INTERNATIONAL ISSUES REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01184R000200720001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 22, 2016
• Document Release Date: November 1, 2010
• Sequence Number: 1
• Publication Date: August 1, 1984
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Intelligence
Y I 25X1
IMA
MASTER
ED :b"T cr-I'V W
08 MAR
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
W '14' Intelligence 25X1
International Issues
Review
This publication is produced by the Office of
Global Issues. Some issues contain articles drafted in
other offices. Some articles are preliminary or
speculative in nature, but the contents are formally
coordinated as appropriate with other offices
within CIA. Occasionally an article represents the
views of a single analyst; these items are clearly
designated as noncoordinated views.
Secret
GI IIR 84-004
August 1984
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
secret
Contents
Narcotics Panama: Drug Money Crossroads i
Panama's close financial relationship with Colombia's stringent
bank secrecy laws, liberal incorporation laws, corruptible officials,
and legal tender status for the US dollar are the leading factors
contributing to Panama's status as perhaps the leading narco-dollar
Arms Transfers North Korean Acquisition of Western Weapons
The New THV Ammunition: Ideal for Terrorists
A new type of special-purpose ammunition that combines the ability
to penetrate armor with the potential for massive tissue damage will
significantly enhance the ability of terrorists to conduct close-in
attacks on individuals-including those wearing soft body armor.
East European Military, Security, and Intelligence Advisory and 13
Training Programs for LDCs
East European military and related advisory and training programs
are smaller and less comprehensive than those of the USSR but
have doubled in size since 1978. The growth in these programs
mirrors both the obligation to support Soviet initiatives as well as
fulfilling national goals of the suppliers.
iii Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Secret ' -
Arms Transfers: Significant Sales and Negotiations
25X1
Comments and queries are welcome. They may be directed to the
Secret iv
25X1
25X1'
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
Secret
Narcotics
Panama: Drug Money
Crossroads
Summary Despite disclaimers by its government, Panama has become perhaps the
leading narco-dollar center in the Caribbean. Panama's rise to prominence
as a drug money center is in large part a result of its attractiveness to the
region's dominant Colombian trafficking organizations. Along with a long
and close financial relationship, Panama offers the Colombians a Spanish-
speaking banking system with stringent secrecy laws, liberal incorporation
laws that facilitate shell accounts, corruptible officials, and legal tender
status for the US dollar. US pressure for relaxation of Panama's bank
secrecy laws may be forcing the Colombians to search for alternatives to
Panama, but, as long as a modicum of bank secrecy is preserved there, a
dramatic shift in drug money movement is unlikely. Rather we expect the
Colombians would first attempt to alter their methods of operation in
Panama or gradually fragment the drug money chain, with Panama
becoming one of several equally important centers
Panama's Role as a Money Laundering Center
Over the last several years considerable evidence has
accumulated that Panama is a leading, if not the
leading, drug money center in the Caribbean Basin.
One indicator of its importance to the all-cash drug
industry is the enormous amount of surplus dollars
returned by the Banco Nacional de Panama to the
United States. In 1982 and 1983 the returned surplus
was on the order of $1 billion-compared to several
hundred million or less from any other offshore
banking center. Although this cash cannot be directly
traced to drug trafficking, the denominations involved
suggest strongly that much of it is "street money"
derived from drug sales in the United States. More-
over, along with
evidence compiled domestically in connection with the
indictments of several major money launderers, over-
whelmingly support the conclusion that Panama is a
Ties With Colombian Traffickers
Panama's prominence as a drug money center stems
in large part from its role as a magnet for Colombian
coca and marijuana money. From one-third to one-
half of the estimated $5-15 billion in drug money that
leaves the United States each year represents reve-
nues of Colombian marijuana and cocaine traffickers,
most of whom bank part of their proceeds in Panama.
narco-dollar crossroads)
Secret
GI !IR 84-004
August 1984
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
The first credible evidence that Panama was serving
as a center for Colombian narco-dollars was provided
in 1980 to the US Consulate in Cali, a major cocaine
trafficking center. A Cali exchange house operator
familiar with black-market money movements report-
ed that "a great deal of [drug money] passes straight
through the country to Ecuador or never enters but
stops in banks in Panama."
The attraction of Panama for Colombian drug traf-
fickers is a reflection of a close financial relationship
that extends back several decades. Even before Pana-
manian banking law was liberalized in 1970 to attract
foreign banks, three Colombian banks had branches
in Panama, a representation exceeded only by the
United States' four branch banks. There are now nine
Colombian banks with general licenses in Panama,
more than any other nationality except the United
States and Panama (see table); and Colombians re-
portedly hold substantial equity in non-Colombian
banks. The role of Colombian traffickers in this
expansion has never been fully documented, but ac-
cording to DEA at least one trafficker, Gilberto
Rodriguez Orjuela, is a major investor in, and officer
of, a Panamanian bank that opened in 1975. Since
most Colombian branch banks in Panama were estab-
lished in the 1960s and 1970s, the period during
which the lucrative Colombian drug trade to the
United States was launched, involvement of other
traffickers seems likely.
In addition to its advantages as a Colombian offshore
banking center, Panama offers a number of other
features of particular interest to Colombian
traffickers:
? It is the only large Spanish-speaking offshore bank-
ing center in the Caribbean Basin area. This is a
major attraction for Colombian traffickers, many of
whom are inexperienced in the international milieu
and all of whom demonstrably prefer the anonymity
offered by a Hispanic environment.
? Panama provides perhaps the most stringent bank
secrecy in the Caribbean along with liberal incorpo-
ration laws that facilitate establishment of shell
accounts to further disguise the true ownership of
dirty money.
? The free port of Colon, long a transit point for
contraband, offers a convenient acquisition site for
precursor chemicals used in the processing of
cocaine.
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Notice to recipients of DI document: International Issues Review. GI IIR 84-n(14
The attached table is to replace the incorrect table on page 2. F--] 25X1
General License Banks in Panama
as of 31 December 1982
Us
Colombian
Other Latin American
European and Canadian
Asian and Middle Eastern
Number
External
Loans
Local
Loans
External
Deposits
Local
Deposits
10
15.2
1,213.4
170.7
1,147.3
9
7,341.8
936.1
10,074.4
751.0
9
1,689.4
255.0
1,560.3
475.0
13
2,128.0
178.6
2,481.5
321.8
16
3,355.9
645.8
6,730.1
770.0
9
3,541.3
133.8
4,429.9
131.6
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
Secret
? Panamanian officials at many levels are viewed as
corruptible at rates the Colombians are willing to
pay.
? The legal tender status in Panama of the US dollar,
the medium of exchange for most Colombian drug
deals, permits more inconspicuous handling of cash
receipts than in centers where the dollar is foreign
exchange.
Money Flows
The movement of drug money to Panama is facilitat-
ed by a cadre of gray money managers in the United
States whose records have provided some of the most
damning evidence of Panamanian involvement in the
drug money chain:
Most of the large amounts of money flowing into
Panama apparently is profits from the Colombian
organization's illicit narcotics activity. Operating
costs in Panama are minimal, with only a small
proportion of the incoming money going to pay ex-
penses. Judging from information obtained from Op-
eration Greenback and from DEA field offices, funds
used to reimburse growers, processors, and distribu-
tors in the drug chain are delivered in the form of cash
or cashiers check directly to Colombia. There is little
information on the disposition of those drug profits
after deposit in Panama.
Outlook
Panama's status in the drug money hierarchy may be
on the wane.
m
response to US pressure for relaxation of Panamanian
bank secrecy laws, some traffickers also may be
looking for other suitable financial centers. The list of
those countries offering facilities comparable to Pana-
ma has been reduced by cooperation agreements
signed with Switzerland and with the United King-
dom on behalf of the Cayman Islands. The chances
are good, however, that the Colombians would be
most willing to tolerate lesser accommodations in such
Hispanic locales as:
? Spain, to which traffickers travel frequently to avoid
arrest, to seek socially acceptable brides, and to
monitor their interests in the growing European
market for cocaine.
involved locally in drug money movements.
? Venezuela and Ecuador, to which growing and
processing operations may be moved if the situation
in Colombia becomes untenable and which have
well-developed financial sectors that already are
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
Since no location offers all the advantages of Panama
in the eyes of the Colombians, a dramatic shift in
drug money movements is unlikely so long as some
bank secrecy protection is maintained in Panama.
More probable developments would be:
? Adaptation of the modus operandi to provide pre-
liminary laundering of money en route to Panama.
Initial deposits of cash in other locations is a move
in this direction.
? Preservation of de facto secrecy in Panama in the
form of greater corruption, an option that might be
viewed as more cost effective than investment in the
development of such untested centers as Venezuela
and Ecuador.
? Greater fragmentation of the drug money chain.
25X1
25X1
Secret 4
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
North Korean Acquisition
of Western Weapons F-
Summary
5 Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
Selective Fire Weapons
North Korea has also sought compact West European
automatic weapons on the international gray arms
market. These weapons are probably intended as
potential replacements for the Czechoslovak 7.65-mm
Skorpian machine pistol issued in the past to North
Korean agents but which-like the North Korean
silencer-has also been compromised throueh South
Korean nronaeanda.
for example, a four-member
25X1
2bAl
North Korean -delegation visited the Austrian firm
Steyr-Daimler-Puch in December 1983 and arranged
to purchase 1,000 Steyr AUG-77 Universal Army
Rifles for a total cost of over $3 million-almost twice
the normal price. Although few additional details are
available, these weapons were reportedly to be
shipped to North Korea in four installments with the
final shipment to have been made by June 1984.
Acquisition of this weapon will significantly enhance
the ability of North Korean agents to conduct a
variety of operations. Although technically an assault
rifle, the Steyr AUG is an extremely versatile weapon
and features removable barrels in four different
lengths-14, 16, 20, and 24 inches. It can be config-
ured as a submachinegun, carbine, rifle, or squad
automatic weapon simply by interchanging these bar-
rels-an operation which takes less than a minute to
complete. With the 14-inch barrel, the AUG has an
overall length of only 690 millimeters (27 inches), thus
making it only slightly longer than many submachine-
guns and ideal for close-in fighting. Unlike subma-
chineguns that fire conventional pistol ammunition,
however, the AUG fires the more powerful 5.56-mm
subcaliber, hypervelocity NATO assault rifle round.
With the 24-inch barrel, moreover, the weapon is
capable of delivering sustained, accurate automatic
fire out to a range of 800 meters. A grenade launcher
is also available as an accessory.
The AUG has one other feature which may make it
particularly attractive to the North Koreans. Many of
the AUG's components are composed of a high
impact plastic which will not trip metal detectors and
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
may not be discernible as gun parts when viewed
through an X-ray machine. Combined with the ease
with which it can be field-stripped and reassembled,
this feature could facilitate the smuggling of the
AUG through airport security checks.
Other Weapons
North Korea also purchases a large variety of other
Western weapons on the gray arms market. Typically,
these weapons fall in the category of sporting arms
and ammunition which-because of their nonmilitary
nature-can be easily acquired through private deal-
ers and even legitimate gun shops. In some cases these
"sporting" arms fire the same ammunition as many
military-issue weapons.
North Korea also ac uires US-made weapons on the
gray arms market.
The types and quantities of these weapons-as well as
the nature of their acquisition-suggest that these
arms are intended for North Korean agents, sabo-
teurs, and infiltrators rather than for resale on the
international gray arms market. By continuing to
purchase weapons through private arms dealers and
brokers, P'yongyang will be able to ensure itself an
element of deniability in the event its operatives are
caught or killed and attempts are made to trace their
weapons.
25X1
25X1 'I
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
The New THV Ammunition:
Ideal for Terrorists
Summary A new type of small-arms ammunition has been developed which combines
the previously irreconcilable qualities of massive tissue damage and armor
penetration. Acquisition of this ammunition by terrorists-which we
believe is inevitable-will significantly enhance their ability to conduct
close-in attacks on individuals-including those wearing soft body armor or
A new type of special-purpose small-arms ammuni-
tion has been developed which would be extremely
lethal in the hands of terrorists. It combines the
previously irreconcilable qualities of massive wound
potential ("stopping power") and the ability to defeat
the protection afforded by soft body armor or a
Wound Potential Versus Penetration
Although there are many theories about why some
bullets are more effective than others, most agree
that, in order to produce incapacitating wounds or
death, a bullet must transfer all or most of its kinetic
energy to the target. In order to maximize its ability
to do so, it is essential that the bullet remain within
the target body rather than merely passing through it.
Thus, hollow-point bullets which expand or mushroom
upon impact not only produce larger wounds, but-
because they come to rest quickly-impart most of
their kinetic energy to the target. The stopping power
of such rounds can be further enhanced by increasing
their mass, diameter, and-above all-velocity. C
THV ammunition: 9-mm THV round and bullet.
can be successfully attacked, however, with a wide
Because hollow-point and other types of soft nose variety of military-issue or special-purpose armor-
expandin
b
ll
t
d
"
"
g
u
e
s are
esigned to
brake
quickly and metal-piercing ammunition.
within human tissue, they are poor penetrators of the
soft body armor or hardened vehicles used to protect
the potential victim of a terrorist attack. Such targets
9 Secret
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
Secret
Because of their high velocity and nondeforming bullets, THV
Perhaps the best known examples of such ammunition
are the US-made KTW and the French-made Arcane
rounds. Often referred to as "teflon-coated bullets,"
KTW ammunition was developed 13 years ago to
enable police officers to shoot through concrete
blocks, automobile engine blocks, barricades, or ar-
mor plate. The penetration capability of the KTW
round stems from a hotter powder load and a ma-
chined brass core, which provide greater muzzle
velocity, mass, and hardness than a conventional lead
slug. Similar in concept to the KTW round, Arcane
ammunition was invented by Fabrice Bodet, an inde-
pendent French arms dealer, for use by special police
and military units. Made of solid electrolytic copper
with a distinct conical shape, Arcane ammunition also
demonstrates exceedingly high penetration in range
tests and can pierce 28 layers of Kevlar soft body
armor, an 8-mm-thick aluminum plaque, or a 33-mm-
thick block of Lexgard bulletproof glass.
Cavitation and wound canal produced by firing THV round into a
block of plastiline tissue simulate. Measurements are in centime-
ters.
Although capable of impressive penetration, such
metal-piercing rounds have no special utility beyond
the purpose for which they were designed-that is, to
penetrate hardened targets. A person shot with such a
round may, in fact, stand a better chance of survival
than if shot with conventional ammunition. Because
of its higher velocity and resistance to deformation, a
metal- or armor-piercing round could punch a rela-
tively small, clean hole through its victim-imparting
less kinetic energy and leaving a smaller entrance and
exit wound than a jacketed hollow-point bullet that
mushrooms or a modern subcaliber, hypervelocity
assault rifle round that tumbles on impact and causes
extensive tissue damage.
THV Ammunition
The Societe Francaise de Munitions in Paris, France,
has recently introduced a new type of ammunition
which combines both excellent stopping power and
good armor penetration. Manufactured under the
registered trademark THV-tres haute vitesse (very
high velocity)-this new ammunition would make an
ideal terrorist round as it delivers the same disabling
effect as hollow-point rounds; but, unlike hollow
points, which deform against hard targets, THV has
three times more penetrating power than conventional
jacketed bullets.
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
Table I
Metal Penetration
of THV Ammunition a
Caliber
Weapon
Barrel
Length
(mm)
Penetration
(mm)
9-mm Para
M1950 pistol
110
4
9-mm Para
Uzi submachinegun
260
5.5
.38 SPL
S&W revolver
50
3.2
.38 SPL
S&W revolver
150
4
.357 Magnum
Manurhin revolver
100
4.5
.45 ACP
Star PD pistol
100
3
a The weapons were fired at a distance of 5 meters into rolled
homogeneous steel plates with a resistance of 110 kg per mm'.
The key to the THV round is the unique construction
and shape of its bullet. Like Arcane ammunition, the
THV bullet is made of a hard copper alloy which does
not deform on impact like conventional soft nose or
semijacketed bullets. THV bullets are also hollow
inside which results in greater velocity not only
because of reduced bullet weight, but also because of
the considerably increased powder charge obtained.
Unlike conventional ammunition, the powder volumes
of THV rounds reach and usually exceed the total
volume of the case, due to the deep cavity cut in the
bullet. This combination of hardness and increased
velocity provides THV with its impressive metal-
piercing capabilities. When test-fired, various caliber
THV ammunition produced the results found in table
THV ammunition is available in a number of differ-
ent calibers including the 9x19-mm Parabellum round
popular with terrorists because it can be fired in both
pistols and submachineguns. When fired in the latter
weapons, the penetration capability of 9-mm THV
ammunition is increased because of the longer barrel
length and subsequent increase in muzzle velocity.
Moreover, the submachinegun's higher cyclic rate of
fire also enhances the ability of THV ammunition to
strike at targeted personnel traveling in hardened
vehicles. The armor on such vehicles is rated by the
number of impacts that can be sustained in a given
area. Although most commercially hardened vehicles
Table 2
Cavitation Produced
by THV Ammunition
Caliber
Muzzle
Velocity
(eet per
second)
Muzzle
Energy
(foot
pounds)
Diameter
of Entry
Wound
(mm)
Depth of
Penetration
(mm)
9-mm Para
2,560
650
80
120
.38 SPL
2,428
585
80
130
.357 Magnum
2,625
684
84
140
.45 ACP
2,560
874
100
100
can withstand three impacts in a circle 8 inches in
diameter, concentrated fire from an automatic weap-
on directed at a small area can defeat this armor=25X1
In addition to permitting a larger powder charge to be
used, the design of the THV bullet also ensures
maximum braking-and, therefore, energy transfer-
on impact with the target. This is achieved by the
unique shape of the bullet point, a section of which is
defined by two symmetric, concave lines forming a
negative parabolic profile. Tests conducted by firing
THV rounds into blocks of plastiline-a material
which behaves similarly to human tissue-have shown
that on impact this material is compressed against the
concave bullet tip and expelled laterally at high
speeds away from the point of impact. The resulting
cavitation is many times larger than the bullet's
actual caliber and results in massive tissue destruction
and trauma. The results of firing various caliber THV
rounds into blocks of plastiline tissue simulate are
Availability
Given the ease with which terrorist groups obtain
weapons on the international gray arms market, it is
probably only a matter of time before these groups
acquire THV ammunition through private arms deal-
ers, theft, or established governments which support
international terrorism. Terrorist groups have used
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
such channels to obtain similar special-purpose am-
munition in the past.
Like KTW and Arcane ammunition which
were supposedly intended for police use only, THV
ammunition has been widely publicized and terrorist
groups are undoubtedly aware of its existence and
potential.
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Ow-tCL
East European Military,
Security, and Intelligence
Advisory and Training
Programs for LDCs
Summary Since the late 1970s, the size and scope of East European military and re-
lated advisory and training programs for less developed countries has
expanded rapidly. We estimate that, in 1983, more than 2,600 East
Europeans performed military support functions in some 25 LDCs and a
record 1,850 trainees from these countries, mainly from North Africa,
departed for Eastern Europe. Both were twice the observed 1978 numbers.
East European programs still are smaller and-except for East Germany-
far less comprehensive functionally than those of the USSR. The East
European presence abroad in 1983, for example, was only 15 percent of the
Soviet presence and less than half the number of trainees went to Eastern
Europe as the USSR. The growth in East European advisory and training
activities mirrors both the obligation to support Soviet initiatives in LDCs
as well as fulfilling unique national political goals. The greatest benefit to
East European governments, however, probably is hard currency earnings,
which may have reached more than $250 million during the period 1979-
East European Programs: The Soviet Connection
East European 2 advisory and training activities clear-
ly reflect efforts of the USSR to enlist the support of
its allies to help Moscow gain influence in the Third
World and penetrate military and government estab-
lishments. East European countries, as members of
the Warsaw Pact, are obligated to support Soviet
policy for political and economic reasons. As a result,
Moscow attempts to orchestrate East European selec-
tion of targets and specific commitments, sometimes
2 Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and
exerting considerable pressure. Although direct evi-
dence is lacking, the timing of commitments and
specialization by some East European countries-
such as East German activities in Angola and Ethio-
pia-strongly suggest close coordination with Mos-
cow.
East European governments also have pursued adviso-
ry and training activities to satisfy nationalistic goals.
The genesis of East Germany's program, for example,
was Berlin's efforts in the 1950s to establish itself as a
legitimate government and compete successfully with
West Germany. Romania, the most independent
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
East European Military, Security, and Intelligence
Advisory and Training Clients in the Third World, 1983
500 or more
100-499
F- -7 Fewer than 100
Data not available
The united Sralas Goaemment hae not recognized
the Incorporation or Estonia, Latvia. and Lithuania
into tha snorer union. Othbr boundary rep/aeantetbn
P.D.R.Y.
de. Yemen)
Moza bique
7( (Madagascar
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
secret
member of the Warsaw Pact, portrays itself as a
developing, nonaligned country that offers Third
World states an alternative to assistance from the
large powers. Aside from political considerations, East
European governments have been motivated by hard
currency earnings.
The East European programs parallel and comple-
ment Soviet training and advisory activities in several
important respects. Large arms buyers in Africa and
the Middle East, for example, are the biggest custom-
ers of all Warsaw Pact services, reflecting the close
cooperation between Moscow and its allies in servic-
ing the needs of important clients. Moreover, Soviet
and East European programs are administered simi-
larly. In both cases, they are part of the overall
military assistance packages to LDCs that also in-
clude the provision of weapons, other materiel, and
construction projects.
Experts in LDCs: Various Levels of Support
The East European military, security, and intelligence
presence in LDCs grew to a near-record 2,650 in
1983, led by East Germany, and-to a lesser extent-
Czechoslovakia and Poland.' The greater involvement
was driven largely by Soviet efforts to enlist the
support of its allies to gain influence and penetrate
military and government establishments. The need for
technical support associated with higher arms sales,
especially to the Middle East and North Africa, and
increasing demands for security and intelligence serv-
ices by LDCs also contributed to the growth. East
Europeans in Syria, Libya, Angola, and Ethiopia
accounted for more than 80 percent of the Third
World presence, while smaller contingents were post-
ed in countries like Algeria, Nicaragua, Iraq, and
South Yemen (figures 1 and 2).
Security and intelligence specialists and instructors
constitute one of the largest functional contingents of
East Europeans. These experts, comprising an esti-
mated 30 percent of the total presence in 1983, are
Figure 1
Eastern Europe: Military and Security/.
Intelligence Personnel in LDCs, 1974-83
Number of persons'
South Asia
Middle East
Latin America
Sub-Saharan Africa
1------I -1 I I I I-1 I
- 9 999 0 1974 75 76 77 78 79 80b 81e` 82` 83
Estimated number of personnel present for one month or more.
Data not available for Latin America.
Data not available for South Asia.
virtually all East Germans from both military and
state organizations sent to help LDCs defend "revolu-
tionary" gains. They have been assigned throughout
the Third World:
mg electronics technicians, were sent to Nicaragua
in late 1982,
gence operations since 1977
? Ethiopia, with the largest East German presence,
has relied on security/intelligence experts for in-
struction, investigations, and to run counterintelli-
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
Figure 2
Eastern Europe: Comparison of Military Presence and
Deliveries to LDCs, 1974-83
0 ? ?
>00 S ?
t~ l l l l l l l I
0 1974 75
76 77 78 79 80 81 82 83
Army and air force personnel account for almost all
the estimated 1,800 East Europeans assigned to LDC
military services. Concentration among armies re-
flects the fact that they usually receive the bulk of
weapons imports, while efforts among air forces are
due to the inability of most clients to operate and
satisfactorily maintain aircraft-even the less ad-
vanced models supplied by Eastern Europe-on their
own:
? Czechoslovakia and Poland have focused their ef-
forts on Libya, where they have provided instruction
on L-39 trainer aircraft, MI-2 helicopters, tanks
and other armored vehicles, and other ground force
weapons supplied by Prague and Warsaw, according
to F_ I
Soo
1 1 I
0 1974 75 76 77 78 79 80 81 82 83
? East German Army and Air Force personnel are
present in LDCs throughout Africa and the Middle
East, where they have functioned as pilot-instruc-
tors (Zambia), technicians on both weapons and
nonlethal hardware (Syria), and provided air defense
training (South Yemen) according to State Depart-
ment and
? Some 150 Romanian Air Force pilot-instructors and
mechanics were posted to Angola's military aviation
school in 1982,
East European technicians also have been sent to
LDCs to supervise military construction projects,
although small numbers are assigned to navies-
almost always the smallest military service-and to
general staff positions, which Soviets typically monop-
olize.
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
.0cuVt
Military Training in Eastern Europe: Diverse Courses
and Clients
East European governments have trained growing
numbers of Third World students in an increasingly
comprehensive array of military and related subjects
since the late 1970s (figure 3). Like the growth in the
number of East Europeans posted abroad, expanded
training reflects higher arms sales and increased
demands for security and intelligence assistance, as
well as the need to conduct some instruction (such as
advanced weapons maintenance) at special facilities.
About 90 percent of all trainees went to East Germa-
ny, Czechoslovakia, and Poland-the same countries
that supply the bulk of East European experts work-
ing in LDCs. Libya sent some two-thirds of all
trainees to Eastern Europe, while Algeria, Iran, and
Syria accounted for most of the remainder.
East Germany's training program is by far the most
extensive of non-Soviet Warsaw Pact countries. Berlin
provides a wide variety of basic and advanced mili-
tary, security and intelligence, and police instruc-
tion-all including heavy doses of political indoctrina-
tion, unlike most other East European-sponsored
courses. Sub-Saharan countries and Libya have been
traditional East German clients, although Berlin has
broadened its list of recipients during the past several
years:
? Small groups of Libyans have been sent to East
Germany for aircraft, air defense, ground force, and
specialized training,
Training in other East European countries is more
narrowly focused than in East Germany. Most of the
Libyans sent to Poland since 1980, for example, have
Figure 3
Eastern Europe: Military and Related
Trainees From LDCs, 1974-83
South Asia
i Middle East
Latin America
Sub-Saharan Africa
North Africa
I
0 1974 75 76. 77 78 79 80b 81 82'
n Estimated number of departures. Actual departures to Eastern
b Data not available for South Asia.
Data not available for Latin America.
received pilot or aircraft maintenance training, and
students in Czechoslovakia often study the operation
and repair of ground force weapons supplied by
25X1
25X1
25X1 1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
Secret
Nearly 50 facilities used to train LDC personnel
have been identified throughout Eastern Europe,
mainly in East Germany and Poland. These include
officer and noncommissioned officer schools, acade-
mies, security/ intelligence installations, and state pro-
duction plants. Because most of these sites are used
mainly to train indigenous personnel, separate classes
usually are established to accommodate language and
greater than for their Soviet counterparts. In general,
Libya probably pays the highest rate of any LDC.
aptitude needs of specific LDC students,
Few sites in Eastern Europe,
unlike in the USSR, are devoted exclusively to train-
ing foreigners. Nonetheless, like the Soviets, the East
Europeans accommodate students of varying capabili-
ties and generally emphasize rigid adherence to pre-
scribed procedures
Surging Hard Currency Receipts
East European suppliers historically have placed more
emphasis on generating financial returns than the
USSR, and this goal has become increasingly impor-
tant as key clients-mainly in the Middle East and
North Africa-realized large oil revenues in the mid-
1970s. We estimate that LDC hard currency obliga-
tions to East European governments-mainly East
Germany, Czechoslovakia, and Poland-for advisory
and training services totaled roughly $260 million in
1979-83, more than seven times the value during the
previous five years." Obligations surged in the early
1980s-reaching more than $100 million in 1983-on
the strength of increased training in Eastern Europe.
Libya accounted for about 60 percent of the total,
while the remainder probably came from Iraq, Syria,
Algeria, and Angola. However, poor LDCs, such as
Somalia, sometimes have been required to pay for
services, according to US attache reporting.
East European countries have independent policies for
pricing advisory services and training.
An Assessment: Gains Outweigh Drawbacks
The rapid expansion of East European training and
advisory programs during the past decade has had
mutual benefits for both suppliers and recipients,
although neither side has fully realized its objectives.
East European governments probably consider hard
currency earnings to be the most important return.
These receipts have helped reduce the large current
account deficits of all East European countries except
for Poland (which still had a more than $2 billion
deficit in 1983) and Bulgaria (which has enjoyed a
surplus for years). Moreover, some East European
countries-notably East Germany-have acquired
reputations in the Third World as reliable sources of
unique services, a situation that has buttressed efforts
to achieve recognition independent of the USSR.
Advisory and training programs also have spurred
arms sales, which in turn increase demands for serv-
ices. Despite these benefits, most supplier countries,
except for Romania, probably would have pursued
training and advisory programs for LDCs solely to
satisfy their obligations to Moscow, although less
actively.
East European programs also have served Soviet
interests by affording Moscow expanded opportunities
for political penetration, especially where the Soviet
presence is restricted. East European activities have
enabled Moscow to gain access to military intelligence
and assess attitudes of key government decision-
makers who often have close ties to the military
for example, indicates that Syrian pay-
ments in 1978 for same-grade Hungarian, Czechoslo-
vak, East German, and Bulgarian officers and enlisted
men varied as much as several thousand dollars
annually. The average reimbursement for these tech-
nicians-$15,000 a year-was about 50 percent
? Actual receipts, however, may have been lower than $260 million
in obligations, as declining oil revenues undoubtedly led to payment
Some LDCs value East European assistance, present-
ed as independent efforts, because they believe it
protects their nonaligned image. Substantively, the
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
East Germans are most favored, mainly for their
security and intelligence expertise-reflected in the
widespread reliance of LDCs on Berlin for such
assistance. Similarly, some recipients rely on techni-
cians and instructors-such as Czechoslovak L-39
aircraft mechanics in Nigeria-because of their
unique capabilities with certain weapon systems.
Nonetheless, East European programs, like virtually
all Communist and non-Communist efforts, do not
escape criticism. Most often, complaints concern the
close ties of some governments (mainly East Germa-
ny) to Moscow and, to a lesser extent, substantive
training shortfalls.
The future of East European training and advisory
programs will be driven by the same factors responsi-
ble for their recent growth. As a result, specific
programs are expected to expand at varying rates.
East Germany's willingness and ability to meet a wide
range of demands strongly suggest it will remain the
most active non-Soviet Warsaw Pact supplier. By
contrast, Czechoslovak and Polish efforts probably
will continue at recent levels only if Libya or another
large client relies on these countries, because they are
unable to offer a wide range of services. Similarly,
there is no evidence to indicate that Bulgaria, Hun-
gary, or Romania will become a major source of
personnel assistance for LDC governments because
these suppliers offer little expertise that is not already
available from other countries, often as part of an
integrated weapons transfer program.
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Secret
Arms Transfers: Significant
Sales and Negotiations
In February, Indonesia purchased three Tribal-class
frigates from Britain for $45 million. The Royal
Navy will shrink drastically over the next decade, and
the sale may prove to be the first of several involving
soon-to-be-surplus ships. Similarly, Argentina, deeply
in debt, has offered to sell its British-built destroyers
Asia
Recent sales to India provided a showcase for east-
west competition for arms sales. In February, the
Soviets concluded a sale of SA-8B surface-to-air
missiles. To do this, and prevent the Indians from
diversifying their suppliers, the USSR had to beat
French, British, and West German competitors by
offering a package of low prices and rapid delivery.
Currently, Moscow is making an attempt to counter
Indian involvement with West German submarine
producers by promising to supplement India's Foxtrot
fleet with new Kilo-class diesel boats.
to Jakarta.
France may soon end its declared policy of not selling
the submarine-launched SM39 version of the Exocet.
a written commitment for SM39s for use on its
French-built Agosta-class submarines.
Middle East
Iran and Iraq while purchasing most of their arms
from traditional sources, continue to seek arms from
nontraditional su liers.
for $29 million. Iran has been
negotiating with Portugal for mortar and artillery
has 25X1
25X1 5X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Algeria, trying to reduce its dependence on Soviet
equipment, is negotiating with France to buy four
Super Puma and six Dauphin helicopters. Talks are
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85T01184R000200720001-5
also continuing for sales of air defense radar, Alpha- T-54/55 tanks, 25 PT-76 tanks, and 38 BTR-152
jets, and Epsilon trainers. The purchases will be the armored personnel carriers. In June, North Korea
first step in a long-term Algerian plan for improving delivered two Sinhung-class patrol boats.
Kuwait and Jordan, both of whose requests for US
antiaircraft missiles were turned down, have begun
talks with the USSR. It is possible that the two states
may purchase SA-9 surface-to-air missiles. However,
neither country has yet committed itself and both still
prefer American equipment; the talks may be a tactic
Ammunition captured from rebels in El Salvador in
May has been found to be of Bulgarian manufacture,
strongly suggesting that it was shipped from Nicara-
gua.
for pressuring the United States.
South America
Peru, dissatisfied with USSR arms supply, spare parts
service, and the Soviets' reluctance to train Peruvians,
is seeking to further diversify its arms suppliers. In
late June, Lima signed an agreement with China to
explore the possibility of Chinese technical assistance
in maintaining the Peruvian Air Force's Soviet-made
equipment.
L
The accord, however, is more a reflection of
improving Peruvian-Chinese relations than any seri-
ous supplanting of Moscow by Beijing.
In July, Peru and France finally concluded a deal for
the sale of 26 Mirage-2000s. Lima will pay $650
million over 12 years. Although the purchase will
placate the military, it also will jeopardize Peru's
foreign financial support.
Central America
Nicaragua continues to receive Soviet arms through
Bulgaria. Deliveries in February and May brought 61
25X1
25x1 ~
25X1
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
Iq
Next 9 Page(s) In Document Denied
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5
secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP85TO1184R000200720001-5