2012 INCSR: Introduction
BUREAU OF INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS
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 2012 INCSR, published in March 2012, covers the year January 1 to December 31, 2011 and is published in two volumes, the second of which covers money laundering and financial crimes.
The following major illicit drug producing and/or drug-transit countries were identified and notified to Congress by the President on September 15, 2011, consistent with section 706(1) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228):
Afghanistan, The Bahamas, Belize Bolivia, Burma, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, India, Jamaica, Laos, Mexico, Nicaragua, Pakistan, Panama, Peru, and Venezuela.
Of these 20 countries, Bolivia, Burma, and Venezuela were designated by the President as having “failed demonstrably” during the previous 12 months to adhere to their obligations under international counternarcotics agreements and take the measures set forth in section 489(a)(1) of the FAA. The President determined, however, in accordance with provisions of Section 706(3)(A) of the FRAA, that continued support for bilateral programs in Bolivia and limited programs in Venezuela are vital to the national interests of the United States.
[for more details and access to full report, please use the links below]
The 2012 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 2011. Volume I covers drug and chemical control activities. Volume II covers money laundering and financial crimes.
Volume I: Drug and Chemical Control
Bolivia is the world’s third largest cocaine producer and a significant transit zone for Peruvian-origin cocaine. Existing reports indicate that most Bolivian-origin cocaine exports flow to other Latin American countries, especially Brazil, for domestic consumption or onward transit to West Africa and Europe. U. S. government surveys estimate that approximately one percent of the cocaine seized in the United States and submitted for testing originates from Bolivia.
Bolivian President Evo Morales remains the president of the coca growers’ federation in the Chapare region of Bolivia, one of the two major coca growing areas in Bolivia. His administration maintains a “social control” policy for illicit coca eradication in which the Bolivian government negotiates with coca growers to obtain their consent for eradication. In 2011, Bolivia intensified coca eradication efforts, reporting the eradication of more than 10,000 hectares for the first time since 2002, even as eradication forces continued to meet resistance from coca growers. However, illegal coca cultivation for drug production remains high, and the Bolivian government maintains inadequate controls to prevent diversion of licit coca to illicit cocaine production.
The Government of Bolivia’s ability to identify, investigate and dismantle drug trafficking organizations (DTOs) and follow actionable law enforcement leads developed in Bolivia remains diminished following the expulsion of all U.S. Drug Enforcement Administration (DEA) personnel from Bolivia in January 2008. Colombian, Brazilian, Peruvian and other foreign nationals in Bolivia engage in financing, producing and exporting drugs and laundering drug proceeds. The Bolivian government denies that foreign drug cartels are present on Bolivian soil.
According to the Latin American Center of Scientific Investigation (CELIN), illegal drug use is a growing problem in Bolivia.
B. Drug Control Accomplishments. Policies, and Trends
1. Institutional Development
Bolivia is a signatory to the 1988 UN Drug Convention and the 1971 UN Convention on Psychotropic Substances. Bolivia is also a party to the UN Convention Against Transnational Organized Crime and its Protocols on Trafficking in Persons and Migrant Smuggling, UN Convention Against Corruption, and Inter-American Convention against Corruption; however, Bolivia lacks many of the legal and enforcement mechanisms necessary to fully implement these agreements. Bolivia signed, but has not yet ratified, the Inter-American Convention on Extradition, and although ratified the Inter-American Convention on Mutual Assistance to Criminal Matters remains unsigned.
The Government of Bolivia enacted an Anti-Corruption Law on March 31, 2010, that applied to all public officials retroactively with no statute of limitations. However, the law does not specifically refer to narcotics-related corruption. The new law was used in 2011 by government prosecutors to bring corruption charges and to indict some judges for dismissing charges in CN and other criminal cases.
As a matter of policy, the Bolivian government does not encourage or facilitate illegal activity associated with drug trafficking. Nevertheless, there were arrests of corrupt senior CN officials, both inside and outside Bolivia, for facilitating drug shipments. For example, Rene Sanabria, who was then head of the Information and Intelligence Generating Center (CIGEIN) and former Bolivian Police Commander pled guilty to U.S. Federal cocaine trafficking charges in June 2011. CIGEIN, a CN intelligence organization under the Ministry of Government, was disbanded after Sanabria’s arrest. In 2010, the FELCN Director General launched an initiative to deter corruption that included polygraph exams for all of its CN officers.
In 2011, the Bolivian National Police (BNP) Office of Professional Responsibility (OPR) for internal investigations absorbed FELCN’s independent OPR. The OPR investigates all cases and may sanction law enforcement for minor infractions. The BP’s Disciplinary Tribunal is responsible for reviewing cases and determining punishment, if appropriate, for police officers involved in misconduct and other integrity-related violations. Cases involving violation of Bolivian law are referred to the Attorney General’s Office for prosecution.
Although Bolivia’s eradication program is meeting its stated targets, when taken as a whole, Bolivia’s eradication and interdiction results have not been sufficient to adequately reverse high coca cultivation and cocaine production levels. Bolivia’s policy to consider 20,000 hectares of coca cultivation as licit, its intention to enact legislation to legalize the entire 20,000 hectares, and its withdrawal from the 1961 Convention contribute to the international view that Bolivia’s efforts to meet its international CN obligations were insufficient.
The Bolivian public, media, and experts widely perceive that the challenge to Bolivian institutions from designated terrorist organizations (DTOs), corruption, and citizen insecurity from drug trafficking and other crimes, increased during 2011. For the near- term, drug traffickers will continue to exploit opportunities to process abundant coca leaf into cocaine, suborn more Bolivian institutions and increase their influence in Bolivian communities.
The Government of Bolivia is encouraged to strengthen efforts to achieve tighter controls over the trade in coca leaf in order to stem diversion to cocaine processing in line with international treaties, achieve net reductions in coca cultivation, and protect its citizens from the deleterious effects of drug trafficking. To diminish Bolivia’s appeal to drug traffickers, further action is required to improve security and through the justice sector effectively combat drug production and trafficking, money laundering, corruption, and other transnational crime, and bring criminal enterprises to justice through the rule of law. Bolivia is encouraged to provide more of its own resources for this effort as the USG transitions from providing direct operational support for the mature CN assistance program in Bolivia, to focusing on training and law enforcement capacity building. Enacting new asset forfeiture legislation and other CN measures would provide Bolivian law enforcement agencies with necessary resources. Members of the international community most directly affected by Bolivian cocaine exports are encouraged to share more responsibility and increase their support to Bolivia.
The FELCN Chemical Substances Investigation Group (GISUQ) searches for chemicals used in the traditional cocaine process, such as sulfuric acid, kerosene, diesel oil and limestone. Beginning in 2011, GISUQ found traffickers using new chemicals, such as isopropyl alcohol, liquid ethyl acetate and sodium bisulphate, and cement to produce cocaine. These chemicals are not among the precursor chemicals controlled under the Bolivian CN law. In 2011, GISUQ seized 747 metric tons T of solid substances and 2,634,906 liters of precursor chemicals, a 23 percent decrease and 10 percent increase respectively, over 2010.
The Bolivian government does not have control regimes for ephedrine and pseudoephedrine.
Bolivia is not a regional financial center, but money laundering activities continue to take place. These illicit financial activities are related primarily to narcotics trafficking, corruption, tax evasion, and smuggling and trafficking of persons. Casinos, cash transporters, informal exchange houses, and wire transfer businesses are not subject to anti-money laundering controls. The Bolivian banking supervision entity has declared that any non-registered exchange houses will be shut down. The Bolivian financial system is highly dollarized, with approximately 40% of deposits and loans distributed in U.S. dollars rather than Bolivianos, the local currency (down from 90% in 2004). Bolivia has 13 free trade zones for commercial and industrial use located in El Alto, Cochabamba, Santa Cruz, Oruro, Puerto Aguirre, and Desaguadero.
In December 2008, the Egmont Group expelled the Financial Investigation Unit (UIF), Bolivia’s financial intelligence unit (FIU), from its membership, due to a lack of terrorism financing legislation in Bolivian law. To regain Egmont membership, Bolivia must reapply and provide written evidence of its FIU’s compliance with Egmont FIU definitions and requirements.
Bolivia is included in the October 2011 Financial Action Task Force (FATF) Public Statement because it has not made sufficient progress in implementing its action plan and continues to have certain strategic AML/CFT deficiencies, including inadequacies in its criminalization of both money laundering and terrorist financing.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/