Proposal for a COUNCIL REGULATION (EC) ON NORTH-SOUTH COOPERATION IN THE CAMPAIGN AGAINST DRUGS AND DRUG ADDICTION (Budget heading B7-5080)
Date: 1995-06-30
Institutions: European Commission
Subjects: North-South relations, cooperation policy, drug addiction, fight against crime

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  30.06.1995 
COM(95) 296  final 

95/0167  (SYN) 

Proposal  for  a 

COUNCIL  REGULATION (TEC) 

ON NORTH-SOUTH COOPERATION IN THE  CAMPAIGN 

AGAINST DRUGS AND DRUG ADDICTION 

(Budget heading B7-5080) 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

The  statistics  on  the  production  of  raw  materials,  seizures  of  narcotics  and  psychotropic 
substances and drug abuse levels all confirm that the world drugs situation has deteriorated to a 
marked degree over the last ten years. 

National  and international  action has been  stepped up, but  has failed  to  keep  pace  with the 
rapid  expansion  of  the  drugs  trade.  This  failure  can  be  ascribed  to  a  number  of  factors: 
underestimation of the social and economic costs involved by being too quick to assimilate drugs 
to  tobacco  and  alcohol  abuse;  underestimation  of  the  link  between  drug  addiction  and  the 
HIV/AIDS  epidemic; underestimation of the threat posed to democracy by the enormous wealth 
of the organized drugs trafficking  cartels;  underestimation of the opportunities created by world 
trade liberalization and privatization for trafficking and money laundering. 

But  today  the  international  community  is  increasingly  united  in  confronting  the  drugs 
phenomenon. Political  commitment is growing at national level,  and there is a burgeoning range 
of  instruments  available to  combat  illegal  trafficking  and drug  abuse.  More  than  130  countries 
have ratified two of the three international drugs treaties (Single Convention on narcotic drugs of 
1961, as amended by the Protocol of  1972; Convention on psychotropic substances of  1971) and 
105  countries,  with the EC,  have  ratified  the  Convention  against  illicit  traffic  in narcotic  drugs 
and psychotropic  substances of  1988.  A  rapidly growing  number of  countries  are also  adopting 
legislative  and  administrative  measures  to  enable  them  to  monitor  and  regulate  the  chemicals 
trade and to curb money laundering activities. 

In this evolving context, the Community's North/South cooperation in the domain of the  fight 
against drugs and drug addiction must be re-evaluated in order to exploit the prevailing political 
impetus to the full,  and to improve their focus  and efficiency.  In this context,  it is important  to 
integrate  the  campaign  against  drugs  into  existing  policies  on  health,  education  and  rural 
development. 

In the Commission's opinion, such activities should be governed by three main principles: they 
must  complements the measures taken by individual Member  States,  and be consistent  with the 
national  drugs  strategies  of  the  countries  concerned; they  must  be  consistent  with  Community 
activities  in  related  areas,  such  as  cooperation,  and  with  Community  legislation  on  money 
laundering and the trade in precursors; and they must be accompanied by political commitment at 
the  highest  level  on  the  part  of  the  countries  concerned.  These  principles  are  in  line  with the 
guidelines  on  international  cooperation  featured  in  the  Commission  Communication  to  the 
Council  and to Parliament of 23 June  1994 with regard to  a European Union Plan of Action on 
Drugs (1995-99)(COM(94)234  final). 

They  are reflected  in the  following  priorities:  (1)  support  for  the  drafting  of National  Drug 
Control Master Plans in close  cooperation  with the UN  International  Drug  Control Programme 
(UNIDCP); (2) strengthening local and sub-regional institutions' legal and administrative capacity 
to  implement  these  Plans,  particularly  with  regard  to  their  ability  to  combat  the  diversion  of 
precursors and money laundering; (3) measures focusing on demand and the treatment of addicts; 
(4) measures to consolidate the structural impact of the special trade concessions made to certain 
developing  countries  (the  Andean Pact  and  Central  American  countries)  under the  Community 
GSP scheme. This  proposal is based on these principles. Its aim is to promote awareness of drug-
related problems in the developing countries concerned, to help them draw up integrated national 
strategies  encompassing  their  institutional,  legal  and  administrative  structures,  and  to  support 
their  efforts  to  combat  drug  trafficking  and  drug  addiction.  To  emphasise  the  importance  of 
continuity  in  this  area  of  Community  activity,  no  provision  is  made  as  to  the  proposed 
Regulation's duration. 

PROPOSAL FOR COUNCIL REGULATION NO ... OF... 

ON NORTH-SOUTH COOPERATION IN THE  CAMPAIGN 

AGAINST DRUGS AND DRUG ADDICTION 

(Budget heading B7-5080) 

THE COUNCIL OF THE EUROPEAN UNION, ' 

Having regard to the Treaty establishing the European Community, and in particular Article 130w 
thereof, 

Having regard to the proposal from the Commission, 

In cooperation with the European Parliament, 

Whereas,  in  a  communication  to  the  Council  and  to  Parliament  dated  23  June  1994,  the 
Commission presented its guidelines for a European Union plan of action on drugs for  1995-99, 
including measures at international level; 

Whereas the international community's strategy to curb drug abuse and drug trafficking  is based 
on universal accession to the Single Convention on narcotic drugs of  1961, as amended by the 
Protocol  of  1972,  the  Convention  on  psychotropic  substances  of  1971  and  the  International 
Convention against illicit traffic  in narcotic drugs and psychotropic  substances of  1988, and on 
the systematic implementation of those Conventions at national and international level; 

Whereas the European Community is a party to the Convention of 1988, in particular by virtue of 
Article  12  of  that  Convention,  and  has  adopted  the  appropriate  legislation  based  on  the 
recommendations  of  the  Chemicals  Action  Task  Force  (CATF)  set  up  by  the  G7  and  the 
President of the Commission in 1989, the effectiveness  of which would be generally enhanced by 
the adoption of the relevant legislation and procedures in other parts of the world; 

Whereas the European Community has adopted  a Directive on money laundering based  on the 
recommendations of the Financial Action Task Force on Money Laundering (FATF) set up by the 
G7 and the President of the Commission in  1989, the effectiveness  of which would be generally 
enhanced by the adoption of the relevant legislation and procedures in other parts of the world; 

Whereas  the  fourth  Lomé  Convention  and  the  cooperation,  association  and  partnership 
agreements concluded by the European Community with developing countries contain clauses on 
cooperation  to  curb  drug  abuse  and  drug  trafficking,  the  monitoring  of  trade  in  precursors, 
chemical  products  and  psychotropic  substances  and  the  exchange  of  relevant  information, 
including measures in the field of money laundering; 

Whereas the Member States of the European Community have endorsed the policy statement and 
general plan of action adopted by the UN General Assembly at its 17th special session, 

Whereas the  cooperation  in the  domain  of the fight against  drugs  and  drug  abuse contributes 
importantly to the objectives  of the Community's  development  cooperation  policy  as set  out in 
article 13 OU of the Treaty establishing the European Community; 

HAS ADOPTED THE FOLLOWING REGULATION: 

Article 1 

The European  Community  shall  carry out  cooperation  activities  in the field of  drugs  and drug 
addiction, giving priority to developing countries that have ratified the Single Convention of 1961 
as amended by the Protocol of 1972, the Convention of 1971 and the Convention of 1988. 

Article 2 

The  Community  shall  give  priority  to  supporting  partner  countries  requesting  help  in  the 
preparation of a national drug control master plan, in close consultation with the United Nations 
International  Drug  Control  Programme.  These  plans  will  identify  objectives,  strategies  and 
priorities  in  the  campaign  against  drugs  and  the  related  requirements  (including financial 
requirements),  thus  establishing  an  integrated,  multidisciplinary  and  multisectoral  approach 
designed to maximize the efficiency of Community assistance. 

Article 3 

Preferably  operating  within  the  strategic  framework  established  by  the  national  plans,  the 
Community shall also support specific operations in the following areas: 

-  development of institutional capacity to implement National Drug Control Master Plans; 

-  on  the basis  of  agreements  between  the  European  Community  and  "sensitive"  countries,  in 
conformity  with  the  CATF  recommendations  and  relating  to  cooperation  to  prevent  the 
diversion  of  trade  in  precursors  used  in  the  production  of  illegal  drugs  and  psychotropic 
substances, the Community will help partner countries to develop their institutions with a view 
to  promoting  the  rapid  and  efficient  implementation  of  the  agreements  and  encouraging 
regional and subregional cooperation; 

-  on the basis  of  agreements between the European  Community  and  "sensitive" countries  on 
cooperation  in the field of money  laundering,  within the limit  of the  available  resources,  the 
Community  may  provide  technical  assistance  to  countries  that  have  entered  into  the 
appropriate commitments, notably by ratifying the Vienna and Strasbourg Conventions and by 
adopting the FATF recommendations; 

-  the  introduction  of  measures  to  control  trade  in,  and  consumption  of,  legal  narcotics  and 

psychotropic substances; 

-  analysis of local drug abuse patterns, preventive measures, treatment and reintegration of drug 
addicts,  risk  limitation  and  the  integration  of  these  measures  with  health  and  education 
policies. Human rights will be duly respected in implementing these measures; 

-  feasibility studies on cooperation projects designed to ensure that the special trade preferences 
granted by the Community to  countries committed to  curbing the drugs trade are genuinely 
advancing alternative social and economic development  opportunities for  small, independent 
producers of the raw materials for illegal drugs; direct support for the measures taken by these 
countries to curb the drugs trade. 

Particular emphasis will be given to: 

-  the participation  of local people and target  groups in identifying,  planning and  carrying out 

operations; 

-  the development of the developing countries' institutions at national, local and regional level. 

Article 4 

The recipients of aid and cooperation partners shall include not only states and regions, but local 
services, regional organizations, government  agencies,  traditional or local communities, private 
operators and industries, including cooperatives, NGOs and grassroots associations. 

Article 5 

1. Community assistance in the implementation  of the operations referred  to  in Article 2 and 3 
shall include studies, technical assistance, training or other services, supplies and works, and 
evaluation and monitoring missions and audits. 

2.  According  to  the needs of the  operations  concerned,  Community financing may cover both 
capital investment,  other than the purchase  of real  estate, and  operating  costs in foreign  or 
local currency.  However, with the exception of training and research programmes, operating 
costs may normally be covered only during the start-up phase and on a digressive basis. 

3.  A  systematic  effort  shall  be  made  to  obtain  a  contribution,  and  in  particular  a  financial 
contribution, from the ultimate beneficiaries  (countries, local  communities, firms or  others), 
according to their means and the nature of the operation concerned. 

4.  Opportunities  shall be sought  for  cofinancing,  in particular with the Member  States or with 
multilateral, regional or other organizations.  The requisite measures shall be taken to highlight 
the Community character of aid granted under this Regulation. 

5.  The Commission shall take all coordination measures necessary to maximize overall  efficiency 
by enhancing the consistency and complementarity of operations financed by the Community 
and the Member States, and in particular: 

(a)  the  setting-up  of  a  standard  system  for  exchanges  of  information  on  the  operations 

financed  or considered for financing by the Community and the Member States; 

(b)  on-the-spot  coordination  of  operations  through  regular  meetings  and  exchanges  of 
information between the representatives of the Commission and the Member States in the 
recipient country. 

5"-

Article 6 

Financial support under this Regulation shall take the form of grants. 

Article 7 

1. The  Commission  shall  be  responsible  for  appraising,  approving  and  managing  operations 
covered by this Regulation in accordance with the budgetary and  other procedures in force, 
and in particular those laid down in the Financial Regulation applicable to the general budget 
of the European Communities. 

2.  Decisions relating  to  grants  of  more than  ECU 2 million  for  individual  operations  financed 
under this Regulation and any changes resulting in an increase of more than 20% in the sum 
initially  approved  for  such  an operation  shall be adopted  under the procedure  laid  down in 
Article  9 

3.  All financing agreements or contracts concluded under this Regulation  shall provide for  the 
Commission and the Court of Auditors to conduct on-the-spot checks according to the usual 
procedures laid down by the Commission under the rules in force,  and in particular those of 
the Financial Regulation applicable to the general budget of the European Communities. 

4.  Where  operations  are the  subject  of financing agreements between  the  Community  and the 
recipient country, such agreements shall stipulate that the payment of taxes, duties or any other 
charges is not to be covered by the Community. 

5.  Participation in invitations to tender and the award of contracts shall be open on equal terms to 
natural  and  legal  persons  of  the  Member  States  and  of  the  recipient  country.  It  may be 
extended to other developing countries. 

6.  Supplies  shall  originate  in  the  Member  States,  the  recipient  country  or  other  developing 
countries.  In  exceptional  cases,  where  circumstances  warrant,  supplies  may  originate 
elsewhere. 

Article 8 

1. The Commission shall be assisted by an advisory committee made up of representatives  from 
the Member States and chaired by a representative of the Commission, namely, depending on 
the recipient country or region: 

- 

- 

- 

in  the  case  of  the  ACP  countries,  the  EDF  Committee  set  up  by  Article 21  of  Internal 
Agreement  91/401/EEC on the financing and administration  of Community aid under the 
fourth  Lomé Convention, adopted  on  16 July 1990 by the  representatives  of the Member 
States meeting with the Council; 

in the  case  of the Mediterranean  countries,  the MED  Committee  set  up  by  Article 6 of 
Council Regulation (EEC) No 1762/92 of 29 June 1992; 

in the  case  of  the  Asian  and  Latin  American  countries,  the  ALA  Committee  set  up by 
Article 15 of Council Regulation (EEC) No 443/92 of 25 February 1992. 

€ 

2.  The Commission  representative  shall  submit to the  committee  a draft  of the  measures to be 
taken.  The  committee  shall  deliver  its  opinion  on  the  draft  within  a  time  limit  which  the 
chairman may lay down according to the urgency of the matter, if necessary by taking a vote. 
The  opinion  shall be  recorded  in the minutes; in addition  each Member  State  shall have the 
right  to ask to have its position recorded in the minutes. 
The Commission shall take the utmost account of opinion delivered by the committee.  It shall 
inform the committee of the manner in which its opinion has been taken into account. 

3.  The  committee  shall  meet  once  a  year,  during  a  joint  meeting  of  the  three  committees 
mentioned in the first paragraph, to  discuss general  guidelines  presented  by the  Commission 
representative for operations in the year ahead. 

Article 9 

At  the  end  of  each budget  year,  the  Commission  shall  present  a  report  to  Parliament  and the 
Council  summarizing  the  operations  financed  in  the  course  of  that  year  and  evaluating  the 
implementation of this Regulation over that period. 

The summary shall in particular contain information about those with whom contracts have been 
concluded. 

The report shall also summarize any independent evaluations conducted of specific operations. 

Article 10 

This Regulation  shall  enter into  force  on the  third  day following  its  publication  in the Official 
Journal of the European Communities. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 

The President 

FINANCIAL STATEMENT Ç9S-'99) 

1.  TITLE OF OPERATION 

North-South cooperation projects in the field of drugs and drug addiction. 

2.  BUDGET HEADING INVOLVED 

B7-5080 

3.  LEGAL BASIS 

Article 130 W of the Treaty establishing the European Community. 

4.  DESCRIPTION OF OPERATION 

4.1.  General objective 

To improve the efficiency  of the EU campaign against drugs and drug addiction within the 
Union by supplementing  it with  measures to  support  developing  countries' efforts  in this 
field. 

For reasons relating to the efficacy and the strengthening of these projects, it is important to 
integrate  the fight against  drugs  within  existing  cooperation  policies  (health,  education, 
rural development). 

This  operation  should  be governed  by three  main  principles:  they  must  complement  the 
measures taken by individual Member  States, in  particular  in the framework of national 
strategies against drugs and drug abuse implemented by partner countries; coherence with 
projects and policies of the Community in related  areas, such as cooperation,  Community 
legislation  in  the  domain  of  the  fight  against  money  laundering  and  the  diversion  of 
precursors;  the  existence  of  a  political  commitment  at  the  highest  level  in  the  partner 
country. 

4.2.  Period covered and arrangements for renewal or extension 

Period covered: 1 January 1995 - 31 December 1999 (five years). 

Renewal/extension:  before  three  years  have  elapsed,  the  situation  will  be  evaluated  to 
redefine the requirements and replan as necessary. 

5.  CLASSIFICATION OF EXPENDITURE 

Non-compulsory expenditure 
Differentiated  appropriations 

8 

6.  TYPE OF EXPENDITURE 

Financing of projects in the field of drugs and drug addiction conceived in the light of:  the 
general  action  plan  adopted  by  the  UN  in  1990;  the  commitments  entered  into  by 
signatories of the three UN conventions on drugs and drug trafficking;  and national drug 
control  master  plans  drawn  up  in  close  consultation  with  the  UN  International  Drug 
Control Programme (UNIDCP). Such financing will take the form of grants covering up to 
100% of project  costs and grants to cofinance projects with other public or private sector 
sources. 

Supporting measures may take the form of technical assistance, studies, supplies of material 
and equipment, and works. 

7.  FINANCIAL IMPACT 

7.1.  Method of calculating total cost of operation (definition of unit costs) 

The average EC contribution to each operation will be over ECU 500 000, in line with the 
following elements: 
- provision of services (unit price) 
- equipment supplies (cost price) 
- operating costs (overall price) 

7.2. Itemized breakdown of cost (ECU million) 

Breakdown 

1. Support for the preparation of  national drug 

control master plans 

2. Consolidation of "sensitive" developing 
countries' institutional capacity to curb 
trafficking, the diversion of precursors and 
drug money laundering 

3. Action to curb demand and to  treat drug 

addicts 

4. Feasibility studies for alternative economic 
development and alternative development 
projects 

7.3. Indicative schedule of appropriations 

Budget heading 

B7-5080 

1995 

10.0 

°) 

1995 

1.5 

1996 

1.5 

2.5 

3.0 

3.5 

2.5 

3.0 

2.5 

1996 

10.0 

8. 

FRAUD PREVENTION MEASURES 

Technical monitoring by Commission officials, with the assistance of independent experts. 

The  Commission  will  check  the  grants  and  the  performance  of  services  and  preliminary 
studies, feasibility  studies and evaluations before  payment is made, taking  account  of the 
contractual  obligations  involved  and  considerations  of  economy  and  sound  financial 
management. Anti-fraud  provisions (e.g. spot checks and reporting) will be included in all 
agreements and contracts concluded between the Commission and the beneficiaries. 

9.  COST-EFFECTIVENESS ANALYSIS 

9.1.  A. Specific and quantified objectives 

-  to support the creation of the institutional capacity (broad  sense) to carry out  effective 
campaigns  against  drugs  and  drug  addiction  at  national  and  sub-regional  level  in the 
developing  countries.  These  institutional  capacities  should  be promoted,  on  a priority 
basis, in the following  areas: formulation  of national  drug  strategies,  the fight against 
local consumption; the fight against trafficking  by strengthening the legal and judiciary 
framework  as well as the interdiction and control forces; 

-  in  1995  and  1996,  it  is  being  envisaged  to,  first  of  all,  provide  support  for  the 
formulation  of  "national  drug  control  master  plans"  in  the  different  regions  of  the 
developing  world.  Within  such framework, projects  in  the  area  of  drug  prevention, 
treatment of drug addicts and their re-integration will receive priority, in particular Asia, 
Latin  America  and the ACP countries.  Assistance will  also be provided  to  alternative 
development projects, and to the development of the technical and human resources for 
interdiction and control, in particular in the Mediterranean region. 

B. Target groups 

These  projects  will  be  carried  out  with  the  national  authorities,  national  committees 
coordinating the campaign against drugs and drug addiction, local communities, NGOs and 
the private sector. Target groups will vary according to the type of project, and will include 
traffickers,  small independent growers, addicts and population groups vulnerable to drugs. 

C. Indicators 

Some  of  the  projects  will  be  carried  out  in  close  harmony  with  measures  taken  by the 
authorities; others will be monitored using specific indicators that will directly or indirectly 
quantify the impact of the Community's contribution. 

- reduction of drug abuse in developing countries 
- reduction in area used to cultivate the raw material for illicit drug 
- drug seizures 

AC 

9.2.  Grounds for the operation 

The campaign  against  drugs and  drug addiction is increasingly  recognized  as  one  of the 
main social problems in the developing countries, one that has disastrous consequences for 
public  health,  economic  structures,  domestic  allocations  of  economic  resources,  the 
operation  of democratic institutions and human rights, especially the physical  and mental 
well-being. 

The operation is also justified  by the fact  that it provides an opportunity to maximize the 
impact  of  Community  policy,  projects  and  regulations  by  supporting  the  worldwide 
implementation  of certain types of controls, especially in the field of chemical  precursors 
and money laundering. 

9.3.  Monitoring and evaluation 

- monitoring and evaluation indicators will be selected for each project; 

- in some cases special impact and feasibility studies will be carried out; 

- cost-effectiveness will be a crucial criterion for all projects; 

- results and information will be disseminated on a regular basis; 

- management procedures and methods will be evaluated regularly; 

- an annual report is drawn up covering the projects initiated in the course of the previous 
calendar year.  A more global  and  in-depth  evaluation  is envisaged  after  3 years. These 
reports  will  destined  to  the  Council  and  the  European  Parliament,  and  will  help  in 
updating the strategy being pursued by the Community in this domain. 

9.4.  Consistency with financial programming 

A. The  operation  is  in  line  with  the  Commission's financial programming  for  the  years 

concerned. 

B. The objective of the operation is in line with development cooperation policy as defined 

in the Treaty on European Union. 

A4 

ANNEX 

DRUGS AND DRUG ADDICTION IN THE DEVELOPING COUNTRIES: 
ASSESSMENT OF THE CURRENT SITUATION AND  PROPOSALS FOR 
A COMMUNITY STRATEGY 

SECTION  1: Background  to  budget  heading  B7-5080.  "North-South  cooperation  in  the 

context of the campaign against drug abuse" 

This  budget  heading  was  created  in  1987  with  an  initial  allocation  of  ECU  5  million  in 
commitment  appropriations,  in response to  the  conclusions  of the European  Council  meetings 
held  in  Milan  (June  1985)  and  The  Hague  (June  1986),  and  requests  from  Asian  and  Latin 
American  countries  for  Community  support  in  the  campaign  against  drug  abuse.  It  was  not 
possible  to  carry  out  measures  in  this field under  the  general  budget  heading  owing  to  the 
restrictions imposed by the regulations on technical and financial development cooperation. 

The  Commission's  preliminary  draft  budget  for  1987  included  a  programme  -  to  be 
implemented in close consultation with the Member States, beneficiary governments and regional 
cooperation  and  integration  bodies  -  for  the  implementation  of  integrated,  multidisciplinary 
cooperation projects to reduce drug production by diversifying agricultural and economic output, 
developing  national  and  regional  anti-drug  and  research  bodies,  and  improving  the  legal, 
technical,  social  and  economic  components  of national  and  regional  strategies  to  reduce  drug 
production and consumption. 

SECTION 2: Measures carried out under heading B7-5080.1987-94 

Over this period  a total  of nearly ECU 67 million was allocated to  a large number  of drug-

related projects in Asia, Latin America, the Mediterranean and the ACP countries. 
Some 25% of this amount was used to finance projects aimed at reducing the supply of drugs by 
promoting alternative development;  5% went to projects  designed to reduce supply by policing 
drug trafficking,  and more than 60% was allocated to projects targeting demand, from prevention 
to rehabilitation to risk reduction; the balance of 7% was spent on research and the identification 
of national or local drug abuse profiles. 

It is not possible to carry out a detailed evaluation of projects targeting the supply side through 
alternative development. The impact of such projects  must be measured  over a period  of time, 
and in most  cases the time elapsed  is insufficient;  furthermore, 
the  positive impact  of  specific 
alternative  development  projects  has  been  more  than  offset  by  the  significant  rise  in  world 
demand  for  drugs.  With regard  to  demand,  a  number  of pilot  projects  have been  successfully 
carried out, particularly in the area of treating and resettling drug addicts;  however, here too the 
progress  made  has  been  neutralized  by  social  and  economic  developments,  particularly  the 
shortcomings of local basic health infrastructure. Nevertheless, the individual successes logged by 
these pilot projects have provided some useful  pointers for the Commission, the local authorities 
and the communities concerned. 

4;L 

From  1991 onwards, the Community  also used the GSP  scheme to  extend  additional  trade 
benefits to Bolivia, Colombia, Ecuador, Peru and the Central American countries, with the aim of 
reducing  the  internal  economic  costs  of  the  campaign  against  illegal  drug  production,  and 
promoting alternative development. A number of surveys have confirmed  the link between these 
trade benefits  and increased  exports, but there is no clear evidence that the area given over to 
coca cultivation has reduced. 

SECTION 3: Drug figures continue to increase alarmingly 

Supply side: UNIDCP statistics indicate that the production of poppies (from which heroin is 
derived) and coca leaf (cocaine and crack) is increasing at a significant rate: the poppy index rose 
from 100 in  1985 to 280 in  1993, while the coca index went from 100 in  1985 to 230 in 1992, 
before falling back to 180 in 1993 owing to a fungus that blighted the Peruvian crop that year. 

The increase in production is reflected in the ever cheaper prices paid by the end user, and the 

continuing increase in drug seizures by the authorities. 

New,  easy-to-produce  and  relatively  cheap  "industrial"  drugs  (particularly  psychotropic 
substances and amphetamines) are increasing their market share, particularly in Eastern Europe, 
but also in the Union itself, at the expense of traditional drugs derived from poppies, coca and 
cannabis. 

Drug  abuse:  according  to  UNIDCP  estimates  and  studies  carried  for  the  Commission, 
consumption  has  undoubtedly  increased  over  the  last  ten  to  fifteen  years,  not  only  in  the 
industrialized  countries  but  also  in  the  developing  world,  particularly  in  producer  and  transit 
countries. A large number of ACP countries appear to be particularly badly affected.  It is this fact 
that  has  brought  about  a  change  in  attitude  towards  drugs  on  the  part  of  many  developing 
countries; where once it was considered a problem affecting  the industrialized world, drug abuse 
is  now  a worry  in the  poorer  countries.  The  same goes  for  the  consumption tof  cannabis and 
psychotropic substances, particularly amphetamines and methaqualone. 

Drug money: for  obvious reasons, reliable estimates are hard to  come by. According to the 
UNIDCP, the total value of the consumer countries' drug imports may be in the region of USD 
60-100 billion, which  corresponds to  a  street  value of USD 300-500  billion.  "Value"  is added 
primarily in the consumer countries, owing to the risk involved in marketing illegal goods where 
policing is reasonably effective. 

At the other  end  of the  economic  chain, the producer  countries  pocket  around  10% of the 
retail price. Drug money laundering activities take place mainly in the consumer countries, to a 
lesser  extent  in transit  countries, and  only minimally in the producer  countries. However,  even 
with only  10% of total turnover actually coming back to the producer, the financial returns are 
significant in terms of the GDP of the countries concerned, especially in Bolivia, Colombia, Peru, 
Afghanistan and some Caribbean countries. The economic, financial and political repercussions of 
this phenomenon are dire. 

Ah 

SECTION 4: Drugs in the developing world 

Sub-Saharan Africa:  39 countries are party to the  Single Convention  on narcotic drugs of 
1961,  as  amended  by  the  Protocol  of  1972;  35  countries  are  party  to  the  Convention  on 
psychotropic substances of  1971; 25 countries are party to the International Convention against 
illicit traffic in narcotic drugs and psychotropic substances of 1988; and  14 countries are party to 
none  of  these  treaties.  Faced  with  increasingly  serious  economic  problems,  the  countries 
concerned have relegated drug abuse and trafficking  to the back burner,  and have consequently 
become  a favoured  route  for  cocaine  and  heroin  bound  for  North  America  and  the European 
Union. Drug abuse is also rapidly increasing in Africa itself, as is the production and consumption 
of cannabis, psychotropic substances and phoney medicines. 

Mediterranean: Morocco remains the main source of cannabis resin, with a market share of 
65% in the EU;  with effective policing noticeable by its absence, it could become a major centre 
for large scale trafficking.  Turkey plays a pivotal role in the hashish, morphine and heroin trade 
between Asia and the European union, a role which embraces processing, distribution and money 
laundering. Lebanon remains a major player in production and processing, with the EU again its 
principal market. 

Central  America  and  the  Caribbean:  far  too  few  countries  have  ratified  the  above-
mentioned  Conventions.  This  region  is  primarily  involved  in  trafficking  and  drug  money 
laundering: its location, terrain  and limited policing resources are being increasingly exploited by 
drug traffickers, while the proliferation  of banks and other financial institutions has proved fertile 
ground  for  the  development  of money laundering  activities.  This  has  led  to  the  creation  of a 
Caribbean regional subgroup of the G7's Financial Action Task Force. 

South America: all the South American countries are party to the Single Convention of 1961, 
the Convention of  1971 and - with the exception of Uruguay - the International  Convention of 
1988. To varying degrees, the countries of South America are plagued by the full range of drug-
related  problems,  from  production  and  processing  to  consumption,  diversion  of  precursors, 
money laundering and trafficking. 

Drug abuse is on the increase; cannabis and cocaine are the main problems, but psychotropic 

substances and stimulants are becoming increasingly popular in urban areas. 

Although coca leaf production fell  sharply in Peru in  1993 owing to  a disease affecting  coca 
plants,  output  in Bolivia  and  Colombia  has risen sharply  over  the  past  few  years.  Operations 
conducted  by the authorities, especially in Peru,  clearly indicate that production  and processing 
activities are being shifted to less accessible areas of the Amazon basin, in Venezuela and - more 
particularly - Brazil, where the secondary importance attached by the authorities to  drug-related 
problems, and the absence of legislation to prevent the diversion of chemical precursors and their 
export to neighbouring countries, make life a great deal easier for the drug barons. 

In many South American nations the legislation  on money laundering  is inadequate  or non 
existent,  and several countries risk becoming laundering centres for  the drug traffickers,  if they 
are not already fulfilling  that function. 

Argentina, Bolivia,  Chile and Peru  have undertaken  to  improve  subregional  cooperation  on 

drugs with the help of the UNIDCP. 

East  and  South-East  Asia:  of  the fifteen countries  involved,  12  are  party  to  the  1961 
Convention, 9 to the  1971 Convention and 4 to the  1988 Convention. Cambodia, North Korea 
and Vietnam are party to none of the international drugs conventions. As in South America, the 
countries concerned are affected,  to varying degrees, by the full range of drug-related problems. 
Poppy and opium production is undoubtedly on the increase in South-East Asia, having probably 
doubled since  1988, while there has been a similar development  of the transit networks passing 
through China and in particular, Vietnam. Cannabis production is also increasing, particularly in 
Thailand, Cambodia and the Philippines. 

Money laundering remains a serious problem in this region, which boasts a number of major 
financial  centres;  the  record  economic  growth  of  the  last  ten  years  has  created  excellent 
opportunities for drug money laundering, with legislation regulating this area almost non-existent. 

Southern Asia: all six nations are party to the three UN Conventions. Cannabis production is 
increasing significantly  in the region. In India, which under the terms of the  1961 Convention is 
the world's only legal exporter of opium, illegal poppy production is expanding, and the country 
is also a major  supplier of psychotropic  substances, particularly to  Africa.  Under the combined 
pressure  of  poverty,  unemployment  and  population  growth,  consumption  of  drugs  and 
psychotropic  substances  continues  to  spread  throughout  southern  Asia.  To  supplement  the 
international  agreement  of  1988, a  convention  drawn  up  by  the  South  Asian  Association  for 
Regional Cooperation  on illegal trafficking  in narcotics and psychotropic substances entered into 
force  in  1993. With the help of the UNIDCP  India  and Pakistan  have adopted  procedures  for 
operational  cooperation between their drug enforcement agencies. 

Central  and  western  Asia:  of  the  25  countries  concerned,  18  are  party  to  the  1961 
Convention,  15 to  the  1971 Convention  and  14 to  the  1988  Convention.  Almost  none  of the 
central Asian Republics are party to any of the three conventions. The Golden Crescent is one of 
the world's  main  suppliers  in heroin  and  cannabis.  Afghanistan  and  Pakistan,  which  signed  all 
three conventions, together  produce  75% of the heroin and  a large proportion  of the  cannabis 
resin  seized  in  Europe.  Trafficking  on  the  Afghanistan-Pakistan-Iran-Turkey  route  continues 
unabated.  With  the  help  of  the  UNIDCP,  Pakistan,  Afghanistan  and  Iran  have  signed  a 
memorandum  of understanding  for  closer  operational  cooperation.  The Economic  Cooperation 
Organization countries are also stepping up operational cooperation in the face of drug trafficking 
activities  that  have taken  on  alarming  proportions.  The  huge  drugs  trade  is having  disastrous 
political, social and health-related effects throughout the region, with drug addiction rising all the 
time. 

SECTION 5: Main guidelines for future  action 

The  international  community,  including  the  European  Community,  is frankly failing  in  its 
attempts to curb the drugs trade. This failure can be attributed to the laws of economics, which 
are as valid in this sector as in any other. 

The first such law is that any poverty-stricken grower who receives no government assistance 
will go for crops that will provide the best return on his labour, and secure  the best possible life 
for his family. 

4% 

A second law states that the greater the potential profits - and they will remain high given the 
©sk  premium  linked  to  the  illegal  nature  of  the  trade  -  the  greater  the  economic  incentive  to 
produce  and  market  drugs.  Thirdly,  supply  will  respond  to  demand  as  long  as  it  can  do  so 
profitably, which is certainly the case with drugs. In other words, as long as there is a demand for 
drugs anywhere in the world, production and trafficking  will continue.  With profit  margins high 
owing to the illegal nature of the trade, activities such as the diversion of precursor chemicals and 
money  laundering  will  continue  to  increase,  particularly  in  countries  lacking  the  administrative 
and legislative wherewithal to control these phenomena. 

This analysis may appear pessimistic but at least has the advantage of being realistic. Far  from 
leading to the abandonment of international action on drugs, it ought to be the starting point for 
an in-depth assessment of how to make such action more effective  in an environment of growing 
political  commitment  and  increasing  international  cooperation.  The  question  is  how  best  to 
employ the modest resources allocated to heading B7-5080. 

The Commission believes that the answer to this question is dictated by three principles. First, 
as the heading concerned comes under Chapter 7  of the budget,  which is  entitled  "Cooperation 
with developing countries and other third countries", the Community's activities in this area must 
form  part  of  its  overall  cooperation  strategy  and  must  complement  the  measures  taken  by 
individual  Member  States,  in line with  Article  130u  of the  Union  Treaty.  Second,  measures  to 
curb the  drugs trade must be  consistent  with  Community  activities or policies  in related areas, 
applying  the  principle  of  subsidiarity  by  integrating  these  measures  into  areas  in  which  the 
Community  has an established track-record,  while  at the  same time  consolidating  the impact  of 
Community cooperation as a whole;  this goes particularly for measures to curb money laundering 
and  the  trade  in  precursors.  Third,  partner  countries  must  give  a  solid  indication  of  their 
commitment  to  the  campaign  against  drugs; ratification  of  the  three  Conventions  (of  1961/72, 
1971  and  1988) must be considered  a key criterion if some degree of synergy is to  be  achieved 
between national and Community projects in this  field. 

These  principles  are in line  with  the  guidelines  on  international  cooperation  featured  in the 
Commission communication of 23 June 1994 to the Council and to Parliament on the EU Plan of 
Action on Drugs (COM (94)2344  final). 

SECTION 6: Priority  measures 

Without  making  it  a  pre-condition  for  Community financing, priority  should  be  given  to 

countries that have ratified the three international drugs conventions. 

The Community will work closely with the UNIDCP to help these countries draw up national 
drug control  master plans.  These master plans will  commit the countries concerned  to  ratifying 
the three international  conventions while clearly identifying  individual  national  strategies to  deal 
with  drugs  and  drug  addiction,  and  setting  out  the  resources  required  to  implement  those 
strategies, including contributions from external sources. 

They will also provide a framework for dovetailing Community input with that of the Member 
States,  a process which will  also  be  furthered  by adapting  Community  measures  in the  light  of 
political  and operational  decisions  adopted by the Union in the context  of the  CFSP,  especially 
with regard to joint action on international cooperation on drugs. 

Mo 

The Community will use the national drug control master plans to identify  external assistance 
requirements that are consistent with its other policies and directives,  supporting projects of the 
following kinds: 

(1)  assistance  in upgrading  the  institutional,  administrative  and legal framework to  enable the 
countries concerned to implement their national plans once they have been approved by the 
UNIDCP; 

(2) technical assistance and aid in setting up specialized bodies to improve "sensitive" developing 
countries'  ability  to  impose  rigorous  controls  on  the  trade  in  precursors,  in  line  with 
Community legislation in this area; 

(3)  assistance  in upgrading  "sensitive" developing  countries' institutional  capacity to  cope with 
drug  money  laundering,  in  conjunction  with  measures  taken  by  the  Community  and  its 
Member States to upgrade their own internal financial systems in this regard. With regard to 
technical  assistance,  the  Commission  is  already  heavily  involved  in  work  of  this  kind  in 
implementing  the  Phare  programme  in  eleven  Central  and  East  European  countries,  and 
could carry out similar projects in the developing countries if it had access to the additional 
personnel required. 

(4)  preventive  measures,  treatment  and  social  reintegration  for  drug  addicts,  in  line  with  the 
Community's development cooperation policy and its objectives in the field of human  rights 
and the campaign against poverty; 

(5)  feasibility  studies  prior to  launching  development  cooperation  projects  to  ensure  that  the 
special trade preferences (currently extended only to the Andean Pact and Central American 
countries)  lead  to  social  and  economic  progress  via  the  diversification  of  exports,  the 
development  of  alternative  crops  and  sustainable  alternative job  creation  that  will  reduce 
drug-related economic and financial activity, at least in relative terms. 

Project types (4) and (5) will place special  emphasis on the participation of local people, NGOs 
and  the  social  and  economic  target  groups  and  on  building  up  the  developing  countries' 
institutions at local, national and regional level. 

AJf 

ISSN 0254-1475 

COM(95) 296  final 

DOCUMENTS 

EN 

11  05 

Catalogue number  : CB-CO-95-323-EN-C 

ISBN 92-77-90969-2 

Office  for Official Publications of the European Communities 

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