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Cablegate: Burma - Incsr I Drugs and Chemical Control

VZCZCXRO4443
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0861/01 3110914
ZNR UUUUU ZZH
R 060914Z NOV 08
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 8352
RUEHBJ/AMEMBASSY BEIJING 2093
RUEHNE/AMEMBASSY NEW DELHI 5097
RUEHVI/AMEMBASSY VIENNA 0126
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHCHI/AMCONSUL CHIANG MAI 1907
RUEABND/DEA HQS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUCNDT/USMISSION USUN NEW YORK 2081
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 10 RANGOON 000861

SIPDIS

DEPT FOR EAP/MLS, INL, SCT
DEPT OF JUSTICE FOR AFMLS, OIA, OPDAT
VIENNA FOR UNODC OFFICE

E.O. 12958:N/A
TAGS: EFIN KCRM KTFN SNAR BM
SUBJECT: BURMA - INCSR I DRUGS AND CHEMICAL CONTROL

REF: STATE 100989

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This report responds to reftel request for the INCSR I Drugs
and Chemical Control Report update.

I. Summary
Both UNODC and U.S. surveys of opium poppy cultivation
indicated a significant increase in cultivation and potential
production in 2007, while production and export of synthetic
drugs (amphetamine-type stimulants, crystal methamphetamine
and Ketamine) from Burma continued unabated. (Note: 2008
UNODC Cultivation Report statistics will not be available
until December.) The significant downward trend in poppy
cultivation observed in Burma since 1998 was reversed in 2007,
with increased cultivation reported in Eastern, Northern and
Southern Shan State and Kachin State. Whether this represents
a sustained change in poppy cultivation in Burma, which
remains far below levels of 10 years earlier, remains to be
seen. It does indicate, however, that increases in the value
of opium are driving poppy cultivation into new regions. An
increased number of households in Burma were involved in opium
cultivation in 2007. While Burma remains the second largest
opium poppy grower in the world after Afghanistan, its share
of world opium poppy cultivation fell from 55 percent in 1998
to 5 percent in 2006, and rose slightly in 2007. This large
proportional decrease is due to both decreased opium poppy
cultivation in Burma and increased cultivation in Afghanistan.
The Golden Triangle region in Southeast Asia no longer reigns
as the worldQs largest opium poppy cultivating region; that
dubious honor is now held by Afghanistan.
Despite increased cultivation in 2007, BurmaQs opium
cultivation declined dramatically between 1998 and 2006. The
UN Office on Drugs and Crime (UNODC) estimates a decrease from
130,300 hectares (ha) in 1998 to 21,500 ha in 2006, an 83
percent decrease. Cultivation in 2007 increased 29 percent,
from 21,500 ha in 2006 to 27,700 ha. The most significant
decline over the past decade was observed in the Wa region,
following the United Wa State ArmyQs (UWSA) pledge to end
opium poppy cultivation in its primary territory, UWSA Region
2. UWSA controlled territory accounted for over 30 percent of
the acreage of national opium poppy cultivation in 2005, but
almost no poppy cultivation was reported in the Wa region in
2006 and 2007. However, there are indications that
cultivation has increased in regions closely bordering UWSA
Region 2.
Burma has not provided most opium farmers with access to
alternative development opportunities. Recent trends indicate
that some opium farmers were tempted to increase production to
take advantage of higher prices generated by opiumQs relative
scarcity and continuing strong demand. Increased yields in
new and remaining poppy fields (particularly in Southern Shan
State), spurred by favorable weather conditions in 2007 and
improved cultivation practices, partially offset the effects
of decreased cultivation in 2006. Higher yields in some areas
may also signal more sophisticated criminal activity, greater
cross border networking, and the transfer of new and improved
cultivation technologies.

BurmaQs overall decline in poppy cultivation since 1998 has
been accompanied by a sharp increase in the production and
export of synthetic drugs, turning the Golden Triangle into a
new QIce Triangle.Q Burma is a significant player in the
manufacture and regional trafficking of amphetamine-type
stimulants (ATS). Drug gangs based in the Burma-China and
Burma-Thailand border areas, many of whose members are ethnic
Chinese, produce several hundred million methamphetamine
tablets annually for markets in Thailand, China, and India, as
well as for onward distribution beyond the region. There are
also indications that groups in Burma have increased the
production and trafficking of crystal methamphetamine or
QIceQQa much higher purity and more potent form of
methamphetamine than tablets.
Through its Central Committee for Drug Abuse Control (CCDAC),
the Government of Burma (GOB) cooperates regularly and shares
information with the U.S. Drug Enforcement Administration
(DEA) and Australian Federal Police (AFP) on narcotics
investigations. In recent years, the GOB has also increased

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its law enforcement cooperation with Thai, Chinese and Indian
counternarcotics authorities, especially through renditions,
deportations, and extraditions of suspected drug traffickers.
In May 2008, Burmese General Ye Myint was forced to retire
from his senior position as Chief of Bureau of Special
Operations 1, which some observers attribute to his sonQs
involvement with narcotics. During the 2008 drug
certification process, the U.S. determined that Burma was one
of only three countries in the world that had Qfailed
demonstrablyQ to meet its international counternarcotics
obligations. Major concerns remain: unsatisfactory efforts by
Burma to deal with the burgeoning ATS production and
trafficking problem; failure to take concerted action to bring
members of the UWSA to justice following the unsealing of a
U.S. indictment against them in January 2005; failure to
investigate and prosecute military officials for drug-related
corruption; and failure to expand demand-reduction, prevention
and drug-treatment programs to reduce drug-use and control the
spread of HIV/AIDS. Burma is a party to the 1988 UN Drug
Convention.
II. Status of Country
Burma is the worldQs second largest producer of illicit opium.
Eradication efforts and enforcement of poppy-free zones
combined to reduce cultivation levels between1998 and 2006,
especially in Wa territory. However, in 2007, a significant
resurgence of cultivation occurred, particularly in eastern
and southern Shan State and Kachin State, where increased
cultivation, favorable weather conditions, and new cultivation
practices increased opium production levels, led to an
estimated 29 percent increase in overall opium poppy
cultivation and a 46 percent increase in potential production
of dry opium.
According to the UNODC, opium prices in the Golden Triangle
have increased in recent years, although prices in Burma
remain much lower than the rest of the region due to easier
supply. Burmese village-level opium prices or farm-gate prices
increased from $153 per kg in 2004 to $187 in 2005, to $230 in
2006 and to $265 per kg in 2008. Burmese opium sales
contribute about half of the annual household cash income of
farmers who cultivate opium, which they use to pay for food
between harvests. Forty-five percent of the average yearly
income ($501) of opium cultivating households in Shan State
was derived from opium sales in 2007.
In 2007, the UNODC opium yield survey estimated there were
approximately 27,700 ha planted with opium poppies, with an
average yield of 16.6 kg per hectare (significantly higher
than the 2006 average yield of 14.6 kg per hectare).
[Independent U.S. opium poppy cultivation surveys also
indicated increased poppy cultivation and estimated opium
production to approximately 27, 700 ha cultivated and 270
metric tons (MT) produced]. The UNODCQs opium yield survey
concluded that land under cultivation had increased 29 percent
in Burma from 2006 levels, with a 46 percent increase in
potential opium production to 460 MT. This represented a 67
percent increase in the total potential value of opium
production in Burma, from $72 million in 2006 to $120 million
in 2007. Nonetheless, both surveys indicated that opium
production is still down 90 percent from its peak production
in 1996.
The general decline in poppy cultivation in Burma since 1996
has been accompanied by a sharp increase in the local
production and export of synthetic drugs. According to GOB
figures for 2008 (January-August), the GOB seized
approximately 700,000 methamphetamine tablets, compared to 1.5
million seized in 2007. Opium, heroin, and ATS are produced
predominantly in the border regions of Shan State and in areas
controlled by ethnic minority groups. Between 1989 and 1997,
the Burmese government negotiated a series of cease-fire
agreements with several armed ethnic minorities, offering them
limited autonomy and continued tolerance of their narcotics
production and trafficking activities in return for peace. In
June 2005, the UWSA announced implementation in Wa territory
of a long-delayed ban on opium production and trafficking.
While the cultivation of opium poppies decreased in the Wa
territory during 2006 and 2007, according to UNODC and U.S.
surveys, there are indications from many sources that Wa
leaders replaced opium cultivation with the manufacture and

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trafficking of ATS pills and QIceQ in their territory, working
in close collaboration with ethnic Chinese drug gangs.
Although the government has not succeeded in persuading the
UWSA to stop its illicit drug production and trafficking, the
GOBQs Anti-Narcotic Task Forces continued to pressure Wa
traffickers in 2008. UWSA also undertook limited enforcement
actions against rivals in Shan State in 2006 and 2007. In May
2006, UWSA units found and dismantled two clandestine
laboratories operating in territory occupied and controlled by
the UWSA-South in Eastern Shan State. When the UWSA units
entered the lab sites, a firefight ensued, with eight people
fatally wounded, four arrested, and 25 kg of heroin and
500,000 methamphetamine tablets seized by the raiding UWSA
units. In June 2006, the UWSA passed custody of the
contraband substances to GOB officials. The prisoners remained
in the custody of the UWSA. These UWSA actions likely were
motivated more towards eliminating the competition in their
area than by a desire to stop drug trafficking. According to
UNODC, opium addiction remains high in places of historic or
current opium production, ranging from 1.27 percent of the
total adult population in Eastern Shan State to 0.97 percent
in Kachin State and an estimated 0.83 percent in the Wa
region, the main area of opium production until 2006.
III. Country Actions Against Drugs in 2007
Policy Initiatives. BurmaQs official 15-year counternarcotics
plan, launched in 1999, calls for the eradication of all
narcotics production and trafficking by the year 2014, one
year ahead of an ASEAN-wide plan of action that calls for the
entire region to be drug-free by 2015. To meet this goal, the
GOB initiated its plan in stages, using eradication efforts
combined with planned alternative development programs in
individual townships, predominantly in Shan State. The
government initiated its second five-year phase in 2004.
Ground surveys by the Joint GOB-UNODC Illicit Crop Monitoring
Program indicate a steady decline in poppy cultivation and
opium production in areas receiving focused attention, due to
the availability of some alternative livelihood measures
(including crop substitution), the discovery and closure of
clandestine refineries, stronger interdiction of illicit
traffic, and annual poppy eradication programs. The UNODC
estimates that the GOB eradicated 3,598 ha of opium poppy
during the 2007 cropping season (ranging between July-March in
most regions), compared to 3,970 ha in 2006.
The most significant multilateral effort in support of BurmaQs
counternarcotics efforts is the UNODC presence in Shan State.
The UNODCQs QWa ProjectQ was initially a five-year, $12.1
million supply-reduction program designed to encourage
alternative development in territory controlled by the UWSA.
In order to meet basic human needs and ensure the
sustainability of the UWSA opium ban announced in 2005, the
UNODC extended the project through 2007, increased the total
budget to $16.8 million, and broadened the scope from 16
villages to the entire Wa Special Region No. 2. Major donors
that have supported the Wa Project include Japan and Germany,
with additional contributions from the UK and Australia. The
U.S. previously funded the UNODC Wa project, but halted
funding over death threats issued by UWSA leadership against
U.S. DEA agents following the January 2005 indictment of seven
UWSA leaders in a U.S. district court for their role in
producing and smuggling heroin to the U.S.
Law Enforcement Measures. The CCDAC, which leads all drug-
enforcement efforts in Burma, is comprised of personnel from
the national police, customs, military intelligence, and army.
The CCDAC, under the control of the Ministry of Home Affairs,
coordinates 27 anti-narcotics task forces throughout Burma.
Most are located in major cities and along key transit routes
near BurmaQs borders with China, India, and Thailand. As is
the case with most Burmese government entities, the CCDAC
suffers from a severe lack of funding, equipment, and training
to support its law-enforcement mission. The Burmese Army and
Customs Department support the Police in this role.
Burma is actively engaged in drug-abuse control with its
neighbors China, India, and Thailand. Since 1997, Burma and
Thailand have had more than 12 cross-border law enforcement
cooperation meetings. This cooperation resulted in the
repatriation by Burmese police of drug suspects wanted by Thai
authorities: two in 2004, one in 2005 one in 2006, and one in

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2008. According to the GOB, Thailand has contributed over
$1.6 million to support an opium crop substitution and
infrastructure project in southeastern Shan State. In 2007,
Thailand assigned an officer from the Office of Narcotics
Control Board (ONCB) to its mission in Rangoon; this officer
remains in country. Burma-China cross border law enforcement
cooperation has increased significantly, resulting in several
successful operations and the handover of several Chinese
fugitives who had fled to Burma. While not formally funding
alternative development programs, the Chinese government has
actively encouraged investment in many projects in the Wa area
and other border regions, particularly in commercial
enterprises such as tea plantations, rubber plantations, and
pig farms. China has assisted in marketing those products in
China through lower duties and taxes. There are also
indications that China conducted its own opium cultivation and
production surveys in 2007 and 2008 in regions of Burma
bordering the PRC, although they have not shared data
resulting from those surveys with other parties.
After Burma and India signed an agreement on drug control
cooperation in 1993, the two countries have held cross border
Law Enforcement meetings on a bi-annual basis, though the last
meeting was September 11, 2004, in Calcutta.
The GOB has to date taken no direct action against any of the
seven UWSA leaders indicted by U.S. federal court in January
2005, although authorities have taken action against other,
lower ranking members of the UWSA syndicate. In 2007, one of
the indicted leaders, Pao Yu-hua, died of natural causes.
During 2008, the GOB arrested suspects connected with the UWSA
who were involved in a local ecstasy and methamphetamine
distribution investigation.
The GOB reports significant arrests in 2008, totaling more
than 2,000 suspected drug traffickers.
In May, the GOB investigated 158 suspected drug cases,
arresting 245 suspects, of which 201 men and 44 women. In
July and August, the police arrested more than 800
individuals. In September, the GOB arrested 398 suspects, of
which 300 were men and 98 were women, and investigated 253
drug-related cases.
Narcotics Seizures. Summary statistics provided by Burmese
drug officials indicate that from January 2008 through
September 2008, Burmese police, army, and the Customs Service
together seized 1262.52 kilograms of raw opium, 2443.62
kilograms of low quality opium, 76.24 kilograms of opium oil,
56.10 kilograms of heroin, 206.08 kilograms of morphine base
(#3 heroin), 692,698 methamphetamine tablets, 7.74 kilograms
of methamphetamine ICE, 467.96 kilograms of ephedrine, 9,023.2
liters of precursor chemicals, and 1922 kilograms of precursor
chemical powder.
-- On February 13, 2008 the Myawaddy CCDAC anti-narcotics task
force (ANTF) stopped a motorcycle near Yadana Thein Kha Main
Road, Ward Number 3, Three Pagoda Pass, Burma. A subsequent
search resulted in the seizure of 28,000 tablets of pink WY
branded methamphetamine.

-- On February 13, 2008 the Yangon CCDAC Anti Narcotics Task
Force Q East (ANTF-E) seized approximately 138.88 grams of
heroin from Kyaw Htay at the Olympic Hotel, U Wisara Road,
Rangoon, Burma.

-- On April 3, 2008, the Taunggyi CCDAC ANTF raided a home in
Pet Kaw Village, Southern Shan State, Burma. A search
resulted in the seizure of 6.5 kilograms of brown opium
powder.

-- On April 3, 2008, Burmese Army Infantry Battalion 567
assisted the Nan Zalat Police Station at a checkpoint at the
Man Lin/Kunlong Road junction in Nan Zalat Village, Theinni
Township, Northern Shan State, Burma. A search of a vehicle
driven from Shauk Haw Village, Kutkai Township, Northern Shan
State, Burma resulted in the seizure of 2,182 literQ ether,
902 liters of hydrochloric acid, and 181 liters of chloroform.

-- On April 10, 2008 the Myitchina CCDAC ANTF searched a
residence located in Sa Pau Chaung Phyar Village, Hseik Mu
Village Track, Phar Kant Township, Kachin State, Burma. The
search resulted in the seizure of 5,260 tablets of

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methamphetamine.

-- On April 10, 2008, the Bhamo CCDAC ANTF seized 1,940
tablets of methamphetamine at the No. 2 border gate from two
female pedestrians.

-- On April 10, 2008, the Myitchina CCDAC ANTF raided a
residence located in Ward 2 Hseik Mu Village, Phar Khant
Township, Kachin State, Burma. A subsequent search resulted
in the seizure of 1.633 kilograms of opium.

-- On April 11, 2008, the Taunggyi CCDAC ANTF stopped and
searched a motorcycle and rider at a checkpoint on the
Pinlong/Aung Pan Road, Lai Pyar Village, Pinlong Village
Track, Southern Shan State, Burma. The search resulted in the
seizure of 16 kilograms of opium. On the same day, the
Taunggyi CCDAC ANTF stopped and searched a Toyota car. The
search resulted in the seizure of an AK-47 assault rifle, an
M-16 assault rifle, and 3 kilograms of opium.

-- On April 12, 2008, the East Yangon CCDAC ANTF searched room
804 at the Pin Lon Hteik Htar San Ein Housing compound located
at the corner of U Wizara Road and Chindwin Road, Ward 10,
Kamaryut Township, Rangoon, Burma. The search resulted in the
seizure of 69 tablets of ecstasy, 45 tablets of WY brand
methamphetamine and the arrest of Min Naing, Kyaw Thu Win, and
Yan Yan Chan. On April 14, 2008, as a result of information
developed from the arrest of Min Naing and the seizure of 69
tablets of ecstasy and 45 tablets of WY brand methamphetamine,
the East Yangon CCDAC ANTF raided and searched the residence
of Ma Phyo Thu Thu Win in Bahan Township, Rangoon, Burma. A
search resulted in the seizure of 536 tablets of WY brand
methamphetamine. On April 18, 2008, the East Yangon CCDAC
ANTF enlisted her cooperation to arrest Aung Naing in the
parking lot of Janko Market on Inya Road, Kamaryut Township,
Rangoon, Burma. Aung Naing was arrested in possession of
2,465 tablets of WY brand methamphetamine. In addition, on
April 19, 2008, Aung Naing's arrest led the East Yangon CCDAC
ANTF to search Room 411 of the Shwegondine Hotel, Rangoon,
Burma. The search resulted in the seizure of 27 tablets of
methamphetamine and the arrests of Ma Htet Htet Aung, Ye
Nandar Nyunt, and Aung Sit.

-- This case ultimately led to the arrest of Aung Zaw Ye
Myint, the son of prominent Burmese general Ye Myint, the
arrest of Burmese businessman Maung Weik, and the arrest of a
UWSA-affiliated trafficker known as Thet Naing Win.

-- On April 22, 2008, the Myitchina CCDAC ANTF searched a
house in Myitchina, Kachin State, Burma. A search resulted in
the seizure of 7 soap boxes containing a total of 98.7 grams
of heroin and 2,200,000 Kyat (approximately $2,200.00 US
Dollars).

-- On April 27, 2008, at approximately 1200 hours, the
Taunggyi CCDAC ANTF initiated an undercover operation at No.
C/9 Wun Kan Ward, Loi Hsaung Htauk, Mine Hsu Township, Shan
State, Burma. At approximately, 1500 hours, a suspect
delivered undercover officers 1.143 kilograms of opium and
1,854 tablets of WY brand methamphetamine.

-- On May 5, 2008, an undercover investigation conducted by
the Lashio CCDAC ANTF resulted in an arrest and the seizure of
50,000 tablets of methamphetamine.

-- On May 8, 2008, the Tachilek CCDAC ANTF arrested a suspect
near the MAY HOTEL, Bogyoke Street, Tachilek, Burma. A
subsequent search of the suspect resulted in the seizure of
8,000 pink QRQ brand methamphetamine tablets.

-- On May 11, 2008, the North Mandalay CCDAC ANTF, acting on
informant information, search a residence located on 32nd
Street, between 67th & 68th Streets, Mandalay, Burma. The
search resulted in the seizure of 200 tablets of WY brand
methamphetamine. During a debriefing, the suspect stated that
he had purchased 4,400 tablets of methamphetamine from an
individual at Mya Myitta Hotel, Lashio, Burma for 8,100,000

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Kyat (approximately $8100.00 USD).

-- On May 12, 2008, the Tachilek CCDAC ANTF stopped and
searched two suspects at the Loi Taw Khan Checkpoint. The
suspects were enroute to Tachilek, Burma from Mine Hsat, Shan
State, Burma. The search resulted in the seizure of 175
tablets of pink WY brand methamphetamine and approximately one
kilogram of methamphetamine ICE

-- On May 23, 2008, the Tachilek CCDAC ANTF stopped and
searched two suspects at a checkpoint near Tachilek, Burma.
The search resulted in the seizure of 4,000 tablets of
methamphetamine. During debriefing, the suspects implicated a
third suspect and indicated that additional methamphetamine
tablets were hidden in a house in Wai Lu Shan Village,
Tachilek Township, Tachilek, Burma. A subsequent search of
the house resulted in the seizure of an additional 7,200
tablets of methamphetamine.

-- On May 24, 2008, the Muse CCDAC ANTF stopped a motorcycle
at the 105 mile checkpoint along the Muse/Pang Sai Road. A
search resulted in the seizure of 9,840 tablets of
methamphetamine.

-- On May 26, 2008, the Muse CCDAC ANTF stopped and searched
an individual identified as he was driving from Mon Paw
Village to Nant Taung Village, Northern Shan State, Burma.
The search resulted in the seizure of 3,000 tablets of WY
brand methamphetamine. Information from subsequent
debriefings resulted in the seizure of an additional 1,990
tablets of methamphetamine.

-- On July 11, 2008, the Muse ANTF stopped and searched a
three wheel taxi driven at the Shwe Li Kyo Thadar Bridge, Nam
Khan, Burma. The search resulted in the seizure of 44 soap
boxes containing a total of approximately 572 grams of heroin
and 4,860 tablets of methamphetamine.
-- On July 28, 2008, the Taunggyi ANTF searched a residence in
Kaung Sai Village, Loi Hsaung Htauk, Mine Shu Township, Burma.
The search resulted in the seizure of approximately 250 grams
of heroin and 2,000 tablets of methamphetamine.

-- On July 30, 2008, the Lashio ANTF stopped and searched a
vehicle at the Yay Bu Checkpoint north of Lashio, Burma. The
search resulted in the seizure of 12,600 tablets of
methamphetamine.
-- On July 31, 2008, the Taunggyi ANTF and Taunggyi District
Police observed a motorcycle at the Payar Phu vehicle
checkpoint on Pan Tin Road, Payar Phyu Ward, Taunggyi, Burma
evade the checkpoint. As officers attempted to stop the
vehicle, the driver discarded a plastic bucket. Taunggyi ANTF
officers subsequently determined that the discarded bucket
contained 99,000 tablets of WY and R brand methamphetamine.
-- On August 5, 2008, the Muse ANTF conducted an operation in
Shauk Haw Village, Kutkhai Township, Northern Shan State,
Burma that resulted in the seizure of material for refinery
operations and the arrest of a former Kachin Defense Army
soldier. A search resulted in the seizure of the following
items:

A. 5.627 kg of heroin.
B. 7.2 kg of opium
C. Three assault rifles
D. Four handguns
E. 12 magazines for the assault rifles and handguns
F. 638 rounds of ammunition for both the assault rifles
and the handguns
G. 100 liters of hydrochloric acid
H. 9 kilograms of potassium chloride
I. 1.5 kilograms of sodium metal
J. Two hand grenades
K. 29 boxes each containing 100 detonators
L. 3000 sticks of dynamite or similar explosive
M. One gold bar (weight 10 tickel)
N. 2,000,000 Kyat (approximately $2000 USD)
O. Miscellaneous paraphernalia for the refining of heroin
P. 480 liters of ethyl alcohol

RANGOON 00000861 007.2 OF 010


Q. 1228 liters of ether
R. 240 liters of acetic anhydride
S. 112 liters of lysol
-- On August 7, 2008, the Myitkyina ANTF searched a home in
Hmaw Shan Village Tract, Hsiek Mu, Kachin State, Burma. The
search resulted in the seizure of 52,000 tablets of
methamphetamine and 5.5 Million Kyat (approximately $5,500 US
Dollars).

-- On August 15, 2008, the Mandalay ANTF-North searched a
vehicle at a vehicle checkpoint North of Mandalay. The
vehicle had originated in Kalay, Burma. The search resulted
in the seizure of 19.35 kilograms of ephedrine.
-- On August 15, 2008, the Muse ANTF searched a vehicle at the
105 mile checkpoint near Muse, Burma. The search resulted in
the seizure of 13,650 tablets of methamphetamine.
-- On August 17, 2008, the Taunggyi ANTF searched a room at
the Fuji Inn, Bogyoke Aung San Road, Taunggyi, Burma. The
search resulted in the seizure of 20,650 tablets of
methamphetamine.
-- On August 18, 2008, the Taunggyi ANTF seized a heroin
refinery near Htee Tan Village, Hsi Hsai Township, Southern
Shan State, Burma. The following items were seized.
A. 17.116 kilograms of opium
B. 9.78 kilograms of opium waste
C. 800 kilograms of ammonium chloride
D. 106.14 kilograms of solid opium oil
E. Miscellaneous narcotics paraphernalia

-- On August 30, 2008 the CCDAC Taunggyi ANTF seized an active
heroin refinery near Nar Khait Village, Hsi Hseng Township,
Southern Shan State, Burma. The refinery raid resulted in the
seizure of the following precursors and assorted items.

A. 800 liters of an opium and chemical solution
B. 55 kilograms of dry opium oil
C. 11.5 kilograms of No.3 heroin powder
D. 58 kg of no.3 solid form
E. 52 liters of opium liquid
F. 6 kilograms of Lysol powder
G. 7 kilograms of charcoal
H. 35 kilograms of raw opium
I. 40 kilograms of an opium and chemical mixture in oil
form
J. 32 liters of sulfuric acid
K. 1200 kilograms of opium residue
L. Assorted paraphernalia used in the production of heroin
-- On September 1, 2008, the Myitkyina ANTF seized 274
kilograms of opium in Phakant, Kachin State, Burma. The opium
was found in an abandoned car near a vehicle checkpoint.
According to a post arrest statement, the opium originated in
near Pin Laung, Southern Shan State, Burma
Corruption. Burma does not have a legislature or effective
constitution, and has no laws on record specifically related
to corruption. While there is little evidence that senior
officials in the Burmese Government are directly involved in
the drug trade, there are credible indications that mid-and-
lower level military leaders and government officials,
particularly those posted in border and drug producing areas,
are closely involved in facilitating the drug trade. The
Burmese regime closely monitors travel, communications and
activities of its citizens to maintain its pervasive control
of the population, so it strains credibility to believe that
government officials are not aware of the cultivation,
production and trafficking of illegal narcotics in areas it
tightly controls. A few officials have been prosecuted for
drug abuse and/or narcotics-related corruption. In May 2008,
Burmese General Ye Myint was forced to retire from his senior
position as Chief of Bureau of Special Operations 1, which
some observers attribute to his sonQs involvement with
narcotics. However, Burma has failed to indict any military
official above the rank of colonel for drug-related
corruption.
Agreements and Treaties. Burma is a party to the 1961 UN
Single Convention on Narcotic Drugs as amended by the 1972
Protocol, the 1971 UN Convention on Psychotropic Substances,
and the 1988 UN Drug Convention. Burma is a party to the UN

RANGOON 00000861 008.2 OF 010


Convention against Transnational Organized Crime and its
protocols on migrant smuggling and trafficking in persons, and
has signed but has not ratified the UN Corruption Convention.
Cultivation and Production. According to the UNODC opium yield
estimate, in 2007 the total land area under poppy cultivation
was 27,700 ha, a 29 percent increase from the previous year.
The UNODC also estimated that the potential production of
opium increased by 46 percent, from 315 MT in 2006 to 460 MT
in 2007. The significant increase in potential opium
production in 2007 indicated in the UNODC estimates reflect
improved agricultural methods and an end to several years of
drought, resulting in more favorable growing weather in major
opium poppy growing areas, such as Shan State and Kachin
State.
Burma as yet has failed to establish any reliable mechanism
for the measurement of ATS production. Moreover, while the
UNODC undertakes annual estimates of poppy cultivation and
production, the U.S. has been unable to conduct its annual
joint crop survey with Burma since 2004 due to the GOBQs
refusal to cooperate in this important area.
Drug Flow/Transit. Most ATS and heroin in Burma is produced in
small, mobile labs located near BurmaQs borders with China and
Thailand, primarily in territories controlled by active or
former insurgent groups. According to UNODC, the GOB seized
eight methamphetamine labs in 2006 and five labs in 2007. A
growing amount of methamphetamine is reportedly produced in
labs co-located with heroin refineries in areas controlled by
the UWSA, the Shan State Army-South (SSA-S), and groups inside
the ethnic Chinese Kokang autonomous region. Ethnic Chinese
criminal gangs dominate the drug syndicates operating in all
three of these areas. Heroin and methamphetamine produced by
these groups is trafficked overland and via the Mekong River,
primarily through China, Thailand, India and Laos and, to a
lesser extent, via Bangladesh, and within Burma. There are
credible indications that drug traffickers are increasingly
using maritime routes from ports in southern Burma to reach
trans-shipment points and markets in southern Thailand,
Malaysia, Indonesia, and beyond. The UNODC claims there is
evidence that Burmese methamphetamine tablets are also shipped
to Bangladesh, India, and Nepal. The UNODC also reports that
heroin seizures in 2005, 2006 and 2007 and subsequent
investigations revealed the increased use by international
syndicates of the Rangoon International Airport and Rangoon
port for trafficking of drugs to the global narcotics market.
However, U.S. DEA information indicates that heroin transits
the Thai/Chinese borders over land rather than by sea.
Demand Reduction. The overall level of drug abuse is low in
Burma compared with neighboring countries, in part because
most Burmese are too poor to be able to support a drug habit.
Traditionally, some farmers used opium as a painkiller and an
anti-depressant, often because they lack access to other
medicine or adequate healthcare. There has been a growing
shift in Burma away from opium smoking toward injecting
heroin, a habit that creates more addicts and poses greater
public health risks. Deteriorating economic conditions will
likely stifle substantial growth in overall drug consumption,
but the trend toward injecting narcotics is of significant
concern. The GOB maintains that there are only about 65,000
registered addicts in Burma. According to several HIV
Estimation Workshops conducted in 2008 by the National AIDS
Program, UNAIDS, and the World Health Organization, there are
an estimated 60,000 to 90,000 injecting drug users in Burma.
Surveys conducted by UNODC and other organizations suggest
that the addict population could be as high as 300,000.
According to the UNODC, BurmaQs opium addiction rate is high,
at 0.75 percent. NGOs and community leaders report increasing
use of heroin and synthetic drugs, particularly among
disaffected youth in urban areas and by workers in mining
communities in ethnic minority regions. The UNODC estimated
that in 2004 there were at least 15,000 regular ATS users in
Burma; there are likely more now, although official figures
are unavailable.
The growing HIV/AIDS epidemic in Burma has been tied to
intravenous drug use. According to the National AIDS Program,
one third of officially reported HIV/AIDS cases are
attributable to intravenous drug use, one of the highest rates
in the world. Information gathered by the National AIDS

RANGOON 00000861 009.2 OF 010


Program showed that HIV prevalence among injecting drug users
was 46.2 percent in 2006 Q a figure that remained stable
through 2008. Infection rates are highest in BurmaQs ethnic
regions, and specifically among mining communities in those
areas where opium, heroin, and ATS are more readily available.
Burmese demand reduction programs are in part coercive and in
part voluntary. Addicts are required to register with the GOB
and can be prosecuted if they fail to register and accept
treatment. Altogether, more than 21,000 addicts were
prosecuted between 1994 and 2002 for failing to register.
(The GOB has not provided any data since 2002.) Demand
reduction programs and facilities are limited, however. There
are six major drug treatment centers under the Ministry of
Health, 49 other smaller detoxification centers, and eight
rehabilitation centers, which, together, have provided
treatment to about 70,000 addicts over the past decade. Prior
to 2006, the Ministry of Health treated heroin addicts with
tincture of opium. However, based on high levels of relapse,
the Ministry of Health in 2006 began to treat heroin addicts
with Methadone Maintenance Therapy (MMT) in four drug
treatment centers, found in Rangoon, Mandalay, Lashio, and
Myitkyina. The Ministry of Health also began dispensing
methadone treatment in three additional sites, two in Kachin
State and one in Rangoon. By August 2008, the Ministry of
Health had treated more than 300 patients using MMT.
As a pilot model, in 2003 UNODC established community-based
treatment programs in Northern Shan State as an alternative to
official GOB treatment centers. UNODC expanded this program,
opening centers in Kachin State. In 2008, UNODC operated 12
drop-in centers. UNODC plans to open an additional five drop-
in centers by 2009. Since 2004, more 2,000 addicts received
treatment at UNODC centers. In 2007 and 2008, an additional
6,000 addicts have sought medical treatment and support from
UNODC-sponsored drop-in centers and from outreach workers who
are active throughout northeastern Shan State. The GOB also
conducts a variety of narcotics awareness programs through the
public school system. In addition, the government has
established several demand reduction programs in cooperation
with NGOs. These include programs coordinated with CARE
Myanmar, World Concern, and Population Services International
(PSI), focus on addressing injected drug use as a key factor
in halting the spread of HIV/AIDS.
While maintaining these programs at pre-existing levels, Burma
has failed to expand demand-reduction, prevention, and drug-
treatment programs to reduce drug use and control the spread
of HIV/AIDS. The Global Fund, which had a budget of $98.5
million to fight AIDS, TB, and malaria in Burma, withdrew in
2005. In 2006, a number of foreign donors established the 3
Diseases Fund (3DF) to provide humanitarian assistance for
AIDS, TB, and malaria. The 3DF, with its budget of $100
million over five years, supports the work of local and
international NGOs, the United Nations, and government health
officials at the township level. In 2008, the 3DF supported
HIV/AIDS programs such as HIV surveillance and training on
blood safety. The 3DF also provided funds for antiretroviral
therapy and the MMT program.
IV. U.S. Policy Initiatives and Programs
Policy and Programs. As a result of the 1988 suspension of
direct USG counternarcotics assistance to Burma, the USG has
limited engagement with the Burmese government in regard to
narcotics control. U.S. DEA, through the U.S. Embassy in
Rangoon, shares drug-related intelligence with the GOB and
conducts joint drug-enforcement investigations with Burmese
counternarcotics authorities. In 2006 and 2007, these joint
investigations led to several seizures, arrests, and
convictions of drug traffickers and producers. The U.S.
conducted opium yield surveys in the mountainous regions of
Shan State from 1993 until 2004, with assistance provided by
Burmese counterparts. These surveys gave both governments a
more accurate understanding of the scope, magnitude, and
changing geographic distribution of BurmaQs opium crop. In
2005, 2006, 2007, and again in 2008, the GOB refused to allow
another joint opium yield survey. A USG remote sensing
estimate conducted indicated a slight increase in opium
cultivation in 2007 and a significant increase in potential
opium production, mirroring UNODC survey results. Bilateral
counternarcotics projects are limited to one small U.S.-

RANGOON 00000861 010.2 OF 010


supported crop substitution project in Shan State. No U.S.
counternarcotics funding directly benefits or passes through
the GOB.
In September 2008, the USG identified Burma as one of three
countries in the world that had Qfailed demonstrablyQ to meet
its international counternarcotics obligations.
The Road Ahead. The Burmese government must reverse the
negative direction of narcotics production in 2007 to restore
the significant gains it made over the past decade in reducing
opium poppy cultivation and opium production. This will
require greater cooperation with UNODC and major regional
partners, particularly China and Thailand. Large-scale and
long-term international aidQincluding increased development
assistance and law-enforcement aidQcould play a major role in
reducing drug production and trafficking in Burma. However,
the ruling military regime remains reluctant to engage in
political dialogue within Burma and with the international
community. Its barriers to those offering outside assistance
have limited the potential for international support of all
kinds, including support for BurmaQs counternarcotics law
enforcement efforts. Furthermore, in order to be sustainable,
a true opium replacement strategy must combine an extensive
range of counternarcotics actions, including crop eradication
and effective law enforcement, with alternative development
options, support for former poppy farmers and openness to
outside assistance. The GOB must foster closer cooperation
with the ethnic groups involved in drug production and
trafficking, especially the Wa, refuse to condone continued
involvement by ceasefire groups in the narcotics trade, tackle
corruption effectively, and enforce its counternarcotics laws
more consistently to reach its goals of eradicating all
narcotics production and trafficking by 2014.
The USG believes that the GOB must further eliminate poppy
cultivation and opium production; prosecute drug-related
corruption, especially by corrupt government and military
officials; take action against high-level drug traffickers and
their organizations; strictly enforce its money-laundering
legislation; and expand prevention and drug-treatment programs
to reduce drug use and control the rapid spread of HIV/AIDS.
The GOB must take effective new steps to address the explosion
of ATS that has flooded the region by gaining closer support
and cooperation from ethnic groups, especially the Wa, who
facilitate the manufacture and distribution of ATS. The GOB
must close production labs and prevent the illicit import of
precursor chemicals needed to produce synthetic drugs.
Finally, the GOB must stem the troubling growth of domestic
demand for heroin and ATS.

DINGER

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