INTERNATIONAL NARCOTICS SITUATION REPORT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91M01043R002200150004-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 27, 2016
• Document Release Date: January 31, 2014
• Sequence Number: 4
• Publication Date: May 1, 1989
• Content Type: REPORT

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Central Intelligence Agency
Ntshington. D. C.20505
INTERNATIONAL NARCOTICS SITUATION
REPORT
DI M 89-20005
MAY 1989
6 nia, 1989
iC STAFF
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May 1989
International Narcotics Situation Report
This Situation Report was prepared by the DCI
Counternarcotics Center. It assesses narcotics-related
developments worldwide. The Report leads with a short
Perspective on a drug-related issue or trend that we believe to
be of special importance. The Perspective is intended to be
speculative and to generate discussion. The Perspective is
followed by Feature Articles, and the remainder of the Situation
Report examines various dimensions of the drug problem by
regions. This issue contains contributions from analysts in the
Office of African and Latin American Analysis. Questions and
comments are welcome and should be addressed to Chief,
Assessments Group, DCI Counternarcotics Center
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PERSPECTIVE
Burma: Prospects for Increased Opium Exports
The supply of opium from Burma could rise dramatically in
1989, the result of a bumper crop and flagging Burmese
counternarcotics efforts.
Burma's counternarcotics program, including crop
eradication, traditionally has been focused against growing areas
controlled by the Burmese Communist Party (BCP)--the country's
largest drug trafficking group and considered by Rangoon to be
the main insurgent threat. Counternarcotics efforts in Burma
have been hampered by last year's political upheaval which
resulted from massive student demonstrations, a general strike,
and the eventual change in the government. While the government
has taken tough steps to restore order, Rangoon remains
preoccupied with maintaining internal security and has relegated
counternarcotics initiatives to the back-burner.
The reported breakup of the BCP will likely sap Burmese
interest more. Ethnic Wa and Chinese trafficking groups,
attempting to gain control of drug operations, reportedly
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rebelled against the
BCP headquarters and
likely recognize that
not pose an insurgent
inducement for the
and use these forces
Southeast Burma.
The Wa and Chinese
quickly to reestablish
BCP in March
most of the
as drug traffickers
threat and
Army to shift
to confront
and April, gaining
organization.
the
thus provide
troops away from
Karen insurgents
for their part,
links. For
control of
The Burmese will
Wa and Chinese do
a powerful
BCP strongholds
operating in
are moving
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factions,
trafficking
instance,
Chinese factions
have already
Army
sought to form
(KIA) and the Shan
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an alliance with the Kachin Independence
United Army (SUA)--major trafficking groups in
their own right.
The Wa faction, in
turn, has already received
support from the Wa
National Army (WNA)
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Moreover, with eradication programs on hold and nearly ideal
growing conditions throughout the region, we anticipate a bumper
opium crop in Burma this year. Reported opium yields are up due
to good weather--some areas reportedly recording a threefold
increase. The area harvested also rose, although a final tally
will not be available for another month. Taking these factors
into account, we believe the opium harvest this year could
increase by several hundred tons or more, compared with the
nearly 1,300 tons harvested in 1988.
We expect that the resulting increases in the supply of
heroin will find ready buyers, especially in the rapidly growing
Asian heroin market. It is also possible that some of the
increased heroin supply will make its way to the United States
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and Western Europe. Heroin
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demand in both areas
has stabilized
in recent years
Nonetheless, a
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United States and
sharp increase (...n1Lnectst Asian neroin to the
Western Europe could drive domestic prices down further and thus
make heroin accessible to an even broader spectrum
of the
population.
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FEATURE ARTICLES
Colombia: Profits Strengthening Drug Lords' Position
Colombia's billionaire drug lords are intensifying their
grip on the country by investing in legitimate business
enterprises and by financing paramilitary groups. Bogota's
countermeasures are a step in the right direction but, in our
judgment, are unlikely to prevent the situation from
deterioratincl further.
Some top traffickers are investing in Colombian businesses
that facilitate trafficking and money laundering operations as
well as provide an air of respectability for their owners. For
example, sources of varying reliability report that the Rodriguez
Orejuela brothers, based in Cali, have in recent years acquired
banks, pharmaceutical firms, security agencies, shopping malls,
computer-services companies, and professional soccer teams--as
well as 28 radio stations, 250 drugstores, and more than 50
nightclubs and restaurants (see chart).
Other top traffickers, such as Medellin kingpin Pablo
Escobar. are nourina mon y into Colombian real estatel
as of last year, Escobar owned at least 335
residences in Medellin, including 16 homes in its most exclusive
suburb, and numerous estates elsewhere in Colombia. The
aggregate impact of narcotics-related land purchases is
highlighted by reports estimating
that $5.5 billion in drug profits was used to buy property in
Colombia from 1979 to 1988 and that traffickers have bought more
than one million hectares of land since 1983, mostly in the
north-central region.
Growing Friction with Insurgents
We believe the purchase of large, isolated cattle ranches
and other rural land that can be used in drug operations and
serve as safehavens for traffickers on the run is meanwhile
putting drug lords increasingly at odds with leftist insurgents.
traffickers generally are refusing to pay the fees that
insurgents had long extorted from previous owners. In addition,
efforts by insurgent groups to increase their revenues from the
drua tradp arp impinging on the operations of some traffickers.
Accordingly, traffickers, often working closely with
conservative landowners and local political and security
officials, have formed heavily-armed, well-financed paramilitary
groups to counter the insurgents and protect drug-related
facilities. Drug lord Gonzalo Rodriguez Gacha, for example,
reportedly is sponsoring a 250-man paramilitary group. The unit,
located east of Medellin, is said to be equipped with grenades,
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automatic weapons, and bazookas. The group operates its own
sophisticated communications center and,
has had intensive training from
mercenaries at nearby sites.
In northern areas where paramilitary groups have gained the
upper hand over insurgents, traffickers have become powerful
warlords controlling extensive patronage systems. Some
reportedly have won the gratitude of local authorities and
ranchers previously victimized by the insurgents and of peasants
employed in new agribusinesses set up with drug revenues.
Traffickers who bought large tracts of land at prices depressed
by the insurgent presence also have benefitted from a' subsequent
skyrocketing o real estate values, according to press reports.
Bogota's Response
Senior Colombian officials are voicing mounting concern
over the traffickers' growing investments in
Colombia, particularly in real estate, but no quick solutions are
evident. Colombia's asset seizure laws already are strong but
have had little impact on the drug trade because violence and
corruption have virtually destroyed the ability of the iudicial
system to deal with narcotics enforcement.
President Barco meanwhile appears determined to curb all
paramilitary groups. He recently ordered the formation of a
commission of senior government and security officials to devise
a counter-paramilitary strategy. He also created a special
security force of up to 1,000 men to combat the problem, and
efforts are being made to close legislative loopholes that could
allow paramilitary groups to claim legal status.
While encouraging, we believe these measures are unlikely to
break up the coalition of forces in rural areas that spawned and
supports the paramilitary groups. In our view, these groups
probably will proliferate, particularly if relations between
insurgents and traffickers in those areas deteriorate further.
Traffickers, meanwhile, will likely continue to expand their
business empires while strengthening their hold in some rural
areas. Over the longer term, these trends do not bode well for
Colombian politics as some drug lords such as Rodriguez Gacha
reportedly have strong political views and latent political
aspirations.
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The Kinds of Businesses Owned by Colombian Drug Traffickers
Enterprise Use in Narcotics Operations
Air services
Import-export firms
Security services
Pharmaceutical
companies
Can move personnel, drugs, and related
supplies ... crop dusting, "flying
ambulances" firms popular because
aircraft not subject to standard civil,
commercial air regulations ... charter
airlines used to launder money by
falsifying passenger logs to indicate
empty seats were occupied by paying
customers.
Smuggling ... drugs frequently hidden in
bulky shipments of commodities such as
flowers, coffee to throw off dogs
trained to detect drugs.
Allow drug lords to protect themselves
and their operations with security
personnel authorized by government to be
heavily armed.
Facilitate import, illicit diversion of
chemicals used to process cocaine.
Real estate agencies Laundering and investment of drug
profits.
Luxury car dealerships Cash from drug sales in US sometimes
hidden in cars shipped to Colombia ...
also used in money laundering scheme
involving bogus car repairs.
Media Allow traffickers to influence public
opinion.
Entertainment
Restaurants, night clubs, sports teams
allow traffickers to ingratiate
themselves with local communities.
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India: The Heroin Challenge*
India is playing an increasingly important role in the
international heroin trade. The country is developing into the
primary distribution center for Asian heroin destined for Western
markets and for precursor chemicals to supply Southeast Asian
heroin laboratories. Indian heroin smuggling networks constitute
a critical link in the regional export heroin trade, tying
'together key border market towns, exit ports, and worldwide
Indian expat7iate communities to facilitate the distribution of
heroin to international markets. In addition, Indian narcotics
elements have developed a heroin refining capability, aided by
the ready availability of precursor chemicals and locally
procured opium. The emergence of a domestic source of heroin,
coupled with the spillover of heroin in transit through India,
has contributed -to an explosion of heroin addiction, a drug whose
abuse was virtually unheard of in India as recently as 1980.
India's expanded narcotics role over the last decade is a
direct result of internal upheavals in the neighboring illicit
drug areas of the Golden Crescent (Afghanistan, Pakistan, and
Iran) and the Golden Triangle (Burma, Thailand, and Laos). The
disruption of traditional smuggling patterns led drug traffickers
to develop the Indian heroin route as a less risky alternative
for shipping their product to Western markets. Currently, every
major Golden Triangle trafficking country has a tie to India, and
the country is a vital link in the major heroin smuggling chains
that originate in refineries along the border between Afghanistan
and Pakistan. The country's strategic location, long porous
borders, and numerous transportation links to the United States
and Western Europe cater to trafficking organizations. Lax
antidrug enforcement and widespread corruption also encourage
dru activity.
we estimate that more than half of all Southwest Asian
approximately 15 percent of Southeast Asian heroin
exported to the West transits India. We calculate that almost
one-third of this heroin is consigned for the United States.
The Indian Government has taken steps to increase its
antinarcotics effectiveness, but New Delhi's current level of
commitment is inadequate to counter the expanding trade. Despite
new and tougher antinarcotics laws and the creation of a central
counternarcotics enforcement authority, significant barriers
remain to the implementation of an effective antinarcotics
program. The narcotics issue remains subservient to a variety of
other developmental and security concerns. Moreover, the
majority of Indian officials still view the drug trade as a crime
that poses little danger to internal stability. In our judgment,
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the Prime Minister's professed commitment to narcotics control
has lost credibility because of his reluctance to give
antinarcotics policy more attention and to crack down on drug-
related corruption within his administration.
Unless New Delhi significantly strengthens its antidrug
efforts in the near future, we believe India's attractiveness to
the regional heroin industry will continue to increase. In our
judgment, the trade is vulnerable to harsher enforcement measures
that would create an environment significantly more inhospitable
to narcotics interests. Such actions could include improving the
legal system to crack down on trafficking groups, intensifying
efforts to monitor and interdict domestic air and maritime
checkpoints, and developing more efficient controls over the
country's licit opium and precursor chemical industries. We do
not believe, however, that New Delhi currently is willing to
undertake the wide-ranging program revisions and personnel
shakeups necessary for a successful antidrug strategy primarily
because the Gandhi administration is preoccupied with other
domestic and foreign policy concerns. The development of a
genuine commitment to redress counternarcotics shortfalls and to
take stronger action against the heroin trade will, in our view,
depend largely on the extent to which New Delhi perceives the
drug problem as an internal threat. Over the longer term, a
steadily worsening domestic drug situation--and the likely
pressure of adverse international publicity--may prompt the
development o consensus throughout the Indian
Government.
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Singapore: Tough Antidrug Measures Getting Tougher
Singapore is taking steps to toughen already rigorous
counternarcotics programs, probably as a result of burgeoning
narcotics production in Southeast Asia. Singapore has long been
a transshipment center for Southeast Asian heroin en route to the
United States, Western Euro .e and Australia mos ly by air and
increasingly by sea Heroin is also
brought into the country by so-called "ant traffickers,"
individuals carrying small amounts of the drug into Singapore via
the causeway from Malaysia. no large
drug syndicates are headquartered in Singapore, but individual
traffickers maintain residences and plan operations there.
Moreover, Singapore's strong bank secrecy laws make it
particularly attractive to drug money launderers
The nation's tough antidrug program already includes the
death penalty and other stiff government measures for drug
traffickers. To date, more than 20 people have been executed for
narcotics violations and about 40 more have received the death
penalty. Other laws allow government officials to arrest persons
suspected of drug involvement without warrants and to detain them
indefinitely without trial. Approximately 1,000 people currently
are beino detained for drug-related offenses.
Singapore's counternarcotics officials
free from corruption.
largely
Tougher Measures Ahead
have
been
Despite these efforts, Singapore is moving to strengthen its
already tough antidrug program. A recent press report revealed
that two Malaysians had been hanged for drug trafficking, the
first time Singapore has executed foreigners. Previously,
foreigners convicted of drug trafficking were deported,
the government probably
will enact the death penalty for marijuana trafficking to deter a
spillover of such activity from Malaysia of traffickers seeking
to avoid Kuala Lumpur's death penalty. In our view, a recent
move to pass asset seizure legislation is a step towards getting
at the more important managers and financiers of the trade, and
to cooperate in international financial investigations. The
government previously had been concerned that easing bank secrecy
would hurt Singapore's position as a financial center.
On the interdiction side, Singapore's geography--an island
city-state covering an area of only some 600 square kilometers
and having a population of 2.6 million--would appear to lend
itself to relatively simple enforcement operations. In fact,
last November Singaporean authorities seized 24 kilograms from
crewmen of a Thai oil tanker, and
1988 heroin seizures in Singapore topped 50 kilograms, up from
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the 1984-87 average of around 11 kilograms. Other interdiction
efforts throughout the world since late 1988 produced about 60
kilograms of heroin shipped through Singapore.
Despite these efforts, however, a number of circumstances
have hampered government initiatives. Some 30,000 people cross
the causeway connection to Malaysia each day, making it virtually
impossible to detprt A cionificant number of "ant traffickers."
Singapore, witli Malaysian
authorities, has set up a task force of its Central Narcotics
Bureau, customs, immigration, and police at the causeway,
resulting in increased arrests and seizures. Moreover,
Singapore's extensive port facilities also are difficult to
monitor, particularly since the government is reluctant to
enforce strategic trade controls in the free trade zones in order
to keep them attractive to shippers and to avoid frequent cargo
inspections. The government plans to hire more personnel to set
up other task forces at several maritime arrival points and at
the international airport.
Opportunities
Despite the government's vigorous stance against drugs, we
believe its overall effort could be enhanced. Enaction of
conspiracy legislation would help officials to apprehend major
traffickers; current interdiction operations net only low-level
drug couriers. Even after asset seizure laws are passed,
however, police would need additional training to conduct complex
financial investigations.
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REGIONAL HIGHLIGHTS
South America
Increasing insurgent activity in Peru's coca-rich Upper
Huallaga Valley and growing ecological concerns are leadina Lima
to consider abandoning drug eradication.
the Peruvian military is urging
abandon eradication operations in the Valley. The
military repertedly believes eradication operations force coca
growers to turn to Sendero Luminoso insurgents for support in
obstructing government efforts. Moreover, Garcia appears to be
backing away from
using herbicides against the coca crop if they
were proved ecologically safe. In two recent speeches,
he signaled that he no longer
supports a comprehensive eradication program. In our judgment,
Garcia probably believes he must shift the emphasis in the
counternarcotics program to meet military concerns about rising
guerrilla activity in the Valley. Nevertheless, even if he
orders increased interdiction efforts, in part to assuage
concerns in Washington, we believe such measures will likely be
hampered by continuing corruption among military and police
personnel in the Valley. Moreover, the Army would have to turn a
blind eye to narcotics activities in order to shift growers'
allegiances away from the guerrillas.
The recent discovery of local cocaine crack laboratories
probably will further heighten Belizean Government concern over
the country's increasing role in the regional cocaine trade.
Belizean traffickers continue to
operate at least six crack processing facilities in-country
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despite recent police antidrug
allegation of indigenous
the first
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activities. This is
crack processing.
most of it is intended
for
traffickers
in suspe7ted
local consumption.
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local
are smuggling refining
cocaine processing
chemicals
facilities.
its concern
increasingly
view, the
may prompt
long-pending
the
to wait
measures.
Pessoa
Limon, for
of cocaine
Pessoa was
from police
ship bound
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from Mexico for use
Belmopan recently voiced
that the Belize-Yucatan
attractive to Colombian
government's recognition
a renewed effort to
antinarcotics and
ruling party, however,
until after the upcoming
pass
asset
probably
of
Judicial
in shipping
export corridor is becoming
cocaine traffickers. In our
of the drug threat to Belize
legislation to strengthen
seizure laws. Divisions within
will force the government
elections to initiate bolder
Costa Rica suspended Oscar
The Supreme Court
Arias, chief of the
alleged involvement
to the United States.
suspended for protecting
scrutiny while they
Police Office (OIJ) in
some 1,300 kilograms
a group of narcotraffickers
loaded the cocaine on a container
for Miami in March. Pessoa was to receive $200,000 for the
shipment's delivery, but the drugs were seized in the United
States. The Court's quick action, following recent allegations
of corruption levied against the OIJ, underscores the
government's concern over growing drug-related corruption
throughout Costa Rica and its determination to protect the
integrity of the OIJ the country's most effective law
enforcement body.
drug
money laundering is continuing in Panama despite the US
indictment of the Banco de Occidente in March. Banco Ganadero
has been aggressively courting former Occidente clients to
collect lucrative laundering fees, and an international money
launderer who recently returned to Panama is offering to pick up
drug cash in the United States and launder it through Montserrat
and Panama. In our judgment, drug traffickers have weathered
crises in laundering their funds in Panama over the past year and
now appear to believe they can evade further US drug enforcement
investigations. The lucrative fees and the return of some
international money launderers suggest that drug money laundering
is rebounding from the disruptions of the political and economic
crises of last year.
Nassau continues to seek the support of its Caribbean
neighbors in countering US charges that The Bahamas is not doing
enough to stem drug trafficking and corruption.
the Caribbean Community (CARICOM)--organized
to promote economic and political cooperation among English-
speaking islands--has decided to back Nassau's bid to host a
proposed high-level hemispheric conference on narcotics. In the
past, Bahamian Prime Minister Pindling has used regional fora to
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contest US charges of official corruption and inadequate
cooperation on drug control, claiming that the United States is
using the narcotics issue to interfere in the domestic affairs of
sovereign nations. Although Pindling has had some success with
this tactic, he has been unable to garner widespread backing for*
his position in part because of The Bahamas' traditional economic
and political isolation from other Caribbean islands
Nevertheless, Pindling likely believes that
hosting a high-profile conference--suggested in the US antidrug
act of 1988-'-would cast him as a regional, and possibly
hemispheric, leader in the drug battle, discrediting charges that
The Bahamas lacks commitment to counternarcotics.
Europe and the Soviet Union
South American cocaine traffickers appear to be expanding
their operations into France; these drug lords traditionally used
Iberia as thP Enronnpan nAtclwalr
Cocaine
traffickers are moving multi-kilogram shipments of cocaine from
Colombia in maritime containers as well as by air directly to
France--where a wholesale kilogram of cocaine sells for five
times the New York price. In addition, Caribbean territories
such as Guadeloupe continue to be transshipment points for
cocaine destined for France. Recent large seizures including
one of approximately 500 kilograms in Nice last February--
demonstrate the maturation of these trafficking routes. Press
?reports indicate, moreover, the increasing involvement of French
nationals in the distribution process, further underscoring the
entrenchment of the trade. We believe traffickers may be using
France as &conduit in part to avoid the recent increased
security measures in other European countries such as Italy. For
instance, reports indicate Spanish and French
authorities recently broke up a cocaine-smuggling network
operating out of southern France that was run by the Camorra--a
Naples-based crime organization. In our judgment, cocaine
trafficking networks will make further inroads onto the Continent
with the removal of all internal security checks within the
European Community in 1992.
Efforts by the Soviet Union to broaden its antinarcotics
campaign are likely to cause friction with Cuba.
President Castro was infuriated when
General Secretary Gorbachev asserted last month that Havana
should take a more active role in combating domestic and regional
drug use. Cuban Government
officials interpreted Gorbachev's comments as an effort to cozy
up to Washington. During the past year, the Soviets have stepped
up counternarcotics efforts internationally, including signing
bilateral agreements with the United States and other Western
nations for the exchange of drug investigative intelligence,
cosponsoring a US draft resolution in the United Nations on
narcotics trafficking, and encouraging the Eastern Bloc to
increase interdiction and rehabilitation efforts. In our
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judgment, Moscow likely sees promoting counternarcotics efforts
in Latin America as a means of furthering relations with
Washington and of underscoring its commitment--both at home and
abroad--to address the growing Soviet drug problem. We believe
that Castro's reported reaction reflects his sensitivity to
Cuba's domestic drug problem and to US allegations of Cuban
Government involvement in narcotics trafficking.
Heroin refining activity in Turkey may be more extensive
than previously reported. Until 1988, Turkish enforcement
authorities had discovered only a few heroin manufacturing
facilities. These mobile, single-load conversion laboratories,
capable of producing only a small quantity of heroin at a time,
were located along Turkey's border with Iran.
however, three of the nine laboratories seized
in the last 13 months have had greater capacity and been more
sophisticated than those previously uncovered. Two of the
laboratories, the first discovered in Istanbul, were major
operations run jointly by Turkish and Iranian criminal elements.
The third laboratory, seized in early May in eastern Turkey,
contained 187 kilograms of refined heroin and 113 kilograms of
precursor chemicals. This is the single largest heroin seizure
in Turkish counternarcotics history. In addition, Turkish
seizure statistics suggest that growing quantities of acetic
anhydride, a precursor chemical critical to the heroin refining
process, are being smuggled into the country. We believe Turkish
traffickers increasingly are capitalizing on the ready
availability of raw opium grown in Iran and precursor chemicals
available from Syrian and West European sources to increase
heroin refining activity. Indeed, Italian counternarcotics
officials recently announced the recovery of 56 kilograms of
heroin--the fourth largest seizure in Italian history--which they
claim was manufactured in Turkey.
The recently concluded counternarcotics cooperation
agreement between Turkey and Iran appears to be largely cosmetic
and will have little effect in curbing cross-border drug
y.
the protocol provides for stepped-up interdiction along
urkish-Iranian border, the exchange of intelligence on drug
traffickers, and the creation of a permanent counternarcotics
commission to meet annually, the
negotiations were difficult, primarily because of Tehran's
insistence that Ankara adopt the death penalty for drug
offenders. The Turkish Government also voiced concerns that Iran
would use charges of drug trafficking as a smokescreen to force
Turkey to crack down on Iranian dissidents. In our view, the
agreement will do little to stem the flow of opium and morphine
from Iran to the many heroin refining laboratories operating in
eastern Turkey. The rugged mountain terrain provides smugglers
with ample opportunities to evade even greatly increased patrols.
In addition, Tehran is reluctant to confront drug producers in
northwest Iran for fear of upsetting relations with the highly
autonomous Kurdish tribesmen. Finally, continuing mutual
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mistrust and a general reluctance to share sensitive information
will limit implementation of the agreement.
Southwest Asia
Pakistan's drug producers are taking advantage of the
winding down of the Afghanistan war to expand their arsenals and
strengthen their ability to resist counternarcotics eforts.
heavy
macnineguns, rocxet launchers, mortars, anti-aircraft guns, and
other sophisticated weapons, either abandoned by withdrawing
Soviet forces or sold by resistance fighters, are showing up in
increasing numbers in the gun and drug bazaars of northwest
Pakistan. Various sources meanwhile report that drug convoys
from Afghanistan into Pakistan and Iran now are routinely
escorted by vehicles mounted with heavy machineguns and,
possibly, surface-to-air missiles. The new government's
reluctance to confront the well-armed drug producers is reflected
in its failure to raid any of the estimated 200 heroin
laboratories that operate in the Pathan-controlled tribal areas.
According to a government spokesman, Islamabad is considering
forming a division-sized paramilitary unit with drug control
responsibilities for this region. The military's failure to
deliver a long-promised plan outlining its role in
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counternarcotics efforts,
and the aversion of the Frontier
Corps
--a military unit stationed along the northwest frontier--to
become involved in a potentially
violent confrontation with the
Pathans, however, are thwarting
this effort.
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