COMMUNIST CHINA'S INVOLVEMENT IN THE ILLICIT OPIUM TRADE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A001500260010-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 50
• Document Creation Date: December 9, 2016
• Document Release Date: February 28, 2000
• Sequence Number: 10
• Publication Date: August 20, 1956
• Content Type: REPORT

25X1A
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*MI
Getteeeosteet
Project #42.972
4.,
4einauali-et---Chinais Involvement in the Illicit Opium Trade
?di
ITY
c,fr: eicc
20 August 1956
25X1A
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NO DISSEM ABROAD
SummarY 1
I. Introduction 4
II. GemmonittilhOWe Involvement in the Illicit Opium Trade of the
Free World
III. Opium-Producing Areas and Markets in the Far East . . .
Al. Burma
Thailand
ludo
IA.:,Malgya4md Singapore .1' "
y p4 Hong Kong and Macao
() t1e)-1_ " 4;.e.re. in,c, i
I V Principa.1.42,1ieit MaAets ant-Produotion in the Near Bast
d South Asia
1? tk CCivi
kIran
2, if. India
Turkcey
L?f
A. Pakistan
1, E. Afghanistan
or
V. fl.i4it Ma,rkets in Other Areas of the World
?
?
VI. Conclusions
Appendixes
Appendix A. Methodology
Appendix B. Gaps in Intelligence
Appendix C. Source Reference
Tables
Or -4,- C t ot. ktft4?/00,
I di
1. Value of ptimstcd 90-Metzsic Ton Burma-Thailand Opium, _Trade at
Various Stages of Transport, Surea-end-Tirgetttald .17 '....,
2. Estimated Number of,InUMicts and Consumption of Illicit Raw Opium in
Ind.o2Oina, 1955
3.Isurqu of Supply and Countries of Origin of-SLagespore Seizures of
' Raw OpiumA 19547-1055 4,-,
I' 23
4. Sources of Supply and Origin a Raw OpiumkSingapoTe and Malay,
1954, 1955 e i ? ?,./.4. 7 _A, _st,t,,,?,t,,? it., 4 COE .14.4 *I 4 if-* .? ' A t " ...it ?
5. Estimated lile-ir?rall Area -Offium-limperts y Country
of Origin o ?urce, 1955 e; ect.t. 1 27
6. Estima,ted F B. Value of Opium Exports to tle_Malayan Area- ? ? 28
ri )
7
12
12
15
18
23
29
31
31
32
32
33
33
35
36
14
19
i (A.;!.04
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SOTARY q-- 7
There is no reliable evidence indicatfii that the government of
/?
(16,14,
Communist China either officially permits orAengages in the illicit export
of opium or its derivatives to the Free World. There is also no reliable
evidence ofiCommunisilf[222/Control over the lucrative opium trade of
Southeast Asia and adjacent markets* Inittomtlars,amiet, however, that small
A
quantities of raw opium produced by tribes:pee!** in Yunnan Province,
r ? (
China, move over the Burmese border. The annual earning5to the Communist
A
116
Canoee tribespeople from such saleswouldjprobablj not exceed $500,000 per
year. Communist China
A
attempting:to idn the favor of the
YUnnaniporder"tribespeopand it may be tha it permits small-scale
violation of its strict antilopium program beCaUse of political expediency,
"*Th
The principal opium.producing areas in the Far East are in Burma and
C
Laos. The production of opium in these countries, .coupled-vri-th-livei-paio-
ir?
duetionlis sufficient to supply the great mass markets of Burma, Thailand,t
i2P
and Indochina and to provide a further export potential of the equivalent
of 150.tonslOf raw opium a year. This export moves principally through
4
Thailand and to a lesser extent through Burma to markets in Malaya, Hong Kong)
0
and Macao. Consumptio4catimates1 and sei75reports indicate that exports
4 r?nna'1171MtiOn nrobably do not exceed the
** Dollar values throughout this memorandum
are given in terms of US dollars.
op.
the remainderAapproximately
rded.and partAmoves to other
1-Asil. %WIC). Vesnri. niqA
' t/tr t
1"**Estimates of consumption and zaporti,!ef--figuasz from reports of eigures
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47Te giNen in terms of mptm raw opium equivalentithroughout this memorandum:
tI I
1\
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The governments of Burma, Thailandand Laos either explicitly or
.i.reorre't
tacitly permit the production of opium by the minority tribespoople. These
governments have only nominal control over the majority of these tribe=1
and attempts to suppress opium production very likely would result in
strenuous resistance. Furthermore, these tribes traditionally have relied
upon the sale of their opium crop as a source of cash income) anda ban on
its production would work an economic hardship on these people.
The principal profit; however'N-from opiumiare not earned by the
producers but by the opium traders, middlem7/and government officials.
/1
For example, reliable price data indicate that the Burmese producers realize
less than $1,54fteee for the 90 tons of Burmese opium which transits
Thailand annuallyiliCis same quantity of opium in Bangkok is worth approxi-
TYloi, ji4440,4V4L
mately $9,500-,ee0; and landed in foreign markets like Singapore its wholesale
11.43 11,4-0-61D-A?
value 4vers increased to almost $25,06e0-04g414, This large increase in value
illustrates the lucrative profits earned by the traders, the middlemen, o-4
O
v444,
the opium runners and the bribed government officials involved in the
opium trade. This trade is substantially in the hands of private traders
Pt
motivated by- profit considerations and not by ideological goaleir-
-,
'
r
Southeast AsiaeOpium is exportedlin raw, crudely processea or in a
A
relatively highly refined form. In the estimates mentioned above, morphine,
heroin,and other derivatives have been converted to raw-opium equivalents.
There are several refineries located in Thailand near the Thai-Burmese border,
e? %hAAVI
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and it is*06,watift that the majority of the morphine and other refined forms
JA
mowitigg through Thailand is processed in this area. Other refineries are
located in the major market and transit areast gr example, in 1955/ there
were four known refineries operating in Macao and extensive clandestine
A i '' OP*4 )en(VnAtt,, NN k4144
;1 ,./
morphine and heroin rer-inery--4ftee existed in Hong Kong.
/Pk' /nil tO4 Y4.1 4 IV Allw
CountriesAalso supplied significant quantities
'114Thi\l)?411:44
of opium to the world's illicit markets,Aeven those in Southeast Asia. For
example,itisestimatedthatinl955)Jialaya received 50 tons of opium
from Iran and 12 tons from India. The Near East and South Asia, however,
la'also a major consuming area and consume far more than A'export$.
Minor markets exist in other areas of the world.
Theseri:rlaec:Upplied
with opium produced in Southeast Asia and in the Near Eastend South AsiaiI
A
volgolimdmem The European and African opium traffic zatuatioR has been
(01,44:5,0;111 en, noccoi-i0 Ort.?.,44
characterized by the UrtRieel-- Nations .Nareertic Cettrrieffien as not important%
p,1:4.1r;T-Vilt
.1
The North American market appears to be suppliedNwith opium from litwatAmmr/
IN74"6"
9F4114.1"IdagMillimignin Mexico. vt
-411?410+4'43
1." )
."9,117rhere appearsisto be iiitemmiklitakproduction of opitiTi2
Oc
S
re than
adequate to meet the demands of the two great opium-consuming areas,
and
in view of the extremely limited foreign exchange which Communist China
014',
might earn from the production of opium, its official participation in such
production is unlikely.
Trade and refinery processing appear') to be in the
446.0.1444WA4
hands of non-Communists, and Communist Chinalle:dontrol
19W4046Sia4
likely.
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I. Introduction,
1.
41,?6
Smuggling of goods in the NearfandlFar East is a commonly accepted
trade channel. Border areas are in some cases poorly definedjand in
extreme cases exist only as a line on a map. 49,41.11mmr-mmnrInnmr-Wtel-
Vc4P--J.
-are weli-define14-ihay are often poorly guarded. Custom officials,
military authorities, and police enforcement officers customarily supple-
ment their low salaries by accepting bribes from smugglers or actually
engage in smuggling themselves. Central governments hesitate to enforce
laws which would change traditional trading customs and provoke the
hostility and resentment of semitautonomous minority ethnic groups. Under
these conditions)smuggling flourishes.
One of the commodities most frequently smuggled is opium. Opium in
these regions is more than a narcotic: it is a medium of exchange and a
store of value. The governments of Asia in general do not regard the use
of opium with the same abhorrence that Western governments do. One official
Southeast Asian view of production and traffic in narcotics was voiced by
the Burmese government to the Tjalted Natiem Opium Conference in 1953 when
it commented as follows on a proposed protocol to limit and regulate the
cultivation of the poppy plant: "tiqn the Shan State and the Kachin
State p.111.% the hill tribes find it an economic necessity to cultivate poppy
for their own consumption, besides striking a favorable balance in their
barter trade in which they have been traditionally engaged from time immemorial.
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The prohibition of poppy cultivation in these areas has all along been a
difficult problem, as poppy is a cash crop in these areas." Qm14e Recently
f kt 1
PodereAten qf MalayaluChief Minister angku 1 Rahman, called for
the
w - ? ? ? -
a return to the prewar system of registering known addicts and permitting
them certain prescribed amounts of opium. One of the reasons advanced by
the Chief Minister for the legalization of opium smoking was that revenues
of approximately 01$ $165,000 yearly would accrue to the government. It
should be noted, however, that the
Li/
with a storm of criticism.
Itarcotics
Chief Minister
proposal was greeted
ditionAn the Near East and parts of the Far East is
A 4'
extensive) and because trade in narcotics generally is officially prohibited,
there is a large and lucrative illicit trade. As an illustration of the
profitsinvolvedinthistrade.itisestimatedt,the Malayan area
6
with a population of less than sIx million, there are 115,000 opium smokers
and an estimated yearly consumption of illicit opium of approximately
100 tons. The wholesale price for this quantity of raw opium amounts to
approximately $37 million. al The price paid to the producers, however,
ta,t -t?
amounted to only about 00 $2 million. The rest accrued to the opium
Oca,
"syndicates7 "runners"/ and government officials.
p; Lirro 1;1 e
The-above introductory remarks indicate la-a-gefteaal-way the complex
"77IT,114-')
motivations whack-encourage, condone,
/
of narcotics in the Near and Far East.
4
'ae,149.4
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and sustain the production and trade
In order to appraise aciambetials__-
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el/
,tiwprobable involvementin this trade,it is necessary to determine as carefinly
as data permit the amount of illicit narcotics furnished the principal
markets by the several suppliers. This approach serves to place in
Ii-
perspective the extent of Cemmunist?ehinem probable involvement through
Ao...04NJ
rytiret,C4
1955 with that of the other major suppliers. Accordingly,this -Pefacart
presents available data on production and illicit traffic for each of the
major markets.
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II. ?azraakaiist?Criliefter3-s Involvement in the Illicit Opium Trade of the Free World,.
Jtri
25X1C There are numerous reports the
popular press stating that Communist China is officially and substantially
__14/
involved in the international illicit opium trade. From an examination
and evaluation of these reports and, a survey of the Southeast Asian and other
1
orld opium markets it would appear that the majority of these reports have
little factual basis.
There are,indeed, indications that opium is not being produced on an
extensive scale in Communist China. These indications are,' (25-tot
1. Communist China has apparently waged an intensive campaign against
opium production, trade and addiction.
J1
A series of articles appearing in
_
Communiit,,Chinesekewspapers and magazines (including those in opium,-growing
_
areas) have detailed the progress
63
of this campaign. .2
2. A complete lack of reliable reports on extensive production of
opium inlChina.
Or medical use in Shanghai.
Reports that other Blee countriesA have been buying opium from the
Yr !YUAN, {PI-
Free World, possibly indicating thatlChina has inadequate production to
to
supply such markets.
Although Communist China has apparently been successful in curtailing
C?I)N1
opium production and trade, it is reported that small amounts of opium are
still being grown in Yunnan along the Burmese border. In these areas the
Kachen, Wa, and Lisu ethnic groups live on both side5 of the rather poorly
defined border. Among these groups several tribes engage in the growing of
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r'"141 ).0,S rt, 41.c: (Ice'
opium as a major occupation. 'Thee., 1,1 such settlement5opium le grown on
:f.Torom.A.,Nsi
the Chinese as well as the Burmese side of the torder.
In Burma/ the
authorities have either explicitly or tacitly-permitted the growing of
pr.1011# eS
opium by these groups on the grounds that it would work undue hardships to
A
ban this major cash crop unless the tribes could be persuaded to grow other
42
cash crops. Moreover, control over these tribes on the Burmese side)and
perhaps on the Chinese sideas well, is nominal. It is reported thatee-
-Gftimmi-ets met with such resistance from Chinese Kachen tribes) when they
414i
attempted to ban opium production, that they permitted this activity to con-
*r7
tinue.
There appears to be no precise way to measure the quantities of opium
which move from 'Airman to Burma. There are, however, several indications
that such amounts are small. From a 1950 ethnic study of the area it is
known that the majority of the opium-producing tribal groups mentioned above
Communist- ,don
are physically located in Burma rather than in China. Furthermore, it is
reliably reported that the bulk of opium exported from Burma is actually
/
of Burmese origin.
The identity of the Yunnan opium so reported becomes lost because it is
intermingled with Burmese opium.
\
owever,' the Singapore Central Narcotics
-
Intelligence Burea Whenever possible rePartAe suspected origin or source
abotk't
of supply of seized narcotics andin 195450,se4e 20 percent of its total
seizures of raw opium were classified as Yunnan opium. The Singapore
authorities state that the term/ onium. is used to designate opium
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received through Thailand and probably consists of opium produced in Burma,
-1141/4--
Yunnan, Thailanl)and Laos. They state, however, that they have no evidence
that this opium is produced in Communist countries. ?
4( oF 42 gr.
..uulveverj.f the opium termed kunnan by the Singapore authorities
ik
and imported at an estimated annual rate of 20 tons was in fact produced
totally in Yunnan, the Chinese tribes-peep-31e- wouldOill4Feceive $300,000 for
-1414'w
the entire exportl?lhe price of Burmese and Yunnan is reported to be $15,000
Cceil.cri.1,C4.., A
In fact, the total amount received by the
a ton at the produceriq leve];).
producers of the Burmese export crop would not exceed $20041,61064
In the
A/.7
extreme assumption that 25 percent of Burmese export was of Yunnan origin,
possible foreign exchange earnings by the Chinese tribespeep4o from such
sales of opium in 1955 would not exceed $500,000.
The lucrative profits in the illicit traffic Ame of opium and its
derivatives are earned not by the opium producers but by the various processOrs
444r
and middlemen. Especially profitable is the marketing of morphine and heroin.
An examinetion of narcotics markets in Southeast Asia, Malaya, Macao, and
Hang Kong failed to identify official Chinese Communist involvement. On the
contrary, substantial evidence exists that this market is dominated by
non-Communist groups.
Some idea of the possible involvement of Communist China both in the
adjacent Southeast Asian and in other world markets can be obtained from
U:
the Annual 1955 '614ted Nati :f'?"h"-"I'
Neileektudiiiirsat,
*In earlier year-b this opium waS ciastified as 'Thailand. opium.
of -as mfgleading as the term "YunnsnO opium.
** F. , below.
course, t
c)-
?
4 t
This elas:
'cation is
below.
*** The relative earnings of producers and middlemen are given in Simedaen III,
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211 opium seizures by country_of,originis listed in this report
i
A
and only in,.,one case was Communist China reported as the country of origin
of the drug. The reporting country was the United Stetesi he seized drug,
heroin, was less than 3 percent of total U/St opium seizures reporteal4kand
the case involved a shipment from Hong Kong. Hong Kong authorities, however,
as recently as the=of 1956, stated that they have no evidence that
opium or opium derivatives of uommunistorigin enter Hong Kong.
di
It is not only possible but also probable that individual Communists
and Communist sympathizers of Chinese extraction/ engage; in individual and
44,t,
perhaps even group efforts to profit from the lucrative opium trade. One
4
of the reasons given for the recent crac
own by the South Vietnamese
G.tOttm.4k1)
government on opium dens was that they were a source of funds for the
i7
activities of North Vietnamagents. The racial group most heavily involved
.1
in the local distribution of opium in Southeast Asia and also the racial
group most heavily addicted to its use are the Chinese. Although no evidence
of blackmail of these groups byrOommunistiChineselagents is available, this
possibility always exists. It is also probab4that profits so earned
A
would be used to finance Communist objectives. A local Japanese Communist
4401714:-
1412
Party group reportedly engaged in such activity in the early #50's. There
4
is, however, no evidence indicating that such involvement is substantial or
(lystematicall,ydirectediby Communist China.
Ale S
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t is oncluded that Communist China is not involved in an
extensive export of opium or opium derivatives to the countries of the
Free World. Communist China, furthermore, does not engage in the lucrative
opium trade in the Free World. The principal sources of opium and derivatives
for illicit Free World markets are described in the following sections.
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Cp,
III. Caupl:1-Producina Areas aniVarkets in the Far East.
,r
--in-the-prevlio4e-eeettrnr-trt-thi-e-repoPt., it is certelnded that Communist
Chinacis\probablvinvolved only to a very minor extent in the illicit opium
traffic in the Far EastA There are, on the other hand, many indications
that non-Communists are substantially involved in this trade.
seelkionlSome of the major aspects of this involvement are discussed/
r, Ale. Burma,
25X1C
4J)
There are no official estimates ofA annual oplem production4in Burma.
Although tribes of the Akha, Kachin, Lahu, Lisu Shan and Wa groups
4
traditionally produce opium, the number of people involved in the production
op.," pa PP, ts;mror.,_di
of opium and the acreage planted to peppy le not known. The government of
Burma freely admits that substantial quantities of opium are produced in
the areas where these groups live but has never released an estimate of
iq
annual production. the majority
of opium exported from Burma originates in the Shan State.
From available information on domestic consumption and exports it is
Iop( L4.
possible to estimate tentatively-Bermel-e annual production
A
5
estimated 60,000 opium addicts, concentrated principally in the
A
producing areas and in the Bhamo and Myitkyina districts, consume
yjf 4(
.spitionated 30 tons of opium a year.
-)44 rm 44,
qpium is exported teak by
/I
4a)
r-a-
4lat estimated4 30 tons Wee- exported from Rangoon in 1955.
10 Oet..ce
(3:3tirtVe.tr
sea from Rangoon and,lopaimati4atothailand
This estimate is
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5-0 e4,-;
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is esi, rAck;kle
based won the following considerations: (a) an-estimated 12 tons were exported
(s.ei'--Sol-LL41
to Singapore and Malaya in 1955 from 13'
land6) Rangoon is one of the ter
principal supply ports for the Hong Kong and Macao markets. The opium
traffic from Burma to Thailand is much larger than the shipments from Rangoon
andA.e.estimated to amount to approximately 90 tons.-OVNC
It is 'gut* probable that large stocks of opium are hoarded by the
producers. One possible indication of such stocks/is furnished by the
offer of a Thai firm to sell 200 tons of opium. /The source of this quantity
of opium has never been satisfactorily explained by firm hQwewer, the
most logical assumption ,is that large quantities have been hoarded in the
Burmese producing areas.
he collection of opium from the producers is in the hands of officials
and rulingclass of the Shan State, the officials of the Wa and Kengtung-
1 A
Staig=7;;;;;41dly very heavily involved. Opium is then carried by
A
caravans of lUnnanese traders who are called "Ha TheActawseuare refugees
from Yunnan. It was
estimated in mid-1954 that approximately 1,500 of
these people were scattered in small groups in tribal villages in Amphur
-zior
fing, Thailand. Burmese army officials reportedly are involved in this
trade both as armed escorts for the protection of the opium runners and also
;047'7.2,
as independent traders. An early 1955 report indicates that Thai military
airplanes were flying into Muang Pong, Burma, and carrying opium back into
410m-6*
Thailand.
4i 21
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ihe value of the Wermee4 exporo Thailand
1
Table 1
ry,
St
Traraoort4taae ?
Producers
.1:1243urrnai
Burma-Thai border
Ching Na?Thailan0
A
Bangkok'
GL, lc 64
In 6.9.ddi-Eit!tiLthe
ValueAn Who esale Price
7.14(Asa4,4 0,,S -I
1,350 0Gteer
;off
3 910 row
5,31000004
6,84004000.
9,5400448e
P
$1,350,000 received py the producers for the opium
alsolteceive aare4464komml $450,000
1.1:t
Assuming emewribiger $200,000 is
moving to Thailand, the producers(uld
for the 30 tons exported from Rangoon.
earned by the supply/
opium to consumers in the domestic markets (part
of the domestic supply is consumed by the producers), the Burmese tribal
groups wonldorobabylnot earn more than$2,41a670070 annually from the sale
of opium.
The profits to the Burmese groups involved in the clandestine trade
would be considerablvore than the amounts realized by the producers.
From Table 1 it appears that 90 tons of opium at the Thai-Burma border is
valued at $5,310,000,22 it is assumed that opium at Rangoon is valued at
the same price as at Bangkok, the 30 tons reported by this route would have
a value of $3,180,000. The middlemen, bribed government officials) arid
runners thus would earn approximately *6,7QaToog for thelr services(
t;)Ce d d4 Pod-648.74A,70
tral -12"*'?e 1.4 /4 4/,10/ a
liwAt -1,11.444.1.meL444.0,A
wm:r NICM=01114
4 , Aproved1For eleaseVMPON20 : CIA7RDP79T01049A001809200p7?AvAD
CONTROL
Approved Fodj0OI08I29 : CIA-RDP79T010494001500260010-6
ntil WED CONJRUL soviova4
Thailand. NO DISSEM ABROAD
Opium is smuggled from Burma to the following places in Thailand:
46?trrS.'43-1 Plv.e01
Dao, Chiangai, Chieng()ai, Malang rang,iegie. and Lampang.
) A
The main collection points are Chiang L, Chiang ai and*Iampang, from tA.
A ) P
rr 4\
willimee it moves by rail or by road to Bangkok. Laosieptem moves from
a.,bot,n
0 Ha 4.
Luang: to Nan and There is also a small export from other
towns in the Iona producing areas to Thai towns across the border.
Small quantities of opium are also produced in Thailand. The main
0444
regioroof opium cultivation 11Qs along the side of the Boaafteatala Range
/11
/\
on the Thai-Burmese border in the northwest, in the area west of Tak, in
Hpr,T,Ert
Mae Nangeonr and north of Chien i from Chien*ai to Nan. There are
4
approximately 15,000 to 20,000 people of the Mao, Musso (Lahu), Ise,
Yao tribes who are the principal cultivators of opium popNr It is
that raw opium
and
4
dl
production may amount to approximately 25 tons a year.
A
The annual consumption of opium in Thailand is estimated at 30 tons,
of which 17 tons are supplied legal channels and the aUter 13
tons
iawl-iRaffp-liby illicit channels. The Thai government stocks have been
built up over the years by seizures and Purchases from foreign countries
4
and are not drawn from current production. It is believed that the Thai
opiumproduction is sufficient to supply the illicit domestic consumption
-to
and add aeme 10 tons a year to the transit trade.
4
Police Army, and government officials and "opium kings"
are the
L
principals involved in an annual estimate 20 ton-Arai:telt opium Movement t,!
4 '
SBRET
15
C"31i I At.
Approved For Relehse-2000/08/29 : CIA- 10\49A601180046d610-6
Approved FcMjJ4pss 2600/014g RDE1010494001500260010-6
talti "1"1"1?
CIA INTERNAL USt ONLY NO DiSSIM MROAD
tlFough....Thailaads. Police officials are bribed to protect the smugglers.
One report states that the Thai police purchase and transport opium from
the Burma border to Bangkok. It is also reported that Thai Army and Air
overa.Lnet.5
Force personnel are involved in large-scale, purchasing and smuggling
opa446ticaul. In early 1956 there was a sensational seizure of 20 tons of
opium. Allegedly involved in this large;iscale smuggling effort were the
Thai Police Director, the Minister of the Interior, the Director-General
of the Excise Department, and five other highly placed Thai officials.
The 20 tons of opium were purchased for Hong Kong buyers. Remnants of the
engaged in the trade.
There are approximately 30 Chinese "opium kings" in Thailand. These
dealers finance a considerable part of the trade. Some of these dealers
ur-be---1954Aoperated opium syndicates in Malaya. In 1954fhey were banished
and went to Thailand where they resumed their former occupation.
X
From Table 1,...pace4444,, and with an addition for the transit Lao,
and Thai opium)it can be estimated that the profits to the Thais involved
in the wholesale opium trade would appzolielftee4e-e3eneet $6 million annually.
A I\
Profits are also made from morphine and heroin, which are produced in
Thailand. It is believed that there are two refineries in Thailand near
the Thai-ZurmietOrder, one at Ching Saen and one probably in Tachilek.
A
Another refinery was reported Wider construction in early 1956 at Ching DaO.
The value and volume of theAmorphine andAderivatives 4goda, however, cannot
be estimated without further information. The price of a pound of morphine
at the refinery/J1pie is approximately (xylem price of the
14picrovedde1Release 20010%9 : CIA-M;IFUNWilfdp
11TRNAL ME ONLY
' cod)
CW219190 ABROAD
SECRET
CONTINUED rqNTROL
Approved For Releaf* 2000/08/29 : CIA-RIN7aN104.2A001500260010-6
CIA INTERNAL ot wpirl
NO [ASSN ABROAD
raw opium used to manufacture it plus a small processing fee. kaw
)41:
opium at the refinery-points iscworth $35 a pound,and morphine40100
./
$212 a pound., This isa4 litile more than 4tre6 to I retake and reflects the
topy.404t
relationship betWeen impQrt of raw opium and the output of morphine.
IN
with raw opium, the profits in the morphine trade go to the middlemen
rather than the producers.
As
There are a few reports indicating that Communists or Communist
1 -,11,x
sympathizers are involved in the Tlami illicit opium tra".,i It is apparent,
however, that they do not dominate the trade. Available information indicates
that Communist participation is relatively minor.
The Thais purchase opium at the border areas for gold. The value of
11,
such purchases is in the-order-of $7.00819e9
-*
annually.
imports of gold of $22 million, it is estimated that 50
\L,k
($11 to716.5 million) was illegally reiexported.
A 0:
CT g11955 Thai
to 75 percent
reported that a
considerable part of the illegally retexported gold was used to pay for the
import of opium. Assuming that 50 percent of/I 44111A4emd4o illegally re-
3,r ,p,r4
,
exporteci goid was expended for this purpose, Thailemd gold expenditures in
1955 4er-imported-eplum could have amounted to between 1) $5.5:and $8.25
million. Thus/ the estimate of $7 million as
o'
purchases for Burmese, Thailand Isotiqin opium is
/N ,/
with the possible level of payments.
the value of Thai
reasonably consistent
consistent
OprUIeu.
SECRELONIA CONTIN"r0 CONTROL
Approved For Releast 2000/08/29 : CIA-RDP79T010411A001500260010-6
CIA INTERNAL USE ONLY NO DISSEM ABROAD
AA04 rlf-C
Li
/the producing area for opium in Indo4ina.try-46~.. /ihe main producers
rotta. PkA^.(Sa"
are the Meo, principally in the provinces of Xieng Khouang, Si )e and
)
fLuang Prabang. The Yao in Nan Tharovince and the Kha of northwest Laos,'
also produce a small part of the total output. Production varies greatly
with the weathert,j4 severe rainy season will cut dawn the output as much
as 60 percent. Production in an average year is probably about 125 tons of
raw opium.
1 Average rate of production in Laos apparently has been little affected
by the occupation of part of the important producing area of Sart-Nees by
ovoyutArt,::4
/1
the Pathet Laos., The Pathet Lao and their Ulatmlnh overlords do not attempt
(1
to control opium production in areas of Laos occupied by them/but instead
purchase opium from the tribesjb with silver at more favorable prices
/..o e?4:- ett 1'12
than the latter can obtain elsewhere. The Pathet and rth have been
very careful in dealing with the Meo tribe
whose fighting qualities
they respect. It is noteworthy that the Cemmunitt Pathet Lao authorities
share with the Thais and Burmese a reluctance to interfere with the
traditional opium production,md traffic engaged in by the mountain tribespeoplo.
"
. /
Cetati*Iiiran S-sstimated?as follows:
00k
)
? 1?ii ft, 40I Is
1.8
r-
er t
Approved For Releass3 IER/00414060V?ItdaigA301500260010-6
CIA INTERNAL USE ONLY 1,
NU uisstIvi iir31(wid
Approved For Releasp 2000/08/2gglaW0464401;BM01 0-6
CIA INTERNAL USE ONLY NO DISSEM ABROAD
Table 2
t on of 'cit
Ps-01[cl') c--5
Number of Addicts Illicit consumption
(ietric-TOns)
South Vietnam
55,000 Bi
30
North Vietnam
60,000
1+5
Laos
10,000
8
Cambodia
P9,22
Total I*544110
145,000
98
25X1X
41
a. Approximately 15,000 of these addicts receive legal opium "disintoxication"
doses from government stocks rather than illicit opium.
r--- 47471,.rt:-.1.711.
8,
/ \
Annual si_p_riti consumption,in South Vietnam is estimated
25X1X
./t
at about 36 to 4,8
tons a year. Total number of addicts is estimated at 55,000, of whom about
4,0,000 are supplied by illicit opium:41411e remaining 15,0004* are
evr
registered addict aAreceive legal "disintoxicationdoses."' From these figures
it is estimated that illicit consumption of opium may amount to about
30 tons a year.
No statistics are available of annual opium consumption in North
Vietnam, Cambodia, and Laos. The American Ambassador to Laos estimated
-Fret
that about half the opium produced is consumed locally.,/ This estimate of
consumption is probably not an estimate of personal consumption by the
Laoi (sie they number only 1.3 million) but an estimate of the amount
retained by the Lao/ after the official collection. The larger part of
the opium retained after the official collection was purchased by private
19
Approved For Release 2000/03N
Escrwortarci*TIMEMA(6260010-6
CIA INTERNAL USE ONLY 1'1? r"tuml)
n
Approved For Releas?102000/08/2SEREIaRD? iiitailalfgag10010-6
NO MEM ABROAD
6oril 1,!!,
CIA MUM. USE ONLY
opium dealers and resold in Indot?hina, Thailand, Burma) and Gh?nesse markstl:'
'
A smaller part of retained opium was actually consumed in Laos. Assuming
that North Vietnam, Laos, and Cambodia have a pattern of addiction and
consumption similar to South Vietnam, annual consumption could amount to
about 68 tons.
Total consumption in Indophina, 'Mims, could amount to approximately
100 tons a year. Witla approximately 125 tons of opium are produced annually
in Laos, approximately 25 tons of Lao/ opium are available for hoarding
and for export to other countries.
Opium is sold quite openly in Laos. The American Consul at Viettiane,
Lao recently reported:A "Opium can be purchased in village markets in
J4j
K6c. wani,
Sam Neu Luang PrOang)and Xieng Ahmmeng province4 as well as in the
-
northwest. It can be bought right in the town of Xieng Khouang." With a
readily available source of supply at competitive prices, opium smuggling
from Leos is a relatively large-scale operation. Airplanes and trucks,
1
both civilian-and military, are used extensively for the clandestine move-
ment of opium from the Laos collection centers to the markets.
South Vietnam is currently supplied principally from Vientiane, Laos,
Leir?
by plane and truck. The center for import is the Chalon district of Saigon.
Many Frenchmen are reportedly engaged in the opium trade both at the
source of supply and along the smuggling routes.i The French have been able
to retain advisers and inspectors in almost all customs offices4bove the
2, 0
118INFOR1 CONTINUED CONTROL
Approved For Release AcA t-ttaA- R D P7 9 TO1049A001500260010-6
CIA INTERNAL USE ONLY No Di&.Liv, Abhuiii)
T310.a4LoginTio CONTROL
Approved For Releasdp2000/08/ACX-Kuv79Toio4w01500260010-6
CIA INTERNAL USE ?WINO DiSSEM ABROAD
25X1C
r4,14,,,ftr
nr P'4 e C 04\ 4eised.
18th parallel the only customs offices are along the Makeftg -- at Ban geetri
Saxa,
Sai, Pak Lay, Sanakham, Vientiane and Paksonel and occupy key positions
in the central customs bureau in Vientiane./ The French are also involved
in the smuggling of opium to Cambodia.
March . 7
19561news despatch reported
the seizure of 800 pounds of opium smuggled by plane from Laos to a secret
airstrip in the Cambodian jungle. The builder of the airstrip, a French
citizen, was arrested.:
opium constitutes an important
01W
source of wevenue for Communist agents in South Vietnam. It is believed
that a part of the illicit supply of opium may be smuggled from Haiphor7
A011,
and other'North Vietnamoporty The retail end of the opium trade in
South Vietnam is reportedly in the hands of Chinese who since the recent
introduction of stricter measures against illicit opium traffic probably
are susceptible to blackmail by Communist agents. Although there is no
evidence at hand that this is taking place, a development of this type is
not impossible. The determination of whether the Communist North Vietnamese
are involved in the South Vietnaleopium traffic is not within the scope of
ut the comments of the AmericantiMbassador to Vietnam are
10(
enforcement
Commenting on the increased activity in late 1955 of the 1-
authorities in raiding and closing clandestine opium dens in
the ,Saigon
AT.441-1 he said: "It is believed probable that two factors
contribute to this increase in anti-narcotics
21
activity, first the strong
rvILI _
Approved For Release 2000/08/29 : ClA-P&Milif09419A001500260010-6
SECRETNOM-'''
CIA INTERNAL USE OW NU 1.)1;.).c.ivi tti.irtuAti
Approved For ReleasgjOlig KilenDIDatinda4044'01260010-6
CIA INTERNAL USE ONLY NO DiSSEM ABROAD
reformist views of Prime Minister Ngo Dinh Diem and secondly a desire to
eliminate sources of revenue for the
nhXuyen rebels, clandestine Vietminh
agents, and other anti,-government elements."
On the other hand, quantities of opium move from Laos across the Tonkin
411 4,1,
/
frontier into North Vietnam., This traffic is not covert smuggling, since
Atna
the Viet14411h control the border and do not interfere with the traffic. The
"1/
quantities involved, however, are believed to be small.
22
Approved For Release 2000/06/2%,;g*FIRTAI049A001500260010-6
SECRET "'uu
CIA INTERNAL USE ONLY O 1:16;.:Lhi hbrtur,D
Approved For Release.2000MTdalthalliMpAglila0260010-6
NO bi AbROAD
CIA INTERNAL USE ONLY SSEM
Maaarve-eteel- Simzaoore
One of the principal markets for Sout g
V14 2,,t,trit.P. se,rr 4
Singapore and tios-Fedepa414a-ef Malaya.
Aelan.,,,,caplum exports
fiatd
of
In l9>50 19,50 percent of the se
Vlq
1 "7. t,
' ....?) 4
1611,101trifit#11-
//; f -
e-scrta*ce-tIr iifn relative
Iran len opium and 32 percent
Country of Origin Qus
Iran
Yunnan
India
- Burma
Unknown
Totali
a Thi.s term is
34,6
cp.xive, ceb
(ikoitAr- crizAker i/vN
'1"/"NtS'T it-Af6Q-oi,ofr
1::) ? -
i is if- gs".
tAefts--ettila
?2.252t. 3,255
1,834 2.333
914 965
546 552
656 547
9 498
j?1?25_
_
1954 1955.
46.5 50
23 20
14 12
12
6
16.5
100
Igo
used by local traffickers to indicate opium received
through Thailand and probably consists of illicit supplies originating
in the adjoining areas of the Wa States and Kantung State in Burma,
t
Laosand North Thailand as well as "Yunnan.
4
? ? ?
mis
*Mr..
The MaIerm-aud-Singar*re market7 is estimated by the Singapore
/
Central Narcotics Intelligence Bureau to consume about 100 tons of illicit
opium annually. The total number of opium addidt6 is estimated./
an/d1xIgkaper,e to be 115,000. There is no domestic production of raw opium
23
Approved For ReleassfeRg t I If :.Rifttierierit9TAitittiA001500260010-6
lt,A INTERNAL USE GAY NO DIS.c.tvi Abi,UAD
SECRET NOFORttONTINUED CONTROL
Approved For Re!eau 2000/08/29 : CIA-RDP79T01046A001500260010-6
ciA INTERN/IL liS1 ?N1-3 NO DISSEM ABROAD
S
in/spingapore or Malaya. Assuming that the Singapore origin 3eilmwo9-liaU,-
/1
are closely correlated with estimate$ total illicit consumption and that
" 0e)w-a-t1
the yodel* datalsmay be applied "to.4.11....3aclar.a.ti Malaya the fell-wing
d 1
r:? . e.,-m)
tablia-alaar4m,Avrived1
t
t',41
ble 4
V.B.C.Skt.5,;k_ 4ngabore and Mala
Country of Orlin
Ai
1Metric Tons
1954
lai
Iran
46.5
50
YUnnan4-/
23
20
India
3.14,
12
Burma
16.5
12
'Unknown
6
Dejnates opium ship ed throug101hailand and probably originating
e,
Thailand, Lao and Y
10. rorAp,
.1, OTOMIliPp?m,
The tasuI44ng estimatesAare consistent with the known export potential of
the above countries, The allow tables indicate that despite the proximity
of sources of supply of raw opium in the Burma-Thailand-Yunnan--Laos region,
the major part of the illicit supply of opium in 1955 came from Iran.
Singapore officials believe that the preference for Iranian opium rather
Le. ''' i f
'':,f.t-
than for other types is44o two factors: (1) -54e. Iranian opium is easily
---1
imported and available in good supply/ and (2) Iranian opium has a very
high morphine contentiO to 11 percentjnompitime as-compared with tift
6 to 9 percent 4Neoloiti.Re Yunnan typ4
c-T-7
24
Approved For Relea ERM491fitnIM7p6M9A001500260010-6
PI A INTFMki_ U3: ONLY 110 01,),?Livi hortuiii)
25X1X
SECRET NOFORN gums
n pnr.1--nni
Approved For Release.2000/08/29 : CIA-Rulain0104SVCIT500260010-6
CA INTFRMAI. USE ONLY
NO DISSEM ABRuA0
Iranian opium moves into the Malayan atm:gam:market principally by sea.
ports4are active outlet centers for Iranian
The following\Persian Gulf
?
opium: Bahrein, plibai and Aden.
4 )
outlet-Torte are MenaAl-Ahmadi
Additional Persian Gulf illicit opium
4
KutAm.4f
(neariamit.)-, Fao((mouth of the Euphrates),
a, K uw 4,4
Ras Tanurah (near Bahrein), Abadan, Elwa-it, Basra, Khorram*hahr,
4
Dammaa (near Bahrein).
4 4
and
There are several reports which furnish details of the movement of
illicit opium from Iran to the(Per-SI:n
outlet ports/4 One report states
a..
that a small syndicate of Bahraini Arabs tradlin opium on a very large
A 44
Aden, East Africa and Singapore. The is pro
scale from Dabai to
/1
cured from Iran and shipped to Aden concealed in cargo where it is transferred
to ocean/going vessels. Another report states that fairly large quantities
of opium are being smuggled into Basra, Iraq, from Iran via Muzairia and
epiej
,
1
The source of this report states that Iraqi police share in the
iltmo
profits. It is also reported that the town of Qasbat, Irar,Ilis the center
keivivt
for smuggling opium into "Kuwait. Small ships of Iranian or ICmiti owner-
ship are used to carry the opium from Qaebat to Kualft-
Opium smugglers have also used commercial aircraft to move opium from
Iran to the Malayan area. For example, the
25X1X
f,in late 1955 broke up a narcotics-.
and gold?.smuggling syndicate which was exploiting the facilities offered by
A
the air-charter cargo aircraft on a regular run between England, 3hrein,
25
Approved For ReleiMiNgf3ActNifgEtf Ugfpth5149A001500260010-6
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Approved For Release020?Vbig0WREWMP
0 01500260010-6
&;;;01tOL
NO DISSEM ABROAD
CIA INTERNAL U ONLY
Pakistan, India and the Far East, including Singapore.
Tables 3 and 4 show that, next to Iranian opium, the most common
imported into the Malayan area is 4unnan?' opium.) The cla ification of
this opi
as 4qUnnang'opium do s not mean that it
from Yunna& province in Communist
Narcotics Bure u this classific
grown or exported
ccording to he Sinppore
s applied to opium'Ampor?d via
Thailand and proba ly ori ating in Thai ind, Burma, Taos
Singapore custom off)41 ls, however, emphatic y state that
evidence that o um being i citly imported into ngapore comes from
?
- no
Communist 46untries.
1-11"0-7-
1)Considerable information exists concerning the routes used to move
71
44e-A4ennar;# type-of opium from Thailand to the Malayan area. The
principal route is by sea from Bangkok. Singapore Narcotics Bulletin No. 2
for the second quarter of 1955 reports that nearly every ship arriving
from Bangkok carries illicit narcotics drugs, usually opium.
It is probable that considerable quantities of opium move across the
#(5k,
Thai-Malayan border. /Opium is shipped by rail from NorthermThailand to
HaZyai )which apparently is the smuggling center of South Thailand. From
1 Haadyai it moves out to the ports of Songkhla, Pattani,4Norathiwat and
across the border to Malaya. The facilities of commercial airlines have
also been used to smuggle opium from Bangkok to Singapore. The transport
of opium by airplane, however, appears to be a small?scale and intermittently
used means of smuggling.
;p earlier years ttlis opi,letm was classified "Thailand' opplmt
fiCation is;-of/course)as misle'a4ing as the t6rm )11funna,opLum.
\
'14 e'Reii4aittfiregbiAl4r
-prbVed,
- f MR1..500260010-6
NO DISAM
INTFPNIAI nrdi v
SEunti NOWA CONTINUED C-NTROL
Approved For Releaf,. 2000/08/29: CIA-RDP79T0104111?4001500260010-6
Cm INTERNAL USE ONLY NO DISSEM ABROAD
Yvv
Opium from Burma is transported to Malaya principally from the port of
Rangoon.
A 1441.`-`-?a" AV 61 "I a 6tr'd S )
e S:
The importance of-pert imports ter-the-Ma-layan-ssansger-saa-sesily_be_.
,51 ,g1 411.1, Z: 4441 )4.1, - rro.at, s,-"Y 114_ 1- ;
C,L'Ai c
- seen bg-an examination of Table 5 and trade returns. In 1955 opium was the
ai
,tpl
sixth largest import into lierletya-aset Singapore
/?
Table 5*-4:400
P3t4mak.3?d Joetzieli Vele of' Viale-yen-Area.4 m
04iti
prt'grOur e
Country of
Origin or Source
Iran
ifunnanOrt-/
India
Burma
Unknown
ITS
Estimated tnports
(fetriciOns)
Value per
Mot ic'ton
(UIS dellarsi-
50
396,995
20
272,003
12
459,491
12
308,761
6
356,800
TOia C.I.F!Icalue of opium imports
meorrir4.70oratzwrstr*"7
S
.b.y Countrz of Origin
,
Total C.I.F. Value
(UiSi dol1ar8)-k-
19,849,750
5,440,060
5,513,892
3,705,132
2 140 600
$36,649,634
EV
0.- ,-17
a e _ ,' S CA r 06- tit j a tif
.......1
The abase values have ben expressed on a c.i.f. basis: however, the
,
cost of importing opium into Malaya is very high. Bribes alone are
reported to account for almost half of the Ted costs. In 1955 opium
_./
could be purchased in Bangkok at $105,831 a metric ton, or approximately
39 percent of the price in Malaya. Assuming that this percentage is
.1t)
representative, the wholesale f.o.b, value of opium at-ths-outiet paints
eau,a11,',
an be es imate-a as-fellaws: it, ?
?
? r
27
Approved For Rift2AtfibbIRMR)1049A001500260010-6
CIA INTERNAL USE ONLY NO DISsurti korwAD
SECRETNOFORN CONTINUED CONTROL
Approved For Release02000/08/29 : CIA-RPR79A10494001500260010-6
NO DISSLEVI ABROAD
CIA INTERNAL nt upiLi
Table 6
pfrx
EStiMatlei:i60; alue of Opium licadists to thii-
Origin1g6i .
, rir
Country of
grip:in or kource
Iran
iYunnailikcj
India
Burma
Unknown
T#AL#
layant *riga bv Country of
_Approximate
FiCriBi Value of Opium
47,7k1,402
2,121,623
2,150,418
1,445,001
firt-LWR
414,293.W
um also moves to Singapore for transshipment to other world
markets. Seizure reports indica that opium from Singapore moved to
Indonesia, to the That?ted Kingde7r,and to Mauritius.
The amount of opium
transshipped annually from Singapore and Malaya is not known but is probably
small in comparison with the estimated 100-ton consumption in the Malayan
area.
28
Approved For Relem9,2000/0,412L9Omptufac1049A001500260010-6
SEUlit DiUrgul NO DON ABROAD
0111 INTrmim II nmiv
SECRET NOFORN CONTINUED CONTROL
Approved For Release02000/08/29 :.,CIA-RDP79,T01Ch4MNO
IAA INit,KNAL !1St UNLY
Z. Ion a Kopa and Macao,
I rAlk
10-6
464
Seizure reports inrboateAThailand-te-be the principal source of opium
and opium derivatives imported into Hong Kong/ and India 4,o-13e-s secondary
LIJ
sourceS, Macao's sources are reported to be similar to those of Hong Kong.
In both cities there are refinery facilities. In 1955, Macao had at
iroe7 --6c/
least four refineries.( in
1955 there existed in Hong Kong elaborate clandestine manufacturing
-of
aotivitie..1 Unlike the rest of Southeast Asia, the Hong Kong and Macao
markets are not essentially opium-smoking markets. Smoking heroin/ and
-A
heroin nred-ball pills" appear to be preferred by the addicts.
A
,Annual opium consumption of Macao and Hong Kolvstimated on the basis
or 10,000 addicts, apparently would not exceed the equivalent of 10 tons of
raw opium. Probably larger than this import for domestic consumption is
25X1 C
the import for transshipment. Seizure reports indicate that the -Uni-ted
" .
_54atee and Japan imported heroin from Hong Kong. IMI===1 25X1C
25X1C
opium from Hong Kong also reaches other markets.
Seizure reports probably-provide a very rough indication of the amount
of opium and opium derivatives imported into Hong Kong. Hong Kong seizures
in 1955 amounted to about 60 percent of Malayan and Singapore seizures:
It would be expected, however, that Hong Kong authorities would be con-
siderably more effective in preventing opium smuggling, since they do not
have to guard a long, thinly settled coastline and domestic conditions are
29
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more settled. Annual Hong Kong imports, accordingly, might be estimated to
- fo
amount to the equivalent of,201,30 tons of opium.
1 "
Macao is probably a considerably less important market than Hong Kong,
and much of its opium export goes through Hong Kong and is included in the
estimate of Hong Kong imports. Perhaps the equivalent of an-additional
14
WO tons of opium ) imported by-Macao for consumption and export to
markets other than Hong Kong.
The great majority of the Hong Kong seizures report/Jhailand es the
origin of the opium and opium derivatives. Thisike,,, obviouslynot the
actual origin of the opium but merely the outlet country. The Hong Kong
Ornxrq?,
imports probably originate mainly in Burma, with smaller amounts -from
Thailand aad Leos,and lUnnan.
A?) 11.4424,1t:
/ftyriotal imports into Macao and Hong Kong arei\estimated-?n-the-arder
,1
460"',4 to Le- jus.--v-ta
,aethe equivalent of .2401,40 tons of opium and exports at 15/60 tons.
/?
30
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SECRETNOFORN 7 conNti
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6
Iv.A-garb Princioal Illf#t Markets 4m01-4NmmilmWW6elr ip the Near East and South Asia.
.1)6''';01500260010-6
NO Abh6Au
Apart from the Far East there is only one other area where an extremely
large market for opium exists. The problem of opium addiction is very
serious in the Near East and in South Asia. Perhaps the worst problem exists
in Iran, where according to a press statement made by the Minister of Health
in 1955ithere were 1,5007000 opium addicts. He also stated thAtotal4opium
_produettanAn the past ten year ;had varied between 700 and 1,200 tons
\,, 1
annually, of which only'an annual average 4 90 tons were legally exported.
Atqz'
A
Other producing countries in this region from which opium is exported
clandestinely are Turkey, Afghanistan, India) and Pakistan.
Cpium from the Far East is quite clearly not an important factor in
this area. Production facilities for the manufacture of morphine and heroin
in 1955 existed/practically 411 the iberre countries# ,In addition, refineries
1
probably were operating in transit zonesVin this connection, the exports
fr'11.71'
Lebanon to the United States
,1
25XlC
are of
some significance.
ThergerrEmbaggrAgrkettlAtarel-attaehe,/ estimated that in 1954) production
30.1
of opium in Iran was approximately 850 tons., Of the 850 tons bp estimated,'
150 tons might have been clandestinely exported from the country. Seizure
indicate that Iranian opium in substantial quantity
77
was exported to Singapore and Malaya. Iranian opium also was clandestinely
exported to India, Pakistan, Aden, the United Kingdom)and the Netherlands.
31
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25X1C
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?-t);
Reports indicate that)despite the complete ban on*Umi production in Iran
44Pm
in 1956, Wit slme clandestine production still continiles.
The Minister of Publi . Health has estimated a daily consumption of
A
-24
opium in Iran of about 1 ton. 'This estimate would appear to be extremely
hvA0A-0--
low in view of his own estimate of 145007000 addicts, since it mould represent
a daily consumption per addict less than half that of the Southeast Asian
addicts. An annual opium consumption before 1956 of 500-600 tons would
appear likely in view of the number of addicts and vhat is known about
production and exports.
PamoduOtten-et,opiwaln 1951-53irs 334 metric tons. This production
was under relatively firm control of the Central Government. ?
that.)in 1951-],52
pproximately 15 tons
was- anaggled from Madras to Singapore and Malaya. Seizure date indicate
a-4 hi 0L.
that 1955 exports to Malaya-and Singapore were about 12 tons or slightly
A
less than the 1951- 52 estimate of Indian illicit exports to this area.4
Illicit opium from India also was exported to Hong Kong, the Netherland!)
and the United Kimgdem.
31. Turkey,
611 ht
The Central Statisiical Office estimated that 44,000 hectares were
planted to opium poppy in 195 ? oduction in 1955 is estimated at 300 tons
,
;
comparedilt 1954 productionAof 130 tons.
'1
dit,b?{),_ 4 ,Ay
25X1C
It is estimated that &beat 10 to 15
-4
32
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tons escaped the governmental official buying program. A
of the 101)15 tons presumably could be illicitly exported.
indicate that Turkish opium was exported to Egypt and the
11, Pak#ta.n?
t4 1.
Opium is grown in the Jadkn area of the Nort
substantial portion
Seizure data
United States.
at Frontier Province '
under governmental supervision. In 1952 the government collected approxi-
mately 15 tons principally from this area. Current production and col-
lection probably has increased since 1952 as the government planned to
increase domestic production to 50 percent of its domestic legal require-
ments (legal requirements in 1952 were estimated at 45 wwrtraile. tons).
There is reported illicit cultivation of opium and Indian hemp in the North:;
, ihAi
A6.1.
7/
est Frontier Province and Tribal areas andA Baluchistan
? entra5and Swat.
Although Pakistan is believed to be a net importer of illicit opium, there
are indications thatztillicit opium is exported from West Pakistan to other
areas.
Afghanistan
Estimates of average annual production of opium in Afghanistan can not
4
be made with any great degree of preciseniees. A U/Si Reparteeentrof-Agriettlture
botanist visitedA Jurim and Eishim districts of Badakshan jwovjnoe in late
Y4
1954 and estimated total Afghan production at 12 tos. Ie a' reportst.
,
that production in 1955 probably wtll exceed that of 1954. AtteevI74955
A
reportStates that the Afghan government had requested UN permission to sell
on the legal world market about 40 tons annually. This request suggests
_
that production in 1955 probably was in excess of 12 tons t however,it is
Approved For Releane 08/29.; ClIN3RDP79T01049A09prc^0
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114,14,e44,-,71,,; oux.-
believed" that the 40 tons requesemme for pur
14
-4te 0.,,,teurii e1 .1
probably?was.doub114current production. It
/1
ses of bargaining and
believed that part
of Afghan production is exported clandestinely.
34
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Approved For ReleZ8E161/1891M : arEPT91746A0' 0
CM MU 1
NN_ USE ONLY 0 D0120
161
V.Quoit m4ketym Other Areas of the World
?
Is
50010-6
The markets in the other areas of the world,Fe small relative =to
the markets of the Far and Near East and ito South AsiaM,merkets7- The
A )
Un4ted Nations Commission on Narcotic Drugs stated in its annual 1955 report
that opium traffic in
market apparently is
South America, opium
Europe and Africa is unimportant. The North American
supplied with ?gin from Mexico and Lebanon.
-41:PC
traffic is unimportant ittapared, 10 the -movement et
A
35
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(TgIET,?,0i-uRisk coN1 MUD G01-1 [ROL,
'1
" 4?, IN1 ;S3L_ ONLY NO D1SSEM LIMAD
SECRETNOFORN CONTINUED CONTA.
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CIA 'INTERNT1 uoL uHLT
VI. Conclusions.
The international illicit opium traffic is conducted in an atmosphere
of secrecy and intrigue. This secrecy, tyr-evrfmmrbiimmr-odAk the fact that
A
the trade is carried on by many entrepreneur militates against the making
of precise estimates. Despite these disadvantages, it # possible to
obtain
-
obtain sufficient reliable information to characterize GewpmeEet-41,14.naLs-
' /
o?,
possible involvement/in the opium situation in Southeast Asia and in other
world markets.as follows:
1,2 There is a small export of raw opium produced by tribes
31114.,
'Abbe in Yunnan Province, Communist China, to Burma. The earnings to the
producers from this export would not exceed $500,000 annually.
Communist China probably permits this export for political
purposesA that is, it does not want to precipitate an open break with the
unruly tribal producers by interfering with an important traditional economic
and social pursuit.
The major opium producers in Southeast Asia are Burma and Laos.
The production of these two countries coupled -with Thai production supplies
the large domestic markets and provides a sizfable export potential. The
Burmese, Thaiiland Laotian governments permit this production for political
and economic considerations similar to those attributed to Communist China.
) -EA-pert dpiumA ll from Southeast Asia moves principally through Bangkok,
Thailand, and,to a lesser extent, through Rangoom urma, supplying significant
Approved For ReleagE
36
pottrauditukibriii*M1
IN TERM iNL1
ir
A
001500260010-6
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Approved For Releasa02000/086V liRtiMitptlf!?19(1F01104941001500260010-6
NO DISSEM ABROAD
quantities of opium to Malaya, Hong Kong, Macao,iand Indonesia. Singapore,
Hong Kong and Macao are important intermediate transit points for the
supply of opium to other world markets. Refinery facilities to service
the opium-derivati4marketsexist in Thailand, Macao, Hong Kong, and in
A
the major consuming areas. There is no evidence indicating that Communist
China exports opium derivatives. Spasmodic efforts of the affected govern-
ments to suppress this trade are nullified by the tolerant attitude of the
Southeast Asian people toward/opium addiction; by the venality of poorly
paid government officials: and by the realization that.)if opium does not
move through their country, it will move through an adjoining country.
0) The Southeast Asian producers receive a very small return for
their opium crop. Opium produced for the illicit trade is apparently in
A44 .7te%.4.,A-Z1
surplus supply. This surplus maybe okia-to the virtual disappearance of
-/
the former large Chinese market since the generally successful opium-
1J
addiction-suppression campaignAof the Chinese Communist government-ert,--,
Chi", 44-131
(I 4 ) The lucrative profits in A4 opium traffic are sabstoddlatilF
earned by many middlemen and by government officials. Available evidence
suggests that these dealers and government officials on-the-whole are engaged
in this trade for personal gain. Members of local Communist parties in
A-01'
the Far East and Southeast Asia maybe involved in the trade in order to
finance Communist activities but there is no available evidence indicating
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adaskGUM .150026001
91iclitici4WL
0-6
41\1164.`,,,,L 0,;Li liu AbRUAD
SECRET NOFORK CONTINUED CONTROL
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r'' 7,3R0,4E
A-A:L/z
that such involvement is substantial ori\ ll systematicay directed by the
Chinese Communists. The trade appears to be dominated by non-Communists.
North Vietnam- and North Korean agents may be involved in the
opium traffic in South Vietnam and South Koreap howaxar. &cause Communist
China is not patently and directly involved in this trade, this aspect has
YINA-1 tr? .
not been developed in this popes.
ZIA*
In Near East and South Asian countries, the production and illicit
A
consumption of opium
Southeast Asia. The
and opium derivatives(iiprobably)even greater than in
countries in in these regions are also important suppliers
4 /
,
to the world illicit markets t Iran, alone, supplied.samosminiosoled 150 tons
to international markets in 1955. Seizure reports indicate that Turkish
d
opium is an important factor in the supply of Middle Eas ou e
ntries.
Morphine and heroin-processing facilities and trade are under the control
of non-Communists in this general region. There oePtalizOty does not appear
to be any evidence of1ConarT---1---;uni-9..hinese)influence in this trade.
kA/A..tk neen ,,J110...1
40 Compared 4AT the 4nre-great-opitan-consuming-regions-ent14zed
the remaining illicit markets are relatively unimportant. Opium traffic in
Europe and Africa is not important. Seizure reports indicate that the
*
North American market iTupplied with opium which either originated in
,
Mexico or Lebanon or was transshipped from these countries. One United Sete
seizure report indicates that Communist China was the suspected origin of
a shipment of contraband heroin which was transshipped from Hong Kong.
Hong Kong authorities and Uni*ed States -Treasury representatives in Hong Kong
38
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SECRENFORN eu"""6.
INTFRNAL USE ONLY iuLit.
SECRETNoroniconim coh?,1
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CIA INTERNAL USE ONLY
NO ()ISSN ABROAD
state, however, that they have no evidence that opium or derivatives from
Communist China enter Hong Kong. With this possible exception, seizure
reports indicate that the world illicit markets are supplied with contra-
25X1C
band opium and derivatives produced in Free World countries/and
the worldA:trade is in the hands of non-Communists.
25X1C
.)b
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Ir-UriE1
CA INtRiAL UAY NO DISSEivi
SPlig NOFORN CONTINUED C019""? DISSEM ABROAD
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APPENDIX A
Methodology
Tr
The general methodology used in this re?port vars as follows,
s,
based on intelligence and seizure reports, was made
moves to the principal market) XI/rough calculation was made of the amounts
#444
/041?
of the origin of opium which
(1)
4 /survey)
of opium required by the illicit markets
groups involved in the marketing of opium.
//similar survey was made of the
\
As a result ofps'4:41-) *1
/A
it was determined that adequate supplies of illicit opium produced in the
Free World moved to
contraband traders.
A(dir-
was,thereforIruled out.
the illicit markets under the direction of Free World
Gommunist-Chinesiubstantial participaeion in this trade
The illicit opium trade, is
haracteristically)carried out in great secrecy.
4/
This secrecy made it impossible to reconcile all the elements of the various
estimates. For example, one of the key estimates indicates that on the average
approximately 150 tons of opium
are exported rom Laos, Thailand,and Burma
A
tabulation of imports by various markets with an addition for total seizures
leaves approximately 35 tons of this opium unaccounted for. This discrepancy,
however, is not serious)since it does not affect the main conclusions of the
-report: Errors could have resulted from one or more of the following factors:
i.?(d1 The estimated 150 tons of opium exports (opium and derivatives -
derivatives were converted to their raw opium ervi valmit)were broken down to a
120-ton transit movement through Thailand and a 30-ton export through Rangoon.
1\ ,1
ISECRET NOFORN CONTINUED CONTROL IVO DISSEM ABROAD
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The former estimate is based on ahyaagement that seizures probably represent
25 pertent of total transit movementt,this could be in error. The
latter estimate appears to be relatively firm.
;i, (0 The assumption was made that the origin of opium imported into Malaya
is identical with the origin of opium imported into Singapore. This assumption
may be erroneous,iand Malaya may import a greater percentage of her annual imports
from Thailand than does Singapore.
The opium traffic from Burma to Thailand is estimated to abount to approxi-
mately 90 tons. This estimate is based on the following considerations;
40 Total trtnsit traffic through Thailand is estimated to be 120 tons.
4.1s) Approximately 10 tons were available for export from. Thai production.
.(01 Approximately20425 tons were available for export through Thailand
from Laos production.
1.0 The remainder of the transit opium, approximately 90 tons, entered
Thailand through Burma and was produced principally in Burma. Opium
from Yunnan supnlemented the Burmese production.
There are a considerable number of unreliable reports alleging that
Communist China is substantially involved in the illicit export of opium and
derivatives to the Free World. Each of these reports: had to be evaluated. This
evaluation required extensive research 4the entire world opium situation in
order to determine the actual sources of illicit narcotics. T00,
Ligabl.13
'''' N \
repor4, re ot onlitmisleading
-
4 I k 1.124191 et4033 Of tie project but
, =
,I
made it necessary to extend-JO scope.
SECRET
NOFORN - CONTINUED CONTROL
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rNIApproved For RE eaca SI 8/219?111X-R@POrlie 812 StligittibieROAD
CIA IIVTERNAL USE ONLY
Gaps in Intelligence
The most serious gap in intelligence is the lack of an independent
estimate for opium production in Burma. It is possible that data could be
obtained from Burmese local officials which would allow an estimate to be
le"p.47,
made based on acreage under cultivation or nunber of people growing poppr--
rather than by the method used in the report.
There is also a deficiency of reliable information from Communist China
(
on arium production, Interrogation of refugees and repatriates on this subject
A
presumably could fill this gap. More reports on the extent of opium production
by the Chinese minority ethnic groups probably could be obtained from Chinese
who have fled from Ynnan into Burma and Thailand.
tsEcRET 30E0B11 CONTINUED CONTROL 140 DIS5M AIIROAC
CIA INTERNAL USE ONLY
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S ,
o
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001500260010-6
-
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LPPENDIX C
Souf;Ce 01;
at4,3
1. State Outgoing to Rangoon). A466, 21 Oct 55, info 19531 U. Doc*
re.
2. State, Singapore. Dsp/ 406, 2 Mar 56, info :105.6,0FF USE. Doc,
3. Singapore Central Narcotic g Intelligence Bureau. Bulletin No. 4 of 1955 For
the Fourth Quarter, Feb 56, p.6 and p.10, info 19554 OFF USE. RR 2141efteterry
estlEa_teza -made-15yr/A?Sir-bet8443-4)g- -date,j11-QD.r!.014
25X1 A
Berrigan, Darrell. "They Smuggle Dope by the Ton," The Saturday
Evening Post, 5 May 56, p.42, info 19564 U. RR 5
25X1 A
zine article cited are ood examples of the n rous rep rts. Th
n1aga4ne aticle, with he excepti n of the tatements in ?lying mmunis
- to,pe
5. CIA. C 1142, Apr 56, Anti-Narcotics Campaign Opens with Much Fanfare. C.
rly factuaNIccount of
he niovenknt of opium hrough Thail d.)
tc.
(tr of CMang-chiang Jih-pao, Whan, Ii. Jun 0 )152, U7) Dim
25X1 A
tr)
t.
State, Tehran, Dsp/ 748, 5 Mar 56, info 1956, U. Doc.
Yale University. Ethnic Groups of Northern Southeast Asia, Itte?thriVeret-try,
J1
0
Southeast Asia Studies, New Haven, 19501 p.7-54 and 139-156, RR 3.
State (Outgoing to Rangoon). A466, 21 Oct 55, info 19534 U.,1Doc,
SECRET
NOFORN CONTINUED CONTROL
NO DISSLM AbKUHItIA WERN1
. Y
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25X1A
V
Approved For ReleaappT /29 169M1001500260010-6
NO DISSEM ABROAD CIA INTERNAL USE ONLY
/0 IA.' Yale University, EL...7.-5.14,....and?..1?1,9...1.54.--ap-raitr.
'25X1A
3/
I2;4.
I
Singapore Central Narcotics Intelligence Bureau/
Ibid. p.9. tRR 2,
-3--
Arlf-
P.9, info-4440n USE. RR 2
. State, Singapore. Dspi 273, 2 Dec514, info 1954r U. ,Doc
i? ?to//31,!--
10'. Commission on Narcotic Drugs Uri44eiA44,4ensIg;onomic and
A
/6 Aor:
41.6.
Social Council '?
'
Report to the Economic and Social Council on the Eleventh Session of the
Commission) 8 June 56, E/ON. 7/31?.1, AnOg'
p.1-18, info 1955, U. RR 2,
1
State, Hong Kong. Dspf 1412, 7 May 55 info May 19566 C.,4 RR 2.
State, Saigon. Dspi 58, 29 Aug 55) info Aug 0,556 OFF uglily* RR 3,
2 (
Pi? 045. State (Outgoing to Blingloom.). A$66, 21 Oct 551 info 1955, U. Doc,
t4-
State, ittAgoon.1
UR-i-ted Nat:A-ems/
D9/ 137, 22 Sep 55,
info Sep 140556 U. IiRR 3
p.43. 4.nfa-1-95 U. qp-reit. RR 2,
*xtAv
.0, -25N State, Chiengmmi. Dsp
61Vk PO a-)
43, 30 June 51) info Jun $54, S.
Dspt 431 30 JUE410.,4r.mam4,
firt
F - CL 12,4? T9111
Di,ssuo 13ROAD CIA INTERN/:IL UE ONLY
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25X1A
25X1A
25X1A
25X1A
25X1A
25X1A
S C7ET
Approved For Relehggq143/00 J0,114 ' T?01.413A001500260010-6
NO DISSEM ABROAD CIA INTERNAL USE 0;4LY
State, Bangkok. Dsp, 109,A 26 Aug 55) info Aug ;455. OFF USE. -4925M.
te-Stat'e5-13arrgimitT-DBP----109-7- 26 Aug 55-----an-USAMMEM---RR-5
4
Ida).
State, Chiengriva.k, Dsp/ 31, 9 Apr 56 info Apr #56. RR 2.
)
Cri7 PR 3,
State, Bangkok, Dsp/ 109, 26 Aug 55.) info Aug /55. 0biUSVADIMB.
Stat_to_Zetegitokr-Mr.-109; -2.6--Aug-557 -OFF -USESEES1110.-- RR 3
State, Bangkok,. Dsp/ 570, 23 Apr 56) info Mar Si56. OFF USE. RR 3
Cy, )
AS?erett-erttansttrit-p-Etspl- 109,26 Aug 55,
A
info Aug 31555. OFF USEASSIMIND.
Staltey-13angkek, ,infe,---Aug 1955: --=ross-eiett--)-~
(..g.gic 1 to
State, Bangkok, Dspi 10926 Aug 55)
4
-ter-Ber-r--1-G9r-26-Aug_55_,_
25X1A
?
txj 7
info Aug 3,55. OFF =JR. +entail-
4
NOFORN - CCTIEfl MIRO!.
NO DISSEM ABROAD CIA INTEWIA,. USE OM Y
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(7/6
Approved For Relea,'
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DISkil ABROAD CIA INTERNAL USE ONLY
State, Bangkoka, Dsp,/ 559, 9 Jun$ 55) info Jun" 1955.
I
raik(), F
S. -iiisser.,A4--
,
State, Vientiane. Dspi 23, 23 Aug 55) info Aug 5. C't,(pa.1/1=ta 3
41-7 Y6' Ibid. ?WS
14,5( State, Saigons Dspl 58, 29 Aug 551 info Aug *55. OFF RR 3,
'17 yl. State, Vientiane, Dspit 23, 23 Aug 55. info Aug *55. c. RR 3,.
,s /. Ibid. 1117(1/13
/* State, Saigon, Dspi 58, 29 Aug 55) info Aug 1955. 4OFF US
3.1;- State, Vientiane, DSP/ 23, 23 Aug 55) info Aug 055.
Washington Evening Star, 28 Mar 56.
State, Saigon, Dspi 58, 29 Aug 55;
Ibid. -IkEtP.-3-
?W'
11%4
C . RR 3..
4
*>441011 U. RR 2,
)
,
info Aug 1955. OFF USESIMMINK RR 3
RR 3
- ,
X. State, Vientiane, Dspoi 23, 23 Aug 55) info Aug 55. ?...C).: ,RR 3.
Singapore Central Narcotics Intelligence Bureauil,,p.9. _infer-495".
!,,
OFF USE. -01,Mt 0 RR 2
. r ,
60. Ibid.) p.6.4 RR 2
25X1A
State, Tehran, Dspi 36, 21 Jul" 5/5 info 21 Jul, 3654. S. . RR 3, 25X1A
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State, Bangkok; Dspf 773, 30 Jun l 5,, p.10. info Jun0- 10512;) 4111111111111L
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RR 3 .
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State, Hong Kong; Dspi 1412, 7 May 56) info May 56. C. RR 3,
/alsoTreasury, Hong Kong; File Ilbi 42 Macau, 16 Nov 55%/ info Nov )05. C.
__Traasux4T-Hcm-Kong, File $o. 6-135, 7 Feb 551
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Ibid. AnVG1 p.1-18.
Ibid. AneG, p.1-18.
RR 2,
RR 2.
State, Tehran; Dsp, 36, 21 Jul 5/5 info Jul 3454.
, N
Uaited Nations An. Go p.1-181 op.cit. RR 2
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State, Tehran; DSP/ 45, 15 May 56) info May 5456. 0.h.b USE. IRR 3
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State, New New Delhi; Dspi 1365, 26 Feb 54) info 1951-52., RR 3,
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NUNN - CONTINUED CIPTor"
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Approved For Release 2000/08/29 : CIA-RDP79T01049A001500260010-6
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State, Bonbaye Dsp,00( 628, 18 Jan 54)
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United Nat4onal An. G, p.1-18. U.
info 1951-14952.
op-oWlets.. RR 2,
, I
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State, Ankara, Dsly 455, 22 Mar 561 info 31055. U.. RR 3
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United Natiedi,si An. G, p.1-18. U.
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State, Meshed, Ds/ 60, 12 Junf 56, info Juni 10656.
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UiedIaoTs, chap/ III, p.32. U. RR 2,
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4
/-1
S. RR 3,
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4
RR 3,
- SECRET
NOFORN - CONTINUED CONTROL
NO OWN ABROAD CIA INTERNAL USE ONLY
Approved For Release 2000/08/29 ? CIA-RDP79T01049A001500260010-6