The U.S. State Department today issued this year's edition of the International Narcotics Control Strategy Report, which describes the efforts of key countries to attack all aspects of the international drug trade in the past year. The INCSR is mandated to annually identify the countries which serve as major sources of illegal narcotics and the major money laundering countries. The INCSR also reports findings on each country's adoption of laws and regulations to prevent drug-related money laundering. Last year, I posted on the change in status of Afghanistan in the 2006 report, from a "Jurisdiction of Concern" for money laundering to a "Jurisdiction of Primary Concern."
The new report heightens the official concern over Iran's international activities and again reminds us of the links between the international drug trade and terrorism. The report moves Iran from a "Jurisdiction of Concern" to a "Jurisdiction of Primary Concern," stating, "Reportedly, a prominent Iranian banking official estimates that money laundering encompasses an estimated 20 percent of Iran's economy. There are currently no meaningful anti-money laundering (AML) controls on the Iranian banking system... According to the United Nations Office on Drugs and Crime, approximately 60 percent of Afghanistan's opium is trafficked across Iran's border... The drugs are then shipped to the international market, primarily Europe. Iran's "bonyads," or charitable religious foundations, were originally established at the time of the Iranian revolution to help the poor... Despite some limited attempts at reforming bonyads, there has been little transparency or substantive progress. Bonyads have been involved in funding terrorist organizations and serving as fronts for the procurement of nuclear capacity and prohibited weapons and technology." At today's press release announcing the new report, State Department officials told Brett Wolf, a veteran anti-money laundering analyst, that US officials do not know, with any degree of certainty, where or how Afghan drug proceeds flow.
We've posted often on the connections between the drug trade, money laundering, and terrorism:
Aaron Mannes, "A Plan Colombia for Afghanistan: Exporting Success?" on Feb. 9, 2007, and "Lacto-Terrorism: FARC Bombs a Dairy," Jan. 23, 2007
Michael Cutler, "Links Between Terrorism, Drug Trade, and Illegal Immigration Can't Be Ignored," Jan. 3, 2007
My post, "FARC Terrorist Leaders Indicted for Massive Cocaine Dealing," Mar. 22, 2006
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