VZCZCXRO7565
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0728/01 1560925
ZNR UUUUU ZZH
P 050925Z JUN 06
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC PRIORITY 4617
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0912
RUEHBY/AMEMBASSY CANBERRA 9686
RUEHKA/AMEMBASSY DHAKA 4174
RUEHLO/AMEMBASSY LONDON 1630
RUEHNE/AMEMBASSY NEW DELHI 3356
RUEHUL/AMEMBASSY SEOUL 6782
RUEHKO/AMEMBASSY TOKYO 4397
RUEHCI/AMCONSUL CALCUTTA 0763
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RUDKIA/AMCONSUL CHIANG MAI 0434
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RUEHUNV/USMISSION UNVIE VIENNA 0058
RUCNDT/USMISSION USUN NEW YORK 0339
RUEABND/DEA HQS WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI UNCLAS SECTION 01 OF 04 RANGOON 000728
SIPDIS
SENSITIVE
SIPDIS
STATE FOR EAP/MLS, INL/AAE, INL/PC; DEA FOR OF, OFF;
USPACOM FOR FPA
E.O. 12958: N/A
TAGS:
SUBJECT: BURMA: 2006 COUNTERNARCOTICS REPORT CARD
REF: A. SECSTATE 78495
B. 9/05 INL/AAE-RANGOON E-MAIL (BENCHMARKS)
C. 05 RANGOON 668
RANGOON 00000728 001.2 OF 004
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
late 2005 (ref B), in preparation for the FY 2007
certification process.
2. (SBU) Begin Text of 2006 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 investigating, arresting,
convicting leading drug producers and traffickers.
Embassy Rangoon Assessment: Limited cooperation.
The GOB has taken no direct 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).
The GOB, however, took significant action against components
of the UWSA. The GOB, with DEA and Australian Federal Police
(AFP) cooperation, disrupted two international trafficking
syndicates associated with the UWSA that have ties throughout
Asia, India, and North America. In September 2005, the GOB
seized a UWSA-related shipment of approximately 496 kgs of
heroin bound for China via Thailand. The seizure led to the
arrest of 80 suspects, including two of UWSA Chairman Bao Yu
Xiang,s family members, and the seizure of 7 UWSA-owned
vehicles and $1.3 million USD (equivalent) in assets.
A second, and related, investigation from December 2005
through April 2006 culminated in the arrest of 30 subjects
and the seizure of $2.2 million in assets and significant
quantities of morphine base, heroin, opium, weapons,
methamphetamine tablets and powder, crystal methamphetamine
(ice), pill presses, and precursor chemicals.
In 2005, according to official statistics, Burma arrested
4,754 suspects on drug related charges. In 2005, Burma again
cooperated with law enforcement agencies in neighboring
countries on 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 methamphetamine and destroy production facilities; adopt
meaningful procedures to control the diversion of precursor
chemicals.
Embassy Rangoon Assessment: Adequate cooperation overall,
though inadequate for the U.S.-Burma joint opium survey.
Burma's most significant counternarcotics achievement has
been the reduction of poppy cultivation and opium production.
For a second consecutive year, however, the GOB failed to
provide sufficient cooperation to support the U.S.-Burma
joint opium yield survey, previously an annual exercise. USG
yield estimates relied on less reliable imagery assessments.
In 2005, the USG estimated that 40,000 hectares was under
opium poppy cultivation, a slight increase over the previous
year. A UNODC survey estimated 32,800 hectares, a decline of
26%. Both surveys concluded, however, that poppy cultivation
and opium production (380 metric tons in 2005) declined by
roughly 80 percent over the past decade.
RANGOON 00000728 002.2 OF 004
In June 2005, local authorities in Wa Special Region 2
implemented an opium ban. A rapid survey conducted by UNODC
in October showed that no opium cultivation had taken place
in the Wa region after the ban. There are growing concerns
that the process will not be sustainable in the longer term
in the absence of alternative income sources. Preliminary
UNODC results in its 2006 survey, for example, indicate a
resurgence of cultivation in southern Shan State.
GOB seizures of illicit drugs increased considerably in 2005
and early 2006, due to closer cooperation with neighboring
countries and stepped-up law enforcement investigations.
During the same period, the GOB dismantled two clandestine
heroin laboratories.
Burma does not have a chemical industry. The GOB recognizes
the threat posed by the diversion and trafficking of
precursor chemicals; however, porous borders and corruption
are significant obstacles to effective countermeasures. The
GOB's Precursor Chemical Control Board has identified
twenty-five chemical substances (including caffeine and
thinyl 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 from gangs on the
border with China, India, and Thailand.
Embassy Rangoon Assessment: Inadequate cooperation.
Methamphetamine production and trafficking have exploded over
the past four years. Burma remains a primary source of
amphetamine-type substances (ATS) produced in Asia and
international drug enforcement agencies are concerned that
ATS production and consumption levels are increasing.
Traffickers continue to smuggle chemical precursors into
Burma from India and China, and then smuggle the final
product across the border into Thailand and China for the
domestic market and to other foreign ports including Hong
Kong and the Philippines.
The GOB does not have a mechanism for the measurement of ATS
production.
Seizures increased in 2005; law enforcement officials netted
in excess of 19 million meth tablets. The GOB destroyed one
ATS lab in 2005. In June 2005, officials from Burma and
China conducted operations against a drug smuggling ring and
seized 100 kg of crystal methamphetamine (ice).
The joint DEA-GOB investigation against a UWSA associated
group led to the seizure of approximately 15 million
methamphetamine tablets, 45 kgs of crystal methamphetamine
(ice), 65 kgs of methamphetamine powder, 673 kgs of
ephedrine, 2 pill presses, 360 gallons of AA, and other lab
equipment.
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.
Embassy Rangoon Assessment: Adequate cooperation.
The GOB maintains a regular dialogue on precursor chemicals
with India, China, Thailand, and Laos. As a result, India
and China have taken steps, including the creation of
exclusion zones, to divert precursors away from Burma's
border areas. The GOB has also cooperated with these
RANGOON 00000728 003.2 OF 004
countries on a variety of counterdrug law enforcement issues.
Burma and Thailand jointly operate border liaison offices.
Burma and Laos, with the assistance of the UNODC, conduct
joint anti-drug patrols on the Mekong River.
GOB cooperation with China and Thailand has been the most
productive, yielding arrests, seizures, and extraditions.
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: Limited cooperation
In 2005, the GOB continued progress in fulfilling the
money-laundering concerns of the Financial Action Task Force
(FATF), producing a number of quality progress reports.
The GOB, which is currently investigating a number of major
money laundering cases, instituted an on-site examination
program for financial institutions. Over the past year, the
GOB closed three major banking institutions (Asia Wealth
Bank, Myanmar Mayflower Bank, and the Myanmar Universal Bank)
for violations of banking regulations. The banks were
allegedly involved in laundering money linked to the UWSA's
illicit narcotic trade. In August 2005, the GOB, with the
assistance of DEA, seized assets of the Myanmar Universal
Bank and arrested its Chairman, Tin Sein, and sentenced him
to death, for laundering UWSA drug proceeds. The total value
of seized bank accounts, property, and personal assets
exceeded $25 million.
The GOB recently initiated an investigation into the Myanmar
Oriental Bank. The probe is based on alleged violation of
banking regulations and laundering money linked to the
illicit narcotic trade.
In July 2005, Burma and Thailand signed an MOU on the
exchange of information relating to money-laundering.
Throughout 2005, technical specialists of the Australian
Transaction Reports and Analysis Centre (AUSTRAC) visited
Burma to deliver training on anti-money laundering and the
countering of the financing of terrorism. The regional
technical assistance and training program is ongoing, with
further workshops scheduled for year 2006. As a result of
the promulgation in 2004 of the Mutual Assistance in Criminal
Matters Law (MACML) and subsequent measures to address money
laundering and terrorism financing, Burma gained membership
in the Asia Pacific Group on Money Laundering in March 2006.
Burma, however, remained on FATF's list of "Non-Cooperative
Countries and Territories." This was largely due to the
GOB's inadequate implementation of its money-laundering
regime. With the exception of the Myanmar Universal Bank
case, the GOB did not make public the results of its
investigations into private banks, nor make explicit
connections between the banks and money laundering.
F. The USG urged the GOB to prosecute drug-related
corruption, especially corrupt government and military
officials who facilitate drug trafficking and money
laundering.
Embassy Rangoon Assessment: Inadequate cooperation.
RANGOON 00000728 004.2 OF 004
According to the GOB, between 1995 and 2003 officials
prosecuted and punished over 200 police officials and 48
Burmese Army personnel for narcotics-related corruption or
drug abuse. There is no evidence that the GOB took any
similar actions over the past three years.
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, the GOB charged none of these officials with
drug-related offenses. The GOB has never prosecuted a
Burmese Army officer over the rank of full colonel.
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.
Embassy Rangoon Assessment: Inadequate cooperation.
Although drug abuse levels remain low in Burma compared to
neighboring countries, the addict population could be as high
as 300,000 abusers, including a growing number of injecting
drug users (IDU) and regular consumers of ATS.
The GOB's prevention and drug treatment programs suffer from
inadequate resources and a lack of senior-level government
support. Demand reduction programs are in part coercive and
in part voluntary. Burmese authorities, however, have
collaborated with UNODC in expanding anti-drug campaigns as
well as establishing treatment and rehabilitation programs.
The GOB's Myanmar Anti-Narcotic Association, for example, has
supported the activities of several outreach projects in
northern Shan State that treat thousands of addicts annually.
Several international NGOs have effective demand reduction
programs, but in February 2005 the GOB issued new guidelines
that restrict the activities of INGOs and UN agencies.
Implementation of the new guidelines, however, has been
uneven.
The transmission of HIV/AIDS through injecting drug use is a
major concern. The HIV epidemic in Burma, one of the most
serious in Asia, continues to expand rapidly. UNAIDs
estimates over 600,000 people are affected with HIV, 34
percent of which are IDUs.
The GOB, national and international NGOs, and UN agencies
developed the Joint Program for HIV/AIDS in Burma. The
Program identified the link between IDU and HIV/AIDS as a
priority area. The Global Fund for Aids, TB and Malaria had
approved grants totaling $98.5 million for Burma, but
withdrew in late 2005 due to the GOB's onerous restrictions
and lack of full cooperation. A consortium of six donors
(Australia, UK, Sweden, Norway, the Netherlands, and the EC)
is currently negotiating to develop a new funding mechanism
to fight the three diseases.
End Text of 2006 Certification Report Card.
VILLAROSA
