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. Afghan narcotrafficking presented such an opportunity for this important bilateral 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- 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

narcotrafficking 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 narcotrafficking 9 There is, then, is, There anda clear compelling on both interest the Russian sides and U.S. upin stepping oncooperation drug control Afghanistan in and beyond. - - - avrov Lavrov in March A 2009. - re concerned concerned that the shift of security - respon sibilities to the still weak or fledgling 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 inter and compelling a clear then, is, There est on both the Russian in on drug control up cooperation stepping and U.S. sides 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 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 Commission Presidential Bilateral Russian (BPC) led Officeby the of U.S. NationalDrug Control Policy Director Gil Kerlikowske and (FSKN) Service Control Drug Federal Russian Ivanov. Viktor Director Despite the many ups-and-downs in the bilateral relationship between Russia and the United States, cooperation on counternar cotics has endured, developing slowly steadily. but Counternarcotics cooperation though the reset even endure to expected is policy between the two countries 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 - - - Most cultivation gains gains cultivation Most 1 The U.S.-Russia Context The U.S.-Russia The consequences of Afghanistan’s ongoing security issues have spread far beyond Many borders. states have its an inherent inter Many experts believe that recent but limited in cultivation poppy in decreasing successes some provinces will be unsustainable once the presence ends NATO in December 2014. And some provinces have been under - cultivation, experienc in poppy ing an increase The boom in ate production poppy following the collapse cultivation of the and regime Taliban in 2001 has opi- had a significant impact on Russia, which has become one of - Rus heroin. Afghan of consumers largest the sia has subsequently criticized the U.S. and their and production in increase this for NATO - eradi an aggressive pursue to unwillingness Afghanistan. in policy cation est est in Afghanistan developing along perhaps is a Russia more path. prosperous and stable facing the most devastating human security challenges from Afghan narcotrafficking because Afghan opiates have made their way into Russia in startling numbers. The United and po- thus motivated are and Russia States sitioned to cooperate to combat Afghan nar cotrafficking, since theUnited States is the and counternarcotics security main external be to continue will Afghanistan—and in player ends in 2014. mission combat its after even mining earlier gains. Although Governor-led Eradication LE) (G increased by percent some from 2012 154 over 2011, there was cultivation 18 under poppy land more percent in 2012 than in 2011. were in Afghanistan’s southern region, which southern region, in Afghanistan’s were and the provinces, insecure include the most are provinces some where region, western is justifiably Russia insecure. becoming more 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 as tic objections, the administration of Presi- 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- 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 narcotrafficking 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 narcotrafficking 11 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 de- and more - tailed recom mendations on the way for forward U.S.-Russian cooperation. - - - - - pros and challenges and the priorities tional cooperation. bilateral for pects The threatened United are and States Russia by different aspects of Afghan narcotraffick The extent. ing and different a to significantly and type the comparative will outline report 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 Thesenarcotrafficking. sharedconcerns of are Afghan - glob to links general more the to both related related to especially crime, al transnational money laundering, and to the more specific links to the dysfunction of the state, - corrup within and around and armed violence tion, Afghanistan. This focus has dictated the structure of the report. Section 2 provides overview of a the U.S. and comparative Russia’s exposure to and perceptions of the threat emanating It Afghanistan. from is followed by an outline - opium econo Afghan the of the of mainstays in spurring corruption their role including my, - trans the to devoted is 4 Section 3. Section in national trafficking of Afghan 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 and are thesole responsibility of this expert group. To the extent possible, the report’s conclusions and consensus-based. analysis are is the report assessment threat The present first productof thework of theU.S.-Russian expert group on Afghan narcotrafficking. A with will report a second follow set of general on the detailed recommendations and more cooperation. U.S.-Russian for forward way - - - 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 sources on cultivation, production, traffick Our work seeks to supplement and provide the than duplicate, rather support to, expert Group Working work of the Counternarcotics of group”) the U.S.- “Kerlikowske-Ivanov (the Russian Bilateral Presidential Commission. This report results from a non-governmental up with indepen- come that aims to initiative dent conclusions and about Russian na- U.S. With With the withdrawal of NATO security - forc es and drawdown of U.S. troops underway, counter that sustainable contend may some narcotics efforts in Afghanistan are doomed. of reduction significant any for prospects The This report, the opium appear slim. economy takes issue with a simplistic hands- however, becoming quickly is Afghanistan that view off - has an prob become) intractable already (or lem. Instead, it critically reexamines Russian and U.S. interests, concerns, strategies, and capacities; the general driving forces behind including Afghanistan, in economy opium the the complex links between drugs, the socio- militan- corruption, environment, economic and the failure; main pat and governance cy, terns of transnational trafficking of Afghan laundering. money and related opiates opiates—the Afghan of consumption and ing, United Nations Office on Drugs (UNODC) and Crime and the U.S. government. Rather, on perspective comparative critical, a takes it the data, supplements it with evidence from it and by reexamines other focusing sources, on the U.S.-Russian implications. Since busi- drug illicit the the of aspects various on data is often ness and Afghan narcotrafficking the imperfect and incomplete, the report had to analysis data, of existing on rely comparative reservations multiple of sight losing not while about also We had its veracity. the benefitof the extensive fieldwork andexpertise of the members of our unique U.S.-Russian expert this analysis. in informing group Report Overview Report problem, problem, it is useful to reexamine the scale, nature, and type of threat posed by the - pro duction and trafficking of This report Afghanseeks to analyze these issues by opiates. placing them in the broader context security. international gional and of - re 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- A 4 ly, depending on who is doing the assess- rorism and illegal migration. 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- In order to identify potential drivers for fos- ern Route.5 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

narcotrafficking AFGHAN • EWI States. heroin, consuming almost the same amount of pure heroin as all the countries of Western 12 Russia as a Market and Central Europe combined. Russia is one 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 narcotrafficking 13 2009. Source: Source: rug Survey, rug Survey, D UNODC, World World UNODC,

8 - - 9 Fig. 1. Global heroin consumption, 2008 consumption, heroin Global 1. Fig. Related negative social and economic impli- and economic social negative Related cations produce economic losses of up to 3 percent of Russia’s GDP. Narcotics-related in- pressing, particularly are issues health rates. cluding rising HIV In Russia, the health implications of opiate and other drug abuse are deficiencies in demand reduction exacerbated strategies, by such as the low effectiveness of - drug-addic and the programs treatment tion medical acute shortage of and treatment - social reha 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 to the U.S. Drug expert with Enforcement 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 and Russia’s Federal Drug Control (FSKN), Service there are 1.7 million opiate users in of comprising the 68 roughly percent Russia, 2.5 million drug addicts and 1.64 percent of drug new with 80,000 population, the total users, 30,000 deaths from year. each deaths drug-related other 70,000 overdose, and - - - - In addition, weak border controls and feeble in Central capacity national counternarcotics Asia cannot keep pace with the - pos growing sibilities for traffickersby created expanding Cou- infrastructure. transport and flows trade pled with the between regime new free-trade Belarus, Russia, and Kazakhstan, which has longest world’s the on controls customs lifted and Kazakhstan, Russia between land border these risk factors could facilitate trafficking and further complicate counternarcotics ef Trafficking of heroin and other drugs Afghanistan from to Russia via Central Asia may and higher consumption to leading increase, prevalence rates. As estimated by UNODC The relative stabilization of opiate inflowsto Russia may The also be situation short-lived. can easily deteriorate in the next few years, despite Russia’s intensifying counternarcot ics and drug control efforts at home. This is wrap- the looming true considering especially up of operations NATO in Afghanistan in the absence of a fully functional state or lasting political settlement. This will mean - continu gov and contested insecurity, ing violence, Thus, in ernance. a deeply-embedded opium economy that lacks viable income-generat and measures antinarcotics ing alternatives, unlikely are soft, or tough whether strategies, to lead to a sizeable reduction of the opium term. output in the short and its economy Route. along the Northern forts to to becoming one of the heroin. for markets 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 insurgency, funding. In the early years of this century’s first laboratories) and alternative development.13 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. 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- narcotrafficking 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 narcotrafficking 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 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 narcotrafficking 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 narcotrafficking 17 - While coun the tering drug trade along the main traffick and ing routes in the main consuming is countries no essential, sustainable can progress be achieved - until the prob - lem is sys tematically at addressed the source— Afghanistan. - - - - - This report 19 (July 2011). U.S. Strategy to Combat Transnational Organized Crime contains 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 willbecome more pressing. tackling Afghan along the the drug trade While countering main traffickingroutes and in the maincon- 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 and priorities shared concerns about Afghanistan and Afghan narcotrafficking, the following sections 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 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 narcotraffickingmay 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 complex transnational networks as posing a new type of threat at the regional and global These growing levels. concerns are apparent the in - - - Second, Second, narcotrafficking is not only a mark cotrafficking remains thelargest threat the at global level and opiates and trafficking narcotics global of share large account for a markets. Both the United States and Russia bear the high costs of serving as large ate opi- markets and face serious opiate abuse even if problems, the opiate respective flows originate from different parts of the not only interest strong have Both countries world. and drug control international in promoting cooperation counternarcotics in but general, also in the more specific international initia- and trafficking opiate reducing at aimed tives global opiate markets in a coordinated man- - as the highly self-regu This is important, ner. latory nature of this type of market tends to quickly compensate for declining demand or restricted supply in one regional context by counterbalancing trends in other producing weak Russia’s Given regions. consuming and ness in demand reduction and States’ longer the track United 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 operation. edly multi-faceted challenge that combines and political social, security, economic, - rela close has a particularly it also threats, - exac to propensity strong tionship to—and of erbate—a range broad other transnational threats. The links between narcotrafficking and other types of transnational crime and money laundering are endemic. Other types of transnational crime and especially money laundering are less tied to several major “source areas” and respective transit routes production to in contrast the world, around and trafficking of illicitsubstances such as opiates. The laundering of proceeds from il- in place take may opiates Afghan in trade licit routes primary transit neither that are areas nor main consumer for markets these drugs, First, First, of all types of transnational crime, nar concerns concerns that are highly relevant for It both. would be an over-simplification to reduce in the narcotrafficking Afghan of the problem U.S.-Russian context to Russia’s obsession with its own drug addiction and abuse the and 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 sia may, in fact, have more common ground seem. otherwise than it may on the issue 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 A20 the second half tion. According to the U.S. government, general security. 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 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 narcotrafficking 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 narcotrafficking 19 Opium Opium Report. Narcotics Narcotics and Crime Survey; U.S. U.S. Survey; Afghanistan Afghanistan Sources: UN Sources: International International Government/ Government/ Office on Drugs Drugs on Office Control Strategy Strategy Control - -

28 Accord 26 The number of poppy- Even as governor-led as governor-led Even 25 27 The data for 2012 show a 29 insecurity insecurity of individual farmer households. - con changing economic those to Compared the ditions, limited eradication played efforts - reduc in this temporary role only a marginal cultivation. tion in poppy short- was It is not surprising that the decline lived. Between 2009 and 2011, total - cultiva - and the varia stable, relatively tion remained mostly was tion in annual opium production due to changes in per-ha yield weather affected conditions by and plant diseases. Cul- ac- reaching, again, rise to started tivation cording 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 marked marked increase in cultivation over 2011 (18 percent) despite an increase in led Eradication LE). (G Ninety-five percentof Governor- ing to an alternative U.S. government dropped marginally cultivation poppy mate, - esti by 3 percent in 2011 opium (to production increased 115,000 by 38 ha), percent, but reaching 4,400 mt. It is alarming that poppy and 2009 has not declined since ghanistan cultivation in Af that opium production has largely been on the rise again. eradication at the provincial level increased increased level at the provincial eradication by 65 percent in 2011 and by 154 percent in 3 and approximately it only eliminated 2012, respectively. cultivation total of 6 percent growing provinces increased again and the again increased provinces growing amount of opium produced increased by 61 percent to reach 5,800 mt in 2011. Fig. 2. Opium poppy cultivation in Afghanistan, 1994–2011 Afghanistan, in cultivation poppy Opium 2. Fig. A temporary decline in poppy decline in poppy temporary A 24 Cultivation Trends Cultivation cultivation cultivation in Afghanistan in 2008–2009 primarily occurred due to combined pressures local and regional, global, at forces market by This levels. was the result of several factors: a short- towards correction market a positive global a amidst cultivation wheat to shift term food crisis; rising wheat prices coupled with - over-produc due to opium prices low-cycle tion in the previous years; and growing food Following the historical peak year of 2007, the 2007, of year peak historical the Following area under poppy cultivation in Afghanistan temporarily decreased in 2008–2009, than but larger 35 percent then it remained even in the peak year of - cultivation under the Tali ban (1999). Cultivation and Cultivation Trends Production much For of the first decadeof the 21stcen- tury, poppy cultivation in Afghanistan un- that than higher was level rose overall its and der the Taliban de facto rule in the half of the second 1990s. Cultivation and production increase, a linear displayed not always have of a pattern large- a cyclical following instead scale in increase the early - to fol mid-2000s, 2008–2009, in decline short-lived a by lowed since in cultivation increase and a renewed 2010. Of more critical importance, however, are the possible explanations of the factors upwards both the general to that contributed and an in- and production in cultivation trend decline in 2008–2009. terim 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. vation offers took place in this one province. Cultivation in- Extensive infrastructure for loans, credit, and 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- ity of gener- region (Badakhshan, Takhar, Kunduz) by 37 tion of raw opium the optimal cash crop for 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 cash income, ern region did enjoy a decrease in cultivation on opium remain high relative to other crops (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 in areas that 1 percent of cultivation.31 Although multiple to purchase at the farm-gate, minimizing the 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. tive economic ambiguous consequences with the potential 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. and general of development funds but is now a designa- Insecurity is, of course, a major problem on a 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 Tali- Factors Affecting ban 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), in- areas 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 of social, economic, and security factors. and Khogyani) or in the Uzbeen valley in the central Kabul province is partly linked to anti- Poppy cultivation offers the possibility of government elements, but not necessarily generating quick cash income, particularly the Taliban. The minimal presence of the Tali- in areas that lack alternative economic op- ban insurgents in the northern region has not portunities and general security. The impor- guaranteed stability or prevented farmers narcotrafficking AFGHAN • EWI tance of opium as an indispensable source from restarting poppy cultivation in some dis- of cash income for farmers’ households in tricts in 2011.35 But the northern region is not 20 poppy-growing districts is underscored by without anti-government elements, particu- widespread resistance against eradication— larly in Wadooj, Argi, and Darayem in Badakh- from direct attacks and mine explosions to shan and Sholgara, Chemtal, and Charbolak demonstrations—in the Badghis, Day Kundi, in the Balkh province. Farah, Ghor, Helmand, Hirat, Kabul, Kanda- har, Kapisa, Kunar, Nangarhar, Nimroz, Uruz- EWI • AFGHAN narcotrafficking 21 - Initiatives from ranged find to attempts - so single-crop aslutions (such pome- wheat, saf granates, or onions, fron, more to cotton) efforts complex at diversifying off- on-farm, and non- farm, incomefarm and building social nets. safety 37 ocation ocation is a key factor in determining the 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 strategies and adopt coping nomic distress signs of - eco that undermine earning capacity, their future of quantity and quality the reducing including delaying health expenditure, consumed, food and failing to meet assets, selling productive social obligations, such as marriage costs. Furthermore, 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 innot less. security, Afghanistan has never had as much land under 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 will impede licit economic insecurity growing presence coupled with opportunities and markets, while the significantly expanded arable and irrigated areas are likely to be diverted to poppy cultivation again. L cash-generating strategies of farmers. Non- in close in areas households growing poppy proximity to markets, good demand and with high consumer transportation options, will have significantly more crop - diversifica tion. Where poppy has been abandoned for - re with limited households reason, 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 on a na- is that, important implication One - reconstruc economic general tional scale, including the growth tion and development, of industrial, and resource, services sectors, 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 - - - However, to become become to However, 36 Alternatives to Poppy Cultivation Cultivation Poppy to Alternatives These efforts have made some progress even even progress some made have efforts These in select areas of those regions and prov stimulated largely was While this reduction in wheat increase a by market-driven general prices due to growing food insecurity, there were also other factors. - devel growing A programs, diversification crop combination of - pres state and increased opment assistance, ence backed by upgraded government and support international all security contributed to reduction of poppy fields insouth areas of areas rural in especially Canal, Boghra the centers. urban to close To reduce economic dependence on opium, on opium, dependence economic reduce To community development the international and Afghan authorities have increasingly - fo legal diversifying and strengthening on cused livelihoods. Initiatives ranged from attempts to find single-cropsolutions (such as wheat, saffron, pomegranates, onions, or cotton) to on-farm, diversifying at efforts complex more off-farm, and non-farm income and building social safety nets. The effectiveness or even appropriateness of such measures - politi heavily socioeconomic, local the on depends context. and security cal, Afghanistan’s been that to inces central have and the as the south opium economy—such east—when certain factors applied. They in- ur to close locations central clude: relatively access better security; improved centers; ban or to expanded irrigation; markets; improved as- agricultural government of availability the op- income diverse to and access sistance; portunities, including non-farm cash-gener ating New incomes. for crops instance, have, fertile more the in introduced effectively been and accessible districts of Nangarhar. other example is - An a major reduction in poppy 2008–2011, in Helmand Central in cultivation and other crops. wheat by replaced partly These solutions, however, are not universally not universally are however, solutions, These sustainable, especially in more remote and or no access with limited areas, secure less to markets and income - opportunities. Farm ers may temporarily increase cultivation of sustainable, sustainable, areas that have seen progress must see investment in - com infrastructure, and improved development, rural prehensive in hand go should which order, and law of rule and security in overall increase hand with the at functional the governance national and lo- levels. cal 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- 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-

narcotrafficking 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 narcotrafficking 23 Opium tradersOpium withoperate legal of little fear consequences of part and pay di- their profits corrupt to rectly local officials, strongmen, and insurgent groups. - - 48 47 ow levels of heroin seizure in of seizure heroin the ow levels north have Cross-border Cross-border traffickers and precursor im- porters, in turn, have to pay border guards, po- and strongmen, regional operators, airline litical officials.Profit sharesfrom 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 L 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 more south, the in insecurity persistent to with there directed been have resources ISAF 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 and processing trafficking along iticians, and iticians, businessmen and some of them business opiate the in involved be to continue money and corruption and narcotics-related laundering. land- wealthier or villagers level, local the At 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 the area at the time. For example, field-based studies 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 in involved as heavily - are estab police, lished local as the anti-government trade taxing opiate elements. They are also and intimidation “taxes” for of generally illegal farmers blamed who travel by road. Predation by authorities, is police, local and especially ANP including conflict in communities by reported routinely areas, who often unfavorably compare low moral standards of government employees Taliban. the of those to - - 44 (Russia may have have may (Russia 43 The U.S. government 45 This points to a - disturb 42 In many provinces, local strong local provinces, In many 46 concurs concurs with the UNODC that many Afghan government officials directly profit from the drug trade. Narcotics-related corrupt practices are are practices corrupt Narcotics-related deeply embedded, multiple, Those who from theprofit opium business in and diverse. Afghanistan include “a broad range of - profi teers, at home including and solely abroad,” criminal groups and officials at different lev Illicit Drugs and Corruption Illicit Drugs els of government. percent percent increase). - Afghan decade, first century’s this in Overall, with the the country into has evolved istan at in the world rate prevalence opiate highest 2.65 percent—followed by Iran with a - preva percent. 2.26 of rate lence ing trend of a rapidly growing users. number heroin of proportion and Opium traders operate Opium with operate traders little of fear legal 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 men—both in and out of - government—con trol opium markets as well as the illicit arms and other criminal activities. trade In northern Afghanistan alone, ers consume opiate an estimated 85 us- tons (mostly drug local bring could which annually, opium) traders around 50 million USD a - Addi year. tionally, cross-border opiate trafficking from northern Afghanistan to Central Asia could bring traffickers 344 million USD. total The sum of domestic consumption and of Afghanistan illicit in sales opiates northern export for 2010 was estimated at 393 million USD, GDP. Afghan of 3 percent to equivalent the largest number of Afghan heroin users, number absolute while China has the highest of opiate users in the world.) The same data shows that more than 65 percent of opiate is consumption Afghanistan for in accounted - produc opium minimal or low with regions by tion, such as the northern (32 percent) and central areas (33 percent). However, these regional differences could be explained survey bias—access is by much more - problem concerns; security due to atic in the south it is possible that additionally, cultural norms drug to admit to likely less respondents make use. narcotrafficking AFGHAN • EWI

24 EWI • AFGHAN narcotrafficking 25 - - northern “We are not are “We farmer from from farmer for bread on bread for Afghanistan. (poppy field) (poppy criminals, we we criminals, While the opi- While the um economy Afghanistan in farmershelps in a number of their feed areas it also families, traffick earns corrupt ers, andofficials, other strong men major andprofits thethreatens the of future as acountry whole. 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 The second and more dangerous risk cerns - con Afghanistan’s main This risk highlights that after southern areas. drug-producing foreign security forces withdraw, the - com bination of the reduced state presence, the opium to alternatives economic dwindling farming and declining development and more insecurity growing amidst tance - assis an increase to lead may land under irrigation and production. cultivation in opiate showing showing that many Afghans are increasingly for ev at frustrated “bakshish” having to pay or electric- license a such as getting erything, ity. More generally, a mix of corruption and the more traditional patronage and - “baksh ish” practices is a function of a long that has and economy - tional society semi-tradi traumatic and been painful undergoing mod- 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 the cost raises prices, estate and real values prevents and thereby business, doing of legal the of growth The a opium healthy economy. economy also reinforces—no less than the the that perception does—the insurgency government is weak and ineffectual. Finally, Afghanistan serves as a center for the larger opi- of and a source opium economy regional ate trafficking that dramatically affects neighbors and its other large markets, such as Asia, and in Europe and other states Russia while high generating for- profits transnation launderers. al criminals and money More specifically, two risks may make situation the with Afghan narcotrafficking risk some even is first The future. near the in worse of a return to more significant- poppy cultiva tion in Afghanistan. This northern/northeast decrease an expected to part is due in large 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 - - 51 aw Law en- In north- 50 49 the Northern Route, northeast Afghanistan seizures opiate of levels lowest the of one has 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 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 forces to attacks. The minimal seizures - re ported, mostly in Badakhshan, take place in extend rarely and very areas the processing to border areas or crossing points. particularly is counternarcotics on forcement weak, traffickers appear operateto almost unhindered, and, as elsewhere in stan, the largest traffickers- Afghani are protectedby political linkages and alignments. Widespread corruption and patronage, how patronage, and corruption Widespread ever endemic and long-standing, should not should long-standing, and endemic ever be viewed as an inherent part of Afghan cul- ture and thus immutable. not as “bakshish” Afghans see a bribe but as Although some a small sign of respect to get things - accom plished more quickly, there are also surveys The term “corruption” in its modern sense, understood as a rather - the com not capture does relationship, advanced type market- plex mix of corruption-style trenched in Afghanistan, practices including nepotism en- and multiple overlapping or at strongmen various conflicting by run systems patronage large- While levels. national and local the both social narrow very involves corruption scale strata—bureaucrats and other elites—some kind of patronage system and type “bakshish”- practices affect every part of the population, from university professors drivers, from to police officers to taxi farmers. The UNODC has estimated that Afghans spend alone. “bakshish” on a year 2.5 billion USD While narcotics-related corruption is the corruption While narcotics-related - Afghani of corruption in type prevalent most out in the and carried to is connected it stan, wider context of deeply embedded practices has one of Afghanistan corruption. general of the worst corruption problems in the world, tying for last place (along with Somalia International’s and Transparency on Korea) North Index. Perception Corruption 2012 ern Afghanistan, then, the facilitating role of corruption, narcotics-linked patronage net works, and the limits of - explain ISAF towards a long way go and mandates deployments drug seizures. of ing the poor record 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 Afghanistan serves as the larg- Routes, Markets, and in 2008-2009 West global source of illicit opiates, Profit Distribution was around 60 the profits and problems inherent in the drug trade have a much wider footprint. Afghans billion USD. 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 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- Section 4 outlines the main directions and ficking. narcotrafficking AFGHAN • EWI patterns of transnational trafficking of Af- ghan opiates, markets, and profits distribu- 26 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. the Northern Route. -

- EWI • AFGHAN narcotrafficking 27 The main opi- The main traffickingate Af out of routes run,ghanistan size of in order flows: traffic of (a) through Chi- to Pakistan na, other Asian the Iran, states, Middle East, (b) Africa; and via Iran through West to Turkey (c) ern Europe; Central through - Rus to Asia sia along the Northern Route. - - - - 56 was smuggled smuggled was 57 In addition, 35–40 mt 58 Central Asia: the Northern Route Asia: Central through the Northern Route to and through through and to Northern Route the through heroin, of mt 90 to amounts This Asia. Central some of which is consumed in Central Asia. More than three quarters, reaches however, the Russian market. of opium are trafficked to Central Asia, most Asia, toCentral trafficked of opium are consumption. domestic ly for 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 border, Afghan-Tajik 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 At the next stage, the traffickers make best the use of the practically visa-free regimes borderless between and countries of the transport the mainstream and Russia, region infrastructure, especially the road and - rail way systems, the weak economies, limited functionality of governance, and poor social conditions in the Central Asian analysis by states. UNODC-affiliated An Almaty-based Central Asia Regional Information - Coordina tion Center (CARICC) estimates that 70–75 percent of opiates that cross are Central transported by Asia road, in trucks and cars, sumers in Europe. Some opiates are also traf also 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 poli- enforcement-and counternarcotics interdiction-centered - Afghani with especially along its border cies, stan. As a result, Iran seizes more illicit - opi in the world—in other country than any ates other all than more times eight seized it 2010, combined. opium seizures countries’ In 2009–2010, approximately 25 of heroin from percent Afghanistan

------54 55 Pakistan and Iran and Pakistan Pakistan Pakistan is an old narcotrafficking corridor 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. 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 Since the 1980s, Pakistan and Iran have been have Iran and Pakistan 1980s, the Since 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 north. via the leave the rest Iran; Pakistan. transited country the of out ficked In 2009, over 31 percent of exported heroin Afghanistan left via Iran and continued along the Balkan route—the shortest way to - con Many Many of the problems that Pakistan faces as a transit country are similar to those faced by Afghanistan. In the Administered in especially the Federally stan, northwest of - Paki the Areas Tribal on-and-off (FATA), counter The Afghan-Pakistani border has just three officialcrossings, and borderthe is not for mally recognized by the Afghan government or by the Pashtu and other tribes on either side of the border. Pakistan also remains a minor producer of opiates from illicit - Afghani with crops border the along areas in grown stan. Finally, the majority of precursors are imported into Afghanistan with from minor shares Pakistan, also coming from China, Asia. and Central India, insurgency campaign takes priority for the government, absorbing much of its security counternarcot and downgrading resources ics to a This secondary task. region lacks - ba areas, border to access state and security sic is there where in the northwest, particularly widespread violence and corruption. Those maritime and land existing with along factors, transportation infrastructure, create favor able conditions for trafficking, storing, and refining opiates.Recently, there has been a disturbing increase of direct maritime traf fickingof Afghan opiates from the Pakistani ports to Europe. Part of that further traffic moves through the European ports, reaching as far as some the northern ports of - Rus sia. In addition to its main supply of Afghan heroin Asia from Central in the south, Russia now faces a minor additional inflow from the north. through Kazakhstan to adjacent regions of prosecute high-level drug smugglers. the Russian Federation. Transit by rail and air accounts for another 15–25 percent, and Opiates that cross the Afghan-Tajik border there has been an increase in the use of rail are then consolidated in trafficking hubs, transportation for trafficking. Eight to ten especially in Dushanbe, and trafficked west- percent of the Afghan heroin reaching Russia ward into Uzbekistan and northward to Kyr- The major- is trafficked by air, mainly from Tajikistan. The gyzstan, with a small portion trafficked to ity of Afghan price differences between Central Asian tran- Russia directly by air. A smaller, older opiate sit markets and the wholesale market in Rus- route to Osh (Kyrgyzstan) runs eastward opiates traf- sia are significant: 1 kg of heroin worth 4,000 through the remote Gorno-Badakhshan Au- ficked through USD in Tajikistan costs at least five times tonomous Oblast, which is largely outside more in Russia.59 government control. Kyrgyzstan has poor the Northern border controls and has experienced the Route initially 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 passes 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 Transit through criminal operations able to move large ship- from where they are mainly trafficked north Tajikistan ments, often with the cooperation of corrupt to Kazakhstan (from where they continue on officials. to Russia), while some are also exported from amounts to 85 Kyrgyzstan to China. Opiate seizures along percent of the 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 total opiate ghan opiate trafficking through Central Asia, in seven years in 2010.62 flow through it is important to differentiate between the countries of the region. Country specifics and In contrast to Tajikistan and Kyrgyzstan, Uz- Central Asia. 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 passes 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, 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 Rahmon opposes. Much of the trafficking 25 percent increase that year.63 passes through the Panj River, including almost open drug trade on some of the border Turkmenistan is in many ways a stand-alone narcotrafficking AFGHAN • EWI 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- 28 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 opiates that are trafficked through its territo- subsidiary branch of the major westward traf- ry.61 Security agencies in Tajikistan have been ficking corridor from Afghanistan to Iran and chronically reluctant or unable to arrest and onwards along the so-called Balkan route. As EWI • AFGHAN narcotrafficking 29 2012. Sources: Sources: FSKN, March March FSKN, UNODC, 2011; 2011; UNODC, - - -

66 There There is a lack of precursor seizures, which partly thereflects mainfocus of the- interdic on opi- the region of the states by 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 or discreet interdiction, or a decline in opium nature, in northern cultivation in poppy reductions Afghanistan since 2007 and the subsequent depletion of existing opium stocks. Drops in opiate seizures may also suggest weakening narcotics- and growing capacity interdiction a trend the region, across corruption related 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 There are two other more fundamental ex planations of this confluence of large-scale stable trafficking with declining seizures. One 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

- - - - 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 ers ers in Afghanistan in the same year (1.2 billion USD). While Central Asian countries are the starting their to role diversify economies, of narcotics trafficking as thesource of illicit and Kyr especially Tajikistan in cash income, gyzstan, remains huge. On a regional scale, it is only exceeded by remittances sent migrants working in by Russia and Kazakhstan, estimated to reach 2.4 billion USD in 2010. from from the opiate trade by all received traffick Either of these informal sources of revenues aid and foreign of the volume outmatches far may be comparable to the volume of formal in the region investment economic external In contrast Turkey). China or by instance, (for to drug profits inAfghanistan wherefarmers may garner over half of the net corrupt the traffickers, profit it’s production, opiate from officials and other who powerbrokers collect - Afghan tran opiates from of most the profits sit in Central Asia. Narcotics-related - corrup that and laws in the region, tion is widespread enforced. not well it are cover According to According the the UNODC, net profit from heroin trafficking to Russia made traf by mentioned above, mentioned Iran above, has the strictest bor - at the Ira in the region system der controls nian-Afghan For border. traffickers, one way around that border is the long remote poorly border guarded into and Afghan-Turkmen Iran. and then to Turkmenistan fickers inAsiaCentral in2009 was billion 1.4 USD. Fig. 5. Hard narcotics market value in Russia

Source: The first one is related to the region’s de- states and Afghanistan, between Kazakhstan FSKN data veloping transport infrastructure that links and the rest of Central Asia, and between the disclosed in it more closely to both Afghanistan on one region and Russia. National border, customs, March 2012 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 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 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 transportation possibilities and limited state Afghan origin) and 1 billion USD worth of syn- narcotrafficking AFGHAN • EWI 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- 30 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 counternarcotics, customs, and border controls between Large criminal networks do not monopolize Central Asian states lags far behind increased opiate trafficking into Russia; it also involves economic cooperation between Central Asian many smaller and more segmented groups, EWI • AFGHAN narcotrafficking 31 While the heroin Russia into flow has stabilized at a relatively since high level 2009-2010, is a riskthere - in the com that, opiate ing years, and hashish fromtrafficking AsiaCentral increase. may - - - - and Kazakhstan. These initiatives range from from range initiatives These and Kazakhstan. - counternarcotics-cen narrowly the more tered Central Asia Counternarcotics Quartet 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 Asia increased with in its securing interest strategic a stable military logistics supply corridor to - Afghani stan from the north (the Northern - Distribu 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 Asian support Central to Initiative narcotics Central Asian Counter on focused disrupt efforts, counternarcotics ing the narcotrafficking these countries to andparticipate in the work of encouraging the Northern Route Working Group the DEA. lished by - estab - drug EU-led) con (or U.S.-led most However, in Central initiatives and counternarcotics trol than rather to, parallel develop to tend Asia those with, and cooperation in coordination a plays Russia where efforts regional existing lead Indeed, the role. UNODC-affiliatedCAR- cooperative the main regional remains ICC - partic Russia’s and U.S. both with framework ipation. This reflects the persistent low level of trust each regarding other’s interests and and the widespread in the region presence NATO–SCO/ the of sides both on perceptions Asia. in Central rivalry strategic CSTO ------

71 While the heroin flowinto bilized Russia at a relatively high sta- has level since 2009- years, coming the in that, risk a is there 2010, opiate and hashish traffickingthat is from factor risk main The Central increase. may Asia the customs union between - Russia, Kazakh stan, and Belarus means fewer border - con trols for traffickersto negotiate. This- agree ment gives a powerful impulse for regional but effectively socio-economic development, Kazakhstan’s southern border is southern entry point now to And Russia. - Kazakh the stan still lacks strong border management capacity. Any potential further extension of the Customs Union to Tajik perhaps and other Kyrgyzstan as such states, Central Asian often often ethnic clan-based. and/or In the west ern hemisphere, transnational organizations traffic drugs and control distribution inside the United States. However, and in heroin Afghan the in bring Russia, who traffickers the hashish from Central Asia are not necessar control who networks criminal broader the ily wholesale and retail drug trade in prof the extracting largest domestic market, Russia’s its. It is extremely difficult to undercut Rus- sia’s fragmented system due to its fluid and nature. multifaceted huge the already only aggravate would istan, challenges for border control, interdiction of and general goods, other smuggled drugs, counternarcotics. All this underscores the critical role of—and specificcounternarcotics - pressures on—Ka zakhstan. interdiction Kazakhstan’s capacity sur The Asia. Central in lowest the currently is prisingly low number of from seizures, compared anything reflect may traffic, of size the to the vast trafficking opportunitiesoffered by the porous large country’s borders, territory, the to system transportation and developed nature of trafficking narcotics well-organized 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 guardian of the southern border of the Cus- toms Union, it is well-positioned to become counternarcotics in regional actor the central It cooperation. is not surprising that - Kazakh Asia the stan Central hosts UNODC-affiliated Regional Information Coordination 2011. in March Russia joined by (CARICC), Center The format UNODC/CARICC is supplement ed by several other China regional extent, cooperative some ef to and, Russia, by led forts 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 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

narcotrafficking 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 narcotrafficking 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 wire transfers transfers wire tries was over over was tries - 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 is also larger than the Afghan national - bud get and is thought to equal one-fourth of the economy. cently placed a 20,000 USD cap on cash that cash on cap USD 20,000 a placed cently the country.) out of taken be physically can dis- to has a tendency illicit economy large A tort the commercial economy. Drug profits tend to inflate the value; currency traffickers use narcotics-related profitsto import luxu- on then sell which they ry and other goods, 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 that leaves 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.

- 76 transfers into Afghanistan, 2010 Afghanistan, into transfers Fig. 6. Top ten countries with wire with wire countries ten Top 6. Fig. There There are three main methods of transmit The corruption potential from the inflow of donor aid should not be overlooked, cially - espe since the amount of donor assistance export estimated the of that dwarfs spending per year. billion USD at 2.4 opiates of value ting narcotics-related money for laundering 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 Afghanistan is primarily cash-based. profits inside the Drug country may bereinvested in sections of the licit such economy, as real estate, goods or expensive vehicles. Some Third, Third, due to high levels of foreign donor assistance and billion security spending (286.4 USD, or 9,426 USD per Afghan citizen, from 2001 to 2011), formal financialflows comparison in to and high very are Afghanistan from with countries of similar low GDP per capita. 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- Afghani. stronger a and reserves ternational - 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) than they receive, which logically reflects the are the UAE and other Gulf countries. With flows of economic and security aid and remit- expatriates from the region accounting for The chief des- tances into Afghanistan. In contrast, the UAE, up to 85 percent of its residents, the Emir- tinations of Pakistan, China, the UK, and India receive ates is a major international banking and more funds from Afghanistan than they send trading center for licit economic activity in declared cash (while Switzerland and Turkmenistan do not the Gulf, Southwest Asia and East Africa. For flows from send anything, but still receive some money decades, though, it has also played the role transfers).79 Such dynamics can hardly be of the main financial hub for the smuggling- Afghanistan explained by trade or economic relationships based, regional-shadow economy comprised (about 1 billion alone. Importantly, the picture gleaned from of Iran, Afghanistan, and Pakistan. The main data on formal money flows is incomplete. It types of financial crime in Dubai and the UAE USD a year) does not include Iran, which has well-devel- are money laundering and fraud in the global are the UAE oped financial relations with Afghanistan that financial sector. The main portion of the mon- are mostly outside the legal framework, or ey laundering is linked to proceeds from Af- and other Gulf the Central Asian states. ghanistan’s illegal narcotics. countries. The underdeveloped legal and other institu- In most cases, narcotics-related money 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 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 narcotrafficking 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 narcotrafficking 35 In all of theIn all of consumerlarge end-markets opi- Afghan for ates—Europe, or AsianRussia, such asstates China and In- dia—narcotics andtrafficking andwholesale - distribu retail majortion are of sources proceeds illegal moneyfor laundering. ------Against this back 88 arge-scale Large-scale financial- transac Money Laundering in Money States Consumer tions in Russia are primarily associated with primarily associated are tions in Russia which also resources, natural vast own its - dominate the Typi money-laundering scene. cal schemes involve the misuse of foreign fi- real in investments entities, legal and nancial estate or security instruments, and buying luxury consumer goods. 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, Perception Corruption in the 2012 Tajikistan, Kyrgyzstan, and Kazakhstan oc- spots, and 133rd 154th, the 157th, cupying This combination may indicate respectively). laundering activities money drug-related that are still largely confined to the national and sub-regional level and have not yet acquired dimension. transnational a broader In all of Af the consumer for end-markets large states Asian or Russia, ghan opiates—Europe, such as China and India—narcotics trafficking and wholesale and retail distribution are major sources of illegal proceeds for money launder ing. Financial hubs in these countries may also serve as links in the longer money laundering chains that originate directly from Afghanistan or run and from - intermediaries through in Paki where UK, the in example, For etc. UAE, the stan, the opiate market is heroin and Afghan heavily opium, narcotics dominated revenues remain by the main source for money laundering. com- finance global in role special country’s The bined with the size and diversity of its financial markets makes it particularly attractive to the money laundering networks—whether profits or drug corruption of moniesaid laundered. are being Some important distinctions make stand out Russia for its money laundering potential among other consumer Af large markets for ghan opiates. drop, narcotics-related money laundering money narcotics-related drop, just remains but significant, relatively be may 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,

- - - - 87 85 The fact ist of Ma- of List 86 Laundering Countries and FATF’s the billions of dollars it transferred in and the out billions of it dollars transferred 2010. and 2007 between Afghanistan of In contrast to the Pakistan, Iran, and Turkey, Central Asian states are conspicuously ab- sent from the list of states 2011 of government’s primary U.S. the in cern - con - drug-re to Turkey of vulnerability specific The lated money laundering is that it both serves as a major Afghan opiates transit country for center. financial regional important an as and This is particularly true for the Central Asian states located along the Northern trafficking route, but also for the Caucasus, the Middle Europe. and Eastern East, jor Money This 2012). of (as lists “dark-gray” or “black” weak countries’ respective the to due be may financial systems, low levels into integration of the global financial system, and limited access to major international financial and trade centers. While Central Asia has a de- ceptively low profile ininternational narcot it has high lev laundering, money ics-related Pakistan’s Pakistan’s weak control of the border Afghanistan with combined with its active formal 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- ties, “hawaladars,” money exchanges, bulk cash smuggling, and real estate). An indication of the possibly deteriorating sit deteriorating possibly the of indication An The Iranian government has strongly em- has strongly government The Iranian phasized counternarcotics and established, in cooperation with the UNODC, a national financial intelligence unit. Nonetheless, Iran remains a major point of concern. Although Iran is not a financial hub, the sheer capital estimated of size economy, underground its flow, largeexpatriate community, regional body po- sence from any FATF-style and ab- center. laundering be a significant sition it to that Pakistan relaxed many of its regulations, in financial particular for its stock and kets, made mar large cash deposits to banks finan- complicated also has areas tribal the in Afghanistan. in cial investigations laundering money narcotics-related of uation at the regional level is the fact that all three top transit countries for lists Pakistan, on Iran, Afghan and FATF Turkey—are opiates— dis- (a list” “black the on Iran with concern, of tinction it shares only with North and Korea) on Pakistan the and “dark-gray list.” Turkey 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 than in the producing or first transit states, traf- transnational trade in Afghan opiates provide fickers face much tougher financial and security an additional reason for Washington’s concern controls, as well as more effective policing and about the larger issues raised by Afghan nar- law and order systems. For example, in the UK, cotrafficking, rather than just the role of drug 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 narcotrafficking 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 narcotrafficking 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 Tlence directly, in both peacetime and version of religious funds, often coming from conflict 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 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.

narcotrafficking 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 narcotrafficking 39 At the outsetAt their regime, of Taliban the triedbriefly limit opiumto (butcultivation innot trade) underareas their control. - - percent percent Analysts sug Analysts 93

91 - Tali the why explain This may 92 ban ban felt they could afford to impose the ban on cultivation in poppy 2000. the country, they collected a 10 percent post- percent a 10 collected they the country, harvest tax from all agricultural production, cultivation. including 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 an to compared goods, in consumer trade estimated 27 million USD from taxing poppy cultivation. gest 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 effective provincial the used bans Karzai a the administration, Taliban under combination of moral coercion, suasion, and 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 as did the continued, the opium trade poppy, ------When the de facto Taliban government came government When the de Taliban facto to power in amidst 1996, bitter feuds among competing mujahedin factions, the country was already well-established hub of the - re gional shadow economy. Adjusting to these tried the to Taliban realities, establish a rent Considering Considering the high profit margins of nar cotics, non-state actors’ involvement in the drug business is usually predetermined by their main areas of operation and/or origin. The links between insurgents and drug businesses are most profound and systematic in major drug-producing countries such as Af ghanistan and in areas without stable state control along major traffickingroutes. In addition to drug revenues the insurgents’ for involvement in protection self-financing, of 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 letting population, the for support of source a a hearts-and-minds- develop the insurgency in Importantly, like areas strategy. where the links ac- between drugs and conflict/militant tors are the drug closest, profits are the low propor small relatively a and comprise est tion of the overall income and total value of the global narcotics market. However, even these limited revenues can of small size to the relatively when compared be significant or national economies. the local ier economy and taxed licit and illicit trade. was highly Taxing In localized. some parts of Illicit Drugs and Islamist and Islamist Illicit Drugs in Afghanistan 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 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- narcotrafficking 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 narcotrafficking 41 - What is clearWhat is is that the on- armedgoing ofvoid conflict, - settle political prevents ment, - the estab lishment of stable relatively and functional in governance poppy-growing which, regions, - compli in turn, ef any cates forts to counter to forts illicit drugs. ------101 101 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 different from 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 - com turn, in which, regions, poppy-growing illicit drugs. 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 in areas especially under their control, 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 and a shadow movement insurgency active rev uses now Taliban the system, governance enues from opium cultivation as one of their 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 these andor other trafficking. processing, 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 during not the been US/ effective and is campaign counterinsurgency NATO even less likely to be effective a or political negotiation through withdrawal) after ISAF’s process. The nature of a political settlement that matter is a highly contentious ghanistan for 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, ------This suits their counterinsur their This suits 100 gency gency strategies, but does an not adequate strategy constitute to reduce commanders the Taliban overall opium Moreover, trade. 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 In most insecure areas affected by - conflict mea counternarcotics tough and terrorism, sures (such as massive aerial tend eradication) to antagonize the population, increase insecurity, and garner support for the insur The most critical link between conflict drugs and in Afghanistan may not even direct be role of the drug revenues as a source funding for of the insurgency or in creating the 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 weakening and violence undermining basic state in - ca corrupting the state, and functionality, pacity insurgency- to access state and preventing crops drug where areas peripheral controlled concentrated. or are migrate In the absence of functional governance central that are in regions areas in contested to Afghanistan’s opium production, neither tough nor soft counternarcotics measures, nor a combination of the two, can work. In Armed Conflict, Narcotics, Narcotics, Armed Conflict, and State Functionality gency. At the same time, as well illustrated by the situation in the more peripheral areas of Afghanistan’s southern and eastern prov inces, softer counternarcotics measures are difficultto implement in areas lackingsecu- state rity, access, or recognized governance. More generally, softer measures (voluntary eradication, crop substitution, development) tend to alternative work only if they are of implemented as strategy part of a broader and when the population development rural has a relatively non-confrontational attitude There Bolivia). or Thailand of case the was (as are conditions where country the in areas are in place (primarily in some lower valley eas), ar but these conditions are mostly is not a there lack where areas ing in upper valley and especially control, state of history strong armed confrontation. continuing of in areas 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 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 narcotrafficking 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 narcotrafficking 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 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

narcotrafficking 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 narcotrafficking 45 - Combating is adrug abuse multi-pronged involv effort ing not only enforcement, development, - and internation al cooperation, - preven but also treatment, tion, and education. - - Much more Much can more be done to thetrace global financialflows from and Afghan the Russia U.S. narcotrafficking; would benefitfrom cooperation to the money.” “follow The ongoing armed conflict state limit to continues ghanistan in Af central that are areas in many access to poppy cultivation and The effectiveness functionality. state weakens of any development is drugs illicit against and ment strategies - enforce likely to hinge on improved security. That, in turn, may require the to solution tangible on a political progress ongoing conflict Cur Afghanistan. in - pros a remote this remains rently, pect. Combating drug abuse is a pronged multi- effort involving enforcement, not only development, international cooperation, but and also - and educa treatment, prevention, tion. U.S.-Russia cooperation must - demand reduc to attention involve the supply reducing to as as well tion Afghanistan. from opiates of A counternarcotics strategy that is that strategy counternarcotics A fully subordinated to combating the Taliban insurgency is Afghan insufficient. narcotraffickingother actors in Afghanistan, includ- benefits ing andstatecriminal - offi profiteers The cials. insurgents also enjoy mul- streams, revenue tiple and diverse including from sources other than drugs. • • • • - - - bad bad governance in regions Russia to importance strategic of States. and the United ing and organized armed transnational and related lence, vio- criminal and militant/terrorist pose new types of networks, - se and at the regional threats curity levels. global Russia and the United share the challenge States of high lev els of opiate abuse, even if opi- their domestic to come ates markets from different source regions. The links between narcotraffick between The links espite disagreements on the on disagreements espite D choice of and counternarcotics responsibilities measures for in such as large-scale ghanistan, Af there eradication, is also a degree of shared understanding between the United States and Russia. The main in dilemma and for counternarcotics around Afghanistan is not a choice between hard strict and soft - mea sures prioritizing either eradication/ - develop alternative or interdiction ment. This expert emphasizes that group any - effective coun strongly an implies strategy ternarcotics integrated enforcement and - devel opment solution. The optimal - com bination and proportions - of interdic crops, alternative eradication, tion, strategies and income-generating will for even different inevitably vary, within the contexts and regional local country. same • • • • The combined value of the her- where Russia plays a lead or major oin markets in Russia and in the role. This reflects the persistent low Northern route transit countries level of trust regarding each other’s of Central Asia accounts for over interests and presence in the region When the in- 12 percent of the global heroin and their differing perceptions of the market, highlighting money NATO–CSTO/SCO strategic rivalry ternational laundering concerns and the in broader Central Asia. Two more security pres- need for more active regional specific challenges to U.S.-Russia and international cooperation counternarcotics cooperation along ence ends in on related issues. the Northern Route are: its present • The U.S. financial system and interests are not safe from money- • The reluctance of Central Asian form in 2014, laundering transactions related governments, especially in Tajik- the Afghan to narcotics, including opiates of istan, Uzbekistan, and Turkmen- Afghan origin. At the same time, istan, to fully cooperate with government’s the United States possesses Russia and the United States, still fragile con- unique anti-money laundering and with each other, on counter- trol in some experience and capacities that narcotics efforts. may be of particular interest and • Increased U.S. security involve- of the poppy- use to Russia, given the scale of ment in Central Asia reinforces its heroin threat. Russia’s suspicions of U.S. mo- growing prov- tivations for cooperation along inces is likely • Afghan narcotrafficking poses a the Northern Route. to weaken, growing threat not only to Russia and other consumer end-markets, but • In Central Asia, the counternarcotics perhaps sig- also to Afghanistan itself, in terms challenges will especially increase of soaring domestic drug abuse as for Kazakhstan. These growing pres- nificantly. well as corruption fueled by the drug sures dictate the urgent need for Ka- trade. It also poses a direct threat to zakhstan to become the main hub transit states such as Iran and Paki- for counternarcotics in the region. stan, as well as Central Asian states. This requires maximum assistance and cooperation from both Russia • The widening possibilities for traf- and the United States. This raises fickers along the Northern Route the significance of the Almaty-based through Central Asia may overlap UN-affiliated Central Asia Regional with and be exacerbated by several Information Coordination Center risk factors that favor a short- to (CARICC), including its role as the mid-term increase in opiate produc- regional cooperative framework with tion and output in Afghanistan itself. both U.S. and Russia’s participation. Afghanistan has never had as much land under irrigation as it does now. • Despite existing difficulties and When the international security disagreements, especially on Af- presence ends in its present form in ghanistan and Central Asia, there 2014, the Afghan government’s still are also some facilitating factors for fragile control in some of the poppy- U.S.-Russian cooperation on coun- growing provinces is likely to weaken, ternarcotics in the context of Afghan perhaps significantly. The lack of narcotrafficking. One such factor is state presence coupled with growing active, broad bilateral cooperation insecurity will impede licit economic on counternarcotics that develops opportunities and markets. Against rather steadily, regardless of the narcotrafficking AFGHAN • EWI this background, expanded arable zigzags in the overall U.S.-Russia re- and irrigated areas may be easily di- lationship. In fact, U.S.-Russian bilat- 46 verted to poppy cultivation again. eral cooperation on interdiction and other counternarcotics issues has • So far, most U.S.-led counternar- proved to be an effective way to build cotics initiatives in Central Asia de- trust between the two countries, veloped in parallel to, rather than in especially in their counternarcotics cooperation with, regional forums and law enforcement communities. EWI • AFGHAN narcotrafficking 47 yms cron A Afghan National Police Afghan Center Coordination Information Regional Asia Central Organization Treaty Security Collective USA Administration, Enforcement Drug Laundering and Money on Combating Group Eurasian Terrorism the Financing of Pakistan Areas, Tribal Administered Federally Force Task Action Financial Afghanistan Center, Analysis and Financial Reports Circulation, on Narcotics Control for Service Federal Federation Russian Eradication Governor-led Afghanistan in Force Assistance Security International Network Northern Distribution Federation Russian Service, Financial Monitoring Federal Organization Shanghai Cooperation and Crime Drugs on Nations Office United dollar States United

ANP counterinsurgency CARICC COIN CSTO DEA EAG FATA FATF Fin TRACA FSKN tons GLE hectare ha ISAF metric mt NDN Rosfinmonitoring SCO UNODC USD Abbreviations and Acronyms Abbreviations 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 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,

narcotrafficking 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 narcotrafficking 49 - - Wash- ow-Intensity ow-Intensity , June 27, 2009, http:// 2009, , June 27, Reuters , , July 23, 2009. http://www.ny aw Enforcement Affairs, March 2012, 91. http:// 91. 2012, March Affairs, Enforcement Law The New York Times 28, No. 4, Autumn 2005, 55–72. http://reformdrugpolicy.com/wp-content/ 55–72. Autumn 2005, 4, No. 28, “U.S. reverse Afghan drug policy, eyes August vote,” Afghan reverse drug “U.S. August eyes policy, vote,” “Report “Report of the International International Narcotics Narcot Control Board for 2011,” 62. Ibid., United the in abused substance dangerous most the remain also Opiates 58–62. Ibid., “Alternative Development: A Global Thematic Evaluation Final Synthesis Report,” See “Strategy to Combat Transnational Organized Crime: Addressing Converging “Afghanistan Opium Survey 2011,” United Nations Office Opium onSurvey “Afghanistan 2011,” Drugs and Crime (UNO- of Department States United 1,” Vol. Report, Strategy Control Narcotics “International United Nations Office onDrugs and Crime (UNO- 2008,” Opium Survey “Afghanistan - Van see Afghanistan, in employed measured counternarcotics of review a critical For L Operations/ Special for Defense of Secretary Assistant Vickers, Michael 12 ington Quarterly 15 16 17 18 19 times.com/2009/07/24/world/asia/24poppy.html?_r=0. times.com/2009/07/24/world/asia/24poppy.html?_r=0. ics Control Board (INCB), January 2012, http://www.unodc.org/documents/southasia/ 57. L_REPORT_english_PDF.pdf. reports/2011_INCB_ANNUA admissions among dominated narcotics-related steadily abuse opiate in 1999–2009, States: 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. United Nations Office onDrugs and Crime (UNODC),2005, 15. http://www.unodc.org/pdf/ Alternative_Development_Evaluation_Dec-05.pdf. 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. 21 22 DC), DC), December 2011, 5. http://www.unodc.org/documents/crop-monitoring/Afghanistan/ Afghanistan_opium_survey_2011_web.pdf. and Narcotics International for Bureau State www.state.gov/documents/organization/187109.pdf. DC), November 2008, 7. http://www.unodc.org/documents/crop-monitoring/Afghanistan_ Opium_Survey_2008.pdf. Section 3 Section 20 13 R127167. LR127167. www.reuters.com/article/2009/06/27/idUS counterterrorism,” undermines counternarcotics when “Afghanistan: Felbab-Brown da 14 uploads/2011/09/05autumn_felbab.pdf. On effects of forced eradication in Afghanistan, see see Afghanistan, in eradication forced of effects On uploads/2011/09/05autumn_felbab.pdf. 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 Conflict andInterdependent Capabilities, quoted in ShankerThom Elisabeth and Bumiller, shifts “U.S. Afghan narcotics strategy,” 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.

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.

narcotrafficking 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 narcotrafficking 51 - “Afghanistan Opium Survey 2011,” 18, 29, 31, 58. 31, 29, 18, 2011,” Survey Opium “Afghanistan Afghanistan Research David “Managing Mansfield, Concurrent andRepeated Risks,” the at Mansfield David by remarks and Place” Hard a and Rock a “Between Mansfield, 54–55. 2011,” Survey Opium “Afghanistan 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 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,” 93. 1,” Vol. Report, Strategy Control Narcotics “International “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. 36 37 38 39 40 41 42 43 44 45 47 48 49 50 35 2011. August Unit, and Evaluation http://www.areu.org.af/Uploads/EditionPdfs/1122E%20Managing%20Concurrent%20 and%20Repeated%20Risks%202011.pdf. 2011. 25, September Narcotrafficking, Afghan on Group Expert the U.S.-Russia meeting of United Nations Office onDrugs and Crime (UNODC), May http://www.unodc.org/ 2012, 17. documents/data-and-analysis/Studies/Afghanistan_northern_route_2012_web.pdf; “Drug United Summary, Executive Use Nations in Afghanistan: Office 2009 onSurvey,” Drugs and Crime (UNODC), 2010, 5. https://www.unodc.org/documents/data-and-analysis/Studies/ Afghan-Drug-Survey-2009-Executive-Summary-web.pdf. opi- of numbers absolute the of terms in lead China and Russia rate, prevalence opiate highest addicts. ate - http://www.unodc.org/doc 2–3. 2009, (UNODC), Crime and Drugs on Office Nations United uments/data-and-analysis/Afghanistan/Afghan_Opium_Trade_2009_web.pdf. 46 32. Risks,” and Repeated rent transparency.org/cpi2012/results/. ENDNOTES

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.

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

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.

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 1.7 million opiate users in 2009. See “World Drug Report 2011,” 51, 72–73. narcotrafficking AFGHAN • EWI 68 Viktor Ivanov, quoted by Interfax news agency, March 23, 2012. 52 69 UNODC, “World Drug Report 2011,” 83. http://www.unodc.org/documents/data-and- analysis/WDR2011/World_Drug_Report_2011_ebook.pdf.

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

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.

92 Zareen Fatima Naqvi, “Afghanistan–Pakistan Trade Relations,” World Bank, 1999, 15– 16.

93 “Afghanistan: Annual Opium Poppy Survey 2001,” United Nations International Drug Control Program (UNDCP), 2001, ii. http://www.unodc.org/pdf/publications/re- port_2001-10-16_1.pdf.

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-

narcotrafficking AFGHAN • EWI 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 54 Drugs: A Survey, London: Routledge, 2010, 120–130.

95 “Addiction, Crime and Insurgency: The Transnational Threat of Afghan Opium,” United Nations Office on Drugs and Crime (UNODC), October 2009, 2. https://www.unodc.org/documents/data-and-analysis/Afghanistan/Afghan_Opium_Trade_2009_web.pdf. EWI • AFGHAN narcotrafficking 55 - - Laun- The Wash- Laundering and Combat , April 19, 2010. http://counterterrorism.newamerica. 2010. 19, April , Lakhdar Brahimi and Thomas R. Pickering, - “Afghanistan: Negoti NewAmerica Foundation , , September 27, 2009. http://articles.washingtonpost.com/2009-09-27/ - “Islamic Re also 30; see 22, Assessment,” Threat A Trade: Opium Afghan “The Global 77. 2011,” Survey Opium “Afghanistan Craig Whitlock, “Diverse Sources Fund Insurgency In Afghanistan,” “Afghanistan Report 2009,” NATO Public Diplomacy NATO http://www. Division, 29. 2009, Report 2009,” “Afghanistan See, for instance, “Islamic Republic of Afghanistan: Detailed Assessment Report on Anti-Money world/36920360_1_taliban-officials-taliban-leaders-afghan-officials; Catherine Collins and the Ashraf “Financing Ali, Tracing Dollar the behind Taliban: the Insurgencies in Afghanistan Pakistan,” and 97 98 96 public of Afghanistan: Detailed Assessment Report on Anti-Money 31. Terrorism,” of ing the Financing 101 dering and Combating the Financing of Terrorism,” 31. Terrorism,” the Financing of dering and Combating 100 isaf.nato.int/pdf/20090331_090331_afghanistan_report_2009.pdf. 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 Force%20BookComplete.pdf. net/publications/policy/financing_the_taliban. net/publications/policy/financing_the_taliban. 99 ington Post 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 George F. Russell, Jr. (U.S.) CO-FOUNDER DIRECTORS EMERITI Former Chairman EastWest Institute Ira D. Wallach* (U.S.) Jan Krzysztof Bielecki (Poland) Chairman Emeritus Former Chairman CEO Russell Investment Group Central National-Gottesman Inc. Bank Polska Kasa Opieki S.A. Founder Co-Founder Former Prime Minister of Poland Russell 20-20 EastWest Institute Emil Constantinescu (Romania) Ramzi H. Sanbar (U.K.) President Chairman CHAIRMEN EMERITI Institute for Regional Cooperation SDC Group Inc. and Conflict Prevention (INCOR) Berthold Beitz (Germany) Former President of Romania Ikram ul-Majeed Sehgal President (Pakistan) Alfried Krupp von Bohlen William D. Dearstyne (U.S.) Chairman und Halbach-Stiftung Former Company Group Chairman Security & Management Johnson & Johnson Services Ltd. Ivan T. Berend (Hungary) Professor John W. Kluge* (U.S.) Kanwal Sibal (India) University of California, Los Angeles Former Chairman of the Board Former Foreign Secretary of India Metromedia International Group Francis Finlay (U.K.) Pierre Vimont (France) Former Chairman Maria-Pia Kothbauer Executive Secretary General Clay Finlay LLC (Liechtenstein) European External Action Service Ambassador Former Ambassador Hans-Dietrich Genscher Embassy of Liechtenstein to Embassy of the Republic of France (Germany) Austria, OSCE and the UN in Vienna in Washington, D.C. Former Vice Chancellor and Minister of Foreign Affairs William E. Murray* (U.S.) Alexander Voloshin (Russia) Former Chairman Chairman of the Board Donald M. Kendall (U.S.) The Samuel Freeman Trust OJSC Uralkali Former Chairman and CEO PepsiCo. Inc. John J. Roberts (U.S.) Zhou Wenzhong (China) Senior Advisor Secretary-General Whitney MacMillan (U.S.) American International Group (AIG) Boao Forum for Asia Former Chairman and CEO Cargill Inc. Daniel Rose (U.S.) Chairman Rose Associates Inc. NON-BOARD COMMITTEE MEMBERS Mitchell I. Sonkin (U.S.) Managing Director Laurent Roux (U.S.) MBIA Insurance Corporation Founder Gallatin Wealth Mangement, LLC Thorvald Stoltenberg (Norway) President Hilton Smith, Jr. (U.S.) Norwegian Red Cross President and CEO East Bay Co., LTD Liener Temerlin (U.S.) Chairman 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

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