The International Narcotics Control Strategy Report

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1. The annual strategy report

The International Narcotics Control Strategy Report (INCSR) is required by the reporting section of the narcotics control chapter of the Foreign Assistance Act. The President transmits the report not later than June 1 of each year (22 U.S.C. 2291h(a)). It goes to the Speaker of the House of Representatives and to the Senate Committee on Foreign Relations, with the contents the section lists (22 U.S.C. 2291h(a)).

The first part covers each country that received assistance under the narcotics control part for either of the 2 preceding fiscal years (22 U.S.C. 2291h(a)(1)). For each, the report addresses the extent to which the country has met the goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (22 U.S.C. 2291h(a)(1)(A)). The issues listed include illicit cultivation, production, distribution and financing, money laundering, asset seizure, extradition, mutual legal assistance, precursor chemical control and demand reduction.

The report also addresses whether the country has accomplished the goals of an applicable bilateral narcotics agreement with the United States or a multilateral agreement (22 U.S.C. 2291h(a)(1)(B)). And it covers whether the country has taken legal and law enforcement measures to prevent and punish public corruption, especially by senior government officials, that facilitates drug production or shipment or discourages investigation (22 U.S.C. 2291h(a)(1)(C)).

2. State Department programs and money laundering

The report describes the policies adopted, agreements concluded and programs implemented by the Department of State in pursuit of its delegated responsibilities for international narcotics control (22 U.S.C. 2291h(a)(2)(A)). That includes the status of negotiations on updated extradition treaties, mutual legal assistance treaties, precursor chemical controls and money laundering. It also covers agreements relating to interdiction procedures for vessels of foreign registry. The report must show that the Departments of State, Justice and the Treasury and other agencies are pursuing a common strategy with respect to major money laundering countries (22 U.S.C. 2291h(a)(2)(B)).

3. Countries the report must identify

The report identifies the major illicit drug producing countries and major drug-transit countries, as determined under section 2291j(h) (22 U.S.C. 2291h(a)(3)). It also identifies major sources of precursor chemicals and major money laundering countries (22 U.S.C. 2291h(a)(3)). For each identified country, it describes the plans, programs and timetables adopted by the country to address the problem and the adequacy of its legal and law enforcement measures (22 U.S.C. 2291h(a)(4)(A)). It also states whether, as a matter of government policy, the country encourages or facilitates illicit production or distribution, or whether any senior official engages in, encourages or facilitates it (22 U.S.C. 2291h(a)(4)(B)).

For the producer and transit countries and the major precursor chemical sources, the report includes a detailed status report (22 U.S.C. 2291h(a)(5)). Using such information as can be reliably obtained, it covers the drugs cultivated, produced, processed or transported, with significant changes (22 U.S.C. 2291h(a)(5)). For money laundering countries, it states which are parties to agreements on precursor chemical records (22 U.S.C. 2291h(a)(6)(A)). It also states which have a procedure for making such records available to United States law enforcement authorities, and which have enacted national chemical control legislation (22 U.S.C. 2291h(a)(6)).

4. Financial institutions and safeguards

The report identifies countries whose financial institutions engage in transactions involving significant amounts of United States currency or currency derived from illegal drug sales in the United States (22 U.S.C. 2291h(a)(7)(A)(i)). It notes which of those have not reached an agreement on a record-exchange mechanism with the United States (22 U.S.C. 2291h(a)(7)(A)(ii)). It also notes which of them are negotiating in good faith to establish one or have adopted laws ensuring adequate records are available (22 U.S.C. 2291h(a)(7)(A)(ii) and 22 U.S.C. 2291h(a)(7)(A)(iii)).

It includes findings on each country’s adoption of law and regulations considered essential to prevent narcotics-related money laundering (22 U.S.C. 2291h(a)(7)(C)). One listed finding is whether the country has required or allowed financial institutions to report suspicious transactions. Where the information is available, the report gives examples of improvements in each country (22 U.S.C. 2291h(a)(7)(D)). It also details instances of refusals to cooperate with foreign governments, and any actions or sanctions taken in response (22 U.S.C. 2291h(a)(7)).

5. Precursors, fentanyl and synthetic drugs

A separate section identifies the five countries that exported the largest amount of chemical precursors used in the production of methamphetamine that significantly affected the United States during the preceding calendar year (22 U.S.C. 2291h(a)(8)(A)(i)). It also identifies the five countries that imported the largest amount of those chemicals and have the highest rate of diversion of those chemicals for illicit methamphetamine production (22 U.S.C. 2291h(a)(8)(A)(ii)). It includes an economic analysis of total worldwide production of the chemicals compared with legitimate demand (22 U.S.C. 2291h(a)(8)(A)(iii)).

Another section, to the extent feasible, identifies the most significant sources of illicit fentanyl, xylazine and fentanyl analogues significantly affecting the United States during the preceding calendar year (22 U.S.C. 2291h(a)(11)(A)). For each, it addresses cooperation in preventing exports, and whether the country uses scheduling or other procedures like those under the Controlled Substances Act (22 U.S.C. 2291h(a)(11)(B) and 22 U.S.C. 2291h(a)(11)(C)). The report also assesses countries significantly involved in the manufacture, production, transshipment or trafficking of covered synthetic drugs (22 U.S.C. 2291h(a)(12)(A)).

A separate section identifies all United States Government-supported units funded by the Bureau of International Narcotics and Law Enforcement Affairs (22 U.S.C. 2291h(a)(10)). It also identifies any Bureau-funded operations by those units in which United States law enforcement personnel have been physically present (22 U.S.C. 2291h(a)(10)).

6. The companion assistance report

At the time the strategy report is submitted, the Secretary of State, in consultation with appropriate agencies, reports to the appropriate committees on assistance provided or proposed for the preceding, current and next fiscal years (22 U.S.C. 2291h(b)(1)). The report specifies the amount and nature of the assistance (22 U.S.C. 2291h(b)(2)(A)). For each major illicit drug producing or major drug-transit country, it includes information from the Drug Enforcement Administration, the Customs Service and the Coast Guard on assistance provided to and received from that country (22 U.S.C. 2291h(b)(2)(B)). It lists all transfers in the preceding fiscal year of seized or forfeited property to foreign countries for narcotics control (22 U.S.C. 2291h(b)(2)(C)). Each item comes with an estimate of its fair market value and physical condition (22 U.S.C. 2291h(b)(2)(C)). How the report feeds certification is covered in drug country certification and withholding.

Key terms

INCSR	The International Narcotics Control Strategy Report under 22 U.S.C. 2291h(a).
June 1	The statutory deadline for the strategy report.
Record-exchange mechanism	An arrangement for sharing financial records with the United States.
Precursor chemicals	Chemicals used to make drugs, tracked by export and diversion rate.
Assistance report	The Secretary of State’s report on three fiscal years of assistance.

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