The strategy of the U.S. Government is to disrupt the market for illegal drugs—and to do so in a way that both reduces the profitability of the drug trade and increases the costs of drugs to consumers. In other words, we seek to inflict on this business what every legal business fears—escalating costs, diminishing profits, and unreliable suppliers.

But how do we disrupt a market whose profits seem limitless?

First, it is important to understand that the drug trade is not in fact limitlessly profitable. Like every other business, the supply of and demand for illegal drugs exist in equilibrium; there is a price beyond which customers, particularly young people, will not pay for drugs. It follows that, when supplies are disrupted, prices go up, or drug supplies become erratic. Prices rising too much can precipitate a crisis for the individual user, encouraging an attempt at drug treatment. Use, in turn, goes down.

But that begs the question of how to disrupt.

	Fiscal Year 2006 Budget Highlights Drug Enforcement Administration—Priority Targeting Initiative: +$22.6 million and 55 Special Agents. This initiative will strengthen DEA’s efforts to disrupt or dismantle drug trafficking and money laundering Priority Target Organizations, including those linked to trafficking organizations on the Attorney General’s Consolidated Priority Organization Target list. Organized Crime and Drug Enforcement Task Forces (OCDETF)— Fusion Center Initiative: +$14.5 million. This request provides base funding for the ongoing operations and maintenance of the OCDETF Fusion Center beyond fiscal year 2005. The Fusion Center has been developed to collect and analyze drug trafficking and related financial investigative information and to disseminate investigative leads to OCDETF participants.

Many drug trafficking organizations are complex, far-flung international businesses, often compared to multinational corporations. Yet others have more in common with the vast numbers of small networked businesses that exploit the communications revolution to get the best deal and price on goods and services almost anywhere on the globe. These organizations function as networks, with business functions accomplished by loosely aligned associations of independent producers, shippers, distributors, processors, marketers, financiers, and wholesalers. Such networked organizations pose special challenges to law enforcement and interdiction forces, because the very nature of a network is to be resistant to the disruption or dismantling of individual business entities. As this Strategy demonstrates, networked organizations are not immune from being attacked, disrupted, and dismantled.

One way to severely disrupt a networked organization is to damage or destroy most of the elements in one horizontal layer of the network— especially a layer requiring critical contacts or skills—faster than the organization can replace them.

For instance, typically, a Colombian trafficking organization may sell partially refined cocaine to a second organization, which routes it through final processing and then sells it to a broker. The broker may then sell to a second trafficking organization, which hires a transporter in conjunction with other traffickers to spread risk. The transporter typically moves the finished cocaine to Mexico in exchange for a portion of the profits. Once in Mexico, the cocaine is handled by entirely different sets of transporters and wholesalers. A Colombian transporter who can choose from among a dozen wholesalers cannot be disrupted simply by targeting a single wholesaler group. The transporter can, however, be significantly disrupted if, for example, eight of twelve wholesalers have been disrupted or taken out of operation.

	Fiscal Year 2006 Budget Highlights OCDETF—Transfer of FBI Drug Resources: +$50.0 million and 365 Special Agents. This request transfers $50 million from the FBI’s direct drug budget by providing these resources as part of OCDETF. This funding can be effectively focused on targeting major drug trafficking organizations and their financial infrastructure. The infusion of these resources will increase OCDETF’s ability to disrupt and dismantle major international, national, and regional networks, particularly to the extent that such organizations are engaged in financial crimes, public corruption, and other activities within the expertise of the FBI. Department of State—Andean Counterdrug Initiative (ACI): $734.5 million. The request will fund projects needed to continue the enforcement, border control, crop reduction, alternative livelihoods, institution building, administration of justice, and human rights programs in the region. The ACI budget provides support to Colombia, Peru, Bolivia, Ecuador, Brazil, Venezuela, and Panama. Also included in the fiscal year 2006 ACI request is $40 million for the Critical Flight Safety Program. This program will stop degradation and extend the life of Vietnam-era aircraft to maintain a viable fleet for counternarcotics missions.

This Strategy describes how the U.S. Government, in concert with international allies, is seeking to target networks by attacking entire business sectors, such as the transporter sector. The Strategy lays out several examples, including destroying the economic basis of the cocaine production business in South America by fumigating the coca crop, seizing enormous and unsustainable amounts of cocaine from transporters, and selectively targeting major organization heads for law enforcement action and, ultimately, extradition and prosecution in the United States. Rather than provide an encyclopedic discussion of all supply reduction programs, the Strategy articulates examples of the creative ways in which the U.S. Government is hurting the drug trade.

Attacking the Means of Production

After years of steady increases, cocaine production in the Andes is, for the third straight year, decreasing. An aggressive program of eradication, begun in earnest with the election in mid-2002 of Colombian President Alvaro Uribe, has cut Colombia’s potential cocaine production by one-third compared with the year before he took office (see Figure 11). And, although final production estimates for last year are not yet available, 2004 was the third consecutive record year for eradication, with 120,713 hectares sprayed by the eradication forces of the Colombian National Police (see Figure 13) against coca plantations, which had totaled 113,850 hectares at the end of 2003. In other words, Colombian forces sprayed enough herbicide to cover more than the entire coca crop as it stood at the beginning of 2004, leaving many growers in the unenviable position of replanting at a furious pace to maintain production, relocating to other areas, or getting out of the business altogether.

Figure 11: Colombia: Coca Under Cultivation

    Source: U.S. Government

Crucially, progress in Colombia has not been offset by increases in Peru or Bolivia. There was a net decrease in the total area cultivated in those countries in 2003, including a remarkable 15 percent drop in Peru. Only trace amounts of coca are cultivated in neighboring Venezuela, Ecuador, Panama, and Brazil.

Coca eradication remains a major and unavoidable problem for traffickers because of the crop’s inherent vulnerability. We can locate the coca fields and destroy them before the raw material is harvested and processed and becomes invisible in the illicit smuggling world. Large-scale eradication is an effective means of targeting trafficker networks because most growers are affected, reducing the production available to all traffickers. With Colombia producing one-third less cocaine than it was just two years earlier, there simply is less to go around.

Figure 12: Colombia: Potential Cocaine Production

    Source: U.S. Government

Eradication has dramatically reduced cocaine production capacity. It is also denying the narcoterrorists crucial revenues—reducing the amount of money flowing into the coffers of the Revolutionary Armed Forces of Colombia (FARC) at a time when the guerrilla movement is under sustained attack by the Colombian military.

The Government of Colombia continues its relentless attack on poppy cultivation and heroin production. Eradication programs supported by the U.S. Department of State sprayed or manually eradicated 4,152 hectares during 2004—an amount almost equal to the entire poppy crop at the end of 2003, the most recent year for which cultivation data is available. To put further pressure on heroin traffickers, President Uribe has advanced an initiative to seize farms involved in the cultivation of illicit crops, especially poppy.

Figure 13: Eradicating Coca in Colombia

    Source: U.S. Department of State

Bigger Seizures through Better Intelligence: Disrupting the Market by Targeting Transporters

Coca eradication in Colombia represents a strategic opportunity to target the drug crop at a vulnerable point—when it is growing in the field and exposed to attack. Another key trafficker vulnerability occurs with the shipment by go-fast boats and fishing vessels of hundreds of tons of cocaine annually, typically from Colombia to Mexico en route to the United States.

The extent of this vulnerability can be summed up in a single fact: Since 2000, we have consistently increased the amount of U.S.-bound cocaine seized each year in the transit zone— even as potential production has dropped by roughly 100 metric tons a year of export-quality cocaine.

In 2003, the United States and our allies seized or forced the jettisoning of 210 metric tons of cocaine headed through the transit zone before it could reach U.S. consumers. Adding in seizures in South America, Mexico, and elsewhere, the United States and our allies removed 401 metric tons of cocaine—about half of the world’s potential production—from distribution channels.

Figure 14: Cocaine Seizures Are up Worldwide

In 2004, those figures rose to 248 and 430 metric tons, respectively—against a backdrop of declining production in Latin America.

That this occurred despite periodic redeployments of interdiction forces to cover homeland security missions is strong testament to the crucial role of intelligence. Simply put, better intelligence has produced more seizures and a more efficient interdiction system.

Much of that intelligence has been the result of an unusually productive military-law enforcement collaboration (see box). But even the best intelligence is not worth having if the interdiction assets are not there to act on it. Supportive interdiction agency leadership from the Departments of Homeland Security and Defense have managed to maintain interdiction force structure commitments despite the demands of other homeland security missions and the war on terror.

Complementing the exceptional success of operations targeting transit zone cocaine movement, the Colombian Navy, Marines, and the Colombian National Police have developed their own joint capability to disrupt cocaine export at Colombian north and west coast staging areas, where cocaine is positioned before being loaded onto fishing vessels and go-fast boats. These and other Colombian operations seized about 74 metric tons of cocaine in 2004 and are poised to expand in 2005.

Figure 15: Seizures of U.S.-Bound Cocaine Are Up

The category “U.S.-Bound” includes seizures and other losses due to jettisons, sinkings, and plane crashes, in transit and arrival zones, as well as seizures inside the United States. Seizure data for 2004 include estimates for internal U.S. seizures. At the time of publication, Federal-wide Drug Seizure System data for internal U.S. seizures was not complete. Source: Consolidated Counterdrug Database.

Dismantling Transporter Networks: A Law Enforcement Case Study

As we have seen, attacks on networks can involve focused enforcement by interdiction forces, as with the remarkably successful efforts against trafficker movements departing Colombia. They can involve strategic efforts against a market segment, as is the case with coca eradication programs in the Andes. But they can also be a product of law enforcement operations, which have the capacity to eradicate major organizations root and branch.

One such operation, which came to fruition in 2004, coincided with a significant reduction in the flow of cocaine to the United States through the Caribbean—a reduction that continues to this day.

For years, about one-third of the cocaine heading toward the United States was moved through the Greater Antilles toward Florida. Approximately 10 percent of the total U.S. supply was handled by two organizations, one run by Colombian CPOT Elias Cobos-Muñoz and the second headed by Melvin Maycock and Pedro Smith.

	TWO ORGANIZATIONS—ONE REINVENTED INTERDICTION SYSTEM To a great degree, the effectiveness of the U.S. Government’s interdiction effort is the result of creative collaboration between different types of organizations: those in the military and interdiction fields and those in Federal law enforcement. Operation Panama Express, an Organized Crime Drug Enforcement Task Force (OCDETF) initiative managed jointly by DEA, FBI, and the Bureau of Immigration and Customs Enforcement, has greatly expanded interdiction-related intelligence collection and dissemination and ensured that follow-on investigations and prosecutions continue to develop intelligence leads and sources. Joint Interagency Task Force South is a primary consumer of the intelligence created by Panama Express. Known as JIATF-South, the task force provides one of the most sophisticated command, control, communications, and intelligence centers in the world, capable of fusing all-source intelligence and using it to drive ongoing interdiction operations. Interdiction-related intelligence for JIATF-South and Operation Panama Express is provided by the El Paso Intelligence Center, through its participation in a multiagency program that analyzes drug trafficking organizations traveling through the eastern Pacific Ocean and the Caribbean Sea.

A 29-month DEA-led investigation led to the arrest of all three CPOT targets, as well as more than 50 of their colleagues in Colombia, Panama, Jamaica, The Bahamas, the United States, and Canada.

More important, it disrupted organizations supplying an estimated 10 percent of the cocaine imported into the United States—roughly 30 metric tons per year. In seeming confirmation of this disruption, which was amplified by the deployment of international forces following the ouster of President Jean Bertrand Aristide in Haiti, intelligence estimates assess that there has been a significant reduction in the amount of cocaine flowing through the central and eastern Caribbean to the United States—from roughly one-third of total flow to perhaps 10 percent.

	SEVEN DAYS IN SEPTEMBER: INTERDICTION AGENCIES AND THE POWER OF TEAMWORK In the span of seven days this past September, two fishing vessels yielded the largest and the second-largest maritime cocaine seizures in history—some 26 metric tons, or more than a month’s supply for U.S. cocaine markets. For the crew of the Lina Maria, the first indication that something had gone wrong was the appearance overhead of a propeller-driven aircraft belonging to the Bureau of Immigration and Customs Enforcement (ICE). The Cambodian-flagged vessel was identified some 300 miles southwest of the Galapagos Islands and tracked until a Coast Guard boarding team embarked on a U.S. Navy frigate could complete preparations for the boarding. The Coast Guard team boarded the vessel and within minutes had taken control of the bridge and the engine room, locating some 13.9 metric tons of cocaine in short order. Intelligence collected during that seizure was then turned against another target. The San Jose was located by a maritime patrol aircraft of the Coast Guard, after an arduous search within an area roughly the size of the United States. Once again, a special Coast Guard detachment effected the boarding, this time seizing 12.1 metric tons of cocaine. Two additional seizures within the next month brought the total to 39 metric tons. The chain of events that ended with the takedown of the Lina Maria and the San Jose began where such events typically start—with actionable intelligence. In this case, agents of the DEA, FBI and Department of Homeland Security had spent years developing enough intelligence on the movement of vessels like the Lina Maria to permit an educated guess as to the vessel’s course and whereabouts. The takedowns were also made possible by Joint Interagency Task Force South, which coordinated a search by Navy ships as well as ICE, Navy, and Coast Guard maritime patrol aircraft.

Cases like those pursued under the Caribbean Initiative will cause an even greater impact on the flow of drugs entering the United States as law enforcement pays renewed attention to the enduring problem of financial support services. This is a key effort in that major traffickers, whether international or domestic, typically insulate themselves from their drug distribution networks, but almost all remain closely linked to the proceeds of their trade. Efforts in this area are already bearing fruit. DEA’s asset seizures are up from $383 million during fiscal year 2003 to $523 million in 2004, and the number of seizures valued more than $1 million rose by more than half.

In order to continue the illicit production of cocaine, sources of supply must move their proceeds out of the United States to a place where these funds can be used to finance future drug supplies. Strategically targeting these monies for seizure and denying revenue to international sources of drug supply will cause the significant disruption to the supply of illegal drugs entering the United States and is a major focus of the Department of Homeland Security, through the Bureau of Immigration and Customs Enforcement, and the Department of Justice, through the OCDETF program.

Such efforts include the bulk currency initiative, in which DEA, ICE, and the Internal Revenue Service are collaborating to ensure the coordination of all U.S. highway interdiction money seizures and related intelligence; the black market peso exchange initiative, targeting the largest known money laundering system in the Western Hemisphere, responsible for moving an estimated $4 billion worth of drug proceeds annually from the United States to Colombia; and the wire remitter initiative, which tracks drug proceeds that are sent from the United States to Latin America as well as other countries where drug production and drug-related money laundering are prevalent.

	FOCUSING ON NETWORKS: THE CPOT LIST Organizations are built around people—managers, leaders, and implementers. Whether in business or in the criminal underworld, in traditional linear organizations or in networked organizations, people are at the core of successful organizations. A first step toward dismantling a trafficker network is to identify these key leaders, then dismantle the organizations they manage. Over the past two years, the U.S. Government has identified 58 major trafficking organizations, 12 of which have links to terrorist organizations, and added them to the Consolidated Priority Organization Target (CPOT) list. In two years, we have dismantled 14 organizations while severely disrupting an additional eight. The heads of 17 CPOT organizations—nearly 30 percent of the total CPOT targets—have been arrested. Organizations dismantled during fiscal year 2004 were responsible for shipping an estimated 44 metric tons per year of cocaine—and 500 kilograms per year of heroin—to the United States. Indictment alone, while a significant step, does not put traffickers behind bars. To make faster progress on the crucial next step in the judicial process, DEA has established a new Fugitive Apprehension Program to pursue, locate, and apprehend CPOTs and their first- and second-tier associates. Consistent with efforts by President Vicente Fox to target the powerful drug trafficking organizations operating in Mexico, the Fugitive Apprehension Program has led to Operation United Eagles, a successful collaboration between the United States and Mexico to bring high-level fugitives to justice. As part of the operation, 67 specially trained Mexican federal agents arrested eight individuals, including five lieutenants of CPOT Arellano Felix. The Tijuana-based Arellano Felix Organization has been one of the most powerful and violent trafficking groups in Mexico, responsible for more than 100 drug-related murders in the United States and Mexico. The U.S. Department of State’s narcotics rewards program has been a key tool in efforts to apprehend major traffickers. The program can pay up to $5 million for information leading to the arrest and conviction of major traffickers operating outside the United States. It paid out more than $4 million in rewards in 2004 and more than $17 million since the program’s inception.

Securing the Future of a Free and Democratic Afghanistan

Progress toward a safe and democratic Afghanistan has been steady and significant. That progress, however, faces a threat that requires renewed attention by the Afghan Government and a helping hand from the international community. The threat is illegal drugs and a booming drug trade that transforms innocent and otherwise honest farmers into laborers trapped in the service of a criminal enterprise. The trade in illegal narcotics, if left unchecked, threatens to crowd out legitimate enterprise and undermine institutions. The challenge is to free Afghan farmers from their dependence on poppy cultivation so that they may become producers of crops that feed their people and grow their nation.

In 2004, Afghanistan produced some 207,000 hectares of opium poppy. Current cultivation levels equate to a potential production of 4,950 metric tons of opium. This represents a 239 percent increase in the poppy crop and a 73 percent increase in potential opium production over 2003 estimates (see Figures 16 and 17). Adverse growing conditions are the principal reason the percentage increase for potential production is not proportional to the increase in cultivation.

If all of Afghanistan’s opium were converted to heroin, the result would be 582 metric tons of heroin. By comparison, Colombia and Mexico combined produced roughly 22 metric tons of pure heroin in 2003, more than enough to satisfy U.S. consumption. The level of opium and heroin production in 2004 does pose an immense threat to Europe, Southeast Asia, Iran, Pakistan, and Russia—all major consumers of Afghan heroin.

According to United Nations estimates, illicit poppy cultivation and heroin production in Afghanistan and the region generate nearly $3 billion, equivalent to about 60 percent of Afghanistan’s gross domestic product. This level of illicit income fosters instability and supports criminals, terrorists, and militias. Further, the large incomes from the opium crop and heroin trafficking inhibit the normal development of the Afghan economy by sidetracking the labor pool and diminishing the attractiveness of legal farming and economic activities.

Narcotics production has been a major problem for Afghanistan for the better part of a decade. It is a problem that the Afghan people clearly recognize and one that will be solved only with their determined leadership and perseverance, along with the assistance of the international community. It is not a problem that defies solution: Colombia’s dramatic progress against a pervasive narcotics trade demonstrates the power of credible, coordinated, and comprehensive policies to reduce the destabilizing threat of drugs. Working with the United Kingdom, the United States is prepared to assist Afghanistan in this effort, at an estimated cost of over $800 million in fiscal year 2005.

Our assistance will rest on five pillars. First, we will assist the Afghan Government with a public affairs campaign designed to discourage poppy cultivation and dissuade participation in any aspect of the drug trade. Toward this end, the Afghan Government may choose to pursue an amnesty policy for narcotics involvement.

These efforts will be enhanced by the second pillar, increased law enforcement. We will help the Afghans build a special narcotics prosecution task force and aid construction of judicial and detention facilities expressly for counternarcotics cases.

Progress against the drug trade benefits from establishing the alternative livelihoods needed for poppy farmers to feed their families and prosper.

	IMPROVING INTELLIGENCE AND INTELLIGENCE SHARING Accurate, timely intelligence and intelligence sharing across organizational boundaries are thus at the heart of disrupting the market for illegal drugs. Here, much work is under way, and much remains to be done. The intelligence and law enforcement communities must learn more about the way drugs are produced and trafficked, identify vulnerabilities in drug trafficking organizations and their financial infrastructures, and support enforcement efforts to attack these vulnerabilities. Additionally, the Administration will continue its efforts to improve intelligence and information sharing by drug enforcement agencies. The Administration has established the Drug Intelligence Fusion Center under the Organized Crime and Drug Enforcement Task Forces (OCDETF) program. When fully operational, the Center will provide member agencies with a comprehensive data warehouse with access to investigative drug and related financial information and intelligence possessed by OCDETF member agencies, National Drug Intelligence Center, Financial Crimes Enforcement Network, and other sources. The Center can compile a complete intelligence picture of targeted drug trafficking organizations and their financial infrastructure. DEA’s Collection Requirements Management System will enable it to identify and address the intelligence needs and requirements of DEA enforcement operations, identify intelligence gaps, and coordinate with other agencies within the Departments of Justice and Homeland Security, and the Intelligence Community to complete the intelligence picture. An ONDCP-sponsored research project has resulted in the first advanced method for remote sensing of marijuana cultivation. This method, which will be applied to the principal marijuana growing areas of the United States, will enable more accurate assessments of the extent of cultivation and, hence, the quantity of marijuana produced domestically. The intelligence the system generates will enable more effective and more resource-efficient targeting of marijuana cultivation for purposes of eradication. The Significant Investigation Impact Measurement System, developed by DEA, will enable law enforcement to examine the concrete impact of a seizure or organizational takedown through the collection of law enforcement, public health, and social services statistics.

Our third pillar will create new opportunities for growing legitimate and high-value crops. These fresh livelihood opportunities will initially be made available in key provinces targeted for poppy eradication, including Helmand, Kandahar, Nangarhar, and Badakhshan. Micro-credit programs, improved irrigation, and access to improved seeds and better roads will make turning away from poppy cultivation a viable alternative.

Nothing the Afghan Government does to quell the drug trade can be effective without aggressive eradication programs—our fourth pillar. Farmers in the past have faced little risk from growing poppy and were able to reap three to four times more profits than from food crops. Destroying poppy fields outright will be a powerful tool to discourage any future planting of illicit crops. We have set a goal for 2005 of eradicating 15,000 hectares of poppy and are working with the Afghan Government to apply the best and most effective mix of eradication methods.

The fifth pillar is interdiction. Our goal is to help the Government increase the size and mobility of its counternarcotics police while accelerating the pace of their efforts. More police forces will be trained, high-impact targets arrested, drug-related intelligence sharing improved, and the pressure points of the drug trade identified and suppressed. We will help with the construction of border checkpoints that will assist in narcotics interdiction. Because interdiction occurs on both sides of the border, we will also work with Afghanistan’s neighbors to formulate a regional strategy, and help them build their capacity to protect their own borders.

Figure 16: Afghanistan’s Growing Opium Production

    Source: U.S. Government.

The stakes are high, not only for the future stability of Afghanistan but also for the United States, our allies, and partners. A vibrant drug trade fosters corruption, undermines the rule of law, can finance terror, and will destabilize the region. It threatens all that the courageous Afghan people have achieved. In a troubled region’s newest democracy, there is simply no place for the drug trade.

Targeting Synthetic Drugs

Globally, the production and use of the synthetic drugs amphetamine, methamphetamine, and MDMA (Ecstasy) remain serious problems. There are numerous foreign sources for synthetic drugs and their precursors, including countries in Asia, Europe, and North America. Use patterns are strongly regional, with methamphetamine consumed in the United States and Asia. Amphetamines and Ecstasy are the drugs of choice in Europe. U.S. law enforcement continues to act in cooperation with law enforcement officials worldwide to disrupt foreign sources of the pseudoephedrine and ephedrine that are used to produce much of the methamphetamine used in the United States and Mexico.

Figure 17: Expanding Poppy Cultivation in Afghanistan

    Note: Net cultivation in hectares. Source: U.S. Government.

Mexico is the largest foreign source of the methamphetamine distributed in the United States. Although flow estimates are elusive, production appears to be increasing in that the amount of methamphetamine seized within Mexico rose during 2003, as did seizures along the U.S.-Mexico border in 2003 and 2004. Moreover, Mexican criminal groups based in California and Mexico control most of the wholesale distribution of methamphetamine in the United States.

In Asia, the largest source of amphetamine and methamphetamine in the world, the United States will continue to support efforts by law enforcement officials in the region to disrupt Asian synthetic drug traffickers.

Although Asia provides only a minor amount of the methamphetamine used in the United States, it is the major source of the bulk precursor chemicals used by large, illicit methamphetamine production laboratories in Mexico and the United States.

Europe supplies most of the Ecstasy distributed in the United States, but since the success of major enforcement efforts in the United States, Canada, and Europe, Ecstasy use continues to decline in the United States.

U.S. law enforcement officials are confronting and disrupting the synthetic drug markets through both organizational attack activities targeting major synthetic drug trafficking organizations and chemical control initiatives focused on keeping critical precursors out of traffickers’ hands.

	Fiscal Year 2006 Budget Highlights DEA—Central/Southwest Asian Operations: +$22 million. This proposal provides permanent funding for Operation Containment in Afghanistan and will ensure full DEA support for the ongoing interagency efforts of poppy investigation and enforcement. DEA, in combination with the Departments of State and Defense, is implementing a comprehensive counternarcotics strategy aimed at reducing heroin production in Afghanistan and contributing to the stabilization and redevelopment of the country. Department of State—Afghanistan: +$166.2 million. The President’s budget includes an increase of $166.2 million in support of counternarcotics programs in Afghanistan. This enhancement will bring total counternarcotics funding to $188.0 million in fiscal year 2006. Funds will be used to expand the Central Poppy Eradication Force of 100-member Afghan teams to continue the annual poppy crop eradication campaign. These resources will also support a demand reduction program and a public affairs campaign aimed at reducing use and publicizing the eradication program. With the opium production of Afghanistan increasing, farmers must be presented with options to resist the lure of opium planting.

As an example, as recently as 2001, Canada was the primary transit country for the bulk pseudoephedrine used by large, illicit methamphetamine production laboratories in the United States. Operation Northern Star—an investigation involving DEA and the Royal Canadian Mounted Police—changed all that. Northern Star resulted in 78 arrests and the seizure of enough pseudoephedrine to produce more than 22,000 pounds of methamphetamine. Canada has also placed restrictions on the import and export of pseudoephedrine and other precursors by Canadian firms.

The overall result of these two efforts has been a 92 percent reduction in methamphetamine precursor seizure events inbound from Canada (from 531 in 2001 to 40 in 2004) and a 96 percent drop in such seizures by weight (from 46,046 pounds in 2001 to 1,624 pounds in 2004). Traffickers appear to have largely abandoned their once-plentiful Canadian precursor source. A similar change may be under way in the Canadian Ecstasy market, after Operation Candy Box yielded more than 130 arrests, the confiscation of $6 million in illicit proceeds, and the seizure of more than 500,000 Ecstasy tablets in March 2004.

In Mexico—where four of the ten identified Consolidated Priority Organization Targets are linked to the methamphetamine trade—continued bilateral organizational attack efforts have the potential to significantly disrupt the illicit synthetic drug market. U.S. law enforcement will seek to magnify the impact of these organizational attack efforts by assisting their Mexican counterparts with the identification and dismantlement of the expanded methamphetamine production infrastructure within that country. Chemical control efforts also must be augmented through increased bilateral import-export information sharing as well as new initiatives targeting the illicit flow of precursor chemicals from Asia to drug traffickers in Mexico.

Figure 18: Rising Methamphetamine Seizures on the Southwest Border

    Source: El Paso Intelligence Center

In Europe, The Netherlands and Belgium have been partners in law enforcement activities against the Ecstasy trade. U.S. law enforcement will continue its organizational attack efforts with Dutch and Belgian law enforcement agencies, while working to realize the full potential of multilateral chemical control initiatives such as Project Prism throughout Europe.

In Asia, the United States will continue to support efforts by law enforcement officials in China and Burma to disrupt Asian synthetic drug traffickers. Yet the greatest impact on synthetic drug availability in the United States may be attained through programs targeting the illicit flow of precursor chemicals emanating from that region. DEA already has developed an intelligence sharing network with Chinese authorities to improve chemical controls. U.S. law enforcement officials will seek similar arrangements with other Asian countries linked to the illicit precursor chemical trade to support the disruption of methamphetamine and Ecstasy markets worldwide.

Figure 19: Methamphetamine Super Labs Seized Nationwide

    Note: 2004 data are preliminary. Source: El Paso Intelligence Center

Within our borders, the production and use of methamphetamine remain serious problems. Although law enforcement analysis of seizures suggests that less than half of the methamphetamine consumed within the United States is actually produced in small laboratories operating inside our borders, the labs themselves constitute a significant hazard. A recent trend toward declining seizures of so-called “super labs” (laboratories capable of producing at least ten pounds of methamphetamine in a day) suggests that production of methamphetamine is moving out of the country, possibly in response to reduced availability of precursor chemicals like bulk pseudoephedrine (see Figure 19).

Federal law enforcement agencies and programs continue to focus on disrupting the domestic market for methamphetamine. The OCDETF program, for example, has seen a steady increase in investigations involving methamphetamine (see Figure 20).

An ongoing review among Federal agencies is exploring various steps to further control methamphetamine production. These steps include working with Congress to lower the Federal limit on retail sales of pseudoephedrine, thus making it more difficult for criminals to acquire enough of the precursor to produce meaningful amounts of methamphetamine. Additionally, the Administration has recommended the removal of a loophole in current law that allows larger purchases of pseudoephedrine in blister packs. Although the exemption was initially implemented on the expectation that methamphetamine manufacturers would not undergo the difficult process of removing small amounts of pseudoephedrine from a large number of blister packs, the emptied blister packs are commonly found at methamphetamine lab sites.

Figure 20: More Cases Involving Methamphetamine

Note: OCDETF cases involving methamphetamine or methamphetamine and other drugs, by fiscal year. Source: U.S. Department of Justice.