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

EXECUTIVE SUMMARY

Chemical Controls

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.

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 implmentation 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 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.