Chapter 262

Afghanistan world's largest producer of opium; poppy cultivation increased 17% to a near-record 202,000 hectares in 2007; good growing conditions pushed potential opium production to a record 8,000 metric tons, up 42% from last year; if the entire opium crop were processed, 947 metric tons of heroin potentially could be produced; drug trade is a source of instability and the Taliban and other antigovernment groups participate in and profit from the drug trade; widespread corruption impedes counterdrug efforts; most of the heroin consumed in Europe and Eurasia is derived from Afghan opium; vulnerable to drug money laundering through informal financial networks; regional source of hashish

Albania increasingly active transshipment point for Southwest Asian opiates, hashish, and cannabis transiting the Balkan route and - to a lesser extent - cocaine from South America destined for Western Europe; limited opium and growing cannabis production; ethnic Albanian narcotrafficking organizations active and expanding in Europe; vulnerable to money laundering associated with regional trafficking in narcotics, arms, contraband, and illegal aliens

Angola used as a transshipment point for cocaine destined for Western Europe and other African states, particularly South Africa

Anguilla transshipment point for South American narcotics destined for the US and Europe

Antigua and Barbuda considered a minor transshipment point for narcotics bound for the US and Europe; more significant as an offshore financial center

Argentina a transshipment country for cocaine headed for Europe; some money-laundering activity, especially in the Tri-Border Area; law enforcement corruption; a source for precursor chemicals; increasing domestic consumption of drugs in urban centers, especially cocaine base and synthetic drugs

Armenia illicit cultivation of small amount of cannabis for domestic consumption; minor transit point for illicit drugs - mostly opium and hashish - moving from Southwest Asia to Russia and to a lesser extent the rest of Europe

Aruba transit point for US- and Europe-bound narcotics with some accompanying money-laundering activity; relatively high percentage of population consumes cocaine

Australia Tasmania is one of the world's major suppliers of licit opiate products; government maintains strict controls over areas of opium poppy cultivation and output of poppy straw concentrate; major consumer of cocaine and amphetamines

Austria transshipment point for Southwest Asian heroin and South American cocaine destined for Western Europe; increasing consumption of European-produced synthetic drugs

Azerbaijan limited illicit cultivation of cannabis and opium poppy, mostly for CIS consumption; small government eradication program; transit point for Southwest Asian opiates bound for Russia and to a lesser extent the rest of Europe

Bahamas, The transshipment point for cocaine and marijuana bound for US and Europe; offshore financial center

Bangladesh transit country for illegal drugs produced in neighboring countries

Barbados one of many Caribbean transshipment points for narcotics bound for Europe and the US; offshore financial center

Belarus limited cultivation of opium poppy and cannabis, mostly for the domestic market; transshipment point for illicit drugs to and via Russia, and to the Baltics and Western Europe; a small and lightly regulated financial center; new anti-money-laundering legislation does not meet international standards; few investigations or prosecutions of money-laundering activities

Belgium growing producer of synthetic drugs and cannabis; transit point for US-bound ecstasy; source of precursor chemicals for South American cocaine processors; transshipment point for cocaine, heroin, hashish, and marijuana entering Western Europe; despite a strengthening of legislation, the country remains vulnerable to money laundering related to narcotics, automobiles, alcohol, and tobacco; significant domestic consumption of ecstasy

Belize transshipment point for cocaine; small-scale illicit producer of cannabis, primarily for local consumption; money-laundering activity related to narcotics trafficking and offshore sector

Benin transshipment point used by Nigerian traffickers for narcotics destined for Western Europe; vulnerable to money laundering due to poorly enforced financial regulations

Bolivia world's third-largest cultivator of coca (after Colombia and Peru) with an estimated 29,500 hectares under cultivation in 2007, a slight increase over 2006; third largest producer of cocaine, estimated at 120 metric tons of potential pure cocaine in 2007; transit country for Peruvian and Colombian cocaine destined for Brazil, Argentina, Chile, Paraguay, and Europe; cultivation generally increasing since 2000, despite eradication and alternative crop programs; weak border controls; some money-laundering activity related to narcotics trade, especially along the borders with Brazil and Paraguay; major cocaine consumption (2007)

Bosnia and Herzegovina increasingly a transit point for heroin being trafficked to Western Europe; minor transit point for marijuana; remains highly vulnerable to money-laundering activity given a primarily cash-based and unregulated economy, weak law enforcement, and instances of corruption

Brazil second-largest consumer of cocaine in the world; illicit producer of cannabis; trace amounts of coca cultivation in the Amazon region, used for domestic consumption; government has a large-scale eradication program to control cannabis; important transshipment country for Bolivian, Colombian, and Peruvian cocaine headed for Europe; also used by traffickers as a way station for narcotics air transshipments between Peru and Colombia; upsurge in drug-related violence and weapons smuggling; important market for Colombian, Bolivian, and Peruvian cocaine; illicit narcotics proceeds earned in Brazil are often laundered through the financial system; significant illicit financial activity in the Tri-Border Area

British Virgin Islands transshipment point for South American narcotics destined for the US and Europe; large offshore financial center makes it vulnerable to money laundering

Brunei drug trafficking and illegally importing controlled substances are serious offenses in Brunei and carry a mandatory death penalty

Bulgaria major European transshipment point for Southwest Asian heroin and, to a lesser degree, South American cocaine for the European market; limited producer of precursor chemicals; some money laundering of drug-related proceeds through financial institutions

Burma remains world's second-largest producer of illicit opium with an estimated production in 2008 of 340 metric tons, an increase of 26%, and cultivation in 2008 was 22,500 hectares, a 4% increase from 2007; production in the United Wa State Army's areas of greatest control remains low; Shan state is the source of 94% of poppy cultivation; lack of government will to take on major narcotrafficking groups and lack of serious commitment against money laundering continues to hinder the overall antidrug effort; major source of methamphetamine and heroin for regional consumption; currently under Financial Action Task Force countermeasures due to continued failure to address its inadequate money-laundering controls (2008)

Cambodia narcotics-related corruption reportedly involving some in the government, military, and police; limited methamphetamine production; vulnerable to money laundering due to its cash-based economy and porous borders

Canada illicit producer of cannabis for the domestic drug market and export to US; use of hydroponics technology permits growers to plant large quantities of high-quality marijuana indoors; increasing ecstasy production, some of which is destined for the US; vulnerable to narcotics money laundering because of its mature financial services sector

Cape Verde used as a transshipment point for Latin American cocaine destined for Western Europe; the lack of a well-developed financial system limits the country's utility as a money-laundering center

Cayman Islands offshore financial center; vulnerable to drug transshipment to the US and Europe

Chile transshipment country for cocaine destined for Europe and the region; economic prosperity and increasing trade have made Chile more attractive to traffickers seeking to launder drug profits, especially through the Iquique Free Trade Zone, but a recent anti-money-laundering law improves controls; imported precursors passed on to Bolivia; domestic cocaine consumption is rising, making Chile a significant consumer of cocaine

China major transshipment point for heroin produced in the Golden Triangle region of Southeast Asia; growing domestic drug abuse problem; source country for chemical precursors, despite new regulations on its large chemical industry

Colombia illicit producer of coca, opium poppy, and cannabis; world's leading coca cultivator with 167,000 hectares in coca cultivation in 2007, a 6% increase over 2006, producing a potential of 535 metric tons of pure cocaine; the world's largest producer of coca derivatives; supplies cocaine to most of the US market and the great majority of other international drug markets; in 2007, aerial eradication dispensed herbicide to treat over 153,000 hectares with another 67,000 hectares manually eradicated, but aggressive replanting on the part of coca growers means Colombia remains a key producer; a significant portion of non-US narcotics proceeds are either laundered or invested in Colombia through the black market peso exchange; important supplier of heroin to the US market; opium poppy cultivation is estimated to have fallen 25% between 2006 and 2007 with a corresponding estimated 27% decline in the yield of pure heroin to 1.9 metric tons; (2007)

Congo, Democratic Republic of the one of Africa's biggest producers of cannabis, but mostly for domestic consumption; while rampant corruption and inadequate supervision leaves the banking system vulnerable to money laundering, the lack of a well-developed financial system limits the country's utility as a money-laundering center

Costa Rica transshipment country for cocaine and heroin from South America; illicit production of cannabis in remote areas; domestic cocaine consumption, particularly crack cocaine, is rising; significant consumption of amphetamines

Cote d'Ivoire illicit producer of cannabis, mostly for local consumption; utility as a narcotic transshipment point to Europe reduced by ongoing political instability; while rampant corruption and inadequate supervision leave the banking system vulnerable to money laundering, the lack of a developed financial system limits the country's utility as a major money-laundering center

Croatia transit point along the Balkan route for Southwest Asian heroin to Western Europe; has been used as a transit point for maritime shipments of South American cocaine bound for Western Europe

Cuba territorial waters and air space serve as transshipment zone for US- and European-bound drugs; established the death penalty for certain drug-related crimes in 1999

Cyprus minor transit point for heroin and hashish via air routes and container traffic to Europe, especially from Lebanon and Turkey; some cocaine transits as well; despite a strengthening of anti-money-laundering legislation, remains vulnerable to money laundering; reporting of suspicious transactions in offshore sector remains weak

Czech Republic transshipment point for Southwest Asian heroin and minor transit point for Latin American cocaine to Western Europe; producer of synthetic drugs for local and regional markets; susceptible to money laundering related to drug trafficking, organized crime; significant consumer of ecstasy

Dominica transshipment point for narcotics bound for the US and Europe; minor cannabis producer; anti-money-laundering enforcement is weak, making the country particularly vulnerable to money laundering

Dominican Republic transshipment point for South American drugs destined for the US and Europe; has become a transshipment point for ecstasy from the Netherlands and Belgium destined for US and Canada; substantial money laundering activity; Colombian narcotics traffickers favor the Dominican Republic for illicit financial transactions; significant amphetamine consumption

Ecuador significant transit country for cocaine originating in Colombia and Peru, with over half of the US-bound cocaine passing through Ecuadorian Pacific waters; importer of precursor chemicals used in production of illicit narcotics; attractive location for cash-placement by drug traffickers laundering money because of dollarization and weak anti-money-laundering regime; increased activity on the northern frontier by trafficking groups and Colombian insurgents

Egypt transit point for cannabis, heroin, and opium moving to Europe, Israel, and North Africa; transit stop for Nigerian drug couriers; concern as money laundering site due to lax enforcement of financial regulations

El Salvador transshipment point for cocaine; small amounts of marijuana produced for local consumption; significant use of cocaine

Estonia growing producer of synthetic drugs; increasingly important transshipment zone for cannabis, cocaine, opiates, and synthetic drugs since joining the European Union and the Schengen Accord; potential money laundering related to organized crime and drug trafficking is a concern, as is possible use of the gambling sector to launder funds; major use of opiates and ecstasy

Ethiopia transit hub for heroin originating in Southwest and Southeast Asia and destined for Europe, as well as cocaine destined for markets in southern Africa; cultivates qat (khat) for local use and regional export, principally to Djibouti and Somalia (legal in all three countries); the lack of a well-developed financial system limits the country's utility as a money laundering center

France metropolitan France: transshipment point for South American cocaine, Southwest Asian heroin, and European synthetics French Guiana: small amount of marijuana grown for local consumption; minor transshipment point to Europe Martinique: transshipment point for cocaine and marijuana bound for the US and Europe

Georgia limited cultivation of cannabis and opium poppy, mostly for domestic consumption; used as transshipment point for opiates via Central Asia to Western Europe and Russia

Germany source of precursor chemicals for South American cocaine processors; transshipment point for and consumer of Southwest Asian heroin, Latin American cocaine, and European-produced synthetic drugs; major financial center

Ghana illicit producer of cannabis for the international drug trade; major transit hub for Southwest and Southeast Asian heroin and, to a lesser extent, South American cocaine destined for Europe and the US; widespread crime and money laundering problem, but the lack of a well developed financial infrastructure limits the country's utility as a money laundering center; significant domestic cocaine and cannabis use

Greece a gateway to Europe for traffickers smuggling cannabis and heroin from the Middle East and Southwest Asia to the West and precursor chemicals to the East; some South American cocaine transits or is consumed in Greece; money laundering related to drug trafficking and organized crime

Grenada small-scale cannabis cultivation; lesser transshipment point for marijuana and cocaine to US

Guatemala major transit country for cocaine and heroin; in 2005, cultivated 100 hectares of opium poppy after reemerging as a potential source of opium in 2004; potential production of less than 1 metric ton of pure heroin; marijuana cultivation for mostly domestic consumption; proximity to Mexico makes Guatemala a major staging area for drugs (particularly for cocaine); money laundering is a serious problem; corruption is a major problem

Guinea-Bissau increasingly important transit country for South American cocaine enroute to Europe; enabling environment for trafficker operations thanks to pervasive corruption; archipelago-like geography around the capital facilitates drug smuggling

Guyana transshipment point for narcotics from South America - primarily Venezuela - to Europe and the US; producer of cannabis; rising money laundering related to drug trafficking and human smuggling

Haiti Caribbean transshipment point for cocaine en route to the US and Europe; substantial bulk cash smuggling activity; Colombian narcotics traffickers favor Haiti for illicit financial transactions; pervasive corruption; significant consumer of cannabis

Honduras transshipment point for drugs and narcotics; illicit producer of cannabis, cultivated on small plots and used principally for local consumption; corruption is a major problem; some money-laundering activity

Hong Kong despite strenuous law enforcement efforts, faces difficult challenges in controlling transit of heroin and methamphetamine to regional and world markets; modern banking system provides conduit for money laundering; rising indigenous use of synthetic drugs, especially among young people

Hungary transshipment point for Southwest Asian heroin and cannabis and for South American cocaine destined for Western Europe; limited producer of precursor chemicals, particularly for amphetamine and methamphetamine; efforts to counter money laundering, related to organized crime and drug trafficking, are improving, but remain vulnerable; significant consumer of ecstasy

India world's largest producer of licit opium for the pharmaceutical trade, but an undetermined quantity of opium is diverted to illicit international drug markets; transit point for illicit narcotics produced in neighboring countries and throughout Southwest Asia; illicit producer of methaqualone; vulnerable to narcotics money laundering through the hawala system; licit ketamine and precursor production

Indonesia illicit producer of cannabis largely for domestic use; producer of methamphetamine and ecstasy

Iran despite substantial interdiction efforts and considerable control measures along the border with Afghanistan, Iran remains one of the primary transshipment routes for Southwest Asian heroin to Europe; suffers one of the highest opiate addiction rates in the world, and has an increasing problem with synthetic drugs; lacks anti-money laundering laws; has reached out to neighboring countries to share counter-drug intelligence

Ireland transshipment point for and consumer of hashish from North Africa to the UK and Netherlands and of European-produced synthetic drugs; increasing consumption of South American cocaine; minor transshipment point for heroin and cocaine destined for Western Europe; despite recent legislation, narcotics-related money laundering - using bureaux de change, trusts, and shell companies involving the offshore financial community - remains a concern

Israel increasingly concerned about ecstasy, cocaine, and heroin abuse; drugs arrive in country from Lebanon and, increasingly, from Jordan; money-laundering center

Italy important gateway for and consumer of Latin American cocaine and Southwest Asian heroin entering the European market; money laundering by organized crime and from smuggling

Jamaica transshipment point for cocaine from South America to North America and Europe; illicit cultivation and consumption of cannabis; government has an active manual cannabis eradication program; corruption is a major concern; substantial money-laundering activity; Colombian narcotics traffickers favor Jamaica for illicit financial transactions

Kazakhstan significant illicit cultivation of cannabis for CIS markets, as well as limited cultivation of opium poppy and ephedra (for the drug ephedrine); limited government eradication of illicit crops; transit point for Southwest Asian narcotics bound for Russia and the rest of Europe; significant consumer of opiates

Kenya widespread harvesting of small plots of marijuana; transit country for South Asian heroin destined for Europe and North America; Indian methaqualone also transits on way to South Africa; significant potential for money-laundering activity given the country's status as a regional financial center; massive corruption, and relatively high levels of narcotics-associated activities

Korea, North for years, from the 1970s into the 2000s, citizens of the Democratic People's Republic of (North) Korea (DPRK), many of them diplomatic employees of the government, were apprehended abroad while trafficking in narcotics, including two in Turkey in December 2004; police investigations in Taiwan and Japan in recent years have linked North Korea to large illicit shipments of heroin and methamphetamine, including an attempt by the North Korean merchant ship Pong Su to deliver 150 kg of heroin to Australia in April 2003

Kyrgyzstan limited illicit cultivation of cannabis and opium poppy for CIS markets; limited government eradication of illicit crops; transit point for Southwest Asian narcotics bound for Russia and the rest of Europe; major consumer of opiates

Laos estimated opium poppy cultivation in 2008 was 1,900 hectares, about a 73% increase from 2007; estimated potential opium production in 2008 more than tripled to 17 metric tons; unsubstantiated reports of domestic methamphetamine production; growing domestic methamphetamine problem (2007)

Latvia transshipment and destination point for cocaine, synthetic drugs, opiates, and cannabis from Southwest Asia, Western Europe, Latin America, and neighboring Balkan countries; despite improved legislation, vulnerable to money laundering due to nascent enforcement capabilities and comparatively weak regulation of offshore companies and the gaming industry; CIS organized crime (including counterfeiting, corruption, extortion, stolen cars, and prostitution) accounts for most laundered proceeds

Lebanon cannabis cultivation dramatically reduced to 2,500 hectares in 2002 despite continued significant cannabis consumption; opium poppy cultivation minimal; small amounts of Latin American cocaine and Southwest Asian heroin transit country on way to European markets and for Middle Eastern consumption; money laundering of drug proceeds fuels concern that extremists are benefiting from drug trafficking

Liberia transshipment point for Southeast and Southwest Asian heroin and South American cocaine for the European and US markets; corruption, criminal activity, arms-dealing, and diamond trade provide significant potential for money laundering, but the lack of well-developed financial system limits the country's utility as a major money-laundering center

Liechtenstein has strengthened money laundering controls, but money laundering remains a concern due to Liechtenstein's sophisticated offshore financial services sector

Lithuania transshipment and destination point for cannabis, cocaine, ecstasy, and opiates from Southwest Asia, Latin America, Western Europe, and neighboring Baltic countries; growing production of high-quality amphetamines, but limited production of cannabis, methamphetamines; susceptible to money laundering despite changes to banking legislation