US embassy cable - 04RANGOON1056

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 001056 
 
SIPDIS 
 
STATE FOR EAP AND INL; DEA FOR OF, OFF; 
USPACOM FOR FPA 
 
E.O. 12958: DECL: 05/30/2013 
TAGS: SNAR, PREL, PGOV, KCRM, KISL, BM 
SUBJECT: BURMA: HISTORIC HEROIN BUST REVEALS MAJOR 
SMUGGLING SYNDICATE 
 
REF: RANGOON 887 (NOTAL DEA REPORT) 
 
Classified By: CDA, a.i. Ron McMullen for Reasons 1.4 (B,D) 
 
1. (C) Summary:  Burma's largest heroin seizure in history 
(592 kilos seized along the southern coast in early July) has 
uncovered a major drug trafficking syndicate with possible 
connections to traffickers and markets in Thailand, Vietnam, 
Hong Kong, Indonesia, Australia, India, and the United 
States.  Unusually, most of the local players are Muslim 
Sino-Burmese, with no ties to traditional traffickers based 
in the ethnic Wa and Kokang regions on the Chinese border. 
Likewise, the seized heroin appears to have originated in the 
Taunggyi area of southwest Shan State--not in Wa territory, 
Burma's traditional source for major heroin shipments.  More 
importantly perhaps, a post-seizure investigation has shed 
further light on a major sea-shipping route from Rangoon to 
the Andaman Sea, one which the GOB has virtually no capacity 
to thwart and may well offer drug traffickers a viable, 
low-risk option to move their product for the foreseeable 
future.  End Summary. 
 
2. (U) A/DCM and PolEconoff met on August 13 with Burmese 
Police Colonel Hkam Awng to discuss details about an ongoing 
investigation into the seizures by GOB authorities of 592 
kilos of heroin in Tanintharyi (Tenasserim) Division in 
southern Burma (reftel).  Colonel Hkam Awng, as Joint 
Secretary of Burma's Central Committee for Drugs Abuse 
 
SIPDIS 
Control (CCDAC), is the GOB's lead working-level counterdrug 
official.  He described the combined seizure (well over 500 
kilos seized on July 9 and more than 70 kilos seized during 
subsequent searches) as the largest in Burmese history and 
one of the most significant in the world, with a "street 
value" of over USD 75 million. 
 
3. (SBU) According to Hkam Awng, the July 9 seizure was a 
case of good luck.  Local police in a small village on 
Burma's southern coast arrested a "suspicious" character on 
July 8, which led to additional arrests and the first of two 
related heroin seizures on the following day.  As reported 
reftel, a follow-on investigation determined that in late May 
smugglers were originally trafficking the heroin via a small 
fishing vessel through the Gulf of Martaban, just south of 
Rangoon, when crew members mutinied, murdered the vessel 
owner and two others, and brought the heroin ashore for 
storage. 
 
4. (C) Hkam Awng said that as a result of the seizure, the 
GOB has uncovered a major heroin trafficking syndicate. 
Burmese police have to date arrested 36 Burmese persons and 
are cooperating closely with the DEA, the Australian Federal 
Police, and Thai drug officials.  The investigation has thus 
far revealed possible connections to heroin traffickers and 
markets in Thailand, Vietnam, Hong Kong, Indonesia, 
Australia, India, Seattle, Los Angeles, San Francisco, and 
Dallas.  Despite insights gained on the operational aspects 
of the syndicate, however, investigators have been unable to 
trace all financial flows associated with the heroin 
transactions. 
 
5. (C) Hkam Awng said that although the syndicate "kingpins" 
appear to be based in Taiwan and/or Hong Kong, most of the 
local players are young (late 20s, early 30s) Muslim 
Sino-Burmese men and women from Kengtung in eastern Shan 
State.  These individuals appear to have no ties to 
traditional Sino-Burmese drug traffickers, older men who are 
based in the ethnic Wa and Kokang border regions of northern 
Shan State.  A second unusual aspect is that the heroin 
seized appears to have originated in the Taunggyi area of 
southwest Shan State, a region that has experienced a 
dramatic decline in poppy cultivation in recent years, unlike 
northern Wa territory along the China border which is Burma's 
principal, and growing, source of poppy, opium, and heroin 
(as well as ATS). 
 
6. (C) Colonel Hkam Awng said that although the GOB was 
vaguely aware that traffickers had started shipping heroin 
south through Rangoon, the July 9 bust shed significant light 
on a major sea-shipping route--the scope of which has 
"shocked and surprised" GOB authorities.  GOB investigators 
have since discovered that the syndicate behind the July 9 
case has been operative since 2002 and is responsible for the 
trafficking of at least 2,000 kilos of heroin by land from 
Shan State to Rangoon and then onward to the Andaman Sea. 
The July 9 seizure was the fifth in a series of shipments, 
but, said Hkam Awng, "we missed the first four, which 
averaged over 400 kilos each." 
 
7. (SBU) According to Hkam Awng, the syndicate's modus 
operandi has been to ship heroin from Rangoon by small 
fishing trawlers under cover of darkness.  Concealment of the 
drugs is rudimentary at best (i.e. heroin packed into 
coolers), but the traffickers are equipped with high-tech 
communication equipment including radios, satellite phones, 
and GPS devices.  The small boats then rendezvous south of 
Burma in the Andaman Sea with large cargo vessels.  In the 
case of the July 9 seizure, for example, traffickers had 
originally planned to transfer their heroin shipment to a 
1,000-plus ton Vietnamese-flagged cargo vessel. 
 
8. (C) Comment:  The GOB, Colonel Hkam Awng acknowledges, has 
a serious problem on its hands.  The July 9 heroin seizure 
and related arrests are good news for the country's 
counterdrug professionals and may have disrupted a 
substantial international syndicate.  However, the 
investigation into the July 9 case has also fully exposed a 
drug trafficking route which Burma has virtually no capacity 
to thwart.  The country has no Coast Guard and its poorly 
equipped Navy has no counterdrug mandate.  Customs inspection 
capabilities fall well below international standards and the 
ports are notoriously corrupt.  Absent senior-level GOB 
attention, substantial domestic resources to detect coastal 
trafficking activities, and close cooperation from 
neighboring countries, the "southern sea route" may well 
offer drug traffickers a viable, low-risk option to move 
their product for the foreseeable future.  End Comment. 
McMullen