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U.S. DEPARTMENT OF STATE
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT
MARCH 1996
United States Department of State
Bureau for International Narcotics and Law Enforcement Affairs
Introduction
Perhaps no element of a comprehensive counternarcotics strategy has more
potential than chemical control. At the same time, perhaps none is more
difficult to implement. The concept is simple. Synthetic drugs, heroin
and cocaine all require chemicals for their manufacture or refining.
The chemicals used for these purposes are manufactured in legitimate
commerce and then diverted to the illicit production of drugs. A system
of controls, implemented by national laws and regulations, to prevent
the crossover of chemicals from legitimate commerce to clandestine drug
manufacture would deny traffickers raw materials indispensable for drug
production.
Chemical control has been internationally accepted. Article 12 of the
1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances (1988 UN Convention) establishes the
obligation for parties to the treaty to control their chemical commerce
to prevent diversion to illicit drug manufacture. The annexes to the
Convention list 22 chemicals as those most necessary to drug manufacture
and, therefore, subject to control.
The Chemical Action Task Force (CATF), mandated by the Group of Seven
Industrialized Nations and chaired by the U.S., developed practical
recommendations for governments to consider in enacting national laws
and regulations to comply with the chemical control obligations of
Article 12. The CATF noted that international cooperation between
enforcement and regulatory agencies is essential to the effective
implementation of the national laws and regulation. Information
exchange to verify the legitimate end-use of proposed transactions in
regulated chemicals is the key element of this cooperation.
Chemical control is complicated by the nature of the chemicals involved
and, in many cases, their availability from many sources. Precursor
chemicals are those used in the manufacture of synthetic drugs. The
become part of the final product, such as amphetamines for which
ephedrine is major ingredient.
Ephedrine and ten other precursors listed in Annex 1 of the 1988 UN
Convention are targetted for international control under the convention.
Many of these precursors are traded in relatively small, pharmaceutical-
size consignments, and are controlled by many governments as
pharmaceuticals. However, the quantities needed to manufacture
significant volumes of illicit synthetic drugs are only a small
percentage of this limited legitimate commerce, complicating the
regulatory process.
Essential chemicals are used in the refining of coca leaf into cocaine
and crack and opium into morphine and heroin. They are generally widely
used industrial chemicals, such as sulfuric acid and acetic anhydride,
traded internationally in large quantities. They are manufactured and
traded by many countries. The 11 essential chemicals most important to
illicit drug manufacture are listed in Annex 2 of the 1988 UN Convention
and targetted for international control. Although coca and opium
refining requires significant quantities of essential chemicals, as with
precursor chemicals, this is a small percentage of the vast
international commerce in essential chemicals.
Transactions in chemicals liable to diversion represent a relatively
small market for major chemical manufacturers and traders. The U.S.
experience in the administration of the U.S. chemical control law, the
Chemical Diversion and Trafficking Act, demonstrates that they will
cooperate with a well-administered regulatory and licensing regime that
imposes a limited administrative burden and does not compromise
commercial confidentiality. They also can assist enforcement
authorities by flagging suspicious transactions such as those involving
cash payments, new and unknown customers, unusual delivery requests,
etc.
The size and complexity of international commerce in chemicals, however,
facilitates the evasion of control by illicit, or less conscientious,
operators, frequently brokers.
Diversion Methods
The four most common diversion methods are:
1. Chemicals are diverted to illicit drug manufacture from domestic
chemical production. This requires the capacity to manufacture the
needed chemicals coupled with poor domestic controls on them. It is
more common in synthetic drug manufacture which requires only chemicals.
Cocaine and heroin type drugs also require coca and opium as essential
raw materials.
2. Chemicals are imported legally into the drug-producing country with
a valid import license and subsequently diverted. In this case, the
importing country does not adequately investigate the legitimate end-use
of the chemicals before issuing the import license, and the exporting
country makes no independent effort to ensure legitimate end-use,
accepting the import license at face value.
3. Chemicals are imported into a neighboring country, diverted, and
smuggled into the drug-producing country. This occurs because the
conduit countries do not adequately investigate legitimate end-use
before authorizing imports, nor do chemical source countries ensure the
legitimate end-use of regulated chemicals before authorizing shipment.
4. Chemicals are manufactured in one country, diverted from domestic
commerce, and smuggled into neighboring drug-producing countries.
Inadequate internal controls and weak border security make this type of
diversion possible.
All these methods are embellished by the use of front companies, false
invoicing, mis-labelling, use of free trade areas, multiple trans-
shipments, bribery, and any other device that will conceal the ultimate
recipient. Also, as authorities implement measures to prevent diversion
by one method or from one source, traffickers react by shifting among
diversion methods and source countries. Smuggling is now increasing as
international cooperation among enforcement authorities enhances the
effectiveness of controls over import and export transactions.
Recycling of solvents, particularly by cocaine traffickers, is another
tactic used by traffickers to overcome chemical controls. The process
involves distilling (boiling) the solvents away from the waste
byproducts in them resulting from their use in cocaine production.
According to DEA tests, by using fractionization towers or distillers,
traffickers can separate and recover up to 80 percent of the solvents
used in the production process. Solvents can be recycled five to seven
times by relatively simple distillation techniques. The extent of
recycling is unknown, but it cannot be utilized until the chemicals to
be recycled have been diverted using one of the methods noted above.
1995 Chemical Control Developments
By 1995, most major chemical and drug producing countries had chemical
control laws and regulations on the books adequate to meet the chemical
control obligations of the 1988 UN Convention. In some cases not all 22
chemical listed in the convention were regulated, but the chemicals most
pertinent for each country were covered. Since many of these laws and
regulations were based on the recommendations of the CATF, they were
compatible, thereby facilitating international cooperation, a key CATF
objective.
The need for international cooperation, most importantly information
exchange, became more apparent in 1995 as individual control regimes
became more efficient and traffickers were forced to seek alternative
sources of supply. To preclude this, information on proposed
transactions needs to be shared among enforcement authorities so
"shoppers" can be identified and thwarted. However, there is a
reluctance on the part of many governments to share information on
proposed transactions except with the importing government which would
be aware of the transactions through its import control procedures.
In pursuing an export, no crime has been committed by the exporter; the
purpose of sharing information on proposed transactions with other
governments is to tap the experience of others to assist the exporting
or importing government in determining the legitimacy of the
transaction. The vast majority of transactions are innocent, and in
highly competitive international chemical commerce, exporters do not
want the confidentiality of their transactions compromised by sharing
with third parties. Some governments have laws precluded sharing
information received as part of a regulatory process.
During 1995, at the policy level, we continued to urge adoption of
chemical control regimes by governments that do not have them, and wider
and more effective international cooperation in their implementation by
those that do. Concurrently, at the enforcement level, we continued to
strengthen cooperation and communication among enforcement agencies.
These efforts are mutually supportive: policy level direction to
enforcement agencies improves cooperation among them, and improved
cooperation among enforcement agencies, whether directed or self-
initiated, demonstrates that cooperation is possible without
compromising legitimate commercial interests.
In September 1995, DEA, with financial and administrative support from
the European Commission and with the cooperation of the Turkish
Government, held a major chemical control conference in Istanbul.
Delegations from 22 Middle Eastern, Balkan, European, Central and South
Asian countries attended. The purpose was twofold: to impress upon the
new governments of Central Asia to need to adopt chemical control
regimes in conformity with international standards, and to improve
cooperation among all the participating enforcement agencies. It is too
early to assess the long-term results of the conference, but shortly
thereafter a DEA team visited Tajikistan, one of the participating
governments, to find a government receptive and eager for effective law
enforcement cooperation.
In December 1995, the European Union on behalf of its member states,
signed chemical control agreements with Bolivia, Colombia, Ecuador,
Peru, and Venezuela, to improve cooperation and communication between
governments to ensure the legitimate end-use of proposed transactions in
regulated chemicals. Engaging major European chemical producing and
trading countries in chemical control directly with their Latin American
trading partners was an objective spelled out in the interagency U.S.
Strategy To Control the Diversion of Drug-Essential Chemicals approved
in 1994.
International cooperation among enforcement agencies also improved,
particularly when it was directed at specific, identifiable cases of
diversion. For example, Indian authorities moved quickly to effectively
control commerce in Indian-manufactured ephedrine and pseudoehedrine
when it was demonstrated that it was being routed through Guatemala and
Mexico to methamphetamine labs in California. The Indian Government now
notifies DEA of every export of ephedrine and pseudoephedrine, and DEA
is able to research its data banks and advise the Indian authorities of
possible risks of diversion regardless of the recipient country.
Cooperation between US and German enforcement authorities is also good.
In 1995, it resulted in the suspension of several large shipments of
ephedrine and essential chemicals intended for Central and South
America. Czech and Swiss authorities have also been quick to react when
presented with evidence of diversion from shipments originating or
transshipping these countries.
Our goal is to continue and expand the ad hoc cooperation until sharing
of information on proposed transactions in regulated chemicals is
routine. We need to demonstrate that all sources of information need to
be queried, not only those in the exporting and importing countries, and
that information sharing can occur without jeopardizing commercial
confidentiality.
With this objective, we proposed to the Dublin Group in October 1995 a
meeting of chemical control experts from interested governments to
consider practical measures to improve cooperation, particularly,
information sharing. The meeting will seek to identify the most
important items of information that need to be shared, the means of
protecting and transmitting the information, and the procedures and
extent to which governments can participate in such as system while
respecting their national information protection laws.
Is chemical control worth the effort? Drug trafficking is a clandestine
enterprise, and hard facts on the impact of chemical control are
difficult to obtain. However, there have been some reports. In the
summer of 1995, before India's stricter controls were fully in place, a
ton of ephedrine could be purchased on the black market for
approximately $54,000; in December 1995, the same amount was demanding a
price of approximately $80,000. Acetic anhydride prices in Pakistan are
reportedly going up because of improved Indian controls over diversion
and smmuggling from its domestic production. Our Embassy in Lima, Peru
reports that diminished availability and increased prices of essential
chemicals due to enforcement efforts appears to have contributed to a
severe reduction in the earnings of coca farmers (who as the primary
coca leaf processors are the main consumers chemicals essential to
cocaine base processing).
These results, which indicate greater difficulty and expense for
traffickers in manufacturing drugs, were obtained largely through
regulatory measures involving fewer personnel and much less risk to them
than more traditional law measures directed at stopping the drugs after
they are manufactured. Despite the difficulties of implementation,
chemical control is contributing now to our comprehensive drug control
strategy, and has the potential to make a greater, cost-effective
contribution as the national control regimes of other governments become
more effective and international cooperation evolves and improves.
COUNTRY REPORTS
Country reports have been prepared on the major source countries for
chemicals used in the manufacture of illicit narcotics. The countries
in this section are those with large chemical manufacturing and trading
industries that have significant chemical trade with drug-producing
regions, and those considered to be sources of chemicals diverted from
domestic commerce for local illicit drug manufacture or smuggling into
neighboring drug-manufacturing countries. Many other countries
manufacture and trade in precursor and essential chemicals, some of
which are diverted to illicit drug manufacture, but they are not now
considered major source countries. These designations are reviewed
annually.
Because of the important role drug-manufacturing countries have in
narcotics chemical control, a separate section summarizes the status in
countries relying on chemical diversion for the significant manufacture
of cocaine and heroin. The 1988 United Nations Convention Against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances (1988 UN Convention) is the major
agreement for international cooperation in chemical diversion control.
It includes provisions for maintaining records of transactions in the 22
precursor and essential chemicals listed Annexes 1 and 2 of the
Convention.
Major Chemical Source Countries
Major Cocaine and Heroin Producing Countries with Significant Chemical Diversion
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