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Viewing cable 08LIMA979, PERU FY 2007-2008 CERTIFICATION REPORT CARD

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Reference ID Created Released Classification Origin
08LIMA979 2008-06-06 16:47 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0012
RR RUEHWEB

DE RUEHPE #0979/01 1581647
ZNR UUUUU ZZH
R 061647Z JUN 08
FM AMEMBASSY LIMA
TO SECSTATE WASHDC 8769
UNCLAS LIMA 000979 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/LP 
AND INL/PC 
 
E.O. 12958: N/A 
TAGS: SNAR KCRM ASEC PREL PE
SUBJECT: PERU FY 2007-2008 CERTIFICATION REPORT CARD 
 
REF: (A) SECSTATE 00029120 (B) LIMA 358 
 
1.  (SBU)  Working relationships and cooperation between the 
Government of Peru (GOP) and the U.S. Government agencies 
responsible for implementation of counter-narcotics (CN) 
policies continue at an all time high.  The Narcotics Affairs 
Section (NAS), Drug Enforcement Administration (DEA), U.S. 
Agency for International Development (USAID) as well as other 
USG agencies in Peru have near unfettered access to the 
highest levels of the Ministry of Interior, DEVIDA, Public 
Ministry and the Peruvian National Police (PNP). Per REFTEL 
B, the FY 2007-2008 Certification Demarche was presented to 
the Ministry of Foreign Affairs, Directorate for Drug 
Control, on 22 February 2008.  The following are specific 
benchmarks presented to the Government of Peru and the 
actions taken in each area to date: 
 
A. Coca and opium poppy reduction: 
 
1) The USG asked the GOP to reduce illegal coca cultivation 
in Peru through continued programmed eradication, steadily 
reducing hard-core areas and coca expansion zones, and to 
continue eradication at the same or better rate than in 2007, 
taking into consideration reduced assistance resources 
available from the United States. 
 
----- Peru's eradication efforts are currently close to 30 
percent above last year and should succeed in converting the 
San Martin Department, part of the Upper Huallaga Valley, 
into a &coca insignificant8 zone.  The 2008 eradication 
plan aims to consolidate Alternative Development efforts in 
Tocache as well as assisting USAID with the establishment of 
a new AD Program in the Aucayacu area.  With the exception of 
about 500 hectares in one sub-region, programmed to be 
eradicated in the next 45 days, the only coca existing in the 
area will be small, scattered fields, unattractive for 
narco-trafficking.  In the coming two months, operations will 
commence in the southern UHV in a hard production zone, 
opening the door for development activity and sustained coca 
reduction. 
 
2)  The USG asked the GOP to make every effort to fulfill its 
commitment to cause a net reduction in coca cultivation in 
FY-2008, including eradicating at least 8,000 hectares. 
 
----- Peru's circa 1000 USD per hectare coca eradication 
program is considered to be highly cost effective.  Funding 
constraints mean Peru can still only concentrate resources on 
about 20-33 percent of the total coca in existence, however. 
Despite success in sharply reducing the number of hectares 
under coca cultivation in the Upper Huallaga Valley (from 
4,000 hct down to the 500 hct programmed for eradication in 
the next month), some expansion is occurring in other areas. 
However, Peru is stabilizing coca crops overall. 
In CY2007, Peru exceeded its programmed eradication goal of 
10,000 hct by over 1,000 hct.  In CY2008, at the current rate 
of eradication, the 8,000 hct goal with budgeted funds should 
be reached or surpassed. 
 
3)  The USG asked the GOP to continue efforts to locate opium 
poppy cultivation and eradicate all poppy found. 
 
----- In 2005, CADA prepared a map of potential poppy growing 
areas.  However, since the PNP has not approved CADA civilian 
employees to participate in operations to detect and destroy 
poppy plants, no spectral signatures have been documented to 
be able to detect poppy through satellite imagery. Since 
January 2008, the PNP located and destroyed approximately 
750,000 poppy plants and one morphine processing laboratory. 
 
 
B. Police Counter-Narcotics Enforcement 
 
1) The USG asked the GOP continue to graduate at least 1000 
new counter-narcotics police through the PNP Basic Training 
Academies, to provide security for eradication of illegal 
coca and to carry out interdiction operations.  Their 
efforts contribute to disrupting cocaine HCl and cocaine- 
base as well as opium latex trafficking.  This will 
require a commitment to fund and maintain the viability of 
these new officers to guarantee police presence and 
operational success in the future. 
 
-----There are currently three PNP Basic Training Academies 
for the Peruvian narcotics police, DIRANDRO, located in the 
coca-growing regions east of the Andes: a fourth is being 
added in 2009.  In March 2007, 727 new drug police graduated 
from these academies, their December 2006 graduation having 
been delayed.  In December 2007, 820 more DIRANDRO police 
graduated, who went on to finish operational training for 4 
months into 2008.  The annual training cycle is now 
established: there are currently 750 trainees registered at 
the three ETS-PNP schools who will be assigned upon 
graduation to CN bases for three years.  In February 2008, 
758 students from remote and rural communities located in the 
Huallaga and Apurimac/Ene Valleys (VRAE) were enrolled in the 
police pre-academies to qualify for entry into one of the 
four Basic Training Academies.  Approximately 1800 new 
narcotics police are already part of DIRANDRO operational 
units conducting aggressive interdiction and eradication 
security support operations. 
 
2) The USG asked the GOP to attempt to lower the price of 
illicit coca leaf and maintain the lower value through 
repeated 
interdiction, simultaneously raising the price of illegal 
precursor chemicals through increased seizures in the drug 
source zones. 
 
--- The market laws of supply and demand do not always apply 
when dealing with criminal mafias.  However, the PNP has been 
able to achieve some success in the strategy of reducing the 
value of illegal coca and raising the price of precursor 
chemicals through sustained interdiction.  In the VRAE, where 
police interdiction has been more aggressive, the price of an 
arroba of coca (11.5 kilos)has shown some decrease (by 5-10 
soles to s/75, or 27 USD) and the price of precursor 
chemicals has more than doubled. The increased presence of 
police officers in the region has also contributed to an 
heightened risk to narco-traffickers of being arrested and 
losing leaf and chemicals.  In areas where eradication and 
interdiction are non-existent such as the Monzon Valley, the 
price of coca leaf has risen more than 100 percent in the 
past year.  An arroba of coca leaf was 22 USD in April 2007, 
but had risen to 45.5 USD by April 2008 as drug mafias pumped 
money into the production effort. 
 
3) The USG asked the GOP to increase the seizures of illicit 
drugs and 
precursor chemicals in the production area by 10 percent 
above the FY 07 total. 
 
----- To date, DIRANDRO personnel have conducted 
approximately 4116 drug interdiction missions, destroyed 390 
cocaine base and 10 HCL producing laboratories, seized more 
than 4,700 kilos of HCL, 2,652 kilos of cocaine base, 7.9 
kilos of opium latex, 719 kilos of marijuana, and 
approximately 169,000 kilos of precursor chemicals that 
prevented the production of approximately 8.3 metric tons of 
cocaine.  This represents an increase of approximately 22.5 
percent of cocaine production averted. 
 
C. International narco-trafficking organizations: 
 
1) The USG asked the GOP to focus investigative and 
intelligence 
resources on discovering and destroying attempts by major 
international trafficking organizations to operate or 
become established in Peru. 
 
----- Drug trafficking investigations indicate that Peruvian 
drug trafficking organizations (DTO) are maintaining their 
role as transportation support for cocaine HCL and base 
products.  Their efforts appear to be coordinated with 
Mexican and Colombian drug trafficking organizations who are 
orchestrating the routes and destination of these cross-sea 
and overland shipments.  The PNP, with US law enforcement 
assistance, has developed investigations against drug 
traffickers having interconnected organizational relations 
with Sendero Luminoso (SL) to continue the flow of coca leaf 
and cocaine products transported from the Monzon, UHV and the 
VRAE. 
 
Peru's law enforcement efforts continue to achieve limited 
success against DTOs including those related to Fernando 
Zevallos Gonzales and Adrian Velarde-Huamani.  Through 
continued investigations and drug intelligence, additional 
drug and money laundering charges are being effected against 
these organizations as well as seizures of assets. 
 
D. Airports and seaports: 
 
1) The USG asked the GOP to maintain its drug interdiction 
capabilities in Peru's Callao and Paita seaports through 
maritime shipping container inspection programs, including 
the National Cargo Manifest Review Unit, to adequately staff 
container scanners, and to maintain the cargo inspection 
canine teams in Callao and Paita as well as at Lima's 
international airport.  The goal is an increase of 10 
percent in the quantities of drugs seized by Peruvian 
Coast Guard, Customs and Police units to substantially 
diminish the exploitation of Peru's ports and coastline by 
narco-traffickers. 
 
----- The GOP maintains tight control over cargo and 
passengers by using high technology equipment and trained 
dogs to search for and detect drugs passing through Peru's 
air and seaports.  Using ION scanners, body scanners, 
canines, container scanners and specialized tactics and 
procedures, the Joint Task Force, consisting of SUNAT 
(Peruvian Customs) and the PNP made over 700 arrests and 
seized more than 7.8 metric tons of cocaine HCL and base at 
Jorge Chavez International Airport in Lima and the Ports of 
Callao and Paita this year alone (2008).  At the Ports of 
Callao, Salaverry, Chimbote and Paita, SUNAT continues to 
closely review containerized cargo through its Manifest 
Review Unit (MRU), electronically inspecting more than 
180,000 sea-going containers between January and April 2008. 
SUNAT created a specialized Dive Team to conduct under-hull 
inspections of suspect vessels in port and barges on the 
inland waterways.  SUNAT has also recently intensified its 
efforts to detect illicit currency being used for drug 
trafficking, resulting in several significant seizures 
totaling approximately one million USD. 
 
E. Money laundering: 
 
1) The USG asked the GOP to use recent legislation 
authorities to develop and implement a national anti-money 
laundering 
strategy, including prosecution of those involved in 
laundering money.  The strategy should identify functional 
and legal causes for delays in prosecutions and initiate 
actions to remove such barriers. 
 
---- Money laundering remains a serious problem in Peru. The 
Peruvian Congress passed an Asset Forfeiture Law in July 
2007. Congress subsequently modified the law and ratified its 
constitutionality in March 2008.  The Ministry of Justice has 
undertaken a media campaign to educate the public about how 
the law will be used to attack organized crime, and is 
developing a strategy to train police, prosecutors and judges 
who will be involved in money laundering prosecutions.  A 
national study on money laundering activities in Peru and 
prosecution efforts is underway. The Financial Intelligence 
Unit (UIF) has implemented an anti-money laundering strategy 
to generate financial intelligence to detect money laundering 
crimes. The UIF reported that it had detected 1,554 
suspicious operations in 2007 and 108 this year (the latest 
statistics). Judicial authorities launched twelve formal 
investigations for money laundering in 2007 and eight in the 
first quarter of this year.  Recent investigations implicate 
money exchange houses, offshore and straw corporations, wire 
transfers, and investment of drug money into existing 
legitimate companies.  The complexity of such investigations 
require substantial manpower and resource commitments: while 
there has been improved cooperation between the police, 
prosecutors and tax authorities, Peru,s burdensome legal 
system and institutional disaccord has impeded aggressive 
prosecutions of money laundering organizations to date. 
 
2) The USG asked the GOP to implement asset forfeiture 
legislation to increase seizures of narco-assets, and 
establish 
mechanisms to convert them to use for counter-narcotics and 
other law enforcement efforts. 
 
---- The Ministry of Justice is designated as the lead agency 
in implementing the Asset Forfeiture Law.  The Ministry has 
revised the law's implementing regulations and has undertaken 
a media campaign to educate the Peruvian public about the law 
and how it will be used to attack organized crime.  The 
Ministry is also in the process of developing a strategy to 
implement the law and to provide training to police, 
prosecutors and judges who will be involved in asset 
forfeiture prosecutions.  The law received final approval, in 
terms of constitutionality, from the Peruvian Congress in 
April 2008.  Although no cases have been prosecuted to date, 
it is anticipated that a number of cases will be brought 
forward in the next several months.  The GOP is also 
undertaking a national money laundering study that will look 
at current money laundering activities in Peru and the GOP's 
efforts to prosecute money launderers.  The study will 
provide recommendations to GOP entities on how to facilitate 
money laundering investigations and prosecutions. 
 
F. Precursor chemical control: 
 
1) The USG asked the GOP to take significant steps to stop the 
diversion of precursor chemicals for drug manufacture 
including adding legislative language outlawing certain 
precursor chemicals. 
 
-----The GOP has made slight progress in developing the 
chemical control registry which is at the heart of the 
Chemical Precursor Control Law passed by the Peruvian 
Congress in 2004.  It has taken the GOP three years to 
develop the implementing regulations and another year for the 
Ministry of Production and SUNAT, the Peruvian IRS, to reach 
agreement on developing the software needed to create the 
registry which will be used by law enforcement entities to 
track commerce in precursor chemicals and undertake 
enforcement actions nationwide.  It will be another 12-15 
months before the registry is online for users. 
 
G. Extraditions: 
 
1) The USG asked the GOP to provide cooperation, bilaterally 
and 
multilaterally, if/when extradition requests are filed 
regardless of nationality. 
 
-----The U.S. and Peru are parties to an Extradition Treaty 
that entered into force in 2003.  Among the eight U.S. 
extradition and provisional arrests still pending, six are 
related to narco-trafficking.  In 2008, there were three new 
extradition requests presented for two Peruvians and one 
Colombian for narcotics trafficking.  These prospective 
extradites are not subject to any criminal charges under 
Peruvian law and are currently being processed for 
extradition hearings.  Normally, Peruvian law requires an 
individual to serve his/her sentence in Peru before being 
eligible for extradition; consequently, no Peruvians have 
been extradited to the United States.  These recent request 
will provide the GOP with an excellent opportunity to 
demonstrate its cooperation on this issue. 
 
H. Demand reduction: 
 
1) The USG asked the GOP to expand its efforts to reduce drug 
abuse among the Peruvian population by intensifying their 
activities to educate the Peruvian public about narco- 
trafficking's threat to society and democratic 
institutions in Peru through an active public awareness 
campaign and education efforts nationwide, especially 
among the most vulnerable members of society. 
 
For the first time, in 2007 Peru,s Anti-Drug agency DEVIDA 
received substantial government funding of over 3 million USD 
to implement strategies, demand reduction and prevention 
activities, media outreach and training programs in 
conjunction with relevant ministries. A December study 
conducted by DEVIDA in the drug-producing regions showed that 
the public there is now well aware of the threat of 
narco-trafficking.  The responses of the 1,600 people 
interviewed revealed a much stronger understanding of and 
support for counter-narcotics programs: over 63 percent 
acknowledged that most coca goes to narcotics production and 
over 41 percent indicated they favored eradicating all coca 
beyond that used by the legal market; almost 29 percent were 
in favor of eradicating all coca.  DEVIDA,s regional 
anti-drug education programs reached 100,000 school students. 
 DEVIDA also implemented a Rapid Impact Plan (funded at 3 
million USD) with the Ministry of Health for demand 
reduction. 
 
I. Supply reduction: 
 
1) The USG asked the GOP to establish and employ 
reciprocal maritime operational procedures with the USG to 
expedite communications and decisive interdiction action 
between 
our respective maritime operations centers. 
 
-----This issue is being considered by the Ministry of 
Foreign Affairs (MFA) and monitored closely by several 
sections within the U.S. Mission in Peru.  The Peruvian Navy 
and Coast Guard have advanced this agreement within the GOP 
and have express support in principle for such an agreement. 
 
J. Alternative development: 
 
1) The USG asked the GOP to take a leadership role in 
furthering post-eradication alternative development efforts. 
 
-----The GOP has been a strong advocate for post-eradication 
alternative development, taking a very public leadership role 
both in Peru and on the international scene.  DEVIDA 
presented the post-eradication alternative development model 
at the Inter-America Drug Abuse Control Convention (CICAD) 
meeting in early 2008, and Peru has since been named 
President of the CICAD Experts Group on Alternative 
Development.  This new role for Peru will facilitate the 
sharing of post-eradication alternative development 
experiences with other countries in the region and the world 
that struggle with making eradication efforts sustainable. 
 
2) The USG asked the GOP to increase its investment in 
economic 
infrastructure in the coca growing valleys to facilitate 
greater market access for alternative development 
products. 
 
-----For the first time in history, the GOP has dedicated 
significant budgetary resources specifically to 
counter-narcotics efforts through the Rapid Impact Plan.  The 
Rapid Impact Plan effort is led by DEVIDA, and has resulted 
in increased funding for activities and infrastructure in 
coca-growing areas, which will be implemented by more than 15 
government entities under DEVIDA's coordination.  Funding in 
2008's Plan amounted to S/35,000,000 (12,411,348 USD), a 
significant portion of which is for economic infrastructure, 
which will directly impact market access for alternative 
development products. 
MCKINLEY