VZCZCXRO4443
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0861/01 3110914
ZNR UUUUU ZZH
R 060914Z NOV 08
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 8352
RUEHBJ/AMEMBASSY BEIJING 2093
RUEHNE/AMEMBASSY NEW DELHI 5097
RUEHVI/AMEMBASSY VIENNA 0126
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHCHI/AMCONSUL CHIANG MAI 1907
RUEABND/DEA HQS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUCNDT/USMISSION USUN NEW YORK 2081
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 10 RANGOON 000861 
 
SIPDIS 
 
DEPT FOR EAP/MLS, INL, SCT 
DEPT OF JUSTICE FOR AFMLS, OIA, OPDAT 
VIENNA FOR UNODC OFFICE 
 
E.O. 12958:N/A 
TAGS: EFIN KCRM KTFN SNAR BM
SUBJECT: BURMA - INCSR I DRUGS AND CHEMICAL CONTROL 
 
REF:  STATE 100989 
 
RANGOON 00000861  001.2 OF 010 
 
 
This report responds to reftel request for the INCSR I Drugs 
and Chemical Control Report update. 
 
¶I. Summary 
Both UNODC and U.S. surveys of opium poppy cultivation 
indicated a significant increase in cultivation and potential 
production in 2007, while production and export of synthetic 
drugs (amphetamine-type stimulants, crystal methamphetamine 
and Ketamine) from Burma continued unabated. (Note:  2008 
UNODC Cultivation Report statistics will not be available 
until December.)  The significant downward trend in poppy 
cultivation observed in Burma since 1998 was reversed in 2007, 
with increased cultivation reported in Eastern, Northern and 
Southern Shan State and Kachin State.  Whether this represents 
a sustained change in poppy cultivation in Burma, which 
remains far below levels of 10 years earlier, remains to be 
seen.  It does indicate, however, that increases in the value 
of opium are driving poppy cultivation into new regions. An 
increased number of households in Burma were involved in opium 
cultivation in 2007.  While Burma remains the second largest 
opium poppy grower in the world after Afghanistan, its share 
of world opium poppy cultivation fell from 55 percent in 1998 
to 5 percent in 2006, and rose slightly in 2007.  This large 
proportional decrease is due to both decreased opium poppy 
cultivation in Burma and increased cultivation in Afghanistan. 
The Golden Triangle region in Southeast Asia no longer reigns 
as the worldQs largest opium poppy cultivating region; that 
dubious honor is now held by Afghanistan. 
Despite increased cultivation in 2007, BurmaQs opium 
cultivation declined dramatically between 1998 and 2006.  The 
UN Office on Drugs and Crime (UNODC) estimates a decrease from 
130,300 hectares (ha) in 1998 to 21,500 ha in 2006, an 83 
percent decrease.  Cultivation in 2007 increased 29 percent, 
from 21,500 ha in 2006 to 27,700 ha. The most significant 
decline over the past decade was observed in the Wa region, 
following the United Wa State ArmyQs (UWSA) pledge to end 
opium poppy cultivation in its primary territory, UWSA Region 
¶2.  UWSA controlled territory accounted for over 30 percent of 
the acreage of national opium poppy cultivation in 2005, but 
almost no poppy cultivation was reported in the Wa region in 
2006 and 2007.  However, there are indications that 
cultivation has increased in regions closely bordering UWSA 
Region 2. 
Burma has not provided most opium farmers with access to 
alternative development opportunities.  Recent trends indicate 
that some opium farmers were tempted to increase production to 
take advantage of higher prices generated by opiumQs relative 
scarcity and continuing strong demand.  Increased yields in 
new and remaining poppy fields (particularly in Southern Shan 
State), spurred by favorable weather conditions in 2007 and 
improved cultivation practices, partially offset the effects 
of decreased cultivation in 2006.  Higher yields in some areas 
may also signal more sophisticated criminal activity, greater 
cross border networking, and the transfer of new and improved 
cultivation technologies. 
 
BurmaQs overall decline in poppy cultivation since 1998 has 
been accompanied by a sharp increase in the production and 
export of synthetic drugs, turning the Golden Triangle into a 
new QIce Triangle.Q  Burma is a significant player in the 
manufacture and regional trafficking of amphetamine-type 
stimulants (ATS). Drug gangs based in the Burma-China and 
Burma-Thailand border areas, many of whose members are ethnic 
Chinese, produce several hundred million methamphetamine 
tablets annually for markets in Thailand, China, and India, as 
well as for onward distribution beyond the region.  There are 
also indications that groups in Burma have increased the 
production and trafficking of crystal methamphetamine or 
QIceQQa much higher purity and more potent form of 
methamphetamine than tablets. 
Through its Central Committee for Drug Abuse Control (CCDAC), 
the Government of Burma (GOB) cooperates regularly and shares 
information with the U.S. Drug Enforcement Administration 
(DEA) and Australian Federal Police (AFP) on narcotics 
investigations.  In recent years, the GOB has also increased 
 
RANGOON 00000861  002.2 OF 010 
 
 
its law enforcement cooperation with Thai, Chinese and Indian 
counternarcotics authorities, especially through renditions, 
deportations, and extraditions of suspected drug traffickers. 
In May 2008, Burmese General Ye Myint was forced to retire 
from his senior position as Chief of Bureau of Special 
Operations 1, which some observers attribute to his sonQs 
involvement with narcotics.  During the 2008 drug 
certification process, the U.S. determined that Burma was one 
of only three countries in the world that had Qfailed 
demonstrablyQ to meet its international counternarcotics 
obligations.  Major concerns remain: unsatisfactory efforts by 
Burma to deal with the burgeoning ATS production and 
trafficking problem; failure to take concerted action to bring 
members of the UWSA to justice following the unsealing of a 
U.S. indictment against them in January 2005; failure to 
investigate and prosecute military officials for drug-related 
corruption; and failure to expand demand-reduction, prevention 
and drug-treatment programs to reduce drug-use and control the 
spread of HIV/AIDS.  Burma is a party to the 1988 UN Drug 
Convention. 
II. Status of Country 
Burma is the worldQs second largest producer of illicit opium. 
Eradication efforts and enforcement of poppy-free zones 
combined to reduce cultivation levels between1998 and 2006, 
especially in Wa territory.  However, in 2007, a significant 
resurgence of cultivation occurred, particularly in eastern 
and southern Shan State and Kachin State, where increased 
cultivation, favorable weather conditions, and new cultivation 
practices increased opium production levels, led to an 
estimated 29 percent increase in overall opium poppy 
cultivation and a 46 percent increase in potential production 
of dry opium. 
According to the UNODC, opium prices in the Golden Triangle 
have increased in recent years, although prices in Burma 
remain much lower than the rest of the region due to easier 
supply. Burmese village-level opium prices or farm-gate prices 
increased from $153 per kg in 2004 to $187 in 2005, to $230 in 
2006 and to $265 per kg in 2008.  Burmese opium sales 
contribute about half of the annual household cash income of 
farmers who cultivate opium, which they use to pay for food 
between harvests.  Forty-five percent of the average yearly 
income ($501) of opium cultivating households in Shan State 
was derived from opium sales in 2007. 
In 2007, the UNODC opium yield survey estimated there were 
approximately 27,700 ha planted with opium poppies, with an 
average yield of 16.6 kg per hectare (significantly higher 
than the 2006 average yield of 14.6 kg per hectare). 
[Independent U.S. opium poppy cultivation surveys also 
indicated increased poppy cultivation and estimated opium 
production to approximately 27, 700 ha cultivated and 270 
metric tons (MT) produced].  The UNODCQs opium yield survey 
concluded that land under cultivation had increased 29 percent 
in Burma from 2006 levels, with a 46 percent increase in 
potential opium production to 460 MT.  This represented a 67 
percent increase in the total potential value of opium 
production in Burma, from $72 million in 2006 to $120 million 
in 2007.  Nonetheless, both surveys indicated that opium 
production is still down 90 percent from its peak production 
in 1996. 
The general decline in poppy cultivation in Burma since 1996 
has been accompanied by a sharp increase in the local 
production and export of synthetic drugs.  According to GOB 
figures for 2008 (January-August), the GOB seized 
approximately 700,000 methamphetamine tablets, compared to 1.5 
million seized in 2007. Opium, heroin, and ATS are produced 
predominantly in the border regions of Shan State and in areas 
controlled by ethnic minority groups.  Between 1989 and 1997, 
the Burmese government negotiated a series of cease-fire 
agreements with several armed ethnic minorities, offering them 
limited autonomy and continued tolerance of their narcotics 
production and trafficking activities in return for peace.  In 
June 2005, the UWSA announced implementation in Wa territory 
of a long-delayed ban on opium production and trafficking. 
While the cultivation of opium poppies decreased in the Wa 
territory during 2006 and 2007, according to UNODC and U.S. 
surveys, there are indications from many sources that Wa 
leaders replaced opium cultivation with the manufacture and 
 
RANGOON 00000861  003.2 OF 010 
 
 
trafficking of ATS pills and QIceQ in their territory, working 
in close collaboration with ethnic Chinese drug gangs. 
Although the government has not succeeded in persuading the 
UWSA to stop its illicit drug production and trafficking, the 
GOBQs Anti-Narcotic Task Forces continued to pressure Wa 
traffickers in 2008.  UWSA also undertook limited enforcement 
actions against rivals in Shan State in 2006 and 2007.  In May 
2006, UWSA units found and dismantled two clandestine 
laboratories operating in territory occupied and controlled by 
the UWSA-South in Eastern Shan State.  When the UWSA units 
entered the lab sites, a firefight ensued, with eight people 
fatally wounded, four arrested, and 25 kg of heroin and 
500,000 methamphetamine tablets seized by the raiding UWSA 
units.  In June 2006, the UWSA passed custody of the 
contraband substances to GOB officials. The prisoners remained 
in the custody of the UWSA.  These UWSA actions likely were 
motivated more towards eliminating the competition in their 
area than by a desire to stop drug trafficking.  According to 
UNODC,  opium addiction remains high in places of historic or 
current opium production, ranging from 1.27 percent of the 
total adult population in Eastern Shan State to 0.97 percent 
in Kachin State and an estimated 0.83 percent in the Wa 
region, the main area of opium production until 2006. 
III. Country Actions Against Drugs in 2007 
Policy Initiatives. BurmaQs official 15-year counternarcotics 
plan, launched in 1999, calls for the eradication of all 
narcotics production and trafficking by the year 2014, one 
year ahead of an ASEAN-wide plan of action that calls for the 
entire region to be drug-free by 2015.  To meet this goal, the 
GOB initiated its plan in stages, using eradication efforts 
combined with planned alternative development programs in 
individual townships, predominantly in Shan State.  The 
government initiated its second five-year phase in 2004. 
Ground surveys by the Joint GOB-UNODC Illicit Crop Monitoring 
Program indicate a steady decline in poppy cultivation and 
opium production in areas receiving focused attention, due to 
the availability of some alternative livelihood measures 
(including crop substitution), the discovery and closure of 
clandestine refineries, stronger interdiction of illicit 
traffic, and annual poppy eradication programs.  The UNODC 
estimates that the GOB eradicated 3,598 ha of opium poppy 
during the 2007 cropping season (ranging between July-March in 
most regions), compared to 3,970 ha in 2006. 
The most significant multilateral effort in support of BurmaQs 
counternarcotics efforts is the UNODC presence in Shan State. 
The UNODCQs QWa ProjectQ was initially a five-year, $12.1 
million supply-reduction program designed to encourage 
alternative development in territory controlled by the UWSA. 
In order to meet basic human needs and ensure the 
sustainability of the UWSA opium ban announced in 2005, the 
UNODC extended the project through 2007, increased the total 
budget to $16.8 million, and broadened the scope from 16 
villages to the entire Wa Special Region No. 2.  Major donors 
that have supported the Wa Project include Japan and Germany, 
with additional contributions from the UK and Australia.  The 
U.S. previously funded the UNODC Wa project, but halted 
funding over death threats issued by UWSA leadership against 
U.S. DEA agents following the January 2005 indictment of seven 
UWSA leaders in a U.S. district court for their role in 
producing and smuggling heroin to the U.S. 
Law Enforcement Measures. The CCDAC, which leads all drug- 
enforcement efforts in Burma, is comprised of personnel from 
the national police, customs, military intelligence, and army. 
The CCDAC, under the control of the Ministry of Home Affairs, 
coordinates 27 anti-narcotics task forces throughout Burma. 
Most are located in major cities and along key transit routes 
near BurmaQs borders with China, India, and Thailand.  As is 
the case with most Burmese government entities, the CCDAC 
suffers from a severe lack of funding, equipment, and training 
to support its law-enforcement mission.  The Burmese Army and 
Customs Department support the Police in this role. 
Burma is actively engaged in drug-abuse control with its 
neighbors China, India, and Thailand.  Since 1997, Burma and 
Thailand have had more than 12 cross-border law enforcement 
cooperation meetings.  This cooperation resulted in the 
repatriation by Burmese police of drug suspects wanted by Thai 
authorities: two in 2004, one in 2005 one in 2006, and one in 
 
RANGOON 00000861  004.2 OF 010 
 
 
¶2008.  According to the GOB, Thailand has contributed over 
$1.6 million to support an opium crop substitution and 
infrastructure project in southeastern Shan State.  In 2007, 
Thailand assigned an officer from the Office of Narcotics 
Control Board (ONCB) to its mission in Rangoon; this officer 
remains in country.  Burma-China cross border law enforcement 
cooperation has increased significantly, resulting in several 
successful operations and the handover of several Chinese 
fugitives who had fled to Burma.  While not formally funding 
alternative development programs, the Chinese government has 
actively encouraged investment in many projects in the Wa area 
and other border regions, particularly in commercial 
enterprises such as tea plantations, rubber plantations, and 
pig farms.  China has assisted in marketing those products in 
China through lower duties and taxes.  There are also 
indications that China conducted its own opium cultivation and 
production surveys in 2007 and 2008 in regions of Burma 
bordering the PRC, although they have not shared data 
resulting from those surveys with other parties. 
After Burma and India signed an agreement on drug control 
cooperation in 1993, the two countries have held cross border 
Law Enforcement meetings on a bi-annual basis, though the last 
meeting was September 11, 2004, in Calcutta. 
The GOB has to date taken no direct action against any of the 
seven UWSA leaders indicted by U.S. federal court in January 
2005, although authorities have taken action against other, 
lower ranking members of the UWSA syndicate.  In 2007, one of 
the indicted leaders, Pao Yu-hua, died of natural causes. 
During 2008, the GOB arrested suspects connected with the UWSA 
who were involved in a local ecstasy and methamphetamine 
distribution investigation. 
The GOB reports significant arrests in 2008, totaling more 
than 2,000 suspected drug traffickers. 
In May, the GOB investigated 158 suspected drug cases, 
arresting 245 suspects, of which 201 men and 44 women.  In 
July and August, the police arrested more than 800 
individuals.  In September, the GOB arrested 398 suspects, of 
which 300 were men and 98 were women, and investigated 253 
drug-related cases. 
Narcotics Seizures. Summary statistics provided by Burmese 
drug officials indicate that from January 2008 through 
September 2008, Burmese police, army, and the Customs Service 
together seized 1262.52 kilograms of raw opium, 2443.62 
kilograms of low quality opium, 76.24 kilograms of opium oil, 
56.10 kilograms of heroin, 206.08 kilograms of morphine base 
(#3 heroin), 692,698 methamphetamine tablets, 7.74 kilograms 
of methamphetamine ICE, 467.96 kilograms of ephedrine, 9,023.2 
liters of precursor chemicals, and 1922 kilograms of precursor 
chemical powder. 
-- On February 13, 2008 the Myawaddy CCDAC anti-narcotics task 
force (ANTF) stopped a motorcycle near Yadana Thein Kha Main 
Road, Ward Number 3, Three Pagoda Pass, Burma.  A subsequent 
search resulted in the seizure of 28,000 tablets of pink WY 
branded methamphetamine. 
 
-- On February 13, 2008 the Yangon CCDAC Anti Narcotics Task 
Force Q East (ANTF-E) seized approximately 138.88 grams of 
heroin from Kyaw Htay at the Olympic Hotel, U Wisara Road, 
Rangoon, Burma. 
 
-- On April 3, 2008, the Taunggyi CCDAC ANTF raided a home in 
Pet Kaw Village, Southern Shan State, Burma.  A search 
resulted in the seizure of 6.5 kilograms of brown opium 
powder. 
 
-- On April 3, 2008, Burmese Army Infantry Battalion 567 
assisted the Nan Zalat Police Station at a checkpoint at the 
Man Lin/Kunlong Road junction in Nan Zalat Village, Theinni 
Township, Northern Shan State, Burma.  A search of a vehicle 
driven from Shauk Haw Village, Kutkai Township, Northern Shan 
State, Burma resulted in the seizure of 2,182 literQ ether, 
902 liters of hydrochloric acid, and 181 liters of chloroform. 
 
-- On April 10, 2008 the Myitchina CCDAC ANTF searched a 
residence located in Sa Pau Chaung Phyar Village, Hseik Mu 
Village Track, Phar Kant Township, Kachin State, Burma.  The 
search resulted in the seizure of 5,260 tablets of 
 
RANGOON 00000861  005.2 OF 010 
 
 
methamphetamine. 
 
-- On April 10, 2008, the Bhamo CCDAC ANTF seized 1,940 
tablets of methamphetamine at the No. 2 border gate from two 
female pedestrians. 
 
-- On April 10, 2008, the Myitchina CCDAC ANTF raided a 
residence located in Ward 2 Hseik Mu Village, Phar Khant 
Township, Kachin State, Burma.  A subsequent search resulted 
in the seizure of 1.633 kilograms of opium. 
 
-- On April 11, 2008, the Taunggyi CCDAC ANTF stopped and 
searched a motorcycle and rider at a checkpoint on the 
Pinlong/Aung Pan Road, Lai Pyar Village, Pinlong Village 
Track, Southern Shan State, Burma.  The search resulted in the 
seizure of 16 kilograms of opium.   On the same day, the 
Taunggyi CCDAC ANTF stopped and searched a Toyota car.   The 
search resulted in the seizure of an AK-47 assault rifle, an 
M-16 assault rifle, and 3 kilograms of opium. 
 
-- On April 12, 2008, the East Yangon CCDAC ANTF searched room 
804 at the Pin Lon Hteik Htar San Ein Housing compound located 
at the corner of U Wizara Road and Chindwin Road, Ward 10, 
Kamaryut Township, Rangoon, Burma.  The search resulted in the 
seizure of 69 tablets of ecstasy, 45 tablets of WY brand 
methamphetamine and the arrest of Min Naing, Kyaw Thu Win, and 
Yan Yan Chan.  On April 14, 2008, as a result of information 
developed from the arrest of Min Naing and the seizure of 69 
tablets of ecstasy and 45 tablets of WY brand methamphetamine, 
the East Yangon CCDAC ANTF raided and searched the residence 
of Ma Phyo Thu Thu Win in Bahan Township, Rangoon, Burma.  A 
search resulted in the seizure of 536 tablets of WY brand 
methamphetamine.  On April 18, 2008, the East Yangon CCDAC 
ANTF enlisted her cooperation to arrest Aung Naing in the 
parking lot of Janko Market on Inya Road, Kamaryut Township, 
Rangoon, Burma.  Aung Naing  was arrested in possession of 
2,465 tablets of WY brand methamphetamine.  In addition, on 
April 19, 2008, Aung Naing's arrest led the East Yangon CCDAC 
ANTF to search Room 411 of the Shwegondine Hotel, Rangoon, 
Burma.  The search resulted in the seizure of 27 tablets of 
methamphetamine and the arrests of Ma Htet Htet Aung, Ye 
Nandar Nyunt, and Aung Sit. 
 
-- This case ultimately led to the arrest of Aung Zaw Ye 
Myint, the son of  prominent Burmese general Ye Myint, the 
arrest of Burmese businessman Maung Weik, and the arrest of a 
UWSA-affiliated trafficker known as Thet Naing Win. 
 
-- On April 22, 2008, the Myitchina CCDAC ANTF searched a 
house in Myitchina, Kachin State, Burma.  A search resulted in 
the seizure of 7 soap boxes containing a total of 98.7 grams 
of heroin and 2,200,000 Kyat (approximately $2,200.00 US 
Dollars). 
 
-- On April 27, 2008, at approximately 1200 hours, the 
Taunggyi CCDAC ANTF initiated an undercover operation at No. 
C/9 Wun Kan Ward, Loi Hsaung Htauk, Mine Hsu Township, Shan 
State, Burma.  At approximately, 1500 hours, a suspect 
delivered undercover officers 1.143 kilograms of opium and 
1,854 tablets of WY brand methamphetamine. 
 
-- On May 5, 2008, an undercover investigation conducted by 
the Lashio CCDAC ANTF resulted in an arrest and the seizure of 
50,000 tablets of methamphetamine. 
 
-- On May 8, 2008, the Tachilek CCDAC ANTF arrested a suspect 
near the MAY HOTEL, Bogyoke Street, Tachilek, Burma.  A 
subsequent search of the suspect resulted in the seizure of 
8,000 pink QRQ brand methamphetamine tablets. 
 
-- On May 11, 2008, the North Mandalay CCDAC ANTF, acting on 
informant information, search a residence located on 32nd 
Street, between 67th & 68th Streets, Mandalay, Burma.  The 
search resulted in the seizure of 200 tablets of WY brand 
methamphetamine.  During a debriefing, the suspect stated that 
he had purchased 4,400 tablets of methamphetamine from an 
individual at Mya Myitta Hotel, Lashio, Burma for 8,100,000 
 
RANGOON 00000861  006.2 OF 010 
 
 
Kyat (approximately $8100.00 USD). 
 
-- On May 12, 2008, the Tachilek CCDAC ANTF stopped and 
searched two suspects at the Loi Taw Khan Checkpoint.  The 
suspects were enroute to Tachilek, Burma from Mine Hsat, Shan 
State, Burma.  The search resulted in the seizure of 175 
tablets of pink WY brand methamphetamine and approximately one 
kilogram of methamphetamine ICE 
 
-- On May 23, 2008, the Tachilek CCDAC ANTF stopped and 
searched two suspects at a checkpoint near Tachilek, Burma. 
The search resulted in the seizure of 4,000 tablets of 
methamphetamine.  During debriefing, the suspects implicated a 
third suspect and indicated that additional methamphetamine 
tablets were hidden in a house in Wai Lu Shan Village, 
Tachilek Township, Tachilek, Burma.  A subsequent search of 
the house resulted in the seizure of an additional 7,200 
tablets of methamphetamine. 
 
-- On May 24, 2008, the Muse CCDAC ANTF stopped a motorcycle 
at the 105 mile checkpoint along the Muse/Pang Sai Road.  A 
search resulted in the seizure of 9,840 tablets of 
methamphetamine. 
 
-- On May 26, 2008, the Muse CCDAC ANTF stopped and searched 
an individual identified as he was driving from Mon Paw 
Village to Nant Taung Village, Northern Shan State, Burma. 
The search resulted in the seizure of 3,000 tablets of WY 
brand methamphetamine.  Information from subsequent 
debriefings resulted in the seizure of an additional 1,990 
tablets of methamphetamine. 
 
-- On July 11, 2008, the Muse ANTF stopped and searched a 
three wheel taxi driven at the Shwe Li Kyo Thadar Bridge, Nam 
Khan, Burma.   The search resulted in the seizure of 44 soap 
boxes containing a total of approximately 572 grams of heroin 
and 4,860 tablets of methamphetamine. 
-- On July 28, 2008, the Taunggyi ANTF searched a residence in 
Kaung Sai Village, Loi Hsaung Htauk, Mine Shu Township, Burma. 
The search resulted in the seizure of approximately 250 grams 
of heroin and 2,000 tablets of methamphetamine. 
 
-- On July 30, 2008, the Lashio ANTF stopped and searched a 
vehicle at the Yay Bu Checkpoint north of Lashio, Burma.  The 
search resulted in the seizure of 12,600 tablets of 
methamphetamine. 
-- On July 31, 2008, the Taunggyi ANTF and Taunggyi District 
Police observed a motorcycle at the Payar Phu vehicle 
checkpoint on Pan Tin Road, Payar Phyu Ward, Taunggyi, Burma 
evade the checkpoint.  As officers attempted to stop the 
vehicle, the driver discarded a plastic bucket.  Taunggyi ANTF 
officers subsequently determined that the discarded bucket 
contained 99,000 tablets of WY and R brand methamphetamine. 
-- On August 5, 2008, the Muse ANTF conducted an operation in 
Shauk Haw Village, Kutkhai Township, Northern Shan State, 
Burma that resulted in the seizure of material for refinery 
operations and the arrest of a former Kachin Defense Army 
soldier.  A search  resulted in the seizure of the following 
items: 
 
¶A. 5.627 kg of heroin. 
¶B. 7.2 kg of opium 
¶C. Three assault rifles 
¶D. Four handguns 
¶E. 12 magazines for the assault rifles and handguns 
¶F. 638 rounds of ammunition for both the assault rifles 
and the handguns 
¶G. 100 liters of hydrochloric acid 
¶H. 9 kilograms of potassium chloride 
¶I. 1.5 kilograms of sodium metal 
¶J. Two hand grenades 
¶K. 29 boxes each containing 100 detonators 
¶L. 3000 sticks of dynamite or similar explosive 
¶M. One gold bar (weight 10 tickel) 
¶N. 2,000,000 Kyat (approximately $2000 USD) 
¶O. Miscellaneous paraphernalia for the refining of heroin 
¶P. 480 liters of ethyl alcohol 
 
RANGOON 00000861  007.2 OF 010 
 
 
¶Q. 1228 liters of ether 
¶R. 240 liters of acetic anhydride 
¶S. 112 liters of lysol 
-- On August 7, 2008, the Myitkyina ANTF searched a home in 
Hmaw Shan Village Tract, Hsiek Mu, Kachin State, Burma.  The 
search resulted in the seizure of 52,000 tablets of 
methamphetamine and 5.5 Million Kyat (approximately $5,500 US 
Dollars). 
 
-- On August 15, 2008, the Mandalay ANTF-North searched a 
vehicle at a vehicle checkpoint North of Mandalay.  The 
vehicle had originated in Kalay, Burma.  The search resulted 
in the seizure of 19.35 kilograms of ephedrine. 
-- On August 15, 2008, the Muse ANTF searched a vehicle at the 
105 mile checkpoint near Muse, Burma.  The search resulted in 
the seizure of 13,650 tablets of methamphetamine. 
-- On August 17, 2008, the Taunggyi ANTF searched a room at 
the Fuji Inn, Bogyoke Aung San Road, Taunggyi, Burma.  The 
search resulted in the seizure of 20,650 tablets of 
methamphetamine. 
-- On August 18, 2008, the Taunggyi ANTF seized a heroin 
refinery near Htee Tan Village, Hsi Hsai Township, Southern 
Shan State, Burma.  The following items were seized. 
¶A.  17.116 kilograms of opium 
¶B.  9.78 kilograms of opium waste 
¶C.  800 kilograms of ammonium chloride 
¶D.  106.14 kilograms of solid opium oil 
¶E.  Miscellaneous narcotics paraphernalia 
 
-- On August 30, 2008 the CCDAC Taunggyi ANTF seized an active 
heroin refinery near Nar Khait Village, Hsi Hseng Township, 
Southern Shan State, Burma.  The refinery raid resulted in the 
seizure of the following precursors and assorted items. 
 
¶A. 800 liters of an opium and chemical solution 
¶B. 55 kilograms of dry opium oil 
¶C. 11.5 kilograms of No.3 heroin powder 
¶D. 58 kg of no.3 solid form 
¶E. 52 liters of opium liquid 
¶F. 6 kilograms of Lysol powder 
¶G. 7 kilograms of charcoal 
¶H. 35 kilograms of raw opium 
¶I. 40 kilograms of an opium and chemical mixture in oil 
form 
¶J. 32 liters of sulfuric acid 
¶K. 1200 kilograms of opium residue 
¶L. Assorted paraphernalia used in the production of heroin 
-- On September 1, 2008, the Myitkyina ANTF seized 274 
kilograms of opium in Phakant, Kachin State, Burma.  The opium 
was found in an abandoned car near a vehicle checkpoint. 
According to a post arrest statement, the opium originated in 
near Pin Laung, Southern Shan State, Burma 
Corruption. Burma does not have a legislature or effective 
constitution, and has no laws on record specifically related 
to corruption.  While there is little evidence that senior 
officials in the Burmese Government are directly involved in 
the drug trade, there are credible indications that mid-and- 
lower level military leaders and government officials, 
particularly those posted in border and drug producing areas, 
are closely involved in facilitating the drug trade.  The 
Burmese regime closely monitors travel, communications and 
activities of its citizens to maintain its pervasive control 
of the population, so it strains credibility to believe that 
government officials are not aware of the cultivation, 
production and trafficking of illegal narcotics in areas it 
tightly controls. A few officials have been prosecuted for 
drug abuse and/or narcotics-related corruption.  In May 2008, 
Burmese General Ye Myint was forced to retire from his senior 
position as Chief of Bureau of Special Operations 1, which 
some observers attribute to his  sonQs involvement with 
narcotics.  However, Burma has failed to indict any military 
official above the rank of colonel for drug-related 
corruption. 
Agreements and Treaties. Burma is a party to the 1961 UN 
Single Convention on Narcotic Drugs as amended by the 1972 
Protocol, the 1971 UN Convention on Psychotropic Substances, 
and the 1988 UN Drug Convention.  Burma is a party to the UN 
 
RANGOON 00000861  008.2 OF 010 
 
 
Convention against Transnational Organized Crime and its 
protocols on migrant smuggling and trafficking in persons, and 
has signed but has not ratified the UN Corruption Convention. 
Cultivation and Production. According to the UNODC opium yield 
estimate, in 2007 the total land area under poppy cultivation 
was 27,700 ha, a 29 percent increase from the previous year. 
The UNODC also estimated that the potential production of 
opium increased by 46 percent, from 315 MT in 2006 to 460 MT 
in 2007.  The significant increase in potential opium 
production in 2007 indicated in the UNODC estimates reflect 
improved agricultural methods and an end to several years of 
drought, resulting in more favorable growing weather in major 
opium poppy growing areas, such as Shan State and Kachin 
State. 
Burma as yet has failed to establish any reliable mechanism 
for the measurement of ATS production.  Moreover, while the 
UNODC undertakes annual estimates of poppy cultivation and 
production, the U.S. has been unable to conduct its annual 
joint crop survey with Burma since 2004 due to the GOBQs 
refusal to cooperate in this important area. 
Drug Flow/Transit. Most ATS and heroin in Burma is produced in 
small, mobile labs located near BurmaQs borders with China and 
Thailand, primarily in territories controlled by active or 
former insurgent groups.   According to UNODC, the GOB seized 
eight methamphetamine labs in 2006 and five labs in 2007.  A 
growing amount of methamphetamine is reportedly produced in 
labs co-located with heroin refineries in areas controlled by 
the UWSA, the Shan State Army-South (SSA-S), and groups inside 
the ethnic Chinese Kokang autonomous region.  Ethnic Chinese 
criminal gangs dominate the drug syndicates operating in all 
three of these areas.  Heroin and methamphetamine produced by 
these groups is trafficked overland and via the Mekong River, 
primarily through China, Thailand, India and Laos and, to a 
lesser extent, via Bangladesh, and within Burma.  There are 
credible indications that drug traffickers are increasingly 
using maritime routes from ports in southern Burma to reach 
trans-shipment points and markets in southern Thailand, 
Malaysia, Indonesia, and beyond.  The UNODC claims there is 
evidence that Burmese methamphetamine tablets are also shipped 
to Bangladesh, India, and Nepal.  The UNODC also reports that 
heroin seizures in 2005, 2006 and 2007 and subsequent 
investigations revealed the increased use by international 
syndicates of the Rangoon International Airport and Rangoon 
port for trafficking of drugs to the global narcotics market. 
However, U.S. DEA information indicates that heroin transits 
the Thai/Chinese borders over land rather than by sea. 
Demand Reduction. The overall level of drug abuse is low in 
Burma compared with neighboring countries, in part because 
most Burmese are too poor to be able to support a drug habit. 
Traditionally, some farmers used opium as a painkiller and an 
anti-depressant, often because they lack access to other 
medicine or adequate healthcare.  There has been a growing 
shift in Burma away from opium smoking toward injecting 
heroin, a habit that creates more addicts and poses greater 
public health risks.  Deteriorating economic conditions will 
likely stifle substantial growth in overall drug consumption, 
but the trend toward injecting narcotics is of significant 
concern.  The GOB maintains that there are only about 65,000 
registered addicts in Burma.  According to several HIV 
Estimation Workshops conducted in 2008 by the National AIDS 
Program, UNAIDS, and the World Health Organization, there are 
an estimated 60,000 to 90,000 injecting drug users in Burma. 
Surveys conducted by UNODC and other organizations suggest 
that the addict population could be as high as 300,000. 
According to the UNODC, BurmaQs opium addiction rate is high, 
at 0.75 percent.  NGOs and community leaders report increasing 
use of heroin and synthetic drugs, particularly among 
disaffected youth in urban areas and by workers in mining 
communities in ethnic minority regions.  The UNODC estimated 
that in 2004 there were at least 15,000 regular ATS users in 
Burma; there are likely more now, although official figures 
are unavailable. 
The growing HIV/AIDS epidemic in Burma has been tied to 
intravenous drug use.  According to the National AIDS Program, 
one third of officially reported HIV/AIDS cases are 
attributable to intravenous drug use, one of the highest rates 
in the world.  Information gathered by the National AIDS 
 
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Program showed that HIV prevalence among injecting drug users 
was 46.2 percent in 2006 Q a figure that remained stable 
through 2008.  Infection rates are highest in BurmaQs ethnic 
regions, and specifically among mining communities in those 
areas where opium, heroin, and ATS are more readily available. 
Burmese demand reduction programs are in part coercive and in 
part voluntary.  Addicts are required to register with the GOB 
and can be prosecuted if they fail to register and accept 
treatment.  Altogether, more than 21,000 addicts were 
prosecuted between 1994 and 2002 for failing to register. 
(The GOB has not provided any data since 2002.)  Demand 
reduction programs and facilities are limited, however.  There 
are six major drug treatment centers under the Ministry of 
Health, 49 other smaller detoxification centers, and eight 
rehabilitation centers, which, together, have provided 
treatment to about 70,000 addicts over the past decade.  Prior 
to 2006, the Ministry of Health treated heroin addicts with 
tincture of opium.  However, based on high levels of relapse, 
the Ministry of Health in 2006 began to treat heroin addicts 
with Methadone Maintenance Therapy (MMT) in four drug 
treatment centers, found in Rangoon, Mandalay, Lashio, and 
Myitkyina.  The Ministry of Health also began dispensing 
methadone treatment in three additional sites, two in Kachin 
State and one in Rangoon.  By August 2008, the Ministry of 
Health had treated more than 300 patients using MMT. 
As a pilot model, in 2003 UNODC established community-based 
treatment programs in Northern Shan State as an alternative to 
official GOB treatment centers. UNODC expanded this program, 
opening centers in Kachin State.  In 2008, UNODC operated 12 
drop-in centers.  UNODC plans to open an additional five drop- 
in centers by 2009.  Since 2004, more 2,000 addicts received 
treatment at UNODC centers.  In 2007 and 2008, an additional 
6,000 addicts have sought medical treatment and support from 
UNODC-sponsored drop-in centers and from outreach workers who 
are active throughout northeastern Shan State.  The GOB also 
conducts a variety of narcotics awareness programs through the 
public school system. In addition, the government has 
established several demand reduction programs in cooperation 
with NGOs.  These include programs coordinated with CARE 
Myanmar, World Concern, and Population Services International 
(PSI), focus on addressing injected drug use as a key factor 
in halting the spread of HIV/AIDS. 
While maintaining these programs at pre-existing levels, Burma 
has failed to expand demand-reduction, prevention, and drug- 
treatment programs to reduce drug use and control the spread 
of HIV/AIDS.  The Global Fund, which had a budget of $98.5 
million to fight AIDS, TB, and malaria in Burma, withdrew in 
¶2005.  In 2006, a number of foreign donors established the 3 
Diseases Fund (3DF) to provide humanitarian assistance for 
AIDS, TB, and malaria.  The 3DF, with its budget of $100 
million over five years, supports the work of local and 
international NGOs, the United Nations, and government health 
officials at the township level. In 2008, the 3DF supported 
HIV/AIDS programs such as HIV surveillance and training on 
blood safety.  The 3DF also provided funds for antiretroviral 
therapy and the MMT program. 
IV. U.S. Policy Initiatives and Programs 
Policy and Programs. As a result of the 1988 suspension of 
direct USG counternarcotics assistance to Burma, the USG has 
limited engagement with the Burmese government in regard to 
narcotics control.  U.S. DEA, through the U.S. Embassy in 
Rangoon, shares drug-related intelligence with the GOB and 
conducts joint drug-enforcement investigations with Burmese 
counternarcotics authorities.  In 2006 and 2007, these joint 
investigations led to several seizures, arrests, and 
convictions of drug traffickers and producers.  The U.S. 
conducted opium yield surveys in the mountainous regions of 
Shan State from 1993 until 2004, with assistance provided by 
Burmese counterparts.  These surveys gave both governments a 
more accurate understanding of the scope, magnitude, and 
changing geographic distribution of BurmaQs opium crop.  In 
2005, 2006, 2007, and again in 2008, the GOB refused to allow 
another joint opium yield survey.  A USG remote sensing 
estimate conducted indicated a slight increase in opium 
cultivation in 2007 and a significant increase in potential 
opium production, mirroring UNODC survey results.  Bilateral 
counternarcotics projects are limited to one small U.S.- 
 
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supported crop substitution project in Shan State.  No U.S. 
counternarcotics funding directly benefits or passes through 
the GOB. 
In September 2008, the USG identified Burma as one of three 
countries in the world that had Qfailed demonstrablyQ to meet 
its international counternarcotics obligations. 
The Road Ahead. The Burmese government must reverse the 
negative direction of narcotics production in 2007 to restore 
the significant gains it made over the past decade in reducing 
opium poppy cultivation and opium production.  This will 
require greater cooperation with UNODC and major regional 
partners, particularly China and Thailand.  Large-scale and 
long-term international aidQincluding increased development 
assistance and law-enforcement aidQcould play a major role in 
reducing drug production and trafficking in Burma.  However, 
the ruling military regime remains reluctant to engage in 
political dialogue within Burma and with the international 
community.  Its barriers to those offering outside assistance 
have limited the potential for international support of all 
kinds, including support for BurmaQs counternarcotics law 
enforcement efforts.  Furthermore, in order to be sustainable, 
a true opium replacement strategy must combine an extensive 
range of counternarcotics actions, including crop eradication 
and effective law enforcement, with alternative development 
options, support for former poppy farmers and openness to 
outside assistance.  The GOB must foster closer cooperation 
with the ethnic groups involved in drug production and 
trafficking, especially the Wa, refuse to condone continued 
involvement by ceasefire groups in the narcotics trade, tackle 
corruption effectively, and enforce its counternarcotics laws 
more consistently to reach its goals of eradicating all 
narcotics production and trafficking by 2014. 
The USG believes that the GOB must further eliminate poppy 
cultivation and opium production; prosecute drug-related 
corruption, especially by corrupt government and military 
officials; take action against high-level drug traffickers and 
their organizations; strictly enforce its money-laundering 
legislation; and expand prevention and drug-treatment programs 
to reduce drug use and control the rapid spread of HIV/AIDS. 
The GOB must take effective new steps to address the explosion 
of ATS that has flooded the region by gaining closer support 
and cooperation from ethnic groups, especially the Wa, who 
facilitate the manufacture and distribution of ATS.  The GOB 
must close production labs and prevent the illicit import of 
precursor chemicals needed to produce synthetic drugs. 
Finally, the GOB must stem the troubling growth of domestic 
demand for heroin and ATS. 
 
DINGER