ILLICIT OPIUM TRAFFIC SOUTHEAST ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R002100350002-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: November 9, 2016
• Document Release Date: February 4, 1999
• Sequence Number: 2
• Publication Date: December 13, 1948
• Content Type: REPORT

-i tISS!FiCATION 25X1 A2g
Approved For,Re 96.49g978 9iA4WR'82-00457 0210'Q8
INFORM
COUNTRY lndoahina/Siam/ alaya DISTR. 13
SUBJECT Illicit Opium Traffic Southeast Asia NO. OF PAGES 5
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PLACE NO.OF.ENGLS.
ACQUIRED Vol" mmmo BELOW)
DATE 0?. IT. 25X1 X6 SUPPLEMENT TO
REPORT NO.
December 19148 '
1. Most of the opium that enters into the illegal traffic in Southeast Asia is
grown in ? nnan, the Shan States, northern Siam, Laos, and the Thai regions
of Tonkin. (The Thai regions of Tonkin may be roughly bounded by the Fad
,.fiver. Iioa-Binh, the Laos frontier, Thong-Tho, and Lao-Kay.) Opium from
I-ersia, although the mainstay of the le{,al consumption in Siam, is of little
importance in the illegal traffic. Indian opium, sometimes considered a lux-
ury product in Southeast Asia, enters into the illegal traffic in the area
in far smaller quantities than that of the other regions. No reasonable
estimate car be placed on the relative production of the various regions.
There was considerable stimulus to production in Japanese ocosupied arc-as
during the war and in areas oo':upied by O'hinese troops after the war, esp-
ecially Laos and Tonkin. The pre-war production figures in these areas
should probably be increased due to this factor.
2. "oat of the opium grown in Yunnan, the Shan States, northern Siam, Laos,
and Tonkin is grown by hill tribes in mountainous and inaccessible regions
in which suppression of cultivation would be very difficult even if it
were seriously undertaken. The fact that the grotrtv::?a are Zenerally rsembera
of hill tribes would add a special political difficulty to any suri:ression
effort. The opium grown in these areas is usually sold in its "-a:v" form '
(a greyish resin) to legal purchasers, and in both its' "raw" and "black"
(prepared) form to illegal purchasers. Much the greater part of the opium.
sold to illegal purchasers is in the form of black opium prepared from raw
opium by the cultivators themselves.
3. The only two countries in the rer_ion in which the consumption of opium. is
legal are Siam and Indochina. wen in these countries, however, a large
amount of illegal opium is distributed in the divans of government concess-
ionaires as it is more profitable to the concessionaires than thy covern-
nent opium, the price of which naturally includes a large profit to the
government.
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The two great distribution points for illegal opium are Singapore and
Hong Song. Singapore distributes to Malaya, Indonesia, and other leas
important places. Hong Sons distributtis to the whole of China and to
Japan. The illegal traffic in the Indochinese Peninsula may be divided
into two oategorieaz (a) that which is destined for consumption in Slam
and Indochimi and (b) that which Cosa abroad, especially through Singa-
pore and Hong Kong.
5. Heaarding the first category, the principal cer.tars of consumption in Siam
and Indochina rv7,Bangkok, Saigon, and Hanoi. The principal sources of the
opium consumed in Bangkok are Yunnan, the Shan States, and northern Siva.
The most important route taken by the illegal traffic from Yunnan and the
Shan States into Siam is via Mae Sal. Thie traffic is
apparently enormous but there is no way of estimating its size.) The pi-
lots of Siamese Airways purchase illegal opium in Chien{ nai, Lampang, and
other places in the north and bring it to Bangkok. Some illecL_al opium is
also brought from Laos down the Lekon and then transported via overland
means to TJbol and to Bangkok. The sources of illegal
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opium consumed in Saigon and Hanoi will be discussed later in this report.)
6- A strict definition of what is legal and what is illegal in the opium
traffic in Indochina offers some difficulties. i-emt is illegal from the
French point of view is not necessarily so from the point of view of 110
Chi Minh's government and vice-versa. The following is an attempt to ex-
press the situation schematically;
French Point of View Point of View of the Ho-Chi-
Minh Government
a. Production Freely permitted to the hill Freely permitted to the hill
tribes tribes
b. Purchase from Xrmitted only to government Permitted only to individuals
Growers monopoly and firms but is to some ex-
tent taxed and controlled.
Source is
under n on ti is point.)
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CO
c. Initial preps-
Permitted to cultivators
Permitted to cultivators
ration
d. Final prepa-
Government monopoly
Permitted and taxed
ration
e. Transportation
Government monopoly
Permitted and taxed (?)
f. Viholesale dis-
Forbidden
Permitted and taxed (?)
tribution
Z. Consumption
In divans operated by
Forbidden to Vietnamese
concessionaires
Permitted to Chinese
h. Export
Forbidden
Government incont pi.cuously
engaged in export; encour-
ages private firms, under
govt. blessing to export
as source of foreign exchange
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The foregoing table must not be taken too literally but
may serve as a general guide. In noting the applicability of this table,
it must be remembered that: (a) the French control most of Laos, Cambodia,
and the principal cities of Tonkin, Annam, and Coohlnohina; and (b) Ho-Q i-
t4inh?a government controls most of the countryside in Tonkin, Annam, and
Cochinahina,\but this control is not one hundred percent . effeotive
nor are the regions which are t:,eoretically under Viet Minh control entirely
Inaccessible to the French for business purposes.)
7? The principal regions of production of the opium which enters into the I.I.
regal traffic in Indochina are Yunnan. Laos, and the Thai region of Tonkin.
Laos, which is under French control, is a more important producer than the
Thai regions of Tonkin which are largely under Viet Minh control.
8. The greater part of this opium is repared by the cultivators and sold on
the spot; as "black" opium. There are a number of very large firms which are
concerned in purohasing the opium. From the French point of view this act-
ivity is entirely illegal. The attitude of the Ho government is not certain
but the general impression is that such firms are permitted, controlled, and
taxed.
9. The moat important traffickers are, to generalize somewhat, of two aorta:
(a) Large firms, of which the ow>>ers and employees include both Vietnamese
and Chinese. They have branches in the principal cities of Indochina and
sometimes in Hon g Kong and China. They may also ene in other legal,
quasi-illegal, and illegal businesses including gold and arms traffic.
They may often have, partly as a cover and partly a r, a profitable business,
an open and legal import-export business. In some cases these firms are
well-known and apparently respectable.-
(b) Corrupt officials and functionaries, both French and Vietnamese, of
the French government monopoly or other government offices. *hile this
category has conducted some sensational transactions, it is doubtless re-
sponsible for a much smaller total than the first category. Mesa two
categories are not necessarily separate, and may work in concert.
10. These purchasers may s' .d their purchasing agents directly to the cultiv-
ators, as does the government nonopoly, or else they may purchase the op-
ium in certain oenters. Opium is transported to these a'~nters by an Immense
number of individuals operating more or less independently. These -nn ters
include the following.,
a. Yunnans Mengtse, and various towns in the Mengtze area
b. Laos s Xieng-Khoang, and various towns in that area; possibly also
some towns in the M,iang-La area
There are two principal outlets, one in the north, the other in the south.
For the northern outlet, the following is the broad outlines
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a. After the opivai has, been purchased either from the cultivators or from
the sma11 smugglers in the various centers listed in the preceding paragraph,
a second centralization takes place in the "Ib ion _M_oye_~a_s" of Tonkin. The
two most important points of this second oe era is own awes
(1) Yen-Nay, for opium which has arrived from Yunnan or from the nor-
thern parts of the Thai region via lao-Ity.
(2) Hoa-Binh, for opium which has arrived from Laos or from the southern
parts of the Thai region via Son-La.
b. From Yen-Bay, opium is distributed tos
(1) The towns along the Chinese frontier (of which Cao-Hang and Lang-Son
are the most important) for local consumption;
(2) Qao-Bang and fang-Son for export overland into Lwangsi and Kwangtung.
a. Means of transport are extremel;- varied and include trucks, wagons, pack
animals, and human carriers. The traffickers often travel in bands of twenty
or thirty. If two rival bands meet, there is usually a fight. One band att-
acks the other for two purposes, to seize the opium belon,;irig to the rival
band and to eliminate the possibility of exposure by killing the riembers of
the other band.
d. Opium is distributed to Hanoi, flaiphong,and the pities of the delta for
local consumption from both Yen-B&.y and Iloa-Binh.. A large quantity of opium
formerly passed to the coastal towns of Tonkin, especially Aaiphong, Hongay,
Tien-Yen, Monday, for export by sea to Hong Kong i,?id China.
e. Present political and military conditions have not greatly modified the
traffic on the route via Yen-Bay to the Chinese frontier. The traffic to the
delta area and the coastal o,;ties of Tonkin for export to China hats been con-
siderably diminished by current conditions which involve the neoe.sity of
passing successively through a number of zones held by the French and the Viet
-inh. This traffic, however, has rot entirely ceased. It is now conducted
principal1y by Chinese (merchants, farmers, railway workers).
i'. The diminution of the traffic in the delta area of Tonkin is compensated
by a great inosease in the traffic from Hoa-Binh and directly from northern
Iao& to Thanh.-Hoa. The routes taken by this traffic are tracks rather than
roads. The opium is transported principally by pack animals and by human
carriers.. This traffic is almost exclusively destined for export. Export is
by junk from Thanh-Hos, and a number of small and obscure ports in the Thanh-
Hoa area.. The junks take the opium to ports along the South China coast as
well as Hainan, Macao, and Hong Konb.
g. The To-Fi, Chinese bandits, play an important ]part, in the traffic via
Yen-Bay eastward to the Chinese frontier. The Viet Minh find it advant-
ageous to remain on good terms with these bandits and to use thorn as allies.
In order to maintain cordial relations with them, the Vietnamese, Government
alloys them a certain amount of freedom in opium trafficking. The To-Fl,
however play no part in the traffic via Thanh-Hoa, a region in which they
are practically non-rtl.ztent.
CON DENTIAL
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12. The following is the broad outline of the southern outlet traffics
a. This outlet is more important than the northern one as regards opium
to be consumed in Indochina bbcause o the f c . * b t . ; the (Masse p:;pul .tion
of southern Indochina is more ,numerous than that of northern Indochina.
It is, however, much less important as an outlet for export.
b. The principal source of opium involved in this traffic is IRos. The
most important points of initial centralization are in the neighborhood
of Vientiane.
a. The routes used for transport to the southern areas are mainly the
Mekong River and the rot-ds and paths which parallel various portions of
the river both in Siam and Indochina. Means of trasport include sampans,
pirogues, and small launches on the river; truck, wagon, pack-animals,
and human carriers along the neighboring roads.
d. A partial distribution of the opium takes place en route. A. certain
amount of opium leaves the route in the neighborhood of Thakek and goes
to Siam (Sakol Nakorn, Korat, Bangkok, eto.). Some opium leaves the route
at Kratie and is distributed for local consumption in Cambodia.
e. The main traffic leaves the Mekong at Kratie and goes to the Saigon-
Cholon region by road. Some of the opium is distributed along the way.
The greatest portion goes to the Saigon-Cholon area where most of it is
consumed locally.
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f. Some opium is illegally exported to China, Hong Kong, Singapore, and
Bangkok from Saigon. The amount involved is relatively snail.
There are reports which indicate that illegal cocaine is
brougEt to B ngkok from Saigon via Air ]Fiance and Siamese Airways, and
that one of the principals involved in this traffic is Le Thanh Nhnn, alias
Vietnamese agent of the French in Bangkok. 25X1A2
Another reportedly involved in this traffic is Nai Vikrom Ninnad,
Siamese `lice consul ib Saigon. The information con' erning Nai Vikrom Ninnad
is, however, unclear and may refer to a worker in the consulate rather than
the tiice consul himself.)
13. As opium has many of the aspects of ready cash in Southeast Asia, it is a
subject that pr- 'oundly affect- political life. The French authorities are
not unaware of this fact. They have made use of it (a) in order to persuade
certain Chinese to work for the French; and (b) for certain French individuals
to profit by the connivance of the French authorities in the opium business.
There have been many reports which indicated how opium is used by the Viet
Minh as currency and a source of foreign exchange. The arrest of Nguyen-Due
9 huy, Viet Minh r6prosenttitive I n China, while carrying o ium to be used as
a sort of travellers checks is an example of this. The French
have succeeded to some extent in interfering with the Viet Minh overland 25X1A2g
opium traffic to China (via Ceo-Bang, Mon-Clay, etc.). They have, however,
had absolutely no success in Impeding the sea-traffic via Thanh-Hoa. The
importance of the latter traffic has completely overshadowed the overland
route. According to one source, Thanh-Hoc is about the only place in the 25X1X6
Viet Minh zones where American cigarettes are available; the last outpost
of the foreign world before entering the austerity zones.
The availability of American cigarettes in this city suggests d ou s ng
trade in some export oommodity. It would appear that this commodity is-
certainly opium.)
CONF DENTIAL
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