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December 9, 2016
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July 19, 2001
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October 1, 1970
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Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Abuse of opium-based drugs has been on the rise in the postwar period despite international efforts to suppress it. The present system of international controls is embodied in the 1961 Single Convention on Narcotic Drugs, adopted under United Nations auspices. By the time the Convention was adopted, the controls over opium -- once it came into the possession of the state export organizations and the pharmaceutical firms -- had proved on the whole to be quite effective. One of the main control problems, continues to be the preventing of the diversion of farm production directly into the illicit traffic. In order to reduce leakage from the farm, the Single Convention calls for the establishment of state opium monopolies which are to designate areas for legal poppy cultivation and license individual farmers to grow the crop. The Convention also permits exports only by those countries which legally ex- ported it in the period prior to 1961: Turkey, Bulgaria, India, Iran, the USSR, Greece, and Yugo- slavia. To oversee compliance with its provisions, the Convention established the International Nar- cotics Control Board; however, the INCB has no enforcement powers. Notwithstanding the Convention's provisions, illicit production has continued to flourish for many reasons beyond the lack of enforcement authority of the INCB. In addition to the inherently difficult task of administering crop control, the responsible factors include the persistence of con- sumer demand and the limitations on the ability of enforcement authorities to deal with illicit traders. Given the present scale of opium-based drug abuse Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 it is unlikely to be lastingly suppressed without greater international cooperation in treatment and enforcement programs as well as in attempts to control production directly. In any case, progress will not be easy, because opium production and consumption reflect larger problems of political, social, and economic developments. This report attempts first to estimate the scale of world opium production and consumption and to describe the patterns of illicit trade and its organization at the wholesale level. Second, it traces the history of the major changes in the opium market in the postwar period. Finally, the report discusses the problems involved in controlling illicit production, consumption, and trade in opium and its derivative products. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 The Production, Consumption of Opium and Its Derivatives Sources and Uses of Opium and Opiates Opium is produced from several varieties of the poppy plant, Papaver somniferum. This annual plant rises three to four feet on a thin main stalk and produces several blossoms and pod-like structures about the size of an egg. Planted mostly as a fall crop but sometimes also as a spring crop, it requires intensive cultivation and much harvesting labor. About two weeks after the blossoms fall the pods are lanced by hand and the white latex-like raw opium oozes out and coagulates. It is then collected by scraping the gum from the pod. Upon further exposure, the gum turns brown and hardens into a brick-like form. The chief active chemical principle of opium is the alkaloid morphine, the sole source of the drug's simultaneously analgesic, narcotic, and addictive properties. In its pure state, opium may be eaten, smoked, or drunk in potions. Eating and smoking are the pre- dominate forms of consumption. Opium has a long tradition. in folk medicine, and addiction to it is to some extent associated with the alleviation of physical pain in settings of poverty and low standards of public health. The habitual use of opium for nonmedicinal purposes also reflects long- standing customs in many parts of the world. Only relatively small amounts appear to be consumed by people reacting to stress in settings of rapid social change and conflicts between traditional and modern values. In modern medicine the use of raw opium has been long superseded by its easily distilled derivatives (opiates) in which the morphine content is isolated. Most morphine is still produced from raw opium, but increasingly it is being derived from the industrial processing of poppy straw (pods and upper parts of stalks). This yields no opium and results in the direct production of morphine. The use of morphine as an analgesic has fallen off especially since World War II in favor of synthetic substitutes, but the further processing of morphine into codeine, the major antitussive in modern medicine, has been Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 on the rise. While addiction to morphine is now a serious problem in only a few countries, heroin addiction has spread to many. Heroin is a semi- synthetic derivative of morphine obtained by the action of acetic anhydride or acetylchloride on morphine. Now generally regarded as having no unique medical value, heroin is outlawed in most countries. For the most part it is now produced in small, crude clandestine laboratories. In morphine the effects of opium are multiplied several times and in heroin they are even more intensified, particularly when the substances are taken by injection. Euphoria and indifference to pain and distress are heightened as are the after- effects and addictive craving. Although a sub- stantial portion of populations consuming opium may be classified as users rather than addicts, in those consuming morphine and heroin addiction is the general rule. Addiction to heroin especially can be associated with societies undergoing rapid social change and with attendant conflicts between tradi- tional and modern values. In contrast to opium consumption, heroin consumption is essentially an urban phenomenon restricted mostly to people under 40 years of age. Zone of Production The location and extent of opium poppy cultiva- tion are profoundly influenced by factors of climate, terrain, and economics. While the opium poppy can be grown in a variety of soils, it dis- likes heavy, clayey, or sandy soils. The plant thrives in warm but not humid climates. It re- quires only a moderate amount of water before and during the growth cycle to insure profitable yields, but rainfall during the harvest period can be dis- astrous because it leaches alkaloids from the pod. Much of the sometimes irrigated flat terrain of mountain valleys, 3,000 feet or more above sea level, in the Middle and Far East meets the climatic and soil conditions well. Most world poppy cultivation occurs within a zone extending from the Turkish Anatolian Plain to Yunnan Province in China (see Figure 1). Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 The greatest concentrations of opium poppy acreage are in India and within the contiguous areas occupied mostly by hill tribes of Burma, Laos, and Thailand. India has well over 35,000 hectares under cultivation, and the other Far Eastern areas probably have a significantly larger acreage under cultivation. In the region embracing the Pushtu- speaking peoples of northwestern West Pakistan and northeastern Afghanistan and in the Central Asian republics of the USSR there is also extensive poppy acreage. Turkish poppy cultivation was reported to be 12,000 hectares in 1970, probably somewhat less than in either Afghanistan, Pakistan, or the USSR. The poppy acreage in Communist China is unknown but may well be less than it is in Turkey. Iran, which abolished production during 1956-68, planned to have 12,000 hectares under poppy culti- vation in the fall of 1970. The scattered cultiva- tion in Mexico, South America, and parts of North Africa is of very little significance compared with the major growing areas. In all the above-cited areas, poppy is raised by hand cultivation and harvesting, chiefly to obtain raw opium. Poppy is raised also by mechanical cultivation and har- vesting on a relatively modest scale in Northern and Eastern Europe and the European parts of the USSR for the purpose of processing poppy straw into morphine. In 1969, such processing accounted for about 40% of world morphine production. An equally important purpose of this European and Soviet cul- tivation, however, is to obtain poppy seed for bakery products. In most opium-producing areas, poppy cultivation represents only a minor portion of the cropped land. Poppy farmers from Turkey and Iran through India seldom devote more than one hectare to the crop. In these producing countries the farmers use the major part of their land to produce food for their own needs, chiefly to produce wheat. In some producing areas of the Far East, however, poppy acreage represents a larger portion of the cropped land. Among some of the Meo hill tribes of northern Thailand pursuing a slash-and-burn type of agriculture, half or more of the cropped land may be in poppy, with the remainder in upland rice. These farmers produce only part of the rice they need for food, and hence they market part of their opium for additional rice. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Beyond the need to produce food, another major constraint on the extent of poppy cultivation arises from its highly labor-intensive character. Some authorities have estimated that from 175 to 250 hours of labor are required to produce one kilogram of opium. Although yields vary with soils, temperatures, rainfall, and quality of seed, they also depend upon farming techniques. Thus in practically all produc- ing areas yields can be significantly increased with proper irrigation. Moreover, because poppy rapidly depletes the soil of nutrients, good yields can be obtained only with fertilization or, at a minimum, by rotating land used for poppy with other crops. The most important determinant of yields, however, is the amount of labor used. The plant cannot thrive without thinning the young plants to allow for proper spacing and without several hoeings and weed- ings during the growth cycle. Harvesting, however, requires the greatest amount of labor. Each of the five or six pods growing on a single plant must be lanced and then -- usually within a 24-hour inter- val -- the gum must be collected. Lancing is commonly done at least twice (with a one-week in- terval between the first and second time) in Turkey but may be done as much as six or eight times in India. This harvesting labor is sufficiently time- consuming to occupy entire families -- and sometimes hired hands as well -- over periods extending from two to three weeks to two months at times close to the harvesting or planting of other crops. Be- cause of the tremendous amount of labor it involves, poppy tends to be raised only where labor is abundant and cheap -- annual per capita incomes range from $370 in Turkey to less than $100 in India and the Far East. The Economic Motivation to Produce The farmer's income from poppy cultivation is affected both by the yield he obtains and by the quality of his product. These, in turn, reflect to an important degree the intensity of his culti- vation techniques and his care in developing quality seed. In gross terms, yields are highest in India (20 kilograms per hectare), but Indian opium is commonly adulterated with seed, leaves, and even foreign matter. Turkish yields during the late 1960s ran 15 to 16 kilograms per hectare. Afghani Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 and Pakistani yields may approximate the Turkish but mainly because of adulteration. In Burma, Laos, and Thailand, yields may amount to only about 8 to 10 kilograms per hectare. The quality of opium may be defined as its morphine content. In Turkish opium this ranges from 9% to 13%, the highest in the world. In other producing countries the morphine content is generally lower, varying from 4% to 12%. In Turkey and India the farmer receives additional income from the harvesting of poppy seed and straw. In general the farm price of opium, both licit and illicit, tends to decline moving from west to east in a pattern corresponding with changes in product quality. On the illicit market the price to Turkish farmers is estimated to have been about $25 per kilogram in 1969 (see Table 1). Table 1 Prices to Farmer for Raw Opium 1969 Producing Country Us $ per Kilogram Turkey Licit 11.00 Illicit 25.00 Pakistan Licit 10.00 Illicit 12.00 to 15.00 India Licit 10.00 Burma/Laos Illicit 12.00 Iran Licit 91.80 a/ a. Price for top-grade opium only. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 In Pakistan the illicit price averaged an estimated $12 to $15 and in Burma, Laos, and Thailand about $12. Prices to farmers on the licit opium market vary less markedly, except for the special case of Iran. In Turkey and India, the only significant exporters of licit opium, the upper limit is de- termined by the world market price. Both countries export most of their licit production and attempt to make a small profit on the export sales. For Turkish opium the price was about $12 per kilogram during most of the 1960s, and for Indian opium it was about $1 less. Iran is a special case because when it resumed licit production in 1969 it set a producer price of $91.80 per kilogram for top- grade opium and an average price of perhaps half that amount in order to discourage leakage into illicit market channels. Even though the price for opium declines moving eastward, poppy cultivation as an element of farmers' incomes is usually more significant in the eastern countries. In Turkey, for example, earnings for the 70,000 farmers cultivating poppy in the late 1960s averaged $70 to $80 per year, with half this amount deriving from illicit production. These earnings represented roughly 10% of the average income in the major poppy-growing areas of about $700 per farm and accounted for perhaps half the cash income per farm. In India, 200,000 farms each earned $70 to $75 on the average from poppy cultivation. This could easily represent 15% to 20% of average total income per farm and probably most of its cash income. In Burma, Laos, and Thailand, opium is often the principal source of farm income. Given the climate and soil conditions of the main opium-producing countries, there is no readily substitutable crop that can yield a comparable income return per unit of cultivated land. In West Pakistan, for example, much of the area sown to poppy could be used for high-yielding Mexican wheat, but given current yields in the area, the return to the farmer would be only about $50 per acre, compared with the $90 realized from poppy. In Turkey it might also be possible to raise Mexican or other high-yielding varieties of wheat on some poppy acreage and obtain the same return as in Pakistan. The disparity between the income from Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 wheat and poppy per unit of land would be even greater there, however, since the average price for opium --- counting licit and illicit sales -- is considerably higher than in Pakistan. In order for wheat fully to compensate the farmer for forgoing opium production, yields would have to be almost doubled in Pakistan and in excess even of that in Turkey. A recent UN survey of the poppy-growing areas of northern Thailand concluded that the pros- pects for developing an alternative crop to poppy that would bring anything like commensurate returns are not encouraging. Licit Production, Consumption, and Trade Licit opium production probably approaches 1,100 tons annually, or less than half of total world pro- duction (see Table 2). India, with 750 tons of licit output in 1968, far outranks any other national producer. The USSR and Turkey, each with an output of roughly 120 tons in 1968, are the second-ranking producers. On the basis of the likely medical requirements for its vast population, production in Communist China can be estimated at 75 to 100 tons. Production in North Vietnam is very much less. Pakistan, Japan, Bulgaria, and Yugoslavia all produce only small amounts of licit opium. In 1969, Iran produced 9 tons. Practically all the world's licit opium pro- duction is used for the manufacture of medicinal opiates. Morphine production currently runs about 160 tons per year, with 40% originating from the processing of poppy straw. In 1968, 30,000 tons of poppy straw were processed, including 6,500 tons by the USSR. Other leading processors include the Netherlands, Czechoslovakia, Hungary, and Poland. The supply of opium is adequate for world medicinal needs and, although prices for opium have risen in the past year or so, this has reflected no long- term shortages. The major portion of licit opium produced -- about two-thirds of world production in the late 1960s -- is exported as raw material to pharma- ceutical firms, chiefly in Western Europe and North America. India accounted for more than 80% of these exports in 1968 and Turkey for nearly all Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 0 -ri cd U 4J 0 O rb E- 0 $? P4 O 0 OLn 000 LO O O N LO rl r-I a% N r-I r-I r-I 0 0 Ln ri O r-I 0 0 0 0 0 0 0 -P N r-I j71.IJ bP -I-I 4-L 0 0 +I 4J N r-I Q) Q) IRV N Ln Z Ln Z Ln c) O LC) Ln N I- I- O 0 01 r--I ri r-I O O Ln 000 O O N LO Hr-A N N H r-I I~. 00I 101 000000 -1-L O I I -I-- I -N O O 4 -I-- H -~r N Ln Ln O O Ln LO r- N O O ri H H r-I 0 0 Ln r- -I ' 4 H4 0 Ln N r1 b1 bn m -1-- N r-I H Q) Q) Q) z z z Ln r cd cli .r.1 .u ri I~ 0I ?, r-i .{-I i-r R) 0 co Q) U) U) 9 0 0 0 r-i U I-I -r.I x a 0 -ri 'IC 9 4 E -ri (n -r1 a) rO )4 (!) 01 4 a-d is H R) 0 k H E+ >4 04 173 U i GPI E-+ .VEr' 0 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 the remainder. Both countries sell most of their licit output abroad. The USSR and China export none of their opium production, and the USSR supple- ments its domestic supply with substantial imports from India. Exports of poppy straw also serve as medicinal raw materials. World exports amounted to 6,560 tons in 1968, with 98% from Turkey. A very minor portion of licit opium production is used by some governments for the treatment of addicts, mainly to provide maintenance dosages for registered addicts. Maintenance programs are in effect in India, Pakistan, and Iran. India planned to dispense two tons of opium in 1970 to registered addicts through authorized vendor out- lets. This amount would account for only a small percentage of total consumption by Indian addicts and users. Pakistan's program is also small in relation to total consumption. Iran began regis- tering addicts only in late 1969. By March of this year, 30,000 persons had registered, and by mid-year the figure may have reached 50,000, or perhaps 15% of the national addict and user popu- lation. Though the quantity of opium provided by government maintenance programs varies among these countries, in each of them, as in other victim countries, most addicts are supplied ex- clusively by the illicit market. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Illicit Production and Consumption The world's illicit production of opium is an estimated 1,250 to 1,400 tons annually. The princi- pal concentration of illicit production is the Far East with the other areas tending to rank in descending order of importance moving westward. Together Burma., Laos, and Thailand account for an estimated 700 to 750 tons, or more than half of world illicit output, and Burma alone for about 30%. Afghanistan-Pakistan is in second place as a pro- ducing region., with an output on the order of 300 tons. Pakistan?s production of 175 to 200 tons is about the same as India's. Turkey's illicit output, estimated at 100 tons in 1968 and 1969, may not be significantly less, Some opium is produced illicitly on a very small scale in Mexico and in some South American, North African, and Near Eastern countries. Communist China's once vast illicit output dwindled to insignificance in the latter 1950s. Illicit out- put in the USSR, the Communist countries of Eastern Europe, and North Vietnam is probably also insignif- icant It is possible that the user and addict popula- tions consuming the world's illicit supply of opium and opiates number at least two million persons (see Table 3)m No firm data on these populations are available for any individual country, and for the most part the only estimates available are based on the judgments of health or police authorities or independent observers. Moreover, estimates vary widely as to the populations in individual countries. Yet practically all observers are agreed that the largest single grouping of users and addicts consists of overseas Chinese in the Far East and Southeast Asia. Burma, Laos, and Thailand may together account for.three-quarters of a million users and addicts, with Burma having the largest share. Hong Kong alone may account for another 150,000, indicating the highest per capita opium-based drug abuse rate in the world. The largest national populations of users and addicts are in Burma and Iran where their number in each could be 350,000. A likely figure for India .is 250,000 to 300,000 persons and for the Afghanistan- Pakistan region, perhaps 100,000 to 150,000. For North America (mainly the United States) and Western Europe the best estimates are more than 100,000 and 75,000, respectively. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Annual Consumption of Illicit Opium and Opiates and Sources of Supply Metric Tons of Raw-Opium Country/Area Users and Addicts a/ (Thousand) Domestic Illicit Supplies Net Illicit Imports Iran 350 Negl. Afghanistan/Pakistan 100 to 150 75 to 100 India 2.50 to 300 175 to 200 Negl. Thailand 250 175 Negl. Burma/Laos 500 - 350 Negl. .Hong Kong- 150 -- 105 Singapore/Malaysia 40 30 North America 100 40 Western Europe 75 -- 30 Other b/ 100 Negl. 70 a. Including heroin and morphine addicts whose consumption is converted to units of raw opium equivalent. b, Including Indonesia, South Korea, Japan, the Philippines, Taiwan, Macao, North Africa, and the Near East. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Most of the world's users and addicts consume opium in its raw form either by smoking or eating. From Iran through India, eating is generally the main form of consumption, whereas in the Far East and Southeast Asia smoking is more common. In Iran and all the countries now producing illicit opium, except Turkey, user and addict populations are traditionally found in both rural and urban areas and among both the youth and older people. The poppy-growing tribes of the Far East, in particular, contain sizable numbers of users and addicts. Turkey itself, however, has no significant user or addict population. The illicit consumption of opium derivatives -- overwhelmingly in the form of heroin -- is now a major problem for many countries of the world. The United States, with no addiction to raw opium, has the largest single population of heroin addicts, which is estimated to be more than 100,000. A major heroin population of some 50,000 also exists in Iran, while the total for Western Europe as a whole may be on the order of 75,000. Addiction to heroin also accounts for a significant and increasing part of the opium consumed in Thailand, Hong Kong, Taiwan, Japan, South Korea, and the Philippines. Morphine accounts for a substantial share of the opium consumed only in Singapore and Malaysia. In the populations consuming opium or opiates there is considerable variance among individuals re- garding the amounts consumed. Consumption varies with the form of the drug and the manner in which it is taken as well as with the severity of the habit or addiction and the availability of the drug at any given time. Opium smokers may consume up to five times more of the product than eaters. It requires 10 units of opium to produce one like unit of heroin, but because of the strength of the con- verted substance, heroin addicts generally consume less of their product in terms of raw opium than do opium addicts. In the Far East, where heroin is mostly smoked,the consumption of the average addict is presumably greater than in Western countries, where heroin is taken almost exclusively by injec- tion. If all these variable factors in consumption are considered, only the roughest rule-of-thumb Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 estimate can be devised for. an average per capita consumption in terms of opium among user and addict populations. For this purpose the norms provided by the Iranian maintenance dosage program for registered opium addicts appear .to be useful. These norms represent minimal requirements of an addict population, allowing a daily ration of 4.7 grams for smokers (roughly 1,700 grams per year) and one gram for eaters (3.65 grams per year). Since the available information'indi.cates Iran has some 200,000 opium eaters and..100,000 smokers plus 50,000 heroin addicts, who' consume at' a minimum about the same amount per person as US addicts, then the per capita consumption for the entire user and addict population would be about 700 grams annually. The use of the Iranian consumption norms for the major victim countries indicates that about three-fifths of the world's illicit opium supply is consumed within the political territories of the producing. countries and handled through their domestic black markets. Burma is the largest single consumer among these countries and, combined with Laos, the domestic user and addict population may require:. some. 350 tons per year. Thailand's consump- tion possibly approaches another 175 tons. India probably absorbs between 175 and 200 tons of illicit opium and Afghanistan-Pakistan about half the level. The remainder of the world's illicit consumers are-supplied by imports smuggled from the major. producing.. countries. The largest market for such imports is Iran, where they have reached a level of .perhaps 250 tons.. The large consumer population of Hong Kong probably absorbs more than 100 tons per year .in.terms of opium equivalent. The other major markets are the United States, with the estimated smuggled: imports of 40 tons in opium equivalent, .Singapore.and Malaysia combined (30 tons), and West- ern Europe (30 tons). Lesser. markets may together account for another 70 tons, including Japan, Indonesia.,,_ South Korea, the Philippines, Taiwan, Macao, and parts of North Africa and the Near East. On the basis of the national origin of these illicit. imports in the late 1960s, the major sources arethe poppy-growing regions of Burma, Laos, and Thailand and those of Afghanistan and Pakistan (see Figure 2). An estimated two-thirds of the Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 latter region's output -- 175 to 200 tons -- is smuggled-out, mostly to Iran's massive Burma and. Laos together probably export market. about 30% of their-combined output, or 150 to 200 tons, to other Far Eastern and Southeast Asian countries. Thailand. consumes most of its production and exports only 25. tons to the same markets. Sixty tons of Turkey's illicit opium production of about 100 tons in 196:8-and 1969 was the source of about 80% of the heroin consumed in Western Europe and North America. The remaining 40 tons was nearly all smuggled into Iran. Small amounts of opium are smuggled into India .(mainly from-Pakistan) and out of the country (in several directions), but on a net basis India is probably not-a significant exporter. The small production of Mexico and some South American coun- tries is nearly all exported to the United States. Only a small amount -- perhaps only 5% -- of.the US heroin supply was of Far Eastern origin in the late 1960s, and perhaps 15% entered from Mexico. A very small amount of Western Europe's heroin came from the Far East, India, and Pakistan. The latter two countries also supplied small amounts to North Africa and the Near East. There has been no evidence of any illicit exports of opium originating from the USSR and the East European Communist countries, or in recent years from Communist China. Except in Iran, a substantial part of the heroin consumed in victim countries is manufactured abroad. All of the North American supply so originates, the bulk of it from Turkish morphine processed into heroin in France. Other European countries are also supplied for the most part by laboratories located in France. Heroin laboratories have been observed in Burma, Laos, and Thailand, and some of their product is exported, chiefly to Hong Kong. That colony is also a major site of heroin processing and, like France, a source of heroin exports. Heroin laboratories also have been detected in Mexico. In Iran, virtually all the heroin consumed through the 1960s was processed within the country from opium or morphine of Turkish origin. Organization of the Illicit Trade The illicit markets for opium and opiates are seller's markets from which the major supplying firms (individuals and organizations) receive very Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 high rates of return on their investment. Supplying the US market offers the largest scope for profits, as can be shown from the development of the price of heroin in 1969: from a farm price of $25 per kilo- gram for opium in Turkey to a wholesale price of $22,000 Per kilogram for heroin in New York City to a retail price of $88,000 for the product in adulte- rated form (see Table 4). In Iran the $15 originally paid to the Afghani or Pakistani farmer for a kilo- gram of opium spiralled to $2,600 wholesale for the like amount of heroin and to $13,000 retail. In Hong Kong, $2,000 was about the average wholesale price for heroin last year. In Pakistan, where little if any heroin is consumed, the price for opium rose from $15 per kilogram at the farm to $25 in Peshawar to $75 in Karachi. In general, despite the large gap between wholesale and retail price, the largest profits are realized in the wholesale trade where firms can handle large volumes of their product. Typically, retail distribution is managed by dealers selling relatively small quantities. The wholesale firms trafficking in opium and opiates operate as oligopolies. They are large and few enough for each to exercise considerable influence over the local or national market. Rarely, however, do they choose to act independently. They normally operate in explicit or implicit collusion to set prices a.nd they tend to form cartels to divide up national. markets. The established firms also seek a stable environment that will allow them to restrict output of rival firms and dependably to arrange for the handling of large volumes with regularity. Rather elaborate organization as well as careful planning and efficiency of operations are required. Characteristically, wholesalers also minimize the legal risks to themselves from engaging in criminal activity. In some cases they may not actually come into direct contact with the contraband product and restrict their role to financing, negotiating con- tracts, and arranging through intermediaries for the collection or delivery of supplies. The movement of opium from Turkish farms to il- licit markets to the East and West serves to illu- strate the general rule of highly organized whole- sale trade. The collection of raw opium from the farmers is arranged by the so-called middlemen, Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Development of Retail Price of Heroin in the United States and. Iran 1969 Price to farmer for opium (In Turkey) Wholesale price for heroin a/ (Marseilles) Border price for heroin (New York) Wholesale price for heroin (New York) Retail price for heroin (New York) US $ per Kilogram of US $ per Raw Opium Kilogram Equivalent $25 -- $5,000 $500 $10,000 $1,000 $22,000 $2,200 $220,000 b/ $22,000 Price to farmer for opium (In Afghanistan/Pakistan) $12 to $15 -- Border price for opium (Afghanistan/Iran) $80 to $110 -- Wholesale price for heroin a/ (Teheran) $2,600 $260 Retail price for heroin (Teheran) $13,000 $1,300 a. When raw opium is converted to morphine and heroin the volume is reduced by a ratio of 10:1. b. If sold as pure heroin. In fact, heroin is greatly adulterated when it reaches the addict; the price for adulterated heroin -- 40% purity -- would be about $88,000 per kilogram. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 small-scale entrepreneurs who may deal with several villages and who individually gather relatively small quantities of the product. When the product as raw material or in the form of morphine base comes under the control of criminal syndicates in Istanbul, however, the supplies have been aggregated into relatively large amounts. These groups arrange for the export of morphine base westward to France through the use of smugglers who may carry it over- land via Bulgaria or Yugoslavia and thence to Germany where other operators arrange delivery to France. They may also use smugglers who carry it directly to Marseilles by boat. Turkish workers based in Europe may be utilized for overland delivery and individual sailors or entire crews for delivery by boat. The morphine exported west from Turkey is all delivered to a few nationally prominent criminal syndicates in France which arrange for its conver- sion into heroin and for delivery to European and North American markets. The delivery to the North American markets has been made by some smugglers operating as individuals and others operating in rather well-organized rings. In either event, during the 1960s most of this heroin was delivered to 10 to 12 wholesale firms in the United States and Canada that were major elements in the organized crime of both countries, When arranging the export of morphine and opium eastward to Iran, the Turkish syndicates usually arranged for its movement to the border areas and then for its smuggling into Iran both by groups of Kurdish tribesmen via Iraq and by individual Turkish smugglers directly to Iran. There the nar- cotic substances were commandeered by wholesalers who marketed some of the opium directly to retailers and arranged for the conversion of morphine and some of the opium into heroin before distribution. In Afghanistan and Pakistan the first major aggregation of opium for supplying the Iranian market is usually the business of tribal chieftains near the producing areas. These in turn deliver to groups sufficiently organized to arrange transportation for the contraband overland across Afghanistan to the Iranian border, usually by means of trucks using the cross-country northern highway. In the western border area, delivery is usually made to tribal chiefs resi- dent there whose tribesmen make the actual delivery to Iran in armed gangs for small commission fees, Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 often in quantities of several hundred kilograms. In the distribution of opium on the local black market of Pakistan, tribal chiefs near the producing areas of the country deliver their product to rings which arrange for its movement southward as far as Karachi. In India, where smuggling and black mar- keting are major economic activities, the wholesale trade in illicit opium may also invite a fairly elaborate degree of organization. The pattern of wholesale trade is most elaborate in the Far East. The major flow of the traffic from the producing areas of Burma, Laos, and Thailand is directed through the Mekong River valley in the latter two countries. Major cities in these two countries, such as Luang Prabang, Vientiane, and Bangkok serve both as final markets and transshipment points. Thence a major part of the exported opium and heroin is smuggled to Hong Kong which is also both a final market and a transshipment point. Other routes pro- ceed from the transshipment points in Laos and Thailand directly to other markets in the Far East (South Vietnam and Cambodia, for example), by land through Thailand to Malaysia and Singapore, and by boat or air to other countries. The first major collections of the raw opium in Burma are made by the so-called Kuomingtang Irregulars and guerrilla armies of Shan tribal insurgents who themselves con- vey the product southward for delivery to wholesale operators in cities. The latter arrange for conver- sion to heroin and for the domestic and export dis- tribution of both opium and heroin. Often these wholesalers are prominent local businessmen. In Laos, both the Communist and the government armed forces are major wholesalers of opium and heroin and have been directly involved in large-scale smuggling operations. In Hong Kong the most prominent importers and wholesalers have also frequently been businessmen whose other activities may have been largely licit. in general the wholesale organizations trading in opium and opiates seek to involve government officials in their activities by corruption. Essen- tially, the wholesalers want both legal protection for themselves and insurance for the dependability of their business operations. In order to provide deliveries of contraband in large volumes and with regularity, the wholesalers must indeed seek to cor- .rupt officialdom at fairly high :Levels if possible. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 At the same time, officialdom itself may be vulner- able to corruption because of the relatively large compensation it can get for collaborating with the major traders. For this reason, some officials have been directly involved in marketing transactions. Military officers, for example, were among those recently executed for narcotics violations in Iran. The involvement in the traffic of individual offi- cials and. military officers in some other countries has also been documented, as has the use of diplomatic pouches for smuggling opium and heroin. In no country, however, is there likely to be a flourishing illicit trade in opium or heroin without the complicity of at least a few key civil servants or police officials. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Postwar Changes in the Opium Market Key Developments The world market for opium has experienced dy- namic change -- including two major upheavals -- from the beginning of the postwar period down to the present. In order of importance the landmark events were (1) the shutdown of China's vast illicit market with the change of governments there in 1949, and (2) the abolition of cultivation in Iran after 1955 coupled with the rapid suppression of China's illicit production at about the same time. Although the gradually increasing use of poppy straw and changes in the medicinal uses of opiates have in- fluenced world markets for opium, the major shifts have resulted from government policies. The market has demonstrated a continuous flexi- bility in replacing sources of supplies that have been eliminated, in responding to shifts in demand, and in devising new traffic routes. The most massive change in the market was the sudden closure of the incomparably large Chinese illicit market, which greatly reduced world demand for opium. In response to abolition of poppy cultivation in Iran and the sharp reduction or possibly cessation of illicit cultivation in South China, new supplies were developed in Afghanistan-Pakistan, India, Turkey, and the hill areas of Burma, Laos, and Thailand. Further changes in the world distribu- tion of opium production appear to have been put in motion as a result of a cutback in Turkish production beginning in 1968. Trends in Licit Production, Consumption, and Trade World licit opium production has fluctuated widely in the postwar years without any clearly discernible long-term trend. The fluctuations may chiefly reflect changes in demand coincident with buildups and depletions of stockpiles. Production was high in the early 1950s -- averaging 1,100 tons annually -- probably because of a desire to replenish Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 stocks drawn down during World War II (see Table 5). This was followed by a drop of about 25% in average annual production until the late 1950s, after which output rapidly soared to reach 1,500 tons in 1960, or about 50% above the level of 1950. Production remained high until the mid-1960s but has fallen since then to an average of 800 to 900 tons per year. As an indication of the probable drawdown of stocks by pharmaceutical manufacturers in recent years, annual average exports of opium were about the same during 1959-63 and during 1964-68. World Licit Opium Production by Principal Country a/ Year India Turkey USSR Iran Others Total 1950 231 185 86 481 20 .1,003 1951 527 358 94 32 23 1,034 1952 350 466 104 131 19 1,070 1953 629 321 92 227 26 1,295 1954 438 71 103 144 17 773 1955 362 222 109 95 33 821 1956 348 277 105 -- 51 781 1957 485 45 147 -- 37 714 1958 657 162 93 -- 27 939 1959 763 168 132 -- 35 1,098 1960 914 365 169 -- 50 1,498 1961 912 172 120 -- 50 1,254 1962 971 311 148 -- 15 1,445 1963 691 287 172 -- 21 1,171 1964 644 83 188 -- 25 940 1965 625 86 177 -- 13 901 1966 436 139 201 -- 6 782 1967 473 115 181 -- 9 778 1968 752 122 116 -- 3 993 a. Excluding Communist China and North Vietnam, Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 The lion's share of licit opium production and exports came to be concentrated in India following a sharp reduction in Iran's licit production after 1950 and its total abolition of poppy cultivation after 1955. India's share of the licit market seems likely to be further enlarged as a result of the recent cutback in Turkish poppy acreage, from 20,000 hectares in 1967 to about 12,000 hectares in 1970. India by 1968 accounted for about three- quarters of world licit output and exports (see Table 6). World Licit Opium Exports by Principal Country Year India Turkey Iran Others Total 1950 234 265 246 10 755 1951 358 173 267 12 810 1952 163 167 200 7 537 1953 168 169 41 15 393 1954 263 211 56 10 540 1955 199 296 100 5 600 1956 266 274 106 22 668 1957 361 205 71 15 652 1958 493 207 98 2 800 1959 593 170 -- 4 767 1960 626 103 -- 4 733 1961 658 64 -- 3 725 1962 375 116 -- 39 530 1963 472 147 - - -- 619 1964 473 190 -- -- 663 1965 426 257 -- -- 683 1966 531 303 -- -- 834 1967 419 151 -- 3 573 1968 532 111 -- 4 647 The manufacture of morphine shows an upward long-term trend, from 85 tons in 1954 to 120 tons by 1960 and to 150 tons by the late 1960s (see Table 7). The rather steady growth of morphine Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 World Licit Production of Opium, Morphine, and Codeine a/ Metric Tons Year Opium Morphine Codeine 1960 1,498 120 104 1961 1,254 116 105 1962 1,445 121 105 1963 1,171 128 119 b/ 1964 940 119 109 b/ 1965 901 123 112 b/ 1966 782 149 131 1967 778 143 127 1968 1,002 153 136 a. Excluding Communist China and North Vietnam. b. Incomplete reporting. production has been stimulated by the rising demand for codeine, the production of which climbed from 104 tons in 1960 to 136 tons in 1968. About 95% of the morphine produced is now reserved for con- version to other substances, overwhelmingly to codeine. While the drawing down of stocks probably accounted for most of the raw materials not supplied by world exports, requirements were also met to some extent by increasing use of poppy straw. Whereas poppy straw accounted for 29% of the mor- phine produced in 1965, in 1969 the ratio was 39%. The decline in the production of raw opium since 1964 has resulted in higher prices. Average prices paid for Turkish exports rose from $11.49 per kilo- gram in 1966 to $13.00 in 1968 and to $16.00 in 1969. The current shortage in world opium supplies appears to be only temporary, however, and the key question for the longer term is not whether opium will be abundantly available but, rather, whether world demand for the production will be sustained. The recent increase in Indian poppy acreage should be sufficient to meet any foreseeable rise in Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 medicinal needs under present pharmaceutical tech- nology. Any major change in the market for raw opium will therefore almost certainly depend, in the first instance, on the extent to which satis- factory synthetic replacements are found for codeine. To date, such synthetics have proved costly to produce. The market for licit opium will also depend on whether a rapid expansion of poppy straw production proves both technically practical and economically worthwhile. The main government programs to provide main- tenance dosages of raw opium to registered addicts have long been declining except in Iran. In India, distribution to registered addicts through authorized outlets fell from 150 tons in 1950 to 34 in 1957 to about 3 tons on average since 1960. In Pakistan these sales declined from 14 tons in 1957 to an average of about 7 tons in the mid-1960s. In both countries the decline in the programs appears to be due chiefly to progressively higher excise taxes added on the price to addicts. As a result, sup- plies are cheaper on the black market. In Iran the maintenance program has been growing rapidly in 1970, with the number of registered addicts reaching 50,000 by mid-year. The growing enrollment largely reflects an intensifying shortage of illicitly imported opium in the country. This shortage has driven up the black market. price for opium, some- times beyond the very high licit maintenance dosage price. The latter price is currently $230 per kilo- gram, or $0.23 per gram? Effects of Government Policies on the Illicit Market Government policies have produced changes -- in some instances massive changes -- in all aspects of illicit enterprise in opium and opiates. The shut- down of the Chinese market, abolition in Iran, and China's gradual gaining of administrative control over its own poppy-growing areas largely determined the illicit patterns of production, consumption, and trade that existed during the 1960s. These steps led to a concentration of world illicit pro- duction in the Far East, Afghanistan-Pakistan, and Turkey. Abolition in Iran also significantly Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 altered the consumption patterns of that country's large user and addict population. Illicit Patterns to the Mid-1950s With the change in government in China in 1949, world illicit demand for opium was greatly dimin- ished. Before 1949, China was the largest single illicit market in the world, possibly several times larger than all other markets combined. Some esti- mates place the Chinese user and addict population on the eve of World War II at 10 million. This population, which may have changed little during the War, was mostly in the large eastern cities and was supplied principally by imports. These originated chiefly from Iran and India, then the world's two leading producers of illicit opium. Many other countries including Pakistan, Egypt, and countries of French Indochina contributed small amounts to China. The Chinese opium-producing areas centering around Yunnan Province were remote from the main consumer markets of the country. They supplied a relatively small local market, but most of their large output was shipped out of the country to the south. Chinese opium went directly to Burma and the countries of French Indochina and through them to Southeast Asia, Hong Kong, and in some quantity to eastern coastal cities of China itself. In the early 1950s, after the shutdown of the Chinese market, Iran remained a leading producer and exporter of illicit opium. Given an estimated 25,000 hectares under poppy cultivation and a licit output averaging only 185 tons annually, the balance of output available for illicit purposes was several times larger. In addition to providing for most of the :Large domestic market, this illicit output supplied many other markets to the east and west of Iran. Probably the larger part of Iranian exports moved in the brisk traffic eastward through the Persian Gulf to Hong Kong and Southeast Asian countries. Toward the west the main flows went both through the Gulf and overland to Iraq, Syria, Lebanon, the Arabian Peninsula, and North Africa. Some of the Iranian opium directed westward was destined for Western Europe and North America Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 after first being processed into morphine in Syria and Lebanon and then being shipped to Italy and France for processing into heroin. India's illicit export trade began the drop to its present low level in the early 1950s. The denial of access to the massive Chinese market was the initial cause. At the same time the Indian domestic black market was becoming a major alterna- tive outlet for illicit production. During the first half of the 1950s, the government's main- tenance program -- in the past the principal source of addict consumption -- was already declining precipitously. Production from South China apparently continued to service the markets of the Far East and Southeast Asia during this period, but probably in decreasing measure. Although seizures of Chinese opium con- tinued to be reported by customs authorities in Hong Kong and Southeast Asia, it may be presumed that illicit production in China began to decline as the new government extended its political control. It is reasonable to assume that production in Burma, Laos, and Thailand, which had long been servicing the same markets, probably began to increase as an offset to declining Chinese output. The remaining major source of illicit output was Turkey. Virtually all its output was exported, mainly southward to the Arab countries also being supplied by Iran. As with Iranian opium, part of the Turkish product was directed to Western Europe and North America after processing and transshipping first through Syria and. Lebanon and then through Italy and France. Some portion of Turkish opium was aimed directly at Italy and France by sea routes chiefly originating in Istanbul. In this period, West Pakistan was still. a minor producer. Dependent on Afghanistan for a large share of its own supplies, West Pakistan was probably a net importer of opium at this time. From the Mid-1950s to the Mid-1960s After Iran banned poppy cultivation in 1955 and China acquired control over its cultivation, the Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 main shifts in world illicit opium production were responses to continuing high demand in Iran itself and in the region of the Far East and Southeast Asia. In order to meet demand in Iran, illicit production rose sharply in both Afghanistan- Pakistan and Turkey. After the elimination of supplies from China and Iran to the Far East and Southeast Asia, production also rose substantially in Burma, Laos, and Thailand. In addition, with the elimination of Iran's formerly westward-moving illicit exports, Turkey largely filled the gap by increasing its exports to the Arab countries, Western Europe, and North America. Afghanistan-Pakistan came to. supply the larger. portion of Iran's post-abolition illicit imports, which eventually reached an estimated 250 tons annually. Reflecting the pull of Iranian demand, the illicit price for opium in West Pakistan rose by more than 250% from 1957 to 1959. Toward the late 1960s, when production had risen to an esti- mated 175 to 200 tons per year, the price dropped to the 1957 level. While expanding its illicit output, moreover, West Pakistan became virtually the sole supplier to its own fairly large domestic black market. Large increases after the mid-1950s in Afghanistan's poppy acreage, in irrigated valleys adjacent: to Pakistan, were noted by several observers. Meanwhile, during the early and mid-1960s, Turkey's illicit output accounted for about 40% of Iran's illicit imports. Opium of Turkish origin largely supplied the western half of the country. By the end of the 1950s, Burma, Laos, and Thailand together had become a massive producer, and the source of more than half the world's present illicit supply of 1,250 to 1,400 tons annually. Moreover, with this increase in output the region of the Far East and Southeast Asia quickly became self-sufficient in opium. With the shifts in world illicit production since 1955, there have been some major changes in levels of consumption. Abolition in Iran reduced the active user and addict population of the country significantly. The current population of some 350,000 represents perhaps only one-third that existing before abolition. The growth or decline - 29 - Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 of populations elsewhere in the world is not easily documented. Consumption in the Far East and South- east Asia very likely rose substantially during the 1960s. Increased consumption in Burma, Laos, and Thailand seems especially likely in view of the rise in supply. Western Europe and North America also experienced rapid growth in their addict populations -- almost exclusively addicted to heroin -- after World War II. Some growth in these populations has apparently persisted throughout the postwar period. Moreover, addiction to opiates -- mostly to heroin -- has been on the rise in the postwar period. Heroin addiction has grown in several other countries besides those in Western Europe and North America. Before the mid-1950s, Iranian addicts were exclusively consumers of raw opium. Heroin was indeed unknown in the country until 1953. From 1960, however, heroin addiction spread rapidly so that by the middle of the decade the population probably reached its present level of 50,000. In the Far East and Southeast Asia, considerable growth in heroin addiction also occurred. The observations of many specialists document this phenomenon as do the increasing number of heroin-processing instal- lations in the region, particularly in the producing countries and Hong Kong. In both the Far East and Iran, a shift from emphasis on heroin consumption in urban areas has probably been stimulated by enforcement efforts because heroin is easier to handle by traffickers and its consumption is less visible. However, heroin addiction in these countries as elsewhere also reflects basic problems of development and health. As Turkish traffic toward the Arab countries, Western Europe, and North America increased to replace Iran's exports, the routing of the portion destined for Western Europe and North America increasingly shifted to direct overseas shipments from Turkish to French ports. By the mid-1950s -- thanks to decisive action by Italian enforcement authorities -- Italy ceased to be an important Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 processing and transshipment point in this traffic. From the 1960s, however, Turkish traffic destined for Western Europe and North America also began to go overland to Europe in increasing amounts in defense against enforcement applied both in Turkey and France to seaborne contraband. Also as a defense against enforcement and for greater profits, Turkish traffic in morphine increased rapidly from the mid- 1950s. :By the mid-1960s practically all Turkish illicit exports to the West consisted of crude morphine. Heroin has never been manufactured in Turkey, and Turkish smugglers are loathe to carry heroin, probably because the government set very stiff penalties in 1953 for trafficking in the product. Recent Developments The main recent change in world illicit produc- tion has been the decline in Turkish output. In 1968, illicit production dropped sharply as a consequence of official policies to reduce poppy acreage and to purchase a larger share of the total crop. Substantial cutbacks in acreage were actually begun in 1964 (from 38,000 to 28,000 hec- tares), but this had no marked impact on illicit output. This was the case because until 1968 government purchases from the farmers averaged much less than half of total production, as indicated by the data on yields from licit production. Derived from government purchases and official acreage estimates, these yields fluctuated from year to year but averaged only 6 kilograms per hectare during 1960-67 (see Table 8). Actual yields from this acreage, on the other hand, may have averaged as much as 15 kilograms, with the balance available to the illicit market. In 1968, however, government purchases rose slightly, to 122 tons, even though acreage had been reduced by one-third. The official yield thus rose to 9.4 kilograms per hectare. On roughly the same 13,000 hectares in 1969, the official yield reached nearly 10 kilograms per hectare. Even if allowance is made for a slight increase in actual yields on the reduced but probably more fertile poppy acreage, illicit diversion in Turkey, which probably averaged Approved For Release 2001/09/043:CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Turkish Licit Production, Acreacre, and Yields of Opium Year Production (Metric Tons) Acreage (Hectares) Yields a/ (Kilograms per Hectare) 1960 365 42,000 8.7 1961 172 38,000 4.5 1962 311 36,000 8.6 1963 287 38,000 7.6 1964 83 28,000 3.0 1965 86 22,000 3.9 1966 139 24,000 5.8 1967 115 20,000 5.8 1968 122 13,000 9.4 1969 127 13,000 b/ 9.8 a. Derived from official estimates of acreage and government purchases of raw opium from the farmers. b. Estimated. well over 250 tons in previous years, may have been cut back by more than half as the government acquired a larger share of the crop. With the fall in illicit output, Turkish illicit exports must also have declined. The effects of reduced production on exports would not have been felt until 1969, however, because exports in 1968 originated chiefly from the 1967 fall harvest. In 1969, Turkish exports to Iran were probably cut back in favor of maintaining exports to the more profitable Western markets. There has been a further decline in Turkish illicit output this year which can be related to drought conditions that substantially reduced actual yields and to changes in official policies in both Turkey and Iran. In 1970 the Turkish government decided for the first time to buy up the entire opium crop if possible and instructed Approved For Release 2001/09/d42: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 its purchasing officers and enforcement arms accordingly. Also for the first time, Ankara and Tehran in 1970 entered into a formal collaborative effort to suppress opium smuggling from Turkey to Iran. The Turkish army and Iranian gendarmerie signed an agreement in January providing for in- creased cooperation and forces on both sides. The upshot of all these developments has been a severe reduction in the traffic across the Iranian-Turkish border and in the traffic of Turkish origin across the Iraqi-Iranian border. Seizures in these areas have dwindled to insignificance this year. The incentive to Turkish smugglers to ship opium and morphine to Iran was also dampened in 1969, when Iran imposed the death penalty for narcotics smug- gling offenses. The reduced supply for Iran from Turkey com- bined with the generally intensive enforcement campaign initiated in 1969 by Iran has resulted in a scarcity of opium and heroin in the country. From August 1969 to August 1970 the illicit price of Turkish opium in Tehran doubled, ranging from $100 to $400 on the latter date, depending on quality. Much of Turkish opium thus was available only at prices in excess of the licit price for maintenance dosages for registered addicts. Prices for heroin, manufactured mainly from Turkish opium and morphine, tripled during this period. While the imposition of capital punishment and increased border surveillance have been weighty deterrents to Turkish smugglers, these measures have been less effective against their Afghani counterparts. By mid-1970 the price of Afghani opium in Iran was still well below the licit price. Iranian seizures on the Afghani border have risen sharply in 1970, but there are also indications of more frequent border incursions from Afghanistan involving smaller shipments in order to thwart the Iranian border authorities. A large number of the more than 40 persons executed in Iran for smuggling offenses since 1969 have been Afghani tribesmen. In view of the reduced supplies from Turkey and the per- sisting strong demand in Iran, it seems likely that production in Afghanistan-Pakistan will in- crease. - 33 - Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 The drop in Turkish illicit output may soon be reflected in illicit traffic patterns to Western European and North American markets. If illicit Turkish output this year indeed declined, supplies from this source for Western Europe, North America, and the Arab countries will not be available in the usual amounts in 1971. During the past two years, traffic of Turkish origin has also been the target of stepped-up enforcement by the French and US governments. One consequence has been some shifting in the location of heroin-processing plants formerly based in the Marseilles area. but now more widely dispersed to areas both within and outside France. Moreover, the regular smuggling of heroin from Europe to the United States has become a more difficult task for the wholesalers to arrange. At the same time, as established traffic organizations have encountered increased enforcement opposition, the smuggling business itself has witnessed the entry of new organized rings. The recent arrests of Cuban exiles in the United States provide a striking example of this general trend. F1_nally, enforcement in the United States has evidently helped set the stage for the entry of new groups, attracted by the prospects of large profits, into the wholesale dis- tribution of heroin in the United States. Some established wholesale firms, reacting to the enforce- ment pressures, have apparently chosen to disengage themselves at least temporarily from the business while some others were forced out by successful prosecutions. The entry of some of the Cuban-exile smuggling groups into the internal wholesaling of heroin in the United States indicates a degree of disarray in the established wholesale structure. Given the prospect of reduced supplies for Western markets from Turkey and also reduced sup- plies from Mexico to the United States following Mexican-US collaboration in Operation Cooperation, the traffickers have already begun to seek out new sources. Probably in direct response to enforce- ment pressures in Mexico, some dealers in the traffic from that country to the Jnited States have 34 - Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 been exploring the possibilities for developing new sources in other countries. Both new heroin distil- leries and new areas of poppy. cultivation have been observed this year in South America. Other whole- salers are apparently turning to the Far East for supplies. Although that area still remains a rela- tively small supplier of heroin to the United States, traffic from the Far East has increased in the past year, perhaps severalfold. New smuggling organizations are. being formed in anticipation of growth in traffic by that route. Meanwhile, the West European market has also felt the effect of reduced supplies from Turkey. Recently, for example., there have been increasing amounts of heroin appearing in European countries from Pakistan, India, and the Far East. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Controlling Opium-Based Drug Abuse Control and Development Opium-based drug abuse has persisted as a grow- ing international problem. This is evident in the rise of consumption generally in the Far East and Southeast Asia and in the international spread of heroin addiction. The illicit sector has shown great flexibility in adjusting to drastic changes in sources of supply. When national governments have eliminated or significantly curtailed illicit production, new sources have quickly been developed on a large scale. Similarly, when national enforce- ment campaigns have unsettled established wholesale structures, the effect has soon been blunted by the entry of new organizations into the trade and the eventual re-emergence of fairly stable marketing arrangements, The growth of opium-based drug abuse reflects larger problems of economic, political, and social development. The economic incentive to cultivate poppy remains strong in most producing countries because agricultural incomes are low and labor cheap. Complete administrative control over poppy cultivation is difficult in the best of circum- stances and made impossible in many areas by lack of national political control. Abuse has grown partly because prevailing public attitudes tend to forestall broad treatment and rehabilitation pro- grams. In most producing countries the public is tolerant of widespread habitual use of opium. In many nonproducing, victim countries, on the other hand, abuse is commonly viewed as a criminal ac- tivity and the burden of responsibility falls upon enforcement agencies. At the same time, national resources for an attack on consumer demand itself have not been available on a scale commensurate with the extent of addiction. Also partly because of public attitudes, enforcement itself has lagged in developing techniques appropriate to suppressing the illicit trade at the controlling wholesale level. Progress both in enforcement and treatment has been hampered, finally, by inadequate international co- operation Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Dampening the Incentive to Produce An economic approach to controlling illicit opium production has serious limitations. The basic problem is that opium is almost always pro- duced where labor is plentiful and cheap and the demand for it is strong. There are many substitute crops that would earn more income than opium per unit of labor input but it is difficult to find any that would earn more than opium per unit of land. So long as large-scale underemployment exists, a farmer can increase his family's income by raising poppy, natural conditions being appro- priate. Thus the government seeking to control produc- tion through incentives will probably find that crop substitution will not suffice. Such a program would have to be accompanied by subsidies -- either directly to the farmer as an inducement not to grow poppy or indirectly in the form of supporting above- market prices for substitute crops. In the long run the best solution, of course, is to promote the general economic development of the poppy- growing areas. Raising agricultural yields, diver- sifying farm output, and establishing industry accessible to local labor would all help. Among the major opium-producing countries, Turkey is most advanced in economic development, and its further development will probably reduce the prof- itability of opium production significantly. But in the countries to the east this goal probably remains out of reach for a long time to come, and any effective restriction of output will depend most heavily on the capability for direct govern- ment control. Although opium production is an important source of income to individual farmers and thus a political issue of moment in some countries, it does not benefit the national economies of any of the producing countries significantly. India, the world's largest producer and exporter of licit opium, earns only $6 million to $7 million annually from overseas sales compared with total export earnings approaching $2 billion. Income generated from licit production -- measured by the total returns to farmers -- hardly exceeds $12 million. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 annually. Turkey's situation is similar. In 1967, for example, Turkish licit opium exports were valued at $1.7 million, less than 0.3% of total export earnings. In addition, some smaller amount was earned from exports of poppy straw. Income generated in Turkey that year from licit produc- tion may have approached $3 million, out of a national income of nearly $9 :billion. Against the scale of national income, it is apparent that illicit production is also of minor significance in all the other producing countries. If the tribal area of Burma-Laos-Thailand were considered as an economic region, however, opium production would assume more economic significance. Opium is a principal source of income at least among some of the tribes. It also helps finance the importation of arms and hence is a main economic support of insurgency. Direct Control Over Production While Communist China, Iran, and, on a partial basis, Turkey have shown that energetic national governments can stop the production of opium, the major share of illicit output comes from areas where such national control is not possible. Most of the world's illicit opium is now produced by tribal peoples over which their respective national governments impose little political control. The lack of control is most complete in Burma, Laos, and Thailand where most of the producing areas are also areas of insurgency. In Pakistan, most illicit poppy is cultivated in the settled areas of the Northwest Frontier Province where the settlers cultivating it are mostly tribal peoples although they live mainly outside the designated tribal areas. Much the same situation exists in Afghanistan. The small scattered production in Mexico, South America, and North America takes place in remote rural areas. Even where control systems to monitor poppy cultivation have been established, however, large illicit production has occurred, as in Turkey and India. Turkey has no licensing system fixing quotas on poppy acreage for individual farms, but both countries record acreage and have state monopolies responsible for the collection of all harvested opium. In general, illicit production Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 in such countries can originate from two sources: (1) from understating yields on licensed or other- wise reported acreage, and (2) from unlicensed or unreported acreage. In Turkey, official statistics on acreage are probably fairly complete, and understatement of yields appears to be the principal source of il- licit production. Until recently, most production entered illicit channels, as the state opium mo- nopoly restricted its purchases to the amount necessary to fulfill its export sales contracts. Very little of Pakistan's poppy cultivation is under a formal control system, but where that system has been in force a substantial portion of the production has leaked in the same fashion as in Turkey. During 1966-68 the official Pakistani yield averaged 4.7 kilograms per hectare, probably only one-third the actual yield, This yield mainly represented the opium needed for the government maintenance program for addicts, In India, probably most illicit production has originated not from understating yields but from unlicensed acreage. Official Indian yields have rather steadily averaged about 20 kilograms per hectare and hence should not understate actual yields by very much. In India as in Turkey the government's purchasing policy largely reflects export contracts. During the 1960s, 70% of licit Indian production was exported. To date, Iran's fledgling control system over opium production has been subject to little leak- age. Its effectiveness has been due to the com- bination of a high farm price for opium and ex- tremely severe punishment for illicit dealing in opium. A very high priority has been assigned to administering the new program. Responsibility for licensing poppy acreage and collecting the harvested opium has been vested in the Ministry of Land Reform, which has taken elaborate control measures. A number of new laws have been passed, including the one fixing capital punishment for trafficking in opium or opiates. Enforcement efforts, including those of the gendarmerie in the rural areas, have been greatly stepped up. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 In countries where poppy is cultivated by tribal peoples beyond the political reach of the national governments, opium production can probably be controlled only with further political develop- ment. Such development would probably have to include not only extending national political con- trol into the tribal areas but also socially inte- grating the tribal peoples into national life. Even in Pakistan the requisite development repre- sents formidable and probably long-term tasks. In Burma, Laos, and Thailand this kind of develop- ment must await both an abatement of insurgency and also an easing of international tensions presently focussed in the area. In order to achieve full control of poppy production in Turkey and India, the governments would have to exert costly administrative and en- forcement efforts continuously. The historical tendency, however, has been for both countries to minimize such costs and to hold crop collection down to the level of export commitments. The apparent drop in Turkish illicit output reflects improvement in the control system, but as matters stand it could be vulnerable to recurrent leakage. Whether or not a licensing system is in force, the poppy farmer is attracted to illicit dealings if the black market price is significantly higher than the licit price. Iran is trying to prevent diversion by setting a very high farm price for opium, but if production there becomes large the program's costs will be significant. In view of the cost and effort needed to control even small- scale production in Iran, a simpler answer -- administratively and from the point of view of enforcement -- would be to abolish cultivation altogether. Abolition has proved feasible in the past in all of Iran and more recently in many provinces of Turkey. Reducing Demand On the whole, public attitudes toward opium- based drug abuse probably have not changed very much in the last two decades. In much of the world, tolerance based on longstanding beliefs and customs prevails. Among tribal peoples pro- ducing opium, its use in religious ceremonies and on festive occasions is common. Among these Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 peoples and others without access to modern med- icine, opium is a general household medicine. Belief in the efficacy of opium as an aphrodisiac and cure-all is widespread. By contrast, in most countries where heroin addiction is the main abuse problem., public fear and outrage tend to focus on the illicit traffickers and addicts alike. As a consequence of these attitudes, almost nowhere is opium-based drug abuse regarded pri- marily as a medical problem. In the present state of medical and social scientific knowledge, the costs of treatment and rehabilitation aimed at entire addict populations are not predictable. The costs., however, would almost certainly involve treatment of broader human problems of adjustment to rapid social change and mental health generally and could easily exceed politically acceptable limits. As matters stand the degree of public support for new medical approaches to treatment and rehabilitation is uncertain. Unexpected leak- ages from the system of free prescriptions for addicts in Britain, for example, may lessen accept- ance of further experimental programs in that country. In the United States, methadone programs for treating heroin addicts have an uncertain future not only because medical efficacy has yet to be confirmed but also because public support for broad-scale coverage is as yet undetermined. The fate of the maintenance programs for opium addicts in India and Pakistan suggests that fiscal constraints can easily weaken government-sponsored treatment programs for addicts in any country. Pressures to record budgetary surpluses from the programs helped price licit opium largely out of the market so that the black market could supply addicts more cheaply but still realize large profits. Moreover, because the programs declined rapidly in both countries, no adequate test of their efficacy in diminishing addiction was pos- sible. Iran now operates the largest opium mainte- nance program, with increasing success to judge by the rising enrollment of registered addicts. The governing principle in the Iranian program -- that receipts must cover costs -- has dictated the official price to addicts of $230 per kilogram, - 41 - Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 however. In view of that price, the program's success to date must be largely attributed to the effectiveness of police controls over illicit im- ports and production. If illicit supplies again become more plentiful and cheaper, the program will probably fall off. Breakthroughs in medical and social science are in all probability essential for any large reduction in illicit market demand. Gaps in knowl- edge of abuse patterns are formidable and probably less is known about the medical and social effects of raw opium -- still the main form of abusive consumption in the world -- than about those of heroin. Research on opium-based drug abuse would undoubtedly benefit from close links with work on psychomimetic substances. Given the breadth of the research problems and their long-term nature, a greater international pooling of scientific effort would be strongly indicated. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Suppressing the Illicit Trade The organizational character of the illicit wholesale trade and the political and economic set- tings in which it prospers help to place the enforce- ment tasks in perspective. Although its operations are national and international in scope, wholesaling in opium or opiates often represents only one part of a particular syndicates business activity and very often not the most important part. Historically the near-monopoly of the US wholesale heroin trade by the major criminal organizations in the country has exemplified this situation. The fact that whole- sale organizations the world over frequently manage to protect themselves politically adds to the enforce- ment complexities. Finally, illicit trade in opium and opiates is very often part of a larger smuggling activity. In some producing countries, for example, a significant portion of international trade moves through smuggling channels. When it reaches this scale, however, the suppression of trade in a single commodity may be extremely difficult. A change in the public's view of the enforcement mission is probably indispensable to more effective suppression of the illicit wholesale trade. Just as they tend to define the scale of treatment and re- habilitation, public attitudes influence the kind and amount of law enforcement available. By and large any citizenry wants police protection for its immediate safety and protection against locally based, relatively unorganized criminal activity. There is generally little public awareness of criminal activ- ity organized on national and even international lines. It has frequently been observed that this lack of awareness in the United States results in a pendulum effect in law enforcement administration. Occasionally public interest in nationwide enforce- ment campaigns is aroused, but the interest then wanes and, as a result, the campaigns tend to diminish in intensity and effectiveness. Moreover, in order to contribute to a lasting suppression of opium-based drug abuse, enforcement probably would have to accomplish a twofold develop- mental task of its own, consisting of (a) a redefini- tion of targets and (b) a reform of organization and methods. Most enforcement manpower is necessarily occupied with suppressing locally based criminal Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 activity, and much work of national police organi- zations directly supports local enforcement. One effect of this focus is the preponderance of the enforcement effort even at the national police level that is directed against relatively small- scale retailers of opium and opiates, hired couriers of the contraband, and the addicts themselves. In most countries there is no intelligence organization with central responsibility for operational and an- alytical intelligence in respect to national and international criminal organizations. Finally, an upgrading of enforcement capabil- ities against the illicit trade in opium and opiates would almost certainly presume increasing interna- tional cooperation among police agencies and perhaps especially multilateral cooperation. Despite their notable achievements the recent bilateral enforce- ment agreements between the United States and Mexico, the United States and France, and between Iran and Turkey serve to point up the relatively occasional nature, historically speaking, of such accords. There is a need, therefore, for more continuity and a systematic exchange of intelligence on criminal activity involving a broad range of countries. Although the creation of Interpol represents a sig- nificant advance in this respect, that organization has been operating with limited support from partic- ipant states. It does not have sufficient funds to modernize its communications systems and is not organized for intelligence collection. Often the members must collaborate bilaterally in order to speed up intelligence acquisitions. The limitations on Interpol's effectiveness reflect a narrow view of the enforcement role against highly organized criminal activity in general and against the whole- sale trade in opium and opiates in particular. A broadening of this view could be essential to a lasting suppression of illicit traffic in opium- based drugs. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Conclusions Less than half the world's opium is produced for licit medicinal purposes, chiefly for manufacturing codeine. The balance of production -- some 1,250 to 1,400 tons annually -- is illicitly produced and marketed for consumption of some two million users and addicts around the world. Illicit production is now concentrated in Southeast Asia (the hill country of Burma, Laos, and Thailand) and in Afghanistan and Pakistan but continues on a sig- nificant scale in India and Turkey. Most of the people consuming this illict opium take it in raw form, but a large and increasing proportion has been using it in its refined, more dangerous form of heroin. Addiction to opium is a major problem in every opium-producing country except Turkey as well as in many non-producing victim countries. The United States has the largest single population of heroin addicts -- over 100,000 -- but Western Europe, Iran, the Far East, and Southeast Asia also have large populations. The market for illicit opium and its derivatives is everywhere controlled at the wholesale level by syndicates highly organized on national and even international lines. Since World War II the main changes in the world market for opium have resulted. from national govern- ment policies, chiefly policies eliminating or significantly reducing production but also enforce- ment policies. Despite these government actions, however, the illicit market has shown a continuous flexibility in replacing sources of supplies, in responding to shifts in demand, and in devising new channels of illicit traffic. As a result, abuse of opium-based drugs has been a persistingly growing international problem. Growth of the abuse of opium-based drugs reflects larger problems of economic, political, and social development. The economic incentive to produce opium remains strong in most producing countries because agricultural incomes are low and labor cheap. Complete administrative control over poppy cultivation is difficult in the best of circum- stances and made impossible in many areas of lack of national political control. Abuse has grown Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 partly because prevailing public attitudes tend to forestall broad treatment and rehabilitation programs. As a reflection of these public attitudes, enforcement itself has lagged in developing tech- niques appropriate to suppressing the illicit trade at the controlling wholesale level. Progress both in enforcement and treatment has been hampered, finally, by inadequate international cooperation. Specific problems involved in the control of the illicit opium market include the following: a. A purely economic approach has serious limitations because crop substi- tution alone will not suffice. In order to fully offset the loss to the farmer for forgoing opium production, crop subsidies would almost certainly be re- quired. b. Direct administrative control over poppy cultivation is not possible in many areas of illicit production, because they are not controlled by the national govern- ments. Even in countries where national governments are relatively strong, those governments must exert costly adminis- trative and enforcement efforts continuously in order to suppress illicit production; c. A greater effort to reduce demand itself is now indispensable for the control of abuse of opium-based drugs, but this requires public support for larger expendi- tures on treatment. At present the degree of such support is unknown. A reduction in illicit market demand also presupposes break- throughs in medical and social science and a greater pooling of international efforts in research. d. Enforcement alone cannot suppress abuse of opium-based drugs in the countries now experiencing its worst effects. Never- theless, the contribution of enforcement to suppression would be improved by focus- ing more effort against the illicit trade at the wholesale level and by upgrading enforce- ment methods and organization, particularly Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 at the national police level. Increased international collaboration among en- forcement arms against organized crime is probably crucial to suppressing the illicit trade. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 The Growing Hashish Traffic Worldwide use of hashish is increasing. The growing demand in the United States and Europe has resulted in a rapid increase in smuggling. Our information indicates that the traffickers are becoming better organized. Seizures of hashish reported to the United Nations by Lebanon and neighboring countries suggest that Lebanon is probably the world's leading pro- ducer of this drug. Although as much as 90% of the hashish produced in Lebanon appears destined for the illicit traffic in Egypt, there is a rapidly increas- ing traffic from Lebanon to the United States and Western Europe. A significant amount enters the United States STATINTL During the past year there has been an increase in hashish smuggling. from Afghanistan. Preliminary findings are that much of this material is actually grown and produced in West Pakistan. India has been the source country of hashish involved in several recent seizures. Indian officials report;that much of the drug found in India is grown and produced in Nepal. Morocco and Tunisia appear to be source countries for hashish being smuggled into Spain frequently for further distribution to the United States and Europe. It is not known how much of the drug from these sources actually originates in Lebanon. Hashish is grown and produced in Lebanon, Pakis- tan, North Africa, Afghanistan, Nepal, and India, with some produced in Turkey. There are persistent reports that hashish is being produced in South America, but apparently not in significant amounts. The increasing use of hashish can possibly be explained by the emergence of a new class of drug user, predominantly from middle and upper class societies. As an example of increasing use of hash- ish, the statistics of the Division of Narcotic Drugs of the United Nations showed that between January and August 1968, the member nations reported seizing 6,766 kilograms (kg) of cannabis which Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 included much hashish. As a comparison, between January and August 1969, 16,987 kilograms of canna- bis were seized. The same comparison is valid for the United States. The following is a tabulation of the domestic hashish seizures in the United States (in kilograms): Bureau of Narcotics and Dangerous Drugs Customs 1968 152.627 95.208 1969 109.339 647.706 1970 (Jan-Jul) 5.937 654.902 In Europe alone there were 254 Americans arrested between December 1969 and April 1970, in possession of 864.6 kg of cannabis. The bulk of these United States citizens arrested abroad are between 20 and 30 years of age and not the criminal type as we know it in the heroin and cocaine traffic. Most of these Americans are of the so-called "hippie" class and have been arrested with a small amount of hashish intended for their personal use and that of their immediate associates. However, increasing numbers are found with significant amounts of hashish indi- cating that they are smuggling for profit. According to the latest figures submitted to the United Nations, the price of hashish per kilogram in Lebanon has risen to $49 for class-one hashish and $20 for class two. The same hashish when smuggled into the United States will bring from $2,000 to $2,500 per kilogram. Some professional marihuana smugglers have switched to hashish due to the reduc- tion in bulk and increase in price. Much of the hashish smuggling is not directed at the United States. Several violators have indi- cated that they were smuggling hashish to Western Europe, especially Germany, France, and Italy, for resale to the nationals of these countries. Lebanon Although Lebanese law prohibits the growing, selling, possession, or transportation of hashish, Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 most evaluations indicate that Lebanon is the lead- ing grower and producer of hashish in world traffic. in 1969, Lebanon reported to the United Nations that over 10,000 kg of hashish were seized in that country. In the first four months of 1970, Lebanon seized over 3,200 kg of hashish. Recently, a reliable re- porter observed cannabis growing beside a well- traveled road in Lebanon, as far as he could see for several kilometers. A large part of the hashish grown and produced in Lebanon is destined for countries other than the United States. It is estimated by various officials that 90% is smuggled through Syria and Jordan to Egypt for local consumption. Syrian and Jordanian authorities do little to curtail the traffic. Several Americans have been arrested attempting to smuggle significant amounts of hashish (from 9 kg to 83 k(j) out of Lebanon by commercial airlines. Some of those arrested were attempting to fly to Canada where they could then enter the United States by various routes. Canada also provides a ready market for the sale of hashish. As of 31 March 1970, Lebanon had 17 United States citizens in detention for hashish violations. Lebanese law sets a penalty for use at one to three years, and trafficking at three to 15 years. Most of those arrested indicated to State Department officials that they obtained the hashish in Lebanon. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Afghanistan Afghanistan has recently become a significant source for hashish smugglers. Several individuals have been arrested by Greek authorities on the Greek- Turkish border traveling predominantly in Volkswagen buses with as much as 70 kg of hashish secreted in- side the paneling of the vehicles. Americans detained in Greece advised State Department officials that they obtained the hashish in Afghanistan. One violator stated that he saw and talked with at least 30 youthful smugglers in Afghanistan who were all purchasing multikilogram quantities of hash- ish. He said that Americans were waiting in line for Afghan peddlers to load their vehicles. Most of the hashish in Afghanistan is reported to have been grown and produced in Pakistan. Afghan- istan cannot stop smuggling across the Afghanistan- Pakistan border because this area is under the con- trol of tribesmen who are deeply involved in the smuggling. India India takes a very permissive attitude toward the use of hashish and in fact the drug can be legally purchased through government-controlled outlets. Hashish grown and produced in India is of an indifferent quality and much of the hashish sold there is brought into India from Nepal and Pakistan. Indian officials state that it is very difficult to control smuggling from these countries due to the terrain and the extended borders. The Indian authorities are examining outgoing mail for hashish, and between January 1970 and 30 April 1970, 135 parcels containing a total of 86.643 kg of hashish were seized at New Delhi alone; 91 of these parcels were addressed to the United States. In 1968, 31 kg of hashish were seized in such a manner and this figure rose to 98 kg in 1969. According to reports to the United Nations, the government of Nepal prohibited the unauthorized cultivation of cannabis in 1960, but it is unknown what enforcement steps have been taken. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Pakistan Questioning of traffickers suggests that a large amount of the hashish obtained in Afghanistan and India is actually grown and produced in Pakistan. Several American citizens have been arrested at the Karachi Airport while attempting to smuggle significant amounts of hashish out of Pakistan. One seizure at Karachi amounted to 169 pounds of hashish. Pakistan reported seizing 93.245 kg of hashish to the United Nations during the first three months of 1970. The US Customs Bureau has made several seizures of hashish up to 41 kg from ships listing Pakistan as the source country. Morocco Morocco and other North African countries have traditionally been a source of hashish. A signif- icant number of persons have been arrested in Spanish seaports returning from Morocco with hashish for personal use. The ]?rench authorities recently made a 108-kg seizure of Moroccan hashish secreted in an automo- bile waiting to be shipped to the Philippines where it was to be shipped to the United States. An American was arrested by Spanish authorities attempting to smuggle hashish from Tunisia through Spain to Germany where he intended to sell the drug. According to information furnished by the State Department, Government of Morocco organizations are engaged in the campaign against kief, or hashish. Moroccan law calls for imprisonment of 6 days to 2 months and a fine of from $24 to $720 for hashish violations. Turkey In 1968, Turkey reported seizing 552 kg of hashish to the United Nations. Recently Turkish officials reported several seizures of hashish in- cluding one 23-kg seizure last June. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 The cultivation of the cannabis plant is pro- hibited by Turkey and, if found, the crops are destroyed and the persons growing cannabis are prose- cuted. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 DRUG TRAFFIC IN SOUTH AMERICA Illegal trafficking in drugs has reached serious proportions in South America over the course of the past several years. Two plants indigenous to the area are involved, the coca shrub (may ro y on cnra),* from which cocaine is derived, and the hemp plant (Cannabis sativa), which is the source of marijuana. The traffic in cocaine is of particular interest because of the recent increase of the flow of this dangerous drug from South America into Europe and the United States. Also of concern is the illegal trade in synthetic drugs and the transit of heroin and other narcotics introduced from Europe and destined for the United States. Millions of highland Indians in Bolivia and Peru habitually chew the dried leaves of the coca shrub. The custom is also practiced to a lesser extent in southern Colombia, northern Argentina, and western Brazil. From time immemorial coca chewing has been one of the few indulgences of the Andean Indians. Today it is estimated that perhaps 25 million pounds of coca are used annually in Peru and Bolivia alone. Coca thrives on the moist slopes of the eastern face of the Andes between elevations of 2,000 and 7,000 feet. The shrub is also grown on a small scale by primitive Indian groups scattered through the Amazon Basin. Very little coca is known to be under cultivation any where else in the world, with the exception of Java where there are small plantations. The areas of most intensive cultivation in South America are located in the departments of Cajamarca, San Martin, Huanuco, Ayacucho, Cuzco, and Puno in Peru; and in the departments of La Paz, Cochabamba, and Santa Cruz, in Bolivia. * Rrythrnx,ylnn nn zngranatansP is another cultivated species of coca, and there are numerous wild species of the genus. The word "coca" is often confused with "cacao." The two are not related. Cacao (Theobroma cacao) is the name of a tree from which cocoa and chocolate are derived. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Individual coca plantations usually cover 2 or 3 acres in Peru and Bolivia. The shrubs are grown in narrow trenches cut in the steep mountain sides. For ease in picking, the plants, which would normally grow 6 to 8 feet high, are kept to heights of about 3 feet. The glossy green leaves are picked three or four times a year, and after careful drying and packing, are shipped and sold in hundreds of Indian markets throughout the highlands. Most authorities hold that coca chewing is both physically and mentally debilitating, and recent investigations have pointed to chronic brain damage from habitual use. However, there is little chance that the habit will decrease to any appreciable extent in the foreseeable future. The custom is too deeply ingrained and too widespread to disappear as a result of anything short of a massive improvement in the socio-economic lot of the Indians. While the great bulk of coca leaves grown in Bolivia and Peru is used in these countries for chewing, smaller amounts are processed for medicinal and industrial purposes; for example, ''de-cocainized '' coca leaf serves as a flavoring agent in beverages. In addition to these legal uses, the coca leaf is also illegally converted to cocaine for consumption by drug addicts. To process one kilo of refined cocaine over 100 kilos of leaves are required; hence the extraction process is most conveniently done near the areas of cultivation in Bolivia and Peru in clandestine laboratories. In Bolivia alone there are reportedly some 100 mobile clandestine cocaine laboratories. However, because the process is also relatively expensive and complicated, conversion operations are frequently performed outside Peru and Bolivia. Therefore the drug may be smuggled across borders in any one of three forms: in the leaves, as a red paste made from the leaves, or as a white powder of hydrochloride of cocaine crystals derived from the leaves or paste. Cocaine Smuggling frpm Bolivia to Brazil Much of the coca paste and cocaine produced in Bolivia moves eastward to Brazil. Principal border crossing point for the drug is between the towns of Puerto Suarez, Bolivia and Corumba, Brazil. The main road running eastward from Santa Cruz, Bolivia and the parallel Santa Cruz-Corumba railroad are both extensively used in the illicit traffic. Once across the border in Brazil, the cocaine is usually shipped to Sao Paulo or Rio de Janeiro, often by air. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Bolivian authorities sometimes capture the smugglers before they get the drug out of the country, and occasionally they are able to track down and destroy the clandestine laboratories. In recent years many small laboratories have been discovered and destroyed in the vicinity of Santa Cruz. In attempting to control the traffic in cocaine coming from Bolivia, Brazilian authorities have directed most of their efforts at centers of distribution such as Sao Paulo and Rio de Janeiro rather than at the border zone. Army officers responsible for security along the frontier have complained that although their men check vehicles as well as they can, cocaine is so easy to conceal that the task of discovering it is almost impossible. As in smuggling generally, most arrests are made as the result of tips or the recognition of known traffickers. Habitual smugglers are well known by the police as are the hotels that they frequent in Corumba, Cuiaba, and Campo Grande. The police also know the usual sleeping hours of couriers, when it is relatively easy to apprehend them. However, when one smuggler is arrested another almost immediately takes his place. Cocaine Smuggling from Bolivia to a agLay Very little information is available on the movement of cocaine out: of Bolivia into Paraguay. The existence of a regular traffic in the drug through Paraguay to points south has frequently been rumored around Asuncion, but nothing has been officially reported. Scheduled airline service is now available from La Paz to Asuncion, and it might well be used by cocaine smugglers. Another possible smuggling route would involve transit of Brazilian, Paraguayan, Argentine, and Uruguayan territory via the Paraguay, Parana, and La Plata rivers. Barge loads of manganese ore from the Corumba area are shipped. by this route, and hidden cargoes of drugs could easily accompany them. Cocaine is known to have reached the United States by air from Uruguay. Cocaine and sizeable amounts of coca leaf have been smuggled from Bolivia into the provinces of Salta and Jujuy in northwestern Argentina. In 1964 an exceptional quantity of leaves, weighing almost 15,000 kilograms, was confiscated. The demand for the leaves is a reflection of the large number of Bolivian coca chewers that live and work in northwestern Argentina. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 As in Brazil, arrests on narcotics charges often take place at the centers of distribution in Argentina rather than in the frontier zones. For example a gang of cocaine traffickers was recently captured in downtown Buenos Aires. Included in the group were five Argentines, a Lebanese, and a Bolivian woman who brought the cocaine in from her homeland. Cocaine Smuggling frgm Bolivia to Chile A considerable flow of coca leaves and paste enters northern Chile from Bolivia. Arica is probably the most important reception center for the drug. In and around this port city clandestine laboratories convert the raw material into refined cocaine. After refining, the drug is shipped south to consumption and distribution centers such as Santiago, Concepcion, Valparaizo, Iquique, Antofagasta, and Punta Arenas. Only a small part of the illicit production goes to Chilean addicts; traffickers prefer the external market, particularly Europe and the United States, where much higher profits can be obtained. Chilean authorities discovered a number of clandestine laboratories in 1969 in Arica, in nearby Azapa, and in Puente Alto on the southeastern outskirts of Santiago. In 1970 still more clandestine laboratories have been discovered in Arica and also in Antofagasta. Police officials concluded that although some of the cocaine produced in these laboratories was for domestic consumption, most of it was being shipped to Italy and the United States. :o ai n Sm uggllg f rom Peru to Much of the cocaine manufactured in clandestine laboratories in southern Peru is directed to Guajara' Mirim, Brazil, situated some 500 miles northeast of Cuzco on the Bolivia-Brazil border. From Guajara Mirim the drug probably moves southeastward to Sao Paulo and Rio de Janeiro. Cocaine produced in the northern part of Peru often goes by air from Iquitos to Leticia, Colombia and then to Sao Paulo de Oli.venqa, Tefe, and Manaus, Brazil. From Manaus the cocaine either continues by ship or plane down the Amazon and across the Atlantic to Italy or by air to Surinam and thence to Cuba, Mexico, and the United States. Cocaine Smuggling from Peru to Ecuador? Col_ombi a, and Ven _z _1 a Considerable amounts of paste are smuggled out of northern Peru into Ecuador for conversion to cocaine, which is then shipped to the United States via Colombia Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 or by more direct routes from Guayaquil or Quito. Small amounts of the cocaine continue through Colombia to Venezuela and from there to Europe or the United States. Little of the drug is consumed by addicts in Ecuador, Colombia, or Venezuela. Three international narcotics rings were broken up in northern Peru in early March 1969. Their clandestine laboratories are estimated to have turned out a half million dollars worth of cocaine before being discovered. Later in the same month members of another gang of drug traffickers were captured. This group had been operating for about a year, in the course of which they managed to ship nearly a million dollars worth of cocaine and paste to Guayaquil, to Panama, and the United States. Main centers for their operations were in the vicinity of the coastal towns of Tumbes, Peru and Huaquillas, Ecuador. The group was supplied by a clandestine laboratory located near Tama in central Peru. In March 1970 police authorities were investigating an international network of narcotics smugglers including Peruvians, Ecuadorians, Colombians, and Venezuelans that had been trafficking for the past 6 months in cocaine, arms, and prostitutes. Cali, Colombia and. Guayaquil, Ecuador were the main centers of their illicit operations. Colombian prostitutes, recruited in and around Cali, were sent to Guayaquil and Quito in exchange for Peruvian cocaine refined in Ecuador. From Colombia the cocaine was transshipped to Venezuela and the United States by other international gangs. In May one of the more important international cocaine couriers was captured by Colombian agents at the Eldorado Airport near Bogota. He had been engaged for months in smuggling cocaine into Colombia from Guayaquil and Quito. At the time of his arrest some $60,000 worth of cocaine was found on his person. In July a notorious Cuban trafficker was captured in a luxury hotel in Bogota with cocaine that would have been worth an estimated half million pesos on the black market. He had travelled in Africa, America, and Europe and lived in Caracas for some time before his recent arrival in Bogota. Man] u na Marijuana is derived from the hemp plant, which is distributed very widely in South America. Depending on climate and soil conditions, plants have a greater or lesser value for either their drug-producing properties or for the production of textiles, cord, and twine. As a source of marijuana, the plant is common in most of the countries of the continent, with the possible exception of Peru, Bolivia, Chile, and Argentina. Marijuana smoking is outlawed throughout South America. -5- Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Marijuana Smuggling from Colombia to ~EII~~? ~ P l a It has been estimated that there are over 400,000 marijuana smokers in Venezuela. The habit cuts across socio-economic lines. Jails, barracks, night clubs, schools, and universities are all scenes of marijuana. use -- as in the United States and Europe. Although some of Venezuela's marijuana is home grown, the vast majority of its supply is derived from Colombia. The traffic is said to be in the hands of astute merchants and cultivators and to be very well organized. The centers of greatest production in Colombia are located in the north in the departments of Norte de Santander, Magdalena, Cesar, and in La Guajira. In these places the most advanced agricultural methods are applied. The planters who raise marijuana usually do so exclusively -- their entire farms are dedicated to its cultivation. At certain times during the year, preferably before winter, the marijuana crop is harvested and stored in large sheds where it undergoes a curing process. From these sheds the marijuana passes through the hands of a number of regional and local wholesalers, always increasing in price, until itsreaches the Venezuelan border zone, at Maicao or Cucuta' ucuta for example. By then it has increased in value from about 15 pesos a pound to 100 or more pesos a pound. Once the drug has gone over the border into Venezuela the price triples. The traffickers employ diverse methods to get the drug across the border. Often they use pack animals and take long roundabout routes over the mountains and through the forests. They sell their merchandize to local wholesalers in Venezuela, in places such as San Antonio in Tachira State or Guzare in Zulia State at 200 to 300 bolivares a pound. The marijuana is then transported to important urban centers, such as Caracas, Valencia, Barquisimeto, and Maracay. Local wholesalers sell the marijuana to distributors at 350 to 600 bolivares a pound depending on the quality of the product. The marijuana finally reaches the hands of the consumer in the form of 10, 20 or up to 50-bolivar packets. A 10-bolivar packet might have enough marijuana to make three cigarettes; generally 100 to 150 packets are produced from a pound of marijuana. In other words, the marijuana has increased in value from slightly less than US $1 a pound when it leaves the Colombian farm to about US $220 when it reaches the Venezuelan consumer. Hence, enormous profits are made in the traffic. Approved For Release 2001 /09/04 :CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Marijuana is also smuggled out of Colombia by air to Puerto Rico and the Netherlands Antilles. Marijuana Traffic in Brazil Marijuana (called maconha) is cultivated for the illicit drug traffic in nearly all of the states of Brazil. In descending order of importance the chief producing states are: Alagoas, Mato Grosso, Pernambuco, Sergipe, Piaui, Mananliao, and Bahia. All of these, with the exception of Mato Grosso, are located in the poverty-striken northeastern portion of Brazil; Mato Grosso is both geographically and culturally the "wild west" of Brazil, an enormous expanse of forests and grasslands. The main consumption centers, on the other hand, are located in the more prosperous central and southern coastal regions, particularly in the cities of Sao Paulo, Rio de Janeiro, Belo Horizonte, and Porto Alegre. Most of the marijuana is brought to the consumption centers from the areas of production by trucks and private automobiles. The emergence of Mato Grosso as a major producer of marijuana is a relatively recent phenomenon, perhaps related to suppression of cultivation of the crop in the northeast or interdiction of traffic to the south. S'o Paulo State is also beginning to grow marijuana for its local market. Marijuana Smuggling from Paraguay to Brazil Beginning in 1964 Paraguayans began to export marijuana to Brazil by way of Corumba, Mato Grosso. In 1966 police in Corumba seized a trunk containing 40 kilograms of the drug. By 1969 it could be said that the cultivation and smuggling of marijuana had become "a way of life" in the Pedro Juan Caballero area and in other towns in northeastern Paraguay along the Brazilian border. It was even claimed that Paraguay might soon become the world's largest producer of marijuana. The upsurge of marijuana cultivation in Paraguay is said to be the result of the strong crackdown on illicit cultivators in northeastern Brazil some years ago. The cultivators first tried operating in Mato Grosso, but many of them found the risks still too great there and moved across the border into Paraguay. The price of the marijuana doubles on crossing the border into Brazil. Local Paraguayan officials have reportedly been heavily involved in the illicit trade. Synthetic Drugs In addition to the traffic in cocaine and marijuana, an alarming growth has taken place in the illicit movement of dangerous synthetic drugs, especially within and to Brazil. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 It is sustained both by Brazilian laboratories and by illicit importation from Argentine and Uruguayan laboratories. In 1966 Brazilian authorities seized 4,000 ampoules of Pervitin from Argentina, more than 300 phials of Dexamyl from Uruguay, 1,500 tubes of Stenamine from Argentina, and a further 3,000 tubes of the same drug from Cochabamba, Bolivia. In 1968 over 40,000 tablets of various psychotropic drugs were seized in Brazil. One of the principal centers for the introduction of the synthetic drugs into Brazil is Pedro Juan Caballero, Paraguay, notorious for gambling, prostitution, and smuggling of all types. The synthetic drugs are said to be of Argentine origin and to move into the area as a countercurrent to the marijuana which is moving out. The consumption of opium and its derivat-ves within South America is not currently considered to be a major problem. There is no known significant cultivation of opium poppies or production of morphine or heroin. During 1966, heroin traffic into Brazil was said to be substantial, mainly because of illicit imports to Santos and Sao Paulo by Chinese crewmen from Dutch vessels. Most of the drugs were believed to have come from Hong Kong. Over the 5-year period from 1963 through 1967, however, Brazilian authorities reported actual seizures totaling less than 2 kilograms of heroin, 1,263 ampoules of morphine, and 23 grams of opium. The latest available official report, 1968, indicates no opiates seized during that year. Certain key cities in South America have become increasingly important as transshipment points for heroin from Europe moving into the United States. As early as 1966 reports indicated the probability of narcotics smuggling by air from France to Argentina and then on to the United States. Elements from the predominantly Italian La Boca section of Buenos Aires were suspected of being involved in the contrabanding. Currently (1970) French-Italian and Latin American gangs are engaged in smuggling heroin into Rio de Janeiro for transshipment to the United States. These gangs apparently have connections in New York and Naples, and probably in Buenos Aires and S'do Paulo as well. Most recent addition to the list of transshipment points is Santiago, Chile. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 JtJ..F~VFip`S 97~?...:.7 Approved F Release 2001A CI g10'4': A-RDP80-01601 R001000040003-7 0 phurte acid. There are scores concentrates on penetrating the of operators in Bolivia.' . )international ring by recruit-I, For pure cocaine, a bitter, ing informers and developing white crystalline substance that detection systems along the not only cocaine but also large '"""" `""" (.-- With the rainy season draw- Y Spanish, some simple Indus- International police have long i h ipments of heroin orig nating trial chemistry is needed. known of several Chilean or- ing to a close in the Tamam- s paya River valley, Ricardo in Europe. The work can be done in a ganizations that began as so- Misme, a Bolivian Aymara In- Mr. Misme's coca plot is less laboratory that can be hidden called "pickpocket rings," dian, has finished planting a than half an acre, which is in a house. In the past month which trained thieves and sent new plot of coca shrubs, the small compared with some two such clandestine Tabora-, them to the United States. Ac- -source of up to 30 acres source of cocaine, tories near Santiago, Chile,Icording to narcotics sources, The tender green seedlings in the Yungas. But for the next have exploded, . killing the these rings, which have crimi- are rooted in moist, terraced,25 years it will yield upward operators. Much of the "paste"lnal connections in the United beds that rise like steps on a of 120 pounds of coca leaves from landlocked Bolivia is States, are now in the cocaine 5 hillside that plunges down tolannually, worth about $ 0 at taken to neighboring Chile forland heroin traffic. the rushing river. In the warm current prices. refining and shipment to the! Frenchman Is Accused sun, the. seedlings will grow That and about $100 a year United States. The rings are similar in or}-1 into rows of low, green bushes(in hone: ,sales from 23 bee- The cocaine is moved north gin to that believed to have; hives em:ble Mr. Misme to buy lby next year when Mr. Misme in ships touching at Chilean been operated by Auguste Ri-1 rice, salt, cooking oil, sugar and picks his first crop of coca ports, aboard private planes, in cord, a 61-year-old Frenchman) a few other staples to supple leaves.- ment his own food crops, main- hiding places such as the hol-.who is in jail in Paraguay, The Mr. Misme, 32 years old, has low end of wine bottles and by United States is seeking to ex- lived all his life in the valleys ly potatoes, corn and oranges. Coca a `Safe' Crop or body carriers. tradite him as one of the major of the Yungas region in the The Profits Are High traffickers in South America. Andes of western Bolivia and "Coca is safer than planting The enormous increase in the Ricord went to Buenos Aires, fruit trees, which can et sick," does not know that cocaine has) get of cocaine between a Argentina, after World War II become one of the most lucra-ssaid Mr..Misme, squatting on his? Chilean port and the United and, according to the police, es- tive drugs in internationalI terraced land, which he cleared, States makes the risk of beings tablished a major. white-slave smuggling to the United States.lgraded and planted in 25 days caught worth chancing for operation that sent girls to He is a poor farmer, sup- with a short hoe and a ma- many carriers an and finances the nightspots and prostitution porting a wife, three childrenlchete. o e criminal organizations rings in Uruguay, Brazil and and two elderly parents on 20I Other small plots could be lam that are the major traffickers. Venezuela. acres of land, and coca is a II seen on hillsides across the A kilo of cocaine (2.2 pounds), When - heroin traffic from crop that is legal and deeply river. There are thousands of ;worth $1,000 in the Chilean Marseilles to the United States ;rooted in the Indian cultures lsmall farmers producing coca I . _.,a - in retail drug sales in New through Canada and United tsut the cnain that runs from i uau:uu r[uv,ncc tuL- a cwwuuni :. This means that the creasing pressure in the late Peru the to coca the plots in cocaine Bolivia pushers inand market northern that Argentina covers and ChileBolivia.,,;;, agents3,000 kilos of cocaine originat-nineteen-sixties, Ricord's op- b l ecame a y New New York or Miami involves The chewing of coca leaf,; ing in Bolivia are worth $70- eration reported powerful criminal organizations 1combined with a small amount million in the United State's. major channel for heroin ship- making profits in the tens of of lye is a deeply rooted Indian i. The temptations of such prof-,ments to the United States millions of dollars. tradition. Stimulating alkaloids, Its apparently caused the through Miami. death of two our Americans Y l.i f- I RV I I I Cc a V a n s o a d ri V uct.The process is simple, in to Chile make disruption of the, Wa~y ? port of Arica, is worth $23,000 traffic from here very difficult.) ]mot's A Life dng !rose more than oil The United States Bureau ofi ,( 1so f drum, kerosene, water and d sul-(Narcotics and- Dangerous Drugs] major target of the United States Bureau of Narcotics and Dangerous Drugs In the expand- ing war on South American The New York Times/Feb. 22. 1972 In Chulumanl region and other areas' of BctA ' 0 coca is an important crop or thousands of farmers. g including cocaine, are released... Coca chewing is reputed to in a La Paz hotel in Decem- give physical strength, reduce ber when a technique for smug- hunger and produce mental gling cocaine proved fatal. The clarity. Coca is also widely Youths swallowed sizable quan- used as a medicinal herb, par? ? tities of cocaine packed in rub-, ticularly as a tea. There is sci-I ber contraceptives several I entific debate over the nutri. hours before boarding a flight] tional value of chewing coca, for New York, hoping to pass it, but millions of Indians believe through the digestive system.! it to be beneficial. But the containers broke, ap-I "To deny the use of coca, parently from the effect of gas- to the Indians is as serious ai.tric juices, and both died from disregard for human rights as cocaine intoxication. would be an attempt to out-! Narcotics Squad Set Up law beer in Germany, coffee, Bolivia set up a small nar-, in the Near East or betel chew cotics squad, headed by a po-l Ing in India," said Richard T.jlice major, after a two-week) Martin of Harvard University's 1 training course financed by the, Botanical Museum in a study( United States Agency for Inter-; published by the Journal of national Development,. But l Economic, botany in 1970. while the policy of the military' Much Enters Drug Traffic government of President Hugol Nonetheless a rough estimate !Banzer Suarez is to crack down of production in illegal "Tabora-Ion drug abuse and to cooperate) tories," many of which are, with United States narcotics) crude wildcat "stills," indicates lsagents, personnel and funds aret that as much as one-third of li very limited. ? Bolivia's official coca output of II The widespread operation ofl 4,200 metric tons a year is1 clandestine laboratories and the) going into the drug traffic. lease with which cocaine cans I kjtgsi ket.value of $250, to produce a pound of cocaine "paste," %EW YORK T11 4h5 Approved For Relfaee ff++ ~~04 : CIA-RDP80-01601 R001000040003-7 CPYRGHT .at tt33 0 Ton of Marijuana'Found TIJUANA, Mexico, (AP)-A ton -of marijuana was found wrapped in plastic in a storage; shed here recently, the police said. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 4435 WISCONSIN AVE. N.W.. WASHINGTON, 0. C. 20016. 244-3540 PUBLIC AFFAIRS STAFF PROGRAM CBS Morning News DATE February I, 1972 7:00 AM STATION WTOP TV CBS Network Washington HUMPHREY WOULD HAVE CIA TRACKING DRUG SMUGGLERS JOHN HART: Senator Hubert Humphrey, campaigning in Florida, says the $230 million President Nixon wants to spend on drug treatment is, in his words, totally inadequate. He wants to get rid of narcotics before they get into the country , says Humphrey, saying it's time to put the CIA to work tracking down smugglers. He was at Dade Junior College in Miami yesterday, courting the kind of audience he alienated four years ago, as David Schoumacher reports. SENATOR HUBERT HUMPHREY: I think the important question today is to face up to a fact.... DAVID SCHOUMACHER: Hubert Humphrey is going after campus support with the vengeance of a man trying to taste everything he missed in 1968. As a teacher as well as a politician, the not always cold war between Humphrey and the students four years ago was particularly bitter for him. Now, he must prove as much to himself as to them that he still has something to say, that he is still relevant. SENATOR HUMPHREY: I tell the student body here that this country, your fathers and mothers helped rebuild a wartorn Europe in the I950's with our money, our taxes, $20 billion. Arid today the European city makes the American city look old and obsolete. If we could help Europeans build new cities and new industries and new parks and new highways and new airports, and put their people to work, why in the name of common sense can't we do the same thing for the American people that want to go to work? SCHOUMAC:HER: Of course, it is a new campus population. Many students were only I4 or 15 at the time of the 1968 Chicago Convention, and perhaps more to the point, they and their friends are no longer being drafted for Vietnam. Vietnam, and Humphrey's role as Vice President in the Johnson Administration still comes up, but without the bitterness of 1968. And now after all he's on their side. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 ' CPYRGHT .0, 0 In his bid for the students' approval Humphrey occasionally and awkwardly borrows some of their catch phrases, but when pushed he can be firm. SENATOR HUMPHREY: Now, first of all, that was '68, 1968, and may I say most respectfully, it was the only candidate that suggested a programmed withdrawal, a cease-fire and an ending of the bombing of the North. As a result of it, as a result of it, Mr. Nixon, Mr. Wallace, both condemned me. The President of the United States said he didn't agree with me. I think that that position represented a forward position at the time, and it said withdrawal of our forces, a cease-fire, an ending of the bombing of the North. No president could possibly say to do that without regard for the safety of our troops or he wouldn't be worthy of being president of the United States. I have no apologies whatsoever. It is now.... SCHOUMACHER: The students seemed to respect Humphrey's toughness. And after his appearances he's mobbed for autographs and snapshots. The former professor is given passing grades. Humphrey's campus tour went well, if, not all the students agreed with him they did listen. That, at least, has changed since 1968. David Schoumacher, CBS News, Miami, Florida. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 WASHINGTON DAILY :;E'VS Approved For Release 2001/.09/04 CJh RDP80-01601 R001000040003-7 FED 1 Fulbright and the drug, traffic By VIRGINIA PREWETT SENATOR J. W I L L I A M FULBRIGHT, D-Ark., in a parlimentary putsch late last Friday introduced an amend- ment to the foreign aid appro- priations bill that will kill the best mechanism the United States has for getting other countries to cut the drug flow Into the United States. Sen. Fulbright pulled out of his pocket in the final stage of the floor debate on foreign aid an amendment abolishing an AID operation called the "public safety program." It provided police advisory assistance and some equipment to 15 countries In Latin America and 25 over the world. The program employs 314 people overseas and 105 in Washington at a cost of $26 million annually. It was attacked in the subcommittee stage last week, but survived. Sens. Fulbright, Proxmire of Wisconsin and Pastore of Rhode Island assailed the program on the Senate floor, while Sens. Wong of Hawaii and Cooper of Kentucky. defended it. With 29 senators ab- sent, the amendment won by a vote of 37 to 34. THE BILL will be rushed to a Senate-House conference tomorrow, allowing no time for public awareness or discussion. The public safety program, started in 1954, during the 1960s has emphasized advising for- eign police forces on the humane handling of street riots and the suppression of urban guer- rilla warfare. Since its inception In 15 Latin American countries, rifles have ceased to be used against dissenting crowds. The more hu- mane methods of crowd-handling have to an extent pulled the sting out of street-rioting as a radicalizing tactic. As the overseas police met street riots without undue harshness, It became less necessary to call In military forces, with consequent harsh jolts to Internal political stability. The public safety assistance program has been a chief target of Latin America's ex- treme leftists and urban guerrillas as. it has aided neighboring police forces to suppress such dramatic urban guerrilla tactics as kid- napping diplomats. The extremist charge that U.S. public assist- ance advisors "assist" Latin American police in torturing prisoners has never been proved. Sen. Frank Church, D-Idaho, as chairman of the Inter-American subcommittee of Sen. Ful- bright's Foreign Relations. Committee, held hearings on this and had to admit no proof was available. He had ,special reference to Brazil, where extremists' records themselves reveal that alleged tortures took place in mili- tary barracks, not in police hands . - MANY FEEL that if our National Guard had had the crowd-handling training in which U.S. experts advise foreign police forces, the trage- dies of Kent State and Jackson State would never have occurred. With drug use among U.S. youth a national catastrophe, AID's public: safety program had begun to concentrate on getting overseas po- lice cooperation in stopping drug traffic into the United States. Special efforts were under way in countries of the greatest "drug flow" to our country. A similar drive was under way in Bolivia, Ecuador and Colombia, the three New World cocaine producers. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 CHICAGO, ILL.Approveq IFRIe 2001/09/04: CIA-RDP80-01601 R001000040003-7 NEWS E - 434,849 JAN 2 5 1972-. Cop-leve officials on both sides of Atlantic involved in charges. linking drugs, spy system well Hs ~cs By Milt Freudenheim Daily News Foreign Service spiked walls in a run-down quarter of northeast Paris, he works in a headquarters nicknamed the "Swimming Pool." A real pool is across the street. PARIS-Roger Delouette, 47, high-living sometime French Also known as SDECE (Service de Documentation Ex- secret agent and gun-runner, kissed his young blond mis- terieure et Contre-espionnage), it was home base for Com- tress good-by and left Paris for New York on a mysterious munist agents helping the Russians who were fictionalized adventure that turned sour on an apocalyptic scale. in the best-seller novel "Topaz." It rocked French politics, infuriated President Georges When it hit the headlines, Delouette's charge against Pompidou, threw a pall over the entire French spy system Fournier brought on a sensational public airing of the sinis- and for a time at least curdled French-American relations. ter history of the "Swimming Pool." Cabinet ministers on both sides of the Atlantic were drawn into the maelstrom, including American Secy. of State Wil- IN THE BEGINNING, FRENCH officials didn't respond liam P. Rogers, Atty.-Gen. John Mitchell and the French for months to demands from the prosecutor of the Delouette defense and interior ministers. President Nixon's top-prior- case. He is Herbert J. Stern, a hard-driving young U.S. ity international war against drugs was jeopardized at a attorney in Newark, N.J. Stern demanded action against painfully sensitive point. Col. Fournier. But Delouette, who eventually pleaded guilty to smuggling FINALLY, A HIGH-LEVEL decision was made to im- the heroin, wanted a promise of immunity from French pose a cloak of official secrecy, halt all public statements punishment in return for his co-operation in exposing and wait for better days. Fourn- ier. This type of immunity doesn't exist in French law. Delouette's ill-fated trip last April started it all. He was However, in previous cases Frenchmen convicted in the smuggling heroin. He did a poor job of hiding 44 kilograms United States have not, In fact, been retried for the same In a new Volkswagen camper and was arrested at the dock offense in France. et The French investigating judge, Gabriel Roussel, declined friend Marie-Jose Robert, 22: "Something has gone terribly wrong with the car." But the attempted warning was too to make any promises to Delouette.. Stern flew to Paris and late. waved his finger at Roussel demanding to see Col. Fournier. nearly $17,400 in counterfeit dollars. Marie-Jose was jailed Convinced that Fournier was being protected by a French and held until July when she was released to give birth to a coverup, Stern obtained federal grand jury indictments of daughter. both Fournier and Delouette. Fournier then was called in by Judge Roussel, a top French investigator with a good record SOQN AFTER HE WAS arrested in New York, Delouette of narcotic convictions. Fournier denied everything and told told American authorities he was smuggling heroin for newsmen his job with SDECE prevented his going into de- French intelligence Col. Paul Fournier. tails. This charge was a delayed-action bombshell that exploded seven months later when Delouette's American lawyer Next day a French cabinet spokesman, Leo Hamon, ex- leaked it to the New York Daily News. pressed official "skepticism" about the American charges. Fournier is head of investigations for the French equiva- Pro-government newspapers such as France-Soir became lent, but in a, much smaller and exceedingly corrupt way, of indignant at the indictment and hinted that it was a revenge the American Central e t 1 ' e c rs re AI~I~ $d~i'~'21 2b199t0 b th can ed previous accusations by U.S. officials that "big wheels" were protecting the heroin racket in France. Cit rope, was transferred fb l ater, widely believed, to placate the French. A few weeks Max Fernet, head of the French police Judiciaire and a bitter antagonist of Cusack, also was eased out. The score appeared even. Then the affair escalated from narcotics to the murky world of espionage. A former employer of Delouette sud- denly went on Luxembourg radio charging unnamed SDECE agents with "complicity" in the case. THIS WAS COL. Roger Barberot, head of a Fpeneh agency helping third-world countries with their agriculture and- doing a bit of intelligence work on the side. Barberot is a former French ambassador who seems to know a lot. He identified Fournier as using a second name, Paul Ferrer. Barberot once had attached Delouette to a French aid mis- sion in Cuba, but the French foreign ministry objected and got him removed. Ponnpidou acts According to Barberot, Delouette was the victim of an "operation" by SDECE factions who had been purged for acting as double-agents for the Soviet Union and other Com- munist countries. The "Swimming Pool" has been purged and re-purged. over the years. During the presidency of Gen. Charles de Gaulle, SDECE agents co-operating with the CIA were ousted. When Pompidou became president, he moved to clean up SDECE. He named a friend, pro-American businessman Comte Alexandre de Marenches, as head of SDECE. Anti-Communist newspapers charged. that the Delouette case was being used to discredit the Pompidou-style SDECE and get rid of de Marenches. THE FRENCH.SENATE, where government forces are outnumberecj, voted to cut SDECE'S budget. But the Assem- bly restored it. Defense Minister Michel Debre defended de Marenches and SEDCE. This was important because Debre earlier had tried to minimize the de Marenches purges of pro-Communist agents. French Minister of Interior Raymond Marcellin, in charge' of the anti-narcotics crusade, weighed in with a public prom- ise that France would "do everything to help the American government." These promises were renewed last week when John Inger- soll, head of the.U.S. Bureau of Narcotics and Dagerous Drugs, met top French police. But Ingersoll and his French counterparts ducked all questions on Delouette and Four- nier. Originally, Debre accused New' Jersey U.S. Atty. ' Stern of playing politics. But now Marcellin agrees that "it is necessary that the truth be found in this Delouette affair." Probe Pushed In Washington, Atty. Gen. John Mitchell leaned on Stern who stopped making public accusations against the French. Just before Christmas, Stern and Delouette's attorney made ;a discreet trip to Paris, this time without a word for the press. Later, word leaked from trench sources that Judge Roussel would be traveling to Newark for an official inquiry into Delouette's charges against Fournier. Like ,Americans, the French public is now. deeply worried about drugs. They are involving French young people of all background. 'The French sorely resent U.S. narcotics agents' well-docu- mented charges ,that A*r tdFr i 5ec120OOt'9/04 : CI~ York is processed in clandestine laboratories in France. In 20 years of looking, French police uncovered only 13 of these WASHINGTON STAR Approved For Release 2QA9/0W{141 2A-RDP80-01601 ROO1000040003-7 LATIN CRIMINALS MOVE IN a stro on u-g-Traff ic' afia 'O *%pe By MIRIAM OTTENBERG Star Staff Writer With expertise gained in the Spanish-speaking criminals are outdistancing the Mafia moguls as the key men in international narcotics traffic. "They're moving tremen- dous amounts of. heroin and- cocaine to the point where they rival if not surpass the traditional organized crime elements in the United States," said John R. Enright, who is assistant director for criminal investigation in the Bureau of N a r c o t 1 c s and Dangerous Drugs. When BNDD agents earlier this month made the largest heroin seizure ever reported, the eight persons arrested in- cluded two Cubans, five Puer- to Ricans and an Argentinean. BNDD Director John E. Inger- soll said the 385 pounds seized in Miami would have had a street value of $76 million. Enright said one of the prime factors in the greater availability of heroin and co- caine in this country is a dra- matic increase in activities of important Spanish -speaking traffickers. Mafia Still at It Before the 1960s, the inter- national heroin traffic had been dominated by the Mafia. They're not out of it yet, En- right said. One such-mob in New York recently smashed by BNDD was responsible, En- right said, for importing more than a ton and a half of heroin in the past year and a half. , "There has been some re- trenchment of the traditional crime groups from the heroin trade, however," Enright said, "and Spanish-speaking crimi- nals filled the gap. At the same time, there's been a tre- mendous increase in demand for heroin and cocaine." Cocaine traditionally has been in the hands of Cubans. They were the key middlemen for cocaine shipments from Bolivia, Peru and Ecuador via laboratories in Chile. When the pre-Castro Cuban criminal element left Cuba along with the doctors, lawyers and professors, the Cuban criminals spread all over South America, and to the cocaine trade they went into the expanding heroin market. In Spain, they set up shop across the border from-Mar- seilles and its heroin labs. From Barcelona, they smug- gled heroin by ship. In South America, they de- veloped routes to the United States for heroin moving via Argentina and other South and to prove the Spanish-speaking smugglers could furnish mul- ti-kilogram quantities of hero- in as well as cocaine, agents. made raids in nine major cit- ies. With arrests made one weekend and thereafter, the total was 169 people. Last week, the U.S. 5th Cir- ruit Court,of Appeals freed six members of what the govern- ment charged was a Florida Central American ports. They based narcotics gang uncov- worked with the "contraband- ered during "Operation Ea- istas," the soldier-of-fortune pilots. who will fly smuggled goods anywhere. And in the United States, they recruited couriers and gle." All but one of those freed, including one described as a top figure of the nation- wide ring, were Spanish- speaking. The appeals court threw out their convictions on the ground LT..-L ALL_ r1...- T-U-- TT TR: L..L Cuban colonies in Miami, New York and Chicago. The widespread operations of the Spanish-speaking smug- glers, particularly the Cuban immigrants to the United States, first was noted by nar- cotics enforcement officials in 1969 when two major drug cas- es were developed. One case involved European heroin smuggled by ship into New York in food cans pur- ported to be filled with a Span- ish delicacy, paella. The other case involved a number of Cu- ban conspirators smuggling heroin and cocaine into the Mi- ami area. When BNDD information in-' dicated that the hub of the smuggling operation was the large Cuban immigrant colony in Miami, a bureau task force of Spanish-speaking undercov- er specialists was set up to penetrate--the system and gauge its proportions. The in- vestigation was known as "Op- eration Eagle." As the investigation devel- oped, it became apparent that an organized criminal group of interstate and International proportions was involved. Links were established to New York and Chicago and other U.S. cities with Cuban colo- nies. And the drug traffic routes north from South Amer- ica, Central America and the Caribbean islands were traced. ears executive assistant, act ' ing under authority delegated him by Mtichell, approved ac- tions ultimately leading to two court-approved wiretaps. The appeals court said federal law requires that Mitchell himself authorize the taps. United States and Spain as 169 Arrests M d well. Approvedci09ate 21i0/04 : CIA-RDP80-016018001000040003-7 lot of money on narcotics buys 7T 'IL Approved For Relea, 0Wi 9/~A`~GIA-RDP80-01601 R001 000040003-7 STIR 1972 23 Accused of S muggting 1,500 Lbs. of Heroin Here Twenty-threes men were charged here yesterday with smuggling 1,500 pounds of heroin into the United States during the- last two years in one of the largest narcotics op- erations ever uncovered. cr.ra e i t dj dSate l autho a ma e Haut 1j~~~ es s- from France ort h Can. that the smuggled heroin had g Most of the heroin mentioned gg ada, according to Andrew J. in the indictment was allegedly an importation value of at least Maloney, the Federal prose- $8-million and a street value of cutor in charge of the Investi- more than $200-million, with gation. Maloney, who is chief some estimatesn st $300- milIion, ~ of the narcotics section in Mr. dependi won condi- Seymour's office, said that the tions in the narcotics n`r et, defendants had smuggled in the ! American and ' French agents heroin in expensive automo- cooperated in the 'extensive in- vestigationn which included months Of surveillance in New York, Montreal, Paris and other cities. United States Attorney Whit- ney North Seymour Jr. said that the 23 men were indicted by a Federal grand jury here on Jan. 4, but the Indictment" was not unsealed until yester- day, after six of the defendants were arrested in France during` the weekend. Twenty of 'the defendants named in the indictment were identified as Frenchmen, one as an Austrian national who was arrested in France and two as Bronx residents, identi- fied as Louis Cirillo and John; After the initial interception, Anthony Astuto. I which resulted in several ar- The indictment accused all rests here, French authorities of the defendants of conspiring made additional arraests in Par- to conceal large amounts of is and seized 233 pounds of heroin in automobiles shinned heroin last Oct. 6,, described at Mercedes, a Cadillac and an ;Alfa Romeo. A key break In the case came 'last September when United States Customs agents intercepted a heroin-laden car that had been shipped here from France. Little Dent Made in Supply eeini to The New York Times PARIS, Jan. 17-A mint 11 month fight by the. Anrericanl and French police to halt the. drug traffic was acknowledgedi today to have made little dent) in the level of supply and con- sumption of narcotics in the! United States. John E. Ingersoll, chief of the'' American Bureau of Narcotics and dangerous drugs, said after a meeting here with French police officials that he was not satisfied with the efforts of the French police or of his own agents. The area of biggest failure has been in finding the clan- destine heroin laboratories in southern France, notably around Marseilles. No laboratory has been discovered for several years, but Jacques Solier, head of the French criminal police, said "all our efforts are being directed towards finding them." The indictment announced to- day in New York of 23 sus- pected drug smugglers was hailed by Mr. Ingersoll and Mr. Solier as one of the most im portant results to date of French-American cooperation. smuggled into this country without being recovered by the authorities, but Federal agents said their investigation - could document shipments totaling three-quarters of a ton. Andre Labay, a French indus- trialist, and two others arrested as part of the heroin case in Paris last October were named in yesterday's indictment here, but all the French suspects ar- rested in France will face pros-I ecution in their own country. Federal authorities here ex- pect to extradite Guido Ran- dell, an Austrian arrested in Paris, and Michael Mastantu- ono, a French citizen arrested in Montreal. Five defendants, including the 48-year-old Cirillo of 2970 Ran- dall Avenue in the Bronx, were arrested in the United States and face trial In Federal Court here, but several others were still being sought by the au- thorities. One of those still being sough is Astuto, 27, who formerly lived at 4712 Osman Place in the Bronx. 4 Others In Custody Besides Cirillo the defendants Federal custody here are Richard Berdin, Roger Preiss, Laurent Fiocconi and Jean Claude Kella, all French citizens ranging in age from 26 to 35. The defendants who are pros- ecuted here face maximum sentences of up to 20 years in; prison and fines up to $20,000' on each of nine counts In the' indictment if they are convicted,. according to Arthur J. Viviani and Dean C. Rohrer, the pros- ecutors who presented the case to the grand jury. The first count of the indict- Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 June 2, 19, ,pproved 9X~ ~~ PAL09A '1.A~ s~~~~ R M 94 A~003-7 E 5305 Tile objr'etivc of the new policy is to induce foreign conc,'rlls to take the Antidumping Act into account before they engage In sales to the United rates. Tho 25 Percent Rule The Antidumping Act provides that In normal situations fair value shall be deter- mined by comparing the ex factory home market price of the merchandise snider in- vestigation with the ex factory price at which the merchandise is sold in the United States. If the price in the United states is less than the home market price, then there are "sales at less than fair value" within the meaning of the statute. The Act also states that in situations where the quantity of merchandise sold in the home market is so small in relation to the quantity sold for exportation to countries other than the United States as to form an Inadequate basis for comparison, then third country price should be used as the basis for comparison. The Antidumping Regulations provide that generally for purposes of determining what constitutes an "inadequate basi& of coin- parison" for fair value purposes, home mar- ket sales will be considered to be inadequate if less than 25 percent of the non-U.S. sales of the merchandise are sold in the home mar- ket. The selection of home market or third country price for fair value comparison can easily be crucial to the results of intidunip- Ing investigations, for frequently home mar- ket price tends to be higher than third coun- try price. This is particularly true where merchandise is sold in a protected home mar- kct and, when sold in third countries, is ex- posed to the vagaries of world competition. It has been Treasury's experience that cases arise where sales In. the home marke are adequate as a basis for fair value coin parison, even though leas than 25 percent o the non-U.S. sales are sold in the home mar- ket. From a technical standpoint, the exist- ing regulations provide for this situation, since the 25 percent rule is introduced by the adverb "Generally." Examination of the precedents, however, revealed that the Treas- ury has not, in recent years at least, made an exception In applying the 25 percent rule. This left the Treasury with two alterna- tives. It could have ignored the previous in- terpretations' of the Antidumping Regula- tions which had, in effect, applied the regula- tions as If the word "Generally" were not there, or it coud propose a, change In the Antidumping Regulations to eliminate the 25 percent rule.- We chose the latter course. The proposal was published in the Federal Register of April 27, and is currently open for comment by interested persons. Any com- ments received will be carefully considered before we take filial action on this proposal. A LOON INTO THE FUTURE In my judgment, we have only come to the end of the beginning of the rejuvenation process. But, I believe we have made a solid start. Let me take it final brief moment to touch upon what I see happening in the future. We .have taken steps to initiate a fresh examina- tion of the Treasury's anticlumping proce- dures and regulations to scc what more can be done. The regulations were substantially revised in mid-l9G8 after a broad review, with the dual objectives of conforming the Treasury's procedures to the requirements of the International Anti-Dumping Code, and also of having the regulations Imple- ment in clear and precise language c ob- jectives of the Antidumping Act. 11 al- most three additional years of experience under the regulations, as then revised, it is now appropriate to stop and take it new look to see whether additional changes may be ap- propriate. A Notice of Proposed Rule Making to this effect was published in the Federal Register of April 13, 1971. - Sixty days are being allowed for the sub- 'mission of comments. I would assume that many persons present here today-if you are not already aware of the Treasury's invita- tion to submit colmnents--may wish to do so. Let me emphasize that the Treasury De- partment continues, as always, to adhere to its policy of equitable administration of the Antidumping Act. With the increased per- sonnel assigned to this field and modernized procedures and policies, we shall speed up antidumping investigations, thereby making administration of the law more effective--all this without sacrificing equity. Let inc also emphasize that the Treasury Department and the Administration are strongly opposed to having the Antidumping Act transformed into an instrument of pro- tectionism. On the other hand, we are equally strongly opposed to allowing foreign firms to injure U.S. industry by unfair price discrimination. It is with the latter objec- tive in mind that the Treasury Department introduced the changes in the administra- tion of the Antidumping law, which I have discussed with you today. To the extent that we succeed in our objective, the Treasury's rejuvenation of the Antidumping Act will become an increasingly important influence in favor of a freer international trade policy. In. conclusion, I would like to repeat a statement made by Secretary Connally oil May 17 before the Subcommittee on Inier- national Trade of the Senate Committee on Finance: "The efforts to foster increased competi- tiveness in our economy must be actively pursued In the context of fair and liberal trading arrangements." RAMPARTS MAGAZINE MISREPRE- SENTS ROLE OF CENTRAL INTEL- LIGENCE AGENCY IN FIGHTING AGAINST IMPORTATION OF DAN- GEROUS DRUGS 1-10N. C I RLES S. GUBSER OF CALIFORNIA - IN THE HOUSE Oil REPRESENTATIVES Wednesday, June 2, 1971 Mr. GUI3SER. Mr. Speaker, recently Ramparts magazine published an article which, like so many other articles which appear in new left publications, attempt- ed to discredit established agencies of the Government, including the Central in- telligence Agency. Unfortunately, the Stanford Daily, the newspaper pub- lished by students at Stanford Univer- sity, saw 8t 'to lend credibility to this article by reprinting it. A tearsheet from the Stanford Daily was sent to me by a constituent and I submitted it to the Bureau of Narcotics and Dangerous Drugs with a request for comment. Under date of May 27 1 re- ceived a reply from Mr. John E. Ingersoll, director of the Bureau of Narcotics and Dangerous Drugs. His letter should be brought to the attention of all responsible Members of Congress and the press since it certainly contradicts the implications contained in the Ramparts magazine article. Mr. Ingersoll's response follows: lion. CHARLES S. GUPSER U.S. House of Representatives Washington, D.C. DEAR CONGI.ESSrsAN Gc*.?srl,: This is. in response to your letter of May 21, 1971, which enclosed a tearsheet from the "Standard Daily" (a publication of Stanford Univer- sity) of the article entitled, "The New Opium War," as reprinted from "Ramparts Mag- azine." Charges made in the article appear to be a part of a continuing effort to discredit agencies of the U.S. Government, such as the U.S. Military, the FBI, the CIA, and the De- partment of State, all of which are, in point of fact, working actively with the Bureau of Narcotics- and Dangerous Drugs (ENDD) in our worldwide effort to curtail international drug traffic. Actually, CIA has for sometime been this Bureau's strongest partner In identifying foreign sources and routes of illegal trade in narcotics. Their help his Included both direct support in intelligence collection, as well as in intelligence analysis and production. Liai- son between our two agencies is close and constant in matters of mutual interest. Much of the progress we are now making in iden- tifying overseas narcotics traffic can, in fact, be attributed to CIA cooperation. In Burma, Laos, and Thailand, opium is produced by tribal peoples, some of whom lead a marginal existence beyond the polit- ical reach of their national governments. Since the 1950's, this Southeast Asian area has become a massive producer of Illicit opium and is the source of 500 to 700 metric tons annually, which is about half of the world's illegal supply. Up to now, however, loss than ten percent of the heroin entering the United States conies from Par Eastern production. . The dimensions of the drug problem and the ab:;ence of any strong political base for control purposes has been a dilemma for United Nations opium control bodies op- erating in Southeast Asia for nanny years. Drug traffic, use, and addiction appears to have become accepted as a fact of life in this area and, on the whole, public attitudes are not conducive to change. The U.S. Government has been concerned that Southeast Asia could become the major source of illicit narcotics for U.S. addicts after the Turkish production, 1s brought under control. The Bureau of Narcotics and Dangerous Drugs, with the help of CIA, DOD, and the Department of State, has been working to define and characterize the prob- lein so that suitable programs to suppress the illicit traffic and eliminate illegal opium production, such as the proposed United Nations pilot project In Thailand, can be implemented. It Is probable that opium production in Southeast Asia will be brought under effec- tive control only with further political de- velopment in these countries. Nevertheless, in consideration of U.S. Military personnel in the area, as well as the possibility that opium from this area may become a source for domestic consumption, concerned U.S. Agencies, including CIA, Bureau or Customs, Dorm, and State, are cooperating with ENDD to work out programs to meet the immedi- ate problem as well as provide longer term solutions. Since the subject matter of your letter concerns CIA, I have taken the liberty of furnishing a copy along with my reply to Director Richard Helms. Sincerely, JOAN E. INGERSOLL, Director. As an enclosure to his letter, A1r. In- gersoll included a paper entitled "Recent Trends in the Illicit Narcotics Market in Southeast Asia." This should also be. of interest to every person who is con- cerned about this problem and I there- fore include the text herewith: RECLNT TRENDS IN THE ILLICIT NARCOTICS MARKET IN SOUTHEAST ASIA,- 1. The reported increasing Incidence of heroin addiction among U.S. servicemen in Vietnam and recent intelligence indicating that heroin traffic between Southeast Asra Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 E 5306 Approved For Release 2001/09/04: CIA-RDP80-61601 R001 000040003-7 CONGRESSIONAL RECORD - Extensions of Remarks June 2, 1971 and the United States may also be increas- ing suggest that Southeast Asia is grow- ing In importance as a producer of heroin. While this phenomenon in part reflects im- provement In information available in re- cent months to the U.S. Government, there are tilso good indications that production of illicit narcotics in Southeast Asia has in- deed risen in 1071. BACKGROUND 2. The Burma, Laos, Thailand border area, known also as the "Golden Triangle," is considered one of the world's largest opium producing regions. This region normally ac- counts for about 700 tons of opium annual- ly or about one-half of the world's total il- licit output. A substantial proportion is con- sumed within'the region. Burma, by far the largest producer of opium in this region, accounts for about 400 tons annually. SURR3A 3. Production in Burma is concentrated In the Eastern and Northern parts of Shan State and in the Southwestern part of Ka- chin State. Poppy fields cover the rugged slopes In Fastern Shan State around Keng Tung and in Northern Shan State from Lashio east and north to the China border. The latter territory, comprised of the former Wa and Kokang feudal states, is now a cen- ter of insurgency directed -against the Bur- mese government, with much of the area un- der insurgent control. 4. The growing season varies with the al- titude, but the planting season generally falls during the-months of August and Sep- tember, with the harvest some seven months later during February and March. At har- vest time the women of the hill tribes slit the poppies and collect the raw opium by hand. The : opium plants themselves are ground into a compound. for smoking. In Northeast Burma, the raw opium is packed by the growers and traded to itinerant Clii- nese merchants who transport it to major collection points, particularly around Lashio and Keng Tung. Agents of the major en- trepreneurs circulate through the hill coun- try shortly after harvest time arranging for payment and pickup. Payment is often in the form of weapons and ammunition, al- though gold and silver rupees are also used. 5. The opium harvested in Shan, Wa, and Kokand areas is picked up by caravans that are put together by the major insurgent leaders in these areas. The caravans, which can include up to 600 horses and donkeys and 300 to 400 men, take the opium on the southeasterly journey to the processing plants that lie along the Mekong River in 'the Tachilek (Burma) -Mae Sal. (Thailand) - Ben Houei Sal (Laos) area. Caravans carry- ing in excess of 16 metric tons have been reported. THAILAND 6. Opium-growing areas in northern Thai- land are located in the upland tracts oc- cupied by various tribal groups. The pro- vinces of Ching Mal, Chiang Ral, and Nan, which have the largest concentration of Moos, produce most That opium. Illicit opium production in Thailand is estimated at 200 tons. LAOS 7. Another, less productive, opium growing area is along the 2,500 to 4,500 foot high mountainsides of Northwest Laos. The opium cultivated by' the Moo in this area is of a relatively lower grade and thus less suit- able for refinement into morphine base or heroin. In these areas where the tribesmen have been encouraged to grow corn, the pop- pies are planted among the corn. When the corn is out, the poppies continue to grow until they too can be harvested. 8, Major producing areas include Phong Saly Province in the North, Houa Phan (Sainueua) Province in the Northeast, and the Plaine de Jarres area of Xiang Khoang Province in the East-central part of the country. However, large arena of production in Pliong Saly, Ilona Phan, and Xiang Khoang have fallen under the control of the Pathet Lao and North Vietnamese, 9. The trade in Northwest Laos is less well structured and organized for significant com- mercial exploitation. There are no advance purchasing agents or pick-up caravans. The harvested opium and the poppy plants which are ground up for smoking are transported to nearby village markets by the growers themselves. In highland market places the raw opium and its by-product are used open- ly as currency. Ethnic Chinese merchants ire the traditional purahnsers of the opium products throughout Laos. The products they collect are transported to population cen- ters and also to processing plants along the Mekong River by travelers, particularly gov- ernnient soldiers, who have the most mobil- ity and access to air travel in the area, and refugees. Opium produced in the Commu- nist-controlled areas also find its way into the regular marketing channels. DISTRIBUTION AND REFINESISS 10. The KMT irregular "armies" and the Burmese Self Defense Forces (KKY) are the. most important trafficking syndicates in Northern Southeast Asia. The KMT irregu- lars--formerly the remnants of the Chinese Nationalist forces which retreated across the Chinese border in 1949--now composed largely of recruits from the local population, have a combined strength of between 4,000 and 6,000 well-armed nten. The largest force, with an estimated strength of 1,400 to 1,900, is the Fifth Army. 'The secorid largest with a troop strength of between 1,200 and 1,700 Is the Third Army. The headquarters of both armies are located in a remote part of North- ern Thailand between Fang and Mae Sai. It is estimated that these two KMT irregular forces control more than 80 percent of the opium traffic from the Shan State. 11. The KKY have been major competitors of the KMT irregulars in the opium trade. The KKY are comprised of former Shan State insurgents and bandits who have allied themselves with the Burmese government against both the KNt'I' and Chinese Commu- nist-backed insurgents. In return the gov- ernment of Burma allowed them to pursue their opium trafficking activities. 12. 't'he Shan States Army, an insurgent group, is also heavily involved in the opium business. It maintains several camps in Northern Thailand where opium is nearketecl for weapons and military supplies. 13. About 140 tons of raw opium is nor- mally transported annually out of Northeast Burma to foreign markets. Most of this opium is stored or processed in the Mekong River trf-border area before transiting Thai- land and Laos. Tachilek, Burma is probably the most important transshipment point in the border area. In 1970, out of a total of 123 tons reportedly shipped out of Northeast Burma, 45 tons was received in the Tachilek area. In the first two mouths of 1971, 58 out of a total of 87 tons had Tachilek as its desti- nation. Other Important transshipment points appear to be located in the vicinity of Ban Houet Sat, Laos, and Mae Salong, Thailand. 14. There appear to be at least 21 opium refineries of various sizes and capacities lo- cated in the tri-border area, of which about 7 are believed to be able to process to the heroin stage. The most important are located in the areas around Tachilek, Burma, Ban Houei Sal and Nam Iieung, Laos, and Mao Salong, Thailand. The best known, if not largest of these refineries Is the one at Ban Houei Tap, Laos, near Ban Houei Sai which is believed capable of processing come 100 kilos of raw opium per day. The 11 refineries in the Tachilek area apparently process the largest volume of raw opium in the region. In 1970, about 30 tons was converted by the Tachilek refineries into refined opium, mor- phine base, and heroin. 15. The typical refinery is on a small trib- utary of the Mekong River in an isolated area wi th a military defense perimeter guard- ing all ground approaches. Most of these re- fineries operate under the protection of the various military organizations in the region, or are owned or managed by the leaders of these military groups. The KKY units pro- tect and operate most of the refineries in Burma. Leaders of these groups also hold an ownership interest in many of these fa- cilities. In Thailand, the refineries appear to be operated by units of the KMT irregulars, whereas in Laos, most of the refineries oper- ate under the protection of elements of the Royal Laotian Armed Forces (FAR). While the management and ownership of the Lao- tian refineries appear to be primarily in the hands of a consortium of Chinese, some re- ports suggest that a senior FAR officer may hold an ownership interest in a few of these facilities. 16. Most of the narcotics buyers in the trl- border area are ethnic Chinese. While many of these buyers pool their purchases, no large syndicate appears to be involved. The opittni, morphine base, and heroin purchased in this area eventually finds its way into Bangkok, Vientiane, and Luaing Prabang, where addi- tional processing may take place before de- livery to Saigon, Hong Kong, and other Inter- nation al markets. 17. Much of the opium and its derivatives transisting Thailand from Burma moves out of such Northern Thai towns as Chiang Rat, Chiang Mai, Lampang, or Tak by various modes of ground and water transport. These narcotics, along with those produced in Thai- land, are smuggled into Bangkok for further refinement into morphine or heroin. A con- siderable quantity of the raw 'opium and morphine base is sent by fishing trawler from 13angkolz to Hong Kong during a period from about 1 January to 1 May. During this pe- riod, approximately one fishing trawler a day--carrying one to three tons of opium and/or quantities of morphine base--leaves Bangkok for Hong Kong. The boats proceed to the vicinity of the Chinese Communist- controlled Lena Islands-15 miles south of Hong Kong-where the goods are loaded into Hong Kong junks. 18. Opium and its derivatives which move through Laos are transferred from the Mekong River refineries by river craft and FAR vehicles to Ban Houei Sat, further downstream on the Mekong in Laos, from where it is transported on Royal Laotian Air Force (RLAF) aircraft to Luaing Prabang or Vientiane. From Vientiane narcotics are usually sent via RLAF aircraft, as well as Air Laos, to other cities in Laos such as Savannakliet or Pakse or to international markets. A considerable portion of the Lao- tian produced narcotics Is smuggled into Saigon on military and commercial air flights, particularly on royal Air Laos and Air Vietnam. Although collusion between crew members and air line agents on one hand and individual narcotics smugglers on the other has been reported, poor handling of commercial cargo and the laxity of Lao customs control in Vientiane and other sur- reptitious loading of narcotics aboard com- inercial flights. RECENT CHANGES IN TIIE AREA 19. There are tentative indications that larger quantities of raw opium may now be moving into the tri-border area for refining and that larger quantities of this raw opium are now being refined into morphine base and heroin in this area. As suggested in para- graph 13 above, data on the first two months of 1971 indicate that the Tachilek trans- shipment and refining area may be receiving and processing sizably larger amounts of raw opium than was the case in 1970. As for changes in the type of refined narcotics pro- duced, the processing plants at Mae Ilaw in Thailand and flouei 'l'ap in Laos noey appear Approved For Release 2001/09/04: CIA-RDP80=01601 R001000040003-7 June 2, 19'i1 CONGRESSIONAL RECORD - Extc,jsio,rs of Rentln' :s - E 53-3 7 Approved For Release 2001/09/04 CIARDP8-01601 R0Q'~0000 00O3z7 - rticle oil the Set ill, Of 1119C a io a i o - r. plit will cost you $555 no0t of their opium in o fi convertin b t g o e ne a No. 4 or 9G percent pure white heroin. Pre- air fares: round trip for it 17- to 23-day stay. vlously, these refineries tended to produce AVIAl?soN Co NSOnirrt Acrlo r PROJLCr, refined opium, morphine base and No. 3 ' smol:in heroin. An increased demand for No. 4 heroin also appears to be reflected in the steady rise In its price. For e.Nn-Inple, tile mid-April 1971 price in the Tachilck area for a kilo 'of No. 4 heroin was reported to be U.S. $1,750 as compared to U.S. $1,240 in September 1070. Spine of this incrca,,;e may also reflect a tight supply situation in the area because of a shortage of chemicals user! In the processing of heroic. Rising prices for opium and its derivatives can also be seen in other areas of Southeast Asia. 20. The establishment of now refineries since 1080 in the trl-border area, many with a capability for producing 9G percent pure heroin, appears to be due to the sudden increase in demand by a large and relatively affluent market in South Vietnam. A recent report pertaining to the production of mor- phine base in the Northern Shan States would indicate a possible trench toward ver- tical integriaiops---producing areas estab- lishing their own refineries----in the produc- tion of narcotics, Such a development would significantly facilitate transportation and distribution of refined narcotics to the mar- ket places. ;,IOW FA111 7.'lIE FARE? l ON. Bsi'NA1'i N S. 'OSA'.il ' .1AJ. OF NEW YORK IN TIIE hIOUSE OF REPI1ESEi3'.CATIVES Wednesday, Juste 2, 1971 Mr. 11.OSYNTIIAI, Mr. Speaker, repre- sentatives of U.S. transatlantic airlines are going to Montreal later this month to negotiate air fares -actually the word should be to "fix" ail' fares, for the com- peting carriers meet in private to decide the rates they all will charge. The prices are fixed by the Interna- tional Air Transport Association. Frances Cerra, Newsday's consumer writer, has aptly described IATA as "a cartel which operates without the participation of consumers and above the laws of the United States and any international or- ganization." The position of the American carriers is thrashed out by the airlines and the Civil Aeronautics Board in secret ses- sions. The people who must pay the fares will be given no opportunity to partici- pate or express their views; after all, they have little choice: only one or two transatlantic airlines land in the United States that are not IATA members. The Aviation Consumer Action Project has written to CATS Chairman Secor ll. Browne protesting the lack of public par- ticipation in these proceedings. That let- ter said, in part: Such practices on the part or a ideral regulatory agency are hostile to elementary notions of due process and deprive citizens of basic participatory rights assured In the First Anlendnlcr}t. I would like at this time to join them in urging an end to these secret meetings with the airlines in the course of fare negotiations. So that all my colleagues may be aware of this situation, I am inserting in the RECOiiO at this point the Aviation Con- sulner Action Project's letter to CA' Chairman Browne, and ivliss Cerra's very Washington, D.C.,-,lfay 25, 1971. IIon. Socon D. I3RoWNL, Chairman., Civil Aerouaitfics Board, Washington, D.C. DeAF CHAIRMAN BROV,NE: The traf;ic con- ference of the International Air Transport Association (IATA) Is scliccluled to meet at Montreal on June 23, 1071, to negotiate trans- atIantic air fares. The Presidents of the transatlantic IATA carriers will meet in Now York on May 27, 1971, to discus the Montreal fares conference. And the Board, in accord- ance with Its customary practice, will prob- ably meet with the rep'e.seutatives of the U.S. carriers and discuss with them the various views and positions which they will adopt in the IATA negotiations at Montreal. All these meetings will, as usual, be held In secret. Members of the public and farepayers will not be given an opportunity to present their views and opinions in any of the,=.e r_lcetings. The Aviation Consumer Action Project (ACAP), is writing to express its cheep re- sentment and disapproval of the roetrictlve price-fixing practices of IATA, and the I3ocu?d ;s complicity in those practices. ACAP is a non-profit consumer organlza- tion which has been founded for the purpose of providing an independent Voice for the advocacy of consumer and environmental In- terests in matters and proceedings before the Hoard and other regulatory agencies. Whatever may be the underlying reasons for the Board's approval of U.S. carriers' participation In IATA meetings, ALAI' is of the opinion that there cannot be any justi- fication for the Board's secret niceting with airline executives on the eve of the IATA conference. The issues raised by such a meet- ing are rendered all the more serious when the Board, on the exclusive basis of the air- lines' in camera presentations, formulates policies and opinions with respect to the ap- propriate and permie.sable fare levels for various international routes and traffic re- gions. Such policies and opinions are corn- municatecl to the carriers by the Board-in the form of "directives." For all practical purposes these directives arc informal de- cisions of the Board which tentatively set forth the fares that the Board considers reasonable and legal. The Federal Aviation Act and the regula- tory scheme outlined therein do not permit the Board to make ex parte decisions after hearing the airlines in closed sessions. Such practices oil the part of a federal regulatory agency are hostile to elementary notions of due process and deprive citizens of basic par- ticipatory rights assured in the First Amend-- ment. They are wholly inconsistent with the procedural principles embodied in the Ad- ministrative Procedure Act. ACAP urges the Hoard not to engage In secret or private audiences with the airlines coneerning fuses or other matters to be nego- tiated in the IATA conference, except in open proceedings of record, in which all interested and affected parties would have the right to attend and lawfully participate. We urge the Board to abstain from convening any secret meeting with the airlines whether prior to or in the course of IATA fares.nego- tiations. Sincerely, K. G. J. PILLAr, Rt:uimN 13. ROD:ERTSON III. INTri1NA'nl0i76L FARES: Am, TrizY Ss FArRi,Y? (By Frances Cerra) Unless you really dig bazouki music or care about the color scheme of a plane's interior, it doesn't pay to shop around for the cheapest flight to Athens. Whatever air- other international destination except Lux- embourg. (Icelandic, a maverick airline, flies there.) The prices are fixed by the In- ternational Air Transport Association, a car- tel whlch operates without the participation of consumers and above the laws of the U.S.- and any international c.rganivation. This year the price of international travel increased from eight to 12 per cent as a result of IA'i'A agreements. Next month, the process of fix- - lug the 1972 prices will begin, hilt a new ele- ntcilt may be added: A new consumer group hacked by Ralph Nader premises to challenge the IATA system ill the courts. Since its formation in 1023, IATA has been involved in the complicated maneuvers of international politics. Many governments in - the world subsidize their owls airlines and therefore want to be protected frpnr true competition on air fares. These governments therefore adopt the IATA agreements as law and threaten to prosecute any foreign airline which tries to charge lower fares. Great Brit- ain, which subsidizes I'O AC, actually made such a threat against the U.S. airlines in 1903 when the Civil Aeronautics Board opposed a five per cent increase in air fares. Faced with this threat and an international incident, the CAI3 backed down. Foreign governments also enforce the IA'i'A agreements by another simple measure: They refuse to allow an airline that is not a mem- ber of the cartel to land in their countries. That Is why Icelandic Airlines, the only non- nember of IATA, call land only in Luxcin- bourg. No other European country will give it landing rights. A spokesman for ran American, whose president, Najeeb E. Ilalaby, is on the exccll- tit-c committee of IATA, said that he would not call IATA agreements "price fixing," but all area of cooperation." "If there were not all area of cooperation, he said, "many airlines would not be able to exist. The U.S. airlines in particular would have a ham time because they are not suhst- di^_ei by the government. IATA maters for fair play, and without it there would be chaos." 1Ierb As;vall, the acting chief of- the IATA rates and fares section of the Civil Aeronau- tics Hoard, which sets dorucetic air fare rates, echoed Pan American's concern. "With 20 carriers flying the Atlantic alone," lie said, "to not have IATA would result ill chaos he- causc we would have to deal with each in- dividual foreign government to establish fares. And because the CAT' has no authority to regulate international fares, we might have to accept all unocolloneic fares, which would drive au American carrier out of business." Dr. K. G. J. Pillar, author of a bock on IATA called "Air Net," and head of the new Aviation Consumer Action Project, calls such arguments illogical. "The private airlines are now at a cIis,ldvantage Ili IATA because they are negotiating as private concerns with gov- ernlucrit-owned airlines. That is exactly why we say IATA should not exist. If there were competition in air fares I per.-sonally dou't think it would he very dcstruel-ive because the eflicicnt airlines would survive. But the alternative is for the U.S. government to directly represent the private airlines in these conferences." Filial said that such negotiations would not be unusual for the gover"llient Which now makes tariff and excise duty agreements on thousands of products like oil and tex- tiles, and even airmail rates. "I can't under- stand why air fares should be different," lie said. Pillal said that if the government Was involved In fixing the international air fares, the Consenter would h, ve a better chance of influencing the negotiations. Right now, he charges, the coilsunio ? has no chalice of in- fluencing IATA. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 IVAS11INGTON STAR Approved For Release 260I /c72ClA-RDP80-01601 R001000040003-7 MCDCL1,20 By JEREMIAH O'LEARY Star Staff Writer The United States is making a major diplomatic effort to obtain the extradition from Paraguay of a Corsica-born Argentine citizen who is de- scribed as one of the major nar- cotics smugglers in the world. He is Auguste Ricort, 61, now in jail in Asuncion, Paraguay, the mastermind of a multi-mil- lion dollar ring of narcotics operators engaged for years in smuggling narcotics into the United States from France by way of a number of Latin Amer- ican cities. Ricort's long and spectacular career is reminiscent of the principal villain of the current movie hit, "The French Connection." His importance was under- lined yesterday when State De- partment spokesman Charles Bray disclosed that the United States is continuing its efforts to obtain Ricort's extradition. Ricort, a native Frenchman and in recent years a resident of Asuncion, is known to inter- national law enforcement offi- Ricort arranged, a spokesman said, for the heroin to be trans- shipped from Buenos Aires, San- tiago, Montevideo, Asuncion and a half dozen other terminals in South America to the United States. Ricort stands indicted by, a federal grand jury in New York in one case involving shipment of 97 pounds of heroin in October 1970. This shipment was flown in a Cessna 210 by way of Panama and Jamacia to Miami and then to New York. The BNDD and the Customs Service collaborated, on the case, shado'. ing the shipment from origin to destination where they arrested two Frenchmen, a Paraguayan, an Argentine and a Brazilian. Based on the retail price of $250,000 a kilo (2.2 pounds), the shipment was valued at $11 million by the Justice Depart- ment. It was on the basis of this seizure that Ricort was indict- ed on March 15,1971. Ten days later, he was arrested by Par- aguayan authorities on the ba- vials as a man who was a Nazi collaborator during World War tradition. II, and is wanted on criminal Under new laws and treaties charges in France. He fled to by which nations are attempt- South America after the war ing to stamp out the narcotics and set up his elaborate heroin traffic, it was possible for the network. United States to request extra- He rarely used individual dition of Ricort even though he couriers, the Justice Depart- never has set foot in the Unit- ment's Bureau of Narcotics and ; ed States. Dangerous Drugs said, instead, Ricort, a wizened, bald man employing small planes, ships who looks like a mummy ac- and commercial flights with the '. cording to one source, was heroin hidden in artifacts and picked tip at the Paris Niza, a other containers. The Ricort motel be owns on the out- ring brought the heroin to Latin skirts of Asuncion. He has re- Some sources consider that Ri- Some Paraguayans believe tort's continued imprisonment the United States, which gave is a minor miracle because of his enormous wealth and Par- aguay's reputation as a coun- try where money talks and smuggling is not regarded as a major crime. Court Snag Hit The Paraguayan solicitor general, in effect attorney for the United States under the treaty, rendered a favorable opinion when Washington's ex- tradition request was present- ed by, Ambassador Ray Yli- talo, a former FBI agent who has taken a personal interest in the case. But Bray said yes- terday the court of original jurisdiction in Asuncion denied the request. "We hope and are confident in view of the solicitor gener- al's favorable opinion," Bray said, "that Paraguay will ex- ercise appeal procedures to obtain the desired extradi- tion." January is a judicial holiday in the landlocked South American nation and of- ficials say no final action is likely until March or April. Paraguay is a small country under the very personal lead- ership of Latin America's most durable dictator, Presi- dent Alfredo Stroessner. The outcome for Ricort probably depends on Stroessner's rela- tionship with the United States, which normally is very close. Early Skepticism Some Paraguayan newspa- pers at the time of Ricort's arrest predicted he would not be extradited. It generally is believed that, because of their wealth, some Nazi war crimi- nals have remained safely hid- ,den with new identities in Par- the-country a sugar quota last year for the first time, did so to induce Stroessner to give up Ricort. The United States says this is not true. The members of Congress who gave Para- guay the highly-profitable sug- ar quota had no idea Ricort existed when the quota was set, The official estimate in Washington is that Ricort will be handed over to the United States when the due process has been completed, of Stroessner's desire to continue friendly and responsible reia- tions under the narcotics treaty. America .from portsdi the away desoite Israeli efforts to vicinity of Mar v r' $P s "2o1/V 10f'0'tlA-RDP8ii&aR~GiLR001000040003-7 Nib YORK TIMES Approved For Release2A(AW9/(V? CIA-RDP80-01601 R001 000040003-7 0 U.S. REPORTS GAIN He said that the Bureau' of Narcotics and Dangerous Drugs pre- IN FIGHT ON DRUGS had more than doubled its pr vio ious overseas operations and d in 1972 would have 46 offices overseas staffed by 123 men. On the domestic front, he 6 Tons of Heroin Seized in said he held high hopes for the World Traffic in Year effect of the International Rev- enue Service's systematic tax investigations of middle and By DANA ADAMS SCHMIDT upper echelon narcotic traf- SpecialfoTheNewYorkTimes fickers, smugglers and finan- clers. WASHINGTON, Dec. 28- More than a million copies of Nelson Gross, the State Depart- a warning to travelers against ment coordinator for interna- violations have been distribu- tional narcotics affairs, said to- day that at least six tons of heroin and related materials were confiscated in the last year through the direct or in- direct efforts of United States authorities. He said this would have been enough to supply this country for one year. Mr. Gross, who since August has held the post of coordina- tor and senior adviser on drugs to Secretary of State William P. Rogers, discribed seizures as a "very severe deterrent" to, the international drug traffic and said that supplies had been severely reduced in some parts of the United States. The main effect, he said, had been to reduce the quality of the narcotics reaching addicts. "Whereas formerly they pur- chased 10 per cent heroin from. pushers," lie said, "today the $6 packets commonly distribut- ed contain 4 or 3 per cent and ,in some areas only 2 per cent of heroin." Speaking at a news confer- ence at the State Department, Mr. Gross attributed this year's success to the "high priority given enforcement." He added that a Cabinet committee on drugs reaffirmed on Dec. 16 this high priority for the com dng year and decided to seek a budget increase for enforce- ment. Customs Seizures Double Mr. Gross said that seizures of drugs by the Bureau of Cus-' toms doubled during the last; year and would undoubtedly in-1 crease when new equipment ' aircraft, high-speed boats and sophisticated sensors-was put into operation. ted through travel agencies and consulates abroad, Mr. Gross reported. They warn Americans that American consuls abroad will not be able to protect them if they are arrested for narcot- ics violations. Approved For Release 2001/09/04: CIA-RDP80-01601 R001000040003-7 AMS 7 . ZCZC NY YY LJP 19441 I AC,CU ) r}~y ~ l k R p NE ef?! 1O,PI