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Viewing cable 07RANGOON555, BURMA: 2007 COUNTERNARCOTICS REPORT CARD

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Reference ID Created Released Classification Origin
07RANGOON555 2007-06-08 09:17 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rangoon
VZCZCXRO9503
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0555/01 1590917
ZNR UUUUU ZZH
P 080917Z JUN 07
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC PRIORITY 6145
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1438
RUEHBY/AMEMBASSY CANBERRA 0329
RUEHKA/AMEMBASSY DHAKA 4551
RUEHLO/AMEMBASSY LONDON 1948
RUEHNE/AMEMBASSY NEW DELHI 3877
RUEHUL/AMEMBASSY SEOUL 7424
RUEHKO/AMEMBASSY TOKYO 4976
RUEHCN/AMCONSUL CHENGDU 1139
RUDKIA/AMCONSUL CHIANG MAI TH 0995
RUEHUNV/USMISSION UNVIE VIENNA 0082
RUCNDT/USMISSION USUN NEW YORK 0789
RUEABND/DEA HQS WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 05 RANGOON 000555 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR INL/PC, INL/AAE; INFO EAP/MLS; DEA FOR OF, OFF; 
TREASURY FOR FINCEN; JUSTICE FOR OIA, AFMLS, NDDS; USPACOM 
FOR FPA 
 
E.O. 12958: N/A 
TAGS: SNAR KCRM BM
SUBJECT: BURMA: 2007 COUNTERNARCOTICS REPORT CARD 
 
REF: A. STATE 72494 
 
     B. 06 RANGOON 00728 
 
RANGOON 00000555  001.2 OF 005 
 
 
1.  (U) This message responds to ref A request for a report 
on the Government of Burma's cooperation on counternarcotics 
efforts, based on benchmarks established in the prior year, 
in preparation for the FY 2008 certification process. 
 
2.  (SBU) Begin Text of 2007 Certification Report Card: 
 
A. The USG requested that the GOB take demonstrable and 
verifiable actions against high-level drug traffickers and 
their organizations, such as investigating, arresting, and 
convicting leading drug producers and traffickers. 
 
Embassy Rangoon Assessment: Limited cooperation. 
 
The GOB has to date taken no direct action against the eight 
leaders of the notorious United Wa State Army (UWSA) indicted 
in January 2005 in a U.S. federal court, although authorities 
have taken action against other, lower-ranking members of the 
UWSA syndicate.  Two members of UWSA Chairman Bao Yu Xiang's 
family were sentenced to death and remain in detention after 
their arrest and conviction in connection with the September 
2005 GOB seizure of a UWSA-related shipment of approximately 
496 kgs of heroin bound for China via Thailand. 
 
The GOB has not succeeded in convincing the UWSA to stop its 
illicit drug production or trafficking, although Burmese 
anti-narcotic task forces stepped up pressure against drug 
producers and traffickers in 2006 and 2007.   The GOB 
continued to cooperate with DEA and the Australian Federal 
Police (AFP) to monitor and disrupt the flow of illegal 
narcotics by the UWSA and associated international 
trafficking syndicates that have ties throughout Asia, the 
Pacific region, and North America. 
 
In May 2006, a raid coordinated with DEA Rangoon, the Thai 
Office of Narcotics Control Board (ONCB), and Burma's 
anti-narcotics task force in eastern Shan State resulted in 
the dismantling of two active heroin refineries, the arrest 
of 16 suspects, and the seizure of 340 kilos of heroin, 140 
gallons of opium in solution, and 1.08 kilos of opium gum. 
Also in May 2006, UWSA armed units cooperated with the GOB to 
dismantle two heroin refineries operated by a rival drug gang 
in the Eastern Shan state, resulting in a firefight that left 
eight dead.  The UWSA turned over the 25 kgs of heroin and 
500,000 methamphetamine tablets seized to the GOB, but 
retained custody of four prisoners taken alive. 
 
A second, and related, investigation from December 2005 to 
April 2006 culminated in the arrest of 30 subjects and the 
seizure of $2.2 million in assets and significant quantities 
of morphine base, heroin, opium, weapons, methamphetamine 
tablets and powder, crystal methamphetamine (ice), pill 
presses, and precursor chemicals. 
 
In another related operation, ongoing since October 2006, a 
series of raids directed against heroin refineries in Burma's 
northern Shan State resulted in the seizure of a number of 
labs and opium caches. This operation created a rise in the 
use of violence against narcotics police by drug traffickers, 
including a May 27, 2007, ambush of a combined Muse ANTF and 
Burmese Army patrol bringing a large quantity of seized 
chemicals, drugs and a high-ranking prisoner back from a 
successful raid on a heroin refinery located in northern Shan 
State. The subsequent ambush left four ANTF police officers 
dead and two severely wounded. 
 
In 2006, according to official statistics, Burma arrested 
4,360 suspects on drug related charges. Burma enhanced its 
 
RANGOON 00000555  002.2 OF 005 
 
 
cooperation with law enforcement agencies in neighboring 
countries in 2006 and 2007, in several cases leading to the 
interdiction of cross-border drug transfers and the 
extradition of traffickers to and from Burma. 
 
B. The USG asked the GOB to continue good efforts on opium 
poppy eradication and provide location data to the U.S. for 
verification purposes; increase seizures of opium, heroin, 
and methamphetamine and destroy production facilities; adopt 
meaningful procedures to control the diversion of precursor 
chemicals. 
 
Embassy Rangoon Assessment: Limited cooperation. 
 
For the third consecutive year, the GOB failed to provide 
sufficient cooperation to support the U.S.-Burma joint opium 
yield survey, previously an annual exercise. 
 
UNODC surveys and imagery assessments showed a significant 
reduction of poppy cultivation in Burma, particularly in Wa 
Special Region 2 as a result of an opium ban implemented in 
June 2005 by local authorities. 
The long-term sustainability of the ban is questionable in 
the absence of alternative income sources.  The 2006 UNODC 
survey shows a modest increase in opium poppy cultivation 
outside of Special Region 2, particularly in eastern and 
southern Shan State State. 
 
The UNODC estimates that 3,970 hectares of opium poppy were 
eradicated by the Government of Burma in 2006, and that 
21,000 hectares remain under opium poppy cultivation, a 36% 
decline from the 2005 opium survey estimate of 32,800 
hectares.  Both UNODC surveys and U.S. imagery indicate that 
poppy cultivation in Burma has declined by over 80 percent in 
the past decade. The UNODC estimated opium production in 
Burma to be 315 metric tons in 2006 and the yield average to 
be 14.7 kg/ha. 
 
GOB seizures of illicit drugs increased considerably in 2006 
and early 2007, due to closer cooperation with neighboring 
countries and stepped-up law enforcement investigations. 
During 2006, Burmese police, Army, and the Customs Service 
seized approximately 9,864.73 kilograms of raw opium, 192.3 
kilograms of heroin, 72.73 kilograms of marijuana, and just 
over 19.065 million methamphetamine tablets. During the same 
period, the GOB dismantled seven clandestine heroin 
laboratories. 
 
Burma does not have a domestic chemical industry, but its 
porous borders and endemic corruption facilitate the 
diversion and trafficking of precursor chemicals, primarily 
from China and India, to drug labs in country.  The GOB 
recognizes the threat but has been unable to establish 
effective countermeasures to date.  The GOB's Precursor 
Chemical Control Board has identified twenty-five chemical 
substances (including caffeine and thionyl chloride) and 
prohibited their import, sale, or use, but border controls 
are regularly evaded. 
 
C. The USG urged the GOB to establish a mechanism for the 
reliable measurement of methamphetamine production and 
demonstrate progress in reducing production (e.g., 
destruction of labs) and increasing seizures, particularly 
focusing increased illicit drug seizures from gangs on the 
border with China, India, and Thailand. 
 
Embassy Rangoon Assessment: Limited cooperation. 
 
Declining poppy cultivation has been matched by a sharp 
increase in the production and export of synthetic drugs. 
Burma remains a primary source of amphetamine-type substances 
 
RANGOON 00000555  003.2 OF 005 
 
 
(ATS) produced in Asia.  While the GOB has significantly 
increased the quantity of methamphetamine seized, trafficking 
efforts disrupted, and narcotics labs destroyed in 2006 and 
2007, international drug enforcement agencies see indications 
that ATS production levels continue to rise.  The GOB does 
not have a mechanism for the measurement of ATS production. 
 
Traffickers continue to use clandestine labs inside Burma to 
make ATS, using chemical precursors smuggled from India and 
China, and to smuggle narcotics across the Thai and Chinese 
borders for distribution within Thailand and China, and for 
transshipment, primarily to other Asian countries and 
Australia. 
 
Seizures increased in 2006 and 2007; law enforcement 
officials netted in excess of 19 million methamphetamine 
tablets.  The GOB destroyed 3 ATS labs in 2006. 
 
D. The USG asked the GOB to continue cooperation with China 
and Thailand and expand cooperation to other neighboring 
countries, such as India, Laos, and Vietnam, to control the 
production and trafficking of illicit narcotics and the 
diversion of precursor chemicals. 
 
Embassy Rangoon Assessment:  Adequate cooperation. 
 
The GOB maintains a regular dialogue on precursor chemicals 
with India, China, Thailand, and Laos.  As a result, India 
and China have taken steps, including the creation of 
exclusion zones, to divert precursors away from Burma's 
border areas.  The GOB has also cooperated with these 
countries on a variety of counterdrug law enforcement issues. 
 
GOB cooperation with China and Thailand has been the most 
productive, yielding arrests, seizures, and extraditions. 
The law enforcement relationship with India has been less 
productive.  Nonetheless, GOB counterdrug officials meet on a 
monthly basis with Indian counterparts at the field level at 
various border towns. 
 
Burma and Thailand jointly operate border liaison offices, 
and in 2007, Thailand added a drug enforcement liaison 
officer to its embassy staff in Rangoon.  Burma and Laos, 
with the assistance of the UNODC, conduct joint anti-drug 
patrols on the Mekong River. 
 
Burma became a member of the Asia/Pacific Group on Money 
Laundering in January 2006, and is a party to the 1988 UN 
Drug Convention. Over the past several years, the Government 
of Burma has expanded its counter-narcotics cooperation with 
other states. The GOB has bilateral drug control agreements 
with India, Bangladesh, Vietnam, Russia, Laos, the 
Philippines, China, Indonesia, and Thailand.  These 
agreements include cooperation on drug-related money 
laundering issues. 
 
E.  The USG requested that the GOB enforce existing 
money-laundering laws, including asset forfeiture provisions, 
and fully implement and enforce Burma's money-laundering 
legislation passed in June 2002. 
 
Assessment:  Adequate cooperation. 
 
In October 2006, the Financial Action Task Force (FATF) 
removed Burma from the FATF list of Non-Cooperative Countries 
and Territories (NCCT), although the U.S. maintains the 
separate countermeasures issued by the Financial Crimes 
Enforcement Network of the Treasury Department, adopted in 
2004 under Section 311 of the 2001 USA Patriot Act, which 
found the jurisdiction of Burma and two private Burmese 
banks, Myanmar Mayflower Bank and Asia Wealth Bank, to be "of 
 
RANGOON 00000555  004.2 OF 005 
 
 
primary money laundering concern," and requiring U.S. banks 
to take special measures with respect to all Burmese banks, 
with particular attention to Myanmar Mayflower and Asia 
Wealth Bank. 
 
Burma is a party to the UN Convention against Transnational 
Organized Crime and ratified the UN Convention on Corruption 
in December 2005 and the UN 
International Convention for the Suppression of the Financing 
Terrorism in September 2006.  The GOB now has in place a 
framework to allow mutual legal assistance and cooperation 
with overseas jurisdictions in the investigation and 
prosecution of serious crimes. 
 
In 2005, the GOB instituted an on-site examination program 
for financial institutions and closed three major banking 
institutions (Asia Wealth Bank, Myanmar Mayflower Bank, and 
the Myanmar Universal Bank) for violations of banking 
regulations.  The banks were allegedly involved in laundering 
money linked to the illicit narcotic trade. In August 2005, 
the GOB, with the assistance of DEA, seized assets of the 
Myanmar Universal Bank and arrested its Chairman, Tin Sein, 
and sentenced him to death for laundering UWSA drug proceeds. 
The total value of seized bank accounts, property, and 
personal assets exceeded $25 million. 
 
As a result of the promulgation in 2004 of the Mutual 
Assistance in Criminal Matters Law (MACML) and subsequent 
measures to address money laundering and terrorism financing, 
Burma gained membership in the Asia Pacific Group on Money 
Laundering in March 2006.  In July 2005, Burma and Thailand 
signed an MOU on the exchange of information relating to 
money-laundering. 
 
With the exception of the Myanmar Universal Bank case, the 
GOB did not make public the results of its investigations 
into private banks, nor make explicit connections between the 
banks and money laundering.  Since August 2005, there have 
been no significant prosecutions of banking or government 
officials in cases related to laundering of drug money, and 
administrative and judicial authorities lack resources to 
investigate and enforce the anti-money laundering regulations 
at all levels.  The government continues to award contracts 
for construction and other major infrastructure projects to 
corporations linked to suspected drug traffickers. 
 
F. The USG urged the GOB to prosecute drug-related 
corruption, especially corrupt government and military 
officials who facilitate drug trafficking and money 
laundering. 
 
Embassy Rangoon Assessment:  Inadequate cooperation. 
 
Burma ranks next to the bottom of the 2006 Transparency 
International index of perceived corruption, ahead of only 
Haiti.  Many army and police personnel posted on the border 
are believed to be involved in facilitating the drug trade. 
 
According to the GOB, between 1995 and 2003, officials 
prosecuted and punished over 200 police officials and 48 
Burmese Army personnel for narcotics-related corruption or 
drug abuse.  There is no evidence that the GOB took any 
similar actions over the past four years.  The GOB has never 
prosecuted a Burmese Army officer over the rank of full 
colonel. 
 
G. The USG asked the GOB to expand demand-reduction, 
prevention and drug treatment programs to reduce drug use and 
control the spread of HIV/AIDS. 
 
Embassy Rangoon Assessment:  Limited cooperation 
 
RANGOON 00000555  005.2 OF 005 
 
 
 
Although drug abuse levels remain low in Burma compared to 
neighboring countries, the addict population could be as high 
as 300,000 abusers, including a growing number of injecting 
drug users (IDU) and regular consumers of ATS. 
The HIV epidemic in Burma, one of the most serious in Asia, 
continues to expand rapidly.  UNAIDS estimates that 34 
percent of officially reported HIV cases are intravenous drug 
users, one of the highest rates in the world. 
 
The GOB's prevention and drug treatment programs suffer from 
inadequate resources and a lack of high-level government 
support.  Demand reduction programs are in part coercive and 
in part voluntary.  There are six major drug treatment 
centers under the Ministry of Health, 49 other smaller detox 
centers, and eight rehabilitation centers which, together, 
have provided treatment to about 60,000 addicts over the past 
decade.  Burmese authorities have also collaborated with 
UNODC in expanding anti-drug campaigns as well as 
establishing treatment and rehabilitation programs.  The 
GOB's Myanmar Anti-Narcotic Association, for example, has 
supported the activities of several outreach projects in 
northern Shan State that treat thousands of addicts annually. 
 
Several international NGOs have effective demand reduction 
programs, including Care International, World Concern, and 
Population Services International (PSI), but the GOB's 
promulgation of new guidelines on the activities of 
international NGOs and UN agencies, first announced in 
February 2006, created a more uncertain operating 
environment.  Funding limitations mean that many addicts 
cannot be reached. 
 
End Text of 2007 Certification Report Card. 
VILLAROSA