Legislative Basis for the INCSR
The Department of State's International Narcotics Control Strategy Report (INCSR) has been prepared in accordance with section 489 of the Foreign Assistance Act of 1961, as amended (the "FAA," 22 U.S.C. � 2291). The 2001 INCSR is the fifteenth annual report prepared pursuant to the FAA. In addition to addressing the reporting requirements of section 489 of the FAA (as well as sections 481(d)(2) and 484(c) of the FAA and section 804 of the Narcotics Control Trade Act of 1974, as amended), the INCSR provides the factual basis for the Presidential narcotics certification determinations for major drug producing and/or drug-transit countries ("Majors List") required under section 490 of the FAA. Section 490 of the FAA requires that 50 percent of certain kinds of assistance be withheld from all such countries, required to be identified and reported to Congress by the President by November 1 of each year, pending the President's March 1 certification determinations. If a country is not certified, most foreign assistance is cut off and the United States is required to vote against assistance by six multilateral development banks to that country.
The statute requires a report on the extent to which each country or entity that received assistance under chapter 8 of Part I of the Foreign Assistance Act(1) in the past two fiscal years has "met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances" (the "1988 UN Drug Convention"). FAA � 489(a)(1)(A). Similarly, the President's certification determination must address whether a country, during the previous year, has cooperated fully with the United States or has taken adequate steps on its own to achieve full compliance with the goals and objectives established by the 1988 UN Drug Convention. FAA � 490(b)(1)(A), FAA � 489(a)(4)(A).
Although the Convention does not contain a list of goals and objectives, it does set forth a number of obligations that the parties agree to undertake. Generally speaking, it requires the parties to take legal measures to outlaw and punish all forms of illicit drug production, trafficking, and drug money laundering, to control chemicals that can be used to process illicit drugs, and to cooperate in international efforts to these ends. The statute lists action by foreign countries on the following issues as relevant to evaluating performance under the 1988 UN Drug Convention: illicit cultivation, production, distribution, sale, transport and financing, and money laundering, asset seizure, extradition, mutual legal assistance, law enforcement and transit cooperation, precursor chemical control, and demand reduction.
In attempting to evaluate whether countries and certain entities are meeting the goals and objectives of the 1988 UN Drug Convention, the Department has used the best information it has available. The 2001 INCSR covers countries that range from major drug producing and drug-transit countries, where drug control is a critical element of national policy, to small countries or entities where drug issues or the capacity to deal with them are minimal. The reports vary in the extent of their coverage. For key drug-control countries, where considerable information is available, we have provided comprehensive reports. For some smaller countries or entities where only sketchy information is available, we have included whatever data the responsible post could provide.
The country chapters report upon actions—including plans, programs, and, where applicable, timetables—toward fulfillment of Convention obligations. Because the 1988 UN Drug Convention's subject matter is so broad and availability of information on elements related to performance under the Convention varies widely within and between countries, the Department's views on the extent to which a given country or entity is meeting the goals and objectives of the Convention are based on the overall response of the country or entity to those goals and objectives.
Some countries and other entities are not yet parties to the 1988 UN Drug Convention; some do not have status in the United Nations that would allow them to become parties. For such countries or entities, we have nonetheless considered actions taken by those countries or entities in areas covered by the Convention as well as plans (if any) for becoming parties and for bringing their legislation into conformity with the Convention's requirements. For some of the smallest countries or entities that are not on the Majors List, the Department has insufficient information to make a judgment as to whether the goals and objectives of the Convention are being met.
Unless otherwise noted in the relevant country chapters, INL considers all countries and other entities with which the USG has bilateral narcotics agreements to be meeting the goals and objectives of those agreements.
Information concerning counternarcotics assistance is provided, pursuant to section 489(b) of the FAA, in sections entitled "FY 2001-2002 Fiscal Summary and Functional Budget" and "Other USG Assistance Provided."
Statement on Certification
Section 490(b)(2) of the FAA requires that, in making determinations regarding full certification, the President consider the extent to which each major illicit drug producing or drug-transit country has:
met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, including action on such issues as illicit cultivation, production, distribution, sale, transport, and financing, and money laundering, asset seizure, extradition, mutual legal assistance, law enforcement and transit cooperation, precursor chemical control, and demand reduction;
accomplished the goals described in an applicable bilateral narcotics agreement with the United States or a multilateral agreement; and
taken legal and law enforcement measures to prevent and punish public corruption, especially by senior government officials, that facilitates the production, processing, or shipment of narcotic and psychotropic drugs and other controlled substances, or that discourages the investigation or prosecution of such acts.
The statute provides, alternatively, that a country that cannot be certified under the foregoing standard may be certified on the grounds that "vital national interests of the United States require" that assistance withheld pursuant to section 490(a)(1) be provided to and the United States not vote against multilateral development bank lending to such country. FAA � 490(b)(1)(B).
Major Illicit Drug Producing, Drug-Transit, Significant Source, Precursor Chemical, and Money Laundering Countries
Section 489(a)(3) of the FAA requires the USG to identify:
(A) major illicit drug producing and major drug-transit countries,
(B) major sources of precursor chemicals used in the production of illicit narcotics; or
(C) major money laundering countries.
These countries are identified below.
Major Illicit Drug Producing and Drug-Transit Countries
A major illicit drug producing country is one in which:
(A) 1,000 hectares or more of illicit opium poppy is cultivated or harvested during a year;
(B) 1,000 hectares or more of illicit coca is cultivated or harvested during a year; or
(C) 5,000 hectares or more of illicit cannabis is cultivated or harvested during a year, unless the President determines that such illicit cannabis production does not significantly affect the United States. FAA � 481(e)(2).
A major illicit drug-transit country is one:
(A) that is a significant direct source of illicit narcotic or psychotropic drugs or other controlled substances significantly affecting the United States; or
(B) through which are transported such drugs or substances. FAA � 481(e)(5).
The following major drug producing and/or drug-transit countries were identified and notified to Congress by the President pursuant to section 490(h) of the FAA in 2000:
Afghanistan, The Bahamas, Bolivia, Brazil, Burma, Cambodia, China, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, Thailand, Venezuela, and Vietnam.
Major Precursor Chemical Source Countries
The following countries have been determined to be major sources of precursor or essential chemicals used in the production of illicit narcotics:
Argentina, Brazil, China, Germany, India, Mexico, The Netherlands, and the United States.
Information is provided pursuant to section 489 of the FAA in the section entitled "Chemical Controls."
Major Money Laundering Countries
A major money laundering country is defined by statute as one "whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking" FAA �481(e)(7). However, the complex nature of money laundering transactions today makes it difficult in many cases to distinguish the proceeds of narcotics trafficking from the proceeds of other serious crime. Moreover, financial institutions engaging in transactions involving significant amounts of proceeds of other serious crime are vulnerable to narcotics-related money laundering. This year's list of major money laundering countries recognizes this relationship by including all countries and other jurisdictions, whose financial institutions engage in transactions involving significant amounts of proceeds from all serious crime. The following countries/jurisdictions have been identified this year in this category:
Antigua and Barbuda, Australia, Austria, the Bahamas, Brazil, Burma, Canada, Cayman Islands, China, Colombia, Cyprus, Dominica, the Dominican Republic, France, Germany, Greece, Grenada, Guernsey, Hong Kong, Hungary, India, Indonesia, the Isle of Man, Israel, Italy, Japan, Jersey, Lebanon, Liechtenstein, Luxembourg, Mexico, Nauru, the Netherlands, Nigeria, Pakistan, Panama, Paraguay, Philippines, Russia, Singapore, Spain, St. Kitts and Nevis, St. Vincent and the Grenadines, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United Kingdom, United States, Uruguay, and Venezuela.
Further information on these countries/entities and United States money laundering policies, as required by section 489 of the FAA, is set forth in the section entitled "Financial Crimes and Money Laundering."
(1) The Department of State's Bureau of International Narcotics and Law Enforcement Affairs (INL) is responsible for managing more than $300 million a year in narcotics control and anticrime assistance to foreign countries.