Afghan Narcotrafficking: a Joint Threat Assessment

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The EastWest Institute 11 East 26th Street, 20th Floor New York, NY 10010 U.S.A. 1-212-824-4100 [email protected] www.ewi.info AFGHAN NARCOTRAFFICKING A JOINT THREAT ASSESSMENT

JOINT U.S. - RUSSIA WORKING GROUP ON AFGHAN NARCOTRAFFICKING

APRIL 2013 PRINCIPAL AUTHOR:

Ekaterina Stepanova

EDITOR:

Jacqueline McLaren Miller

CONTRIBUTORS:

Ilnur Batyrshin, Head of the Scientific Research Center, Russian Federal Drug Control Service (FSKN)

George Gavrilis, Executive Director, The Hollings Center for International Dialogue

Viktor Korgun, Head of the Afghanistan Department, Institute of Oriental Studies, Russian Academy of Sciences

John “Jack” Lawn, former Administrator, Drug Enforcement Administration

David Mansfield, Independent Consultant

Gretchen Peters, author, Seeds of Terror: How Heroin is Bankrolling the Taliban and Al Qaeda; Lead Associate, Booz Allen Hamilton

Aman Saliev, Senior Expert, Institute of Strategic Analysis and Planning, Kyrgyz-Russian University of the Kyrgyz Republic

Konstantin Sorokin, Adviser, Department of Training and Methodology and Research Projects, International Training and Methodology Centre for Financial Monitoring (ITMCFM)

Ekaterina Stepanova, Lead Researcher and Head of Peace and Conflict Studies Unit, Institute of World Economy and International Relations (IMEMO), Russian Academy of Sciences

Cory Welt, Associate Director, Institute for European, Russian and Eurasian Studies, The George Washington University’s Elliott School of International Affairs; Adjunct Fellow, Center for American Progress

Georgi Zazulin, Associate Professor at the Chair of Conflictology, St. Petersburg University; Russian expert on narco-conflictology, “European Cities Against Drugs” (ECAD)

EXPERT GROUP COORDINATORS:

Vladimir Ivanov, Senior Associate and Director, Moscow Center, EWI

Jacqueline McLaren Miller, Senior Associate, U.S. Global Engagement Program, EWI

The coordinators would like to thank Kimberly Marten, Professor of Political Science, Barnard College; Ambassador David T. Johnson, former Assistant Secretary for the Bureau of International Narcotics and Law Enforcement Affairs, Lev Timofeev, Director, Center for Studies of Illegal Economic Activities, Russian State Humanitarian University, and Yuri Kroupnov, Chairman of the Steering Board, Institute of Demography, Migration, and Regional Development for their early invaluable contributions to the project. We would also like to express our sincere gratitude to the Expert Group members, who each made significant contributions to the project and gave so generously of their time and talents. And finally, we thank the Carnegie Corporation of New York for their support.

This publication was made possible by a grant from the Carnegie Corporation of New York. CONTENTS

1. Introduction 8

Afghanistan: Approaching 2014 and Beyond 8

The U.S.-Russia Context 9

Report Overview 11 2. Afghan Narcotrafficking as a Threat to Russia and the United States 12

Russia as a Market for Afghan Heroin 12

U.S. Presence in Afghanistan: Counternarcotics Implications 13

Comparative Threats and Shared Concerns 16 3. The Opium Economy in Afghanistan: An Overview 18

Cultivation and Production Trends 19

Cultivation Trends 19

Factors Affecting Cultivation Patterns 20

Alternatives to Poppy Cultivation 21

Opiate Production, Trade, and Consumption in Afghanistan 22

Illicit Drugs and Corruption 23 4. Transnational Trade in Afghan Opiates and Money Laundering 26

Main Trafficking Routes, Markets, and Profit Distribution 26

Pakistan and Iran 27

Central Asia: The Northern Route 27

Money laundering 32

Afghanistan and Narcotics-related Money Laundering 32

Laundering Drug Profits from Transit States 34

Money Laundering in Consumer States 35 5. Illicit Drugs, Armed Conflict, and State Functionality 38

Illicit Drugs and the Islamist Insurgency in Afghanistan 39

Armed Conflict, Narcotics, and State Functionality 41 6. Conclusions 44 An Afghan farmer works in a poppy field in Nangarhar province of eastern Afghanistan. According to a UN report, poppy cultivation in Afghanistan has been constantly increasing over the past 10 years. It is estimated that the country produces about 90 percent of the world’s opium. FOREWORD

he EastWest Institute is pleased to publish this Joint Threat Assessment on Afghan Narcotrafficking, a product of discussions, deliberations, and debates between U.S. and Russian subject matter experts. This project was conceived of as an innovative approach to sustaining dialogue and contributing to Ttrust-building in the U.S.-Russia relationship at a time when a policy “reset” was needed. In our view, for progress to be made in the U.S.-Russia relationship, it was vital that opportunities for cooperation be seized when they arose.ose. Afghan narcotraffinarcotrafficking cking presented�� presented ��such such an an opportunity opportunity for for this this ��important important bilat bilat-- eral relationship. As Presidents Obama and Medvedev outlined in their July 2009 summit, the United States and Russia both have substantial security interests in Afghanistan—and these interests are closely related to the issues of drug production and trafficking. The benefits to the United States and Russia of reducing the threat of narcotrafficking would be obvious—and, aside from the enhanced security to both states, concrete measures offered for Afghanistan could contribute to a stabilization of the situation there.

With generous funding from the Carnegie Corporation of New York, we launched the U.S.-Russia Work- ing Group on Afghan Narcotrafficking in 2011 to bring together Russian and American technical and policy experts to share knowledge, make consensus assessments of the situation on the ground, and then to deliver innovative and concrete policy solutions that will have traction in both states (and to the larger relevant policy communities). This publication summarizes the Working Group’s consensus findings on the scope and threat of Afghan narcotrafficking. It will be followed in short order by a Joint Policy Assessment, which offers policy suggestions for both Russia and the United States to stem the seemingly endless flow of opiates from Af- ghanistan.

The Working Group members met in Washington, D.C., and Brussels in 2011 and 2012, for multiple days of working through a consensus assessment. Working group members also met with officials from the United States (the Drug Enforcement Administration, the Department of Defense), Russia (the Ministry of Foreign Affairs, the Federal Drug Control Service), NATO, and the European Union.

Despite the many ups and downs in the bilateral relationship between Russia and the United States, cooperation on counternarcotics has endured, developing slowly but steadily. Counternarcotics cooperation is expected to continue even though the reset policy between the two countries appears to have run its course. That neither United States nor Russia are prioritizing Track 1 engagement as they did in the past (and even halting such dialogue on some thorny issues) emphasizes the need for Track 2 approaches like this one.

The deterioration of bilateral U.S.-Russia relations at the end of 2012 and early 2013 might have put into question the willingness or ability to sustain the “reset” policy. It has not, however, changed the reality that the Unit- ed States and Russia have common interests in counternarcotics (as well as in non-proliferation, antiterrorism, and the fight against organized crime) or the need for “closer cooperation with the U.S. on Afghanistan,” as stressed by Russian Foreign Minister Sergei Lavrov on February 2, 2013, at the Munich Security Conference.

The project coordinators wish to extend a note of thanks and appreciation to Dr. Ekaterina Stepanova, a member of the expert group who drafted the joint threat assessment, which was discussed in detail by the group, who made additional inputs and repeatedly revised and updated the report. We also wish to thank the several research assistants at the EastWest Institute who also contributed to research, fact-checking, and the logistics of the groups’ meetings: Talin Baghdadlian, Athina Doutis, Joseph Messina Jr., Ardian Mollabeciri, Judith Sabba, and Alex Schulman.

Jacqueline McLaren Miller Vladimir Ivanov Senior Associate Senior Associate EastWest Institute, New York EastWest Institute, Moscow 1. Introduction

The opium economy in Afghanistan has become Afghanistan: Approaching er troop level. Regardless of the pace of the withdrawal and of the scale and substance of deeply 2014 and Beyond residual U.S. involvement after 2014, deter- entrenched mined by a bilateral security agreement with More than a decade after the United States Afghanistan, the Afghan government will be and shows and allied troops began military operations fully responsible for providing its own securi- no signs of in Afghanistan, the country remains a major ty. There is real concern whether Afghan mili- conflict zone. Afghanistan’s continuing insta- tary and police forces will be up to the task. declining. bility constitutes the largest security issue in the region. The country’s role as the center of Complicating Afghan efforts to assume se- global opiate production contributes heavily curity functions are weak and dysfunctional to this instability. The grave social, economic, governance, unabated corruption, deteriorat- political, and security implications of the traf- ing security, and an ongoing if not strength- ficking of the Afghan opiates extend beyond ening insurgency. And, while the pending the regions of South, Southwest, and Central withdrawal of the bulk of NATO forces has Asia. The opium economy in Afghanistan has spurred the dynamic interaction of insurgent become deeply entrenched and shows no and counter-insurgent violence with informal signs of declining. Inside Afghanistan, nar- and formal contacts and talks involving the cotrafficking contributes to insecurity and combatants, thus far, no genuine political so- feeds corruption, warlords, and insurgents. All lution in Afghanistan is in sight. this vastly complicates the prospects of the Afghan central government consolidating its Throughout the U.S. and NATO direct secu- power and effectively governing. Compound- rity presence in post-Taliban Afghanistan, the ing these issues is the scheduled withdrawal quick resurgence and the exponential growth of NATO forces from Afghanistan in 2014 and of the opium economy has posed a major the ongoing drawdown of U.S. troops. challenge at the national, regional, and international levels. The cultivation and trafficking Weeks into his second term, President of Afghan opiates directly threaten security in Barack Obama announced his intention to a wide range of countries, from Afghanistan speed up the drawdown of U.S. forces from and its immediate neighbors to major end- NARCOTRAFFICING Afghanistan, withdrawing half of the 66,000 markets such as Europe, Russia, and China. deployed troops by January 2013 and shift- As NATO and U.S. troops prepare to withdraw ing from a combat to a support operation from Afghanistan, which is still struggling by spring of 2013, several months ahead of with a highly volatile security situation, weak schedule. But the White House has still not governance, and major social and economic

EWI • AFGHAN • EWI come to a decision about troop levels for the problems, the size of the opium economy and post-2014 “Resolute Support” mission—and opiate trafficking are likely to increase and 8 estimates of the numbers have ranged from pose an even greater challenge to regional the “zero option” to 20,000 troops, although and international security. the Pentagon has reportedly drawn up plans for 3,000, 6,000, or 9,000 troops to remain. Afghan President Hamid Karzai has said the final decision on troop size is up to the United States, although he reportedly prefers a high- EWI • AFGHAN NARCOTRAFFICING 9 There is, then, then, is, There and clear a compelling both on interest Russian the sides U.S. and up stepping in on cooperation control drug Afghanistan in beyond. and ------expected expected to endure even though the policy between the two countries reset appears to bilat of deterioration The course. its run have eral relations U.S.-Russia at the end of 2012 and early 2013 might have put into question in the relation some bilateral circles broader ship. It changed has the not, reality however, that the United States and com Russia have stepping stepping up cooperation on drug control in Afghanistan and beyond. This cooperation had begun before the “reset” of U.S.-Russia relations announced by U.S. State Secretary Hillary of Clinton and Minister Sergey Lavrov in March A 2009. re Russian Foreign newed push by both Russia and the United States for more active counternarcotics co operation on issues ranging from tion to demand reduction interdic was highlighted by President Obama and then President Dmitry Medvedev’s June 2010 Joint Statement on Afghanistan. They emphasized the interdic tion of narcotics flows and the work Group of Working the U.S.- Counternarcotics of the Russian Bilateral Presidential Commission (BPC) led by Officethe ofU.S. National Drug Control Policy Director Gil Kerlikowske and (FSKN) Service Control Drug Federal Russian Ivanov. Viktor Director Despite the many ups-and-downs in the bi lateral relationship between Russia and the United States, cooperation on counternar cotics has endured, developing slowly steadily. but Counternarcotics cooperation is concerned concerned that the shift of security respon sibilities to the still weak or fledging Afghan structures, coupled with increasing freedom of trade and movement in parts of posed the may threat further Asia, aggravate Central Russia. into opiates Afghan of the inflows by There is, then, a clear and compelling inter est on both the Russian and U.S. sides in ------Most cultivation gains 1 becoming more insecure. Russia is justifiably Russia insecure. becoming more were in Afghanistan’s southern region, which southern region, in Afghanistan’s were and the include the provinces, most insecure western region, where some provinces are percent percent from 2012 over 2011, there was 18 percent more land under poppy cultivation in 2012 than in 2011. ing an increase in poppy cultivation, under mining earlier gains. Although Governor-led Eradication (GLE) increased by some 154 successes successes in decreasing poppy cultivation in some provinces will be unsustainable once the presence ends NATO in December 2014. And some provinces have been experienc cation policy in Afghanistan. Afghanistan. in policy cation Many experts believe that recent but limited sia has subsequently criticized the U.S. and their and production in increase this for NATO unwillingness to pursue an aggressive eradi iban iban regime in 2001 has impact on had Russia, which has become a one of significant Rus heroin. Afghan of consumers largest the The boom in poppy cultivation production following and the collapse opiate of the Tal cotrafficking, since Unitedthe States is the main external security and counternarcotics be to continue will Afghanistan—and in player ends in 2014. mission combat its after even into into Russia in startling numbers. The United po and motivated thus are Russia and States sitioned to cooperate to combat Afghan nar facing facing the most devastating human security challenges from Afghan narcotrafficking be cause Afghan opiates have made their way borders. Many borders. states have an inherent inter est in Afghanistan developing along perhaps is a Russia more path. prosperous and stable The U.S.-Russia Context The U.S.-Russia The consequences of Afghanistan’s ongoing security issues have spread far beyond its mon interests in counternarcotics (as well as primarily seen as a law enforcement issue, in non-proliferation, antiterrorism, and the hampered the adoption of a more compre- fight against organized crime) or the need for hensive approach across Afghanistan. The To better un- “closer cooperation with the U.S. on Afghani- U.S./NATO emphasis on the link between derstand and stan,” as stressed by Russian Foreign Minister narcotics and the insurgency (and terrorism) Sergei Lavrov on February 2, 2013, at the Mu- in Afghanistan came at the cost of attention explain the dif- nich Security Conference.2 Nor does it affect to the role of opiates as a source of govern- ferences in U.S. practical cooperation on counternarcotics, ment corruption and an impediment to state which, according to an FSKN spokesperson, functionality. and Russian is “on the rise.”3 This cooperation has also approaches to been facilitated by the relative closeness of For Russia, the scale and hierarchy of threats both states’ respective national counternar- and priorities is different. The expansion of this problem, cotics strategies. the opium industry in Afghanistan, especial- it is useful to ly after 2001, and the inflow of illicit Afghan While both Russia and the United States drugs, primarily heroin, became Russia’s larg- reexamine the have an interest in stepping up cooperation est challenge from Afghanistan and posed a scale, nature, on drug control and counternarcotics, Rus- vital and direct threat to its national security. sia is heavily constrained in terms of what it Narcotrafficking outweighs all other security and type of can do. It does not and will not have a direct concerns that Russia has about the situation threat posed security presence in Afghanistan, especially in Afghanistan, including those related to ter- in light of the troubled 1980s Soviet experi- rorism and instability. Given the consistently by the produc- ences in that country. But Russia has provid- high levels of opiate production in Afghani- tion and traf- ed assistance to the U.S. and NATO security stan throughout the first decade of this cen- presence in other ways. In 2012, for example, tury, Russian officials have persistently com- ficking of Af- Russia further extended its support to them plained that U.S. and NATO counternarcotics ghan opiates. by providing a crucial transport corridor and efforts and support to Afghanistan have been logistical support to non-lethal and military limited and insufficient. The FSKN has espe- transit related to Afghanistan (the Northern cially been promoting more proactive and Distribution Network). Despite some domes- tougher counternarcotics strategies, such tic objections, the administration of Presi- as aerial eradication, and more robust efforts dent Vladimir Putin has proceeded with plans against key drug lords and laboratories. to allow U.S. and NATO forces to use a Rus- sian air base in Ulyanovsk as a transit hub for There are also broader political controversies flights to and from Afghanistan. As the U.S. and concerns regarding the general situa- and NATO scale down their security presence tion in and around Afghanistan, especially in Afghanistan, they are trying to get other given the limited progress in building a se- regional states, such as Russia, as well as re- cure, stable, and functional government. The gional organizations more actively involved in United States and Russia may have different managing the Afghan problem, including its and even some conflicting political and stra- counternarcotics aspects. tegic priorities in relation to Afghanistan and Central Asia. These tensions are not likely to Importantly, however, the United States and subside, particularly as the United States, Russia differ in their main priorities vis-à-vis while scaling down its ground presence in Afghanistan and in their respective security Afghanistan, may seek to keep or even ex- NARCOTRAFFICING threat assessments. pand some back-up security presence in the broader region, including Central Asia. How- For the United States, the main interest in ever, when it comes to interdiction, develop- Afghanistan since 2001 has been security ment, and most other aspects of counternar- related. Initially, counterterrorism remained cotics and drug control in relation to Afghan the U.S. top priority and was tied to a grow- narcotrafficking, the U.S. and Russia’s efforts EWI • AFGHAN • EWI ing concern about the escalating insurgency and capacities appear to be complementary and dysfunctional governance. Only in 2005 rather than contradictory and may point to 10 did the United States start to address more some natural division of counternarcotics as- comprehensively the security implications of sistance and responsibilities in the broader the opiate trade for its presence in Afghani- region. stan, including within the NATO-ISAF framework. Reluctance by some NATO members To better understand and explain the differ- to engage on counternarcotics, which was ences in U.S. and Russian approaches to this - - - -

EWI • AFGHAN NARCOTRAFFICING 11 and more de and more tailed recom mendations on the way for forward U.S.-Russian cooperation. The present The present assess threat ment report is the first the of product the of work U.S.-Russian group expert Afghan on narcotraffick second A ing. will report with a follow general of set ------consensus-based. consensus-based. The present threat assessment report is the first productof thework of theU.S.-Russian expert group on Afghan narcotrafficking. A with will report a second follow set of general and more detailed recommendations on the cooperation. U.S.-Russian for forward way to to and perceptions of the threat emanating It Afghanistan. from is followed by an outline opium econo Afghan the of the of mainstays corruption spurring in role their including my, trans the to devoted is 4 Section 3. Section in national trafficking Afghanof related opiates money laundering and that mostly take place outside Afghanistan and have transnational broad repercussions. The links complex between illicit drugs, armed (in local the and form regional of warlordism, violence power struggles, and insurgency) and state functionality and legitimacy are addressed in Section 5. The concluding Section 6 for a mulates findings set thatof key summarize both the common ground as well as the nu ances in the U.S. and Russian assessments of Afghan narcotraf the posed by challenges ficking. This outline highlights the issuesfor cooperation that U.S.-Russian will serve as a work. this group’s of stage the next to bridge The findingsof thereport are notpart of any official policy andare the sole responsibility of this expert group. To the extent possible, the report’s conclusions and analysis are tional tional priorities and the challenges and pros cooperation. bilateral for pects The threatened United are and States Russia by different aspectsof Afghan narcotraffick The extent. ing and to a significantly different report will outline the comparative type and scale of respective threats and the extent to which they are prioritized at the national lev el. At the same time, the paper’s primary fo concern shared of points identifying on is cus about the broader implications narcotrafficking. These shared concerns of are Afghan glob to links general more the to both related al transnational crime, especially to related money laundering, and to the more specific links to the dysfunction of the state, corrup tion, and armed violence within and around Afghanistan. This focus has dictated the structure of the report. Section 2 provides overview of a the U.S. and comparative Russia’s exposure ------Russian Russian Bilateral Presidential Commission. This report results from a non-governmental initiative that aims to come up with indepen dent conclusions and about Russian na U.S. expert expert support to, rather than duplicate, the Group Working work of the Counternarcotics of group”) the U.S.- “Kerlikowske-Ivanov (the group in informing this analysis. in informing group Our work seeks to supplement and provide about its veracity. We about also We had its veracity. the benefitof the extensive fieldwork andexpertise of the members of our unique U.S.-Russian expert ness ness and is Afghan often the narcotrafficking imperfect and incomplete, the report had to analysis data, of existing on rely comparative reservations multiple of sight losing not while other sources, and reexamines it and by reexamines other focusing sources, on the U.S.-Russian implications. Since busi drug illicit the the of aspects various on data (UNODC) (UNODC) and the U.S. government. Rather, on perspective comparative critical, a takes it the data, supplements it with evidence from sources sources on cultivation, production, traffick opiates—the Afghan of consumption and ing, United Nations Office Drugs on and Crime The report’s main point is not to merely re data the well-publicized produce and already global main two the of both or one of findings cy, and governance failure; and the failure; main pat and governance cy, terns of transnational trafficking Afghan of laundering. money and related opiates the opium economy in Afghanistan, including Afghanistan, in economy opium the the complex links between drugs, the socio- economic environment, corruption, militan lem. lem. Instead, it critically reexamines Russian and U.S. interests, concerns, strategies, and capacities; the general driving forces behind however, takes issue with a simplistic hands- however, becoming quickly is Afghanistan that view off has an prob become) intractable already (or some may contend that sustainable counter that sustainable contend may some narcotics efforts inAfghanistan are doomed. of reduction significant any for prospects The This report, the opium appear slim. economy With With the withdrawal of NATO security forc es and drawdown of U.S. troops underway, gional and international security. security. international gional and Overview Report duction and trafficking This report seeks Afghanof to analyze these issues by opiates. placing them in the broader context of re problem, problem, it is useful to reexamine the scale, nature, and type of threat posed by the pro 2. Afghan Narco- trafficking as a Threat to Russia and the United States

Russia is one of the largest per capita fghan narcotrafficking poses major human security threat to Russia. Illicit drug global, regional, and local security circulation has been listed by Russia’s Se- consumers threats. The exact type, scale, and curity Council as one of three main security of heroin in nature of this threat vary significant- challenges facing the country, alongside ter- Aly, depending on who is doing the assess- rorism and illegal migration.4 Russia has re- the world. ment at what stage of the narcotics chain. peatedly called on the United Nations and The once relatively strict supply-demand the international community to label the pro- division behind any narcotrafficking chain is duction and trafficking of Afghan opiates as becoming increasingly blurred as large-scale a major “threat to international peace and drug abuse has become prevalent not only security,” which would put it on par with inter- in the end-market states (such as Russia or national terrorism. This reflects the fact that the UK), but also in the main producing state Russia turned into a transit and consumer itself (Afghanistan) and along the key transit country for illicit drugs in the 1990s and in countries (neighboring Iran, Pakistan, and the first decade of the 21st century became the states of Central Asia). Afghanistan is not one of the largest consumer markets for Af- only the main source of illicit opiates but also ghan heroin. While Russia’s drug problem is one of the main victims of its narcotraffick- not confined to Afghan opiates, they continue ing. To complicate matters further, narcotics- to dominate the market. related threats and narcotrafficking patterns are dynamic rather than static and have Of the estimated 365 metric tons (mt) of evolved—changing direction, substances, heroin exported from Afghanistan in 2009, and scale over time. 90 mt (or approximately 25 percent) are trafficked through Central Asia via the North- 5

NARCOTRAFFICING In order to identify potential drivers for fos- ern Route. The majority of heroin trafficked tering U.S.-Russia cooperation on Afghan along the Northern Route—approximately narcotrafficking in the near and more- dis 75-80 mt—ends up in Russia.6 According to tant future, the general threat first needs to United Nations Office on Drugs and Crime be disaggregated in order to understand the (UNODC) estimates, Russia may be the larg- respective concerns of Russia and the United est single country market for Afghan-origin EWI • AFGHAN • EWI States. heroin, consuming almost the same amount of pure heroin as all the countries of Western 12 and Central Europe combined. Russia is one Russia as a Market of the largest per capita consumers of heroin for Afghan Heroin in the world (although Afghanistan and Iran have higher opiate prevalence rates).7 It took Over the past two decades, the problem of Russia less than two decades to shift from illicit drugs has become a top national and very low narcotics usage in the Soviet period EWI • AFGHAN NARCOTRAFFICING 13 2009. Source: Source: Drug Survey, Survey, Drug UNODC, World World UNODC,

8 ------9 Fig. 1. Global heroin consumption, 2008 consumption, heroin Global 1. Fig. to to the U.S. Drug expert Enforcement with discussions in officials (DEA) tion Administra Afghan group members, heroin is thought to U.S. the of percent 6 to 5 between for account heroin market, based on And although Afghan analyses. program her heroin signature oin is expected to make increasing inroads into the U.S. market through scale is Canada, simply the not comparable. The United 2.5 million drug addicts and 1.64 percent of the total population, with 80,000 new drug users, 30,000 deaths from year. each deaths drug-related other 70,000 overdose, and Related negative social and economic impli cations produce economic losses of up to 3 percent of Russia’s GDP. Narcotics-related health issues are particularly rates. cluding rising HIV pressing, in In Russia, the health implications of opiate and other drug abuse are deficiencies in demand reduction exacerbated strategies, by such as the low effectivenessof drug-addic tion medical treatment programs acute shortage of and and treatment social reha the personnel. and specialized bilitation centers Afghanistan: in Presence U.S. Counternarcotics Implications is not direct States the United Russia, Unlike ly threatened by Afghan opiates. According and Russia’s Federal Drug Control (FSKN), Service there are 1.7 million opiate users in of comprising the 68 roughly percent Russia, ------prevalence prevalence rates. As estimated by UNODC Trafficking heroinof and other Afghanistan from drugs to Russia via Central Asia may leading increase, to higher consumption and and further complicate counternarcotics ef Route. along the Northern forts lifted customs controls on the world’s longest longest world’s the on controls customs lifted and Kazakhstan, Russia between land border these risk factors could facilitate trafficking sibilities sibilities for createdtraffickers by expanding Cou infrastructure. transport and flows trade pled with the between regime new free-trade Belarus, Russia, and Kazakhstan, which has In addition, weak border controls and feeble in Central capacity national counternarcotics Asia cannot keep pace with the pos growing to to lead to a sizeable reduction of the opium term. output in the short and its economy economy economy that lacks viable income-generat ing alternatives, antinarcotics measures and unlikely are soft, or tough whether strategies, political political settlement. This will mean continu ing violence, insecurity, and contested gov Thus, in ernance. a deeply-embedded opium ics ics and drug control efforts at home. This is wrap- looming the considering true especially up of operations NATO in Afghanistan in the absence of a fully functional state or lasting Russia Russia may The also be situation short-lived. can easily deteriorate in the next few years, despite Russia’s intensifying counternarcot markets for heroin. heroin. for markets The relative stabilization of opiate inflowsto to to becoming one of the largest consumer States may seem to have less of an incentive went so far as to call previously allocated U.S. to combat the opiate threat than Russia does, funds for counternarcotics in Afghanistan but it has direct access to the source of the “the most wasteful and ineffective program” problem, putting it in a better position than he had “seen in 40 years in and out of the gov- For the United Russia to act. ernment.”11 On June 27, 2009, Holbrooke an- States, the nounced the revised counternarcotics strategy For the United States, the main problems in during a G8 conference in Trieste on stabilizing main problems Afghanistan remain insurgency, terrorism, Afghanistan.12 The revised policy rejected aerial in Afghani- and dysfunctional governance, with concern eradication and prioritized a combination of about heroin cultivation and trafficking initially interdiction (drug seizures and targeting drug stan remain prompted by their role as a source of insurgency traders, cross-border traffickers, and heroin 13 insurgency, funding. In the early years of this century’s first laboratories) and alternative development. decade, when the security situation was initially terrorism, and less tense and the insurgency movement was At the same time, in both theory and practice, dysfunctional regrouping and consolidating, the U.S. focused the revised U.S. counternarcotics strategy in primarily on antiterrorism, state-building (with Afghanistan has become even more strictly governance, particular emphasis on the security sector), and subordinated to U.S. counterinsurgency strat- with concern development. While the DEA reopened their Ka- egy. The central focus of U.S. counternarcot- bul office in January 2003, at that stage coun- ics strategy remains identifying and disrupting about heroin ternarcotics was largely seen as an outcome of funding support for insurgent forces. As a re- cultivation and wider state building efforts, particularly invest- sult, U.S. support for drug interdiction efforts ments in rural development. Dependence on has been largely confined to “going after those trafficking ini- regional powerbrokers—some of whom had di- targets where there is a strong nexus between tially prompted rect interests in the drugs trade and local politi- the insurgency and the narcotics trade, to deny cal bargains in which drug-crop cultivation and resources to the Taliban.”14 The United States is by their role the trade in narcotics played a part—limited the also paying growing attention to alternative de- as a source scope for more robust counternarcotics efforts. velopment solutions. of insurgency The United States’ increased interest in counter- The fact that only a miniscule share of Afghan funding. narcotics efforts followed the marked increase opiates makes it to the U.S. market does not in poppy cultivation and opium production in mean that it does not face a major opiate prob- Afghanistan in 2004, and subsequently with the lem at home. The United States remains the deteriorating security situation in late 2005 and largest drug market in the world.15 While it is a 2006, particularly in the southern region. The highly diversified market, its opiate segment is United States has made a significant financial significant. The opiate problem for the United contribution to counternarcotics efforts in Af- States may be intensifying: the amount of her- ghanistan, both directly (allocating about 2.9 oin seized from 2005 to 2010 almost doubled billion USD in 2001–2009) and through activi- to reach 2.42 mt. The U.S. market for illicit opi- ties that do not fall under counternarcotics bud- ates is dominated by suppliers other than Af- gets.10 ghanistan. According to the DEA, the main inflows come from South America: 58 percent of After coming to power in 2009, the Obama ad- heroin seized in the United States in 2011 was ministration reformulated U.S. counternarcot- of Colombian origin and 39 percent originated ics policy in Afghanistan. This was in recognition in Mexico.16 In addition, a large part of the U.S. NARCOTRAFFICING of the continuing high levels of opium produc- opiate market consists of licit opioids entering tion in Afghanistan and growing concern about the illicit market, i.e., the non-medical use of pre- the extent to which the insurgency was being scription medicines, which is the fastest grow- funded by narcotics. The new strategy also re- ing drug problem in the United States.17 Last but A U.S. Army flected a certain revision of the traditional U.S. not least: Afghan opiates may currently have a colonel and counternarcotics approach and priorities, since marginal presence in the U.S. market, but ac- EWI • AFGHAN • EWI his Afghan it did not want to be seen as supporting eradi- cording to the International Narcotics Control interpreter cation. The new administration believed such Board, 78 percent of heroin trafficked to Cana- 14 discover tactics could alienate the population in insecure da is from Afghanistan. Without more effective a pile of areas and undermine the “heart and minds” pil- counternarcotics efforts in Afghanistan, it could dried poppy lar of its counterinsurgency strategy. be just a matter of time before Afghan opiates plants in gain a larger share of the U.S. market. Badula Qulp, Helmand In March 2009, U.S. Special Representative for province. Afghanistan and Pakistan Richard Holbrooke EWI • AFGHAN NARCOTRAFFICING 15 Comparative Threats The direct harm to Russia as a nation and society from addiction to and abuse of Af- and Shared Concerns ghan opiates can hardly be compared to the minimal presence of Afghan opiates in the The situation in and around Afghanistan U.S. market, but it may be comparable to the poses a major challenge to regional and in- threat that the United States has faced from ternational security. Afghan narcotrafficking Colombian cocaine, both in terms of scale accounts for much of this challenge. How- and preferred response strategies. The kind ever, the opiates originating in Afghanistan of strategy that the Russian government has So while both clearly do not pose a major direct threat to been promoting for Afghanistan replicates the United all stakeholders. Furthermore, the kinds of U.S. counternarcotics strategy in Colombia, threat that Afghanistan’s illicit opiate output with its reliance on large-scale aerial eradi- States and does pose to its neighbors, as well as to Rus- cation, in combination with economic assis- Russia face sia and other European and Asian states, may tance and measures to strengthen state insti- significantly vary in scale and composition. tutions, particularly the security sector. very real The size of the threat is quite different even threats, their for Russia and some of the other consumer While the U.S. government’s position against end-markets in Europe. While the Russian aerial eradication in Afghanistan has irritated main concerns market is overwhelmed by Afghan heroin, Russia, it also has several rational explana- regarding European markets are generally much more tions. As opposed to Colombia, illicit cultiva- diversified. Illicit drug flows from South and tion in Afghanistan is typically on small fields, Afghan nar- Central America, especially via West Africa, located next to food crops, livestock, and the cotrafficking have become their most pressing drug-relat- sources of irrigation and drinking water. Aer- ed threat as stabilizing opiate consumption ial spraying could not occur without causing are actually gave way to growing inflows of cocaine from considerable damage (real or perceived) to quite different. those regions. licit crops and potentially human and animal health. Russian and U.S. priorities, threats, and interests related to Afghan narcotrafficking differ More importantly, thematic evaluations by even more significantly. For Russia, the most UNODC and the Commission on Narcotic vital threat posed by Afghan narcotrafficking Drugs (CND) highlight that an effective coun- is to its own society and to domestic public ternarcotics strategy is one that eradicates health. Social and human security takes pri- only in areas where viable alternatives exist.18 ority. The United States is concerned with the In addition, aerial or widespread eradication security implications of the opiate trade for risks provoking popular unrest and increas- its presence in Afghanistan, including within ing support for the insurgency. The Afghan the ISAF framework, and emphasizes the opi- government and some of the United States’ ates’ link to insurgency/terrorism. More re- major allies, including the United Kingdom cently, the role of the illicit drug business as (former ISAF lead nation on counternarcot- a source of corruption and, thus, an impedi- ics), the European Commission, and development to state functionality has received more ment organizations such as the World Bank, attention. have consistently opposed aerial eradication.

So while both the United States and Russia Despite these differences, the U.S. and Russia NARCOTRAFFICING face very real threats, their main concerns re- are more actively cooperating on counternar- garding Afghan narcotrafficking are actually cotics measures in and beyond Afghanistan. quite different. This is key to explaining why The FSKN and DEA engage frequently—near- Washington and Moscow tend to emphasize ly every month. Efforts can go beyond bilat- different aspects of counternarcotics in their eral fora: the Russian government has agreed respective strategies for Afghanistan. Mos- to host the International Drug Enforcement EWI • AFGHAN • EWI cow pushes for a robust eradication cam- Conference (IDEC) in 2013, for example. IDEC paign to be supported by interdiction and de- brings together law enforcement representa- 16 velopment measures. Washington promotes tives from more than 40 countries to share a strategic combination of select interdiction strategies in dealing with illicit drugs. efforts with alternative development measures while simultaneously providing support Nor should the differences on counternar- to and increasingly relying on the Afghan se- cotics strategies in Afghanistan imply that curity sector for counternarcotics. the two powers do not have some shared - -

EWI • AFGHAN NARCOTRAFFICING 17 - - until the prob lem is sys tematically at addressed the source— Afghanistan. While coun the tering drug trade along the main traffick and routes ing in the main consuming is countries no essential, sustainable can progress be achieved ------This report 19 (July 2011). U.S. Strategy to Combat Transnational and shared concerns about Afghanistan and Afghan narcotrafficking, the following sec tions of this report key review aspects of the complex set of threats posed by the opium transnation the and Afghanistan in economy opiates. Afghan of al trafficking complex complex transnational networks as posing a new type of threat at the regional and global These growing levels. concerns are apparent in the Organized Crime contains a detailed assessment of the pro liferation of transnational organized criminal networks, their growing use of corruption to states, many in governance weaken or co-opt and the intensifying links between drug traf ficking and varioustypes of violence armed and militancy. Because the opiate output stan is likely from to rise more Afghani rapidly post-2014, the U.S.–Russia angle in international regional and cooperation on narcotrafficking will become more pressing. tackling Afghan While countering the drug trade main along trafficking routes and the in the main con suming countries is no essential, sustainable is problem the until achieved be can progress systematically addressed at the source—Af ghanistan. Through this prism of respective priorities but are major regional financialmajor but hubs orregional are glob al financialForcenters. instance, the United States is not the primary destination for the Afghan from proceeds the but heroin, Afghan narcotrafficking may affect while U.S. being laundered interests through the interna system. tional financial Third, links between narcotrafficking,ruption cor and dysfunctional governance, and organized armed violence, including terror ism, have long been recognized internation ally and are fully acknowledged by both the connections These Russia. and States United areas drug-producing major to limited not are alone. In an era of “glocalization”—dynamic interaction of globalization tion—such linkages not only easily spill and over localiza borders in the direction of the main traffick Pakistan to Afghanistan from (e.g., ing routes or Central Asia), but also tend to acquire a broader cross-regional transnational dimen sion. Both countries view these increasingly ------nor main consumer for markets these drugs, opiates. opiates. The laundering of proceeds from il in place take may opiates Afghan in trade licit areas that are neither primary transit routes “source “source areas” and respective transit routes around the world, in contrast to production and trafficking of illicit substances such as and other types of transnational crime and money laundering are endemic. Other types of transnational crime and especially mon ey laundering are less tied to several major tionship to—and strong propensity to exac of erbate—a range broad other transnational threats. The links between narcotrafficking edly multi-faceted challenge that combines economic, security, threats, social, it also has a particularly and close rela political operation. Second, narcotrafficking is not only a mark States’ States’ longer track record in treating drug abuse and addiction, sharing best practices the side demand from of the reduction equa tion is another potentially rich avenue of co counterbalancing counterbalancing trends in other producing weak Russia’s Given regions. consuming and ness in demand reduction and the United latory latory nature of this type of market tends to quickly compensate for declining demand or restricted supply in one regional context by tives aimed at reducing opiate trafficking and trafficking opiate reducing at aimed tives global opiate markets in a coordinated man as the highly self-regu This is important, ner. in promoting international drug control and cooperation counternarcotics in but general, also in the more specific international initia ate ate markets and face serious opiate abuse even if problems, the opiate respective flows originate from different parts of theBoth countries world. have strong interest not only large share of global narcotics and trafficking of global narcotics share large markets. Both the United States and Russia bear the high costs of serving as large opi First, First, of all types of transnational crime, nar cotrafficking remains largest the threat the at global level and opiates account for a sia may, in fact, have more common ground seem. otherwise than it may on the issue the U.S. prioritizing counterinsurgency over counternarcotics. There are at problem the of aspects transnational least broader three that that suggest the United States and Rus the problem of Afghan narcotrafficking in the narcotrafficking Afghan the of problem U.S.-Russian context to Russia’s obsession with its own drug addiction and abuse and concerns concerns that are highly relevant for It both. would be an over-simplification to reduce 3. The Opium Economy in Afghanistan: For much of the first de- An Overview cade of the 21st century, poppy cultivation in Afghani- stan rose and its overall level was higher than that un- ccording to the UNODC, in 2011 Af- cash-generating income. The bulk of the cul- der the Taliban ghanistan accounted for almost two- tivation takes place in relatively marginalized thirds of global poppy cultivation and areas with poor access to markets, few or no de facto rule in 82 percent of global opium produc- cash-generating alternatives, and a lack of Ation.20 According to the U.S. government, general security. the second half which uses a different methodology for esti- of the 1990s. mating poppy cultivation and opium yields, Second, opium production of, local trade in, Afghanistan had an even higher production and the cross-border trafficking of Afghan rate and produced roughly 90 percent of the opiates offers a lucrative source of income world’s illicit opium.21 for various informal economic entrepreneurs such as larger landowners; local and cross- Afghanistan became a major source of global regional traders within Afghanistan; cross- opiate inflow in the late 1970s and 80s and border smuggling networks; and warlords turned into the primary source of the global and corrupt officials. poppy cultivation and opiate production in the 90s. Afghanistan’s opiate output has con- Third, taxing poppy cultivation, opium pro- tinued to grow since the U.S.-led intervention duction and, to a lesser extent, the opiate in 2001. The area under poppy cultivation in trade serves as a conflict resource, primarily the peak year of 2007 (193,000 ha) was more as one of several sources of funding for the than 25 times larger than the low of 8,000 ha anti-U.S./NATO and anti-government insur- in 2001—the last year of de facto Taliban rule, gency dominated by the Taliban. 23 when the strict ban on poppy cultivation had been effectively enforced.22 This section addresses the first of three main

NARCOTRAFFICING functions of the opium economy. It both In post-Taliban Afghanistan, in addition to views the Afghan opium economy as a whole weak governance, insecurity, and the rapid and provides some differentiation between rise in opium price that followed the Taliban various regional contexts. The main focus is ban on poppy cultivation, three other main on the southern provinces, which form the factors contributed to the overall increase core of the Afghan opium economy. This area EWI • AFGHAN • EWI in high levels of poppy cultivation and opium serves as the main source of Afghan heroin, production. These three factors are related to including heroin trafficked via Central Asia 18 the multiple roles played by the opium econ- to Russia. Attention is also paid to the north/ omy and coincide with its three main func- northeast of Afghanistan where poppy culti- tions. vation is low, but heroin manufacturing, opiate trafficking and consumption, and narcot- First, poppy cultivation and opium produc- ics-related corruption thrive. tion provides farmers with a major source of EWI • AFGHAN NARCOTRAFFICING 19 Report. Narcotics Narcotics and Crime Afghanistan Afghanistan Sources: UN Sources: / International / International Opium Survey; Survey; Opium Office on Drugs Drugs on Office Control Strategy Strategy Control U.S. Government Government U.S. ------

28 Accord 26 The number of poppy- Even as governor-led 25 27 The data for 2012 show a 29 6 percent of total cultivation respectively. cultivation total of 6 percent It is alarming that poppy ghanistan cultivation has not in declined Af since 2009 and that opium production has largely been on the rise again. marked increase in cultivation over 2011 (18 percent) despite an increase in led Eradication (GLE). Ninety-five percentof Governor- ditions, the ditions, limited eradication efforts played only a marginal role in this temporary reduc cultivation. tion in poppy short- was decline the that surprising not is It lived. Between 2009 and 2011, total cultiva and the varia stable, relatively tion remained tion in annual opium production was mostly due to changes in per-ha yield weather affected conditions by and plant diseases. Cul tivation started to rise again, reaching, cording ac to the UNODC, 131,000 ha in 2011, or a 7 percent increase for the two previous ha in 2012 (an and 18 154,000 percent years, 2011). from increase growing provinces increased again and the amount of opium produced increased by 61 percent to reach 5,800 mt in 2011. ing to an alternative U.S. government mate, esti poppy cultivation marginally dropped by 3 percent in 2011 opium (to production increased 115,000 by 38 ha), percent, but reaching 4,400 mt. eradication at the provincial level increased by 65 percent in 2011 and by 154 percent in 2012, it only eliminated 3 approximately and insecurity insecurity of individual farmer households. Compared to those changing economic con ------Fig. 2.Opium poppy cultivation in Afghanistan, 1994–2011 Afghanistan, in cultivation poppy 2.Opium Fig. A temporary decline in poppy 24 Cultivation Trends Cultivation tion in the previous years; and growing food term shift to wheat cultivation amidst a global global a amidst cultivation wheat to shift term food crisis; rising wheat prices coupled with low-cycle opium prices due to over-produc by market forces at global, regional, and local local and regional, global, at forces market by This levels. was the result of several factors: a short- towards correction market a positive iban iban (1999). cultivation in Afghanistan in 2008–2009 pri marily occurred due to combined pressures area area under poppy cultivation in Afghanistan temporarily decreased in 2008–2009, but then even it remained 35 than larger percent in the peak year of cultivation under the Tal terim decline in 2008-2009. terim the 2007, of year peak historical the Following are are the possible explanations of the factors upwards both the general to that contributed and an in and production in cultivation trend lowed by a short-lived decline in 2008–2009, 2008–2009, in decline short-lived a by lowed and a renewed increase in cultivation since 2010. Of more critical importance, however, have have not always displayed a linear increase, of a pattern large- a cyclical following instead scale in increase the early to fol mid-2000s, tury, tury, poppy cultivation in Afghanistan rose and its overall level was higher than that un der the Taliban de facto rule in the half of the second 1990s. Cultivation and production For much For of the first decadeof the 21stcen Cultivation and Cultivation Trends Production opium cultivation in Afghanistan took place gan, and Zabul provinces.33 in the south (72 percent) and west (22 percent).30 Helmand province in the south re- The extensive systems and structures in place mains the single largest opium-growing that facilitate the opium trade convey how Poppy culti- province—in 2012, 49 percent of cultivation ingrained it is in the fabric of Afghan society. took place in this one province. Cultivation in- Extensive infrastructure for loans, credit, and vation offers creased in the west by 57 percent (including a farm-gate trade, and well-developed opiate the possibil- 195 percent increase in Herat), in the eastern markets make poppy growing and produc- region (Badakhshan, Takhar, Kunduz) by 37 tion of raw opium the optimal cash crop for ity of gener- percent, and in the north-eastern region by farmers in different contexts and locations. ating quick 13 percent. The central region and the north- While opium prices fluctuate, the net returns ern region did enjoy a decrease in cultivation on opium remain high relative to other crops cash income, (45 percent and 42 percent respectively), (in 2011, the ratio between gross income from particularly but these two regions account for less than opium to wheat was 11:1),34 and traders tend 1 percent of cultivation.31 Although multiple to purchase at the farm-gate, minimizing the in areas that provinces in Afghanistan still enjoy a “poppy- transport and transaction costs incurred by lack alterna- free” label, the pursuit of this label itself has the farmer. ambiguous consequences with the potential tive economic to contribute to destabilization. “Poppy-free” The general insecurity also contributes to opportunities is no longer just a measure of the distribution the success and growth of the opium trade. of development funds but is now a designa- Insecurity is, of course, a major problem on a and general tion to be pursued. The result is that provin- national scale that reflects the government’s security. cial governors have targeted small amounts limited outreach, access, and functionality. of cultivation through eradication in an effort It complicates even modest counternarcot- to achieve a poppy-free status, provoking re- ics or alternative development efforts. The sistance and contributing to destabilization. causes and manifestations of this general Nangarhar in spring 2010 is an immediate ex- insecurity, however, cannot be reduced solely ample, when an eradication campaign late in to the Taliban-led insurgency: opium produc- the growing season in Sherzad District in April tion does not singularly correlate with Taliban led to Anti-Government Elements (AGEs) be- presence. ing invited into the district by disgruntled farmers, resulting in fighting between the Af- The western region ranks second in opium ghan National Police (ANP) and AGEs.32 production. Farah and Nimroz have particularly high levels of cultivation—but the Tal- Factors Affecting iban has also been making inroads back into Cultivation Patterns these provinces, which have strong anti-government elements. In the west (as well as in While poppy cultivation is increasing in some the north and northeast of Afghanistan), inareas and decreasing in others, the national security is largely fuelled by violence by and upwards trend indicates that local reductions between the local strongmen, including some are being offset by increases in other districts anti-government elements, and all sorts of in- or regions. For Afghan farmers, the decision formal smuggling networks. Extremely poor whether or not to grow poppy is complex, security in the main poppy-growing districts context-specific, and driven by a combination of Nangarhar province in the east (Sherzad NARCOTRAFFICING of social, economic, and security factors. and Khogyani) or in the Uzbeen valley in the central Kabul province is partly linked to an- Poppy cultivation offers the possibility of ti-government elements, but not necessar- generating quick cash income, particularly ily the Taliban. The minimal presence of the in areas that lack alternative economic op- Taliban insurgents in the northern region has portunities and general security. The impor- not guaranteed stability or prevented farm- EWI • AFGHAN • EWI tance of opium as an indispensable source ers from restarting poppy cultivation in some of cash income for farmers’ households in districts in 2011.35 But the northern region is 20 poppy-growing districts is underscored by not without anti-government elements, par- widespread resistance against eradication— ticularly in Wadooj, Argi, and Darayem in Ba- from direct attacks and mine explosions to dakhshan and Sholgara, Chemtal, and Char- demonstrations—in the Badghis, Day Kundi, bolak in the Balkh province. Farah, Ghor, Helmand, Hirat, Kabul, Kanda- har, Kapisa, Kunar, Nangarhar, Nimroz, Uruz- - EWI • AFGHAN NARCOTRAFFICING 21 - - on-farm, off- on-farm, non- and farm, income farm building and social nets. safety Initiatives Initiatives from ranged find to attempts so single-crop as (such lutions pome wheat, saf granates, or onions, fron, more to cotton) efforts complex diversifying at ------37 37 may may provide a more viable alternative to the opium economy than select context-specific substitution strategies related to agriculture harsh the to points implication Another alone. poppy sustained of areas many in that, reality cultivation and opium production in Afghani stan, more successful alternatives to poppy are wages licit or crops substitute either than alternative illicit/informal activities such as growing insecurity will growing impede licit economic opportunities and markets, while the signifi cantly expanded arable and irrigated areas are likely to be diverted to poppy cultivation again. Location is a key factor in determining cash-generating strategies the of farmers. Non- poppy growing households in areas in close proximity to markets, good transportation options, and with high will consumer have significantly demand more crop diversifica tion. Where poppy has been abandoned for households with limited reason, re whatever sources and without easy access to markets and transportation have to rely on non-farm remittances) and labor wage as (such income as there are simply The few via alternatives. as jobs cash-generating non-farming, of bility highly thus is farming poppy to alternative an on the region. contingent One important implication is that, on a tional na scale, general economic reconstruc tion and development, including the growth of industrial, and resource, services sectors, licit crops under pressure from authorities, but fail to adopt or complex sustainable crop diversification. With no other viable income sources, including non-farming opportuni ties, farmers typically show nomic signs distress and of adopt coping strategies eco that undermine earning capacity, their future of quantity and quality the reducing including health expenditure, delaying consumed, food and failing to meet assets, selling productive social obligations, such as marriage costs. in areas with no Furthermore, viable income- generating alternatives, a major decline poppy cultivation in (due to coercion, weather or other tends pressures) to create more in not less. security, Afghanistan has never had as much land un der irrigation as it currently does. After ISAF withdraws, the Afghan fragile control of some of the government’s poppy-growing still provinces is likely to This significantly lack weaken. of state presence coupled with ------However, to become become to However, 36 Alternatives to Poppy Cultivation Cultivation Poppy to Alternatives ers ers may temporarily increase cultivation of sustainable, sustainable, especially in more remote and less secure areas, with limited or no access to markets and income opportunities. Farm cal levels. cal are not universally These solutions, however, prehensive rural development, and rural prehensive development, improved in hand go should which order, and law of rule and security in overall hand with the increase at functional the governance national and lo close to urban centers. urban to close sustainable, areas that have seen progress must see investment in com infrastructure, international security support international all security contributed to reduction of poppy fields insouth areas of the Boghra Canal, especially in rural areas crop diversification programs, growing devel growing programs, diversification crop pres state increased and assistance, opment ence backed by upgraded government and While this reduction was largely stimulated in wheat increase a by market-driven general prices due to growing food insecurity, there were also other factors. A combination of cultivation in Central Helmand in 2008–2011, 2008–2011, in Helmand Central in cultivation and other crops. wheat by replaced partly been effectively introduced in the more fertile more the in introduced effectively been and accessible districts of Nangarhar. other example is An a major reduction in poppy sistance; sistance; and access to diverse income op portunities, including non-farm cash-gener ating New incomes. for crops instance, have, ban centers; improved security; better access access better security; improved centers; ban or to expanded irrigation; markets; improved as agricultural government of availability the inces that have been central to Afghanistan’s Afghanistan’s been that to inces central have opium economy—such as the south and the east—when certain factors applied. They in clude: central locations relatively close to ur These efforts have made some progress even even progress some made have efforts These in select areas of those regions and prov appropriateness appropriateness of such measures heavily depends on the local socioeconomic, politi context. and security cal, more complex efforts at diversifying on-farm, on-farm, diversifying at efforts complex more off-farm, and non-farm income and building social safety nets. The effectiveness or even cused on strengthening and diversifying legal legal diversifying and strengthening on cused livelihoods. Initiatives ranged from attempts to find single-cropsolutions (such as wheat, pomegranates, saffron, onions, orcotton) to To reduce To economic dependence on opium, the international development and community Afghan authorities have increasingly fo Fig. 3.Opium production in Afghanistan, 1994–2011

Sources: UN smuggling, including smuggling of licit com- The overall size of the opium economy in Af- Office on modities. Migration to cities or even emigra- ghanistan is best illustrated by comparing Drugs and tion is also a possible alternative to poppy its total value with the country’s licit GDP. Crime Afghani- farming. In 2011, the farm-gate value of opium pro- stan Opium duction alone was estimated at 1.4 billion Survey; U.S. Government / Opiate Production, Trade, and USD, or 9 percent of the licit GDP (16.34 bil- International Consumption in Afghanistan lion USD). The total net value of the opiate Narcotics Con- economy—the net exports of opiates—has trol Strategy In the 1980s and 1990s, the opium economy been estimated at 2.4 billion USD, or around Report. in Afghanistan was still largely confined to 15 percent of GDP in 2011.40 Adding the net poppy growing and production of raw and dry value of Afghanistan’s domestic opiate con- opium. In the course of the 2000s, the full sumption (which is already worth 1 percent of narcotics production cycle developed, from licit GDP), the sum of domestic market and cultivation to conversion into morphine and the export value of the remaining opium for heroin, as well as massive storage and whole- 2011 was estimated at 2.6 billion USD.41 Of sale trade at local, regional, and cross-region- this amount, poppy-growing farmers earned al levels. Drug laboratories within Afghani- around 1.4 billion USD. The farmers usually stan that are often clustered in border areas contributed a share of this income to the lo- process a large portion of the country’s raw cal mullah and a share to public expenditures opium into heroin and morphine base. The (education, medical care, etc.). The remain- UNODC estimated that 42 percent of opium ing 1.2 billion USD could accrue to the crimi- production in 2008–2010 was converted into nal entrepreneurs inside Afghanistan—those morphine or heroin inside of Afghanistan. involved in processing the opium, trading If this ratio is applied to 2011, the output of opium inside Afghanistan, and narcotics traf- NARCOTRAFFICING the opium economy inside Afghanistan could ficking across the borders. have consisted of 3,400 mt of unprocessed opium and 348 mt of morphine and heroin.38 This vast amount of financial resources gen- erated from the opium economy cannot be Afghanistan is also the largest global produc- easily substituted by other economic activi-

EWI • AFGHAN • EWI er of hashish, with estimated production in ties. It also comes at a very high cost to Af- 2011 between 1,200 to 3,700 mt with a farm- ghanistan. This is especially true considering 22 gate value between 85 to 263 million USD. the growing local demand and the domestic This reflects the growing cannabis cultivation opiate addiction problem. In 2009, the esti- in Afghanistan, which can sometimes even mated number of opiate users in Afghanistan provide a higher net income per hectare than reached 353,000 (a 59 percent increase from opium due to lower labor costs.39 2005). Of these, 233,000 were estimated to be opium users (a 52 percent increase from 2005) and 120,000 to be heroin users (a 142 EWI • AFGHAN NARCOTRAFFICING 23 - and insurgent insurgent and groups. Opium traders traders Opium with operate legal of fear little consequences of part pay and di profits their corrupt to rectly local officials, strongmen, ------48 47 a greater a focus greater on interdiction by those ISAF troops. As a result, most seizures are ISAF- related. a generally is however, Afghanistan, Northern safer part of the country despite occasional minor spillovers of cross-border violence to and from relative Central Asia. Nevertheless, to its role in processing and trafficking along routinely reported by communities in conflict conflict in communities by reported routinely areas, who often unfavorably compare low moral standards of government employees Taliban. the of those to Cross-border traffickers and precursor im porters, in turn, have to pay po and border strongmen, guards, regional operators, airline litical officials.Profit shares from drug-trade climb further up revenues and the patronage corruption ladders, reaching higher levels of government bureaucracy, security politics, and sector, social The structure. higher the modi get they more the climb, revenues drug fied and diversified in theprocess, including laundering activities. money through in of seizure heroin the levels north Low have several possible explanations or contribut ing but factors, the common denominator is some combination of corruption and insecu the In of low Afghanistan, rates southern rity. heroin seizures are linked to high insecurity Due conflict. ongoing the by primarily caused to persistent insecurity in with the there directed been have resources south, ISAF more iticians, and iticians, businessmen and some of them business opiate the in involved be to continue and corruption narcotics-related and money laundering. At the local level, villagers or wealthier land their poppy to keep bribe eradicators owners crops safe; farm-gate traders pay the police to pass checkpoints on the road to the mar ket; and owners and of operators processing facilities pay off whoever controls area at the the time. For example, field-based stud ies of the dynamics economy of in southern Afghanistan confirm the a Afghan opiate widespread perception that corrupt officials, National Afghan the of in the ranks especially Police (ANP) and the more recently estab lished local police, are as heavily involved in taxing opiate trade as the anti-government elements. They are also and intimidation “taxes” for of generally illegal farmers blamed who travel by road. Predation by authorities, including ANP and especially local police, is ------44 (Russia may have have may (Russia 43 The U.S. government 45 This points to a disturb 42 In many provinces, local strong In many provinces, 46 consequences consequences and pay part of their profits directly to corrupt officials, local strongmen, and insurgent groups. Many large traffickers pol officials, public become themselves have trade and other criminal activities. and other criminal activities. trade Opium with operate traders little of fear legal drug trade. men—both in and out of government—con trol opium markets as well as the illicit arms els of government. concurs with the UNODC that many Afghan government officialsdirectly profit from the Those Those who from theprofit opium business in Afghanistan include “a broad range of profi teers, at home including and solely abroad,” criminal groups and officials at different lev Narcotics-related Narcotics-related corrupt deeply practices embedded, multiple, are and diverse. equivalent to 3 percent of Afghan GDP. Afghan of 3 percent to equivalent and Corruption Illicit Drugs sum of domestic consumption and of Afghanistan illicit in sales opiates northern export for 2010 was estimated at 393 million USD, tionally, tionally, cross-border opiate traffickingfrom northern Afghanistan to Central Asia could bring traffickers 344 million USD. total The ers ers consume an estimated 85 tons (mostly drug local bring could which annually, opium) traders around 50 million USD a Addi year. use. In northern Afghanistan alone, opiate us survey survey bias—access is much more problem atic in the south due to it is security possible that additionally, cultural norms concerns; drug to admit to likely less respondents make tion, tion, such as the northern (32 percent) and central areas (33 percent). However, these regional differences could be explained by shows shows that more than 65 percent of opiate is consumption Afghanistan for in accounted produc opium minimal or low with regions by the largest number of Afghan heroin users, number absolute while China has the highest of opiate users in the world.) The same data istan istan has evolved into the country with in at the world rate prevalence opiate the highest 2.65 percent—followed by Iran with a preva percent. 2.26 of rate lence proportion of heroin users. users. heroin of proportion Afghan decade, first century’s this in Overall, percent percent increase). ing trend of a rapidly growing number and NARCOTRAFFICING EWI • AFGHAN • EWI

24 EWI • AFGHAN NARCOTRAFFICING 25 - - - northern “We are not are “We farmer from from farmer for bread on bread for Afghanistan. (poppy field) (poppy criminals, we we criminals, profits and and profits the threatens the of future a as country whole. While the opi the While economy um Afghanistan in farmers helps of number a in their feed areas also it families, traffick earns corrupt ers, and officials, strong other major men are just trying just are our table.” — A A — our table.” is only enough to survive. What What survive. to we get from this from get we ------

52 foreign foreign security forces withdraw, the com bination of the reduced state presence, the dwindling economic alternatives to farming opium and declining development tance assis amidst growing insecurity and land more under irrigation may lead to an increase and production. cultivation in opiate economy economy also reinforces—no less than the insurgency does—the perception that government is weak the and ineffectual. Finally, Afghanistan serves as a center for the larger opi of and a source opium economy regional ate trafficking that dramaticallyaffects neighbors and its other large markets, such as Russia and other states in Europe and Asia, while high generating for profits transnation launderers. al criminals and money More specifically, two risks may make situation the with Afghan narcotrafficking risk some is even first The future. near the in worse of a return to more significant poppy cultiva tion in Afghanistan. This northern/northeast is due in large part to an expected decrease in It security may post-2014. also partly be a market response to a previous decline in lo met up to cal half cultivation that, until 2007, of the Northern opiate Route demand and to opium stocks. local the depletion of The second and more dangerous risk cerns con Afghanistan’s main This risk highlights that after southern areas. drug-producing showing showing that many Afghans are increasingly for ev at frustrated “bakshish” having to pay electric or license a getting as such erything, ity. More generally, a mix of corruption and the more traditional patronage and “baksh ish” practices is a function of a tional semi-tradi society and economy that traumatic and been painful undergoing mod has long ernization, severely distorted by decades of violence of and an growth informal economy, and remains in urgent need of comprehen development. socio-economic sive While the opium economy their feed in a number areas of farmers helps in Afghanistan families, it also earns traffickers, corrupt of ficials, and other strongmen majorand threatens the future profits of the country as a whole. It stimulates rising domestic abuse, opiate spreads corruption, inflates currency values and real estate prices, raises the cost prevents and thereby business, doing of legal the of growth The a opium healthy economy. ------51 In north 50 49 plished more quickly, there are also surveys ture ture and thus immutable. not as “bakshish” Afghans see a bribe but as Although some a small sign of respect to get things accom Widespread Widespread corruption and how patronage, ever endemic and long-standing, should not be viewed as an inherent part of Afghan cul drivers, drivers, from police officers farmers.to The UNODC has estimated that Afghans spend alone. “bakshish” on a year 2.5 billion USD kind of patronage system and type practices “bakshish”- affectevery part of the popu lation, from university professors to taxi both the local and national levels. While large- While levels. national and local the both scale corruption involves very narrow social strata—bureaucrats and other elites—some trenched trenched in Afghanistan, including nepotism and multiple overlapping or at strongmen various conflicting by run systems pa tronage The term “corruption” in its modern sense, understood as a rather advanced type does relationship, not capture the com market- plex mix of corruption-style practices en North Korea) on Transparency International’s International’s Transparency on Korea) North Index. Perception Corruption 2012 of general corruption. Afghanistan has one of has one of Afghanistan corruption. general of the worst corruption problems in the world, tying for last place (along with Somalia and most prevalent type of corruption in Afghani of corruption in type prevalent most it stan, is connected to and carried out in the wider context of deeply embedded practices ing the poor record of drug seizures. drug seizures. of ing the poor record While narcotics-related corruption is the ern Afghanistan, then, the facilitating role of corruption, narcotics-linked patronage net works, and the limits of explain towards way long ISAF a go mandates and deployments unhindered, unhindered, and, as elsewhere in stan, the largest traffickers Afghani are protected by political linkages and alignments. to to border areas or crossing points. Law en particularly is counternarcotics on forcement weak, traffickers appear operate to almost forces forces to attacks. The minimal seizures re ported, mostly in Badakhshan, take place in the processing areas and very rarely extend ble, there are fewer ISAF resources deployed ble, there deployed are fewer resources ISAF in the north and ISAF troops there sought to limit their counternarcotics mandate, fearful that such a focus would further expose ISAF in the country. In 2010–2011, it accounted for for accounted it 2010–2011, In country. the in just 5 percent of the country’s total But seizures. because heroin the north is more sta the Northern Route, northeast Afghanistan seizures opiate of levels lowest the of one has 4. Transnational Trade in Afghan Opiates and Money Laundering

The estimated annual value of the global market in Af- hile the extensive and deeply Main Trafficking ghan opiates embedded opium economy in in 2008-2009 Afghanistan serves as the larg- Routes, Markets, and est global source of illicit opiates, Profit Distribution was around 60 Wthe profits and problems inherent in the drug billion USD. trade have a much wider footprint. Afghans The UNODC estimates that 92 percent of only take home a very minor share of the the opiates produced in Afghanistan are traf- profits made from trading Afghan opiates. ficked out of Afghanistan; the rest -is con The larger profits are collected by traffickers sumed domestically or seized at the border. It along the transit routes and by distributors in is the trafficking and distribution that gener- the main consumer markets, both in transit ates the largest profits along the lengthy nar- states (such as Iran and Pakistan) and in the cotics chain. The estimated annual value of end-markets (such as European states, Rus- the global market in Afghan opiates in 2008- sia or China). 2009 was around 60 billion USD.53 The profits accrued by transnational traffickers and Trafficking of Afghan opiates and the result- organized crime groups that control distri- ing money laundering of these proceeds are bution in the main consuming states are, on vast moneymaking enterprises, and that’s average, 20-25 times higher than the income where the problem lies. Trafficking routes are that stays in Afghanistan. Afghan traffickers plagued with related problems that ensure are heavily involved in shipping opiates across that the effects extend far beyond Afghani- borders, especially to Iran and Pakistan, but stan’s borders, including increased drug not as much in subsequent trafficking. use, crime, violence, and the rapid spread of HIV and other diseases. Both trafficking and

NARCOTRAFFICING Border security continues to be a major chal- money laundering have corrupted govern- lenge throughout Afghanistan, with only 14 ments at all levels—which then leads to sec- official border crossings under central- gov ond order effects on governance, security, ernment control. Most border areas are un- and the economy. der-policed or not policed at all, making them particularly susceptible to cross-border traf-

EWI • AFGHAN • EWI Section 4 outlines the main directions and ficking. patterns of transnational trafficking of- Af 26 ghan opiates, markets, and profits distribu- Currently, the main opiate trafficking routes tion. While only a quarter of Afghan opiates out of Afghanistan run, in order of size of traf- are trafficked through the so-called Northern fic flows: (a) through Pakistan to China, other transit route via Central Asia, this route has Asian states, Iran, the Middle East, and Africa; important specific attributes, which, given (b) through Iran via Turkey to Western Eu- the focus of this report, deserve particular at- rope; (c) through Central Asia to Russia along tention. - - - EWI • AFGHAN NARCOTRAFFICING 27 - - ern Europe; (c) (c) Europe; ern Central through Rus to Asia the along sia Route. Northern The main opi main The trafficking ate Af of out routes run, ghanistan size of order in flows: traffic of through (a) Chi to Pakistan Asian other na, the Iran, states, East, Middle (b) Africa; and via Iran through West to Turkey ------56 was smuggled 57 In addition, 35–40 58 Central Asia: the Northern Route Asia: Central At the next stage, the traffickers make the best best the make traffickers the stage, next the At visa-free and borderless practically the of use between countries regimes of the region and the transport Russia, mainstream infrastruc systems, railway and road the especially ture, the weak economies, limited functionality of the in conditions social poor and governance, An analysis Asian by UNODC- states. Central Regional Asia Central Almaty-based affiliated of of heroin from Afghanistan through the Northern Route to and through Central Asia. This amounts to 90 mt of her oin, some of which is consumed in Asia. Central More than reaches three the Russian market. It quarters, is suspected however, that a small portion may continue to onward Europe—a claim that FSKN chief Viktor Iva nov strenuously rejects. mt of opium are trafficked consumption. domestic for Centralmostly to Asia, Opiate trafficking along the Northern Route via Central Asia can be split into The stages. first two stage involves cross-border main transit from Afghanistan. Payment is usually in cash in or, some cases, the parties barter in cars and arms. especially those some, that Once the cross border, opiates cross the Afghan-Tajik border, are trafficked onwards in at the lab Afghan times original packaging, found as far as Russia. Others and areas border stored—in often aged—and are repack in major redistribution centers (such as the in Kyrgyzstan). Osh of city the Balkan route—the shortest way to traf also con are opiates Some Europe. in sumers ficked via Iran Centralto Asia Turk and via menistan to Iran. The Iranian transit has two route specific characteristics.First, while most heroin continues and onward Europe, a large to share of Afghan Turkey opium is consumed in Iran, contributing extremely to high Iran’s rate of opiate addicts—sec ond only to Afghanistan. Second, in contrast to Afghanistan, Pakistan, and most Central Asian states, Iran invests massive efforts in its robust and pro-active enforcement-and interdiction-centered counternarcotics poli Afghani with especially along its border cies, stan. As a result, Iran seizes more illicit opi ates than any other country in the world—in other all than more times eight seized it 2010, combined. opium seizures countries’ In 2009–2010, approximately 25 percent

------54 55 Pakistan and Iran Pakistan left Afghanistan Afghanistan left via Iran and continued along minor additional inflow from the north. from minor additional inflow In 2009, over 31 percent of exported heroin as far as the northern ports of Russia. In addi In Russia. of ports northern the as far as tion to its main supply Afghan of heroin from Asia Central in the Russia south, now a faces turbing increase of direct maritime trafficking trafficking maritime direct of increase turbing of Afghan opiates from the Pakistani ports to Europe. Part of that trafficmoves further through the European ports, some reaching transportation transportation infrastructure, create re and favor storing, trafficking, for conditions able dis a been has there Recently, opiates. fining particularly particularly in the northwest, where there is widespread violence and corruption. Those maritime and land existing with along factors, resources resources and downgrading counternarcot ics to a This secondary task. region lacks ba areas, border to access state and security sic stan, especially in the Federally Administered Administered in especially the Federally stan, the Areas Tribal on-and-off (FATA), counter insurgency campaign takes priority for the government, absorbing much of its security Many Many of the problems that Pakistan faces as a transit country are similar to those faced by Afghanistan. In the northwest of Paki with minor shares also coming from China, Asia. and Central India, grown in areas along the border with Afghani with border the along areas in grown stan. Finally, the majority of precursors are imported into Afghanistan from Pakistan, or by the Pashtu and other tribes on either side of the border. Pakistan also remains a minor producer of opiates from illicit crops ficked out of the country transited Pakistan. transited country the of out ficked The Afghan-Pakistani border has just three official crossings, and borderthe is not for mally recognized by the Afghan government By By 2009-2010, this flow became the largest one: in 2009, approximately 44 percent (or 160 mt of the 365 mt) of Afghan heroin traf and one of its the joins later that corridor transit western a as served branches has long to via Europe “Balkan Iran route” and Turkey. Iran; the rest leave via the north. north. via the leave the rest Iran; Pakistan is an old narcotrafficking corridor the two main transit countries for opiates and opiates for countries transit main two the hashish originating in Afghanistan. It is esti Afghanistan’s of percent 75 about that mated and Pakistan through leave opiates trafficked Since the 1980s, Pakistan and Iran have been have Iran and Pakistan 1980s, the Since the Northern Route. the Northern Information Coordination Center (CARICC) opiates that are trafficked through its territo- estimates that 70–75 percent of opiates that ry.61 Security agencies in Tajikistan have been cross Central Asia are transported by road, in chronically reluctant or unable to arrest and trucks and cars, through Kazakhstan to adja- prosecute high-level drug smugglers. cent regions of the Russian Federation. Tran- sit by rail and air accounts for another 15–25 Opiates that cross the Afghan-Tajik border The major- percent, and there has been an increase in the are then consolidated in trafficking hubs, ity of Afghan use of rail transportation for trafficking. Eight especially in Dushanbe, and trafficked west- to ten percent of the Afghan heroin reaching ward into Uzbekistan and northward to Kyr- opiates traf- Russia is trafficked by air, mainly from Tajiki- gyzstan, with a small portion trafficked to ficked through stan. The price differences between Central Russia directly by air. A smaller, older opiate Asian transit markets and the wholesale mar- route to Osh (Kyrgyzstan) runs eastward the Northern ket in Russia are significant: 1 kg of heroin through the remote Gorno-Badakhshan Au- Route initially worth 4,000 USD in Tajikistan costs at least tonomous Oblast, which is largely outside five times more in Russia.59 government control. Kyrgyzstan has poor pass through border controls and has experienced the Tajikistan. At each transit stage from the Afghan border highest levels of political instability in the to Russia, trafficking involves many players region in the first decade of this century. It Transit through of different sizes and capacities. They range remains the main route for Afghan opiates Tajikistan from fragmented, small, often family/clan- trafficked through Tajikistan. Most of the opi- based groups to larger and better-organized ates first reach the southern Batken province amounts to 85 criminal operations able to move large ship- from where they are mainly trafficked north percent of the ments, often with the cooperation of corrupt to Kazakhstan (from where they continue on officials. to Russia), while some are also exported from total opiate Kyrgyzstan to China. Opiate seizures along flow through While some broad generalizations can be the Kyrgyz borders are almost negligible and made regarding the main patterns of the Af- the total seizures reached their lowest point Central Asia. ghan opiate trafficking through Central Asia, in seven years in 2010.62 it is important to differentiate between the countries of the region. Country specifics and In contrast to Tajikistan and Kyrgyzstan, Uz- even regional variations at the subnational bekistan has built a more efficient border level are significant—in terms of the size of control system. This has been facilitated in trafficking and profits, organization of trade, part by the relatively short border with Af- direction of flows, and interdiction levels. ghanistan—all 137 kilometers of which are double-fenced—as well as a robust and The majority of Afghan opiates trafficked relatively functional security sector and the through the Northern Route initially pass government’s heightened concern about through Tajikistan. Transit through Tajikistan any potential spill-over of instability from Af- amounts to 85 percent of the total opiate flow ghanistan as well as from neighboring Cen- through Central Asia.60 In northern Afghani- tral Asian states. The main border crossing stan, most laboratories are concentrated in at Hairaton Bridge over the Amu Darya River, areas along the Tajik border. The trafficking which is the busiest transportation hub along situation at the Afghan-Tajik border remains Afghanistan’s northern border, has a heavy a major concern, especially after the with- security presence. Most smuggling, then, NARCOTRAFFICING drawal of Russian border guards from that takes places at illegal border crossings and border in 2005. with necessarily smaller amounts than can be shipped via road. Uzbekistan has the high- Russia has sought to reintroduce Russian est interdiction rate in the region—the border guards on the Tajik-Afghan border, a UNODC estimated the interdiction rate at move that, for now, Tajik President Emomali over 10 percent in 2010, which also marked a EWI • AFGHAN • EWI Rahmon opposes. Much of the trafficking 25 percent increase that year.63 passes through the Panj River, including al- 28 most open drug trade on some of the border Turkmenistan is in many ways a stand-alone islands. The volume of drugs passing through case and an exception from the main patterns Tajikistan suggests that traffickers are using and dynamics of the Northern Route traffick- official crossing points such as the Nizhny- ing. Thanks to its unique position and size- Panj Bridge. Overall, Tajikistan seizures ac- able borders with both Afghanistan and Iran, count for no more than 2 percent of Afghan Turkmenistan has evolved as an important EWI • AFGHAN NARCOTRAFFICING 29 - March 2012. March Sources: UNO Sources: DC, 2011; FSKN, FSKN, 2011; DC, - - - - -

66 Afghanistan Afghanistan since 2007 and the subsequent depletion of existing opium stocks. Drops in opiate seizures may also suggest weakening interdiction capacity and growing narcotics- related corruption across the region, a trend decline a of indicative as to points Russia that in Tajikistan’s border interdiction began troops border Tajik capacity. after occurred This in 2005. border Afghan-Tajik the guarding tion is widespread in the region, and laws that laws and region, the in widespread is tion enforced. not well it are cover One disturbing development emerging from the Northern Route opiate trafficking figures noted by UNODC is a mismatch the between relatively stable volume of drugs that enter the Russian market from this direction and a significantdrop seizuresin of heroin opium and in all Central Asian states except Uz bekistan. In 2010 overall regional seizures of opium declined by 36 percent while heroin seizures fell by 25 percent. Cen Altogether, tral Asian countries seized less than 3 per cent (or 2.6 mt) of heroin trafficked through in 2010. the Northern Route There is a lack of precursor seizures, which partly thereflects mainfocus of the interdic region on opi of the states by the tion efforts Explanations exports. not imports, ate-related for declining seizures in Central Asia range from changing trafficking patterns, such as their increasingly fragmented and discreet nature, or a decline in opium interdiction, or reductions in poppy cultivation in northern

------65 Fig. 4. Profit distribution in the global heroin market market heroin in the global distribution Profit 4. Fig. This is comparable to estimated profits profits estimated to comparable is This 64 sit in Central Asia. Narcotics-related corrup opiate production, it’s the traffickers, corrupt the traffickers, it’s opiate production, officials and other whopowerbrokers collect Afghan tran opiates from of most the profits (for instance, by China or Turkey). In contrast In contrast Turkey). China or by instance, (for to drug profits inAfghanistan wherefarmers may garner over half of the net profitfrom Either of these informal sources of revenues aid and foreign of the volume outmatches far may be comparable to the volume of formal external economic investment in the region it is only exceeded by remittances sent migrants working in by Russia and Kazakhstan, estimated to reach 2.4 billion USD in 2010. of of narcotics trafficking as the source of illicit and Kyr especially Tajikistan in cash income, gyzstan, remains huge. On a regional scale, ers ers in Afghanistan in the same year (1.2 bil lion USD). While Central Asian countries are the starting their to role diversify economies, ers ers in Central Asia in 2009 USD. was 1.4 billion from the opiate trade by received all traffick Turkmenistan and then to Iran. Iran. and then to Turkmenistan to According the the UNODC, net profit from heroin trafficking to Russia made bytraffick nian-Afghan nian-Afghan border. For traffickers, one way around that border is the long remote poorly border guarded into and Afghan-Turkmen onwards along the so-called Balkan route. As As along the onwards so-called Balkan route. mentioned Iran above, has the strictest bor der controls system in the region at the Ira subsidiary branch of the major westward traf westward major the of branch subsidiary fickingcorridor Afghanistan to from Iran and Fig. 5. Hard narcotics market value in Russia

Source: There are two other more fundamental ex- ics, customs, and border controls between FSKN data planations of this confluence of large-scale Central Asian states lags far behind increased disclosed in stable trafficking with declining seizures. economic cooperation between Central Asian March 2012 The first one is related to the region’s- de states and Afghanistan, between Kazakhstan veloping transport infrastructure that links and the rest of Central Asia, and between the it more closely to both Afghanistan on one region and Russia. National border, customs, end, and to Kazakhstan, Russia, and China on and counternarcotics security systems in the the other. This infrastructure both facilitates region are largely developed in isolation. and reflects the expanding regional trade. In general, these are very welcome processes Russia is the main final destination of the Af- that expand economic cooperation and spur ghan heroin trafficked through the Northern socio-economic development in the region. Route. It is estimated to be one of the larg- At the same time, these new, upgraded and est single markets for heroin likely with the planned road and railway networks are—and largest total number of heroin users in the will be—increasingly utilized by traffickers world(see Fig. 1).67 According to FSKN esti- to blend into the licit goods flows, improve mates, the Russian heroin market value is 6 logistics, increase undetected shipments, billion USD.68 If the global heroin market is 61 and facilitate access to markets. Examples billion USD, as the UNODC estimates,69 then include the newly built Hairaton-Mazar-i- the Russian market alone makes up almost 10

NARCOTRAFFICING Sharif Railway, which will link Turkmenistan percent of the global heroin market. If we add with Kazakhstan and Iran, and an agreement the Central Asian heroin market to the mix, between China, Kyrgyzstan, and Uzbekistan which has been estimated at 1.4 billion USD, calling for a regional rail line connecting the the Northern Route alone could account for three countries. some 12 percent of the global heroin market. Heroin is the main source of profits and the EWI • AFGHAN • EWI Second, it may be more accurate to point to largest drug market in Russia, followed by 1.5 a growing gap between expanding trade and billion USD worth of hashish (also primarily of 30 transportation possibilities and limited state Afghan origin) and 1 billion USD worth of syn- security capacity across Central Asia, includ- thetic drugs. By comparison, opium, deso- ing inter-state cooperation on counternarcot- morphine, and cocaine account for 200 mil- ics and border control, than to suggest uni- lion, 100 million and 80 million USD of drug versal decline in interdiction capacity. More profits, respectively (see Fig. 5).70 specifically, cooperation on counternarcot- -

EWI • AFGHAN NARCOTRAFFICING 31 trafficking from from trafficking Asia Central increase. may While the heroin heroin the While Russia into flow stabilized has relatively a at since level high 2009-2010, risk a is there com the in that, opiate years, ing hashish and ------CSTO strategic rivalry in Central Asia. Asia. in Central rivalry strategic CSTO tion Network or NDN), as supply routes U.S. and forces NATO to running through Paki stan were becoming ous and increasingly unstable and subject to the ups and danger downs in the U.S.-Pakistan relationship. proposed State of Department the U.S. In 2012, a 4.2 million USD narcotics Initiative Central to support Asian Central Asian Counter focused on disrupt efforts, counternarcotics ing the narcotrafficking these countries to participate andin the work of encouraging the Northern Route Working Group the DEA. lished by estab drug EU-led) con (or U.S.-led most However, Central in initiatives counternarcotics and trol Asia tend to develop parallel to, rather than in coordination and cooperation with, those Russia a plays where efforts regional existing lead Indeed, the role. UNODC-affiliated CAR ICC remains the main partic regional Russia’s and cooperative U.S. both with framework ipation. This reflects the persistent low level of trust each regarding other’s interests and presence in the region and NATO–SCO/ the the of sides both widespread on perceptions The UNODC/CARICC The format UNODC/CARICC is supplement ed by several other China regional extent, cooperative some ef to and, Russia, by led forts from range initiatives These and Kazakhstan. the more narrowly tered Central Asia Counternarcotics Quartet counternarcotics-cen that Russia, Afghanistan, includes Tajikistan, and Pakistan, to counternarcotics initiatives by larger regional organizations. Those clude in the Operation bi-annual Kanal (Channel) organized by law interdiction-centered agencies enforcement of the member-states Organization Treaty Security the of Collective (CSTO). The Shanghai Cooperation Organi zation (SCO) adopted its own Anti-Narcotics Strategy for 2011–2016 and is about to cre structure. counternarcotics its ate attention U.S. to the problem of Afghan nar cotics trafficking via Central increased Asia with in its securing interest strategic a stable military logistics supply corridor to Afghani stan from the north (the Northern Distribu ------

71 (CARICC), joined by Russia in March 2011. 2011. in March Russia joined by (CARICC), cooperation. It cooperation. is not surprising that Kazakh stan Asia the hosts UNODC-affiliated Central Regional Information Coordination Center guardian guardian of the southern border of the Cus toms Union, it is well-positioned to become counternarcotics regional in actor central the and significant narcotics-linked corruption. At the same time, Kazakhstan has a functional state and more economy healthier much institutions than the rest of the region. As a the country’s large territory, the porous large country’s borders, territory, and developed transportation system to the nature of well-organized narcotics trafficking prisingly low number of seizures, from compared anything reflect may traffic, of size the to the vast trafficking opportunitiesoffered by specificcounternarcotics pressures on—Ka zakhstan. interdiction Kazakhstan’s capacity sur The Asia. Central in lowest the currently is smuggled goods, and general counternarcot and general smuggled goods, ics. All this underscores the critical role of—and Kyrgyzstan Kyrgyzstan and perhaps Tajikistan, only aggravate would the already huge challenges other drugs, of interdiction control, border for strong strong border management capacity. potential Any further extension of the Customs Union to other Central Asian states, such as ic development, ic but development, effectivelyKazakhstan’s southern border is now the southern entry point to Russia. And Kazakhstan still lacks Belarus means fewer border controls for traf for controls border fewer means Belarus fickers to negotiate. Thisagreement gives a impulse powerful for socio-econom regional there is a risk that, in the coming years, opiate opiate years, coming the in that, risk a is there may Asia Central from trafficking hashish and The is main that risk the factor cus increase. and Kazakhstan, Russia, between union toms While the heroin flow2009-2010, into since Russia level high stabi relatively has a at lized its. its. It is extremely difficult undercutto Rus sia’s fragmented system due to its fluid and nature. multifaceted ily the broader criminal networks who control control who networks criminal broader the ily wholesale and retail drug trade in prof the extracting largest domestic market, Russia’s traffic drugs control and distribution inside the United States. However, in and heroin Afghan the in bring Russia, who traffickers the hashish from Central Asia are not necessar many many smaller and more segmented groups, often ethnic and/or clan-based. In the west ern hemisphere, transnational organizations Large Large criminal networks do not monopolize opiate trafficking into Russia; it alsoinvolves Money Laundering financial sector that is relatively small, but rapidly expanding and well connected to the Money laundering is a critical aspect of drug world, with banking relationships with finan- 72 trafficking—after all, earning vast profits is cial institutions in several countries. Yet, ru- the very reason traffickers engage in -smug dimentary financial relations prevail, such as gling. Even as the heroin market in Russia a cash-based economy, low rate of financial accounts for just about 10 percent of the intermediation, illiteracy, problems with es- global market in the Afghan opiates, it could tablishing identity, prevalence of traditional Laundering of be assumed to involve a significant scale of payment, and informal money transfer systems. Less than 5 percent of Afghans use drug money narcotics-related money laundering. U.S. interests may also be affected less directly— banks, depending instead on the entrenched is one of the when proceeds from Afghan narcotrafficking and convenient “hawala” system. This system has many legitimate uses such as en- most trans- are laundered through the international and U.S. financial systems. The United States abling financial activity despite continuing nationalized has decades of experience fighting financial security challenges, compensating for the lack of banks in rural areas, and facilitating forms of nar- crime, and while there is a long way to go, it might support Russian efforts to track, seize, the inflow of remittances, which serve as one 73 cotics-related or freeze illicit narcotics proceeds. Combat- of major cash-based incomes. Up to 90 percent of financial transactions run through the activity, and ing money laundering is thus an area where the United States and Russia can and should “hawala” system, including foreign exchange the money cooperate. transactions, remittances, funds transfers, and micro- and trade-finance.74 While the “ha- flow may take Laundering of drug money is one of the most wala” system and formal financial sector are a different trail transnationalized forms of narcotics-related distinct, “hawaladars” often keep accounts at banks and use wire transfer services to settle than the drug activity, and the money flow may take a different trail than the drug flow. The launder- their balances with “hawaladars” abroad. flow. ing of proceeds from Afghan opiates takes place on a different scale, both in and outside While this mixed system evolved naturally to producing, transit, and consumer countries. meet the country’s socioeconomic and de- While the largest profits in the opiate trade velopment needs, it also created exception- are made in consumer countries, hubs for ally favorable conditions for the laundering of laundering these profits include states that proceeds from informal economic activities are not producers, major transit countries, or at the regional and international levels. The consumer countries. States that are regional following three main factors make Afghani- financial centers like the UAE are thus also stan a particular problem as a source of mon- drawn in to Afghan narcotrafficking. ey laundering.

One of the main hurdles in combating the First, Afghanistan is the largest producer and drug-related money laundering is the com- exporter of opiates in the world and the cen- plexity of drug-related financial transactions. ter of the regional shadow and opium econ- This makes it difficult to distinguish between omy. Illicit drug-related activities (including the proceeds of narcotics trafficking from production and trade in opiates and other those of other serious crimes. Additionally, drugs and related precursors, operating nar- in less developed and developing countries in cotics infrastructure, and narcotics-related NARCOTRAFFICING particular, money-laundering activity extends corruption) make the country prime territory beyond banks and traditional financial insti- for money launderers. Other sources of illicit tutions to other non-financial businesses and revenue and laundered funds are general cor- professions and alternative money and value ruption, contract frauds, smuggling and pro- transfer systems. This is well illustrated in Af- tection payments for legal and illegal movement of goods, and kidnapping.75 EWI • AFGHAN • EWI ghanistan, as well as its neighboring states.

Second, for unlicensed and unregulated “ha- 32 Afghanistan and Narcotics-related Money Laundering waladars” with cross border relationships, the absence of a strong supervisory frame- In the past decade, Afghanistan’s financial work presents particularly favorable oppor- system evolved into a mix of modern glob- tunities for both laundering proceeds from ally connected and traditional unregulated Afghan opiates and other illicit revenues and mechanisms. Afghanistan has developed a for region-wide cash smuggling (e.g. from EWI • AFGHAN NARCOTRAFFICING 33 - - The total The total amount of amount of billion USD. Afghanistan Afghanistan 10 countries countries 10 (Fin TRACA). TRACA). (Fin was over 1.15 over was wire transfers transfers wire transfers wire tries was over over was tries from 10 coun 10 from the amount of the amount of of Afghanistan Afghanistan of Source: Finan Source: sent to the top the top to sent Analysis Centre Centre Analysis 1.21 billion USD; 1.21 billion USD; cial Reports and cial Reports received in 2010 in 2010 received ------This amount Fig. 7. Top ten countries with wire with wire ten countries Top 7. Fig. transfers out of Afghanistan, 2010 Afghanistan, out of transfers 77 (The Afghan government has re 78 use use narcotics-related profitsto import luxu ry and other goods, which they then sell on the The risk domestic biggest market. is that of (mispricing laundering money trade-based hard it makes profits) drug move to goods licit Af risk for A to compete. businesses legal for ghanistan is that its economy could become dependent on the illicit economy. completely One way to help identify the main destina of of this capital also goes directly or indirectly towards financing further drug shipments, which perpetuates the vicious cycle. In con the leaves that money narcotics-related trast, country usually does not Afghanistan’s enter show data Bank Central Afghan economy. licit that in 2011 4.6 billion USD was taken out of the country through Kabul’s airport out double the taken that 2.3 was billion USD alone, amount, This massive of the country in 2010. however, does not reflect the actual extent of cash fleeing the country. is also larger than the Afghan national bud get and is thought to equal one-fourth of the economy. that cash on cap USD 20,000 a placed cently the country.) out of taken be physically can A illicit large economy has a tendency to dis tort the commercial economy. Drug profits tend to inflate the currencyvalue; traffickers

------76 transfers into Afghanistan, 2010 Afghanistan, into transfers Fig. 6. Top ten countries with wire with wire countries ten Top 6. Fig. estate, estate, goods or expensive vehicles. Some Afghanistan Afghanistan is primarily cash-based. profits inside the Drug country may bereinvested in sections of the licit such economy, as real purposes: purposes: in cash using couriers, by sending cash through alternative remittance bankers (“hawala”), or via banks and other financial institutions. Money laundering in and out of There There are three main methods of transmit ting narcotics-related money for laundering cially since the amount of donor assistance export estimated the of that dwarfs spending per year. billion USD at 2.4 opiates of value ternational reserves and a stronger Afghani. stronger a and reserves ternational The corruption potential from the inflow of donor aid should not be overlooked, espe These inflows, along with illicit flows financialinflows, These from the narcotics trade, non to and services goods domestic of sales have stimulated residents and contributed to a buildup of in 2001 2001 to 2011), formal financialflows comparison in to and high very are Afghanistan from with countries of similar low GDP per capita. Third, Third, due to high levels of foreign donor as sistance and billion security spending (286.4 USD, or 9,426 USD per Afghan citizen, from Pakistan to Dubai due to strict exchange con exchange strict to due Dubai to Pakistan in Pakistan). restrictions trol tions and financial hubs for laundering- nar 2012 commitment to address its deficiencies cotrafficking profits—as well as corruption of in anti-money laundering (AML) and counter- aid monies—is to examine the limited data on terrorist financing (CFT), but reaffirmed that the money inflows and outflows to and from strategic AML/CFT deficiencies remain.82 Afghanistan. Afghanistan’s financial intelligence unit (Financial Reports and Analysis Laundering Drug Profits Centre, or Fin TRACA) conducted a compara- from Transit States tive analysis of the amounts received through wire transfers in 2010. It shows that the Unit- The chief destinations of declared cash flows ed States, Canada, and Turkey send more from Afghanistan (about 1 billion USD a year) The chief des- than they receive, which logically reflects the are the UAE and other Gulf countries, most flows of economic and security aid and remit- commonly Dubai. With expatriates from the tinations of tances into Afghanistan. In contrast, the UAE, region accounting for up to 85 percent of declared cash Pakistan, China, the UK, and India receive its residents, the Emirates is a major inter- more funds from Afghanistan than they send national banking and trading center for licit flows from (while Switzerland and Turkmenistan do not economic activity in the Gulf, Southwest Asia Afghanistan send anything, but still receive some money and East Africa. For decades, though, it has transfers).79 Such dynamics can hardly be also played the role of the main financial hub (about 1 bil- explained by trade or economic relationships for the smuggling-based, regional-shadow lion USD a alone. Importantly, the picture gleaned from economy comprised of Iran, Afghanistan, and data on formal money flows is incomplete. It Pakistan. The main types of financial crime in year) are the does not include Iran, which has well-devel- Dubai and the UAE are money laundering and UAE and other oped financial relations with Afghanistan that fraud in the global financial sector. The main are mostly outside the legal framework, or portion of the money laundering is linked to Gulf countries, the Central Asian states. proceeds from Afghanistan’s illegal narcotics. most com- The underdeveloped legal and other institu- In most cases, narcotics-related money monly Dubai. tional mechanisms, along with the low level laundering operations are similar to those of of functionality and legitimacy of the Afghan money laundering in general. But some char- government coupled with a high prevalence acteristics of the drug business lead to pref- of corruption, minimizes the capacity and erences for certain money laundering tech- willingness of authorities to investigate finan- niques over others. The most common are cial crimes. The parliament has not endorsed real estate purchases; followed by the trading the 2004 presidential decrees on anti-money in transportation, particularly expensive cars; laundering and combating the financing of bank deposits; the establishment of shell terrorism. If narcotics-related money laun- companies and projects; and wire transfers. dering is investigated at all, it is only done in a Equally popular are stock trading, trading in handful of cases linked to terrorism financing precious movables, and cross-border fund (with no convictions).80 transfers. These techniques may and often do overlap. In most cases, the suspect starts The government dismissed the only case with shell projects or the purchase of real es- successfully linking money laundering to ter- tate and cars and invests or sells them as a rorism by Afghanistan’s financial intelligence cover to justify bank deposits and transfers.83 unit; no one has been tried or convicted. No NARCOTRAFFICING proceeds of drug trafficking have been con- In the UAE, groups operating outside the Gulf, fiscated in any of the 600 reported cases of in regions from Southwest Asia to Europe and counternarcotics convictions. In addition, a the Middle East, control the narcotics-related wide range of criminal activities that are of- funds.84 A case in point is the New Ansari ten linked to drug trafficking—such as -traf Money Exchange, designated, along with af- ficking of arms, stolen goods, and people or filiated individuals and entities, as a major EWI • AFGHAN • EWI participation in organized crime—racketeer- money-laundering network by the U.S. De- ing and extortion, are not even criminalized partment of Treasury under the U.S. Foreign 34 in Afghanistan. The country is not on the Narcotics Kingpin Designation Act in Febru- “black” or “dark-gray” lists of the most prob- ary 2011. The U.S. government believes that lematic jurisdictions identified by Financial this network of individuals, money exchange Action Task Force (FATF)81—but it is on the houses and other businesses, operating so-called FATF “gray list.” FATF has noted the throughout Afghanistan and the UAE, has steps Afghanistan has taken since its June laundered large-scale narcotics profits from EWI • AFGHAN NARCOTRAFFICING - 35 - - retail distribu retail major are tion of sources proceeds illegal money for laundering. In all of the the of all In consumer large end-markets opi Afghan for ates—Europe, Asian or Russia, as such states In and China dia—narcotics and trafficking and wholesale ------Against this back 88 Money Laundering in Money States Consumer one of several types of When money compared to laundering. countries on an equiva lent level of development, place (133rd corruption of levels higher Russia much displays and Index) Perception Corruption 2012 the in organized crime. Considering the country’s porous borders and visa-free Asia, Central its large opiate regime market, and the with is there dominance in of heroin opiate abuse, chains that originate directly from Afghanistan Afghanistan from directly originate that chains Paki in intermediaries where UK, through and the from in run or example, For etc. UAE, the stan, the opiate market is heavily revenues and heroin narcotics Afghan opium, dominated by laundering. money com for source main the finance remain global in role special country’s The financial its of diversity and size the with bined to the attractive it makes particularly markets money laundering networks—whether drug or profits of corruption aid monies are being laundered. Some important distinctions make stand out Russia for its money laundering potential among other consumer Af large markets for ghan opiates. Large-scale financialtransac tions in Russia are primarily associated with its own vast natural resources, which dominate the Typi money-laundering scene. also cal schemes involve the misuse of foreign fi nancial and in investments legal entities, real estate or security instruments, and buying luxury consumer goods. drop, narcotics-related money just remains but significant, relatively be may laundering els of domestic narcotics-related corruption and some of the world’s worst general cor ruption levels throughout region (with Turk place 170th sharing Uzbekistan and menistan and Index, in the 2012 Corruption Perception Tajikistan, Kyrgyzstan, and Kazakhstan oc cupying the 157th, 154th, and 133rd This combination may indicate respectively). spots, activities laundering money drug-related that are still largely confined to the national and sub-regional level and have not yet acquired dimension. transnational a broader Af for end-markets consumer large the of all In or states Asian Russia, ghan opiates—Europe, trafficking such as and China India—narcotics major are distribution retail and wholesale and launder money for proceeds of illegal sources also may countries in these hubs Financial ing. as serve in links the laundering money longer

------87 85 The fact 86 ics-related money it laundering, ics-related has high lev access access to major international financial and trade centers. While Central Asia has a de ceptively low profile ininternational narcot may be due to the respective countries’ weak weak countries’ respective the to due be may financial systems, low levels into integration of the global financial system, and limited sent sent from the list of Ma of states List 2011 of government’s primary U.S. the in cern con jor Money Laundering Countries and FATF’s This 2012). of (as lists “dark-gray” or “black” In contrast to the Pakistan, Iran, and Turkey, Central Asian states are conspicuously ab states states located along the Northern trafficking route, but also for the Caucasus, the Middle Europe. and Eastern East, as a major Afghan opiates transit country for center. financial regional important an as and This is particularly true for the Central Asian tinction it shares only with North and Korea) on Pakistan the and “dark-gray list.” Turkey drug-re to Turkey of vulnerability specific The lated money laundering is that it both serves top top transit countries for lists Pakistan, on Iran, Afghan and FATF Turkey—are opiates— dis (a list” “black the on Iran with concern, of An indication of the possibly deteriorating sit deteriorating possibly the of indication An laundering money narcotics-related of uation at the regional level is the fact that all three sence from any FATF-style regional body po sence from any FATF-style center. laundering be a significant sition it to Iran Iran is not a financial hub,the sheer of size its underground estimated economy, capital flow, largeexpatriate community, and ab phasized phasized counternarcotics and established, in cooperation with the UNODC, a national financial intelligence unit. Nonetheless, Iran remains a major point of concern. Although cial investigations in Afghanistan. Afghanistan. in cial investigations The Iranian government has strongly em regulations, regulations, in particular for its stock and kets, made mar large cash deposits to banks finan complicated also has areas tribal the in ties, ties, “hawaladars,” money exchanges, bulk cash smuggling, and real estate). that Pakistan relaxed many of its financial and informal financial flows, make it a hub for a hub it make flows, financial informal and both trafficking opiates and other illicit and licit Afghan goods to international markets and for laundering the profits (though chari Pakistan’s Pakistan’s weak control of the border Afghanistan with combined with its active formal the billions of dollars it transferred in and the out billions of it dollars transferred 2010. and 2007 between Afghanistan of much potential for narcotics-related money increase. The fundamental risk factors are the laundering. widening gap between the region’s growing trade connections and developing transport Some of the money laundering vulnerabilities infrastructure and weak border controls, coun- and restraints common for most large con- ternarcotics capacity and declining opiate inter- Moscow and sumer markets for Afghan opiates also apply to diction levels in most Central Asian states. The Russia. Moscow and Saint Petersburg are grad- challenges created by this disparity will be par- Saint Peters- ually evolving as major international trade and ticularly acute for Kazakhstan, as its southern burg are grad- financial hubs, creating the need for the Russian border has now become the external border of government to further improve the anti-money the vast free-trade space that includes its Cus- ually evolving laundering legal and enforcement framework. toms Union partners, notably Russia. as major inter- As a result, in the past decade Russia became a member of FATF, took a series of measures that The widening possibilities for traffickers along national trade helped to get it removed from FATF lists, and ex- the Northern Route through Central Asia may and financial panded the investigative powers of its financial be exacerbated by several risk factors that intelligence unit, Rosfinmonitoring (with pros- could favor a short- to mid-term increase in opi- hubs, creating ecutions and convictions for money launder- ate production in Afghanistan. If this happens, the need for ing offenses reaching 141 and 113, respectively, the threat posed by Afghan narcotrafficking to in the first half of 2011). Russia also plays a lead Russia, as the main destination market for the the Russian role in the Eurasian Group on Combating Mon- Northern Route trafficking and one of the larg- government ey Laundering and the Financing of Terrorism est end-recipients of Afghan heroin, may in- (EAG) that includes all Central Asian states. crease. Furthermore, the worst-case scenario to further im- may have implications beyond Central Asia and prove the anti- As the case of the UK shows, it would be an Russia, and may even reorient part of the Bal- oversimplification to view the scale of narcotics- kan trafficking route to Europe. money laun- related money laundering as directly related to dering legal the size of the market or link it primarily to con- As noted above, heroin traffickers along the sumer end-markets. These markets may bring Northern Route made some 1.4 billion in profits and enforce- higher profits to organized crime groups en- in 2009 supplying heroin to Russia and Central ment frame- gaged in narcotics trade, but also have their own Asia, and combined with the estimated 6 billion specific constraints. First, in the past few years, USD Russian market this accounts for some 12 work. banks and mainstream financial institutions percent of the global heroin market (see Fig. 4). have tightened their controls and increased The remaining profits from the global heroin their vigilance, in part due to the new security market are distributed between transit and pressures related to the international campaign consumer states in other parts of the world or against terrorism. Second, in a more sophisti- are laundered through the global financial sys- cated and diversified financial system, illicit drug tem. The growing focus on the money trail helps revenues are increasingly overshadowed by the stimulate international cooperation on coun- growing proceeds from other offenses, such ternarcotics and correct the supply-demand as financial fraud and the smuggling of people imbalance in drug control, including in the more and goods. Third, while end-markets for opiates supply-centered counternarcotics strategies of tend to have a more developed, and in some both the United States and Russia. cases, extremely developed financial infrastructure involving incomparably larger money flows The broader money laundering implications of NARCOTRAFFICING than in the producing or first transit states, traf- transnational trade in Afghan opiates provide fickers face much tougher financial and secu- an additional reason for Washington’s concern rity controls, as well as more effective policing about the larger issues raised by Afghan nar- and law and order systems. For example, in the cotrafficking, rather than just the role of drug UK, over 2,400 money laundering criminal pros- money in funding the insurgency in Afghanistan. ecutions and more than 1,400 convictions took As shown by the case of the New Ansari Money EWI • AFGHAN • EWI place in 2009 alone—compared, for instance, to Exchange, the proceeds from the Afghan opi- zero such convictions in Pakistan.89 ate trade may be laundered in Dubai and then 36 transferred through the United States and By early 2009-2010, the heroin flow through other international financial systems. This illus- the Northern Route from Afghanistan via Cen- trates how ubiquitous the effects of the Afghan tral Asia to Russia had stabilized. However, there narcotrafficking are, as neither the UAE nor the is a risk that, in the coming years, the opiate United States are primary trafficking routes or and hashish trafficking from Central Asia may major consumer markets for Afghan opiates. EWI • AFGHAN NARCOTRAFFICING 37 Russian Cultural Center in Kabul. Center Cultural Russian An opium dealer, top, hands Javed, an Javed, hands top, An opium dealer, of the bombed-out ruins of the former the former the bombed-out ruins of of Afghan opium addict, drugs in the terrace in the terrace drugs addict, opium Afghan 5. Illicit Drugs, Armed In addition to drug revenues for self- Conflict, and State financing, the insurgents’ Functionality involvement in protection of cultivation of drug crops, especially in the absence of cash-generat- he illicit drug business is linked to nomic activity. For Islamist groups, such as armed violence in two main ways. the Taliban in Afghanistan, an additional spe- ing income al- First, it may generate criminal vio- cific mode of funding is available through di- ternatives, may lence directly, in both peacetime and version of religious funds, often coming from Tconflict settings. Traffickers are often armed abroad and originally collected as religious become a way and trafficking organizations either have donations for legitimate purposes. to link the local armed guards or hire armed groups, sometimes amounting to private mini-armies, to Links between illicit drug business involving population to protect them, attack police and other se- Afghan opiates and armed opposition groups the insurgency. curity forces. Traffickers engage in violent are not strictly confined to Afghanistan. turf wars among themselves and resort to There is some potential for overlap between violence against civilians. Among the most organized crime, including trafficking, and intensive forms of such criminal violence are anti-government militants in certain parts trafficking-related cross-border incidents, of Central Asia (such as parts of the Batken especially along the borders between major region in southern Kyrgyzstan or the Isfara source countries and transit states, such as district of Tajikistan’s Sughd province border- the Afghan-Tajik or Afghan-Iranian borders. ing Kyrgyzstan). This overlap is secondary to the primary role of organized crime groups Second, in areas of armed conflicts over con- across the Northern trafficking route and its trol of government or territory, drug business- connections to government officials. In - par es also become a major conflict resource. ticular, the UNODC sees no strong evidence This mainly holds for non-state combatants that any terrorist group is benefiting from who are generally constrained in their access the heroin trade in Central Asia.90 The peri- to the formal economy and heavily rely on odical incursions of Islamist militants from informal activities for funding, but may also Afghanistan into Central Asian states points NARCOTRAFFICING apply to some state-affiliated actors who rely to the absence of effective border controls on drugs and counternarcotics policies as a and the lack of state functionality and access means of patronage. Armed non-state actors to peripheral areas. It does not appear to be in conflict with the state, such as the Taliban primarily related to cross-border narcotraf- in Afghanistan since late 2001, should be dis- ficking.

EWI • AFGHAN • EWI tinguished from organized crime, even if they use drug profits for funding and engage in All this, however, pales in comparison to the 38 drug business. The main distinction is that, long-standing, persistent, and deeply em- unlike criminal groups, these militant ac- bedded symbiosis between illicit drugs and tors contest political control over territory or armed conflict in Afghanistan. The next sec- government. While non-state conflict actors, tion focuses on Afghanistan where a major much like organized crime groups, primarily armed conflict has been underway and where operate within the informal economy, they the links between illicit drugs and insurgency may also engage in some forms of legal eco- are closer. EWI • AFGHAN NARCOTRAFFICING 39 At the outset outset the At regime, their of Taliban the tried briefly opium limit to (but cultivation in trade) not under areas control. their ------percent percent Analysts sug Analysts 93

91 This may explain why the Tal 92 the promise of development assistance impose to the ban. In the east, in the province of Nangarhar, the Taliban struck deals with some of the more influentialsuch tribal as groups the Shinwari, with ac reports preferential and elders tribal to payments of cash cess to international In donors. the al south, growing on ban a enforced Taliban the though the opium as trade continued, did the poppy, At At the outset of briefly their tried regime, the to limit Taliban opiumnot cultivation trade) in areas under (but their Their control. from revenues taxing the region-wide smug gling of other goods tended to be than larger in example, For opium cultivation. from those 1997 reportedly the collected Taliban 75 mil taxing the regional from in revenues lion USD trade in consumer goods, compared to estimated 27 million an USD from taxing poppy cultivation. iban felt they could affordto impose theban on cultivation in poppy 2000. gest the ban might have also been intended to avert further international sanctions and to secure foreign aid. Thus, a of combination market forces, political conditions, and a an opium favored religious strong imperative ban. cultivation As a result of the 2000 Taliban ban, opium cultivation in Afghanistan fell by 91 in 2001 (see Fig. 2). As with subsequent but much less effectiveprovincial the used bansKarzai a the administration, Taliban under combination of moral coercion, suasion, and the country, they collected a 10 percent post- percent 10 a collected they country, the harvest tax from all agricultural production, cultivation. including poppy ------Taxing was highly Taxing In localized. some parts of gional shadow economy. Adjusting to these tried the to Taliban realities, establish a rent ier economy and taxed licit and illicit trade. to to power in amidst 1996, bitter feuds among competing mujahedin factions, the country was already well-established hub of the re when compared to the relatively small size of small size to the relatively when compared or national economies. the local came government When the de Taliban facto tion of the overall income and total value of the global narcotics market. However, even these limited revenues can be significant links links ac between drugs and conflict/militant tors are the drug closest, profits are the low est and comprise a relatively small propor a source of support for the population, letting population, the for support of source a the insurgency develop a hearts-and-minds- in Importantly, like areas strategy. where the cultivation cultivation of drug crops, especially absence in the of cash-generating income natives, may become a alter way to link the local population to the This insurgency. allows for control control along major trafficking routes. In ad dition to drug revenues the insurgents’ for involvement in protection self-financing, of nesses nesses are most profound and systematic in major drug-producing countries such as Af ghanistan and in areas without stable state drug business is usually predetermined by their main areas of operation and/or origin. The links between insurgents and drug busi Considering Considering the high profit margins of nar cotics, non-state actors’ involvement in the Illicit Drugs and Islamist and Islamist Illicit Drugs Afghanistan in Insurgency reports that they collected taxes on both the We cannot be sure if the funds that insur- trade and the processing of opiates. The abil- gents receive from farmers’ poppy harvest ity of the Taliban to sustain a ban on growing form a larger or smaller portion of Taliban In most in- was not tested, however, as the regime col- drug earnings. The Taliban do collect farm lapsed during the U.S.-led military interven- taxes, and these are probably the majority of secure areas tion. earnings for the local commanders in those affected by areas. Analysis that suggests that the Taliban The Taliban-led insurgency has gained collect the agricultural tithe, known as “ushr,” conflict and strength since the mid-part of the last de- of 10 percent of the final yield of all crops, in- terrorism, cade. Due to high opium prices following the cluding opium, is not borne out by in-depth effective Taliban ban, ineffectual governance fieldwork in Helmand or Kandahar. As was tough counter- in large swaths of the country, and a lack of suggested by a member of the expert group, narcotics mea- alternative economic opportunities, poppy on-the-ground empirical work suggests a far cultivation also grew exponentially. Seeking more complex picture in which farmers make sures (such as to expand its control over rural areas, most- payments to a variety of institutions includ- massive aerial ly in the poppy-growing south, the Taliban ing the mullah, the Taliban, and government raised some of the funds for their comeback officials. It indicates that these payments dif- eradication) by taxing cultivation and opium production fer considerably according to location, the tend to antago- or getting payments from farmers in poppy- productivity of the land (with those in former growing areas. desert areas paying only 5 percent “ushr” to nize the popu- the mullah) and existing relationships and lation, increase By 2009-2010, the Taliban developed an patronage networks. interdependent relationship with those in- insecurity, and volved in the opium economy in the south, It is also very difficult to estimate how much garner support including farmers, local traders, and traffick- the Taliban gets in revenues stemming from ers. This symbiosis, however, still falls short of other aspects of the opium trade. Depend- to the insur- the more advanced stages of integration with ing on the region, the insurgents’ total in- gency. illicit drug business that can be seen in some come from opiates may also include pro- drug-producing areas in other parts of the tection fees on laboratory processing and world (e.g., in Colombia or Myanmar).94 taxation on imports of chemical precursors. The amount and proportion of these funds It is harder to estimate the annual value of are very difficult to estimate. Overall, Taliban Taliban income from drug-related activities in drug earnings are concentrated in southwest the last decade and the relative share of drug Afghanistan and parts of Pakistan. In those revenues in their overall funding than to calcu- areas, they earn significant sums from taxing, late the gross and net values of Afghanistan’s protecting, and engaging in drug trafficking, opium economy, which is difficult in and of but they are not poised to become a global itself. Estimating how much the Taliban earns drug trafficking organization. from drugs and other crime is extremely complex and fraught with uncertainty. Estimates Research also points to the insurgency’s in- differ and the methodology used for these cal- creasingly diversified financial system and culations are often unclear. The numbers that at several other sources of funding available are circulating can give an estimate as to the to the Taliban. They include levying regular scope and scale of Taliban involvement in and Islamic taxes on property and licit economic NARCOTRAFFICING profit from the growth, production, and traf- activity; taxing gems and timber smuggled ficking of opium, but they are only that—esti- across the Afghan-Pakistani border; demand- mates. Some of the circulating figures (such ing protection money from a wide range of lo- as the UN estimate of opium-related funds cal businesses; and receiving donations from of armed groups at 200-400 million USD ideological sympathizers in the Gulf states— annually for 2006–2007) did not differenti- non-state and state-affiliated actors in Paki- EWI • AFGHAN • EWI ate between various warlords and insurgent stan.98 According to an assessment by the groups.95 Recent UNODC analyses estimated International Monetary Fund, the Taliban and 40 the insurgency’s drug income at 140-170 mil- other anti-government elements may raise lion USD.96 The highest of the UNODC esti- more money through other illicit activities mates of the Taliban annual drug income (170 than from opium revenues.99 million USD) makes up for about 6.5 percent of the net value of the opium economy inside Against this backdrop, the U.S. and NATO Afghanistan (2.6 billion USD in 2011).97 forces are focusing on targeting traffickers -

EWI • AFGHAN NARCOTRAFFICING 41 - - - - regions, which, which, regions, compli turn, in ef any cates counter to forts drugs. illicit What is clear clear is What on the that is armed going of void conflict, settle political prevents ment, estab the of lishment stable relatively functional and in governance poppy-growing ------101 101 several sources of funding, but they have also also have they but funding, of sources several taxes basic collect to ability an demonstrated from licit activities Historically, and property. movement the is Taliban one of the very few actors in Afghanistan with a record of strict counternarcotics politics. the of enforcement total unprecedented their However, even 2000 cultivation ban did not restrict selling, All or these andtrafficking. processing, other the reality on the ground. What is clear is that is clear is What ground. the on reality the the ongoing armed conflict, void of political settlement, prevents the establishment in governance functional and stable relatively of poppy-growing regions, which, in turn, com drugs. illicit counter to efforts any plicates A political settlement, will however, not fully func governance of lack of problem the solve tionality in Afghanistan, including in not affected areas by the insurgency. Some may perceive the Taliban as an alternative government system to that does not a work, but government a is like would actually they what that works. system The Taliban has a record of both improved basic security and functional governance in areas under their control, especially in areas less contested by foreign and forces. government Relative improvements been at a have sig in however, and governance, security nificantcost to the civilian population.As an active insurgency movement and a rev uses now shadow Taliban the system, governance enues from opium cultivation as one of their such such areas, the fundamental condition tangible progress towards for an integrated de velopment and enforcement solution is ensure basic to security and functional gover nance. This, in turn, is impossible to achieve reduced. is violence armed of level the unless force by either done be could this principle, In (which has not during been theUS/ effective NATO counterinsurgency campaign and is even less likely to be effective a or political negotiation through withdrawal) after ISAF’s process. The nature of a political settlement ghanistan is a highly matter contentious for that Af combines intra-Afghan, regional, and inter national dimensions. A number of other re ports have addressed this subject in detail. plans peace the best-intentioned even Still, that contend that the Taliban can, ciple, be in integrated into prin Afghanistan’s heav ily centralized and relatively secularized civil governance system are very differentfrom ------This suits their counterinsur 100 nor a combination of the two, can work. In contested contested areas in regions that are central to Afghanistan’s opium production, neither tough nor soft counternarcotics measures, in areas of continuing armed confrontation. continuing of in areas In the absence of functional governance in in place (primarily in some lower valley eas), ar but these conditions are mostly lack ing in upper valley areas where there is not a and especially control, state of history strong has a relatively non-confrontational attitude There Bolivia). or Thailand of case the was (as are conditions where country the in areas are development) development) tend to work only if they are of implemented as strategy part of a broader rural development and when the population rity, state rity, access, or recognized governance. More generally, softer measures (voluntary eradication, crop substitution, alternative by by the situation in the more peripheral areas of Afghanistan’s southern and eastern prov inces, softer counternarcotics measures are difficult toimplement inareas lacking secu tend tend to antagonize the population, increase insecurity, and garner support for the insur gency. At the same time, as well illustrated In most insecure areas affected by conflict and terrorism, tough counternarcotics mea sures (such as massive aerial eradication) controlled peripheral areas where drug crops drug crops where areas peripheral controlled concentrated. or are migrate weakening weakening and undermining basic state ca corrupting the state, and functionality, pacity and preventing state access to insurgency- financialreasonsfor collusion between state and the anti-state actors. Rather, critical link may be the more general role of armed con flict and other conflict-related violence in drugs drugs in Afghanistan may not even direct be role of the drug revenues as a source funding for of the insurgency or in creating the and State Functionality and State Functionality The most critical link between conflict and Armed Conflict, Narcotics Narcotics Armed Conflict, control a limited segment of the global heroin heroin global the of segment limited a control trade, largely in Afghanistan and The Pakistan. Taliban have not become a global Colombia. in FARC traf the like force ficking gency gency strategies, but does an not adequate strategy constitute to reduce commanders the Taliban overall opium Moreover, trade. who are “providing material support to the insurgents.” factors make tougher counternarcotics provisions a ne- gotiable—but unlikely—condition for any configuration of The main settlement talks with the insurgency. question, Finally, the ability of the Taliban to implement laws against however, is poppy cultivation again may be more constrained now than it was in 2000-early 2001. Considering the lack of alterna- whether devel- tive economic opportunities and state security presence opment and and the unprecedented size of arable and irrigated land now available for cultivation in these areas, it is likely the enforcement- poppy cultivation in the south will increase. In this context, oriented coun- it is unlikely that the Taliban would risk their non-confrontational relations with and support from the population in ternarcotics these areas by enforcing strict counternarcotics measures, measures can at least in the near future. be effective Continuing armed violence and general insecurity in Af- beyond select ghanistan complicate the use of “soft” counternarcotics strategies such as crop substitution, generating alternative local contexts cash incomes, development assistance, and socio-eco- and can reduce nomic development in general. In high-risk areas of continuing armed conflict, it is also difficult to employ enforce- the opium ment-type policing activities. The main question, however, economy while is whether development and enforcement-oriented counternarcotics measures can be effective beyond select local Afghanistan contexts and can reduce the opium economy while Afghan- lacks function- istan lacks functional governance and an effective state security presence. These challenges will be exacerbated once al governance the ISAF security presence ends in its current form. and an effec- No significant reduction of the drug economy, including in tive state secu- a conflict-torn area, is likely to occur unless there is a com- rity presence. bination of regional and global market conditions favoring the decline of drug production in a particular region, such as the emergence of formal or informal economic alternatives to opium as sustainable cash-based income. As noted in this report, a temporary decline in poppy cultivation in Afghanistan in 2008–2009 resulted partly from a positive market correction towards a discernible shift to wheat cultivation amid the global food crisis, rising wheat prices, and growing food insecurity at the micro-level of farming households.

However, no economic condition will have the lasting effect NARCOTRAFFICING of reducing the size of the opium economy without security—and that can only happen when a functional state exists. This capacity has been true in all countries that managed to significantly reduce the size of their narcotics economies in the past (such as Thailand, Myanmar, or China). The lack An Afghan of such capacity in today’s Afghanistan makes effective EWI • AFGHAN • EWI security guard state- and institution-building, based on an intra-Afghan stands near political settlement, the single most important long-term 42 a flame of priority. A political settlement must takes into account the opium fire stark differences in Afghanistan, especially given the- his during an tory of Afghan state control over lowland valleys but not in opium burning areas of greater tribal heterogeneity and limited resources. ceremony on the outskirts of Kabul. EWI • AFGHAN NARCOTRAFFICING 43 6. Conclusions

The main dilemma for counternarcotics in and around Afghanistan is not a strict • Afghanistan is already the source for The United States has paid progres- 80-90 percent of global opium pro- sively growing attention to the role choice be- duction and poppy cultivation, which of drug revenues in the financing of tween hard will likely continue to increase ahead insurgency and terrorism, and it in- of and after the 2014 ISAF withdraw- creasingly sees narcotics as one of and soft mea- al and U.S. drawdown. All stakehold- the main sources of corruption and sures pri- ers must recognize that slowing the impediments to state functionality in flow of drugs from Afghanistan is a Afghanistan. oritizing either long-term challenge that will require eradication/ multifaceted cooperative counter- • The United States is the largest and narcotics strategies that take on se- most influential external security ac- interdiction curity, development, and governance tor and provider of counternarcot- or alternative challenges in Afghanistan. ics assistance in Afghanistan, and will continue to be so after the end development. • Russia is one of the single largest of the NATO- ISAF mission in 2014. markets for Afghan heroin. Conse- The United States also possesses quently, Russia faces some of the significant resources and capacities gravest health, socio-economic, and to contribute to countering narcotics law enforcement challenges from Af- trafficking from Afghanistan. ghan narcotrafficking. • While the type and scale of threats • Since Russia cannot afford direct posed by Afghan opiates to the Unit- military or security involvement in ed States and Russia are different, Afghanistan, it has to rely on what- Washington and Moscow also have ever security capacity is present in a number of shared concerns related Afghanistan for counternarcotics. to Afghan opiates and the global opi- Russia thus has a genuine interest ate market. in strengthened security capacity and general state functionality Afghan narcotrafficking is one

NARCOTRAFFICING • in Afghanistan and in increased re- of the leading sources of illicit gional counternarcotics cooperation drug-related criminal profits. It around Afghanistan, especially along is closely related to and spurs the Northern trafficking route via other types of transnational Central Asia. crime and money laundering at

EWI • AFGHAN • EWI the regional and global levels, • Since 2001, the United States’ main affecting both Russian and U.S. 44 interests in Afghanistan have been interests. security-related. Despite not be- • The links between narcotrafficking a major end-market for the Af- ing, corruption, and dysfunc- ghan opiates, the United States has tional governance are endemic its own interest in contributing to and extend beyond Afghanistan, counternarcotics in Afghanistan. contributing to insecurity and - - EWI • AFGHAN NARCOTRAFFICING 45 - tion, treatment, treatment, tion, education. and Combating Combating a is abuse drug multi-pronged involv effort only not ing enforcement, development, internation and cooperation, al preven also but ------The The combined value of the her and in in the Russia oin markets countries transit route Northern

global global financial flows from Afghan and Russia U.S. the narcotrafficking; would benefit from cooperation to money.” the “follow The The ongoing armed conflict in ghanistan Af continues to central are that limit areas many in access state to poppy cultivation and effectiveness The functionality. state weakens of any is development drugs illicit against and strategies ment enforce likely to hinge on security. improved That, in turn, may the require to solution tangible political a on progress Cur Afghanistan. in conflict ongoing rently, this remains a remote pros pect. Combating drug abuse is a pronged multi- effort involving enforcement, not only development, international cooperation, but and also prevention, treatment, and educa tion. U.S.-Russia cooperation must involve attention to demand reduc supply the reducing to as well as tion Afghanistan. from opiates of the be can done to trace Much more fully subordinated fully to subordinated combating the Af is insufficient. insurgency Taliban ghan benefits other narcotrafficking actors in officials. state and profiteers criminal Afghanistan, including The insurgents also enjoy includ multiple streams, revenue diverse and drugs. than other sources from ing •

• • • ------share share the challenge of high lev els of opiate abuse, even if opi ates come to markets their from domestic different source regions. ing ing and organized armed lence, and vio related transnational criminal and militant/terrorist of se new types pose networks, and regional the at threats curity levels. global Russia and the United States bad bad governance in regions strategic of importance to Russia States. United the and narcotraffick between links The

will inevitably vary, even for different for different even vary, will inevitably the within contexts regional and local country. same A counternarcotics strategy that is emphasizes that emphasizes coun any effective ternarcotics strategy integrated implies enforcement and devel an opment solution. The optimal com of bination and interdic proportions tion, eradication, alternative crops, and income-generating strategies dilemma for counternarcotics in and counternarcotics for dilemma around Afghanistan is not a choice between strict hard and soft mea either prioritizing eradication/ sures interdiction or alternative develop ment. This expert group strongly Despite Despite disagreements choice of on and counternarcotics responsibilities measures the for in ghanistan, Af such is there also a of degree eradication, as shared understanding between large-scale the United States and The Russia. main • •

• • of Central Asia accounts for over interests and presence in the region 12 percent of the global heroin and their differing perceptions of the market, highlighting money NATO–CSTO/SCO strategic rivalry laundering concerns and the in broader Central Asia. Two more When the in- need for more active regional specific challenges to U.S.-Russia and international cooperation counternarcotics cooperation along ternational on related issues. the Northern Route are: security pres- • The U.S. financial system and interests are not safe from money- • The reluctance of Central Asian ence ends in laundering transactions related governments, especially in Tajik- its present to narcotics, including opiates of istan, Uzbekistan, and Turkmen- Afghan origin. At the same time, istan, to fully cooperate with form in 2014, the United States possesses Russia and the United States, the Afghan unique anti-money laundering and with each other, on counter- experience and capacities that narcotics efforts. government’s may be of particular interest and still fragile con- use to Russia, given the scale of • Increased U.S. security involve- its heroin threat. ment in Central Asia reinforces trol in some Russia’s suspicions of U.S. mo- of the poppy- • Afghan narcotrafficking poses a tivations for cooperation along growing threat not only to Russia and the Northern Route. growing prov- other consumer end-markets, but inces is likely also to Afghanistan itself, in terms • In Central Asia, the counternarcotics of soaring domestic drug abuse as challenges will especially increase to weaken, well as corruption fueled by the drug for Kazakhstan. These growing pres- perhaps sig- trade. It also poses a direct threat to sures dictate the urgent need for Ka- transit states such as Iran and Paki- zakhstan to become the main hub nificantly. stan, as well as Central Asian states. for counternarcotics in the region. This requires maximum assistance • The widening possibilities for traf- and cooperation from both Russia fickers along the Northern Route and the United States. This raises through Central Asia may overlap the significance of the Almaty-based with and be exacerbated by several UN-affiliated Central Asia Regional risk factors that favor a short- to Information Coordination Center mid-term increase in opiate produc- (CARICC), including its role as the tion and output in Afghanistan itself. regional cooperative framework with Afghanistan has never had as much both U.S. and Russia’s participation. land under irrigation as it does now. When the international security • Despite existing difficulties and dis- presence ends in its present form in agreements, especially on Afghani- 2014, the Afghan government’s still stan and Central Asia, there are also fragile control in some of the poppy- some facilitating factors for U.S.- growing provinces is likely to weaken, Russian cooperation on counter- perhaps significantly. The lack of narcotics in the context of Afghan NARCOTRAFFICING state presence coupled with growing narcotrafficking. One such factor is insecurity will impede licit economic active, broad bilateral cooperation opportunities and markets. Against on counternarcotics that develops this background, expanded arable rather steadily, regardless of the and irrigated areas may be easily di- zigzags in the overall U.S.-Russia re- verted to poppy cultivation again. lationship. In fact, U.S.-Russian bilat- EWI • AFGHAN • EWI eral cooperation on interdiction and So far, most U.S.-led counternar- other counternarcotics issues has 46 • cotics initiatives in Central Asia de- proved to be an effective way to build veloped in parallel to, rather than in trust between the two countries, cooperation with, regional forums especially in their counternarcotics where Russia plays a lead or major and law enforcement communities. role. This reflects the persistent low level of trust regarding each other’s EWI • AFGHAN NARCOTRAFFICING 47 ACRONYMNS Russian Federation Federation Russian the Financing of Terrorism of Financing the Pakistan Areas, Tribal Administered Federally Financial Action Task Force Task Action Financial hectare Collective Security Treaty Organization Treaty Security Collective Governor-led Eradication Governor-led tons metric Organization Cooperation Shanghai Afghan National Police National Afghan USA Administration, Enforcement Drug and Laundering Money Combating on Group Eurasian United States dollar States United Northern Distribution Network Distribution Northern counterinsurgency Afghanistan Center, Analysis and Reports Financial Afghanistan in Force Assistance Security International United Nations Office on Drugs and Crime and Drugs on Office Nations United Federal Service for Control on Narcotics Circulation, Narcotics on Control for Service Federal Central Asia Regional Information Coordination Center Coordination Information Regional Asia Central Federal Financial Monitoring Service, Russian Federation Russian Service, Monitoring Financial Federal

USD ISAF mt NDN Rosfinmonitoring SCO UNODC Fin TRACA Fin FSKN GLE ha CSTO DEA EAG FATA FATF Abbreviations and Acronyms and Abbreviations ANP CARICC COIN ENDNOTES

Section 1

1 “Afghanistan Opium Survey 2012: Summary Findings,” United Nations Office on Drugs and Crime (UNODC), 2012, 4-5. http://www.unodc.org/documents/crop-monitoring/Afghani- stan/Summary_Findings_FINAL.pdf.

2 Press conference by S.V. Lavrov, Russian Minister of Foreign Affairs, for the Russian media on results of the 49th Munich Security Conference, Munich, February 2, 2013. http:// www.mid.ru/brp_4.nsf/newsline/8C06FC31D7B8F91A44257B07001FCDBD.

3 Interview with Nikolai Kartashov, Head of the FSKN Department for relations with the media, in Kommersant-FM, January 30, 2013. http://www.kommersant.ru/ doc/2116465?isSearch=True.

Section 2

4 As stated by Nikolai Patrushev, Secretary of the Russian Security Council, in RIA No- vosti, September 22, 2011. http://rt.com/politics/security-world-hold-meeting-093/.

5 “World Drug Report 2011,” United Nations Office on Drugs and Crime (UNODC), 2011, 71. http://www.unodc.org/documents/data-and-analysis/WDR2011/World_Drug_Re- port_2011_ebook.pdf; “The Global Afghan Opium Trade: A Threat Assessment,” United Nations Office on Drugs and Crime (UNODC), July 2011, 44. http://www.unodc.org/documents/data- and-analysis/Studies/Global_Afghan_Opium_Trade_2011-web.pdf.

6 “The Global Afghan Opium Trade: A Threat Assessment,” 44.

7 “World Drug Report 2011,” 72–73.

8 “International Narcotics Control Strategy Report, Volume 1,” U.S. Department of State Bureau for International Narcotics and Law Enforcement Affairs, March 2012, 376. http://www. state.gov/documents/organization/187109.pdf.

9 According to Gennady Onishchenko, Russia’s chief sanitary inspector and director of the Federal Service for Control in the Sphere of Protection Consumers’ Rights and Well-Being

NARCOTRAFFICING of Humans (Rospotrebnadzor), HIV rates in Russia increased 5 percent in 2011 from 2010 figures and 12.5 percent in the first 10 months of 2012 over 2011 figures.

10 As of June 2011, the U.S. Department of Defense has spent over 330 million USD on counternarcotics efforts dating back to 2004. Remarks by Willoughby at the meeting of the U.S.–Russia expert group on the Afghan Narcotrafficking, Washington D.C., September 26,

EWI • AFGHAN • EWI 2011.

48 11 Quoted in: Christopher M. Blanchard, “Afghanistan: Narcotics and U.S. Policy,” Con- gressional Research Service (CRS) Report for Congress RL32686, August 12, 2009, i. http:// www.fas.org/sgp/crs/row/RL32686.pdf. EWI • AFGHAN NARCOTRAFFICING 49 ------Wash , June 27, 2009, http:// 2009, , June 27, Reuters , , July 23, 2009. http://www.ny The New York Times 28, No. 4, Autumn 2005, 55–72. http://reformdrugpolicy.com/wp-content/ 55–72. Autumn 2005, 4, No. 28, “Afghanistan Opium Survey 2008,” United Nations Office on Drugs and Crime (UNO 2008,” Opium Survey “Afghanistan “Afghanistan Opium Survey 2011,” United Nations OfficeOpium onSurvey “Afghanistan 2011,” Drugs and Crime (UNO of Department States United 1,” Vol. Report, Strategy Control Narcotics “International “Alternative “Alternative Development: A Global Thematic Evaluation Final Synthesis Report,” See “Strategy to Combat Transnational Organized Crime: Addressing Converging Ibid., 58–62. Opiates also remain the most dangerous substance abused in the United United the in abused substance dangerous most the remain also Opiates 58–62. Ibid., “Report “Report of the International International Narcotics Narcot Control Board for 2011,” 62. Ibid., Michael Vickers, Assistant Secretary of Defense for Special Operations/Low-Intensity Operations/Low-Intensity Special for Defense of Secretary Assistant Vickers, Michael “U.S. reverse Afghan drug policy, eyes August vote,” Afghan reverse drug “U.S. August eyes policy, vote,” Van see Afghanistan, in employed measured counternarcotics of review a critical For 22 DC), November 2008, 7. http://www.unodc.org/documents/crop-monitoring/Afghanistan_ Opium_Survey_2008.pdf. 21 http:// 91. 2012, March Affairs, Enforcement Law and Narcotics International for Bureau State www.state.gov/documents/organization/187109.pdf. DC), DC), December 2011, 5. http://www.unodc.org/documents/crop-monitoring/Afghanistan/ Afghanistan_opium_survey_2011_web.pdf. Section 3 Section 20 Threats to National Security,” The White House, July 2011. http://www.whitehouse.gov/sites/ 2011. July House, White The Security,” National to Threats default/files/Strategy_to_Combat_Transnational_Organized_Crime_July_2011.pdf. Alternative_Development_Evaluation_Dec-05.pdf. Alternative_Development_Evaluation_Dec-05.pdf. 19 18 United Nations Office on Drugs and Crime (UNODC), 2005,15. http://www.unodc.org/pdf/ to to treatment (accounting for 21 percent of all such See admissions, cases. compared alcohol-related to to only second was and 9 drugs) synthetic for percent percent 6 and cocaine for April Services, Human and Health of Department States United Set,” Data Episode “Treatment http://wwwdasis.samhsa.gov/teds09/teds2k9nweb.pdf. 2011. 17 admissions among dominated narcotics-related steadily abuse opiate in 1999–2009, States: reports/2011_INCB_ANNUAL_REPORT_english_PDF.pdf. reports/2011_INCB_ANNUAL_REPORT_english_PDF.pdf. 16 15 ics Control Board (INCB), January 2012, http://www.unodc.org/documents/southasia/ 57. Conflict andInterdependent Capabilities, quoted in ShankerThom Elisabeth and Bumiller, shifts “U.S. Afghan narcotics strategy,” times.com/2009/07/24/world/asia/24poppy.html?_r=0. Barnett R. Rubin and 2008. Jake to “Counter-Narcotics Sherman, Stabilize Afghanistan: The University, False York New Cooperation International on Center Eradication,” Crop of Promise 14 da Felbab-Brown “Afghanistan: when counternarcotics undermines counterterrorism,” counterterrorism,” undermines counternarcotics when “Afghanistan: Felbab-Brown da ington Quarterlysee Afghanistan, in eradication forced of effects On uploads/2011/09/05autumn_felbab.pdf. www.reuters.com/article/2009/06/27/idUSLR127167. www.reuters.com/article/2009/06/27/idUSLR127167. 13 12 ENDNOTES

23 There are different views, both among the expert group members and among other analysts, as to the extent to which the Taliban can be described as a unitary or singular actor. The two main schools of thought view the Taliban as a “franchiser” organization in which the local commanders maintain autonomy or as a decentralized organization with a clear leadership structure. (See Antonio Giustozzi, “Negotiating with the Taliban: Issues and Prospects,” The Century Foundation Report, June 20, 2010. http://tcf.org/assets/downloads/tcf-Gius- tozzi.pdf.) The Taliban does have a clear national leadership structure and, according to some analyses, there is not confusion or conflict over leadership in a given district or province. (See Gilles Dorronsoro, “The Taliban’s Winning Strategy in Afghanistan,” Carnegie Endowment for International Peace, 2009. http://carnegieendowment.org/files/taliban_winning_strategy. pdf.) Given the limited information available, what is at question is the extent to which the Taliban’s informal hierarchy constrains its ability to set priorities and policies at the district, province, and local level.

24 “Afghanistan Opium Survey 2009: Summary Findings,” United Nations Office on Drugs and Crime (UNODC), September 2009, 1. http://www.unodc.org/documents/crop- monitoring/Afghanistan/Afghanistan_opium_survey_2009_summary.pdf.

25 “Afghanistan Opium Survey 2012: Summary Findings,” United Nations Office on Drugs and Crime (UNODC), November 2012, 4-5. http://www.unodc.org/documents/crop- monitoring/Afghanistan/Summary_Findings_FINAL.pdf.

26 “Afghanistan Opium Survey 2011,” 1, 6, 51–52.

27 “International Narcotics Control Strategy Report, Vol. 1,” 91.

28 “Afghanistan Opium Survey 2011,” 18; “Afghanistan Opium Survey 2012: Summary Findings,” 4; “International Narcotics Control Strategy Report, Vol. 1,” 93.

29 Although the UNODC has noted that potential opium production decreased by 36 percent from 2011, this decrease was due to a decreased yield from plant disease and harsh weather conditions (see “Afghanistan Opium Survey 2012,” 4).

30 “Afghanistan Opium Survey 2012: Summary Findings,” 6.

31 Ibid. NARCOTRAFFICING 32 See David Mansfield, “Between a Rock and a Hard Place: Counter-narcotics Efforts and Their Effects in Nangarhar and Helmand in the 2010-2011 Growing Season,” Afghanistan Research and Evaluation Unit Case Study Series, 2011, 11. http://www.areu.org.af/Uploads/ EditionPdfs/1128E-Between%20a%20Rock%20and%20a%20Hard%20Place-CS-2011.pdf.

EWI • AFGHAN • EWI 33 “Afghanistan Opium Survey 2011,” 38.

50 34 “Afghanistan Opium Survey 2011: Statistics and Surveys Section,” United Nations Of- fice on Drugs and Crime (UNODC), 2001. http://www.unodc.org/documents/commissions/ subcom/SUBCOM-2011/Afghanistan_Opium_Survey_2011.pdf. EWI • AFGHAN NARCOTRAFFICING 51 - - - . . David Mansfield, “Responding to risk and uncertainty,” 47; idem, “Managing47; idem, Concur “RespondingDavid to Mansfield, risk and uncertainty,” cit. Op. Sherman, Jake and Rubin Barnett R. 37. 34, Asia,” and Central Afghanistan Northern Through Flows “Opiate “Corruption Perception Index Transparency 2012,” International, 2012. http://cpi. “International Narcotics Control Strategy Report, Vol. 1,” 93. 1,” Vol. Report, Strategy Control Narcotics “International “World Drug Report 2011,” 210. While Afghanistan and Iran display the first and second second and first the display Iran and Afghanistan While 210. 2011,” Report Drug “World 35–36. 19–20, 10, Asia,” and Central Afghanistan Northern Through Flows “Opiate “Addiction, Crime and Insurgency: The Threat Transnational of the Afghan Opium,” Ibid., 64; “International Narcotics Control Strategy Report, Vol. 1,” 93. 1,” Vol. Report, Strategy Control Narcotics “International 64; Ibid., 77. 73, 2, 2011,” Survey Opium “Afghanistan 77. Ibid., Assessment,” Threat A Asia: Central and Afghanistan Northern Through Flows “Opiate Mansfield, “Between a Rock and a Hard Place” and remarks by David Mansfield at the at Mansfield David by remarks and Place” Hard a and Rock a “Between Mansfield, 54–55. 2011,” Survey Opium “Afghanistan “Afghanistan Opium Survey 2011,” 18, 29, 31, 58. 31, 29, 18, 2011,” Survey Opium “Afghanistan Afghanistan Research David “Managing Mansfield, Concurrent andRepeated Risks,” 50 transparency.org/cpi2012/results/. 48 49 47 32. Risks,” and Repeated rent uments/data-and-analysis/Afghanistan/Afghan_Opium_Trade_2009_web.pdf. uments/data-and-analysis/Afghanistan/Afghan_Opium_Trade_2009_web.pdf. 46 45 http://www.unodc.org/doc 2–3. 2009, (UNODC), Crime and Drugs on Office Nations United ate addicts. ate 44 Afghan-Drug-Survey-2009-Executive-Summary-web.pdf 43 opi of numbers absolute the of terms in lead China and Russia rate, prevalence opiate highest documents/data-and-analysis/Studies/Afghanistan_northern_route_2012_web.pdf; documents/data-and-analysis/Studies/Afghanistan_northern_route_2012_web.pdf; “Drug United Summary, Use Executive in Nations Afghanistan: Office 2009 onSurvey,” Drugs and Crime (UNODC), 2010, 5. https://www.unodc.org/documents/data-and-analysis/Studies/ 42 United Nations Office on Drugs and Crime (UNODC),17.May http://www.unodc.org/ 2012, 40 41 39 37 2011. 25, September Narcotrafficking, Afghan on Group Expert the U.S.-Russia meeting of 38 http://www.areu.org.af/Uploads/EditionPdfs/1122E%20Managing%20Concurrent%20 and%20Repeated%20Risks%202011.pdf. 36 2011. August Unit, and Evaluation 35 ENDNOTES

Section 4

51 “Corruption in Afghanistan: Bribery as Reported by the Victims,” United Nations Of- fice on Drugs and Crime (UNODC,) January 2010, 4. http://www.unodc.org/documents/data-and-analysis/Afghanistan/Afghanistan-corruption-survey2010-Eng.pdf.

52 “Opiate Flows Through Northern Afghanistan and Central Asia”, 10, 21-25; “Afghani- stan Opium Survey 2012,” 4.

53 “World Drug Report 2011,” 45.

54 Ibid., 71.

55 Press-conference by Viktor Ivanov, Director of Federal Service for Control of Narcotics Circulation (FSKN), State TV and Radio Corporation “Rossiya” Press-Center, April 5, 2012.

56 “International Narcotics Control Strategy Report, Vol. 1,” 267–269.

57 “The Global Afghan Opium Trade: A Threat Assessment,” 28; “International Narcotics Control Strategy Report, Vol. 1,” 376, 413.

58 “Federal Drug Control Service: Russia doesn’t transit drugs to Europe,” Interfax, Sep- tember 18, 2012. http://rbth.ru/articles/2012/09/18/federal_drug_control_service_russia_ doesnt_transit_drugs_to_europe_18353.html.

59 “Opiate Flows Through Northern Afghanistan and Central Asia,” 48, 69–70.

60 Ibid., 58–59.

61 “International Narcotics Control Strategy Report, Vol. 1,” 413.

62 “Opiate Flows Through Northern Afghanistan and Central Asia,” 14, 72.

63 Ibid., 53, 57.

64 “The Global Afghan Opium Trade: A Threat Assessment,” 47. NARCOTRAFFICING 65 “Opiate Flows Through Northern Afghanistan and Central Asia,” 70.

66 Ibid., 46.

67 According to the UNODC, heroin users accounted for an absolute majority of Russia’s EWI • AFGHAN • EWI 1.7 million opiate users in 2009. See “World Drug Report 2011,” 51, 72–73. 52 68 Viktor Ivanov, quoted by Interfax news agency, March 23, 2012.

69 UNODC, “World Drug Report 2011,” 83. http://www.unodc.org/documents/data-and- analysis/WDR2011/World_Drug_Report_2011_ebook.pdf. EWI • AFGHAN NARCOTRAFFICING 53 ------, , Feb The Wall Street Journal . . news agency, March 23, 2012. 23, March agency, news Interfax , , July 5, 2012. http://www.bloomberg.com/news/2012-07-05/u-s-exit-risks-af “Islamic Republic of Afghanistan: Detailed Assessment Report on Anti-Money Laun http://www. 2012. 16, February Public Statement, (FATF) Force Task Action Financial 2013. 22, February FATF, process,” on-going Compliance: AML/CFT Global “Improving This is not differentiating between drug monies and corruption of aid monies. corruption and drug monies between This is not differentiating Yaroslav Trofimov, “Afghanistan Targets FlightTargets of Cash,” “Afghanistan Trofimov, Yaroslav Eltaf Najafizada,“U.S. ExitRisks AfghanEconomy as Cash Pumped Dubai,” Into “Islamic Republic of Afghanistan: Detailed Assessment Report on Anti-Money Laun Ibid., 10. Ibid., “International Narcotics Control Strategy II: Volume Report, Money Laundering and Anti-Mon on Report Assessment Detailed Afghanistan: of “Islamic Republic 49; Ibid., “Islamic Republic Report Afghanistan: of on Assessment Detailed Anti-Money Laun Viktor Ivanov, quoted by by quoted Ivanov, Viktor See George Gavrilis, “Central Asia’s Border Woes and the Impact of International provingglobalamlcftcomplianceon-goingprocess-22february2013.html. provingglobalamlcftcomplianceon-goingprocess-22february2013.html. 82 http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/im 81 fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/fatfpublicstate ment-16february2012.html. 80 Con “International Narcotics 57; 47, 26, 7, dering and the Combating Terrorism,” Financing of 31. 9–10, II,” Vol. Report, Strategy trol 79 78 Bloomberg ghan-economy-as-cash-pumped-into-dubai-villas.html. ruary 22, 2012. http://online.wsj.com/article/SB1000142405297020413100457723700134 9011894.html. dering and Combating the Financing of Terrorism,” 20; “International Narcotics Control Strat Control Narcotics “International 20; Terrorism,” of Financing the Combating and dering 28. 2, II,” Vol. egy Report, 77 ey Laundering and Combating the Financing of Terrorism,” 7, 27. 27. 7, Terrorism,” the Financing of and Combating Laundering ey 76 pdf. pdf. 75 74 Department U.S. of State Financial Bureau Crimes,” for International Narcotics and Law En forcement Affairs, March2012, 50. http://www.state.gov/documents/organization/184329. 73 72 International (IMF) Monetary Coun Fund dering and Combating the Financing Terrorism,” of try Report No. 11/317, November 2011, ghanistan%20-%20published%20DAR.pdf 7. http://www.apgml.org/documents/docs/17/Af 2012. 2012. ries-20120601.pdf. http://www.opensocietyfoundations.org/sites/default/files/occasional-paper-se 71 Open Assistance,” Society Foundation Central Asia Project, Occasional Paper No. 6, May 70 ENDNOTES

83 “Illicit Trafficking in Narcotic Drugs and Psychotropic Substances and Money Laun- dering,” Financial Action Task Force (FATF) and The Middle East and North Africa Financial Action Task Force (MENAFATF), 2011, 26–27. http://www.menafatf.org/images/UploadFiles/ Illicit_Trafficking_and_ML_Eng.pdf.

84 “Mutual Evaluation Report of the United Arab Emirates: Anti-Money Laundering and Combating the Financing of Terrorism,” Financial Action Task Force (FATF) and The Middle East and North Africa Financial Action Task Force (MENAFATF), April 9, 2008, 15. http://www. fatf-gafi.org/media/fatf/documents/reports/mer/MER%20UAE%20full.pdf.

85 “Drug Investigations Lead to Treasury Designation of New Ansari Money Exchange,” U.S. Drug Enforcement Administration Press-Release, February 18, 2011, http://www.justice. gov/dea/pubs/pressrel/pr021811a.html.

86 “Mutual Evaluation Report of Pakistan: Anti-Money Laundering and Combating the Financing of Terrorism,” The World Bank and Asia/Pacific Group on Money Laundering, July 9, 2009, 1, 37. http://www.apgml.org/documents/docs/17/Pakistan%20MER%20-%20 final%20version.pdf; “Islamic Republic of Afghanistan: Detailed Assessment Report on Anti- Money Laundering and Combating the Financing of Terrorism,” 27.

87 FATF Public Statement, February 22, 2013. http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/fatfpublicstatement22february2013.html.

88 “Second Mutual Evaluation Report of the Russian Federation: Anti-Money Laundering and Combating the Financing of Terrorism,” Financial Action Task Force (FATF), June 20, 2008, 7. http://www.fatf-gafi.org/media/fatf/documents/reports/mer/MER%20Russia%20ful.pdf.

Section 5

89 “International Narcotics Control Strategy Report, Vol. II,” 178-179, 147.

90 “The Global Afghan Opium Trade: A Threat Assessment,” 46.

91 Barnett R. Rubin, “The political economy of war and peace in Afghanistan,” World De- velopment, Volume 28, No. 10, October 2000, 1789–1803. http://elmu.umm.ac.id/file.php/1/ jurnal/UVW/World%20Development/Vol28.Issue10.Oct2000/1060.pdf. NARCOTRAFFICING 92 Zareen Fatima Naqvi, “Afghanistan–Pakistan Trade Relations,” World Bank, 1999, 15– 16.

93 “Afghanistan: Annual Opium Poppy Survey 2001,” United Nations International

EWI • AFGHAN • EWI Drug Control Program (UNDCP), 2001, ii. http://www.unodc.org/pdf/publications/re- port_2001-10-16_1.pdf. 54 94 For more detail, see Ekaterina Stepanova, “Illicit Drugs and Insurgency in Afghani- stan,” Perspectives on Terrorism, Volume VI, Issue 2, May 2012, 4–18. http://www.terroris- manalysts.com/pt/articles/issues/PTv6i2.pdf; idem, “Beyond ‘Narcoterrorism’: Illicit Drug Business and Terrorist Tactics in Armed Conflicts,” in Julia Buxton, ed.,The Politics of Narcotic Drugs: A Survey, London: Routledge, 2010, 120–130.

EWI • AFGHAN NARCOTRAFFICING 55 ------The Wash , April 19, 2010. http://counterterrorism.newamerica. 2010. 19, April , NewAmerica Foundation , , September 27, 2009. http://articles.washingtonpost.com/2009-09-27/ See, See, for instance, Lakhdar Brahimi and Thomas R. Pickering, “Afghanistan: Negoti “Afghanistan Report 2009,” NATO Public Diplomacy NATO http://www. Division, 29. 2009, Report 2009,” “Afghanistan “Islamic Republic of Afghanistan: Detailed Assessment Report on Anti-Money Laun “Afghanistan Opium Survey 2011,” 77. 2011,” Survey Opium “Afghanistan Craig Whitlock, “Diverse Sources Fund Insurgency In Afghanistan,” “Addiction, Crime and Insurgency: The Transnational Threat of Afghan Opium,” United United Opium,” Afghan of Threat Transnational The Insurgency: and Crime “Addiction, “Islamic Re also 30; see 22, Assessment,” Threat A Trade: Opium Afghan “The Global Force%20BookComplete.pdf. Force%20BookComplete.pdf. 101 ating The Peace: Report of the Century on Force Foundation International Afghanistan Task and its Regional and International The Dimensions,” Century Foundation Press, March 2011. 31, http://old.tcf.org/publications/pdfs/afghanistan-negotiating-peace/AfghanTCFTask 100 isaf.nato.int/pdf/20090331_090331_afghanistan_report_2009.pdf. 99 31. Terrorism,” the Financing of dering and Combating and Pakistan,” and net/publications/policy/financing_the_taliban. ington world/36920360_1_taliban-officials-taliban-leaders-afghan-officials; PostCatherine Collins and the Ashraf “Financing Ali, Tracing Dollar the behind Taliban: the Insurgencies in Afghanistan 97 98 96 public of Afghanistan: Detailed Assessment Report on Anti-Money Laundering and Combat 31. Terrorism,” of ing the Financing Nations Office on Drugs and Crime (UNODC), October 2009, 2. https://www.unodc.org/doc 2. 2009, October (UNODC), Crime and Drugs on Office Nations uments/data-and-analysis/Afghanistan/Afghan_Opium_Trade_2009_web.pdf. 95 EWI Board of Directors

OFFICE OF THE OFFICERS MEMBERS CHAIRMEN John Edwin Mroz (U.S.) Martti Ahtisaari (Finland) Ross Perot, Jr. (U.S.) President, Co-Founder and CEO Former Chairman Chairman EastWest Institute EastWest Institute EastWest Institute 2008 Nobel Peace Prize Laureate Chairman R. William Ide III (U.S.) Former President of Finland Hillwood Development Co. LLC Council and Secretary Board of Directors Chair of the Executive Committee Tewodros Ashenafi (Ethiopia) Dell Inc. EastWest Institute Chairman and CEO Partner Southwest Energy (HK) Ltd. Armen Sarkissian (Armenia) McKenna Long and Aldridge LLP Vice Chairman Jerald T. Baldridge (U.S.) EastWest Institute Leo Schenker (U.S.) Chairman President Treasurer Republic Energy Inc. Eurasia House International EastWest Institute Former Prime Minister of Senior Executive Vice President Sir Peter Bonfield (U.K.) Armenia Central National-Gottesman Inc. Chairman NXP Semiconductors

Matt Bross (U.S.) Chairman and CEO WBE Hong Kong

Robert N. Campbell III (U.S.) Vice Chairman (Retired) Deloitte LLP

Peter Castenfelt (U.K.) Chairman Archipelago Enterprises Ltd.

Maria Livanos Cattaui (Switzerland) Former Secretary-General International Chamber of Commerce

Angela Chen (U.S.) Founder and Managing Director Global Alliance Associates Partner Epoch Fund Michael Chertoff (U.S.) Anurag Jain (India) Tsuneo Nishida (Japan) Co-founder and Managing Principal Chairman Ambassador; Chertoff Group Laurus Edutech Pvt. Ltd. Permanent Representative of Japan to the U.N. David Cohen (U.K.) James L. Jones (U.S.) Chairman Former U.S. National Security Ronald P. O’Hanley (U.S.) F&C REIT Property Management Advisor President,Asset Management and Corporate Services Joel Cowan (U.S.) Haifa Al Kaylani (U.K.) Fidelity Invesments Professor Founder and Chairperson Georgia Institute of Technology Arab International Women’s Forum Yousef Al Otaiba (U.A.E.) Ambassador Addison Fischer (U.S.) Zuhal Kurt (Turkey) Embassy of the United Arab Chairman and Co-Founder CEO Emirates in Washington, D.C. Planet Heritage Foundation Kurt Enterprises Admiral (ret) William A. Owens Adel Ghazzawi (U.A.E.) Mark Maletz (U.S.) (U.S.) Founder Senior Fellow Chairman CONEKTAS Harvard Business School AEA Holdings Asia Former Vice Chairman Stephen B. Heintz (U.S.) Kevin McGovern (U.S.) U.S. Joint Chiefs of Staff President Chairman Rockefeller Brothers Fund The Water Initiative Sarah Perot (U.S.) Co-Founder Director and Co-Chair for Emil Hubinak (Slovak Republic) SOBE Beverages Development Chairman and CEO Dallas Center for Performing Arts Logomotion General (ret) T. Michael Moseley (U.S.) Louise Richardson (U.S.) John Hurley (U.S.) Moseley and Associates, LLC Principal Managing Partner Former Chief of Staff University of St. Andrews Cavalry Asset Management United States Air Force John Rogers (U.S.) Wolfgang Ischinger (Germany) F. Francis Najafi (U.S.) Managing Director Chairman CEO Goldman Sachs and Co. Munich Security Conference Pivotal Group Global Head of Governmental Affairs Allianz SE CO-FOUNDER DIRECTORS EMERITI

George F. Russell, Jr. (U.S.) Ira D. Wallach* (U.S.) Jan Krzysztof Bielecki (Poland) Former Chairman Former Chairman CEO EastWest Institute Central National-Gottesman Inc. Bank Polska Kasa Opieki S.A. Chairman Emeritus Co-Founder Former Prime Minister of Poland Russell Investment Group EastWest Institute Founder Emil Constantinescu (Romania) Russell 20-20 President CHAIRMEN EMERITI Institute for Regional Cooperation Ramzi H. Sanbar (U.K.) and Conflict Prevention (INCOR) Chairman Berthold Beitz (Germany) Former President of Romania SDC Group Inc. President Alfried Krupp von Bohlen William D. Dearstyne (U.S.) Ikram ul-Majeed Sehgal und Halbach-Stiftung Former Company Group Chairman (Pakistan) Johnson & Johnson Chairman Ivan T. Berend (Hungary) Security & Management Professor John W. Kluge* (U.S.) Services Ltd. University of California, Los Angeles Former Chairman of the Board Metromedia International Group Kanwal Sibal (India) Francis Finlay (U.K.) Former Foreign Secretary of India Former Chairman Maria-Pia Kothbauer Clay Finlay LLC (Liechtenstein) Pierre Vimont (France) Ambassador Executive Secretary General Hans-Dietrich Genscher Embassy of Liechtenstein to European External Action Service (Germany) Austria, OSCE and the UN in Vienna Former Ambassador Former Vice Chancellor and Embassy of the Republic of France Minister of Foreign Affairs William E. Murray* (U.S.) in Washington, D.C. Former Chairman Donald M. Kendall (U.S.) The Samuel Freeman Trust Alexander Voloshin (Russia) Former Chairman and CEO Chairman of the Board PepsiCo. Inc. John J. Roberts (U.S.) OJSC Uralkali Senior Advisor Whitney MacMillan (U.S.) American International Group (AIG) Zhou Wenzhong (China) Former Chairman and CEO Secretary-General Cargill Inc. Daniel Rose (U.S.) Boao Forum for Asia Chairman Rose Associates Inc.

Mitchell I. Sonkin (U.S.) NON-BOARD COMMITTEE Managing Director MEMBERS MBIA Insurance Corporation

Laurent Roux (U.S.) Thorvald Stoltenberg (Norway) Founder President Gallatin Wealth Mangement, LLC Norwegian Red Cross

Hilton Smith, Jr. (U.S.) Liener Temerlin (U.S.) President and CEO Chairman East Bay Co., LTD Temerlin Consulting

John C. Whitehead (U.S.) Former Co-Chairman Goldman Sachs Former U.S. Deputy Secretary of State

* Deceased EastWest Institute Policy Report Series

2012

Bridging the Fault Lines Collective Security in Southwest Asia Policy Report 2012—1

Priority International Communications Staying Connected in Times of Crisis Policy Report 2012—2

2011

Working Towards Rules for Governing Cyber Conflict Rendering the Geneva and Hague Conventions in Cyberspace Policy Report 2011—1 [EN | RU]

Seeking Solutions for Afghanistan, Part 2 Policy Report 2011—2

Critical Terminology Foundations Russia-U.S. Bilateral on Cybersecurity Policy Report 2011—3

Enhancing Security in Afghanistan and Central Asia through Regional Cooperation on Water Amu Darya Basin Consultation Report Policy Report 2011—4

Fighting Spam to Build Trust China-U.S. Bilateral on Cybersecurity Policy Report 2011—5 [EN | CH]

Seeking Solutions for Afghanistan, Part 3 Policy Report 2011—6

2010

Economic Development and Security for Afghanistan Increasing Jobs and Income with the Help of the Gulf States Policy Report 2010—1

Making the Most of Afghanistan’s River Basins Opportunities for Regional Cooperation Policy Report 2010—2

The Reliability of Global Undersea Communications Cable Infrastructure Policy Report 2010—3

Rights and Responsibilities in Cyberspace Balancing the Need for Security and Liberty Policy Report 2010—4

Seeking Solutions for Afghanistan, Part 1 Policy Report 2010—5 Founded in 1980, the EastWest Institute is a global, action-oriented think-and-do tank. EWI tackles the toughest international problems by:

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