Air Smuggling of Cocaine Surging
Drug Enforcement Agency, 2007-03-07
Haiti, a major transit country for cocaine from South America, is experiencing a surge in air smuggling of cocaine out of Venezuela. The new Government of Haiti (GOH) headed by President Preval, like the Interim Government it replaced following elections in 2006, struggled to overcome pervasive corruption, weak governance and mismanagement. Haiti's law enforcement institutions are weak and its judicial system dysfunctional. Another challenge confronting the GOH is the need to curb continuing violence and disorder perpetrated by criminal elements - some of whom are involved in drug trafficking - that continues to undermine efforts to promote the economic, social and political development of the country. The GOH with assistance from international donors - principally the United Nations Stabilization Mission in Haiti (MINUSTAH) and the USG - took important steps during the year toward restoring the rule of law. President Preval reappointed a reform-minded Haitian National Police Director General to a three-year term in June 2006. The GOH also reached agreement with MINUSTAH on a plan to reform the Haitian National Police (HNP) that includes a vetting and certification process for new police recruits as well as existing officers. With the support of MINUSTAH troops, the GOH initiated a campaign to dismantle and disarm the criminal gangs in Port au Prince involved in kidnappings and other criminal activity. The HNP's anti-drug unit carried out limited operations during the year that resulted in some seizures of drugs and drug-related funds. Haiti is a party to the 1988 UN Drug Convention.
II. Status of Country
Haiti is a significant transit country for cocaine destined for the United States and to a lesser extent Canada and Europe. According to the U.S. Joint Interagency Task Force-South (JIATF-S), the number of drug smuggling flights from Venezuela to Hispaniola increased by 167 percent from 2005 to 2006. Approximately one third of these flights went to Haiti. In addition to 1,125 miles of unprotected shoreline, uncontrolled seaports, and numerous clandestine airstrips, Haiti's struggling police force, dysfunctional judiciary system, corruption, a weak democracy and a thriving contraband trade contribute to the prolific use of Haiti by drug traffickers as a strategic point of distribution.
III. Country Actions Against Drugs in 2006
During 2006, the HNP trained 1,044 new recruits and provided in-service training to 860 existing officers. In December, the HNP graduated a class of 565 new officers, most of whom were initially assigned to traffic control duties. Since 2004, a total of 2,300 new recruits have been trained and 1,100 existing officers have been given in service training. The HNP and MINUSTAH reached agreement on a reform plan with the goal of creating a police force of 12,000 trained and vetted officers within five years. Since August MINUSTAH troops, United Nations Police (UNPOL) and HNP officers have made progress in dismantling gangs that support drug trafficking organizations. The GOH reaffirmed its support of the DEA-led Sensitive Investigative Unit (SIU) with the signing of an agreement in September. With a location for the unit leased and renovated and the procurement of necessary investigative equipment underway, the SIU is expected to become fully operational in early 2007.
The GOH Central Financial Intelligence Unit (French acronym UCREF), and the Financial Crimes Task Force (FCTF) within it, continued to investigate money laundering and corruption cases during the year. However, none of the hundreds of investigations conducted by UCREF and the FCTF since 2004 have been prosecuted. UCREF confiscated $800,000 and froze $1.4 million as well as the equivalent of $5 million in local currency related to money laundering offenses. UCREF provided assistance to DEA in two investigations and to an IRS investigation during the year.
Law Enforcement Efforts. With assistance from DEA and the Narcotics Affairs Section (NAS), the counterdrug unit of the HNP (French acronym BLTS) conducted limited operations against drug trafficking. In August, the BLTS seized 372 kg (kg) of cocaine linked to a Haitian trafficker currently under indictment in the U.S. In November, the BLTS unit at the airport in Port au Prince arrested a former HNP officer and known associate of Colombian traffickers and seized $254,000 before he was able to board a flight to Panama. As a result of an investigation into drug trafficking across the border with the Dominican Republic, the BLTS set up a checkpoint on the main road and seized 238 kg of cocaine. DEA provided training to two BLTS agents in the use of the Centers for Drug Information database that is linked to DEA offices in the Caribbean via the Internet. The BLTS formed a drug detection canine unit with support from American Airlines that will inspect baggage and cargo at the airport. American Airlines provided two dogs and training for four BLTS agents and the Narcotics Affairs Section (NAS) contributed a vehicle to the new unit.
The Haitian Coast Guard (HCG) conducted limited drug and migrant interdiction operations from its bases in Port au Prince and Cap Haitien during the year. The HCG deployed one 40 ft vessel and two 35 ft. "Eduardono" fast boats to Cap Haitien for patrol and port security operations. In May, the HCG successfully interdicted a boat with more than one hundred Haitian migrants aboard that had departed the north coast for The Bahamas.
Corruption. There is rampant corruption in almost all public institutions in Haiti, including the HNP. Since 2004, all new police recruits are vetted and the HNP reached agreement in August 2006 with MINUSTAH on procedures to vet all currently serving police officers. The HNP Director General dismissed 500 officers during the year for misconduct. However, in June, a magistrate ordered the release of funds frozen by UCREF as the result of its investigations into money laundering and corruption and briefly jailed the director of UCREF when he refused to do so. Over $1.4 million were eventually released by the magistrate to the suspected money launderers.
Agreements and Treaties. Haiti is a party to the 1988 UN Drug Convention. A U.S.-Haiti maritime counternarcotics agreement entered into force in 2002. Haiti has signed and ratified the Inter-American Convention Against Corruption. Haiti has signed but not ratified the Caribbean Regional Maritime Agreement, the UN Convention Against Transnational Organized Crime and the UN Convention Against Corruption. Haiti has not signed or ratified the OAS Mutual Legal Assistance Treaty. There is no bilateral mutual legal assistance treaty between the U.S. and Haiti. Requests for assistance historically have been made through letters rogatory but there have been no formal requests for assistance in years.
Extradition. Haiti and the U.S. are parties to an extradition treaty that entered in force in 1905. Although the Haitian Constitution prohibits the extradition of nationals, in the past Haitians under indictment in the U.S. have been returned to the U.S. by non-extradition means. During 2006, no Haitian fugitives were returned to the U.S. nor were there any extraditions.
Cultivation/Production. There is no known cultivation or production of illicit drugs in Haiti with the exception of low quality cannabis, which is grown on a small scale and sold locally.
Drug flow/transit. For the greater part of 2006, traffickers used small aircraft to make offshore air drops of illegal drugs, however, near the end of 2006, traffickers shifted to land deliveries using clandestine airstrips. According to JIATF-South, in 2006 there were 46 suspect drug flights from Venezuela, where a permissive environment is allowing smuggling aircraft to operate with impunity. Fast boats transporting cocaine from South America to the United States through a variety of strategic Haitian locations frequented the southern coast of Haiti. Drug shipments arriving at the various seaports are transported overland to Port-au-Prince where they are frequently concealed on cargo and coastal freighters destined for the United States and Europe. Marijuana is shipped via fast boats from Jamaica to waiting Haitian fishing vessels and cargo freighters to seaports along Haiti's southern claw. It is then shipped directly to the continental United States or transshipped through the Dominican Republic or Puerto Rico . Cocaine, crack and marijuana are readily available and consumed in Haiti.
Demand Reduction. Drug abuse is not yet a major problem in Haiti. In 2006, the GOH continued a public awareness campaign designed to discourage drug use launched in 2005 with USG assistance.
IV. U.S. Policy Initiatives and Programs
Reform of the HNP continues to be the cornerstone of USG efforts to combat drug trafficking in Haiti. In cooperation with MINUSTAH, the USG provided equipment and technical assistance in 2006, aimed at transforming the HNP into an effective law enforcement institution. The NAS Police Advisory Group identified specific requirements and coordinated the procurement of vehicles, radios and other technical equipment for the HNP. The police advisers also oversaw the construction of four model police stations in Leogane, Petit Goave, Carrefour and Thiotte and the installation of 58 solar-powered radio base stations for the HNP throughout the country. The USG contributed 50 officers to MINUSTAH's UNPOL contingent, many of whom are involved in training recruits at the HNP academy. The USG also is contributing three corrections experts to form the nucleus of a sixteen-member UN team that will work on improving the infrastructure and management of Haiti's prison system. In addition, the USG has provided an adviser to help the HNP Director General implement anti-corruption measures. Advisers from U.S. Treasury's Office of Technical Assistance provided training and mentoring in financial investigations to UCREF and the Financial Crimes Task Force. The U.S. Coast Guard supported HCG operations with leadership and technical courses, visits by Mobile Training Teams that advised on boat maintenance and handling, law enforcement techniques and port security operations, and by refitting one 40 ft. patrol vessel.
Road Ahead. Continued USG support for the reform and expansion of the HNP as well as reform of the judicial system is prerequisites for effective counternarcotics operations throughout the country. More importantly, the restoration of the rule of law will provide the security and stability Haiti needs to fully meet the economic, social and political development needs of the Haitian people.
Volume II: Money Laundering and Financial Crimes
Haiti is not a major financial center. Given Haiti's dire economic condition and unstable political situation, it is doubtful that it will become a major player in the region's formal financial sector in the near future. Haiti is a major drug-transit country, and money laundering activity is linked to the drug trade. Money laundering and other financial crimes occur in the banking system and in casinos, foreign currency transactions and real estate transactions. While the informal economy in Haiti is significant and partly funded by illicit narcotics proceeds, smuggling is historically prevalent and predates narcotics trafficking. Flights to Panama City, Panama, remain the main identifiable mode of transportation for money couriers. Usually travelers, predominantly Haitian citizens, hide large sums, ranging from $30,000 to $100,000 on their persons. Haitian narcotics officers interdicting these outbound funds often collect a six to 12 percent fee and allow the couriers to continue without arrest. During interviews, couriers usually declare that they intend to use the large amounts of U.S. currency to purchase clothing and other items to be sold upon their return to Haiti, a common practice in the informal economic sector. Further complicating the picture is the cash that is routinely transported to Haiti from Haitians and their relatives in the United States in the form of remittances, representing an estimated 30 percent of Haiti's gross domestic product.
In March 2004, an interim government was established in Haiti following former President Jean Bertrand Aristide's resignation and departure. The Interim Government of Haiti (IGOH) took initiatives to establish improvements in economic and monetary policies, as well as working to improve governance and transparency. In response to the corruption that continues to plague Haiti, the IGOH created an Anti-Corruption Unit and a commission to examine transactions conducted by the government from 2001 through February 2004. The commission published its report in July 2005. In early 2006 Presidential elections took place. Neither the IGOH nor the new government have prosecuted any cases based on the information provided in the report.
Despite political instability, Haiti has taken steps to address its money laundering and financial crimes problems. Since 2001, Haiti has used the Law on Money Laundering from Illicit Drug Trafficking and other Crimes and Punishable Offenses (AML Law) as its primary anti-money laundering legislation. All financial institutions and natural persons are subject to the money laundering controls of the AML Law. The AML Law criminalizes money laundering and applies to a wide range of financial institutions, including banks, money remitters, exchange houses, casinos, and real estate agents. Insurance companies are not covered; however, they are only nominally represented in Haiti. The AML Law requires financial institutions to establish money laundering prevention programs and to verify the identity of customers who open accounts or conduct transactions that exceed 200,000 gourdes (approximately $5,420). It also requires exchange brokers and money remitters to obtain declarations identifying the source of funds exceeding 200,000 gourdes or its equivalent in foreign currency. The nonfinancial sector, however, remains largely unregulated.
In 2002, Haiti formed a National Committee to Fight Money Laundering, the Comité National de Lutte Contre le Blanchiment des Avoirs (CNLBA). The CNLBA is in charge of promoting, coordinating, and recommending policies to prevent, detect, and suppress the laundering of assets obtained from the illicit trafficking of drugs and other serious offenses. Created in 2003, the Unite Centrale de Renseignements Financiers (UCREF) is the financial intelligence unit (FIU) of Haiti. The UCREF is responsible for receiving and analyzing reports submitted in accordance with the law. The UCREF has approximately 42 employees, including 25 investigators. Institutions are required to report to the UCREF any transaction involving funds that appear to be derived from a crime, as well as those exceeding 200,000 gourdes. Failure to report such transactions is punishable by more than three years' imprisonment and a fine of 20 million gourdes (approximately $542,000). Banks are required to maintain records for at least five years and are required to present this information to judicial authorities and UCREF officials upon request. Bank secrecy or professional secrecy cannot be invoked as grounds for refusing information requests from these authorities.
The AML Law has provisions for the forfeiture and seizure of assets; however the government cannot declare the asset or business forfeited until there is a conviction. The inability to seize or freeze assets early in the judicial process reduces the government's authority and resources to pursue cases. The IGOH was supportive of a stronger, more proactive asset seizure law, yet its temporary governmental mandate did not allow for the passage of new laws. The IGOH set-up a Financial Crimes Task Force under the auspices of the Central Bank and the Ministries of Justice and Finance, charged with identifying and investigating major financial crimes and coordinating with the UCREF in recommending prosecutions. The recently elected Government of Haiti has not recognized the Task Force and the Task Force has become dormant.
In 2006, UCREF confiscated $801,000 and froze 157 million gourdes (approximately $4.3 million), in addition to $1.4 million related to money laundering offenses. It is unknown how many current investigations are active at this time. The director of UCREF was jailed for a short period of time by a magistrate on unknown charges. At the time of his incarceration over $1.4 million was unfrozen and released to the persons who claimed ownership.
In 2006 the UCREF assisted the U.S. in at least three major investigations. The UCREF also assisted the IGOH in filing the first-ever civil lawsuit in a U.S. court for reparation of Haitian government funds diverted through U.S. banks and businesses. However, the law suit was dropped shortly after the new government took office. Though the recent achievements of the UCREF are a marked improvement, it is still not fully functional or funded, and many of the UCREF's employees still lack experience and the ability to independently investigate cases, which translates into slow progress in moving cases into the judicial system.
Haiti still has not passed legislation specifically criminalizing the financing of terrorists and terrorism, nor has it signed the UN International Convention for the Suppression of the Financing of Terrorism. Reportedly, Haiti does circulate the UN 1267 list. The AML Law provides for investigation and prosecution in all cases of illegally derived money. Under this law, terrorist finance assets may be frozen and seized. Currently, there is no indication of the financing of terrorism in Haiti.
Haiti is a party to the 1988 UN Drug Convention, and has signed, but not yet ratified, the UN Convention against Transnational Organized Crime, the UN Convention against Corruption and the Inter-American Convention against Terrorism. Haiti is a member of the OAS/CICAD Experts Group to Control Money Laundering and the Caribbean Financial Action Task Force. The UCREF is not a member of the Egmont Group of financial intelligence units; however, it has three memoranda of understanding with the FIUs of the Dominican Republic, Panama and Honduras.
While improvements were made to Haiti's anti-money laundering regime under the IGOH, the new administration should implement and enforce the AML Law. The Government of Haiti should confront the rampant corruption present in almost all public institutions. The GOH should recognize the Financial Crimes Task Force and should strengthen the organizational structures and personal skills of employees both in the UCREF and the Financial Crimes Task Force. Steps should be taken so that the UCREF fully meets international standards and is eligible for membership in the Egmont Group. The GOH should enact legislation to criminalize the financing of terrorism and become a party to the UN International Convention for the Suppression of the Financing of Terrorism.
With thanks to Stanley Lucas of Haiti Solutions for bringing this report to our attention.
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