The 2006 International Narcotics Control Strategy Report

Real Audio of Briefing

MR. BAILY: Welcome to the Foreign Press Center. This afternoon's briefing will be on the 2006 International Narcotics Control Strategy with Assistant Secretary for International Narcotics and Law Enforcement Anne Patterson. She will have a brief statement about the report and then be happy to take your questions from journalists here in Washington and our colleagues in New York. Thank you very much.

AMBASSADOR PATTERSON: Thank you very much. Good afternoon. Today we are releasing the Administration's 23rd International Narcotics Control Strategy Report, which is published annually by the State Department's Bureau of International Narcotics and Law Enforcement Affairs. Having followed these issues in my previous posts, particularly in El Salvador and Colombia, I am proud to present this report, which is considered the authoritative report on international narcotics. I would like to recognize my staff for their efforts in preparing this. And I think some of you have been able to pick up copies during the course of the day.

During the past year, the international community has continued to combat the drug trade and the activities financed by drugs: terrorism and transnational organized crime. We can point to significant successes attributable in large measure to increasingly unified international efforts in reducing drug trafficking and criminal activity.

In the U.S., research made public by the White House Office of National Drug Control Policy indicates that we lose over 20,000 Americans a year to drug-induced deaths. In 1998, at a special session of the UN, other countries recognized they were facing the same problem when they adopted a resolution to "significantly reduce both the supply and demand for drugs by 2008." No country now says that drugs are somebody else's problem.

The progress we can point to in this year's INCSR reflects the work of many countries to consolidate the gains against drugs and crime with many brave people throughout the world having taken great personal risk. Let me highlight some important developments. I thought I would move through this quickly because I think some of you heard previously from the State Department, but let’s just go through it quickly.

In the Western Hemisphere, in Colombia, 170,000 hectares of illegal coca have been destroyed. This takes about 150 potential tons of cocaine off the market at a street value of about 15 billion. A hundred and thirty-four people were extradited from Colombia to face charges in the U.S. in 2005, an all-time high. Mexico extradited a record 41 criminals and expelled other fugitives last year. Andean countries and Mexico seized 330 metric tons of cocaine with a street value of 33 billion. U.S. and Canadian law enforcement have worked closely to attack and dismantle trafficking organizations, including one engaged in ecstasy. And the OAS Drug Commission CICAD now conducts hemispheric peer reviews of national drug and crime efforts. This offers concrete recommendations to the 34 OAS member countries, including the U.S., on how to strengthen counternarcotics performance.

In Asia, the size of the opium poppy crop in Afghanistan makes its elimination a daunting task, but Afghanistan's leadership, with the support of the international community, is beginning to demonstrate greater political will to eradicate this crop which puts at great risk political and economic advances. Companion programs are helping farmers adopt alternative ways to earn a living and establishing more effective law enforcement and justice systems.

Thailand, once considered a major source of opium poppy, has practically eliminated its crop and sharply curtailed cross-border trafficking, taking itself off the list of major heroin producing and transit countries.

And while opium poppy cultivation in Laos exceeded 42,000 hectares in 1989, today the level of opium production in the country is no longer significant.

In the U.S., ONDCP shows that the use of illegal drugs by teenagers has dropped by nearly 20 percent. The longer drug abuse is delayed, the less the likelihood that an individual will use drugs in the first place. From 2003 to 2004, the purity of heroin in the U.S. decreased by 22 percent while the price rose by 30 percent. Since February of 2005, a similar albeit preliminary pattern has been seen with cocaine.

Let me discuss a couple other countries that have gotten special attention in the INCSR more in detail, particularly Colombia and Afghanistan. In 2002, Colombia and the U.S. developed a U.S. assistance package known as Plan Colombia to target illicit narcotics. During that first year while we were building up the plan, coca and opium poppy cultivation reached an all-time high. Under the leadership of Presidents Pastrana and Uribe, progress in Colombia has been dramatic. Major drug traffickers extradited to the U.S. by Colombia have included FARC leaders and Cali Cartel leader Miguel Rodriguez Orejuela. Public safety has improved dramatically. In 2005, kidnappings were down 51 percent and homicides by 13 percent. Perhaps most telling about how far Colombia has come is its recent listing by the World Bank as one of the world's ten most attractive investment climates.

The U.S. and Colombia understand that major challenges remain. Narcotraffickers embarked on an aggressive replanting campaign last year that nearly equaled the coca crop destroyed by eradication. The U.S. and Colombia are looking at ways to counter this rapid replanting. This would include stepping up the aerial spray program, which sprayed a record amount of coca in 2005, and helping Colombia build its capacity to take over the program in the future.

Peru and Bolivia remain the second and third largest producers of coca. In Peru, recent surveys show that coca cultivation has increased, grown by farmers who are attracted by high prices for coca leaf. At the same time, Peru remains committed to eradicating coca wherever it is found.

Our relationship with the new Morales government in Bolivia will depend on the policies it adopts on a wide range of issues, including counternarcotics, which is a key component of our relationship. Bolivia has many natural resources -- hydrocarbons, ores and agricultural products -- that could with the right policies support many social sector initiatives and broad-based economic growth to better the lives of all Bolivians. More coca cultivation will only serve the interest of drug traffickers. We seek to continue close cooperation with the new government of Bolivia in our fight against illegal narcotics.

In Afghanistan, the UN estimates that the drug trade represents a significant percentage of the country's total GDP. Fostering a stable democracy in Afghanistan requires curbing the drug economy and the criminality and corruption it supports. This will be a long, hard effort. The good news in 2005 of a 48 percent drop in opium cultivation from the 2004 level is tempered by reporting that poppy planting is again on the rise. To counter this trend we are working with our international partners to implement a five pillar program which includes a public information campaign, alternative development, crop eradication, effective interdiction, and police and justice sector reform.

President Karzai has expressed his commitment to stemming illicit drug production and has welcomed international help in building the technical capacity for a successful counternarcotics program. Just as importantly, the U.S. continues to engage the Government of Afghanistan on the need to crack down on corruption at all levels. Reflecting an extremely important step against the drug trade, in October of 2005 Afghanistan for the first time ever extradited a major trafficker to the U.S.

The second volume of the INCSR, devoted to money laundering and terrorist financing, describes the status of these activities in more than 130 countries and these countries' efforts to improve anti-money laundering and counterterrorist financing regimes. Of special interest is the table which divides 195 countries, including the United States, into categories of primary concern, concern and other. No official sanctions are taken against countries based on their designations, but many companies review the designations when considering future business relationships.

Since September 11th, we have become more aware that terrorists use underground methods to move money or transfer value. They are attracted to these "alternative remittance systems" such as the hawala system in Asia and the Middle East because they allow them to avoid financial reporting requirements. In Latin America, the black market place of exchange distorts legitimate commerce by laundering drug proceeds through trade.

Responding to this challenge, INL funded the Department of Homeland Security to establish three trade transparency units in the tri-border area of Paraguay, Argentina and Brazil. A pilot TTU program in Colombia demonstrated direct links between the laundering of narcotics proceeds via trade and the terrorist organization, the FARC. We anticipate expanding this program to other countries.

As we look to the future, we must be flexible to confront rapidly new issues. Let me just mention a few:

Anticorruption -- December 15th marked the entry into force of the UN Convention against Corruption. Fifteen years ago, there was no international consensus on corruption and some countries even argued erroneously that corruption was acceptable in some cultures. Today, we have a new comprehensive global treaty and are continuing to develop effective anticorruption programs.

Today, we are particularly concerned about synthetic drugs such as methamphetamine and ecstasy, which present medical, social and law enforcement challenges in Asia and North America, particularly in our own country. We are working at home and internationally, especially on border controls with Canada and Mexico, to ensure that laws and law enforcement can deal with illegal production and with the diversion of precursor chemicals used to make these drugs. Synthetic drugs that are produced in small toxic labs with readily available substances indicate why we must be vigilant in controlling essential precursor chemicals, especially ephedrine and pseudo-ephedrine. We are working closely with Canada, Mexico and with bulk export countries to control the movement of chemicals used to make synthetic drugs.

Youth gangs -- Many street gangs have evolved into well organized, profit-driven criminal enterprises. These activities include not only retail sales of narcotics, but also smuggling and wholesale distribution. We are working closely with other countries, especially in Central America, to confront the social and security problems posed by these gangs. The largest of these, including Mara Salvatrucha and Calle Dieceocho, are now recognized as full-blown criminal organizations.

When the first edition of the INCSR was published, Latin American narcotics-producing countries were just reporting the first signs of drug abuse in their own country. Today, we've come a long way. The international community understands that drugs and crimes are a problem which we all face and we also recognize the insidious links of drug trade to money laundering, terrorist financing and organized crime. We know criminals learn quickly from their mistakes. The challenges are daunting, but increasingly the international community has been working together and America is playing a pivotal role. We understand only that through common cause will we be able to contain and diminish the threats of drugs and organized crime which are impediments to our efforts to advance political and economic freedom.

Thank you. I'd be happy to answer any questions.

MR. BAILY: If you'd state your name and organization and wait the mike. Sonia.

QUESTION: Thank you. Sonia Schott with Radio Valera, Venezuela. What kind of impact do you expect from this new report, considering that Venezuela was decertified in the last report? No change-around*? What is your read?

And the second one, if I may, despite the Plan Colombia, do you see real results in the fight against drugs, considering the balloon effects?

AMBASSADOR PATTERSON: Thank you. Let me answer the second question first about the results of Plan Colombia. And I think in Colombia the effects have been very dramatic and they have been associated with a dramatic increase in security in Colombia; for instance, the decrease in homicides, the decrease in kidnappings. And from my time there, I can tell you that nothing is more important to foreign investors, not just because of their own safety, but because of the enormous costs associated with protection. They're reducing the kidnapping threat. FARC desertions are up. The police are deployed in 1,000 communities where they weren't deployed five years ago, even three years ago. So I think the effect on Colombia has been very, very substantial.

Has there been some movement of cultivation back into Peru and Bolivia? Yes, but it's been slight by historic standards. In other words, the production -- the cultivation in neither country has come even close to the levels it had reached ten years ago.

Now, regarding Venezuela -- let me say Plan Colombia vis-à-vis the United States, we're beginning to see evidence of decreased purity and increased price, most assuredly for heroin. Less so for cocaine, but we are beginning to see it and we hope these preliminary numbers will be sustained. But if we hadn't had Plan Colombia, coca cultivation was growing almost geometrically (inaudible) in the year 2000; it would have swamped American treatment programs with cheap narcotics. So this was a valuable project in its preventative aspects as well as in its aspects in reducing price and purity.

On Venezuela, the certification process is not immediately tied to the INCSR, but if you -- but certainly we hope that we can make a different decision on Venezuelan certification, that the Venezuelan Government will begin to cooperate fully with this, work with our Drug Enforcement Agency in country, interdict and provide information about what we suspect are drug trafficking planes transiting Venezuela. So we hope this will change, but our judgment, as you know, was that Venezuela had failed demonstrably to meet this standard.

MR. BAILY: I believe we have a question in New York. If you'd go ahead, please.

QUESTION: Yes, Ms. Patterson, it's Diego Senor from Caracacol Radio in Colombia, precisely I have a couple of questions for you. First one is you've mentioned all the advances that we had in our country with Plan Colombia, but what would happen if, you know, the Congress doesn't approve the next budget for Plan Colombia? That's the first question.

And the second one is that the free trade agreement has just been -- not signed by the negotiations have been closed with the States and Colombia. I wanted to know, like, how much do you think this would help in the drug trafficking -- you know, the war against narcotraffic in our country.

AMBASSADOR PATTERSON: Let me take your first question. I tread very gingerly on predicting what the U.S. Congress would do, but let me just put it like this: Colombia has had very significant bipartisan support for Plan Colombia for a number of years. So I would be very surprised -- let me put it this way -- if that support did not continue. And I think the fact that the results are so specific, that I think that that's likely to continue because people want to support -- American congressmen and senators want to support President Uribe.

On your second question, which just left my mind, what was it?

MR. BAILY: Free trade agreement.

AMBASSADOR PATTERSON: Free trade agreement. I haven't been involved in that at all and I heard from my colleagues that it was closed the other day at 4 a.m., but I think it's a wonderful thing because the key to fighting narcotics in Colombia was always jobs and investment. And once coca producers had other forms of employment they weren't going to grow coca, and having Colombians bring their money back and foreign investment come in and jobs being created was always the key to Colombia's long-term security problems. So I'm very gratified that this has been passed because I think it will have a considerable job creation capacity in Colombia.

Thank you.

MR. BAILY: In the front.

QUESTION: Thank you, Ambassador. I just saw you a few minutes ago at the State Department and I know you spend a lot of time on narcotics. I was wondering if you could talk more in detail about money laundering and I'm curious if you can shed some light on the DPRK, North Korea.

AMBASSADOR PATTERSON: I probably can't shed very much light on that. Let me say that common sense and some information we had would suggest that the DPRK, and I think you've seen it in the newspaper about counterfeiting and the like, is involved both in narcotics trafficking and organized crime. And I don't think we can go any further that or maybe, Steve, if you could --

STAFF: I would just add, I mean, the connection -- the concern that we've had when we've worked with the Treasury Department on this is banks in Macau. This is -- your money laundering question and how this gets at is banks in Macau have been facilitating some of the movement of crime-related funds coming out of North Korea. And the Treasury Department imposed these 311 sanctions or, you know, the U.S. did and Treasury administers the 311 sanctions on these banks in Macau, which has caught the attention and the North Koreans caught the attention of those banks there.

So we've got the evidence that came through law enforcement and other channels about this type of activity. We have the authority in the Patriot Act to do this. We worked it out through an interagency process and came to that decision and are trying to get the compliance with the Macau banks to get them shut down or whatever to clean up this laundering activity, this avenue for moving money from some of this criminal activity that emanates from North Korea.

QUESTION: Is that something where you -- it's measurable? Where you can see progress and then say next year provide on the report saying that there's been progress from Macau or the DPRK for that matter?

STAFF: We would hope so. Measuring progress in this is tough. A lot of it becomes anecdotal in terms of what criminal investigations are able to show or what intelligence is able to come up with. It's not going to be a quantifiable thing. We already know, I think, that the banks in Macau I think have been shut down already on this, so folks will be looking to see if this surfaces anywhere else. But right now in terms of its effect in Macau, it seems to have the positive effect. We'll have to see how this redounds back on North Korea.

QUESTION: Dubravka Savic, Vecerneje Novosti. Balkans traditionally have been mentioned like traditional route for drugs and my question specifically goes to Kosovo. To your knowledge, how international community present on the spot address this problem, if you can be specific about that? And also do you have knowledge about how money collected from drugs by smugglers has been used?

AMBASSADOR PATTERSON: Let me -- I can answer the narcotics portion of that, I think, and then I'll ask my colleague on the money laundering side. On the narcotics -- what we're seeing is an increase flow out of Afghanistan through the Balkans, generally into Europe, and I think that's a fairly long established route into places like Germany and the United Kingdom, so there is increased activity. And I'll ask Steve to answer about specific money laundering issues in Kosovo, if we have any information.

STAFF: I'd actually have to get back to --

AMBASSADOR PATTERSON: We'll get back to you.

STAFF: -- on the specifics of that. So, you know, I'll check in the INCSR where we have that. It's probably an area of concern that we're looking at, not primary concern. I check that though.

AMBASSADOR PATTERSON: Yeah. We'll see what we can find.

MR. BAILY: Any other questions? Thank you all very much for coming. Excuse me, we have one more from New York, I think.

QUESTION: Yes, it's Diego Senor from Caracol Radio again in Colombia. It's very important for us to talk to you, so just two final questions.

One is that you have mentioned the positive results in the war against narcotraffic in Colombia, our country, but where are we lacking in efforts in order to finish this once and for all? Is it the United States also not helping enough? Or what do you think is lacking there in order to get rid of this problem?

And another is a little bit more personal, which is, like, what is your, like, special frustration in the work you've done in fighting this business that it doesn't seem to end?

AMBASSADOR PATTERSON: Let me answer the first one. I'll take the first one first.

Certainly I think we'd like to see -- I think we underestimated the size of the coca crop. I think that was an error we made from the very beginning and we underestimated the amount of coca cultivation always in places like Guaviare and Narino. So that means we're going to be spraying for longer than we anticipated and it means we're going to need more resources for a longer period of time than we anticipated. But the other thing we're seeing is the traffickers are really pushing back vigorously. We see this in attacks on our spray planes and other things, so they must feel very considerably under threat. But we're on the right track in Colombia and eventually the cartels will reduce their activities and the growers will give up. And we're fortunate, in my view, to have the problem largely contained in Colombia right now despite the very modest increase in cultivation in Peru and Bolivia.

What's the frustration? Sure it's a frustration, but as a predecessor of mine, (inaudible) put it once, there's no such thing as a war on drugs; there's no victory; it's just sort of like fighting a chronic disease. And I was telling somebody today we're always going to be in a place like Bolivia because the Bolivians don't have resources to fight this on their own. They're always going to need our support for their counternarcotics unit. And I suspect there will always be some counternarcotics -- some narcotics in Colombia. The purpose is just to roll back the traffickers so they don't control the major urban areas and they go back to being a nuisance in the countryside, as they were for many years. So it's not a frustration; it's just a fact of life that there's never sort of a clear-cut victory on this; it's just a question of containing it where it breaks out.

Thank you.

MR. BAILY: Thank you. Thank you all for coming.