15010: Nadal: Jean Bertrand Aristide, the King of Cocaine in the Caribbean (fwd)

[Bob Corbett <corbetre@webster.edu>]

>From Olivier Nadal: o_nadal@bellsouth.net



International Narcotics Control Strategy Report   -2002
Released by the Bureau for International Narcotics and Law Enforcement
Affairs
March 2003

The Caribbean

Haiti

I. Summary
Haiti's geographical position, weak institutions, and failed economy have
made it a key conduit for drug traffickers transporting cocaine from South
America to the United States and, to a lesser degree, Canada and Europe. The
Haitian National Police (HNP) is a weakened institution, unable to field
more than 3500 officers, lacking in discipline, and increasingly corrupt.
The judicial system is equally weak, its prosecutors and judges susceptible
to bribes and threats.

In May 2002, the Government of Haiti (GOH) signed a counter-narcotics Letter
of Agreement with the United States, but moved slowly to implement it. There
has been progress, however, in building a Cap Haitien facility to be manned
by the Haitian Coast Guard (HCG). In September, the DEA polygraphed members
of the counter-narcotics unit (BLTS) and identified a vetted group. Those
who failed the polygraph were reassigned. The GOH also brought into force
the bilateral U.S.-Haiti maritime counter-narcotics interdiction agreement,
which the parliament had approved in December 2001. The Financial
Investigations Unit was organized in 2002 and will begin operations when
President Aristide names a director general.

Corruption, weak law enforcement capability, and lack of GOH commitment
combine to limit cooperation in general, although Haitian officials have
cooperated in specific cases upon request by the USG. Haiti's political and
economic crises preoccupied the GOH in 2002, eclipsing the fight against
drug trafficking. There are serious allegations that high level officials,
both police and civilian, are involved in or profit from drug trafficking.
Haitian participation in Operation Hurricane II, a two-week regional
counter-narcotics operation, was marred by political interference.

Although Haiti passed a money laundering law in 2001, it has not been fully
implemented. Under pressure from the Prime Minister, the parent anti-money
laundering commission met, but did not submit names to the President and
Minister of Justice of candidates for Director General and Deputy DG of the
Financial Intelligence Unit (FIU). Until those officers have been appointed,
the unit cannot begin to function. The FIU does, however, have an office in
the Central Bank and some staff members have been trained in Martinique and
Trinidad. While the BLTS cooperated with DEA on some operations, it showed
little initiative in developing cases of its own. Haiti is a party to the
1988 UN drug convention.



II. Status of Country

The political impasse that stems from the flawed legislative elections of
May 2000 and which inhibits international assistance, continued in 2002. The
economy continued to decline, increasing reliance on income from drug
trafficking. The gourde-dollar gap widened dramatically, reaching 40-to-1 at
one point. The Central Bank allowed dwindling reserves, while the government
continued to subsidize fuel prices. Unrest grew in several of the major
cities. In Haiti's second-most populous city of Cap Haitien, on November 17,
anti-government sectors joined in a march of more than 30,000 people. Rival
gangs openly fought in Gonaïves, where law and order have disappeared,
leaving the port open to uncontrolled traffic, among other problems there.

U.S. Customs Service interdiction activities in Miami in 2002 included the
seizure of 8,916 pounds of cocaine hidden in ships arrived from Haiti.

The Haitian National Police has continued to lose members and, under Lavalas
pressure, to assign unqualified Aristide loyalists to key positions,
relegating U.S.-trained officers to secondary positions. The government does
not provide adequate resources to the police. Lack of international
assistance, including locally based advisors, has damaged both the HNP and
judiciary and contributed to their erosion in numbers and effectiveness.



III. Country Actions Against Drugs in 2002

In 2002 President Aristide brought into force the agreement concerning
cooperation in the suppression of illicit maritime traffic in narcotic drugs
and psychotropic substances that had been signed in 1997., A U.S.-Haiti
Letter of Agreement on counter-narcotics cooperation was signed May 15,
after two years of Haitian government recalcitrance. Haiti has been slow to
implement the LOA, but toward year's end both the HNP and Haitian Customs
showed renewed interest to cooperate. In November, a U.S. Customs
international training team provided airport interdiction training to 27
Haitian police and customs officials. In September, DEA polygraphed all 40
members of the BLTS; 27 officers passed the exam. The 13 who did not were
reassigned. The director of Haiti's national drug commission, Rene Magloire,
made an effort to bring diverse groups involved in the counter-narcotics
effort together. The Organization of American States' drug control
organization, CICAD, presented a seminar on counter-narcotics strategy,
which the GOH is attempting to apply.

The HNP confirmed Commissaire Jeannot François as the permanent director of
the Judicial Police (DPCJ). Members of the DPCJ's nascent financial
investigations unit continued to receive training from the Caribbean
Financial Action Task Force (CFATF). The resignation of Justice Minister
Gary Lissade dealt a blow to progress, as his successor, Jean-Baptiste Brown
showed little of Lissade's enthusiasm and dedication. Brown also resigned
and was replaced in October by Calixte Delatour.

Corruption. There were no serious efforts to curb drug-related corruption
nor prosecutions or convictions of major traffickers. Two Colombian pilots
caught with cocaine in Artibonite were quietly released in January 2002.

Accusations continued to surface that members of the government and HNP,
most notably the Presidential Security Unit (PSU) and Palace Guard, were
actively involved in drug trafficking. These accusations included claims
that palace personnel retrieved cocaine from the suspect small airplanes
that land near Port-au-Prince and in other areas with impunity.

Law Enforcement Efforts. Haitian police reported seizures of 264.16
kilograms of cocaine and 53.45 kilograms of marijuana in 2002. They arrested
19 Haitians and 18 non-Haitians for drug-related offenses. There were no
arrests of major traffickers, although the HNP, accompanied by the DEA,
arrested Salim Jean Batrony, well known in Port-au-Prince as a drug
trafficker, on May 31 with 58 kilograms of cocaine.

The Haitian Coast Guard (HCG), quite active from July 1996 to November 2000,
interdicting 15 vessels and seizing over five tons of illegal drugs, was
able to claim only two interdictions in 2002. The latest one, in July,
netted only four kilograms of cocaine. The GOH does not provide the HCG with
funds for vessel maintenance and repair and this, combined with the
termination of U.S. support and assistance, has rendered the unit
ineffective.

DEA's final evaluation of Operation Hurricane II in Haiti (September 16-28)
was negative. The operation was flawed at its outset by delays attributed to
lack of personnel and vehicles. The operation was further impeded by judges
who refused to accompany teams on enforcement missions, threats against
officers, and unresponsiveness of Haitian law enforcement units. Rumors
surfaced that Haiti-based traffickers were forewarned, enabling them to
evade arrest. Under these circumstances, DEA believes a sustained
enforcement operation is impossible in Haiti.

Haitian drug trafficking organizations operate with relative impunity. The
arrival of cocaine from South America is generally unimpeded, due to the HNP
's lack of human and material resources as well as high level corruption.
Haiti's roads are very poor and the HNP has no air assets. The HCG had no
presence on either the north or south coast.

Agreements and Treaties. Haiti is a party to the 1988 UN Drug Convention.
Haiti's law on the control and suppression of illicit drug trafficking
reflects most of the convention's provisions; however, there has been no
serious effort to implement it. The GOH has not developed an effective asset
seizure and forfeiture mechanism. There were no prosecutions and convictions
of traffickers and few if any full investigations to determine drug
traffickers' affiliation with organized crime groups. Haiti's judicial
system is dysfunctional and cooperation with the United States and other
countries is sporadic. A 1905 U.S.-Haiti extradition treaty is in force.
Haitian law prohibits the extradition of nationals. However, the GOH has, in
the past, cooperated with specific requests for expulsion of non-Haitians.
The GOH has not acted on the OAS mutual legal assistance treaty, still under
review by the Haitian foreign ministry.

Cultivation/Production. Illicit cultivation in Haiti is limited to minor
amounts of marijuana. There is no information concerning production or use
of precursors.

Domestic Programs (Demand Reduction). There are no viable demand reduction
or rehabilitation programs. Polling data indicate that domestic marijuana
and cocaine use are on the rise.

Drug Flow/Transit. Embassy Port-au-Prince estimates that the flow of cocaine
through Haiti has increased, with some going to the United States through
the Dominican Republic, whose 225-mile (360 km) border with Haiti is largely
uncontrolled. Other cocaine shipments move directly north by ship and air.
Airdrops have increased, some occurring outside of Port-au Prince during
daytime hours. DEA regularly receives detailed information on fast boat
deliveries to the south coast; however, the GOH lacks the means to interdict
them.



IV. U.S. Policy Initiatives and Programs

The U.S. plan for combating illegal drugs in Haiti remained one of
interdiction and police and judicial institution building; however, several
factors worked against its successful implementation: forewarned smugglers
eluded the HNP. Slow or no response by the HNP to DEA intelligence leads
allowed suspect airdrops to go unchallenged. The GOH's slow acceptance and
implementation of a U.S.-proposed bilateral counter-narcotics assistance
agreement (unsigned until mid-May) were also hindrances.

The Road Ahead. Stemming the flow of illegal narcotics through Haiti remains
a cornerstone of U.S. counter-narcotics policy. Key objectives to stemming
the illegal flow remain improving the effectiveness of GOH law enforcement
and judicial institutions and strengthening the GOH's ability to fund these
institutions by encouraging development of an effective system of
liquidating assets seized from arrested smugglers. A barracks and pier
facility in Cap Haitien is scheduled for completion in early 2003. Both the
HCG and the BLTS have pledged to staff the facility. If this facility proves
to be effective in stemming the flow of illegal drugs and migrants,
establishment of a similar facility on the south coast would be considered.
The road ahead is clearly marked, but is obstructed by the politicization
and corruption of the police and judiciary.



  Money Laundering and Financial Crimes

Haiti. Haiti is not a major regional financial center, and-as investigative
and enforcement units are yet to begin to operate-we do not know the extent
of money laundering. Given Haiti's dire economic condition low level of
financial sector development and unstable political situation, it is
doubtful it is of major significance in the formal financial sector. Alleged
money laundering activities appear to be related to narcotics (primarily
cocaine) proceeds, although there is a significant amount of contraband
passing through Haiti. Criminal proceeds are reportedly derived primarily
from domestic activity.

While informal and parallel market activity in Haiti is significant and may
be partly funded by narcotics proceeds, smuggling is historically prevalent
in Haiti pre-dates narcotics-trafficking. Money laundering occurs in the
banking system and in the non-bank financial system, including casinos.
Further complicating the picture is the cash that is routinely transported
to Haiti from Haitians in the United States in the form of remittances.
Distinguishing between legal transfers and illegal flows is no easy task. To
our knowledge, money laundering proceeds are controlled by local
drug-trafficking organizations. There are allegations that senior government
officials may profit from the proceeds from illegal drug transactions. There
is no indication of terrorist financing. Haiti, however, is used as a
stopover by illegal migrants from several countries.

In recent years, Haiti has taken steps to address its money laundering
problems. Since August 2000, Haiti, through Central Bank Circular 95, has
required banks, exchange brokers, and transfer bureaus to obtain
declarations identifying the source of funds exceeding 200,000 gourdes
(approximately $5,200) or its equivalent in foreign currency. Covered
entities must report these declarations to the competent authorities on a
quarterly basis. Failure to comply can result in fines up to 100,000 gourdes
(approximately $2,600) or forfeiture of the license of the bank.
Unfortunately, because of widespread official laxity and rampant corruption
and the fact that nearly two thirds of Haiti's economy is informal, large
amounts of money do not flow through the legitimate financial system that is
governed by these regulations.

In April 2001, the Haitian government published the "Law on Money Laundering
from Illicit Drug Trafficking and other Crimes and Punishable Offenses." All
financial institutions and natural persons are subject to the money
laundering controls established in the new law. The law criminalizes money
laundering which it defines as "the conversion or transfer of assets for the
purpose of disguising or concealing the illicit origin of those assets or
for aiding any person who is involved in the commission of the offense from
which the assets are derived to avoid the legal consequences of his acts;
the concealment or disguising of the true nature, origin, location,
disposition, movement, or ownership of property; and the acquisition,
possession or use of property by a person who knows or should know that this
property constitutes proceeds of a crime under the terms of this law." The
law provides for relatively long prison sentences and large fines totaling
millions in gourdes, and applies to a wide range of financial institutions,
including banks, money exchangers, casinos, and real estate agents.
Insurance companies are not covered, but as yet represent only a nascent
industry in Haiti. The money laundering law requires natural persons and
legal entities to verify the identity of all clients, record all
transactions, including their nature and amount, and submit the information
to the Ministry of Economy and Finance.

In 2002, Haiti formed a National Committee to Fight Money Laundering, the
Comite 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. The CNLBA, through
the Financial Intelligence Unit (FIU) or Unite Centrale de Renseignements
Financiers (UCREF), is responsible for receiving and analyzing the reports.
This information may be exchanged with foreign agencies. Entities or persons
are required to report to the UCREF any transaction involving funds that
appear to be derived from a crime. Failure to report is punishable by more
than three years' imprisonment. Banks are required to maintain records for
at least five years and are required to present this information to judicial
authorities and financial information service officials upon request.
Article 3.4.1 states that bank secrecy or professional secrecy may not be
invoked as grounds for refusing to furnish the information required by
article 2.27 or requested in the scope of a laundering investigation ordered
by the senior judge of the court of first instance or conducted under the
authority of an examining magistrate. Articles 4.2.4 and 4.2.5 have "due
diligence" provisions. The national drug control law addresses the issue of
international transportation of illegal-source currency.

The law also requires financial institutions to establish money laundering
prevention programs and to verify the identity of customers who open an
account or conduct transactions that exceed 200,000 gourdes (approximately
$5,200). When stock or currency transactions exceed 200,000 gourdes and are
of a suspicious nature, financial institutions are required to investigate
the origin of those funds and prepare an internal report. These reports are
available (upon request) to the UCREF. The UCREF was created through an
August 2000 circular by the Ministries of Justice and Public Security and is
mentioned in the 2001 money laundering law.

However, the money laundering commission is not yet fully functional, and no
director general of the UCREF has been appointed. Furthermore, the UCREF
does not meet the international standards established for FIUs, and the
Egmont Group does not recognize the UCREF. Additionally, corruption and the
large informal economy have prevented the 2001 anti-money laundering law
from being fully implemented and enforced. There have been no arrests or
prosecutions for money laundering or terrorism, as the system is not yet
effectively operating.

At present, Haiti is considering modifications to the law to strengthen the
judicial procedure and asset seizure and forfeit provisions. The senior
judge of the court of first instance may order the freezing of funds or
accounts for eight days. While assets and businesses can be seized, the
government cannot declare them forfeited until there is a conviction, which
does not happen often in Haiti. The judicial branch is the deciding
organization, but seizures and use of seized assets is on an ad hoc basis.

The money laundering law has provisions for the exchange of records with
other countries, but there is no specific agreement with the United States.
Haiti cooperated with the United States following the September 11 attacks.
The money laundering law provides for investigation and prosecution in all
cases of illegally derived money. Under this law, terrorist finance assets
may be frozen and seized. The commission printed and circulated to all banks
the list of individuals and entities included on the UN 1267 Sanctions
Committee's consolidated list. The Central Bank chaired meetings with all
bank presidents and requested their cooperation.

Beyond this, Haiti has made little progress in the area of terrorist
financing. The government has not passed legislation criminalizing the
financing of terrorists and terrorism, nor has it signed the UN
International Convention for the Suppression of the Financing of Terrorism.
Haiti has signed, but not yet ratified, the UN Convention on Transnational
Crime, which is not yet in force internationally. Haiti is also a party to
the 1988 UN Drug Convention. Haiti is a member of the OAS/CICAD Experts
Group to Control Money Laundering, and it recently became a member of the
Caribbean Financial Action Task Force (CFATF).

The Government of Haiti should criminalize terrorist financing and take
steps to implement the 2001 anti-money laundering law. In addition Haiti
should take steps to ensure that the UCREF meets Egmont standards. Finally
Haiti should take advantage, to the greatest extent possible of any training
and technical assistance opportunities offered by the CFATF and/or the
Caribbean Anti-Money Laundering Program (CALP).