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1997 International Narcotics Control Strategy Report (INCSR) Taiwan

BG9805E | Date: 1998-03-06

I. Summary

The United States continues to consider Taiwan a transit point for drugs affecting the United States due to its geographic location relative to the Golden Triangle and its role as a regional transportation/shipping hub. The United Nations in 1996, however, removed Taiwan from its list of major drug transit areas, and Taiwan authorities question U.S. Government claims that the island is a transit point for heroin significantly affecting the United States. There is no dispute, however, that individuals from Taiwan continue to be involved in international narcotics trafficking. Taiwan's own on-going aggressive domestic counternarcotics program in 1997 resulted in statistical increases in seizures, prosecutions, and percentage of population incarcerated for drug-related offenses in Taiwan. These figures do, however, remain below those of 1993, which was the peak year. Taiwan cannot be a signatory to the 1988 UN Drug Convention because it is not a U.N. member. Taiwan authorities are nonetheless passing and implementing laws which will bring Taiwan into compliance with the 1988 UN Drug Convention's goals and objectives. Supplementing legislation passed in 1996 addressing money laundering, organized crime and asset forfeiture, Taiwan passed an omnibus counternarcotics law in 1997 which provides a basis for controlling imports and exports of precursor chemicals. Taiwan expanded operational cooperation with U.S. law enforcement agencies in counternarcotics areas, through the American Institute in Taiwan (AIT).

II. Status of Taiwan

Taiwan is not a significant cultivator or producer of illegal narcotics, but the illegal consumption of both heroin and methamphetamines is a serious social problem. In the past, amphetamines were produced on-island. Due to aggressive police efforts and shifting market forces within the drug trade, production facilities have moved to mainland China. Some 67 percent of all drugs smuggled into Taiwan are believed to come via mainland China.

Although the United Nations removed Taiwan from its list of major drug transit areas in 1996, U.S. Government analysts continue to believe that Taiwan is a major transit point for illicit drugs significantly affecting the United States. This assessment is due to regional trafficking patterns and Taiwan's possession of the world's third busiest container port, Kaohsiung, which is a major center for shipping to and from Southeast Asian ports. Monitoring this traffic for smuggling is a difficult task. Of the 5,000,000 teu (twenty foot equivalent unit) shipping containers which enter Kaohsiung port every year, a significant percentage are "in transit," and, according to standard international practice, not normally subject to inspection by Taiwan Customs. Of the containers entering Taiwan which local authorities are legally permitted to inspect, Taiwan Customs examines approximately 15 percent--a percentage comparable to that of other major ports.

Taiwan authorities have come to recognize that money laundering--which in the past has been linked in Taiwan not only to narcotics trafficking but also to other illegal enterprises, including insider trading on the securities market--has become a growing problem.

III. Taiwan Actions Against Drugs in 1997

Policy Initiatives. Taiwan has continued an aggressive island-wide counternarcotics campaign that includes both harsh sentences for narcotics trafficking and social rehabilitation programs. Illegal drug production and narcotics trafficking are capital crimes under Taiwan's omnibus Hazardous Narcotics Prevention Act, passed on October 30, 1997. In addition to stiffening penalties for drug trafficking, this law permits first-time drug addicts to participate in drug treatment programs in lieu of imprisonment. A separate draft law currently before the legislature which would expand the size and powers of the 7th Peace Preservation Corps (Marine Police) could help the authorities interdict would-be smugglers.

Taiwan, which has a large chemical industry, is a key producer of several precursor chemicals. Taiwan lacks a comprehensive chemical control law, but the Taiwan authorities are working to develop such legislation. Taiwan's Hazardous Narcotics Prevention Act also creates a basis for controlling the import and export of all List I and List II chemicals contained in the Annex of the 1988 UN Drug Convention. The executive branch is currently fine-tuning and reviewing the implementing regulations. Taiwan authorities have also indicated that they will cooperate fully with U.S. Government law enforcement authorities to help prevent diversion of phenylpropanolamine (PPA), a key amphetamine precursor produced on Taiwan, which is not contained in the Annex.

Taiwan's Money Laundering Prevention Act, passed in October 1996, came into effect in 1997. The Act criminalized the laundering of money gained through illegal activities. As a result of this legislation, a Money Laundering Prevention Center was established in 1997 under the auspices of the Ministry of Justice Investigation Bureau. This Center serves as the enforcement backbone of Taiwan's interagency anti-money laundering efforts.

Taiwan has cooperated with U.S. law enforcement agencies in conducting investigations related to illegal narcotics trafficking and financial crimes; authorities also respond positively and constructively to U.S. requests and initiatives related to counternarcotics issues, the number and frequency of which have increased. Recently, with the opening of the Money Laundering Prevention Center, authorities have started sharing informally with U.S. law enforcement authorities Taiwan-originated information related to money laundering cases where the flow of money leads to the United States. Taiwan authorities acknowledged that the law as passed did not fully meet all concerns; they have worked to address shortcomings regulatorily.

Accomplishments. The Ministry of Justice (MOJ) reports a 19.1 percent increase in drug convictions in the first ten months of 1997 over all of 1996. In addition, Taiwan authorities during this period seized 147.15 kilograms of heroin and 1,818.54 kilograms of amphetamines, which represent 16.7 and 22.9 percent increases respectively over the same period in 1996. Throughout 1997, cooperation and information exchanges between U.S. and Taiwan law enforcement authorities (via the unofficial offices representing both sides) have been good. In February 1997, Taiwan sponsored and paid for a Drug Enforcement Administration (DEA)-taught training seminar for Taiwan law enforcement officers. In March, Taiwan hosted a working-level regional counternarcotics conference. Taiwan also held a money laundering seminar for Taiwan law enforcement officers taught jointly by U.S. DEA and Financial Crimes Enforcement Network (FinCEN) officers.

Since the anti-money laundering law went into effect in April 1997, the interagency Money Laundering Prevention Center has received--and investigated--a total of 360 reports of suspicious financial transactions from financial institutions and customs. In one case, the Center investigated a case involving NTD 1,100,000 (approximately USD 45,000) derived from 7.5 kilograms of heroin smuggled into Taiwan from Thailand. This in turn led to the freezing of an account holding NTD 7,000,000 (USD 260,000), which the center believes was also derived from narcotics trafficking.

Law Enforcement Efforts/Corruption. The MOJ plays a major role in formulating counternarcotics-related policies and legislation. The Ministry of Justice Investigation Bureau (MJIB) and the National Police Administration's Criminal Investigation Bureau (CIB) are Taiwan's lead counternarcotics law enforcement agencies. There is no question that Taiwan's law enforcement personnel are fully committed to the fight against narcotics trafficking: through October 1997, Taiwan law enforcement officials investigated 40,505 narcotics-related cases and obtained 26,183 convictions. However, as a result of Taiwan's authoritarian past, police counternarcotics operations are limited by strong public sentiment against undercover investigations. Undercover activity by law enforcement officials is a legal gray area; while authorities acknowledge the undoubted effectiveness of undercover operations as a tool in fighting the drug trade, there is little support for now for a bill which would provide a legal basis for such activities.

Taiwan has continued its crackdown on organized crime, started in August 1996, and is aggressively pursuing cases of public corruption. To date, however, there have been no reported cases of official involvement in narcotics trafficking in Taiwan. Taiwan authorities do not support the production or distribution of illegal drugs.

Agreements and Treaties. Taiwan does not currently have mutual legal assistance or extradition agreements with the United States, although Taiwan authorities have indicated an interest in negotiating such agreements. In 1992, Taiwan signed a Memorandum of Understanding on counternarcotics cooperation in criminal prosecutions with the American Institute in Taiwan, which represents U.S. interests in Taiwan. Taiwan is not now party to any other formal bilateral counternarcotics agreements and cannot be a party to the 1988 UN Drug Convention because it is not a U.N. member. Nevertheless, the Taiwan authorities state they are committed to the goals and objectives of the Convention and have enacted legislation which has brought Taiwan's counternarcotics laws into closer conformity with the provisions of the Convention.

Cultivation/Production. With the shifting of amphetamine labs to mainland China, Taiwan is not a significant producer of illicit drugs.

Drug Flow/Transit. From January to October 1997, Taiwan authorities seized 147.15 kilograms of heroin, a 16.7 percent increase over 1996 seizures. Of this heroin, only 4 percent came from mainland China. Of the 2156.46 kilograms of methamphetamines seized in Taiwan during the first ten months of 1997, 65 percent came from mainland China. While most heroin is smuggled into Taiwan on cargo container ships, fishing boats continue to be the principal means of smuggling methamphetamines from mainland China to Taiwan.

Domestic Programs. Figures for drug-related crimes in 1997 show a statistical increase. This is a change in the statistical decline of the last several years. Methamphetamine usage in particular continues to be a serious and growing social problem, particularly among juveniles. While reports indicate that overall drug abuse and dependency among juveniles are on the increase, the number of drug-related juvenile cases brought before the courts during the period January-August 1997 decreased 7.6 percent. The percentage of juvenile offenders remanded to court-approved rehabilitation programs increased 28.7 percent, and the authorities have reportedly referred a growing number of first-time juvenile offenders to rehabilitation programs without bringing legal action against them.

Taiwan continues to employ an aggressive media campaign to educate the public on the negative consequences of narcotics use and has expanded school programs designed to discourage juveniles from trying drugs. Taiwan authorities have also undertaken programs to reduce narcotics-related recidivism in its prisons.

IV. U.S. Policy Initiatives and Programs

Bilateral Cooperation. The U.S. Government, through the American Institute in Taiwan, has vigorously pursued closer working-level cooperation on counternarcotics matters, including increased intelligence exchanges and joint operations. In the spring of 1997, Taiwan MOJ investigation officers assisted U.S. DEA agents with a case involving a shipment of drugs to the U.S. Territory of Guam. During the past year, DEA has expanded its working-level contacts with Taiwan law enforcement agencies to include the new Money Laundering Prevention Center under the auspices of the MJIB and the Seventh Peace Preservation Corps. DEA and FinCEN provided money laundering training to several Taiwan law enforcement agencies in July 1997, and members of the DEA's Office of Diversion Control consulted with relevant Taiwan authorities on the drafting of new legislation on chemical precursor controls.