Text: 1998 International Narcotics Control Strategy Report (INCSR) Taiwan

BG9904E | Date: 1999-03-10

I. Summary

The United States Government (USG) continues to view Taiwan as a transit point for drugs affecting the U.S. because of its role as a regional transportation/shipping hub in Asia. In 1996 the UN removed Taiwan from its list of major drug transit areas, and Taiwan authorities question the USG's decision to keep Taiwan on its list of major transshipment points for heroin entering the U.S. Everyone agrees, however, that individuals from Taiwan continue to be involved in international narcotics trafficking. Although Taiwan's aggressive domestic counternarcotics program continued, with an increase of 19 percent in the number of new cases investigated and the implementation of new counternarcotics laws, the amount of drugs seized and the number of prosecutions in 1998 decreased substantially from last year's figures. Not being a UN member, Taiwan cannot be a party to the 1988 Drug Convention. Nevertheless, over the last several years Taiwan passed and implemented laws bringing it into compliance with the Convention's goals and objectives.

II. Status of Taiwan

Taiwan is not a significant cultivator or producer of illegal narcotics, but the illegal consumption of both heroin and methamphetamine remains a serious social problem. In the past, amphetamines were produced on Taiwan. Aggressive police efforts and shifting market forces within the drug trade have forced producers to move their facilities to mainland China. About 68 percent of the methamphetamine and 42 percent of the heroin seized on Taiwan during the first eleven months of 1998 came via mainland China.

Although the UN removed Taiwan from its list of major drug transit areas in 1996, USG analysts consider Taiwan a major transit point for illicit heroin significantly affecting the United States. This assessment derives from regional trafficking patterns and concern that Taiwan's ports are used by narcotics traffickers to transship drugs destined for the United States. Kaohsiung Harbor, the world's third-busiest container port, is a major center for shipping to and from Southeast Asian ports. Monitoring this traffic for smuggling is a difficult task. A significant percentage of the nearly 6 million TEU (twenty-foot equivalent unit) shipping containers at Kaohsiung port last year were "in transit" and, according to standard international practice, not subject to routine inspection by Taiwan Customs. Of the nearly 3 million containers legally entering and leaving Taiwan, Customs examined approximately 2 percent--a percentage comparable to that of other ports.

Taiwan authorities recognize that money-laundering--linked in the past not only to narcotics trafficking, but also to other illegal enterprises, including insider trading in the securities market--has become a growing problem. Taiwan's Money-Laundering Prevention Act, implemented in 1997, criminalized the laundering of money gained through major criminal activities and established a Money-Laundering Prevention Center (MLPC) under the auspices of the Ministry of Justice Investigation Bureau (MJIB). Taiwan authorities acknowledge that the act as passed did not fully meet all concerns and have worked to address shortcomings through implementing regulations.

III. Taiwan's Actions Against Drugs in 1998

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 can be capital crimes under Taiwan's tough new omnibus Hazardous Narcotics Prevention Act, implemented in May 1998. In addition to stiffening penalties for narcotics traffickers--and for officials who are involved in trafficking or who fail to enforce the law--this law permits first-time drug addicts to undergo treatment rather than face imprisonment. The law also contains asset forfeiture provisions for narcotics crimes and permits authorities to decrease sentences for criminals who provide information crucial to resolution of narcotics cases. Plea-bargaining is illegal on Taiwan.

Many of the narcotics, particularly methamphetamine, entering Taiwan from the People's Republic of China (PRC) are smuggled across the Taiwan Strait in small, coastal marine vessels. Taiwan's ability to block such smuggling has been hampered by cross-strait tensions; efforts by Taiwan police to inspect suspect smuggling vessels from the PRC have generated considerable political friction between mainland China and Taiwan, adding a new element of potential discord to the cross-strait situation. In one such case earlier this year, a PRC crew successfully beat back Taiwan police attempting to board their vessel, then proceeded to their home port with a seriously injured Taiwan police officer on board. The officer was returned to Taiwan only after four months of intense negotiations between the PRC and Taiwan. Taiwan authorities would like to include law enforcement issues in the cross-strait talks, but the PRC is unwilling to do so until certain key, sensitive political issues have been worked out first.

In order to eliminate jurisdictional disputes between Taiwan's maritime agencies and to enhance Taiwan's ability to interdict cross-strait smuggling, the Legislative Yuan in May 1998 passed a bill that upgraded and reorganized the 7th Peace Preservation Corps into the Marine Police Bureau. Whereas the Peace Preservation Corps had a jurisdictional limit of 12 nautical miles, the new bureau will be responsible for police operations for up to 200 nautical miles off Taiwan's coast. The ability of the Marine Police Bureau to fulfill its new mandate successfully, however, will depend upon its gaining adequate legislative funding for new vessels, equipment, and personnel. Taiwan continues to work on plans to establish a central criminal research institute, which would combine the centralized intelligence-gathering and -analysis functions of a national intelligence center and the research and policy-planning aspects of a think tank. After much discussion, the Executive Yuan approved a plan creating such a center and has submitted a funding proposal for legislative approval.

Having a large chemical industry, Taiwan produces several precursor chemicals. The Hazardous Narcotics Prevention Act created a basis for controlling most List I and List II chemicals contained in the Annex of the 1988 UN Drug Convention; since May, authorities have required companies to report shipments of Taiwan-listed chemicals. The law, however, does not cover shipments of phenylpropanolamine (PPA), a precursor for illicit amphetamines produced on Taiwan, nor does Taiwan's system of controls include end-user checks. Taiwan authorities have tried to address USG concerns about PPA diversion in two separate bills currently before the legislature that would authorize controls on certain key pharmaceuticals, including PPA. Moreover, the authorities in September 1998 agreed to consider options allowing Taiwan to overcome confidentiality restrictions in order to implement pre-export notification for shipments of PPA and all listed chemicals.

The MJIB's Money-Laundering Prevention Center (MLPC), established in 1997, serves as the enforcement and intelligence backbone of Taiwan's interagency anti-money-laundering efforts. In the past year the MLPC has vigorously expanded contacts and exchanges with law enforcement officials in the U.S. and other countries and upgraded its financial intelligence collecting and processing capabilities. The MLPC, in cooperation with Taiwan's Ministry of Finance, has trained employees at financial institutions on new money-laundering prevention requirements and has sponsored workshops for prosecutors and field agents. The MLPC is a founding member of the Asia/Pacific Group on Money-Laundering and in June joined the Egmont Group, an unofficial, international anti-money-laundering collective of financial intelligence units.

Taiwan has cooperated with U.S. law enforcement agencies in conducting investigations and joint operations related to illegal narcotics trafficking and related crimes; the authorities also have responded positively and constructively to USG requests and initiatives related to counternarcotics issues. Over the past year Taiwan law enforcement officials have expanded exchanges with U.S. and regional law enforcement officials (including from Malaysia, Singapore, Thailand, Australia, and Hong Kong) and have shared information in cases extending beyond the island itself. In February 1998 the MJIB arrested several individuals and seized 22 kilograms of heroin and 76 kilograms of methamphetamine. The MJIB later provided the Drug Enforcement Administration (DEA) with a copy of the principal defendant's personal telephone directory, which has offered DEA valuable intelligence, and has continued to share useful information on this case. The MJIB also worked closely with the Australian police on the same case, with the result that an additional 5 kilograms of heroin were seized in Australia. In August 1998, MJIB arrested several individuals, including citizens of Hong Kong and Malaysia, during a seizure of 7.7 kilograms of heroin. MJIB officers went to great lengths to notify and provide case-related information to DEA.

Accomplishments. Taiwan authorities continued to investigate vigorously all potential narcotics leads. By the end of November 1998, the authorities seized nearly 129 kilograms of heroin and nearly 871 kilograms of methamphetamine, a decrease of 19.6 percent for heroin seizures and 62.2 percent for methamphetamine for the same period the previous year. Taiwan's law enforcement agencies attributed the drop in narcotics seizures to new smuggling methods and smaller shipments by traffickers as a result of the growing number of successful seizures by police in recent years. The significantly lower seizure rates, particularly of methamphetamine, may also be linked to the increasingly complex cross-strait situation and to resource problems hindering the marine police from fully carrying out their newly expanded mandate. The number of individuals charged with narcotics crimes in the first eleven months of 1998 decreased 62.2 percent to 13,328, the decrease due in large part to the newly implemented Hazardous Narcotics Prevention Act exempting first-time users who successfully undergo treatment from facing criminal charges. Likewise, narcotics-related convictions at the end of November 1998 numbered 19,081, representing a decrease of nearly 35 percent from the previous year.

Through October the interagency MLPC received and investigated a total of 953 new reports of suspicious financial transactions from financial institutions (274 cases) and customs authorities (679 cases). Money-laundering charges have been filed in four cases, and 242 cases have been referred to various law enforcement units, including 210 cases to the MJIB's drug enforcement center, for additional investigation of related criminal activity.

Law Enforcement Efforts/Corruption. The Ministry of Justice plays a major role in formulating counternarcotics policies and legislation. The MJIB and the National Police Administration's Criminal Investigation Bureau (CIB) are Taiwan's lead counternarcotics law enforcement agencies.

Taiwan's law enforcement personnel are fully committed to the fight against narcotics trafficking, investigating more than 52,000 new cases through November 1998. Taiwan continued to crack down on organized crime and aggressively pursued cases of public corruption. In 1998, there were no reported cases of official involvement in narcotics trafficking on Taiwan. Taiwan authorities do not support the production or distribution of illegal drugs.

Taiwan law enforcement officers demonstrate both the will and the ability to pursue major syndicates and individuals trafficking in drugs and have worked with DEA on such probes. A law requiring that investigations be completed within a specified period of time, however, has made it difficult for counternarcotics authorities to carry out long-term investigations. Moreover, as a result of Taiwan's authoritarian past, police counternarcotics operations are limited by strong public sentiment against undercover investigations. Laws against entrapment are strict, and undercover activity by law enforcement officials remains a legal gray area. While authorities acknowledge the indisputable effectiveness of undercover operations as a tool in fighting the drug trade, there is little support at present for a bill providing a legal basis for such activities.

Agreements and Treaties. Taiwan authorities have long indicated an interest in negotiating mutual legal assistance and extradition agreements with the USG. There is currently in place a Memorandum of Understanding on Counternarcotics Cooperation in Criminal Prosecutions signed by the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) in 1992. In May 1998, the U.S. proposed that a Mutual Legal Assistance Agreement be negotiated, provided a draft text, and proposed negotiation dates. In some instances, Taiwan has not provided law enforcement cooperation, citing a lack of any formal agreement. 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 UN member. Nevertheless, Taiwan authorities have demonstrated their commitment to the goals and objectives of the convention by enacting legislation bringing Taiwan's counternarcotics laws into closer conformity with the provisions of the convention.

Cultivation/Production. Taiwan is not a significant producer of illicit drugs, since traffickers have relocated most amphetamine labs to the PRC. By September 1998, Taiwan authorities had made three seizures of liquidized "black water"--partially finished methamphetamine--that had been brought into Taiwan from the PRC for final processing.

Drug Flow/Transit. Between January and November 1998, Taiwan authorities seized nearly 129 kilograms of heroin, a 19.6 percent decrease from 1997. Of that amount 42 percent came from the PRC, 12 percent came from Hong Kong, and the rest originated from Thailand, Burma, and unidentified other countries. Of the 871 kilograms of methamphetamine seized in Taiwan during the first ten months of 1998, 64 percent came from the PRC and 32 percent from unknown locations. While most heroin is smuggled into Taiwan on cargo container ships, fishing boats continue to be the principal means of smuggling methamphetamine from the PRC into Taiwan. In 1998, Taiwan authorities also seized .15 kilogram of cocaine, the first seizure of this drug in Taiwan, and seizures of marijuana in 1998 reached a five-year high of 11 kilograms. Finally, seizures of other narcotics, primarily MDMA, were the highest ever, at 2.02 kilograms.

Domestic Programs. Recognizing that traditional methods of dealing with narcotics usage were unsuccessful, Taiwan authorities passed the Hazardous Narcotics Prevention Act, which went into effect in May. The act requires users to undergo observation and treatment at newly established narcotics rehabilitation centers. Users who successfully and permanently give up their drug habits do not face criminal charges. If users fail to respond to treatment, they may be charged with narcotics crimes. It is too early to judge whether Taiwan's new approach will result in lower narcotics use and recidivism rates. Between May and the end of November, 29,047 individuals (including 27,208 adults and 1,839 juveniles) entered treatment programs. Of the 26,019 individuals who completed treatment, 19,018 (73 percent) have not resumed drug use.

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.

IV. U.S. Policy Initiatives and Programs

U.S. Policy Initiatives. The USG, through AIT, has vigorously pursued closer working-level cooperation on counternarcotics matters, including increased intelligence exchanges and joint operations. During 1998, DEA expanded its working-level contacts with Taiwan law enforcement agencies. In March, the director of DEA's Special Testing Laboratory visited Taiwan in order to help develop a Taiwan heroin signature program. Since then, an MJIB chemist has visited DEA's special testing laboratory and plans to return for further training. In July the chief counsel of the Ministry of Justice attended a State Department-sponsored executive-level seminar in Washington on transnational crime. In August, Hong Kong DEA personnel accompanied key Taiwan law enforcement personnel, including the CIB commissioner, to Guam for the "War on Ice" ("ice"=methamphetamine in crystal form) seminar. AIT's voluntary visitor and international visitor programs enabled key Taiwan prosecutors and legislators to meet U.S. law enforcement policymakers and to learn about U.S. programs.

The U.S. continues to work with the MLPC to expand the center's contacts, both in the U.S. and regionally. The U.S. Financial Crimes Enforcement Network (FINCEN) exchanged visits with the MLPC in April and November.

In September the deputy director of DEA's Chemical Diversion Section went to Taiwan to discuss pre-export notification of phenylpropanolamine. The fact that members from at least nine different Taiwan agencies participated in the AIT-hosted meeting indicates the importance Taiwan authorities attach to chemical control issues.

The Road Ahead. In the coming year, AIT and U.S. law enforcement agencies will continue to work closely with Taiwan to further promote joint counternarcotics operations, money-laundering investigations, and two-way exchanges of information. Completion of an AIT-TECRO mutual legal assistance memorandum of understanding is a high priority, as is establishing a framework that would allow Taiwan authorities to perform end-user pre-export checks for PPA and other narcotics precursors. AIT will continue to encourage Taiwan's legislature to pass the two pharmaceutical control bills currently awaiting legislative approval, as well as to provide funding for the Marine Police Bureau. Finally, AIT and DEA will assist and support Taiwan's efforts to establish a central criminal research institute and a narcotics signature program.