960
914
365
169
--
50
1,498
1961
912
172
120
--
50
1,254
1962
971
311
148
--
15
1,445
1963
691
287
172
--
21
1,171
1964
644
83
188
--
25
940
1965
625
86
177
--
13
901
1966
436
139
201
--
6
782
1967
473
115
181
--
9
778
1968
752
122
116
--
3
993
a. Excluding Communist China and North
Vietnam,
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
The lion's share of licit opium production and
exports came to be concentrated in India following
a sharp reduction in Iran's licit production after
1950 and its total abolition of poppy cultivation
after 1955. India's share of the licit market
seems likely to be further enlarged as a result of
the recent cutback in Turkish poppy acreage, from
20,000 hectares in 1967 to about 12,000 hectares
in 1970. India by 1968 accounted for about three-
quarters of world licit output and exports (see
Table 6).
World Licit Opium Exports
by Principal Country
Year
India
Turkey
Iran
Others
Total
1950
234
265
246
10
755
1951
358
173
267
12
810
1952
163
167
200
7
537
1953
168
169
41
15
393
1954
263
211
56
10
540
1955
199
296
100
5
600
1956
266
274
106
22
668
1957
361
205
71
15
652
1958
493
207
98
2
800
1959
593
170
--
4
767
1960
626
103
--
4
733
1961
658
64
--
3
725
1962
375
116
--
39
530
1963
472
147
- -
--
619
1964
473
190
--
--
663
1965
426
257
--
--
683
1966
531
303
--
--
834
1967
419
151
--
3
573
1968
532
111
--
4
647
The manufacture of morphine shows an upward
long-term trend, from 85 tons in 1954 to 120 tons
by 1960 and to 150 tons by the late 1960s (see
Table 7). The rather steady growth of morphine
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
World Licit Production
of Opium, Morphine, and Codeine a/
Metric Tons
Year
Opium
Morphine
Codeine
1960
1,498
120
104
1961
1,254
116
105
1962
1,445
121
105
1963
1,171
128
119
b/
1964
940
119
109
b/
1965
901
123
112
b/
1966
782
149
131
1967
778
143
127
1968
1,002
153
136
a. Excluding Communist China and North Vietnam.
b. Incomplete reporting.
production has been stimulated by the rising demand
for codeine, the production of which climbed from
104 tons in 1960 to 136 tons in 1968. About 95%
of the morphine produced is now reserved for con-
version to other substances, overwhelmingly to
codeine. While the drawing down of stocks probably
accounted for most of the raw materials not supplied
by world exports, requirements were also met to
some extent by increasing use of poppy straw.
Whereas poppy straw accounted for 29% of the mor-
phine produced in 1965, in 1969 the ratio was 39%.
The decline in the production of raw opium since
1964 has resulted in higher prices. Average prices
paid for Turkish exports rose from $11.49 per kilo-
gram in 1966 to $13.00 in 1968 and to $16.00 in
1969. The current shortage in world opium supplies
appears to be only temporary, however, and the key
question for the longer term is not whether opium
will be abundantly available but, rather, whether
world demand for the production will be sustained.
The recent increase in Indian poppy acreage should
be sufficient to meet any foreseeable rise in
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
medicinal needs under present pharmaceutical tech-
nology. Any major change in the market for raw
opium will therefore almost certainly depend, in
the first instance, on the extent to which satis-
factory synthetic replacements are found for
codeine. To date, such synthetics have proved
costly to produce. The market for licit opium will
also depend on whether a rapid expansion of poppy
straw production proves both technically practical
and economically worthwhile.
The main government programs to provide main-
tenance dosages of raw opium to registered addicts
have long been declining except in Iran. In India,
distribution to registered addicts through authorized
outlets fell from 150 tons in 1950 to 34 in 1957 to
about 3 tons on average since 1960. In Pakistan
these sales declined from 14 tons in 1957 to an
average of about 7 tons in the mid-1960s. In both
countries the decline in the programs appears to
be due chiefly to progressively higher excise taxes
added on the price to addicts. As a result, sup-
plies are cheaper on the black market. In Iran the
maintenance program has been growing rapidly in
1970, with the number of registered addicts reaching
50,000 by mid-year. The growing enrollment largely
reflects an intensifying shortage of illicitly
imported opium in the country. This shortage has
driven up the black market. price for opium, some-
times beyond the very high licit maintenance dosage
price. The latter price is currently $230 per kilo-
gram, or $0.23 per gram?
Effects of Government Policies on the Illicit Market
Government policies have produced changes -- in
some instances massive changes -- in all aspects of
illicit enterprise in opium and opiates. The shut-
down of the Chinese market, abolition in Iran, and
China's gradual gaining of administrative control
over its own poppy-growing areas largely determined
the illicit patterns of production, consumption,
and trade that existed during the 1960s. These
steps led to a concentration of world illicit pro-
duction in the Far East, Afghanistan-Pakistan, and
Turkey. Abolition in Iran also significantly
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
altered the consumption patterns of that country's
large user and addict population.
Illicit Patterns to the Mid-1950s
With the change in government in China in 1949,
world illicit demand for opium was greatly dimin-
ished. Before 1949, China was the largest single
illicit market in the world, possibly several times
larger than all other markets combined. Some esti-
mates place the Chinese user and addict population
on the eve of World War II at 10 million. This
population, which may have changed little during
the War, was mostly in the large eastern cities
and was supplied principally by imports. These
originated chiefly from Iran and India, then the
world's two leading producers of illicit opium.
Many other countries including Pakistan, Egypt,
and countries of French Indochina contributed small
amounts to China. The Chinese opium-producing
areas centering around Yunnan Province were remote
from the main consumer markets of the country. They
supplied a relatively small local market, but most
of their large output was shipped out of the country
to the south. Chinese opium went directly to Burma
and the countries of French Indochina and through
them to Southeast Asia, Hong Kong, and in some
quantity to eastern coastal cities of China itself.
In the early 1950s, after the shutdown of the
Chinese market, Iran remained a leading producer
and exporter of illicit opium. Given an estimated
25,000 hectares under poppy cultivation and a licit
output averaging only 185 tons annually, the balance
of output available for illicit purposes was several
times larger. In addition to providing for most
of the :Large domestic market, this illicit output
supplied many other markets to the east and west
of Iran. Probably the larger part of Iranian
exports moved in the brisk traffic eastward through
the Persian Gulf to Hong Kong and Southeast Asian
countries. Toward the west the main flows went
both through the Gulf and overland to Iraq, Syria,
Lebanon, the Arabian Peninsula, and North Africa.
Some of the Iranian opium directed westward was
destined for Western Europe and North America
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
after first being processed into morphine in Syria
and Lebanon and then being shipped to Italy and
France for processing into heroin.
India's illicit export trade began the drop to
its present low level in the early 1950s. The
denial of access to the massive Chinese market was
the initial cause. At the same time the Indian
domestic black market was becoming a major alterna-
tive outlet for illicit production. During the
first half of the 1950s, the government's main-
tenance program -- in the past the principal source
of addict consumption -- was already declining
precipitously.
Production from South China apparently continued
to service the markets of the Far East and Southeast
Asia during this period, but probably in decreasing
measure. Although seizures of Chinese opium con-
tinued to be reported by customs authorities in
Hong Kong and Southeast Asia, it may be presumed
that illicit production in China began to decline
as the new government extended its political control.
It is reasonable to assume that production in Burma,
Laos, and Thailand, which had long been servicing
the same markets, probably began to increase as an
offset to declining Chinese output.
The remaining major source of illicit output
was Turkey. Virtually all its output was exported,
mainly southward to the Arab countries also being
supplied by Iran. As with Iranian opium, part of
the Turkish product was directed to Western Europe
and North America after processing and transshipping
first through Syria and. Lebanon and then through
Italy and France. Some portion of Turkish opium
was aimed directly at Italy and France by sea routes
chiefly originating in Istanbul. In this period,
West Pakistan was still. a minor producer. Dependent
on Afghanistan for a large share of its own supplies,
West Pakistan was probably a net importer of opium
at this time.
From the Mid-1950s to the Mid-1960s
After Iran banned poppy cultivation in 1955 and
China acquired control over its cultivation, the
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
main shifts in world illicit opium production were
responses to continuing high demand in Iran itself
and in the region of the Far East and Southeast
Asia. In order to meet demand in Iran, illicit
production rose sharply in both Afghanistan-
Pakistan and Turkey. After the elimination of
supplies from China and Iran to the Far East and
Southeast Asia, production also rose substantially
in Burma, Laos, and Thailand. In addition, with
the elimination of Iran's formerly westward-moving
illicit exports, Turkey largely filled the gap by
increasing its exports to the Arab countries,
Western Europe, and North America.
Afghanistan-Pakistan came to. supply the larger.
portion of Iran's post-abolition illicit imports,
which eventually reached an estimated 250 tons
annually. Reflecting the pull of Iranian demand,
the illicit price for opium in West Pakistan rose
by more than 250% from 1957 to 1959. Toward the
late 1960s, when production had risen to an esti-
mated 175 to 200 tons per year, the price dropped
to the 1957 level. While expanding its illicit
output, moreover, West Pakistan became virtually
the sole supplier to its own fairly large domestic
black market. Large increases after the mid-1950s
in Afghanistan's poppy acreage, in irrigated valleys
adjacent: to Pakistan, were noted by several observers.
Meanwhile, during the early and mid-1960s, Turkey's
illicit output accounted for about 40% of Iran's illicit
imports. Opium of Turkish origin largely supplied
the western half of the country.
By the end of the 1950s, Burma, Laos, and
Thailand together had become a massive producer,
and the source of more than half the world's present
illicit supply of 1,250 to 1,400 tons annually.
Moreover, with this increase in output the region
of the Far East and Southeast Asia quickly became
self-sufficient in opium.
With the shifts in world illicit production
since 1955, there have been some major changes in
levels of consumption. Abolition in Iran reduced
the active user and addict population of the country
significantly. The current population of some
350,000 represents perhaps only one-third that
existing before abolition. The growth or decline
- 29 -
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
of populations elsewhere in the world is not easily
documented. Consumption in the Far East and South-
east Asia very likely rose substantially during the
1960s. Increased consumption in Burma, Laos, and
Thailand seems especially likely in view of the
rise in supply. Western Europe and North America
also experienced rapid growth in their addict
populations -- almost exclusively addicted to
heroin -- after World War II. Some growth in these
populations has apparently persisted throughout the
postwar period.
Moreover, addiction to opiates -- mostly to
heroin -- has been on the rise in the postwar
period. Heroin addiction has grown in several
other countries besides those in Western Europe and
North America. Before the mid-1950s, Iranian
addicts were exclusively consumers of raw opium.
Heroin was indeed unknown in the country until 1953.
From 1960, however, heroin addiction spread rapidly
so that by the middle of the decade the population
probably reached its present level of 50,000. In
the Far East and Southeast Asia, considerable growth
in heroin addiction also occurred. The observations
of many specialists document this phenomenon as do
the increasing number of heroin-processing instal-
lations in the region, particularly in the producing
countries and Hong Kong.
In both the Far East and Iran, a shift from
emphasis on heroin consumption in urban areas has
probably been stimulated by enforcement efforts
because heroin is easier to handle by traffickers
and its consumption is less visible. However,
heroin addiction in these countries as elsewhere
also reflects basic problems of development and
health.
As Turkish traffic toward the Arab countries,
Western Europe, and North America increased to
replace Iran's exports, the routing of the portion
destined for Western Europe and North America
increasingly shifted to direct overseas shipments
from Turkish to French ports. By the mid-1950s --
thanks to decisive action by Italian enforcement
authorities -- Italy ceased to be an important
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
processing and transshipment point in this traffic.
From the 1960s, however, Turkish traffic destined
for Western Europe and North America also began to
go overland to Europe in increasing amounts in
defense against enforcement applied both in Turkey
and France to seaborne contraband. Also as a defense
against enforcement and for greater profits, Turkish
traffic in morphine increased rapidly from the mid-
1950s. :By the mid-1960s practically all Turkish
illicit exports to the West consisted of crude
morphine. Heroin has never been manufactured in
Turkey, and Turkish smugglers are loathe to carry
heroin, probably because the government set very
stiff penalties in 1953 for trafficking in the
product.
Recent Developments
The main recent change in world illicit produc-
tion has been the decline in Turkish output. In
1968, illicit production dropped sharply as a
consequence of official policies to reduce poppy
acreage and to purchase a larger share of the
total crop. Substantial cutbacks in acreage were
actually begun in 1964 (from 38,000 to 28,000 hec-
tares), but this had no marked impact on illicit
output. This was the case because until 1968
government purchases from the farmers averaged much
less than half of total production, as indicated
by the data on yields from licit production.
Derived from government purchases and official
acreage estimates, these yields fluctuated from
year to year but averaged only 6 kilograms per
hectare during 1960-67 (see Table 8). Actual
yields from this acreage, on the other hand, may
have averaged as much as 15 kilograms, with the
balance available to the illicit market. In 1968,
however, government purchases rose slightly, to
122 tons, even though acreage had been reduced by
one-third. The official yield thus rose to 9.4
kilograms per hectare. On roughly the same 13,000
hectares in 1969, the official yield reached nearly
10 kilograms per hectare. Even if allowance is
made for a slight increase in actual yields on the
reduced but probably more fertile poppy acreage,
illicit diversion in Turkey, which probably averaged
Approved For Release 2001/09/043:CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Turkish Licit Production,
Acreacre, and Yields of Opium
Year
Production
(Metric Tons)
Acreage
(Hectares)
Yields a/
(Kilograms
per Hectare)
1960
365
42,000
8.7
1961
172
38,000
4.5
1962
311
36,000
8.6
1963
287
38,000
7.6
1964
83
28,000
3.0
1965
86
22,000
3.9
1966
139
24,000
5.8
1967
115
20,000
5.8
1968
122
13,000
9.4
1969
127
13,000
b/
9.8
a. Derived from official estimates of acreage and
government purchases of raw opium from the farmers.
b. Estimated.
well over 250 tons in previous years, may have been
cut back by more than half as the government acquired
a larger share of the crop.
With the fall in illicit output, Turkish illicit
exports must also have declined. The effects of
reduced production on exports would not have been
felt until 1969, however, because exports in 1968
originated chiefly from the 1967 fall harvest. In
1969, Turkish exports to Iran were probably cut
back in favor of maintaining exports to the more
profitable Western markets.
There has been a further decline in Turkish
illicit output this year which can be related to
drought conditions that substantially reduced
actual yields and to changes in official policies
in both Turkey and Iran. In 1970 the Turkish
government decided for the first time to buy up
the entire opium crop if possible and instructed
Approved For Release 2001/09/d42: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
its purchasing officers and enforcement arms
accordingly. Also for the first time, Ankara and
Tehran in 1970 entered into a formal collaborative
effort to suppress opium smuggling from Turkey to
Iran. The Turkish army and Iranian gendarmerie
signed an agreement in January providing for in-
creased cooperation and forces on both sides. The
upshot of all these developments has been a severe
reduction in the traffic across the Iranian-Turkish
border and in the traffic of Turkish origin across
the Iraqi-Iranian border. Seizures in these areas
have dwindled to insignificance this year. The
incentive to Turkish smugglers to ship opium and
morphine to Iran was also dampened in 1969, when
Iran imposed the death penalty for narcotics smug-
gling offenses.
The reduced supply for Iran from Turkey com-
bined with the generally intensive enforcement
campaign initiated in 1969 by Iran has resulted
in a scarcity of opium and heroin in the country.
From August 1969 to August 1970 the illicit price
of Turkish opium in Tehran doubled, ranging from
$100 to $400 on the latter date, depending on
quality. Much of Turkish opium thus was available
only at prices in excess of the licit price for
maintenance dosages for registered addicts. Prices
for heroin, manufactured mainly from Turkish opium
and morphine, tripled during this period. While
the imposition of capital punishment and increased
border surveillance have been weighty deterrents
to Turkish smugglers, these measures have been
less effective against their Afghani counterparts.
By mid-1970 the price of Afghani opium in Iran was
still well below the licit price. Iranian seizures
on the Afghani border have risen sharply in 1970,
but there are also indications of more frequent
border incursions from Afghanistan involving smaller
shipments in order to thwart the Iranian border
authorities. A large number of the more than 40
persons executed in Iran for smuggling offenses
since 1969 have been Afghani tribesmen. In view
of the reduced supplies from Turkey and the per-
sisting strong demand in Iran, it seems likely
that production in Afghanistan-Pakistan will in-
crease.
- 33 -
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
The drop in Turkish illicit output may soon be
reflected in illicit traffic patterns to Western
European and North American markets. If illicit
Turkish output this year indeed declined, supplies
from this source for Western Europe, North America,
and the Arab countries will not be available in
the usual amounts in 1971.
During the past two years, traffic of Turkish
origin has also been the target of stepped-up
enforcement by the French and US governments. One
consequence has been some shifting in the location
of heroin-processing plants formerly based in the
Marseilles area. but now more widely dispersed to
areas both within and outside France. Moreover,
the regular smuggling of heroin from Europe to the
United States has become a more difficult task for
the wholesalers to arrange. At the same time, as
established traffic organizations have encountered
increased enforcement opposition, the smuggling
business itself has witnessed the entry of new
organized rings. The recent arrests of Cuban
exiles in the United States provide a striking
example of this general trend. F1_nally, enforcement
in the United States has evidently helped set the
stage for the entry of new groups, attracted by the
prospects of large profits, into the wholesale dis-
tribution of heroin in the United States. Some
established wholesale firms, reacting to the enforce-
ment pressures, have apparently chosen to disengage
themselves at least temporarily from the business
while some others were forced out by successful
prosecutions. The entry of some of the Cuban-exile
smuggling groups into the internal wholesaling of
heroin in the United States indicates a degree of
disarray in the established wholesale structure.
Given the prospect of reduced supplies for
Western markets from Turkey and also reduced sup-
plies from Mexico to the United States following
Mexican-US collaboration in Operation Cooperation,
the traffickers have already begun to seek out new
sources. Probably in direct response to enforce-
ment pressures in Mexico, some dealers in the
traffic from that country to the Jnited States have
34 -
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
been exploring the possibilities for developing new
sources in other countries. Both new heroin distil-
leries and new areas of poppy. cultivation have been
observed this year in South America. Other whole-
salers are apparently turning to the Far East for
supplies. Although that area still remains a rela-
tively small supplier of heroin to the United
States, traffic from the Far East has increased in
the past year, perhaps severalfold. New smuggling
organizations are. being formed in anticipation of
growth in traffic by that route. Meanwhile, the
West European market has also felt the effect of
reduced supplies from Turkey. Recently, for example.,
there have been increasing amounts of heroin
appearing in European countries from Pakistan,
India, and the Far East.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Controlling Opium-Based Drug Abuse
Control and Development
Opium-based drug abuse has persisted as a grow-
ing international problem. This is evident in the
rise of consumption generally in the Far East and
Southeast Asia and in the international spread of
heroin addiction. The illicit sector has shown
great flexibility in adjusting to drastic changes
in sources of supply. When national governments
have eliminated or significantly curtailed illicit
production, new sources have quickly been developed
on a large scale. Similarly, when national enforce-
ment campaigns have unsettled established wholesale
structures, the effect has soon been blunted by the
entry of new organizations into the trade and the
eventual re-emergence of fairly stable marketing
arrangements,
The growth of opium-based drug abuse reflects
larger problems of economic, political, and social
development. The economic incentive to cultivate
poppy remains strong in most producing countries
because agricultural incomes are low and labor
cheap. Complete administrative control over poppy
cultivation is difficult in the best of circum-
stances and made impossible in many areas by lack
of national political control. Abuse has grown
partly because prevailing public attitudes tend to
forestall broad treatment and rehabilitation pro-
grams. In most producing countries the public is
tolerant of widespread habitual use of opium. In
many nonproducing, victim countries, on the other
hand, abuse is commonly viewed as a criminal ac-
tivity and the burden of responsibility falls upon
enforcement agencies. At the same time, national
resources for an attack on consumer demand itself
have not been available on a scale commensurate
with the extent of addiction. Also partly because
of public attitudes, enforcement itself has lagged
in developing techniques appropriate to suppressing
the illicit trade at the controlling wholesale level.
Progress both in enforcement and treatment has been
hampered, finally, by inadequate international co-
operation
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Dampening the Incentive to Produce
An economic approach to controlling illicit
opium production has serious limitations. The
basic problem is that opium is almost always pro-
duced where labor is plentiful and cheap and the
demand for it is strong. There are many substitute
crops that would earn more income than opium per
unit of labor input but it is difficult to find
any that would earn more than opium per unit of
land. So long as large-scale underemployment
exists, a farmer can increase his family's income
by raising poppy, natural conditions being appro-
priate.
Thus the government seeking to control produc-
tion through incentives will probably find that
crop substitution will not suffice. Such a program
would have to be accompanied by subsidies -- either
directly to the farmer as an inducement not to grow
poppy or indirectly in the form of supporting above-
market prices for substitute crops. In the long
run the best solution, of course, is to promote
the general economic development of the poppy-
growing areas. Raising agricultural yields, diver-
sifying farm output, and establishing industry
accessible to local labor would all help. Among
the major opium-producing countries, Turkey is
most advanced in economic development, and its
further development will probably reduce the prof-
itability of opium production significantly. But
in the countries to the east this goal probably
remains out of reach for a long time to come, and
any effective restriction of output will depend
most heavily on the capability for direct govern-
ment control.
Although opium production is an important
source of income to individual farmers and thus
a political issue of moment in some countries, it
does not benefit the national economies of any of
the producing countries significantly. India, the
world's largest producer and exporter of licit
opium, earns only $6 million to $7 million annually
from overseas sales compared with total export
earnings approaching $2 billion. Income generated
from licit production -- measured by the total
returns to farmers -- hardly exceeds $12 million.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
annually. Turkey's situation is similar. In 1967,
for example, Turkish licit opium exports were
valued at $1.7 million, less than 0.3% of total
export earnings. In addition, some smaller amount
was earned from exports of poppy straw. Income
generated in Turkey that year from licit produc-
tion may have approached $3 million, out of a
national income of nearly $9 :billion. Against
the scale of national income, it is apparent that
illicit production is also of minor significance
in all the other producing countries. If the
tribal area of Burma-Laos-Thailand were considered
as an economic region, however, opium production
would assume more economic significance. Opium
is a principal source of income at least among
some of the tribes. It also helps finance the
importation of arms and hence is a main economic
support of insurgency.
Direct Control Over Production
While Communist China, Iran, and, on a partial
basis, Turkey have shown that energetic national
governments can stop the production of opium, the
major share of illicit output comes from areas
where such national control is not possible. Most
of the world's illicit opium is now produced by
tribal peoples over which their respective national
governments impose little political control. The
lack of control is most complete in Burma, Laos,
and Thailand where most of the producing areas
are also areas of insurgency. In Pakistan, most
illicit poppy is cultivated in the settled areas
of the Northwest Frontier Province where the
settlers cultivating it are mostly tribal peoples
although they live mainly outside the designated
tribal areas. Much the same situation exists in
Afghanistan. The small scattered production in
Mexico, South America, and North America takes
place in remote rural areas.
Even where control systems to monitor poppy
cultivation have been established, however, large
illicit production has occurred, as in Turkey and
India. Turkey has no licensing system fixing
quotas on poppy acreage for individual farms, but
both countries record acreage and have state
monopolies responsible for the collection of all
harvested opium. In general, illicit production
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
in such countries can originate from two sources:
(1) from understating yields on licensed or other-
wise reported acreage, and (2) from unlicensed or
unreported acreage.
In Turkey, official statistics on acreage are
probably fairly complete, and understatement of
yields appears to be the principal source of il-
licit production. Until recently, most production
entered illicit channels, as the state opium mo-
nopoly restricted its purchases to the amount
necessary to fulfill its export sales contracts.
Very little of Pakistan's poppy cultivation
is under a formal control system, but where that
system has been in force a substantial portion of
the production has leaked in the same fashion as
in Turkey. During 1966-68 the official Pakistani
yield averaged 4.7 kilograms per hectare, probably
only one-third the actual yield, This yield mainly
represented the opium needed for the government
maintenance program for addicts,
In India, probably most illicit production has
originated not from understating yields but from
unlicensed acreage. Official Indian yields have
rather steadily averaged about 20 kilograms per
hectare and hence should not understate actual
yields by very much. In India as in Turkey the
government's purchasing policy largely reflects
export contracts. During the 1960s, 70% of licit
Indian production was exported.
To date, Iran's fledgling control system over
opium production has been subject to little leak-
age. Its effectiveness has been due to the com-
bination of a high farm price for opium and ex-
tremely severe punishment for illicit dealing in
opium. A very high priority has been assigned
to administering the new program. Responsibility
for licensing poppy acreage and collecting the
harvested opium has been vested in the Ministry
of Land Reform, which has taken elaborate control
measures. A number of new laws have been passed,
including the one fixing capital punishment for
trafficking in opium or opiates. Enforcement
efforts, including those of the gendarmerie in
the rural areas, have been greatly stepped up.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
In countries where poppy is cultivated by
tribal peoples beyond the political reach of the
national governments, opium production can probably
be controlled only with further political develop-
ment. Such development would probably have to
include not only extending national political con-
trol into the tribal areas but also socially inte-
grating the tribal peoples into national life.
Even in Pakistan the requisite development repre-
sents formidable and probably long-term tasks.
In Burma, Laos, and Thailand this kind of develop-
ment must await both an abatement of insurgency
and also an easing of international tensions
presently focussed in the area.
In order to achieve full control of poppy
production in Turkey and India, the governments
would have to exert costly administrative and en-
forcement efforts continuously. The historical
tendency, however, has been for both countries to
minimize such costs and to hold crop collection
down to the level of export commitments. The
apparent drop in Turkish illicit output reflects
improvement in the control system, but as matters
stand it could be vulnerable to recurrent leakage.
Whether or not a licensing system is in force,
the poppy farmer is attracted to illicit dealings
if the black market price is significantly higher
than the licit price. Iran is trying to prevent
diversion by setting a very high farm price for
opium, but if production there becomes large the
program's costs will be significant. In view of
the cost and effort needed to control even small-
scale production in Iran, a simpler answer --
administratively and from the point of view of
enforcement -- would be to abolish cultivation
altogether. Abolition has proved feasible in the
past in all of Iran and more recently in many
provinces of Turkey.
Reducing Demand
On the whole, public attitudes toward opium-
based drug abuse probably have not changed very
much in the last two decades. In much of the
world, tolerance based on longstanding beliefs
and customs prevails. Among tribal peoples pro-
ducing opium, its use in religious ceremonies and
on festive occasions is common. Among these
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
peoples and others without access to modern med-
icine, opium is a general household medicine.
Belief in the efficacy of opium as an aphrodisiac
and cure-all is widespread. By contrast, in most
countries where heroin addiction is the main abuse
problem., public fear and outrage tend to focus on
the illicit traffickers and addicts alike.
As a consequence of these attitudes, almost
nowhere is opium-based drug abuse regarded pri-
marily as a medical problem. In the present state
of medical and social scientific knowledge, the
costs of treatment and rehabilitation aimed at
entire addict populations are not predictable.
The costs., however, would almost certainly involve
treatment of broader human problems of adjustment
to rapid social change and mental health generally
and could easily exceed politically acceptable
limits. As matters stand the degree of public
support for new medical approaches to treatment
and rehabilitation is uncertain. Unexpected leak-
ages from the system of free prescriptions for
addicts in Britain, for example, may lessen accept-
ance of further experimental programs in that
country. In the United States, methadone programs
for treating heroin addicts have an uncertain
future not only because medical efficacy has yet
to be confirmed but also because public support
for broad-scale coverage is as yet undetermined.
The fate of the maintenance programs for opium
addicts in India and Pakistan suggests that fiscal
constraints can easily weaken government-sponsored
treatment programs for addicts in any country.
Pressures to record budgetary surpluses from the
programs helped price licit opium largely out of
the market so that the black market could supply
addicts more cheaply but still realize large
profits. Moreover, because the programs declined
rapidly in both countries, no adequate test of
their efficacy in diminishing addiction was pos-
sible.
Iran now operates the largest opium mainte-
nance program, with increasing success to judge
by the rising enrollment of registered addicts.
The governing principle in the Iranian program --
that receipts must cover costs -- has dictated
the official price to addicts of $230 per kilogram,
- 41 -
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
however. In view of that price, the program's
success to date must be largely attributed to the
effectiveness of police controls over illicit im-
ports and production. If illicit supplies again
become more plentiful and cheaper, the program
will probably fall off.
Breakthroughs in medical and social science
are in all probability essential for any large
reduction in illicit market demand. Gaps in knowl-
edge of abuse patterns are formidable and probably
less is known about the medical and social effects
of raw opium -- still the main form of abusive
consumption in the world -- than about those of
heroin. Research on opium-based drug abuse would
undoubtedly benefit from close links with work on
psychomimetic substances. Given the breadth of
the research problems and their long-term nature,
a greater international pooling of scientific
effort would be strongly indicated.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Suppressing the Illicit Trade
The organizational character of the illicit
wholesale trade and the political and economic set-
tings in which it prospers help to place the enforce-
ment tasks in perspective. Although its operations
are national and international in scope, wholesaling
in opium or opiates often represents only one part
of a particular syndicates business activity and
very often not the most important part. Historically
the near-monopoly of the US wholesale heroin trade
by the major criminal organizations in the country
has exemplified this situation. The fact that whole-
sale organizations the world over frequently manage
to protect themselves politically adds to the enforce-
ment complexities. Finally, illicit trade in opium
and opiates is very often part of a larger smuggling
activity. In some producing countries, for example,
a significant portion of international trade moves
through smuggling channels. When it reaches this
scale, however, the suppression of trade in a single
commodity may be extremely difficult.
A change in the public's view of the enforcement
mission is probably indispensable to more effective
suppression of the illicit wholesale trade. Just as
they tend to define the scale of treatment and re-
habilitation, public attitudes influence the kind
and amount of law enforcement available. By and
large any citizenry wants police protection for its
immediate safety and protection against locally based,
relatively unorganized criminal activity. There is
generally little public awareness of criminal activ-
ity organized on national and even international
lines. It has frequently been observed that this
lack of awareness in the United States results in
a pendulum effect in law enforcement administration.
Occasionally public interest in nationwide enforce-
ment campaigns is aroused, but the interest then
wanes and, as a result, the campaigns tend to diminish
in intensity and effectiveness.
Moreover, in order to contribute to a lasting
suppression of opium-based drug abuse, enforcement
probably would have to accomplish a twofold develop-
mental task of its own, consisting of (a) a redefini-
tion of targets and (b) a reform of organization and
methods. Most enforcement manpower is necessarily
occupied with suppressing locally based criminal
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
activity, and much work of national police organi-
zations directly supports local enforcement.
One effect of this focus is the preponderance of
the enforcement effort even at the national police
level that is directed against relatively small-
scale retailers of opium and opiates, hired couriers
of the contraband, and the addicts themselves. In
most countries there is no intelligence organization
with central responsibility for operational and an-
alytical intelligence in respect to national and
international criminal organizations.
Finally, an upgrading of enforcement capabil-
ities against the illicit trade in opium and opiates
would almost certainly presume increasing interna-
tional cooperation among police agencies and perhaps
especially multilateral cooperation. Despite their
notable achievements the recent bilateral enforce-
ment agreements between the United States and Mexico,
the United States and France, and between Iran and
Turkey serve to point up the relatively occasional
nature, historically speaking, of such accords.
There is a need, therefore, for more continuity and
a systematic exchange of intelligence on criminal
activity involving a broad range of countries.
Although the creation of Interpol represents a sig-
nificant advance in this respect, that organization
has been operating with limited support from partic-
ipant states. It does not have sufficient funds to
modernize its communications systems and is not
organized for intelligence collection. Often the
members must collaborate bilaterally in order to
speed up intelligence acquisitions. The limitations
on Interpol's effectiveness reflect a narrow view
of the enforcement role against highly organized
criminal activity in general and against the whole-
sale trade in opium and opiates in particular. A
broadening of this view could be essential to a
lasting suppression of illicit traffic in opium-
based drugs.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Conclusions
Less than half the world's opium is produced for
licit medicinal purposes, chiefly for manufacturing
codeine. The balance of production -- some 1,250
to 1,400 tons annually -- is illicitly produced and
marketed for consumption of some two million users
and addicts around the world. Illicit production
is now concentrated in Southeast Asia (the hill
country of Burma, Laos, and Thailand) and in
Afghanistan and Pakistan but continues on a sig-
nificant scale in India and Turkey. Most of the
people consuming this illict opium take it in raw
form, but a large and increasing proportion has
been using it in its refined, more dangerous form
of heroin. Addiction to opium is a major problem
in every opium-producing country except Turkey as
well as in many non-producing victim countries.
The United States has the largest single population
of heroin addicts -- over 100,000 -- but Western
Europe, Iran, the Far East, and Southeast Asia also
have large populations. The market for illicit
opium and its derivatives is everywhere controlled
at the wholesale level by syndicates highly organized
on national and even international lines.
Since World War II the main changes in the world
market for opium have resulted. from national govern-
ment policies, chiefly policies eliminating or
significantly reducing production but also enforce-
ment policies. Despite these government actions,
however, the illicit market has shown a continuous
flexibility in replacing sources of supplies, in
responding to shifts in demand, and in devising
new channels of illicit traffic. As a result,
abuse of opium-based drugs has been a persistingly
growing international problem.
Growth of the abuse of opium-based drugs reflects
larger problems of economic, political, and social
development. The economic incentive to produce
opium remains strong in most producing countries
because agricultural incomes are low and labor
cheap. Complete administrative control over poppy
cultivation is difficult in the best of circum-
stances and made impossible in many areas of lack
of national political control. Abuse has grown
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
partly because prevailing public attitudes tend
to forestall broad treatment and rehabilitation
programs. As a reflection of these public attitudes,
enforcement itself has lagged in developing tech-
niques appropriate to suppressing the illicit trade
at the controlling wholesale level. Progress both
in enforcement and treatment has been hampered,
finally, by inadequate international cooperation.
Specific problems involved in the control of the
illicit opium market include the following:
a. A purely economic approach has
serious limitations because crop substi-
tution alone will not suffice. In order
to fully offset the loss to the farmer
for forgoing opium production, crop
subsidies would almost certainly be re-
quired.
b. Direct administrative control over
poppy cultivation is not possible in many
areas of illicit production, because they
are not controlled by the national govern-
ments. Even in countries where national
governments are relatively strong, those
governments must exert costly adminis-
trative and enforcement efforts continuously
in order to suppress illicit production;
c. A greater effort to reduce demand
itself is now indispensable for the control
of abuse of opium-based drugs, but this
requires public support for larger expendi-
tures on treatment. At present the degree
of such support is unknown. A reduction in
illicit market demand also presupposes break-
throughs in medical and social science and
a greater pooling of international efforts
in research.
d. Enforcement alone cannot suppress
abuse of opium-based drugs in the countries
now experiencing its worst effects. Never-
theless, the contribution of enforcement
to suppression would be improved by focus-
ing more effort against the illicit trade at
the wholesale level and by upgrading enforce-
ment methods and organization, particularly
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
at the national police level. Increased
international collaboration among en-
forcement arms against organized crime is
probably crucial to suppressing the illicit
trade.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
The Growing Hashish Traffic
Worldwide use of hashish is increasing. The
growing demand in the United States and Europe has
resulted in a rapid increase in smuggling. Our
information indicates that the traffickers are
becoming better organized.
Seizures of hashish reported to the United
Nations by Lebanon and neighboring countries suggest
that Lebanon is probably the world's leading pro-
ducer of this drug. Although as much as 90% of the
hashish produced in Lebanon appears destined for the
illicit traffic in Egypt, there is a rapidly increas-
ing traffic from Lebanon to the United States and
Western Europe. A significant amount enters the
United States STATINTL
During the past year there has been an increase
in hashish smuggling. from Afghanistan. Preliminary
findings are that much of this material is actually
grown and produced in West Pakistan. India has been
the source country of hashish involved in several
recent seizures. Indian officials report;that much
of the drug found in India is grown and produced in
Nepal. Morocco and Tunisia appear to be source
countries for hashish being smuggled into Spain
frequently for further distribution to the United
States and Europe. It is not known how much of the
drug from these sources actually originates in
Lebanon.
Hashish is grown and produced in Lebanon, Pakis-
tan, North Africa, Afghanistan, Nepal, and India,
with some produced in Turkey.
There are persistent reports that hashish is
being produced in South America, but apparently not
in significant amounts.
The increasing use of hashish can possibly be
explained by the emergence of a new class of drug
user, predominantly from middle and upper class
societies. As an example of increasing use of hash-
ish, the statistics of the Division of Narcotic
Drugs of the United Nations showed that between
January and August 1968, the member nations reported
seizing 6,766 kilograms (kg) of cannabis which
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
included much hashish. As a comparison, between
January and August 1969, 16,987 kilograms of canna-
bis were seized. The same comparison is valid for
the United States. The following is a tabulation of
the domestic hashish seizures in the United States
(in kilograms):
Bureau of Narcotics
and Dangerous Drugs
Customs
1968
152.627
95.208
1969
109.339
647.706
1970
(Jan-Jul)
5.937
654.902
In Europe alone there were 254 Americans arrested
between December 1969 and April 1970, in possession
of 864.6 kg of cannabis. The bulk of these United
States citizens arrested abroad are between 20 and
30 years of age and not the criminal type as we know
it in the heroin and cocaine traffic. Most of these
Americans are of the so-called "hippie" class and
have been arrested with a small amount of hashish
intended for their personal use and that of their
immediate associates. However, increasing numbers
are found with significant amounts of hashish indi-
cating that they are smuggling for profit.
According to the latest figures submitted to the
United Nations, the price of hashish per kilogram in
Lebanon has risen to $49 for class-one hashish and
$20 for class two. The same hashish when smuggled
into the United States will bring from $2,000 to
$2,500 per kilogram. Some professional marihuana
smugglers have switched to hashish due to the reduc-
tion in bulk and increase in price.
Much of the hashish smuggling is not directed
at the United States. Several violators have indi-
cated that they were smuggling hashish to Western
Europe, especially Germany, France, and Italy, for
resale to the nationals of these countries.
Lebanon
Although Lebanese law prohibits the growing,
selling, possession, or transportation of hashish,
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
most evaluations indicate that Lebanon is the lead-
ing grower and producer of hashish in world traffic.
in 1969, Lebanon reported to the United Nations that
over 10,000 kg of hashish were seized in that country.
In the first four months of 1970, Lebanon seized
over 3,200 kg of hashish. Recently, a reliable re-
porter observed cannabis growing beside a well-
traveled road in Lebanon, as far as he could see for
several kilometers.
A large part of the hashish grown and produced
in Lebanon is destined for countries other than the
United States. It is estimated by various officials
that 90% is smuggled through Syria and Jordan to
Egypt for local consumption. Syrian and Jordanian
authorities do little to curtail the traffic.
Several Americans have been arrested attempting
to smuggle significant amounts of hashish (from 9 kg
to 83 k(j) out of Lebanon by commercial airlines.
Some of those arrested were attempting to fly to
Canada where they could then enter the United States
by various routes. Canada also provides a ready
market for the sale of hashish.
As of 31 March 1970, Lebanon had 17 United
States citizens in detention for hashish violations.
Lebanese law sets a penalty for use at one to three
years, and trafficking at three to 15 years. Most
of those arrested indicated to State Department
officials that they obtained the hashish in Lebanon.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Afghanistan
Afghanistan has recently become a significant
source for hashish smugglers. Several individuals
have been arrested by Greek authorities on the Greek-
Turkish border traveling predominantly in Volkswagen
buses with as much as 70 kg of hashish secreted in-
side the paneling of the vehicles. Americans detained
in Greece advised State Department officials that
they obtained the hashish in Afghanistan.
One violator stated that he saw and talked with
at least 30 youthful smugglers in Afghanistan who
were all purchasing multikilogram quantities of hash-
ish. He said that Americans were waiting in line
for Afghan peddlers to load their vehicles.
Most of the hashish in Afghanistan is reported
to have been grown and produced in Pakistan. Afghan-
istan cannot stop smuggling across the Afghanistan-
Pakistan border because this area is under the con-
trol of tribesmen who are deeply involved in the
smuggling.
India
India takes a very permissive attitude toward
the use of hashish and in fact the drug can be
legally purchased through government-controlled
outlets. Hashish grown and produced in India is of
an indifferent quality and much of the hashish sold
there is brought into India from Nepal and Pakistan.
Indian officials state that it is very difficult to
control smuggling from these countries due to the
terrain and the extended borders.
The Indian authorities are examining outgoing
mail for hashish, and between January 1970 and
30 April 1970, 135 parcels containing a total of
86.643 kg of hashish were seized at New Delhi alone;
91 of these parcels were addressed to the United
States. In 1968, 31 kg of hashish were seized in
such a manner and this figure rose to 98 kg in 1969.
According to reports to the United Nations, the
government of Nepal prohibited the unauthorized
cultivation of cannabis in 1960, but it is unknown
what enforcement steps have been taken.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Pakistan
Questioning of traffickers suggests that a
large amount of the hashish obtained in Afghanistan
and India is actually grown and produced in Pakistan.
Several American citizens have been arrested at
the Karachi Airport while attempting to smuggle
significant amounts of hashish out of Pakistan. One
seizure at Karachi amounted to 169 pounds of hashish.
Pakistan reported seizing 93.245 kg of hashish to
the United Nations during the first three months of
1970.
The US Customs Bureau has made several seizures
of hashish up to 41 kg from ships listing Pakistan
as the source country.
Morocco
Morocco and other North African countries have
traditionally been a source of hashish. A signif-
icant number of persons have been arrested in
Spanish seaports returning from Morocco with hashish
for personal use.
The ]?rench authorities recently made a 108-kg
seizure of Moroccan hashish secreted in an automo-
bile waiting to be shipped to the Philippines where
it was to be shipped to the United States. An American
was arrested by Spanish authorities attempting to
smuggle hashish from Tunisia through Spain to Germany
where he intended to sell the drug.
According to information furnished by the State
Department, Government of Morocco organizations are
engaged in the campaign against kief, or hashish.
Moroccan law calls for imprisonment of 6 days to 2
months and a fine of from $24 to $720 for hashish
violations.
Turkey
In 1968, Turkey reported seizing 552 kg of
hashish to the United Nations. Recently Turkish
officials reported several seizures of hashish in-
cluding one 23-kg seizure last June.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
The cultivation of the cannabis plant is pro-
hibited by Turkey and, if found, the crops are
destroyed and the persons growing cannabis are prose-
cuted.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
DRUG TRAFFIC IN SOUTH AMERICA
Illegal trafficking in drugs has reached serious proportions
in South America over the course of the past several years.
Two plants indigenous to the area are involved, the coca shrub
(may ro y on cnra),* from which cocaine is derived, and the
hemp plant (Cannabis sativa), which is the source of marijuana.
The traffic in cocaine is of particular interest because of the
recent increase of the flow of this dangerous drug from South
America into Europe and the United States. Also of concern is
the illegal trade in synthetic drugs and the transit of heroin
and other narcotics introduced from Europe and destined for the
United States.
Millions of highland Indians in Bolivia and Peru habitually
chew the dried leaves of the coca shrub. The custom is also
practiced to a lesser extent in southern Colombia, northern
Argentina, and western Brazil. From time immemorial coca
chewing has been one of the few indulgences of the Andean
Indians. Today it is estimated that perhaps 25 million pounds
of coca are used annually in Peru and Bolivia alone.
Coca thrives on the moist slopes of the eastern face of
the Andes between elevations of 2,000 and 7,000 feet. The
shrub is also grown on a small scale by primitive Indian groups
scattered through the Amazon Basin. Very little coca is
known to be under cultivation any where else in the world, with
the exception of Java where there are small plantations. The
areas of most intensive cultivation in South America are
located in the departments of Cajamarca, San Martin, Huanuco,
Ayacucho, Cuzco, and Puno in Peru; and in the departments of
La Paz, Cochabamba, and Santa Cruz, in Bolivia.
* Rrythrnx,ylnn nn zngranatansP is another cultivated species of
coca, and there are numerous wild species of the genus. The
word "coca" is often confused with "cacao." The two are
not related. Cacao (Theobroma cacao) is the name of a tree
from which cocoa and chocolate are derived.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Individual coca plantations usually cover 2 or 3 acres
in Peru and Bolivia. The shrubs are grown in narrow trenches
cut in the steep mountain sides. For ease in picking, the
plants, which would normally grow 6 to 8 feet high, are kept
to heights of about 3 feet. The glossy green leaves are
picked three or four times a year, and after careful drying
and packing, are shipped and sold in hundreds of Indian
markets throughout the highlands.
Most authorities hold that coca chewing is both physically
and mentally debilitating, and recent investigations have
pointed to chronic brain damage from habitual use. However, there
is little chance that the habit will decrease to any appreciable
extent in the foreseeable future. The custom is too deeply
ingrained and too widespread to disappear as a result of
anything short of a massive improvement in the socio-economic
lot of the Indians.
While the great bulk of coca leaves grown in Bolivia and
Peru is used in these countries for chewing, smaller amounts
are processed for medicinal and industrial purposes; for
example, ''de-cocainized '' coca leaf serves as a flavoring
agent in beverages. In addition to these legal uses, the
coca leaf is also illegally converted to cocaine for consumption
by drug addicts. To process one kilo of refined cocaine over
100 kilos of leaves are required; hence the extraction process
is most conveniently done near the areas of cultivation in
Bolivia and Peru in clandestine laboratories. In Bolivia
alone there are reportedly some 100 mobile clandestine cocaine
laboratories. However, because the process is also relatively
expensive and complicated, conversion operations are frequently
performed outside Peru and Bolivia. Therefore the drug may be
smuggled across borders in any one of three forms: in the
leaves, as a red paste made from the leaves, or as a white
powder of hydrochloride of cocaine crystals derived from the
leaves or paste.
Cocaine Smuggling frpm Bolivia to Brazil
Much of the coca paste and cocaine produced in Bolivia
moves eastward to Brazil. Principal border crossing point
for the drug is between the towns of Puerto Suarez, Bolivia
and Corumba, Brazil. The main road running eastward from
Santa Cruz, Bolivia and the parallel Santa Cruz-Corumba
railroad are both extensively used in the illicit traffic.
Once across the border in Brazil, the cocaine is usually
shipped to Sao Paulo or Rio de Janeiro, often by air.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Bolivian authorities sometimes capture the smugglers
before they get the drug out of the country, and occasionally
they are able to track down and destroy the clandestine
laboratories. In recent years many small laboratories have
been discovered and destroyed in the vicinity of Santa Cruz.
In attempting to control the traffic in cocaine coming
from Bolivia, Brazilian authorities have directed most of
their efforts at centers of distribution such as Sao Paulo
and Rio de Janeiro rather than at the border zone. Army
officers responsible for security along the frontier have
complained that although their men check vehicles as well
as they can, cocaine is so easy to conceal that the task of
discovering it is almost impossible. As in smuggling
generally, most arrests are made as the result of tips or
the recognition of known traffickers. Habitual smugglers
are well known by the police as are the hotels that they
frequent in Corumba, Cuiaba, and Campo Grande. The police
also know the usual sleeping hours of couriers, when it is
relatively easy to apprehend them. However, when one
smuggler is arrested another almost immediately takes his
place.
Cocaine Smuggling from Bolivia to a agLay
Very little information is available on the movement of
cocaine out: of Bolivia into Paraguay. The existence of a
regular traffic in the drug through Paraguay to points south
has frequently been rumored around Asuncion, but nothing has
been officially reported. Scheduled airline service is now
available from La Paz to Asuncion, and it might well be used
by cocaine smugglers. Another possible smuggling route would
involve transit of Brazilian, Paraguayan, Argentine, and
Uruguayan territory via the Paraguay, Parana, and La Plata
rivers. Barge loads of manganese ore from the Corumba area
are shipped. by this route, and hidden cargoes of drugs could
easily accompany them. Cocaine is known to have reached the
United States by air from Uruguay.
Cocaine and sizeable amounts of coca leaf have been
smuggled from Bolivia into the provinces of Salta and Jujuy
in northwestern Argentina. In 1964 an exceptional quantity
of leaves, weighing almost 15,000 kilograms, was confiscated.
The demand for the leaves is a reflection of the large
number of Bolivian coca chewers that live and work in
northwestern Argentina.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
As in Brazil, arrests on narcotics charges often take
place at the centers of distribution in Argentina rather
than in the frontier zones. For example a gang of cocaine
traffickers was recently captured in downtown Buenos Aires.
Included in the group were five Argentines, a Lebanese,
and a Bolivian woman who brought the cocaine in from her
homeland.
Cocaine Smuggling frgm Bolivia to Chile
A considerable flow of coca leaves and paste enters
northern Chile from Bolivia. Arica is probably the most
important reception center for the drug. In and around this
port city clandestine laboratories convert the raw material
into refined cocaine. After refining, the drug is shipped
south to consumption and distribution centers such as
Santiago, Concepcion, Valparaizo, Iquique, Antofagasta,
and Punta Arenas. Only a small part of the illicit
production goes to Chilean addicts; traffickers prefer the
external market, particularly Europe and the United States,
where much higher profits can be obtained.
Chilean authorities discovered a number of clandestine
laboratories in 1969 in Arica, in nearby Azapa, and in
Puente Alto on the southeastern outskirts of Santiago. In
1970 still more clandestine laboratories have been discovered
in Arica and also in Antofagasta. Police officials concluded
that although some of the cocaine produced in these laboratories
was for domestic consumption, most of it was being shipped to
Italy and the United States.
:o ai n Sm uggllg f rom Peru to
Much of the cocaine manufactured in clandestine laboratories
in southern Peru is directed to Guajara' Mirim, Brazil, situated
some 500 miles northeast of Cuzco on the Bolivia-Brazil border.
From Guajara Mirim the drug probably moves southeastward to
Sao Paulo and Rio de Janeiro. Cocaine produced in the northern
part of Peru often goes by air from Iquitos to Leticia, Colombia
and then to Sao Paulo de Oli.venqa, Tefe, and Manaus, Brazil.
From Manaus the cocaine either continues by ship or plane down
the Amazon and across the Atlantic to Italy or by air to Surinam
and thence to Cuba, Mexico, and the United States.
Cocaine Smuggling from Peru to Ecuador? Col_ombi a, and Ven _z _1 a
Considerable amounts of paste are smuggled out of
northern Peru into Ecuador for conversion to cocaine,
which is then shipped to the United States via Colombia
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
or by more direct routes from Guayaquil or Quito. Small
amounts of the cocaine continue through Colombia to
Venezuela and from there to Europe or the United States.
Little of the drug is consumed by addicts in Ecuador,
Colombia, or Venezuela.
Three international narcotics rings were broken up in
northern Peru in early March 1969. Their clandestine laboratories
are estimated to have turned out a half million dollars worth
of cocaine before being discovered. Later in the same month
members of another gang of drug traffickers were captured.
This group had been operating for about a year, in the course
of which they managed to ship nearly a million dollars worth
of cocaine and paste to Guayaquil, to Panama, and the United
States. Main centers for their operations were in the
vicinity of the coastal towns of Tumbes, Peru and Huaquillas,
Ecuador. The group was supplied by a clandestine laboratory
located near Tama in central Peru.
In March 1970 police authorities were investigating an
international network of narcotics smugglers including Peruvians,
Ecuadorians, Colombians, and Venezuelans that had been trafficking
for the past 6 months in cocaine, arms, and prostitutes. Cali,
Colombia and. Guayaquil, Ecuador were the main centers of their
illicit operations. Colombian prostitutes, recruited in and
around Cali, were sent to Guayaquil and Quito in exchange for
Peruvian cocaine refined in Ecuador. From Colombia the cocaine
was transshipped to Venezuela and the United States by other
international gangs. In May one of the more important
international cocaine couriers was captured by Colombian agents
at the Eldorado Airport near Bogota. He had been engaged for
months in smuggling cocaine into Colombia from Guayaquil and
Quito. At the time of his arrest some $60,000 worth of cocaine
was found on his person. In July a notorious Cuban trafficker
was captured in a luxury hotel in Bogota with cocaine that
would have been worth an estimated half million pesos on the
black market. He had travelled in Africa, America, and Europe
and lived in Caracas for some time before his recent arrival
in Bogota.
Man] u na
Marijuana is derived from the hemp plant, which is distributed
very widely in South America. Depending on climate and soil
conditions, plants have a greater or lesser value for either
their drug-producing properties or for the production of textiles,
cord, and twine. As a source of marijuana, the plant is common
in most of the countries of the continent, with the possible
exception of Peru, Bolivia, Chile, and Argentina. Marijuana
smoking is outlawed throughout South America.
-5-
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Marijuana Smuggling from Colombia to
~EII~~? ~ P l a
It has been estimated that there are over 400,000 marijuana
smokers in Venezuela. The habit cuts across socio-economic
lines. Jails, barracks, night clubs, schools, and universities
are all scenes of marijuana. use -- as in the United States and
Europe.
Although some of Venezuela's marijuana is home grown,
the vast majority of its supply is derived from Colombia.
The traffic is said to be in the hands of astute merchants
and cultivators and to be very well organized. The centers
of greatest production in Colombia are located in the
north in the departments of Norte de Santander, Magdalena,
Cesar, and in La Guajira. In these places the most advanced
agricultural methods are applied. The planters who raise
marijuana usually do so exclusively -- their entire farms
are dedicated to its cultivation.
At certain times during the year, preferably before
winter, the marijuana crop is harvested and stored in
large sheds where it undergoes a curing process. From
these sheds the marijuana passes through the hands of a
number of regional and local wholesalers, always increasing
in price, until itsreaches the Venezuelan border zone,
at Maicao or Cucuta'
ucuta for example. By then it has increased
in value from about 15 pesos a pound to 100 or more pesos
a pound. Once the drug has gone over the border into
Venezuela the price triples.
The traffickers employ diverse methods to get the drug
across the border. Often they use pack animals and take
long roundabout routes over the mountains and through the
forests. They sell their merchandize to local wholesalers
in Venezuela, in places such as San Antonio in Tachira
State or Guzare in Zulia State at 200 to 300 bolivares a
pound. The marijuana is then transported to important urban
centers, such as Caracas, Valencia, Barquisimeto, and
Maracay. Local wholesalers sell the marijuana to distributors
at 350 to 600 bolivares a pound depending on the quality of
the product.
The marijuana finally reaches the hands of the consumer
in the form of 10, 20 or up to 50-bolivar packets. A
10-bolivar packet might have enough marijuana to make three
cigarettes; generally 100 to 150 packets are produced from
a pound of marijuana. In other words, the marijuana has
increased in value from slightly less than US $1 a pound
when it leaves the Colombian farm to about US $220 when it
reaches the Venezuelan consumer. Hence, enormous profits
are made in the traffic.
Approved For Release 2001 /09/04 :CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
Marijuana is also smuggled out of Colombia by air to
Puerto Rico and the Netherlands Antilles.
Marijuana Traffic in Brazil
Marijuana (called maconha) is cultivated for the illicit
drug traffic in nearly all of the states of Brazil. In
descending order of importance the chief producing states are:
Alagoas, Mato Grosso, Pernambuco, Sergipe, Piaui, Mananliao,
and Bahia. All of these, with the exception of Mato Grosso,
are located in the poverty-striken northeastern portion of
Brazil; Mato Grosso is both geographically and culturally the
"wild west" of Brazil, an enormous expanse of forests and
grasslands. The main consumption centers, on the other hand,
are located in the more prosperous central and southern
coastal regions, particularly in the cities of Sao Paulo,
Rio de Janeiro, Belo Horizonte, and Porto Alegre. Most of
the marijuana is brought to the consumption centers from the
areas of production by trucks and private automobiles.
The emergence of Mato Grosso as a major producer of
marijuana is a relatively recent phenomenon, perhaps related
to suppression of cultivation of the crop in the northeast
or interdiction of traffic to the south. S'o Paulo State is
also beginning to grow marijuana for its local market.
Marijuana Smuggling from Paraguay to Brazil
Beginning in 1964 Paraguayans began to export marijuana to
Brazil by way of Corumba, Mato Grosso. In 1966 police in
Corumba seized a trunk containing 40 kilograms of the drug.
By 1969 it could be said that the cultivation and smuggling of
marijuana had become "a way of life" in the Pedro Juan Caballero
area and in other towns in northeastern Paraguay along the
Brazilian border. It was even claimed that Paraguay might
soon become the world's largest producer of marijuana. The
upsurge of marijuana cultivation in Paraguay is said to be the
result of the strong crackdown on illicit cultivators in
northeastern Brazil some years ago. The cultivators first
tried operating in Mato Grosso, but many of them found the
risks still too great there and moved across the border into
Paraguay. The price of the marijuana doubles on crossing the
border into Brazil. Local Paraguayan officials have
reportedly been heavily involved in the illicit trade.
Synthetic Drugs
In addition to the traffic in cocaine and marijuana, an
alarming growth has taken place in the illicit movement of
dangerous synthetic drugs, especially within and to Brazil.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
It is sustained both by Brazilian laboratories and by illicit
importation from Argentine and Uruguayan laboratories. In
1966 Brazilian authorities seized 4,000 ampoules of Pervitin
from Argentina, more than 300 phials of Dexamyl from Uruguay,
1,500 tubes of Stenamine from Argentina, and a further 3,000
tubes of the same drug from Cochabamba, Bolivia. In 1968
over 40,000 tablets of various psychotropic drugs were seized
in Brazil. One of the principal centers for the introduction
of the synthetic drugs into Brazil is Pedro Juan Caballero,
Paraguay, notorious for gambling, prostitution, and smuggling
of all types. The synthetic drugs are said to be of Argentine
origin and to move into the area as a countercurrent to the
marijuana which is moving out.
The consumption of opium and its derivat-ves within South
America is not currently considered to be a major problem.
There is no known significant cultivation of opium poppies or
production of morphine or heroin.
During 1966, heroin traffic into Brazil was said to be
substantial, mainly because of illicit imports to Santos and
Sao Paulo by Chinese crewmen from Dutch vessels. Most of the
drugs were believed to have come from Hong Kong. Over the
5-year period from 1963 through 1967, however, Brazilian
authorities reported actual seizures totaling less than 2
kilograms of heroin, 1,263 ampoules of morphine, and 23 grams
of opium. The latest available official report, 1968, indicates
no opiates seized during that year.
Certain key cities in South America have become increasingly
important as transshipment points for heroin from Europe moving
into the United States. As early as 1966 reports indicated the
probability of narcotics smuggling by air from France to
Argentina and then on to the United States. Elements from the
predominantly Italian La Boca section of Buenos Aires were
suspected of being involved in the contrabanding. Currently
(1970) French-Italian and Latin American gangs are engaged in
smuggling heroin into Rio de Janeiro for transshipment to the
United States. These gangs apparently have connections in New York
and Naples, and probably in Buenos Aires and S'do Paulo as well.
Most recent addition to the list of transshipment points is
Santiago, Chile.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 JtJ..F~VFip`S 97~?...:.7
Approved F Release 2001A CI
g10'4': A-RDP80-01601 R001000040003-7
0
phurte acid. There are scores concentrates on penetrating the
of operators in Bolivia.' . )international ring by recruit-I,
For pure cocaine, a bitter, ing informers and developing
white crystalline substance that detection systems along the
not only cocaine but also large '"""" `"""
(.-- With the rainy season draw- Y Spanish, some simple Indus- International police have long
i
h
ipments of heroin orig
nating trial chemistry is needed. known of several Chilean or-
ing to a close in the Tamam- s
paya River valley, Ricardo in Europe. The work can be done in a ganizations that began as so-
Misme, a Bolivian Aymara In- Mr. Misme's coca plot is less laboratory that can be hidden called "pickpocket rings,"
dian, has finished planting a than half an acre, which is in a house. In the past month which trained thieves and sent
new plot of coca shrubs, the small compared with some two such clandestine Tabora-, them to the United States. Ac-
-source of up to 30 acres
source of cocaine, tories near Santiago, Chile,Icording to narcotics sources,
The tender green seedlings in the Yungas. But for the next have exploded, . killing the these rings, which have crimi-
are rooted in moist, terraced,25 years it will yield upward operators. Much of the "paste"lnal connections in the United
beds that rise like steps on a of 120 pounds of coca leaves from landlocked Bolivia is States, are now in the cocaine
5
hillside that plunges down tolannually, worth about $
0 at taken to neighboring Chile forland heroin traffic.
the rushing river. In the warm current prices. refining and shipment to the! Frenchman Is Accused
sun, the. seedlings will grow That and about $100 a year United States. The rings are similar in or}-1
into rows of low, green bushes(in hone: ,sales from 23 bee- The cocaine is moved north gin to that believed to have;
hives em:ble Mr. Misme to buy
lby next year when Mr. Misme in ships touching at Chilean been operated by Auguste Ri-1
rice, salt, cooking oil, sugar and picks his first crop of coca ports, aboard private planes, in cord, a 61-year-old Frenchman)
a few other staples to supple
leaves.-
ment his own food crops, main- hiding places such as the hol-.who is in jail in Paraguay, The
Mr. Misme, 32 years old, has low end of wine bottles and by United States is seeking to ex-
lived all his life in the valleys ly potatoes, corn and oranges.
Coca a `Safe' Crop or body carriers. tradite him as one of the major
of the Yungas region in the The Profits Are High traffickers in South America.
Andes of western Bolivia and "Coca is safer than planting The enormous increase in the Ricord went to Buenos Aires,
fruit trees, which can et sick,"
does not know that cocaine has) get of cocaine between a Argentina, after World War II
become one of the most lucra-ssaid Mr..Misme, squatting on his? Chilean port and the United and, according to the police, es-
tive drugs in internationalI terraced land, which he cleared, States makes the risk of beings tablished a major. white-slave
smuggling to the United States.lgraded and planted in 25 days caught worth chancing for operation that sent girls to
He is a poor farmer, sup- with a short hoe and a ma- many carriers an
and finances the nightspots and prostitution
porting a wife, three childrenlchete. o e criminal organizations rings in Uruguay, Brazil and
and two elderly parents on 20I Other small plots could be lam that are the major traffickers. Venezuela.
acres of land, and coca is a II seen on hillsides across the A kilo of cocaine (2.2 pounds), When - heroin traffic from
crop that is legal and deeply river. There are thousands of ;worth $1,000 in the Chilean Marseilles to the United States
;rooted in the Indian cultures lsmall farmers producing coca I
. _.,a - in retail drug sales in New through Canada and United
tsut the cnain that runs from i uau:uu r[uv,ncc tuL- a cwwuuni :. This means that the creasing pressure in the late
Peru the to coca the plots in cocaine Bolivia pushers inand market northern that Argentina covers and ChileBolivia.,,;;, agents3,000 kilos of cocaine originat-nineteen-sixties, Ricord's op-
b
l
ecame a
y
New New York or Miami involves The chewing of coca leaf,; ing in Bolivia are worth $70- eration reported
powerful criminal organizations 1combined with a small amount million in the United State's. major channel for heroin ship-
making profits in the tens of of lye is a deeply rooted Indian i. The temptations of such prof-,ments to the United States
millions of dollars. tradition. Stimulating alkaloids, Its apparently caused the through Miami.
death of two our Americans
Y
l.i f- I RV I I I
Cc a V a n s o a d ri V uct.The process is simple, in to Chile make disruption of the,
Wa~y ? port of Arica, is worth $23,000 traffic from here very difficult.)
]mot's A Life dng !rose more than oil The United States Bureau ofi
,( 1so f drum, kerosene, water and d sul-(Narcotics and- Dangerous Drugs]
major target of the United
States Bureau of Narcotics and
Dangerous Drugs In the expand-
ing war on South American
The New York Times/Feb. 22. 1972
In Chulumanl region and
other areas' of BctA ' 0
coca is an important crop
or thousands of farmers.
g
including cocaine, are released...
Coca chewing is reputed to in a La Paz hotel in Decem-
give physical strength, reduce ber when a technique for smug-
hunger and produce mental gling cocaine proved fatal. The
clarity. Coca is also widely Youths swallowed sizable quan-
used as a medicinal herb, par? ? tities of cocaine packed in rub-,
ticularly as a tea. There is sci-I ber contraceptives several I
entific debate over the nutri. hours before boarding a flight]
tional value of chewing coca, for New York, hoping to pass it,
but millions of Indians believe through the digestive system.!
it to be beneficial. But the containers broke, ap-I
"To deny the use of coca, parently from the effect of gas-
to the Indians is as serious ai.tric juices, and both died from
disregard for human rights as cocaine intoxication.
would be an attempt to out-! Narcotics Squad Set Up
law beer in Germany, coffee, Bolivia set up a small nar-,
in the Near East or betel chew cotics squad, headed by a po-l
Ing in India," said Richard T.jlice major, after a two-week)
Martin of Harvard University's 1 training course financed by the,
Botanical Museum in a study( United States Agency for Inter-;
published by the Journal of national Development,. But l
Economic, botany in 1970. while the policy of the military'
Much Enters Drug Traffic government of President Hugol
Nonetheless a rough estimate !Banzer Suarez is to crack down
of production in illegal "Tabora-Ion drug abuse and to cooperate)
tories," many of which are, with United States narcotics)
crude wildcat "stills," indicates lsagents, personnel and funds aret
that as much as one-third of li very limited. ?
Bolivia's official coca output of II The widespread operation ofl
4,200 metric tons a year is1 clandestine laboratories and the)
going into the drug traffic. lease with which cocaine cans
I kjtgsi
ket.value of $250, to produce
a pound of cocaine "paste,"
 %EW YORK T11 4h5
Approved For Relfaee ff++ ~~04 : CIA-RDP80-01601 R001000040003-7
CPYRGHT .at tt33
0
Ton of Marijuana'Found
TIJUANA, Mexico, (AP)-A
ton -of marijuana was found
wrapped in plastic in a storage;
shed here recently, the police
said.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 4435 WISCONSIN AVE. N.W.. WASHINGTON, 0. C. 20016. 244-3540
PUBLIC AFFAIRS STAFF
PROGRAM CBS Morning News
DATE February I, 1972 7:00 AM
STATION WTOP TV
CBS Network
Washington
HUMPHREY WOULD HAVE CIA TRACKING DRUG SMUGGLERS
JOHN HART: Senator Hubert Humphrey, campaigning in Florida, says the
$230 million President Nixon wants to spend on drug treatment is, in his words, totally
inadequate. He wants to get rid of narcotics before they get into the country , says
Humphrey, saying it's time to put the CIA to work tracking down smugglers.
He was at Dade Junior College in Miami yesterday, courting the kind of
audience he alienated four years ago, as David Schoumacher reports.
SENATOR HUBERT HUMPHREY: I think the important question today is to face
up to a fact....
DAVID SCHOUMACHER: Hubert Humphrey is going after campus support with
the vengeance of a man trying to taste everything he missed in 1968. As a teacher as
well as a politician, the not always cold war between Humphrey and the students four
years ago was particularly bitter for him. Now, he must prove as much to himself as
to them that he still has something to say, that he is still relevant.
SENATOR HUMPHREY: I tell the student body here that this country, your
fathers and mothers helped rebuild a wartorn Europe in the I950's with our money, our
taxes, $20 billion. Arid today the European city makes the American city look old and
obsolete. If we could help Europeans build new cities and new industries and new parks
and new highways and new airports, and put their people to work, why in the name of
common sense can't we do the same thing for the American people that want to go to work?
SCHOUMAC:HER: Of course, it is a new campus population. Many students
were only I4 or 15 at the time of the 1968 Chicago Convention, and perhaps more to the
point, they and their friends are no longer being drafted for Vietnam.
Vietnam, and Humphrey's role as Vice President in the Johnson Administration
still comes up, but without the bitterness of 1968. And now after all he's on their side.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
' CPYRGHT
.0, 0
In his bid for the students' approval Humphrey occasionally and awkwardly
borrows some of their catch phrases, but when pushed he can be firm.
SENATOR HUMPHREY: Now, first of all, that was '68, 1968, and may I say
most respectfully, it was the only candidate that suggested a programmed withdrawal, a
cease-fire and an ending of the bombing of the North. As a result of it, as a result of it,
Mr. Nixon, Mr. Wallace, both condemned me. The President of the United States said
he didn't agree with me. I think that that position represented a forward position at the
time, and it said withdrawal of our forces, a cease-fire, an ending of the bombing of
the North. No president could possibly say to do that without regard for the safety of
our troops or he wouldn't be worthy of being president of the United States. I have no
apologies whatsoever. It is now....
SCHOUMACHER: The students seemed to respect Humphrey's toughness. And
after his appearances he's mobbed for autographs and snapshots. The former professor is
given passing grades.
Humphrey's campus tour went well, if, not all the students agreed with him
they did listen. That, at least, has changed since 1968.
David Schoumacher, CBS News, Miami, Florida.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 WASHINGTON DAILY :;E'VS
Approved For Release 2001/.09/04 CJh RDP80-01601 R001000040003-7
FED 1
Fulbright and the drug, traffic
By VIRGINIA PREWETT
SENATOR J. W I L L I A M
FULBRIGHT, D-Ark., in a
parlimentary putsch late last
Friday introduced an amend-
ment to the foreign aid appro-
priations bill that will kill the
best mechanism the United
States has for getting other
countries to cut the drug flow
Into the United States.
Sen. Fulbright pulled out of
his pocket in the final stage of
the floor debate on foreign aid an amendment
abolishing an AID operation called the "public
safety program." It provided police advisory
assistance and some equipment to 15 countries
In Latin America and 25 over the world.
The program employs 314 people overseas
and 105 in Washington at a cost of $26 million
annually. It was attacked in the subcommittee
stage last week, but survived. Sens. Fulbright,
Proxmire of Wisconsin and Pastore of Rhode
Island assailed the program on the Senate
floor, while Sens. Wong of Hawaii and Cooper
of Kentucky. defended it. With 29 senators ab-
sent, the amendment won by a vote of 37 to 34.
THE BILL will be rushed to a Senate-House
conference tomorrow, allowing no time for
public awareness or discussion.
The public safety program, started in 1954,
during the 1960s has emphasized advising for-
eign police forces on the humane handling of
street riots and the suppression of urban guer-
rilla warfare. Since its inception In 15 Latin
American countries, rifles have ceased to be
used against dissenting crowds. The more hu-
mane methods of crowd-handling have to an
extent pulled the sting out of street-rioting as
a radicalizing tactic. As the overseas police
met street riots without undue harshness, It
became less necessary to call In military
forces, with consequent harsh jolts to Internal
political stability.
The public safety assistance program has
been a chief target of Latin America's ex-
treme leftists and urban guerrillas as. it has
aided neighboring police forces to suppress
such dramatic urban guerrilla tactics as kid-
napping diplomats.
The extremist charge that U.S. public assist-
ance advisors "assist" Latin American police
in torturing prisoners has never been proved.
Sen. Frank Church, D-Idaho, as chairman of
the Inter-American subcommittee of Sen. Ful-
bright's Foreign Relations. Committee, held
hearings on this and had to admit no proof
was available. He had ,special reference to
Brazil, where extremists' records themselves
reveal that alleged tortures took place in mili-
tary barracks, not in police hands . -
MANY FEEL that if our National Guard had
had the crowd-handling training in which U.S.
experts advise foreign police forces, the trage-
dies of Kent State and Jackson State would
never have occurred.
With drug use among U.S. youth a national
catastrophe, AID's public: safety program had
begun to concentrate on getting overseas po-
lice cooperation in stopping drug traffic into
the United States. Special efforts were under
way in countries of the greatest "drug flow"
to our country. A similar drive was under way
in Bolivia, Ecuador and Colombia, the three
New World cocaine producers.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 CHICAGO, ILL.Approveq IFRIe 2001/09/04: CIA-RDP80-01601 R001000040003-7
NEWS
E - 434,849
JAN 2 5 1972-.
Cop-leve officials on both sides of Atlantic
involved in charges. linking drugs, spy system
well
Hs ~cs
By Milt Freudenheim
Daily News Foreign Service
spiked walls in a run-down quarter of northeast Paris, he
works in a headquarters nicknamed the "Swimming Pool."
A real pool is across the street.
PARIS-Roger Delouette, 47, high-living sometime French Also known as SDECE (Service de Documentation Ex-
secret agent and gun-runner, kissed his young blond mis- terieure et Contre-espionnage), it was home base for Com-
tress good-by and left Paris for New York on a mysterious munist agents helping the Russians who were fictionalized
adventure that turned sour on an apocalyptic scale. in the best-seller novel "Topaz."
It rocked French politics, infuriated President Georges When it hit the headlines, Delouette's charge against
Pompidou, threw a pall over the entire French spy system Fournier brought on a sensational public airing of the sinis-
and for a time at least curdled French-American relations. ter history of the "Swimming Pool."
Cabinet ministers on both sides of the Atlantic were drawn
into the maelstrom, including American Secy. of State Wil- IN THE BEGINNING, FRENCH officials didn't respond
liam P. Rogers, Atty.-Gen. John Mitchell and the French for months to demands from the prosecutor of the Delouette
defense and interior ministers. President Nixon's top-prior- case. He is Herbert J. Stern, a hard-driving young U.S.
ity international war against drugs was jeopardized at a attorney in Newark, N.J. Stern demanded action against
painfully sensitive point. Col. Fournier.
But Delouette, who eventually pleaded guilty to smuggling
FINALLY, A HIGH-LEVEL decision was made to im- the heroin, wanted a promise of immunity from French
pose a cloak of official secrecy, halt all public statements punishment in return for his co-operation in exposing and wait for better days. Fourn-
ier. This type of immunity doesn't exist in French law.
Delouette's ill-fated trip last April started it all. He was However, in previous cases Frenchmen convicted in the
smuggling heroin. He did a poor job of hiding 44 kilograms United States have not, In fact, been retried for the same
In a new Volkswagen camper and was arrested at the dock offense in France.
et
The French investigating judge, Gabriel Roussel, declined
friend Marie-Jose Robert, 22: "Something has gone terribly
wrong with the car." But the attempted warning was too to make any promises to Delouette.. Stern flew to Paris and
late. waved his finger at Roussel demanding to see Col. Fournier.
nearly $17,400 in counterfeit dollars. Marie-Jose was jailed Convinced that Fournier was being protected by a French
and held until July when she was released to give birth to a coverup, Stern obtained federal grand jury indictments of
daughter. both Fournier and Delouette. Fournier then was called in by
Judge Roussel, a top French investigator with a good record
SOQN AFTER HE WAS arrested in New York, Delouette of narcotic convictions. Fournier denied everything and told
told American authorities he was smuggling heroin for newsmen his job with SDECE prevented his going into de-
French intelligence Col. Paul Fournier. tails.
This charge was a delayed-action bombshell that exploded
seven months later when Delouette's American lawyer Next day a French cabinet spokesman, Leo Hamon, ex-
leaked it to the New York Daily News. pressed official "skepticism" about the American charges.
Fournier is head of investigations for the French equiva- Pro-government newspapers such as France-Soir became
lent, but in a, much smaller and exceedingly corrupt way, of indignant at the indictment and hinted that it was a revenge
the American Central e
t 1 ' e c rs re
AI~I~ $d~i'~'21 2b199t0 b th can
ed previous accusations by U.S. officials that "big
wheels" were protecting the heroin racket in France.
 Cit
rope, was transferred fb
l
ater,
widely believed, to placate the French. A few weeks
Max Fernet, head of the French police Judiciaire and a
bitter antagonist of Cusack, also was eased out. The score
appeared even.
Then the affair escalated from narcotics to the murky
world of espionage. A former employer of Delouette sud-
denly went on Luxembourg radio charging unnamed SDECE
agents with "complicity" in the case.
THIS WAS COL. Roger Barberot, head of a Fpeneh agency
helping third-world countries with their agriculture and-
doing a bit of intelligence work on the side. Barberot is a
former French ambassador who seems to know a lot. He
identified Fournier as using a second name, Paul Ferrer.
Barberot once had attached Delouette to a French aid mis-
sion in Cuba, but the French foreign ministry objected and
got him removed.
Ponnpidou acts
According to Barberot, Delouette was the victim of an
"operation" by SDECE factions who had been purged for
acting as double-agents for the Soviet Union and other Com-
munist countries.
The "Swimming Pool" has been purged and re-purged.
over the years. During the presidency of Gen. Charles de
Gaulle, SDECE agents co-operating with the CIA were
ousted.
When Pompidou became president, he moved to clean up
SDECE. He named a friend, pro-American businessman
Comte Alexandre de Marenches, as head of SDECE.
Anti-Communist newspapers charged. that the Delouette
case was being used to discredit the Pompidou-style SDECE
and get rid of de Marenches.
THE FRENCH.SENATE, where government forces are
outnumberecj, voted to cut SDECE'S budget. But the Assem-
bly restored it. Defense Minister Michel Debre defended de
Marenches and SEDCE. This was important because Debre
earlier had tried to minimize the de Marenches purges of
pro-Communist agents.
French Minister of Interior Raymond Marcellin, in charge'
of the anti-narcotics crusade, weighed in with a public prom-
ise that France would "do everything to help the American
government."
These promises were renewed last week when John Inger-
soll, head of the.U.S. Bureau of Narcotics and Dagerous
Drugs, met top French police. But Ingersoll and his French
counterparts ducked all questions on Delouette and Four-
nier.
Originally, Debre accused New' Jersey U.S. Atty. ' Stern
of playing politics. But now Marcellin agrees that "it is
necessary that the truth be found in this Delouette affair."
Probe Pushed
In Washington, Atty. Gen. John Mitchell leaned on Stern
who stopped making public accusations against the French.
Just before Christmas, Stern and Delouette's attorney made
;a discreet trip to Paris, this time without a word for the
press. Later, word leaked from trench sources that Judge
Roussel would be traveling to Newark for an official inquiry
into Delouette's charges against Fournier.
Like ,Americans, the French public is now. deeply worried
about drugs. They are involving French young people of all
background.
'The French sorely resent U.S. narcotics agents' well-docu-
mented charges ,that A*r tdFr i 5ec120OOt'9/04 : CI~
York is processed in clandestine laboratories in France. In
20 years of looking, French police uncovered only 13 of these
 WASHINGTON STAR
Approved For Release 2QA9/0W{141 2A-RDP80-01601 ROO1000040003-7
LATIN CRIMINALS MOVE IN
a
stro on u-g-Traff ic'
afia
'O *%pe
By MIRIAM OTTENBERG
Star Staff Writer With expertise gained in the
Spanish-speaking criminals
are outdistancing the Mafia
moguls as the key men in
international narcotics traffic.
"They're moving tremen-
dous amounts of. heroin and-
cocaine to the point where
they rival if not surpass the
traditional organized crime
elements in the United States,"
said John R. Enright, who is
assistant director for criminal
investigation in the Bureau of
N a r c o t 1 c s and Dangerous
Drugs.
When BNDD agents earlier
this month made the largest
heroin seizure ever reported,
the eight persons arrested in-
cluded two Cubans, five Puer-
to Ricans and an Argentinean.
BNDD Director John E. Inger-
soll said the 385 pounds seized
in Miami would have had a
street value of $76 million.
Enright said one of the
prime factors in the greater
availability of heroin and co-
caine in this country is a dra-
matic increase in activities of
important Spanish -speaking
traffickers.
Mafia Still at It
Before the 1960s, the inter-
national heroin traffic had
been dominated by the Mafia.
They're not out of it yet, En-
right said. One such-mob in
New York recently smashed
by BNDD was responsible, En-
right said, for importing more
than a ton and a half of heroin
in the past year and a half. ,
"There has been some re-
trenchment of the traditional
crime groups from the heroin
trade, however," Enright said,
"and Spanish-speaking crimi-
nals filled the gap. At the
same time, there's been a tre-
mendous increase in demand
for heroin and cocaine."
Cocaine traditionally has
been in the hands of Cubans.
They were the key middlemen
for cocaine shipments from
Bolivia, Peru and Ecuador via
laboratories in Chile.
When the pre-Castro Cuban
criminal element left Cuba
along with the doctors, lawyers
and professors, the Cuban
criminals spread all over
South America, and to the
cocaine trade they went into
the expanding heroin market.
In Spain, they set up shop
across the border from-Mar-
seilles and its heroin labs.
From Barcelona, they smug-
gled heroin by ship.
In South America, they de-
veloped routes to the United
States for heroin moving via
Argentina and other South and
to prove the Spanish-speaking
smugglers could furnish mul-
ti-kilogram quantities of hero-
in as well as cocaine, agents.
made raids in nine major cit-
ies. With arrests made one
weekend and thereafter, the
total was 169 people.
Last week, the U.S. 5th Cir-
ruit Court,of Appeals freed six
members of what the govern-
ment charged was a Florida
Central American ports. They based narcotics gang uncov-
worked with the "contraband- ered during "Operation Ea-
istas," the soldier-of-fortune
pilots. who will fly smuggled
goods anywhere.
And in the United States,
they recruited couriers and
gle." All but one of those
freed, including one described
as a top figure of the nation-
wide ring, were Spanish-
speaking.
The appeals court threw out
their convictions on the ground
LT..-L ALL_ r1...- T-U-- TT TR: L..L
Cuban colonies in Miami, New
York and Chicago.
The widespread operations
of the Spanish-speaking smug-
glers, particularly the Cuban
immigrants to the United
States, first was noted by nar-
cotics enforcement officials in
1969 when two major drug cas-
es were developed.
One case involved European
heroin smuggled by ship into
New York in food cans pur-
ported to be filled with a Span-
ish delicacy, paella. The other
case involved a number of Cu-
ban conspirators smuggling
heroin and cocaine into the Mi-
ami area.
When BNDD information in-'
dicated that the hub of the
smuggling operation was the
large Cuban immigrant colony
in Miami, a bureau task force
of Spanish-speaking undercov-
er specialists was set up to
penetrate--the system and
gauge its proportions. The in-
vestigation was known as "Op-
eration Eagle."
As the investigation devel-
oped, it became apparent that
an organized criminal group of
interstate and International
proportions was involved.
Links were established to New
York and Chicago and other
U.S. cities with Cuban colo-
nies. And the drug traffic
routes north from South Amer-
ica, Central America and the
Caribbean islands were traced.
ears executive assistant, act
' ing under authority delegated
him by Mtichell, approved ac-
tions ultimately leading to two
court-approved wiretaps. The
appeals court said federal law
requires that Mitchell himself
authorize the taps.
United States and Spain as 169 Arrests M d
well. Approvedci09ate 21i0/04 : CIA-RDP80-016018001000040003-7
lot of money on narcotics buys
 7T 'IL
Approved For Relea, 0Wi 9/~A`~GIA-RDP80-01601 R001 000040003-7
STIR 1972
23 Accused of S muggting
1,500 Lbs. of Heroin Here
Twenty-threes men were
charged here yesterday with
smuggling 1,500 pounds of
heroin into the United States
during the- last two years in
one of the largest narcotics op-
erations ever uncovered.
cr.ra
e
i
t
dj
dSate
l autho
a
ma
e
Haut
1j~~~ es
s-
from France ort h Can.
that the smuggled heroin had g Most of the heroin mentioned
gg ada, according to Andrew J. in the indictment was allegedly
an importation value of at least Maloney, the Federal prose-
$8-million and a street value of cutor in charge of the Investi-
more than $200-million, with gation.
Maloney, who is chief
some estimatesn st $300-
milIion, ~ of the narcotics section in Mr.
dependi won condi- Seymour's office, said that the
tions in the narcotics n`r et, defendants had smuggled in the
! American and ' French agents heroin in expensive automo-
cooperated in the 'extensive in-
vestigationn which included
months Of surveillance in New
York, Montreal, Paris and other
cities.
United States Attorney Whit-
ney North Seymour Jr. said
that the 23 men were indicted
by a Federal grand jury here
on Jan. 4, but the Indictment"
was not unsealed until yester-
day, after six of the defendants
were arrested in France during`
the weekend.
Twenty of 'the defendants
named in the indictment were
identified as Frenchmen, one
as an Austrian national who
was arrested in France and
two as Bronx residents, identi-
fied as Louis Cirillo and John; After the initial interception,
Anthony Astuto. I which resulted in several ar-
The indictment accused all rests here, French authorities
of the defendants of conspiring made additional arraests in Par-
to conceal large amounts of is and seized 233 pounds of
heroin in automobiles shinned heroin last Oct. 6,, described at
Mercedes, a Cadillac and an
;Alfa Romeo.
A key break In the case
came 'last September when
United States Customs agents
intercepted a heroin-laden car
that had been shipped here
from France.
Little Dent Made in Supply
eeini to The New York Times
PARIS, Jan. 17-A mint 11
month fight by the. Anrericanl
and French police to halt the.
drug traffic was acknowledgedi
today to have made little dent)
in the level of supply and con-
sumption of narcotics in the!
United States.
John E. Ingersoll, chief of the''
American Bureau of Narcotics
and dangerous drugs, said after
a meeting here with French
police officials that he was not
satisfied with the efforts of the
French police or of his own
agents.
The area of biggest failure
has been in finding the clan-
destine heroin laboratories in
southern France, notably around
Marseilles. No laboratory has
been discovered for several
years, but Jacques Solier, head
of the French criminal police,
said "all our efforts are being
directed towards finding them."
The indictment announced to-
day in New York of 23 sus-
pected drug smugglers was
hailed by Mr. Ingersoll and Mr.
Solier as one of the most im
portant results to date of
French-American cooperation.
smuggled into this country
without being recovered by the
authorities, but Federal agents
said their investigation - could
document shipments totaling
three-quarters of a ton.
Andre Labay, a French indus-
trialist, and two others arrested
as part of the heroin case in
Paris last October were named
in yesterday's indictment here,
but all the French suspects ar-
rested in France will face pros-I
ecution in their own country.
Federal authorities here ex-
pect to extradite Guido Ran-
dell, an Austrian arrested in
Paris, and Michael Mastantu-
ono, a French citizen arrested
in Montreal.
Five defendants, including the
48-year-old Cirillo of 2970 Ran-
dall Avenue in the Bronx, were
arrested in the United States
and face trial In Federal Court
here, but several others were
still being sought by the au-
thorities.
One of those still being sough
is Astuto, 27, who formerly
lived at 4712 Osman Place in
the Bronx.
4 Others In Custody
Besides Cirillo the defendants
currently.in Federal custody
here are Richard Berdin, Roger
Preiss, Laurent Fiocconi and
Jean Claude Kella, all French
citizens ranging in age from
26 to 35.
The defendants who are pros-
ecuted here face maximum
sentences of up to 20 years in;
prison and fines up to $20,000'
on each of nine counts In the'
indictment if they are convicted,.
according to Arthur J. Viviani
and Dean C. Rohrer, the pros-
ecutors who presented the case
to the grand jury.
The first count of the indict-
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 June 2, 19, ,pproved 9X~ ~~ PAL09A '1.A~ s~~~~ R M 94 A~003-7 E 5305
Tile objr'etivc of the new policy is to induce
foreign conc,'rlls to take the Antidumping
Act into account before they engage In
sales to the United rates.
Tho 25 Percent Rule
The Antidumping Act provides that In
normal situations fair value shall be deter-
mined by comparing the ex factory home
market price of the merchandise snider in-
vestigation with the ex factory price at which
the merchandise is sold in the United States.
If the price in the United states is less than
the home market price, then there are "sales
at less than fair value" within the meaning
of the statute.
The Act also states that in situations where
the quantity of merchandise sold in the
home market is so small in relation to the
quantity sold for exportation to countries
other than the United States as to form an
Inadequate basis for comparison, then third
country price should be used as the basis for
comparison.
The Antidumping Regulations provide that
generally for purposes of determining what
constitutes an "inadequate basi& of coin-
parison" for fair value purposes, home mar-
ket sales will be considered to be inadequate
if less than 25 percent of the non-U.S. sales
of the merchandise are sold in the home mar-
ket.
The selection of home market or third
country price for fair value comparison can
easily be crucial to the results of intidunip-
Ing investigations, for frequently home mar-
ket price tends to be higher than third coun-
try price. This is particularly true where
merchandise is sold in a protected home mar-
kct and, when sold in third countries, is ex-
posed to the vagaries of world competition.
It has been Treasury's experience that
cases arise where sales In. the home marke
are adequate as a basis for fair value coin
parison, even though leas than 25 percent o
the non-U.S. sales are sold in the home mar-
ket. From a technical standpoint, the exist-
ing regulations provide for this situation,
since the 25 percent rule is introduced by
the adverb "Generally." Examination of the
precedents, however, revealed that the Treas-
ury has not, in recent years at least, made
an exception In applying the 25 percent rule.
This left the Treasury with two alterna-
tives. It could have ignored the previous in-
terpretations' of the Antidumping Regula-
tions which had, in effect, applied the regula-
tions as If the word "Generally" were not
there, or it coud propose a, change In the
Antidumping Regulations to eliminate the
25 percent rule.- We chose the latter course.
The proposal was published in the Federal
Register of April 27, and is currently open
for comment by interested persons. Any com-
ments received will be carefully considered
before we take filial action on this proposal.
A LOON INTO THE FUTURE
In my judgment, we have only come to
the end of the beginning of the rejuvenation
process. But, I believe we have made a solid
start.
Let me take it final brief moment to touch
upon what I see happening in the future. We
.have taken steps to initiate a fresh examina-
tion of the Treasury's anticlumping proce-
dures and regulations to scc what more can
be done. The regulations were substantially
revised in mid-l9G8 after a broad review,
with the dual objectives of conforming the
Treasury's procedures to the requirements
of the International Anti-Dumping Code,
and also of having the regulations Imple-
ment in clear and precise language c ob-
jectives of the Antidumping Act. 11 al-
most three additional years of experience
under the regulations, as then revised, it is
now appropriate to stop and take it new look
to see whether additional changes may be ap-
propriate. A Notice of Proposed Rule Making
to this effect was published in the Federal
Register of April 13, 1971. -
Sixty days are being allowed for the sub-
'mission of comments. I would assume that
many persons present here today-if you are
not already aware of the Treasury's invita-
tion to submit colmnents--may wish to do
so.
Let me emphasize that the Treasury De-
partment continues, as always, to adhere to
its policy of equitable administration of the
Antidumping Act. With the increased per-
sonnel assigned to this field and modernized
procedures and policies, we shall speed up
antidumping investigations, thereby making
administration of the law more effective--all
this without sacrificing equity.
Let inc also emphasize that the Treasury
Department and the Administration are
strongly opposed to having the Antidumping
Act transformed into an instrument of pro-
tectionism. On the other hand, we are
equally strongly opposed to allowing foreign
firms to injure U.S. industry by unfair price
discrimination. It is with the latter objec-
tive in mind that the Treasury Department
introduced the changes in the administra-
tion of the Antidumping law, which I have
discussed with you today. To the extent that
we succeed in our objective, the Treasury's
rejuvenation of the Antidumping Act will
become an increasingly important influence
in favor of a freer international trade policy.
In. conclusion, I would like to repeat a
statement made by Secretary Connally oil
May 17 before the Subcommittee on Inier-
national Trade of the Senate Committee on
Finance:
"The efforts to foster increased competi-
tiveness in our economy must be actively
pursued In the context of fair and liberal
trading arrangements."
RAMPARTS MAGAZINE MISREPRE-
SENTS ROLE OF CENTRAL INTEL-
LIGENCE AGENCY IN FIGHTING
AGAINST IMPORTATION OF DAN-
GEROUS DRUGS
1-10N. C I RLES S. GUBSER
OF CALIFORNIA -
IN THE HOUSE Oil REPRESENTATIVES
Wednesday, June 2, 1971
Mr. GUI3SER. Mr. Speaker, recently
Ramparts magazine published an article
which, like so many other articles which
appear in new left publications, attempt-
ed to discredit established agencies of the
Government, including the Central in-
telligence Agency. Unfortunately, the
Stanford Daily, the newspaper pub-
lished by students at Stanford Univer-
sity, saw 8t 'to lend credibility to this
article by reprinting it.
A tearsheet from the Stanford Daily
was sent to me by a constituent and I
submitted it to the Bureau of Narcotics
and Dangerous Drugs with a request for
comment. Under date of May 27 1 re-
ceived a reply from Mr. John E. Ingersoll,
director of the Bureau of Narcotics and
Dangerous Drugs. His letter should be
brought to the attention of all responsible
Members of Congress and the press since
it certainly contradicts the implications
contained in the Ramparts magazine
article. Mr. Ingersoll's response follows:
lion. CHARLES S. GUPSER
U.S. House of Representatives
Washington, D.C.
DEAR CONGI.ESSrsAN Gc*.?srl,: This is. in
response to your letter of May 21, 1971, which
enclosed a tearsheet from the "Standard
Daily" (a publication of Stanford Univer-
sity) of the article entitled, "The New Opium
War," as reprinted from "Ramparts Mag-
azine."
Charges made in the article appear to be
a part of a continuing effort to discredit
agencies of the U.S. Government, such as the
U.S. Military, the FBI, the CIA, and the De-
partment of State, all of which are, in point
of fact, working actively with the Bureau of
Narcotics- and Dangerous Drugs (ENDD) in
our worldwide effort to curtail international
drug traffic.
Actually, CIA has for sometime been this
Bureau's strongest partner In identifying
foreign sources and routes of illegal trade in
narcotics. Their help his Included both direct
support in intelligence collection, as well as
in intelligence analysis and production. Liai-
son between our two agencies is close and
constant in matters of mutual interest. Much
of the progress we are now making in iden-
tifying overseas narcotics traffic can, in fact,
be attributed to CIA cooperation.
In Burma, Laos, and Thailand, opium is
produced by tribal peoples, some of whom
lead a marginal existence beyond the polit-
ical reach of their national governments.
Since the 1950's, this Southeast Asian area
has become a massive producer of Illicit
opium and is the source of 500 to 700 metric
tons annually, which is about half of the
world's illegal supply. Up to now, however,
loss than ten percent of the heroin entering
the United States conies from Par Eastern
production. .
The dimensions of the drug problem and
the ab:;ence of any strong political base for
control purposes has been a dilemma for
United Nations opium control bodies op-
erating in Southeast Asia for nanny years.
Drug traffic, use, and addiction appears to
have become accepted as a fact of life in this
area and, on the whole, public attitudes
are not conducive to change.
The U.S. Government has been concerned
that Southeast Asia could become the major
source of illicit narcotics for U.S. addicts
after the Turkish production, 1s brought
under control. The Bureau of Narcotics and
Dangerous Drugs, with the help of CIA,
DOD, and the Department of State, has been
working to define and characterize the prob-
lein so that suitable programs to suppress
the illicit traffic and eliminate illegal opium
production, such as the proposed United
Nations pilot project In Thailand, can be
implemented.
It Is probable that opium production in
Southeast Asia will be brought under effec-
tive control only with further political de-
velopment in these countries. Nevertheless,
in consideration of U.S. Military personnel
in the area, as well as the possibility that
opium from this area may become a source
for domestic consumption, concerned U.S.
Agencies, including CIA, Bureau or Customs,
Dorm, and State, are cooperating with ENDD
to work out programs to meet the immedi-
ate problem as well as provide longer term
solutions.
Since the subject matter of your letter
concerns CIA, I have taken the liberty of
furnishing a copy along with my reply to
Director Richard Helms.
Sincerely,
JOAN E. INGERSOLL,
Director.
As an enclosure to his letter, A1r. In-
gersoll included a paper entitled "Recent
Trends in the Illicit Narcotics Market
in Southeast Asia." This should also be.
of interest to every person who is con-
cerned about this problem and I there-
fore include the text herewith:
RECLNT TRENDS IN THE ILLICIT NARCOTICS
MARKET IN SOUTHEAST ASIA,-
1. The reported increasing Incidence of
heroin addiction among U.S. servicemen in
Vietnam and recent intelligence indicating
that heroin traffic between Southeast Asra
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 E 5306
Approved For Release 2001/09/04: CIA-RDP80-61601 R001 000040003-7
CONGRESSIONAL RECORD - Extensions of Remarks June 2, 1971
and the United States may also be increas-
ing suggest that Southeast Asia is grow-
ing In importance as a producer of heroin.
While this phenomenon in part reflects im-
provement In information available in re-
cent months to the U.S. Government, there
are tilso good indications that production of
illicit narcotics in Southeast Asia has in-
deed risen in 1071.
BACKGROUND
2. The Burma, Laos, Thailand border area,
known also as the "Golden Triangle," is
considered one of the world's largest opium
producing regions. This region normally ac-
counts for about 700 tons of opium annual-
ly or about one-half of the world's total il-
licit output. A substantial proportion is con-
sumed within'the region. Burma, by far
the largest producer of opium in this region,
accounts for about 400 tons annually.
SURR3A
3. Production in Burma is concentrated
In the Eastern and Northern parts of Shan
State and in the Southwestern part of Ka-
chin State. Poppy fields cover the rugged
slopes In Fastern Shan State around Keng
Tung and in Northern Shan State from
Lashio east and north to the China border.
The latter territory, comprised of the former
Wa and Kokang feudal states, is now a cen-
ter of insurgency directed -against the Bur-
mese government, with much of the area un-
der insurgent control.
4. The growing season varies with the al-
titude, but the planting season generally
falls during the-months of August and Sep-
tember, with the harvest some seven months
later during February and March. At har-
vest time the women of the hill tribes slit
the poppies and collect the raw opium by
hand. The : opium plants themselves are
ground into a compound. for smoking. In
Northeast Burma, the raw opium is packed
by the growers and traded to itinerant Clii-
nese merchants who transport it to major
collection points, particularly around Lashio
and Keng Tung. Agents of the major en-
trepreneurs circulate through the hill coun-
try shortly after harvest time arranging for
payment and pickup. Payment is often in
the form of weapons and ammunition, al-
though gold and silver rupees are also used.
5. The opium harvested in Shan, Wa, and
Kokand areas is picked up by caravans that
are put together by the major insurgent
leaders in these areas. The caravans, which
can include up to 600 horses and donkeys
and 300 to 400 men, take the opium on the
southeasterly journey to the processing
plants that lie along the Mekong River in
'the Tachilek (Burma) -Mae Sal. (Thailand) -
Ben Houei Sal (Laos) area. Caravans carry-
ing in excess of 16 metric tons have been
reported.
THAILAND
6. Opium-growing areas in northern Thai-
land are located in the upland tracts oc-
cupied by various tribal groups. The pro-
vinces of Ching Mal, Chiang Ral, and Nan,
which have the largest concentration of
Moos, produce most That opium. Illicit opium
production in Thailand is estimated at 200
tons.
LAOS
7. Another, less productive, opium growing
area is along the 2,500 to 4,500 foot high
mountainsides of Northwest Laos. The opium
cultivated by' the Moo in this area is of a
relatively lower grade and thus less suit-
able for refinement into morphine base or
heroin. In these areas where the tribesmen
have been encouraged to grow corn, the pop-
pies are planted among the corn. When the
corn is out, the poppies continue to grow
until they too can be harvested.
8, Major producing areas include Phong
Saly Province in the North, Houa Phan
(Sainueua) Province in the Northeast, and
the Plaine de Jarres area of Xiang Khoang
Province in the East-central part of the
country. However, large arena of production
in Pliong Saly, Ilona Phan, and Xiang
Khoang have fallen under the control of the
Pathet Lao and North Vietnamese,
9. The trade in Northwest Laos is less well
structured and organized for significant com-
mercial exploitation. There are no advance
purchasing agents or pick-up caravans. The
harvested opium and the poppy plants which
are ground up for smoking are transported
to nearby village markets by the growers
themselves. In highland market places the
raw opium and its by-product are used open-
ly as currency. Ethnic Chinese merchants ire
the traditional purahnsers of the opium
products throughout Laos. The products they
collect are transported to population cen-
ters and also to processing plants along the
Mekong River by travelers, particularly gov-
ernnient soldiers, who have the most mobil-
ity and access to air travel in the area, and
refugees. Opium produced in the Commu-
nist-controlled areas also find its way into
the regular marketing channels.
DISTRIBUTION AND REFINESISS
10. The KMT irregular "armies" and the
Burmese Self Defense Forces (KKY) are the.
most important trafficking syndicates in
Northern Southeast Asia. The KMT irregu-
lars--formerly the remnants of the Chinese
Nationalist forces which retreated across the
Chinese border in 1949--now composed
largely of recruits from the local population,
have a combined strength of between 4,000
and 6,000 well-armed nten. The largest force,
with an estimated strength of 1,400 to 1,900,
is the Fifth Army. 'The secorid largest with
a troop strength of between 1,200 and 1,700
Is the Third Army. The headquarters of both
armies are located in a remote part of North-
ern Thailand between Fang and Mae Sai. It
is estimated that these two KMT irregular
forces control more than 80 percent of the
opium traffic from the Shan State.
11. The KKY have been major competitors
of the KMT irregulars in the opium trade.
The KKY are comprised of former Shan State
insurgents and bandits who have allied
themselves with the Burmese government
against both the KNt'I' and Chinese Commu-
nist-backed insurgents. In return the gov-
ernment of Burma allowed them to pursue
their opium trafficking activities.
12. 't'he Shan States Army, an insurgent
group, is also heavily involved in the opium
business. It maintains several camps in
Northern Thailand where opium is nearketecl
for weapons and military supplies.
13. About 140 tons of raw opium is nor-
mally transported annually out of Northeast
Burma to foreign markets. Most of this
opium is stored or processed in the Mekong
River trf-border area before transiting Thai-
land and Laos. Tachilek, Burma is probably
the most important transshipment point in
the border area. In 1970, out of a total of 123
tons reportedly shipped out of Northeast
Burma, 45 tons was received in the Tachilek
area. In the first two mouths of 1971, 58 out
of a total of 87 tons had Tachilek as its desti-
nation. Other Important transshipment
points appear to be located in the vicinity
of Ban Houet Sat, Laos, and Mae Salong,
Thailand.
14. There appear to be at least 21 opium
refineries of various sizes and capacities lo-
cated in the tri-border area, of which about
7 are believed to be able to process to the
heroin stage. The most important are located
in the areas around Tachilek, Burma, Ban
Houei Sal and Nam Iieung, Laos, and Mao
Salong, Thailand. The best known, if not
largest of these refineries Is the one at Ban
Houei Tap, Laos, near Ban Houei Sai which
is believed capable of processing come 100
kilos of raw opium per day. The 11 refineries
in the Tachilek area apparently process the
largest volume of raw opium in the region.
In 1970, about 30 tons was converted by the
Tachilek refineries into refined opium, mor-
phine base, and heroin.
15. The typical refinery is on a small trib-
utary of the Mekong River in an isolated
area wi th a military defense perimeter guard-
ing all ground approaches. Most of these re-
fineries operate under the protection of the
various military organizations in the region,
or are owned or managed by the leaders of
these military groups. The KKY units pro-
tect and operate most of the refineries in
Burma. Leaders of these groups also hold
an ownership interest in many of these fa-
cilities. In Thailand, the refineries appear to
be operated by units of the KMT irregulars,
whereas in Laos, most of the refineries oper-
ate under the protection of elements of the
Royal Laotian Armed Forces (FAR). While
the management and ownership of the Lao-
tian refineries appear to be primarily in the
hands of a consortium of Chinese, some re-
ports suggest that a senior FAR officer may
hold an ownership interest in a few of these
facilities.
16. Most of the narcotics buyers in the trl-
border area are ethnic Chinese. While many
of these buyers pool their purchases, no large
syndicate appears to be involved. The opittni,
morphine base, and heroin purchased in this
area eventually finds its way into Bangkok,
Vientiane, and Luaing Prabang, where addi-
tional processing may take place before de-
livery to Saigon, Hong Kong, and other Inter-
nation al markets.
17. Much of the opium and its derivatives
transisting Thailand from Burma moves out
of such Northern Thai towns as Chiang Rat,
Chiang Mai, Lampang, or Tak by various
modes of ground and water transport. These
narcotics, along with those produced in Thai-
land, are smuggled into Bangkok for further
refinement into morphine or heroin. A con-
siderable quantity of the raw 'opium and
morphine base is sent by fishing trawler from
13angkolz to Hong Kong during a period from
about 1 January to 1 May. During this pe-
riod, approximately one fishing trawler a
day--carrying one to three tons of opium
and/or quantities of morphine base--leaves
Bangkok for Hong Kong. The boats proceed
to the vicinity of the Chinese Communist-
controlled Lena Islands-15 miles south of
Hong Kong-where the goods are loaded into
Hong Kong junks.
18. Opium and its derivatives which move
through Laos are transferred from the
Mekong River refineries by river craft and
FAR vehicles to Ban Houei Sat, further
downstream on the Mekong in Laos, from
where it is transported on Royal Laotian Air
Force (RLAF) aircraft to Luaing Prabang
or Vientiane. From Vientiane narcotics are
usually sent via RLAF aircraft, as well as
Air Laos, to other cities in Laos such as
Savannakliet or Pakse or to international
markets. A considerable portion of the Lao-
tian produced narcotics Is smuggled into
Saigon on military and commercial air
flights, particularly on royal Air Laos and
Air Vietnam. Although collusion between
crew members and air line agents on one
hand and individual narcotics smugglers on
the other has been reported, poor handling
of commercial cargo and the laxity of Lao
customs control in Vientiane and other sur-
reptitious loading of narcotics aboard com-
inercial flights.
RECENT CHANGES IN TIIE AREA
19. There are tentative indications that
larger quantities of raw opium may now be
moving into the tri-border area for refining
and that larger quantities of this raw opium
are now being refined into morphine base
and heroin in this area. As suggested in para-
graph 13 above, data on the first two months
of 1971 indicate that the Tachilek trans-
shipment and refining area may be receiving
and processing sizably larger amounts of raw
opium than was the case in 1970. As for
changes in the type of refined narcotics pro-
duced, the processing plants at Mae Ilaw in
Thailand and flouei 'l'ap in Laos noey appear
Approved For Release 2001/09/04: CIA-RDP80=01601 R001000040003-7
 June 2, 19'i1 CONGRESSIONAL RECORD - Extc,jsio,rs of Rentln' :s - E 53-3 7
Approved For Release 2001/09/04 CIARDP8-01601 R0Q'~0000 00O3z7 -
rticle oil the Set ill, Of 1119C a io a i o - r. plit will cost you $555
no0t of their opium in o fi
convertin
b
t
g
o
e
ne a
No. 4 or 9G percent pure white heroin. Pre- air fares: round trip for it 17- to 23-day stay.
vlously, these refineries tended to produce AVIAl?soN Co NSOnirrt Acrlo r PROJLCr,
refined opium, morphine base and No. 3 '
smol:in heroin. An increased demand for
No. 4 heroin also appears to be reflected in
the steady rise In its price. For e.Nn-Inple, tile
mid-April 1971 price in the Tachilck area for
a kilo 'of No. 4 heroin was reported to be
U.S. $1,750 as compared to U.S. $1,240 in
September 1070. Spine of this incrca,,;e may
also reflect a tight supply situation in the
area because of a shortage of chemicals user!
In the processing of heroic. Rising prices for
opium and its derivatives can also be seen
in other areas of Southeast Asia.
20. The establishment of now refineries
since 1080 in the trl-border area, many with
a capability for producing 9G percent pure
heroin, appears to be due to the sudden
increase in demand by a large and relatively
affluent market in South Vietnam. A recent
report pertaining to the production of mor-
phine base in the Northern Shan States
would indicate a possible trench toward ver-
tical integriaiops---producing areas estab-
lishing their own refineries----in the produc-
tion of narcotics, Such a development would
significantly facilitate transportation and
distribution of refined narcotics to the mar-
ket places.
;,IOW FA111 7.'lIE FARE?
l ON. Bsi'NA1'i N S. 'OSA'.il ' .1AJ.
OF NEW YORK
IN TIIE hIOUSE OF REPI1ESEi3'.CATIVES
Wednesday, Juste 2, 1971
Mr. 11.OSYNTIIAI, Mr. Speaker, repre-
sentatives of U.S. transatlantic airlines
are going to Montreal later this month
to negotiate air fares -actually the word
should be to "fix" ail' fares, for the com-
peting carriers meet in private to decide
the rates they all will charge.
The prices are fixed by the Interna-
tional Air Transport Association. Frances
Cerra, Newsday's consumer writer, has
aptly described IATA as "a cartel which
operates without the participation of
consumers and above the laws of the
United States and any international or-
ganization."
The position of the American carriers
is thrashed out by the airlines and the
Civil Aeronautics Board in secret ses-
sions. The people who must pay the fares
will be given no opportunity to partici-
pate or express their views; after all,
they have little choice: only one or two
transatlantic airlines land in the United
States that are not IATA members.
The Aviation Consumer Action Project
has written to CATS Chairman Secor ll.
Browne protesting the lack of public par-
ticipation in these proceedings. That let-
ter said, in part:
Such practices on the part or a ideral
regulatory agency are hostile to elementary
notions of due process and deprive citizens
of basic participatory rights assured In the
First Anlendnlcr}t.
I would like at this time to join them
in urging an end to these secret meetings
with the airlines in the course of fare
negotiations.
So that all my colleagues may be aware
of this situation, I am inserting in the
RECOiiO at this point the Aviation Con-
sulner Action Project's letter to CA'
Chairman Browne, and ivliss Cerra's very
Washington, D.C.,-,lfay 25, 1971.
IIon. Socon D. I3RoWNL,
Chairman.,
Civil Aerouaitfics Board,
Washington, D.C.
DeAF CHAIRMAN BROV,NE: The traf;ic con-
ference of the International Air Transport
Association (IATA) Is scliccluled to meet at
Montreal on June 23, 1071, to negotiate trans-
atIantic air fares. The Presidents of the
transatlantic IATA carriers will meet in Now
York on May 27, 1971, to discus the Montreal
fares conference. And the Board, in accord-
ance with Its customary practice, will prob-
ably meet with the rep'e.seutatives of the U.S.
carriers and discuss with them the various
views and positions which they will adopt in
the IATA negotiations at Montreal. All these
meetings will, as usual, be held In secret.
Members of the public and farepayers will
not be given an opportunity to present their
views and opinions in any of the,=.e r_lcetings.
The Aviation Consumer Action Project
(ACAP), is writing to express its cheep re-
sentment and disapproval of the roetrictlve
price-fixing practices of IATA, and the
I3ocu?d ;s complicity in those practices.
ACAP is a non-profit consumer organlza-
tion which has been founded for the purpose
of providing an independent Voice for the
advocacy of consumer and environmental In-
terests in matters and proceedings before
the Hoard and other regulatory agencies.
Whatever may be the underlying reasons
for the Board's approval of U.S. carriers'
participation In IATA meetings, ALAI' is of
the opinion that there cannot be any justi-
fication for the Board's secret niceting with
airline executives on the eve of the IATA
conference. The issues raised by such a meet-
ing are rendered all the more serious when
the Board, on the exclusive basis of the air-
lines' in camera presentations, formulates
policies and opinions with respect to the ap-
propriate and permie.sable fare levels for
various international routes and traffic re-
gions. Such policies and opinions are corn-
municatecl to the carriers by the Board-in
the form of "directives." For all practical
purposes these directives arc informal de-
cisions of the Board which tentatively set
forth the fares that the Board considers
reasonable and legal.
The Federal Aviation Act and the regula-
tory scheme outlined therein do not permit
the Board to make ex parte decisions after
hearing the airlines in closed sessions. Such
practices oil the part of a federal regulatory
agency are hostile to elementary notions of
due process and deprive citizens of basic par-
ticipatory rights assured in the First Amend--
ment. They are wholly inconsistent with the
procedural principles embodied in the Ad-
ministrative Procedure Act.
ACAP urges the Hoard not to engage In
secret or private audiences with the airlines
coneerning fuses or other matters to be nego-
tiated in the IATA conference, except in open
proceedings of record, in which all interested
and affected parties would have the right
to attend and lawfully participate. We urge
the Board to abstain from convening any
secret meeting with the airlines whether
prior to or in the course of IATA fares.nego-
tiations.
Sincerely,
K. G. J. PILLAr,
Rt:uimN 13. ROD:ERTSON III.
INTri1NA'nl0i76L FARES: Am, TrizY Ss FArRi,Y?
(By Frances Cerra)
Unless you really dig bazouki music or
care about the color scheme of a plane's
interior, it doesn't pay to shop around for
the cheapest flight to Athens. Whatever air-
other international destination except Lux-
embourg. (Icelandic, a maverick airline,
flies there.) The prices are fixed by the In-
ternational Air Transport Association, a car-
tel whlch operates without the participation
of consumers and above the laws of the U.S.-
and any international c.rganivation. This year
the price of international travel increased
from eight to 12 per cent as a result of IA'i'A
agreements. Next month, the process of fix- -
lug the 1972 prices will begin, hilt a new ele-
ntcilt may be added: A new consumer group
hacked by Ralph Nader premises to challenge
the IATA system ill the courts.
Since its formation in 1023, IATA has been
involved in the complicated maneuvers of
international politics. Many governments in -
the world subsidize their owls airlines and
therefore want to be protected frpnr true
competition on air fares. These governments
therefore adopt the IATA agreements as law
and threaten to prosecute any foreign airline
which tries to charge lower fares. Great Brit-
ain, which subsidizes I'O AC, actually made
such a threat against the U.S. airlines in 1903
when the Civil Aeronautics Board opposed a
five per cent increase in air fares. Faced with
this threat and an international incident, the
CAI3 backed down.
Foreign governments also enforce the IA'i'A
agreements by another simple measure: They
refuse to allow an airline that is not a mem-
ber of the cartel to land in their countries.
That Is why Icelandic Airlines, the only non-
nember of IATA, call land only in Luxcin-
bourg. No other European country will give
it landing rights.
A spokesman for ran American, whose
president, Najeeb E. Ilalaby, is on the exccll-
tit-c committee of IATA, said that he would
not call IATA agreements "price fixing," but
all area of cooperation."
"If there were not all area of cooperation,
he said, "many airlines would not be able to
exist. The U.S. airlines in particular would
have a ham time because they are not suhst-
di^_ei by the government. IATA maters for
fair play, and without it there would be
chaos."
1Ierb As;vall, the acting chief of- the IATA
rates and fares section of the Civil Aeronau-
tics Hoard, which sets dorucetic air fare rates,
echoed Pan American's concern. "With 20
carriers flying the Atlantic alone," lie said,
"to not have IATA would result ill chaos he-
causc we would have to deal with each in-
dividual foreign government to establish
fares. And because the CAT' has no authority
to regulate international fares, we might have
to accept all unocolloneic fares, which would
drive au American carrier out of business."
Dr. K. G. J. Pillar, author of a bock on
IATA called "Air Net," and head of the new
Aviation Consumer Action Project, calls such
arguments illogical. "The private airlines are
now at a cIis,ldvantage Ili IATA because they
are negotiating as private concerns with gov-
ernlucrit-owned airlines. That is exactly why
we say IATA should not exist. If there were
competition in air fares I per.-sonally dou't
think it would he very dcstruel-ive because
the eflicicnt airlines would survive. But the
alternative is for the U.S. government to
directly represent the private airlines in
these conferences."
Filial said that such negotiations would
not be unusual for the gover"llient Which
now makes tariff and excise duty agreements
on thousands of products like oil and tex-
tiles, and even airmail rates. "I can't under-
stand why air fares should be different," lie
said. Pillal said that if the government Was
involved In fixing the international air fares,
the Consenter would h, ve a better chance of
influencing the negotiations. Right now, he
charges, the coilsunio ? has no chalice of in-
fluencing IATA.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 IVAS11INGTON STAR
Approved For Release 260I /c72ClA-RDP80-01601 R001000040003-7
MCDCL1,20
By JEREMIAH O'LEARY
Star Staff Writer
The United States is making
a major diplomatic effort to
obtain the extradition from
Paraguay of a Corsica-born
Argentine citizen who is de-
scribed as one of the major nar-
cotics smugglers in the world.
He is Auguste Ricort, 61, now
in jail in Asuncion, Paraguay,
the mastermind of a multi-mil-
lion dollar ring of narcotics
operators engaged for years in
smuggling narcotics into the
United States from France by
way of a number of Latin Amer-
ican cities. Ricort's long and
spectacular career is reminiscent
of the principal villain of the
current movie hit, "The French
Connection."
His importance was under-
lined yesterday when State De-
partment spokesman Charles
Bray disclosed that the United
States is continuing its efforts to
obtain Ricort's extradition.
Ricort, a native Frenchman
and in recent years a resident
of Asuncion, is known to inter-
national law enforcement offi-
Ricort arranged, a spokesman
said, for the heroin to be trans-
shipped from Buenos Aires, San-
tiago, Montevideo, Asuncion and
a half dozen other terminals in
South America to the United
States.
Ricort stands indicted by, a
federal grand jury in New York
in one case involving shipment
of 97 pounds of heroin in October
1970. This shipment was flown
in a Cessna 210 by way of
Panama and Jamacia to Miami
and then to New York. The
BNDD and the Customs Service
collaborated, on the case, shado'.
ing the shipment from origin to
destination where they arrested
two Frenchmen, a Paraguayan,
an Argentine and a Brazilian.
Based on the retail price of
$250,000 a kilo (2.2 pounds),
the shipment was valued at $11
million by the Justice Depart-
ment.
It was on the basis of this
seizure that Ricort was indict-
ed on March 15,1971. Ten days
later, he was arrested by Par-
aguayan authorities on the ba-
vials as a man who was a Nazi
collaborator during World War tradition.
II, and is wanted on criminal Under new laws and treaties
charges in France. He fled to by which nations are attempt-
South America after the war ing to stamp out the narcotics
and set up his elaborate heroin traffic, it was possible for the
network. United States to request extra-
He rarely used individual dition of Ricort even though he
couriers, the Justice Depart- never has set foot in the Unit-
ment's Bureau of Narcotics and ; ed States.
Dangerous Drugs said, instead, Ricort, a wizened, bald man
employing small planes, ships who looks like a mummy ac-
and commercial flights with the '. cording to one source, was
heroin hidden in artifacts and picked tip at the Paris Niza, a
other containers. The Ricort motel be owns on the out-
ring brought the heroin to Latin skirts of Asuncion. He has re-
Some sources consider that Ri- Some Paraguayans believe
tort's continued imprisonment the United States, which gave
is a minor miracle because of
his enormous wealth and Par-
aguay's reputation as a coun-
try where money talks and
smuggling is not regarded as a
major crime.
Court Snag Hit
The Paraguayan solicitor
general, in effect attorney for
the United States under the
treaty, rendered a favorable
opinion when Washington's ex-
tradition request was present-
ed by, Ambassador Ray Yli-
talo, a former FBI agent who
has taken a personal interest
in the case. But Bray said yes-
terday the court of original
jurisdiction in Asuncion denied
the request.
"We hope and are confident
in view of the solicitor gener-
al's favorable opinion," Bray
said, "that Paraguay will ex-
ercise appeal procedures to
obtain the desired extradi-
tion." January is a judicial
holiday in the landlocked
South American nation and of-
ficials say no final action is
likely until March or April.
Paraguay is a small country
under the very personal lead-
ership of Latin America's
most durable dictator, Presi-
dent Alfredo Stroessner. The
outcome for Ricort probably
depends on Stroessner's rela-
tionship with the United
States, which normally is very
close.
Early Skepticism
Some Paraguayan newspa-
pers at the time of Ricort's
arrest predicted he would not
be extradited. It generally is
believed that, because of their
wealth, some Nazi war crimi-
nals have remained safely hid-
,den with new identities in Par-
the-country a sugar quota last
year for the first time, did so
to induce Stroessner to give up
Ricort. The United States says
this is not true. The members
of Congress who gave Para-
guay the highly-profitable sug-
ar quota had no idea Ricort
existed when the quota was
set,
The official estimate in
Washington is that Ricort will
be handed over to the United
States when the due process
has been completed beca.us.:, of
Stroessner's desire to continue
friendly and responsible reia-
tions under the narcotics
treaty.
America .from portsdi the away desoite Israeli efforts to
vicinity of Mar v r' $P s "2o1/V 10f'0'tlA-RDP8ii&aR~GiLR001000040003-7
 Nib YORK TIMES
Approved For Release2A(AW9/(V? CIA-RDP80-01601 R001 000040003-7
0
U.S. REPORTS GAIN He said that the Bureau' of
Narcotics and Dangerous Drugs
pre-
IN FIGHT ON DRUGS had more than doubled its pr
vio ious overseas operations and
d
in 1972 would have 46 offices
overseas staffed by 123 men.
On the domestic front, he
6 Tons of Heroin Seized in said he held high hopes for the
World Traffic in Year effect of the International Rev-
enue Service's systematic tax
investigations of middle and
By DANA ADAMS SCHMIDT upper echelon narcotic traf-
SpecialfoTheNewYorkTimes fickers, smugglers and finan-
clers.
WASHINGTON, Dec. 28- More than a million copies of
Nelson Gross, the State Depart- a warning to travelers against
ment coordinator for interna- violations have been distribu-
tional narcotics affairs, said to-
day that at least six tons of
heroin and related materials
were confiscated in the last
year through the direct or in-
direct efforts of United States
authorities. He said this would
have been enough to supply
this country for one year.
Mr. Gross, who since August
has held the post of coordina-
tor and senior adviser on drugs
to Secretary of State William P.
Rogers, discribed seizures as a
"very severe deterrent" to, the
international drug traffic and
said that supplies had been
severely reduced in some parts
of the United States.
The main effect, he said, had
been to reduce the quality of
the narcotics reaching addicts.
"Whereas formerly they pur-
chased 10 per cent heroin from.
pushers," lie said, "today the
$6 packets commonly distribut-
ed contain 4 or 3 per cent and
,in some areas only 2 per cent
of heroin."
Speaking at a news confer-
ence at the State Department,
Mr. Gross attributed this year's
success to the "high priority
given enforcement." He added
that a Cabinet committee on
drugs reaffirmed on Dec. 16
this high priority for the com
dng year and decided to seek a
budget increase for enforce-
ment.
Customs Seizures Double
Mr. Gross said that seizures
of drugs by the Bureau of Cus-'
toms doubled during the last;
year and would undoubtedly in-1
crease when new equipment '
aircraft, high-speed boats and
sophisticated sensors-was put
into operation.
ted through travel agencies and
consulates abroad, Mr. Gross
reported. They warn Americans
that American consuls abroad
will not be able to protect them
if they are arrested for narcot-
ics violations.
Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7
 AMS 7
. ZCZC NY
YY LJP
19441 I AC,CU )
r}~y ~ l k R p
NE ef?! 1O,PI