Volume I : Drug and Chemical Control
Haiti
I. Summary
Haiti is a key conduit for drug traffickers transporting cocaine from South America to the United States and, to a smaller degree, Europe. The Haitian National Police (HNP), which is undergoing extensive USG-supported reform, is tarnished by a long-history of corruption. The judicial system is dysfunctional, its prosecutors and judges susceptible to bribes and intimidation. Corruption, lack of judicial infrastructure and the ongoing political and economic crises have caused the Interim Government of Haiti (IGOH) to focus its limited resources on maintaining civil order and organizing fair, democratic elections, rather than on counternarcotics. Haiti did not pursue any drug-related prosecutions in 2005. Haitian officials cooperated with requests from the Haiti South Florida Task Force (DEA, IRS, U.S. Attorney’s Office, and DOJ Criminal Division Asset Forfeiture and Money Laundering Section), which is charged with drug-related investigations, as well as requests for removal of suspects and fugitives.
The IGOH appointed a reform-minded Haitian National Police Director General in 2005 who has taken a proactive stance in countering drug-related crime and police corruption. In a public demonstration of this policy, 15 officers implicated in the August killings of civilians at a soccer stadium in Martissant, were arrested. Though Haiti remains highly susceptible to money laundering due to its weak legal system and pervasive corruption, the IGOH has made progress in investigating and preparing for prosecution several money laundering cases involving official corruption. Haiti is a party to the 1988 UN Drug Convention.
II. Status of Country
Haiti has approximately 1,125 miles of unprotected shoreline, numerous uncontrolled seaports and clandestine airstrips, a thriving contraband trade, weak democratic institutions, a renascent police force that has a history of cooperating with drug traffickers, a dysfunctional judiciary system and official corruption. These factors contribute to the frequent use of Haiti by drug traffickers as a strategic transshipment area.
III. Country Actions Against Drugs in 2005
By the end of 2005, the HNP had trained 1256 new recruits (among them former members of the disbanded military) and retrained 240 existing uniformed officers. Academy training consisted of 16 weeks basic police tactics, traffic management, less-than-lethal tactics and weapons training. In-service training consisted of a week-long course in basic police tactics, crime scene management, and traffic management. On December 18, 33,192 Haitians took the police entrance exam. Thirteen thousand are expected to pass, at which point they will receive further screening and rigorous UN vetting before being admitted to the police academy in 2006. The HNP, the UN troops and the UN Civilian Police (UNPol) currently in Haiti have made limited progress toward disarming gangs that support and provide security to established drug trafficking organizations.
Supported by DEA and Narcotics Affairs Section (NAS), the HNP expanded the Counter-Narcotics Trafficking Office (French acronym BLTS) of the HNP to over 50 agents by the end of 2005. The HNP permitted the DEA to establish a Sensitive Investigative Unit (SIU) within BLTS, which has facilitated closer collaboration on counternarcotics matters. The Haitian Coast Guard (HCG) re-established operations in Cap Haitien in 2005, an important milestone in the HCG’s effort to patrol Haiti’s territorial waters and to interdict narcotics, illegal migrants and other illegal activities.
The IGOH reorganized the Central Financial Intelligence Unit (FIU, French acronym UCREF) and the Financial Crimes Task Force, two units involved in prosecuting financial crimes. Although the UCREF had launched approximately 400 investigations since 2004, it had achieved little success in bringing cases to trial. Data provided by the UCREF and to a lesser extent the task force in 2005 resulted in the freezing of $17.6 million in assets of convicted drug trafficker Serge Edouard.
Law Enforcement Efforts. Drug trafficking organizations operate with impunity, exploiting the instability and the weak institutions in the country. The lack of country infrastructure and governmental support leaves the BLTS and the HCG without the necessary equipment, maintenance, logistical support or incentive to effectively combat drug trafficking in Haiti.
In spite of these limitations, the BLTS continued daily patrols including inspection of inbound and outbound passenger baggage and airfreight. The BLTS also apprehended three fugitives wanted in the United States for drug-related crimes. The BLTS Maritime Interdiction Task Force (MITF) also conducted random daily searches and assisted in identifying vessels and individuals associated with drug trafficking at the local seaports. The Joint Information Coordination Center (JICC) continued to provide useful intelligence and to coordinate with the BLTS at the airport and the MITF.
The HCG conducted limited operations during 2005, supporting a UN security intervention in the Cite Soleil neighborhood of Port au Prince and participating in a joint counternarcotics operation with DEA and the BLTS.
Corruption. In October 2005, Transparency International designated Haiti as one of the most corrupt countries in the world. Corruption is endemic in almost all public institutions. The HNP Director General estimated that 25 percent of active duty HNP were involved in serious illegal activities. Intelligence confirms that the HNP continue to support drug traffickers by providing security and offloading drug-laden aircraft and vessels in Haiti. The IGOH responded by re-establishing a HNP Inspector General’s office.
Cultivation/Production. There is no known cultivation or production of illicit drugs in Haiti, with the exception of cannabis, which is grown on a small scale for local consumption.
Drug Flow/Transit. The southern coast of Haiti is one of the preferred destinations for go-fast boats laden with cocaine traveling directly from the north coast of Colombia. The go-fasts typically meet Haitian fishing vessels that remain offshore at coastal towns. Near the end of 2005, the DEA noted a significant spike in suspected drug-laden airplanes landing in the border region with the Dominican Republic at Malpasse. Cocaine airdrops and sea cargo shipments from Colombia, Venezuela, and Panama were also reportedly on the rise.
Sea cargo cocaine shipments are concealed in legitimate cargo or inside the vessel structure itself. Smuggled drug shipments arriving at seaports are often transported overland to Port-au-Prince where they are broken down into smaller loads and concealed on cargo and coastal freighters. Smaller vessels carry loads of cocaine from Haiti’s northern coast to the Bahamas for onward transport to Florida via fishing or pleasure boats. Multi-kilogram loads of cocaine are transported by commercial aircraft in checked luggage, strapped to bodies or hidden in food service or air cargo luggage carts. Large quantities of cocaine are also driven over the land to the Dominican Republic for eventual shipment to Puerto Rico or other destinations. Some drug planes arriving in Haiti with cocaine cargo also carry smaller amounts of heroin.
Marijuana is transported from Jamaica via go-fast boats to waiting fishing vessels and via cargo freighters to Haitian seaports along Haiti’s southern claw. It is then shipped directly to the United States or transshipped through the Dominican Republic or Puerto Rico. Cocaine, crack, and marijuana are readily available and consumed in Haiti. Heroin usage for personal consumption is virtually nonexistent in Haiti.
Asset Seizure. Under the 2001 Anti-Money Laundering Law, forfeiture and seizure of assets are contingent upon convictions. Though the IGOH is supportive of a stronger, more proactive asset seizure law, its temporary governmental mandate does not allow for the passage of new laws. The inability to seize or freeze assets early in the judicial process limits the government’s authority and resources to pursue cases.
Extradition. There is a U.S. and Haiti extradition treaty, signed in 1905 ; however, Haitian law prohibits the extradition of its nationals. The IGOH has, however, continued to cooperate with specific requests for expulsion. In 2005, three drug fugitives and six fugitives involved in other international crimes were returned to the U.S. by nonextradition means.
Demand Reduction. Widespread media coverage of high-profile suspects expelled from Haiti to face charges on drug-related crimes in the United States has helped to temper domestic demand. In addition, a public awareness campaign to discourage drug use was launched in 2005. Two radio jingles jointly sponsored by the IGOH and the USG, were broadcast free by all major radio stations in Haiti, and a public launching of the jingles attracted over 200 participants from the government, international and nongovernmental organizations, media and the general public.
Agreements and Treaties. Haiti is a party to the 1988 UN Drug Convention. A U.S.-Haiti maritime counternarcotics agreement and a bilateral maritime agreement entered into force in 2002. Haiti has signed but not ratified the OAS mutual legal assistance treaty, the Inter-American Convention Against Corruption, the Caribbean Regional Maritime Agreement, the UN Convention Against Transnational Organized Crime and the UN Convention Against Corruption.
IV. U.S. Policy Initiatives and Programs
Reform of the HNP is a major cornerstone of USG support for combating illegal drug trafficking in Haiti. The USG provided 8.2 million USD in FY 2005 to this effort through INL. Forty-five vans and trucks, 75 motorcycles, one wrecker and two armored SWAT trucks were deployed to increase the HNP’s operational effectiveness and visibility. A wide array of essential police equipment was also provided in conjunction with training from INL police advisors and UNPOL. Five high-profile model police stations were rehabilitated and inaugurated in 2005 in Bicentenaire, Fort National, Delmas 33, Cap Haitian and Gonaives. The model police station project provided professional facilities with essential equipment to enable the UNPOL and HNP officers to collocate and operate jointly. INL augmented communications by installing permanent, solar-powered base radio stations and portable radios at 80 commissariats throughout Haiti.
In addition, the USG provided the Haitian Coast Guard with maritime interdiction capability, including interceptor craft, infrastructure improvements, operational support, and training and equipment. A major accomplishment in this area included a joint U.S.-UN effort to renovate the HCG station in Cap Haitien, which permitted the HCG to re-establish operations there in December 2005. Significant Military Liaison Office projects included the overhaul of four boats, USCG boat maintenance and boat operations courses funded by Federal Military Funding (FMF) and International Military Education and Training (IMET). The USCG Caribbean Support Tender (CST) cutter GENTIAN made four visits to the HCG Admiral Killick Base in Carrefour to provide supplies, conduct training, repair boats and generators, install a communications battery backup system, and inspect weapons. The USCG also supported the HCG with numerous Mobile Training Team missions. Under a SOUTHCOM humanitarian project, the medical clinic at Killick was renovated for the HCG and the community.
The DEA and NAS also worked closely with the BLTS to establish a Sensitive Investigative Unit. A site was identified, and a working plan for procurement and operations was established in 2005. The U.S. Treasury Office of Technical Assistance (OTA), in cooperation with NAS, provided on-the-job investigative training to the Financial Crimes Task Force and to a lesser extent UCREF. In addition, NAS provided 25 computers to UCREF and four laptops and office equipment to the Task Force to support their work on prosecuting financial crimes.
The Road Ahead. Stemming the flow of illegal narcotics through Haiti remains a cornerstone of U.S. counternarcotics policy. Key preconditions to accomplishing of this goal are more effective law enforcement and judicial institutions, a government commitment to providing resources for these institutions through budgetary means and an effective asset seizure mechanism. Continued social disorder and political violence will only obstruct the road ahead. Following democratic elections, the new government should continue the IGOH’s focus on fighting corruption and reforming the police and the judicial system.
Volume II : Money Laundering and Financial Crimes
Haiti
Haiti is not a major regional financial center, and, given Haiti’s dire economic condition and unstable political situation, it is doubtful that it will become a major player in the region’s formal financial sector in the near future. Money laundering and other financial crimes occur in the banking system and in casinos, foreign currency, and real estate transactions. Money laundering activity is linked to the drug trade as Haiti continues to be a major drug-transit country. While the informal economy in Haiti is significant and partly funded by narcotics proceeds, smuggling is historically prevalent and predates narcotics trafficking. Flights to Panama City, Panama, remain the main identifiable mode of transportation for money couriers. Usually travelers, predominantly Haitian citizens, hide large sums, $30,000-$100,000 on their persons. Haitian narcotics officers interdicting these outbound funds often collect a 6-12 percent fee and allow the couriers to continue without arrest. During interviews, couriers usually declare that they intend to use the large amounts of U.S. currency to purchase clothing and other items to be sold upon their return to Haiti, a common practice in the informal economic sector. Further complicating the picture is the cash that is routinely transported to Haiti from Haitians and their relatives in the United States in the form of remittances, representing an estimated 30 percent of Haiti’s gross domestic product (GDP).
In March 2004, an interim government was established in Haiti following former President Jean Bertrand Aristide’s resignation and departure. The Interim Government of Haiti (IGOH) has taken initiatives to establish improvements in economic and monetary policies as well as working to improve governance and transparency. In response to the corruption that continues to plague Haiti, the IGOH created an Anti-Corruption Unit as well as a commission to examine transactions conducted by the government from 2001 through February 2004. The commission published its report in July 2005, but to date the IGOH has not submitted for prosecution any cases based on the information provided in the report.
Despite political instability, Haiti has taken steps to address its money laundering and financial crimes problems. Since 2001, Haiti has used the Law on Money Laundering from Illicit Drug Trafficking and other Crimes and Punishable Offenses (AML Law) as its primary anti-money laundering tool. All financial institutions and natural persons are subject to the money laundering controls of the AML Law. The AML Law criminalizes money laundering and applies to a wide range of financial institutions-including banks, money changers, casinos, and real estate agents. Insurance companies are not covered ; however, they are only nominally represented in the Haitian economy. The AML Law requires financial institutions to establish money laundering prevention programs and to verify the identity of customers who open accounts or conduct transactions that exceed 200,000 gourdes (approximately $4,760). It also requires exchange brokers and transfer bureaus to obtain declarations identifying the source of funds exceeding 200,000 gourdes or its equivalent in foreign currency. The nonfinancial sector, nonetheless, remains largely unregulated.
In 2002, Haiti formed a National Committee to Fight Money Laundering, the Comité National de Lutte Contre le Blanchiment des Avoirs (CNLBA). The CNLBA is in charge of promoting, coordinating, and recommending policies to prevent, detect, and suppress the laundering of assets obtained from the illicit trafficking of drugs and other serious offenses. The financial intelligence unit (FIU) created in 2003, the Unite Centrale de Renseignements Financiers (UCREF), is responsible for receiving and analyzing reports submitted in accordance with the law. The UCREF was expanded since its creation from 8 to 42 employees, including 25 investigators. Entities are required to report to the UCREF any transaction involving funds that appear to be derived from a crime, as well as those exceeding 200,000 gourdes. Failure to report such transactions is punishable by more than three years’ imprisonment. Banks are required to maintain records for at least five years and are required to present this information to judicial authorities and UCREF officials upon request. Bank secrecy or professional secrecy cannot be invoked as grounds for refusing information requests from these authorities.
The UCREF assisted in obtaining, validating and certifying Haitian bank records for use as exhibits in U.S. court proceedings. In 2005, UCREF confiscated $800,000 and froze $2.86 million related to money laundering offenses. Approximately 400 investigations were underway in 2005. Data provided largely by UCREF in 2005 resulted in the freezing of $17.6 million in assets of convicted drug trafficker Serge Edouard. The UCREF also assisted the IGOH in filing the first-ever civil lawsuit in a U.S. court for reparation of Haitian Government funds diverted through U.S. banks and businesses. Though these 2005 achievements of the UCREF are a marked improvement, the CNLBA is still not fully functional or funded, and many of the UCREF’s employees still lack experience and the ability to independently investigate cases, which translates into slow progress in moving cases into the judicial system.
The AML Law has provisions for the forfeiture and seizure of assets ; however the government cannot declare the asset or business forfeited until there is a conviction. The inability to seize or freeze assets early in the judicial process reduces the government’s authority and resources to pursue cases. The IGOH is supportive of a stronger, more proactive asset seizure law, yet its temporary governmental mandate does not allow for the passage of new laws. The IGOH has set-up a Financial Crimes Task Force under the auspices of the Ministries of Justice, Finance, and the Central Bank, charged with identifying and investigating major financial crimes and coordinating with the UCREF in recommending prosecutions.
Supported by the U.S. Embassy Narcotics Affairs Section (NAS) and the U.S. Treasury Office of Technical Assistance (OTA), this task force and UCREF cooperated with the U.S. Internal Revenue Service in 2005 to investigate several significant cases of U.S. tax fraud. One major case developed by the task force, without U.S. assistance, is presently being prosecuted. At least six other significant cases are currently under investigation. With U.S. guidance and support, the IGOH took steps to reorganize the UCREF and the Financial Crimes Task Force. Efforts were underway at the end of 2005 to separate the intelligence gathering and investigative functions to provide for essential checks and balances and reduce the potential for internal fraud abuses.
The UCREF has three memoranda of understanding with the Dominican Republic, Panama and, Honduras. The UCREF has not yet been accepted and accredited to the Egmont Group. Haiti is a member of the OAS/CICAD Experts Group to Control Money Laundering and the Caribbean Financial Action Task Force. Haiti is a party to the 1988 UN Drug Convention. Haiti has signed, but not yet ratified, the UN Convention against Transnational Organized Crime and the UN Convention against Corruption. Haiti still has not passed legislation specifically criminalizing the financing of terrorists and terrorism, nor has it signed the UN International Convention for the Suppression of the Financing of Terrorism. The AML Law provides for investigation and prosecution in all cases of illegally derived money. Under this law, terrorist finance assets may be frozen and seized. Currently, there is no indication of terrorist financing.
Presidential elections are scheduled for early 2006 ; the incoming administration should work diligently and expeditiously to fully implement and enforce the AML Law, which will require them to confront the rampant corruption present in almost all public institutions. Haiti should also further strengthen the organizational structures and personal skills of employees both in the UCREF and the Financial Crimes Task Force. The Government of Haiti should criminalize terrorist financing and become a party to the UN International Convention for the Suppression of the Financing of Terrorism.
RSS 2.0