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CANADAI. Summary Canada, like the United States, is primarily a drug-consuming country and also produces large amounts of marijuana. Much of the Canadian-produced marijuana is shipped to the U.S. International drug traffickers frequently attempt to route drug shipments, primarily heroin, through Canada to the U.S., taking advantage of the long and open Canada-U.S. border, the massive flow of legitimate commerce, and the lower risk of long prison terms or forfeiture of assets if caught in Canada compared with the U.S. Money laundering and chemical diversion are also problems. Legislation is being drafted to strengthen Canada's ability to control money laundering. With approximately 1,000,000 drug users in Canada, including some 250,000 cocaine addicts and 40,000 heroin addicts, The Government of Canada's (GOC) drug control strategy emphasizes drug abuse prevention and treatment. The law enforcement component emphasizes action against organized crime. Canadian law enforcement officials cooperate closely with their U.S. counterparts on narcotics investigations and interdiction efforts. Canada is a party to the 1988 UN Drug Convention and participates actively in international drug control efforts. II. Status of Country Narcotics production, distribution, and use are illegal in Canada. Drugs are smuggled into Canada for domestic use and for transshipment to the U.S. While the level of illicit drug transshipment through Canada to the U.S. is not known, Canadian and U.S. law enforcement agencies are taking the problem very seriously, particularly with respect to Asian-sourced heroin. Southeast Asian heroin continues to enter North America predominantly by sea containers, but also by air and overland. Major ports of entry include Vancouver, Montreal, and Halifax. Given the long and open U.S.-Canada border, Canada will continue to be targeted by smugglers for potential transit points to and from the U.S. market. U.S. and Canadian law enforcement coordinate closely at all levels to curb trafficking, but recognize that constant vigilance is required. Money laundering and chemical diversion are also problems in Canada. Canada has a relatively low crime rate compared with most countries in the Western Hemisphere, but organized crime and drug trafficking are becoming more serious problems. Toronto, Canada's largest city, has experienced growing problems with organized criminals from Asia and Russia. Asian ethnic groups, particularly gangs from China, dominate the heroin trade, alien smuggling, and credit card fraud, much of which is aimed at the United States. Vancouver, which also has significant Asian gang activity, now suffers from epidemic drug abuse with nearly one death per day from heroin overdoses. There have also been reports that outlaw motorcycle gang activities are on the rise nationwide, including methamphetamine trafficking. Arrests in Europe have also indicated that Romanian and other criminal groups have smuggled Turkish-origin heroin to Vancouver as well. Canadian-based cocaine traffickers once relied primarily on U.S.-based suppliers, but are increasingly going directly to Colombia, according to the RCMP. Shipments arrive via mothership, marine containers, and occasionally by clandestine flights. Colombian organizations dominate the cocaine trade in eastern and central Canada. Italian organized crime is also involved in drug trafficking. The RCMP estimates that between 50-100 tons of foreign marijuana, 100 tons of hashish (plus 6 tons of liquid hashish), 15 tons of cocaine and at least one ton of heroin are imported into Canada each year, producing up to CAN$4 billion in wholesale profits and CAN$18 billion in street-level profits. Canada's drug strategy, the third in a series of five-year plans, was issued in 1998. While the strategy is comprehensive, addressing all of the foregoing problems, it focuses most of its counternarcotics efforts, and resources (approximately 70%), on domestic demand reduction. Building on stronger anti-drug legislation passed in 1997, the Canadian drug strategy calls for a new targeting imperative on organized crime by the Solicitor General's Office. III. Country Actions Against Drugs in 1999 Policy Initiatives. Canada's large and diverse financial sector, and lack of mandatory reporting requirements for suspicious transactions, has become an attractive venue for international money launderers. Recognizing this increasing threat, and responding to recommendations made to Canada by the Financial Action Task Force (FATF), the GOC promulgated control legislation in 1999. It has also taken steps to increase the capabilities of Canadian law enforcement authorities to detect suspicious transactions and to conduct money laundering investigations. Canada also added ten new integrated proceeds-of-crime law enforcement units, based on pilot projects in three cities. Accomplishments. In 1999 (as of September), Canadian authorities made 12,541 drug-related arrests (compared with 7,531 in 1998). As of September 1999, GOC authorities had seized 500 kilograms of cocaine (down from 1.22 metric tons during the same period in 1998), 51 kilograms of heroin (down from 121 kilograms for this period in 1998), 4.289 metric tons of marijuana (down from 5.955 metric tons for this period in 1998), and 3.35 metric tons of hashish (down from 819 kilograms as of September 1998). Canadian law enforcement operations, often in cooperation with U.S. agencies, resulted in the interdiction of numerous large-scale narcotics shipments and disruption of trafficking organizations. After a two-year investigation, Royal Canadian Mounted Police (RCMP) arrested Alfonso Caruana, reputed leader of the Caruana/Contreara organized crime family. This organization was responsible for the acquisition of cocaine in Mexico, which was ultimately shipped to the U.S., Canada and Italy. As part of this investigation, 200 kilograms of cocaine were seized in Houston, Texas. The RCMP cooperated with the Hong Kong Narcotics Bureau in January to arrest members of a heroin ring operating between China and Canada. There were simultaneous arrests in Hong Kong, Vancouver and Toronto, along with seizures of large amounts of heroin and drug proceeds. Canadian customs inspectors arrested two Hong Kong traffickers who arrived in Toronto from Vancouver in possession of 43 kilograms of heroin; they were en route to London. In June, after a three-year investigation, the RCMP launched a full-scale operation against a major international heroin ring that had been smuggling large amounts of Burmese-origin heroin into Vancouver for distribution in Canada and the U.S. Over 30 suspects were arrested and 56 kilograms (120 pounds) of heroin seized. According to the RCMP, the group moved enough heroin that it could occasionally stockpile supplies in Canada and drive up prices in North American markets. Parallel raids and arrests were conducted by the FBI in New York and Puerto Rico, and by Thai and Hong Kong authorities. This exceptional investigative work and international coordination dismantled the organization. Law Enforcement Efforts. During 1999, Canadian authorities continued to implement the five-year anti-drug strategy issued in 1998. The strategy recognizes the growing threat from transnational organized crime, particularly narcotics traffickers, and directs a concerted effort against it. In addition to creating proceeds of crime units, the offensive focuses law enforcement resources on criminal organizations and money laundering operations. These efforts will be enhanced once expected suspicious transaction reporting requirements legislation is passed next year and a new financial investigation unit is created. After five years of consecutive budget cuts to law enforcement, the improving national budget situation permitted an increase in funding in 1999. While the RCMP has mounted effective operations against narcotics and other criminal organizations, the impact of these efforts have been undermined in numerous cases by court decisions. Canadian courts have been reluctant to impose tough prison sentences, often opting for fines, reflecting a widespread view that drugs are a "victimless" crime or simply a health issue, not a criminal or public safety concern. For example, one court dismissed charges against an individual arrested for snorting crack in a public restroom, calling it an invasion of his privacy. The Supreme Court has questioned the legality of police involvement in "sting"-type operations, undercover "buys" and other techniques now commonly used around the world in drug investigations, largely on privacy grounds, as a potential violation of the 1982 Canadian Charter of Rights and Freedoms. Canadian press reports indicate that only about 20% of those convicted of growing marijuana in Vancouver receive jail terms, and that British Colombia has the highest rate of acquittal rates in the nation. In January, a judge ruled that a convicted criminal, who had already been deported by the GOC, must be returned to Canada at GOC expense to pursue his request for refugee status, despite having aided two Colombian drug traffickers to escape from jail. Corruption. Canada holds its officials and law enforcement personnel to very high standards of conduct and has strong anti-corruption controls in place. Government personnel found to be engaged in malfeasance of any kind are removed and subject to prosecution. Agreements and Treaties. Canada is a party to the 1988 UN Drug Convention. The U.S. and Canada have long-standing agreements on law enforcement cooperation, including extradition and mutual legal assistance treaties and an asset sharing agreement. In 1998, the RCMP became the first foreign law enforcement organization to be afforded access to the El Paso Intelligence Center (EPIC), the USG's tactical drug intelligence center. The USG has concluded a Customs Mutual Assistance Agreement (CMAA) with the Government of Canada. Canada is also a party to the World Customs Organization's International Convention on Mutual Administrative Assistance for the Prevention, Investigation, and Repression of Customs Offenses (Nairobi Convention), Annex X on Assistance in Narcotics Cases. Canada actively participates in international anti-drug fora including: the United Nations International Drug Control Program (UNDCP), the Inter-American Drug Abuse Control Commission of the Organization of American States (CICAD), the Dublin Group, the Financial Action Task Force, and other groups. Canada is an active participant in the UN negotiations on a global crime convention. During 1998-9, Deputy Solicitor General Jean Fournier chaired the inter-governmental working group that negotiated the Multilateral Evaluation Mechanism (MEM), a hemispheric peer review system to evaluate each OAS Member State's anti-drug strategies and efforts. The MEM, which was mandated by the 1998 Summit of the Americas, was completed in Ottawa, Canada in August after 18 months of negotiations. It was approved by the OAS in October. The first MEM evaluations will be completed during 2000. Minister of Foreign Affairs Axworthy organized a Foreign Ministers' Dialogue Group at the June OAS General Assembly to explore the drug issue from the perspective of "Human Security," including the impact of law enforcement or drug control activities on individuals and communities. Canada provided CAN$650,000 to UNDCP for 1998. It also contributed CAN$246,900 cash and CAN$132,000 in kind directly to CICAD. Cultivation and Production. Cannabis is grown throughout the country and is particularly abundant in the Provinces of Quebec and British Columbia. While the GOC does not produce a formal production estimate, Canadian law enforcement authorities estimate it at around 800 metric tons per year, with up to 60 percent of that smuggled into the United States. According to Canadian intelligence, marijuana cultivation in British Columbia is a sophisticated, one billion dollar-a-year growth industry. RCMP investigations suggest that high-THC content, hydroponically-grown marijuana is exchanged pound-for-pound with cocaine from the U.S. U.S.-produced marijuana is also imported into Canada, although the level of this activity is not known. Domestic Programs. The GOC emphasizes demand reduction in its drug control strategy and, along with non-governmental organizations, offers extensive drug abuse prevention programs. The focus on prevention is considered a more cost-effective intervention. There are substantial regional differences in the patterns of drug abuse. For example, Vancouver suffered a wave of heroin overdose deaths while native American communities in the prairie provinces were plagued with propane and glue-sniffing and an injected combination of two legal drugs (over-the-counter Talwin and prescription Ritalin) known as "poor-man's heroin." IV. U.S. Policy Initiatives and Programs U.S. law enforcement agencies maintain broad, deep, and highly productive cooperation with their Canadian counterparts. In this context, the USG continues to press the following goals: Work to strengthen legislation and regulatory practice in an effort to bring them more in line with international standards and practices; Maintain and expand two-way intelligence sharing; Maintain and expand professional exchanges and cooperative training activities between our law enforcement agencies; and, Maintain joint cross-border investigations and operations. Bilateral Cooperation. In addition to the extensive cooperation described elsewhere in this report, the U.S. and Canada established the Cross-Border Crime Forum in 1997 to regularize and institutionalize, at a high level, coordination on policy matters, projects and operations and to resolve any problems or impediments that arise in the relationship. The Forum met in June in Canada. It is actively working on establishing a mechanism to enhance intelligence sharing and develop priorities for joint targeting of criminal groups involved in drug trafficking. Other U.S.-Canada cooperative mechanisms include often-used extradition and mutual legal assistance (MLAT) treaties, and an information sharing agreement between the U.S. Drug Enforcement Administration (DEA) and the RCMP. The Road Ahead. The United States looks forward to continuing its already excellent law enforcement cooperation with Canada at both the bilateral and international level. The GOC has taken important steps to enhance the capabilities of Canadian law enforcement to confront the growing threat of international organized crime, drug trafficking and money laundering in Canada: the organized crime focus of its new anti-drug strategy, strengthened laws and regulations, improved organization of police and security entities, and increased funding for law enforcement. However, greater support from other sectors, notably the judicial and financial sectors, would increase the impact of the GOC's law enforcement efforts significantly and create a stronger deterrent to crime. COSTA RICAI. Summary Costa Rica is a transshipment country for the smuggling of cocaine from South America to the United States. The first six-part, comprehensive bilateral Maritime Counterdrug Cooperation Agreement in the region entered into force in November 1999. The legal reforms enacted in May 1998 continue to augment law enforcement's ability to address narcotics trafficking activity as well as strengthen controls within the banking sector against narcotics-related money laundering. Costa Rica is a party to the 1988 United Nations Drug Convention. II. Status of Country Costa Rica's location on the Central American isthmus makes it a transshipment country and a temporary storage area for cocaine being smuggled to the United States and Europe, although we do not have evidence of sufficient quantities to have a significant effect on the United States. This year has seen a marked decrease in cocaine seizures as compared to the previous two years (approximately 1.9 tons thus far in 1999 versus roughly seven tons in 1997 and eight tons in 1998). Faced with enhanced land interdiction capabilities by Costa Rican officials, drug trafficking organizations adapted, in part, by bypassing traditional overland routes. Some traffickers may be transporting drug shipments to points north via go-fast boats and aircraft. Costa Ricans are increasingly concerned over local consumption of illicit narcotics, particularly crack cocaine, and violent crimes associated with drug use and trafficking. The Government of Costa Rica's (GOCR) adoption of anti-drug measures, such as wiretap laws and the maritime accord, are an attempt to meet the serious threats posed by narcotics trafficking. However, resource limitations continue to constrain enforcement. III. Country Actions Against Drugs in 1999 Policy Initiatives. The U.S.-Costa Rica six-part bilateral Maritime Counterdrug Cooperation Agreement, signed on December 1, 1998, entered into force on November 19, 1999. The Administration of President Rodriguez also continued efforts to implement reforms that established within the banking sector, deposit reporting requirements and laws against laundering the proceeds of narcotics activities. The professionalization of executive branch police forces continued under the National Police Code enacted in 1994. All new enlisted recruits must undergo training at the Public Security Ministry's National Police School. Additionally, the GOCR enacted legislation in November to transform the Maritime Surveillance Service into a professional Coast Guard organization. The Criminal Procedure Code, enacted in January 1998, which strengthens prosecutorial responsibilities in investigations, saw its second year of implementation. The Judicial Investigative Police and the Public Prosecutor's Office are attempting to work more closely, as mandated in the new Code. Accomplishments. Relations between USG law enforcement agencies and GOCR counternarcotics officials remain close and productive resulting in routine sharing of information and joint operations. The Judicial Investigative Police initiated an investigation of a group of Cuban-American traffickers using information provided from U.S. law enforcement agencies. The operation netted over one million U.S. dollars in currency in Costa Rica and led to additional seizures of cash and properties in the United States, bringing the total seizure value to more than two million dollars. The suspects in this case were arrested by GOCR authorities and are currently in custody awaiting trial. Costa Rica hosted three successful joint operations under the auspices of USG regional engagement, known as "Central Skies." Personnel from the Public Security Ministry destroyed over 1.6 million marijuana plants in the mountainous regions of southern Costa Rica during the Central Skies deployment in June 1999. The Drug Department of the Public Healt


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