US embassy cable - 05RANGOON668

UNCLAS SECTION 01 OF 03 RANGOON 000668 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP, INL/LP (ABIGAIL SMITH), INL/PC, INL/AAE; DEA 
FOR OF, OFF; USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: SNAR, KCRM, BM 
SUBJECT: BURMA: 2005 COUNTERNARCOTICS REPORT CARD 
 
REF: A. SECSTATE 94578 
 
     B. 04 SECSTATE 246838 
     C. RANGOON 11 
     D. 04 RANGOON 680 
 
1. (U) This message responds to ref A request for a report 
card on the Government of Burma's cooperation on 
counternarcotics efforts (based on benchmarks established in 
November 2004, ref B, and delivered to the GOB in December 
2004, ref C) in preparation for the annual certification 
process. 
 
2. (SBU) Begin Text of Certification Report Card: 
 
a. The USG requested that the GOB take demonstrable and 
verifiable actions against high-level drug traffickers and 
their organizations, such as arresting and convicting leading 
drug producers and traffickers.  Assessment: Insufficient 
cooperation. 
 
The GOB has taken no significant action in response to the 
unsealing in January 2005 of U.S. federal court indictments 
against eight leaders of the notorious United Wa State Army 
(UWSA), a kingpin organization cited in a series of 
drug-related charges. 
 
The GOB cooperated with the DEA in a joint investigation that 
disrupted an international trafficking group reportedly 
associated with the UWSA.  The group has ties throughout 
Asia, India, and North America and was responsible for 
trafficking over 1,800 kilos of heroin between 2001 and 2004. 
 A seizure in July 2004 of 591 kilos of heroin led to the 
arrest and conviction of 36 suspects and the extradition to 
Burma of several suspects from China and Thailand. 
 
In 2004, according to official statistics, Burma arrested 
4,153 suspects on drug related charges (1,468 suspects during 
the first four months of 2005) and extradited 14 drug 
traffickers to China and Thailand.  During the first few 
months of 2005, Burma again cooperated with China and 
Thailand in several cases leading to the extradition of 
traffickers to/from Burma. 
 
b. The USG asked the GOB to continue good efforts on opium 
poppy eradication and provide location data to the U.S. for 
verification purposes; increase seizures of opium, heroin, 
and methamphetamines and destroy production facilities; adopt 
meaningful procedures to control the diversion of precursor 
chemicals.  Assessment: Adequate cooperation overall, though 
inadequate for joint opium survey. 
 
Burma's most significant counternarcotics achievement has 
been the reduction of poppy cultivation and opium production. 
 Although Burma remains the world's second largest producer 
of illicit opium, eradication efforts, enforcement of 
poppy-free zones, and alternative development (including crop 
substitution) have combined to reduce opium production to 
less than five percent of the opium produced in Afghanistan. 
The 2004 joint U.S.-Burma opium yield survey concluded that 
the total area under poppy cultivation had declined by 34 
percent from the previous year and opium production had 
dropped 40 percent (an 89 percent decline over the past eight 
years). 
 
The GOB failed in 2005 to provide sufficient cooperation to 
support the annual U.S.-Burma joint opium yield survey. In 
large part due to this lack of cooperation, for the first 
time in nine years the survey did not take place.  The 
Government did support an annual UNODC-sponsored survey, for 
which the USG provided a financial contribution. 
 
GOB seizures of illicit drugs have dropped considerably in 
recent years.  The GOB argues that declining seizures reflect 
declining production.  However, a 60 percent drop in opium 
seizures in 2004 (to just over 600 kilos) greatly exceeds the 
40 percent decline in opium production.  A 41 percent 
increase in heroin seizures in 2004 was more encouraging, as 
was the 342 kilos of opium seized during the first four 
months of 2005.  The GOB only destroyed one heroin lab in 
2004. 
 
Burma does not have a significant chemical industry and the 
GOB recognizes the threat posed by the trafficking of 
precursor chemicals.  The GOB's Precursor Chemical Control 
Committee has identified 25 chemical substances, including 
caffeine and thionyl chloride, and prohibited their import, 
sale, or use. 
c. The USG urged the GOB to establish a mechanism for the 
reliable measurement of methamphetamine production and 
demonstrate progress in reducing production (e.g., 
destruction of labs) and increasing seizures, particularly 
focusing increased illicit drug seizures on gangs on the 
borders with China, India, and Thailand.  Assessment: 
Insufficient cooperation. 
 
Burma remains a primary source of ATS produced in Asia, 
although the GOB does not have a mechanism for the 
measurement of ATS production.  Methamphetamine production 
and trafficking has exploded over the past three years, yet 
seizures in 2004 (8.3 million tablets) were 74 percent less 
than peak seizures in 2001.  The GOB destroyed only one meth 
lab in 2004. 
 
A joint DEA-GOB investigation culminated in two seizures 
during the first five months of 2005 that netted over 280 
kilos of crystal methamphetamine. 
 
d. The USG asked the GOB to continue cooperation with China 
and Thailand and expand cooperation to other neighboring 
countries, such as India, Laos, and Vietnam, to control the 
production and trafficking of illicit narcotics and the 
diversion of precursor chemicals.  Assessment: Adequate 
cooperation. 
 
The GOB maintains a regular dialogue on precursors with India 
and China, and in 2004 expanded the dialogue to include Laos 
and Thailand.  As a result, India and China have taken steps, 
including the creation of exclusion zones, to divert 
precursors away from Burma's border areas.  Burma has 
experienced difficulties with drug abuse and crime associated 
with the illegal import from India of codeine-based cough 
syrup, regulated in Burma but available over the counter in 
India.  A bilateral dialogue recently resulted in Indian 
efforts to substitute codeine with a synthetic substitute. 
 
Burma and Thailand jointly operate border liaison offices and 
recently established ten additional offices in four Mekong 
countries.  Burma and Laos, with the assistance of the UNODC, 
have established joint anti-drug patrols on the Mekong River. 
 
GOB cooperation with China and Thailand has yielded arrests 
and seizures, though the law enforcement relationship with 
India has been less productive.  Nonetheless, GOB counterdrug 
officials meet on a monthly basis with Indian counterparts at 
the field level at various border towns. 
 
e. The USG requested that the GOB enforce existing 
money-laundering laws, including asset forfeiture provisions, 
and fully implement and enforce Burma's money-laundering 
legislation passed in June 2002.  Assessment: Insufficient 
cooperation. 
 
In 2004, the GOB made significant progress in fulfilling the 
money-laundering concerns of the Financial Action Task Force 
(FATF).  After an 18-month investigation, in April 2005 the 
GOB revoked the banking licenses Of Myanmar Mayflower Bank 
and Asia Wealth Bank for violations of banking law.  There 
was no mention of money laundering in the government's 
determination, however authorities told FATF they are 
continuing a money laundering investigation into the two 
banks' activities. 
Despite the GOB actions, Burma remained on FATF's list of 
"Non-Cooperative Countries and Territories" due to lingering 
concerns over the high threshold reporting amount ($100,000), 
the Central Bank's lack of independence, and links of private 
banks to narcotics traffickers.  Likewise, there are concerns 
over the limited number of reports issued by banks and the 
unclear actions of authorities to investigate these reports. 
The GOB lacks the will and technical capability to enforce 
its money-laundering regime, and rampant corruption makes 
enforcement even more questionable.  Despite their claims to 
FATF, the GOB did not make public the results of its 
investigation into Myanmar Mayflower Bank and Asia Wealth 
Bank. 
 
f. The USG urged the GOB to prosecute drug-related 
corruption, especially corrupt government and military 
officials who facilitate drug trafficking and money 
laundering.  Assessment: Inadequate cooperation. 
 
In October 2004, the military regime ousted Prime Minister 
General Khin Nyunt, accusing him and hundreds of his military 
intelligence subordinates of illegal activities conducted in 
the drug producing and trafficking areas of northern Shan 
State.  However, none of these officials has been charged 
with drug-related offenses and no Burmese Army officer over 
the rank of full colonel has ever been prosecuted for drug 
offenses. 
 
According to the GOB, over 200 police officials and 48 
Burmese Army personnel were punished for narcotics-related 
corruption or drug abuse between 1995 and 2003--though none 
over the past two years. 
 
g. The USG asked the GOB to expand demand-reduction, 
prevention, and drug-treatment programs to reduce drug use 
and control the spread of HIV/AIDS.  Assessment: Insufficient 
cooperation. 
 
The GOB's demand-reduction, prevention, and drug-treatment 
programs suffer from inadequate resources and a lack of 
senior-level government support, and are insufficient to deal 
with the scope of a growing abuse problem.  The UNODC 
estimates that the addict population could be as high as 
300,000 abusers, including up to 130,000 injecting drug users 
and 15,000 regular ATS users. 
 
Burmese demand reduction programs are in part coercive and in 
part voluntary.  The Ministry of Health's drug treatment and 
rehabilitation centers have provided treatment to only 55,000 
addicts over the past eleven years. 
 
The UNODC and international NGOs--including CARE, World 
Concern, and PSI--have effective demand reduction programs, 
though the GOB's increasingly restrictive posture toward NGOs 
in general makes expansion of such programs unlikely. 
 
Although Burma has a national HIV/AIDS program, UNAIDS and 
INGOs (such as PSI and MSF) lead the most successful HIV/AIDS 
prevention programs, including condom distribution and 
prevention education.  Burma participates in UNAIDS regional 
activities and is a Global Fund recipient country, but 
because of the high levels of corruption within the 
government, UNDP handles all fund management.  The GOB's 
"AIDS Prevention and Control Programme" carries out some 
prevention programs and the latest figures (1999) indicate an 
annual government contribution of a mere $13,000. 
 
End Text of Certification Report Card. 
Martinez