US embassy cable - 03TEGUCIGALPA4

INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT (INCSR) - HONDURAS

Identifier: 03TEGUCIGALPA4
Wikileaks: View 03TEGUCIGALPA4 at Wikileaks.org
Origin: Embassy Tegucigalpa
Created: 2003-01-02 20:03:00
Classification: UNCLASSIFIED
Tags: SNAR EAID PREL ETTC KCRM KJUS PHUM HO
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 06 TEGUCIGALPA 000004 
 
SIPDIS 
 
STATE FOR INL/LP, WHA/CEN, WHA/PPC, AND DRL/PHD 
STATE PASS AID FOR LAC AND G 
JUSTICE FOR OIA, AFMLS AND NDDS 
TREASURY FOR FINCEN 
PANAMA FOR CUSTOMS ATTACHE 
 
E.O. 12958: N/A 
TAGS: SNAR, EAID, PREL, ETTC, KCRM, KJUS, PHUM, HO 
SUBJECT: INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT 
(INCSR) - HONDURAS 
 
REF: A. STATE 240035 
     B. STATE 240015 
 
1.  Embassy Tegucigalpa hereby submits 2002 International 
Narcotics Control Status Report (INCSR) for Honduras.  Begin 
text: 
 
I.  Summary 
 
The trans-shipment of cocaine through Honduras using air, 
land and maritime routes continued without significant 
disruption in 2002.  Overall seizures in Honduras dropped to 
their lowest level in more than three years and were the 
fewest in Central America.  There is solid evidence of drug 
trafficking-related corruption within Honduran law 
enforcement, judicial, and military organizations.  On a 
positive note, the Honduran Congress finally approved a new 
money laundering law in March that will facilitate U.S. and 
Honduran law enforcement and counterterrorism efforts.  The 
National Council for the Fight Against Drug Trafficking 
renewed its commitment to lead the country's counternarcotics 
efforts.  A new, more politically-independent Supreme Court 
was installed in January with the change of government.  It 
has already demonstrated its willingness to tackle the 
problems of judicial corruption.  It is working assiduously 
to improve the administration of justice in the country. 
Available funds to implement a government-approved 
counternarcotics master plan remain limited.  The Ministry of 
Public Security and Honduran military took a more active role 
in counterdrug operations; however, their actions did not 
effectively reduce the amount of drugs transiting Honduras. 
The U.S. continues to provide funding, training and technical 
support to improve Honduran law enforcement capabilities. 
Ensuring the detention, prosecution and incarceration of 
major offenders, however, remains a challenge.  Honduras is a 
party to the 1988 UN Drug Convention. 
 
II. Status of Country 
 
Honduras does not produce drugs in any meaningful quantities. 
 Its primary drug problem stems from the trafficking of hard 
drugs, in particular, cocaine, via air, land and maritime 
routes.  There are direct air and maritime links to U.S. 
cities and the Panamerican Highway crosses southern Honduras. 
 The Honduran police and Honduran Navy do not have sufficient 
maritime assets to attack drugtrafficking along its north 
coast.  There was a significant drop in drug interdiction 
this year, with the total amount of cocaine seized dropping 
from 182 kg to 76 kg.  Despite the recent passage of a new 
broader money laundering law, money laundering in Honduras 
remains a serious threat, although the country is not yet a 
major money laundering center. 
 
III. Country Actions against Drugs in 2002 
 
Policy Initiatives:  In February, the new President, Ricardo 
Maduro, launched a "zero tolerance" campaign to combat crime 
in Honduras.  His policy launched a combined police-military 
effort to patrol throughout the country, but primarily in 
urban areas, where widespread violent gang activity had 
reached alarming levels.  The President directed more than 
3,000 soldiers to work directly in support of law enforcement 
activities. 
 
In response to violations of its airspace, the new Government 
approved the creation of a joint inter-agency incident 
response group; however, implementation of this new 
capability stalled.  In late 2002, Presidential-designate 
Armida Villeda de Lopez Contreras, the chair of the National 
Council for the Fight Against Drug Trafficking, launched an 
effort to improve coordination between the police, armed 
forces, prosecutors, and judiciary. 
 
The Criminal Procedures Code took effect on February 20, 
2002.  The new code changes Honduras, criminal legal system 
from an inquisitorial system to an accusatorial one.  The 
code's chief goal is to decrease opportunities for criminals 
to manipulate the justice system; and it should assist 
efforts to prosecute drug-trafficking cases.  However, it 
requires substantial political will and monetary resources to 
implement effectively.  All elements of the judicial system 
(law enforcement, prosecutors, judges, public defenders) 
required, but did not fully receive, additional budgetary 
resources for the successful implementation.  Nonetheless, 
Honduras carried out far more trials (84) under the new code 
than other Central American countries during similar 
transition periods. 
 
Accomplishments:  As of December 1, 2002, 76 kilograms and 
708 rocks of crack and 914.75 pounds of marijuana had been 
seized and there had been 722 narcotics-related arrests. 
Some progress was made in establishing a small maritime law 
enforcement facility in Gracias a Dios Department. The 
Honduran Frontier police had success detecting cocaine 
transshipments through frontier posts, drawing on increased 
U.S. government-provided counternarcotics training.  Law 
enforcement agencies seized USD 460,000 in a mid-December 
seizure and search of the M/V Capt. Ryan. 
 
Law Enforcement Efforts:  Counternarcotics efforts are a 
priority for government agencies, but evidence continues to 
mount of penetration of law enforcement agencies by 
narcotraffickers and other criminals, as well as bribery. 
The DEA equivalent investigative force (the DLCN) continued 
to operate ineffectively despite new leadership.  The new 
DLCN Director subsequently resigned his post in late October. 
 A successor had not yet been named as of December 30.  The 
Minister of Public Security supported creation of new 
anti-narcotics police units, authorized an expanded role for 
the Frontier Police in the counter-drug effort, and joined an 
inter-agency effort to create a new joint police-military 
counternarcotics command. 
 
Corruption:  Corruption remains a major problem in all 
aspects of national life.  It is the single most serious 
impediment to more effective counternarcotics efforts.  While 
the government does not encourage or facilitate drug 
trafficking nor does any senior official participate in the 
illicit production or distribution of drugs, corruption 
within the government and judiciary is a significant 
impediment to effective law enforcement actions.  The 
Minister of Public Security named a new Police Chief and 
Internal Affairs Director in February and continued efforts 
to purge the police of corrupt elements.  However, the 
Government has still not conducted any effective 
investigations into criminal penetration of law enforcement 
and judicial units.  The Internal Affairs Director and 
Minister of Public Security became embroiled in a highly 
publicized dispute over the involvement of police officers in 
extrajudicial killings, which inhibited efforts to 
investigate corruption within the police.  Nationally elected 
officials enjoy legal immunity for all acts while in office, 
creating a perverse incentive for people involved in illicit 
activity to run for office and complicating enforcement 
efforts against suspected illegal narcotics activity.  The 
widespread issuance of Honduran diplomatic and official 
passports also aids drug-trafficking.  A member of the 
1997-2001 Honduran Congress was arrested with 6 kilos of 
heroin while attempting to cross the Panama-Costa Rica border 
using a valid Honduran diplomatic passport. 
 
Agreements and treaties:  During the course of year, the U.S. 
and Honduras both ratified a stolen car treaty, which had 
been signed in November 2001.  The treaty has not yet entered 
into effect.  A U.S.-Honduras maritime counternarcotics 
agreement entered into force in 2001, under its auspices a 
trilateral counterdrug maritime operation, which included 
Nicaragua, was conducted during April 2002.  The agreement 
allows U.S. vessels to operate in Honduran waters in support 
of Honduran law enforcement efforts; in addition, the 
agreement provides for information exchange and the 
coordination of joint counternarcotics activities.  The 
Honduran government is an active member of the Inter-American 
Drug Abuse Control Commission (CICAD).  Honduras also hosts 
the Regional Center for (Counternarcotics) Development and 
Judicial Cooperation in Central America, headed by a 
Nicaraguan.  Honduras has counternarcotics agreements with 
the U.S., Belize, Colombia, Jamaica, Mexico, Venezuela and 
Spain. 
 
Cultivation/Production:  Marijuana remains the only illegal 
drug known to be cultivated in Honduras.  There were no 
additional seizures of synthetic drugs during 2002, despite 
the seizure of ecstasy for the first time in Honduras in 
December 2001.  Aerial herbicides are not used. 
 
Drug Flow/Transit:  The volume of drugs transiting Honduras 
continues to increase.  There has been a noticeable increase 
in the number of suspect air flights transiting Honduran 
airspace en route to Guatemala and southern Mexico. Overland 
routes using commercial and private vehicles continue to be 
used to smuggle cocaine.  Illegal go-fast boat landings in 
Department of Gracias a Dios also are used to deliver cocaine 
for trans-shipment via small boat to La Ceiba, where it is 
transported onward for embarkation on commercial vessels, or 
trucked toward Guatemala.  The vast majority of drugs 
entering/transiting Honduras - probably over 90 percent - are 
destined for the U.S., although it is now an apparent common 
practice for traffickers to pay local "contractors" in drugs. 
 Gang members are increasingly used to "push" these in-kind 
payments to Hondurans in urban areas and along the north 
coast.  Drug smuggling using ships departing Honduran ports 
on the Caribbean is common.  Despite efforts to establish a 
port security program, the government's autonomous Port 
Authority has not made any significant progress to address 
this problem. 
 
Domestic Programs/Demand Reduction:  The Maduro 
Administration, under the direction of Presidential-designate 
Armida Villeda de Lopez Contreras, the chair of the National 
Council for the Fight Against Drug Trafficking, has launched 
a pilot program directed at Honduran youth to fight drug 
abuse.  The National Council is making demand reduction a 
major part of Honduran counternarcotics efforts.  It reflects 
the government's appreciation that drug trafficking through 
Honduras is a national security threat and major public 
policy problem inside the country. 
 
Drug use is a growing phenomenon among youth culture in 
Honduras; 49 percent of Hondurans are under 18.  Drug abuse 
by gang members is a growing issue of public concern.  It is 
viewed by some as only one of many public health and social 
problems linked to unemployment, poverty and economic 
under-development.  Alcohol is by far the most abused drug in 
Honduras, followed by marijuana, inhalants, and - to a much 
lesser degree - cocaine.  Crack cocaine and designer drug use 
is increasing. 
 
The National Council's pilot program links the efforts of the 
government's demand reduction entity "IHADFA" - the Institute 
for the Prevention of Alcoholism and Drug Addiction - with an 
umbrella group ("CIHSA") of NGOs working in demand reduction 
and drug rehabilitation. The new program combines programs 
operated by the Ministries of Public Health and Education, 
IHADFA and CIHSA, to launch a community-wide effort to inform 
youth about the dangers of drugs and to address root causes 
of drug experimentation.  The U.S. Embassy is working with 
the National Council to support this new approach. 
 
IV. U.S. Policy Initiatives and Programs 
 
U.S. Policy Initiatives:  U.S. counternarcotics initiatives 
are aimed at improving the institutional abilities of 
Honduran law enforcement entities, with a special focus on 
enhancing GOH maritime interdiction capabilities along the 
north coast.  The new government has worked hard to support 
implementation of bilateral counternarcotics projects and 
expressed interest in expanding program cooperation, even 
though its resources are extremely limited.  In addition, the 
June amendment to the 2000 Letter of Agreement directed 
monies for the establishment of a machine readable passport, 
completion of the construction of a container freight 
tracking system, and a repatriation shelter for illegal 
aliens from third countries. We are continuing our support to 
help launch the Honduran government's pilot programs. 
 
Bilateral Cooperation:  The U.S. added almost USD 1.5 million 
to its bilateral counternarcotics program during 2002.  We 
funded construction of additional office space for a new 
transnational crime analytical unit and provided necessary 
computer equipment to CEINCO, the joint intelligence 
coordination center.  U.S. Customs provided refresher 
training and an assessment of the DLCN canine program. 
Construction of a counternarcotics and customs checkpoint on 
the Panamerican Highway was completed in November 2002.  The 
new facility will be manned by the Frontier Police, which 
received intensive training for the U.S. INS Border Tactical 
Police.  The refurbishment of two 36-foot and two 24-foot 
USG-donated boats for counternarcotics purposes was completed 
and the boats were deployed along the Caribbean (north) 
coast.  The U.S. doubled its support for Honduran demand 
reduction programs.  The Embassy found no irregularities when 
it conducted a thorough review, including site visits, of the 
status of previous USG donations to Honduran law enforcement 
units. 
 
The Road Ahead:  The Honduran government of President Maduro 
has demonstrated a strong interest in attacking drug 
trafficking through its national territory and is organizing 
itself to more effectively respond to this challenge.  We 
expect to see an increased level of maritime interdiction 
operations by the government during the next year.  The 
National Council for the Fight Against Drug Trafficking, 
under the direction of Presidential-designate Armida Villeda 
de Lopez Contreras, has taken a revitalized leadership role 
within the government.  We expect to work closely with the 
council to address better implementation of the national 
counternarcotics master plan.  The council is more 
effectively coordinating the various efforts of the police, 
Attorney General's Office, judiciary, and armed forces. 
Corruption, threats and violence continue to pose a major 
challenge to effective law enforcement, but our relationships 
with the National Council and key ministries should result in 
significant progress during the next year. 
 
V.  Statistical tables 
 
Summary Tables for Three Years 
 
For Calendar Years:       2002 -- 2001 -- 2000 
 
1.  Coca: 
 
-- A. Cultivation         N/A      N/A     N/A 
-- B. Eradication         N/A      N/A     N/A 
-- C. Harvestable after Eradication 
                          N/A      N/A     N/A 
 
2.  Potential Coca Leaf:  N/A      N/A     N/A 
 
3.  Opium: 
 
-- A. Cultivation         N/A      N/A     N/A 
-- B. Eradication         N/A      N/A     N/A 
-- C. Harvestable after Eradication: 
                          N/A      N/A     N/A 
 
4. Cannibis (in plants) 
 
-- A. Cultivation:        Unknown  Unknown Unknown 
-- B. Eradication:         41,402  269,000  590,000 
-- C. Harvestable after Eradication: 
                          N/A      N/A     N/A 
 
5. Potential Cannabis Yield: 
                          Unknown  Unknown Unknown 
6. Drug Seizures (in kilos) 
 
A. Coca leaf              N/A      N/A     N/A 
B. Cocaine paste          N/A      N/A     N/A 
C. Cocaine base           N/A      N/A     N/A 
D. Cocaine HCL             76       182      1,139 
E. Opium poppy straw      N/A      N/A     N/A 
F. Opium gum              N/A      N/A     N/A 
G. Heroin (grams)         N/A      N/A     N/A 
H. Cannabis (tons)        .46      2.85    2.74 
I. Crack Cocaine (rocks)  708      714    1,289 
 
8. Illicit Labs Destroyed: 0       0       0 
 
9. Domestic Consumption of illicit drugs: 
                          Unknown  Unknown Unknown 
 
10. Arrests:              722       896      1,009 
 
11. Users:                Unknown  Unknown Unknown 
 
VI.  Chemical Control:  The GOH continues to try to limit the 
illicit introduction of precursor chemicals into the country. 
 However, comprehensive regulations to control the sale of 
chemicals necessary for the processing of illegal narcotics 
have never been developed.  During the year, the government 
in conjunction with UNDP installed a national data system to 
more effectively track precursor chemical transactions. 
 
 
VII.  Money Laundering: 
 
Honduras has a growing money laundering problem, but with 
passage of a tough new anti-money laundering law in February 
2002 (Decree 45-2002), is taking steps to control money 
laundering activities.  Honduras is not an important regional 
financial center and is not considered to have a significant 
black market for smuggled goods.  Per a January 2002 National 
Banking and Insurance Commission Resolution (No. 
012/08-01-2002), the operation of offshore financial 
institutions is prohibited.  The arrest of the Jimenez drug 
trafficking cartel in May 2001, on the north coast of 
Honduras revealed an extensive money laundering operation of 
both domestic and foreign illicit proceeds.  Their operation 
revealed a variety of criminal activities including narcotics 
trafficking, auto theft, kidnappings, bank fraud, smuggling, 
prostitution and corruption.  Money laundering activities are 
not limited to the banking sector, but likely include 
currency exchange firms, casinos and front companies. 
 
The new anti-money laundering law expands the definition of 
the crime of money laundering to encompass (1) any 
non-economically justified sale or movement of assets and (2) 
asset transfers connected with trafficking of drugs, arms and 
people, auto theft, kidnapping, bank and other forms of 
financial fraud, or terrorism.  The law includes banker 
negligence provisions that make individual bankers subject to 
two to five-year prison terms for allowing money laundering 
activities. 
 
The law creates a financial information unit in the National 
Banking and Insurance Commission to which banks and other 
non-bank financial institutions must send information on all 
transfers exceeding USD 10,000 or 500,000 lempiras (about USD 
30,000) or other atypical transactions.  The law requires the 
Financial Information Unit and the reporting banks to keep a 
registry of reported transactions for five years.  The 
Financial Information Unit receives between 2,600 to 2,700 
reports per month of transactions over the designated 
threshold.  A public prosecutor is assigned full-time to the 
Financial Information Unit and public prosecutors, under 
urgent conditions and with special authorization, may 
subpoena data and information directly from financial 
institutions.  Since passage of the law, the Financial 
Information Unit has begun investigating approximately 70 
cases of possible money laundering activity. 
 
In October 2002, Honduras became a member of the Caribbean 
Financial Action Task Force.  Honduras cooperates with U.S. 
investigations and requests for information pursuant to the 
1988 UN Drug Convention.  Honduras has signed Memoranda of 
Understanding to exchange information on money laundering 
investigations with Panama, El Salvador, Guatemala and 
Colombia.  The Honduran government adheres to the core 
principles for effective banking supervision that the Basel 
Committee adopted in 1997.  At the regional level, Honduras 
is a member of the Central American Council of Bank 
Superintendents, which meets periodically to exchange 
information. 
 
Asset Seizure and Forfeiture:  The National Congress enacted 
an asset seizure law in 1993 that subsequent Honduran Supreme 
Court rulings substantially weakened.  The new money 
laundering legislation strengthens the asset seizure 
provisions of Honduran law.  According to the law, officials 
in the Public Ministry will operate a warehouse for seized 
assets.  The implementing regulation governing the operations 
of the warehouse is still under discussion.  Since passage of 
the law and during the course of investigating cases of 
suspected money laundering, Honduran officials have frozen 
two bank accounts worth approximately USD 250,000. 
 
Terrorist Financing:  The National Banking and Insurance 
Commission has issued freeze orders promptly for the names on 
the UN 1267 Sanctions Committee's consolidated list and the 
subsequent lists of individuals and entities the U.S. has 
designated under relevant authorities.  The Commission 
reported that, to date, no accounts linked to the entities on 
the lists have been found in the Honduran financial system. 
The Ministry of Foreign Affairs is responsible for 
instructing the Commission to issue freeze orders.  The 
Commission directs Honduran financial institutions to search 
for, hold and report on terrorist-linked accounts and 
transactions, which, if found, are frozen.  Honduras signed 
the 1999 International Convention for the Suppression on the 
Financing of Terrorism on November 11, 2001. 
Palmer 

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