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[Senate Hearing 109-858]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-858
 
               INTERNATIONAL METHAMPHETAMINE TRAFFICKING
=======================================================================

                                HEARING

                               BEFORE THE

    SUBCOMMITTEE ON INTERNATIONAL ECONOMIC POLICY, EXPORT AND TRADE 
                               PROMOTION

                                  AND

 SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE CORPS AND NARCOTICS AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                        WEDNESDAY, JUNE 21, 2006

                               __________

       Printed for the use of the Committee on Foreign Relations

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                 ------                                

                 SUBCOMMITTEE ON INTERNATIONAL ECONOMIC
                   POLICY, EXPORT AND TRADE PROMOTION

                    CHUCK HAGEL, Nebraska, Chairman

LAMAR ALEXANDER, Tennessee           PAUL S. SARBANES, Maryland
LISA MURKOWSKI, Alaska               CHRISTOPHER J. DODD, Connecticut
MEL MARTINEZ, Florida                JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            BARACK OBAMA, Illinois

                                 ------                                

               SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE
                      CORPS AND NARCOTICS AFFAIRS

                   NORM COLEMAN, Minnesota, Chairman

LINCOLN CHAFEE, Rhode Island         CHRISTOPHER J. DODD, Connecticut
GEORGE ALLEN, Virginia               JOHN F. KERRY, Massachusetts
MEL MARTINEZ, Florida                BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page

Coleman, Hon. Norm, U.S. Senator from Minnesota..................     2
Hagel, Hon. Chuck, U.S. Senator from Nebraska, opening statement.     1
Patterson, Hon. Anne W., Assistant Secretary for International 
  Narcotics and Law Enforcement Affairs, Department of State, 
  Washington, DC.................................................    11
    Prepared statement...........................................    12
    Responses to questions submitted for the record..............    41
Tandy, Hon. Karen P., Administrator, Drug Enforcement 
  Administration, Department of Justice, Washington, DC..........    16
    Prepared statement...........................................    19
Walters, Hon. John P., Director, Office of National Drug Control 
  Policy, Executive Office of the President, Washington, DC......     3
    Prepared statement...........................................     7

                                 (iii)

               INTERNATIONAL METHAMPHETAMINE TRAFFICKING

                              ----------                              

                        WEDNESDAY, JUNE 21, 2006

                       U.S. Senate,        
             Subcommittees on International        
   Economic Policy, Export and Trade Promotion;    
            and Western Hemisphere, Peace Corps and
         Narcotics Affairs; Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, in room SD-419, 
Dirksen Building, at 2:30 p.m., Hon. Chuck Hagel and Hon. Norm 
Coleman, jointly presiding.
    Present: Senators Hagel and Coleman.

   OPENING STATEMENT OF HON. CHUCK HAGEL, U.S. SENATOR FROM 
                            NEBRASKA

    Senator Hagel. This committee will come to order. Good 
afternoon and welcome to this joint hearing of the Subcommittee 
on International Economic Policy, Export and Trade Promotion 
and the Subcommittee on Western Hemisphere, Peace Corps, 
Narcotics and Terrorism, on international meth trafficking.
    I'd like to thank Senator Coleman, the Chairman of the 
Western Hemisphere Subcommittee, for his leadership on this 
issue and for helping organize and cochair this joint 
subcommittee hearing. The scourge of methamphetamine abuse has 
had a devastating effect on our communities and continues to 
spread across our country. This epidemic has strained local law 
enforcement agencies, community treatment facilities, drug 
courts, and has exacted an enormous human price on our Nation's 
families.
    Chairman Coleman and I have seen meth's destructive force 
first hand in our States of Minnesota and Nebraska and believe 
communities, States, and the Federal Government must work 
together if we are to effectively combat methamphetamine abuse.
    On March 9, the president signed in to law reauthorization 
of the Patriot Act. It included provisions that restricted the 
sale of medicines containing meth precursor chemicals and 
required that they be put behind the counter. This legislation 
follows successful efforts by many States, including my State 
of Nebraska, to address domestic meth production. These are 
important steps forward. But they do little to stop meth 
trafficking at its source.
    To stop meth, we must focus on international meth 
trafficking. The amount of meth coming into our country from 
abroad has increased dramatically. In 2001, the Drug 
Enforcement Administration intercepted more than 1,170 
kilograms of meth along our southwest border. By 2004, the 
amount intercepted had grown to more than 2,320 kilograms, an 
increase of 96 percent in a matter of just 3 short years. The 
DEA now estimates that approximately 80 percent of all meth 
consumed in the United States is smuggled into the country from 
Mexico.
    Today's hearing will address efforts to control the 
international shipment of meth precursor chemicals and avoid 
their diversion for the illicit production of meth. It will 
also examine our strategy to stop meth at the border, along 
with the implementation of meth-related provisions included in 
the Patriot Act reauthorization. These measures, along with law 
enforcement, treatment, and prevention efforts are essential to 
disrupting international meth trafficking and the overall 
success of stopping the meth epidemic. I'd like now to return 
to my friend and colleague, the cochairman of today's 
subcommittee, Senator Coleman.

  STATEMENT OF HON. NORM COLEMAN, U.S. SENATOR FROM MINNESOTA

    Senator Coleman. Thank you, Senator Hagel, and let me 
return the compliment, and I say it whole-heartedly with a deep 
sense of appreciation, for your leadership in bringing this 
hearing together. We've had a lot of focus on the domestic side 
of methamphetamine. Indeed, we've had some successes, I'm sure 
we're going to hear about that on the domestic side. But what 
it has done is increased some of the challenges on the 
international side, increased the availability, increased the 
potency in what we're seeing coming in from Mexico. And so, 
your leadership in recognizing what we've done at home, but 
seeing the need to focus beyond home has been critically 
important. Today we're going to have an exceptional panel of 
witnesses to talk about these issues.
    On the domestic side, let us always remember, though, that 
even though we have made strides in cutting down homegrown 
labs, we're still hearing the stories every day in our 
communities of 10- and 12-year-olds addicted to meth; girls 
barely in their teens resorting to prostitution to support 
habits. When we had our national hearing, a woman talked about 
wanting to kill her brother, kill her family members. The 
stories are horrifying, but they are not unique. They appear, 
unfortunately, with alarming frequency in hometown newspapers 
from Idaho to Nebraska to Minnesota to New York. It is a 
growing concern.
    In my State, I asked my staff to do a Lexis-Nexus word 
search for methamphetamine in the Minneapolis Star Tribune and 
the St. Paul Pioneer Press. In 2002-2003 you get 253 news 
stories. If you do the same search for the years 2004 and 2005, 
you get 724--almost 3 times as many. So clearly the problem has 
grown at an alarming rate.
    Eighty-seven percent of law enforcement officials, in a 
survey of the National Association of Counties, said that meth-
related arrests have risen in the past 3 years. In the same 
survey, most sheriffs and local law enforcement people say meth 
is the single biggest law enforcement problem they have in 
their communities. The good news is that we're making 
significant progress in closing some of the openings, as I said 
before, I think because of the work done nationally that we 
have done with dealing with precursor chemicals, the work 
that's been done locally. We're seeing a decrease in meth labs, 
which is a good thing because our first responders aren't 
walking into toxic situations and environmental damage, an 
incredible amount of resource.
    Those are the good things. In fact, in one of my counties, 
Kanabec, an hour north of Minneapolis, Sheriff Steve Schultz 
says only one lab has been seen since the law took effect on 
July 1. That's pretty good progress, that's a big positive. But 
unfortunately, the reduction in homeland labs hasn't resulted 
in a reduction of meth problems. And that's where we're seeing 
the problems coming in from Mexico. I'm told now that 80-90 
percent of meth now is made outside the State, usually in 
superlabs near the southern borders or trafficked by Mexican 
syndicates. Mexico is a key country in our overall counter-drug 
strategy. Canada has been involved in this, and we'll hear 
testimony, I think very positive testimony, about the efforts 
of Canada to help us in reducing the imports of precursors, 
joint law enforcement activities, et cetera, et cetera. The 
Combat Meth Act has made some inroads. So the good news is 
we're making progress.
    The bad news is that this is still a very serious, very 
significant, and in some ways, so overwhelming problem that has 
international implications. In our globalized world, 
international cooperation must be a vital component of our 
anti-meth strategy, so at today's hearing we will examine just 
that.
    As I noted, we have an exceptional--I think an 
extraordinary panel of witnesses. Senator Hagel and I were 
taking about that before we came in here. We have before us key 
administration policy makers when it comes to international 
narcotics matters. The first witness is Mr. John Walters, 
Director of the White House Office of National Drug Control 
Policy. Director Walters has served as the Nation's drug czar 
since December of 2001 as the president's lead official on 
Federal drug programs. His central role in formulating the 
synthetic drug control strategy will provide valuable 
perspective on the meth problem, both domestically and 
internationally.
    Our second witness is Ambassador Ann Patterson, Assistant 
Secretary of State for International Narcotics and Law 
Enforcement Affairs. Ambassador Patterson's prior service as 
Ambassador to Colombia, where I had the great pleasure of 
working with her, and just have a great pride in her 
qualifications and abilities. She served in Colombia from 2000 
to 2003, and as Ambassador to El Salvador from 1997 to 2000, 
certainly a valuable witness at today's hearing.
    And our final witness is Ms. Karen Tandy, Administrator of 
the Drug Enforcement Administration. As a former Associate 
Deputy Attorney General, Administrator Tandy has considerable 
experience developing and implementing drug enforcement policy 
and strategy. So we thank you all for getting here today, being 
here today, and we look forward to hearing your testimony. Mr. 
Walters, I think you're prepared to start first.

STATEMENT OF HON. JOHN P. WALTERS, DIRECTOR, OFFICE OF NATIONAL 
              DRUG CONTROL POLICY, WASHINGTON, DC

    Mr. Walters. Thank you, Chairman Hagel and Chairman 
Coleman. I'd ask that my prepared statement be inserted in the 
record, if that's all right, and I'll just do a brief summary 
to move quickly to your questions following our testimony.
    Thank you most of all for this opportunity to appear before 
you today and discuss this important issue of our international 
efforts against methamphetamine. There is no worse drug than 
meth. It exacts a heavy toll on individuals, families, and 
communities throughout the Nation and indeed the world. Meth 
represents a unique challenge because of its addictive 
qualities and the relative ease of production. The rise of meth 
production and use have galvanized Government at all levels 
here, from State and local law enforcement, to the prevention 
and treatment communities, as well as institutions at the 
national level, Congress, and indeed our international 
partners. We are grateful for the efforts of many individuals 
and institutions who have worked tirelessly to push back 
against this threat. I join you in congratulating those who 
have been working so hard for so long, and they are making a 
dramatic difference through those efforts.
    Though meth still represents one of our most serious drug 
threats, I'm pleased today to report some progress from some of 
the indicators that we watch. Nationally, as you pointed out, 
the number of meth lab incidents decreased sharply from 2004. 
According to the El Paso Intelligence Center Clandestine 
Laboratory Seizure System, the total number of meth lab 
incidents in 2005 dropped 30 percent from 2004. These are 
summarized on the chart to my right, your left.
    We've also seen a reduction in meth-positive workplace 
screenings. Quest Diagnostics, the Nation's largest provider of 
diagnostic testing, recently reported a 45 percent reduction in 
positive workplace tests from 2004 through May of this year. 
The summary of those results are on the chart closest to you on 
this side. And also, by region, you see the declines are 
greatest in some of the regions to the west and central part of 
the country that have been the hardest hit by the meth epidemic 
as it grew in the southwest part of the country.
    Finally, we have seen significant positive developments 
with respect to meth use among our Nation's youth. The Youth 
Risk Behavior Survey released last week indicates lifetime 
youth meth use has declined 36.7 percent since 2001. That 
survey covers grades 9 through 12. The Monitoring the Future 
Survey indicates a 34 percent decrease in lifetime use among 
8th, 10th, and 12th graders combined, from 2001 to 2005. 
Overall, due to cooperative efforts of the administration and 
Congress and, most of all, the work of many, many Americans, we 
have witnessed an historic 19 percent decline in overall 
teenage drug use in the last 4 years. This is an important 
thing because, as you know, many people who get into meth don't 
actually start with meth, they start somewhere else and turn to 
it later.
    Our common goal now is to push these gains further as fast 
as we can to save more lives. On June 1, building on the 
earlier efforts of ONDCP, the Justice Department, and the 
Department of Health and Human Services, along with our other 
Federal colleagues, we released, as you pointed out, the 
Synthetic Drug Control Strategy. The Synthetic Strategy, a 
companion document to the National Drug Control Strategy, 
details plans for an unprecedented cooperation with Mexico and 
other international partners to drastically reduce the flow 
into the United States of both methamphetamine and the 
precursor chemicals used to produce the drug. The Synthetic 
Strategy sets a national goal of 15 percent reductions in 
methamphetamine use and prescription drug abuse from 2005 
baseline to 2008, a 3-year goal; and another goal of 25 percent 
further reduction in domestic meth labs by 2008.
    The Synthetic Strategy outlines a three-tiered approach to 
United States international efforts: One, improving 
intelligence and information on the global market for precursor 
chemicals; two, effective implementation of the Combat Meth Act 
passed by Congress and signed into law by President Bush, as 
you pointed out, in March, which set the national standard for 
restricting the retail sale of precursor chemicals within the 
United States; and three, strengthening law enforcement and 
border control activities, particularly with Mexico.
    Our successful efforts to combat meth have involved the 
States taking decisive action with dramatic results, as you see 
here. Thirty-nine States have imposed regulations on retail 
sale of the methamphetamine precursor, pseudoephedrine, and 
preparations that contain pseudoephedrine. This was the model 
for the heart of those regulatory controls in the Combat Meth 
Act that take those measures nationwide. That act gives us a 
powerful tool, but also other important measures that we expect 
to be able to use to reduce the number of labs and the flow of 
meth into our country from abroad. But as the committee surely 
knows, this is not just a domestic problem, as you pointed out. 
We must continue to increase our international supply 
disruption interdiction efforts.
    Canada, as you mentioned in your opening remarks, is aiding 
us in the fight against trafficking and diversion. It has 
reduced its own domestic precursor imports, resulting in sharp 
declines in the amount of pseudoephedrine and ephedrine 
diverted to the United States. Seizures of pseudoephedrine at 
our northern border are now down 92 percent.
    Mexico, as you are aware, has become the major producer and 
trans-shipment point for much of methamphetamine entering 
America today. It represents a major focus of our international 
strategy. The Justice Department, acting primarily through the 
Drug Enforcement Administration, has taken the lead in these 
efforts. In addition to implementing wholesale and retail 
controls on pseudoephedrine with the United States support, 
Mexico is also training and equipping methamphetamine-focused 
law enforcement teams to combat the spread of methamphetamine 
production in Mexico.
    Finally, interagency efforts will soon culminate in a 
coordinated national southwest border counternarcotics strategy 
which will identify key strategic objectives and provide 
specific recommendations to address narcotics trafficking along 
the southwest border, with the objective of significantly 
improving all interdiction efforts there. Canada and Mexico now 
represent the totality of our international engagement on 
methamphetamine. The administration has built important bridges 
with primary producing and exporting countries for bulk 
ephedrine and pseudoephedrine: China, Germany, and India. For 
example, earlier this year DEA's Beijing office secured 
commitment from the Chemical Control Division of the Ministry 
of Public Security of the People's Republic of China to 
initiate, for a trial period, a chemical tracking program with 
the DEA. The administration is currently engaged in efforts to 
reach these types of prenotification agreements with India and 
Germany, as well for all shipments of pseudoephedrine and 
ephedrine and pharmaceutical preparations that include these 
products regardless of the destination country.
    ONDCP, DEA, and the Department of State are working with 
China, India, and Germany, all major PSE and ephedrine 
producing and exporting countries, in a multifaceted approach. 
I have met, and will continue to work with, the ambassadors of 
these countries here in Washington to strengthen our work 
against meth and amphetamine type stimulants, and implement 
rapidly the precursor control measures that we have been given 
as tools in the Combat Meth Act and we've been reaching for in 
these international control bodies. These meetings have been 
positive and productive. All have expressed their desire to 
work with the United States on solutions to this problem. As 
you know, these drugs are not just a threat to the United 
States, they are a global threat.
    In late February, DEA hosted a meeting in Hong Kong with 
law enforcement officials from India and Germany, and several 
other major PSE- and ephedrine-importing countries to discuss 
PSE and ephedrine diversion control issues. In March, the 49th 
United Nation Commission on Narcotic Drugs, the CMD meeting in 
Vienna, passed a U.S.-sponsored resolution on synthetic drugs. 
The resolution will ask every country that imports or exports 
methamphetamine precursors to take concrete action to ensure 
their licit use.
    In conclusion, let me say that the United States has had 
domestic successes in fighting this threat of methamphetamine 
production by controlling the precursors. There's a weakness 
here that we are trying to exploit, and you've given us tools 
to exploit on a wider scale. This type of impact can be 
achieved globally if nations combat this problem in the 
multilateral venues that we are now pursuing. To disrupt the 
methamphetamine market we'll continue to rely on our ability to 
work together to reduce the flow of methamphetamine and prevent 
diversion of its precursors, principally pseudoephedrine, 
ephedrine, and pharmaceutical preparations that include these 
chemicals.
    You have helped us show that this threat can be made 
smaller. We need to follow through and use those tools that our 
States have proven can work. The Combat Meth Act gives us the 
nationwide and global application of those tools as the core of 
our international efforts against meth and ATS. I want to thank 
you for that work. I know that was not an easy measure to pass, 
but we think we're safer and we're going to be able to help 
others make their nations safer, as well, as a result of those 
tools.
    Thank you.
    [The prepared statement of Mr. Walters follows:]

    Prepared Statement of Hon. John P. Walters, Director, Office of 
   National Drug Control Policy, Executive Office of the President, 
                             Washington, DC

                              introduction
    Chairman Hagel, Chairman Coleman, Senator Sarbanes, Senator Dodd, 
and distinguished members of the subcommittees. Thank you for the 
opportunity to appear before you today to discuss such an important 
issue and to address our international efforts against methamphetamine 
and its precursors.
    Since the early 1990s, and especially over the last few years, the 
illicit use of synthetic drugs has become a severe and troubling 
problem, at both the international and national levels. The most 
devastating of these synthetic drugs for the United States has been 
methamphetamine.
    In response to these developments, in October 2004, the U.S. 
Government released the National Synthetic Drugs Action Plan, the first 
comprehensive national plan to address the problems of synthetic and 
pharmaceutical drug trafficking and abuse. The action plan outlined 
current Federal and State efforts in the areas of prevention, 
treatment, regulation, and law enforcement and made concrete 
recommendations for enhancing Government efforts to reduce synthetic 
drug abuse.
    On June 1, building on these earlier efforts ONDCP, DOJ, DHS, and 
HHS released the Synthetic Drug Control Strategy. The Synthetics 
Strategy, a companion document to the President's National Drug Control 
Strategy, details plans for unprecedented cooperation with Mexico and 
other international partners to drastically reduce the flow into the 
United States of both methamphetamine and the precursor chemicals used 
to produce the drug. The Synthetics Strategy calls for 15 percent 
reductions in methamphetamine use and prescription drug abuse over the 
next 3 years and a 25 percent reduction in domestic meth labs.
    The Synthetics Strategy outlines a three-tiered approach to the 
United States' international efforts: Improving intelligence and 
information on the global market for precursor chemicals; effective 
implementation of the Combat Meth Act, signed into law by President 
Bush this March, which sets a national standard for restricting the 
retail sale of precursor chemicals within the United States; and 
strengthening law enforcement and border control activities, 
particularly with Mexico.
                the spread of meth and latest trend data
    In the past decade and a half, methamphetamine use has spread 
eastward across the United States. Between 1992 and 2003, the treatment 
admission rate for methamphetamine and amphetamine increased from 10 to 
57 admissions per 100,000 population aged 12 or older (an increase of 
over 470 percent). Additionally, between 2001 and 2004, the positive 
drug-testing rates among the general United States workforce for 
methamphetamine/amphetamine increased from 0.29 percent to 0.52 percent 
of all tests (an increase of 79 percent). However, this trend reversed 
in 2005 when the incidence of methamphetamine/amphetamine positive 
drug-testing rates declined 8 percent to 0.48 percent. The news is even 
more encouraging when we look only at methamphetamine, which we can do 
for the first time thanks to a new analysis of the testing results by 
Quest Diagnostics. The incidence of methamphetamine positives dropped 
from 0.33 percent in 2004 to 0.26 percent in 2005 and down further, to 
0.18 percent, for the first five months of 2006, a 45 percent reduction 
over 2 years and significant downward trend.
    There is additional good news when we look closely at the data for 
youth drug use. Methamphetamine use rates have dropped by almost one-
third among 8th, 10th and 12th graders combined since 2001. The Center 
for Disease Control's Youth Risk Behavior Survey found a 36.7 percent 
decline in lifetime youth meth use since 2001. There is much additional 
work to do to fight the threat of methamphetamine, both at home and 
abroad, but the latest information we have received is good news for 
Americans.
                        united states' response
    In response to the increased threat from methamphetamine, United 
States law enforcement agencies have increased their efforts, both 
domestically and internationally, to stem the flow of methamphetamine 
and the precursors that are used to produce it. States have also taken 
decisive action with dramatic results.
    Within the past 2 years, 39 states have imposed new regulations on 
the retail sale of the methamphetamine precursor pseudoephedrine (PSE) 
and preparations that contain pseudoephedrine. These restrictions vary 
from State to State in their severity and content, as the severity and 
nature of the meth problem itself differs significantly among different 
States. States with the strictest pseudoephedrine laws have seen 
significant reductions in the seizure of small toxic labs. For example, 
1,063 lab incidents occurred in Oklahoma in 2003. After instituting 
strict laws controlling pseudoephedrine in March 2004, lab seizures in 
Oklahoma dropped by 37.3 percent to 667 lab incidents in 2004. Only 218 
labs were reported seized in Oklahoma during 2005, a dramatic decline 
of 67.3 percent from the previous year. As more States have adopted 
similar restrictions, and as States and the Federal Government have 
taken other actions to combat use of the drug, the United States has 
seen national declines in the number of super labs and total labs 
seized. In fact, the total number of lab incidents in the United States 
declined from 17,675 in 2004 to 12,213 in 2005. This substantial 30.9 
percent decline is the result of the hard work by State, local, and 
Federal law enforcement officers across this country, as well as 
enactment and effective implementation of new laws controlling 
precursors enacted by 39 States.
    Congress has also taken decisive steps to combat methamphetamine 
production and precursor diversion through the passage of the Combat 
Meth Act. This legislation is an important and positive step forward 
and has provided many useful tools both domestically and 
internationally.
    Many of the restrictions on consumer retail sales of products 
containing pseudoephedrine have been in effect for over 2 months with 
remainder of the restrictions taking effect September 30, 2006. The 
reduction of domestic methamphetamine production has been achieved by 
controlling the precursors used to make the drug and when the Combat 
Meth Act is fully implemented we expect this national trend to 
continue. Concerning national demand for legitimate products containing 
pseudoephedrine, ephedrine, and phenylpropanolamine, the Drug 
Enforcement Administration is gathering and analyzing information 
regarding the licit national demand for these products, so that the 
agency may meet its obligation under the Combat Meth Act to set 
manufacturing quotas. We expect the retail sales restrictions and the 
ceiling on pseudoephedrine imports to have a significant positive 
affect on the domestic diversion of pseudoephedrine.
    The Combat Meth Act also contains mechanisms to assist in reducing 
international diversion of methamphetamine precursors. The Department 
of State will identify the top five exporters and the top five 
importers of ephedrine, pseudoephedrine, and phenylpropanolmine, (which 
are the precursors for methamphetamine/amphetamine), with the highest 
rate of diversion for illicit uses. The State Department will publish 
the list of those countries in the annual International Narcotics 
Control Strategy Report that will be released no later than March 1, 
2007. The President will determine whether the identified countries are 
``cooperating fully'' with the United States or taking adequate 
measures on their own to address the production and trafficking of 
illegal drugs. The Department of State has formed an interagency 
working group to develop and implement a workable methodology that will 
be used to identify the top five countries in each category. The 
administration is committed to using the new tools provided by the 
Combat Meth Act effectively to foster better international controls on 
methamphetamine precursors.
    Reducing precursor diversion and decreasing the number of domestic 
labs not only reduces methamphetamine production and the environmental 
damage caused by the production process, but also reduces the threat 
that these labs pose to our citizens. Methamphetamine production and 
use exact a huge toll on families and particularly children. 
Methamphetamine production can occur in homes and apartments where 
children live, exposing them to a variety of toxic and noxious 
substances. The research of current and future health risks of such 
exposure is ongoing, but it appears that the consequences to the health 
of the meth-exposed child are severe. Children of methamphetamine users 
are also exposed to the numerous social and developmental problems that 
result from their parent's abuse problem. While under the influence of 
methamphetamine, these parents do not care for themselves, let alone 
their children. While on a multi-day methamphetamine binge, these 
parents have no interest in the needs of a child; they are simply 
focused on their high. When the binge ends they sleep for days at a 
time, while their children continue to be without parental care.
    In October 2003, the Office of National Drug Control Policy 
launched a national Drug-Endangered-Children initiative to assist with 
coordination among existing State programs that help rehabilitate 
children who have been affected by methamphetamine. The results of this 
initiative have been promising with the number of affected children, as 
reported by the national Drug-Endangered-Children Program, dropping 
from 3,708 in 2003, to 3,104 in 2004, and for 2005 there were 1,660 
affected children reported. Although this trend is promising we must 
continue our efforts.
    The United States has had domestic success fighting the spread of 
methamphetamine production by controlling the precursors. We can 
achieve this impact globally by working cooperatively with our 
international partners. Disrupting the methamphetamine market will 
continue to rely on our ability to work together to reduce the flow of 
methamphetamine and prevent the diversion of its precursors--
principally pseudoephedrine, ephedrine, and pharmaceutical preparations 
that include these chemicals.
                         international efforts
    In targeting international methamphetamine production, the 
Department of Justice, primarily acting through the Drug Enforcement 
Administration, is the lead U.S. Government agency. Recently, its 
attention has been focused primarily on Mexico--a major producer or 
transshipment point for much of the methamphetamine entering America.
    Over the past few years, rising seizures at the United States' 
southwest border indicate increasing production of methamphetamine 
within Mexico, as do reports of additional methamphetamine lab seizures 
within Mexico, and reports from State and local law enforcement 
throughout the United States concerning the influx of out-of-state 
methamphetamine within their jurisdictions.
    The increase in southwest border seizures of methamphetamine from 
2001 to 2004 has been significant with 1,170 kilograms in 2001; 1,130 
kilograms in 2002; 1,790 kilograms in 2003; and, 2,320 kilograms in 
2004.
    Because the U.S. Government's counterdrug, counterterror, and 
immigration enforcement missions are interrelated, improved counterdrug 
efforts will also enhance border security. In February 2005, the 
President's Homeland Security Advisor directed the development of a 
strategy to address the drug threat to the southwest border. 
Interagency efforts, at this time, are culminating in a coordinated 
National Southwest Border Counternarcotics Strategy that will identify 
key strategic objectives and provide specific recommendations to 
address the illicit narcotics threat and significantly improve overall 
interdiction efforts along the southwest border.
    Although this is a significant and growing threat, Mexico has taken 
some important steps. Through its Federal Commission for the Protection 
against Sanitary Risks (COFEPRIS), the Government of Mexico is 
implementing several important wholesale and retail controls on 
pseudoephedrine in cooperation with the pharmaceutical industry and is 
considering others. Mexican pharmacies are moving pseudoephedrine 
combination products behind the counter and limiting retail sales to 9 
grams. In addition, Mexico recently imposed a policy limiting imports 
of pseudoephedrine and ephedrine to manufacturers only. Wholesale 
distributors are barred from importing raw pseudoephedrine and 
ephedrine. Furthermore, importers can import shipments of no more than 
3,000 kilograms at a time. Mexico also has begun imposing import quotas 
tied to estimates of licit national need after a study revealed that 
imports far exceeded this amount. As a result, Mexico's PSE imports 
have dropped from 216 metric tons in 2004 (COFEPRIS), to 132.5 metric 
tons in 2005 (COFEPRIS), with a goal of 70 metric tons for 2006 
(COFEPRIS).
    With United States support, Mexico is training and equipping 
methamphetamine-focused law enforcement teams to combat the spread of 
methamphetamine production in Mexico. DEA is providing laboratory 
investigation and processing training for Mexican law enforcement 
elements, enabling them to identify and destroy methamphetamine labs. 
Additionally, Mexican authorities have seized more than 55 million 
methamphetamine precursor pills since December 2000.
    Canada, like Mexico, is aiding in the fight against trafficking and 
diversion. Canada has taken numerous steps over the past few years to 
prevent the diversion of pseudoephedrine and ephedrine through 
increased control of imports and exports. From 2000 to 2004, lawful 
pseudoephedrine imports into Canada fell from just over 500 to less 
than 50 metric tons. Additionally, from 2003 to 2004, lawful ephedrine 
imports fell from 19 to 7 metric tons, and overall pseudoephedrine and 
methamphetamine seizures of shipments into the United States have 
dropped over the past year. These reduced precursor imports into Canada 
resulted in sharp declines in the amounts of pseudoephedrine and 
ephedrine diverted into the United States for the manufacture of 
methamphetamine. The number of superlabs in the United States detected 
by law enforcement fell from 143 in 2002 and 130 in 2003 to just 55 in 
2004 and seizures of pseudoephedrine at our northern border are now 
down by 92 percent.
    In addition to working with Mexico and Canada on this issue, the 
United States continues to work with the primary producing and 
exporting countries for bulk ephedrine and pseudoephedrine--China, 
Germany, and India. In addition to working with each of these nations 
multilaterally, which I will address when discussing the recently 
adopted U.S.-sponsored resolution at the Commission on Narcotic Drugs 
(CND), DEA continues to actively work cooperatively with each of these 
nations on precursor chemical investigation and regulatory issues. To 
accomplish this task, DEA has assigned chemical diversion investigators 
to their country offices in each of these nations to address this 
important issue.
    The United States and Mexico are also working to gain broader 
international support for prenotification of international shipments of 
combination tablets containing pseudoephedrine through multilateral 
bodies such as the Organization of American States and the Project 
Prism initiative facilitated by the United Nations International 
Narcotics Control Board. Extending these pre-export notifications 
(PENs) to pharmaceutical preparations that contain pseudoephedrine and 
ephedrine are critical to controlling the diversion of precursors. 
Under the 1988 U.N. Convention on Psychotropic Substances, signatory 
countries are only required to provide PENs on bulk pseudoephedrine, 
bulk ephedrine, and single-entity tablets containing these substances; 
pharmaceutical preparations (combination products) are exempt. 
Additionally, unlike the United States, many nations have not suffered 
the significant costs associated with small toxic labs. Many countries 
are either unaware that diverted pharmaceutical preparations containing 
pseudoephedrine or ephedrine are often used as the main precursor for 
methamphetamine production (and how easily they can be converted into 
methamphetamine), or face continued challenges in stopping this 
diversion.
                         multifaceted approach
    ONDCP, the DEA, and the Department of State are working with the 
major PSE and Ephedrine producing/exporting countries of China, 
Germany, and India on a multifaceted approach:

    (1) I am meeting with the ambassadors from these countries to 
discuss amphetamine-type stimulants (ATS) and precursor control/
diversion issues. To date, I have met with the Chinese Ambassador to 
the United States, Zhou Wenzhong, the Deputy Chief of Mission of the 
Indian Embassy, Ambassador R.S. Jassal, and the Head of the European 
Union's Delegation to the United States, John Bruton. The meetings were 
very positive and productive; all expressed their desire to work with 
the United States on solutions to this problem.
    (2) In late February 2006, DEA hosted a meeting in Hong Kong with 
law enforcement officials from India, Germany, and several major PSE 
and ephedrine-importing countries to discuss PSE and ephedrine 
diversion control issues. There was an overall agreement that more must 
be done internationally to control diversion and it was a significant 
first step in the process.
    (3) In March 2006, at the 49th United Nations Commission on 
Narcotic Drugs (CND) in Vienna, member states adopted a United States-
sponsored resolution on synthetics drugs. The resolution:

    (a) Requests that countries estimate their licit need for PSE and 
ephedrine (in addition to precursor chemicals for Ecstasy) as well as 
the pharmaceutical preparations containing them. By knowing countries' 
licit requirements, the resolution aims to reduce surpluses and 
potential diversion of the precursors.
    (b) Requests exporting countries to verify the authenticity of each 
export shipment.
    (c) Urges exporting countries to provide to the International 
Narcotics Control Board information on all shipments of 
pseudoephedrine, ephedrine, licit pharmaceutical preparations 
containing these substances, and other chemicals.
    (d) Requests member states to allow the International Narcotics 
Control Board to share shipment information with concerned countries' 
law enforcement and regulatory authorities to prevent or interdict 
diverted shipments. The intent is to prevent diversion while not 
impeding legitimate international commerce.
    (e) Requests countries to ensure that the quantity of imports is 
commensurate with their legitimate requirements.

    Implementation of the resolution will mean that each country that 
exports or imports methamphetamine precursors will be pressured to take 
concrete actions. Our Government will be working through our embassies 
to encourage countries to move quickly to meet their new obligations. 
In addition we will continue to provide assistance, through the State 
Department, to the INCB to facilitate their administration of these new 
measures.
                               conclusion
    The United States has had significant success fighting the spread 
of methamphetamine production by controlling precursor chemicals 
domestically. This type of impact can be achieved globally if nations 
combat the problem cooperatively. Disrupting the methamphetamine market 
will depend on our ability to work together to prevent the diversion of 
its precursors--principally pseudoephedrine, ephedrine, and 
pharmaceutical preparations that include these chemicals used in 
manufacturing the drug and then to crimp the flow of manufactured 
methamphetamine coming into the United States.
    Thank you again for the opportunity to testify on this important 
topic, and I welcome any questions the subcommittees may have regarding 
methamphetamine, and the administration's efforts to reduce its use, 
production, trafficking, and the diversion of its precursors.

    Senator Coleman. Thank you very much. Ambassador Patterson.

 STATEMENT OF HON. ANNE W. PATTERSON, ASSISTANT SECRETARY FOR 
INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, WASHINGTON 
                               DC

    Ms. Patterson. Chairman Hagel, Chairman Coleman, thank you 
for this opportunity to discuss the Department of State's 
efforts to curb the international production and trafficking of 
methamphetamine. Methamphetamine abuse is a growing problem 
throughout the world, and we certainly are not alone in this 
challenge. The Department of State focuses on two key areas: 
One, seeking greater transparency in the international trade in 
methamphetamine precursor chemicals; and two, continued efforts 
with the government of Mexico to disrupt methamphetamine 
production and trafficking.
    The last comprehensive agreement on international chemical 
control is in the 1988 U.N. Convention Against Illicit Traffic 
and Narcotic Drugs and Psychotropic Substances. While the 
convention covers methamphetamine's precursor chemicals, such 
as ephedrine and pseudoephedrine, it exempts finished 
pharmaceutical preparations containing them. Furthermore, many 
countries have been reluctant to share information because much 
of the data is commercially sensitive.
    Given these challenges, we have found that seeking 
voluntary cooperation, based on mutual benefit, is the best way 
to obtain information beyond what is required by the 
convention. DEA has been successful in joint investigations, 
bilateral agreements, and through multilateral efforts such as 
the International Narcotics Control Board's Project Prism. The 
Department of State, DEA, and ONDCP continue to press this 
issue in international organizations and through bilateral 
relations.
    In March, a U.S.-sponsored resolution was adopted by 
consensus at the 49th U.N. Commission on Narcotic Drugs. This 
resolution specifically requests countries to provide the INCB 
with annual estimates of their legitimate requirements for 
synthetic drug precursor chemicals, as well as the 
pharmaceutical preparations containing these substances. This 
resolution also requests countries to permit the INCB to share 
such information with concerned law enforcement and regulatory 
agencies which the INCB has since agreed to publish. This will 
allow governments to track any spikes in imports, a possible 
signal of illegal diversion.
    While we consider the adoption of our resolution an 
important step, the Department of State will work hard to make 
this effort successful. The Combat Methamphetamine Epidemic Act 
has provided the administration with new tools and focused our 
efforts on this important issue, and we have begun taking steps 
to implement its international provisions. As a fundamental 
step, we have established an interagency working group, 
composed of experts from relevant agencies, to develop a 
methodology for how countries will be evaluated in accordance 
with the Act's reporting requirements.
    In March, I visited Mexico where I met with many officials 
who were increasingly concerned about Mexico's own problem with 
methamphetamine abuse and addiction. Methamphetamine is a 
common challenge, as the drug now harming communities in 
Mexico, along traditional trafficking routes, an inevitable 
symptom of the drug business. Recognizing that its import of 
pseudoephedrine exceeded its legitimate demand, Mexico has made 
progress in controlling a legitimate import by enacting tariff 
regulations on the importation and distribution of these 
products. However, the threat of smuggling a precursor chemical 
from third countries into Mexico will continue to be a 
challenge.
    To counter smuggling and methamphetamine production, the 
State Department is working closely with the Government of 
Mexico to enhance law enforcement capacity to secure our common 
border. In coordination with DEA, we have provided specialized 
equipment and have established vetted units to safely dismantle 
methamphetamine labs and to prosecute those responsible.
    The Department of State also participates in the National 
Meth Chemical Initiative, which includes officers from local, 
State, and Federal law enforcement agencies, as well as Mexico 
and Canada. The group works to create strategies and identify 
current chemical trends related to methamphetamine. At the May 
meeting, the Department of State facilitated the attendance of 
the Mexican Attorney General and other high officials from 
Mexico.
    Although Mexico remains the focus of our bilateral efforts 
against methamphetamine, we have smaller programs in Asia, 
where 60 percent of the world's methamphetamine users live. 
While the United States is not the principle destination market 
for these drugs, Asia produces the majority of the world's 
amphetamine-type stimulants to feed the growing demand in 
Australia and East and Southeast Asia.
    In conclusion, we can expect that in the future an even 
greater percentage of methamphetamine consumed in the United 
States will be produced abroad, even if access to precursor 
chemicals is further restricted. While the international 
efforts that I have described are important tools, more must be 
done. The Department will continue to press this issue in 
bilateral and multilateral settings, move forward with 
international precursor chemical control, and fully implement 
the Combat Meth Act. We are also exploring additional ways to 
strengthen cooperation with Mexico and other international 
partners. We appreciate Congress's support and leadership on 
this issue, and we always communicate your strong interest when 
working without international partners. Thank you for the 
opportunity to testify today.
    [The written statement of Ambassador Patterson follows:]

 Prepared Statement of Hon. Anne W. Patterson, Assistant Secretary for 
  International Narcotics and Law Enforcement Affairs, Department of 
                         State, Washington, DC

    Chairman Hagel, Chairman Coleman, Senator Sarbanes, Senator Dodd, 
and other distinguished members, thank you for the opportunity to 
discuss the Department of State's efforts to curb the international 
production and trafficking of methamphetamine. I appreciate your 
continuing interest in this growing challenge and thank you for holding 
a hearing on such an important and timely subject.
    Methamphetamine abuse continues to be an enormous problem in this 
country. Current data on drug and laboratory seizures suggest that 
roughly 80 percent of the methamphetamine used in the United States 
comes from larger laboratories, which are increasingly found in Mexico. 
As we have reported in the annual International Narcotics Control 
Strategy Report (INCSR), methamphetamine abuse is a growing problem 
throughout the world. According to the U.N. Office on Drugs and Crime's 
(UNODC) latest statistics, approximately 35 million people in the world 
use amphetamine-type stimulants (ATS),\1\ including methamphetamine and 
Ecstasy.
---------------------------------------------------------------------------
    \1\ ATS generally refers to amphetamine, methamphetamine, and MDMA 
(Ecstasy), and its analogs.
---------------------------------------------------------------------------
    Synthetic drugs such as methamphetamine and Ecstasy present a 
unique challenge to our international drug control policy. These drugs 
are relatively easy and inexpensive to produce, offer enormous profit 
margins, and often do not have the same social stigma associated with 
the use of other drugs. Unlike drugs derived from organic materials, 
such as cocaine or heroin, their production is not limited to a 
specific geographic region. Therefore, we must remain vigilant to 
ensure that progress in one area is not offset by setbacks in others.
    In order to address international methamphetamine production and 
trafficking, the Department of State plays an integral role in the 
administration's synthetic drug control strategy. We emphasize two key 
areas: Seeking greater international control and transparency in the 
production, sale, and transportation of methamphetamine's precursor 
chemicals and the pharmaceutical preparations containing them; and 
significantly expanding our support and cooperation with the Government 
of Mexico on precursor control and other methamphetamine specific 
initiatives.
                international precursor chemical control
    Most of the methamphetamine consumed in the United States--
somewhere between 75 and 85 percent--is produced with chemicals that 
are diverted from the legitimate flow of international commerce. 
Therefore, a central focus of the administration's strategy is to 
encourage transparency in the international trade in methamphetamine's 
precursor chemicals and the pharmaceutical preparations containing 
them.
    The most comprehensive agreement on international chemical control 
is the 1988 U.N. Convention Against Illicit Traffic in Narcotic Drugs 
and Psychotropic Substances. While the convention covers 
methamphetamine's precursor chemicals such as ephedrine and 
pseudoephedrine, it exempts finished pharmaceutical preparations 
containing them. This situation allows criminal organizations to 
circumvent the convention by purchasing uncontrolled pharmaceutical 
preparations on the international market, instead of the regulated bulk 
precursor chemicals. Furthermore, many countries have simply been 
reluctant to share information regarding their trade in these 
substances, because much of the data is commercially sensitive. 
Complicating matters further, in some countries, these chemicals are 
regulated by health officials, rather than law enforcement agencies.
    Given these challenges, we have found that seeking voluntary 
cooperation, based on mutual benefit, is the best way to obtain 
information on the trade in precursor chemicals beyond what is required 
by the convention. The U.S. Drug Enforcement Administration (DEA) has 
been successful in this regard. DEA works with its international drug 
law enforcement and regulatory partners to target organizations 
involved in the trafficking of these essential precursor chemicals. By 
promoting voluntary cooperation between law enforcement entities, 
pursuant to joint investigations, DEA has been able to monitor some 
suspect shipments to detect and prevent the diversion of chemicals for 
illicit uses.
    DEA also works with foreign law enforcement and regulatory 
counterparts through Project Prism, an international initiative 
supported by the International Narcotics Control Board (INCB). Project 
Prism brings together relevant institutions and experts from member 
states in order to assist governments in developing and implementing 
operating procedures to control and more effectively monitor the trade 
in precursor chemicals. Project Prism also collects information on pre-
export notifications to monitor shipments of the essential precursor 
chemicals used to produce methamphetamine and other synthetic drugs.
    Beyond these established mechanisms to ensure that chemical imports 
are in line with legitimate requirements, the Department of State, DEA, 
and the Office of National Drug Control Policy (ONDCP) are working to 
elevate the threat of methamphetamine in international fora and in 
bilateral relations. In March, a U.S.-sponsored resolution entitled 
Strengthening Systems for Control of Precursor Chemicals Used in the 
Manufacture of Synthetic Drugs was adopted by consensus at the 49th 
U.N. Commission on Narcotic Drugs (CND).\2\ This resolution 
specifically requests countries to provide the INCB with annual 
estimates of their legitimate requirements for PMK (a precursor for 
Ecstasy), pseudoephedrine, ephedrine, and phenyl-2-propanone (P2P), as 
well as the pharmaceutical preparations containing these substances. 
The resolution also requests countries to permit the INCB to share such 
information with concerned law enforcement and regulatory agencies. In 
addition, the INCB has since agreed to publish the data collected on 
legitimate requirements, which will allow governments to track any 
spikes in imports, a possible signal of illegal diversion.
---------------------------------------------------------------------------
    \2\ The U.N. Commission on Narcotic Drugs is the central policy-
making body within the United Nations system dealing with drug-related 
matters.
---------------------------------------------------------------------------
    The resolution also urges countries to continue to provide to the 
INCB--subject to their national legislation and taking care not to 
impede legitimate international commerce--information on all shipments 
of these substances, including pharmaceutical preparations containing 
them. Finally, the resolution requests that countries grant permission 
to the INCB to share the shipment information on these consignments 
with concerned law enforcement and regulatory authorities to prevent or 
interdict diverted shipments.
    To promote the full implementation of this resolution, the 
Department of State intends to contribute $700,000 in fiscal year 2006 
funds, double our fiscal year 2005 contribution, to help fund the 
INCB's activities. While we consider the adoption of our CND resolution 
an important first step, we will continue to encourage countries to 
actively provide information to the INCB and support its expanding 
role. The Department of State, DEA, and ONDCP will also work to 
identify new mechanisms that might promote the further exchange of 
information and expertise pertinent to the control of methamphetamine 
and other synthetics.
    Finally, the Department of State also works through the Inter-
American Drug Abuse Control Commission (CICAD), to evaluate the use of 
precursor chemicals and assist countries in strengthening controls. 
Many nations in the Western Hemisphere still lack the capacity to 
distinguish between the legitimate international trade in precursor 
chemicals and pharmaceuticals, and any excess production that is being 
diverted for illicit use. Therefore, the United States, through its 
work with CICAD, has assisted in the development of model regulations, 
information-sharing mechanisms, and guides and reference tools for the 
control of chemicals.
                        cooperation with mexico
    Early in my tenure I visited Mexico and met with many officials who 
were increasingly concerned about Mexico's own problem with 
methamphetamine abuse and addiction. Methamphetamine is a common 
challenge, as the drug is now harming communities in Mexico along 
traditional drug trafficking routes, which is an inevitable part of the 
drug business.
    It is likely that methamphetamine production has steadily migrated 
into Mexico, because production in the United States and Canada has 
declined due to stricter regulations and enhanced law enforcement 
efforts. Today, Mexican drug trafficking organizations now produce and 
traffic a large percentage of the methamphetamine consumed in the 
United States. They also control superlabs, a laboratory capable of 
producing 10 pounds or more of methamphetamine within a single 
production cycle, located throughout Mexico and California. These same 
Mexican criminal organizations control most mid-level and retail 
methamphetamine distribution in the Pacific, Southwest, and west-
central regions of the United States, as well as much of the 
distribution in the Great Lakes and Southeast regions. It is also 
likely that these organizations are capitalizing on their huge 
resources and existing smuggling and distribution networks to traffic 
methamphetamine into the United States. However, Mexico is increasingly 
aware of its own methamphetamine problem and is beginning to make 
progress in limiting imports of the essential chemicals used to produce 
methamphetamine.
    Between 2002 and 2004, Mexico saw a remarkable 140 percent increase 
in its imports of pseudoephedrine and ephedrine, indicating a strong 
likelihood of illegal diversion. Recognizing that these imports far 
exceeded legitimate demand, Mexico enacted a series of regulations and 
policies to restrict imports and better regulate the sale of precursor 
chemicals. For instance, between 2004 and 2005, the Mexican Government 
banned pseudoephedrine imports of over 3 tons and restricted the 
importation of pseudoephedrine to only drug companies. In order to 
further prevent the illegal diversion of these chemicals, Mexico 
restricted the sale of pseudoephedrine-based products to only licensed 
pharmacies, restricted the amount that can be purchased by an 
individual, and instituted a policy that requires all shipments of 
pseudoephedrine to be transported in police-escorted armored vehicles 
equipped with GPS tracking systems. In 2005, the result of these import 
restrictions and domestic regulations was a 40 percent reduction of 
legitimate imports and this year the Government of Mexico is committed 
to reducing imports even further. However, the threat of illegal 
smuggling of precursor chemicals and pharmaceutical preparations from 
third countries into Mexico will continue to be a challenge.
    To counter illegal smuggling and methamphetamine production, the 
State Department works closely with the Government of Mexico on a wide 
range of counterdrug, law enforcement, and border security initiatives, 
and provides assistance and training that specifically targets 
methamphetamine. For instance, we are supporting the enhancement of a 
Sensitive Investigations Unit dedicated to targeting criminal groups 
involved in methamphetamine production and trafficking. Working with 
DEA we are assisting in the establishment of specialized Mexican 
clandestine laboratory response teams to target organizations involved 
in the operation of clandestine methamphetamine labs and are providing 
training for a select group of Mexican authorities to improve 
prosecutions in chemical control and synthetic drug cases. In 
cooperation with DEA, we provided Mexico with a new mobile laboratory 
vehicle equipped with specialized equipment to safely locate and 
dismantle methamphetamine labs. We have also refurbished and donated 
eight additional used laboratory vehicles to Mexican law enforcement.
    In addition, the Department continues to provide basic training and 
technical assistance to Mexican chemical control agencies in order to 
promote comprehensive chemical control projects. Together with UNODC, 
we have also supported a national computer data system that permits the 
Government of Mexico to monitor the importation and movement of 
chemicals used for methamphetamine production at 17 sites throughout 
the country.
    Along with these methamphetamine-specific initiatives, we will 
continue ongoing programs that directly confront methamphetamine 
trafficking, including: Targeting international crime along our common 
border, enhancing Mexican law enforcement's ability to disrupt the 
international drug trade, and continuing cooperation and coordination 
between the law enforcement agencies of our two countries.
    Currently, the interagency is in the process of finalizing the 
implementation strategy for the National Southwest Border 
Counternarcotics Strategy that has identified key strategic objectives 
and provide specific recommendations to address the illicit narcotics 
threat and significantly improve overall interdiction efforts along the 
southwest border. This strategy reflects the Department of State's 
long-range objective to strengthen the Government of Mexico's law 
enforcement capacity.
                        east and southeast asia
    While most of the Department of State's efforts to curb 
methamphetamine production, trafficking, and abuse concentrate on 
international precursor chemical control and cooperation with Mexico, 
we also have smaller programs in Asia, where 60 percent of the world's 
ATS users live (most of whom are methamphetamine users in East and 
Southeast Asia). The scope of the problem in Asia is quite troubling. 
For example, methamphetamine is by far the most commonly abused drug in 
Thailand. Japan has an estimated 600,000 addicts and between one and 
three million ``casual'' users nationwide. And in the Philippines, 
statistics from rehabilitation centers show that 84 percent of patients 
list methamphetamine as their drug of choice.
    While the United States is not the destination market for these 
narcotics, Asia produces the majority of the world's ATS to feed 
growing demand in Oceana and East and Southeast Asia. To help stem 
production, trafficking, and abuse in East and Southeast Asia, the 
Department of State has supported bilateral and multilateral efforts. 
We have provided funding to the ASEAN and China Cooperative Operations 
in Response to Dangerous Drugs (ACCORD) program to combat drug 
production, trafficking, and abuse, with a particular focus on ATS. We 
have also provided funding to Indonesia and the Philippines for DEA law 
enforcement training, including: Basic drug investigations, chemical 
control, and clandestine laboratory training. Finally, the Department 
of State has provided support for demand reduction and treatment 
programs in Laos, Thailand, Vietnam, Cambodia, and elsewhere in 
Southeast Asia. Demand reduction programs like these and others have 
been proven highly effective throughout the world and can be 
implemented through correctional systems, schools, religious 
institutions, or even civil society groups.
implementing the international provisions of the combat methamphetamine 
                              epidemic act
    The Department of State has begun taking steps to implement the 
international provisions of the Combat Methamphetamine Epidemic Act 
(CMEA). Beginning on March 1, 2007, our annual INCSR will include a new 
section reporting on the top five exporters of methamphetamine's 
precursor chemicals and pharmaceutical preparations containing them, as 
well as the top five importers of these chemicals with the highest 
rates of diversion. After this report is issued, the President will 
then determine if the identified countries are ``cooperating fully'' 
with the United States or taking adequate measures on their own to 
address the production and trafficking of illegal drugs. Shortly after 
the INCSR is submitted to Congress, the Department of State will then 
issue a separate report on the countries that were not ``certified'' by 
the President. This additional report will address steps being taken by 
the country (or countries) to prevent the diversion of precursor 
chemicals and pharmaceutical preparations. The CMEA also requires a 
report on the total worldwide production as compared to the legitimate 
demand for these chemicals. In addition, we are complying with the CMEA 
by continuing our bilateral partnership with Mexico and will be 
reporting on our cooperation on chemical control and law enforcement 
activities with the Government of Mexico.
    Currently, the Department has established an interagency 
International Chemical Assessment Work Group composed of experts from 
the Department of State, ONDCP, DEA, the Department of Justice, the 
U.S. Trade Representative, the intelligence community, and other 
relevant agencies to develop a methodology for how countries will be 
evaluated in accordance with the CMEA. Based on this group's 
recommendations, the Department of State will develop guidance for our 
overseas embassies on how to best report on the information required by 
the CMEA. This process will augment any commercial data that is 
publicly available to determine the top five exporters and top five 
importers with the highest rate of diversion.
                               conclusion
    I would like to close by thanking Congress for its leadership on 
this issue. The CMEA has provided the administration with new tools and 
has focused our efforts on this important issue. I look forward to 
continuing to work with Congress, the U.S. law enforcement community, 
and global partners in meeting and countering this common threat. Thank 
you for the opportunity to testify today and I look forward to 
answering your questions.

    Senator Coleman. Thank you, Ambassador Patterson. Director 
Tandy.

     STATEMENT OF HON. KAREN P. TANDY, ADMINISTRATOR, DRUG 
           ENFORCEMENT ADMINISTRATION, WASHINGTON, DC

    Ms. Tandy. Chairman Hagel and Chairman Coleman, thank you 
very much for the opportunity for the DEA to discuss with you 
today what we are doing to combat international methamphetamine 
trafficking. This hearing highlights that we need to be 
concerned about more than what is happening in our own 
backyard, and recognize that with methamphetamine, our backyard 
has become the globe. To fight meth in such places as Nebraska 
and Minnesota, we have to go to the far corners of the world to 
places such as Mexico, Hong Kong, and India.
    Methamphetamine trafficking, and the movement of its 
precursor chemicals are an increasing global threat. According 
to a recent report by the United Nations Office on Drugs and 
Crime, more than 26 million people worldwide use amphetamines, 
largely, methamphetamine, which is more than the worldwide 
users of heroin and cocaine combined. We're seeing meth 
production spread around the world. In Canada, for example, the 
number of meth labs seized there has increased from 12 in the 
year 2000, to 41 in 2004, which was a 200 percent plus 
increase. And these labs are larger and more sophisticated than 
in the past.
    Last November, one of the three meth labs that had the 
largest potential production capacity in the world, was seized 
in Indonesia. Further, more countries than ever are part of the 
meth chemical movement chain. Because of the law enforcement 
successes that we've had in Hong Kong and Mexico, in 
identifying and stopping precursor chemical shipments, we are 
now seeing chemicals moving from India and China and being 
rerouted through new places such as Egypt and South Africa 
before going to Mexico. And in a more disturbing trend, we've 
begun seeing Asian-organized crime groups in Canada selling 
tens of thousands of pills that look like, and were marketed 
as, Ecstasy, but instead, were 100 percent methamphetamine. 
Those meth pills are now turning up in the United States. And 
if this Ecstasy bait and switch marketing trend continues, we 
will see a new host of unwitting meth addicts at potentially 
much younger ages.
    Closer to home, we have good news in our fight against meth 
as this committee has heard and is familiar with. In just 1 
year of tough State legislation, we've seen the mom-and-pop 
meth labs slashed 40 percent nationally, and that downward 
trend should continue across the country. Between the new State 
laws and the passage of the Combat Meth Act by the United 
States Congress, we have the foundation in place to prevent 
America from becoming a toxic waste dump and saving thousands 
of innocent children from contamination. To protect even more 
innocent citizens, DEA is creating for the first time, a 
national listing on our Web site of the addresses of properties 
in which meth labs or chemical dump sites have been found. This 
is a public service alert so that innocent citizens will not be 
victimized. We expect the public list to be available on the 
Web site this fall.
    Today, about 20 percent of the meth consumed in America is 
made here. The balance is manufactured and distributed by 
Mexican organizations operating on both sides of the border. 
Certainly the main share is in Mexico, but it is also in the 
United States. To combat that 80 percent, just a month ago, 
Attorney General Gonzales and Mexico's Attorney General Cabeza 
de Vaca, stood together for the first time in history to 
announce a real plan to tackle Mexican meth by both of our 
countries.
    Together, DEA and our Mexican counterparts are setting up 
specialized meth enforcement teams in both countries. We are 
jointly targeting the most wanted meth traffickers based on 
shared intelligence. DEA has donated eight clandestine lab 
trucks to Mexican law enforcement, and we are even exchanging 
our personnel, our chemical regulatory experts between the two 
countries for the first time. Already, DEA has established new 
dedicated meth task forces along the southwest border. And 
additionally, with the time that we have saved from 40 percent 
fewer small toxic labs and 87 percent fewer superlabs in the 
United States, we've expanded the focus of our own clan lab 
teams across the country to target and shut down the networks 
and domestic supply lines for those organizations trafficking 
Mexican meth.
    This committee knows well that a critical part of fighting 
meth is fighting the chemicals used to make it. Simply put, if 
there are no chemicals, there are no drugs. DEA is working 
closely with our international partners, as you've heard, to 
monitor trade in precursor chemicals and prevent them from 
getting into the hands of criminal manufacturers. One hundred 
twenty-six countries now participate in DEA's Project Prism 
which uses pre-export notifications to monitor shipments of 
ephedrine, pseudoephedrine, and other such chemicals.
    In just 3 years, more than 5 metric tons of 60 milligram 
tablets were seized in the United States, Mexico, and Panama. 
Had that not been seized, the pseudoephedrine easily could have 
produced more than 3 metric tons of finished methamphetamine.
    Additionally, as you have heard, the United Nations 
Commission on Drugs passed the U.S. Government-sponsored 
resolution that, for the first time, would provide for broader 
tracking of worldwide shipments of precursor chemicals. That 
resolution, which the State Department led the effort on in 
Vienna, includes the previously unreportable pharmaceutical 
preparations. I say unreportable, because under the 1988 Vienna 
Convention, pharmaceutical preparations were not included. And 
the resolution calls for more information sharing with affected 
countries beyond just those at the direct shipment point.
    Other good news is that our friends in Mexico have set new 
quotas on the importation of pseudoephedrine, and they have 
reduced their legal imports this year by 53 percent--from 150 
tons, to 70 tons. But the meth trafficking problem is ever 
evolving, and we are anticipating new trends. A few years ago, 
DEA enforcement efforts, such as Operations Mountain Express 
and its series of three of those, including Operation Northern 
Star, essentially stopped Canadian pseudoephedrine from 
reaching superlabs in the United States. It is because of those 
four series of operations, that we saw the 87 percent decrease 
in domestic superlab seizures from 2001 to 2005. But when we 
start to see the results of the new strategy with Mexico, what 
we are concerned about is that traffickers will feel the pinch 
of those positive results, and could easily shift back to 
Canada. Especially because entrenched Asian organized crime 
gangs in that nation have demonstrated the capacity and have 
built the distribution networks necessary to take over 
methamphetamine production and sales. This means that our 
success in Mexico, when that occurs, should only make us more 
vigilant on the broader international front.
    The meth problem, as I illustrated earlier, is much bigger 
than just Mexico, and it requires the global effort that we've 
all undertaken to combat it at every turn. As we speak, the 
brave men and women of the Drug Enforcement Administration are 
fighting meth around the globe and working to move meth's 
chemical ingredients even farther from the hands of 
manufacturers. DEA will continue to work with our international 
partners and build those relationships so that, together, we 
can wage the battle both at home and abroad to protect our 
Nation from this dangerous drug.
    Thank you very much.
    [The written statement of Ms. Tandy follows:]

    Prepared Statement of Hon. Karen P. Tandy, Administrator, Drug 
   Enforcement Administration, Department of Justice, Washington, DC

                              introduction
    Chairman Hagel, Chairman Coleman, Senator Sarbanes, Senator Dodd, 
and distinguished members of the Senate Foreign Relations Committee, on 
behalf of the Drug Enforcement Administration (DEA), I appreciate your 
invitation to testify today regarding DEA's efforts to combat the 
international trafficking of methamphetamine.
                                overview
    Methamphetamine poses a unique and significant threat to the United 
States. Methamphetamine is unique in that it is a synthetic drug, it is 
not dependent on cultivation of a crop, its production requires no 
specialized skill or training, and its precursor chemicals have 
historically been easy to obtain and inexpensive to purchase. These 
factors have contributed to methamphetamine's rapid sweep across our 
Nation. This drug is a threat because it is powerfully addictive to 
those who use it, and because it can cause harm even to those who are 
not involved in its use or distribution. Those who suffer the ``second 
hand'' effects of methamphetamine include the victims of 
methamphetamine-related crimes, innocent children whose homes have been 
turned into clandestine lab sites, law enforcement officers that work 
with the hazardous materials found at lab sites, and the environment 
from the 5 to 6 pounds of toxic waste produced for every pound of 
methamphetamine cooked. Methamphetamine has not only left a mark on the 
United States, but continues to be a significant problem in Asia and is 
increasingly becoming a problem in other parts of the world.
    Methamphetamine also presents a dual threat to law enforcement 
authorities. They must simultaneously combat both small toxic labs 
(STLs), which have spread across much of our Nation, and ``superlabs,'' 
which are primarily controlled by Mexican drug trafficking 
organizations and are supplying the majority of the methamphetamine 
consumed in this country. The critical tool in combating both of these 
types of labs is the control of methamphetamine's primary precursor 
chemicals: ephedrine, pseudoephedrine, and phenylpropanolamine.\1\
---------------------------------------------------------------------------
    \1\ Phenylpropanolamine is a precursor chemical for amphetamine, 
rather than methamphetamine, although the production process is 
essentially identical.
---------------------------------------------------------------------------
    In response to the threat posed by methamphetamine, the DEA 
continues to aggressively combat this drug through our domestic and 
international enforcement efforts. Domestically, law enforcement 
efforts have been aided by State and Federal legislation placing 
restrictions on the sale of methamphetamine's precursor chemicals. Of 
note, the recent passage of the reauthorization of the USA PATRIOT Act 
(particularly Title VII, the ``Combat Methamphetamine Epidemic Act of 
2005'') has provided important additional tools to enhance law 
enforcement efforts, both domestically and internationally.
    The DEA, through our law enforcement partnerships across the 
country and around the world, has initiated successful investigations 
that have disrupted and dismantled significant methamphetamine 
trafficking organizations. We also have taken an active role in 
fighting the diversion of methamphetamine's key ingredients, ephedrine 
and pseudoephedrine. These efforts, through both enforcement and 
international agreements, have resulted in a substantial reduction in 
the amount of precursor chemicals entering the United States. However, 
with this success, we have seen an increase in the flow of these 
precursor chemicals to Mexico, and an increase in the trafficking of 
finished meth across the southwest border into the United States.
    In addition, the Department of Justice, with the help of Federal, 
State, and local law enforcement, has been committed to prosecuting 
methamphetamine traffickers. Over the past 5 years, data shows there 
has been an increase in the number of methamphetamine defendants 
charged by U.S. Attorneys' offices and sentenced by U.S. District 
Courts. U.S. Attorney case data shows a 34 percent increase \2\ in the 
number of defendants charged over the past 5 years. Data from the 
Sentencing Commission also shows a similar significant increase, 
finding a 42 percent increase \3\ in the number of defendants sentenced 
over the past 5 years.
---------------------------------------------------------------------------
    \2\ There were 5,120 defendants charged in fiscal year 2005, 
compared to 3,815 defendants charged in fiscal year 2001.
    \3\ There were 4,839 defendants sentenced in fiscal year 2005 
(including both Pre-Booker and Post-Booker cases), compared to 3,414 
defendants sentenced in fiscal year 2001.
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                   methamphetamine--threat assessment
    Methamphetamine consumed in the United States originates from two 
general sources, controlled by two distinct groups. Most of the 
methamphetamine consumed in the United States is produced by Mexico-
based and California-based Mexican traffickers. These drug trafficking 
organizations control ``superlabs'' (a laboratory capable of producing 
10 pounds or more of methamphetamine within a single production cycle), 
and have distribution networks throughout the United States, as well as 
access to drug transportation routes to smuggle the methamphetamine 
from Mexico into the United States. Current drug lab seizure data 
suggests that roughly 80 percent of the methamphetamine used in the 
United States comes from these larger labs, which are increasingly 
found in Mexico.
    These same Mexican criminal organizations control most mid-level 
and retail methamphetamine distribution in the Pacific, southwest, and 
west-central regions of the United States, as well as much of the 
distribution in the Great Lakes and southeast regions.
    The second source for methamphetamine used in this country comes 
from small toxic labs (STLs). These STLs produce relatively small 
amounts of methamphetamine and are generally not affiliated with major 
trafficking organizations. Currently, DEA estimates that STLs are 
responsible for approximately 20 percent of the methamphetamine 
consumed in this country. Initially found only in most Western States, 
over the past 10 years there has been an eastward expansion of STLs 
across the United States. A number of factors have served as catalysts 
for the spread, including the presence of ``recipes'' easily accessible 
over the Internet, ingredients needed to produce methamphetamine which 
were available in many over-the-counter cold medications and common 
household products found at retail stores, coupled with the relatively 
simple process involved to manufacture methamphetamine. Today, thanks 
in large part to the legislative restrictions placed on the sales of 
methamphetamine precursor chemicals, the DEA expects to see a 
significant decrease in the number of STLs found this year.
    The manufacture and use of methamphetamine is not a problem 
confined to the United States, but one that has spread to many regions 
of the world. In fact, the International Narcotics Control Board (INCB) 
noted in its 2005 report ``Precursors and Chemicals Frequently Used in 
the Illicit Manufacture of Narcotic Drugs and Psychotropic 
Substances,'' that the illicit manufacture of methamphetamine is 
spreading throughout the world at an alarming rate. Globally, the 
number of users of amphetamine-type stimulants--a majority of which use 
methamphetamine--outnumber cocaine and heroin users combined.
    Specifically, the INCB indicated that the illicit manufacture of 
amphetamine-type stimulants (ATS),\4\ and of methamphetamine in 
particular, is spreading in North America and Southeast Asia, but also 
increasingly to other areas such as Africa, Eastern Europe, and 
Oceania. There are an estimated 26.2 million ATS users in the world, 
compared to an estimated 13.7 million cocaine users and 10.6 heroin 
users. The report further stated that the spread of methamphetamine is 
due to the simple manufacturing process and the availability of the 
required precursors.
---------------------------------------------------------------------------
    \4\ In Europe and Asia the term ``amphetamine-type stimulants'' is 
used rather than a specific reference to methamphetamine. The term ATS 
includes the following: amphetamine, methamphetamine, and MDMA 
(Ecstasy), and its analogues. This term is also used by the United 
Nations.
---------------------------------------------------------------------------
                     the dea's enforcement efforts
    The DEA believes that international cooperation is the key in 
combating methamphetamine. Some of the most significant and successful 
international efforts to combat methamphetamine involve a series of 
enforcement initiatives worked jointly between law enforcement in the 
United States and Canada from the late 1990s into 2003. These 
enforcement initiatives, known as Operations Mountain Express I, II and 
III, and Operation Northern Star, were principally responsible for the 
significant reduction in the amount of pseudoephedrine entering the 
United States for use in Mexican-controlled superlabs. In turn, most of 
the superlabs and the pseudoephedrine needed for them moved from the 
United States to Mexico.
    DEA's longstanding enforcement efforts against methamphetamine 
include utilizing the Consolidated Priority Organization Targets 
(CPOTs) List, the Priority Target Organization (PTO) program, and the 
Organized Crime Drug Enforcement Task Force (OCDETF) program. The 
programs all provide assistance in identifying and targeting the most 
significant methamphetamine trafficking organizations, with the intent 
to disrupt and dismantle the organizations.
    The fiscal year 2006 CPOT list has identified 8 of the 46 
designated organizations as being engaged in methamphetamine 
trafficking--7 of these 8 are Mexican CPOT targets. At the end of the 
second quarter of fiscal year 2006, the DEA had 149 active PTO 
investigations linked to those 7 CPOTs, of which 28 were active PTO 
investigations with methamphetamine as the primary type of drug. Since 
the inception of the PTO program in 2001, the DEA has either disrupted 
or dismantled more than 460 PTOs, where methamphetamine was the primary 
drug involved.
    To enhance our international efforts to combat this drug, DEA has 
assigned diversion investigators (DIs) to a number of our foreign 
offices. These DIs, through their knowledge of pharmaceuticals and 
chemicals, play a critical role in preventing the diversion of List I 
chemicals which are used in the manufacture of methamphetamine and of 
pharmaceutical controlled substances. The DIs coordinate with foreign 
host country counterparts to establish effective systems of chemical 
controls and to ensure that customers in foreign countries receiving 
U.S. exports of pharmaceutically controlled substances are in fact 
legitimate companies. Foreign-based diversion investigators were 
intricately involved in two DEA operations in Hong Kong and Mexico run 
under the auspices of Project Prism that resulted in significant 
seizures of pseudoephedrine.
    In addition to these DEA-specific activities, the DEA works 
internationally though a variety of existing international efforts. 
Project Prism is an international initiative aimed at assisting 
governments in developing and implementing operating procedures to 
control and more effectively monitor trade in ATS precursors to prevent 
their diversion. There are currently 95 countries and 5 international 
organizations participating in this initiative. Since March 2004, 
Project Prism has used pre-export notifications to monitor shipments of 
ephedrine, pseudoephedrine, pharmaceutical preparations containing 
ephedrine or pseudoephedrine, phenyl-2-propanone, and 3,4-
methylenedioxyphenyl-2-propanone. Under Project Prism (through the end 
of 2005), over 5 metric tons of 60 milligram tablets of pseudoephedrine 
were seized in the United States, Mexico, and Panama. These 
pseudoephedrine tablets could have produced over 3 metric tons of 
methamphetamine (at a 60 percent conversion rate).
    The fiscal year 2006 Department of Justice Appropriations Act 
directs the Attorney General to establish a Methamphetamine Task Force 
(MTF) within DEA. The purpose of the Task Force is to improve and 
target the Federal Government's policies on production and trafficking 
of methamphetamine. The MTF is comprised of three DEA special agents, 
two diversion investigators, three attorneys, and one program analyst. 
These are veteran personnel with extensive experience and knowledge in 
the field who will collect and analyze investigative and intelligence 
information from numerous sources. Their analysis will focus on trends 
in chemical trafficking and manufacturing methods, changes in 
trafficking routes and patterns, and regional abuse and distribution 
patterns. While DEA continues to aggressively target the flow of 
foreign and domestic precursor sources and smuggling efforts, to 
include methods of financing, the MTF will review DEA enforcement 
efforts with an eye toward identifying new trends. In addition, the MTF 
will be involved in chemical and equipment sources, methods of 
procurement, and clandestine laboratory clean-up issues. Another aspect 
of the MTF's duties will be making recommendations addressing issues 
that are identified from their analysis. These recommendations 
ultimately will be forwarded to the National Synthetic Drugs 
Interagency Working Group for review and action.
    The DEA also continues its work to ensure that only legitimate 
businesses with adequate chemical controls are licensed to handle bulk 
pseudoephedrine and ephedrine in the United States. In the past 7 
years, over 2,000 chemical registrants have been denied, surrendered, 
or withdrawn their registrations or applications as a result of DEA 
investigations. We investigated the adequacy of their security 
safeguards to prevent the diversion of chemicals to the illicit market, 
and audited their recordkeeping to ensure compliance with Federal 
regulations. In addition to an initial on-site inspection, DEA 
diversion investigators, between 2001 and 2005, have physically 
reinspected nearly 75 percent of the 3,000 chemical registrants at 
their place of business.
            the international control of precursor chemicals
    With the increase in the diversion of precursor chemicals and the 
corresponding need for closer monitoring of chemical shipments, certain 
foreign governments in chemical source countries require a permit or 
written authorization from an importing country's government stating 
the legitimacy of the transaction. Under Federal law, the DEA must be 
notified only if an ephedrine or pseudoephedrine product is destined 
for, or will transit through, the United States. But the legal and 
regulatory tools to limit imports and after-import distribution were 
relatively insufficient. Moreover, the prevailing interpretation of the 
1988 United Nation's Convention that controls chemicals exempts most 
finished pharmaceutical products containing pseudoephedrine in 
combination with other ingredients by allowing them to be shipped in 
international commerce without prenotification--a loophole that 
continues to be exploited by drug traffickers. These pharmaceutical 
preparations contain pseudoephedrine and are used in the manufacture of 
methamphetamine. Since modification of the 1988 U.N. Convention is 
unrealistic, the United States, along with a number of our 
counterparts, has been working to gain international support for 
voluntary international cooperation to prenotify shipments of these 
products. These efforts are being pursued by the United States through 
the drug control commission of the Organization of American States 
(CICAD), through the U.N. Commission on Narcotic Drugs, and bilaterally 
with selected nations.
    Until passage of the Combat Methamphetamine Epidemic Act of 2005, 
United States law did not involve a permit-based system. Any company 
that imported or exported ephedrine, pseudoephedrine, or 
phenylpropanolamine was required to notify the DEA of the transaction. 
This was not a permit for the transaction but rather a declaration that 
the transaction would take place. In other countries, companies must 
obtain a permit before importing or exporting regulated chemicals.
    The 1988 U.N. Convention recommended that countries implement a 
permit system for chemical imports and exports, (paragraph 8(b)(iii)), 
and some countries (e.g., Germany, China, and India) have implemented 
this system. Other countries consider chemicals such as pseudoephedrine 
to be pharmaceutical drugs and therefore issue permits for their import 
and export.
    The Combat Methamphetamine Epidemic Act makes it unlawful to import 
into the United States ephedrine, pseudoephedrine, and 
phenylpropanolamine except as DEA, by delegation, finds to be necessary 
to provide for medical, scientific, or other legitimate purposes. DEA 
is working to implement this system through the promulgation of 
regulations. This system, in conjunction with a system of quotas for 
ephedrine, pseudoephedrine, and phenylpropanolamine also established by 
the Combat Methamphetamine Epidemic Act of 2005, will provide greater 
control over the importation and distribution of these three chemicals.
                       international cooperation
    International cooperation is key in combating methamphetamine and 
its precursor chemicals.\5\ The DEA has had the lead for the United 
States in working with our Mexican counterparts to combat 
methamphetamine. This cooperative effort extends into several areas of 
support. Since 2001, the DEA has provided training to our Mexican 
counterparts regarding clandestine laboratories, chemical training, and 
prosecution. Training has been provided to officials who regulate 
precursor chemicals and pharmaceuticals at the state and Federal level 
within Mexico, as well as agents from the Agencia Federal de 
Investigaciones (AFI) and a number of prosecutors within the Mexican 
Organized Crime Unit (SIEDO). Over 450 students have received training 
through this cooperative effort.
---------------------------------------------------------------------------
    \5\  One of the most significant and successful international 
efforts to combat methamphetamine's precursor chemicals involved a 
series of enforcement initiatives worked jointly between law 
enforcement in the United States and Canada from the late 1990s into 
2003. These enforcement initiatives, known as Operations Mountain 
Express I, II and III, and Operation Northern Star, were principally 
responsible for the significant reduction in the amount of 
pseudoephedrine entering the United States for use in Mexican 
controlled superlabs. In turn, most of these superlabs and the 
pseudoephedrine required for the labs to produce methamphetamine moved 
from the United States to Mexico.
---------------------------------------------------------------------------
    In addition, the United States and Mexico have jointly obtained a 
commitment from Hong Kong not to ship chemicals to the United States, 
Mexico, or Panama until receiving an import permit or equivalent 
documentation and giving prior notification to the receiving country 
before shipment. If suspect shipments can be identified before they 
arrive in Mexico, it is easier for law enforcement to take effective 
action by either attempting to seize the shipment or by conducting a 
controlled delivery of the chemicals in order to identify the 
traffickers and the shipment's ultimate destination.
    Mexico has independently implemented several important voluntary 
controls on pseudoephedrine in cooperation with the industry, and is 
considering others. Those implemented now, or planned soon, include 
limiting retail sales to pharmacies; limiting sales quantities to three 
boxes of approximately 9 grams total; and distributors voluntarily 
agreeing to limit sales to customers with appropriate government 
registrations (pharmacies) and with legitimate commercial needs.
    Additionally, Mexico recently imposed a policy limiting imports of 
pseudoephedrine and ephedrine to manufacturers only, and limits 
importers to shipments of no more than 3 metric tons at a time. 
Wholesale distributors are barred from importing raw material 
pseudoephedrine and ephedrine. These importation restrictions have been 
coupled with recently imposed import quotas tied to estimates of 
national needs, which are based on extrapolations from a large 
population sample. Through a study, The Federal Commission for the 
Protection against Sanitary Risk (COFEPRIS) revealed that there is an 
excess of imports of pseudoephedrine products of approximately 60 to 
100 metric tons. This study showed that the highest peak of respiratory 
diseases in Mexico was registered in 1999 with 29 million cases. That 
year, pseudoephedrine imports accounted for approximately 55,000 
kilograms. In 2003, there was a slight decrease of reported respiratory 
diseases to approximately 27 million cases; however pseudoephedrine 
imports increased to 159,000 kilograms. Equally, in 2004 there were 28 
million respiratory cases compared with 216,000 kilograms of 
pseudoephedrine imported. COFEPRIS determined that these imports were 
not related to the epidemiological index. The DEA has been advised that 
it is the Government of Mexico's intention to reduce pseudoephedrine 
and ephedrine importation permits to 70 tons in 2006. These permits are 
to be split evenly among the Mexican-based pharmaceutical manufacturing 
companies. This is a significant reduction from the 2005 
pseudoephedrine and ephedrine importation levels. Mexican officials 
have further advised that this 70 ton limit also applies to combination 
products containing pseudoephedrine and/or ephedrine.
    Mexico's efforts to control methamphetamine precursor chemicals 
have not been limited to regulatory actions. An example of Mexico's 
pseudoephedrine interdiction efforts occurred during December 2005, 
when approximately 3.2 metric tons (approx. 5.1 million pseudoephedrine 
combination tablets) of pseudoephedrine were seized by Mexican 
authorities in the Port of Manzanillo, Mexico. The tablets were 
concealed within a shipment of electric fans, which were packaged in 
approximately 1,260 boxes. During the follow-up joint investigation 
conducted by DEA and the Hong Kong Customs and Excise Department, 
officials disclosed that the shipment of electric fans containing the 
tablets originated in mainland China and transited one of the mainland 
China/Hong Kong border crossings before being loaded on a marine vessel 
en route to Mexico.
    In addition to these efforts with Mexico, the DEA, operating under 
the auspices of Project Prism, hosted a meeting in February in Hong 
Kong for law enforcement and regulatory officials from countries that 
produce ATS precursor chemicals. The purpose of this meeting was to 
develop and enhance systems for voluntary cooperation in data 
collection to build a consensus toward exchange of information on 
pharmaceutical preparations containing ephedrine and pseudoephedrine as 
well as bulk precursors. This was the first time that almost all of the 
countries that produce these chemicals and those countries affected by 
methamphetamine have sat down together to discuss this problem.
    While there were some differences of opinion as to the manner and 
channels in which information regarding the licit trade in these 
substances should be exchanged, the communication that occurred between 
countries attending the open forum meeting was encouraging. Although we 
were disappointed that China chose not to send a delegation, the DEA, 
in cooperation with the Department of State, will continue discussions 
with all involved countries to determine the worldwide production of 
these chemicals, identify producers and distributors, gain better 
insight as to what form (bulk versus tablets) the chemicals are 
manufactured and distributed at various stages, and learn where the 
chemicals are destined. In fact, during the week of June 5, a 
contingent from China came to DEA headquarters and met with high-level 
officials in part, to discuss the many aspects involved in the 
importation of these precursor chemicals.
    The Hong Kong meeting also helped to lay a foundation for the 
discussions and negotiation among concerned governments which led to 
the passage of a resolution at the 49th Commission on Narcotic Drugs 
(CND) in Vienna, Austria, in March of this year. The resolution, 
entitled ``Strengthening Systems for Control of Precursor Chemicals 
Used in the Manufacture of Synthetic Drugs,'' involves the 
methamphetamine precursors previously mentioned, as well as 
preparations containing these substances, and phenyl-2-propanone (P2P) 
as well.
    The resolution, which was adopted by the CND on March 15, 2006, 
calls on U.N. member states to provide to the International Narcotics 
Control Board (INCB) annual estimates of their legitimate requirements 
for these substances, and preparations containing these substances, and 
to ensure that its imports of these substances are commensurate with 
their respective nation's legitimate needs. It is anticipated that the 
legitimate requirements estimates provided to the INCB will be 
published in their annual precursor report, the next of which is 
scheduled to be released in March 2007.
    The resolution also urges countries to continue to provide to the 
INCB, subject to their national legislation and taking care not to 
impede legitimate international commerce, information on all shipments 
of these substances, to include pharmaceutical preparations. Finally, 
the resolution requests countries grant permission to the INCB to share 
the shipment information on these consignments with concerned law 
enforcement and regulatory authorities to prevent or interdict diverted 
shipments. At present, DEA, as a member of the Project Prism task 
force, is working with the task force to come up with an initial 
initiative to address some of our specific concerns regarding the flow 
of these important precursors to the Western Hemisphere.
    While this resolution is an important first step, it will take 
several years to be fully implemented. Its success will depend upon our 
ability to obtain additional information from the INCB, which is 
contingent upon nations providing the information requested pursuant to 
the resolution.
                          recent developments
    At the National Methamphetamine and Chemicals Initiative (NMCI) 
Strategy Conference in Dallas last month, Attorney General Gonzales 
announced important new anti-methamphetamine domestic initiatives as 
well as new partnerships between the United States and Mexico in 
fighting methamphetamine trafficking. Joined by Mexican Attorney 
General, Daniel Cabeza De Vaca, Attorney General Gonzales unveiled 
several Department of Justice-led initiatives aimed at improved 
enforcement, increased law enforcement training, improved information-
sharing, and increasing public awareness.
    Among the United States-Mexico partnership efforts is an agreement 
between DEA and the Government of Mexico to establish specialized 
methamphetamine enforcement teams on both sides of the border. In 
Mexico, these teams will focus on investigating and targeting the most 
wanted Mexican methamphetamine drug trafficking organizations, while 
DEA-led efforts on the United States side will focus on the 
methamphetamine traffickers and organizations transporting and 
distributing the methamphetamine that was produced in Mexico.
    Other initiatives that are part of the United States-Mexico 
partnership include:

   A new DEA and U.S. Customs and Border Protection Service 
        effort to focus on ports of interest within the United States 
        and target suspicious cargo that is likely to be related to 
        methamphetamine trafficking organizations;
   A binational Law Enforcement Working Group that will focus 
        on methamphetamine production and trafficking from both an 
        enforcement and intelligence perspective;
   A DEA and Mexican CENAPI effort to further share 
        intelligence information and continue to develop stronger 
        working relationships. Such collaborative efforts will focus on 
        investigating large-scale meth trafficking organizations that 
        are operating in Mexico and the United States.
   A ``Most Wanted Methamphetamine and Chemical Drug 
        Trafficking Organization List'' jointly developed by DEA and 
        Mexican police. The list will focus bilateral law enforcement 
        efforts on the most significant threats;
   An agreement between the DEA Office of Diversion Control and 
        Mexico's chemical regulatory agency, COFEPRIS, to a personnel 
        exchange in which chemical regulatory experts from within each 
        agency will be embedded within the other's agency for a 
        specific period to observe, learn best practices, and then 
        implement joint strategies complimentary to both regulatory 
        agencies;
   The transfer of eight DEA trucks used in clandestine lab 
        enforcement operations that have been refurbished and donated 
        to Mexico to be used by specialized Mexican methamphetamine 
        enforcement teams; and
   A new DEA-led training effort for nearly 1,000 Mexican 
        police officials to focus on a variety of investigative, 
        enforcement, and regulatory methods related to methamphetamine 
        trafficking which is being funded by the Department of State's 
        (DOS) Bureau for International Narcotics and Law Enforcement 
        Affairs (INL).

    Domestically, as part of this announcement, the DEA is expanding 
the primary focus of our clandestine lab enforcement teams. The 
significant reduction in the number of domestic small toxic labs this 
year, due in large part to recent legislation restricting access to 
methamphetamine precursor chemicals, will allow these teams to expand 
their efforts beyond dismantling methamphetamine labs to also include 
the targeting Mexican methamphetamine trafficking organizations. These 
DEA clandestine lab teams will use their lab expertise to trace 
chemicals, finished methamphetamine, and drug proceeds to drug 
trafficking organizations in the United States and Mexico. These teams 
also will work to identify and dismantle U.S.-based methamphetamine 
transportation and distribution cells.
    Other DEA domestic initiatives include creating a national listing 
on the DEA Web site of the addresses of properties in which 
methamphetamine labs or chemical dumpsites have been found. The 
registry will provide information for owners or renters that a property 
has been used to produce methamphetamine, as a public service alert 
that there may be potential toxic hazards within the property, if not 
rendered safe by clean-up efforts.
    In addition, a new clandestine lab training facility at the DEA 
Academy in Quantico, VA, will be established in the fall of 2006. At 
this facility, DEA will train United States and foreign law enforcement 
officials on the latest techniques in clandestine lab detection, 
enforcement, and safety in a state-of-the-art facility.
    As stated by Attorney General Gonzales at the NMCI conference last 
month, ``These initiatives represent a policy of true mutual 
cooperation that will put methamphetamine use and all its horrors 
firmly on the road to extinction. If we work together, sharing 
resources and intelligence, the law enforcement agencies of both the 
United States and Mexico will be able to better attack the meth problem 
at every stage in the production and distribution chain.''
             new tools in the fight against methamphetamine
    Many states have enacted various types of legislation to control 
the sale of pseudoephedrine. With the recent passage of the Combat 
Methamphetamine Epidemic Elimination Act of 2005, the combination of 
State and Federal legislation has begun to have some effect. Although 
the overall number of STLs in the United States is decreasing, the 
demand for methamphetamine has not diminished. DEA will continue to use 
the additional tools we have been given to address both domestic and 
international components in this battle.
    In an effort to provide further information to America's youth 
about the dangers of methamphetamine, the DEA developed and launched a 
Web site entitled ``justthinktwice.com.'' This Web site is devoted to 
and designed by teenagers to give them the hard facts about 
methamphetamine and other illicit drugs. Through this Web site, the DEA 
is telling teens to ``think twice'' about what they hear from friends, 
popular culture, and adults who advocate drug legalization. Information 
is also provided regarding the harm drugs cause to their health, their 
families, the environment, and to innocent bystanders.
    Internationally, the Combat Methamphetamine Epidemic Act of 2005 
will expand the notice of importation to include all information known 
to the importer on the chain of distribution. If it is determined that 
the importer is refusing to cooperate in providing such information, or 
DEA has concerns about the downstream customer, the DEA may issue an 
order prohibiting the importation of Scheduled Listed Chemical Products 
(SLCP). Further, the Act requires the DOS to identify the five largest 
exporting countries and the five largest importing countries with the 
highest diversion of SLCPs and provide an economic analysis of 
worldwide production as compared to legitimate demand. Combined with 
the other measures of the Act which provide for the domestic regulation 
of precursor chemicals, the Combat Methamphetamine Epidemic Act of 2005 
provides effective new tools to use in the battle against 
methamphetamine.
                               conclusion
    The DEA continues to fight methamphetamine on all fronts. Our 
enforcement efforts are focused on disrupting and dismantling the 
highest level methamphetamine trafficking organizations operating on 
both a domestic and international level. DEA enforcement and diversion 
initiatives involve not just the ``finished product,'' but also the 
precursor chemicals necessary to produce this poison. To further 
enhance our efforts, the DEA has initiated an internal methamphetamine 
task force, which will help coordinate our overall efforts to combat 
this drug.
    As the international threat of methamphetamine spreads, cooperative 
efforts among nations become vital. Cooperative efforts and initiatives 
to combat methamphetamine production and control chemical shipments on 
an international scale are critical to DEA's ability to combat 
methamphetamine trafficking in the United States.
    Thank you for the opportunity to appear before you today to discuss 
this important issue. I will be happy to answer any questions that you 
may have.

    Senator Coleman. Thank you very much, Director Tandy. 
Senator Hagel.
    Senator Hagel. Thank you all three, for your testimony and 
your leadership and efforts to deal with one of our society's 
great scourges. I would address this question to each of you. 
Where have we been most successful at disrupting the 
international production and trafficking of meth? Mr. Walters.
    Mr. Walters. Well, I think, so far as the international 
side, Canada. All these have a similar theme as you heard, it's 
the precursor. Cut off the precursor, you reduce the 
availability. Canada, as Administrator Tandy pointed out, went 
from big supplier--in 2000 they were importing 500 metric tons 
of pseudoephedrine, 2004, 50 metric tons. They got control, we 
changed the web line on that chart of superlabs. That precursor 
that was coming here to fund criminal labs here went down 
dramatically.
    Senator Hagel. Where would you say, and I'll ask each of 
you this second question as well, where were we least 
successful?
    Mr. Walters. So far we have not, I think, been able to see 
the same kind of declines in the meth coming from Mexico. While 
the Mexicans have done some important things, they're now, as 
was also mentioned, I think, reducing legal imports of 
pseudoephedrine as Canada did. We still see supplies coming up 
from Mexico, the organizations have been able to kind of move 
some of the distribution back there. But, as I said, and I 
think we've all indicated, the Mexican Government has been 
uniquely cooperative in this effort and we're hopeful that 
we're going to be able to make progress in that realm too.
    It is a global problem, and we'll have to make sure we 
follow up. But we now have some tools to go to the three supply 
companies, and there are agreements now to track worldwide 
movements, so that if we can make those work, you can't just 
bounce them off of other countries in order to circumvent this. 
Again, it will be possible to move some of the product, but we 
have the problem we do because massive amounts of this product 
are moved. So if we can cut that down by 50 percent, there'll 
be thousands of lives saved.
    Senator Hagel. Secretary Patterson, would you like to add 
anything?
    Secretary Patterson. Mr. Chairman, while I certainly agree 
with Director Walters, we should realize too that Mexico is the 
source, overwhelmingly, the main source for every other illegal 
drug that comes in to this country, opium, cocaine, and 
marijuana. So we shouldn't underestimate the difficulty 
although we've made progress in methamphetamine precursors in 
the past year.
    Senator Hagel. Thank you. Director Tandy.
    Ms. Tandy. As I mentioned in my opening statement, it's all 
about the chemicals. Our greatest success has been where we 
have been able to, as we did with Hong Kong, Mexico, and 
Panama, broker a multilateral agreement where any shipments of 
the chemicals, no matter what form, would be accompanied 
beforehand with notification to the receiving country, in this 
case Mexico or Panama, so that the receiving country could then 
investigate the shipment recipient in their country and 
determine whether they have the legitimate need for the 
precursor chemicals. And then, at that point, deny the 
shipment, if there is no legitimate purpose for the shipment. I 
think the results from that multilateral agreement demonstrate 
the real success to those types of international information 
sharing exchanges and partnerships.
    When that agreement was put in place, and the 
prenotification of shipments followed from that, there were 
seizures of at least 5 metric tons of pseudoephedrine. That 5 
metric tons, the combined seizures, would have produced 
substantial quantities, metric tons, at least 3 metric tons of 
finished meth had they reached their destination. Those 
countries were not required to exchange that information, and I 
think that's critical. In the United Nations' collective body, 
the resolution that was just passed attempted to overcome a 
failing in the 1988 convention. In that convention, 
pseudoephedrine tablets were exempted. So there's no 
requirement for any member of the Vienna Convention to give 
that kind of notification, or indeed, that information to the 
United Nations controlling body.
    The resolution, and the Hong Kong meeting that DEA hosted 
before that, attempted to turn that picture around without 
having to go back and renegotiate the 1988 convention. I have 
to note, the 1988 convention is a very powerful and successful 
convention which the United States is a signatory to, therefore 
it's a treaty for us. There are 176 countries that have 
ratified it since 1988, there are still 16 who have not yet 
completed the ratification which is why we can't go back and 
open the 1988 convention. The resolution that the State 
Department represented the United States in passing in March in 
Vienna, was an attempt to deal with pharmaceutical 
preparations, these pseudoephedrine tablets, if you will; to 
get the countries, through a resolution, to start sharing that 
information more openly with other countries, and most 
importantly, to be required to report it.
    The resolution is a step in that direction, but 
unfortunately, it is voluntary, it is not required. So when you 
ask me where our greatest success is, our greatest success is 
when it gets reported. Our least success, has been 
unfortunately, so far, the lack of mandatory reporting 
requirements for all of these international countries involving 
what is exempt under the Vienna convention, the pseudoephedrine 
tablets.
    Thank you.
    Senator Hagel. Do you believe the last point you made is a 
result of a lack of emphasis, focus of resources as to why you 
aren't doing this?
    Ms. Tandy. I asked that same question to the experts in 
DEA. And we have wonderful experts in DEA. About 10 percent of 
my workforce is located in foreign countries. We have the 
largest foreign law enforcement presence, so we have great 
capacity out there building international partnerships. So I 
asked the question, and I was told that the reason for the 
reluctance, generally speaking, has more to do with the fact 
that this information is more considered trade protected 
information than it is directly an issue involving 
methamphetamine.
    Senator Hagel. Thank you. Secretary Patterson, you alluded 
to this briefly, and this is the question, what have you 
learned about international trafficking organizations from the 
fight against other drugs like cocaine over the years? And I'll 
ask each of you that question. Secretary Patterson.
    Secretary Patterson. We've learned that this is an 
extraordinarily difficult thing to confront. And in Mexico, 
what we're seeing is some specialization of the Mexican cartels 
in meth products, but we're also seeing the traditional Mexican 
trafficking organizations basically expand their inventories 
and their product line and move this meth into the States 
through their established distribution networks. So it's going 
to be extremely hard and the key here, I think, will be to 
strengthen both the 200-mile border, the southwest border with 
the United States and then to also strengthen the border in the 
southern part of Mexico where actually there are very 
significant joint points coming in from both Belize and 
Guatemala, and we are working on projects that will do that.
    Senator Hagel. Thank you. Mr. Walters.
    Mr. Walters. I would take one step back and say that what 
we've learned in part is that we have to have a balance of 
going after demand and supply. Drug trafficking business 
depends on addiction. We count the number of people who use, 
but 80 percent of those people are for most drugs, not 
dependent. They use about 20-30 percent of the quantity. The 
business of drug trafficking, whatever drug you want, depends 
on addicting people over time and then having them consume the 
large volumes that make the dollars work for traffickers.
    When we use things like drug courts, when people whose 
lives fall apart come into the criminal justice system and get 
them treatment, when we help to strengthen the efforts in our 
healthcare and education systems to intervene with people 
before they start, that's important because these flows require 
the dollars to keep that cycle going on the trafficking side.
    To attack these particular organizations, I think what 
we've learned, what we've tried to incorporate with my 
colleagues here who are taking the lead now is that these are 
businesses, and the different subsets have different 
vulnerabilities. What we've tried to learn is how to exploit 
these vulnerabilities. We're talking a lot here about the 
precursor chemicals here because we've seen those are an 
exploitable choke point for this particular phenomenon. Now, 
it's not easy, as you see with this effort at global measures, 
but that's a choke point. In other cases, we have used 
interdiction, we have sued going after money, we have used 
going after key individuals, we've used going after their 
communications, or in some cases other processing chemicals to 
attack them. Now, they do make adjustments over time, but our 
ability, as with the war on terror, to use precise information 
about what's happening to monitor their change and to follow 
through on things, is critical. The drug problem has in part 
remained the size it has because we've had the tendency to pay 
attention for a while, do some good, stop, drop back, and then 
it sometimes comes back on us or sometimes comes back in a form 
it takes us a while to recognize.
    I would say with meth, one thing that didn't happen with 
other drugs--Monday was the anniversary of Len Bias' death 20 
years ago--at that time we had a lot of foolish notions in this 
country about cocaine that Len Bias' death woke us up to. It's 
not fun, it's not safe, it's not okay. We don't have that with 
meth. Here I would say the media has been very good at not 
glamorizing, showing the harsh reality, showing it comes to 
your community, that's an important dimension on, I think, 
galvanizing communities against it. But it also means we have 
to follow through on that. And now we see the international 
dimension of this.
    With Ecstasy, as you see I put up a chart about youth drug 
use. Over the 4 years, we've had a 20 percent overall decline, 
Ecstasy has gone down 60 percent. We had that kind of 
glamorization with Ecstasy in 2001. We put out information 
through the money you gave us in our youth media campaign 
saying it can kill you. So we helped on the demand side, but we 
also had enormous successes with DEA and cooperation with the 
Dutch and Belgian Governments going after supply. Ecstasy use 
over that period is down 60 percent. We effectively go after 
both supply and demand, we can see quite dramatic changes quite 
rapidly.
    You see some of this happening with the workplace testing 
figures in the small toxic labs. We don't have to be victims of 
this problem where we can identify key choke points and 
pressure points that we drive hard and use to our benefit.
    Chairman Hagel. Thank you. Ms. Tandy.
    Ms. Tandy. Thank you. I agree with my colleagues on the 
panel, and I would just add that for the Drug Enforcement 
Administration, these Mexican trafficking organizations, in 
particular, are very difficult to penetrate, very difficult to 
take down for a variety of reasons. Doing that, and hitting the 
chokeholds that these organizations have along the way in their 
movement of drugs to the United States, is absolutely critical. 
The most important focus for DEA is going after the revenue, 
going after the money that these organizations are plowing back 
into the systems that they launder the money and use and invest 
it outside the United States.
    The typical Mexican trafficking organizations that we have 
seen with other drugs, they have expanded their product line as 
has been noted in the testimony, and it includes meth now and 
increasingly so. That is why Mexico, our counterparts in 
Mexico, and DEA and the officials at this table have banded 
together. And we are sharing information so that we come up 
with a joint list of the organizations in Mexico that are doing 
possible trafficking of methamphetamine, that that shared 
information, and now shared enforcement efforts and shared 
resources, we'll attack their lines both from the command 
control in Mexico, to the smuggling and the domestic 
distribution lines.
    In addition, there is a list that is an existing most-
wanted drug trafficking organization list known as the CPOT 
list. On that list there are currently 44 organizations listed 
not just for meth, but for all drugs. And of those 44 CPOT 
most-wanted trafficking organizations, 7 of them are involved 
in methamphetamine. The focus on meth, the singular focus on 
meth, from intelligence to denying the revenue from the 
trafficking in meth, to shutting down the cell heads and 
distribution points, is what will be critical in making 
additional inroads along with the control of chemicals to 
reduce the supply of meth in this country. Because, as you both 
have noted, the supply is still there. The removal, the 
reduction, the significant reduction of the mom-and-pop labs is 
a huge benefit to us in terms of reducing the toxic waste dump 
and protecting children, but the use is still there although 
declining.
    It is up to us on the international front with both these 
drug trafficking organizations and the chemical control to 
drive home the rest of that formula for success.
    Senator Hagel. Thank you. Chairman Coleman.
    Senator Coleman. Thank you. Director Tandy, let me follow 
up on the 1988 loophole in the U.N. convention. Is there 
anything that we in Congress can be doing? You made it very 
clear, success is where we get cooperation, and failure is 
where we're not. It's still not mandated, required. What can we 
do in Congress to speed up this process where we get full 
implementation of what you worked out at Vienna?
    Ms. Tandy. I'm deferring this to Ambassador Patterson. This 
is actually a State Department area, but let me just add, from 
the Drug Enforcement Administration, your support for DEA's 
collaborative efforts with these countries is vital. We are in 
these countries, we have established relations with our 
counterparts in these countries. Sometimes, when you can't go a 
treaty route, a cop-to-cop sharing of information can be just 
as effective. Your support for our international work is vital 
to our achieving that. Our ability to negotiate that 
multilateral agreement with Hong Kong, Mexico, and Panama, made 
a big difference from 5 metric tons of shipped pseudoephedrine. 
After that agreement, I asked, over the past year, how many 
more shipments after that? One. We went from 5 metric tons to a 
single shipment since the agreement. And that was all cop-to-
cop in those countries.
    Thank you.
    Senator Coleman. Ambassador Patterson.
    Ambassador Patterson. At this point, we don't think we can 
secure mandatory reporting of pharmaceutical products, not the 
least of which, we suspect, would be opposition to our own 
pharmaceutical industry. But, we think, in a few months, that 
we'll have a pretty good picture of the degree of voluntary 
compliance with this. Probably by March or April, that's what 
the INCB is telling us. Of course, a key element of this will 
be the publication of legitimate demand by countries, which 
will enable, for instance, if you see large swings in places 
like South America where you have countries that are relatively 
the same size, you'll know that you have a problem that 
probably leads to the United States market. But give us a few 
months on this and we'll come back to you, and we'll assess the 
degree of voluntary compliance. Believe me, this has become a 
very important agenda item in the Department. People are 
pressing it at all levels, and we'll have a much better idea by 
March or April of next year. Where Congress can have the 
greatest impact is by fully funding the Department's fiscal 
year 2007 INCLE request. While we have obligated $700,000 in 
fiscal year 2006 funds to the INCB's precursor databank project 
in order to support our CND resolution, we expect a continued 
need in fiscal year 2007 and this request will help provide 
additional United States contributions to the INCB.
    Senator Coleman. You raised the issue of the pharmaceutical 
industry. Can anyone talk about the cooperation domestically, 
internationally? Are exporters of these drugs being held 
accountable as to where they are going, tracking this stuff? It 
would be interesting to get a sense of what the industry is 
doing.
    Ambassador Patterson. Well, the existing system under 
Project Prism, which is lightly handled by DEA, does require 
the reporting of pseudoephedrine and ephedrine. And that, yes, 
I think, has been successful for several years. Last year they 
had 2,000 notifications, and they picked up that shipments were 
going to such pharmaceutical powerhouses as the Congo and 
Belize. So there is an ability to see shipments once you have 
data that they are surely headed for the illegal market. Now 
we're working particularly with India to identify and help them 
identify their own pharmaceutical producers.
    Mr. Walters. Just so we're clear here. I could see three 
dimensions that we could exploit here. One, the fact that there 
is a limited number of producers of these chemicals in the 
three countries involved. And they have some institutional 
structures, obviously some more than others. And so we can look 
at those sources and the manufacturing infrastructure there to 
try to begin to get a sense of what's coming out. We have to 
figure out what happens to it once its produced, that's the 
secondary level. And as has been said here, I think we have two 
fundamental directions we're going at, one is the kind of 
general international agreement to track this and report 
information, which is not mandatory, but which, because of the 
urgency, we're seeing a fair amount of coming forward about. 
But the second, as Administrator Tandy mentioned, is the 
bilateral relationship we have with particular countries, even 
countries that may even emerge as a kind of new diversion, 
interim stop. We can go to them, and we can get more direct 
quiet cooperation than we would get than we would get trying to 
negotiate a global agreement that will get into a lot of 
proprietary information. The problem is, as I hope we've made 
clear, the bulk industrial quantities of these chemicals and 
then the stuff that's pilled up in combination as already over-
the-counter remedies acetaminophen mixed with pseudoephedrine, 
we know that if you buy a lot of these pills and just stick it 
in water and let it soak for 72 hours, the different chemicals 
will layer out and they can siphon it off. So we have to avoid 
that diversion, which we've seen in other venues.
    And the reason that commercial problem causes a loophole is 
that, nobody thought when we had the convention that we would 
have a retail level product being a serious drug problem. And 
so it was not incorporated. We're trying to go back without 
getting into the proprietary areas that are such a big part of 
trade which you know can be obstacles. When we try to negotiate 
open markets with others, they use these regulatory barriers 
sometimes, and we have to be consistent in the way we apply 
them. But, so far we've had remarkably good cooperation. In 
fact, the law enforcement bilateral cooperation sometimes is 
quite extensive.
    Senator Coleman. One of the frustrations I have is that I 
kind of look at this is almost a funnel kind of problem. We 
have a narrow funnel, the beginning of where these drugs are 
made, and then it kind of spreads out and it becomes more 
difficult to put your arms around. On the domestic side, what 
we did is, we said, fine, we're going to take the 
pseudoephedrine and we're going to put it behind a counter, 
we're going to hold people accountable. And it's had a huge 
impact. And so I'm trying to think by analogy, is there 
something we can do on the international level that either puts 
it behind the counter, not literally, but somehow allows us to 
have greater control at the outset. And what I'm hearing is 
that there are proprietary and other economic factors that make 
that difficult?
    Mr. Walters. Well, there's one other thing that I think is 
an enormously powerful tool that I think we're going to pursue, 
which is the Nation setting licit consumption needs. All of a 
sudden then, when Canada goes tenfold increase in 
pseudoephedrine, we had some debates initially when people were 
not wanting to come to grips with this, there has been a 
massively successful marketing, it's a bigger product, there's 
a bigger need, but then when you finally put the numbers down 
and said, look, this doesn't make any sense, we got 
cooperation. We took those illicit businesses down with the 
help of the RCMP and DEA. That made an enormous change. So when 
you begin to see what are legitimate needs, and sit down and 
try to create estimates of different economic levels of 
nations, what would be a legitimate consumption in the market. 
So if we're producing in the world, hundreds of metric tons 
more of these chemicals than the world can licitly consume, and 
the production places are three countries, and the 
infrastructure in those three countries, we do have a pressure 
point here.
    Senator Coleman. I would hope we could figure out a way to 
really focus on that pressure point. Let me touch on one other 
area of concern. Ambassador Patterson, at Colombia, we often 
talk about the balloon effect, if we squeezed in one area, it 
would have an impact on what's happening in Peru or Bolivia or 
elsewhere. And I'm trying to get a sense of whether we have a 
balloon effect here. I note that from 2000 to 2003 Argentina's 
pseudoephedrine imports reportedly doubled, Colombia's tripled, 
and Indonesia's rose tenfold. And all of you can respond, do 
you view this as a spread of meth consumption or of meth 
trafficking, or, as we become more successful with Canada and 
perhaps even with Mexico, are we seeing this thing spread 
around? Is it fungible enough to perhaps have activity in 
Indonesia that will come back here?
    Mr. Walters. I'll defer to my colleagues. My impression 
from my experience here is you have to look at the specifics of 
those nations. You can, sometimes, have a pharmaceutical 
company that then adds as a part of its activities, sometimes 
reselling pseudoephedrine-related products. So it could be a 
large pharmaceutical company or a regional pharmaceutical 
company, so the imports listed could be justified. So what 
we're looking at in these reporting situations is, when we see 
large changes, we need to go back in and look at what happened 
underneath that. Sometimes it's explainable for legitimate 
reasons. If it's not, then we have to be able to follow through 
with enforcement.
    Senator Coleman. I do want to get the perspective of 
Director Tandy and Ambassador Patterson on this one on whether 
we're seeing a balloon effect, but when you say we're doing 
this, who's we? Is it your office, Director Tandy, is it, 
Ambassador Patterson, at yours? Who's doing this kind of 
analysis? Where's the repository of all this information?
    Mr. Walters. We've been working together. The Division 
Control Unit of DEA has the single greatest collection of 
information here. We've been working also with the CND in 
Vienna. They have a great deal of information they've been 
collecting on a voluntary basis about some of these chemicals. 
We've also reached out for people in industry elsewhere to give 
us a sense of what are the measures of licit markets. You know, 
these chemicals are part of a pretty widely used and beneficial 
allergy and cold medication, and it helps people with asthma. 
So we're trying to also make sure that we operate in an 
environment sensitive to that reality.
    Senator Coleman. Anyone else want to comment on whether 
we're seeing any balloon effect here, whether that's an area of 
concern?
    Ms. Tandy. I would add to Director Walters' testimony a 
couple of things. We're seeing shipments that get reported, 
whether it's through the International Narcotics Control Board 
under UNODC, or whether it's cop-to-cop in DEA's Project Prism, 
we're seeing shipments that get reported from point A to B. But 
then the shipment gets repackaged, and moved on through other 
countries beyond that for which there is no reporting mechanism 
requirement.
    DEA has offered to establish a database for these 
international countries where all shipments, if they were 
provided, we would put that into a database that all countries 
could use and assist in their own control and monitoring in 
addition to ours. That has not gotten off the ground for the 
reasons that we've discussed here regarding trade. I am hopeful 
that, with the resolution and efforts after the March 
resolution, that we'll start to get some of that. But, to the 
extent you are asking if we push in one area, is it going to 
come out in another, we're already seeing that globally. When 
we started shutting down the shipments from Hong Kong, 
collaboratively, it moved from that direct route to the 
opposite direction around the globe through Africa and into 
Mexico in a different way.
    Senator Coleman. And, if I can, Ambassador Patterson, 
turning to you, in your prepared remarks you talked about East 
Asia, and I thought, some startling statistics--1.5 million 
meth users in the United States; Japan has upwards of 3 million 
casual meth users, twice as much as the United States; rampant 
use in Thailand and Philippines. Is that something, is that 
coming back to us? I'm trying to get a sense of how, if we talk 
about global, there are distribution networks globally, there's 
consumption, there's a flow back and forth. And I'm trying to 
get an understanding, if the problem is so serious elsewhere, 
can we contain it just by what we're doing here? It gets back 
to my question, internationally, what should we be doing with 
other nations in terms of supporting their efforts to have an 
impact?
    Ambassador Patterson. Mr. Chairman, the only beneficial 
side effect of this meth explosion in Asia, is the enormous 
interest now that Asian countries have in cooperating in these 
new international mechanisms that have been established. But, 
it's a terrible problem. And most of the Chinese production is 
now being consumed in places like Australia. Our ambassador to 
Laos came in yesterday, and she said that 20 percent of Laotian 
high school kids are now testing positive for meth, which is an 
incredible statistic.
    But I think in Latin America we may be seeing some of a 
balloon effect. One of the things we'll do under the Combat 
Meth Act, is bring more rigorous analysis to this and that's 
required. And we'll do the reporting over the next few months.
    Senator Coleman. I think it's important to keep us informed 
to make sure we have the resources directed to the analysis so 
that we can respond. Let me ask for a candid discussion about 
Mexico, its level of cooperation. And, if I may, Director 
Walters, your comments talked about our northern border in 
Canada, seizures of methamphetamine down 90 percent. Mexico 
seems still to be more problematic. Director Tandy, you were 
quite complimentary about some of the cooperation and things 
that are going on. And yet, I think there is still a great deal 
of concern about Mexico. Are they making a serious effort to 
cut off production and export of illegal dangerous drugs? The 
extradition issue, which I want to come back to, the 
extradition of indicted criminals to the United States. So can 
I get a candid assessment of the level of cooperation and are 
we considering decertification, is that even an issue on the 
table in regard to Mexico? I'll start with Director Tandy and 
then move across.
    Ms. Tandy. Mexico has certainly committed itself in a very 
serious way to work with us on the methamphetamine issue. I 
would highlight the fact that Mexico actually has quotas in 
place. It has first determined what its legitimate 
pseudoephedrine use market is and has put aggressive quotas in 
place successfully, to reduce its shipments--imports of 
pseudoephedrine to that amount which would supply only the 
legitimate market. That is something that you are responsible 
for, the Combat Meth Act, imposing those same provisions for, 
in this case, DEA will be reviewing that market and 
establishing the quotas in January. So they're actually ahead 
of us on that front.
    In terms of the law enforcement commitment, I can tell you 
it has never been stronger. I have met with the cabinet level 
officials both here and in Mexico with a number of discussions 
about what we could do together that we have not done together 
in the past. This information sharing, joint targeting, joint 
task forces, setting up task forces, joint task forces at our 
particular ports of interest are all new for us in the way that 
they are being developed for this meth strategy. I'm very 
encouraged by that. We are training 1,000 Mexican officials and 
will complete that by the end of the year with the funding from 
the State Department and assistance from Ambassador Patterson's 
section of INL. We will be giving them equipment, and we've 
already sent clan lab trucks to Mexico.
    They're very serious about tackling these labs. Earlier in 
the year, they took down one of their largest labs to date, and 
that was in Guadalajara. It was the most significant lab that 
has been found in Mexico. In that lab, there were seizures of 
over 1,000 pounds of finished methamphetamine along with 1,700 
pounds of ephedrine, together with mass quantities of other 
chemicals. And that particular Guadalajara lab was capable of 
producing 300 pounds of methamphetamine per cook. Per cooking 
cycle.
    So I would say they are demonstrating their commitment to 
attacking the meth issue and the organizations trafficking in 
meth. As I said, we'll have the training completed by the end 
of this year. We just sent the clan lab trucks down. So the 
teams and task forces on the ground going after the labs, for 
example, won't really launch across the board in all the 
methamphetamine hot spots in Mexico until after that point. So 
hopefully, when I have an opportunity to be with you again down 
the road after that, we will see even greater success.
    Senator Coleman. I'm going to ask everyone to respond to 
this, but I want to just follow up. In the past, there have 
been some very real concerns about the criminal justice system 
in Mexico, corruption tied to drug trafficking. And I'm hearing 
a very positive optimistic assessment from you, Director Tandy, 
which is certainly encouraging. But, in some ways, at least, it 
is a contradiction to, at least, a perception of late that one 
of the problems in Mexico in terms of rule of law has been the 
impact of drug money and the impact that it's had on the 
corruption of the system. Are you saying that that's not a 
problem? Help me understand these two different images that I 
have, what I hear here which is very encouraging, but what I 
see on the TV or what I read about and then the concerns that 
are raised in the street.
    Ms. Tandy. The proof will be in the pudding as this 
actually takes hold. The fact that Mexico has committed to this 
aggressive approach is, I can tell you, the first time we have 
tackled it in such a joint collaborative way. And they are 
doing things that are difficult for them. They are putting 
entities together in mixed task forces that wouldn't normally 
be together. The fact that they're sending their chemical 
regulatory experts in a personnel exchange to the United States 
and us to sit with them in Mexico is a first.
    The money side that you mentioned, that's a huge issue. The 
amount of money varies in terms of American dollars that are 
spent on the purchase of drugs in the United States. But it's 
somewhere in excess of $60 billion a year. And for the most 
part, that money is leaving the United States. And it is often 
going in bulk form into Mexico, which is, I think, part of what 
you're touching upon. Part of what we have agreed to do here 
is, through some past budget support, we are in a position now 
to assist in vetted financial task forces in Mexico to focus on 
that issue. We are already doing it on the domestic side in the 
United States. But, we are working together with Mexican 
officials to establish financial task forces in Mexico and that 
will get off the ground, actually is off the ground now, and so 
is being pursued in a very focused way under this 
methamphetamine strategy that our two Attorneys General just 
announced.
    Senator Coleman. Director Walters, I'd be interested in 
your response to the same series of questions.
    Mr. Walters. I think, and let me make this clear, the 
United States is doing two contradictory things to Mexico at 
the same time. We have, I think, unprecedented progress at the 
governmental legitimate level from where we were. President Fox 
has put into place people of integrity, they've built 
institutions, they've developed capabilities to do things on 
crimes and drugs and they have frankly helped us on the terror 
problem as never before. We're dealing with the issue of 
immigration, and we've been continuing to move forward on 
trade. All those things, I think, have gotten to progress I 
don't think we've seen in 25 or 30 years. The problem is the 
other things that we're doing, and that's from things like drug 
users in the United States.
    We are sending enormous sums of money, we're allowing them 
to arm themselves, and they're continuing to tear apart the 
institutions of Mexico. They grew up in the decline of the 
cartels of Colombia, the shift of control from Colombians being 
distributors in New York City and parts of Florida and other 
places for cocaine and heroin, all came from that dimension 
that they built through their original marijuana marketing to 
the United States. Again, it's like a business, they're 
marketing. The marketers got taken out through the Colombians, 
through our partnerships with them and their hard work and 
people dying, and through our law enforcement efforts targeting 
those groups. What happened was that then the flow moved up 
through Mexico. And the super wealth of Mexican criminals has 
been an asset to their institutions that President Fox is 
reversing. But we continue to send too many dollars there, 
that's why it is important that we do balance and we have 
demand reduction and treatment, and testing, and local 
enforcement.
    But right now I would say President Fox is moving things 
ahead. But I think what you see in terms of border violence, 
and the battle between these groups is partly President Fox and 
his Government have destabilized some of these groups by taking 
out and arresting and holding some of these individuals. We 
would like to get these people extradited as we had with 
Colombia. But it's important to mention that the Mexicans are 
now extraditing some people, their supreme court has now 
removed its bar to extraditing people to the United States for 
serious offenses. We have not seen the first one, but again, 
those people's power to attack the institutions of justice, 
courts, prosecutors, police, political officials, is a power 
routed in dollars that come from American drug users.
    Senator Coleman. Ambassador Patterson.
    Ambassador Patterson. Mr. Chairman, I don't think that 
anyone who looks at Mexico can fail to be astonished at how far 
we've come in the past 10 or 15 years. And when I came back to 
this issue after being overseas, that was my reaction. But it's 
decidedly now, a glass half empty, half full picture. Yes, they 
made something like twenty something thousand drug arrests last 
year, and they put a number of major cartel leaders in jail, 
but they're not extradited to the States, which turned out to 
be the key really in breaking up the Colombian cartels. They've 
done an incredible job on restricting the licit use of 
precursor chemicals, but obviously there's huge amounts of 
precursor stuff flowing into Mexico. They've done a great job 
on reforming the Federal police, but the local and provincial 
police are still shot through with corruption. And in a place 
like some of these border towns which have evolved into the 
mouths of drug cartels, the local police are in the pay of one 
of the other side. So as Director Walters said, they've come an 
enormously long way, and you go to Mexico and it's much like 
Colombia, you can't help but be impressed by the bravery of 
these people who have battalions of officers around their 
houses so they can sleep at night. But we have quite a ways to 
go.
    Senator Coleman. I appreciate that. Anyone want to respond?
    Ms. Tandy. Thank you, Chairman Coleman. I would just like 
to speak about extradition in response to your question. 
Extradition is the Achilles heel here. And while Mexico has 
passed laws, and the Supreme Court has held in favor of 
extraditions that previously were not possible, there have been 
41 extraditions from Mexico in the past year, 15 of those for 
drugs. The key cartel leaders that are sitting in prison in 
Mexico are not those that are being extradited. I'm encouraged 
that President Fox has made public statements about his intent 
to extradite key traffickers. I am hopeful before the end of 
his term, that will actually happen.
    If history is indeed prolog, you don't have to look farther 
than Colombia to see the difference after Colombia started 
extraditing in 1997. And the decline in violence in Colombia 
that followed after those extraditions started flowing. And 
Colombia has indeed, since then, and continues to, extradite 
the most serious cartel leaders including the Rodriguez-
Orejuela brothers, who were the founders of the Cali cartel. 
Those extraditions have made a difference in Colombia. And I am 
hopeful that the Fox administration will carry through and make 
more extraditions of some of those leaders that have been in 
prison for years and have yet to have faced a single trial.
    Senator Coleman. I appreciate the candor. And what clearly 
is a positive assessment of the progress that's being made, and 
the reflection of the reality that so much more has to be done. 
But I appreciate the candor. And I want to say that one of the 
things, I don't think we in this country gave enough credit 
when President Fox, when the Mexican Government passed a recent 
drug law that, I think, established certain levels of legal 
use. I thought meth was included in that, personal use of meth 
being part of that. President Fox demonstrated a lot of 
political courage to send that bill back. So I raised the 
question, not from a rhetorical sense, but to try to get an 
honest assessment of the impact of what's happening with 
extradition.
    We're familiar with Colombia. This subcommittee, my 
subcommittee, is Western Hemisphere Peace Corps Narcotics. And 
so obviously working with Ambassador Patterson in Colombia, 
we've seen the impact of that. And also some of the concerns 
regarding extradition in some other countries and the impact 
that has had.
    I have to ask you, Director Walters, a more narrow 
domestic-focused question while I've got you here. And that is, 
we consistently have to deal with the administration calling 
for the cutting of Byrne grants and the JG funds. And in my 
State, Minnesota, and I would suspect, but I can't speak for 
Nebraska, but for my State, Minnesota, our drug task forces are 
having tremendous success in dealing with the labs, in dealing 
with the activity, particularly in rural communities. We're all 
funded, in part by these Byrne grants and these justice 
assistance grants, but we keep fighting the cuts in those. Can 
you help me understand the rationale of cutting the Byrne 
grants and justice assistance when they are the key to our 
local meth reduction enforcement efforts? And I would suspect, 
Director Tandy, that this is a DEA concern, that we're all 
working on this, my folks aren't working alone. These are 
State, Federal task forces directly funded that we keep 
fighting pressure because they are always attempting to be cut.
    Mr. Walters. We're all trying to support people who 
obviously are working hard against this problem. In the budget 
environment that we face, handling both crime, the threat of 
terror and homeland security, trying to maintain the economic 
growth that you and others have to be concerned about that 
raises the taxes at State and local levels as well as the 
Federal level, we try to set some priorities. The Byrne grants 
are not even included in our drug control budget, because, 
while they do fund obviously some task forces, the actual 
expanse of things they can cover is so great we tried to focus 
the budget on what we can actually manage and control, so that 
if we can move resources from one place to another, we can 
actually really move them.
    The consequence of the block grant move is really part of 
trying to, as we see it in the proposal, the President makes to 
Congress, that Congress decides on, is to say, in a time we've 
got to strengthen infrastructure and preparations for homeland 
security, we're partly helping local law enforcement and State 
governments move resources to those areas by moving additional 
resources you've given us, through the homeland security 
channel. It's not to diminish the capacity of other agencies, 
some of those same agencies are getting those same resources 
for those same expanded responsibilities here.
    It's also to say though, that in some cases, yes, we'd like 
to do targeted things: DEA funds task forces, some of which do 
this and other things: the JAG program in my office, where 
we've asked for funding at the JAG program this year, the 
majority of it is initiatives at the local level focused on 
meth in many of the affected areas. We have tried to focus the 
efforts of the JAG program for task forces, but yeah, I suppose 
this is the victim of, in some areas, we don't have as much 
money as we'd like to. You face that as well as we do. And in 
some areas what we are trying to do is balance the priorities 
of homeland security and expanded spending there and the war 
against some of the help to local law enforcement. We believe 
in the value of these task forces, and we hope that also 
they'll be where they are needed, and not only at Federal, but 
they'll continue to be as they are, a State and local 
contribution to these efforts.
    I will say that sometimes I'm troubled, and I recognize 
that sometimes we hear about debates about budget from local 
people that are trying to make a case in a competitive 
environment. It's very valuable, but if the Federal Government 
doesn't pay for it, we're not going to do it. I mean, I think 
in some cases, it's legitimate to say spending priorities ought 
to be based on things that are important, and if they are 
important, they ought to be important generally. Now, you can't 
run things without money.
    On the other hand, I think we're all trying to face here, 
and you're facing it with receiving the President's budget 
request, as we are making that request, how do we finally 
decide, with a limited budget, with a deficit, with the war, 
with the need to protect our country, how do we make those 
tough choices? I think in some cases, block grant programs are 
under pressure precisely because, when I try to make a case, or 
when you try to look at this with others, what's the result of 
a block grant? Well, by definition, it tends not to have a 
specific objective that you can show as outputs. So when you're 
in a competition with other kinds of spending, the question is, 
if it's money going to a block grant, or money going to DEA, I 
know what DEA is doing. They put performance output. When I 
have 28 or 29 different objectives a block grant can go for, I 
can't tell what footprint this makes.
    So it's not a question of being insulting to the hard and 
worthy work that people do here, as you know as well as I, but 
the issue is when we're going to have to constrict domestic 
spending in order to pay for some of the other threats. Where 
do we do it? This has been an unfortunate and contentious part 
of, I think, some of those choices we've had to make. But we're 
not trying to make those choices irresponsibly.
    Senator Coleman. And I know you're not. My words of advice, 
though, would be that when we get beyond the macro debates 
about budgets and deficits and block grants, that, in this 
particular area, where there is such great sensitivity about 
the impact of methamphetamine on local communities that merits 
this hearing, that merited the national task force meeting that 
we had before, that's reflected in my opening statements where 
two-thirds of the folks in rural county jails are there because 
of some meth-related issue, my point being, that at some point, 
you have to step away from the macro discussions about these 
things and say, hey, we have in this area a problem of great 
concern, overwhelming concern. We have some vehicles that we 
are funding that are having an impact in those, and not by 
themselves, not paying the full fair, but allow those things to 
be more effective. And I would just hope that we get away from 
the macro discussions, and be able to really target. And how 
you do that is difficult.
    I can't tell you that my State is like every other State. 
But I can tell you, when local law enforcements come back to 
our citizens and say that our ability to do these joint task 
forces is being impaired because of cutbacks in Byrne grants or 
other funding, that's a problem. And that makes it more 
difficult for folks like us to talk about increased funding for 
matters relating to Mexico, nevertheless, when I want to talk 
about wanting challenge accounts and other things. So I would 
just say that there are some things that are, again, I think we 
have to cut-throat focus on at the local level where we're 
having some impact. So I would just hope, as we have these 
discussions, that, if there's a way to really target, because I 
want a target like you, and say yeah, we've got some things 
that are funding important local vehicles. The DEA is working 
hand in hand with the feds, and the local folks, and it's 
having an impact. And the good news is that it is.
    I don't think folks are saying we're losing this war. 
That's the good thing, we're not losing this battle with meth. 
With all the discussion we've heard today, decline in numbers, 
hey, we're making progress. We're making progress 
internationally, we're making progress in local drug labs, 
we're making progress on amphetamine workplace positives.
    Yet we keep facing the cuts. I say it with a great passion 
because it's very hard for me to explain. And yet I understand 
all the macro issues and all the pressure. So I just wanted to 
lay all that out.
    Director, if I can just focus on one more issue with you. 
We've had great success with the meth labs. And we've got now 
the Combat Meth Act. One of the concerns that we were seeing, 
and I've seen it and I know my colleagues have seen it is a new 
phenomena called smurfing. Teenagers drive across State borders 
together, you know, buy carloads of meth precursors in other 
States. In Minnesota we have both State and national 
boundaries. Are you familiar with this, or is DEA dealing with 
this? You know, perhaps our national Combat Meth Act, has sort 
of given us the tools to take care of this? Do you know about 
smurfing?
    Ms. Tandy. Yes, I have. And there have been some wonderful 
press reports on some of those examples after spring break, as 
I recall. The Combat Meth Act has been very valuable on a 
number of fronts. But, I don't think that the Combat Meth Act 
is going to prevent smurfing. The restrictions on sales, both 
daily and monthly, are in the Combat Meth Act. But there's no 
real system yet to link all of that up, and to provide an 
interconnected cross state lines database that would reflect 
that those purchases are occurring in that way.
    It's not just that the absence of it in the Combat Meth 
Act, the ability, as you well know, to adopt false identities 
and purchase using what would appear to be a legitimate ID, but 
is one of many fake IDs that someone uses, equally frustrates 
the ability to track that. But, I would say that it is the lack 
of a, first of all, electronic system. A log book is required. 
It is not required that it be folded into an electronic 
database. And second, the interconnection of any database, 
whether it's under the prescription monitoring plan, or under 
the Combat Meth Act, that's just another factor that I think we 
will have to be very focused on in terms of potential future 
legislation and budget proposals.
    Senator Coleman. I appreciate that. Director Walters.
    Director Walters. I would say, that's important to watch. 
Because when we looked at what the States were doing here, 
always the question was, well, what about they'll just go 
across State lines. Or what about where there isn't an 
electronic system, they'll just go in to multiple places. And 
there is some of that. But the dramatic declines that we've 
seen suggest that certain barriers are significant and have 
significant consequences.
    And we're looking at, and I've talked to some State 
officials about, what other kinds of things. And some States, 
of course, are putting heavier regulations, more expenses than 
others. The good news is that almost every State has seen a 
decline. And, I think a key point that I would just mention 
here, that you may have heard from your State officials, that 
I've heard and I think is striking, is they think that the 
reduction in the small labs will have far reaching 
implications. Because the explosive growth of this depended on 
people actually cooking it themselves and giving it to their 
friends. That the initiation was, hey, my buddy's going to do 
this thing, it's slightly dangerous, but we already drink a 
lot, we already smoke a lot of dope, so why not try this new 
thing as a way of self-destructive daring.
    That did really rapidly, dramatically increase this. Plus 
the fact that, in addition to the other things that you do to 
support your habit, you can actually cook the product you need 
to consume. So in addition to robbery or prostitution, now I 
have the ability to create toxic sites by making my substance 
myself. The reduction in the epidemic-like spread of this may 
be significant because people are not making quantities and 
immediately giving it to their friends. If you have to buy it 
from Mexico, it's still bad, it's still coming from Mexico.
    It's kind of like having the difference between having a 
backyard barbeque where everybody gets to have hamburgers on 
you, and now we all have to go down to the steakhouse and pay 
our own freight. There's a lot less going to the steakhouse 
here. And that may help us also reduce this on the demand side, 
just the phenomenon of initiation will change as a result of 
this happening. We certainly hope that's the case.
    I was interested when I talked to officials in Iowa and 
Oklahoma who were saying that they were really seeing this kind 
of change in many of the areas where there's contact. So if 
there are additional barriers we need to have to cut off the 
precursor domestically, we want to work with State officials 
and you to make sure that we look at those systems that might 
be put in place. But right now, it looks like these barriers 
are having even more dramatic effect than many people thought.
    Senator Coleman. I hope that you're right. Because it's not 
a Morton's of Chicago steakhouse that they have to go to, it 
can be a pretty cheap steakhouse. I could go on and on, a lot 
more to discuss here. At some point, we will probably have a 
separate discussion on Internet sales of precursor chemicals 
and meth. It's a whole other issue, Director Tandy and I have 
been involved in that discussion.
    I want to thank all of you. This has been an extraordinary 
panel. And as I said, we're making progress here. We're making 
tremendous progress. And I think all of the organizations you 
represent are out there on the front lines doing great work. So 
I appreciate the opportunity to have this hearing. We will 
continue to discuss this issue. With that, this hearing is 
adjourned.
    [Whereupon, at 4:11 p.m., the hearing was adjourned.]

             Questions and Answers Submitted for the Record

                      Responses of Anne Patterson

    Question 1. What can we do to create incentives for other countries 
to cooperate with our efforts to curb international meth trafficking 
voluntarily?

    Answer. There are several areas where the United States can and 
does offer incentives to enhance cooperation in curbing meth 
production, trafficking, and consumption. They include:

    1. Diplomatic engagement.--Continued U.S. bilateral and 
multilateral diplomatic efforts promote international cooperation 
against a common threat by highlighting the negative health, law 
enforcement, and destabilizing consequences generated by meth 
trafficking. These engagements also serve to support the domestic 
interests of other nations by highlighting their supporting roles and 
self interests in engaging a common global threat.
    2. Reduce the availability of precursor chemicals.--By promoting 
the active support of the U.N.'s initiatives to better control 
precursor chemicals, e.g., the recently approved Commission on Narcotic 
Drugs (CND) resolution, and the International Narcotic Control Board's 
ongoing Operation Prism (regional coordination against the diversion of 
synthetic drug precursor chemicals), we again support national-level 
self interests in addressing a global threat. In addition, with U.S. 
financial and substantive support, the Organization of American States' 
Counternarcotics entity (CICAD) Chemical Substance Group of Experts has 
developed a Best Practices Guideline for Inspection/Investigations of 
Chemical Substances and a Matrix for Evaluation of Chemical Control 
Legislation, Systems and Procedures (a self assessment guide for member 
states).
    3. Combat Methamphetamine Epidemic Act (CMEA).--The implementation 
of the CMEA, requiring added international coordination, reporting and 
transparency on methamphetamine precursor chemicals, will offer added 
incentives for cooperation for those countries that are major chemical 
producers and transit countries, and those countries where these 
chemicals are diverted into methamphetamine production.
    4. United States assistance programs--both bilateral and to 
international organizations--provide incentives for cooperation against 
the global threat of methamphetamine. Such programs assist countries 
and organizations most affected by meth trafficking to better control 
precursor chemical imports, improve their law enforcement capabilities 
against meth trafficking, and to address their many demand reduction 
challenges.

    Question 2. What is the biggest challenge that other countries face 
in their efforts to stop the diversion of precursor chemicals and shut 
down meth labs?

    Answer. There are several aspects to the challenge faced by all 
countries in addressing meth production and trafficking. They include:

    1. Understanding the problem.--The expanding, global nature of the 
threat presented by methamphetamine and other synthetic drugs is a 
relatively recent phenomenon. National level officials often lack a 
clear understanding of the significant social, law enforcement, and 
destabilizing consequences posed by methamphetamine trafficking and 
abuse. Without this understanding, international cooperation and 
concerted country-level action will not occur.
    2. Coordination of efforts against the diversion of precursor 
chemicals into illicit drug production.--Coordinating international 
action against meth precursors imposes reporting and other requirements 
on legitimate commercial interests of national chemical industries. 
Further, several of the major countries producing meth precursors have 
expanding chemical industries, making administrative control a daunting 
task. Such controls are made even more complicated when the issue of 
combination products are considered, e.g., products such as 
pharmaceuticals from which meth precursors can be extracted. These 
combination products are not controlled by the 1988 U.N. convention on 
Narcotic Drugs. Further, the administrative control of these commercial 
sectors is often the responsibility of health ministries rather than 
public security and law enforcement ministries. In sum, bureaucratic 
and commercial complexities along with competitive commercial and drug 
control objectives add to the difficulties of addressing chemical 
diversion and meth production challenges.
    3. Enhancing law enforcement and regulatory capacities to deal with 
meth production and trafficking.--Addressing methamphetamine requires 
unique regulatory and law enforcement knowledge, skills, and equipment, 
e.g., safely handling toxic laboratory sites and controlling the import 
and access to precursor chemicals used in meth production. Identifying 
the resources to develop these law enforcement and regulatory 
requirements is often extremely difficult and implementation evolves 
slowly over time.
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