Source: 2005
Released by the Bureau for International Narcotics and Law Enforcement Affairs
I. Summary
Kazakhstan continues to be a major route for Afghan heroin and opium in transit to Russia and Europe. An Associate Professor of the Academy of National Security estimates that approximately 100-150 tons of Afghanistan's narcotics will move through Kazakhstan this year. Approximately 30 percent of these drugs will be sold in Kazakhstan. More than 19 tons of narcotics were seized since the beginning of 2004, which is 14 percent more than the previous year. Local drug use and its health consequences continue to increase, but local crime connected to drug use seems to have dropped. Kazakhstan continues to take steps to control drug-related crimes within its own borders, but official corruption complicates efforts to improve controls over drug trafficking. Kazakhstan is a party to the 1998 UN Drug Convention.
II. Status of Country
Although vast fields of wild marijuana and ephedra, along with some small-scale opium growing, demonstrate that Kazakhstan could become a major producer of narcotics, evidence continues to suggest that local production is mostly limited to in-country use and small-scale smuggling into Russia. Drugs transiting Kazakhstan impact Russia and Europe, not the U.S., but proceeds from drug smuggling potentially could serve as revenue for terrorist groups. There were no discoveries of laboratories for the production of narcotics announced this year.
III. Country Actions Against Drugs in 2004
Policy Initiatives. Kazakhstan is in the fourth year of its five-year plan in the fight against drug trafficking, but President Nazarbayev announced this year that it will take twenty years before Kazakhstan can fully control its narcotics problem. On March 3, 2004, the President signed a decree that established the Committee on Combating and Controlling Narcotics (the Committee) within the Ministry of the Interior (MIA), a DEA-like office whose sole responsibility is fighting narcotics. The Committee coordinates efforts among law enforcement entities, analyzes developing trends in the trafficking and consumption of narcotics, initiates legal reform and drafts statutes pertaining to the narcotics problem in Kazakhstan, interacts with the mass media and the press to inform the public on counternarcotics efforts taken by the Committee and other governmental agencies, and engages with international counterparts through the national branch of Interpol. The Committee's staff is comprised of 630 officers. In cooperation with the Statistics Division of the Prosecutor's Office, the Committee has changed the format of the GOK's intelligence collection on statistics related to narcotics trafficking, cultivation, seizures, and demand reduction. The Committee's current database includes detailed information on major narcotics dealers, underage narcotics users, and the socio-economic background of addicts and those who are involved in criminal activities related to drugs. The GOK also announced that more than $5 million was allocated this year from national and local budgets within the framework of the National Program for Combating Narcotics.
On June 28, 2004, the GOK signed "The Additional Protocol to the Memorandum of Understanding on Narcotics Control and Law Enforcement between the Government of the United States of America and the Government of the Republic of Kazakhstan." This agreement established a framework to support projects designated to improve the capacity of Kazakhstani law enforcement agencies to combat narcotics trafficking and organized crime. The agreement includes a provision for technical assistance aimed at improving the ability of the Ministry of the Interior's counternarcotics forces to interdict narcotics and other contraband transiting through Kazakhstan. It also calls for improving the collection and reporting of crime statistics with an emphasis on those statistics and regions germane to the evaluation of GOK progress in the fight against narcotics trafficking.
Accomplishments. Kazakhstan continues to work toward the UN Convention's goals on combating illicit narcotics cultivation and production within its borders. The annual "Operation Poppy" campaign eradicated more than 977 square meters of illicit poppy and marijuana cultivation this year.
The Presidential decree of March 3, 2004 that established the Committee headed by Colonel Anatoliy Vyborov was a significant move forward this year in Kazakhstan's fight against narcotics trafficking. In his April interview with a local newspaper, Colonel Vyborov called for urgent legal reform to assist the Committee in its work. According to Vyborov, the country needs to toughen punishments for those involved in drug trafficking and the sale of narcotics to the underage population. The MIA is soliciting public opinion regarding an increased sentence for drug-related crimes through its website. While this legal reform is in its early stages, if done transparently and correctly, it could greatly assist the Committee in its work by serving as a deterrent to potential criminals. The Committee is also currently working on statutes to amend the Law of the Republic of Kazakhstan on "Narcotics, psychotropic substances, precursors, and countermeasures to illegal consumption."
In an effort to combat production and trafficking in narcotics, the Ministry of the Interior has also initiated "Operation Dope." This project has led to several raids resulting in the confiscation of narcotics, the most effective of which were conducted by the division of the Ministry of the Interior in Astana, Almaty, and Karaganda. The Karaganda division of the MIA seized 25 tons of narcotics.
Law Enforcement Efforts. The GOK continues to actively fight drug smuggling, but the results of these efforts only demonstrate a slight improvement over last year. The Committee's statistics for the first nine months of 2004 show only a moderate increase in seizures of opium and a slight increase in seizures of heroin and cannabis. The Committee supervised forces, which made the majority of narcotics seizures and has actively employed undercover tactics to eliminate major narcotics traffickers.
More than 19 tons of various narcotics, including 92 kilograms of heroin, were seized in the first nine months of 2004, which is approximately four tons more than the previous year (15 tons and 70 kilograms of heroin in 2003.)
Since the beginning of this year, more than 22 undercover operations were led by the Committee. Two major organized criminal groups and eight smuggling rings with criminal ties to other organized crime groups in the country were apprehended and charged with illicit narcotics activities. More than 21 kilograms of heroin was seized from one of these groups. In May 2004, more than 2.5 kilograms of heroin and 26.5 kilograms of opiates were seized in the northern region of Kazakhstan from a drug dealer who was trafficking narcotics from Kyrgyz Republic to Kazakhstan. Another notable seizure took place in Almaty where a Kyrgyz citizen was apprehended while trying to sell 1.5 kilograms of heroin to an undercover Committee agent.
The annual project "Operation Poppy," which combines intelligence collection, interdiction of smugglers, eradication of cultivation, and demand reduction was conducted from June 7 until October 15, 2004. More than 1,700 officers from the Ministry of the Interior, 145 officers from Customs, and 55 officers from the Committee on National Security combined their efforts in this project. As a result, more than 103 individuals were arrested for the cultivation of opiates and 236 were arrested for marijuana cultivation. In addition to these arrests, authorities seized more than 12 tons of marijuana.
Another large-scale operation, entitled "Dope," is aimed at the control and seizure of psychotropic substances and precursors. A total of more than 15 tons of drugs were seized during the first stages of the operation this year. The Committee raided 703 drug stores, 111 storage facilities, 387 medical facilities and 120 industrial facilities that were discovered to be in possession of illicit/diverted narcotics. As a result, 243 people, including 11 medical workers, were convicted of violations related to the illicit diversion of narcotics substances. In October 2004, the National Security Committee (NSC) also arrested a German citizen in Almaty who was in possession of over 30,000 psychotropic pills. According to the detainee, he acquired the pills in the German town of Aalen in May 2004 and brought them to Kazakhstan in the secret compartment of a vehicle that he shipped overland. According to the NSC, this particular seizure was one of the biggest in all of the CIS countries during 2004.
Overall, however, there has been a decrease in narcotics-related convictions in Kazakhstan. From January 2004 until September 2004, there were 7,897 criminal cases related to narcotics, which is 18.6 percent lower than the previous year (9,705) and comprises only 8 percent of the overall reported national crime apprehensions.
More than 94 percent (4,910 out of 5,185 registered cases) were related to the production, processing, and trafficking of narcotics, psychotropic drugs, and other controlled substances. 44.5 percent (2,123) of these criminal cases were related to the sale of or an attempt to sell narcotics.
In comparison to the previous year, the Committee has reported a drop (25,3 percent) in criminal cases related to illegal narcotics transiting the country, a 15.9 percent decrease in the underage population known to be involved in the narcotics business, and a 13.5 percent drop in cases involving non-Kazakhstani citizens from elsewhere in the former USSR. Overall, there were 63 criminal cases related to the abuse of psychotropic and controlled substances, which is 18.2 percent lower than in 2003 (77 cases). It is difficult to determine whether these statistics are suggestive of an overall decrease in the actual use and trafficking of narcotics in the country or a decrease in the effectiveness of Kazakhstan's law enforcement agencies in apprehending those involved in narcotics. Since this decline in convictions is coupled with at least a slight increase in narcotics seizures, however, it does appear that Kazakh law enforcement agencies are having more success in apprehending larger drug trafficking rings than was the case last year.
Corruption. While it is difficult to determine the extent to which corruption negatively affects the country's efforts to combat narcotics trafficking, widespread corruption in Kazakhstan indicates that it is almost certainly a critical factor in hampering the country's war on drugs. Nonetheless, there appears to be an increasing effort to apprehend at least lower-level officials involved in corruption. The Department on Combating Economic Crimes and Corruption of Almaty City investigated 68 criminal cases this year.
The number of corruption cases increased 4.5 times over 2003.
According to the Constitutional Council of Kazakhstan, in 2004 there were 356 criminal cases involving corruption, 222 officials were reprimanded for abusing their authority, and 210 officials were accused of taking bribes. According to the Head of the Committee on Combating Narcotics of the MIA, Anatoly Vyborov, these corruption charges included 26 criminal cases against individuals from the Ministry of the Interior for illegal actions involving their operations with narcotics. In all cases, the perpetrators were sentenced to jail terms and were immediately fired from their positions in the MIA. While these efforts demonstrate that the GOK is beginning to address corruption among law enforcement officials combating narcotics, given the money involved in drug trafficking, it is likely that corruption will continue to be an issue of grave concern.
Agreements and Treaties. The U.S. and Kazakhstan signed a Memorandum of Understanding on narcotics control and law enforcement in December 2002. Kazakhstan is party to the 1998 UN Drug Convention and has signed the Central Asian Counter-Narcotics Memorandum of Understanding with the UNODC. The Kazakhstan national counternarcotics law, passed in 1998, specifically gives the provisions of international counternarcotics agreements precedent over national law (Article 3.2). Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan signed an agreement in September 1999 on cooperation in combating transnational crime, including narcotics trafficking. The five Central Asian countries, Azerbaijan, Georgia, Iran, Pakistan, and Turkey are members of the Economic Coordination Mechanism supported by the UNODC. Kazakhstan has signed but has not yet ratified the UN Convention Against Transnational Organized Crime.
Cultivation and Production. Marijuana and ephedra grow wild on about 1.2 million hectares of southern Kazakhstan, with the largest single location being the 130,000 hectares of marijuana in the Chu Valley. It is estimated that approximately 97 percent of the marijuana sold in Central Asia originates in Kazakhstan. The production of opium and heroin remains minimal. In the first nine months of 2004, the Statistics Division of the Prosecutor General's Office identified 195 cases of the illicit cultivation of opium poppies, marijuana and ephedra and 31 cases of the cultivation of wild marijuana (916 square meters and 61 square meters of eradicated fields). According to Anatoly Vyborov, the situation in the Chu Valley is growing worse as there is increasing evidence that organized crime rings are involved in the region's marijuana cultivation and production. Evidence of the sophistication of marijuana cultivation includes the discovery of land mines near the entrances to green houses where marijuana is being cultivated. Believing that this problem has not been adequately addressed, the MIA this year fired for incompetence the head of its counternarcotics division in Zhambyl oblast, which includes the Chu Valley.
Drug Flow/Transit. Despite the efforts of law enforcement agencies, Kazakhstan continues to be an important transit country, especially for drugs coming out of Afghanistan. According to UNODC 30 percent of Afghanistan's opium crop will pass through Central Asia, and 70 percent of that (about 800-1000 metric tons) passing through Kazakhstan. The GOK's estimate of the opium transiting Kazakhstan is considerably lower. The main routes for the transit of Afghani narcotics through Kazakhstan continue to run through Tajikistan and Kyrgyz Republic, or Turkmenistan and Uzbekistan.
Domestic Demand. Kazakhstan's increasing prosperity has also created a new market for Ecstasy and amphetamines shipped in from Russia. A much larger problem, however, is the growing use of heroin in Kazakhstan. Likely due to the large amount of heroin and opium transiting Kazakhstan, drug addiction is a quickly growing problem in the country. Since 1991, the number of drug addicts in Kazakhstan is estimated to have grown 22-fold. During the first nine months of 2004, it was estimated that there were approximately 47,000 drug addicts in Kazakhstan. Almost two thirds of these addicts are people younger than 30 years of age. The Procuracy's statistics show a slight drop in the number of registered addicts, almost a 2 percent decrease in comparison to previous year. Experts estimate that the true number of addicts is about five times the number of those registered.
State financing for drug rehabilitation centers has grown substantially over the last several years. This year the GOK allocated 68 million Tenge (130 Tenge equals $1) to finance drug rehabilitation centers, and more than 86 million Tenge has already been allocated for next year. In addition, the GOK has sponsored several drug awareness programs since the beginning of this year. These included 37 counternarcotics programs initiated throughout schools as part of a pilot project on combating narcotics among the underage and teenage population as well as 812 publications in the press, 1010 films, and 163 radio talk shows devoted to combating narcotics abuse.
IV. U.S. Policy Initiatives and Programs
In March 2003, President Nazarbayev approved the State department Narcotics Assistance Letter of Agreement, signed in December 2002, allowing the commencement of assistance to Kazakhstan. Despite its continued problems of drug trafficking and abuse, Kazakhstan has made considerable progress since that time, especially compared to the rest of the region. Given Kazakhstan's great potential as a partner in the fight against narcotics, terrorism and money laundering, our overall goal is to develop a long-term cooperative relationship between the police and investigative services of the United States and those of Kazakhstan.
Bilateral Cooperation. In 2004 the U.S. Government assisted Kazakhstan's counternarcotics effort in several ways:
In August 2004, the State department sponsored two U.K. Customs agents who provided training on drug profiling as well as pedestrian, rail and vehicular searches to selected MIA and Border Guard units as well as to the academies of both the Ministry and the Border Guards.
State continued to assist the National Forensics Laboratory in Almaty. One gas chromatograph as well as numerous drug test kits and "Drug ID Bibles" were delivered to the Laboratory in March 2004.
State also continued to sponsor the Committee on Combating Drugs. As part of a larger project aimed at combating narcotics trafficking in Kazakhstan Approximately one-third of the funds provided by the U.S. were used to acquire equipment needed to search vehicles for contraband, especially illegal narcotics. The remainder of the money is being used to provide specialized training to the unit in a variety of areas including drug identification, the search of vehicles using the equipment provided under the project, and Kazakh legal statutes pertaining to illegal narcotics and the arrest and detention of criminal suspects. The legal training also includes the principles of asset forfeiture (principles of legal seizure, custody, cooperation with prosecutors and judges, and transfer to GOK authorities responsible for the sale of forfeited assets.)
Training and equipment was provided to the Statistics Committee of the Prosecutor's Office, which targets drug trafficking organizations operating in Kazakhstan. The project also covered the costs of modernizing the Statistics Division of the Prosecutor's Office. The first field offices to be modernized under the project were those contiguous to the Kazakh-Kyrgyz border between Kordai and Taraz, the field office in the town of Sarishagan near Lake Balkash, and the field offices contiguous to the Kazakh-Russian border in the towns of Aul and Zheshkent. In total, $117,000 worth of technical equipment was given to the Prosecutor's Office of the GOK under this project, including computers, printers, monitors, and copy machines. In November 2004, computer equipment was distributed throughout Kazakhstan to 17 different branches within the Criminal Statistics Unit; and the State Department sponsored 25 training courses in 2004, during which a total of 687 GOK officials were trained.
The Road Ahead. Kazakhstan is making serious efforts to end its status as a narcotics transit country. The GOK is working to refine its laws related to narcotics, to develop its police services and to cooperate with the international community. Corruption, failure to devote sufficient resources to training and equipment, and a weak infrastructure remain serious problems, but trends are encouraging.
Kazakhstan, with its developed, modern banking system has become the financial center for Central Asia. Unfortunately, the lack of adequate banking regulations, widespread corruption, regular incidents of money laundering and cash smuggling, mostly related to economic crimes, and Kazakhstan,s status as a major transit hub for narcotics-trafficking from Afghanistan, also make this country a potential regional money laundering center. The Government of Kazakhstan (GOK) is a willing partner in the fight against terrorism, but weak laws, corruption, ill-trained financial police and a lack of modern equipment hamper its efforts. It is, however, taking steps to remedy these problems.
Money laundering was first criminalized in Kazakhstan by Article 30 of the 1998 counternarcotics law, which makes it illegal to launder money in connection with the sale of illegal drugs. The definition of money laundering used in the act, however, is narrow and the sanctions against it relatively light (a maximum of three years imprisonment, rising to five for multiple offences). A further limit to the effectiveness of the law is that bank records may not be examined until after a criminal case has been initiated.
The GOK has been aware for several years of problems with its policing of financial crimes and is proactively taking corrective measures. In January 2004, the State Agency for Economic Crimes and Corruption was established. The agency is an amalgam of the former Financial Police Agency and the Ministry of Internal Affairs, 9th Department on Economic Embezzlement. The newly created Agency for the Regulation and Inspection of the Financial Market and Financial Organizations is authorized to supervise all aspects of financial markets. In the past, supervision of financial markets was carried out by various state bodies and coordinated by the National Bank. The establishment of a new body, separate from the National Bank, demonstrates the government,s intentions to ensure that the country,s financial system is consistent with the best international practices. While the head of the new agency reports directly to the president of Kazakhstan, the agency itself continues to operate under the auspices of the National Bank with which it shares regulatory functions. The overall effectiveness of the agency is also limited by a lack of training and the absence of any legal mechanisms to ensure law enforcement,s access to the information related to illegal financial operations, such as money laundering, corruption, terrorism financing and other crimes.
The Prosecutor General,s Office is the lead agency in drafting new anti-money laundering and counterterrorist financing legislation and in the formation of the proposed Financial Investigative Unit (FIU). The Office of the Prosecutor General expects the legislation to be passed by the end of the first quarter (April 1, 2005), and that the FIU should be fully operational by the end of 2005. The latter is contingent on requisite funding of the FIU being provided by the Parliament during the annual GOK budget process. The Office of the Prosecutor General has the responsibility within the GOK to ensure that the provisions of the law and the function of the FIU will meet international standards and become an effective means of combating money laundering and related financial crimes.
Only one-half of 242,000 registered business entities in the country are in fact operational. In addition, it is estimated that over 93,000 businesses do not report their tax incomes. Since the beginning of 2004, the State Agency for Combating Economic Crimes and Corruption reported 421 registered money laundering cases in Kazakhstan totaling $107 million. In early January 2004, the Almaty Prosecutor,s Office charged two companies with bank fraud. The two companies were charged with illegal operations resulting in the laundering of $7 million over a period of five months. According to the Prosecutor,s Office, these crimes were conducted with the help of bank employees, making them especially difficult to detect. According to the Prosecutor General of Kazakhstan the detection of crimes involving money laundering companies is fairly low, and the above figures probably do not reflect the true scope of these crimes in Kazakhstan. Moreover, even when such crimes are detected, they often are not prosecuted. According to the Prosecutor,s Office, approximately only one out of ten criminal proceedings is actually brought to court.
Kazakhstan is not an offshore financial center. There are no offshore companies or banks. Existing legislation does not favor offshore banks and financial centers. Foreign banks, including American, Dutch, Turkish, and Russian-based financial institutions have offices in Kazakhstan.
The GOK cooperated in circulating the E.O. 13224 list among Kazakhstani banks.
Kazakhstan acceded to the 1988 UN Drug Convention in 1997, and in December 2000 the country signed the UN Convention against Transnational Crime. On February 24, 2003, Kazakhstan ratified the UN International Convention for the Suppression of the Financing of Terrorism. In 2000, the GOK signed, but has not yet ratified, the UN Convention against Transnational Organized Crime. Kazakhstan is considering acceding to the Council of Europe,s Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime. Kazakhstan is a signatory of the Central Asian Agreement on Joint Fight Against Terrorism, Political and Religious Extremism, Transnational Organized Crime and Illicit Drug Trafficking, signed in April 2000 by Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan. Kazakhstan is a charter member of the newly organized Eurasian Group on Combating Money Laundering and Financing of Terrorism.
The Government of Kazakhstan is still in the process of developing some of the key legal and institutional frameworks necessary to establish a viable anti-money laundering/counterterrorist financing regime. The Kazakhstan should enact comprehensive legislation, to include criminalizing terrorist financing, and implement due diligence and reporting requirements that meets international standards. Kazakhstan should continue its efforts to provide training and adequate resources to the bodies tasked with enforcing its laws and regulations.