2010 International Narcotics Control Strategy Report
The 2010 International Narcotics Control Strategy Report (INCSR) is an annual report by the Department of State to Congress prepared in accordance with the Foreign Assistance Act. It describes the efforts of key countries to attack all aspects of the international drug trade in Calendar Year 2009. Volume I covers drug and chemical control activities. Volume II covers money laundering and financial crimes.
-03/01/10 Briefing on Release of the 2010 International Narcotics Control Strategy Report (INCSR); Assistant Secretary David T. Johnson, Bureau of International Narcotics and Law Enforcement Affairs; Washington, DC
Briefing on Release of the 2010 International Narcotics Control Strategy Report (INCSR)
David T. Johnson
Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs
March 1, 2010
MR. TONER: Good afternoon – I had to check. It’s my pleasure to introduce you today to Assistant Secretary David Johnson of the Bureau of International Narcotics and Law Enforcement Affairs. He’ll be briefing on the annual comprehensive assessment of worldwide illegal – of the worldwide illegal drug and transnational money laundering situation, known as the International Narcotics Control Strategy Report, or by the acronym INCSR.
This report covers calendar year 2009 and its conclusions reflect the Department’s analysis of the international drug control and money laundering environment during the last calendar year. The briefing’s on the record and CDs of the two-volume report are available in the Press Office. We’ll also be bringing them in here to hand out and will be posted on the State Department website at the conclusion of the briefing.
Without further ado, I’ll let the Assistant Secretary take over.
ASSISTANT SECRETARY JOHNSON: Thank you.
MR. TONER: Thank you.
ASSISTANT SECRETARY JOHNSON: Good afternoon. Today, we have the opportunity to present the 27th edition of the International Narcotics Control Strategy Report to the Congress, or INCSR, as we refer to it here. This report is a review of foreign governments’ efforts to deal with their own domestic narcotics problems and to meet their international responsibilities as set forth in UN narcotics and crime treaties.
The drugs and chemical controls section covers some 130 countries and jurisdictions. The second section on money laundering and financial crimes describes the efforts of 60 nations to implement strong anti money-laundering and counterterrorist financing regime. This information provides a comprehensive assessment of the worldwide illegal drug and transnational money laundering terrorist finance situation.
This report’s been prepared in accordance with Section 489 of the Foreign Assistance Act of 1961, which requires us to identify major illicit drug-producing countries and major drug-transit countries, major sources of precursor chemicals used in the production of illicit narcotics, or major money-laundering countries. Section 481 of that act defines a major money-laundering country by statute as one whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking. That means both those states that are having challenges as well as those simply with very large financial industries.
This year’s report covers calendar year 2009. Its conclusions reflect the Department’s analysis of the international drug control and money-laundering terrorist finance environment during the past year. Based on the analysis, we identify the challenges that we have faced with our partners, but more importantly, it points to lessons learned which will help all of us – the United States as well as our partners – identify practical ways to address the problems of narcotics and crime.
The United States provides significant assistance and resources to our partner states to help develop effective law enforcement, judicial institutions, and anti money-laundering regimes. While we’re judicious in determining how best to provide these resources, our cooperative efforts are essential to deter illicit drug and transnational crime from reaching our shores, as well as from destabilizing our partners. Additionally, we and our partners are working to reduce our own demand for illicit drugs within our own borders in concert with efforts made by other consumer nations. As made clear by the Secretary in her first visit to Mexico, we view this as a shared challenge and a shared responsibility.
If you’ll allow me to do one thing slightly off the subject, last week in Afghanistan when the bombing took place, one of our own fine, young, and dedicated Afghan employees was seriously injured. On behalf of all of his colleagues here in Washington, we want to wish him a speedy and full recovery. His condition is stable, and he’s making progress following surgery for abdominal trauma that was conducted by a U.S. and Afghan team. We look forward to a full recovery.
So with that, I will attempt to answer any questions you might have. If you have none, I will get out of your way. Yes, sir.
QUESTION: What’s your chief takeaway on the narcotics report? Which countries are cooperating the most, which countries are cooperating the least? Where does the greatest effort need to be made?
ASSISTANT SECRETARY JOHNSON: Yeah, I think what I’ll do is stick to the script, if you will. We divide our efforts here between a September report where we do exactly what you say and we identify those countries which you – we say, in the language of the law, are – have failed demonstrably to cooperate. And you can look at that. That’s something we’ll come back and do in September again.
What I’d say the chief takeaway from this is, though, to go to the nub of the question you asked, is that this is a very challenging situation. It requires the cooperative efforts of all the countries involved – those that produce, who are ultimately consumers themselves, whether they wish to be or not, by virtue of the nature of drug production. And it requires efforts on behalf of all governments. It’s not just a U.S. problem or a producer problem. And it also illustrates, I think, that consumption of drugs is an international phenomenon. The country, regrettably, with the highest usage is Iran and has substantial efforts underway themselves to help deter this. But among the fastest-growing cocaine markets is not the United States. They’re the ones in Europe. So it’s a global problem and one that we work on globally with our partners.
QUESTION: Could you describe the situation in Afghanistan as to how the problem evolved last year – better or worse – and the changing nature of it?
ASSISTANT SECRETARY JOHNSON: I’d say that it continues to be a very big challenge. If you look over the recent time, production of poppies has declined by about 30 percent over the course of the last two years, from ’07 to ’09. But that’s beginning at a very high plateau, if you will. So it remains a significant challenge. I’d also underscore that that measures – the measure I cited there is poppy production, area cultivated. And that gets to only one aspect of the problem, and that’s the production of the raw material.
Trafficking throughout Afghanistan continues to be a big challenge. We, with our partners in Afghanistan, forces that through the largesse of the American taxpayer and other donors has been developed, as well as the actions by international partners in the policing area. In particular, the Drug Enforcement Administration is having what we believe to be more and more impact on the trafficking issue. But it remains a very large problem.
One of the things that is – where we’ve reshaped our assistance programs over the course of the last year or so is to move away from a focus on eradication, certainly any eradication that’s being done by outsiders, including ourselves, and one that’s focused more on an interdiction and institution-building effort, as well as an effort to develop more fully alternative livelihoods with a very strong emphasis on agriculture and on subsistence agriculture.
That will only have an impact over time, but it’s a battleship that’s clearly turned over the course of the last year. And we would hope and expect that to have more and more impact as we look forward.
In addition to that, I’d have to point out that some very strong efforts have been taken by the Afghans themselves, in particular a program that we and other foreign journalists reported in Helmand, under the leadership of Governor Mangal in a very concentrated area, which brought a combination of alternative livelihoods, economic support for the area, provision of government services in a more concentrated way, and also the threat of law enforcement action had an impact on the level of poppy production in that area. But I think it goes to the – but underscores a point which I think everyone understands, that this is part and parcel of an insecure situation. So where there is greater insecurity regionally in Afghanistan, there’s a greater incidence of narcotics production and trafficking.
QUESTION: When you – if I could just follow up, when you say it’s turned over the last year, do you mean the broader situation in Afghanistan, or are you referring only to the poppy production or the interdiction, or what were you –
ASSISTANT SECRETARY JOHNSON: I was – our policy has reformed over the course of the last year, moving away from an eradication focus to a focus on interdiction in terms of the law enforcement, or the coercive piece, if you will, as well as a much, much stronger focus on alternative livelihoods with an emphasis on agriculture.
In terms of the results of area under cultivation, that changes took place between 2007 and 2009, a drop of about 30 percent over – from a very high plateau. I wouldn’t have – due to the measurement period we’re talking about here, I think that by the end of calendar year 2009 our programs are just coming on stream, so they would have had some impact, but certainly not the impact we hope they have over time.
ASSISTANT SECRETARY JOHNSON: Yes, ma’am.
QUESTION: According to DHS, the drug cartels, Mexican drug cartels, are operating or have a presence in thousands of U.S. communities, and also there’s reporting on the cultivation of marijuana by drug cartels even in national parks. How does the international strategy address things domestically that are connected to international concerns such as the Mexican drug cartels?
ASSISTANT SECRETARY JOHNSON: Well, the strategy not so much, although it does – I mean, the report, if you will – the strategy does. The report not so much. But the cooperative assistance program that we have with Mexico is aimed at helping our Mexican partners develop a greater capacity to deal within Mexico with these drug cartel organizations. I will leave it to domestic law enforcement agencies to describe just what the level of engagement is in the United States, but I suppose illustrative of that was the takedown under Operation Coronado by Department of Justice a few, I guess, months ago now – arrests that, if I recall correctly, took place in more than 300 locations.
And so yes, there’s a broad impact in the United States of cartel operations that are based or emanating from Mexico. And I think that illustrates another point that bears underscoring. When people think about, quote, unquote, “spillover,” you tend to think of it as a glass and things that are spilling over right at the border. It doesn’t tend to be that way. The spillover, if you will, is more broadly into the United States and some of the border communities can be not nearly as affected as some of the more inland areas are.
QUESTION: Yes. Continuing this topic, I have read the reports for the past eight years regarding specifically Mexico, and money laundering continues to be a challenge all the years. Can we expect something be done between both countries in the area of money laundering soon?
ASSISTANT SECRETARY JOHNSON: Well, I think that money laundering is one of the areas we are seeking to address both in terms of domestic operations within Mexico and the United States as well as our cooperative effort. One of the things that my colleagues and I are responsible for in terms of the cooperation program is providing equipment and training for Mexican border authorities and Mexican law enforcement authorities so that they can better detect bulk cash smuggling. We’ve seen some of that in operation. I’ve seen some of it personally. The motivation for sequestering this is very strong. You see it in the bulk cash sequestered in things as bizarre as the axles of industrial equipment. So it’s not a simple issue to deal with, but this kind of nonintrusive inspection equipment is exactly the type of devices that you need in order to deal with that.
I think that we still have work that we can do and must do on this. We are dealing with the millions on a problem that is best expressed in billions, and so we need to make further progress, I think, in the financial institution piece of this as we move forward.
QUESTION: Hi, I have two questions, if I might. First of all, on the money laundering, I see that, obviously, Iran and the United Arab Emirates and Lebanon, I mean, the idea of money laundering – I know you’re dealing with terrorist financing related to that. Do you believe that one of the reasons that these countries are – and Afghanistan even. I mean, what are the kind of terrorist concerns about terrorist financing that we should take away from this report, specifically in Afghanistan, Iran, and kind of the countries and proxies that Iran is using right now?
And then on Venezuela, last week, the Venezuelan ambassador was quite forceful in defending this country’s efforts to combat the drug problem, and he maintained that – he gave specific statistics that were quite impressive, but I won’t get into them now, but just to say that he said that your charges in this report are political.
ASSISTANT SECRETARY JOHNSON: Okay, I’ll – the report on money laundering deals with not a specific use of laundered money and it is based – it emanates from the legislation that requires us to look at money laundering from the – as generated by illicit narcotics trafficking. But the fact of the matter is an effective anti-money laundering regime deals with all criminal and, if you will, terrorist activities that might be financed or might be – money might be laundered in order to advance those causes, either simply in the moneymaking business of narcotics or in the use of monies that might be acquired for nefarious purposes such as terrorism. So —
QUESTION: You don’t kind of delve into the use of the money?
ASSISTANT SECRETARY JOHNSON: I don’t – no. We deal with the frameworks in place in order to combat it.
On the issue associated with Venezuela, I don’t contradict – I mean, the statistics that are in this report are based on the self-report of the countries involved. So the statistics that you see here for 2009 shouldn’t differ from what was cited by a Venezuelan Government official. It might, but I mean, it’s their numerals.
What I would say is that if you look at the evidence on the ground of where narcotics are emanating from – transiting into the Caribbean or to Africa and then onward into Europe – you see an extraordinary path of particularly aviation exports out of the Venezuelan area next to the border of Columbia. So that’s what we cite. And I don’t – I mean, he’s welcome to his point of view, but that’s not a political statement. That’s based on evidence of radar tracking.
QUESTION: Thank you. I’m aware of the good cooperation that U.S. has with Russia about fighting narcotics in Afghanistan. But on the Russian side, there is a major issue for concern, that U.S. stopped eradicating the poppy in Afghanistan. And Russian officials are saying that it actually helped to increase the supply of narcotics to the Russian Federation several times. Do you think United States can reverse its policy about stopping eradication of poppy in Afghanistan and find some other solution?
ASSISTANT SECRETARY JOHNSON: I’m familiar with the issue as it’s been articulated by Russian Government officials, and in particular, Mr. Ivanov. I would point out to you that the level of production has continued to decline even in the face of our having altered our policies, and it’s declined much more than any eradication program that we ever had or ever contemplated.
We found that the eradication program that we were seeking to make work was not a cost-effective way to deal with this issue, and the number of – the area that we had ever succeeded in eradicating was extremely modest. It was not having a material impact on the problem. So we have refashioned our program. We’ve focused on other areas where we think it might have a greater impact.
Candidly, I don’t think the program that we had underway that had eradication as a significant element was really changing the threat that Russia faced. Russia does face a significant threat of exports of opium poppy products from Afghanistan, as does all of Afghanistan’s neighbors on into – even into Western Europe and into Asia. But I don’t think that the – an eradication program is really going to be an effective way to address that, certainly not the one that we had underway and we terminated.
QUESTION: Yeah. On the Western Hemisphere, have you seen any changes in the last year compared to the previous years on specific countries that have – like Bolivia, for instance?
ASSISTANT SECRETARY JOHNSON: I’d say that of the three major coca-producing states in the Andes, Colombia had a – continues to have significant declines, although it remains by far the largest producer. Peru had a modest increase. And Bolivia has a continuing trend of a step up per year in the neighborhood of 10 to 15 percent that’s taken place over the course of the last several years.
In addition, the method of production that is now being used by cocaine producers in Bolivia has adopted some more effective, if you will, production methods and is, in fact, close to double the output per quantity of coca. So there is a significant increase in the potential output of cocaine hydrochloride from Bolivia because of that.
QUESTION: And do you attribute this to the government efforts —
ASSISTANT SECRETARY JOHNSON: Well, I certainly don’t —
QUESTION: — or non-efforts?
ASSISTANT SECRETARY JOHNSON: I don’t attribute the latter to the government’s effort. I attribute that to the efforts of the producers. But on the former, the continuing growth and area under cultivation, it’s a disappointment to us that that continues to increase and that there are not effective policies that would limit the production over time.
QUESTION: Well, this is on the production, but then if you – for instance, you put Venezuela as one of the principal drug countries —
ASSISTANT SECRETARY JOHNSON: Right.
QUESTION: — in the Western Hemisphere. You see this also an increase, or it’s been the same for some time?
ASSISTANT SECRETARY JOHNSON: I don’t see a significant change over the course of the last year, no.
QUESTION: And the last thing: You just said that the data you are putting here, the (inaudible) data that you got, I didn’t understand. It’s from the UN or from each country?
ASSISTANT SECRETARY JOHNSON: It’s from each country.
QUESTION: Each country.
ASSISTANT SECRETARY JOHNSON: Yes, sir.
QUESTION: Yeah, I want to ask a specific question on North Korea. I just checked volume two and country port of North Korea is not included this year. I want to ask you the reason why, because North Korea was in the list last year. And secondly, because I haven’t had a chance to check the volume one, I want to ask you whether North Korea is in the country port of volume one. And if so, is there any new finding on North Korea? Thank you.
ASSISTANT SECRETARY JOHNSON: There’s not a new finding with respect to North Korea. We haven’t seen sufficient evidence to say with certainty that state-sponsored trafficking had stopped. The last high-profile incident was in 2003. Cumulative impact of repeated incidents and other publicly acknowledged criminal behavior by North Korea points to the likelihood of state-directed trafficking in addition to trafficking by individuals.
QUESTION: And the reason why North Korea is not included in the volume two money-laundering report?
ASSISTANT SECRETARY JOHNSON: I believe that it’s because of the absence of a significant financial industry, but let me check and – okay, I’m getting a nod from one of my colleagues, so –
QUESTION: Thank you. I just want to go back to Venezuela because the Venezuelan Government claims that the Inter-American Drug Abuse Control Commission of the OAS recognized the efforts of Venezuela. Why your report is so different from others in comparison what Venezuela said, that he’s still fighting the drug trafficking?
ASSISTANT SECRETARY JOHNSON: Because the facts as we observe them in terms of product emanating particularly by air from Venezuela remains significant.
QUESTION: But isn’t this report – I’m sorry – isn’t this report about efforts being made by the country? I mean, some of these other countries, you kind of laud their efforts but still they’re major money laundering and major drug-producing countries.
ASSISTANT SECRETARY JOHNSON: I don’t see any effort in this particular region to deal with this issue. We’ve seen some efforts in the seaborne in cooperation with some of our law enforcement agencies. But —
QUESTION: You don’t see any efforts by Venezuela? I’m sorry.
ASSISTANT SECRETARY JOHNSON: I don’t see – in the particular area I’ve talked about, the border area, aviation exports of cocaine from the border area between Venezuela and Colombia on the Venezuelan side. I haven’t seen any effort, any – certainly any significant efforts of – to stop that traffic.
QUESTION: Yeah. Have you been in contact with Venezuelans in trying to improve the cooperation?
ASSISTANT SECRETARY JOHNSON: Yes.
QUESTION: And what did they say?
ASSISTANT SECRETARY JOHNSON: Well, we have some cooperation with them. We think that – particularly in the seaborne area – but we’ve been unable or we haven’t found a willing partner, if you will, on the aviation issue, particularly in that border region.
QUESTION: Yeah. What can you say about the Middle East? Elise has mentioned Iran, UAE and Lebanon. What can you say about these states? And do you have any list of states with special concerns?
ASSISTANT SECRETARY JOHSON: Your colleague earlier asked about that issue, and I explained that our concentration on listing individual states of special concern in the narcotics area was something we dealt with under a program that comes to fruition in September. So we will address that then.
On the question of particular states in the Middle East, I mean, I’d refer you to the report. If you have a specific question, I’ll seek to address it, but I —
QUESTION: I didn’t see the report.
ASSISTANT SECRETARY JOHNSON: Well, it’s available now. I’m sorry.
QUESTION: There is a report, press report in Beirut making a big fuss, calling it a scandal that the U.S. Embassy in Beirut, the department that handle combating drugs, is asking the Lebanese internal security to provide them a list of all the – from all the cell phone companies with all their data to the Embassy. And the newspaper is saying that this violates Lebanon internal security. Are you aware of this?
ASSISTANT SECRETARY JOHNSON: I’m not aware of the report. I’ll be glad to take a look at it and see if there’s something I can be responsive to. But I am unfamiliar with the issue, so I don’t want to speculate on what might be in a press report.
MR. TONER: Just a couple more questions or – anyone?
QUESTION: I just have one more. I’m just trying to understand on the idea of terrorist financing. You kind of mentioned terrorist financing a lot, like the words “terrorist financing,” but then earlier, you said that you don’t look at the source of –
ASSISTANT SECRETARY JOHSNON: What I’m suggesting is that the programs we have underway for cooperation deal with money laundering across the board. So an effective anti money-laundering regime which deals with proceeds of crime as well as terrorism is the same type of program. So we’re looking at the anti-money laundering program, and that’s our evaluative mechanism. But we do recognize that monies that are laundered could be used for various nefarious purposes. And our focus is both – in terms of motivation for dealing with the issue, of course, has to do with both – has to do with counternarcotics, crime, and terrorism.
QUESTION: If I could go back to the money laundering for a second, given the state of the world financial crisis, the collapse of many banks, the lack of funds going into a lot of governments for all kinds of things, are you seeing any substantive changes in money laundering linked to the world financial crisis?
ASSISTANT SECRETARY JOHNSON: I can’t cite anything specific for you, no. I mean, obviously, the pressures that you cite could have an impact, probably more at the individual crime level as opposed to the systems in place.
QUESTION: And if I just follow that up with Haiti, there’s a lot of talk of Haiti as a major transit point for drug trafficking and money laundering in the hemisphere. Most of the money that goes to Haiti seems to come in through the form of remittances, which I know has been a huge sore spot for control of money laundering because it’s such small amounts. They come in in cash, they go out in cash. Can you address that at all? Is there any elevated concern there or any action that’s being taken in regard to Haiti?
ASSISTANT SECRETARY JOHNSON: Well, it is always to be encouraged that remittances or any other form of money transfer goes through recognized financial institutions so that it’s both safe for the sender and the recipient, as well as it avoids the taint and the buildup of a situation which could mask nefarious transfers as well. And with respect to Haiti, we had a program on the ground before the earthquake assisting with the building of capacity in their policing of financial crimes. We intend to restart that as soon as we can appropriately with the Haitian authorities. And so that is our effort to address the issue.
The source of much of the drug money, though, that would be coming into Haiti goes back to the question that we’ve beaten up several times in here concerning Venezuela, because that is the – Hispaniola is one of the destinations – in fact, the largest one – for flights that are emanating from the border region in Venezuela.
MR. TONER: Last question.
QUESTION: I’m sorry. I’m sorry to keep going on about this issue, but I mean, even if you look at the report, do they criminalize narcotic money laundering? Yes. Do they criminalize other money laundering? Yes. I mean, they – it seems that – I mean, I haven’t had time, obviously, to go through all of the report, but it seems that this country —
ASSISTANT SECRETARY JOHNSON: Which country are we talking about now?
QUESTION: Venezuela —
ASSISTANT SECRETARY JOHNSON: Okay.
QUESTION: — is taking a lot more efforts than some of the other countries that you’re citing in the report as other major countries. I mean, if this report is about kind of cooperation, maybe – you know, you do seem in other areas to make the distinction between results and cooperation, whereas, with Venezuela, you kind of singled them out as not having any results. But it does seem that they are making efforts, because in your report, you’re talking about all the things that they’re doing.
ASSISTANT SECRETARY JOHNSON: Well, I mean, we cite what everyone is doing. We don’t – this is not, as you embedded in an earlier question or one of your colleagues did, this is not a political report. But – well —
QUESTION: With all due respect, it seems that in some countries that you have —
ASSISTANT SECRETARY JOHNSON: Well, with due respect, if you look at the radar tracks and the impact it’s having on the Caribbean, I don’t think you can make that argument. I wish you could.
QUESTION: But that’s just one specific area of all that you’re talking about, right?
ASSISTANT SECRETARY JOHNSON: It is – well, it’s one specific area which is a very destabilizing activity both in the Caribbean and West Africa. So it’s of great concern.
MR. TONER: Other question?
QUESTION: Regarding Mexico —
ASSISTANT SECRETARY JOHNSON: Yes.
QUESTION: — do you know – you have – during the past months, you have been very supportive of Mexican efforts and the cooperation with the U.S. You know the Mexican public is growing more unhappy with the fight because of the level of violence continuing – continue to increase. Today’s poll with – you know, President Calderon is down in the polls and so on. So there are elections in Mexico in one year – in a little bit more than a year. Are you worried that this historic strategy that you have followed with the Mexican Government could be in peril?
ASSISTANT SECRETARY JOHNSON: We see a broad commitment to building the institutions of an effective policing system and – in Mexico, and a reform of its judicial institutions. And I think that that has very broad support, certainly in our government and we think in Mexico as well.
QUESTION: Thank you.