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posted 23-Feb-99 6:00am
Part 2 of 3.

State Dept. Homepage)



POLICY INITIATIVES. Burmese counternarcotics efforts improved during
1997, especially with regard to heroin and opium seizures as well as the
destruction of heroin refineries. A quieter security situation in parts
of northern Shan State permitted the Burmese anti-drug forces to conduct
more vigorous law enforcement efforts, especially in the Kachin and
Kokang regions. The Kokang area, in particular, is a major center of
narcotics cultivation and refining. These efforts must be stepped up if
they are to have a significant impact on the overall trafficking

With support from DEA and US embassies in Rangoon and Bangkok, the
Burmese and Thai governments agreed to undertake joint operations
against drug trafficking along Thailand's northern border with Burma. To
this end, they agreed in principle to establish a joint anti-drug task
force in Tachilek, Burma and Mae Sai, Thailand. This approach, which has
been under consideration for several years, has the potential to permit
coordinated enforcement operations in one of the most active trafficking
areas in Southeast Asia.

The GOB also apprehended and rendered to Thailand, Li Yunchung, a former
associate Chang Qifu who had bribed his way out of Thai jail and fled to
Burma. Li had been awaiting extradition by the Thai to the United States
on narcotics charges. Acting on intelligence provided by DEA through the
US Embassy in Rangoon, Burmese authorities arrested Li in April and
formally turned him over to Thai authorities in May. The GOB understood
that the Thai would extradite Li to the United States. This was the
first time the Burmese had returned to Thailand a high profile drug
trafficker sought by the US.

The Burmese continued to refuse the rendition of drug lord Chang Qifu on
the grounds that he had not violated his 1996 surrender agreement. This

agreement reportedly stipulated that if Chang Qifu ended his insurgency
and retired form the drug trade, the GOB would provide him with security
in Rangoon and allow him to conduct legitimate business. Chang Qifu
confirmed in a public interview his plans to found construction of a new
Rangoon-Mandalay highway valued at some $250 million; a Burmese cabinet
member confirmed the accuracy of LChang's statement. Burmese authorities
assert that he will continue to enjoy immunity from prosecution in Burma
or rendition to another country as long as he does not violate his
surrender agreement. This issue remains a source of friction with the US
due to standard international legal principles calling for punishment of
traffickers and other internaitonal criminals. In addition, Chang Qifu
reportedly remains involved in the drug trade through his subordinates,
thereby violating the reported terms of the surrender agreement.

The SPDC affirmed its intention to increase its efforts to implement the
ongoing "master plan for the development of border areas and national
races." The plan calls for a program of integrated development combined
with law enforcement aimed at improving the living standards in the
ethnic areas and providing viable econnomic alternatives to opium
cultivation. Little effort had been made by the end of 1997 to link
this plan, conceived in 1990, to measurable reductions in opium
cultivation in the ethnic areas.

The GOB and UNDCP completed in late 1996 a 12-month pilot integrated
rural development project in the Wa region initiated to take advantage
the United Wa State Army's unilateral decision announced in 1995 to
establish five "opium poppy-free zones" in its area of control in order
to bring about a gradual reduction of opium cultivation. The pilot
project was designed to test the feasibility of a planned five-year, 15
million dollar rural development project aimed at opium income and crop
substitution. In contrast to the UNDCP's previous projects in Mong Yang
and TAchilek, the Wa project will incorporate a monitoring and
evaluation component designed to measure progress in eliminating opium
cultivation. As an integrated development scheme, it will also focus on
infrastructure as well as the provision of educational and health
facilities in the Ho Tao and Mong Pawk districts of the Wa region.

ACCOMPLISHMENTS. Overall, the Burmese drug control situation remained
bleak during 1997. The Burmese effort to seize herion and opium improved
markedly in percentage terms during 1997, but, even so, the total seized
was less than one per cent of Burma's estimated annual opium/heroin
output. The combined police and military narcotics task forces seized a
record 1401 kilos of heroin, a more than two-fold increase over 1996
seizures, which totaled 493 kilos.Seizures of opium gum rose to 7884
kilos, compared with 1300 kilos 1n 1996. The seizure of 5.04 million
amphetamine tablets roughly equalled last year's totals; the two-year
trend in seizures of precursor chemical, ancetic anhydride, was up
sharply, although 1997 seizures fell from the level in 1996. The
authorities destroyed 33 herion refineries during the year, compared

with 11 previous year. Most of the refineries were located using
information provided by DEA from the US Embassy in RAngoon. In NOvember,
the authorities made the largest heroin seizure ever recorded in Burma
-- 297 kilos near Muse in northern Shan State on the Chinese border.

LAW ENFORCEMENT MEASURES. The 1993 narcotic drugs and psychotropic
substances law brought the Burmese legal code into conformity with the
1988 UN Drug Convention. As such, the 1993 law contains useful legal
tools for addressing money laundering, the seizure of drug-related
assets, and the prosecution of drug conspiracy cases. However, by the
end of the year, these provisions had remained apparently unused as
Burmese police and judicial officials had been slow to implement the
law, targeting few if any major traffickers and their drug-related
assets. Burmese drug officials claim they lack sufficient expertise to
deal with money laundering and financial crimes, which is not a
sufficient explanation of the near total failure to address money
laundering, which is believed to be carried out on a massive scale.

Formally, the Burmese government's drug enforcement effort is led by the
office of the Central Committee for Drug Abuse Control(CCDAC), which is
comprised of personnel from various security services, including the
police, customs, military intelligence, and the army. CCDAC now has 18
drug enforcement task forces around the country, most located in major
cities and along key transit routes near Burma's borders with China,
India and Thailand. The CCDAC, which is under the control of the
directorate of Defense Services Intelligence (DDSI) and relies, in
part, on mmilitary personnel to execute law enforcement duties,
continues to suffer from a lack of adequate resources to support its law
enforcement mission.

CORRUPTION: There is no evidence that the government, on an
institutional level, is involved in the drug trade. However, there are
persistent and reliable reports that officials, particularly army
personnel posted in outlying areas, are involved in the drug business.
Army personnel wield considerable political clout locally, and their
involvement in trafficking is a significant problem. In April, the
authorities arrested 11 officers-- including one lieutenant colonel who
received a 25 year prison term-- for colluding with drug traffickers in
the operation of a heroin lab in northern Shan State. The Burmese have
said that they would welcome information from others on corruption
within their ranks.

The lack of a vigorous enforcement effort against money laundering also
leaves Burma vulnerable to the growing influence of traffickers through
the use of drug proceeds in legitimate business ventures. Businesses
owned by family members of former or present traffickers have invested
heavily in infrastructure projects, such as roads and port facilities,
as well as in hotels and other real estate development projects during
the year. It is believed that drug profits formed the seed capital for
those otherwise legitimate enterprises.

AGREEMENT AND TREATIES. burma is a party to the 1961 Single Convention,
the 1971 UN Convention on Psychotropic Substances and the 1988 UN Drug

Convention. However, the RAngoon regime maintains its reservation on
extradition of Burmese citizens to other countries. The United States
does not have a mutual legal assistance treaty(MLAT) with Burma. It is
the opinion of the US Government that a US-U.K. extradition treaty,
which was accepted by the post-independence Burmese government in 1948,
remains in force and is applicable for the US extradition of drug
fugitives from Burma. The GOB continues to refuse to recognize the
applicability of this treaty. In May, the GOB, with UNDCP, signed a
six-nation (Burma, Cambodia, China, Laos, Thailand, Vietnam)
memorandum of understanding on a sub-regional action plan aimed at
controlling precursor chemicals and reducing illicit drug use in the
highlands of Southeast Asia. The GOB signed bilateral drug control
agreements with India in 1993, with Bangladesh in 1994, with Vietnam in
1995, and with the Russian FEderation, Laos, and the Philippines in


EMAILS: drunoo@xxxxxxxxxxxx, uneoo@xxxxxxxxxxxxxxxxxxxxxxx
POSTMAIL: Dr U Ne Oo, 18 Shannon Place, Adelaide SA 5000, AUSTRALIA

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