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2009 INCSR: Country Reports

Bureau of International Narcotics and Law Enforcement Affairs

2009 International Narcotics Control Strategy Report (INCSR)

February 27, 2009

Peru

I. Summary

Peru remains the world’s second largest producer of cocaine and is a major importer of precursor chemicals used for cocaine production. In 2008, the Garcia Government consolidated gains in the eradication of illicit coca cultivation in the UpperHuallagaValley by exceeding its coca eradication goal of 10,000 hectares for the second year in a row, and pressed forward on interdiction, including targeting precursor chemicals. The Government of Peru (GOP) promulgated additional decrees against corruption, money laundering, and other forms of organized crime. The GOP also implemented security measures against violent attacks against personnel engaged in eradication and interdiction efforts. Peruvian forces seized nearly 28 metric tons (MT) of cocaine in 2008 and destroyed record numbers of cocaine labs. The change in government in October 2008 did not alter Peru’s commitment to full cooperation on counternarcotics matters. Peru is a party to the 1988 UN Drug Convention.

II. Status of Country

Peru is a major cocaine producing country and is also a major importer of precursor chemicals used for cocaine production. In the Upper Huallaga Valley (UHV), coca growers, incited by their leaders, at times engaged in violent acts to resist eradication during 2008. Remnants of the terrorist group Shining Path (Sendero Luminoso—SL), reliant on drug trafficking for funding, were reportedly responsible for ambushing and killing police and military personnel in the UHV and the Apurimac and Ene River Valleys (VRAE); as well as threatening eradication workers and other government authorities and alternative development teams. In 2008, one eradication worker was wounded by a booby trap, and another was wounded as he strayed outside of an eradication site security perimeter. Since 2006, 26 Peruvian National Police (PNP) officers and one CORAH (Control and Reduction of Coca in the Upper Huallaga) employee have been killed in SL attacks.

CORAH implemented security measures to prevent and minimize the possible impact of violent attacks. Counter and anti-explosive measures reduced exposure and neutralized located improvised explosive devices. An internal accord with Peruvian Army elements stationed in the Huallaga valley provided additional security for eradicators. Coca growers’ efforts to gain support for sit-ins, road blocks, and forcible eviction of eradicators were ineffective.

According to CatholicUniversity’s Institute for International Studies (IDEI), approximately four million Peruvians are reported to use up to 9,000 metric tons of coca leaf each year for such “licit” purposes as chewing the leaves, or brewing leaves for tea; however, IDEI estimates that over 90 percent of this ‘licit’ coca cultivation is actually directly diverted to narcotics trafficking. It is estimated that about 60,000 Peruvian families (a relatively small percentage out of the greater than 29 million total population) is involved in growing, processing coca leaf, and trafficking cocaine hydrochloride (HCl), and cocaine base. In various public forums, coca growers’ leadership promoted the legal uses and benefits of coca leaf. Despite this, polls show greater public understanding of the close linkage between illegal coca cultivation and the negative impact of drug trafficking on Peru.

III. Country Actions against Drugs in 2008

Policy Initiatives. In July the Peruvian Congress passed laws against organized crime, drugs, and terrorism and also strengthened the provisions of the Precursor Chemical law of 2004. The Attorney General’s Office (Public Ministry) continued to strengthen its prosecutorial capacity for drug cases by increasing staff and enhancing training to improve investigative and procedural skills. In 2008, the Garcia Administration promulgated additional decrees against corruption, money laundering, and other forms of organized crime. The new Criminal Procedure Code (CPC), enacted in 2007, continued to be implemented across the nation with the final regions scheduled to come on line by 2010. As part of the Ministry of Justice’s Anti-Corruption Plan, the section of the CPC which applies to public corruption came into effect nation-wide in 2008. The Public Ministry created a new prosecutor’s position to handle all money laundering cases not related to drug-trafficking. Also, new legislation came into effect in 2008 requiring all members of the Financial Investigation Unit to sign a Standards of Conduct document. Finally, in July 2008, President Garcia signed a defense pact with President Lula of Brazil and President Uribe of Colombia to jointly patrol rivers and expand regional cooperation on borders. This will help limit the cross-border activities, including drug trafficking of illegal armed groups such as the FARC and the SL. The change in government in October 2008 did not alter Peru’s commitment to full cooperation on counternarcotics matters.

Accomplishments. The GOP disrupted the production and transshipment of cocaine through operations on land, sea, and air, seizing more than 16.2 metric tons (MT) of HCl and 11.7 MT of cocaine base as of December 15, 2008. Eradication helped tamp the number of hectares of illicit coca cultivation, although denser coca planting is evident and efficiency of extracting alkaloid among some traffickers has increased from 44 percent to 72 percent, according to the Drug Enforcement Administration (DEA) studies. The GOP also investigated and dismantled major drug trafficking organizations (Valdez in Pucallpa) and shut down drug-processing sites in coca-growing areas. The Peruvian National Police (PNP) Directorate of Antinarcotics Agency—DIRANDRO destroyed 1,225 cocaine-production laboratories, including 19 cocaine HCl and 1,206 base laboratories in the UHV and the VRAE; and 2,119 MT of dry and macerated coca leaf by in 2008.

Law Enforcement Efforts. Actions by Peruvian authorities in August and September led to the arrests of two important SL collaborators, one was considered a major SL financier and drug trafficker, the other was considered a prominent SL recruiter. In September, the Supreme Court upheld the conviction and 20-year sentence of drug “Kingpin” Fernando Zevallos. In October, authorities detained the mayor of the eastern city of Pucallpa on charges of laundering proceeds from drug trafficking, and began proceedings to seize assets valued at more than $200 million.

In 2008, Peru continued to strengthen police capacity east of the Andes. Nine-hundred-thirty-five new police officers, including 76 women, with a 3-year commitment to serve in counternarcotics units, were trained at U.S.-supported police academies. The curriculum in these academies was extended from 12 to 26 months in compliance with Peruvian regulations. Related to this, 842 students also attended PNP pre-Academies that train qualified local police recruits. By the end of 2008, approximately 2,000 anti-drug police were operating in the source zones.

The PNP also continued to operate basic training academies collocated with DIRANDRO police bases at Santa Lucia, Mazamari, and Ayacucho. An increase of DIRANDRO personnel in source zones has contributed to more effective and sustained eradication and interdiction operations. The PNP is also reinvigorating the anti-drug police Special Operations Group, including a special Jungle Operations Training Course established in Mazamari for junior officers.

Despite these efforts, traffickers continued to adapt to counter-drug strategies and tactics, experimenting with new delivery and production methods.

Maritime/Airport Interdiction Programs. Peruvian agencies involved in maritime and airport counter-drug enforcement were responsible for approximately 13 metric tons of cocaine seized nationwide. An additional 2 metric tons were seized in third countries based upon research and alerts conducted by the joint Peruvian Customs (SUNAT) and National Police Manifest Review Unit (MRU). SUNAT personnel examined an average of 9,500 containers per month nationwide, compared to 3-4 per month less than two years ago. Interdiction efforts at Peru’s international airport resulted in the detention of 190 internal carriers (mules).

SUNAT continued to emphasize training and utilization of non-intrusive inspection (NII) technology, at the Port of Callao and the international airport. Using XRAY Container Scanners, SUNAT inspected more than 116,000 export seagoing containers in 2008. Use of NII technology expanded to the southern frontier city of Tacna, with the deployment of a Body Scanner for screening suspect “mules” crossing into Chile. In 2008, SUNAT concentrated efforts to interdict illicit money transported through the international airport and domestic flights, resulting in the seizure of nearly one million dollars. In addition, SUNAT improved the security of cargo at the Port of Callao with a camera system used to provide Peruvian law enforcement full situational awareness at the port. SUNAT now uses container and cargo electronic manifests for the Port of Callao and the Port of Paita (Peru’s second leading port), and is in the final stages of completing electronic manifests for all air-cargo leaving the international airport.

SUNAT also augmented its drug detection canine force and, in collaboration with DIRANDRO, formed and trained a Dive Unit to conduct underwater counternarcotics operations and ship-hull inspections.

Corruption. The GOP does not encourage or facilitate the illicit production or distribution of narcotic or psychotropic drugs or other controlled substances, or the laundering of the proceeds from illegal drug transactions. The Comptroller General has submitted a bill to modify the Asset Forfeiture Law to include corruption of public officials as a predicate offense. The GOP closed the National Anti-Corruption office inaugurated in 2007, dispersing the responsibilities among several Ministries. In October 2008, Luis Valdez, the mayor of Pucallpa, of one of the largest eastern cities was arrested and charged with narcotrafficking and money laundering. He is currently in custody awaiting trial.

Agreements and Treaties. Peru is a party to the 1961 UN Single Convention as amended by the 1972 Protocol; the 1971 UN Convention on Psychotropic Substances; the 1988 UN Drug Convention; the Inter-American Convention on Mutual assistance in Criminal Matters; the Inter-American Convention Against Corruption; the UN Convention against Transnational Organized Crime and its three protocols; and the UN Convention against Corruption.

Extradition and Mutual Legal Assistance. The United States and Peru are parties to an extradition treaty that entered into force in 2003. Peruvian law requires individuals to serve sentences in Peru before being eligible for extradition. Among the pending U.S. extradition and provisional arrests, eight are related to narcotrafficking, and four have been approved; surrender is pending completion of judicial and penal processes in Peru. One subject of an extradition request remains at large, but three were extradited to the U.S. on December 10. The GOP has assured the USG that drug traffickers will be extradited upon completion of their Peruvian judicial and penal processes.

Cultivation and Production. The official U.S. Government estimate for 2007 indicated that 36,000 hectares of coca were under cultivation in Peru, a 14 percent decrease from 2006. This would potentially produce an annual harvest of approximately 43,500 MT of oven-dried coca leaf, enough to potentially produce 210 MT of pure cocaine, and 235 MT of export quality cocaine. Successful interdiction and eradication actions eliminated nearly one quarter of Peru’s potential production of cocaine in 2008.

During 2008 the GOP continued eradication operations in the Upper Huallaga Valley, clearing out remaining coca in San Martin Department and beginning a much awaited program in Huanuco Department. During the year Coca growers’ and their leadership pressured the Government of Peru (GOP) to halt or limit eradication, but their disarray made the protests more a distraction than an effective impediment to counternarcotics efforts. Day-to-day coordination among drug police, aviation components, and eradicators permitted eradication to continue at an optimum pace. As of December 15, based on the Embassy Lima Cocaine Production Averted Formula calculation, CORAH prevented the production of approximately 77 metric tons of cocaine.

Drug Flow/Transit. Cocaine HCl continues as the principal illicit drug product in Peru, with traffickers utilizing large-production laboratories and caletas (storage areas) to prepare and store this product. They transported cocaine base/HCl products from coca production zones, primarily in the Upper Huallaga and ApurimacValley regions, to Peru’s coastal and border areas for further processing and distribution.

Cocaine is exported from Peru to Bolivia, Colombia, Ecuador, Chile, Brazil, Europe, the Far East, Mexico, and the U.S. via maritime conveyances and commercial air flights. U.S. law enforcement agencies and their host nation counterparts from Australia, Hong Kong, Japan, Malaysia and Thailand report of Peruvian cocaine trafficking/transportation organizations operating in the Far East. In addition, cocaine HCl is shipped to Argentina, Bolivia, Brazil, Chile, and Ecuador via land routes, where it is subsequently exported to consumer markets in the United States and Europe.

Colombians and Mexicans were frequently found to be involved in Peru in drug transportation operations of multi-kilogram and multi-ton loads headed to Colombia, Mexico, and the Caribbean. Drug intelligence and investigations also detected clandestine airstrips along Peru’s neighboring borders and in coca cultivation areas.

Maritime smuggling of larger cocaine shipments is becoming the primary method for transporting multi-ton loads of cocaine base and HCl.

Opium Poppy. Though limited, the reported presence of opium poppy cultivation in Peru, continues to raise international concerns. Opiate trafficking in Peru, including opium poppy cultivation, the production of opium latex, and suspected morphine, may be predominately concentrated in the northern and central parts of the country. Opium latex and morphine moved overland north into Ecuador and/or Colombia, for conversion to heroin and subsequent export to the United States and Europe.

In 2008, the PNP eradicated approximately 16 hectares of opium poppy and seized 171 kilograms of opium latex. The PNP reported instances of opium latex, intercepted at JorgeChavezInternationalAirport, being couriered by “drug mules” and/or mailed to European destinations.

Demand Reduction. The USG funds local NGOs in the development of 11 community anti-drug coalitions (CAC) targeting poor, at risk, communities in Lima. The CAC model emphasizes the participation of all sectors of the community in long-term, sustainable activities to reduce drug use. The CACs have proven effective in addressing community specific drug demand issues especially among youth.

The GOP, through its drug policy entity DEVIDA, engages in various media campaigns to inform public opinion, NGOs do most of the work in terms of education, research, and information. Most local/public schools have drug awareness education in the large cities, but drug use prevention programs are lacking in the regional education system and at the University level. Drug use in the regions outside of the major cities has increased steadily without a comparable increase in government sponsored treatment and prevention programs. Statistics indicate that there is a growing incidence of use among university students who report their first exposure and use of drugs occurred when they entered university, not before.

Public opinion has changed its perceptions about coca cultivation and the complicity of coca growers in drug trafficking, particularly when studies show that 90 percent of the coca leaf grown in Peru is made into narcotics. In Peru’s major cities the public is most concerned about the impact of drug trafficking on and the effect of drug abuse among youth. Furthermore, there is a growing awareness of the damage that illicit drug cultivation and production causes to the environment. Recently, Environment Minister Antonio Brack stated that drug trafficking had destroyed nearly two million hectares of forest in Peru, that isolated protected areas are invaded for the purpose of coca cultivation, and that precursor chemicals used to process narcotics pollute water sources and alter hydro-biological resources.

Alternative Development (AD) Program. At the close of the sixth year of the alternative development program, more than 756 communities have renounced coca cultivation and continue to participate in the alternative development program. Over 49,000 family farmers have received technical assistance on 61,000 hectares of licit crops (cacao, coffee, African palm oil, etc.). With many of these long term crops now entering their most productive years, the alternative development program has expanded business development activities to link AD producers to local and world markets at optimum prices. In 2008, sales from AD assisted organizations reached nearly $13 million in San Martin, Huanuco, and Ucayali.

The increase in counternarcotics police allowed the PNP to sustain interdiction and eradicate in previously “no-go” areas that have witnessed violent resistance in the past. CORAH workers focused their efforts in San Martin, where USAID’s Alternative Development (AD) program has been in place since 2002. In 2005, USAID reoriented the AD program to work directly in areas with established CORAH eradication programs. The initiative was confronted with threats from armed groups pressuring communities in the Tocache, San Martin area to refuse to sign up for the program. Extended dialogue and the strong will of these communities eventually overcame the challenges. The direct link between AD and eradication is successfully reducing coca cultivation and is a model for further progress against illicit cultivation.

Coordination between CORAH and USAID programs continued, including the return of eradication activities by CORAH to AD communities where there were residual pockets of coca cultivation. Growers in the 78 communities that signed no-replanting agreements are feeling the economic impact of AD assistance, as their licit crops have now gone through a harvest cycle and are starting to demonstrate improved productivity. Tocache serves as an example to other communities that viable alternatives to coca exist, reducing resistance to eradication and increasing acceptance of alternative development.

V. U.S. Policy Initiatives and Programs

Policy Initiatives. U.S. assistance to Peru focuses on strengthening governance and creating space for legal activities in isolated areas where drug traffickers and terrorists operate, using aggressive eradication, interdiction, and chemical control to reduce drug production; coupled with alternative development efforts geared to reduce dependence on illicit coca cultivation. The USG also provides support for GOP efforts to improve its counter-terrorism efforts and publicize the links between drug production and common crime; so that Peruvians understand that their quality of life (and not just that of United States citizens) is degraded by drug-trafficking.