Drug trafficking networks exploit increased trade and transportation networks, as well as ineffective customs and border control services. The absence of money laundering legislation and foreign exchange controls facilitates the use of banks and non-bank financial institutions for laundering narcotics proceeds. Latvia made progress in chemical control with the adoption in May of new legislation to control the export and import of precursor chemicals. Moreover, the GOL is in the process of developing anti-money laundering legislation. Latvia is a party to the 1988 UN Convention.
Traffickers can easily exploit lax border controls with Russia and Belarus.
Authorities believe that hashish and poppy straw originating in the Caucasus and Central Asia increasingly enter Latvia by road and rail through Russia and Lithuania. Additionally, opium is often smuggled from Central Asia in cotton shipments. Interior Ministry and police officials confirm that the drug trade and transshipment of illegal narcotics are controlled by Latvian and Russian organized crime groups. While most of the heroin and cocaine that transits Latvia is destined for markets in Western Europe, particularly Sweden, health authorities believe that domestic drug use is rising. Official statistics, however, report less than 1,000 users, but the recent increase in the number of teen-age drug users is of particular concern.