US embassy cable - 04SANTODOMINGO148

UNCLAS SECTION 01 OF 07 SANTO DOMINGO 000148 
 
SIPDIS 
 
DEPARTMENT FOR INL AND WHA/CAR 
JUSTICE FOR OIA, AFMLS, AND NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL 
 
E.O. 12958: N/A 
TAGS: SNAR, DR 
SUBJECT: DOMINICAN REPUBLIC: 2003-2004 INTERNATIONAL 
NARCOTICS CONTROL STRATEGY REPORT (INCSR) 
 
REF: A. STATE 324347 
 
     B. STATE 328024 
 
 1.  Text of Dominican Republic draft 2002-2003 INCSR follows. 
 
Part One:  Drugs and Chemical Control 
 
I. Summary 
 
The Dominican Republic (DR) is a major transit country for 
South American drugs, mostly cocaine and heroin, moving to 
the United States and Europe. The Government of the Dominican 
Republic (GODR) continued to cooperate closely with the U.S. 
in counternarcotics matters. Last year (2003) saw a decrease 
in heroin seizures, an increase in cocaine interceptions, and 
a decrease in seizures of MDMA (ecstasy); negligible 
cooperation between the Government of the Dominican Republic 
(GODR) and the Haitian police; continued good results of the 
extradition process; and attempts to apply a strong 
anti-money laundering law to a notorious bank fraud case. 
(For details on the GODR's anti-money laundering initiatives 
in 2003, see the Money Laundering section of this report.) 
Although the GODR continued its efforts to combat corruption 
in 2003, corruption and weak governmental institutions 
remained an impediment to controlling the flow of illegal 
narcotics through the DR.  In 2003, an estimated eight 
percent of the cocaine directed toward the U.S. flowed 
through Hispaniola, and nearly half this amount reached the 
DR's shores directly from South American sources.  The DR is 
a party to the 1988 UN Drug Convention. 
 
II. Status of Country 
 
There is no significant cultivation, refining, or 
manufacturing of major illicit drugs in the DR. Dominican 
criminal organizations are increasingly involved in command 
and control of international drug trafficking operations, but 
the country's primary role in regional drug trafficking is as 
a transshipment hub. 
 
Seizures in 2003 continued to indicate that cocaine, heroin, 
and marijuana destined for the United States and, to a lesser 
extent, Europe were being transshipped through the DR and its 
territorial waters. Ecstasy seized in the DR was most often 
being transported from Europe to the United States. Puerto 
Rican authorities noted a decrease in drug smuggling via the 
ferries operating between Puerto Rico and the DR, probably 
due to the presence of a newly established counternarcotics 
canine unit at the Santo Domingo ferry terminal. 
 
Dominican nationals play a major role in the actual 
transshipment of drugs. Many "go-fast" crews in the Caribbean 
include Dominican nationals, mostly fishermen recruited from 
the local docks. The crews speak Spanish, the language of the 
source country smugglers; move easily throughout the 
Caribbean; and are recruited for very small amounts of money. 
 
The DR is not a producer of precursor chemicals, but there is 
continued concern about their importation. 
 
III. Country Actions Against Drugs in 2002 
 
Policy Initiatives. The DR-initiated bilateral 
intelligence-sharing and interdiction efforts with Haiti, 
begun after Operation Hurricane in 2001, were not continued 
in 2003. The DR has continued to participate in annual 
Caribbean-wide counternarcotics operations. 
 
The National Directorate for Drug Control (DNCD), the law 
enforcement arm responsible for counternarcotics measures, 
and the National Drug Council (CND), the GODR's policy and 
planning organ, have adopted a computerized tracking system 
and are able to track seizures of assets in connection with 
drug-related offenses. 
 
Following the collapse of BANINTER, the third-largest 
Dominican bank, the Dominican Government struggled to 
implement anti-money laundering legislation passed in 2002. 
(See the Money Laundering section of this report.) 
 
The GODR instituted training, with U.S. and other 
international support, for implementing the revised criminal 
procedures code in 2004. This code will change the Dominican 
criminal system from a Napoleonic system, with a dossier of 
evidence evaluated by a judge, to an adversarial system of 
verbal process before a judge or a jury. 
 
Law Enforcement Efforts. The DNCD increased its canine 
program to 30 dogs and handlers.  All canine teams were 
recertified, and unit commanders were certified as dog team 
trainers. 
 
No multinational counternarcotics exercises were conducted 
during 2003. 
The DNCD led a multi-year, U.S. Government-supported effort 
to share data among Dominican law enforcement agencies and to 
make information available on demand by field officers. 
 
Cultivation/Production. There is no known cultivation of coca 
or opium poppy in the DR.  Cannabis is grown on a small scale 
for local consumption. The GODR's investigations into 
possible in-country manufacture of MDMA (ecstasy) have 
produced no definitive evidence of such activity. 
 
Drug Flow/Transit. The DNCD maintained its seizure rate, 
interdicting body-carried heroin and cocaine in the DR's 
international airports and larger quantities from vehicles 
and buildings. Through December 2003, with cooperation and 
assistance of the U.S. Drug Enforcement Administration (DEA), 
the DNCD seized 1,338 kilograms of cocaine, 59 kilograms of 
heroin, 51,965 units of MDMA (Ecstasy), and 1174 pounds of 
marijuana.  Puerto Rican authorities seized 2,039 kilograms 
of cocaine as a direct result of intelligence supplied by the 
DNCD and the Santo Domingo DEA office.  The DNCD continued to 
focus interdiction operations on the drug-transit routes in 
the DR's territorial waters along the northern border and on 
its land border crossings with Haiti, while attempting to 
prevent air drops and sea delivery of illicit narcotics to 
remote areas.  The DNCD and their DEA counterparts 
concentrated increasingly on investigations leading to 
takedown of large criminal organizations, and several 
international rings were broken up as a result. 
 
In 2003, drugs were easily accessible for local consumption 
in most metropolitan areas. The DR attracted a growing number 
of tourists from Europe, the United States, and Canada who 
provided a customer base for local drug sales, especially at 
the beachfront vacation resorts. Traffickers often used drugs 
to pay low-level couriers and distributors. 
 
The DNCD made 3929 drug-related arrests in 2003; of these, 
3692 were Dominican nationals and 237 were foreigners. There 
were 227 fewer drug-related arrests in 2003 than in 2002 and 
62 fewer foreigners were among those arrested on drug charges 
than in 2002. 
 
Only 9 percent of the total cocaine and 61 percent of the 
total heroin seized in the Dominican Republic was seized in 
the airports.  Seizures of Ecstasy were more successful in 
airports, resulting in 77 percent of all Ecstasy pills seized 
in the DR. 
 
Most of the significant seizures were made on land, in the 
big cities.  There were some seizures made at the Haitian 
border in 2003, but quantities seized were limited.  While 
the number of seizures made in Dominican airports was high, 
the actual amount of drugs seized was small.  Maritime 
seizures remain a challenge for the DR, especially drugs 
hidden in commercial vessels for shipment to the US and/or 
Europe.  In one December case, DNCD canine teams were 
dispatched at a moment's notice to search a suspect freighter 
in a small port near the Haitian border; that investigation 
continues. 
 
Extradition. The U.S.-Dominican Extradition Treaty dates from 
1909. Extradition of nationals is not mandated under the 
treaty, and for many years Dominican legislation barred the 
extradition of Dominican nationals. Former President 
Fernandez signed legislation in 1998 allowing the extradition 
of Dominican nationals. In March 2000, the U.S. Marshals 
Service assigned two marshals temporarily to the DR. They 
received excellent cooperation from the DNCD's special 
Section for Fugitive Surveillance and other relevant 
Dominican authorities in locating fugitives and returning 
them to the U.S. to face justice. The marshals were withdrawn 
in 2002, then returned permanently during 2003. 
 
President Mejia's administration generally maintained its 
record of cooperation in 2003, and the GODR extradited 17 
Dominicans to the United States during the year. The DNCD 
arrested 20 fugitives in 2003 in response to U.S. extradition 
requests. The National Police, working with the FBI, arrested 
and extradited two drug-related subjects. Eight individuals 
are now in custody pending extradition to the United States. 
 
In December 2003, with no fanfare, one of six persons 
arrested in the "Joselito.com" case and awaiting deportation 
to the United States was released on orders of the Attorney 
General.  In response to Embassy protests, the Attorney 
General cited supposed inadequacies in the extradition 
request package.  At year's end, President Mejia was aware of 
USG concerns, but no further action had been taken. 
 
Mutual Legal Assistance. The GODR cooperates with USG 
agencies, including the DEA, FBI, U.S. Customs Service, and 
U.S. Marshals Service on counternarcotics and fugitive 
matters. 
 
The DNCD housed and manned the DEA-sponsored Caribbean Center 
for Drug Information (CDI) at its facilities in Santo 
Domingo.  An increasing number of Caribbean countries have 
found the CDI's intelligence analysis services useful and are 
now frequent contributors of new information. 
 
The Dominican Navy received six renovated patrol craft and 
two newly constructed 100 foot patrol ships, supplied under a 
U.S. $22 million commercial contract with a U.S. company, and 
plans were made to incorporate these vessels into 
multilateral counternarcotics and anti-migration patrol 
activities. 
 
Corruption.  The GODR does not, as a matter of government 
policy, encourage or facilitate illicit production or 
distribution of narcotics, psychotropic drugs, and other 
controlled substances, nor does it contribute to drug-related 
money laundering. 
 
Dominican institutions remain vulnerable to influence by 
interest groups or individuals with money to spend, including 
narcotics traffickers. The GODR has not convicted any senior 
government official for engaging in, encouraging, or in any 
way facilitating the illicit production or distribution of 
illicit drugs or controlled substances, or the laundering of 
proceeds from illegal drug transactions. 
 
Legislation remains pending that would strengthen enforcement 
of a 1979 law that requires senior appointed, civil service, 
and elected officials to file financial disclosure 
statements. In what may be a regional model for transparency 
and an indication of the seriousness of the Dominican 
judiciary to uphold the ethical quality of employees, the 
sworn financial disclosure statements for all Dominican 
judges can be found on the Internet at 
http//www.suprema.gov.do/jueces/dj.htm. Nonetheless, an 
effective system to verify these statements has not yet been 
implemented and there are no sanctions for false statements. 
 
The GODR is a party to the Inter-American Convention Against 
Corruption and in 2001 signed the consensus agreement on 
establishing a mechanism to evaluate compliance with the 
Convention. 
 
Precursor Chemical Control. The Secretariat of Health is 
responsible for the control of chemicals entering and 
departing the DR. The CND has prohibited the re-exportation 
of certain chemicals. 
 
Domestic Programs (Demand Reduction). The DNCD conducted 79 
youth events in various cities and neighborhoods, from 
basketball tournaments to chess matches, reaching over 
200,000 young people to encourage competitive and 
recreational activities as better choices than drug abuse.  A 
non-governmental organization, Foundation for Life (FUNVIDA), 
published with U.S. Government assistance a book entitled 
"Schools Without Drugs" and distributed it gratis at several 
neighborhood meetings in the capital area. 
 
Agreements and Treaties. In 1984, the United States and the 
DR entered into an agreement on international narcotics 
control cooperation. In May 2003 the Dominican Republic 
entered into three comprehensive bilateral agreements, on 
Cooperation in Maritime Migration Law Enforcement, Maritime 
Counter-Drug Operations, and Search and Rescue, granting 
permanent overflight provisions in all three agreements for 
the respective operations.  The three agreements conclude a 
long bilateral effort to secure permanent overflight 
provisions; previous agreements provided only annual 
provisions.  In addition, the Maritime Counter-Drug Agreement 
broadened the scope of operations agreed to by the parties. 
The DR remains an active participant in ongoing negotiations 
to reach a Caribbean regional maritime counternarcotics 
agreement. 
 
In 2002 the DR became the first country in the Western 
Hemisphere to sign an Article 98 agreement exempting U.S. 
military personnel in the DR from the jurisdiction of the 
International Criminal Court (ICC). In 2001, the United 
States and the DR exchanged instruments of ratification of 
the Treaty for the Return of Stolen or Embezzled Vehicles. 
Attempts to implement the treaty have been hampered by 
organizational weaknesses within the Dominican bureaucracy, 
and in 2003 no vehicles were repatriated under this treaty. 
 
The DR has signed but not ratified the UN Convention against 
Transnational Organized Crime, the Protocol to Prevent, 
Suppress and Punish Trafficking in Persons, the Protocol 
against the Smuggling of Migrants, and the Protocol against 
the Illicit Manufacturing of and Trafficking in Firearms. 
 
IV. U.S. Policy Initiatives and Programs 
 
Cocaine and heroin trafficking, money laundering, 
institutional corruption, and reform of the judicial system 
remain the United States' primary counternarcotics concerns 
in the DR. The USG and the GODR cooperate to develop 
Dominican institutions that can interdict and seize narcotics 
shipments and conduct effective investigations leading to 
arrests, prosecutions, and convictions. The USG will continue 
to urge the GODR to improve its asset forfeiture procedures 
and its capacity to regulate financial institutions, develop 
and maintain strict controls on precursor chemicals, and 
improve its demand reduction programs. 
 
During 2003, the United States provided essential equipment 
and training to expand the counternarcotics canine units, 
supported the DNCD's vetted special investigation unit and 
border intelligence units, provided radio equipment to 
facilitate communications along the DR's border with Haiti, 
and funded assessments of airport and port security against 
narcotics trafficking and terrorism. The United States 
delivered three harbor patrol craft and a fully refurbished 
go-fast boat, previously captured from drug smugglers, to the 
Dominican Navy. The United States also assisted the Dominican 
Navy in planning for a complete maintenance and training 
program for its maritime assets. The cornerstone of this 
effort is the reopening of the Navy's training and 
maintenance school, closed in 1997.  The first step, 
establishment of a Navy maintenance command, was completed in 
2003. 
 
The United States has funded training to the DNCD Fugitive 
Surveillance Unit, helping it locate, apprehend, and 
extradite individuals wanted on criminal charges in the 
United States. Enhanced computer training, database 
expansion, and systems maintenance support were provided to 
the DNCD. 
 
The Dominican Navy and Air Force have a direct communications 
agreement with the U.S. Coast Guard's regional operations 
center (GANTSEC) in San Juan, Puerto Rico. Dominican Navy 
vessels have participated in numerous maritime drug seizures. 
 
USAID's "Strengthened Rule of Law and Respect for Human 
Rights" program continues to work with the Dominican court 
and prosecutorial system to improve the administration of 
justice, enhance access to justice, and support 
anticorruption programs. Improvements achieved to date 
include speedier, more transparent judicial processes managed 
by better trained, technically competent, and ethical judges 
who insist upon stricter adherence to due process. The USAID 
program continued to provide training to prosecutors in basic 
criminal justice and prosecutorial skills. Several 
high-profile investigations are ongoing. 
 
The U.S. Department of Justice, through OPDAT, provided two 
weeks of training to prosecutors and investigators on basics 
of money laundering. 
 
The U.S. Department of Homeland Security worked closely with 
Dominican business associations to establish a Dominican 
chapter of the Business Anti-Smuggling Coalition (BASC). 
This voluntary alliance of manufacturers, transport 
companies, and related private sector entities has agreed to 
meet stringent security standards to prevent smuggling by 
means of their operations and to receive surprise inspections 
at any time.  The BASC approach has proven successful in 
other Latin countries in minimizing contraband and promoting 
honest business activity. 
 
A third privately owned airport, at La Romana, joined those 
at Punta Cana and Santiago in upgrading counternarcotics 
measures, including co-funding with the U.S. Government of a 
DNCD canine unit. 
 
The United States is planning to deploy a U.S. mobile 
training team for the DNCD's border units and provide 
increased support for Dominican naval patrols of the Mona 
Passage. 
 
With U.S. Customs leadership and DEA support, the Port 
Authority improved security at the formerly chaotic Santo 
Domingo terminal of the ferry to Puerto Rico. An ongoing 
project has improved passenger processing and established 
controls to detect and prevent smuggling of drugs and other 
contraband.  Customs also advised the owners of the new 
Caucedo container terminal, which began limited operations in 
December. 
 
The Drug Enforcement Agency (DEA)-funded Caribbean Center for 
Drug Information at DNCD headquarters now permits real-time 
sharing and analysis of narcotics-related intelligence among 
all the nations of the Caribbean Basin.  Similar centers are 
established in Mexico, Colombia, and Bolivia. 
 
USG training programs have also targeted the DR military's 
intelligence units in order to improve their capacity to 
analyze, detect and interdict narcotics shipments.  Two 
military officers received counternarcotics training at Fort 
Benning, Georgia. 
 
The Road Ahead. The immediate U.S. goal remains helping to 
institutionalize judicial reform and good governance. The DR 
and U.S. are working to build coherent counternarcotics 
programs that can resist the pressures of corruption and can 
address new challenges brought by innovative narcotics 
trafficking organizations. 
 
The U.S. Government and the GODR will continue strengthening 
drug control cooperation through sharing of information and 
developing closer working relations among principal agencies. 
The United States will continue providing training and 
equipment for the DNCD, focusing its attention on the 
information technology and intelligence exchange necessary to 
disrupt narcotics smuggling at Dominican land and sea borders 
and at airports. Support for the retraining and 
re-certification of the DNCD canine units will continue, as 
will establishment of new canine units in cooperation with 
DNCD. The DNCD's fugitive investigation teams will continue 
to receive hands-on U.S. support for their efforts pursuing 
Dominican fugitives from U.S. justice seeking refuge in the 
DR. The USG will continue to provide support to Dominican 
government and private sector counternarcotics efforts, 
including provision of specialized technical equipment and 
support of business and civil society demand reduction 
efforts. 
 
USAID and the U.S. Department of Justice's Office of Overseas 
Prosecutorial Development, Assistance and Training (OPDAT) 
will provide further training to prosecutors and 
investigators, increasing their professionalism and ensuring 
that they are prepared to implement the new Criminal 
Procedures Code when it becomes effective in 2004. U.S. 
support for civil society's and the Mejia administration's 
efforts to curb corruption will continue, regardless of the 
outcome of 2004 presidential elections, through U.S.-funded 
programs to strengthen the Attorney General's Anticorruption 
Prosecution Department and through monitoring and reporting 
compliance with the Inter-American Convention Against 
Corruption. 
 
The USG will continue to work closely with the Anti-Money 
Laundering Commission to ensure full implementation of the 
Anti-Money Laundering Law. 
 
 
Part Two:  Financial Crimes and Money Laundering 
 
Dominican Republic. The Dominican Republic remains a key 
point for the transshipment of narcotics moving from South 
America into Puerto Rico and the United States. The Dominican 
Republic's financial institutions engage in currency 
transactions involving international narcotics-trafficking 
proceeds that include significant amounts of U.S. currency or 
currency derived from illegal drug sales in the United 
States. The smuggling of bulk cash by couriers, and wire 
transfer remittances, are the primary methods for moving 
illicit funds from the United States into the Dominican 
Republic. Once in the Dominican Republic, currency exchange 
houses and money remittance companies facilitate the 
laundering of these illicit funds. 
 
In 2003, counternarcotics authorities of the DNCD pursued 
nine cases of money laundering related to narcotics, 
arresting three persons and seizing a total of 29 vehicles, 
18 firearms, 12 buildings, and USD 184,701 in cash.  Most of 
these seizures were connected with one large case. 
 
During 2003, three Dominican banks failed, including the 
third largest in the nation, BANINTER, where some USD 2.2 
billion evaporated over several years.  Failure of two 
smaller banks, Banco Mercantil and BANCREDITO, brought the 
total loss to about three billion. Charges of bank fraud were 
filed against five individuals related to BANINTER, but all 
were later released on bail.  Preliminary investigations 
revealed no useful information as to the sources of the 
missing BANINTER funds or the presence of laundered accounts, 
but despite GODR guarantees for all depositors, several large 
accounts carried on bank books remained unclaimed by the 
owners. 
 
There have been notable legislative and regulatory efforts by 
the Government of the Dominican Republic (GODR) to combat 
drug trafficking, corruption, money laundering, and 
terrorism.  Narcotics-related money laundering has been a 
criminal offense since the enactment of Act 17 of December 
1995 (the "1995 Narcotics Law").  The Act allows preventive 
seizures and criminal forfeiture of drug-related assets, and 
authorizes international cooperation in forfeiture cases. 
While numerous narcotics-related investigations were 
initiated under the 1995 Narcotics Law and substantial 
currency and other assets confiscated, there have been only 
three successful money laundering prosecutions under the 1995 
Narcotics Law. 
 
Under Decree No. 288-1996, the Superintendency of Banks, 
banks, currency exchange houses, and stockbrokers are 
required to know and identify their customers, keep records 
of transactions (five years), record currency transactions 
greater than USD 10,000, and report suspicious financial 
transactions (SARs) to the Superintendency of Banks. 
 
In 1997, a Financial Analysis Unit (FAU) was created within 
the Superintendency of Banks to receive, analyze, and 
disseminate SAR information. The FAU also refers SARs to the 
Financial Investigative Unit of the DNCD for follow up 
investigation. The FAU is a member of the Egmont Group, and 
is authorized to exchange information with other Financial 
Intelligence Units. In 1998, the GODR passed legislation that 
allows extradition of Dominican nationals on money laundering 
charges. 
 
In June 2002, the GODR augmented its measures to prevent and 
combat money laundering, drug trafficking, and related 
activities, with the passage of Law No. 72-02.  This law 
expanded the predicate offenses for money laundering beyond 
illicit trafficking in drugs and controlled substances, to 
include other serious crimes such as any act related to 
terrorism, illicit trafficking in human beings or human 
organs, arms trafficking, kidnapping, extortion related to 
recordings and electronic film made by physical or moral 
entities, theft of vehicles, counterfeiting of currency, 
fraud against the State, embezzlement, and extortion and 
bribery related to drug trafficking.  It broadened the 
requirements for customer identification, recordkeeping of 
transactions, and reporting of SARs, to numerous other 
financial sectors including: securities brokers; the Central 
Bank; cashiers of checks or other types of negotiable 
instruments; insurers/sellers/cashers of travelers checks or 
money orders; credit/debit card companies; funds remittance 
companies; offshore financial service providers; casinos; 
real estate agents; automobile dealerships; insurance 
companies; and certain commercial entities such as those 
dealing in firearms, metals, archeological artifacts, 
jewelry, boats, and airplanes. 
 
Law No. 72-02 also requires the reporting of cash 
transactions greater than USD 10,000 to the FAU; until now 
these needed only to be recorded internally by the financial 
institutions.  Moreover, the legislation requires individuals 
to declare cross-border movements of currency that are equal 
to or greater than the equivalent of USD 10,000 in domestic 
or foreign currency. 
 
The GODR responded to U.S. Government efforts to identify and 
block terrorist-related funds.  Although no assets were 
frozen, efforts continue through orders and circulars issued 
by the Ministry of Finance and the Superintendency of Banks, 
instructing all financial institutions to continually monitor 
accounts. On November 15, 2001, the GODR signed, but has not 
yet become a party to, the UN International Convention for 
the Suppression of the Financing of Terrorism.  The Dominican 
Republic is a member of the Caribbean Financial Action Task 
Force (CFATF) and of the Organization of American States 
Inter-American Drug Abuse Control Commission (OAS/CICAD) 
Experts Group to Control Money Laundering.  The Dominican 
Republic is a party to the 1988 UN Drug Convention and a 
signatory to the UN Convention against Transnational 
Organized Crime (December 2000), which is not yet in force 
internationally.  Cooperation with U.S. Government law 
enforcement on fugitive and extradition matters remains 
strong. 
 
Effective implementation of the anti-money laundering law of 
June 2002 constitutes a priority for the Dominican Republic, 
as well as sustained anti-corruption efforts.  The GODR 
should also remain vigilant concerning controls relating to 
its many free zones, which may represent vehicles to 
facilitate money laundering. 
 
 
 
Dominican Republic Statistics 
(1993-2003) 
                  2003  2002  2001  2000  1999  1998  1997 
1996  1995  1994  1993 
Seizures 
 
Cocaine (mt)      1.3   1.1   1.8   1.27  1.01  2.34  1.35 
2.14  3.60  2.80  1.07 
Heroin (mt)       0.059 0.115 0.017 0.020 0.012 0.069 0.008 
0.005 -     -     - 
Marijuana (mt)    0.5   1.7   3.794 2.90  0.18  0.11  0.78 
1.01  1.00  6.81  0.31 
 
Arrests/Detentions 
 
Nationals         3,692 3,857 3,496 4,454 3,918 1,676 1,431 
3,097 3,388 2,810 - 
Foreigners        237   299   212   161   111   -     50 
69    11    158   - 
Total Arrests     3,929 4,156 3,708 4,615 4,029 1,676 1,481 
3,166 3,399 2,968 5,635 
MARSHALL